Management Contract


The Management Contract is an arrangement under which a company provides managerial know-how in some or all functional areas to another party for a fee that ranges from 2 to 5 percent of sales. International companies make such contracts with 1) firms in which they have no ownership, 2) joint venture partners, and 3) wholly owned subsidiaries. The last arrangement is made solely for the purpose of allowing the parent to siphon off some of subsidiary’s profits. This becomes extremely important when, as in many foreign exchange poor nations, the parent firm is limited in the amount of profits it can repatriate. Moreover, because the fee is an expense, the subsidiary receives a tax benefit.

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.

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Ethical Problems in Product Strategy


Product quality, planned obsolescence, brand similarity, and packaging questions are significant concerns of consumers, managers, and governments. Competitive pressures have forced some marketers into packaging practices that may be considered misleading, deceptive, and/or unethical. Some firms make package larger than necessary to gain shelf space and consumer exposure in the supermarket. Odd-sized packages make price comparisons difficult. The real question seems to be whether these practices can be justified in the name of competition. Growing regulatory mandates appear to be narrowing the range of discretion in this area.

Product testing is another area that raises ethical concerns. To help assure consumers of product quality, many companies use seals of approval for their goods and services. Recently however consumers have begun to question whether the use of these seals is ethical, since they have to be purchased at fees ranging from $10,000 to $1 million. The seals also do not promise that the product is the best one on the market. Many of the organizations that offer seals of approval do not conduct product testing themselves or even compare brands.

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.

Franchises


A franchise is a contract arrangement by which the owner of a trade name, trademark, copyright, or process grants permission to others to use this property in selling goods or services under specified conditions.

The purchaser of a franchise (franchisee) obtains the advantage of offering a well-known or unusual product that may already have wide appeal. The franchisee  also receives the benefit of mass buying and advertising. Typically, the buyer of a franchise may pay a flat fee for the franchise as well as an additional percentage based on sales. The franchisee may also be required to pay a fractional share of the franchisor’s promotional costs and to purchase certain supplies from the franchisor.

Contract and sales laws pertaining to franchises are comparatively new. If the franchise involves the resale of goods or food, both the franchisor and franchisee will usually be liable under a breach of warranty if the food or other merchandize is not wholesome or proper from the consumer’s standpoint. However, tort liability to a third person is usually the responsibility of the franchisee alone. In a case where the franchisee’s truck struck  and negligently injured a pedestrian , the franchisor would normally have no responsibility.

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.

 

Figuring out what to charge


The hardest part of developing a fee schedule is figuring out what to charge. The professional fees in all fields are rather idiosyncratic. Rarely can a freelance professional set an across the board price for services. Most professionals have sliding fees. Some old, favored clients are always charged less than newer, more affluent clients. Some clients are charged overtime and for rush jobs, while others never are. And in almost every field professionals charge different rates for corporate or commercial work as opposed to creative or literary work.

Then, too, there are various ways to structure a professional fee. In the course of one year a professional is likely to take on jobs that pay by the hour, the day, and by flat fee.

What does it all mean to someone starting out in freelancing who is unsure what to charge or even how to figure out a fee schedule? Basically, a freelancer should not get too caught up in working for one preset fee—for one hourly rate. Sometimes a client will pay you less per hour, but you can pad the bill so you end up earning as much as you would if you charged a higher hourly rate. Sometimes you take a consulting job that is not particularly interesting or challenging but which pays well, so you can later take on creative work that does not pay so well. The trick is to charge enough overall so that you earn what you need to earn. But even a sliding scale or a willingness to negotiate does not mean that you will not require a well-planned rate schedule. If you ever go into a meeting to settle a fee and are unsure what to charge or what you would like to earn, then you will probably walk away a loser. You must always be prepared to negotiate, and you should expect to earn what you are worth 90 percent of the time. To do this, you need to figure out in advance what the general fee ranges will be for your services. The only danger is in setting an hourly fee and measuring all your work by that one standard.

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