PLANNING IN ORGANIZATIONS

Just like in every other field of life, planning is the most important aspect. In organizations, planning helps to chart a course for the achievement of its goals. The whole process begins with the reviewing of current operations of the organization and identifying what needs to be improved operationally in the upcoming year.

From there onwards, planning involves envisioning the results the organization wants to achieve, and determining the steps necessary to arrive at the intended destination-success, whether that is measured in financial terms, or goals that include being the highest-rated organization in customer satisfaction.

All organizations, large and small, have limited resources. The planning process provides the information top management needs to make effective decisions about how to allocate the resources in a way that will enable the organization to reach its objectives. Productivity is maximized and resources are not wasted on projects with little chance of success.

Setting of goals that challenge everyone in the organization to strive for better performance is one of the key aspects of the planning process. Goals must be aggressive, but realistic. Organizations should not allow themselves to become too satisfied with how they are currently doing or they are likely to lose ground to competitors.

The goal setting process can be a wake-up call for managers that have become complacent. It is also advisable that the management includes the employees in goal setting so that they feel obliged to achieve them. Planning in any organization contributes to the ultimate success of the business.

What is the role of leadership for the new millennium organization

LEADERSHIP FOR NEW MILLENIUM

As we race towards the new millennium at warp speed, our leadership skills need to reflect the ever changing need of our constituents. In today’s changing business environment, employees are concerned about how to keep up and get control of their jobs. They also want to know what the customer is looking for now.

Once the whole industry changes, one has to adopt measures that will prevent the crashing and burning syndrome. One will need to develop skills to cope, adapt, adjust and stay in control.

The topic of leadership has undergone a lot of changes and there have been a lot of changing perspectives as time has gone by. These changes reflect shifts in the global economy, competition and human resource needs. Today there is a change from having a vision and actually executing it.

The visionary leader concept that dominated the ‘80s and 90s has been replaced by one that questions whether the provided information is indeed accurate. Implementation is emphasized in organizational life. The leader should be able to execute the vision successfully to ensure that it becomes a reality.

There are two distinct trends that mark the leadership requirements for the millennium. Successful implementation of these two trends requires specific behaviors.

A leader must be an effective process manager and must be able to multitask and oversee processes necessary to complete projects and tasks. He/she must also be a good communicator and develop a style of communications that builds and manages multiple relationships.

To be an effective mentor and coach, it is essential for the leader to develop team members and to transfer his/her skills and knowledge to team members.

Leaders are made, and not born. The present leaders should therefore strive to adapt to these changes or give way to new ones.

sme case study

SMEs in the UK: Case

Whenever the world of business is talked about, it brings up the images of huge corporations employing thousands of people. The big players indeed tend to be the ones that dominate all the headlines and take up all the column spaces in the business sections of all the national newspapers.

The reality in the United Kingdom is that there are millions of people working for themselves or are employed by the so-called Small and Medium Sized Enterprises (SMEs).

It is these SMEs which make up the backbone of the economy and the statistics speak for themselves. They are the unsung heroes who keep the economic engine running.

According to the official figures released by the government, there are currently around 4.9 million small businesses in the UK which employ 24.3 million people and have a combined turnover of £3,300 billion.

Small businesses play a crucial role when it comes to driving the economy forward and without them we would not be able to compete on the international stage.

There may be many obstacles that are facing entrepreneurs but the great thing is that there has never been a shortage of people looking to start their own. Many of these businesses have either been able to enter the foreign market or are looking to do so in the future.

SMEs are there to stay in the UK and are even growing stronger by the day.

History of Nigerian banks and the banking sector to date

Nigerian banks and banking sector History to date

Before the banking industry reached where it has today, there is a history that cannot and should not been forgotten. The history of banning in Nigeria dates back to 1892 and has developed presenting 118 years of complete banking history.

Right from the establishment of the foundation banks in Nigeria, the Banking Corporation and the Bank of British West Africa took the first attempt as an indigenous bank in Nigeria in 1929 up until the establishment of the Central Bank on Nigeria in 1959.

The Nigerian banking industry which is regulated by the Central Bank of Nigeria, is made up of; deposit money banks referred to as commercial banks, development finance institutions and other financial institutions that include; micro-finance banks, finance companies, bureau de changes, discount houses and primary mortgage institutions.

Essentially the industry consists of 24 commercial banks, 5 discount houses, 5 development finance institution, 50 class A bureau de change, 598 bureau de change, 98 Primary Mortgage Institutions, 84 finance companies and 914 Micro-finance institutions.

The development of the banking sector in Nigeria can be attributed to the many sectors that boost the economy staring from the industry sector to the agricultural sector as well as other artistic sectors for example that of film. The banks in the country have had an exchange of management with the aim of seeking better and more efficient services and governance.

Zara International Retail Store supply chain problems

Zara International Retail Store

Zara is a Spanish retail store for clothing and accessories and is based in Artexio. Galicia. It is owned by the Inditex fashion group. The main products stocked in Zara are men’s and women’s clothes, each of which consist of the lower garments, the upper garments, shoes, cosmetics and compliments. Zara also deals in children’s clothing. Zara is a major international store. It engages in activities such as designing, manufacturing, supplying and distribution of its products. Zara has a factory which is its own for the textile industry. It is interesting to note that unlike its competitors with whom it competes very favorably, Zara can design a new product and have it in its stores in a span of four to five weeks. Some of the countries to which Zara distributes and supplies its products are Turkey, the Asian Continent, Spain where it has about 50% of its products being manufactured, all the rest of Europe, United Kingdom, Portugal, Germany, Italy and African countries. Zara mainly gets its financial support for the international operations from its equity. In 2001, Zara had its first initial offering through the Inditex firm. This has fetched over 19.1 million dollars in sales volume. This has created the basis for expansion on an international scale, by enabling the company to open up more stores in more countries. it has empowered more manufacturing operations, more modernized designs as well as more staffing and technological advancement. This equity has also given the company a better financial stability compared to its rivals in the textile industry. The Zara International has stakeholders from all over the world. These stakeholders create a strong financial base by their consequent buying of shares which expands their equity.

Zara business strategy

The kinds of logistics employed in Zara international are both inbound and out bound depending on the operations. They are inbound in cases where their operations are centered within the boundaries of a specific country and are applied in marketing and staffing activities. They are outbound in cases where their operations are on a global scale involving marketing, distribution and staffing across the borders of many different countries. This constitutes their value chain activities and extends to their supply and distribution chains that have been established in the various countries where they have their stores. Zara international employs three types of staffing, i.e. ethnocentric, polycentric and geocentric staffing. In ethnocentric staffing, they make use of the specific country’s natives and involve the members of the company in making key decisions, employing citizens of the same home country in various capacities as well as the subsidiaries involved in resource management practice. In polycentric staffing, each of the subsidiaries runs the firm on a local basis, the local employee is held incharge of a subsidiary since the managers at the headquarters fail to have sufficient local knowledge and hence make use of the locals. Human resource management is established by the subsidiaries. In the geocentric staffing, it is done on a global scale with integrated business strategies, managers and employees recruited on a global basis. Zara recruits international managers who run various offices in various countries at a ‘global’ office. These international managers and employees are from diverse countries. the ethnocentric staffing in Zara is usually dominated by cultural values of the home country whereas the geocentric staffing enjoys a diversity of cultures from the various countries represented. Zara’s organizational structure encourages a high level of performance and also reduces the number of managerial ladder levels as well as dispersed decision making. It employs the various forms of organizational structures such as divisional. Area. Product and matrix. In the divisional structure, also referred to as the product structure, the firm is divided according to their organization, depending on the resources and operational functions within it. This forms a division. It is also defined by the product produced within the particular division and it is set apart from the rest of the operations. It may also be set apart on a geohraphical basis. For instance, Zara has divided some of its divisions in Spain where much of the manufacturing is done while other countries specializing in sales form their own geographical divisions within the industry. In such divisions, there are sales, and marketing departments established to run them specifically. In the matrix structure, Zara divides and organizes its employees in to various groups based on their functions in the firm as well as the products they deal in. zara has matrix structures for designing employees, for sales and marketing employees as well as those who specialize in the manufacturing operations. These employees are put in to teams and use the idea of division of labour although within their specific area of functions. In order to best place these employees to achieve quality performance at the individual level, the organisation closely considers the employees strengths and weaknesses, talents and capabilities at an individual level. A study of these combined will enable the best employee to be placed in the area which best suits them. This has been one of the reasons why the Zara International has achieved such levels of success in their production, sales and profit margins over their competitors.

Conclusion

The Zara international retail store continues to expand globally with the establishments of new stores worldwide and production of its high quality and unique products gaining a competitive advantage over its rivals. The stakeholders’ base continues to grow as more stakeholders are attracted by the stores attractive business practices. More markets are also being discovered for their products in areas where they never existed. Very soon, the firm may grow to the point of dictating the market prices for all clothing, which may pose a threat to other firms along the same lines of operations.

What happened to Kodak company

The real lessons from Kodak’s decline

Kodak is a company that was highly popular and was one of its kind during its era of superiority and dominance. It can actually be called the Google of its days. It was highly inventive, highly innovative and successfully rolled out new, sustaining innovations.

This led to a 90% market share in film and 85% of camera sales in the United States. Well into the 1990s, Kodak was rated as one of the world’s most valuable brands.

In 1996, Kodak was ranked the world’s fourth most valuable brand behind Disney, Coca-Cola and Mc Donald’s.  Who knew this was bound to undergo a drastic change?

With the onset of Digital, Kodak started experiencing problems. The company was sitting on the Digital camera and digital technology since 1973. The digital shift found the company ill prepared to put out products that were to compete with products from other companies such as Fujifilm.

Kodak had a keen understanding of its customers as well as that of controlling markets. Digital photography however took Kodak by surprise and even though they had the expertise to make digital cameras, they let the opportunity go.

Digital cameras scraped the need for the stores where their films were processed and pictures produced. Fujifilm did not take the chance and took the opportunity by the horns. It moved into digital photography and is currently doing good business. It did not stop there and has currently advanced its products to LCD screens, cosmetics and is producing medicine.

Whereas Kodak wanted a strategy that enabled them to control the customer, technology made this more difficult. Customers shifted to other companies leaving Kodak bankrupt and lacking audience.

Organization theory and behaviour notes

Discuss the modern theory of organisation how is it relevant in the modern organisation

Change is inevitable and for the organizations to properly adjust and cope with the rapid change organizational theories come hardy in suggesting the way forward.

By definition, organizational theory is the study of relationship of organization, organizational designs and structures and the relationship with the external environment, behavior of technocrats and managers within the organization.

The main aim of a business organization is delivering goods and services to the customers in a way they can realize maximum profit during the transaction.

Over decades, scholars, researchers, economists, and business analysts have suggested several theories in an attempt to explain business organization dynamics involving the way they adjust to conflict, changes, power distribution and decision-making.

Some theories are widely known and they have been used to expand organizational strategies and how they can benefit positively. Modern organizational theory, which started at the beginning of industrial revolution, is deeply concerned with concept development.

It clearly portrays the importance tightly controlled policies, rules and procedures. The Weber’s bureaucratic approach (modern organization theory) is based on the concept of democracy to workers, specialization, stability and predictability, structure and rationality.

Administrative theory is based on the concept of management by proper training, coordinating, planning and dictating. To ensure our organizations function efficiently , it paramount tom know how the society changes.

Outsourcing in China

Is Outsourcing in China reliable and what it entails

As the US expert said, China remains one of the best global manufacturing outsourcing center. What makes it the best choice according to this expert? One is because of its efficient and reliable labor supply and the super relationship Chinese companies have established cannot be ignored, as it is hard to replace.

The labor supply is due to large population in China who are well armed with the current advancement in technology which is much needed in the modern industries

Secondly, is the big market available in China. Compared to other South Asian countries, it has the biggest market available not only for outsourcing but also for keeping them close to the consumers who are vital in the industry. This is another factor that is making China a force to watch in the outsourcing arena.

Third, is the well-developed infrastructure. In the world, China is categorized among the countries that have good infrastructure.  Although many just view it as only a highway system, it also involves informed labor force enough distributors and suppliers

Finally, China for many years has maintained a stable and steady growth market. This has given a great chance for companies to grow and expand.

Valuation and Recommendation of FedEx

How does Fedex declare Valuation work

Stock valuation involves calculating theoretical values of companies and their stock to predict: future market prices, potential market prices and the profit therefore.  Stock valuation is critical when it comes to investing, because it tells the future cash flow of a company and the possible value of stock in the next financial year.

P/E Ratio Based Model

Price to Earning ratio is  the measure of the share price against  the annual net income earned by the firm per shareThe P/E model Uses net income for the most recent year (12 month period), divided by the weighted average number of common shares in issue during the period. It is the easiest way to calculate the stock value. We will use Earning Per Share(EPS):

2014 2015
EPS 7.40 8.12
P/E ratio 22.88 22.88
Projected stock prices 169.31 185.79

Figure 1.1(stock analysis on net)

figure 1.1, illustrates the projected stock prices by FedEx’s common stock. To project the stock prices, one need to multiply the EPS and the P/E ratio which we have chosen to be constant. According to the calculations we find that FedEx is currently overvalued, the current share price being 169.41 which is higher than the estimated value in 2014(169.31).

Earning Multiplier Model

The value of any investment is the present value of future returns. It is estimated by finding out how much an investor is willing to pay for a share the next 12 months. the current shares atFedEx is 283,246,379. So the net present value of future dividends is the number of shares multiplied by the expected cost per share which is 8.12The expected earnings of FedEx is

283,246,379*8.12= 2299960597.48

This value shows that FedEx will make profit next year and its investors will benefit although not as much as they did in 2013 when the shares were over 3 million and the expected cost was much higher.

Price earning to growth(PEV) ratio

It take three factors into account: the earnings, price and the earnings growth rate.it is calculated by taking the forward P/E divided by the expected/ historical earnings growth rate

The PEV of FedEx is therefore:

22.88/9.68=2.364%

The price earning to growth ratio is 2.364% which shows that FedEx is a better purchase because it has a low PEV ratio which means that one can purchase its future earnings growth for a lower price. Hwoever it shows that the market value of shares will drop significantly

Dividend Valuation Model

It is used to value stock based on the net present value of future dividends. The formulae used is

where p= the current stock price, g= constant growth rate, r= constant cost of equity capital, D= value of next year’s dividends

According to what we know about FedEx stock:

=6.68368/0.8145=$8.21

So the current stock price should be $8.21 which shows that the shares are not returning the required returns and hence even the company’s profit have declined the intrinsic value today should be $187.84 and since our intrinsic value is greater than the market value, it becomes a buy recommendation for this particular model.

Recommendations:

Our recommendations for the FedEx company has been based on the economy, the company’s growth rate, the courier delivery industry and the four valuation models used. The economy is showing great influx and is expected to continue that way for several years, the company’s growth rate is steady and commendable and the courier delivery service industry has show tremendous growth and increase in the past decade. The  four valuation models used show that fedEX is undervalued. The dividend valuation model shows that the shares at FedEx are gaining value from the buying time to the mature stock. PEV shows that buying stock at FedEx is cheaper while the P/E ratio model shows that FedEx is under valued. We recommend buying shares at the current market price of $169.31 and expecting a substantial growth rate.