Role of Leaders in Shaping Organizational Culture

Management Principles

Organizational Culture – Development and Importance

Management Principles

Five Important Organizational Cultural Models

Management Principles

The Customer Satisfaction Model – Based on American Customer Satisfaction Index (ACSI)

Marketing Management

Rumours in Business Organizations

Business Communication

Pros and Cons of Relationship Marketing

Relationship Marketing (RM) is defined as the process in which the construction, cultivation and strengthening of strong value laden relationships with customers and other stakeholders occur. Another way relationship marketing can be defined is as both business marketing and consumer marketing benefit from attention to conditions that foster relational bonds leading to reliable repeat purchase. Pros of Relationship Marketing 1. Customer Loyalty A significant benefit that can be derived from successful relationship marketing (RM) in a business is the development of loyalty in customers. Customer loyalty and positive word-of-mouth recommendations are usually the two outcomes of effective RM. Furthermore, RM can provide exclusive benefits for customers, consequently reducing competition from other businesses that offer the same product which can thus assist in the achievement of consumer loyalty. Loyalty is defined as a close bonding between the consumer and the seller which results in frequent purchase of a certain product or Continue reading

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Major Considerations in Capital Structure Planning

There are three major considerations in capital structure planning, i.e. risk, cost of capital and control, which help the finance manager in determining the proportion in which he can raise funds from various sources.  Although, three factors, i.e. risk, cost and control determines the capital structure of a particular business undertaking at a given point of time. The finance manager attempts to design the Capital Structure in such a manner that his risk and costs are the least and the control of the existing management is diluted to the least extent. Risk  – Risk is of two kinds, i.e. financial risk and business risk. Here we are concerned primarily with the financial risk. Financial risk is also of two types: Risk of Cash Insolvency: As a firm raises more debt, its risk of cash insolvency increases. This is due to two reasons. Firstly, higher proportion of debt in the Capital Continue reading

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Challenges Faced by Indian Commodity Markets

Commodity exchanges in Indian are still at a nascent stage, and there are numerous bottlenecks in the growth of the commodity futures market. The challenges facing the Indian Commodity markets are very serious in nature and cannot be ignored as they can paralyze the agricultural futures markets, much against the objective of agricultural liberalization. The main problem is that the commodity markets are under the control of Government. Towards the growth of any market, the trading conditions or the terms and conditions of contracts play a crucial role. The contracts should be market friendly in terms of attracting both the big and small traders alike. In majority of the contract specifications, it was found that the size is too big for small traders and producers to trade. Unless such finer aspects are dealt with proper attention at the regulatory level and the exchange level, attracting small traders and farmers into Continue reading

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Profit Sharing as an Incentive Scheme

Profit sharing is the most popular method rewarding the employees.  Under profit sharing incentive plan, the employees are paid in addition to the regular wage, a particular  share of the net profits of the business as incentive. Characteristics of Profit Sharing Incentive Plans The key features of profit sharing incentive plans may be stated as follows: It is based on an agreement between the employer and the employees. It is a payment made after ascertaining the net profits of the business. It  is not therefore, a charge on profits. The amount paid to the employees is over and above their normal pay. The amount to the paid is determined based on some agreed formulas. The payments based on seniority and wage level of individual workers. Merits of Profit Sharing The advantages of profit sharing  incentive  plans are as follows: Better employer-employee relations – This is possible, as the employer is Continue reading

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Formal and Informal Leaders

Leadership as the process of influencing people by providing purpose, direction, and motivation to accomplish the mission and improve the organization. While it is a relatively short definition, it implies a lot of action. Look at the action words: influencing; purpose; direction; motivation; accomplish; improve. To define Leadership, means to take action, to get up and do something. It has been observed above that a manager should also be a good leader. But in actual practice, every manager is not able to provide the kind of leadership desired by his subordinates. This gives rise to informal leaders who do not hold any managerial post in the organization. A formal leader, on the other hand, is one who possesses organizational authority to direct and control the activities of his subordinates. He can issue orders and instructions to his subordinates by virtue of his formal authority in the organization. An informal leader is Continue reading

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Total Quality Management (TQM) Summary

Definition of Total Quality Management (TQM) Total Quality Management (TQM) is defined by International Organization for Standardization (ISO): “TQM is a management approach for an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society.” In Japanese,  Total Quality Management (TQM) comprises four process steps, namely: Kaizen — Focuses on Continuous Process Improvement, to make processes visible, repeatable and measurable. Atarimae Hinshitsu — The idea that things will work as they are supposed to (e.g. a pen will write.). KanseiKansei — Examining the way the user applies the product leads to improvement in the product itself. Miryokuteki Hinshitsu  — The idea that things should have an aesthetic quality which is different from “atarimae hinshitsu” (e.g. a pen will write in a way that is pleasing to the writer.) Total Continue reading

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