Financial Management Summary and Definitions. free essay sample

Financial Management: Summary and Definitions Analysis of ch16: Working capital management is a managerial accounting strategy focusing on maintaining efficient levels of both components of working capital, current assets and current liabilities, in respect to each other. Working capital management ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses. Implementing an effective working capital management system is an excellent way for many companies to improve their earnings. This chapter discusses the management of current assets, particularly cash, marketable securities, inventory, and receivables. This chapter answers some Basic questions involving working capital management such as how much cash and inventory should be kept on hand? Will it be affect the liquidity of the firm to sell on credit or not? And how and from which sources the short term financing can be obtained? Therefore this chapter helps us in answering these questions by analyzing the various options available to a firm. We will write a custom essay sample on Financial Management: Summary and Definitions. or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The first important concept mentioned is Cash Conversion Cycle. he net number of days from the outlay of cash for raw material to receiving payment from the customer. As a management tool, this metric makes explicit the inter-relatedness of decisions relating to inventories, accounts receivable and payable, and cash. This is very important because a firm needs to know about the time that it takes to convert its production into sales and into cash receipts and also the payment periods in order to have a check on its liquidity. Moreover, investment policies for current assets are also being highlighted for e. g. relaxed current asset investment policy, restricted current asset policy etc. hese policies can be effected by changes in technology. Furthermore, current assets financing policies such as permanent current assets, temporary current assets etc are also discussed. This chapter also discusses the importance of marketable securities to a corporation. Cash although for an individu al may include currency and demand deposits, for a corporation marketable securities are also a very important source of cash, these securities are liquid as well as having an interest factor associated with them which leads to stability of the interest rates throughout the world. Apart from the management of the cash the corporations have to decide on its credit policy which affects the amount of cash available to a firm directly. Credit policies that a firm can use include credit periods, cash discounts, credit standards and collection policy. A tighter credit policy may discourage sales as some customers may choose to go elsewhere if they are pressured to pay their bills sooner. Short-term credit refers to debt scheduled for repayment within 1 year. Major sources of short-term credit include accounts payable (trade credit), bank loans, and commercial loans. The chapter also discusses the importance of inventory management. Purchases in bulk result in huge inventories which results in the firm incurring a number of costs such as storage, insurance, depreciation, obsolescence, handling costs and property taxes. These costs come under the category of carrying costs. In order to reduce these costs which can be substantial in nature, a firm needs to reduce the amount of inventories the firm has at hand at a particular point of time. Finally the chapter talks about the short term financing techniques. A firm has a number of options from which to finance its short term operations, these includes promissory notes. Here the banks play a very important role as they decide the interest rate that they are going to charge based on the past record and credit worthiness of the firm. Apart from this, commercial papers are also used by firms which however are not secured. A very important option is short term bank loans. From the firm’s perspective, short term credit is riskier than long term debt as the amount originally is to be paid back in a relatively shorter period of time which may pose difficulties for the firm. Short-term financing involves speed, flexibility and lower cost than long-term debt. A lower cost is present because of a lower amount of interest payments. However, it has fluctuating interest expense and firm may be at risk of default as a result of temporary economic conditions. Overall this chapter was very important as it showed the importance of efficient working capital management for a firm. A corporation should include the information provided in order to run an efficient business. DEFINITIONS Working capital: all short term or current assets, such as, cash, inventories nd Account receivables. 1. Net working capital: current assets minus all current liabilities. 2. Net operating working capital: current assets minus noninterest bearing current liabilities. 3. Cash conversion cycle: the length of time funds are tied up in working capital or the length of time between paying for working capital and collecting cash from the sale of working capital. 4. Inventory conversion perio d: average time required to convert raw materials in to finished goods and then to sell to them. 5. Average collection period: the average length of time required to convert the firm’s receivables into cash. 6. Payables deferral period: the average length of time between the purchase of materials and labor and the payment of cash for them. 7. Relaxed current asset investment policy: relatively large amounts of cash, marketable securities and inventories are carried and a liberal credit policy results in a high level of receivables. 8. Restricted current asset policy: holdings of cash, marketable securities, inventories and receivables are constrained. 9. Moderate current asset policy: between the relaxed and restricted policies. 10. Permanent current assets: current assets that a firm must carry even at the trough of its cycles. 11. Temporary current assets: current assets that fluctuate between the seasonal and cyclical variations in sales. 12. Current asset financing policy: the way current assets are financed. 13. Maturity matching: a financing policy that matches assets and liability maturities. This is a moderate policy. 14. Cash budget: a table that shows cash receipts, disbursements, and balances over some period. 15. Target cash balance: the desired cash balance that a firm plans to maintain in order to conduct business. 16. Account receivable: a balance due from a customer. 17. Credit policy: a set of rules that include the firm’s credit period, discounts, credit standards and collection procedures offered. 18. Credit period: The lengths of time customers have to pay for purchases. 19. Credit standards: the financial strength customers must exhibit to qualify for credit. 20. Discounts: These are price reductions given by the creditors/suppliers to the debtors/customers for making early payments. 21. Credit Standards: The financial strength customers must exhibit to qualify for credit. 22. Collection Policy: The degree of toughness in enforcing the credit terms. 23. Credit Terms: A Statement of the credit period and any discount offered. 24. Credit Score: It’s a numerical score from 1 to 10 that indicates the likelihood that a person or business will pay on time. 25. Aging Schedule: It’s a report showing how long accounts receivables have been outstanding. 26. Trade Credit: It is a debt arising from credit sales and recorded as an account receivable by the seller and as an account payable by the buyer. 7. Free Trade Credit: A credit received during the discount period. 28. Costly Trade Credit: A credit taken in excess of free trade credit, whose cost is equal to the discount lost. 29. Stretching Accounts Payable: It’s a practice of deliberately paying late. Revolving Credit Agreement: A formal, committed line of credit extended by a bank or another lending in stitution. 30. Prime Rate: A published interest rate charged by commercial banks to large, strong borrowers. 31. Regular or simple Interest: The situation when only interest is paid monthly 32. Add on Interest: Interest that is calculated and added to funds received to determine the face amount of an installment loan. 33. Commercial Paper: Unsecured, short-term promissory notes of large firms, usually issued in denominations of $100,000 or more with an interest rate somewhat below the prime rate. 34. Accruals: Continually recurring short-term liabilities especially accrued wages and accrued taxes. 35. Spontaneous Funds: Funds that are generated spontaneously as the firm expands. 36. Secured loan: A loan backed by collateral, often inventories or account receivable. Analysis of ch17: No business can succeed without adequate forecasting and financial planning. These two are the main focus of this chapter. For any important business decision such as the cost of capital, capital budgeting, forecasted profit and loss accounts, capital structure, dividend policy and more importantly working capital management effective financial planning and predictions about the future are needed so that the operations of a business are conducted efficiently and any negative circumstances are avoided. Thus both managers and investors need to understand how to forecast future results. To do this managers make use of pro forma or projected financial statements and then use them to anticipate the firms future financial needs and for example to determine the future free cash flows and the company’s overall value. The chapter firstly talks about strategic planning and its importance. Strategic planning has 5 main components, the first and foremost is the mission statement. The mission statement should be a clear and succinct representation of the enterprises purpose for existence. It should incorporate socially meaningful and measurable criteria addressing concepts such as the moral/ethical position of the enterprise, public image, the target market, products/services, the geographic domain and expectations of growth and profitability. The intent of the Mission Statement should be the first consideration for any employee who is evaluating a strategic decision. The statement can range from a very simple to a very complex set of ideas. The next steps are defining the corporate scope which defines a firm’s line of business. The corporate objective is highly important and should be define quantitatively as well as qualitatively. In order to achieve specific objectives, effective strategies are needed, this is the next step. The final component is an operating plan for each unit. Hence by combining all of these components a business reaches its financial plan, the most important part of which is financial statements. These financial statements are not only helpful in evaluating the current strategies but they also provide ample room for alternative strategies. Additional financing need (AFN) consists of required increase in assets, spontaneous increase in liabilities and increase in retained earnings. To generate forvasted sales net working capital must have enough assets, also, the balance sheet must balace. Additional net profit and additional longterm debt can finance AFN. Since the equation method assumes a constant profit margin, a constant dividend payout, and a constant capital structure AFN equati on and financial statement method have different results. Financial statement method is a flexible one plus it also allows different items to grow at different rates. Additional sales could be supported with the existing level of assets if we suppose that fixed assets had only been operating at 75% of capacity in a particular year. The maximum amount of sales that can be supported by current level of assets can be calculated by using the formula Actual Sales/ % of capacity. No additional assets are needed if the answer is less than the 2003 forecasted sales. Excess capacity will affect the forecasted ratios by not affecting the sales but assets would be lower, so turnovers would be better. There will be less new debt, hence lower interest, so higher profits, earnings per share and return on equity. A company should be using regression analysis and individual ratios such as firm should individually calculate the inventory and accounts receivables ratios In order to improve financial forecasts. In totality the forecasting techniques in this chapter are highly important. For one, if the projected operating results are unsatisfactory, management can â€Å"go back to the drawing board†, reformulate its plans, and develop more reasonable targets for coming year. Plus, it is better to know beforehand that firm will not have enough funds to meet the sales forecast so that they can scale back the projected level of operations. DEFINITIONS chapter 17 1. Pro Forma (Projected) Financial Statements: Financial statements that forecast the company’s financial position and performance over a period of years. 2. Mission statement: A condensed version of a firm’s strategic plan 3. Corporate Scope: Defines firms lines of business and geographic areas of operation 4. Statement of Corporate Objectives: See forth specific goals to guide management 5. Corporate Strategies: Broad approaches development for achieving a firm’s goal 6. Operating plan: Provides management with detailed implementation guidance based on the corporate strategy to help meet the corporate objectives 7. Financial Plan: The document that includes assumptions projected financial statements, and projected ratios and ties the entire planning process together 8. Spontaneously generated funds: Funds that arise out of normal business operations from its suppliers, employees and the government(such as account payable and accrued wages and taxes) that reduce the firm’s need for external financing 9. Retention ratio: The proportion of net income that is reinvested in the firm and is calculated as minus 1 the dividend ratio 10. Additional funds needed: The amount of external capital (interest bearing debt and preferred and common stock) needed to acquire the needed capital 11. AFN equation: An equation that shows the relationship of external funds needed by a firm to its projected increase in assets, the spontaneous increase in liabilities, and its increase in retained earnings 12. Sustained growth rate: The maximum achievable growth rate without the firm having to raise external funds. In other words, it is the growth rate at which the firm’s AFN equals zero 13. Capital intensity Ratio: The ratio of assets required per dollar of sale 14. Excess Capacity Adjustment: Changes made to the existing forecast because the firm is not operating at full capacity 15. Regression analysis: A statistical technique that fits a line to observe data points so that the resulting equation can be used to forecast other data points.

Motor Parts Corporation Essay Example For Students

Motor Parts Corporation Essay As first, the main issue that is provoking all this problems is the illness Of Ruth, Asss Wife Who had recurrence Off malignant brain tumor. It is very understandable and remarkable that AY wants to support his wife in this situation; however, his desperation to help his wife is consuming his time provoking that he forgets about other responsibilities. As a Vice president of a company, he has the obligation to project to his employees a good example to follow and he is doing the opposite. There is not an excuse that AY at the last minute pretends to cancel a meeting schedule long time ago, where everyone had to put aside the time to attend, Now, he can not leave the meeting just eying he has to go taking advantage of his position, and assuming that Bob (the president) can assume full responsibility of a big project. Also, how if possible meetings have to be scheduled based on his availability (personal issues) and then cancel as if nothing wrong happened? This behavior clearly demonstrates a lack of seriousness to his work and employees. Second, the lack of commitment in Asss job is now reflecting, Many employees are complaining that it is impossible to work around AY because he is not concentrating in what he is doing. This is showing lack of seriousness, bad performance, wrong behavior ND a bad example to the company. For instances, in the case is mentioned that many people started arising their own problems when they heard that Bob cannot attend the meeting because his wife illness. Do you imagine that all those employees do not go to work because they hue personal problems as an excuse? How Bob can punish their employees when he has not done with the Vice president? Third, based on the case AY is considered as one Of the softest guys that Bob have known. It is ridiculous that people take excuses such as few inches of snow, infection ear, or maybe a light flu to avoid go to work and beside hat to be absent for a week! This is definitively a lack of respect to others in the company. How AY expects someday to have Bob position when he is showing to everybody his incompetence. What al is going to do if he loses his job? Maybe he can find a similar job but he will have the same problems and behavior that have in this company, and they will not have the same consideration that Bob has had with him. Fourth, there is a big issue among the president and the vice president because there is understandable why gob do not call the attention of AY. It is clear to me that AY is responsible to his wrong behavior but there is also another responsible of AY performance and that is Bob because he did not have the courage to say what he really thinks. If AY is not performing well in his job or even worse he is delegating his job to others, and this is obviously affecting the progress of the company; AY avgas supposed to be sanctioned long time ago. Now, it is true that AY has a noble and exhausting function with his wife but he has forget the importance of his position because no one has say anything. He believed he is doing well and he will continue doing the same until someone put the correct things in place. Fifth, AY is supposed to work in the office not a home. It is understandable that sometimes (two to four times in a year) someone needs to work at home but in the case of AY is different. .ufef225809be684763127e6474c41d61b , .ufef225809be684763127e6474c41d61b .postImageUrl , .ufef225809be684763127e6474c41d61b .centered-text-area { min-height: 80px; position: relative; } .ufef225809be684763127e6474c41d61b , .ufef225809be684763127e6474c41d61b:hover , .ufef225809be684763127e6474c41d61b:visited , .ufef225809be684763127e6474c41d61b:active { border:0!important; } .ufef225809be684763127e6474c41d61b .clearfix:after { content: ""; display: table; clear: both; } .ufef225809be684763127e6474c41d61b { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .ufef225809be684763127e6474c41d61b:active , .ufef225809be684763127e6474c41d61b:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .ufef225809be684763127e6474c41d61b .centered-text-area { width: 100%; position: relative ; } .ufef225809be684763127e6474c41d61b .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .ufef225809be684763127e6474c41d61b .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .ufef225809be684763127e6474c41d61b .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .ufef225809be684763127e6474c41d61b:hover .ctaButton { background-color: #34495E!important; } .ufef225809be684763127e6474c41d61b .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .ufef225809be684763127e6474c41d61b .ufef225809be684763127e6474c41d61b-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .ufef225809be684763127e6474c41d61b:after { content: ""; display: block; clear: both; } READ: The great gatspy EssayFirst at all, he is the vice president Of the company and his presence it is absolutely need IL Also, his work is not being view and Bob is thinking that AY is not working as he said he does. For instances, the case mentioned that someone who work for AY achieved an account for the company valued in $15,000. This could be seen like AY has been working a lot on this project and had a good team work; however, the person ho acquires the account for the company informed Bob that AY was not present in the moment that he had to support this business. AY was visiting his mom who is sick too. On the other hand, AY is not a bad employee at all. Bob recognizes that no one has done better in the company that AY during the last eight years and the proof is that he has reach a higher position and is one of the best paid executive. In my understanding, problems can be solved if AY and Bob have a better communication regards functions, AY needs to understand that he is not working in the street where he can lose his job and find a similar and have he same behavior of irresponsibility, He needs to be aware that his behavior can caused the loss of his job and this will bring more problems to him. As mentioned before, communication, recommendations and decisions needs to be made to fix AY behavior. Maybe one of the recommendations to be placed could be the possibility to have an annual leave. In this way, AY might dedicate and concentrate his time in his wife. If this decision was made, he will allow someone else to pay attention and dedication to the companys business Which needs to continue growing.

Avoiding the Passive Voice in Spanish

Avoiding the Passive Voice in Spanish One of the most common mistakes made by beginning Spanish students who have English as a first language is to overuse passive verb forms. Sentences with passive verbs are very common in English, but in Spanish they arent used very much- especially in everyday speech. Key Takeaways: Spanish Passive Voice Although Spanish has a passive voice, it isnt used as much in Spanish as it is in English.One alternative to the passive voice is to turn it into the active voice. Either explicitly state the subject or use a verb that allows the subject to be implied rather than stated.Another common alternative is to use reflexive verbs. What Is the Passive Voice? The passive voice involves a sentence construction in which the performer of the action isnt stated, and in which the action is indicated by a form of to be (ser in Spanish) followed by a past participle, and in which the subject of the sentence is the one acted upon. If that isnt clear, look at a simple example in English: Katrina was arrested. In this case, it isnt specified who performed the arrest, and the person arrested is the subject of the sentence. The same sentence could be expressed in Spanish using the passive voice: Katrina fue arrestada. But not all English sentences using the passive voice can be translated into Spanish the same way. Take, for example, Jose was sent a package. Putting that sentence in a passive form in Spanish doesnt work. Josà © fue enviado un paquete just doesnt make sense in Spanish; the listener might think at first that Jose was sent somewhere. Also, Spanish has quite a few verbs that simply arent used in the passive form. And still others arent used passively in speech, although you may see them in journalistic writing or in items translated from English. In other words, if you want to translate an English sentence using a passive verb to Spanish, youre usually best off coming up with a different way. Alternatives to the Passive Voice How, then, should such sentences be expressed in Spanish? There are two common ways: recasting the sentence in the active voice and using a reflexive verb. Recasting in the passive voice: Probably the easiest way to translate most passive sentences in Spanish is to change them to the active voice. In other words, make the subject of the passive sentence the object of a verb. One reason for using a passive voice is to avoid saying who is performing the action. Fortunately, in Spanish, verbs can stand alone without a subject, so you dont necessarily have to figure out who is performing the action to revise the sentence. Some examples: Passive English: Roberto was arrested.Active Spanish: Arrestaron a Roberto. (They arrested Roberto.)Passive English: The book was bought by Ken.Active Spanish: Ken comprà ³ el libro. (Ken bought the book.)Passive English: The box office was closed at 9.Active Spanish: Cerrà ³ la taquilla a las nueve. Or, cerraron la taquilla a las nueve. (He/she closed the box office at 9, or they closed the box office at 9.) Using reflexive verbs:  The second common way in which you can avoid the passive voice in Spanish is to use a reflexive verb. A reflexive verb is one in which the verb acts on the subject. An example in English: I saw myself in the mirror. (Me vi en el espejo.) In Spanish, where the context doesnt indicate otherwise, such sentences are often understood in the same way as are passive sentences in English. And like passive forms, such sentences dont clearly indicate who is doing the action. Some examples: Passive English: Apples (are) sold here.Reflexive Spanish:  Aquà ­ se venden las manzanas. (Literally, apples sell themselves here.)Passive English: The box office was closed at 9.Reflexive Spanish: Se cerrà ³ la taquilla a las nueve. (Literally, the box office closed itself at 9.)Passive English: A cough isnt treated with antibiotics.Reflexive Spanish: La tos no se trata con antibià ³ticos. (Literally, the cough doesnt treat itself with antibiotics.) Some of the sample sentences in this lesson could be understandably translated to Spanish in the passive form. But native Spanish speakers dont normally speak that way, so the translations on this page would usually sound more natural. Obviously, you wouldnt use the literal translations above in translating such Spanish sentences to English! But such sentence constructions are very common in Spanish, so you shouldnt shy away from using them.

Professional Leadership Development Skills The WritePass Journal

Professional Leadership Development Skills Introduction and Methodology Professional Leadership Development Skills ): Who has influenced you most in your desire to be an effective leader?   This may be a positive or negative influence. My greatest influence was Mr. Koffmann who has been referred to throughout my blogs. I found him to be a very personable individual and having worked with somebody who was willing to encourage me to be creative and to try new things I was able to notice how important it was for junior people to have these key individuals that encourage them to experiment and to test their own boundaries. What skills did they illustrate that have left this marked impression on you? The main skills that I found to be particularly influential were those of his willingness to spend time teaching others in a patient manner. He was forever present and this gave me a lot of confidence in him as a teacher; however, there were times where his expectations were extremely high and he was correct in demanding I found this skill to be particularly admirable, as I found it increasingly hard to be a strong leader in this regard. What skills did they lack that you have since learnt about to add to this desire to be an effective leader? My manager was often short tempered and at times failed to delegate matters sufficiently, so that experiences were not shared amongst all individuals. Had he managed his own workload better and delegated more frequently, not only would other individuals have had opportunities to undertake tasks, but it would be likely that he would be less short tempered during busy periods. On your Professional Development Plan which objectives have you started to develop and how have you got on? My immediate focus has been on my ability to network with others and to interact more with my peer group as well. I find communicating with others difficult at times, as I dont have a high opinion of my own ability and therefore this is undeniably a skill which I need to develop over a prolonged period of time. I have, however, ensured that I regularly discuss matters with my peer group and openly engage in conversations when the opportunity arises, particularly when it comes to how we can better perform the task next time. On your Professional Development Plan which objectives have you not started to develop and why? I dont feel that I have developed leadership skills as yet, due to the fact that initially I need to focus and develop my own communication skills and ability to get my point across to my peer group, before I can suitably develop a leadership style that will enable me to engage with subordinates in such a way that they are engaged and motivated. For this reason, this element of my personal development has not yet been addressed as part of the larger picture of developing confidence. Are there any changes you would like to make to your Professional Development Plan? On the whole, I feel my development plan remains accurate and valid and aligned to my long-term goals. However, I feel that I need to place greater emphasis on my own communication and leadership skills than I had originally thought, recognising that in order to successfully run my own business, I shall need to adapt to a wide variety of different personalities and will need to strive to be better than my competitors. Motivation is a key factor for both myself and my future staff members and a greater focus needs to be placed on developing skills for motivating others and not simply focusing on myself.    References Aubrey,  B (2010) Managing Your Aspirations: Developing Personal Enterprise in the Global Workplace  McGraw-Hill Cassidy, S (2004), ‘Learning styles: an overview of theories, models and measures’, Educational Psychology, 24(4), 419–444 Chartered Institute of Personnel and Development (2013) Learning and Talent Development Strategy. Available at cipd.co.uk/hr-resources/factsheets/learning-talent-development-strategy.aspx Keefe, J. W. Jenkins, J. M. (2008). Personalized instruction: The key to student achievement. 2nd edition. Lanham, MD: Rowman Littlefield Education. Martindale, N (2011). Leadership Styles: How to handle the different personas.  Strategic Communication Management  15  (8): 32–35. Maslow, A.H. (1943). A theory of human motivation. Psychological Review, 50(4), 370–96 Schultz, D and P. Schultz, Sydney Ellen (2010).  Psychology and work today  : An introduction to industrial and organizational psychology  (10th ed. ed.). Upper Saddle River, N.J.: Prentice Hall

Groupthing theory research paper Example | Topics and Well Written Essays - 1250 words

Groupthing theory - Research Paper Example Therefore, Janis’ theory is often reconsidered and complemented by the modern researchers and scientists, who are focused on pros and cons of groupthink. Theory reflections in literature In accordance with Cottam, Dietz-Uhler, Mastors, and Preston (2004) it should be noted that groupthink does not belong to critical thinking based on a detailed discussion of the given problem or relevant issues. There is no process of group argumentation analysis and there is no proper analysis and evaluation of ideas validity testing. One of the main drawbacks of group thinking is the absence of an individual contribution to critical thinking. People think together and very often their ideas are mixed, some of the group members can feel frustrated, confused or even misconceive their initial ideas. Therefore, it is relevant to fight for individuality of thinking. This kind of thinking can be considered in case of solidarity of thinking among group thinkers (Cottam, Dietz-Uhler, Mastors, and Pr eston, 2004). Cohesiveness is the required condition for proper functioning of group thinking in an effective and efficient manner. It should be also noted that effective groupthink is based on two other conditions, such as ideal group structure and a favorable environment for groupthink. The group structure can be endangered in case of a lack of access to information or inability to reflect various opinions. In case there is a self-concentrated leader in the group, he can hardly establish favorable conditions for a sound development of ideas among other members. Groupthink occurs, when the members of the group are sure that their common decision is right and do not listen to any other ideas or consider them wrong (Ahlfinger & Esser, 2001). In the result of such a reservation of thinking, the members of the group become close-minded and they are not focused on their risky actions. Moreover, in case a group feels external pressure in order to reach conformity, they cannot confirm the unity and soundness of their thinking as well. Therefore, it is evident that groupthink is a challenging matter and a complex stage of decision-making process. In accordance with Ahlfinger & Esser (2001) Janis identified other important facts of groupthink. The first fact is that group members do not accept any alternatives; the second fact is that there are no clearly set goals of decision-making. They are not focused on potential risks of their decisions or cannot identify their preferred choice. A lack of information or inability to process information correctly or develop future contingency plans are also intimidating factors for a proper groupthink (Park 1990, Rogelberg, 1999). In case these facts are evident, there will be a poor outcome of decision-making process. These researchers underline that there are many other factors undermining effective groupthink, which should be studied properly (Shmidt, Zapalski, and Toole, 2005). In case a biased leader is present in the group, he may lead to imbalanced groupthink, because this leader will produce the main decisions and ideas. In accordance with another suggestion, a lack of conformity among group members will cause a poor decision making process. There are two main kinds of leaders, such as nonpromotional leaders and promotional leaders (Kim, 2001). In the former case, the leader did not exert much influence on the members of the group and did not foster his ideas. In the second case, the leader

IBM Flourishes in India Assignment Example | Topics and Well Written Essays - 2500 words

IBM Flourishes in India - Assignment Example These ideological differences once drove many foreign multinational companies including IBM out of the country. But at present because of globalization, India has realized the importance of foreign investments for their economic growth and welcoming as much as Foreign Direct Investments (FDI) possible. Moreover India is led by the renowned economist Dr. Man Mohan Singh who knows the importance of IBM like companies in India. â€Å"Growing modestly until the turn of the millennium, IBM India has been growing by leaps and bounds since then. Its workforce now totals 38,000, up from 23,000 two years ago and second only in number to IBMs U.S. workforce among countries in which IBM operates† (Gibson, 2006). This paper briefly analyses the IBM performances in Indian market currently. IBM Global Services works on outsourcing IT services in India on behalf of the many multinationals interested to accessing the local Indian engineering talent and the competitive labor costs available there. â€Å"Outsourcing refers to a company that contracts with another company to provide services that might otherwise be performed by in-house employees† (Thompson, 2009). Labor cost is increasing everyday and moreover shortage of skilled and experienced professionals forced multinational companies like IBM to look beyond their boundaries in America to explore the cheap labor markets of other countries like India which is blessed with immense manpower especially IT professionals. In India like countries IT professionals are searching for better placements whereas IBM like American companies searching for IT professionals. Globalization has opened up the Indian market and the present Indian government led by the Congress party has escaped from the controls of the left parties which actually strongly opposed the entry of foreign companies in India. Thus the setting is well and good for IBM like IT companies to explore the Indian markets. IBM recorded total revenue of US$ 606 million

LeGAL ASPECTS of contract administration Assignment

LeGAL ASPECTS of contract administration - Assignment Example Regardless, exclusion clauses are not always enforceable because they do not meet the three-rule test. Exclusion terms are part of virtually every contractual agreement (Culp, 2010). The clauses and related implied terms function by excluding or restricting the entitlements of a party to the contract in the event of a breach (Frey, & Frey, 2000). For instance, if a party to a contract intends to restrict his or her liability, the party is expected to incorporate an exemption clause restricting the amount of reparations that they will be willing to part with in relation to a clearly defined total amount of damages (Round & Shanahan, 2012). In a number of cases, a party may incorporate a written term seeking to exonerate them from any kind of liability for a particular issue that could affect the contract, for example, brittle goods being broken whilst in shipment (Latimer, 2012). This way, exclusion terms function to the advantage of one party to a contract. Generally, an exemption clause in contract law can only be effective if the party relying on it has been reasonable enough in his or her notification of the other party regarding the same (Culp, 2010). The party consenting to the exemption clause must also be cognizant of its inclusion into the contract. Latimer (2012) notes that to secure its enforceability, the following conditions should be met: firstly, the proposing party can serve notice of the exclusion clause on the other party via actual or constructive means. Actual notice takes place when the offerer actually notifies the other party or when it is apparent in the contract and can be seen by a reasonable person (Scott, 2013). Secondly, constructive notice takes place when the offerer had acted reasonably to notify the other party of the existence of such clauses. Lastly, courts may be persuaded to resolve any disputes