2.5 Project meetings schedule

You need to decide early on what meetings are essential to the monitoring process. All your stakeholders will expect to receive reports at regular intervals, whether formally or informally. So you need to ask yourself:

  • Who needs to be informed?

  • About what?

    How often?

  • By what means?

Effective communication involves giving information, collecting information and listening to people. To ensure the
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2.1 Operations, operations management and operations managers

Every organisation has an operations function, whether or not it is called ‘operations’. The goal or purpose of most organisations involves the production of goods and/or services. To do this, they have to procure resources, convert them into outputs and distribute them to their intended users. The term operations embraces all the activities required to create and deliver an organisation's goods or services to its customers or clients.

Within large and complex organisations operatio
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Acknowledgements

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Grateful acknowledgement is made to the following sources for permission to reproduce material in this unit:

The content ackno
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2.6.2 Cohere

Cohere  is an experimental knowledge mapping tool that runs on the web, connecting you and your ideas to other learners with common interests.


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2.5 Fishbone diagram

There are times when management problems seem too complicated and ‘messy’ to analyse. A technique, the fishbone diagram, can be used by both individuals and groups to help to clarify the causes of a difficult problem and capture its complexity. The diagram will help provide a comprehensive and balanced picture and show the relative importance and interrelationships between different parts of the problem.


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2.4 Systems thinking

‘The whole is more than the sum of its parts’ is a good place to start thinking about systems. A car is more than its individual components. We can think of a football team as being more than a collection of individual players or a family being more than a group of people who share the same name.

Each of these examples – the car, the football team and the family – can be seen as systems. Individual parts of a system are connected together in some way for a purpose.

Example
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2.3.1 The model

Figure 12 shows some of the influences which bear on an organisation. These influences, of course, are felt not by ‘an organisation’ but by people within the organisation. It is sensible, therefore, to talk about the influences on the management or on the mana
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2.3 Influence diagrams

An influence diagram shows the influences, from within the organisation or from outside it, which bear on a person or unit.


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2.2.1 A first diagram

For example, think about the inputs to the running of a commuter rail operation and the outputs from it. The diagram might look like the one in Figure 10.

2.2 Input-output diagrams

An input-output diagram shows the inputs to a system or to an operation and the outputs from it.


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2.1.2 How a force-field diagram can help

  1. The diagram is a useful expositional or presentational device. When you are presenting an analysis or proposal, the diagram will enable you to describe (and distinguish between) the reasons for a change. It will enable you to do the same for the reasons why a change may be resisted.

  2. The diagram will be an explicit prompt for exploring the restraining forces. The more a manager finds out about these, and the earlier, the better placed the manag
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3.6 Event risk

This is not unlike default risk but it is a special case meriting its own category. The shareholders or management of a company might consciously and voluntarily enter into a major transaction that radically changes either the company's nature or its capital structure (that is, the balance and mix of shares and various types of debt in its overall sources of finance). Such a restructuring might cause some or all investors to suffer a significant increase in the uncertainty of their investment
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2.2 Calculating returns

Our first question was: what is the mean expected total return for next year? We calculate this by taking each of the possible returns and weighting it by its relative probability. As our table is so simple and symmetrical, it is not difficult to see that the weighted mean return is 7% per annum.

Our second question was: what is the degree of risk or uncertainty in this mean figure? In other words, how widely dispersed are the possible outcomes around the mean expected outcome? The most
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2.2 The classic six-stage project management model

This model also consists of stages, but, unlike the sequential flow of the project life-cycle, the six-stage model assumes that some stages are carried out simultaneously. In particular, the model (Figure 3) assumes that communications will take place throughout the project. It also assumes that team building, leading and motivatio
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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
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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).

SAQ 4

In a recent
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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.


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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:

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Acknowledgements

The content acknowledged below is Proprietary (see terms and conditions) and is used under licence.

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All other materials included in this unit are derived from content originated at the Open University.

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1.1 Definitions

The need for corporate governance arises out of the divorce in modern corporations between the rights of shareholders and other suppliers of capital on the one hand, and the operational control, which is in the hands of professional managers, on the other. This can be described as the ‘principal–agent’ problem. Put simply, the question is: will the managers run the corporation exclusively for the long-term benefit of the shareholders, and what mechanisms can be put in place to ensure th
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