Transaction Cost Economics and Risk Management Principles
Transaction Cost Economics (TCE)
Transaction Cost Economics (Williamson) is a branch of economics that studies the solution to coordination and motivation problems using price and non-price mechanisms.
Core Principles of Williamson’s TCE
- i) It makes the transaction the basic unit of analysis.
- ii) Transactions differ in attributes that are relevant for the decision on how to govern them.
- iii) Contracts govern transactions, and the list of available contracts is much larger than the narrow view of pure
tgervfrs
6 STRATEGIC BUSINESS OBJETIVES for implementation are:
1. Operational excellence: improve efficiency, productivity and performance through automation and streamlined process. Walmart uses real-time inventory systems to reduce costs.
2. New products, services and business models: enable innovation and create new ways of delivering value. Apple → iTunes / Appstore innovation.
3. Customer and supplier intimacy: use systems to build stronger relationships, improve service and increase loyalty. Amazon
Project Management Principles and Agile Methodology
Week 1: Evolution of Project Management
Historical projects have been around for a long time. Notable examples include:
- Tower of Babel
- Egyptian pyramids
- Great Wall of China
- The Manhattan Project
Modern project management development is largely credited to the military, specifically:
- The Navy’s Polaris program
- NASA’s Apollo space program
- Development of “smart bombs” and missiles
Project management is now widely accepted across various industries beyond construction or the military, including:
- Managing legal
Key Business Concepts: Motivation, Operations, and Financial Analysis
Financial Rewards and Employee Motivation
Financial rewards are monetary payments given to employees to motivate them and improve performance.
Examples of Financial Rewards
- Wages/Salaries: Regular fixed payments.
- Bonuses: Extra pay for meeting specific goals.
- Commission: Payment based on sales volume achieved.
- Profit-Related Pay: A share of company profits distributed to employees.
- Performance-Related Pay (PRP): Based on formal appraisal or achievement metrics.
Advantages of Financial Rewards
- Motivates employees
Understanding Strategic Financial Management for Business Success
Meaning of Strategic Financial Management
Managing financial resources to achieve long-term organizational goals.
Integrating financial strategy with overall corporate strategy.
Scope of Strategic Financial Management
Financial Planning and Forecasting: Aligning financial goals with the strategic plan.
Investment Decisions (Capital Budgeting): Selecting long-term projects that align with strategic objectives.
Financing Decisions (Capital Structure): Determining the optimal mix of debt and equity.
Dividend
Key Steps in Strategic Planning and Management Concepts
Strategic Planning Process Steps
Define Mission and Objectives
Identify the organization’s purpose and set clear long-term goals.
Environmental Analysis
Study the internal and external environment using tools like SWOT, PEST, and competitor analysis.
Identify Opportunities and Threats
Understand external factors that may help or harm the organization.
Identify Strengths and Weaknesses
Analyze internal resources, skills, capabilities, and limitations.
Formulate Strategies
Develop long-term strategies for growth,