Discounted Cash Flow

It is a useful conception from Discounted Cash Flows that they are future cash flows expressed in terms of their present value. The discounted cash flow technique employs this reasoning by evaluating the present value of a business’s net cash flow (cash inflows minus cash outflows). A simplified view of cash flow is “cash flow from operations,” which is net income plus depreciation charges, because depreciation is a non-cash charge against sales to determine net income. The present value of a stream cash flows is obtained by selecting an interest or discount rate at which these flows are to be valued, or discounted, and the timing of each. The interest or discount rate is often defined by the opportunity cost of capital—the cost of earning opportunities forgone by investing in a business with its attendant risk as opposed to investing in risk free securities

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Strategic Decision

Unlike many other decisions, strategic decision deals with the long-run future of the entire organization and has three characteristics:

1.  Rare: Strategic decision is unusual and typically have no precedent to follow;
2. Consequential: Strategic decision commits substantial resources and demands a great deal of commitment from people at all levels.
3. Directive: Strategic decision sets precedents for lesser decisions and future actions throughout the organization.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Behavior and Organizational Strategies

A competency model can be an effective way of communicating to the workforce the values of the senior management and what people should focus on their own behavior. For example, a competency-based appraisal system helps to distinguish individuals with the characteristics that are required to build and maintain an organization’s values (teamwork, respect for individual innovation or initiative) from those who do not exhibit the behaviors that will support these values. In this way competency models can translate general messages about needed strategy and culture change into specifics. There are two principles that can be followed:

• Focus on the superior performers without making an assumption.
• Focus on what they do to perform the given role.

Following are various developed models that are used as a basis for selection, training, promotion and other issues related to human resources:

• Job Competence Assessment Method—this is developed using interviews and observations of outstanding and average performers to determine the competencies that differentiate between them in critical incidents.
• Modified Job Competence Assessment Method—this also identifies such behavioral differences, but to reduce costs, interviewees provide a written account of critical incidents.
• Generic Model Overlay Methods—organizations purchase an off-the-shelf generic competency model for a specific role or function.
• Customized Generic Model Methods—organizations use a tentative list of competencies that are identified internally to aid in their selection of a generic model and then validate it with the input of outstanding and average performers.
• Flexible Job Competency Model Methods—this seeks to identify the competencies that will be required to perform effectively under different conditions in the future.
• Systems Method—this demand reflecting on not only what exemplary performers  do now, or what they do overall, but also behaviors that may be important in the future.
• Accelerated Competency Systems Method—this places the focus on the competencies that specifically support the production of output, such as an organization’s products, services or information.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Two-way HR Planning Process

Like other business strategies, human resource strategies are shaped through both top-down and bottom-up processes in an organization. A top-down processes provides the strategic context necessary for team and unit planning.

Through a focused company environmental assessment, it provides information on possible future trends and issues affecting  the business and influencing the shaping of plans and objectives. People close to the operating business may not readily take such a broad future view. It requires looking outside the company to external competitive practices, economic and social trends, and possible future conditions that may some day have an impact on the business.

A plan is strategic in character if it is focused on important issues raised in an environmental assessment. In today’s competitive organization, it is important that employees at all levels be attuned to external  forces and changes and to the strategic direction being taken to address them.

In a bottom-up approach, planning of human resource actions is a cumulative process. Instead of broad strategies being broken down into progressively greater detail, detailed strategies are aggregated and synthesized into  meaningful umbrella strategies. Each business unit or department is asked to identify the human resource issues of concern, taking into consideration the guidance of the long-term planning inputs. They are also asked to specific analyses, forecasts, and assessments regarding these issues. Specific action plans are selected and adopted. Both human resource staff and managers should participate in this effort.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Strategic Marketing & Budgeting

A phase in the strategic marketing management process is budgeting. A budget is a formal, quantitative  expression of an organization’s planning and strategy initiatives expressed in financial terms. A well-prepared budget meshes and balances an organization’s financial, production, and marketing resources so that overall organizational goals or objectives are attained.

An organization’s master budget consists of two parts: 1) an operating budget, and 2) a financial budget. The operating budget focuses on an organization’s income statement. Since the operating budget projects future revenue and expenses, it is sometimes referred to as a pro forma income statement or profit plan. The financial budget focuses on the effect that the operating budget and other initiatives (such as capital expenditures) will have on the organization’s cash position.

In addition to the operating and financial budget, many organizations prepare supplemental special budgets, such as an advertising and sales budget, and related reports tied to the master budget. Budgeting is more than an accounting function. It is an essential element of strategic marketing management.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Incremental Change Analysis

Most business focuses on the current situation, with changes defined on an iterative, cumulative basis. In this context, issues represent problems or opportunities for change from the current situation. The gaps represent ways that a company may achieve or enhance a competitive edge.

The most common way to define issues is to assess the changes that are expected t occur. These are derived from either internal or external changes, intended by management or occurring as a result of uncontrolled forces (as in workforce changes). Issues are identified in the way that people normally think—incrementally from the present toward future.

In this process, managers identify and evaluate human resource issues by sorting through available strategic planning, competitive, and environmental information for evidence of changes having human resource implications and then define human resource issues that may be addressed. Such analysis may examine employee productivity issues, service quality, staffing surpluses or shortfalls, succession needs, skill requirements, utilization, costs, turnover/retention patterns, or employee attitudes.

Managers also obtain and consider perspectives of relevant constituents, such as other managers and employees, vendors, suppliers, and customers. Companies solicit inputs from managers at various levels through their participation in the planning process or through interviews, focus groups, or surveys with key managers. Many companies survey employees, either specifically for planning inputs or more broadly as an assessment of organizational climate and human resource practices. Companies may involve employees through interviews or focus groups to help define issues and alternative strategies. Some also interview or survey customers, contractors, and other business partners regarding human resource issues to be addressed.

Environmental scanning is used to identify prospective human resource issues deriving from changing external conditions. Scanning the many changes occurring in social, political, legislative, demographic, economic, technological and other areas yields a wide array of issues that may be considered.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Truth and Reconciliation in Business

Access to the truth is a fundamental human right and as such it must form the foundation of any truly amazing organization capable of maintaining long-term, mutually respectful and beneficial relationships. This is as true of organizations as it is of nation states or families.

Truth and Reconciliation in business aims to achieve exactly what it says. It aims to get to the truth about the way relationships are being conducted and it aims to use the acceptance of that truth as the basis for reconciling the organization and building fresh new relationships.

If we want our organization to be amazingly successful we must confront and overcome the practice of having completely separate management, employee and stakeholder perspectives, dividing the way we see our organization’s current and future priorities.

We need to develop one working culture capable of uniting our un-reconciled and incompatible aspirations and goals. This requires us to focus not only on our systems and processes but to build strong, dynamic relationships based on dialogue, interaction, genuinely shared values, mutual respect, inclusiveness, openness and trust.

Truth and reconciliation, as practiced by nation states, such as, South Africa, is a detailed process used under the most extreme situations – far removed from anything or indeed any of us has probably seen in any organization.

But let’s not miss the lessons these experiences can teach us about unity and strength, and about how to create harmony in inharmonious situations. Truth and reconciliation in business is significantly scaled-down version with reduced scope based on a drastically reduced need. What it does do, however, is adhere to principles proven in the most extreme environments where demands for forgiveness take on monumental proportions.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Illusory Promises

For a promise to constitute consideration, it must actually promise something without being illusory. One party to the agreement is not bound anyway. When one party is not legally bound, neither should the other party be. There is no contract because of an absence of consideration. An agreement between the parties to agree on something in the future is regarded as too indefinite to make a contract.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Futures Analysis

Futures analysis allows companies to project future conditions and set future objectives to be achieved. It represents a leap to the future rather than step-by-step progression from  today’s situation forward to the future. It allows managers to assess the future relevance of issues that appear important today and thereby identify important human resource issues.

Futures analysis is an inherent requirements for strategic thinking. It requires defining the forces shaping the future, evaluating alternative future states, setting objectives, and selecting courses of action that will yield needed changes in direction for the enterprise. While incremental change analysis looks at continuities, futures analysis looks at discontinuities.

Futures analysis provides at least a conceptual vision of the future that can help identify and define organizational or competitive requirements. In its simplest forms, futures analysis involves open thinking about future issues and options. Companies use brainstorming, visioning, or modified Delphi analysis (iterative survey of experts) to help define the future human resource issues that need to be addressed. It is an exercise that may involve many participants within the company as well as outside consultants or others.

Futurists, functioning on company planning staffs and as independent consultants, have helped assess the prospective futures in which companies would operate. Their value added appears to lie in their work on demographic technological and environmental futures. In other areas, such as, socio-political changes worldwide, energy availability, economic conditions, or legislation.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Managerial Functions

There are four basic managerial functions are planning, organizing, lending, and controlling. By applying these functions to the various organizational resources—human, financial, physical, and information—the organization achieves different levels of effectiveness and efficiency.

• Planning: The first managerial function is the process of determining the organization’s desired future position and deciding how best to get there.
• Organizing: It is the process of designing jobs, grouping jobs into manageable units, and establishing patterns of authority among jobs and groups of jobs. This process designs the basic structure of the organization.
• Leading: It is the third managerial function, is the process of getting members of the organization to work together toward the organization’s goal. Major components of leading include motivating employees, managing group dynamics, and leadership per se, all of which are closely related to major areas of organizational behavior.
• Controlling: It is the process of monitoring and correcting the actions of the organization and its people to keep them headed toward their goals.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.