Jenna (2010).
Differences in PPSA in Ontario and Quebec
The purpose of the Personal Property Security Act (PPSA) is to establish a framework to govern the right of a creditor to take possession of a debtor’s personal property in the event of insolvency of a loan (Abbott, 2005). Yates, Bereznicki-Korol and Clarke (2008), state that although the PPSA provides “a unified approach toward the use of personal property as security” (p. 343), in which, “formal requirements and procedures” (p. 343) for different types of securities are treated the same, legislation varies across provincial jurisdiction. Two provinces that differ significantly in PPSA legislation are Ontario and Quebec.
Quebec law is unique in Canada. The province of Quebec preserved its civil law after the Confederation initiated the reform of common law throughout the rest of Canada. Civil law originated in France where the French borrowed from the civil code of Roman law (Stewart, 2005). Quebec now uses what is called the Civil Code of Quebec and it has been revised to integrate some concepts of common law (Gervais, 1999).
The Ontario PPSA is similar to the personal property security system described by Article 9 of the U.S Uniform Commercial Code (UCC). Legislation in Quebec parallels the PPSA’s central features (Clark, 2003) however has several differences from Ontario’s personal property security system. One of the most recognized differences between Quebec and Ontario’s PPSA law is the interpretation of the concept of chattel mortgages. In fact, Quebec only added this section to its PPSA in 1994 when the new Quebec Civil Code was introduced. The provincial government decided to call them “hypothecs”. The code states that all “property which would be considered as personal under the PPSA as moveables” (Clark, 2003, Para 14). There is consistency in the Quebec code of hypothecs with the Ontario code of chattels as they both cover all property except real property, or immoveables in Quebec. Furthermore, the code provides provisions for the right to secure debt obligations. One of the differences between the two provisions is how they deal with security transactions.
In the civil law, security is generally understood only as a creditor's conditional right: (i) to extract the value of secured property actually falling within his or her debtor's patrimony (or property); (ii) at a judicial sale or in some other realization; and (iii) to get paid by preference. In principle, security comprises neither a right to take possession nor a right of foreclosure! Leases and title retention sales contracts remain separate and are subject to regimes that prescribe different legal relationships between the parties than those applicable to transactions that create hypothecs (Clark, 2003, n.p).
Although there are many differences between Quebec and Ontario legislation, there are also many similarities. For example, hypothecs can charge on future property and extends new property acquired by debtors to replace charged property that was sold in regular course of business. Also similar to Ontario’s PPSA, Quebec’s hypothec rule allows first registration and publishing priority over an asset. It is important to note however, that the unlike the Ontario PPSA, it does not allow pre-agreement fillings. Furthermore, in registering a debtor in the province of Quebec is quite different from in Ontario and other provinces. There are requirements for French contracts, and the province uses regulations that also limit a creditor to either seize an asset or collect monies, but not both (Carroll, n.d).
Although there are some differences in the interpretations of PPSA law in the different provinces, a common theme is the issue of perfection and priority. Craig and McPherson (2001) state:
Perfection is a concept fundamental to the operation of the PPSA. Once a security interest is perfected, the secured party acquires certain rights in the collateral under the PPSA. Perfection is different from priority. Perfection occurs when a creditor has taken all the necessary steps set out in the PPSA to protect its position as between itself and its debtor. By definition, it is possible for a number of creditors to have taken all those steps and therefore have a perfected security interest in the same collateral. Priority reconciles the competing claims of those creditors who have perfected security interests. Only one party can have priority (Para 6).
Because only one party can have priority over an asset, it is important that perfection in order to establish priority be a legal requirement. If exceptions were permitted, it would be difficult to ensure the title an individual is searching is in fact the same title they wish to register. Eliminating ambiguity in registrations ensures the credibility of the system.
In essence, it is important for any creditor to cross check, and register priority in the assets they are securing in order to protect themselves from insolvency. Understanding the risks involved also require thorough understanding of the provincial legislation they are dealing with. Furthermore, the best protection upon registration is ensuring the contract is perfected.
References
Carroll (n.d). How to cross the border… avoid getting caught with all the wrong
paper work… doing business in Canada. Leasing Logic. Retrieved February 4,
2010 from http://www.litehaus360lease.com/news-article-20080601.pdf.
Clark, D. (January, 2005). Revised article 9 and the PPSA- a comparison of the
American and Canadian secured property legal regimes. The Secured Lender.
Retrieved on February 5, 2010 from: www.allbusiness.com
Craig, D. & McPherson, D. (2001). The personal property securities act. Bell gully
publication. Retrieved February 7, 2010 from:
http://www.bellgully.com/resources/resource.00035.asp
Gervais, M. (May, 1999). Harmonization and dissonance: language and law in
Canada and Europe. Department of Justice Canada. Retrieved February 5,
2010 from: www.justice.gc.ca
Stewart, W. (1948). The civil code of Quebec. The Encyclopedia of Canada, Vol. II.
Toronto: University Associates of Canada.
Yates, A., Bereznicki-Korol, T. & Clarke, T. (2008). Business law in Canada (8th ed). Canada: Pearson Education Canada
Saturday, March 13, 2010
Automotive Industry Overview (Macroeconomics)
Jenna Doucet (2010).
The Automotive Industry Overview
Abstract
The paper analyzes and summarizes how the automotive industry is impacted by the macro economy. The paper includes brief history of the automotive industry, how it impacts the GDP, the unemployment rate, and the inflation rate as measured by the Consumer Price Index (CPI).
The supply and demand of the automotive industry as well as the profits derived from the sector are clearly impacting by then macroeconomic policies. The industry’s history demonstrates the trends it follows in the business cycle and how economic indicators have impacted the performance of the industry over the years. The measure of production, interest rates, real GDP, automotive sales and inflation and unemployment are some of the most compelling instruments that can be used to assess the state of the automotive industry.
Automotive Industry History
In the initial stages of the automotive industry, motoring was considered a sport rather than a means of transportation. It took many centuries from the creation of the first successful self-propelled road vehicle in 1770 for motorcars to generate enough demand for widespread production. After the formation of the Automobile Board of Trade, which eased the monopoly in the industry and promoted the sharing of patent rights there were many successful automakers. Later, as competition began to rise three corporations came to flourish and dominated the industry in the United States. The “big Three” that made headlines were Ford, GM and, Chrysler (Smith, 1996).
Auto Production Business Cycle
The U.S automotive industry saw a steady expansion from its inception until 1978 in which where production reached its all-time peak. The industry showed a small contraction and a quick recovery leading to its peak between 1972 and 1976. In the early 1980 there was a big drop in production units and the industry fell into its first true recession. The industry recovered in the mid 80s peaking in 1988, but never reached its previous high before falling into another recession that lasted from 1990 to 1992 (Smith, 1996). The automotive industry’s production rates have been cycling through different business phases throughout history. In 1999 the automotive industry finally recovered and reached its previous high. Now the automotive industry is again experiencing a recession. Traditionally, during times of expansion the inflation in the economy is stable, and firms invest more capital to meet increased demand. Expansions also contribute to a higher rate of employment. The final stages of expansion, at the peak “demand begins to outstrip the capacity of the economy to supply it. Labour and product shortages in the industry are evident in this stage. Contractions and recessions in a business are usually associated with a decrease in the economy’s real GDP. “ Firms faced with unwanted inventories and declining profits reduce production, postpone investment, curtail hiring and may lay off employees”. (Canadian securities textbook, 2008. Ch. 4 p.17). A through is characterized by the curtailing of falling demand and excess capacities. An overall contraction in the business cycle of real GDP lowers inflation and interest rates. “ The trough is reached when consumers who postponed purchases during the recession are spurred by lower interest rates to begin satisfying some of their pent-up demand” (Canadian securities textbook, 2008. Ch. 4 p.17). A recovery in a business cycle only occurs when GDP or business activity returns to its previous peak.
Interest rates
Interest rates are an important determinant of the performance of an industry. For consumers, interest rates represent the available funds they are willing to borrow to satisfy today’s needs. For businesses they represent the cost of borrowing money to invest in the growth of a company. The following graph represents interest rates changes over the years along side automotive production rates and real GDP. Production rates and real GDP decline as interest rates increase (Canadian securities textbook, 2008. Ch. 4 p. 29).
Real GDP
According to economists Ballew and Schnorbus (1994) the automotive industry is one of the best examples of how durable goods drive economic activity. In the US the automotive industry can influence economic change up to as much as 40% but contributes about 4% of the economy’s GDP (Helmut, 1994). The effects of how the cyclical change of the durable goods sector impacts the automotive industry can be exemplified by the industry’s trends in between the years of 1970 and 1991 respectively. The peaks and lows of the expansions following the troughs of 1970, 1975, and 1982 have been significantly above par the gains and losses of 1991. The industry’s cyclical recovery pattern during those years was very similar to the country’s recovery pattern in both GDP and CPI at that time (Ballew & Schnorbus, 1994). In 1970, the annual percentage change of real GDP was low, just as it was in 1975 and 1982. Over the years, peaks, and troughs in the automotive industry’s production rate follow closely with the time frames of the peaks and troughs in the economy’s real GDP.
Auto Sales: Unemployment and inflation
The peaks and valleys of the GDP also trend in the industry with auto sales. After the peak in 1978 the cycle of sales have risen and fallen. The amount of sales foreseen will not reach the same level it once did because of the advances in technology, creating more long lasting durable vehicles. In addition to technological advances the unemployment rate and inflation rates affect the number of vehicles sold. Auto sales in a positive direction generate the production levels, which in turn contribute to the employment rate (Dolbeck, 2002). One of the trends of employment in the business cycle is that it declines during a recession. This trend is evident and corresponds to the statistics in both the business cycle and employment rates in the U.S between 1970-2009. The weekly unemployment insurance claims both peeked in 1975 and 1982 during the respective recessions. In the current recession numbers for unemployment insurance have more than doubled (Shedlock, 2009). Unemployment and inflation have a direct relationship with one another. Inflation also imposes many cost on society. From 1970-1980, inflation rates in the U.S were high relative to unemployment rates, a characteristic that could be attributed to the growing economy. During these years of high volatility the automotive industry was also generally following trends of expansion. Newer data suggests that higher rates of unemployment are correlated with lower rates of inflation
Conclusion
Many factors effect the performance of an industry and as each industry makes up a portion of real GDP, they in turn can impact the cycle of the economy. The automotive industry is clearly impacted by macroeconomic policy and auto production and sales rates in relation to interest rates, real GDP, inflation and unemployment make this evident.
References
Ballew, P. & Schnorbus, R. (March, 1994). The impact of the auto industry on the economy. The Chicago fed letter. Retrieved on January 29, 2010 from: Bnet database.
Canadian Securities Course Volume 1 (2008). The Canadian Regulatory Environment. Toronto: The Canadian Securities Institute
Dolbeck, A. (2002). Auto industry accelerates as economy slows. Weekly Corporate
Growth. Retrieved January 31, 2010.
Helmut, H. (October, 1994). The automotive industry and monetary policy: an
international perspective. Business Economics. Retrieved February 1, 2010
from: http://www.allbusiness.com/finance/473760-1.html
International organization of motor vehicles- OICA (2009). U.S auto production
statistics. Retrieved January 16 2010 from: http://www.oica.net
Shedlock, M. (July, 2010). U.S unemployment claims: how bad are the “real” numbers?
Economics: recession 2008-2010. Retrieved February 1, 2010. Retrieved from:
http://www.marketoracle.co.uk/Article11934.html
Smith, D. (1996). Automobile industry. History encyclopaedia: World almanac education group. Retrieved January 19, 2010 from: www.history.com
U.S Department of commerce: bureau of economic analysis (2010). Real GDP statistics.
Retrieved January 16, 2010 from: http://www.bea.gov/
The Automotive Industry Overview
Abstract
The paper analyzes and summarizes how the automotive industry is impacted by the macro economy. The paper includes brief history of the automotive industry, how it impacts the GDP, the unemployment rate, and the inflation rate as measured by the Consumer Price Index (CPI).
The supply and demand of the automotive industry as well as the profits derived from the sector are clearly impacting by then macroeconomic policies. The industry’s history demonstrates the trends it follows in the business cycle and how economic indicators have impacted the performance of the industry over the years. The measure of production, interest rates, real GDP, automotive sales and inflation and unemployment are some of the most compelling instruments that can be used to assess the state of the automotive industry.
Automotive Industry History
In the initial stages of the automotive industry, motoring was considered a sport rather than a means of transportation. It took many centuries from the creation of the first successful self-propelled road vehicle in 1770 for motorcars to generate enough demand for widespread production. After the formation of the Automobile Board of Trade, which eased the monopoly in the industry and promoted the sharing of patent rights there were many successful automakers. Later, as competition began to rise three corporations came to flourish and dominated the industry in the United States. The “big Three” that made headlines were Ford, GM and, Chrysler (Smith, 1996).
Auto Production Business Cycle
The U.S automotive industry saw a steady expansion from its inception until 1978 in which where production reached its all-time peak. The industry showed a small contraction and a quick recovery leading to its peak between 1972 and 1976. In the early 1980 there was a big drop in production units and the industry fell into its first true recession. The industry recovered in the mid 80s peaking in 1988, but never reached its previous high before falling into another recession that lasted from 1990 to 1992 (Smith, 1996). The automotive industry’s production rates have been cycling through different business phases throughout history. In 1999 the automotive industry finally recovered and reached its previous high. Now the automotive industry is again experiencing a recession. Traditionally, during times of expansion the inflation in the economy is stable, and firms invest more capital to meet increased demand. Expansions also contribute to a higher rate of employment. The final stages of expansion, at the peak “demand begins to outstrip the capacity of the economy to supply it. Labour and product shortages in the industry are evident in this stage. Contractions and recessions in a business are usually associated with a decrease in the economy’s real GDP. “ Firms faced with unwanted inventories and declining profits reduce production, postpone investment, curtail hiring and may lay off employees”. (Canadian securities textbook, 2008. Ch. 4 p.17). A through is characterized by the curtailing of falling demand and excess capacities. An overall contraction in the business cycle of real GDP lowers inflation and interest rates. “ The trough is reached when consumers who postponed purchases during the recession are spurred by lower interest rates to begin satisfying some of their pent-up demand” (Canadian securities textbook, 2008. Ch. 4 p.17). A recovery in a business cycle only occurs when GDP or business activity returns to its previous peak.
Interest rates
Interest rates are an important determinant of the performance of an industry. For consumers, interest rates represent the available funds they are willing to borrow to satisfy today’s needs. For businesses they represent the cost of borrowing money to invest in the growth of a company. The following graph represents interest rates changes over the years along side automotive production rates and real GDP. Production rates and real GDP decline as interest rates increase (Canadian securities textbook, 2008. Ch. 4 p. 29).
Real GDP
According to economists Ballew and Schnorbus (1994) the automotive industry is one of the best examples of how durable goods drive economic activity. In the US the automotive industry can influence economic change up to as much as 40% but contributes about 4% of the economy’s GDP (Helmut, 1994). The effects of how the cyclical change of the durable goods sector impacts the automotive industry can be exemplified by the industry’s trends in between the years of 1970 and 1991 respectively. The peaks and lows of the expansions following the troughs of 1970, 1975, and 1982 have been significantly above par the gains and losses of 1991. The industry’s cyclical recovery pattern during those years was very similar to the country’s recovery pattern in both GDP and CPI at that time (Ballew & Schnorbus, 1994). In 1970, the annual percentage change of real GDP was low, just as it was in 1975 and 1982. Over the years, peaks, and troughs in the automotive industry’s production rate follow closely with the time frames of the peaks and troughs in the economy’s real GDP.
Auto Sales: Unemployment and inflation
The peaks and valleys of the GDP also trend in the industry with auto sales. After the peak in 1978 the cycle of sales have risen and fallen. The amount of sales foreseen will not reach the same level it once did because of the advances in technology, creating more long lasting durable vehicles. In addition to technological advances the unemployment rate and inflation rates affect the number of vehicles sold. Auto sales in a positive direction generate the production levels, which in turn contribute to the employment rate (Dolbeck, 2002). One of the trends of employment in the business cycle is that it declines during a recession. This trend is evident and corresponds to the statistics in both the business cycle and employment rates in the U.S between 1970-2009. The weekly unemployment insurance claims both peeked in 1975 and 1982 during the respective recessions. In the current recession numbers for unemployment insurance have more than doubled (Shedlock, 2009). Unemployment and inflation have a direct relationship with one another. Inflation also imposes many cost on society. From 1970-1980, inflation rates in the U.S were high relative to unemployment rates, a characteristic that could be attributed to the growing economy. During these years of high volatility the automotive industry was also generally following trends of expansion. Newer data suggests that higher rates of unemployment are correlated with lower rates of inflation
Conclusion
Many factors effect the performance of an industry and as each industry makes up a portion of real GDP, they in turn can impact the cycle of the economy. The automotive industry is clearly impacted by macroeconomic policy and auto production and sales rates in relation to interest rates, real GDP, inflation and unemployment make this evident.
References
Ballew, P. & Schnorbus, R. (March, 1994). The impact of the auto industry on the economy. The Chicago fed letter. Retrieved on January 29, 2010 from: Bnet database.
Canadian Securities Course Volume 1 (2008). The Canadian Regulatory Environment. Toronto: The Canadian Securities Institute
Dolbeck, A. (2002). Auto industry accelerates as economy slows. Weekly Corporate
Growth. Retrieved January 31, 2010.
Helmut, H. (October, 1994). The automotive industry and monetary policy: an
international perspective. Business Economics. Retrieved February 1, 2010
from: http://www.allbusiness.com/finance/473760-1.html
International organization of motor vehicles- OICA (2009). U.S auto production
statistics. Retrieved January 16 2010 from: http://www.oica.net
Shedlock, M. (July, 2010). U.S unemployment claims: how bad are the “real” numbers?
Economics: recession 2008-2010. Retrieved February 1, 2010. Retrieved from:
http://www.marketoracle.co.uk/Article11934.html
Smith, D. (1996). Automobile industry. History encyclopaedia: World almanac education group. Retrieved January 19, 2010 from: www.history.com
U.S Department of commerce: bureau of economic analysis (2010). Real GDP statistics.
Retrieved January 16, 2010 from: http://www.bea.gov/
Thursday, March 11, 2010
Extracting Tacit Knowledge in the Financial Services Industry
Jenna Doucet (2009).
Extracting Tacit Knowledge in the Financial Services Industry
The financial services industry directly affect a country’s economic integrity and is thus a highly regulated industry where organizations and professionals alike are confronted with a continuous flow of complex rulings and must successfully implement compliance systems in order to report relevant information back to regulatory agencies. Much of the information that is reported back from agency to industry and industry to agency is in the form of explicit knowledge which is often articulated through formal documentation. However, both the financial services industries and their regulatory agencies are often confronted with issues regarding the sharing and communication of tacit information. The tacit information that is relevant to the financial investment services industries are generally related to undocumented knowledge of the ins and outs of approval processes or the best methods to resolve issues in different provinces or states (Andrews, 1998). Another form of tacit information in the investment industry are the closely guarded secrets of trading platform technologies and more specifically algorithm or black-box trading. Not only is technology in organizations a large function that contains much tacit information, but technology itself can play a role in decoding tacit information. Lastly, the present state of the economy is causing many financial services companies and investment companies to merge, which renders the transfer of tacit knowledge between individuals from institution to institution crucial.
The first example of tacit knowledge involved in the financial services industry occurs in the investment banking sector whereby an employee maintains knowledge and understanding of a firm’s approval process for taking risks and regulatory issues across different provinces and states. The types of firm-specific skills required to successfully function as an investment banker require that an individual not only be familiar with explicit knowledge of trading policies and underwriting risks, but a thorough grasps of the firms communication policies, that is one must come to understand how to communicate to executives why a particular investment is worth risking the firm’s capital over. As Morrison and Wilhelm (2007) state, much of these skills are tacit and may require “ an understanding of a private company language” (p.285), and that “ this type of knowledge is hard to acquire, and is notoriously hard to write down. We refer to it as the firm’s culture” (p.285). The best way to extract this type of tacit information is through mentorship, the most effective way to gain from the experience of a mentor in a firm is from participating in an internship, which in itself is a competitive task.
The importance technology plays for financial institutions cannot be overemphasized. A good trading platform is one of the core components of any successful investment firm. While some Banks such as BMO Financial Group choose to licence their software from companies like Bloomberg, other financial institutions such as First New York Securities develop their own trading platforms internally. The key to their competitive advantages rest in closely guarding trade secrets so to speak. Many papers have been published about trading algorithms, time series and other relevant material that expert developers and programmers can use and refer to in developing complex trading platforms, however successfully combining efficient market hypothesis, market heterogeneities, forecasting, data filtering, scaling laws, time series, volatility models, Bayesian estimation theories, distributed processing, and other complex processes into meaningful software that allow traders to accurately interpret market information involves a great deal of tacit information. Extracting tacit information from professionals in the field of technology requires a great deal of technical knowledge to begin with and individuals who have achieved such levels of expertise are not eager to give it away.
Although there is a great deal of implicit information in the creation of technology, some technologies exist specifically to help organizations extract tacit information and record it for the internal use of employees. An example of such technology is the Knowledge Management (KM) System. These systems privately track the expertise of individuals within the organization and conveniently store the information into a database or a “network of experts”, who can later be probed (Boghani, Long, and Jonash).Mergers render the transfer of tacit information important because each of the different companies undergoing the process have accumulated different expertise and tacit employee knowledge over the years. In order to benefit from each other’s areas of expertise such information needs to be transferred to and from each organization. There is no protocol manual on how to best accomplish this task, however it certainly requires the willingness of key employees to share information and collaborate with others to take effect. A Knowledge Management System would certainly be an asset.
Conclusion
In conclusion the financial services industry is very complex and involves many facets of tacit information. In some instances organizations and individuals benefit from protecting the knowledge they have require, but at the expense of their competitors or others seeking to enter the workforce. In some instances, for example with mergers, the extracting of tacit information is crucial and can be accomplished through networking, the willingness of employees to share information and with the aid of a Knowledge Management System.
References
Andrews, L. (November, 1998). Regulatory Information Overload. KM World Magazine. Retrieved on September 8th 2009 from: www.kmworld.com
Ashok, B. & Boghani, D. & Jonash, R.Technology intelligence and monitoring
System (TIMS). Retrieved on September 9th 2009 from ProQuest database.
Morrison, A. &Wilhelm, W. (2007). Investment banking: institutions, politics, and law,Volume 10. New York: Oxford University Press.
Extracting Tacit Knowledge in the Financial Services Industry
The financial services industry directly affect a country’s economic integrity and is thus a highly regulated industry where organizations and professionals alike are confronted with a continuous flow of complex rulings and must successfully implement compliance systems in order to report relevant information back to regulatory agencies. Much of the information that is reported back from agency to industry and industry to agency is in the form of explicit knowledge which is often articulated through formal documentation. However, both the financial services industries and their regulatory agencies are often confronted with issues regarding the sharing and communication of tacit information. The tacit information that is relevant to the financial investment services industries are generally related to undocumented knowledge of the ins and outs of approval processes or the best methods to resolve issues in different provinces or states (Andrews, 1998). Another form of tacit information in the investment industry are the closely guarded secrets of trading platform technologies and more specifically algorithm or black-box trading. Not only is technology in organizations a large function that contains much tacit information, but technology itself can play a role in decoding tacit information. Lastly, the present state of the economy is causing many financial services companies and investment companies to merge, which renders the transfer of tacit knowledge between individuals from institution to institution crucial.
The first example of tacit knowledge involved in the financial services industry occurs in the investment banking sector whereby an employee maintains knowledge and understanding of a firm’s approval process for taking risks and regulatory issues across different provinces and states. The types of firm-specific skills required to successfully function as an investment banker require that an individual not only be familiar with explicit knowledge of trading policies and underwriting risks, but a thorough grasps of the firms communication policies, that is one must come to understand how to communicate to executives why a particular investment is worth risking the firm’s capital over. As Morrison and Wilhelm (2007) state, much of these skills are tacit and may require “ an understanding of a private company language” (p.285), and that “ this type of knowledge is hard to acquire, and is notoriously hard to write down. We refer to it as the firm’s culture” (p.285). The best way to extract this type of tacit information is through mentorship, the most effective way to gain from the experience of a mentor in a firm is from participating in an internship, which in itself is a competitive task.
The importance technology plays for financial institutions cannot be overemphasized. A good trading platform is one of the core components of any successful investment firm. While some Banks such as BMO Financial Group choose to licence their software from companies like Bloomberg, other financial institutions such as First New York Securities develop their own trading platforms internally. The key to their competitive advantages rest in closely guarding trade secrets so to speak. Many papers have been published about trading algorithms, time series and other relevant material that expert developers and programmers can use and refer to in developing complex trading platforms, however successfully combining efficient market hypothesis, market heterogeneities, forecasting, data filtering, scaling laws, time series, volatility models, Bayesian estimation theories, distributed processing, and other complex processes into meaningful software that allow traders to accurately interpret market information involves a great deal of tacit information. Extracting tacit information from professionals in the field of technology requires a great deal of technical knowledge to begin with and individuals who have achieved such levels of expertise are not eager to give it away.
Although there is a great deal of implicit information in the creation of technology, some technologies exist specifically to help organizations extract tacit information and record it for the internal use of employees. An example of such technology is the Knowledge Management (KM) System. These systems privately track the expertise of individuals within the organization and conveniently store the information into a database or a “network of experts”, who can later be probed (Boghani, Long, and Jonash).Mergers render the transfer of tacit information important because each of the different companies undergoing the process have accumulated different expertise and tacit employee knowledge over the years. In order to benefit from each other’s areas of expertise such information needs to be transferred to and from each organization. There is no protocol manual on how to best accomplish this task, however it certainly requires the willingness of key employees to share information and collaborate with others to take effect. A Knowledge Management System would certainly be an asset.
Conclusion
In conclusion the financial services industry is very complex and involves many facets of tacit information. In some instances organizations and individuals benefit from protecting the knowledge they have require, but at the expense of their competitors or others seeking to enter the workforce. In some instances, for example with mergers, the extracting of tacit information is crucial and can be accomplished through networking, the willingness of employees to share information and with the aid of a Knowledge Management System.
References
Andrews, L. (November, 1998). Regulatory Information Overload. KM World Magazine. Retrieved on September 8th 2009 from: www.kmworld.com
Ashok, B. & Boghani, D. & Jonash, R.Technology intelligence and monitoring
System (TIMS). Retrieved on September 9th 2009 from ProQuest database.
Morrison, A. &Wilhelm, W. (2007). Investment banking: institutions, politics, and law,Volume 10. New York: Oxford University Press.
Sale and Leaseback
Jenna Doucet, Camile-Lyn Mundy, Richard Davidson,
Charles Tranhike Mary Moroso (2010).
Sale and Leaseback
The U.S. economy is slowly recovering from a credit crisis that has gravely impacted the housing market. Although, the recession take took place through most of 2008 and 2009 is now mostly over, the devastating consequences it has had for many homeowners will not be soon forgotten. Before the recession began the housing market was booming, individuals’ were borrowing more money than they could afford to finance homes that were grossly overpriced. As the recession made way, individuals’ were losing their jobs, forgoing mortgage payments and forced to sell their homes or undergo foreclosure. The possibility of losing their homes, sparked creativity in some individuals and a new trend in sale- and leasebacks emerged. The article Homeowners should steer clear of sale-leasebacks, provides valuable insight into this new trend, the intended purpose of the sale-leaseback, and on the legal implications of going from homeowner to tenant.
Traditionally, sale and leasebacks have been used in commercial real-estate as a way for businesses to generate capital to fund expansions or to take advantage of tax deductibles. For one lease payments are one-hundred percent tax deductable and renting instead of owning assets impacts the company’s balance sheet as those assets are converted into contingent liabilities (Lecky, 2009). Large corporations such as the New York Times, Bank of America, SunTrust and Citibank have all benefited from multi-billion-dollar sale and leaseback agreements says the article, however it is a completely different ball game in residential real-estate. The article quotes, Steve Goddard, an experienced realtor in California who says “ These deals are pretty complex things” (Para, 3), “ And even people that have some expertise or real estate acumen call attorneys before signing anything, much less homeowners” (Para, 3). As the purpose behind the sale-leaseback, is often to give desperate homeowners a way to stay in their homes, it is unlikely that the homeowner will have the resources to pay for a proper leaseback agreement. According to the article the supposed win-win of the homeowner receiving capital to pay his or her bills, and the buyer’s built-in tenant is just a façade for bigger risks. Accordingly, if the buyer runs into his or her own financial potholes, the original homeowner, now tenant will have little legal recourse of staying in their home. Furthermore, in residential real estate sale-leasebacks “ often end up costing more money in the long-term: the seller becomes a renter and losses the chance to built equity in their home” (Para, 5).
The individuals rights also change when becoming a tenant. For example, the tenant is now expected to comply with the requirements of the lease contract and has less flexibility once the title of the property changes and is registered in the name of the new owner. Perhaps one of the most significant changes is that the owner, now tenant can no longer use the property as a security for financial loans. Another important matter is that as the tenant is both the seller and occupant, he or she cannot expect the new landlord to guarantee the building or its conditions. As a result, it is often stipulated in lease agreements that the tenant is fully responsible for maintaining the property and assuming the capital costs. The tenant will not benefit from the capital expenses he or she assumed while occupying the premise once the contract is over (Hahn, 2007). Additionally, all changes, improvements or modifications of the premise will have to be approved by the landlord and not subject to the original owners taste as it was previously.
Sale-leaseback is a very versatile arrangement as it fits into any property type. In conclusion a sale-lease back agreement can be quite an attractive alternative when a individual is faced with the possibilities of losing their property. The advantages can be interpreted to both buyer and seller. The buyer gets a built-in tenant, and the original owner gets to retain his or her property on the terms outlined in the agreement. However, there is a good chance of disappointment and entering into a residential sale-leaseback arrangement as varying un-foreseen circumstances may arise in which the original owner now the tenant will have little or no recourse in a court of law to stay in their home.
References
Anonymous (March, 2009). Homeowners should steer clear of sale-leasebacks.
LexisNexis. Retrieved on March 1, 2010 from: http://www.allbusiness.com/real-
estate/commercial-residential-property-commercial/11913434-1.html
Hahn, T. (2007). Sale-Leaseback transactions. Blakes. Retrieved on March 1, 2010
from:http://www.blakes.com/english/view.asp?ID=1897
Lecky, J. (2009). Demand increases for sale/leaseback transactions. Retrieved on March 1, 2010 from: www.avisonyoung.com/.../AY_Sale_leaseback_article_no_blue.pdf
Charles Tranhike Mary Moroso (2010).
Sale and Leaseback
The U.S. economy is slowly recovering from a credit crisis that has gravely impacted the housing market. Although, the recession take took place through most of 2008 and 2009 is now mostly over, the devastating consequences it has had for many homeowners will not be soon forgotten. Before the recession began the housing market was booming, individuals’ were borrowing more money than they could afford to finance homes that were grossly overpriced. As the recession made way, individuals’ were losing their jobs, forgoing mortgage payments and forced to sell their homes or undergo foreclosure. The possibility of losing their homes, sparked creativity in some individuals and a new trend in sale- and leasebacks emerged. The article Homeowners should steer clear of sale-leasebacks, provides valuable insight into this new trend, the intended purpose of the sale-leaseback, and on the legal implications of going from homeowner to tenant.
Traditionally, sale and leasebacks have been used in commercial real-estate as a way for businesses to generate capital to fund expansions or to take advantage of tax deductibles. For one lease payments are one-hundred percent tax deductable and renting instead of owning assets impacts the company’s balance sheet as those assets are converted into contingent liabilities (Lecky, 2009). Large corporations such as the New York Times, Bank of America, SunTrust and Citibank have all benefited from multi-billion-dollar sale and leaseback agreements says the article, however it is a completely different ball game in residential real-estate. The article quotes, Steve Goddard, an experienced realtor in California who says “ These deals are pretty complex things” (Para, 3), “ And even people that have some expertise or real estate acumen call attorneys before signing anything, much less homeowners” (Para, 3). As the purpose behind the sale-leaseback, is often to give desperate homeowners a way to stay in their homes, it is unlikely that the homeowner will have the resources to pay for a proper leaseback agreement. According to the article the supposed win-win of the homeowner receiving capital to pay his or her bills, and the buyer’s built-in tenant is just a façade for bigger risks. Accordingly, if the buyer runs into his or her own financial potholes, the original homeowner, now tenant will have little legal recourse of staying in their home. Furthermore, in residential real estate sale-leasebacks “ often end up costing more money in the long-term: the seller becomes a renter and losses the chance to built equity in their home” (Para, 5).
The individuals rights also change when becoming a tenant. For example, the tenant is now expected to comply with the requirements of the lease contract and has less flexibility once the title of the property changes and is registered in the name of the new owner. Perhaps one of the most significant changes is that the owner, now tenant can no longer use the property as a security for financial loans. Another important matter is that as the tenant is both the seller and occupant, he or she cannot expect the new landlord to guarantee the building or its conditions. As a result, it is often stipulated in lease agreements that the tenant is fully responsible for maintaining the property and assuming the capital costs. The tenant will not benefit from the capital expenses he or she assumed while occupying the premise once the contract is over (Hahn, 2007). Additionally, all changes, improvements or modifications of the premise will have to be approved by the landlord and not subject to the original owners taste as it was previously.
Sale-leaseback is a very versatile arrangement as it fits into any property type. In conclusion a sale-lease back agreement can be quite an attractive alternative when a individual is faced with the possibilities of losing their property. The advantages can be interpreted to both buyer and seller. The buyer gets a built-in tenant, and the original owner gets to retain his or her property on the terms outlined in the agreement. However, there is a good chance of disappointment and entering into a residential sale-leaseback arrangement as varying un-foreseen circumstances may arise in which the original owner now the tenant will have little or no recourse in a court of law to stay in their home.
References
Anonymous (March, 2009). Homeowners should steer clear of sale-leasebacks.
LexisNexis. Retrieved on March 1, 2010 from: http://www.allbusiness.com/real-
estate/commercial-residential-property-commercial/11913434-1.html
Hahn, T. (2007). Sale-Leaseback transactions. Blakes. Retrieved on March 1, 2010
from:http://www.blakes.com/english/view.asp?ID=1897
Lecky, J. (2009). Demand increases for sale/leaseback transactions. Retrieved on March 1, 2010 from: www.avisonyoung.com/.../AY_Sale_leaseback_article_no_blue.pdf
Organizational Behavior
Jenna Doucet (2010).
Organizational Behavior
One of the most important success factors for an organization is the management’s ability to successfully apply organizational behavior theories and practices. Organizational behavior is about understanding the needs of individuals. Within the modern concept of organizational function, new trends and terms are beginning to emerge to describe how organizations achieve their goals. The concepts of organizational culture, diversity, corporate social responsibility, organizational effectiveness and efficiency, and organizational learning are terms receiving much attention in the corporate world (McShane, 2006).
Many organizations rely on their corporate culture to stay ahead of competition. Pool (2000) proposes that an organization’s culture can positively reinforce the practice of optimal praxis and behaviors within an organization. One of the responsibilities of management is to maintain and establish a positive culture. A good leader establishes a positive and healthy organizational culture by motivating his or her subordinates to perform at a high- level, by promoting open communication, and establishing positive authority. "Management is about human beings. Its task is to make people capable of joint performance, to make their strengths effective and, their weaknesses irrelevant. This is what an organization is about, and the reason which management is the critical, determining factor"(Drucker, 1990, p. 221).
Diversity is another large success driver in a company. Diversity is about more than race and gender; it is about differences in religions, cultural beliefs, capabilities, individual needs, and more. Bazile-Jones (1996) notes, “ In the past, many have considered diversity issues to be the domain of politicians and social engineers who have focused on legal and regulatory solutions to ensure workplace diversity and enhance social welfare” (p. 9). The author argues that today diversity is the prerogative of all organizations. The author also explains that globalization has shifted our entire views on organizations. If Canadian firms and individuals, “ are to achieve sustainable commercial advantage domestically and globally, we must understand how diversity, as one of our intellectual assets, can contribute to long-term organizational health and survival” (p.9). Incorporating diversity as an organizational value can make an organization attractive to others that value diversity, can provide new business opportunities, can create added value to customer support and can foster flexibility and innovation (Bazile-Jones, 1996).
To thrive in the public’s eye, a company must meet certain social responsibility requirements; the organization must consider where it can provide value beyond its products and services (Bateman & Snell, 2007). Consumers and employees want to work for and buy products and services they can feel good about. When an individual works for an organization that does good for the world, he or she is more motivated to perform in the best interest of the company. When a consumer purchases a product or a service from a company that promotes social responsibility, he or she will feel better about their purchase and will want to support the organization with his or her business.
Globalization is not only a driving force in diversity issues but it also plays a big role in an organization’s effectiveness and efficiency. Because more organizations are going global, being efficient and effective for a customer base is critical in staying ahead of the competition. One of the Key ways to take advantage of the global market is to embark in new initiatives through the optimization of how and where products are built. Another area that contributes to effectiveness and efficiency is an organizations willingness to be flexible with their employment and the employee’s willingness to manage his or her own career and develop new competencies. This concept is known as employability (McShane, 2006).
One of the most important aspects in an organization is the interaction of knowledge within the company. Today companies make use of knowledge management to structure their organization’s ability to acquire and share knowledge. An organization depends on human capital; the knowledge held by employees, structural capital; the knowledge attained within an organization’s structure, and relationship capital; the value knowledge gained from an organization’s outside relationships and influences from customers, suppliers and others. An organization that has adapted to a learning approach has the ability to create a flow of information and communication between each source of knowledge (McShane, 2006).
An organization can achieve great success by balancing both internally and externally the components above. Whether the organization is creating value by ensuring employees are striving to reach the organization’s goals, or promoting diversity, and learning to ensure employees are educated with the knowledge to address the needs of each customer.
References
Bateman, T. & Snell, S. (2007). Management: Leading and collaborating in a
competitive world (7th ed.) New York: McGraw-Hill.
Bazile- Jones, R. (1996, June). Diversity in the workplace: why should we care. CMA
Magazine 70(5), 9-12. Retrieved January 27, 2010 from Ebsco-Host database.
Drucker, P. (1990). The New Realities. Mandarin: London. Retrieved January 26, 2010
from Ebsco-Host database.
McShane, L. (2006). Canadian organizational behavior (6th ed.). Canada: McGraw-Hill Ryerson
Pool, S. (2000). The learning organization: motivating employees by integrating TQM
philosophy in a supportive organizational culture. Leadership & Organization
Development Journal. 21(8), 373-378. Retrieved January 27, 2010 from General OneFile via Gale.
Organizational Behavior
One of the most important success factors for an organization is the management’s ability to successfully apply organizational behavior theories and practices. Organizational behavior is about understanding the needs of individuals. Within the modern concept of organizational function, new trends and terms are beginning to emerge to describe how organizations achieve their goals. The concepts of organizational culture, diversity, corporate social responsibility, organizational effectiveness and efficiency, and organizational learning are terms receiving much attention in the corporate world (McShane, 2006).
Many organizations rely on their corporate culture to stay ahead of competition. Pool (2000) proposes that an organization’s culture can positively reinforce the practice of optimal praxis and behaviors within an organization. One of the responsibilities of management is to maintain and establish a positive culture. A good leader establishes a positive and healthy organizational culture by motivating his or her subordinates to perform at a high- level, by promoting open communication, and establishing positive authority. "Management is about human beings. Its task is to make people capable of joint performance, to make their strengths effective and, their weaknesses irrelevant. This is what an organization is about, and the reason which management is the critical, determining factor"(Drucker, 1990, p. 221).
Diversity is another large success driver in a company. Diversity is about more than race and gender; it is about differences in religions, cultural beliefs, capabilities, individual needs, and more. Bazile-Jones (1996) notes, “ In the past, many have considered diversity issues to be the domain of politicians and social engineers who have focused on legal and regulatory solutions to ensure workplace diversity and enhance social welfare” (p. 9). The author argues that today diversity is the prerogative of all organizations. The author also explains that globalization has shifted our entire views on organizations. If Canadian firms and individuals, “ are to achieve sustainable commercial advantage domestically and globally, we must understand how diversity, as one of our intellectual assets, can contribute to long-term organizational health and survival” (p.9). Incorporating diversity as an organizational value can make an organization attractive to others that value diversity, can provide new business opportunities, can create added value to customer support and can foster flexibility and innovation (Bazile-Jones, 1996).
To thrive in the public’s eye, a company must meet certain social responsibility requirements; the organization must consider where it can provide value beyond its products and services (Bateman & Snell, 2007). Consumers and employees want to work for and buy products and services they can feel good about. When an individual works for an organization that does good for the world, he or she is more motivated to perform in the best interest of the company. When a consumer purchases a product or a service from a company that promotes social responsibility, he or she will feel better about their purchase and will want to support the organization with his or her business.
Globalization is not only a driving force in diversity issues but it also plays a big role in an organization’s effectiveness and efficiency. Because more organizations are going global, being efficient and effective for a customer base is critical in staying ahead of the competition. One of the Key ways to take advantage of the global market is to embark in new initiatives through the optimization of how and where products are built. Another area that contributes to effectiveness and efficiency is an organizations willingness to be flexible with their employment and the employee’s willingness to manage his or her own career and develop new competencies. This concept is known as employability (McShane, 2006).
One of the most important aspects in an organization is the interaction of knowledge within the company. Today companies make use of knowledge management to structure their organization’s ability to acquire and share knowledge. An organization depends on human capital; the knowledge held by employees, structural capital; the knowledge attained within an organization’s structure, and relationship capital; the value knowledge gained from an organization’s outside relationships and influences from customers, suppliers and others. An organization that has adapted to a learning approach has the ability to create a flow of information and communication between each source of knowledge (McShane, 2006).
An organization can achieve great success by balancing both internally and externally the components above. Whether the organization is creating value by ensuring employees are striving to reach the organization’s goals, or promoting diversity, and learning to ensure employees are educated with the knowledge to address the needs of each customer.
References
Bateman, T. & Snell, S. (2007). Management: Leading and collaborating in a
competitive world (7th ed.) New York: McGraw-Hill.
Bazile- Jones, R. (1996, June). Diversity in the workplace: why should we care. CMA
Magazine 70(5), 9-12. Retrieved January 27, 2010 from Ebsco-Host database.
Drucker, P. (1990). The New Realities. Mandarin: London. Retrieved January 26, 2010
from Ebsco-Host database.
McShane, L. (2006). Canadian organizational behavior (6th ed.). Canada: McGraw-Hill Ryerson
Pool, S. (2000). The learning organization: motivating employees by integrating TQM
philosophy in a supportive organizational culture. Leadership & Organization
Development Journal. 21(8), 373-378. Retrieved January 27, 2010 from General OneFile via Gale.
A Business Model of the functions of Management
Jenna Doucet (2009).
Abstract
The purpose of this paper is to define the four classic functions of management. To better illustrate the implementation of the functions of management, examples will be applied to a business context from RSC Business Group.
A Business Model of the functions of Management
With old companies, once the cornerstone of the economy, dying, and new companies struggling to emerge , the survival of business is more than ever dependent on strong applications in management . In the new economy, arrogance, risk taking, and casual management are not enough to promote success. Understanding the classic concepts of management are the key to a successful company. This paper defines the functions of management: planning, organizing,leading, and controlling, and illustrates them through examples of their implementation inside a business culture ; in this case I will be using RSC Business Group as a model.
RSC Business group is a business consulting firm which offers professional consulting services and executive training. The company focuses on entrepreneurs and business owners to promote success, grow, and add value to their companies.
Planning
In his book Management: Leading and Collaborating in a competitive world, Bateman (2007) describes planning as defining business goals and the actions required for achieving them. Bateman (2007) writes that the historical views of the top down approach, where plans where established at the executive level and passed down, are not effective in delivering strategic value or competitive advantages. Bateman (2007) writes, “Now and in the future, delivering strategic value is a continual process in which people throughout the organization use their brains and the brains of customers, suppliers, and other stakeholders to identify opportunities to create, seize, strengthen, and sustain competitive advantage” (p.17). RSCBG has adapted to this model and engages in dynamic interactions with employees and customers in order to identify new opportunities. Part of RSCBG planning process is to deliver preliminary business assessments to companies, the gathering of information about all functions and aspects of the customer’s organization, in which RSCBG gains understanding of their customer’s needs. The Information is turned into value as RSCBG designs and offers solutions on its basis. Bateman (2007) summarizes this process as the need for creating more and more value for the customer.
Organizing
0rganizing is coordinating all functions in relation to business. It covers human, financial, and informational resources and includes defining organizational structure , attracting customers, appointing responsibilities, and allocating resources to maximize efficiency inside the organization. Historically, organizations limited themselves to charts that identified business functions, personnel reporting systems, and rigid plans (Bateman, 2007). 0rganizations like RSCBG understand that today, adaptability does not fall into the category of “cookie cutters.” Bateman (2007) states that effective managers implement new forms of organizing and view people as their most valuable resources. RSCBG has adapted to Bateman’s notion of creativity and innovation. RSBG does not constrain itself to geographical limits and takes advantage of globalization by employing and serving individuals around the world. Furthermore, RSBG invite their employees to create their own niches within the organization and are thus able to attract diverse and leading- edge individuals. In Managing by values, Dolan and Garcia (2002) write that self-organizing chaos is a key component of creativity and innovation. The ability to establish organization within chaos depends on a free flow of values and principles for action within the company’s management. Dolan and Garcia (2002) explain that when individuals are not confined to narrow roles, they are able to grow in potential.
Leading
Leading is the stimulation of the workforce within an organization to meet high standards (Bateman, 2007). Thomas (1999) states that leading activities include decision- making, communicating, motivating, aligning, and developing individuals within the organization. Bateman (2007) further notes, “Today and in the future, managers must be good at mobilizing people to contribute their ideas, to use their brains in ways never needed or dreamed of in the past” (p. 17). RSBG understands the importance of mobilizing individuals and emphasize developing and training their employees.
Controlling
The controlling function is responsible for establishing performance standards, measuring, evaluating and finally correcting performance (Thomas,1999). Controlling is what ensures the organization’s success (Bateman, 2007).RSCBG implements many standardization charts to monitor the company’s performance and administer changes if needed. Adapting in the new economy and ensuring an organization’s success
depends on the understanding of the four functions of management, how they have
been utilized in the past and how they are implemented today.
References
Bateman, T. (2007). Management: Leading and collaborating in a competitive world.
New York: McGraw- Hill.
Thomas M. (1999). Mastering people management. Retrieved on July 9th, 2009 from:
http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=24876675&site=ehost-live
Dolan, S. & Garcia, S. (2002). Managing by values: Cultural redesign for strategic
organizational change at the dawn of the twenty-first century. Retrieved on June 9th, 2009 from: http://swtuopproxy.museglobal.com/MuseSessionID=4fa6641b7f21
8303a69d5ecaaad42c1/MuseHost=www.emeraldinsight.com/MusePath/Insight/ViewContentServlet?contentType=Article&Filename=Published/EmeraldFullTextArticle/Articles/0260210202.html
Abstract
The purpose of this paper is to define the four classic functions of management. To better illustrate the implementation of the functions of management, examples will be applied to a business context from RSC Business Group.
A Business Model of the functions of Management
With old companies, once the cornerstone of the economy, dying, and new companies struggling to emerge , the survival of business is more than ever dependent on strong applications in management . In the new economy, arrogance, risk taking, and casual management are not enough to promote success. Understanding the classic concepts of management are the key to a successful company. This paper defines the functions of management: planning, organizing,leading, and controlling, and illustrates them through examples of their implementation inside a business culture ; in this case I will be using RSC Business Group as a model.
RSC Business group is a business consulting firm which offers professional consulting services and executive training. The company focuses on entrepreneurs and business owners to promote success, grow, and add value to their companies.
Planning
In his book Management: Leading and Collaborating in a competitive world, Bateman (2007) describes planning as defining business goals and the actions required for achieving them. Bateman (2007) writes that the historical views of the top down approach, where plans where established at the executive level and passed down, are not effective in delivering strategic value or competitive advantages. Bateman (2007) writes, “Now and in the future, delivering strategic value is a continual process in which people throughout the organization use their brains and the brains of customers, suppliers, and other stakeholders to identify opportunities to create, seize, strengthen, and sustain competitive advantage” (p.17). RSCBG has adapted to this model and engages in dynamic interactions with employees and customers in order to identify new opportunities. Part of RSCBG planning process is to deliver preliminary business assessments to companies, the gathering of information about all functions and aspects of the customer’s organization, in which RSCBG gains understanding of their customer’s needs. The Information is turned into value as RSCBG designs and offers solutions on its basis. Bateman (2007) summarizes this process as the need for creating more and more value for the customer.
Organizing
0rganizing is coordinating all functions in relation to business. It covers human, financial, and informational resources and includes defining organizational structure , attracting customers, appointing responsibilities, and allocating resources to maximize efficiency inside the organization. Historically, organizations limited themselves to charts that identified business functions, personnel reporting systems, and rigid plans (Bateman, 2007). 0rganizations like RSCBG understand that today, adaptability does not fall into the category of “cookie cutters.” Bateman (2007) states that effective managers implement new forms of organizing and view people as their most valuable resources. RSCBG has adapted to Bateman’s notion of creativity and innovation. RSBG does not constrain itself to geographical limits and takes advantage of globalization by employing and serving individuals around the world. Furthermore, RSBG invite their employees to create their own niches within the organization and are thus able to attract diverse and leading- edge individuals. In Managing by values, Dolan and Garcia (2002) write that self-organizing chaos is a key component of creativity and innovation. The ability to establish organization within chaos depends on a free flow of values and principles for action within the company’s management. Dolan and Garcia (2002) explain that when individuals are not confined to narrow roles, they are able to grow in potential.
Leading
Leading is the stimulation of the workforce within an organization to meet high standards (Bateman, 2007). Thomas (1999) states that leading activities include decision- making, communicating, motivating, aligning, and developing individuals within the organization. Bateman (2007) further notes, “Today and in the future, managers must be good at mobilizing people to contribute their ideas, to use their brains in ways never needed or dreamed of in the past” (p. 17). RSBG understands the importance of mobilizing individuals and emphasize developing and training their employees.
Controlling
The controlling function is responsible for establishing performance standards, measuring, evaluating and finally correcting performance (Thomas,1999). Controlling is what ensures the organization’s success (Bateman, 2007).RSCBG implements many standardization charts to monitor the company’s performance and administer changes if needed. Adapting in the new economy and ensuring an organization’s success
depends on the understanding of the four functions of management, how they have
been utilized in the past and how they are implemented today.
References
Bateman, T. (2007). Management: Leading and collaborating in a competitive world.
New York: McGraw- Hill.
Thomas M. (1999). Mastering people management. Retrieved on July 9th, 2009 from:
http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=24876675&site=ehost-live
Dolan, S. & Garcia, S. (2002). Managing by values: Cultural redesign for strategic
organizational change at the dawn of the twenty-first century. Retrieved on June 9th, 2009 from: http://swtuopproxy.museglobal.com/MuseSessionID=4fa6641b7f21
8303a69d5ecaaad42c1/MuseHost=www.emeraldinsight.com/MusePath/Insight/ViewContentServlet?contentType=Article&Filename=Published/EmeraldFullTextArticle/Articles/0260210202.html
Rational Choice Theory
Jenna Doucet (2010).
Abstract
The aim of this paper is to demonstrate how the six step process of the rational choice problem solving method can be applied to any organizational problem in a general way. The paper uses Service Canada as an example. This paper is not intended to stipulate the problems or shortcomings of rational theory or the process at large.
Rational Choice Theory
In light of new trends in their clients needs Service Canada has been in the process of implementing several new paradigms in their service delivery (Tan, 2007). The government’s application of new delivery methods could be facilitated through the rational choice process of problem solving. The rational choice theory facilitates problem solving by dividing the process into six steps: identifying the opportunity, choosing the best decision process, choosing the best alternative, implementing the selected alternative, and evaluating the decisions outcome.
The first step in the process is identifying the problem or opportunity. The focus should be on the extent of the problem and not on the causes. For Service Canada the problem was in the gap between the number of clients and request they were able to process in a day and the number of clients they wanted to service. With the growing number of clients needing its services, the organization faced both a problem and an opportunity to improve its delivery methods.
In the second phase, choosing the best decision process, Service Canada should look at whether the decision is a programmed decision and has been solved in the past or if it is a non-programmed decision and requires going through all of the steps in the decision process (McShane, 2006). In the case of Service Canada’s current problem it is a programmed decision.
The list of possible solutions that Service Canada could implement is large. Service Canada could implement solutions that have worked well in the past, or that have worked for other organizations in similar situations. For example, Service Canada could open more offices and hire more employees, train current employees to process request faster, upgrade their knowledge management software to enhance efficiency, make more services available online, and provide more self-serve units at their offices.
The fourth step would be to choose the best alternative. From a cost perspective, the most cost efficient solutions would be to train employees to process request faster by upgrading their technological systems and by providing more online services. The cost of the solution is an important factor to the government as Service Canada is a non-for profit organization aimed to support Canadian citizens. According McShane (2006) to the rational choice theory suggests that individuals make ‘rational’ decisions based on their own ideology. In this scenario the government as a decision-making would be interested in the option that would allow them cut costs in the long run. Technological advances could keep government costs down and allow for more citizens needs to be processed with less overhead cost of maintaining additional offices and employees.
The next step is to implement the selected alternative. This is probably one of the most difficult steps in the process. This involves moving the decision from idea into reality. This step is probably also one of the lengthiest processes. To accomplish this difficult process and its goals Service Canada resulted to private sector technology companies (Tan, 2007).
The last step of the process is evaluating the decision. The best way for Service Canada to monitor the success of its implementation would be to look at overall figures, the number of complaints totaling its offices and conduct service quality surveys. McShane (2006) says that ideally, this information should come from systematic benchmarks, so that relevant feedback is objective and easily observed” (p. 216).
The rational choice problem solving theory is a process that can be easily applied to solve any organizational problem. The example above illustrates how the process could be applied to Service Canada.
References
McShane, S. (2006). Canadian organizational behavior (6th ed.). Canada: McGraw-Hill
Ryerson.
Tan, K. (2007). Service Canada: a new paradigm in government service delivery.
Leadership in a Networked World: John F Kennedy school of government.
Abstract
The aim of this paper is to demonstrate how the six step process of the rational choice problem solving method can be applied to any organizational problem in a general way. The paper uses Service Canada as an example. This paper is not intended to stipulate the problems or shortcomings of rational theory or the process at large.
Rational Choice Theory
In light of new trends in their clients needs Service Canada has been in the process of implementing several new paradigms in their service delivery (Tan, 2007). The government’s application of new delivery methods could be facilitated through the rational choice process of problem solving. The rational choice theory facilitates problem solving by dividing the process into six steps: identifying the opportunity, choosing the best decision process, choosing the best alternative, implementing the selected alternative, and evaluating the decisions outcome.
The first step in the process is identifying the problem or opportunity. The focus should be on the extent of the problem and not on the causes. For Service Canada the problem was in the gap between the number of clients and request they were able to process in a day and the number of clients they wanted to service. With the growing number of clients needing its services, the organization faced both a problem and an opportunity to improve its delivery methods.
In the second phase, choosing the best decision process, Service Canada should look at whether the decision is a programmed decision and has been solved in the past or if it is a non-programmed decision and requires going through all of the steps in the decision process (McShane, 2006). In the case of Service Canada’s current problem it is a programmed decision.
The list of possible solutions that Service Canada could implement is large. Service Canada could implement solutions that have worked well in the past, or that have worked for other organizations in similar situations. For example, Service Canada could open more offices and hire more employees, train current employees to process request faster, upgrade their knowledge management software to enhance efficiency, make more services available online, and provide more self-serve units at their offices.
The fourth step would be to choose the best alternative. From a cost perspective, the most cost efficient solutions would be to train employees to process request faster by upgrading their technological systems and by providing more online services. The cost of the solution is an important factor to the government as Service Canada is a non-for profit organization aimed to support Canadian citizens. According McShane (2006) to the rational choice theory suggests that individuals make ‘rational’ decisions based on their own ideology. In this scenario the government as a decision-making would be interested in the option that would allow them cut costs in the long run. Technological advances could keep government costs down and allow for more citizens needs to be processed with less overhead cost of maintaining additional offices and employees.
The next step is to implement the selected alternative. This is probably one of the most difficult steps in the process. This involves moving the decision from idea into reality. This step is probably also one of the lengthiest processes. To accomplish this difficult process and its goals Service Canada resulted to private sector technology companies (Tan, 2007).
The last step of the process is evaluating the decision. The best way for Service Canada to monitor the success of its implementation would be to look at overall figures, the number of complaints totaling its offices and conduct service quality surveys. McShane (2006) says that ideally, this information should come from systematic benchmarks, so that relevant feedback is objective and easily observed” (p. 216).
The rational choice problem solving theory is a process that can be easily applied to solve any organizational problem. The example above illustrates how the process could be applied to Service Canada.
References
McShane, S. (2006). Canadian organizational behavior (6th ed.). Canada: McGraw-Hill
Ryerson.
Tan, K. (2007). Service Canada: a new paradigm in government service delivery.
Leadership in a Networked World: John F Kennedy school of government.
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