Operational Risk Management

The basic components of a risk management system include identifying and defining the risks the firm is exposed to, assessing their magnitude, mitigating them using a variety of procedures, and setting aside capital for potential losses. Economic modelling is used well in achieving these. The development of empirical models of financial precariousness leads to increased modelling of market risk which is the risk arising from fluctuations of financial asset pricing. Concerning credit risk, models have recently been developed for large scale credit risk management purposes. Categorizing and modelling of risk has some complications and sometimes they do not cover all aspects of the business, for instance, in modelling risk associated with transactions, we will usually not put into consideration electrical failure, employee fraud, natural disasters and risks of such nature. Operational risk modelling creates arrays for such unforeseen events. The current status of operational risk management by financial institutions nurtures a lot of arguments and uncertainties, explorations on the subject tenders the complexities associated with it. More concrete solutions to risk management have been formulated through the contribution of the (BCBS) Basel Committee on Banking Supervision. A new Basel Capital Accord, known normally as the Basel II Accord was proposed in 2001 by the Bank of International Settlement defining some key requirements of a well-defined model for operational risk management from an operational excellence perspective and part of an integrated performance platform. going beyond Basel II and using ORM as a transformational dais.

Providing Integrated Logistics Management

The root of effective supply chain management lies in managing the logistics well and dealing with them in an effective and efficient manner. The implementation of all plans should be quick and such that the flow of distribution is dealt with correctly, whatever its nature. It can either be the forward flow or the reverse flow. (James, 1994)When it comes to business, there can be two kinds of logistics, based on the kind of focus that they have. They are inbound logistics and outbound logistics. Both of them cannot be done in isolation, though many businesses are treating them as separate fields and areas. The challenge that every business has to face now is to do the planning of inbound logistics, keeping in consideration the volumes that outbound transportation brings which ultimately helps in accelerating the level of collaboration, coordination and consolidation that one expects should be the result of logistics management. (Pegels, 2005)The first kind is that of inbound logistics, which has an internal focus. It is also known as physical supply. It deals with the procurement process which is external and which occurs in a series of steps as soon as the goods are received. As far as transportation planning is concerned, the concept of inbound logistics has gained wide acceptance and has become the major process within this domain. (Brindley, 2004)There are five business processes involved in inbound processing. The inbound logistics process starts when there is a receipt of goods, which is basically a requirement to a purchase that has been made from a company. it can be called a follow-up activity. The finances of the company, as well as the figures for the inventory, are updated. And therefore, it encompasses the services of warehouse management and quality management.

International and Traditional Entrepreneurship

International entrepreneurship can be defined as a general means of creating grounds for business success, generating new ideas, as well as creating a base for economically setting up value creation in another country. This definition of international entrepreneurship arises from the fact that IE arises from the desire to expand its operation beyond the borders of the countries of their operation. International entrepreneurship is becoming increasingly important in many economies around the world as corporations take advantage of the vast opportunities availed by globalization. Consequently, companies, both small and large multinationals, are increasingly finding it necessary to expand their operations into other countries or regions so that that they can tap the numerous benefits availed by such ventures. Hence, a perfect definition for international entrepreneurship must entail the desire to create a successful business venture in a country different than the present country of operation. My definition captures this aspect of IE.Although the wording used in defining IE differs from one scholar to another, almost all of the definitions point to one area: that of seeking out and conducting new and innovative business activities across national borders. For example, McDougall and Oviatt (903) define IE as ‘a combination of innovative, proactive, and risk-seeking behavior that crosses national borders and is intended to create value in organizations’. On the other hand, Zahra and George (45) defined IE as ‘the process of creatively discovering and exploiting opportunities that lie outside a firm’s domestic markets in the pursuit of competitive advantage.’ I agree with these two definitions as they point out to companies becoming innovative and opening up business opportunities outside the company’s domestic market, or simply embracing innovativeness with an aim of expanding operations across the international border. McDougall and Oviatt go a step further in their definition to state that IE creates value in an organization. This is absolutely right as IE elevates the profile of a company to that of a multinational, particularly if it establishes markets in numerous international markets. Expansion into foreign markets also adds value in form the company gaining skills and experience from the challenges and successes realized in the foreign markets. The same concept is captured in by Zahra and George’s definition of IE when they mention that companies establish operations in foreign markets in pursuit of competitive advantage.

The Comprehensiveness of North American Online Reservation Systems

According to Clemons and Hann (1999), the drastic changes that are being experienced by the travel industry can be associated with the dynamics of the competitive environment. Before the extent of the impact of these modifications in the wider market is assessed and analyzed from a comprehensive perspective it is necessary to highlight the fundamental challenges which Rosenbluth International currently faces. Clemons and Hann (1999) state that an extensive trend which has been observed within the industry by analysts highlights the alarming situation for travel agents as hotel chains and airlines intend to raise the scope of their revenue generation by launching electronic distribution systems. Furthermore, Carroll and Siguaw (2003) claim that the popularity of internet-based room reservation has allowed hotel owners to gain complete control over various methods of distribution which is threatening to the wellbeing of Rosenbluth International. Another challenge faced by Rosenbluth is not only rooted in external competitive pressures that are posed by other travel agents but is also caused by the commission cuts which have been introduced by hotels and rental companies thereby, prompting the organization to raise its charges by $10 to $15 (McCubbrey, 1999) to soothe the incurrence of unexpected expenditures. An examination of the case suggests that the challenges being faced by Rosenbluth are largely based on an increase in expenses and a decrease in the revenues being generated by the firm due to the introduction of electronic distribution systems by major travel-based businesses and a reduction in commission caps that are being earned by competing organizations. However, once the case is viewed from a varying perspective it can be comprehended that the issues which Rosenbluth is currently experiencing are also a consequence of the widespread availability of substitute services such as bargain prices and the incorporation of effective and pioneering business models such as reverse auction and auction. Given the present scenario and the challenges posed by the competitive environment in which Rosenbluth International operates, it would seem most appropriate to install an online reservation system to equip the organization with the technological tools that are needed to address the challenges that have surfaced in recent years. As suggested by Buahlis and Law (2008) recent trends are indicative of strong growth and expansion in the use of ICT to assist and aid the process that is associated with travel and tourism. Due to the emergence of this aspect, the role of travel agencies and agents in assisting their customers in fulfilling the necessary conditions such as making a hotel reservation or booking an airline ticket before embarking upon their journey has declined drastically (Morrison et al., 1999).

Small vs Big Business Market Competition

Second factor is the manufacturing, which pertains to the quality of the raw materials that will be used for the product or service. Market availability is also a very important factor in terms of competition. In some instances, competition can also be in terms of availability, not all products and services can be readily available in the market at all times, and in cases like this end users have to get what is available.Product and service pricing, would actually depend on the current market prices, these prices are more often termed as the standard market prices. Benchmarking of prices actually depends on the economical standing of a specific industry, this is why prices cannot go up or down easily. It also determines the profit against capital and ROI or return of investment for a certain business.There are three main characteristics of a small business (Fuller, p.6). First, it has no market power, meaning to say, that since it has small market share, it will be unable to affect its business environment, national prices or national sales. Second, the owners run the firm in a personalized way, in other words, the people who run the company are the owners themselves and so there is no complex management or organizational structure since the main people who run the firm are the owners themselves. Third, the firm is independent, meaning to say, since the firm is not part of a larger business organization, it is able to make its own independent decisions without taking into consideration an approval from a larger firm.The main objectives of a small business are profit and ownership (Fuller, p.13). Their purpose is to achieve the highest income possible for their company and for a return of investment.

Reverse Logistics Principles

In simple words, reverse logistics is all about moving products from their end point of use in an attempt to try and give them another usable form. According to the Reverse logistics association (2009), reverse logistics encompasses all those activities that appertain to products or services after their sale point, the main aim being to maximize on the product in question so as to address other concerns that relate to environmental and money aspects. On the basis of Smith (2009), reverse logistics is simply the handling of returns of a product. For Smith, logistics reversal happens when customers return the products they had purchased for a variety of reasons. Smith has identified five components of reverse logistics: restocking, repackaging, repairing or reconditioning, returning to the vendor, and retaining of scrap.On restocking, the un-opened items are taken straight back to the existing inventory. If the goods had been re-opened, they are repackaged and put back to the selling shelves (Moschis 2005). If the products are found to be faulty, they are reconditioned to meet the minimum level as per requirements and either given back to the customer or put back to the inventory if the customer is unwilling to re-take it. If the faults on a product cannot be corrected, then it is imperative that they be taken back to the original vendor. In the event that a product’s recovery value is zero, then that is taken as scrap.According to Gardner (2005), there are four reasons that necessitate a reverse logistics strategy. They include: product recalls, adjustment of stocks, functional returns, and business by business commercial returns. For one to be able to run a successful business as a result, it is advisable to develop a reverse logistics system that adequately addresses customer and business concerns.Reverse logistics are difficult to handle especially in terms of costs and inconveniences that negatively impact on sales at least at its onset.

The Perfectly Competitive Firm

A market is said to be perfectly competitive when the number of buyers is so enormous, that many small firms are required to participate in the market in order to meet these buyers’ demands. Because both the firms and the buyers are small enough to influence the price, both buyers and sellers can only take the market price of goods as to where to base their transactions. Any deviation from the market price will bring the firm back to the market price in a perfectly competitive situation.When a firm raises its price beyond the market price, selling a product the same as what the other players in the industry are selling, the buyer has no incentive to buy in that firm because he or she has many options from where to buy those products. This does not give any firm in a perfectly competitive market any advantage to increase the price they offer. therefore they accept the price in order to maximize their profits. Hence, these firms in a perfectly competitive market are called price-takers.In a perfectly competitive market, variable costs are a vital part of determining the company’s survival. Because a firm competes in a market where the price cannot be determined by any single firm as it is small enough to influence it, when the market price goes down and puts firms into losses, the firm in the short-run still has an incentive to continue on its operations rather than to completely shut down its business.Firm’s costs are classified according to variable costs and fixed costs—variable, in the sense that a cost’s behavior is consistent with sales, and fixed in the sense that any level of sales will not be able to affect it given a certain range. When a firm’s revenue still produces enough to cover the amount of fixed costs for a certain level of price, the fixed costs is still smaller than what costs the firm when it shuts down. When the market price falls below the firm’s ability to support its fixed costs, only then will it givefirm the incentive to shut down its operations.

Continuous Quality Improvement in the U S A Military

The paper details the efforts of both the Marine Corps and the Air Force to implement systems controls aimed at improving our capability to respond to a rapidly changing external environment. Examples include linking statistical controls to performance assessment, the standardization of procedures in support of the combat mission, a renewed emphasis on training in the concepts of knowledge management, and establishing quantitative metrics that are benchmarked across all four of the major combat departments.The ability to respond quickly in a combat-ready manner to multiple threats around the world is what the new quality initiatives are designed to achieve. The “old culture” of war is no longer in the national security interests of the United States. Next-generation quality models such as CPI/LSS are the way of the future if the United States military is to remain the best quality force in the world.The United States military has long been known for its innovative and pioneering work in several areas. Many of the best business practices that are taken for granted by today’s business managers had their origins in our military organizations. The United States Armed Forces is built upon a tradition of quality in the forces that it trains for combat and in the weapons systems that it deploys in protecting our national security interests around the globe. This paper argues that the Continuous Process Improvement/Lean Six Sigma (CPI/LSS) policy implemented by the Department of Defense (DoD) in 2006, was critical in reorienting the United States military in addressing a new type of war—the global war on terrorism. The reality is that the military was ill-prepared to deal with this new threat because its systems were designed to fight conventional wars and were not adaptable to the rapidly changing environment of global terrorism.

A New Business Idea in Sydney

The coffee shop, intended to be established following this market plan, after developing a better position in the market will aim towards increased profitability as well as towards being reputed as a renowned coffee shop in Sydney over the next two years. On the commencement of the coffee shop, the consumers will be provided with various high-quality gourmet and espresso coffee services and products which is currently observed to be highly favored by the local customer groups in Australia. The coffee shop will provide better quality coffee with enhanced fragrance or aroma and thus create differentiation within its market sphere. The shop will also be equipped with a friendly atmosphere and staffs so as to give high-quality service to the customers. In the future, i.e. almost within the next two years, the coffee shop with better positions in the market segment and demand will provide a variety of coffee products to its consumers. The products will include brewed hot and cold coffee products, pancakes with chocolate coffee fillings and ice creams with blended coffee aroma. It is worth mentioning in this context that the business of the coffee shop will be based on sole proprietorship. Sole proprietorship signifies that the business will be owned by a single individual who will be entitled to all risks as well as profits resulting from the conduct of the integrated organizational performances (Linn-Benton Community College, 2013). In the initial stage, the coffee shop will employ ten experienced staff, who will be liable to conduct various responsibilities in relation to the business functions and thereby render an effective structure as well as working culture to the company. To be precise, these staff members will be responsible for preparing coffee products and meeting the requirements of the customers to ensure consistent growth in customer satisfaction, which is often regarded as an essential constituent for the long-run sustainability of any new start-up firm.

Six Sigma

Organizations are established to be profitable. Successful and profitable organizations provide employment and pay taxes that consequently do good to the community, state, and nation where they manufacture their products or provide their services. Generating a profit is dependent on the number of customers who want an organization’s products and/or services. Customers’ wanting of an organization’s products and/or services is merely the initial step. Every customer has their qualifications concerning the product or service.Effectiveness through addressing and advisably surpassing requirements is merely half the challenge since to be a profitable business enterprise an organization must be efficient. Efficiency implies the quantity of resources consumed to become or maintain effectiveness. Aspects such as time, cost, labor, or value are good measuring tools of efficiency. Since business enterprises are established to generate profit, concentrating on the customer without also concentrating on efficiency will not be an excellent business decision. Six Sigma, as its elementary stage, is endeavoring to develop enhance both effectiveness and efficiency simultaneously (Larson 2003).A practical gauge of the number of unsatisfied customer experiences for every million opportunities in the framework underlying Six Sigma. Six Sigma is a determinant of customer satisfaction that is almost to excellence. The majority of organizations are situated at the two to three sigma stages of performance which implies “between 308,538 and 66,807 customer dissatisfaction occurrences per million customer contacts” (Eckes 2003, 4).Organizations that possess a two to three sigma stage of performance undergo business dilemmas. They are unable to generate as much profit as they are obliged to do for their shareholders. Shareholders usually get frustrated and out of focus.