Incorporated Business


When you incorporate, your business becomes its own separate legal entity. The business consists of shareholders who purchase shares in the business and who are responsible for its operation. You can incorporate a one-owner business and own all the shares of that company. The company has a president, and if more than one person is involved, a secretary-treasurer and directors. Stricter control can be maintained with a board of directors, who can make decisions. Outrageous suggestions by one person can be blocked if company policy stipulates that any significant changes must be approved by the board.

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.

Behavioral Consequences


From behavior of people within an organization come such important consequences as productivity, satisfaction, and revitalization. Productivity refers to the quality and quantity of products and/or services, i.e., the output (in relation to inputs) that is ostensibly the organization’s logical or formal purpose. Satisfaction refers to the positive feelings of the people in a group about themselves and their situation. How much of what kind of satisfaction are they getting? Revitalization refers to the increased ability to cope with and adapt to changes in both the internal and external environments. For the individual this includes growth, in terms of emotional health or skill or learning of various kinds. For the social system in which individuals behave, it means the capacity to change internally to permit more productivity and/or satisfaction in the long run.

Productivity, satisfaction and revitalization are collectively referred as collectiveness. This term implies that to be effective a system must purchase all three. The complexity imposed by these multiple criteria for effectiveness demolishes any meaningful idea of maximizing effectiveness—at best, an organization can only approach an optimization of these criteria. The components of effectiveness may be viewed from the vantage point of any of the principal entities; namely, the individual, group, and organization. The consequences of behavior may vary by entity and category.

A second major behavioral consequence of importance to small groups is cohesiveness. By cohesiveness  is meant the tightness of the inter-personal bonds that hold a group together. Cohesiveness and effectiveness are essentially different concepts.

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.

 

Company Self-Concept


A major determinant of a firm’s success is the extent to which the firm can relate functionally to its external environment. To achieve its proper place in a competitive situation, the firm realistically must evaluate its competitive strengths and weaknesses. This idea—that the firm must know itself—is the essence of the company self-concept. The idea is not commonly integrated into theories of strategic management; its importance for individuals has been recognized since ancient times.

Both individuals and firms have a crucial need to know themselves. The ability of either to survive in a dynamic and highly competitive environment would be severely limited if they did not understand their impact on others on them.

In some senses, then, firms take on personalities of their own. Much behavior in firms is organizationally based; that is, a firm acts on its members in other ways than their individual interactions. Thus, firms are entities whose personality transcends the personalities of their members. As such, they can set decision making parameters based on aims different and distinct from the aims of their members. These organizational considerations have pervasive effects.

Ordinarily, descriptions of the company self-concept per se do not appear in mission statements. Yet such statements often provide strong impressions of the company self-concept. The following excerpts from the Intel Corporation mission statement describe the corporate persona that its top management seeks to foster:

The management is self-critical. The leaders must be capable of recognizing and accepting their mistakes and learning from them.

Open (constructive) confrontation is encouraged at all levels of the corporation and is viewed as a method of problem solving and conflict resolution.

Decision by consensus is the rule. Decisions once made are supported. Position in the organization is not the basis for quality of ideas.

A highly communicative, open management is part of the style.

Management must be ethical. Managing by telling the truth and treating all employees equitably has established credibility that is ethical.

We strive to provide an opportunity for rapid development.

Intel is a results-oriented company. The focus is on substance versus form, quality versus quantity.

We believe in the principle that hard work, high productivity is something to be proud of.

The concept of assumed responsibility is accepted. (if a task needs to be done, assume you have the responsibility to get it done).

Commitments are long term. If career problems occur at some point, reassignment is a better alternative than termination.

We desire to have all employees involved and participative in their relationship with Intel.

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


Truth and reconciliation in business without consistent, decisive, action will rapidly turn into a nightmare. Decisions and actions must be swift and if relationship mapping is to be engaged, it must be engaged fast and directly connected to the truth and reconciliation in business exercise.

Communication will be at an absolute premium and there are several points that the exercise must deliver on. Truth and reconciliation in business must:

  1. Lift the lid on silence and denial;
  2. Give everyone within the organization the chance to have their grievances heard and their ideas listened to;
  3. View the organization as one entity, not separate entities with different expectations and responsibilities. Everybody involved must be equally responsible and accountable for all outcomes and there can be no splintering into different groups, as this will set the seed for different sub-cultures to grow back;
  4. Accept the principle of mutual shared responcibility for any previous shortcomings of the organization.
  5. Encourage the building of a new social network that straddles previous divides, and delivers ongoing dialogue and interaction across every dimension of the organization;
  6. Determine what is negotiable and what is non-negotiable; and
  7. Make clear recommendations for the future, start to define responsibilities, expectations and desired relationships, start the process of reform, and begin to define a working culture for the organization as a single entity.

Engaging in Truth and Reconciliation in business is a great start for any organization looking to develop amazing relationships and enjoy amazing success, but it is only the start of the process. Organizations must be able to maintain what they have started.

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.

Release of Free Cash Flow


The project entry typically has a finite life. Its dividend policy is usually specified contractually at the time any outside equity financing is arranged. Cash flow not needed to cover operating expenses, pay debt service, or make capital improvements—so-called free cash flow—must normally be distributed to the project’s equity investors. Thus, the equity investors, rather than professional managers, get to decide how the project’s free cash flow will be reinvested.

 When project is financed on a company’s general credit, the project’s assets become part of the company’s asset portfolio. Free cash flow from the project augments the company’s internal cash resources. This free cash flow is retained or distributed to the company’s shareholders at the discretion of the company’s board of directors.

 Project financing eliminates the element of discretion. Investors may prefer to have the project company distribute the free cash flow, allowing them to invest it as they choose. Reducing the risk that the free cash flow might be retained and invested without the project’s equity investors’ approval should reduce the cost of equity capital to the project.

 The sponsor is not necessarily placed at a disadvantage under this arrangement. If the sponsor is considering additional projects that it believes are profitable, it can negotiate funding for these projects with outside equity investors. If they agree to fund any of these additional investments within the project entity, the dividend requirement can be waived by mutual agreement and the funds invested accordingly.

 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, Line of Sight

Training and Development


Mr. President, and Director Training:

Spring has arrived with flowers. The buds have reappeared on bare branches again. Indeed! The March winds are the morning yawn of the year.

All and every little thing tell us
That once again ’tis Spring

Please accept my best wishes for a bright and beautiful season.

 

This time spring has brought along the advent of cricket season. And the current cricket series with India has caused a sort of fever to cricket lovers. Today is a crucial day for all of us. An important and decisive match between traditional rival teams is about to start and we are here participating in a learning exercise. You are not alone missing the glimpses of the match. My heart also joins the curious thumping of your heartbeat.

 

I have the opportunity to talk to you, the learned managers under the new system of local government, and I will avail it with honor talking relevant or maybe some irrelevant things.

 

Overtly or covertly, the district government system is new and complex. Its managers face requirements that are different from their federal, provincial, or private sector counterparts. Because of the complexity and range of those requirements, it is important for DDOs to understand the requirements specific to the district.

 

Friends! We use management and professional development to refer to those processes directed towards equipping professional managers with the skills, knowledge and attitudes necessary to achieve administrative objectives both now and in the future.

 

Any human development must be aligned with the entity’s mission and strategic goals in order that, through enhancing the skills, knowledge, learning ability and enthusiasm of people at every level, there will be continuous organizational and individual growth.

 

The perspectives of management and professional development are interpreted here as including the terms education, learning, training, and development which are seen as an integral part of the wider professional development framework.

 

I have the reason to believe, my dear officers, that if the training and development of managers of any department is not accorded high priority, if training is not seen as a vital component in the realization of government policies, then it is hard to accept that we have committed ourselves to management and professional development.

 

Those departments where there is a chronic under-investment in management and professional development that is the prime reason for the poor performance of the financial management or economy at large. The critique that can be constructed is disturbingly pervasive. At the macro level the education and training infrastructure, particularly when subjected to international comparisons is the major basis for consistently failing to address the needs of economic development. Training initiatives failing to provide consistent direction; concentrating on the certainties of vocational relevance rather than longer-term knowledge demands relevant to an imperfect future, and, simply, a lack of overall investment.

 

At the micro level, despite the relevance placed on bureaucratic system by successive governments, the practice of individual departments is similarly disturbing. Under-investment in management and professional development, whether measured in terms of budgets or training days, is regularly reported. All too frequently management and professional development fails to be regarded as a managerial priority or something that should be fully integrated through a learning culture into everyday practice. The traditional practice of public service, dominance of accountancy traditions and short-term-ism that characterize our bureaucratic inheritance arguably provide infertile conditions for what is essentially a long-term commitment.

 

While acknowledging the pessimistic construction that I have made, I would argue that investment in management and professional development could play a key role in initiating and facilitating change. You can thus adapt to whatever comes along and to take advantage of it, turning threats into challenges, and rising to these challenges in ways that produce increased benefit to the government and employees.

 

If I were to prescribe one process in the training of men, which is fundamental to success in any direction, it would be thoroughgoing training in the habit of accurate observation. It is a habit which every one of us should be seeking ever more to perfect.

 

All organizations, entities, and departments require some form of organizational structure to implement their strategies. Principally, structures are changed when they no longer provide the coordination, control, and direction managers, and entities require implementing strategies successfully. The ineffectiveness of structure typically results from increases in department’s revenues and levels of diversification. In particular, the formulation of strategies involving greater levels of diversification demands structural change to match each strategy. Some strategies require elaborate structures and strategic control, while others focus on financial control.

 

Allow me to briefly converse about strategic leadership. If you are a strategic leader, you have the ability to anticipate, maintain flexibility, and empower others to create strategic change as necessary. Multifunctional in nature, strategic leadership involves managing through others, managing an organization rather than a functional subunit, and coping with change that seems to be increasing exponentially in the current administrative landscape. Because of the complexity and global nature of this landscape, as a strategic leader, you must learn how to influence human behavior effectively in an uncertain environment. By word or by personal example, and through your ability to envision the future, as effective strategic leader you can meaningfully influence the behaviors, thoughts, and feelings of those with whom you work. The ability to manage human capital may be the most critical of your leadership skills.

 

From now on, in the 21st century, many managers working in government across country will be challenged to alter their mind-sets to cope with the rapid and complex changes occurring in the global economy.

 

A managerial mind-set is the set of assumptions, premises, and accepted wisdom that bounds—or frames—a manager’s understanding of the department and the core competencies it uses in the pursuit of strategic role. Your continuous success depends on your willingness to challenge continually your managerial frames.

 

Today competition means not product versus product, company versus company, or department versus department. It is a case of mindset versus mindset, managerial frame versus managerial frame. Competing on the basis of mindsets demands that strategic leaders learn how to deal with diverse and cognitively complex situations. One of the most challenging changes is overcoming your own successful mindset.

 

As effective leaders you should always be willing to make candid and courageous, yet pragmatic decisions—decisions that may be difficult, but necessary in light of internal and external conditions. You should solicit corrective feedback from peers, superiors, and employees about the value of your difficult decisions. Unwillingness to accept feedback may be key reason talented executives fail. This highlights the need for you to solicit feedback consistently from those affected by your decisions.

 

Because strategic leadership is a requirement of strategic success, and because departments may be poorly led and over-managed, working in the 21st century competitive landscape you are challenged to develop effective strategic leaders.

 

At district level you are the top administrative managers. And top-level mangers are an important resource for departments seeking to formulate and implement strategies effectively. A key reason for this is that the strategic decisions made by top managers influence how the department is designed and whether goals will be achieved. Thus, a critical element of your organizational success is having a team with superior managerial skills.

 

You often use your discretion (or latitude for action) when making strategic decisions, including those concerned with the effective implementation of strategies. You must therefore be action oriented: thus, the decisions that you make should spur the department to action.

 

Since you are top executives, you have a major effect on your department’s culture. Your values are critical in shaping your department’s cultural values. Accordingly, you have an important effect on organizational activities and performance. The significance of this effect should not be underestimated. Permit me to remind you that acquiring of culture is the development of an avid hunger for knowledge and beauty.

 

 

Add innovation and creativity in all your endeavors. It will certainly pay off. Effective leaders focus their work on the key issues that ultimately shape department’s ability to perform effectively.

 

And in the words of Charles de Gaulle, “Every man of action has a strong dose of egotism, pride, hardness, and cunning. But all those things will be forgiving him, indeed, they will be regarded as high qualities, if he can make them the means to achieve great ends.” To get others to come into your ways of thinking, you must go over to theirs; and it is necessary to follow, in order to lead.

 

While concluding, let me ask: do you know how do geniuses come up with ideas? What is common to the thinking style that produced “Mona Lisa,” as well as the one that spawned the theory of relativity? What characterizes the thinking strategies of the Einsteins, Edisons, da Vincis, Darwins, Picassos, Michelangelos, Galileos, Freuds, and Mozarts of history? What can we learn from them?

 

“Much learning does not teach man to have intelligence.”

This is the quotation from the philosopher Heraclitus, who spanned the fifth and fourth centuries BC. Twenty-five hundred years later, he’s still right. You might spend most of your life going to school, reading, looking up facts, acquiring information, and memorizing it. But, although you’ll become more informed, in the end it won’t make you any smarter. Is a reference library smart? Is a computer with a vast storehouse of voluminous data smart? Is the simple act of digesting and then disgorging information either smart or impressive? My answer is simple: “No.”

 

Anyway, I hereby formally inaugurate this training course.

Thank you for your time and patience.

Thank you for listening.

God bless you!

 

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, Line of Sight

A Healthy Company


A healthy company is like a fine athlete is more than someone who isn’t sick, a healthy company embodies people and practices that combine and coordinate to produce an exceptional performance.

 

Healthy companies all possess and emanate a certain vitality and spirit. This spirit is not a religious fervor or a mindless cheerleader enthusiasm but a deep feeling of shared humanistic values at the core of the company. These values are the glue that binds healthy, successful employees with healthy, productive workplaces. They influence the way people act and think at all levels of the company and form the foundation for corporate policies and practices. They define roles and responsibilities and dictate hor business decisions are made. These principles are expressed and applied at every turn of the business, from receptionists and loading dock workers, through managers and executives, and into the board of directors.

 

These values are perpetually interacting, expanding, and contracting like a living entity. Each value depends on and determines the health of the others; sickness or disease that undermines on weakens all; roboustness in one value strengthens all. The values at the heart of a healthy company enable it to continuously grow, evolve, and renew itself, reinforcing what is productive and prositive and sloughing off the unhealthy and unworkable. In short, the causes and effects between values, people, and companies are not linear but circular. Values are the center of the enterprise; they circulate through every cell and artery of a company, and a company and its employees either reinforce healthy values or bring about their decline.

 

Healthy company values bind people to their organizations. By creating a common language and appealing to principles of dignity, commitment, and growth, these values help to create an identity that connects thousands of people around a shared mission. Suddenly, the traditional hard values of business success and the nontraditional soft values of human development merge into one dream.

 

This convergence generates a synergy, producing something greater than the sum of their parts—a vital business that lives and breathes a humanistic philosophy, that treats people as more than profit producers, views relationships as more than simply financial contracts, and regards the workplace as more than a setting for business. It is a holistic environment, one that nurtures, stretches, and empowers peple. The result is an organization that optimizes people, principles, and profits.

 

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 contact www.asifjmir.com, Line of Sight

Reinterpreting Products


Product is not what the engineer explicitly says it is, but what the consumer, implicitly demands that it shall be. Thus the consumer consumes not things, but expected benefits—not cosmetics, but the satisfactions of the allurements they promise; not quarter-inch drills, but quarter-inch holes; not stock in companies, but capital gains; not numerically controlled milling machines, but trouble-free and accurately smooth metal parts; not low-cal whipped cream, but self-rewarding indulgence combined with sophisticated convenience.

The product does not exist as a separate entity. The product is what the consumer perceives it to be. Consumer perceptions are strategically important at all stages of product development, from initial conceptualization to concept testing, to positioning, to designing, manufacturing, packaging, pricing, delivering, advertising, selling, financing, and servicing. Product analysis, therefore, embraces systematic research at all stages. The focus of such research is not on the product itself, but on the consumers and how they respond to the various alternatives at each stage.

To simplify the exposition I am drawing examples primarily from the field of consumer products, such as the tangible items found on the shelves of supermarkets, in department stores, appliances shops, and automobile showrooms. In doing so I am not overlooking the importance of the field of services, such as airlines, insurance companies, banks, and travel agents; or the field of industrial goods, such as computers, chemicals, textiles, and lift trucks. While there are some differences in marketing strategies from one category to the next, the underlying principle of delivering customer satisfaction is the same.

Therefore, the producer should analyze actual or potential product or service in terms of its ability to meet a consumer need or want. It is axiomatic that consumers cannot draw the blueprints or provide detailed specifications for producers. It is up to the business person to experiment with new products or services, or modifications of old ones, and test their acceptance in the marketplace. Advertising can then be used to point out their presumed need/want satisfying properties to would-be users.

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 contact www.asifjmir.com, Line of Sight

Project Financing


Project Financing (PF) has emerged as an innovative and timely financing technique and is being used in many high-profile infrastructure projects. Employing a carefully engineered financing mix, it is used to fund large-scale projects, from communications, to telecommunications, and power to energy projects. It is a preferred alternative today. It will be foremost option of future.

PF holds great promise, which is just beginning to be realized as a means of financing projects designed to help meet the enormous infrastructure needs that exist in a developing countries.

Most infrastructure projects in developing countries are being funded by exchequer and thus in nearly all cases the construction of much desired projects are delayed due to lacking funds and deficient resources. Particularly when local governments are functioning full swing developing countries need to consider PF as a preferred choice.

PF can be arranged when a particular facility or a related set of assets is capable of functioning profitably as an independent economic unit. City governments (sponsors) of such a unit may find it advantageous to form a new legal entity to construct, own, and operate the project. If sufficient profit is predicted, the project organization can finance construction of the project on a project basis, which involves the issuance of equity securities (generally to the sponsors of the project) and of debt securities that are designed to be spell-liquidating from the revenues derived from project operations.

The intricacies of PF are formidable, and can easily be misunderstood and consequently, misused. While PF structures share certain common features, by necessity, they require tailoring the package to the particular circumstances of the project. That is where both the benefits and the challenges lie.

What distinguishes PF from conventional direct financing is that in PF, the project is a “distinct legal entity” and the financing is tailored to the cash flow characteristics of the project assets. Such a structure can yield a more efficient allocation of risks and returns than conventional financing, but careful financial engineering is critical.

It is a form of asset-based financial engineering. It is asset-based because each financing is tailored around a specific asset or related pool of assets. It involves financial engineering because, in so many cases, the financing structure cannot simply be copied from some other project. Rather, it must be crafted specifically for the project at hand.

PF is the raising of funds to finance an economically separable capital investment project in which the providers of the funds look primarily to the cash flow from the project at the source of funds to service their loans and provide the return and a return on their equity invested in the project. The terms of the debt and equity securities are tailored to the cash flow characteristics of the project. For their security, the project debt securities depend, at least partly, on the profitability of the project and on the collateral value of the project’s assets.

PF is not a means of raising funds to finance a project that is so weak economically that it may not be able to service its debt or provide an acceptable rate of return to equity investors. In other words, it is not a means of financing a project that cannot be financed on a conventional basis.

At the center is a discrete asset, a separate facility, or a related set of assets that has a specific purpose. This can include trash collecting trucks, toll roads, water supply and sewer projects, or some other item of infrastructure. This facility or group of assets must be capable of standing alone as an independent economic unit. The operations, supported by a variety of contractual agreements, must be organized so that the project has the unquestioned ability to generate sufficient cash flow to repay its debts.

PF can be advantageous to Pakistan when it has a valuable resource deposit, other responsible parties would like to develop the deposit, and it lacks the financial resources to proceed with the project on its own.

Commercial banks and life insurance companies have traditionally been the principal sources of debt for large projects. In the typical financing structure, commercial banks would provide construction financing on a floating rate basis, and life insurance companies would then provide “permanent financing” on a fixed rate basis by refinancing the bank loans following project completion. For infrastructure projects have become a high priority, commercial banks, having adjusted to the tighter capital standards, have expanded their role in PF. They advise as well as lend.

Multilateral agencies, such as the World Bank and IDB, and various agencies, such as Eximbank and OPIC, have also stepped up their funding of private infrastructure projects. Developing countries’ capital markets can also be a useful source of funds. Raising funds locally can reduce a project’s political risk exposure.

Most recently, through the financing of hundreds of independent power projects, it has become evident that PF is suitable for relatively low-risk projects that involve standardized nonproprietary technology.

PF has attracted growing interest as a means of obtaining capital. Its potential is perhaps greatest for the many large infrastructure capital investment projects that are on the drawing boards of many local governments. The projects are large and expensive, and the risks are great. But the potential benefits are enormous. Project financing could be the answer to the financial needs of such local governments.

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 contact www.asifjmir.com, Line of Sight

Psychic Profile of a Healthy Company


Just like a fine athlete is more than someone who isn’t sick, a healthy company embodies people and practices that combine and coordinate to produce an exceptional performance.

Healthy companies all possess and emanate a certain vitality and spirit  This spirit is not a religious fervor or a mindless cheerleader enthusiaism but a deep feeling of shared humanistic values at the core of the company. These values are the glue that binds healthy, successful employees with healthy, productive workplaces.  They influence the way people act and think at all levels of the company and form the foundation for corporate policies and practices. They define roles and responsibilities and dictate how business decisions are made. These principles are expressed and applied at every turn of the business, from receptionists and loading dock workers, through managers and executives, and into the board of directors.

These values are perpetually interacting, expanding, and contracting like a living entity. Each value depends on and determines the health of the others; sickness or disease that undermines one weakens all; robustness in one value strengthens all. The values at at the heart of the healthy company enable it to continuously grow, evolve, and renew itself, reinforcing what is productive and positive and sloughing off the unhealthy and unworkable. In short, the causes and effects between values, people, and companies are not linear but circular. Values are the center of the enterprise; they circulate through every cell and artery of a company, and a company and itsemployees either reinforce healthy values or bring about their decline.

Healthy company values bind people to their organizations. By creating a common language and appealing to principles of dignity, commitment, and growth, these values help to create an identity that connects thousands of people around a shared mission. Suddenly, the traditional hard values of business success and the nontraditional soft values of human development merge into one dream.

This convergence generates a synergy, producing something greater than the sum of their parts–a vital business that lives and breathes a humanistic philosophy, that treats people as more than profiot producers, views relationships as more than simply financial contracts, and regards the workplace as more than a setting for business. It is a holistic environment, one that nurtures, stretches, and empowers people. The result is an organizatipn that optimizes people, principles, and profits.

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 contact www.asifjmir.com

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