Concepts of Throughput Accounting and Theory of Constraints

Financial Management

Kaizen – Understanding the Japanese Business Philosophy of Continuous Improvement

Operations Management

Role of Leaders in Shaping Organizational Culture

Management Principles

Organizational Culture – Development and Importance

Management Principles

Five Important Organizational Cultural Models

Management Principles

The Seven Wastes of Lean Manufacturing

There are differing opinions on how many ‘types’ of waste an organisation might have. Current thinking suggests, seven, eight, or even nine depending on the nature of the organisation and the type of work carried out. Originally, there were said to be seven types of waste, and these were largely found in manufacturing organisations.   They can be listed as: Overproduction Excess inventory Waiting (lost time) Unnecessary motion Unnecessary transportation (double handling, or moving excess stock) Re-work (poor quality) Over-processing (over-engineered) In each instance, it is recognized that even incremental improvements can help an organisation to increase its efficiency and reduce its costs.   These savings and improvements are typically realized in a greater proportion of better quality output, meaning that even small improvements can have an exponentially large positive outcome. It is also noted that each one of these seven types of waste can be tied to different types Continue reading

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An Overview of Foreign Exchange Management Act (FEMA)

The Foreign Exchange Regulation Act of 1973 (FERA) in India was repealed on 1st June, 2000. It was replaced by the Foreign Exchange Management Act (FEMA), which was passed in the winter session of Parliament in 1999. Enacted in 1973, in the backdrop of acute shortage of Foreign Exchange in the country, FERA had a controversial 27 year stint during which many bosses of the Indian Corporate world found themselves at the mercy of the Enforcement Directorate (E.D.). Any offense under FERA was a criminal offense liable to imprisonment, whereas FEMA seeks to make offenses relating to foreign exchange civil offenses. FEMA, which has replaced FERA, had become the need of the hour since FERA had become incompatible with the pro-liberalization policies of the Government of India. FEMA has brought a new management regime of Foreign Exchange consistent with the emerging frame work of the World Trade Organization (WTO).  It Continue reading

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Measures to Control Inflation

Inflation should be controlled in the beginning stage, otherwise it will  take the shape of hyper-inflation which will completely run the country. The different methods used to control inflation are known as anti-inflationary measures. These measures attempt mainly at reducing aggregate demand for goods and services on the basic assumption that inflationary rise in prices is due to an excess of demand over a given supply of goods and services. Read more:  Economic Policies to Control Inflation Anti-inflationary measures are of four types: Monetary policy Fiscal policy Price control and rationing Other methods 1. Monetary Policy It is the policy of the central bank of the country, which is the supreme monetary and banking authority in a country. The central bank may use such methods as the bank rate, open market operations, the reserve ratio and selective controls in order to control the credit creation operation of commercial banks and Continue reading

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Prescriptive and Emergent Approaches to Corporate Strategy

The concept of corporate strategy battles with the perennial issue of determining the overall purpose and scope of an organisation. From a contemporary perspective, it involves the specification of long-term goals and objectives that will add value to the business and cope with the uncertainty of modern times. As a practice, it consists of adopting courses of action and allocating resources in ways necessary for carrying out the overall objectives. Widely recognized as the most principal theories for strategy development, the prescriptive and emergent approaches must be examined within the context of an increasingly dynamic, highly competitive and global business environment. Powerful external forces are driving organisations to reduce costs, enhance processes and identify new opportunities for growth. Many businesses are compelled to make dramatic improvements not only to compete and prosper but also merely to survive. This brings to the fore the importance of determining how effectively the prescriptive Continue reading

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Evolution of Corporate Governance in India

The focus has shifted to Corporate Governance (CG) time and again on account of repeat emergence of financial crises across the global, as well as frequent instances of financial reporting failures.   In competitive markets, Corporate Governance is a reflection of market disciplines, and forms the cornerstone for efficient allocation of resources.   CG enables managements to take decisions, while at the same time being accountable for the decisions taken.   Securities and Exchange Board of India (SEBI) appointed the Committee on Corporate Governance in May, 1999 under the Chairmanship of Kumar Mangalam Birla, to promote and raise the standards of Corporate Governance, in the particular context of companies of the Committee included (i) to suggest measures to improve Corporate Governance in the listed companies, in areas such as continuous disclosure of material information, both financial and non financial, manner and frequency of such disclosures, and the responsibilities of independent Continue reading

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Optimal Capital Structure

The capital structure of a company refers to the mix of the long-term finances used by the firm. It is the financing plan of the company. Financing the firm’s assets is a very crucial problem in every business and as a general rule there should be a proper mix of debt and equity capital along with equity shares is called financial leverage or trading on equity. The long term fixed interest bearing debts is employed by a firm to earn more from the use of these sources than their cost so as to increase the return on owner’s equity. It is true that capital structure cannot affect the total earnings a firm but is can affect the share of earnings available for equity shareholders. The capital structure decision can influence the value of the firm through the cost of capital and trading on equity or leverage. The optimal capital structure Continue reading

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