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General Business Articles

Two Basic Aspects of Financial Management

The general meaning of finance refers to the provision of funds, as and when needed. However, as management function, the term ‘Financial Management’ has a distinct meaning. Financial management deals with the study of procuring funds and its effective and judicious utilization, in terms of the overall objectives of the firm, and expectations of the providers of funds. The basic objective is to maximize the value of the firm. The purpose is to achieve maximization of share value to the owners, i.e. equity shareholders.

There are two basic aspects of financial management :

1. Procurement of Funds  

As funds can be obtained from different sources thus, their procurement is always considered as a complex problem by business concerns.… Read the rest

Abey Francis

Functions of Finance Manager

The twin aspects, procurement and effective utilization of funds are crucial tasks faced by a finance manager. The financial manager is required to look into the financial implications of any decision in the firm. Thus all decisions involve management of funds under the purview of the finance manager. A large number of decisions involve substantial or material changes in value of funds procured or employed. The finance manager, has to manage funds in such a way so as to make their optimum utilization and to ensure their procurement in a way that the   risk, cost and control are properly balanced under a given situation.… Read the rest

Abey Francis

Current Trends in Human Resource Management

The world of work is rapidly changing. As a part of organization,  Human Resource Management (HRM) must be prepared to deal with effects of changing world of work. For the HR people it means understanding the implications of globalization, work-force diversity, changing skill requirements, corporate downsizing, continuous improvement initiatives, re-engineering, the contingent work force, decentralized work sites and employee involvement.   Let us consider each of them one by one.

1. Globalization and its implications

Business today doesn’t have national boundaries – it reaches around the world. The rise of multinational corporations places new requirements on human resource managers. The HR department needs to ensure   that the appropriate mix of employees in terms of knowledge, skills and cultural adaptability is available to handle global assignments.  … Read the rest

Abey Francis

Strategic Implications of Business Life Cycle Analysis

Life cycle analysis relies on the belief that there are predictable relationships among the stages of business unit life cycles on one hand, and certain elements of strategy on the other.

The typical business life cycle curve is analogous to the life cycle of products. During pre-introduction and introduction, the firm is investing heavily to build sales growth through product awareness and refinement, with emphasis on the latter. Thus profit margin is negative until growth begins to occur. If sales growth proceeds at a high enough rate, then unit profit margin will swing positive during the growth phase. Typically the firm’s emphasis is shifted from product refinement to building market share, thus increasing the length and slope of the curve during this phase.… Read the rest

Abey Francis

Strategic Business Decisions on Research and Development (R&D)

Industrial research can have one of two fundamental orientations. First orientation is the scientific research, which is concerned with generating new concepts that may or may not have product applications. The second orientation is the commercial development – which can take several forms, but is essentially product, as opposed to concept, oriented. Thus commercial development is a more pragmatic and market-centered form of R&D effort than scientific research.

Research and Development strategy has four primary elements: R&D goals, extent of integration of the R&D function, amount of market coupling desired, and size of the budget.

1. Research and Development  Goals

Goals are needed to specify the purpose of R&D is used as part of product or market development or market-penetration business-level strategies, the firm’s desired competitive position can largely determine the amount and type of R&D needed.… Read the rest

Abey Francis

A New Business Strategy: Familiarity Matrix

Roberts and Berry devised a technique for selecting optimum diversification action plans for firms wishing to enter new product-markets called the familiarity matrix. It helps strategists decide which product-markets to enter and how. Its two axes, familiarity with market factors and technology or service, are both divided into three values: Base, new familiar, and new unfamiliar. The market dimension refers to the amount of knowledge possessed by the diversifying company of various characteristics of the market and the competitors within it. The authors distinguish between the newness of, and the familiarity with, the market for a product-service. Newness of a market is the extent to which the company has previously targeted it.… Read the rest

Abey Francis
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