Hedging

Hedging techniques are used to manage financial risks of an organization. There are mainly two types of financial risks that are faced by an organization.

• Foreign Exchange Risk
• Interest Rate

The idea is simple. Simply, Hedging is reducing the risk of an investment by creating another investment. Now lets see what types of hedging techniques are available for an organization. Mainly, there are two types.

• Internal
• External

Internal Hedging techniques are those techniques that are created inside the organization. Examples are, invoice in home currency, matching and netting. External hedging techniques are those techniques available outside the organization. Examples are Forward rate contracts, money market hedge, Options, Futures, Swaps and Swaptions.

Lets look at these techniques one by one later.

COBIT

Control Objectives for Information and related Technology (COBIT) is a framework that can be used as a control tool in an IT environment. It provides managers, auditors and IT users with generally accepted measures, processors and indicators that can be used as best practices in for controlling purposes.

COBIT was first released in 1996 with the motto “to research, develop, publicize and promote an authoritative, up-to-date, international set of generally accepted information technology control objectives for day-to-day use by business managers and auditors.” This framework provides managers, auditors and users an understanding about level of security and controls that should be implemented in order to protect company assets though an IT governance model.

The complete COBIT package is a set consisting of six publications:

• Executive Summary
• Framework
• Control Objectives
• IT Assurance Guide (formerly Audit Guidelines)
• Implementation Tool Set
• Management Guidelines

COBIT covers four domains:

• Plan and Organize
• Acquire and Implement
• Deliver and Support
• Monitor and Evaluate

Branding

A school of advertising that says, "If the customer has heard of us, we've done our job."

Branding is the process of creating a brand, the visual, emotional, rational, and cultural image associated with a company or a product. Protecting the brand name is very important to become a market leader as well as to survive in this highly dynamic environment. Further Branding is important in persuading consumers of a product quality prior to purchase or experience.

To identify the power of branding just think of a small product. I will give a small example. When we go to a bye a pair of rubber slippers, I have heard most of us ask for a BATA. BATA is not the product. It is the brand. However due to the powerfulness of branding people tend to refer to the product by the brand name.

Another example is that when we are referring to the correction fluid we refer to it as tippex. However tippex is not the product, it is a brand. See how powerful the brand name is.

Strategic Audit

Although financial audits are well recognized, the idea of scrutinizing your business strategy in a similar way is less common. The strategic audit may show essential for ensuring that your organization continues to generate value and that any governance issues are addressed.

A strategic audit can be known as a business health check. Strategic audit will perform a comprehensive review of strategy to identify weaknesses, blind spots and reasons why profits are failing to reach the expected level. It will also identify new areas where far more value can be added.

So, it is very much essential to have a strategic audit with in the organization. Financial audit is a mandatory. But Strategic audit is not mandatory. However Strategic audit is more important than a financial audit as it will enable management to take correct decisions.

I have a Dream

When I say I have a dream most of u will remember that very famous song, I Have a Dream. But I am not going to talk about that song.

"I Have a Dream" is the name given to the famous public speech by Dr. Martin Luther King Jr , when he spoke of his wish for a future where blacks and whites would coexist harmoniously as equals. I thought of talking about this speech because we can learn a lot regarding public speeking from this speech. This speech is considered as one of the greatest speeches ever being delivered.

Dr. Martin Luther King Jr delivered this speech on August 28^th , 1963 from the steps of the Lincoln Memorial. It was really an inspirational speech. His speech had the power to educate and inspire people throughout America regarding the injustice happened to blacks.

“Let us not wallow in the valley of despair. I say to you today, my friends, so even though we face the difficulties of today and tomorrow. I still have a dream. It is a dream deeply rooted in the American dream.

I have a dream that one day this nation will rise up... live out the true meaning of its creed. We hold these truths to be self-evident that all men are created equal.”

These are some quotes from his speech. If you have time just search for the speech “I have a dream by Dr. Martin Luther King “and listen or read this speech and feel how great it is.

Save Energy

Save Energy consumed by your organization. It is one of your social responsiblities. Here are some tips.

• Reduce business mileage by using video conferencing and home working
• Use lighting controls to ensure that lights aren’t left switched on when offices are unoccupied
• Control air conditioning according to the requirement
• Use natural ventilation wherever possible
• Recycle all waste
• Ensure that air conditioning equipment run only during occupied hours
• Monitor energy usage to use as evidence of improvement

A NINE STEP PROGRAMME FOR DEVELOPING CORPORATE ETHICS

A business’s approach to ethics depends on the tone set at the top management level. Here tone means the quality and style that characterize the organization’s behavior. Corporate Ethics of the company, through its employees, displays towards all of it stakeholders and manifest itself in how it conducts its business.

Following is a nine step program for developing corporate ethics.

• Find a champion
• Member of the board who is prepared to introduce the business ethics policy
• Identify core values
• Ensure your company has established the core values. If not you have to identify them
• Secure endorsement of the board
• Board must regularly review the operation of corporate ethics
• Find out what bothers people
• This is to identify issues on which employees need guidance.
• Pick a well-tested model
• Use a framework
• Produce a code of business ethics
• Try it out first
• Issue the code and make it known
• Make it work

Putting in a code of ethics support a business, because it’s an integral part of building a culture within an organization. By following the best practice and developing a code based on shared core values, it can become the glue that cements the company together.

Scenario Planning

All organizations have to face an uncertain future due to complexity in the environment that they are operating. The degree of predictability varies from industry to industry. Scenario planning will enable an organization to deal with the uncertain future in a more convenient manner, minimizing surprises that the organization may face in the future.

The aim is not to arrive at a forecast but to consider a range of plausible outcomes and decide whether the company is able to deal with them.

There is no one right way to produce scenarios. Various approaches have been considered over the years. Following is one such way that any organization can develop scenario planning.

• Define scope of scenarios.
• Identify main stakeholders.
• Identify main trends.
• Identify key uncertainties.
• Construct initial scenario themes.
• Check for internal consistency and plausibility.
• Develop learning scenarios.
• Identify research needs.
• Develop quantitative scenarios.
• Develop decision scenarios.

Balance Score Card

The Balance Score Card transforms organization's vision into a variety of measures which are relevant to achieve results. This will identify control mainly based on 4 areas reflecting strategy in performance.

Development of Balance Score Card

• What are the expectations of shareholders
• ------Financial Perspective
• How we are going to achieve (how to satisfy customer)
  
• ------Customer Perspective
• What is the approach
• ------Internal Business Perspective
  
• Who is involved
  
• ------Learning and growthPerspective

ERP and SEM

Enterpise Resource Plan(ERP)

This is an infromation system which integrates the entire funtions of the organaization through a common platform. This will facilitate multi-disciplinary transactions trough a common base.

Strategic Enterprise Management (SEM)

This is an extension of the ERP concept in order to generate strategic information. This will enable the organization to utilize the ERP system to generate strategic advantage.