rule the world

Forward Rate Agreements

2008-01-30T00:35:00.000-08:00

If we consider managing foreign currency risk, a Forward Rate Agreement (FRA) is an over-the counter agreement between two parties to buy or sell particular amount of foreign currency at a predetermined rate at a predetermined point of time. Thus the delivery date and trade date are separated. It enables a company to control foreign currency risk, by enabling them to be certain about their receipts and payments.

The spot rate, which is the actual rate at which the transaction actually takes place, might be quite different from the rate at which the contract is exercised. In such a case even though, you are going to loose, you have to obey the contract, because it is an obligation. The difference between the spot rate and the forward price refer to as either forward premium or forward discount, depending on the situation.

Hedging

2007-12-24T10:23:00.000-08:00

Hedging techniques are used to manage financial risks of an organization. There are mainly two types of financial risks that are faced by an organization.

Foreign Exchange Risk
Interest Rate

The idea is simple. Simply, Hedging is reducing the risk of an investment by creating another investment. Now lets see what types of hedging techniques are available for an organization. Mainly, there are two types.

Internal
External

Internal Hedging techniques are those techniques that are created inside the organization. Examples are, invoice in home currency, matching and netting. External hedging techniques are those techniques available outside the organization. Examples are Forward rate contracts, money market hedge, Options, Futures, Swaps and Swaptions.

Lets look at these techniques one by one later.

COBIT

2007-11-30T08:53:00.000-08:00

Control Objectives for Information and related Technology (COBIT) is a framework that can be used as a control tool in an IT environment. It provides managers, auditors and IT users with generally accepted measures, processors and indicators that can be used as best practices in for controlling purposes.

COBIT was first released in 1996 with the motto “to research, develop, publicize and promote an authoritative, up-to-date, international set of generally accepted information technology control objectives for day-to-day use by business managers and auditors.” This framework provides managers, auditors and users an understanding about level of security and controls that should be implemented in order to protect company assets though an IT governance model.

The complete COBIT package is a set consisting of six publications:

Executive Summary
Framework
Control Objectives
IT Assurance Guide (formerly Audit Guidelines)
Implementation Tool Set
Management Guidelines

COBIT covers four domains:

Plan and Organize
Acquire and Implement
Deliver and Support
Monitor and Evaluate

Branding

2007-10-24T10:53:00.000-07:00

A school of advertising that says, "If the customer has heard of us, we've done our job."

Branding is the process of creating a brand, the visual, emotional, rational, and cultural image associated with a company or a product. Protecting the brand name is very important to become a market leader as well as to survive in this highly dynamic environment. Further Branding is important in persuading consumers of a product quality prior to purchase or experience.

To identify the power of branding just think of a small product. I will give a small example. When we go to a bye a pair of rubber slippers, I have heard most of us ask for a BATA. BATA is not the product. It is the brand. However due to the powerfulness of branding people tend to refer to the product by the brand name.

Another example is that when we are referring to the correction fluid we refer to it as tippex. However tippex is not the product, it is a brand. See how powerful the brand name is.

Strategic Audit

2007-09-16T03:43:00.000-07:00

Although financial audits are well recognized, the idea of scrutinizing your business strategy in a similar way is less common. The strategic audit may show essential for ensuring that your organization continues to generate value and that any governance issues are addressed.

A strategic audit can be known as a business health check. Strategic audit will perform a comprehensive review of strategy to identify weaknesses, blind spots and reasons why profits are failing to reach the expected level. It will also identify new areas where far more value can be added.

So, it is very much essential to have a strategic audit with in the organization. Financial audit is a mandatory. But Strategic audit is not mandatory. However Strategic audit is more important than a financial audit as it will enable management to take correct decisions.

I have a Dream

2007-08-16T10:45:00.000-07:00

When I say I have a dream most of u will remember that very famous song, I Have a Dream. But I am not going to talk about that song.

"I Have a Dream" is the name given to the famous public speech by Dr. Martin Luther King Jr , when he spoke of his wish for a future where blacks and whites would coexist harmoniously as equals. I thought of talking about this speech because we can learn a lot regarding public speeking from this speech. This speech is considered as one of the greatest speeches ever being delivered.

Dr. Martin Luther King Jr delivered this speech on August 28^th , 1963 from the steps of the Lincoln Memorial. It was really an inspirational speech. His speech had the power to educate and inspire people throughout America regarding the injustice happened to blacks.

“Let us not wallow in the valley of despair. I say to you today, my friends, so even though we face the difficulties of today and tomorrow. I still have a dream. It is a dream deeply rooted in the American dream.

I have a dream that one day this nation will rise up... live out the true meaning of its creed. We hold these truths to be self-evident that all men are created equal.”

These are some quotes from his speech. If you have time just search for the speech “I have a dream by Dr. Martin Luther King “and listen or read this speech and feel how great it is.

Save Energy

2007-06-16T10:44:00.000-07:00

Save Energy consumed by your organization. It is one of your social responsiblities. Here are some tips.

Reduce business mileage by using video conferencing and home working
Use lighting controls to ensure that lights aren’t left switched on when offices are unoccupied
Control air conditioning according to the requirement
Use natural ventilation wherever possible
Recycle all waste
Ensure that air conditioning equipment run only during occupied hours
Monitor energy usage to use as evidence of improvement

A NINE STEP PROGRAMME FOR DEVELOPING CORPORATE ETHICS

2007-06-06T08:44:00.000-07:00

A business’s approach to ethics depends on the tone set at the top management level. Here tone means the quality and style that characterize the organization’s behavior. Corporate Ethics of the company, through its employees, displays towards all of it stakeholders and manifest itself in how it conducts its business.

Following is a nine step program for developing corporate ethics.

Find a champion

Member of the board who is prepared to introduce the business ethics policy

Identify core values

Ensure your company has established the core values. If not you have to identify them

Secure endorsement of the board

Board must regularly review the operation of corporate ethics

Find out what bothers people

This is to identify issues on which employees need guidance.

Pick a well-tested model

Use a framework

Produce a code of business ethics
Try it out first
Issue the code and make it known
Make it work

Putting in a code of ethics support a business, because it’s an integral part of building a culture within an organization. By following the best practice and developing a code based on shared core values, it can become the glue that cements the company together.

Scenario Planning

2007-05-28T08:47:00.000-07:00

All organizations have to face an uncertain future due to complexity in the environment that they are operating. The degree of predictability varies from industry to industry. Scenario planning will enable an organization to deal with the uncertain future in a more convenient manner, minimizing surprises that the organization may face in the future.

The aim is not to arrive at a forecast but to consider a range of plausible outcomes and decide whether the company is able to deal with them.

There is no one right way to produce scenarios. Various approaches have been considered over the years. Following is one such way that any organization can develop scenario planning.

Define scope of scenarios.
Identify main stakeholders.
Identify main trends.
Identify key uncertainties.
Construct initial scenario themes.
Check for internal consistency and plausibility.
Develop learning scenarios.
Identify research needs.
Develop quantitative scenarios.
Develop decision scenarios.

Balance Score Card

2007-03-26T09:48:00.000-07:00

The Balance Score Card transforms organization's vision into a variety of measures which are relevant to achieve results. This will identify control mainly based on 4 areas reflecting strategy in performance.

Development of Balance Score Card

What are the expectations of shareholders

------Financial Perspective

How we are going to achieve (how to satisfy customer)

------Customer Perspective

What is the approach

------Internal Business Perspective

Who is involved

------Learning and growthPerspective

ERP and SEM

2007-03-05T09:23:00.000-08:00

Enterpise Resource Plan(ERP)

This is an infromation system which integrates the entire funtions of the organaization through a common platform. This will facilitate multi-disciplinary transactions trough a common base.

Strategic Enterprise Management (SEM)

This is an extension of the ERP concept in order to generate strategic information. This will enable the organization to utilize the ERP system to generate strategic advantage.

Six Sigma

2006-11-28T09:31:00.000-08:00

Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services. Today's competitive environment leaves no room for error. Manufacturers must delight their customers and relentlessly look for new ways to exceed their expectations. This is why Six Sigma Quality has become a norm.

The central idea behind Six Sigma is that if you can measure how many "defects" you have in a process, you can systematically figure out how to eliminate them and get as close to "zero defects" as possible. To achieve Six Sigma Quality, a process must produce no more than 3.4 defects per million opportunities.

Key concepts of six sigma

Critical to quality - most important attributes to customer
Defect - Failing to deliver what customer wants
Process capability -What the process can deliver
Variation -What the customer ses and feel
Stable operations -Ensuaring consistent processes to improve what the customer sees and feel
Design for six sigma-Designing to meet customer needs and expectations.

Hamburger University

2006-11-07T09:17:00.000-08:00

Hamburger University – McDonald’s Center of Training Excellence

This is a university owned by McDonald's Corporation which has more concern on consistant restaurant operations procedures, service, quality and cleanliness. It has become the company’s global center of excellence for McDonald’s operations training and leadership development.It was founded by Fred Turner, McDonald's former chairman and Ray Kroc's, first grillman in 1961.In that year 14 students graduated from this university.Today, more than 5,000 students attend HAMBURGER UNIVERSITY each year.

McDonald's is the first restaurant company to develop a global training centre.They are investing in training because they consider satisfaction of their people as a responsibility of the company and a key element in their business process

2006-10-31T08:36:00.001-08:00

Have you heard about Nissan's Eco-friendly vehicles?There are 4 categories.
1.Fuel Cell Vehicle(FCV)
2.Hybrid Vehicle(HV)
3.Low Emmision Vehicle(LMV)
4.Compressed Natural Gas Vehicle(CNGV)

Features
FCV -sole emmision is water.
HV -low CO2 emissions and clean exhaust gas emissions.
LEV -75% fewer exhaust emissions than the level of the 2005 exhaust emissions standards.
CNGV-The amount of NO2 emissions from compressed natural gas vehicles (CNGVs) are considerably less than those from vehicles that rely on diesel

How to build a winning team

2006-10-22T04:54:00.000-07:00

Although all managers accept that team working is the key to success, most of them are uncertain how to achieve it. Team-building is generally agreed to be a prerequisite for the development of an effective team. But it is a long term process and must be a part of the organization culture.

The first step in building effective teams would be to agree on a common purpose and ensure that everyone in the company understand that. Establishing who is responsible for each element in attaining that shared purpose is the second key step. Having understand the strengths and weaknesses of the staff, the third step is to close any skill gap. There is often no need to recruit additional staff. If u look closely you can find the skill already there although some additional training is required. The final step would be evaluating the impact on any changes made. Having decided on objectives and taken action, you need to measure the extent to which those actions have helped you reach the objectives.

2006-10-15T22:55:00.000-07:00

Hi all,

Have you heard about "Toyota Saftey"?It is a new step carried out by Toyota with the motto "Toward realizing zero fatalities and accidents".

Although automobiles allow us to dream they are also accompanied by social problems like environmental problems, traffic accidents and congestion.Toyota invested on Toyota Safety in order to address those issues.For an example, Toyota is continuously implementing various traffic safety educational activities toward the public through its safe driving techniques course for drivers and safety educational activities for children.

In thier effort to make safer automobiles the key aspect is thier pursuit of real safety. Real safety refers to thier pursuit of safety performance based on various accident examinations and analysis actually occuring in society.

This is just a very little about that massive process.

If you visit the Toyota site you can see more details.

Management 4 all

2006-10-14T01:58:00.000-07:00

I'm going to talk about interesting thilngs about management.
See you soon.......