Tag: Corporate

Case Study on Corporate Governance for Satyam Scam
Corporate Governance for Satyam Scam; Satyam Computers services limited was a consulting and an Information Technology (IT) services company founded by Mr. Ramalingam Raju in 1988. It was India’s fourth-largest company in India’s IT industry, offering a variety of IT services to many types of businesses. It is networking spanned from 46 countries, across 6 continents and employing over 20,000 IT professionals. On 7th January 2009, the Satyam scandal was publicly announced & Mr. Ramalingam confessed and notified SEBI of having falsified the account. Also learn, Tata Motors Acquisition of Jaguar and Land Rover for Case Study, Corporate Governance for Satyam Scam!

Learn, Case Study on Corporate Governance for Satyam Scam, Explanation.

What is Fraud? Fraud is a worldwide phenomenon that affects all continents and all sectors of the economy. Fraud encompasses a wide-range of illicit practices and illegal acts involving intentional deception, or misrepresentation. According to the Association of Certified Fraud Examiners (ACFE), fraud is “a deception or misrepresentation that an individual or entity makes knowing that misrepresentation could result in some unauthorized benefit to the individual or the entity or some other party”. In other words, mistakes are not a fraud. Indeed, in fraud, groups of unscrupulous individuals manipulate or influence the activities of a target business to make money or obtain goods through illegal or unfair means.

Fraud cheats the target organization of its legitimate income and results in a loss of goods, money, and even goodwill and reputation. Fraud often employs illegal and immoral, or unfair means. Organizations must build processes, procedures, and controls that do not needlessly put employees in a position to commit fraud and that effectively detect fraudulent activity if it occurs. The fraud involving persons from the leadership level is known under the name “managerial fraud” and the one involving only the entity’s employees is named “fraud by employees’ association”.

Raju confessed that Satyam’s balance sheet of 30 September 2008 contained:
- Inflated figures for cash and bank balances of Rs 5,040 crores (US$ 1.04 billion) [as against Rs 5,361 crores (US$ 1.1 billion) reflected in the books].
- An accrued interest of Rs. 376 crores (US$ 77.46 million) which were non-existent.
- An understated liability of Rs. 1,230 crores (US$ 253.38 million) on account of funds which were arranged by himself.
- An overstated debtors’ position of Rs. 490 crores (US$ 100.94 million) [as against Rs. 2,651 crores (US$ 546.11 million) in the books].
- The letter by B Ramalinga Raju where he confessed to inflating his company’s revenues contained the following statements:
“What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of company operations grew significantly [annualized revenue run rate of Rs 11,276 crores (US$ 2.32 billion) in the September quarter of 2008 and official reserves of Rs 8,392 crores (US$ 1.73 billion)]. As the promoters held a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. Also, the aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. It was like riding a tiger, not knowing how to get off without being eaten”. Also learn, Intrapreneurship Better than Entrepreneurship!

The Scandal:

The scandal all came to light with a successful effort on the part of investors to prevent an attempt by the minority shareholding promoters to use the firm’s cash reserves to buy two companies owned by them i.e. Maytas Properties and Maytas Infra. As a result, this aborted an attempt of expansion on Satyam’s part, which in turn led to a collapse in the price of company’s stock following with a shocking confession by Raju, The truth was its’ promoters had decided to inflate the revenue and profit figures of Satyam thereby manipulating their balance sheet consisting non-existent assets, cash reserves and liabilities.

The Probable Reasons:

Deriving high stock values would allow the promoters to enjoy benefits allowing them to buy real wealth outside the company and thereby allowing them to derive money to acquire large stakes in other firms on another hand. There could be the reason as to why Raju’s family build its shareholding and shed it when required. Also learn, What is Bookkeeping?

After the scandal, on 10 January 2009, the Company Law Board decided to bar the current board of Satyam from functioning and appoint 10 nominal directors. On 5th February 2009, the six-member board appointed by the Government of India named A. S. Murthy as the new CEO of the firm with immediate effect. Also learn, What is Organizational Climate? The board consisted of:

1) Banker Deepak Parekh.

2) IT expert Kiran Karnik.

3) Former SEBI member C Achuthan S Balakrishnan of Life Insurance Corporation.

4) Tarun Das, chief mentor of the Confederation of Indian Industry, and.

5) T N Manoharan, former President of the Institute of Chartered Accountants of India.

Investigation: Criminal and Civil Charges!

The investigation that followed the revelation of the fraud has led to charges against several different groups of people involved with Satyam. Indian authorities arrested Mr. Raju, Mr. Raju’s brother, B. Ramu Raju, its former managing director, Srinivas Vdlamani, the company’s head of internal audit, and its CFO on criminal charges of fraud. Indian authorities also arrested and charged several of the company’s auditors (PwC) with fraud. The Institute of Chartered Accountants of India ruled that “the CFO and the auditor were guilty of professional misconduct”. As well as, The CBI is also in the course of investigating the CEO’s overseas assets. There were also several civil charges filed in the US against Satyam by the holders of its ADRs.

The investigation also implicated several Indian politicians. Both civil and criminal litigation cases continue in India and civil litigation continues in the United States. Some of the main victims were: employees, clients, shareholders, bankers and the Indian government. In the aftermath of Satyam, India’s markets recovered and Satyam now lives on. India’s stock market is currently trading near record highs, as it appears that a global economic recovery is taking place. Civil litigation and criminal charges continue against Satyam. Tech Mahindra purchased 51% of Satyam on April 16, 2009, successfully saving the firm from a complete collapse. With the right changes, India can minimize the rate and size of accounting fraud in the Indian capital markets.

Corporate Governance Issues at Satyam:

Every quarter, Satyam’s earnings grew. Mr. Raju admitted that the fraud which he committed amounted to nearly $276 million. In the process, Satyam grossly violated all rules of corporate governance. As well as, The Satyam scam had been the example of following “poor” CG practices. It had failed to show a good relationship between the shareholders and employees. CG issue at Satyam arose because of the non-fulfillment of the obligation of the company towards the various stakeholders. Of specific interest are the following: distinguishing the roles of board and management; separation of the roles of the CEO and chairman; an appointment to the board; directors and executive compensation; protection of shareholder’s rights and their executives. Also read it, Dell Social Business Strategy for Case Study!

Lessons Learned from Satyam Scam:

The 2009 Satyam scandal in India highlighted the nefarious potential of an improperly governed corporate leader. As the fallout continues, and the effects were felt throughout the global economy, the prevailing hope is that some good can come from the scandal in terms of lessons learning. Here are some lessons learning from the Satyam Scandal:

1] Investigate All Inaccuracies:

The fraud scheme at Satyam started very small, eventually growing into $276 million white-elephant in the room. Indeed, a lot of fraud schemes initially start small, with the perpetrator thinking that small changes here and there would not make a big difference and is less likely to detect. This sends a message to a lot of companies: if your accounts are not balancing, or if something seems inaccurate (even just a tiny bit), it is worth investigating. Dividing responsibilities across a team of people makes it easier to detect irregularities or misappropriated funds.

2] Ruined Reputations:

Fraud does not just look bad on a company; it looks bad on the whole industry and a country. “India’s biggest corporate scandal in memory threatens future foreign investment flows into Asia’s third-largest economy and casts a cloud over growth in its once-booming outsourcing sector. Also, the news sent Indian equity markets into a tail-spin, with Bombay’s main benchmark index tumbling 7.3% and the Indian rupee fell”. Now, because of the Satyam scandal, Indian rivals will come under greater scrutiny by the regulators, investors, and customers.

3] Corporate Governance Needs to Be Stronger:

The Satyam case is just another example supporting the need for stronger CG. All public companies must be careful when selecting executives and top-level managers. These are the people who set the tone for the company: if there is corruption at the top, it is bound to trickle-down. Also, separate the role of CEO and Chairman of the Board. Splitting up the roles, thus, helps avoid situations like the one at Satyam.

The Satyam Computer Services scandal brought to light the importance of ethics and its relevance to corporate culture. The fraud committed by the founders of Satyam is a testament to the fact that “the science of conduct” is swayed in large by human greed, ambition, and hunger for power, money, fame, and glory. Also Learn, Good for Company, The Corporate Entrepreneurship Categories, and Organizational Thinking!

Case Study on Corporate Governance for Satyam Scam, Image from Online.
March 11, 2018
What is Organizational Structure for Corporate Entrepreneurship?
An organizational structure defines how activities such as task allocation, coordination, and supervision are directed toward the achievement of organizational aims. Also learn, Why is Intrapreneurship Better than Entrepreneurship? This article explains to Organizational Structure for Corporate Entrepreneurship. Organizations need to be efficient, flexible, innovative and caring to achieve sustainable competitive advantage. Organizational structure can also consider as the viewing glass or perspective through which individuals see their organization and its environment.

Learn, Entrepreneurial, What is Organizational Structure for Corporate Entrepreneurship?

Corporate entrepreneurship (also called intrapreneurship) is defined by Guth and Ginsburg as;

“The birth of new business within existing organizations, that is, internal innovation or venturing; and the transformation of organizations through the renewal of the key ideas on which they are built, that is, strategic renewal.”

The organizational structure affects organizational action in two ways:
1. It provides the foundation on which standard operating procedures and routines rest.
2. It determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organization’s actions.
Organizational Structures for Corporate Entrepreneurship:

Burgelman proposes that the use of a particular organizational structure should determine by:
1. The strategic importance of the new business to the corporation. and.
2. The relatedness of the unit’s operations to those of the corporation.
The combination of these two factors results in nine organizational structures for corporate entrepreneurship.

1] Direct Integration:

A new business with a great deal of strategic importance and operational relatedness must be a part of the corporation’s mainstream. Product champion-people who are respected by others in the corporation and who know how to work the system need to manage these projects.

2] New Product Business Department:

A new business with a great deal of strategic importance and partial operational relatedness should be a separate department. Organize around an entrepreneurial project in the division where skills and capabilities can share.

3] Special Business Units:

A new business with a great deal of strategic importance and low operational relatedness should be a special new business unit with specific objectives and time horizons.

4] Micro New Ventures Department:

A new business with uncertain strategic importance and high operational relatedness should be a peripheral project. Which is likely to emerge in the operating divisions continuously. Each division thus has its new ventures department.

5] New Venture Division:

A new business with the uncertain strategic importance that is only partly related to present corporate operations belongs in a new venture division. It brings together projects that either exists in various parts of the corporation or can acquire externally, sizable new businesses are built.

6] Independent Business Units:

Uncertain strategic importance coupled with no relationship to present corporate activities can make external arrangements attractive. Also read, The Corporate Entrepreneurship Categories and Organizational Thinking.

7] Nurturing and Contracting:

When an entrepreneurial proposal might not be important strategically to the corporation but is strongly related to present operations. Top management might help the entrepreneurial unit to spin-off from the corporation. This allows a friendly competitor, instead of one of the corporation’s major rivals, to capture a small niche.

8] Contracting:

As the required capabilities and sills of the new business are less related to those of the corporation. The parent corporation may spin off the strategically unimportant unit yet keep some relationship through a contractual arrangement with the new firm. The connection s useful in case the new firm eventually develops something of value to the corporation.

9] Complete Spin-Off:

If both the strategic importance and the operational relatedness of the new business are negligible. The corporations are likely to completely sell off the business to another firm or the present employees in some form of ESOP (Employee Stock Ownership Plan). The corporation also could sell off the unit through a leveraged buy-out executives of the unit buy. Also, the unit from the parent company with money from a third source, to be repaid out of the unit’s anticipated earnings.

Entrepreneurial Organizational Structure:

The organizational structure of an entrepreneurial company often has two central requirements based on the nature and size of the business. Because they are innovators, these businesses must develop organizational structures. That promotes frequent interaction and communication among their marketing, sales and production departments. Because they are often smaller businesses that aren’t able to fully departmentalize because they have large sales of one product. They must maximize their management resources through multitasking.

1] Theory Originator:

The theory of an entrepreneurial organizational structure was developing by McGill University professor and management expert Henry Mintzberg. He proposed theories about five different types of organizational structures, including one well suited for operating an entrepreneurial organization. Others have since expanded on his theories, first proposed in the 1970s, as markets and technologies have evolved.

2] Flat vs Hierarchical Structure:

Smaller businesses with few employees that continue to evolve. Their product development and marketing often use a flat organizational structure rather than a hierarchical one. A traditional hierarchical organizational structure organizes a company based on departments. With each department having a leader and subordinates reporting to the department head.

These departments work independently, reporting to a president, chief executive officer or executive management team. A flat organizational structure consists of individuals or small groups that work collaboratively, all reporting to the owner or CEO. A flat structure can require managers to take on or participate in more than one task to maximize scarce human resources.

3] Planning Structure:

An entrepreneurial structure should facilitate cooperative planning rather than top-down strategic and marketing planning. Which features execution of plans assigned to different departments. Marketing activities include product development, pricing strategies, brand creation, and distribution channel selection that occur before any promotions take place.

For example, at a larger business with a hierarchical organizational structure. Also, the marketing department might develop the product and then tell the production department to determine how to make it. In an entrepreneurial organization, all team members are involving in product planning.

So, they can share their concerns or make suggestions about whether they can make the product. At large companies, marketing will know the capabilities of its production department. While at an entrepreneurial company, marketing will pitch an idea, asking production. Information technology, sales, and finance if they can bring the idea to market.

4] Communication Structure:

An entrepreneurial organization holds regular team meetings to discuss ideas before a decision is creating. While a more traditional organizational structure uses meetings of department heads to announce their progress and tell subordinates what has been deciding. An entrepreneurial company might create an intranet or a communication system based on the Cloud to exchange project status in real-time.

A Cloud-based system puts information on a secure Internet site that people can access with a password from anywhere. An intranet resides on a company’s servers. Using such a system, each team member will have his responsibilities but will update his progress on a master document that all other team members can access from their computers at any time of the day.

What is Organizational Structure for Corporate Entrepreneurship? Google Image Searching.

Reference:

1. Structures – //www.mbaknol.com/strategic-management/corporate-entrepreneurship/
2. Entrepreneurial – //yourbusiness.azcentral.com/entrepreneurial-organizational-structure-16071.html
3. Photo Credit URL – //conditionaldesign.org/workshops/3d-straw-structure/resources/09-img-5455-edit.jpg
March 6, 2018
The Corporate Entrepreneurship Categories and Organizational Thinking

Rise of Corporate entrepreneurs: The current change in the economy throughout the world pressurize to businesses and industries to change the strategies rapidly to satisfy the multiple stakeholders. Also learn, What is the Difference Between an Intrapreneur and Entrepreneur? This article explains to Corporate Entrepreneurship Categories and Organizational Thinking. Large organizations are focusing on innovation. The need for Intrapreneur arises due to the number of problems. The number of competitors is increasing rapidly these competitors are very sophisticated, these competitors are not only their backyard but from other countries as well. Many innovative people leave corporate and became business entrepreneurs. Organizations want to improve efficiency and productivity.

Learn, and Understand, The Corporate Entrepreneurship Categories and Organizational Thinking.

Corporate entrepreneurial leadership Characteristics: A corporate entrepreneur is a person who focuses on innovation and creativity to transform dreams into a profitable reality. A charismatic leader in a company instills an entrepreneurial philosophy in the employees in an organization. These entrepreneurs must have leadership characteristics. They must be visionary and flexible. Also, the Entrepreneur encourages teamwork and builds a coalition of support. For the team, performance entrepreneur understands the organization environment they persist continuously trying to give their best.

What is Corporate Entrepreneurship?

Since the late 1990s, many large companies have been experimenting with the idea of corporate entrepreneurship as a way to launch and manage new ventures within a big corporation. Using the resources of the parent company, individual employees and internal teams can develop new products, innovations or brands. Also, this leads to increased profits and a more competitive stance in the marketplace. It also helps large companies retain talented staff that might otherwise leave to start their ventures.

Corporate entrepreneurship has also been called corporate venturing. This should not be confused with corporate venture capital, which involves large corporations investing directly in external startups as a means of innovation. Also, they happen completely from within the existing company.

Categories of Corporate Entrepreneurship:

As well as Corporate entrepreneurship is the choice for large organizations. They have been categorized into four broad categories.

1] Corporate Venturing:

The Corporate venturing involves is starting a new business within the existing business, e.g. Thermo- Electron company’s core competence in medical laser technology and started a new venture involve hair removal salons utilizing their laser technology.

2] Intrapreneuring:

Is an effort used by entrepreneurs to create and build a business to set up their mind and behaviors. Companies who wish to bring innovation in their companies generally make some intrapreneurs in their company to build a culture of creativity.

3] Corporate renewal or Transformation:

When in a company transformation involves innovation and it leads to economic value it is called a corporate renewal.

4] Industrial Rule Breaking:

When a company transforms itself significantly and the change involves a competitive environment it is called an industry rule-breaking. Amazon.com is one such company that broke the rules of engagement of booksellers.

Organizational Thinking in Corporate Entrepreneurship:

Numbers of corporations are trying to re-engineer corporate thinking and encourage an entrepreneurial environment. But some top managers are finding it difficult to implement policies to encourage freedom and not believe in entrepreneurial ideas that can be nurtured in their environment. Managers need to develop policies to encourage innovative people. Management should identify potential intrapreneurs in their companies early. If someone has these qualities try to promote him before he leaves the organization. Also learn, How to Explain Observing Trends in Entrepreneurship?

Key features in the success of any innovative program are trust, accountability, and confidence. Management should emphasize individual responsibility. To encourage staff to take the risk and achieve management should implement the reward system and give freedom. In case of failure, the project must examine closely for real learning. Also, Individuals must feel free to do all the experiments without the fear of punishment.

Why is Intrapreneur better than an entrepreneur?

Intrapreneur generally has the burning vision which helps them to improve the organization as an Intrapreneur you have the company name and a marketing channel at your back which can increase the chances of success of your enterprise, Intrapreneur does not need to risk his funds but as an entrepreneur have to risk your finances.

Especially if capital for your idea is easier to come from inside the organization, Intrapreneur is better than an entrepreneur. The success of the enterprise needs continuous assesses of the companies technologies to stay competitive. If the Intrapreneur wants to bypass the existing company distribution channel still the company name matters. For the right person, intrapreneurs are invigorating and addicting. Also, the company provides him security with the freedom and creativity of the entrepreneur.

Corporate Entrepreneurship Models:

Traditionally, most new ventures arise from the research and development of information technology departments. Also, Corporate entrepreneurship encourages innovative thinking in departments across the organization. A research study by Robert C. Wolcott and Michael J. Lippitz published in MIT Sloan Management Review; outlines four models of corporate entrepreneurship:

1] Opportunist model:

This is sort of the “no model” model. An employee has an innovative idea and happens to get the support of a project champion with the power to say yes to funding and research.

2] Enabler model:

The organization hires entrepreneurially-minded people and encourages all employees and teams to promote and pursue their ideas. Google, for example, aims to hire people with “entrepreneurial DNA,” and allows employees to spend 20% of their time exploring new concepts and prototypes. This model requires that companies communicate clearly how they select projects, provide resources, and track projects.

3] Advocate model:

The company creates a core group of who act as innovation experts and evangelists to work throughout the company and help encourage new business ideas. There are no established funds to participate, so each unit must pay for its ideas. Those that participate do so because they think the initiative is valuable. This model depends on people who can work with different teams and facilitate change.

Producer model:

The company creates internal organizations with funding and a defined process for how new ideas will develop if they don’t fit into the existing business structure. This model requires significant funding and staffing, and support from executive management.

As well as Corporations or management teams that want to encourage intrapreneurship should promote an environment where new ideas are heard and supported, make innovative thinking a part of the corporate culture, and identify and foster those who have an entrepreneurial drive.

Also, Successful corporate entrepreneur initiatives, according to Wolcott and Lippitz, are those that communicate a broad vision and delineate specific objectives. Companies typically start with a small team that can get consensus from senior management to determine these objectives and build support across the board.

The Corporate Entrepreneurship Categories and Organizational Thinking, Image #Pixabay.

Reference:

1. Categories and More – //www.ukessays.com/essays/business/the-need-for-the-corporate-intrapreneurship-business-essay.php
2. Model – //generalassemb.ly/blog/how-to-encourage-corporate-entrepreneurship/
3. Photo Credit URL – //media-exp2.licdn.com/mpr/mpr/AAIAAgDGAAAAAQAAAAAAAAsuAAAAJDUwODhjYTdiLWMwMDAtNGZkZS1iNTdiLTM3NmNiYTZhYmYxNg.jpg

March 5, 2018
What is Corporate Entrepreneurship? Meaning and Definition
Corporate Entrepreneurship Definition and Meaning – Major current researches are based on the studies of Joseph A. Schumpeter (1883 – 1950); An Austrian-American economist and political scientist. He was the first economist who determined entrepreneurs as the main agents of economic growth which create new products, find and develop new methods of production, and allocate other innovations to stimulate economic evolution. Also learn, What is Intrapreneurship? This article explains Corporate Entrepreneurship Meaning and Definition. According to the “creative destruction” the entrepreneurs continually displace, substitute, or destroy existing products or methods of production with new ones. The positive outcomes of these processes are the opportunity to create new technologies and new products to satisfy the changes in customer’s needs and the improvement of overall economic activities.

Learn, Understanding, and explain Corporate Entrepreneurship (CE) meaning and definition.

What is Corporate Entrepreneurship (CE)? It is a set of activities to enhance a company’s ability to innovate, take a risk, and seize the opportunities that are allocated in the market. Also, Corporate entrepreneurship is targeting the new business establishment, new market allocation with further business pursuing, or both.

Robert A. Burgelman (1983) refers to CE to the company’s activity in diversification through internal development. The process of such diversification involves new resources to help the firm to extend its activity in the new spheres of opportunities.

Such diversification through internal resources development represents the process of individual entrepreneurship in the corporate one. Thus, corporate entrepreneurship is a result of combining the entrepreneurial activities of multiple participants.

Meaning of Corporate Entrepreneurship:

Corporate entrepreneurship (also know as intrapreneurship) is defined by Guth and Ginsburg as;

“The birth of new business within existing organizations, that is, internal innovation or venturing; and the transformation of organizations through the renewal of the key ideas on which they are built, that is, strategic renewal.”

A large corporation that wants to encourage innovation and creativity within its firm must choose a structure. That will give the new business unit an appropriate amount of freedom while maintaining some degree of control at headquarters. Also learn, What is the Difference Between an Intrapreneur and Entrepreneur?

Burgelman proposes that the use of particular organizational design should determine by;
- The strategic importance of the new business to the corporation, and.
- The relatedness of the unit’s operations to those of the corporation.
A combination of these two factors results in nine organizational designs for corporate entrepreneurship.

Definition of Corporate Entrepreneurship:

Though its definition is somewhat contentious, the concept of corporate entrepreneurship is generally believing to refer to the development of new ideas and opportunities within large or establish businesses. Directly leading to the improvement of organizational profitability and an enhancement of competitive position or the strategic renewal of an existing business.

Within that system, the notion of innovation is at the very core of CE – the two inseparably bound together and responsible for driving calculated and beneficial risk-taking. Taking it one step further, corporate entrepreneurship may even significantly alter the balance of competition within an industry or create entirely new industries through this act of internal innovation. As well as learn, Why is “The Language of Business” also called Accounting?

Why the Need for Corporate Entrepreneurship?

Corporate entrepreneurship or Intrapreneurship is an important element in large and medium organizations. Also, Intrapreneurship exists within the organizations. It plays an important role in organizational and economic development. Intrapreneurship leads not only to new ventures, but it also leads to other innovative activities and orientations. Such as the development of new products, technologies, services, strategies, and competitive postures.

In good or bad economic times, companies seek innovations to remain competitive. Intrapreneurs are more intelligent and can perceive the big picture. They are self-motivating and optimistic. These people are action-orient and move quickly to get things done.

A corporate entrepreneur is a person who focuses on innovation and creativity to transform dreams into a profitable reality. A charismatic leader in a company instills an entrepreneurial philosophy in the employees in an organization. These entrepreneurs must have leadership characteristics. They must be visionary and flexible. Entrepreneur encourages teamwork and builds a coalition of support. For the team, performance entrepreneur understands the organization environment they persist continuously trying to give their best.

Now a day’s market is highly competitive, to survive organizations trying to be more innovative. Companies want innovative people to work for them. Intrapreneurial techniques have been using throughout the world, some with failure and some with great success. As well as reading, How to Explain the Most Important Characteristics of Organizational Culture? and. Also learn, What are Factors affecting Organizational Change? External and Internal!

Why should established organizations consider corporate entrepreneurship?

Corporate entrepreneurship is especially crucial for large companies. Enabling these organizations – that are traditionally averse to risk-taking – to innovate, driving leaders and teams toward an increased level of corporate enterprising. In addition to the obvious benefits obtained through innovation. This approach also provides the organizational benefit of setting the stage for leadership continuity.

In a simpler view, corporate entrepreneurship can also consider a means of organizational renewal. For in addition to its focus on innovation. There also exists an equal drive toward venturing. These two work in unison as the company undertakes innovations across the entire organizational spectrum, from product and process to technology and administration.

Also, venturing is a primary component in the process, pushing larger companies to enhance their overall competitiveness in the marketplace by taking bigger risks. Examples of these risks, as seen in a large-scale organization, may include the redefinition of the business concept, reorganization, and the introduction of system-wide changes for innovation.

Setting up the corporate entrepreneurship environment:

In modern business, one of the primary tasks of the business leader is to foster an environment in which entrepreneurial thinking is encouraged and readily takes place. Promoting this culture by freely encouraging creativity (and thereby innovation). Also, business leaders motivated toward corporate entrepreneurship must continuously strive to exude and build trust. Embracing the risk to fail and inspiring those around them to take similar calculated risks.

But there is more to an environment of corporate entrepreneurship than simply inciting inspiration. It also relies heavily on a system of continuous analysis and feedback, potentially including the following two steps:

Step 1:

Set a broad direction for achievement, reevaluating it periodically for any new information. That may have surfaced regarding changes in the business environment. Including competitive products and markets in which the firm is operating. Constant evaluation is essential at this stage as even the most finely-tuned direction can still lead to catastrophic failure if the approach is no longer working.

Step 2:

Reinforce efforts across the entire organization that coincide with the current plan for achievement. The task of a leader or senior manager is often that of the analyst. Continuously promoting strategy while making adjustments based on their beliefs related to organizational goals and the feedback they receive from business units.

As these business units continue to experiment with existing products and services. As well as, innovate and develop new ones, senior executives can magnify the stated goals to reinforce those business unit initiatives and thereby achieve the highest degree of success.

What is Corporate Entrepreneurship? Meaning and Definition. Also, the Image is online take.

Reference:

1. Meaning – //www.mbaknol.com/strategic-management/corporate-entrepreneurship/
2. Definition, Establish and Step – //www.businessdictionary.com/article/726/corporate-entrepreneurship-and-its-importance-in-large-companies/
3. Need – //www.mbaknol.com/modern-management-concepts/the-need-for-corporate-entrepreneurship/
4. Photo Credit URL – //bienveillus.fr/wp-content/uploads/2017/02/Bienveillance-au-Travail.jpg
March 5, 2018
The Importance Benefits of Corporate Retreats in Business

Following are the Importance Benefits of Corporate Retreats in Business!

Corporate retreats should handle in such a way that they are loved by everyone. Not only executives or big leagues, but also other employees should keep in mind while planning an office retreat. Office retreats have a lot of benefits, including Rewards – Corporate retreats are a good way to reward your employees. On corporate retreats, management can show their gratitude and appreciation toward their employees through many recreational and meaningful activities. Second Skill building – Besides team building, skills building is another important advantage of corporate retreats. Office retreats ensure that employees are able to build skills as well as know how to perform as a team. Why Small Business needs Corporate Retreats Good for Productivity? Now, learn Corporate Retreats in Business.

Increases in Revenue

Increasing sales and revenues are related but different goals, and each needs its own strategy. Although the tactics for each might be different, they should complement each other. Understanding how sales and revenue are related and how to balance your need to increase both helps you market efficiently and optimize your profits. What is Revenue? The income generating from the sale of goods or services, or any other use of capital or assets. Associated with the main operations of an organization before any costs or expenses are deducted. Revenue is shown usually as the top item in an income (profit and loss) statement from which all charges, costs, and expenses are subtracted to arrive at net income. Also call sales, or (in the UK) turnover.

Increase the number of new customers

After the corporate retreat, the employees will have a wider global perspective and confidence in dealing with people from different cultures and countries. With this values learn, the employees are able to increase the number of new customers. By increasing the number of new customers the organization is the most direct approach to increase the revenue of the organization. With a wider perspective, the employees are able to look into more opportunities and have a larger target market.

When the target market is enlarged the employees are equipped with the confidence in dealing with people from different cultures and countries. Which make the have better opportunities to capture the market. Also, the organization is able to increase the market share due to the huge diversity of the target market. As a result, they can be the market leader in the industry as they are able to capture the most diversity of customers.

Increase the value of each sale made to customers

The communication and influencing skills gain after the corporate retreat are able to help an organization to increase. The revenue by increasing the value of each sale made to customers. It means that the employees will have the power to communicate. Influence and persuade the customer to increase the value of each purchase. For example, if the customers normally purchase 500 units. The employees can persuade and influence the customers to increase the value of each purchase to 800 units. The employee might come out with packages to convince the customer to purchase more. Therefore, the employees can apply the innovation and creativity skill to design valuable packages to generate more revenue for the organization.

Increase the number of times that customers buy from you

Besides, corporate retreat trained employees in building and maintaining relationships. Through this skill, the employees are able to utilize this skill to generate more revenue. By building and maintaining a good relationship can increase the number of times that customers buy from you. The employees are should keep in touch with the customers so that the customers will do purchasing more frequent with you. For example, many organizations such as Hotels and Airlines which come out with loyalty cards. Where have a lot of strategies to increase the number of times you visit? There are various ways to build and maintain relationships with the customers such as e-mail, mail, text messaging, phone call and point and benefit given to attract the customers visit them often. Hence, innovation and creativity play important roles in developing strategies for building and maintaining relationships.

Decreases in Cost

What is Low-Cost? A type of pricing method where a business sets a comparatively low price in order to enhance the demand for its product among consumers, as well as its competitive position in the market. A low-cost pricing strategy is an alternative marketing approach that a business can use as an alternative to differentiation and focus pricing strategies, and it tends to be most successful when the product is fairly generic and high volume production is possible. Also, call a low price strategy.

Employee feedback for cost reduction

After the corporate retreat, the employee will motivate. So this will be the best time to get their contribution to the company. The managers can get feedbacks through personal interview, daily communication or improvement box. The reasons the managers should get feedback’s from the employees because employees have a direct relation to the work process and have more experience regarding the daily operations of the company. On the other hand, managers make cost reduction decisions based on theories such as studies, reports, and charts. But, the company has to start using feedback’s given by the employees so that they will contribute more as they feel they are part of the solution. Besides, rewarding them is very important to encourage feedback.

Decrease in Turnover Rate

The main key to decrease the turnover rate is through job satisfaction. The satisfied employees will show positive attitude and morale during the job. In order to create job satisfaction, the organization should fulfill the employees’ needs. Hence, after the corporate retreat, the employee’s relationships built or maintain, communication & influencing skills are enhanced and more towards team focus. Therefore, the employees will have job satisfaction as the company fulfilled the social need of the employees.

According to the Maslow’s hierarchy of Needs Theory of Motivation, human beings have a social need. Moreover, the employees will more loyal to the company as they feel the sense of belonging. This is because they are given attention, opportunities, and recognition in the company. According to Maslow’s hierarchy, this fulfills their self-esteem need. Besides, according to the Herzberg’s Two Factor Theory of Motivation, it wills the motivators factor for the employees which will create satisfaction. As a result of job satisfaction through the skills develop from the corporate retreat which fulfilling the need for employees, the organization will able to reduce the turnover rate in the organization. How to Get Benefits of Corporate Retreats in Organizations?

Reference

1. Importance Benefits of Corporate Retreats – //www.mbaknol.com/modern-management-concepts/benefits-of-corporate-retreats/
2. What is Revenue? – //www.businessdictionary.com/definition/revenue.html
3. What is Low-Cost? – //www.businessdictionary.com/definition/low-cost.html
4. Photo Credit URL – //www.yourworldwithcreflo.com/wp-content/uploads/2015/01/bigstock-Group-Of-Friends-Having-Fun-To-58863764.jpg

January 21, 2018
How to Get Benefits of Corporate Retreats in Organizations?

Here are Following Tips Get Benefits of Corporate Retreats in Organizations!

Corporate retreats can be of any type, such as a sports retreat, or a seminar-style retreat. They are to promote a feeling of teamwork and to build a better understanding among company employees. Corporate retreats can also help employees gain some problem-solving skills that lead to better teamwork and better overall productivity. These team-building activities focus on events where everyone has to work together to reach a common goal. New Roles of Human Resource Management in Business Development. The study of learning, Benefits of Corporate Retreats in Organizations.

The examples are river rafting, rock climbing, mountain climbing, everyone hiking blindfolded while holding on the same rope, team scavenger hunts, friendly competitions between company departments, etc. Corporate retreats can be customized to fit the company’s need. They can make the employees learn about what the temporary retreat goals are, as well as the long-term results that the company is striving for.

Why can corporate retreats increase productivity? This is because organizations can derive some valuable skills from corporate retreats. These skills include team spirit, problem-solving, leadership, innovation, and creativity.

Team Spirit

Corporate retreats promote a feeling of teamwork among company employees. For example, a company organized a corporate retreat where the employees had to build a bridge out of boxes and unstable wooden planks. The employees are working towards a common goal which is building a bridge. This will get them to see the power of acting as a team. They will be able to understand success in each activity depends more on teamwork than individual effort. Under the pressure of reaching a difficult goal, each individual undergoes rapid growth. This growth occurs in group efforts then enhancing the relationships between employees. Employees become connected with shared experience. They share the commitment and help from one another. Trust can also build through corporate retreats.

Problem-solving

The second skill gain from corporate retreats is about problem-solving. Take rock climbing as the example. Rock-climbing is a problem-solving in the vertical world. We can see varying degrees of linear thinking skills, pre-planning skills, impulsivity vs. thoughtfulness, decision-making skills, focus and concentration, frustration, tolerance, self-confidence vs. insecurity, introversion vs. extroversion, emotional lability, risk-taking vs. caution, and the list goes on. Rock climbing offers the added mental element of continuous problem-solving in the midst of a physical workout. The climbers attempt to ascend a select route without falling. Through rock climbing, they can train on those skills.

Leadership

Through corporate retreats like mountain climbing, rock climbing, river rafting, etc. individuals gain an awareness of faith in their own ability to lead and follow. They have opportunities to test their ability in critical group decision-making and thereby become more confident leaders. Besides, team building events often allow people who are not usually in charge at work to take the reins and direct their teams. This can not only help them work on their leadership skills but also give them a better understanding of what it means to be a leader. The result of this is that they can have a better understanding of their superior’s working situations. They can also aid communication channels within the workforce.

Innovation and Creativity

Another skill derives from the corporate retreat is innovation and creativity. Employees are more able to think out of the box outside the working environment. In outdoor settings, they are taken out of their ‘comfort zone’ and immerse in a changing environment. By handling new circumstances, the team learns to turn problems into opportunities for success. Each challenge mastered is a satisfying achievement that prepares them for even more opportunities. Besides, some team-building activities may require innovation and creativity. Like the previous example, company’s corporate retreat is about building a bridge out of boxes and unstable wooden planks. In this case, in order to build a better and safer bridge with those limited resources, the employees need to innovative and creative.

Other Good Tips also Better, Benefits of Corporate Retreats

There are only two sides to a corporate retreat. It is either loved by employees or hated by them. But nevertheless, corporates retreats have a lot of different advantages to offer. Corporate retreats should handle in such a way that they are loved by everyone. Not only executives or big leagues, but also other employees should keep in mind while planning an office retreat. Office retreats have a lot of benefits, which will we discuss in this article.

Interaction

One of the major benefits of corporate retreats is team building. People may work together for years in an organization. But as soon as they go on an offsite retreat to have sun fun, new and everlasting bonds are built. It is a known fact that people tend to be their true self when they are relieved from pressure. Corporate retreats help remove this pressure and let a person open up. Every employee of an organization is considered to the same on an office retreat. There is no bias or preferences towards anyone. This makes a person feel important and he is easily able to get connect and interact with others.

Rewards

Corporate retreats are a good way to reward your employees. An informal announcement of a bonus or an incentive may come as a lovely surprise. Moreover, it will do wonders when the employees would already light head and in a fun mood. On corporate retreats, management can show their gratitude and appreciation towards their employees through many recreational activities which maybe follow with presents.

Goals and Objectives

During office hours, people are not as focus as they are on a retreat. They are their true self and can give great ideas. Moreover, due to bonding and relationships which are built on a retreat, people move in the same direction and start working to achieve the same goals and objectives. This is because, after a retreat, not only business relationships but also personal feelings come into play while working in an office.

Recruitment

Executives and HR managers also use corporate retreats as a chance to hire and recruit professionals. Corporate recruits give them a chance to learn more about the people they are thinking about hiring for the organization. As mentioned earlier, a person is his true self during a retreat. Due to this, HR managers are able to study their behavior and relationship or rapport with other employees of the organization. This will give them an idea if the newly appointed employees will be able to work in the office environment or not.

Skill building

Besides team building, skills building is another important advantage of corporate retreats. Office retreats make sure that employees are able to build skills as well as know how to perform in a team. It does not matter if you have a low budget. A short retreat in a local area will help you as much as an expensive retreat. Just make sure that you include educational as well as creative recreational activities.

Corporate retreats have the negative side too. Burger King’s corporate retreat in 2001 is a failure. A dozen Burger Kings employees burn themselves while participating in a fire walk-a team building exercise that requires teammates to walk barefoot across an 8-foot pit of burning-hot coals. The results were injuring employees and some very negative publicity for Burger Kings. The concept of this corporate retreat was that when the employees experience humiliation together, they will feel bonded. In fact, organizations should steer away from ridiculous physical challenges, and then they can get benefits from corporate retreats.

Reference

1. Benefits of Corporate Retreats in Organizations – //www.mbaknol.com/modern-management-concepts/benefits-of-corporate-retreats/
2. Others Benefits of Corporate Retreats – //www.business2community.com/human-resources/what-are-the-various-benefits-of-corporate-retreats-0279236
3. Photo Credit URL – //www.doorwaysarizona.com/wp-content/uploads/2015/01/bigstock-Group-Of-Friends-Having-Fun-To-58863776.jpg

January 21, 2018
Why Small Business needs Corporate Retreats Good for Productivity?

Small Business needs Corporate Retreats Good for Productivity with Make a Comeback!

Small business owners can improve productivity by investing in a company retreat. Simply getting away from the stressful atmosphere of the workplace can do a world of good. Your employees can work only so hard before cracking. A company retreat allows them to regroup and rediscover their passion for their work. When they return, their stress levels will be lower, meaning they’ll have the energy to work as hard as necessary without sacrificing quality.

Cooperation

Retreats that include team activities build camaraderie, training you and your workers to identify and incorporate the personal strengths of individuals to achieve group goals. The cooperative skills gained at a retreat will improve the performance of your workforce by showing employees how to work together effectively. As the owner, you might feel separated from your employees and find it hard to fit in during group activities. Hiring an outside facilitator instead of running the show yourself allows you to participate on the level of your employees, according to the book “201 Great Ideas for Your Small Business,” by Jane Applegate.

Improve Morale

Low morale hurts productivity, making workers sluggish. Often, low morale is a problem of perspective. For example, after putting in long hours to complete a difficult project, your employees might have forgotten the more pleasant aspects of their jobs. Company retreats remove workers from their typical contexts, revitalizing them and inspiring them to take pride in their work again. How Do You Know Your Company Wants Help From The Outside?

Fun

When your employees stop having fun at work, they are more likely to leave, so a company retreat can improve staff retention, according to “Rejuvenile: Kickball, Cartoons, Cupcakes and the Reinvention of the American Grown-up,” by Christopher Noxon. Having fun also stimulates creative thinking, which can improve productivity.

Communication

When workers relax, they communicate better, both with you and each other. Opening lines of communication build connections, spurring conversations that might not have happened otherwise, allowing employees to gain new perspectives on the business.

Considerations

Some company retreats have an agenda in addition to relaxation. For example, the relaxed atmosphere of a company retreat can foster effective brainstorming sessions for new company strategies. The key is to define a reasonable agenda that doesn’t overload the employees with work during the retreat. After all, the goal is to stimulate future productivity by helping your employees reconnect and relax. Asking them to do too much will decrease the retreat’s beneficial effects.

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Corporate Retreats Need to Make a Comeback

Instead, corporate retreats have transformed to perform a vital service for businesses. That ultimately generates more revenue without the wastefulness of past generations. Here’s why your business needs to budget for a corporate retreat in 2014.

It Builds Morale

Like spending vacation time, going on a corporate retreat allows. Your employees to renew their enthusiasm and excitement for work.

If your company prefers sunnier climates, a beachside retreat could provide the dose of Vitamin-D your employees need to recharge. Or, if a wilderness corporate retreat sounds more enticing, you and your employees can hold your retreat while admiring the great outdoors. It’s been found that connecting with nature can improve the work performance of your employees.

Mark Duvall of Old Man’s Cave Chalets is an advocate of such retreats:

“We see a lot of repeat business from our corporate clients. Getting away from the office and computers allows them to connect with one another and focus on high-level strategy, without the usual distractions.”

No matter where you go, the time away from the office will make your employees more excited and productive after returning to work.

It Genuinely Forges Bonds Between Your Employees

Your company may spend time trying to encourage your employees to build relationships with the office, but this often results in some common workplace challenges.

Attempts to make your employees be friends often feels inauthentic, and can actually damage your business. Plus, if your office has difficult employees, the efforts spent managing them can place. An expensive strain on company time and financial resources. There may also be very little your employees have in common with each other (other than who processes their direct deposits), limiting their incentive to build relationships.

When you spend time at the corporate retreat, however, your employees will participate in common activities they can talk about when normal work life resumes. This allows them to genuinely get to know each other better and develop authentic friendships based on shared experiences. This new found common ground will also increase their attachment to your company as an organization, decreasing expensive turnover rates.

It Provides Valuable Training

A highly-skilled team of employers means your business will run more efficiently and need less constant supervision from management. The retreat environment is the perfect place to develop creativity, teamwork, problem-solving and other valuable skills that result in increased productivity (and profits) for your company.

Plus, skill building. You can use the skill building training at retreats as a way to focus in-office training efforts throughout the year, or until the next retreat (that is, as long as your retreat includes more productive activities than three-legged races).

It Can Lure New Talent To The Team

Trying to court new employees, especially ones in high demand, takes more than a few free lunches. Inviting a prospective hire to your company’s retreat can quickly integrate her or him into your corporate culture. Show off your company’s assets in an environment that highlights company strengths and make choosing your company the natural decision. It also decreases the amount of time needed to help the new employee feel part of your team. Allowing them to begin effective work sooner.

To begin planning your corporate retreat, begin planning your budget and choosing one of the many attractive retreats along the country. Your corporate retreats don’t need to be the pinnacle of luxury retreats to be a smart investment for your company. 201 Great Ideas for Your Small Business.

Reference

1. Are Company Retreats Good for Productivity – //smallbusiness.chron.com/company-retreats-good-productivity-37136.html
2. Corporate Retreats Need to Make a Comeback – //www.huffingtonpost.com/john-rampton/why-corporate-retreats-ne_b_4374384.html
3. Photo Credit URL – //community.mystar12.com/wp-content/uploads/2015/02/People-Group-2.jpeg

January 20, 2018
Case Study Corporate Social Responsibility of Coffee Starbucks

Starbucks Case Study; It is the world’s largest and most popular coffee company. Case Study; Since the beginning, this premier café has aimed to deliver the world’s finest fresh-roasted coffee. Corporate Social Responsibility of Starbucks Coffee, Case Study; Today the company dominates the industry and has created a brand that is tantamount to loyalty, integrity, and proven longevity. Starbucks is not just a name, but a culture.

Case Study in Corporate Social Responsibility of Coffee Starbucks!

It is obvious that Starbucks and its CEO Howard Shultz are aware of the importance of corporate social responsibility. We try to explain the case study of Corporate Social Responsibility of Starbucks Coffee; Every company has problems they can work on and improve in and so does Starbucks. As of recent, Starbucks has done a great job showing their employees how important they are to the company. Along with committing to every employee, they have gone to great lengths to improve the environment for everyone.

Ethical and unethical behavior is always a hot topic for the media, and Starbucks has to be careful with the decisions they make and how they affect their public persona. The corporate social responsibility of the Starbucks Corporation addresses the following issues: Starbucks’ commitment to the environment, Starbucks’ commitment to the employees, Starbucks’ commitment to consumers, discussions of ethical and unethical business behavior, and Starbucks ‘ commitment and response to shareholders. The following Corporate Social Responsibility of Starbucks Coffee few explain below are;

Commitment to the Environment.

The first way Starbucks has shown corporate social responsibility is through its commitment to the environment. To improve the environment, with a little push from the NGO, Starbucks’ first main goal was to provide more Fair Trade Coffee. What this means is that Starbucks will aim to only buy 100 percent responsibly grown and traded coffee. Not only does responsibly grown coffee help the environment, but it also benefits the farmers as well. Responsibly grown coffee means preserving energy and water at the farms.

In turn, this costs more for the company overall, but the environmental improvements are worth it. Starbucks and the environment benefit from this decision because it helps continue to portray a clean image. Another way to improve the environment directly through their stores is by “going green”. Their first attempt to produce a green store was in Manhattan. Starbucks made that decision to renovate a 15-year-old store. This renovation included replacing old equipment with more energy-efficient ones.

To educate the community, they placed plaques throughout the store explaining their new green elements and how they work. This new Manhattan store now conserves energy, water, materials, and uses recycled/recyclable products. Twelve stores total plan to be renovated and Starbucks has promised to make each new store LEED, meaning a Leader in Energy and Environmental Design.

LEED improves performance regarding energy savings, water efficiency, and emission reduction. Many people don’t look into environmentally friendly appliances because the upfront cost is always more. According to Starbucks, going green over time outweighs the upfront cost by a long shot. Hopefully, these new design elements will help the environment and get Starbucks ahead of their market.

Commitment to Consumers.

The second way Starbucks has shown corporate social responsibility is through their commitment to consumers. The best way to get the customers what they want is to understand their demographic groups. By doing research on Starbucks’ consumer demographics, they realized that people with disabilities are very important. The company is trying to turn stores into a more adequate environment for customers with disabilities.

A few changes include: lowering counter height to improve ease of ordering for people in wheelchairs, adding at least one handicap accessible entrance, adding disability etiquette to employee handbooks, training employees to educate them on disabilities, and by joining the National Business Disability Council. By joining the National Business Disability Council, Starbucks gains access to resumes of people with disabilities.

Another way Starbucks has shown a commitment to the consumers is by cutting costs and retaining loyal customers. For frequent, loyal customers, Starbucks decided to provide a loyalty card. Once a customer has obtained this card, they are given incentives and promotions for continuing to frequent their stores. Promotions include discounted drinks and free flavor shots to repeat visitors.

Economy talk:

Also, with the economy being at an all-time low, Starbucks realized that cheaper prices were a necessity. By simplifying their business practices, they were able to provide lower prices for their customers. For example, they use only one recipe for banana bread, rather than eleven!

It doesn’t end there either! Starbucks recognized that health is part of social responsibility. To promote healthier living, they introduced “skinny” versions of most drinks, while keeping the delicious flavor. For example, the skinny vanilla latte has 90 calories compared to the original with 190 calories. Since Starbucks doesn’t just sell beverages now, they introduced low-calorie snacks. Along with the snacks and beverages, nutrition facts were available for each item.

Also, one big way to cut costs was outsourcing payroll and Human Resources administration. By creating a global platform for its administration system, Starbucks is able to provide more employees with benefits. Plus, they are able to spend more money on pleasing customers, rather than on a benefits system.

Commitment and Response to Shareholders.

One way Starbucks has demonstrated its commitment and response to shareholder needs is by giving them large portions. By large portions, Starbucks is implying that they plan to pay dividends equal to 35% or higher of net income. For the shareholders, paying high dividends means certainty about the company’s financial well-being. Along with that, they plan to purchase 15 million more shares of stock, and hopefully, this will attract investors who focus on stocks with good results.

Starbucks made its commitment to shareholders obvious by speaking directly to the media about it. In 2004, Starbucks won a great tax break, but unfortunately, the media saw them as “money-grubbing”. Their CEO, Howard Shultz, made the decision to get into politics and speak to Washington about expanding health care and the importance of this to the company. Not only does he want his shareholders to see his commitment, but he wants all of America to be able to reap these benefits.

In order to compete with McDonald’s and keeping payout to its shareholders high, Starbucks needed a serious turnaround. They did decide to halt growth in North America but not in Japan. Shultz found that drinking coffee is becoming extremely popular for the Japanese. To show shareholders there is a silver lining, he announced they plan to open “thousands of stores” in Japan and Vietnamese markets.

Commitment to Employees.

The first and biggest way Starbucks shows their commitment to employees is by just taking care of their workers. For example, they know how important health care, stock options, and compensation are to people in this economy. The Starbucks policy states that as long as you work 20 hours a week you get benefits and stock options. These benefits include health insurance and contributions to the employee’s 401k plan.

Starbucks doesn’t exclude part-time workers, because they feel they are just as valuable as full-time workers. Since Starbucks doesn’t have typical business hours like an office job, the part-time workers help to work the odd shifts. Another way Starbucks shows its commitment to employees is by treating them like individuals, not just number 500 out of 26,000 employees. Howard Shultz, a CEO, always tries to keep humanity and compassion in mind.

When he first started at Starbucks, he remembered how much he liked it that people cared about him, so he decided to continue this consideration for employees. Shultz feels that the first impression is very important. On an employee’s first day, he lets each new employee know how happy he is to have them as part of their business, whether it is in person or through a video.

His theory is that making a good first impression on a new hire is similar to teaching a child good values. Through their growth, he feels each employee will keep in mind that the company does care about them. Shultz wants people to know what he and the company stand for, and what they are trying to accomplish.

Ethical/Unethical Business Behavior.

The last way Starbucks demonstrates corporate social responsibility is through ethical behavior and occasional unethical behavior. The first ethically positive thing Starbucks involves itself in is the NGO and Fair Trade coffee. Even though purchasing mostly Fair Trade coffee seriously affected their profits, Starbucks knew it was the right thing to do. They also knew that if they did it the right way, everyone would benefit, from farmers to the environment, to their public image.

In the fall of 2010, Starbucks chose to team up with Jumpstart, a program that gives children a head start on their education. By donating to literacy organizations and volunteering with Jumpstart, Starbucks has made an impact on the children in America, in a very positive way.

Of course, some negatives come along with the positives. Starbucks isn’t the “perfect” company like it may seem. In 2008, the Starbucks mobile app decided to close 616 stores because they were not performing very well. For Starbucks to close this many stores in one year, they had to battle many landlords due to the chain breaking lease agreements. Starbucks tried pushing for rent cuts but some stores did have to break their agreements.

Other thing:

On top of breaching lease agreements, Starbucks was not able to grow as much as planned, resulting in their future landlords were hurting as well. To fix these problems, tenants typically will offer a buyout or find a replacement tenant, but landlords are in no way forced to go with any of these options. These efforts became extremely time-consuming and costly, causing Starbucks to give up on many lease agreements.

As for Starbucks ethical behavior is a different story when forced into the media light. In 2008, a big media uproar arose due to them wanting to re-release their old logo for their 35th anniversary. The old coffee cup logo was basically a topless mermaid, which is Starbucks’ opinion is just a mythological creature, not a sex symbol.

Media critics fought that someone needed to protect the creature’s modesty. Starbucks found this outrageous. To end the drama and please the critics, they chose to make the image more modest by lengthening her hair to cover her body and soften her facial expression. Rather than ignoring the media concerns, Starbucks met in the middle to celebrate its 35th anniversary. Maybe you definitely understand above the information and case study of Corporate Social Responsibility of Starbucks Coffee.

Case Study in Corporate Social Responsibility of Coffee Starbucks!

September 6, 2017
Do Survival is the Mother of Innovation? Explanation

Survival is the Mother of Innovation in Banking Sector: “Banks can provide innovative products and services to their corporate and retail customers only when creative people are in place along with the latest technology. Such people might provide innovative ideas to customers and banks. By converting their acceptable ideas into reality, banks can get an edge to compete effectively in the global village. Indian banking is also changing its shape rapidly by adopting innovative technology, products, and services.” So, what is the question going learn; Do Survival is the Mother of Innovation? Explanation.

Here is the Explanation; Do Survival is the Mother of Innovation?

Innovation is the key to success in any activity, Innovation banking is therefore not an exception. Innovation-banking is possible only when we have innovative people in banking. Moreover, innovative ideas of such people have to be heard at the right time by the right people. Only then the needed encouragement and support is given to convert such innovative ideas into reality. Customer Relationship Management in the Banking Sector.

In the past, a generation gap is considered to be with a span of at least 10 years. Whereas with the improvement in the technology followed by the integration of people and places across the world on account of revolutionary changes in information and communication. The entire world has become virtually a small global village. Since all organizations and people use technologies, we find that a new generation of techno-savvy people emerging in a very short span of 5 years in every sphere of activity infusing dynamism and creativity leading to several innovations.

Globally, usage of technology is very extensive in the financial sector of which banking sector is an integral part. Indian financial sector has made rapid strides in the late 1980s and early 1990s picking up momentum with the advent of the 21st century. Liberalization of the Indian economy has provided scope to the banking sector to reorient its focus by shifting from developmental role obligated mostly by socio-political considerations into professional financial agencies keen on preserving their bottom lines. What are Nature and Characteristics of Leadership?

The direction in which the Indian banking is moving presently indicates that the prevailing competition will lead to consolidation and convergence. Small players will either have to forge a merger to become big players or else they will be either extinguished or swallowed by larger players in the years to come. The pressure will equally be more on the existing large players to retain their lead over others. This emerging scenario warrants an innovative approach by banks to keep themselves sailing in the sea of competition.

No wonder we find a very interesting trend in the recent past in Indian banking. The trend is the major shift from routine banking functions to a very aggressive financial marketing organization. We find most of the routines banking jobs are outsourced, thanks to automation made possible by technology. Direct selling agents are actively engaged by most of the foreign and new generation private sector banks for marketing all the banking products with specified targets.

Therefore, the real core people who will be retained by these banks in the long run under their direct pay roles will only be experts at senior levels in marketing, corporate and retail banking specialists along with risk management professionals who will be required in view of the impending implementation of the Basle-II norms which attaches significant to assessment and management of risk factors in banking activity.

One can visualize the following scenario in Indian banking in the next five to seven years. State bank of India and their associate banks aiming to come under one umbrella on one side followed by mergers and acquisitions taking place between few strong nationalized banks, foreign banks and new private banks on the other side. This will leave the small players and weak banks to become extinct unless they device quick strategies to become larger and stronger.

In this context, innovation plays a very key and crucial role in the survival of the small players and also for the large players to retain their leadership amidst cutthroat competition. Out of the box, thinking is required and such thinking needs to be nurtured by the top management. ATMs of the larger banks are either fully outsourced by the individual banks or handed over to an autonomous agency by most of the banks collectively.

Small players in ATMs are also trying to be a part of this shared network with regard to clearing operations, Reserve Bank of India has already initiated the required steps to gradually dispense with the physical presentation of cheques and replace the same with electronic clearing in major cities.

Similarly, the audit and inspection of the computerized branches are now being done in many cases by transfer of data files to the supervisory and inspecting authorities. Qualitative inspection and supervision of the banks by Reserve Bank of India is made possible by the technology, leaving the routine audit work to the concerned internal audit departments of the individual banks.

With the automation of the routine work process and rapid technological developments, a host of customer-friendly banking products with flexibility is now available to one and all. Few departments of the government (e.g. customs, income tax, central excise, commercial taxes, and sales tax) have already initiated the process of EDI (Electronic Data Interface) thereby reducing the manual tasks in the preparation of documentation and enhancing the levels of automation.

This also facilitates standardization in documentation with uniformity. This will also ensure submission of such standard data in electronic form and be scanning the physical documents where required. In the long run, this enables e-commerce to gain momentum. Therefore, banks can also equally look forward to the submission of commercial documents by the trade industry through EDI in the near future.

Once this is done, the need for the business segment to personally visit the bank branches to submit the documents will be eliminated. When ATMs on one side have reduced the depends on individuals customers on the bank branches to conduct their routine banking operations, the EDI when gains momentum will reduce the dependence of corporate customers on the bank branches in a similar fashion.

These developments taking place mainly on account of automation will reduce the differentiation in the service delivery systems, as they are mostly standardized. Therefore, banks have to be innovative to maintain their brand values. Few banks have already started marketing aggressively for retail business loans by tying up with a select-reputed builder and conducting road shows in India and abroad to lure the salaried people and professionals.

This role is intermediation of the banker between the builders and salaried people and professionals can be further extended to cover other areas as well. For example, banks can connect the manufacturers of goods and services with the ultimate buyers. The process is very simple. Banks are required to have a common agency with which the entire database of all the banks should be shared.

This data should be analyzed and classified into various segments say- according to activity, age, place, income, education, etc., of the organizations and people who constitute this data. When this process is done on all India basis, a wealth of information will be available, which can be used as a marketing tool. Few relaxations in the existing banking laws are required for this purpose.

Banks can also play an active intermediary role in connecting the organizations and people at various segments, thereby facilitating the process of movement of goods and services from the manufacturers/producers to the ultimate users (of course through other intermediaries where they are not dispensable). Banks can finance the manufacturers/producers or the ultimate users while tying up them with one another thereby increasing their lending portfolio and in the process ensuring the end use of funds.

Collection of data from rural places is one area where banks can boast of possessing rich information, especially the public sector banks that have almost more than one-third of the network of branches located in rural areas. Banks can play a dynamic role in the delivery and purchase of consumer durables to the rural sector by using their rural database.

Therefore, instead of acting as financing intermediaries to some of the parties in the total chain as at present, banks can bring all the parties in the chain under their ambit. Banks can thus transform themselves into aggressive marketing intermediaries from mere financial intermediaries. This innovative approach can also be used with regard to NPAs where the products manufactured by such sick or loss-making units are of good quality but the units have become sick due to financial indiscipline or mismanagement or lack of marketing skills.

Buyers for such products can be scouted by the banks by using the above-mentioned database and in deserving cases, buyers can be given bank finance or their own merits to buy the products of sick units. A portion of the funds thus given can be again routed back into the banks for their working capital requirements.

Similarly, banks can play an active marketing role in venture capital financing with the above modus operandi, thereby taking part in not only financing the venture capital but also in marketing functions. Microfinance is yet another area where banks can play an active role. The objective of microfinance is to deliver a wide range of financial services say, deposits, advances, insurance, and other related products to people engaged in agriculture, small enterprises and poor people in order to increase their standard of living.

Finance is extended to SHGs or NGOs, which is basically institutional/group finance instead of lending to individual beneficiaries unlike in the case of other priority sector/rural lending. Moreover, there is no subsidies or interest concession and the basic concept in microfinance is to give timely finance to the needy people. Therefore, transaction costs are cheaper and profitability is better under microfinance when compared to the conventional rural lending.

In view of these factors, in the long run, microfinance is likely to replace the conventional and concessional rural lending. Ample scope is available for private and foreign banks to venture into this activity due to the above-mentioned advantages. Similarly, banks in the rural sector should actively market products like Kisan Credit Cards, Forward, Futures, and Options markets of commodities.

While Kisan Credit Cards serve as an instrument of credit, Forward, Futures and Options markets ensure a fair price to the farmers eliminating uncertainty. However, this requires an effective network that is one regulated as well as a matured financial market in rural areas for the growth and development of these products. Rural India and its economy mainly depend upon Monsoons.

Famine and Floods both occur at the same time in the different parts of the country causing damage to the crops. Therefore, rural insurance has to be an effective tool for hedging these risk factors. The government, banks, and insurance have to together evolve more proactive and vibrant measures to deal with this issue, both at the macro and micro level.

There is a vast untapped potential in this area and a lot of scope for developing new and innovative insurance linked financial products. Explain Dimensions of Price Perception. The merger of developmental financial institutions like ICICI and IDBI with their commercial banking wings lays emphasis on universal banking offering a wide range of financial products under one umbrella.

Similarly, SIDBI and NABARD are having a strategic alliance with few commercial banks to expand the reach of their products and services. Banks have come to realize that it is the survival of the fittest in the competitive environment. Therefore, when necessity is the mother of invention, survival is the mother of innovation.

Do Survival is the Mother of Innovation? Explanation.

August 28, 2017
What is CSR?

What is CSR (Corporate Social Responsibility)?

Corporate social responsibility (CSR) refers to business practices involving initiatives that benefit society. A business’s CSR can encompass a wide variety of tactics, from giving away a portion of a company’s proceeds to charity, to implementing “greener” business operations.

Definition of Corporate Social Responsibility (CSR)

The movement aimed at encouraging companies to be more aware of the impact of their business on the rest of society, including their own stakeholders and the environment. Corporate social responsibility (CSR) is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders.

CSR is a concept with many definitions and practices. The way it is understood and implemented differs greatly from each company and country. Moreover, CSR is a very broad concept that addresses many and various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions and contribution to economic development. Whatever the definition is, the purpose of CSR is to drive change towards sustainability.

Although some companies may achieve remarkable efforts with unique CSR initiatives, it is difficult to be on the forefront on all aspects of CSR. Considering this, the example below provides good practices on one aspect of CSR environmental sustainability.

Corporate Social Responsibility

Example; Unilever is a multinational corporation, in the food and beverage sector, with a comprehensive CSR strategy. The company has been ranked “Food Industry leader’ in the Dow Jones Sustainability World Indexes for the 11 consecutive years and ranked 7th in the ‘Global 100 Most Sustainable Corporations in the World.”

One of the major and unique initiatives is the ‘sustainable tea’ program. On a partnership-based model with the Rainforest Alliance (an NGO), Unilever aims to source all of its Lipton and PG Tips tea bags from Rainforest Alliance Certified™ farms by 2015. The Rainforest Alliance Certification offers farms a way to differentiate their products as being social, economically and environmentally sustainable.

Other Definitions

The World Business Council for Sustainable Development in its publication Making Good Business Sense by Lord Holme and Richard Watts used the following definition:

Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large The same report gave some evidence of the different perceptions of what this should mean for a number of different societies across the world. Definitions as different as CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and the government of Ghana, through to CSR is about business giving back to society from the Philippines.

Traditionally in the United States, CSR has been defined much more in terms of a philanthropist model. Companies make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share of the profits to charitable causes. It is seen as tainting the act for the company to receive any benefit from the giving.

What is the Social Responsibility of Business?

Ever since Milton Friedman famously proclaimed “The Social Responsibility of Business is to Increase its Profits” (NYTimes 1970), pundits have pondered whether his purist interpretation was really the only way.

Profit is certainly a lot easier to quantify than something like ‘happiness’, but the intangible benefits of good, honest business clearly go way beyond pure finance Must the word ‘profit’ always refer to money in the strictest sense?

Collected on this page are various interpretations of the idea of “social responsibility” and the responsibility of business to take an active, passive or indifferent role in building a more sustainable world.

There are a few broad categories of social responsibility that many of today’s businesses are practicing:

I) Environmental efforts: One primary focus of corporate social responsibility is the environment. Businesses regardless of size have a large carbon footprint. Any steps they can take to reduce those footprints are considered both good for the company and society as a whole.

II) Philanthropy: Businesses also practice social responsibility by donating to national and local charities. Businesses have a lot of resources that can benefit charities and local community programs.

III) Ethical labor practices: By treating employees fairly and ethically, companies can also demonstrate their corporate social responsibility. This is especially true of businesses that operate in international locations with labor laws that differ from those in the United States.

IV) Volunteering: Attending volunteer events says a lot about a company’s sincerity. By doing good deeds without expecting anything in return, companies are able to express their concern for specific issues and support for certain organizations.

Examples of Corporate Social Responsibility

While many companies now practice some form of social responsibility, some are making it a core of their operations. Ben and Jerry’s, for instance, uses only fair trade ingredients and has developed a sustainability program for dairy farms in its home state of Vermont. Starbucks has created its C.A.F.E. Practices guidelines, which are designed to ensure the company sources sustainably grown and processed coffee by evaluating the economic, social and environmental aspects of coffee production. Tom’s Shoes, another notable example of a company with CSR at its core, donates one pair of shoes to a child in need for every pair a customer purchases.

However, Stevens said companies need to really understand what their core social purpose is and how that aligns with their stated mission, to create a cohesive CSR strategy.

For example, Stevens said that Kashi, a Kellogg’s brand, wants to increase organic farming and is one of the few certified organic kinds of cereal. Since only 1 percent of U.S. farmland is actually organic, the breakfast brand worked with Quality Insurance International to help certify new organic farmers across the nation.

March 10, 2017