4.3 Net present value If the NPV is positive, then the aggregate present value of the future cash flows is greater than the price to be paid for the investment today, so the investment is cheap and offers an excess return. If the NPV is negative, then the price to be paid today is greater than the present value of the future cash flows; the investment is therefore overpriced and does not offer an adequate return. If the NPV is zero, we can say the investment is fairly priced by the market. All significant fi
2.1 Looking at each of the possible alternative outcomes Investment risk is synonymous with uncertainty of outcome, so it is logical to try to quantify risk by looking at the relative uncertainty, or probability, of each of the possible alternative outcomes. Suppose that we are interested in investing in the shares of Company X, and want to know: What is the mean or average expected total return for the next year? What is the degree of risk or uncertainty in this mean figure?
7.5 Materials costs There will be many categories of materials, supplies and consumables used in a project. Once again, the materials that are in constant use and easily and ‘freely’ available in an organisation might be overlooked in costing the project. For example, it is easy to assume that stationary will be available in much the same way as it is for day-to-day work. However, a project is a bounded activity, and if you are to understand the full cost of achieving the outcomes, you will need to know how
7.3 Staff costs The staff time and staff-related costs need to be calculated. These include salaries, taxes, holidays, overtime, training, travel and subsistence, and accommodation for the number of staff for the time they will be needed. This raises all sorts of questions about the basis on which staff are costed and the relationship of the project budgeting system to other budgets and costing systems in the organisation. The basic assumptions underlying allocation of resources need careful consideration ea
4 Identifying deliverables The project brief will identify the goals of the project and may express some of these as key objectives. At an early stage of planning you will need to identify all of the project objectives and the deliverables that are implied or required from each objective. Each objective will identify a clear outcome. The outcome is the deliverable. In some cases, the outcome will be some sort of change achieved and in other cases it will be the production of something new. In either case, the pro
Acknowledgements Course image: Mike Rolls in Flickr made available under Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Licence. Except for third party materials and otherwise stated (see terms and
6.1 Introduction The process of keeping up-to-date in your chosen subject area is useful for your studies and afterwards, for your own personal satisfaction, or perhaps in your career as part of your continuing professional development. There are a great many tools available that make it quite easy to keep yourself up to date. You can set them up so that the information comes to you, rather than you having to go out on the web looking for it. Over the next few pages, you will be experimenting with some
5.1 Why is it important to be organised? 87% of items that are filed into a filing cabinet are never looked at again. STANFORD UNIVERSITY TIn 2010, the world's digital information output was estimated to pass 1.2 zettabytes. A zettabyte is a new term which equals a thousand billion gigabytes. UNIVERSITY OF CALIFORNIA (BERKELEY) A new blog is created every second. TECHNORATI 10% of salary costs are wasted as employees search
4.1 PROMPT There is so much information available on the internet on every topic imaginable. But how do you know if it is any good? And if you find a lot more information than you really need, how do you decide what to keep and who to discard? In this section we are going to introduce a simple checklist to help you to judge the quality of the information you find. Before we do this, spend a few minutes thinking about what is meant by information quality. 3.8 Internet resources There are many websites where you will find useful information for business and management. With all information on the internet you need to make a judgement on the reliability of the information. 3.3 Books and electronic books Books are a good source of information. The publishing process (where a book is checked by an editor before publishing, and often reviewed by another author) means that books are reliable sources of information, although they may need to be evaluated for bias. To find out about other books available in your subject area, you can search library catalogues and/or online bookshops. Some useful links can be found on the Author(s): 1.5 Organising information How confident are you that you know when it is appropriate to cite references (refer to the work of other people) in your written work? 5 - Very confident 4 - Confident 3 - Fairly confident 2 - Not very confident 1 - Not confident at all How confident do you feel about producing bibliographies (lists of references) in an appropriate format to accompany your written work? References 5 Making a choice If you are interviewing a shortlist of potential providers, the clearer you are in your own mind about what you require, the more effective your selection is likely to be. Given the size of the investment you are likely to be considering and its potential impact on the organisation, this selection process may be at least as significant as the selection of a senior manager, and you should invest appropriate effort in making your choice. You will want to think carefully about the process you wi Learning outcomes After studying this course, you should be able to: appreciate the characteristics of consultancy when viewed as a service offered for sale as client, identify suitable contexts for using consultants as client, identify, gather information on, and evaluate the suitability of competing consultants. 2.4 Shareholder activism Shareholder (investor) activism can also force better corporate governance. Historically, individual shareholders, whether institutions or private persons, have had little chance of influencing the board or management given the fragmentation of ownership. Shareholders can ask questions at the annual general meeting, but they would need a majority of votes in order to pass a motion that was binding on management. Even institutional shareholders do not, in most countries, hold as much as 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 6.6 The social construction of unknown risk While some risks can be quantified, many are unknown. In the face of such uncertainty our approach to risk depends on fundamental assumptions about the way the world works which cannot be readily subject to empirical test. Different social groups have different approaches to uncertainty. Schwarz and Thompson (1990) characterise these in terms of what they describe as four myths of nature. Adams (1995) has conceptualised these in terms of a ball on a surface ( 6.3 The psychology of risk Within the psychological paradigm there is a different starting point for understanding risk. In financial economic accounts, risk is generally regarded as a combination of the expected magnitude of loss or gain and the variability of that expected outcome. Human perception of risk works rather differently. There are two other important components of risk that influence our perceptions: the fear factor – how much we dread the potential outcome – and the control factor 5.5.1 Coercive pressures
Coercive pressures come from the social sanctions that can be applied if we do not act in socially legitimate ways. The law is one source of coercive pressure, but so too is the knowledge that you will get promoted only if you act in ways which fit accepted ways of doing things in your organisation.
Interactive Investor International A good market data site, offering a mixture of real-time, dela
