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

Case Study: Social Anxiety Disorder Campaign by SmithKline Beecham

In 1987 Eli Lilly and Company won U.S. approval to sell Prozac, the first among a class of drugs called Selective Serotonin Reuptake Inhibitors (SSRIs) that treated clinical depression by elevating levels of serotonin–a chemical believed crucial to regulating mood–in the brain. Prozac’s effectiveness and lack of side effects compared to existing medications for depression revolutionized not only the way mental illness was treated by psychiatrists but also the way it was perceived by the public. By 1992, when Pfizer and SmithKline Beecham introduced their own SSRIs, Zoloft and Paxil, respectively, depression had lost much of its stigma in the United States. In the following years SSRIs became one of the best-selling prescription drug categories. For its first several years on the market, Paxil remained in third place among SSRIs, and SmithKline Beecham set its sights on new markets for the drug. In the mid-1990s Paxil won FDA approval for Continue reading

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Bettman Information Processing Model of Consumer Choice

Bettman (1979) in his model describes the consumer as possessing a limited capacity for processing information. He implicate that the consumers rarely analyze the complex alternatives in decision making and apply very simple strategy. In Bettman Information Processing Model, the consumer is portrayed as possessing a limited capacity for processing information. When faced with a choice, the consumer rarely undertakes very complex analyses of available alternatives. Instead, the consumer typically employs simple decision strategies or heuristics. These simplifying decision rules assist the consumer in arriving at a choice by providing a means for sidestepping the overly overburden task of assessing all the information available about all the alternatives. In Bettman Information Processing Model,  there are seven major stages. Processing Capacity:  In this step he assumes that the consumer has limited capacity for processing information, consumers are not interested in complex computations and extensive information processing. To deal with this problem, Continue reading

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Syndicated Euro Credits

History of  Syndicated  Euro Credits Syndicated Euro Credits are in existence  since the late 1960s. The first syndicate was  organized by Bankers Trust in an effort to  arrange a large credit for Austria. During  the early seventies, Euromarkets saw the  demand for Euro credits increasing from  non-traditional and hitherto untested  borrowers. The period after first oil crisis  was marked by a boom phase. To cope with  the increasing demand for funds, lenders  expanded their business without  undertaking due credit appraisal of their  clients or the countries thus financed.  Further, the European banks had short-term  deposits while bulk of borrowers required  long-term deposits. These landings were at  fixed rates thus exposing these banks to  interest rate risks. The banks evolved the  concept of lending funds for medium longterm  i.e. 7-15 years on a variable interest  rate basis linked to the  Interbank Rate  (LIBOR). Revision of rates would take  place every 3-6 Continue reading

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Delegation of Authority – Concept, Features, Advantages and Barriers

The process of assignment of specific work to individuals within the organization and giving them the right to perform those works is delegation. Delegation of authority is one of the most significant concepts in management practice, which affects managerial functions. Management is the art of getting things done through others and delegation means to get the results through the subordinates. The expansion of business volume and diversification of line of business makes it impracticable to handle all the business by a single manager. Therefore, the concept of delegation of some managerial authority to subordinates comes into practice in present day business organizations. Here, the manager delegates some of his authority to his subordinates. This helps in developing a feeling of dedication to the work among the subordinates. The top level management plays only the role of a supervisor and visits them to provide guidance, suggestions and instructions. It minimizes the Continue reading

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Equity and Fairness of Employee Compensation Systems

Compensation is key to organisational strategy. It has an impact on attracting and retaining employees and ensuring optimal performance in meeting the organisation’s objectives. The economic importance of compensation is that it should allow the organization to maintain a cost structure that enables it to compete effectively and efficiently in its markets. Adams equity theory suggests that once an individual has chosen an action that is expected to satisfy his or her needs, the individual assesses the equity or fairness of the outcome. Three attitudes are possible; an individual may feel equitably rewarded, under rewarded, or over rewarded. When individuals feel under rewarded or over rewarded, they will do something to reduce the inequity. A further development ‘Fairness theory’ takes into account the notion of accountability and blame. When people identify an instance of unfair treatment, they are holding someone accountable for an action that threatens another person’s material or Continue reading

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Customer-Based Brand Equity (CBBE) Model

Two questions often arise regarding brands: ‘What makes a brand strong?’ and ‘How do you build a strong brand?’ To answer these questions, this section introduces the customer-based brand equity (CBBE) model. This model incorporates theoretical advances and managerial practices in understanding and influencing consumer behavior. Although useful perspectives concerning brand equity have been put forth, the CBBE model provides a unique point of view as to what brand equity is and how it should be built, measured and managed. The Customer-Based Brand Equity model approaches brand equity from the perspective of the consumer — whether this be an individual or an organization. Understanding the needs and wants of consumers and organizations and devising products and campaigns to satisfy them are at the heart of successful marketing. In particular, two fundamental questions faced by marketers are: ‘What do different brands mean to consumers?’ and ‘How does the brand knowledge of Continue reading

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