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.

Employee Rights


This issue actually spans a wide range of controversies. For example, issues have surfaced regarding the individual’s right to smoke in the workplace. As more and more organizations limit or ban smoking, this issue will continue to be somewhat controversial. Broader controversies involve issues associated with job ownership and individual rights while at work. A popular (albeit not entirely correct) assumption about Japanese organizations is that their employees have lifetime job security/ to the extent that US firms adopt this practice, the question becomes one of due process and the right to appeal in instances of dismissal or reassignment.

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.

Monopoly Regulation


Monopoly is usually considered to lead to economic inefficiency. Excessive monopoly profits are commonly regarded as unfair to consumers. Policies for dealing with monopoly range from laissez faire or toleration at one extreme to “trust-busting” at the other. Another possibility is to put monopolistic enterprises under government ownership, as is commonly done in Europe for railroads and telephone service. Regulation of the monopoly’s price and quantity or quality of service by a government agency is important. In the US regulation is standard practice for privately owned ‘public utilities’ providing goods and services such as electric power, water and gas, telephone, and transportation—usually thought to be natural monopolies.

The standard philosophy of regulation aims at limiting the monopolist to a ‘normal profit.’ Normal profit is supposed to be just adequate to attract needed capital and other resources into the business, but not so high as to represent exploitation of consumers. Normal profit in the accounting sense corresponds to zero economic profit. Zero economic profit characterizes long-run equilibrium in perfect competition. In a sense regulation achieves the result that may occur if competition is possible.

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.

Self-Directed Work Teams


A self-directed work team is a group of employees responsible for an entire work process or segment that delivers a product to an internal or external customer. Sometimes called self-managed teams or autonomous work groups, self-directed work teams reduce the need for extra layers of management and thus can help control costs. Such teams are designed to give employees a feeling of ownership of a whole job. With shared team responsibility for work outcomes, team members often have broader job assignments and cross-team to master other jobs, thus permitting greater team flexibility.

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.

Why Firms are Nationalized?


One might assume that government ownership of the factors of production is found only in communist or socialist countries, but that assumption is incorrect. Large segments of business are owned by the governments of many countries that do not consider themselves either communist or socialist. From country to country, there are wide differences in the industries that are government owned and in the extent of government ownership.

There are a number of reasons, sometimes overlapping, why governments put their hands on firms. Some of them are 1) to extract more money from the firms—the government suspects that the firms are concealing profits; 2) an extension of the first reason—the government  believes it could run the firms more efficiently and make more money; 3) ideological—when left-wing governments are elected, they sometimes nationalize industries, as has occurred in Britain, France, and Canada; 4) to catch votes as politicians save jobs by putting dying industries on life-support systems, which can be disconnected after the election; 5) because the government has pumped money into a firm or an industry, and control usually follows money; and 6) happenstance, as with the nationalization after World war 11 of German-owned firms in Europe.

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.

Pride through Responsibility


If a person is to feel a sense of power in his job, he must feel a sense of pride—pride in the company, pride in the department or group, and perhaps most important, pride in himself.

Pride creates the desire to succeed; the desire to succeed causes people to dig down deep within themselves and draw upon untapped inner resources. Pride is perhaps the greatest catalyst for getting people to discover and use their own personal power.

One of the best ways to instill pride in people is by giving  them a sense of responsibility; by helping them know that they have an important job to do.

A sense of ownership is what we are trying to create. This sense of ownership must be present if you wish to create an entrepreneurial spirit.

If a person believes the job is lowly and insignificant, if he believes that others look upon the job as relatively unimportant, his performance will usually reflect this belief. On the other hand, if you repeatedly remind him of the importance of his job, he will usually perform the job with a sense of pride and purpose.

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.

 

Good Maintenance


Good maintenance is fundamental to productive manufacturing system; try running a production line with faulty equipment. Total productive maintenance is keeping the current plant and equipment at its highest productive level through cooperation of all areas of the organization. Generally, the first task is to break down the traditional barriers between maintenance and production personnel so they are working together. Individuals working together without regard to organizational structure, using their skills and ingenuity, have common objective—peak performance or total productivity.

This approach does not mean that such basic techniques as predictive and preventive maintenance are not used; they are essential to building a foundation for successful total productive maintenance environment. Productive maintenance is the process of using data and statistical tools to determine when a piece of equipment will fail, and preventive maintenance is the process of periodically performing activities such as lubrication on the equipment to keep it running.

The total maintenance function should be directed towards the elimination of unplanned equipment and plant maintenance. The objective is to create a system in which all maintenance activities can be planned and not interfere with the production process. Surprise equipment breakdowns should not occur. Before the advent of computer-aided manufacturing, operators in some organizations were responsible for their machines and took a certain pride of ownership. With the help of maintenance technicians, operators spent part of their work time keeping their equipment in good running order. Recent technical advances have given us more tools to perform the maintenance function.

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.

 

Stock Ownership


One of the best incentives a boss can offer is a fraction of the action in the form of performance-based monetary rewards, or, better yet, options to participate in a company stock ownership. One of Ross Perot’s greatest pleasures was to make some of his managers into multimillionaires through stock participation. They all repaid him with generated enthusiasm, renewed energy, and, ultimately, more corporate profits than any of them had ever imagined. Stock participation can be one of the best ways to transfer the spirit of entrepreneurship into any company. By spreading out the risk-reward net to include more of the staff, the good boss uses shared stress to encourage group excellence.

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.

 

Corporate Disclosures


Giving stockholders more and better company information is one of the best ways to safeguard their interests. The theory behind the move for greater disclosure of company information is that a stockholder, as an investor, should be as fully informed as possible to make sound investments. By law, stockholders have a right to know about the affairs of the corporation in which they hold ownership shares. Those who attend annual meetings learn about past performance and future goals through speeches made by corporate officers and documents such as the company’s annual report. Those who do not attend meetings must depend primarily on annual reports issued by the company and the opinions of independent financial analysts.

Historically, management has tended to provide stockholders with minimum information. But companies now disclose more about their affairs, in spite of the complicated nature of some information. Stockholders therefore can learn about sales and earnings, assets, capital expenditures and depreciation by line of business, and details of foreign operations.

Corporations also are required to disclose detailed information about directors, how they are chosen, their compensation, conflicts of interest, and their reasons for resigning in policy disputes with 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.

 

Group Decision-Making


The person leading the discussion can have a big effect on whether the group’s decision is useful. If a chairperson monopolizes and continually shoots down others’ ideas while pushing his or her own, it’s likely that other points of view will go unexpressed.

An effective discussion leader has responsibility to do the following:

  1. See that all group members participate. As discussion leader, it is your responsibility to ensure that all group members participate and have an opportunity to express their opinions. Doing so can help ensure that different points of view emerge and that everyone takes ownership of the final decision.
  2. Distinguish between idea getting and idea evaluation. Evaluating and criticizing proposed solutions and ideas actually inhibit the process of getting  or generating new ideas. Yet in most group discussions, one person presents an alternative, and others begin immediately discussing its pros and cons. As a result, group members quickly become apprehensive about suggesting new ideas. Distinguishing between the idea getting and idea evaluation stages—in particular, forbidding criticism of an idea until all ideas have been presented—can be useful here.
  3. Not respond to each participant or dominate the discussion. Remember that the discussion leader’s main responsibility is to elicit ideas from the group, not to supply them. As a discussion leader, you should therefore work hard to facilitate free expression of ideas and avoid dominating the discussion.
  4. See that the effort is directed toward overcoming surmountable obstacles. In other words, focus on solving the problem rather than on discussing historical events that cannot be changed. Some groups make the mistake of becoming embroiled in discussion about who is to blame for the problem or what should have been done to avoid the problem. Such discussions can’t lead to solutions because the past can’t be changed. As a discussion leader, your job is to ensure that the group focuses on obstacles that can be overcome and solutions that can be implemented.

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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