Positive review of Citi management questioned

The US regulator Federal Deposit Insurance Corporation has questioned the generally positive conclusions in a government-mandated review of Citigroup's top management, says a media report.

Attributing to people familiar with the situation, the Wall Street Journal said that some officials at the agency have expressed doubts about the rigour of the report, which was based partly on interviews of Citi executives who were asked to rate the effectiveness of their colleagues.

According to the daily, the FDIC has questioned whether Vikram Pandit, a longtime investment banker until he took over as CEO of Citi in December 2007, can manage a company as complicated and troubled as Citigroup.

The FDIC insures the deposits in more than 8,000 US banks, among other regulatory responsibilities.

(http://business.rediff.com/report/2009/oct/09/positive-review-of-citi-management-questioned.htm)

Business Tree

Management Consulting

Management consulting refers to both the industry of, and the practice of, helping organizations improve their performance, primarily through the analysis of existing business problems and development of plans for improvement.

Organizations hire the services of management consultants for a number of reasons, including gaining external (and presumably objective) advice, access to the consultants' specialized expertise, or simply as extra temporary help during a one-time project, where the hiring of more permanent employees is not required.

Because of their exposure to and relationships with numerous organizations, consultancies are also said to be aware of industry "best practices", although the transferability of such practices from one organization to another is the subject of debate[citation needed].

Consultancies may also provide organizational change management assistance, development of coaching skills, technology implementation, strategy development, or operational improvement services. Management consultants generally bring their own, proprietary methodologies or frameworks to guide the identification of problems, and to serve as the basis for recommendations for more effective or efficient ways of performing business tasks.

Happiness

Here are three little anecdotes that I'd like to share with you. They concern three sisters: Arom, Aporn, and Arpa.

You'll get used to it

One day, Arom went to see a fortune-teller who told her that she would encounter many difficulties over the following five years.

"Will my situation got better after that?" she asked.

"No, but you'll get used to it," answered the fortune-teller.

It's we who put our ears under this wooden shoes

Aporn attended a religious ceremony at a friend's house. It was presided over by a meditation master named Luang Pu Boodda, a very old man. Afterwards, while the monk was taking a rest prior to returning to his temple in Sing Buri, loud noises were heard coming from the shophouse next door; a man wearing Chinese-style clogs was walking up the stairs. Irritated, Aporn complained to a friend of hers: "Why does he have to make so much noise?"

Although he had his eyes closed, Luang Pu Boodda was still totally aware of everything going on around him. "He's just walking. It's we who put our ears under this wooden shoes," the monk gently cautioned.

Thinking skills; A problam solving method

How much thinking do we usually do? Of course, it depends on what you mean by thinking. There might be some activity going on in the brain that doesn't necessarily involve creativity. If you are reading something and trying to understand what you are reading, that could be a form of thinking.

If you are listening to someone talking or holding a conversation, that could also be called thinking.

For the purpose of this piece, I would like to restrict the term ‘thinking’ to mental activity that results in action or in a full exploration of a subject or in an insight or new idea.

How often do people do that sort of thinking?

Our usual thinking activity is to judge or analyse a situation in order to identify it as one which is within our experience. Once we have identified a standard element, then we provide, from stock, the standard response to that standard element.

Economic Value Added

1.

EPS is calculated by dividing the net profits (after interest, depreciation and taxation) by the number of equity shares issued by the company to find out the profits earned per share. This measure is flawed because it does not consider the equity cost of capital employed (i.e. it assumes that equity capital comes to the company for free). EPS can be improved without corresponding improvement in performance simply by issuing further equity at a premium. Naturally, when more funds are pumped into the company, the size of the business increases without necessary increasing the profitability.

2.

EVA takes into consideration the total capital employed by the company – total shareholders' fund (equity and accumulated profits) and total debt – and finds out the difference between the earning and the cost of the capital employed.

Interim Management

Interim management can be essential for the future of an organisation. No matter how temporary, the role that an interim manager plays can determine whether a business succeeds or fails.

Interim management is sometimes necessary when an organisation needs to be steered through a transitional period or when short-term change management is necessary. A temporary manager might be necessary if no one suitable can be found to take up the role permanently.

Similarly, an expert interim manager can set a company on a path that can be followed by employees and a longer-term manager in the future.

Alternatively, interim management might be necessary in times of crisis when a manager leaves or is removed at short notice and the organisation needs a safe pair of hands at the helm during a sensitive time.

Management Styles

Management styles vary from company to company. There are many different styles of management that can bring success to an organisation but you have to make sure your management style is right for your business.

People skills are obviously a key asset in the development of effective management styles. Dealing with people is a professional skill in itself. Being able to see from the perspective of others is essential, and caring for their welfare is also of prime importance.

There are many high-profile examples of how to develop a successful management style. Managers like Bill Gates and Warren Buffett have famously developed their own distinctive management style from which others can learn.

However, the fact that the two examples are very different management styles shows that there is no single route to success.

Gates's style and management practice at Microsoft was based on control and concerning himself with detail almost to the point of obsession. The onus that the Bill Gates management style placed on the monitoring of staff and figures is demonstrated by the fact that he even used to sign expenses for Steve Ballmer, his right-hand man.

Agile Management

For some time, management thinkers (and thinking managers) have been stressing the urgent need for radical new approaches to the corporation. In this paradigm, the bottom line cedes its pre-eminence to the top: the corporation concentrates on developing new revenue streams from new products and services, while optimising income from existing lines through innovative marketing and rapid exploitation of changing customer needs and tastes. The new kind of corporation is, above all, 'agile'.

The dictionary defines 'agile' as 'nimble or active: quick-moving and supple'. For decades, the big business has been compared to a supertanker, which can only be turned at lugubrious speed. Top managers fret about the lack of creativity and innovation beneath them, below the supertanker's decks, but their own decision-making processes and command structures stultify efforts - even ones which they themselves have promoted - to develop the new and rejuvenate the old.

Steps in Change Management

Change management

Change management is necessary at some time in all organizations, so it is important for managers to hone their skills and familiarize themselves with change management theories.

Managers have to look at change management models and judge when change is needed and also adapt to changes outside of their organization. Therefore, change management is an essential skill for the modern manager.

However, one change management theory is that real and lasting change cannot be achieved without a radical change in the management itself.

The change manager should start by redefining the purposes of the organization in the context of fully analyzed external change. The next thing to look at is the internal changes that would be required if those purposes are to be accomplished. Then human resources must be dealt with, and that starts at the top.

You must ask whether the new purposes and internal reforms can be accepted and embraced by managers and staff. If they can’t, then more changes are necessary.

Leadership & Team Work

Describing what they term the 'quick wins paradox', the authors explain how many leaders taking on new roles attempt to prove themselves as soon as possible by seeking "quick wins - fresh, visible contributions to the business".

However, in the process, they can fall into traps that undermine or negate the benefit of their achievements.

A study of over 5,400 leaders found that five behaviours were exhibited by those overly concerned with achieving quick wins. These were:

* Focusing too much on details

* Reacting negatively to criticism

* Intimidating others

* Jumping to conclusions

* Micromanaging their direct reports

To guard against the quick win paradox, the authors recommend concentrating on collective quick wins.

"If you are a manager making the transition to a leadership role," they explain, "quick wins should not be about your personal scoreboard or pet projects but about your management of a group of individuals. A focus on collective quick wins ensures that your work as a leader is a success."

Risk Management

It is not often that you can be sure about the future. If you explode a bomb you can be sure there will be some destruction. This is because we are following the routine of the past. A doctor who treats a streptococcal infection with penicillin can be reasonably sure that it will effect a cure. Again, this is repeating a routine that has worked in the past.

In China there is said to be a deficit of 100 million women. This is the result of the ‘one child’ policy. Baby girls are not much valued because they are not so helpful in the fields or in your business. Girls get married and then look after the aging parents of their husbands. So who is going to look after you when you get old? So, somehow, the girl babies disappear. The result is a deficit of 100 million women - and even wife kidnapping.

Each family is allowed to have one boy and must then have more children. This is the ‘one boy’ policy. The result is equal boys and girls. At the moment of conception there is an equal chance of the embryo being a boy or a girl. Since no one is being killed, this equal chance continues. On average each family has two children. This is less than is required for population replacement, which needs about 2.3 children. So there is a declining population of equal boys and girls and everyone gets the chance to have a boy. No babies are ‘lost’ or killed.

E-business

Business and technology are now inextricably linked. Today, e-business is just business, a real business.

There are no technology decisions that are not business decisions, and there are no business decisions today that don't involve technology, according to Jim Cassidy, IBM's Director Asia-Pacific.

Business processes must not only incorporate timely company information – for improved customer relationship management, supply chain management, and beyond, they must also be kept up-to-date with fast-changing business needs. E-business facilitating these processes is the way most business soon will be transacted. Whether or not you ever plan to sell products or services over the Web, your most important customer or supplier may one day insist upon using Web for all transaction.

The fastest growing companies are moving aggressively to bring e-business into all their operations. They align their systems with their fast-changing business priorities and use these systems strategically, for growth. In addition, successful businesses are employing information technology to gather and interpret data about their ultimate customers, including demographics, trends, and buying behavior.

Set the Priorities

Teamwork is one of the rallying cries of the new management. Many of the results have become legendary, like the ultra-successful 1989 launch of the LandRover Discovery, produced in 27 months, roughly half the time needed for the previously typical British car. Tony Gilroy, the father of the Discovery, was so impressed by the project that he applied the same principles at his new job, chief executive of Perkins Engines, where by 1994 900 project teams were busily at work revolutionizing performance.
That's a basic principle of teamwork: nobody's perfect - including the team leader - and everybody can be improved. The whole Xerox empire had compelling reason for seeking self-improvement. As the 1980s began, when compared to surging Japanese competition, its indirect/direct cost ratio was double: it used nine times as many suppliers: assembly line rejects were ten times higher: product lead-times twice as long: defects per 100 products seven times as many. All these deficiencies meant that unit manufacturing cost equated with the Japanese selling price.

Management Decision Making Styles

The behavior of the human maverick can be well short of honourable and may even cut the corners of legality. But whether sharp practice was typical of the eponymous Samuel Maverick, a Texan cattle-raiser, is beside the management point. The reality is that the best maverick managers make the world go round. Without them many great companies and industries would not exist. Indeed, far from being the exceptions that prove the rule, the mavericks disprove it.

You could easily maintain that all great managers, certainly all important entrepreneurs, are mavericks, rule-breakers who disregard the herd and obey their own instincts and intellects. None of these makers and shakers can ever be described as conformist. One fine example of the breed is Philip Knight of Nike, who has now retired as the shoe company’s chief executive for the third time. That in itself is highly unconventional; but when his replacements for the first two retirements didn’t work out, Knight stepped back in. Remarkable recovery and revitalised growth duly followed.

Leveraging the Power of Knowledge

Learning Organization
The learning organization is "an organization which facilitates the learning of all its members and continuously transforms itself."8
Leveraging the Power of Knowledge
Learning is the key competency required by any organization that wants to survive and thrive in the new knowledge economy. Market champions keep asking learning questions, keep learning how to do things better, and keep spreading that knowledge throughout their organization. Learning provides the catalyst and the intellectual resource to create a sustainable competitive advantage.

Knowledge organizations obtain competitive advantage from continuous learning, both individual and collective. In organizations with a well established knowledge management system, learning by the people within an organization becomes learning by the organization itself. The changes in people's attitudes are reflected in changes in the formal and informal rules that govern the organization's behavior.

Develop New Ideas

An idea which does not seem very interesting to anyone else can have this special ‘smell’ for a creative person. This seems to be a sort of instinct in the way it operates. It is not, however, an instinct but a judgment built up from a lot of experience.

At the very start of an idea, difference is a point of interest. Something which is different, or even the opposite, of the normal will always be interesting. Whether that interest develops into something practical is another matter.

The purpose of any new idea is to show value and benefits. Any idea which at an early stage suggests large benefits is always worth hearing and pursuing. The benefits must, however, be made very clear.

An idea that has no obvious benefits is not a creative idea. It is not much use delivering an idea and hoping that there may be benefits somewhere.

(Refernece: http://www.thinkingmanagers.com/management/developing-new-ideas)

Your Business

Birth of strategic management

Peter Drucker was a prolific strategy theorist, author of dozens of management books, with a career spanning five decades. His contributions to strategic management were many but two are most important. Firstly, he stressed the importance of objectives. An organization without clear objectives is like a ship without a rudder. As early as 1954 he was developing a theory of management based on objectives. This evolved into his theory of management by objectives (MBO). According to Drucker, the procedure of setting objectives and monitoring your progress towards them should permeate the entire organization, top to bottom. His other seminal contribution was in predicting the importance of what today we would call intellectual capital. He predicted the rise of what he called the “knowledge worker” and explained the consequences of this for management. He said that knowledge work is non-hierarchical. Work would be carried out in teams with the person most knowledgeable in the task at hand being the temporary leader.

In 1985, Ellen-Earle Chaffee summarized what she thought were the main elements of strategic management theory by the 1970s:

• Strategic management involves adapting the organization to its business environment.
• Strategic management is fluid and complex. Change creates novel combinations of circumstances requiring unstructured non-repetitive responses.
• Strategic management affects the entire organization by providing direction.
• Strategic management involves both strategy formation (she called it content) and also strategy implementation (she called it process).
• Strategic management is partially planned and partially unplanned.
• Strategic management is done at several levels: overall corporate strategy, and individual business strategies.
• Strategic management involves both conceptual and analytical thought processes.

(referenece: http://en.wikipedia.org/wiki/Strategic_management)