Travel Plans In A Fantastic Practical Experience

Vacationing is a lot more than simply located on an plane. It can be a gratifying experience. The options for the fantasy vacation are unlimited – imagine about each of the areas you could potentially go and all of they techniques you could get there.Are you currently ready to work tirelessly in order to prepare the planet? Regardless of how excellent of any manager you will be, the following tips could be a huge assist.

Pack your suitcases the evening before. Make the essential arrangements you will need effectively before your trip.Missing your air travel is a thing you never ever want to endure.

Produce a packing listing of the what exactly you need to pack before a getaway.

Build a loading collection of the what exactly you need to pack just before a trip.

In case your travels will take anyone to a slot of get in touch with before your cruise, stop at a accommodation with totally free parking and acquire there the night prior to being to have. Check with the employees at the hotel that you continue to be about parking bargains.

A wasteland includes gorgeous crops and wildlife the majority of people never ever be able to see within their day-to-day lives.

Keep track of your most important info and items near to you all the time. Will not have a travelling bag with zippers offering easy accessibility to folks in your town that may effortlessly acquire your things.They are but some tips to think about when looking for a safe handbag you want to carry out your journeys.

Make an effort to operate in a big workout prior to your airline flight. This can help you avoid the tediousness of your very long flights. Placed in a similar situation for some time periods of time could cause lower-leg and rear cramping.

The retail price for every model for such quickly scaled merchandise is ridiculous. Try simple foldable and decrease the possibility of creases. These reducing tricks will help you produce further place with your handbag.

Always check expiration dates which can be printed out on of all your passports. Various regions around the world have various passport regulations.Many will not permit you enter in their land when your passport comes to an end shortly.

Use the E-keeping track of solution available on some vacation sites offer.This will likely keep you with economical traveling options. You can actually obtain notify by way of e mail in the event the flight you want or have previously scheduled has fallen in selling price.

Getting to sleep capsules may help you via a long reddish colored-eyes journeys. It can be very difficult to get sleep on a plane because of the noises, given the cramped seating, and the uneasy seating. Try taking getting to sleep supplement might help help you get some sleep on the extended trip if you have difficulty falling asleep otherwise.Don’t have the supplement before the aeroplane takes off, as there could be a wait or difficulty that requires a give back.

Climate can play a massive factor in visiting and should not be underrated when preparing your outings. Look at the forecast for your remain.

Stay away from swapping money whenever you visit a distinct land. You will get foreign exchange effortlessly. You can aquire the foreign exchange via a bank. These ordinarily have the most effective swap charges and they are much less costly than an exchange.

Once you learn that foreign exchange will never be accessible to you shortly after you land, swap a number of your money before you leave, then changing others down the road.

Don’t forget to pack your child’s car seats once you take them together to get a road vacation. The vehicle chairs that may be available with your leasing auto probably will not be as good as the ones you currently have, as well as your chair is just one that the little one is confident with.

Keep in mind that many individuals be in your hotel.Be polite to other individuals keep the disturbance stage lower and shut doors gently. Even in the course of day time, eliminating jet lag or sensation unwell. You don’t really need to be totally silent, but continue to keep quantity levels affordable and be considerate.

Be mindful when obtaining any e-mail you get for traveling offers.

Don’t overlook to pack your child’s car seat when you are planning to take youngsters although hiring an automobile. Most likely you simply will not get a high quality child car seat having a rental automobile, the people a lease car agency will provide would be of poor and also uneasy for a travel.

Before planing a trip to an overseas country, obtain an electrical adaptor or voltage converter from your discount gadgets store. When you wait until you can the international airport to acquire one particular, you will probably be forced to pay triple the cost while you are traveling.

Looking at the Scope of Market Intelligence Scorecard

The world of business is a universe of risks that either results to failure or success. The reason behind this is not only the threat of economic inflation, but also because there is absolute uncertainty of sales. There are plenty of competitors in the market and one or two strategies may not be enough. The use of market intelligence measuring tools gives managers a sigh of relief, at least in terms of coming up with good decisions. No, it is not a way of spying on the competition, but it is more of a business approach. Many large companies have been using the time-tested market intelligence scorecard since 1958.The term market intelligence is almost the same with business intelligence. While the latter subject covers a broader spectrum, market intelligence focuses on three specific areas. Thus, there are three approaches or types of market intelligence metric systems. The three systems center on competitor analysis, market research, and benchmarking. In reality, these three areas are all about analysis since market intelligence is really about analysis.

(adsbygoogle = window.adsbygoogle || []).push({});
The competitor analysis scorecard is one of the most important aspects of measuring and analyzing market intelligence. Most of the time, the best way to define a business or even a brand is not through its products and services, but rather by its competitors in the market. This type of scorecard involves three groups of responders: the company, customers, and the competitors. In order for the company to position itself properly in the market, it should have a good grip on what the customers know about the company brand and the competitor’s brand. In the same way, the company should also consider the methods and marketing strategies of the competitor.The second aspect of measuring market intelligence is marketing research. The focus in this aspect is the customer. This is where surveys, product tests, brand recall, product position, and even product packaging come to play. One of the most effective ways of making a product successful is not capturing an already established market but creating one. Through careful research, the company can even come up with a new market from an already existing one. Market research may take time and resources, but the results are worth it.The third aspect in measuring market intelligence is benchmarking. Benchmarking is to company what market research is to customers. It involves four types of benchmarking strategies: internal, competitive, functional, and generic. Benchmarking within the business units of the organization is an internal strategy. Benchmarking becomes competitive when there is a process efficiency or performance check with the competitors. Functional benchmarking, on the other hand, involves operations within a similar industry. And, generic benchmarking involves the comparison of processes between different industries.

(adsbygoogle = window.adsbygoogle || []).push({});
Many companies are behind in terms of technological facilities. But as long as they keep a close hand on market analysis, these companies are still right on the game. The use of market intelligence scorecard may be producing nothing less than just numbers. But once these numbers are processed, business leaders could make decisions that are synonymous to success.

The Four Economic Benefits of Inflation

Current Economic planners may argue that inflation is the not the main issue in this age of bailouts, and stimulus packages. Inflation is always a threat to any economy, and depending on how the current stimulus packages work, could either become part of the changing economy, or part of an economics textbook.

What are the Advantages of Inflation:

1. Business Growth

 

Controlled growth of Inflation, can become part of business growth, simply because savings are often invested, because of the net loss if they are kept in a Bank.

During times of controlled Inflation, people in the past tended to spend, as they feared prices could rise, saving on buying now, rather then paying more later.

 

2. Falling Debt Values

 

Higher Inflation eats away at the real value of a currency. This could mean that the actual value of debts decrease, benefiting indebted businesses and private individuals.

 

3. Higher Stock Values

 

Stocks bought at an earlier value, could rise in price and sold off at a higher price bringing higher profitability.

 

4. Rising asset Values

 

Values of fixed assets could rise, making some Companies more financially secure. Traditionally higher Inflation often leads to higher prices, therefore fixed assets in theory should rise in value.

 

Conventional Economic theory is based often on past experience, however the current economic crisis has not really been experienced before. It resembles the 1929 Wall Street Crash, but all our economies are fundamentally different, and the World is a different place to the 1930s.

 

We may never be sure what higher inflation could do to our economies, one reason Gold has become the choice of many Savvy Investors. We are at the crossroads of great economical change, and this change could challenge more conventional Economic thinking, especially about the effects of inflation. on an economy.

Aircraft Structural Components

The major aircraft structures are wings, fuselage, and empennage. The primary flight control surfaces, located on the wings and empennage, are ailerons, elevators, and rudder. These parts are connected by seams, called joints.

All joints constructed using rivets, bolts, or special fasteners are lap joints. Fasteners cannot be used on joints in which the materials to be joined do not overlap – for example, butt, tee and edge joints. A fayed edge is a type of lap joint made when two metal surfaces are butted up against one another in such a way as to overlap.

Internal aircraft parts are manufactured in four ways: Milling, stamping, bending, and extruding. The metal of a milled part is transformed from cast to wrought by first shaping and then either chemically etching or grinding it. A stamped part is annealed, placed in a forming press, and then re-heat treated.

Bent parts are made by sheet metal mechanics using the bend allowance and layout procedures. An extrusion is an aircraft part which is formed by forcing metal through a preshaped die. The resulting wrought forms are used as spars, stringers, longerons, or channels. In order for metal to be extruded, bent, or formed, it must first be made malleable and ductile by annealing. After the forming operation, the metal is re-heat treated and age hardened.

Airbus Wings

Here in the UK and in particular at the Airbus facility in North Wales, our expertise is in the manufacture of aircraft wings. Aircraft wings have to be strong enough to withstand the positive forces of flight as well as the negative forces of landing. Metal wings are of two types: Semicantilever and full cantilever. Semicantilever, or braced, wings are used on light aircraft. They are externally supported by struts or flying wires which connect the wing spar to the fuselage. A full cantilever wing is usually made of stronger metal. It requires no external bracing or support. The skin carries part of the wing stress. Parts common to both wing designs are spars, compression ribs, former ribs, stringers, stress plates, gussets. wing tips and wing skins.

Airbus at Broughton employs more than 5,000 people, mostly in manufacturing, but also in engineering and support functions such as procurement and finance.

Wing Spars

Two or more spars are used in the construction of a wing. They carry the main longitudinal -butt to tip – load of the wing. Both the spar and a compression rib connect the wing to the fuselage.

Compression Ribs

Compression ribs carry the main load in the direction of flight, from leading edge to trailing edge. On some aircraft the compression rib is a structural piece of tubing separating two main spars. The main function of the compression rib is to absorb the force applied to the spar when the aircraft is in flight.

Former Ribs

A former rib, which is made from light metal, attaches to the stringers and wing skins to give the wing its aerodynamic shape. Former ribs can be classified as nose ribs, trailing edge ribs, and mid ribs running fore and aft between the front and rear spar on the wing. Formers are not considered primary structural members.

Stringers

Stringers are made of thin sheets of preformed extruded or hand-formed aluminum alloy. They run front to back along the fuselage and from wing butt to wing tip. Riveting the wing skin to both the stringer and the ribs gives the wing additional strength.

Stress Plates

Stress plates are used on wings to support the weight of the fuel tank. Some stress plates are made of thick metal and some are of thin metal corrugated for strength. Stress plates are usually held in place by long rows of machine screws, with self-locking nuts, that thread into specially mounted channels. The stress-plate channeling is riveted to the spars and compression ribs.

Gussets

Gussets, or gusset plates, are used on aircraft to join and reinforce intersecting structural members. Gussets are used to transfer stresses from one member to another at the point where the members join.

Wing Tips

The wing tip, the outboard end of the wing, has two purposes: To aerodynamically smooth out the wing tip air flow and to give the wing a finished look.

Wing Skins

Wing skins cover the internal parts and provide for a smooth air flow over the surface of the wing. On full cantilever wings, the skins carry stress. However, all wing skins are to be treated as primary structures whether they are on braced or full cantilever surfaces.

Fuselage Assemblies.

The largest of the aircraft structural components, there are two types of metal aircraft fuselages: Full monocoque and semimonocoque. The full monocoque fuselage has fewer internal parts and a more highly stressed skin than the semimonocoque fuselage, which uses internal bracing to obtain its strength.

The full monocoque fuselage is generally used on smaller aircraft, because the stressed skin eliminates the need for stringers, former rings, and other types of internal bracing, thus lightening the aircraft structure.

The semimonocoque fuselage derives its strength from the following internal parts: Bulkheads, longerons, keel beams, drag struts, body supports, former rings, and stringers.

Bulkheads

A bulkhead is a structural partition, usually located in the fuselage, which normally runs perpendicular to the keel beam or longerons. A few examples of bulkhead locations are where the wing spars connect into the fuselage, where the cabin pressurization domes are secured to the fuselage structure, and at cockpit passenger or cargo entry doors.

Longerons And Keel Beams

Longerons and keel beams perform the same function in an aircraft fuselage. They both carry the bulk of the load traveling fore and aft. The keel beam and longerons, the strongest sections of the airframe, tie its weight to other aircraft parts, such as powerplants, fuel cells, and the landing gears.

Drag Struts And Other Fittings

Drag struts and body support fittings are other primary structural members. Drag struts are used on large jet aircraft to tie the wing to the fuselage center section. Body support fittings are used to support the structures which make up bulkhead or floor truss sections.

Former rings and fuselage stringers are not primary structural members. Former rings are used to give shape to the fuselage. Fuselage stringers running fore and aft are used to tie in the bulkheads and

former rings.

Aircraft Empennage Section

The empennage is the tail section of an aircraft. It consists of a horizontal stabilizer, elevator, vertical stabilizer and rudder. The conventional empennage section contains the same kind of parts used in the construction of a wing. The internal parts of the stabilizers and their flight controls are made with spars, ribs, stringers and skins.

Also, tail sections, like wings, can be externally or internally braced.

Horizontal Stabilizer And Elevator

The horizontal stabilizer is connected to a primary control surface, i.e., the elevator. The elevator causes the nose of the aircraft to pitch up or down. Together, the horizontal stabilizer and elevator provide stability about the horizontal axis of the aircraft. On some aircraft the horizontal stabilizer is made movable by a screw jack assembly which allows the pilot to trim the aircraft during flight.

Vertical Stabilizer And Rudder

The vertical stabilizer is connected to the aft end of the fuselage and gives the aircraft stability about the vertical axis. Connected to the vertical stabilizer is the rudder, the purpose of which is to turn the aircraft about its vertical axis.

Ailerons

Elevators and rudders are primary flight controls in the tail section. Ailerons are primary flight controls connected to the wings. Located on the outboard portion of the wing, they allow the aircraft to turn about the longitudinal axis.

When the right aileron is moved upward, the left one goes down, thus causing the aircraft to roll to the right. Because this action creates a tremendous force, the ailerons must be constructed in such a way as to withstand it.

Flight controls other than the three primary ones are needed on high-performance aircraft. On the wings of a wide-body jet, for example, there are as many as thirteen flight controls, including high and low-speed ailerons, flaps, and spoilers.

Flaps And Spoilers

Wing flaps increase the lift for take-off and landing. Inboard and outboard flaps, on the trailing edge of the wing, travel from full up, which is neutral aerodynamic flow position, to full down, causing air to pile up and create lift. Leading edge flaps – Krueger flaps and variable-camber flaps – increase the wing chord size and thus allow the aircraft to take off or land on a shorter runway. Spoilers, located in the center section span-wise, serve two purposes. They assist the high-speed ailerons in turning the aircraft during flight, and they are used to kill the aerodynamic lift during landing by spreading open on touchdown.

Trim Tabs

Connected to the primary flight controls are devices called trim tabs. They are used to make fine adjustments to the flight path of an aircraft. Trim tabs are constructed like wings or ailerons, but are

considerably smaller.

Financial Analysis on an Oil Corporation Takeover

Gulf Oil Corp.–Takeover

Summary of Facts

o George Keller of the Standard Oil Company of California (Socal) is trying to determine how much he wants to bid on Gulf Oil Corporation. Gulf will not consider bids below $70 per share even though their last closing price per share was valued at $43.

o Between 1978 and 1982, Gulf doubled its exploration and development expenses to increase their oil reserves. In 1983, Gulf began reducing exploration expenditures considerably due to declining oil prices as Gulf management repurchased 30 million of their 195 million shares outstanding.

o The Gulf Oil takeover was due to a recent takeover attempt by Boone Pickens, Jr. of Mesa Petroleum Company. He and a group of investors had spent $638 million and had obtained around 9% of all Gulf shares outstanding. Pickens engaged in a proxy fight for control of the company but Gulf executives fought Boone’s takeover as he followed up with a partial tender offer at $65 per share. Gulf then decided to liquidate on its own terms and contacted several firms to participate in this sale.

o The opportunity for improvement was Keller’s principal attraction to Gulf and now he has to decide whether Gulf, if liquidated, is worth $70 per share and how much he will bid on the company.

Problems

o What is Gulf Oil worth per share if the company is liquidated?

o Who is Socal’s competition and how are they a threat?

o What should Socal bid on Gulf Oil?

o What can be done to prevent Socal from operating Gulf Oil as a going concern?

Competition

Major competitors for obtaining Gulf Oil include Mesa Oil, Kohlberg Kravis, ARCO, and, of course, Socal.

Mesa Oil:

o Currently holds 13.2% of Gulf’s stock at an average purchase price of $43.

o Borrowed $300 million against Mesa securities, and made an offer of $65/share for 13.5 million shares, which would increase Mesa’s holdings to 21.3%.

o Under the re-incorporation, they would have to borrow an amount many times the value of Mesa’s net worth to gain the majority needed to gain a seat on the board.

o Mesa is unlikely to raise that much capital. Regardless, Boone Pickens and his investor group will make a substantial profit if they sell their current shares to the winner of the bidding.

ARCO:

o Offer price is likely less than $75/share since a bid of $75 will send its debt proportion soaring, thus making it difficult to borrow anything more.

o Socal’s debt is only 14% (Exhibit 3) of total capital, and banks are willing to lend enough to make bids into the $90’s possible.

Kohlberg Kravis:

o Specializes in leveraged buyouts. Keller feels theirs is the bid to beat since the heart of their offer lies in the preservation of Gulf’s name, assets and jobs. Gulf will essentially be a going concern until a longer-term solution can be found.

Socal’s offer will be based on how much Gulf’s reserves are worth without further exploration. Gulf’s other assets and liabilities will be absorbed into Socal’s balance sheet.

Gulf Oil’s Weighted-Average Cost of Capital

o Gulf’s WACC was determined to be 13.75% using the following assumptions:

o CAPM used to calculate cost of equity using beta of 1.5, risk-free rate of 10% (1 year T-bond), market risk premium of 7% (Ibbotson Associates’ data of arithmetic mean from 1926 – 1995). Cost of equity: 18.05%.

o Market value of equity was determined by multiplying the number of shares outstanding by the 1982 share price of $30. This price was used because it is the un-inflated value before the price was driven up by the takeover attempts. Market value of equity: $4,959 million, weight: 68%.

o Value of debt was determined by using the book value of long-term debt, $2,291. Weight: 32%.

o Cost of debt: 13.5% (given)

o Tax rate: 67% calculated by net income before taxes divided by income tax expense.

Valuation of Gulf Oil

Gulf’s value is comprised of two components: the value of Gulf’s oil reserves and the value of the firm as a going concern.

o A projection was made going forward from 1983 estimating oil production until all of the reserves were depleted (Exhibit 2). Production in 1983 was 290 million composite barrels, and this was assumed to be constant until 1991 when the remaining 283 million barrels are produced.

o Production costs were held constant relative to the production amount, including depreciation due to the unit-of-production method currently used by Gulf (Production will be the same, so depreciation amount will be the same)

o Because Gulf uses the LIFO method to account for inventory, it is assumed that new reserves are expensed the same year that they are discovered and all other exploratory costs, including geological and geophysical costs are charged against income as incurred.

o Since there will be no more exploration going forward, the only expenses that will be considered are the costs involved with production to deplete the reserves.

o The price of oil was not expected to rise in the next ten years, and since inflation affects both the selling price of oil and the cost of production, it cancels itself out and was negated in the cash flow analysis.

o Revenues minus expenses determined the cash flows for years 1984-1991. The cash flows cease in 1991 after all oil and gas reserves are liquidated. The cash flows derived account for the liquidation of the oil and gas assets only, and do not account for liquidating other assets such as current assets or net properties. The cash flows were then discounted by net present value using Gulf’s cost of capital as the discount rate. Total cash flows until liquidation is complete, discounted by Gulf’s 13.75% discount rate (WACC), come to $9,981 million.

Gulf’s value as a going concern

o The second component of Gulf’s value is its value as a going concern.

o Relevant to the valuation because Socal does not plan to sell any of Gulf’s assets other than its oil under the liquidation plan. Instead, Socal will utilize Gulf’s other assets.

o Socal can choose to turn Gulf back into a going concern at any time during the liquidation process, all that is needed is for Gulf to start exploration process again.

o Value as a going concern was calculated by multiplying the number of shares outstanding by the 1982 share price of $30. Value: $4,959 million.

o 1982 share price chosen because this is the value the market assigned before the price was driven up by the takeover attempts.

Bidding Strategy

o When two companies merge it is common practice for the purchasing company to overpay for the purchased firm.

o Results in the shareholders of the purchased company profiting from the over-payment, and the shareholders of the purchasing company losing value.

o Socal’s responsibility is to their shareholders, not the shareholders of Gulf Oil.

o Socal has determined the value of Gulf oil, in liquidation, to be $90.39 per share. To pay anything over this amount would result in a loss for Socal shareholders.

o Maximum bid amount per share was determined by finding the value per share with Socal’s WACC, 16.20%. The resulting price was $85.72 per share.

1. This is the price per share that Socal must not exceed to still obtain profit from the merger, because Socal’s WACC of 16.2% is closer to what Socal will expect to pay their shareholders.

o The minimum bid is usually determined by the price the stock is currently selling at, which would be $43 per share.

1. However, Gulf Oil will not accept a bid lower than $70 per share.

2. Also, the addition of the competitor’s willingness to bid at least $75 per share drives the winning bid price up.

o Socal took the average of the maximum and minimum bid prices, resulting in a bid price of $80 per share.

Maintaining Socal’s Value

o If Socal purchases Gulf at $80 it is based on the company’s liquidation value and not as a going concern. Therefore, if Socal operates Gulf as a going concern their stock will be devalued by approximately half. Socal stockholder’s fear that management might takeover Gulf and control the company as is which is only valued at its current stock price of $30.

o After the acquisition, there will be large interest payments that could force management to improve performance and operating efficiency. The use of debt in takeovers serves not only as a financing technique but as a tool to hopefully force changes in managerial behavior.

o There are a few strategies Socal could employ to ensure stockholders and other relevant parties that Socal will takeover and use Gulf at the appropriate value.

o A covenant could be executed on or before the time of the bid. It would specify the future obligations of Socal management and include their liquidation strategy and projected cash flows. Although management might respect the covenant, there is no real motivation to prevent them from implementing their own agenda.

o Management could be monitored by an executive; however, this is often costly and an ineffective process.

o Another way to ensure shareholders, especially when monitoring is too expensive or too difficult, is to make the interests of the management more like those of the stockholders. For instance, an increasingly common solution towards the difficulties arising from the separation of ownership and management of public companies is to pay managers partly with shares and share options in the company. This gives the managers a powerful incentive to act in the interests of the owners by maximizing shareholder value. This is not a perfect solution because some managers with lots of share options have engaged in accounting fraud in order to increase the value of those options long enough for them to cash some of them in, but to the detriment of their firm and its other shareholders.

o It would probably be the most beneficial and the least costly for Socal to align its managers concerns with that of the stockholders by paying their managers partly with shares and share options. There are risks associated with this strategy but it will definitely be an incentive for management to liquidate Gulf Oil.

Recommendation

o Socal will place a bid for Gulf Oil because its cash flows reveal that it is worth $90.39 in a liquidated state.

o Socal will bid $80 per share but limits further bidding to a ceiling of $85.72 because paying a higher price would hurt Socal’s shareholders.

Managerial Economics – Application of Economic Theory in Solving Business Problems!

Managerial economics is concerned with various micro and macro economic tools and the analysis of which can be used in managerial decision making to solve business problems. Micro economic tools that are used in this subject include demand analysis, production and cost analysis, break-even analysis, pricing theory and practice, technical progress, location decisions and capital budgeting. The macro economic concepts that are directly or indirectly relevant to managerial decision-making comprise national income analysis, business cycles, monetary policy, fiscal policy, central banking, government finance, economic growth, international trade, balance of payments, free trade protectionism, exchange rates and international monetary system.

The scope of this managerial science is wide and it has close connections with economic theory, decision sciences and accountancy. Traditional economics talks about the theory and methodology while managerial economics applies economic theory and methodology to solve business problems. It uses the tools and techniques of analysis to provide with optimal solutions to business problems.

  • Relationship with economics:

Managerial economics borrows concepts from economics just as engineering does from physics and medicine from biology. The analysis of both micro and macro economic concepts add valuable inputs to the organization. Say, national income forecasting is an important aid to business condition analysis which in turn could be a priceless input for forecasting the demand for specific product groups. The theories of market structure can be analyzed for the purpose of market segmentation.

  • Relationship with decision sciences:

Decision models are created to format the solutions for problem situations and the process utilizes techniques like, optimization, differential calculus and mathematical programming. This also helps to analyze the impact of alternate course of action and evaluate the results obtained form the model.

  • Relationship with accounting:

Accounting data and statements constitute the language of business. The accounting profession considerably influences cost and revenue information and their classification. A manager should therefore be familiar with the generation, interpretation and use of accounting data. Accounting moreover is viewed as a management decision tool and not anymore as a mere practice of bookkeeping. The concepts and practices of accounting can be very well applied to improve the economic scope of a project.

Economics is an interesting subject as it deals with the day-to-day problems of a common man and at the same time is concerned with the economic prosperity of a country as a whole. Its primary focus is on scarce resource allocations among competing ends. Individuals, enterprises and nations face problems of resource allocation. Managerial economics may be viewed as economics applied to problem solving at the level of the firm.

Role of Budgeting in Planning, Control, and Resource Allocation Process in UAE Companies

Budget

Before understanding the key concepts of budgeting, it is important to understand the meaning of budget. A budget is used to make a documentation of the translation of plans into money. So, the amount of money that needs to be spent in the planned strategies of the company would lie under the budget of that company. These planned strategies include the expenditure that a company incurs and also the income that the company predicts to make. So, in other words, a budget helps one to make an estimation of the amount of money that would be required for the company to handle the projects undertaken by it. It must also be understood that a budget is not made permanently. There are conditions under which a company can make changes in the budget and go as per as the needs of the market. As for example, if a company sees that the use of computers is not as had been planned in the budgeting; it would either replace it with something or not make any investment at all in the field. This is where the utility of controlling comes into the picture. Other than this a budget is also significant from other perspectives. If one talks about the resource allocation, budget has an equally important role to play in it. The reason for the same is that let’s say that a company has budgeted that it can afford a certain amount of power supply for a certain project that is conducted in a village. Under the conditions, the amount of human resource that would be required to carry out the project can be determined from the budget itself. Normally a budget is of three types. They have been mentioned as follows:

Survival Budget: This form of budgeting is important in the boundary conditions. It estimates the minimum resources so as to complete a particular project. So, if a company has a look at the survival project, there is one obvious analysis that can be done. This is that under the most optimistic of the situations, the resources allocated would be sufficient. There would be very little margin of error under the conditions.

Guaranteed Budget: This budget is formulated when there is a guarantee of a particular amount of income at the time of formulation of budget. So, when a budget is made from this perspective, this income is taken into consideration. If somehow, the debtors are not able to provide the income that the company used as guarantee before making the budget, it would have to switch over to the survival budget formation.

Optimal Budget: The third form of budget is the optimal budget. This budget is used under the conditions when there is extra money in the company accounts or else the company feels that it could raise extra money from the market. So, if the position of the company is good then this form of budgeting can be applied. As for example if we consider a very famous company in the infrastructure sector, Emaar, we would find that the company has the ability to raise a lot of extra capital from the market. So, Emaar can hope to use it in utilizing the money to plan a few more interesting projects like it had made the longest mall in the world and the tallest tower in the world. Both these projects were outcomes of an optimal budget made by the company.

Budgeting Responsibilities

Owing to the circumstances under which a budget is fruitful, the organizations should be highly selective in handing over the responsibilities of making the budget. There are a few pre-requisites of making a budget. They are as follows:

The concerned employee should have a clear understanding of the company’s values, strategies, and plans that lie in the near future.

The employees must know the importance of cost-efficiency and cost-effectiveness.

Also, the concerned employee must have knowledge about the resources that would be used to generate and raise funds.

The above pre-requisites are essential for the company if they have the motive of using budgeting in the planning, controlling and resource allocation purposes.

So, it is generally recommended that a company has a budgeting team that has an optimal size so as to prevent any discrepancy with the formation of the budget. Under all situations where the concerned members of the finance department have difficulties in planning the budget, they would have to consult the board of members for the same. For a situation like this to arise, the planning in the company must certainly have been wrong. So, we can see that the new planning would depend solely on the fact that budget allows the same to happen. Under all other conditions, the estimated plan would have to change. (Budgeting, 2010)

Role of Budgeting in Planning

Here we are taking the telecommunication giant, DU into account to understand the role played by budgeting in the planning process. It was only about a couple of years ago that the company introduced its new plan. This new plan was about introducing the pay-by-the second plan amongst the services of the company. This was done as per as the optimal budget plan of the company. DU had formulated a budget where it got the option of introducing a new facility with the extra money that it hand in hand. As the company analysis shows that DU was climbing the ladders of success even then, so this was certainly a major step in the making. Moreover, the funds that had been allocated in the budget were enough for the fact that the company could start this service any time it wanted. So, it chose the time when the nearest rival company Etisalat had screwed up its plans after introducing the Blackberry services. As an optimal budget is that which allows the time for starting a new investment, this was just the time and DU made the most of the opportunity. Today this plan is among the most revenue-fetching plans that the company had ever introduced in its services. So, budget played an extremely important role in the planning of this success of the firm. Had the company planned to use the extra money as a surplus or retained or reserve, it would never have been able to introduce this service. So, one can see the importance of making the right budget at the right time can help in planning for great successes in a company. There are other examples also where one can see the planning being aided by preparation of budget. The tourism department of Abu Dhabi was guaranteed of the fact that it would have a considerable amount of income from the flourishing tourism in the country due to the onset of some of the most peculiar activities in the country. Under the situation, the department used the guaranteed budget to enhance the cultural activities of the country. A number of museums have been renovated because of a planned budgeting under the guaranteed budget plan. The department had planned that with the money they would have from the already existing resources in tourism, it would evoke a cultural feeling in the country and its natives, It has been able to do it successfully as per as the statistics of the museums of the region are concerned. So, once again we see that budgeting has helped in planning of such an important landmark in the country.

As in general one can say that budgeting is about aiding a company to make plans for the future. It is that process where a company can be assured of the fact that it would have enough money so as to carry out the requisite projects. We are all acquainted with the fact that the world is about competition as of today. Every company needs to plan new projects so as to show its core competency. Under the conditions, no company can automatically start investing on its research and development. It has to come through a substantial degree of planning which could only be possible after the budget of the company allows it to do so. In all other situations it would finally have to terminate the services with an excess of demand or supply.

There are also other instances where a company can use the principles of budgeting in order to carry out its planning. This can be seen in the case of training. Every planning of training has to be supported by budget. This is one of the foremost criteria of training. There are a number of instances in the country where the Government is implementing programs like Emiritzation. If the budget of the company does not support such plans they would certainly not be executed. The loss can be huge under the conditions. The first case would be a monetary loss as an incomplete training would actually be of no used as it would be insufficient to fulfill the company’s criteria. If some small companies do place employees with an incomplete bit of training, it would make the company even smaller!

So, we can see how budgeting governs this chain of planning which of not executed in a suitable manner could bring about adverse results. (The Importance of Budgeting, 2010)

Role of Budgeting in Controlling

As in the case of planning, budgeting also has a special role to play in controlling of an organization. We have seen that a plan would simply lay the conditions of taking on a particular activity. What follows is its controlling in the implementation phase. Let’s say that a company wishes to promote its products or services in the trade fare of Dubai. This is one of the places where controlling comes into play with respect to budgeting. Dubai Trade Fare is one of those occasions when a number of companies use the best of means to promote their products. With an adequate amount of control, the companies would never be able to compete in the pool of so many. So, a budgeting has to be done to choose the HR and marketing department which would be responsible to control the scenario.

Without a proper budgeting in this respect, the company would make inefficient decisions and after a while, there would be no control over the promotional measures of the company.

There are also a number of chances where a company goes with leisure expenses. It does increase the value of the company for a particular period of time but after a while there has to be an end to it. Now, with a planned budget under the conditions, the companies would be able to restrict themselves from over-spending as the budget would not suit their expenditure. This requires the company to make a survival budget. As we can see a survival budget would certainly take care of the budgeting requirements of the company. If the employees are aware of the fact that they would not be able to complete their respective projects with the type of expenditure they are doing, they would certainly shift to other economic reasons. This way a company can also control the activities of the employees. Once a planned budget is produced the whereabouts of the employees can also be checked as they would be on a hire. The amount of time given to them in the budget would be fixed. If they are unable to finish their respective works in this stipulated time they would see the effect on their salaries or wages. So, this way, the company’s activities, employees, time and money can all be under control with the introduction of budget in the company’s financial plan. The company would certainly become more efficient if it works in a controlled manner. So, this would be for the mutual benefit of both the employees and the company as well. (Controlling a Budget, 2010)

Role of Budgeting in Resource Allocation

A company’s success is highly dependent on the resource allocation. This has to be done optimally so as to complete a certain project. The law of economics suggests that a company has the least resources and has to make the most of it. So, only an appropriate resource allocation would help this happen. This would be in terms of human resource, raw materials, equipments, money, time and all other attributes that take for making a project successful. Here again, the budgeting of the company plays an important role to play. The reason for the same is that in all the sectors that have been talked about here, only a planned budget could decide the maximum a company can afford. Let’s say that ADNOC has the plan of staring a new subsidiary. Under the conditions, it would have to make a budget where the company could allocate the amount of human resources in order to make this happen. Not only this, there are a series of activities that would have to be done in the process. Much of the time, there would be two processes going on and at times even one. So, a planned budget would estimate the amount of money that the company can afford throughout the process. Based on this, the processes would have to be allocated in a manner where the company can make the best use of the human resource available. If ADNOC has 200,000 AED for the purpose, and there are 10 slots, rather than allocating 20,000 AED per slot, the company would have to see the priorities of each slot. If a particular slot requires double the number of processes than the others, the resources would have to be allocated accordingly for the same. Now this can only be possible with an appropriate amount of budgeting. If the budget of the company does not allow double resource allocation for a particular slot because of other activities, then the company would have to come up with other alternatives. Had there been an inability of a budget, the company would allocate double resources and finally land up with none available for a process that has little requirement. So, we can see that even the process of resource allocation requires budgeting to a large degree.

Talking about the company Emaar, as per as the organizational size of the company, there has to be a proper budgeting done. The reason for the same is that every department requires an adequate amount of human resource and funds. If the company’s budget for a particular project is 200 million AED, the company would also have this budget divided into different departments. Every department would have to use only the allocated funds to support its human resource and all other requisites prior to conducting the project. If the construction department spends so much that the company is not able to use any funds for its advertisement, in this world of competition, even a company like Emaar would have to bow down to others in the league. There are so many options that people have for residents that promotion under forced conditions could change every profitability ratio of Emaar. So, here again we see the hierarchy that could be affected because of the inappropriate use of resources that would result from the non-availability of a budget that could suit the purpose. (The Basic Budgeting Problem, 2010)

Conclusion

So, one can see that a budgeting process has a number of utilities in the projects of a company. This could be from the perspective of planning, controlling or resource allocation. Every company has the desire to be at the top. Finance has a special role to play in the same. Te steps of laying down an appropriate budget are as follows:

Firstly, the concerned person should lay down all the places of investment with respect to a particular project.

Next, make an estimation of the unit cost of every product that would be manufactured in the process.

Next, analyze the resources that would be sufficient to provide for the unit costs found.

Next make a proper budget format so that it is clear to all the departments and they the amount of allocation for them in all the respects.

It is also advisable to make notes so as to be able to explain the budget better.

Next, it is required to take a feedback on the budget so as to see whether it is applicable to all the departments or not. If not, then it would have to be re-planned.

Finally, make the final documentation so as to be able to help in planning, controlling and resource allocation as has been suggested earlier.

With all the above processes followed, a company can afford to perform all the financial activities in its respective projects. It must be remembered that only a systematic design of budget as has been concluded could be used for the mentioned cause.

What Exactly is an MBA Degree?

An MBA (Master of Business Administration) is a graduate degree obtained at a university or college that offers both theoretical and practical training to provide graduates general knowledge about general business management functions. The MBS degree may have a specific focus as: accounting, marketing or finance.

An MBA degree represents a level upward from an undergraduate business course and its achievement places the graduate far above other candidates owning just an undergraduate degree.MBA programs has become to be offered by most universities and colleges during the past two of years. For instance, only in the UK, 116 business schools are currently offering MBA courses and the number of students graduating this form of education has risen from 4,000 in 1990 to over 10,000 in 2000.

In order to be accepted in an MBA program, an applicant must take the Graduate Management Admission Test (GMAT) – for the US education system. The GMAT is a standardized test that aims at determining the aptitude of a candidate for an activity in business management studies. It is presently made up of an essay section containing two free-response essays of 10 minutes each; two multiple choice sections, one mathematical section and one verbal skills section.

Apart from the GMAT test, other admission criteria focus on significant work experience, academic transcripts, references and personal interviews. Extra-curricular and community service activities represent an interest for the admission boards.

The MBA degree courses offer students knowledge on economics, organizational behavior, marketing, international business, finance, government policy, accounting and information technology management.

The traditional MBA degree offers students a broad range of general courses in the first year of studies, followed by a specialization in the second year.

Specialization in particular areas as: technology management, accounting, strategy or specialized business, marketing and finance is being offered by many MBA degrees.

There are several ways of attending MBA courses.Nowadays MBA degrees can be accessed through online, distance learning or e-learning as the program offered by the Open University Business School. Due to the large variety of MBA degrees offered worldwide, the elite business schools are being accredited by independent bodies as the Association of MBAs. This association acts as a global network for the MBA community: MBA students, MBA graduates, schools, businesses and employers.

Consequently, the MBA degree represents a leading management qualification that creates highly competent professional managers.

Serial Entrepreneurship, Multipreneurship, Individualpreneurship, and The Self-Reliant Career

A serial entrepreneur is an individual who starts mainly multiple upwardly mobile enterprises and moves on to the next, either when a new management team takes control, or if the enterprise becomes lifestyle in nature. Because serial entrepreneurs have experience with multiple enterprises, they tend to be bigger risk takers than those that have started only one enterprise. As a consequence, their experience better positions them to respond to problems and to avoid failure over time. Many have learned from past mistakes. A serial entrepreneur will typically always work for themselves, and employ others.

A multipreneur is an individual who pursues multiple upwardly mobile and/or lifestyle business activities as a portfolio, either serially or in parallel. These activities can be within one business, such as new product and/or service line extensions, new product and/or service lines, new markets, or new business units; as new related or unrelated businesses; or as varied careers. A multipreneur may move from being self-employed to being employed by others to being self-employed again.

An individualpreneur is a focused multipreneur. The term “individualpreneur” is derived from the term “individualprise,” which in turn is derived from the term “individual enterprise.” The notion of an individual as an enterprise is based upon the practice of all income sources on an individual’s tax return being actively managed as a portfolio. Thus, individualpreneurship is a “top-down” mindset starting with the summarization of employment, entrepreneurship/business ownership, and investing activities as driven by multipreneurial initiatives. Each multipreneurial activity may be event or opportunity driven.

Multipreneurs (and hence individualpreneurs) include solopreneurs (individuals who work alone), webpreneurs (those doing business primarily on the internet), and can be employed working for others in parallel or between their entrepreneurial endeavors.

Because a married couple can file a joint individual tax return, the notion of individualpreneurship extends to both husband and wife (and their dependents as appropriate). This is notion is consistent with the concept of families pursuing many income generating activities during the agricultural age, such as farming, glassmaking, metalwork (smithy), needlework (weaving), stonework (masonry), and woodwork (carpentry).

Thinking and behaving as an “individualprise” helps an individual perform better, not only as an entrepreneur/business owner, but also for an employer, especially in an executive capacity. This is because they understand the concepts of income generation and expense, asset, liability, and capital management. They should also have a broader understanding of legal, finance, human resources, information technology, business development, and operations activities. For visionaries in the corporate world, intrapreneurial capabilities are also important for enacting and responding to change.

For many jobs, there is a lifecycle from value-added to commodity work over time. As jobs become commoditized, they are often outsourced to scale providers who perform the tasks at lower cost. Thus, to keep the economy healthy, it is necessary to provide for capital formation in new innovative enterprises that generate new job opportunities as the old jobs erode. Both serial entrepreneurs and multipreneurs who see and pursue multiple opportunities for innovation help keep the economy healthy. Typically for every one innovative job generated by an entrepreneur, there are many infrastructure and support jobs generated, either in the same enterprise, or in related.

Those seeking employment positions where such a lifecycle exists must recognize that a job search is a marketing campaign just as a business would adopt. Therefore, it must be treated as such by the job hunter if a satisfactory result is to occur. Thinking as an enterprise, the individualpreneur is more likely to achieve a satisfactory result in a job search because they are aware of the need to add value and promote it as such in the marketplace. Individualpreneurs appreciate the benefit of business relationships and networking, and the value of referrals.

Individualpreneurship is a discipline for building an individualprise for a sustainable self-reliant career. Sustainable means being able to continue over time, either by developing, enhancing, or maintaining the current state, or by changing it. Self-reliant means having the confidence to exercise one’s own judgment so as to be able to continue over time in a career – endeavors of achievement in both personal and professional lives.

As a multipreneur, an individual is willing and able to consider new and emerging opportunities as existing ones mature and decline. As an individualpreneur, they focus on those opportunities that offer the best likelihood of sustaining a livelihood over time.

Individualpreneurship embraces the entrepreneurship disciplines of entrepreneurship, leadership, and management, which apply to every individual in business, whether as an employee, as an entrepreneur/business owner, or as an investor. In the corporate world, leadership and managerial capabilities, and especially the ability to communicate effectively, are essential for advancement through the ranks.

Crowd-Funding May Not Be the Best Way to Finance Your Business

It began with the passage on April 5, 2012, of the JOBS Act, officially known as the Jumpstart Our Business Startups Act. No, not the concept of crowd-funding. That’s been around for several years, thanks largely to Kickstarter. I’m talking about the federal government’s involvement in crowdfunding. Without the hyphen, incidentally, is the other popular way to spell the process whereby people with ideas – or causes – attempt to convince people with money-to-spare to contribute to their particular idea or cause.

The JOBS Act added a new dimension to crowd-funding – a group of people called investors. Prior to April, crowd-funding was loosely based on a system best be described as “donation-and-reward.” In return for you donating a small dollar amount to my idea or cause, if I reached my stated funding goal, and if what I said I’d create with that money became a reality, I’d send you a sample of my product… or a T-shirt promoting my cause. Simple enough, right? Donation and reward.

That JOBS Act, however, allows people with significant amounts of money to now “invest” in small and start-up companies. And, because the rules for “investing” fall under the Security and Exchange Commission (SEC), the JOBS Act has given the SEC until Jan. 1, 2013, to draft and implement rules and regulations for those who want to invest in companies defined by that Act.

There’s a significant difference between investors as defined in the JOBS Act and “donors” under the original crowd-funding concept. Investors loan money with the intent of getting it back, either with interest or in the form of stock in the company in which they invest.

Under the original “donation-and-reward” program, if the person seeking a certain amount of money reached his or her stated goal, each person who donated to that goal basically kissed his or her donation good-bye. If the project to which they contributed became successful, each donor got a “reward,” whatever they’d been promised when they made their donations.

Crowd-funding under the JOBS Act isn’t going to be the answer for every type of business. The most money – the smart money – is will likely fund high-tech businesses or those that best satisfy a major consumer need or want. And that funding is virtually certain to go first to companies that have a well polished, written business plan.

Yes, a written business plan, the curse of so many owners of small and start-up businesses. With JOBS Act crowd-funding, a well written business plan will be a must. No one smart enough to have amassed enough money to invest in a business will be foolish enough to invest in a company that lacks a well written business plan. Those investors will want to see financial projection – sales, profit margins, manufacturing and labor costs – at least three years of those projections, along with other pertinent information.

Is the effort to attract such investors worth it? At this point no one knows for sure because the SEC regs are barely in the drafting stage and likely won’t be implemented until early 2013. Meanwhile, crowd-funding using the time-honored, hassle-free “donation-and-reward” system continues to thrive.