Meaning and Definition of Transfer Pricing Large organizations are divided into a number of divisions to facilitate managerial control. The problem of transfer pricing arises when one division of the organization transfers its output to another division as an input. A transfer price is the price one segment (sub unit, department, division etc.) of an organization charges for a product or service supplied to another segment of the same organization. The transfer from one segment to another is only an internal transfer and not a sale. Transfer pricing is needed to monitor the flow of goods and services among the divisions of a company and to facilitate divisional performance measurement. The main use of transfer pricing is to measure the notional sales of one division to another division. Thus the transfer prices used in the organization will have a significant effect on the performance evaluation of the various divisions. This Continue reading
Management Concepts
Stages of Group Development
A group can be defined as two or more interacting and interdependent individuals who come together to achieve specific goals. Although a groups often have goals, but there’s not state that group members must share a goal or motivation. Many people used the word team and group interchangeably, but there are actually many differences between the word team and group. It is much easier to form a group than a team. In group, they could be grouped according to gender, experience, age or other common factors. Although the effectiveness of the group may be variable, but forming a group just based on a certain commonality is not particularly difficult. A group’s strength may come from sheer volume or willingness to carry out a single leader’s commands. On the other hand, a team can be more difficult to form. The members will selected for their complementary skills, not a single commonality. Continue reading
Functions of Organizational Culture
Organizational culture is the sum of reflects that gradually formed in the production and management practices, agreed and complied with all staff, with the characteristics of the Organization’s mission, vision, purpose, spirit, values and business philosophy, and the ideas in the production and management practices, management system, the behavior of employees with the external image. In essence, organizational culture is a cultural phenomenon among the enterprises, its appearance is inseparable from the development of the theory and practice of modern enterprise, from the management perspective, organizational culture are the application management tools to achieve management objectives, therefore, organizational culture are not only a cultural phenomenon, but also has a connotation as a management tool. First, the organizational culture is led by a sense of enterprise management, the cultural patterns of pursuit and realization in a certain corporate purposes, from a certain sense, the organizational culture is a culture of enterprise Continue reading
Case Study and Different Areas of Management
The cases of management cannot be properly analyzed and solved unless the student has a thorough knowledge of die subject. The cases of General Management may be on the functions of management like planning, co-ordination, organization, control and decision-making. The cases also relate to the principles of management like division of labor, centralization and decentralization of authority, span of control, equity, remuneration, unity of direction, unity of command etc. While solving the case problem the student must be able to know to which function or principle of management the case relates. It will enable the student to analyze the case properly as he becomes clear about what is ‘required “as per functions or principles and what is lacking in the given situation of the case. The cases of Personnel Management relate to recruitment, selection, induction, placement, wage Continue reading
Factors Affecting Organizational Change
Change is inevitable in the life of an organization. In today’s business world, most of the organizations are facing a dynamic and changing business environment. They should either change or die, there is no third alternative. Organizations that learn and cope with change will thrive and flourish and others who fail to do so will be wiped out. The major forces which make the changes not only desirable but inevitable are technological, economic, political, social, legal, international and labor market environments. In very simple words, we can say that change means the alteration of status quo or making things different. “The term change refers to any alterations which occurs in the overall work environment of an organization. When an organizational system is disturbed by some internal or external force, change frequently occurs. Change, as a process, is simply modification of the structure or process of a system. It may be Continue reading
Leadership and Management – Differences
A manager may be a leader, a manager may not be a leader, but a leader may emerge who is not a manager. This saying shows that roles of manager and leader not to be connected at all. However, for a business to be effective, managers must learn how to become leaders by developing effective leadership skills. A leader means a person that holds a dominant or superior position within its field, and is able to exercise a high degree of control or influence over others. A leader is one who has followers. Followers follow leaders because they are influenced by the leader’s personality and share belief in the leader’s visions, goals and values. Leaders gain personal power through credibility. They can communicate their beliefs to team members, who understand that these beliefs will not alter or vary because of circumstances and will become the rock on which their working Continue reading