Introduction This extract from BU130 Working and learning: developing effective performance at work is taken from the introductory week of this module. In it, you will be asked to identify areas in which you would like to improve your performance at work and to think about how you might carry out projects in the workplace to learn how to achieve this improvement. If you choose to go on to study this module you will spend the first eleven weeks planning these projects (which we call work-based learning in
1 Understanding operations management Consider the ingredients of your breakfast this morning. Unless you live on a farm and produced them yourself, they passed through a number of different processing steps between the farmer and your table and were handled by several different organisations. Similarly, your morning newspaper was created and delivered to you through the interactions of a number of different organisations. Every day, you use a multitude of physical objects and a variety of services. Most of the physical obj
1.5 Matrices A matrix is an arrangement of ‘cells’ in rows and columns. A spreadsheet is a simple example of a matrix. Each cell is described by its position in a column, normally denoted by an alphabetical letter, and in a row, normally denoted by a number. So ‘cell B6’ on your spreadsheet is the one which occupies column B and row 6. The size of a matrix is described by the number of rows and the number of columns (in that order). A ‘two-by-two’ matrix has two rows and two columns. A â
1.1 Line graphs A line graph is a method of showing a relationship between two variables, such as the output of an organisation and the associated costs. There are some special terms that you need to understand in order to create and interpret line graphs. These terms include: the axes, the origin, the intercept and the slope (or gradient).
4.1 Introduction This section looks at how discounted cash flow (DCF) and the net present value (NPV) rule help investors to choose between possible alternative investments and decide whether the return offered on an investment is worth it, given the risk. DCF allows us to compare two alternative investments with different expected cash flows, different maturities and different risks. NPV allows us to decide whether or not to go ahead in either case.<
4.3 R is for Relevance Relevance is an important factor to consider when you are evaluating information. It isn’t so much a property of the information itself but of the relationship it has with your question or your ‘information need’. For example, if you are writing an essay about the portrayal of jealousy in the nineteenth century European novel a book or website about Shakespeare’s Othello would not be relevant. So there are a number of ways in which a piece of information may not be relevant to your qu
1.8 Summary In this unit we have looked at how companies raise equity finance. We have examined how companies may move from private equity finance, supported by the venture capital companies, to public equity finance through an IPO. We then went on to study seasoned or secondary equity offerings (SEOs) with particular focus on rights issues. We looked at why companies may choose to list on more than one exchange and at the circumstances that might lead to a company de-listing and reverting to
1.7 Monitoring equity performance For those equities in issue their current market value and some indicators of their performance are provided in the daily press. Table 3 shows the closing levels and the volume of shares traded in respect of a selection of companies on the London, New York, Frankfurt and Tokyo Stock Exchanges on 7 June 2005. 1.6 Equity buybacks, de-listing and reversion to a ‘private’ company Once its shares have been issued, a company has the option to buy back shares. Buybacks will occur if the company believes that it is overcapitalised and cannot generate a sufficiently high return on capital through its operations. Under these circumstances it is effectively saying to the investor ‘thanks but please now have some of your money back – you can probably make it work harder elsewhere’. A further reason for buybacks arises when a major capital restructuring is undertaken by 1.5 Cross-listing For many companies, particularly MNCs, there are attractions in having a share listing on more than one stock exchange. The last decade has witnessed an increase in such cross-listings globally. Chouinard and D'Souza (2004) noted that the proportion of non-US listings on the New York Stock Exchange (NYSE) doubled from about 8.5 per cent in 1994 to 17 per cent at the start of 2003. This period also saw a rise from 7 per cent to 10 per cent in the non-US listings on NASDAQ. Author(s): 1.4 Seasoned equity offerings The issuance of additional shares is called a seasoned or secondary equity offering (SEO). SEOs are common in the London market, but less common in the USA. In some countries, including the UK, one form of SEO is a rights issue. In such issues the existing shareholders are given the right to buy further shares, usually in an amount proportionate to their prevailing holdings. This is known as a pre-emption right. While rights issues can support the need of a successful comp 1.3 ‘Going public’ For many companies a point may be reached, particularly if the company has grown significantly in size and has aspirations for further expansion, to seek equity finance through an initial public offering of shares (IPO). In a recent 1.2 Staying private – private equity and venture capital For many companies – particularly in Europe and Asia – private equity together with retained earnings have been a sufficient source of capitalisation, allowing these companies to avoid listing on a stock exchange. (Retained earnings are the post-tax undistributed – i.e. not paid out in dividends – profits of a company.) The capacity to remain private has been assisted by the rapid growth of private equity in recent years. Private equity has been employed not just by newly established 1.1 Equity instruments Both public and private incorporated companies can issue shares in order to finance their operations. Those who invest in shares expect a return blended from dividend yield and capital growth – although the expectations of investors vary from country to country. In the USA, for example, many companies rarely, if ever, pay dividends, with the result that investors seek their returns through share price growth. You will have learnt from earlier finance studies that investors require higher re Learning outcomes After studying this unit you should be able to: understand private equity and the role of venture capital companies in providing this; understand why and how public equity issues can be undertaken; look at the reasons for cross-listing on stock exchanges; examine why a company might de-list from an exchange and return to private ownership. Introduction This unit looks at equity finance – the range of equity instruments and markets available to a company. First, we look at private equity and the role of venture capital companies that provide such finance. We look at the mechanics of an initial public offering (IPO) and at recent cases of companies ‘listing’ on a stock exchange for the first time. We go on to explore certain important strategic issues for a business when considering equity finance: Acknowledgements The content acknowledged below is Proprietary (see terms and conditions) and is used under licence. All other materials included in this unit are derived from content originated at the Open University. Conclusion We hope this unit has set you thinking about how you and others make decisions. It has been a very brief and to some extent shallow introduction to some quite complex ideas. The reference list should give you some pointers to further resources which will help you explore this topic in greater depth. Before you move on take some time for a final activity. Activity 3 In Author(s): 2.1 Exercising judgement To understand how we make decisions, it is useful to start with the ways in which we make judgements about information we are presented with. Let's start this unit with an activity designed to get you exercising judgement. The answers are at the end of the questions but please arrive at your own answers before checking them! The questions in this activity are adapted from Bazerman (1998). 1 Economic function of the entrepreneur Broadly, entrepreneurs have two vital roles to play in the economy (1) to introduce new ideas and (2) to energise business processes. Strictly speaking, the term entrepreneur, which derives from the French words entre (between) and prendre (to take), referred to someone who acted as an intermediary in undertaking to do something. The term was originally used to describe the activities of what today we might call an impresario, a promoter or a deal maker. The entrep
SAQ 4
Author(s):
Unit Image
Author(s):
