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

What is Angel Investing? Concept, Benefits, and Disadvantages

Implementation of a viable business idea will normally require a great deal of capital and the ability of the entrepreneur to raise the necessary capital, the higher the chances of business success. Start ups are businesses at the initial stages and hence there are very limited sources of funds available to such businesses due to uncertainties surrounding their success. Start ups will therefore depend largely on the owner’s capital and contribution from friends. Credit facilities from financial institutions and other lenders will normally require collaterals and this limits the chances of new business owners to secure such findings. In recent times however, the entrepreneurs across the world have been able to get a lot of reprieve from venture capitalist that are willing to support a business idea to its implementation stages. A venture capital is a specialized form of funding that targets high risk high return investments with potential growth in Continue reading

Abey Francis

Motives for Firms Engagement in Foreign Direct Investment (FDI)

Foreign Direct Investment (FDI) is a popular investment option adopted by firms in the contemporary business environment. This form of investment stream occurs when a firm decides to assume partial ownership of either a company stock or physical assets in a foreign country. Besides, this business manoeuvre enables a firm undertaking FDI to gain a significant measure of controlling its management systems and structures. Although portfolio management and FDI are close and interrelated terms, they are quite distinct in the sense that the former does not permit any tangible degree of securing company control. On an international scale, the inflow in FDI is often considered to start from ten percent of ownership of stocks or assets of a foreign company. In order to accomplish FDI projects, special arrangements such as mergers and acquisitions have to be effected. Alternatively, international franchising can also be used as a channel of attaining the Continue reading

Abey Francis

What is Owner’s Equity? Meaning and Components

Preferred and common stockholders have some interests in organizations which are referred to as owner’s equity. Investors contribute to the capital of a corporation through the purchase of stocks sold by the corporation without the use of a secondary market. This type of capital is referred to as paid-in capital. The total paid-in capital is a combination of share capital and additional paid-in capital that is normally added to the nominal value of a stock. On the other hand, earned capital is the type of capital that comes from a company’s profitable operations. The two types of capital are normally reflected on the balance sheet as part of the owner’s equity. Earned capital is calculated by subtracting dividends from the total sum of the company’s beginning capital and the net income. The net income of a company is the major source of earned capital. Companies reinvest earned capital to generate more Continue reading

Abey Francis

Importance of Audit Independence for Stakeholders

The importance of audit independence can be categorized into four reasons: Firstly, audit independence can hold the public confidence and avoid interest conflicts; Secondly, audit independence can help auditors to provide high quality financial report and avoid scandals like ‘Enron bomb’; Thirdly, the development of no-audit services make it more difficult but more important to maintain audit independence; Lastly, audit independence can improve the quality of audit and it can assist managers to make strategy formulations. Stakeholders make economic decisions by taking advantage of financial reports. Whether those reports are related and reliable are questions. Audit can help to solve this problem. However, auditor fails to fulfill the duty if they cannot remain independence in the conducting process. On one hand, report users will doubt this kind of dependence if they thought auditor and consigner belong to the same party. On the other hand, when auditor cannot keep an unbiased Continue reading

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Impact of E-Commerce in Banking Sector

Advancement in information technologies and improvement of the Internet access have not only changed the way businesses are being conducted, but have also resulted in cutthroat competition on the global market. As a consequence, strategic companies have incorporated and integrated information technologies in their operations to create competitive advantages and to sustain their existing competitive advantage. The banking industry has incorporated web-based information technologies to synchronize with the market trends. Precisely, banks have adopted electronic commerce (e-commerce) products and services in a move to keep in touch with the globalized economy and ongoing migration of people, entities, and businesses to the cyberspace. E-commerce refers to the utilization of the internet as a distribution channel to sell banking products and services to either existing or potential customers. From a broader perspective, e-commerce involves electronic exchange of products (mainly services), information, and payments. It also entails establishment and sustenance of web-based relations, Continue reading

Abey Francis

Importance of Ethical Climate in Business

A strong ethical climate is a system of informal rules concerning the stakeholders’ behavior in internal or external environments. In such an environment, organizational leaders take the initiative to shape or support the ethical environment. Ethical climate corresponds to organizational personality, which has a direct impact on both organizational success and employee satisfaction. Ethical climate represents common values and beliefs that hold an organization intact. Given that employee and customer dissatisfaction are some of the causes of turnover and loss of trust respectively, leaders at all levels of an entity must be aware of their predefined roles and responsibilities in preserving an ethical workplace setting that can improve both customer experience and employee satisfaction. While most managers or organizational leaders recognize the significance of ethical climate in customer and employee satisfaction, some fail to realize the direct impact they have is shaping it. Therefore, shaping ethical climate is one of Continue reading

Abey Francis