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Showing posts with the label Management

Leveraged Buyout

Leveraged Buyout (LBO) is the acquisition of a company where the acquisition is substantially financed by loans and debt. When the management of a company buys their company from their owners, it is called Management Buyout (MBO). The purchase price has 70-90% of debt proportion and generally has a low credit rating. LBOs are popular in countries like the USA, UK. The sellers obtain debt on the basis of the company's future growth potentiate. The key objective of LBS is to enhance wealth swiftly in a very short period of time. The acquirer will go public after few years and earn capital gains. Targets for LBO: The companies decide on characteristics that must be possessed by the acquired firms. Following are general targets for LBOs Low operating risk: Companies that have a low business or operating risk are attractive for LBOs. High Debt Capacity: Firms that have high debt capacity and high liquidity are preferred as there is less chance of insolvency. High Profits: A firm tha

Zero Based Budgeting

Zero Based Budgeting (ZGB) is a budgeting method in which all expenditures for each new period must be justified. The ZBB method begins with zero bases, where all functions and within an organisation are examined for their demands and service costs. Everything is started from scratch where the planning and budgeting is done afresh without any base. Budgets are then based upon what is required for the next year, whether another budget is higher or lower than that of the preceding year. The zero-based budgeting concept was advocated in 1924 by British budget authority Edward Hilton Young. In India, the principle of ZBB was initiated in the department of science and technology in 1983. In 1986, the Indian Government adopted the ZBB technique for determining expenditure budget. Benefits of Zero-based budgeting: Unbiased: The bias from previous information or details eliminated. Higher motivation: ZBB seeks employees to work more cohesively and closely together during the budget process.

Green Human Resource Management

Green HR is the use of strategies to endorse the sustainable use of resources within organisations and supports the cause of environmental sustainability. The HR function will become a driver of environmental sustainability inside the institute by arranging its policies and practices in a line with sustainability aims reflecting a focus on the environment. HRM policies can be used to motivate the employees about sustainable use of assets and resources within the organisation and produce green culture through charting strategies and rules to increase employee's consciousness and commitment towards the environment. It spreads and reinforces sustainable business activities that boost the morale of the workers by working in an environment-friendly manner. Green HRM practices are visible from recruitment to exit. HR strategy must reflect and inspire the ambitions of the HR team and other employees and aligning with the strategy of the business culture and values so that it delivers sust

Collective Bargaining: Features and Advanatges

 Collective bargaining is a process of negotiations between employers and a group of employees aimed at reaching agreements in respect of the terms and conditions of employment of employees, such as wages, hours of work, working conditions and grievance procedures and about the rights and responsibilities of trade unions. The interests of the employees are commonly presented by representatives of a trade unions to which the employees belong. The collective agreements reached by these negotiations usually set out wage scales, working hours, training, health and safety, overtime, grievance mechanisms and rights to participate in workplace or company affairs. Collective bargaining is an opportunity for an individual, as a company employee to actively play a role in making positive changes to protect and improve his wages, benefits and working conditions and one of their most important rights as an employee. Features of Collective Bargaining: It is not equivalent to collective agreements b

Human Resource Development

HRD is a positive humanistic concept in human resource management based on the belief that an investment in human beings is necessary and will invariably bring in substantial benefits to the organisation in the long run. HRD seeks to show people as assets on the credit side of balance sheets. Objectives of HRD: People can do better if they get a chance to grow. Thus, it focuses on involving them and trusting them. Focus on the strengths of people and help them overcome their weaknesses. Integrate the needs and aspirations of individuals into the strategic goals and the mission of an organisation for better results. Encourage individual initiative and response by providing fostering culture. Process of HRD: HRD is a process by which the employees of an organisation are helped in a continuous and planned way to acquire sharpened capabilities required to perform various functions associated with their present or expected future roles. develop their general capabilities as individuals and

Competency: Introduction and Types

 Competency is a person's capacity that leads to the behaviour that merges with the job requirement, which is in behaviour that merges with the job requirement, which is in tandem with the organisation's parameters and gives desired results. Competency is that something you need to be able to do well in a specific job role. Competence in the area of work that the employees perform effectively. Competencies refer to the characteristics required to perform the given job role, activity or task. The competency of an individual is identified with knowledge, skills and abilities and attitudes (KSA). It is also inclusive of operational excellence aptitude, strategic thinking and personal sustainability. According to Mansfield (1997), "undertaking characteristics of a person results in effective a superior performance." According to Rankin , "competencies are the definition of skills and behaviours that organisations expect their staff to practice in work." Types o

Talent Management: Functions and Process

Talent management can be defined as the goal-oriented and integrated process of planning, recruitment, development, management and compensation process. Here the notion is not limited to recruitment, but also exploration, development and smooth transition according to the organisation's culture. It is a continuous process involving the procurement, recruitment, development, retention and promotion of workers while concurrently meeting the organisation's requirements. Talent management, as the title suggests, manages the skills and power of an organisation's employees. It relates to the estimation of the human resource required by the organisation at the time. It then establishes a plan to achieve these business needs. According to McKinsey , "Talent is the sum of person's abilities, his or her intrinsic gifts, skills, knowledge, experience, intelligence, judgement, attitude, character, drive, his or her ability to learn and grow." Functions of Talent Managemen

Career Planning

career planning is a lifelong process, which includes choosing an occupation, getting a job, growing in our job, possibly changing careers and eventually retiring. This may happen once in our lifetimes, but it is more likely to happen several times as we first define and then redefine ourselves and our career goals. Career planning is a conscious, deliberate process through which a person becomes aware of his individual skills, knowledge, interests, motivations and other attributes; acquires information, opportunities, options, recognises and identifies career-related goals and builds action plans to attain these goals. Steps in Career Planning: The first key step in career planning is to collect information about yourself to help make a career decision. This includes learning about the development needs, skills aptitudes, values, your realities, preferred environments, roles and interest. The second step in career planning is to explore your choices and investigate them. Your self-ass

Competency Mapping

 Competency mapping is the procedure of identifying the competencies that are desired to perform work to effectively attain a desired set of goals of the firm. It comprises of breaking a given work into smaller activities and distinguishing competencies like skills, attitudes, managerial, behavioural, conceptual technical, knowledge etc are necessary for performing the same effectively. A competency map includes all the behavioural models, skills, tasks and various competencies along with expertise required for performing a particular job. It emphasises factors that the company has highlighted as 'crucial or crucial' for realising the strategic goals. It is a systematic process of identifying and distinguishing KSAs and behaviour essential for acquiring goals and sustaining necessary results. It is a process through which an individual can decide and assess its strength and weakness as a single person. It is required for appraisals, recruitment, selection, training and developm

Human Resource Planning: Importance and Process

Human resource planning (HRP)  helps the management to anticipate shortages or surpluses of human resources in future and correct these imbalances before they become unmanageable and expensive. Through the HRP tool, management strives to have the right number and the right kind of people at the right places, at the right time for the maximum benefit of both employees and organisations. Importance of Human Resource Planning: The reservoir of talent in the organisation for all times. To prepare people for the future by training and motivational techniques. It helps in adjusting personnel with the expanding or contracting scales of operations. To cut costs by maintaining an appropriate manpower budget for each division and reduces overall cost. It helps in succession planning by preparing promising candidates in advance for senior positions. Process of Human Resource Planning: It is a process of matching the future and current needs of the organisation. Manpower planning is a continuous p

Strategic role of Human Resource Management

 The role of human resource management evolved in the last two decades. In the current context, HR managers are focussing on recruiting and managing the workforce in order to meet the strategic goals of the organisation. It has a key role in fulfilling the visions and mission of the company. Companies work and reach goals through their workforce. Hence, HRM has a relevant role as it provides the most competent employees to the organisation which further the objective of the company. Thus, there is an energies trends that combine the theories of HRM with strategic management. This is known as Strategic Human Resource Management (SHRM). It consists of decisions and actions that result in the formulation and implementation of strategies specially designed to achieve the goals of the organisation. Strategy is defined as a unified comprehensive and integrated plan designed to ensure that the basic objective of the enterprise is achieved. Strategies can be formulated at the top level which i

Job Analysis: Benefits, Process, Components, Methods

 Job analysis is a formal and detailed examination of jobs to understand the tasks that need to be done and the skills required to do these tasks under this job. It is significant HR activity. Job analysis provides the analyst with basic data related to specific jobs in terms of duties, responsibilities, skills, knowledge, degree of risk etc. It investigates the responsibilities and duties that are necessary to perform the job. It tells what individuals do in their job and what is their requirement for performing the job satisfactorily. Job analysis gives information that helps write job descriptions (what work is to be performed) and job specifications (what kind of skill, talent and knowledge is required, what kind of workforce is to be hired). Role/Benefits of Job Analysis: It helps in human resource planning to determine the number and kinds of jobs and qualifications needed to fill these jobs. It makes the recruitment and selection process easier by way of the job description and

Workforce Diversity: Features and Dimensions

 Workforce diversity is the difference between the members of the organisations. It is the characteristic that makes one employee different from other employees. Management of these diversities includes the creation of such organisational climate which encompasses this diversity and uses this variety as its competitive advantage. It is a valuable asset for the organisation because it helps in surviving in the competitive global world. Diversity is found at two levels Surface Level : These are the differences that are superficial such as gender, age etc. They do not share the perspective of the employees. Deep Level : These are the variances in the work performances, personality, value of the workforce which determines the similarity between people in due course of time when they learn about each other. Features of Workforce Diversity: It enforces the creation of an environment where heterogeneous groups work together in order to achieve organisational goals. Workforce diversity ensures

Organisational Climate: Factors Affecting, Levels and Dimensions

Organisational climate is also referred as an environmental determinant of human behaviour. It is the atmosphere, feeling or sense experienced by employees on daily or general basis in their organisation. Culture gives rise to organisational climate. Organisational climate comprises of overall impressions of the institutions that the members build with the processes, structures, policies and by interacting with each other. It refers to common views, members of an institution have about their institute and work atmosphere. According to Schein, "A climate can be locally created by what leaders do, what circumstances apply and what environments afford. A culture can evolve only out of mutual experience and shared learning." According to Moran, "Organisational climate is defined as the shared perceptions, feelings and attitudes that organisational members have about fundamental elements of the organisation, which reflects the established norms, values and attitudes of the or

Types of Organisation Culture

Clan Culture: Here, the working atmosphere is amiable. There are commonalities among the people and the entire organisation is equivalent to a large family. The leaders seem like fatherly figures while loyalty and tradition hold the organisation together. The sense of unity binds the organisation together. There is strong peer pressure. The leader here is the team builder and a facilitator. The values that drives the organisation are development, communication and commitment. Various theories like participation and human resource development prove effective. The leader uses strategies like open communication, HRD, empowerment etc are to improve the quality. Adhocracy Culture: Here, the working environment is creative and dynamic The leaders are innovative whereas the individuals take risks. The culture supports innovations and experiments and the future goal is to create resources and grow. The invention of new services or products is considered a success. Thus, this organisational cul

Corporate Board Committess

 Board committees are set up when the organisation is large and there are complex issues that require systematic discussions or when there are numerous managers are to be held by the board. There are two types of board committees are as follows: Mandatary Committees: Audit Committees: Such committee will review the reports, vouchers, documents with the managers and independent auditors, companies press releases etc. They will also make a recommendation to the board regarding any reappointment or removal of any statutory auditor etc. Nomination Committee: They review and recommend revisions in the corporate governance practices of the company. The annual review of various programmes and policies of the organisation with regards to public policy and environmental sustainability. They also evaluate the composition of various committees. Remuneration Committee: It is especially governed by Clause 49 of the listing agreement. This committee works around the remuneration packages of the se

Ethical Dilemma

It is a paradox, problem or an issue that is confronted by an organisation, group or individual while making choice between conflicting claims, neither of which is clearly preferable or acceptable. It is a moral situation where the individual has to choose between two situations that are morally undesirable. As it is also a paradox, the choices to be made between two unethical situations is known as an ethical dilemma. According to Harrison, "An ethical dilemma is a complex situation a person (business) faces in which a decision must be made about the adequate action to be taken". According to PF Drucker, "Ethics deal with the right action of the individuals. Causes of Ethical Dilemma: Correction by management: The management may pressurise the group or the individual to act in a certain way. Often the companies are focused on generating profits and results. Hence, the individual may feel forced to act unethically. Discrimination or  Ambition: The individual may become

Tools and Techniques in Decision-making

Decision Tree: It is a chart, graph or model that focuses on each event and its outcomes. It also focuses on the likelihood of occurrences of these events. They are used in quantitative decision making. The diagram consists of a tree-shaped figure which shows a course of action. The branch of tree represents various outcomes. It also presents if a certain course of action is selected then what outcomes will follow it. These outcomes are mutually exclusive. Delhi Technique: It helps in estimating the probability of occurrence of future happenings. It involves a written process where a group of people fill their responses in multiple questionnaires. There are no physical meetings and discussion. Every new questionnaire is based on the information collected from the previous questionnaire. The process ceases when the group agrees to a single decision. The responses of members are kept anonymous. Decision Matrix: All the options of a decision are presented in the reform of a table or mat

Cardinal Utility Theory

 Classical economists like Carl Menger, Jeremy Bentham, Leon Walras and neo-classical economists like Alfred Marshall believe that utility can be measured in quantitative figures just as height and weight. It gives absolute figures of utility. Assumptions of Cardinal Utility Theory: It is assumed that the consumer is rational in nature, he will spend his money on that commodity first which yields the highest utility and the last which gives the least utility. Utilities derived from different commodities are independent of each other. Limited money income of a consumer to spend on goods. The consumer tries to maximise his satisfaction with spending. It is assumed that the utility gained from the successive units of a commodity consumed, decreases as a person consumes more of them. The marginal utility of money remains constant, whatever be the level of a consumer income. Unity of additive U n = U.x 1 + U.x 2 + ... + U.x n Limitations of Cardinal Utility Theory: The utility is

Centralisation: Introduction, Advantages and Disadavantages

 According to Louis A Allen, "centralisation is the systematic and consistent reservation of authority at central points within the organisation." Power and authority are concentrated at the top levels only. It facilitates in the early stages of organisational growth to provide for integration among all the departments to achieve a common goal. The top management is responsible for making key decisions and subordinates and lower departments are only into the implementation of rules. The lower department does not have authority over its functions. However, they are accountable to the higher management. The top-level formulates policies, middle-level managers operate the policies and lower-level management performs the work in reality. Advanatges of Centralisation: It provides an opportunity for new managers to develop personal leadership. It facilitates the integration of efforts of all parts of the organisation. Duplication of efforts and activities are avoided. Emergencies c