Friday, December 31, 2010

U.S. productivity

American workers are the most productive in the world, according to recent UN statistics. The U.S. economy produced the most wealth per capita per year followed by Ireland, Luxembourg, Belgium and France. Factors explaining the high U.S. productivity rate include longer work hours, higher information and communication levels, corporate structure, and fluidity of competition and foreign trade.
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Thursday, December 30, 2010

Mad Men

The television series "Mad Men" first aired on AMC in 2007. The show centers on the staff of the Sterling Cooper advertising agency on New York's Madison Avenue during the early 1960s. The main character is Don Draper, the firm's creative director. The storyline draws on the era's business setting and depicts the changing social fabric of the 1960s.
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Wednesday, December 29, 2010

Adam Smith

Adam Smith is considered the "father of economics". The Scottish philosopher and economist lived during the 18th century. His principle economic premise held that if government left the marketplace to its own devices, the free market would guarantee a result beneficial to the populace. Smith published one of the most influential books of all time, The Wealth of Nations, in 1776.
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Tuesday, December 28, 2010

Four business stages

Most businesses will generally experience four stages: start-up, growth, maturity, and decline. Start-ups are businesses that have recently come into existence. Businesses in the growth phase can often function using their own limited resources. Mature firms have achieved a certain amount of name recognition. Businesses in the declining phase tend to experience a shrinking market.
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Monday, December 27, 2010

Forecast vs. prediction

The terms forecast and prediction are sometimes used interchangeably. Forecast implies probability. A forecast is made by observing the trend of similar events and is often based on historical data. Prediction implies hypothesis. A prediction is derived from a theory which states that if a certain set of conditions is satisfied, a particular set of events will occur.
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Sunday, December 26, 2010

Alternative financial services

More than one in four American households use check chashers, payday lenders or pawnbrokers rather than a bank, according to recent FDIC report. Those using check cashers and other services say they are faster, cheaper and more convenient than banks even though they pay a fee to cash a check. Nearly 30 million Americans have no bank account or use alternative financial services.
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Saturday, December 25, 2010

Business factoring

Business factoring is used by companies with accounts receivable balances in order to improve their cash-flow situation. Factoring is the process whereby a finance company provides immediate money against a company's outstanding invoice balance. The receiving company obtains immediate cash in return for a fee paid to the finance company.
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Friday, December 24, 2010

Entrepreneurial spirit

The U.S. holds an unprecedented entrepreneurial spirit. According to the Small Business Administration, over 500,000 new companies with employees are created annually in the United States. Industry experts attribute the high rate to increased layoffs, less executive job security, and more flexibility to operate a business as a secondary source of income.
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Wednesday, December 22, 2010

Profit margin

A company's profit margin is defined as net income divided by net revenue. Profit margin is usually expressed as a percentage. Calculating profit margin allows for normalized comparison of companies in the same industry. Higher profit margins indicate good performance while lower margins indicate inefficiency. Profit margins vary from industry to industry.
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Tuesday, December 21, 2010

Customer service

A Rockefeller University survey found that almost 70% of customers leave because of perceived rude or indifferent behavior by an employee, versus about 20% combined for price and product quality. Another study of customer complaint behavior, conducted by research consultancy TARP, found that only 5% of customers with problems complain to management while 50% simply walk away.
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Monday, December 20, 2010

Delegation guidelines

The hallmark of good supervision is effective delegation. Author Thomas R. Horton suggests the following delegation guidelines: delegate the entire task to one person; select the appropriate person; clarify the preferred results; delegate responsibility and authority; ask for a summary back from the delegatee; get progress feedback; evaluate and reward performance.
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Sunday, December 19, 2010

ROI

ROI stands for Return On Investment. The simple ratio is used to evaluate the net benefits of a project or investment versus its cost. In math terms, the ROI ratio equals the benefit divided by the cost. ROI is a popular method due to its simplicity. If the resulting ROI is negative, the project or investment is deemed a poor investment.
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Saturday, December 18, 2010

The customer is always right

The phrase "the customer is always right" was coined in the late 19th century by Marshall Field and Harry Gordon Selfridge for Marshall Field's Department Store. Nordstrom adopted the same customer philosophy during the 20th century and became American's largest specialty retailer. Nordstrom's legendary customer service has been the subject of books, magazine features, and countless news stories.
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Thursday, December 16, 2010

Green business

A green business is an ecologically-friendly business. It is not limited to any particular market — it could be any kind of product for any market. What characterizes a green business is that it is run in such a way as to conserve natural resources, eliminate waste and remain ecologically in balance. Addressing climate change is the number one perceived green issue among most businesses.
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Wednesday, December 15, 2010

The Leadership Engine

"The Leadership Engine: How Winning Companies Build Leaders at Every Level", by Noel Tichy and Eli Cohen, suggest that effective mangers lead as well as manage. The authors conclude that the best companies have "good leaders who nurture the development of other leaders at all levels of the organization."
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Tuesday, December 14, 2010

Multitasking

Several research studies have concluded that multitasking can actually result in less productivity and efficiency. Researchers conclude that for various types of tasks, people lose time when they switch from task to task. Further, as task complexity increases, lost time increases. The stops, starts and interruptions of multitasking generally slows people down in terms of bottom line output.
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Monday, December 13, 2010

Standard Oil

John D. Rockefeller built Standard Oil during the 19th Century, earning him the distinction of being America's first billionaire. Standard Oil was established in Ohio in 1870 and by the turn of the century became one of the largest multinational corporations in the world. Standard Oil was broken up into 34 independent companies in 1911 by the U.S. Supreme Court under the Sherman Antitrust act.
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Sunday, December 12, 2010

The 50-50-90 rule

The 50-50-90 rule suggests that anytime you have a 50-50 chance of getting something right, there is a 90 percent probability you will get it wrong.
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Saturday, December 11, 2010

The 80-20 rule

The 80-20 rule, also known as the Pereto Principal, states that for many events, 80% of the effects come from 20% of the causes. The business application of this rule of thumb says for most companies, 80% of its revenue comes from 20% of its customers.
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Friday, December 10, 2010

Internet search

Internet search engines are no longer limited in querying only web pages for results. The web has evolved into a vast collection of files that support a variety of applications. Google's Universal search and Yahoo's Glue search well beyond web pages, bringing back results from images, video, news, blogs, and even from specific web sites such as WebMD and Wikipedia.
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Thursday, December 9, 2010

Endowments

Nearly 80 universities have endowments over $1 billion, according to data compiled by the Boston Globe. A robust stock market and generous donations have helped boost endowments to record levels. Some lawmakers are calling for more endowment spending to offset tuition increases. They suggest requiring colleges to spend at least 5 percent of their endowments each year, as nonprofits are required.
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Wednesday, December 8, 2010

Competitive advantage

The most important attribute that Warren Buffet looks for in a company is "sustainable competitive advantage". According to author Erica Olsen, competitive advantage can be boiled down to one question: what is a company best at in its market and why? Olsen suggests that the best companies always understand their competitive advantage and make it a key aspect of planning, strategy and growth.
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Tuesday, December 7, 2010

China

China is an economic superpower. According to the World Bank, China has been the world’s leading producer of steel, copper, aluminum, cement, and coal for several years. China is second in oil imports and is the world's second largest auto market. With ample supplies of money, resources, and people, the world's fastest growing economy will continue its unprecedented growth into the 21st century.
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Monday, December 6, 2010

Energy costs

CEOs have ranked energy costs as one of their biggest challenges, according to the Business Roundtable's Energy Task Force. Energy prices are rising in the face of increasing demand. Public policy has leaned against nuclear and coal energy sources, drilling and building oil refineries. At the same time, global demand has risen steadily, especially from new powerhouse economies in Asia and Europe.
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Sunday, December 5, 2010

Social computing

Social computing, via websites such as FaceBook and Twitter, puts power in communities, not institutions. As more individuals use the Internet to shop, work, and exchange ideas, a more egalitarian social structure is emerging. Individuals take cues from one another, rather than traditional sources of authority — like corporations, media outlets, political institutions or organized religions.
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Saturday, December 4, 2010

CEO Express

CEOExpress.com, the executive’s interface to the Internet, employs expert human editors and "mind ergonomics" to deliver the most critical and useful web information in a clear, easy-to-use format. CEOExpress filters and organizes the content executives need on the Internet while adding features to the site to make their lives even more streamlined and efficient.
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Friday, December 3, 2010

Vacation benefits

There is no federal law that requires employers to provide vacation time, paid or unpaid, to its employers. Most employees consider it to be one of their most important benefits. Workplace experts agree that it is important to productivity and morale for employees to take time off in order to rest and rejuvenate. The typical U.S. worker receives ten vacation days per year.
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Thursday, December 2, 2010

10/80/10 Performance Principal

The 10/80/10 Performance Principal identifies workers in three categories. The first 10% are self-starters; they possess the right skills, knowledge and beliefs to be highly effective. The middle 80% represents the adaptors; employees with some of the skills and knowledge to be successful. The last 10% represent workers that will not be successful regardless of training or direction.
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Wednesday, December 1, 2010

MBA degrees

George W. Bush is the first U.S. President to hold an MBA degree. Dartmouth College established the first graduate business school in 1900 offering an advanced degree in commercial sciences, the fore bearer of the modern MBA. Today, more than 100,000 MBA degrees are awarded each year in the U.S. The estimated average cost of an MBA at an accredited institution is about $80,000.
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