Risk and Return in Investments

There are different motives for investment. The most prominent among all is to earn a return on investment. However, selecting investments on the basis of return in not enough. The fact is that most investors invest their funds in more than one security suggest that there are other factors, besides return, and they must be considered. The investors not only like return but also dislike risk. So, what is required is:

  1. Clear understanding of what risk and return are,
  2. What creates them, and
  3. How can they be measured?

Return: The return is the basic motivating force and the principal reward in the investment process. The return may be defined in terms of (i) realized return, i.e., the return which has been earned, and (ii) expected return, i.e., the return which the investor anticipates to earn over some future investment period. The expected return is a predicted or estimated return and may or may not occur. The realized returns in the past allow an investor to estimate cash inflows in terms of dividends, interest, bonus, capital gains, etc, available to the holder of the investment. The return can be measured as the total gain or loss to the holder over a given period of time and may be defined as a percentage return on the initial amount invested. With reference to investment in equity shares, return is consisting of the dividends and the capital gain or loss at the time of sale of these shares.

Risk: Risk in investment analysis means that future returns from an investment are unpredictable.… Read the rest

Barriers to Effective Communication in Business

Planning, preparation and practice of communication will be incomplete and unsuccessful unless one identifies and understands the barriers to effective communication. These barriers are physical, sociological and psychological obstacles that interfere with the planning, organization, transmission and understanding of the message. There are a number of such obstacles that can occur in the process of communication. The natural result of such obstacles or interfering factors is the misunderstanding of the message. These factors interfere with the self-confidence, self-disclosure and self-consciousness of the communication senders and receivers. The barriers to effective communication are dangers to any organization if they are not removed on time. When the communicator transmits the idea in an unchanged and un-distorted form to the receiver and the receiver responds to it, then, the process of the communication is supposed to have been perfect. But this process of ‘perfect’ communication can never exist due to the number of factors, which stand in its way as the barriers. The communicator has to identify and understand the reasons for poor communication in order to communicate effectively. Understanding the process of communication is the first step towards improving the abilities and skills of communication, but understanding the factors that prevent us in transmitting the exact meaning is very essential for effective communication.

Types of Barriers to Effective Communication

Effective communications will only happen if information is sent, received and them understood. It occurs when the clear message is sent by the sender through an appropriate medium who then gives feedback which shows that the message has been understood.… Read the rest

The focus of Business Process Reengineering (BPR) on the current issues in Business

The existing system in the organization is totally reexamined and radically modified for incorporating the latest technology. This process of change for the betterment of the organization is called as Business process reengineering. With Business process being reengineered, the organizations have to change the workflow and business procedures for efficiency in the organization. Latest software are used and accordingly the business procedures are modified, so that documents are worked upon more easily and efficiently. This is called as workflow management.

Business process reengineering is a major innovation changing the way organizations conduct their business. Such changes are often necessary for profitability or even survival. BPR is employed when major IT projects such as ERP are undertaken. Reengineering involves changes in structure, organizational culture and processes. Many concepts of BPR changes organizational structure. Team based organization, mass customization, empowerment and telecommuting are some of the examples. The support system in any organization plays a important role in BPR.  ES, DSS(Decision Support Systems), AI(Artificial Intelligance) allows business to be conducted in different locations, provides flexibility in manufacturing permits quicker delivery to customers and supports rapid paperless transactions among suppliers, manufacturers and retailers. Expert systems can enable organizational changes by providing expertise to non experts. It is difficult to carry out BPR calculations using ordinary programs like spreadsheets etc. Experts make use of applications with simulations tools for BPR.

Reengineering is basically done to achieve cost reduction, increase in quality, improvement in speed and service. BPR enable a company to become more competitive in the market.… Read the rest

The factors which lead to the success and failure of MIS in an organization

Factors Contributing to Success of MIS

If a Management Information Systems (MIS) is to be success then it should have all the features listed as follows:

  • The MIS is integrated into the managerial functions. It sets clear objectives to ensure that the MIS focuses on the major issues of the business.
  • An appropriate information processing technology required ton meet the data processing and analysis needs of the users of the MIS is selected.
  • The MIS is oriented, defined and designed in terms of the user’s
  • The MIS is kept under continuous surveillance, so that its openn system design is modified according to the changing information needs.
  • MIS focuses on the results and goals, and highlights the factors and reasons for non achievement.
  • MIS is not allowed to end up into an information generationn mill avoiding the noise in the information and the communication system.
  • The MIS recognizes that a manager is a human being andn therefore, the systems must consider all the human behavioral factors in the process of the management.
  • The MIS recognizes that the different information needs forn different objectives must be met with. The globalization of information in isolation from the different objectives leads to too much information and information and its non-use.
  • The MIS is easy to operate and, therefore, the design of the MIS has such features which make up a user-friendly design.
  • MIS recognizes that the information needs become obsolete and newn needs emerge. The MIS design, therefore, has a basic potential capability to quickly meet new needs of information.
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About E-Commerce and it’s different process models

E-COMMERCE deals with buying and selling of goods through internet. With the advent of intent and web technology, E-Commerce today covers an entire commercial scope online including design and developing, marketing, selling, delivering, servicing, and paying for goods. Some E-Commerce application add order tracking as a feature for customer to know the delivery status of the order.

The entire model successfully works on web platform and uses internet technology.

Ecommerce process has two participants, namely Buyer and Seller, like in traditional business model. And unique and typical to E-commerce there is one more participant to seller by authorization and authentication of commercial transaction.

E-Commerce process model can be viewed in four ways and categories:

  • B2C: Business Organisation to Customer
  • B2B: Business Organisation to Business
  • C2B: Customer to Business Organisation
  • C2C: Customer to Customer

In B2C Model, business organization uses websites or portals to offer information about product, through multimedia clippings, catalogues, product configuration guidelines, customer histories and so on. A new customer interacts with the site and uses interactive order processing system for order placements. On placements of order, secured payment systems comes into operation to authorize and authenticate payment to seller. The delivery system then take over to execute the delivery to customer.

In B2B Model, buyer and seller are business organizations. They exchange technical & commercial through websites and portals. Then model works on similar line like B2C. More advanced B2B model uses Extranet and Conducts business transaction based on the information status displayed on the buyer’s application server. … Read the rest

Introduction to E-Business

Managing an E-business & Challenges before an E-business:

Due to Internet capabilities and web technology, traditional business organization definition has undergone a change where scope of the enterprise now includes other company locations, business partners, customers and vendors. It has no geographic boundaries as it can extend its operations where Internet works. All this is possible due to Internet and web moving traditional paper driven organization to information driven Internet enabled E-business enterprise. E-business enterprise is open twenty-four hours, and being independent, managers, vendors, customers transact business any time from anywhere. Internet capabilities have given E-business enterprise a cutting edge capability advantage to increase the business value. It has opened new channels of business as buying and selling can be done on Internet. It enables to reach new markets across the world anywhere due to communication capabilities. It has empowered customers and vendors / suppliers through secured access to information to act, wherever necessary. The cost of business operations has come down significantly due to the elimination of paper-driven processes, faster communication and effective collaborative working. The effect of these radical changes is the  reduction in administrative and management overheads, reduction in inventory, faster delivery of goods and services to the customers.

In E-business enterprise traditional people organization based on ‘Command Control’ principle is absent. It is replaced by people organization that is empowered by information and knowledge to perform their role. They are supported by information systems, application packages, and decision-support systems. It is no longer functional, product, and project or matrix organization of people but E-organization where people work in network environment as a team or work group in virtual mode.… Read the rest