Participative Management – Workers Participation in Management

Human Resource Management

Case Study on Entrepreneurship: Larry Page

Business Analysis

The Boundaryless Career: Modern Contemperory Perspective on Career

Human Resource Management

How to Meet Costa Rica’s 2026 VASP Requirements Without Expanding Headcount

General Business Articles

Concepts of Throughput Accounting and Theory of Constraints

Financial Management

Foreign Exchange Forecasting in Practice

Most of the approaches to foreign exchange rate determination tell only part of the story–like the several blindfolded men touching different parts of the elephant’s body–and other, more comprehensive explanations cannot, in practice, be used for precise forecasting. We do not yet have a way of bringing together all of the factors that help determine the exchange rate in a single comprehensive approach that will provide reliable short- to medium-term predictions. The exchange rate is a pervasive and complex mechanism, influencing and being influenced by many different forces, with the effects and the relative importance of the different influences continuously changing as conditions change. To the extent that trade flows are a force in the market, competitiveness is obviously important to the exchange rate, and the many factors affecting competitiveness must be considered. To the extent that the money market is a factor, the focus should be on short-term interest Continue reading

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Organization Structure and Management Control

Four different types of organization structures have been identified for managing the tasks of the organization. These are (i) a centralized functional structure,     (ii) a decentralized divisional structure, (ii) a hybrid (matrix) structure, and (iv) network/coupling structure. An important aspect in the design of management control systems is that it should be linked with responsibility centers. Because of this   intimate linkage between the control system and the organization structure, it becomes important to know about key control considerations in the choice of an organization structure. Important parameters on the basis of which choice of the structure can be decided are (i) efficiency and effectiveness, (ii) economies of scale, (iii) problems of coordination, (iv) assignment of profit responsibility, (v) conflict and cooperation. Since efficiency is related to level of activity, as the level of activity increases efficiency also increases. Size permits the division of labor and specialization within Continue reading

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International Accounting Standard 37 (IAS37)

The International Accounting Standards Committee (IASC) issued IAS37 Provisions, Contingent Liabilities and Contingent Assets in September 1998. It replaced parts of IAS10 Contingencies and became operative for annual financial statements covering periods beginning on or after 1 July 1999. Before the announcement of IAS37, different countries use various ways to verify their provisions, which bring the problem of inconsistency. Some enterprises confirm their provisions, depending on whether to undertake current obligation or not. While some other enterprises are according to managers’ willingness of proceeding future payments to confirm their preparations. Therefore, the results are: Different types of business enterprises have different classification of provisions, so it creates inconsistency. This jeopardizes comparability of different enterprise’s financial statements. It provides the opportunity for certain enterprises to manipulate their profits. For example, the cost should be recognized in the period but may be moved to other period to confirm; the cost should be Continue reading

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Capital Sources for Business: Bonds

A bond is a type of loan. Bonds are certificates of debt that is issued by a government or corporation in order to raise money with a promise to pay a specified sum of money at a fixed time in the future and carrying interest at a fixed rate. Generally, a bond is a promise to repay the principal along with interest (coupons) on a specified date (maturity). The main types of bonds are corporate bond, municipal bond, Treasury bond, Treasury note, Treasury bill, and zero-coupon bond. It is a tradable debt instrument that might be sold at above or below par (the amount paid out at maturity), and are rated by bond rating services to specify likelihood of default. Bonds are relatively more secured than equity and has priority over shareholders if the company becomes insolvent and its assets are distributed. There is no legal distinction between a debenture Continue reading

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Concept of Goal Congruence

Goal congruence is the term which describes the situation when the goals of different interest groups coincide. A way of helping to achieve goal congruence between shareholders and managers is by the introduction of carefully designed remuneration packages for managers which would motivate managers to take decisions which were consistent with the objectives of the shareholders. Agency theory sees employees of businesses, including managers, as individuals, each with his or her own objectives. Within a department of a business, there are departmental objectives. If achieving these various objectives also leads to the achievement of the objectives of the organization as a whole, there is said to be goal congruence. Achieving Goal Congruence Goal congruence can be achieved, and at the same time, the ‘agency problem’ can be dealt with, providing managers with incentives which are related to profits or share price, or other factors such as: Pay or bonuses related Continue reading

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The Edgeworth Box

In 1881,  Francis Y. Edgeworth  came up with  a way of representing, using  the same axis,  indifference curves  and  the corresponding  contract curve  in his book “Mathematical Psychics: an Essay on the Application of Mathematics to the Moral Sciences”.  It was  Vilfredo Pareto, in his book “Manual of Political Economy”, 1906, who developed Edgeworth’s ideas into a more understandable and simpler diagram, which today we call the Edgeworth box. Edgeworth box a conceptual device for analyzing possible trading relationships  between two  individuals or countries, using indifference curves. It is constructed by taking the indifference map of one individual (B) for two goods (X and Y) and inverting it to face the indifference map of second individual (A) for the same two goods. Thus,  Edgeworth box is a traditional visualization of the benefits potentially available from international trade. Individual A’s preferences are depicted the three indifference curves A1, A2 and corresponding Continue reading

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