Author: chris

Influence processes

Introduction

CEOs and presidents yield power that they use to influence people and employees in organizations. The way this power is exercised is what determines the influence it will have on different people (Shamir, House, & Arthur, 1993).  Leadership can be in the form of non-coercive influence being used to achieve the groups or organization’s goals, motivate the behavior of workers towards the achievement of these goals, and help in defining the group’s or organizational culture. Leadership can also be in the form of coercive influence being used to achieve the organization goals and define its culture. Influence can be examined as the interpersonal process of changing a person’s or a group’s initial thought, feelings, behavior and goals (Shamir, House, & Arthur, 1993).

The various types of influence processes and the factors that can affect them

Influence processes in management include; direct decisions, allocation of resources, reward system, selection and promotion of other leaders and role modeling (Shamir, House, & Arthur, 1993).

Direct decision

This process gives the leaders the ability to influence the choices made by their seniors. This influences the organizations by the power of the leaders to formulate the mission and vision aspects of an organization. They determine the organizational structure and the leaders are given the power to dictate over all the activities of the organizational (Shamir, House, & Arthur, 1993).

Allocation of resources

Organizational resources such as money, human and technological resources are decided on by the leaders. This affects the overall activities of the organization. The leader has the power to allocate money to a department that is clearly in need and also reduce the resources that are allocated to a department that do not require much or misuses the resources (Shamir, House, & Arthur, 1993).

Reward system

Leaders use rewards to influence the performance and behavior of their employees. The rewards could be in the form of money incentives or other non material rewards such as praise. The rewards are intended to direct the behavior of the workers towards attainment of organizational goals (Shamir, House, & Arthur, 1993).

Selection and promotion of other leaders

Leaders can give more power to some of their employees so as to achieve the goals of the organization. This also cultivates good leadership among the junior leaders. Moreover, good leadership demands that leaders should not hoard power but distribute it appropriately (Shamir, House, & Arthur, 1993).

Role modeling

The leaders are expected to portray the behaviors that they wish their employees to show. They should act as role models to their followers because the followers are likely to take the path that their leaders take. The leader is expected to posses high moral and ethical standards and the employees will have the same qualities (Shamir, House, & Arthur, 1993).

The influence processes can be affected by different factors that include charisma, legitimacy, expertise, relationships and even personality. The factors can be related to leadership qualities and they have a big significance on the kind of influence that a leader impacts on his followers. These leadership skills determine the way in which the followers respond to the influence processes used by the leaders. The attitude of the leader determines whether their followers will conform or resist (Cartwright, 2009). In situations where leaders use so much force, the followers resist and they follow rules and execute their duties because they have to but not because they are happy doing them. If the leaders are flexible and friendly, they establish a good relationship with their followers. This makes the followers to perform their duties well because they enjoy doing them. These factors interact to determine how effective the influence processes will be (Cartwright, 2009).

Andrea Jung

Direct decisions: in decision making, she has the responsibility of making direct decisions about the organization’s structure and strategy. These critical decisions cannot be made by anyone else other than the CEO. She made the decision to develop her beauty and cosmetics industry through internet sales (Yukl, & Heaton, 2002).

Allocation of resources: he used her power as the CEO to reduce staff costs by $300m.she also allocates a big amount of money to the research and development program in her organization.

Reward system: this leader uses any rewards to motivate the top sellers. The commonly used rewards were summer vacation offers (Yukl, & Heaton, 2002).

Selection and promotion of other leaders: she brought the revolutionary idea that there was not supposed to be women past middle management. 85% of the top management leaders in the company are currently women (Yukl, & Heaton, 2002).

Role modeling: she is a model to workers and the community and to prove this she changed the company’s motto to “the company of women”. This shows that women have a very big significance in the development of the society and working arena. She is determined and courageous to show that it is possible to have successful female managers.

Indra Nooyi

Direct decisions: they are made by the leader and they are specifically a domain of those with utmost power. She is able to turn ideas and plans into reality. This is evident in making the fast food restaurants diverse in their services and acquiring the Tropicana and the Merger with Quaker oats (Yukl, & Heaton, 2002).

Allocation of resources: Nooyi used an influence process in the allocation of resources whereby she redirects a quarter of Pepsi’s marketing dollars to social media and digital promotions. She promoted community projects and promotions of the organization’s products. She pays much attention to the community projects as a way of doing well to the people and providing the best training to employees, best tools, and offering opportunities for development. Hard work and rewarding employees are the values in her firm.

Reward system: she considers it necessary to reward workers for their good performance. Top sellers are rewarded greatly and this is supposed to be a form of motivation to the sellers and also encourage all sellers to work hard and achieve the best for the firm. She also sends hand written appreciation to the best performing sellers (Yukl, & Heaton, 2002).

Selection and promotion of other leaders: this is supposed to be done keenly by the senior leaders such as the CEOs. Nooyi does not promote other leaders in her firm and she engages in micromanaging the firm and as a result many executives have left. This interference with the junior leaders’ activities can influence an organization separately. The negative influence is seen in the employees and in turn seen in the buyers.

Role modeling: she plays a role modeling part in her firm by practicing the behaviors that she wants the employer to show. Hard work is one of the behaviors used to model the behaviors of the sellers. She is also a role model to young girls in her native homeland which is India. By participating in the activities of her form, she shows her commitment and dedication (Yukl, & Heaton, 2002).

Brenda Barnes

Direct decisions: she uses decision making to improve the economic performance of her firm.

Allocation of resources: she allocated extra resources to the R&D and marketing to promote develop the amount of sales per year. She also reduced the marketing budget in 2009 to increase the profit margins after she had increased it in the previous year.  Her decisions also included redirecting from non-core businesses to core businesses (Manz, 1986).

Reward system: employees are rewarded according to their performance. She also ensures diversity in the work place as an extra reward to the employees.

Selection and promotion of other leaders: she hires a new president to the firm. She holds that the process of selecting and promoting employees to higher ranks of leadership should be done very carefully because the kind of leaders selected are likely to influence the performance of an organization (Manz, 1986).

Role modeling: Barnes plays a role modeling roles as a working mother and executive who had a controlled work-life balance. She was able to spend quality time with her family and at the same time performing excellently as the head of the firm. She promoted the value of a family and re-launched the firm to be “women’s network” (Manz, 1986).

Conclusion

These influence methods affected the organizations in a positive way because it is evident that the workers are more committed in their work. These influence processes are exercised by charismatic and authentic leaders who inspire their employees to achieve their well communicated goals for the organizations. In order to facilitate these influence processes, qualities of good leadership must be applied in the working areas. These qualities enable clear communication of the organizational goals, and establishing a good relationship between the leaders and the employees.

 References

Cartwright, D. (2009). Influence, leadership, control. New York: Unwin.

Manz, C. C. (1986). Self-leadership: Toward an expanded theory of self-influence processes in organizations. Academy of Management review, 11(3), 585-600.

Shamir, B., House, R. J., & Arthur, M. B. (1993). The motivational effects of charismatic leadership: A self-concept based theory. Organization science, 4(4), 577-594.

Yukl, G. A., & Heaton, H. (2002). Leadership in organizations. New York: Pearson.

 

 

 

 

Supply Chain Risk Management Analysis: Coca Cola Company

Coca-Cola Company is a multi-billion beverage producing and bottling enterprise that has won the hearts of many over the years it has been in operation. The journey to its being a market leader has been influenced by a rich history which ranges from leadership to its management of procurement operations in both its internal and external environment. From a life story told of a former CEO at the company, it is no secret that the growth and development of Coke has not only been influenced by leadership from Robert W. Woodruff who is portrayed as a very influential retired CEO. The CEO has been applauded for starting the current supply chain that has served the company for many years. His predecessors have only refined the supply chain process by making it less risky thus increasing the company’s competitive advantage (Kerin & Roger, 2012). Understanding this history leads us into acknowledging how institutionalization of the company’s culture was incorporated into achieving efficiency and effective in its procurement division specifically the supply chain.

At Coca Cola Company, procurement has been integrated with total quality management (TQM) and these two factors have propelled the coke brand into not only attaining competitive advantage but also a becoming a market leader in the soft drink industry. Coca Cola Company presents a good case scenario where an organization can go beyond managing its own supply chain and strive to undertake proactive strategies in order to curb possible supply chain risks for both its suppliers and customers. By so doing the Coca Cola Company has improved its procurement management processes thus increasing efficiency which adds up to creating a competitive advantage. Looking at the background information regarding the company’s operations and information systems identifies Coca Cola as a well leveraged company with inert potential to deal with uncertainties arising from its supply chain (James, 2007).

Literature review on supply chain risk management

Supply chain is a complex and dynamic process that involves an extensive interaction between people, organization, resources and information (Sandhusen, 2008). Activities undertaken along a supply chain facilitates the movement of products from the company which manufacturers the goods into the suppliers premises after which it is distributed to the final consumer. In the case of Coca Cola which is a beverage manufacturing company, its supply chain activities range from transformation of natural resources and raw materials into a finished soft drink. A council of professional supply chain managers described a supply chain as a sophisticated process encompassing managing and planning activities involving sourcing and procurement, managing inbound and outbound logistics as well as converting raw materials into finished goods (Sucky 2009). As a result, a supply chain is a conglomerate of partners such as suppliers, intermediaries and customers which essentially narrows down the definition of supply chain management into an activity that entails management of the demand and supply channel.

The supply chain management process is facilitated by sound information systems, sales and marketing, product differentiation and financial endowment of a company (Clow & Donald, 2007). The main goal of managing supply chain is derived from the need to achieve economies of large scale production which in return increases profitability and fosters competitive advantage. The supply chain management activities undertaken by multinational companies such as Coca Cola are more complex in nature. Managing global supply chains requires institutionalization of ethical practices into the organizational culture of a company in order to assure customers of reliability in supplies which further boosts their brand loyalty (Cleland & Gareis, 2006). As for Coca Cola their international supply chain has been facilitated through construction of affiliate companies which operate in major towns all over the world. This means that their supply chain is rather decentralized from the headquarters.

Along the supply chain, there arises a wide array of risks. As a result the need to manage risks along the supply chain is necessitated because risks could hamper the timely delivery of goods and services to the customers. The Royal Society, (2012) defines supply chain risk management as a process conducted by procurement managers aimed at implementing strategies to hedge the company against exceptional risks that could be too expensive to be managed by insurance companies. Such strategies involve continuous assessment of risks in order to reduce vulnerability of the possible risks along the supply chain.  Norrman and Lindroth, (2012) further defined supply chain risk management as a deliberate process set by a company in order to facilitate interaction between stakeholders and facilitate achievement of organizational objectives. From this definition, it becomes apparent that managing possible risks along a supply chain is a continuous process that requires constant assessment and review of the risks in order to cater for emerging risks (Dobkin, 2009).

In the case of Coca Cola, the risk management process has been extended to cover suppliers and customers who are their core stakeholders. Furthermore an analysis of the sources of risks associated with the supply chain for Coca Cola identified that the company supply chain risks could emanate from three sources. As emphasized by Stevenson, (2005) the risks range from those internal to the supply chain, external risks and network related supply chain risks. These classifications can be narrowed down into organizational, environmental and supply chain related risks. Supply chain risks are so demanding in the sense that they are uncertain and their impact could be detrimental to the organization. According to Juttner, (2012) External sources of risks comprise of external factors that a firm can hardly influence among them being political risks, social risks, natural risks, market or industrial risks which are caused by volatile demand and supply determinants.

The second classification entails internal or organizational supply chain risks which range from labor unrests, failure of machinery and information systems while the third source of supply chain risks is the network related or supply chain related risks such as relationship between partners in the supply chain (Rainer 2009). This factor is dependent on the degree of cooperation and interaction between the company and its intermediaries. In the event that these risks occur, then the supply chain will be hampered in terms of increased costs for the company, reduced quality, and compromised health and safety standards for the customers and employees.

On the other hand, Johnson and Zsidisin (2007) came up with a different classification that classifies supply chain risks into supply related risks which lie in the bracket of capacity limitations, supply disruptions and currency fluctuations. Their second classification is based on the demand related risks caused by volatility or seasonality of demand, seasonal imbalances and desire for new products motivated by innovation. The demand related risks are more so related to competitors because in the event that competitors for Coca Cola. For instance there is an ongoing market war between Coca Cola and Pepsi hence in the event that the latter designs a much superior energy drink then definitely the demand for the formers energy drink will be jeopardized leading to a reduction in demand which then becomes a supply chain risk (Juttner, 2012).

Additionally Johnson and Zsidisin, (2012) emphasized that supply risks can be promoted further by production derivatives such as design of the goods, packaging materials, cost, availability and quality, manufacturing technology, supplier, environment, safety and health factors. In the case scenario, Coca Cola has employed the use of specially designed plastic and glass bottles. The bottles are designed with a wide base to increase stability of the bottles thus reduce risks associated with packaging (Andreas & Marcus, 2011). The quality of their soft drinks has been standardized across all of the affiliate companies. This is because certain inventory characteristics have been exhibited by Coca Cola including stocking of raw materials. It includes the cola chemical formulae, water and other additives.

The raw materials are processed in a state called work in progress which includes mixing of the chemicals, additives and water which then moves onto the finished goods stage where the soft drinks are bottled, packaged and transported to wholesalers, warehouses, stores and final consumers. The stringent observation of manufacturing and packaging rules has ensured that the beverages attain a desirable quality while the decentralized operations ensure that production and procurement costs are minimized which translates into low cost beverages. This by itself is a competitive advantage for Coca Cola because decentralization reduces their supply chain thus reducing supply chain risks. From the integration of the literature review with the definition and illustration of supply chain risk management processes, it emerges that other authors seem to support the ideas postulated by Juttner supporting that there are three major sources of supply chain risks (Juttner, 2012).

Generally there is a widespread notion among author that supply chain risks are mostly related to outbound and inbound logistics and this is true. Research conducted by Andreas and Marcus (2011) identified that most procurement risks are incurred during the flow of information and materials in terms of goods and services. They emphasize that such risks not only affect the company but also the suppliers, customers and sub-suppliers which means that companies have to be vigilant when designing and reviewing their supply chains. Apparently, Andreas and Marcus (2011) noted that the procurement departments have become more enlightened on undertaking measures to curb supply chain risks because supply chains are the main determinant towards attainment of competitive advantages.

Importance of supply chain risk management strategies on Coca Cola Company

Wieland and Wallenburg, (2012) supports that the field of supply chain risk management has made organizations realize risks associated with unmanaged risks along the supply chain.  He quotes instances of Erickson Electronic Company which was faced out of the market as a result of its negligence of its suppliers and possible risks of fire (Wieland & Wallenburg, 2012). Erickson Company became vulnerable and succumbed to lose arising from fire which caused major loses and inconveniences which later led to financial crisis and adverse competition. This instance supports the need for managing risks along the supply chain. Therefore this report purposes to illustrate how sound procurement strategies and supply chain risk management strategies have been important to the attainment of competitive advantage at Coca Cola Company.

The process of supply chain risk management starts with inventory management. Inventory management plays an essential role at Coca Cola Company since it deals with the allocation of resources, stock taking, store keeping, replenishing of goods, forecasting, valuation and pricing (Bierderman, 2004). At this company, inventory management has been known to be proportionate to the level of its financial success. Combining inventory management with supply chain is a complex task that requires adequate planning, experience and analytical skills because over stocking by both the company and its soft drink suppliers might hold up capital that might have been productively used by another department whereas under stock may lead to stock cuts or stock outs which reduces productivity of a firm. Thus the attainment of the right inventories at Coca Cola has been a priority in its endeavor to attain maximum competitive advantage.

At Coca Cola Company, risk management is a collective responsibility meant to create a cohesive unit between all its business partners who are essentially stakeholders. By so doing, the company has embraced a holistic approach to supply chain risk management and this has bolstered that attainment of procurement strategies (Dev & Don 2005). By involving suppliers, consumers and surrounding communities through extensive corporate social responsibilities especially in Africa, Coca Cola has managed to get new ways of managing its extensive supply chain activities. In addition the careful selection of its supply chains coupled with the employment of experienced employees has been a major factor in fostering efficiency and attainment of competitive advantage.  With such initiatives, the company has continuously transformed its operations to encompass mitigation plans aimed at managing risks related to logistics and finances thus the company has experienced very few interruptions in the past. Ultimately, Coca Cola Company is faced paced towards attaining supply chain optimization because measures have been put in place to manage diseconomies of scale that might arise from mechanical failures at one of its production units.

Prior planning is of essence in order to attain a balanced risk management program. Taking a deeper analysis of operations at the Coca Cola Company illustrates that the history of the company is another determinant in facilitating supply chain optimization. In bid to gain competitive advantage and becomes a market leader, Coca Cola Company had to go through processes involving acquisition of patent rights and taking complete ownership of the coke formula.  This strategy was aimed at giving the company total control over its supply of the Coke formula which is a vital ingredient in the manufacture of the coke soft drink. After possessing full ownership of this vital ingredient the company had to gain the trust of the surrounding community in Atlanta by actively participating in social corporate responsibilities. The move was motivated by the need to win customer loyalty from the surrounding communities back at its Headquarters after which it started building more production units in other states. This action came to be termed as decentralization of operations which was helpful not only in reducing costs of production but also in managing costs and more so spreading of risks. With the decentralized operations, the company was assured of more income because of the large customer base and in the event of failure along the supply chain; beverages could still be supplied from another affiliate company (Ireland 2010).

The supply chain manager at Coca Cola Company has promoted the company by his enthusiasm in promoting the enactment of environmental conservation pacts such as the Climate Change Task Force and Kyoto Protocol. According to a story narrated by a former CEO at Coca Cola, is worth noting that the history of Coke was made better by its implementation of a sustainability triangle between non-profit organizations, governments and other businesses. Among which are the company’s key partners in the supply chain process. This triangle was helpful in driving the management of Coca Cola Company into valuing everyone along its supply chain (Bierderman, 2004). Apparently everyone in Coca Cola’s distribution chain counts and this is one reason why the company ensures that all its down-lines make a profit from every bottle of soft drink sold. The profits derived by the suppliers work as a motivation towards being responsible hence delivering quality to its final customers again Coca Cola has managed its supply chain in such a way that the soft drinks are available to the customers at the right time and in the right quantities.

Coca-Cola Company has for a long time applied the Just in Time Inventory (JIT) theory of supply chain management. It is a Japanese concept of saving on supply chain costs where goods are ordered for at the instance when they are needed so as to avoid loss of quality, depreciation or wastages which might result into lose (Michael, Nicholas & Anita 2008). Additionally, its subsidiaries or affiliates use real time data system to collect and disseminate information regarding its sales proceeds. The end result has been the attainment of competitive advantage for all the partners involved in the supply chain of Coca Cola Company because their procurement process is devoid of volatilities that could jeopardize attainment of economies of scale.

 

List of References

Andreas, V & Marcus, E (2011), Rating Customers According to Their Promptness to Adopt New Products, Operations Research, Canada.

Andreas, W & Marcus, W 2011, Supply-Chain-Management in stürmischen Zeiten. Berlin.

Bierderman, D, 2004, Reversing Inventory Management. Traffic World Press: Michigan.

Cleland, D. I. & Gareis R. (2006). Global Project Management Handbook. “Chapter 1: “The evolution of project management”. McGraw-Hill Professional

Clow, K & Donald, B 2007, Integrated Advertising Promotion and Marketing Communications, 3rd Edition, Upper Saddle River, New Zealand

Dev, C & Don E, 2005, In the Mix: A Customer-Focused Approach Can Bring the Current Marketing Mix into the 21st Century. Marketing Management Journal

Dobkin, J 2009, Direct Marketing Strategies: Forget Theory – Here’s What Really Works, Danielle Adams Publishing Mexico.

Ireland, H 2010, Understanding Business Strategy. South Western, Canada.

James, S 2007, The Business Communication Casebook: A Notre Dame Collection. Edition2. Cengage.  United States

Johnson, M & Zsidisin, I 2012, Learning from toys: lessons in managing supply chain risk from the toy industry, California Management Review, Vol. 43 No. 3, pp. 106-24.

Juttner, U 2012, Supply chain risk management: outlining an agenda for future research”, in Griffiths, J., Hewitt, F. and Ireland, P. (Ed.), Proceedings of the Logistics Research Network 7th Annual Conference, pp. 443-50.

Kerin, K & Roger, A 2012, Marketing: The Core, Mc Gaw-Hill Ryerson. Canada

Michael, P & Nicholas, A & Anita, M 2008, An Interview with Michael Porter, The Academy of Management Executive, U.S

Norrman, A & Lindroth, R 2012, Supply chain risk management: purchasers’ vs planners’ views on sharing capacity investment risks in the telecom iindustry, Proceedings of the 11th International Annual IPSERA Conference, Twente University, 25-27 March, pp. 577-95.

Rainer, T 2009, Introduction to Information Systems (2nd Ed.), Wiley, United States.

Sandhusen, R 2008, Chapter 6: Organizational markets and buyer behavior, Rohan, UK

Stevenson, W, 2005, Production operations management. Irwin Press:  Boston

Sucky, E 2009, Inventory management in supply chains: A bargaining problem. International Journal of production Economics.

The Royal Society 2012, Analysis, Perception and Management, The Royal Society, London.

Wieland, A & Wallenburg, M 2012, Dealing with supply chain risks: Linking risk management practices and strategies to performance. International Journal of Physical Distribution & Logistics Management, 42(10).

Evolving Leadership Models

Leadership is the social influence of an individual that aids them to get the cooperation of people in order to get tasks done in an organizational setting. For a person to be considered a leader there are certain values, traits and skills that the leader must possess to be considered fit for the title “leader” These qualities include, integrity, decisive, courageous, inspiring just to name but a few. Leadership models define the manner in which leaders execute their duties. The essay that follows will explore different leadership models and center the discussion around transformational and transactional leadership models.

My choice leadership model is transformational leadership. In transformational leadership, the leader is inspiring, enthusiastic and passionate, is involved in the organizational activities by employees, and focuses on helping each one of them to achieve desired results. They challenge employees to do more than they originally intended by setting higher expectations to achieve great performance (Bass & Riggio, 2012). Continuous improvement and standardization is priceless to the employees and the organization’s success. Great leader-follower relationships are fostered and a conducive working environment results where there is a constant personal improvement, which defines the organization’s culture (Hacker & Roberts, 2003).

I do not prefer transactional leadership on the basis that it is stressful to follow. Transactional leadership is a give and take type where leaders only focus on supervision and employee performance is either rewarded or punished. They focus on criticism, negative feedback and reinforcement (Lang, 2011).  The transactional model of leadership has rules, procedures and standards that are clearly set and employees must adhere to them to the latter. The term transactional leadership stems from the fact that employees are either rewarded or punished for the output they bring to the organization (Lussier & Achua, 2009).

In summary transformational leadership is more employee-focused where relationships and self-improvements are vital while transactional is more job focused and the leaders are not concerned with relationship. Therefore, I support transformational leadership.

 

References

Bass, M. B., & Ronald E. Riggio, E. R., (2012), Transformational Leadership, Psychology Press.

Hacker, S., & Roberts, T. (2003), Transformational Leadership: Creating Organizations ofMeaning, ASQ Quality Press.

Lang, M. (2011). Transformational Leadership. Munich: GRIN Verlag.

Lussier, N. R., & Achua, F. C., (2009), Leadership: Theory, Application, & Skill Development: Theory, Application, & Skill Development, Cengage Learning.

Unit II Article Critique: Communication in an organization

Summary

In the article, “Appraising the impact of organizational communication on worker satisfaction in organizational workplace” by Abugre James published in 2011, he assess how organizational communication impacts on the employee satisfaction at their workplace.   The findings of the study show positive relationships between effective communication and employee satisfaction. Organizations that have put in place effective communication strategies recorded high performance. Furthermore, workers would prefer good leadership communication behaviors as this create positive working environment and impacts on their level of satisfaction (Abugre, 2011).  The three formal organizations adopted in this study stand a better chance of recording positive performance by enhancing communication. This study targeted formal organizations and other organizations in Africa because they have similar cultures and management styles.

Article critique

The article is a peer review and accessible through academic databases. The article is   well structured. It has an abstract that provides a summary of the article, the purpose, methodology, findings and conclusion reached. It has an induction that provides an overview of the topic, methodology, result section, discussion and conclusion. It also has a list of references that the researcher used to substantiate his arguments. Various tables are also used to present numerical information to enhance understanding. The article is therefore credible and valid. The fact that is was published in an education database is an indication that it meets the threshold. The author is also a professional teaching at the University of Ghana business school, Legon in Ghana. The article is organized and coherent; the author uses understandable language.

Even though, the methodology adopted is appropriate, the researchers did not observe ethics in conducting the study especially when it comes to his data collection. He does not indicate any sign of ensuring that the identity of the participant is preserved. It is important to ensure that the participants are protected from exposure to third parties without their consent. Therefore, this limitation should be corrected in the subsequent studies. The sampling technique employed was also biased. The author was subjective in selecting the organization to study. It could be appropriate if the researcher would have sourced his information from a variety of organizations not only formal government organizations. This therefore provides an avenue for skewed findings that may not be representational. The sample size was also small and this may not have provided enough data to represent the entire organizations in the country and across Africa. These are some of the limitations recommendable for improvement.

Nevertheless, the article is very important to organizations and even to my professional life. Its recommendations are applicable in the sense that they provide insights for the management to adopt to good communication strategies in their organization.  Communication enhances workers relationships as well as employees trust fostering corporate citizenship and helps in creation of organizations networks. It also helps to resolve conflicts amicably and most importantly ensure employee satisfaction which transcends into improved performance. Therefore, as a professional, I have an obligation to always foster communication in my organization to reap the benefits. I believe that when employees are satisfied then the rate of turnover decreases as well. Leaders must therefore promote and create environment that is conducive and open.

In conclusion, the article is credible and at the same time informative. Its structure is well organized and the information is coherent to foster understanding. Even though it has some limitations that need improvement its argument about communication in organization and its impacts are well supported by various sources.

Reference

Abugre, J. (2011). Appraising the impact of organizational communication on worker        satisfaction in organizational workplace, Problems of Management in the 21st Century,     7-15

 

 

Finance And Investment

 

The rate of return for an Australian Commonwealth Government Treasury Bond is given as 4% per annum. The yearly return for the Australian share market is given as 12%. Suppose a listed company has a beta value of 0.75. The dividend payments for the listed company are expected to grow at 4% per year. The current dividend is $3 per share.

(a) Calculate the market premium.

The formula for calculating risk premium is to calculate the return or income on the investment less the return or income that would be earned on a risk free investment.

Risk-Free rate = 4% (Normally pegged on the Australian commonwealth Gov.T-Bonds)

Stock’s rate of return = $3

Market rate of return = 12%

= Risk Premium = Stocks rate of return – Risk Free rate

= 3 – 4 = -1 i.e. these means that the investment will incur a loss during these period

Beta = 4-4/12-4

= -0.125 The stock is very volatile as compared to the market.
(b) Calculate the investors’ required rate of return for the company’s shares.

Using beta to calculate a stock rate of return = beta *(market rate of return –risk free rate)

Risk free rate = 4%

Market rate of return= 12

Beta = 0.75

0.75(12-4) = 6% + 4% (risk free rate) = 10%

(4 marks)
(c) Calculate the intrinsic price of the shares. (4 marks)

Intrinsic value = 10%-4% = 4%

6% * 3 = $0.18
(d) If the market price is $50 per share, would you buy shares in the company? Explain your answer. (2 marks)

Yes. The beta = 50 – 4/12- 4 = 5.75 The stock is very volatile than the market. It will be a good investment. Beta indicates the riskiness of certain stock that’s used to analyze the expected rate or return. High volatility is also associated with high income and also high volatility.

The broadest index on the Australian share market is the All Ordinaries Index.

(a) Define the All Ordinaries Index and explain how the All Ordinaries Index can be used to estimate the market return of the Australian share market. (4 marks)

All ordinaries index derives its name from its meaning i.e. it includes all the oldest ordinary shares in its index calculations. All the shares that are listed in the ASX (Australian Stock Exchange) The ASX value of shares amounts to approximately makes up about 95% of the market Capitalization that are included in the ASX. All the ordinary shares had a base index of 500. It means that if the current index is 5000 points then the value of all the Ords have multiplied ten times since it began trading in January 1980. It was restructured in the year 2000 to include only 500 largest trading companies by their market capitalization.

(b) Construct a table showing the daily closing value of the All Ordinaries Index from September 30, 2013, to October 18, 2013, inclusive. (2 marks)

Month	All Ords Price Index		Month	All Ords Price Index
30-Sep	5217.72		10-Oct	5146.21
1-Oct	5206.27		11-Oct	5228.84
2-Oct	5214.89		12-Oct	5228.84
3-Oct	5232		13-Oct	5206.47
4-Oct	5205.88		14-Oct	5206.47
5-Oct	5205.88		15-Oct	5259.16
6-Oct	5160.61		16-Oct	5264.39
7-Oct	5160.61		17-Oct	5281.88
8-Oct	5148.1		18-Oct	5321.01
9-Oct	5151.55

(c) On your table, show the daily percentage change in the All Ordinaries Index in this time period, to two decimal places. (4 marks)

Month	All Ords Price Index		Month	All Ords Price Index
30-Sep	5217.72		10-Oct	5146.21	-0.10%
1-Oct	5206.27	-0.22%	11-Oct	5227.84	1.59%
2-Oct	5214.89	0.17%	12-Oct	5228.84	0.02%
3-Oct	5232	0.33%	13-Oct	5206.47	-0.43%
4-Oct	5205.88	-0.50%	14-Oct	5214.47	0.15%
5-Oct	5205.88	0.00%	15-Oct	5259.16	0.86%
6-Oct	5160.61	-0.87%	16-Oct	5264.39	0.10%
7-Oct	5160.61	0.00%	17-Oct	5281.88	0.33%
8-Oct	5148.1	-0.24%	18-Oct	5321.01	0.74%
9-Oct	5151.55	0.07%

(d) Did the All Ordinaries Index show any volatility during this time period and what was the cause of this volatility? (5 marks)

It’s a low volatility relatively high dividend index. The volatility shown were minor as the index Percentages moved to negative figures.

Question 7 (Total marks for this question = 10 marks)
Consider an investment project with a length of n years and an initial outlay IO. Let be the net cash flow for the project in year t, where t = 1, 2, …, n. Let k be the project discount rate per annum, expressed in decimal form. t ACF
Write down a formula for the net present value, NPV, for the project. (2 marks)

NPV = Cash Inflows – Cash Out flows + PV

{IO1/1+k) + IO2/ (1+k) ^2 +IOn/(1+k)^n = IO

NPV = (n∑ t=1) n-1 = OIt/ (1+k) ^t –IO

Write down a formula for the profitability index, PI, for the project. (2 marks)

PI = PV of Annual Cash Flows/Initial Investment.

PI = n∑t=1 *IOt/ (1-k) ^t/IO0

(c) Using your answers to (a) and (b), show that. (4 marks) NPV IO PI IO??

NPV= (n∑t=1) n-1 = OIt/ (1+k) ^t –IO = n∑t=1 *IOt/ (1-k) ^t/IO0

NPV = PI  = (n∑t=1) n-1 = OIt/ (1+k) ^t –IO = n∑t=1 *IOt/ (1-k) ^t/IO0

NPV=PI=

 

NPV = PV of Cash inflows – Initial Investment

PI =  PI = PV of Annual Cash Flows/Initial Investment  IF Cash flows = t and initial investment =  x then NPV = t – n while PI = t/n

t-n = t/n =

(d) Why is the net present value used more than the profitability index in capital budgeting?

The profitability index only supplements the conclusions arrived at after NPV calculations. It’s a relative measure of determining profitability. It’s not consistent in the calculations of mutually exclusive projects. NPV measures the profitability of a project and it provides for the time and value of money. It’s takes care of wealth maximization and satisfies the concept of value-additivity.

Question 10
State whether or not you think the Board of the Reserve Bank of Australia will decrease the cash rate again in the current interest rate cycle. Give reasons for your answer.

In the first quarter of this current year, the Australian GDP improved by 0.5% while it increased by 2.5% in the second Quarter. This trend if fairly favorable to the economy and there is no need to start causing jitters in the market as interest rates are normally affected mostly by what people perceive will happen in future. Changing the interest rates now may cause unwanted effects in the economy which currently does not warrant an increase or decrease in interest rates.

 

Reference

Levinson, M. (2006). Guide to Financial Markets. London: The Economist (Profile Books). pp. 155–6. ISBN 1-86197-956-8

 

 

 

Response to statement one

I tend to agree with the fact that animals feel pain just like human beings and should be treated with some due respect. However, I hold the opposite view that similar rights awarded to human beings should as well be awarded to animals. Human beings are supreme to animals and animals naturally exist to enhance well being of human including acting as sources of food.

Response to statement two

It is right for America, being the super power, to act as the world’s watchdog. Just like any other nation, I don’t expect America to lack domestic problems but at the same time, this should not prevent it from its responsibility of watching of the world to ensure peace, harmony and safety.

Response to state three

As much as immigration is associated with positive impacts according to the statement, I tend to hold the opposite view as it actually promotes terrorism and other dangerous acts of crime and insecurity. Exchange of bad culture is also a product of immigration.

Response to statement four

I tend to hold the opposite view on the statement that parents should not be held responsible for juvenile crimes but rather the children themselves. It is actually the responsibility of parents to shape up and make children grow up in a morally upright environment respecting the set laws and regulations. A child’s actions largely depend on the conditions he/she was brought up.

Response to statement five

Very few young girls engage in beauty pageants. Beauty pageants only serve small population of young girls and thus do not qualify as a fantastic way for young girls to grow talents, self esteem and public speaking ability. Schooling seems to be more effective as it give young girl opportunity to interact with others, take leadership roles and engage in curricula activities to enhance talents.

Rakesh Kapoor’s View on Leadership

Rakesh Kapoor believes that an individual’s opportunity to lead produces a new set of opportunities and challenges (Bryant, “Rakesh Kapoor,” 1^st answer). From his experiences, Kapoor describes how his childhood experiences shaped his worldview about leadership. For instance, his experience with schooling made him to conclude that if a manager is successful in company X then it is not automatic that he/she can realize the same results when managing company Y.  Such worldview is based on leadership reality because every organization has its unique challenges and opportunities. As such, each company’s management should come up with solutions to the challenge and exploit the opportunities for the benefit of the company. In fact, not all decisions made by the manager usually yield positive results thereby justifying Kapoor’s assertion that any leader ship opportunity should be treated as unique.

Secondly, Kapoor asserts that a leader should learn how to deal with the “bitter” realities for him/her succeed (Bryant, “Rakesh Kapoor,” 2^nd answer). Kapoor reports how his childhood experience with medicine shaped his world view; he believes that leaders should accept the fact that life presents unique challenges to be handled in a unique manner. As such, Kapoor recommends leaders to accept themselves since leadership is exposed to challenges. For example, any investor in a particular company always believes that the CEO’s leadership should guide the company to profitability. Nevertheless, some chief executives might use unethical means to drive their company’s to profitability. For instance, some CEOs may decide to manufacture counterfeit products to reduce the company’s expenses thereby increase its profit margins relative to costs. In his opinion, Kapoor argues that CEOs should know that one does not need shortcuts to achieving profitability, but embrace business rules for a sustainable success.

Kapoor further urges younger employees to begin, love their work, and strive for success. For instance, as a manger with  “electric” typewriters company at Gujarat, India,  Kapoor realized that successful leaders always start small (Bryant, “Rakesh Kapoor,” 3^rd answer). As such, a jobseeker or employee with a vision to become a successful manager should desire to work with a company that will enable him/her to make a personal impact in the long-run. In Kapoor’s opinion, leaders are those who have helped organizations create business empires out of dreams and not those exercising existing business strategies. For instances, great business leaders like the late Steve Job and Bill Gates created Apple Inc. and Microsoft Corporation respectively out of ideas. Similarly, John D. Rockefeller created Standard Oil Company out of personal dreams for success. Such examples justify Kapoor’s recommendation that jobseekers should test their leadership skills by seeking employment in smaller organizations.

Kapoor further urges that business leaders should enhance talent by hiring workers with a strong urge for success because such persons have the capacity to perform (Bryant, “Rakesh Kapoor,” 4^th answer). He also believes that those who are bright reasons logically and can direct businesses as managers to attain the intended success. Such assertion justifies why most businesses employ those who are bright because of the belief that such persons are productive.

In conclusion, Rakesh Kapoor’s leadership is impressive because of his belief that success can only be realized when one is focused. As such, effective leadership is often enhanced through being focused, ambitious, resilient, realistic, and creative in one’s duties.

 

Profiles

Brian O’Kelley, CEO, AppNexus.  In Bryant, Adam.  “For Brian O’Kelley of AppNexus, Learning Never Stops.” The New York Times, Corner Office. Nytmes.com. 17 Oct. 2013. Web. 24. Oct. 2013.

Bryant, Adam. Simon Anderson, on Creating a Culture of Shameless Honesty. The New York Times, Corner Office. 12 Sept. 2013. Web. 24. Oct. 2013.

Jeff Fluhr, CEO, Spreecast. In Bryant, Adam. “Jeff Fluh of Spreecast, on Finding Employees Who Fit.” The New York Times, Corner Office. 10 Oct. 2013. Web. 24. Oct. 2013.

Rakesh Kapoor, CEO, Reckitt Benckiser. In Bryant, Adam.  “Rakesh Kapoor on Accepting Bitter Pills.” The New York Times, Corner Office. 21 Sept. 2013. Web. 24 OCt. 2013.

Val DiFebo, CEO, Deutsch NY. In Bryant, Adam. “Val DiFebo of Deutsch NY, on Being Direct.” The New York Times, Corner Office. 19 Oct. 2013. Web. 24 Oct. 2013.

 

 

 

Punishment

The five main purposes of punishment include retribution, rehabilitation, restoration, deterrence, and incapacitation. People who have committed crime have to suffer the consequences. The punishment given can be in form of hardships such as physical pain and loss of freedom. In many cases, the punishment given should be equal to the harm done. An example of retribution would be imposing a fine for harm done to an individual. Restoration aims at reinstating the offenders to their previous state before they committed the crime. It differs from retribution in the sense that it aims to repair the harm done. Restoration would involve doing community work as a form of punishment.

The idea behind the rehabilitation perspective is to reduce the chances of committing crimes in future. Those who support rehabilitation hold the perspective that it is possible to unlearn criminal behavior. Training on anger management and providing opportunities to learn different skills are examples of rehabilitation programs. The deterrence principle aims at using a specific offender as an example to would-be offenders. Those who support this principle do so with the hope that potential offenders will abstain from committing crime for fear of receiving a similar sentence. The incapacitation principle aims at preventing the offender from doing more harm. This will involve imprisoning the offender for a long time.

Retribution seems to be the most common form today. It has received support from policy makers as well as from the society. Many people believe that offenders should suffer for the harm they have inflicted on others. They support the idea that offenders deserve the punishment they get. Punishing the offender in this way makes the people feel that they have received some form of justice and that the lawbreaker has paid the debts he owes them. It is an age-old system, which has been developed and practiced over time, and people have come to accept the kind of punishments offered. Deviating from such a system would be disrupting an established order in the society.

I think that rehabilitation is the most effective form. It involves an understanding of the crime and the offender. It supports the idea that people are drawn to crime for different reasons. It not only puts the blame on the individual, but it also considers the societal factors that would be the cause of crime. It goes a step further and ensures that those who offend will not be tempted to do so again, by giving them opportunities to rectify their behaviors, change their attitudes, and provide them with a chance to make a decent living. Identifying the causes of crime and finding ways to help the offenders ensures less crime is committed. Many lawbreakers end up committing other crimes because they do not have an option. Giving them more opportunities in life means that they have a chance to change their old lifestyles and habits. Reformed people will rarely go back to their old ways and this reduces crime.

Some people may prefer one form of punishment such as incarceration or retribution because they do not have the resources to implement other forms of punishment. Although many people recognize the importance of rehabilitation, the society may not be able to provide opportunities to the offenders. They may not be in a position to offer the resources required to train the offenders in matters education or to give them life skills. This limits their choices and they opt for the less expensive options.

 

Reference

Banks, C. (2004). Criminal justice ethics: Theory and practice. Thousand Oaks, CA: SAGE

Evaluating the Costs of Corporate Threats

Effects and Costs

Financial fraud and sabotage in a company has many far-reaching negative impacts that can lead to multiple long-term and short-term problems. Sabotage refers to malicious and deliberate actions by people intending to harm and weaken a unit through destruction, disruption and subversion. It also entails the intentional withdrawal of responsibility and efficiency in order to achieve a given self-centered goal (Petrucelli, 2012). On the other hand, financial fraud is a financial crime committed by an individual through manipulation and alteration of financial documents or financial transactions for the purpose of self-gain. Financial fraud is a crime that involves a violation of corporate law, and it is punishable by law. Sabotage and financial fraud can be done internally or through external influences. Internally organized actions amounting to fraud and sabotage are mainly coordinated and performed by employees of a company, entity, or organization. External influence is usually propagated by interested secondary parties such as competitors, financiers, and in some cases clients (Nixon, 2008). Irrespective of the means of crime, crimes propagated cause immense disruptions and losses for the company.

The impact and effects of sabotage and fraud are felt in all sectors and departments of an organization. The crimes negatively affect the success of the company as they lead to loss of profits, and revenue. Most crimes committed by individuals are propagated in order to earn financial gain. Culprits organize and implement mechanisms that drain money directly and indirectly from an organization. This, in turn, leads to the instability and financial shortage in the company. Business responsibilities, duties and operations are also negatively affected because of resource and financial shortage. On the other hand, the effects can lead to lack of funds to cater for salaries, debt repayment, supplies, contracts and shareholders. Future expansion and growth of an organization also depends heavily on the financial stability and proficient management of operations in all departments (Petrucelli, 2012). Failure to manage operations efficiently and the occurrence of fraud and sabotage can eventually lead to destruction and the collapse of an organization.

Financial fraud and sabotage in a company or organization can be either immense or minute. However, irrespective of the magnitude, affected parties lose trust or withdraw from the company. These crimes create a negative image for the affected organization and cause insecurities associated with future certainty, success, stability, performance and reliability. Financiers and investors of a company affected by sabotage and financial fraud tend to lose trust and confidence in the company. The presence of these problems exposes investors and financiers to major risks, such as, loss of money and bad debts (Barko, 2004). Moreover, potential financiers and investors interested in investing in the company fail to invest leading to additional problems for the organization. On the other hand, employees are negatively affected as they lose trust and confidence in the company. The employees feel insecure because of the risk of losing their jobs through impromptu retrenchment, or an entire collapse of the company.  This, in turn, can lead to early retirement and job changes by the employees and eventual loss of workers for the company. Sabotage and financial fraud should be avoided and controlled at all costs as they yield a chain of subsequent repercussions for the company.

Reasons

Sabotage and financial fraud in organizations has become exceedingly prevalent and common. There are many factors that determine, trigger and influence the occurrence of sabotage and financial fraud. Individuals committing these crimes can be internally based or outside based influences. Moreover, culprits of fraud can be from any level within  hierarchies of an organization. Research has shown  that most fraudulent acts are perpetrated by high officials (Barko, 2004). Factors influencing the occurrence of fraud and sabotage are determined by personality factors as well as the organization’s environment. Job satisfaction is a significant factor that is associated with fraud and sabotage. Unsatisfying occupations can be triggered by many factors, which include insufficient remuneration, stagnation, discrimination and favoritism. Poorly paid workers are unsatisfied, and this can result in malicious acts or direct theft of money. Employees implement ways of diverting and draining business revenue for their own personal gain. In addition, an organization that does not pay most of its employees well is at the risk of collaborative fraud and sabotage. This involves employees’ organized mass action to sabotage and steal from the company. Moreover, poor remuneration of employees provides a basis for justification. The employees justify their actions basing their argument on the fact that the company uses money meant for their remuneration.

Poor management and supervision is another factor that significantly contributes to the occurrence of sabotage and financial fraud. The success of an organization is highly dependent on the nature and productivity of the management team. Lenient management and insufficient supervision provides malicious people with the opportunity to engage in fraudulent activities (Nixon, 2008). Moreover, the employees are able to manipulate the system without attracting attention because of their familiarity with business operations. Poor management also fails to administer appropriate measures aimed at preventing, detecting and monitoring operations, responsibilities, crime and any inconsistency. On the other hand, incompetent leadership can be a result of malicious leaders who are directly responsible for crimes in the organization.

Technology advancement and changes in the nature and means of running operations in the corporate world have significantly increased corporate crimes such as sabotage and fraud. Data transfers have multiplied in most organizations because of expansion, growth and increased customer base (Miles, 2009). Moreover, formal communication, transactions and corporate interactions with suppliers, clients, financial institutions, and shareholders among other associates have increased. This has in turn led to increased sharing and transfer of information and vital corporate data. Leakage and infiltration of essential information in the wrong channels generate fraud, sabotage and theft in the company.

Prevention

Sabotage and fraud can be prevented and managed efficiently through improved management. Strategies, controls and techniques effective in curtailing and avoiding fraud should be implemented in internal and external operations. Fraud occurring because of employee dissatisfaction can be prevented through improved employer-employee relationships and increased employee satisfaction through monetary and non-monetary benefits. Moreover, supervision and management of employees should be improved to ensure that all inconsistencies and questionable operations are identified and controlled. In addition, an organization should implement supervision techniques that are superior to all employees (Hammer, 2003). Managers and high ranking employees are often not investigated leading to the ease of engaging in corporate crimes. On the other hand, information and business operations should be categorized appropriately so as to avoid disruptions, and diversion of information.

Data and information management should be well specialized and classified to ensure that information management is well stipulated. Information should be handled by  appointed personnel. A company should categorize information and ensure that certain information and documents, especially containing sensitive data should be handled by appointed people. This helps in the efficient management of information and control of data leakage. Information sabotage can be traced efficiently to the cause as persons responsible for data management are known (Miles, 2009). Sabotage and information leakage are less likely to occur in a well organized system than in an organization where company information is open to all employees.

Monitoring and control measures should be implemented in an organization at all levels. Employees and other authorized personnel should be provided with access codes for offices and computerized systems. This allows for efficient monitoring of movement, operations and transactions. Security codes should be computed and installed for financial systems and records where access should be given to selected people (Hammer, 2003). Good back-up systems should also be installed so as to ensure that inconsistencies and data alterations can be verified using archived information. Advanced technology has its advantages and disadvantages. Hacking and malware application are some of the significant flaws associated with digital and computerized systems. An organization should ensure it installs anti-malware and anti-hacking applications so as to control and manage fraud and sabotage cases. There are many ways in which sabotage and fraud can be prevented in a company. The success of these measures can be achieved through culture competence, good interpersonal communication, improved prevention and control measures, information safeguarding and appropriate supervision at all levels of operation.

 

References

Barko, C. D., & Nemati, H. R. (2004). Organizational data mining: Leveraging enterprise data resources for optimal performance. Hershey, Pa. [u.a.: Idea Group Publ.

Hammer, M., & Champy, J. (2003). Reengineering the corporation: A manifesto for business revolution. New York, NY: HarperBusin

Miles, R. E., & Snow, C. C. (2009). Organizational strategy, structure, and process. Stanford: Stanford University Press.

Nixon, W. B., & Kerr, K. M. (2008). Background screening and investigations: Managing hiring risk from the HR and security perspectives. Amsterdam: Butterworth-Heinemann.

Petrucelli, J. R. (2012). Detecting fraud in organizations: Techniques, tools, and resources. Hoboken, N.J: Wiley.

 

 

Crime Statistics

Forms of Crime Data

There are three main forms of crime data. The first relates to official crime reports, which have been sourced by the government. Such data is found through government agencies such as courts, the police and correctional institutions. The second form relates to crime victimization surveys. Such data is collected through surveys conducted on samples of the general population. The final form relates to self-reports of criminal offences. This data is also collected through surveys.

Benefits and Limitations

Each of these data sources has its strong points and limitations. The sources are therefore suitable for use in different contexts, albeit for different purposes. At the international level, official data is very beneficial. This is attributable to its good geographical coverage. However, comparisons of national legal definitions are difficult in the global environment. International Victimization Surveys are characterized by many advantages. Firstly, they are inclusive of both reported and unreported offenses. Secondly, special surveys can be designed to detect specific criminal activities. However, they also have their disadvantages. For instance, some victims may not reveal the truth, either intentionally or unintentionally. Secondly, the surveys offer spotty geographical coverage. Similarly, some crimes are undetectable. For instance, participants cannot report incidents such as homicide. Self-report data enables international agents to avoid the problems of varied legal definitions. However, such data is also characterized by validity issues, and spotty geographical coverage (Natarajan, 2011).

 

 

Evaluation of crime

Comparison of crime rates in nations assists in evaluation of the probability that an offence may be carried out in another country. Official records are more useful in this context, when compared to the other survey methods. This is attributable to various reasons. Firstly, they have already been validated before their publishing. This eliminates the inaccuracies that plague the survey methods. Similarly, they are more detailed than the surveys. The data contained inside them is usually devoid of assumed information, unlike the surveys. Official records are therefore more useful in evaluation of international crime risks.

 

 

Reference

Natarajan, M. (2011). International crime and justice. Cambridge: Cambridge University Press.