Global operations management - multiculturalism and diversity Essay

Global operations management - multiculturalism and diversity management - Essay Example There are back office, front office, retail and wholesale operations as part of the operations management. Customer service is another area focussed by the operations managers. Customer service determines the success and failures of a business. It is aimed at building active relationships with the customers. Because of the highly globalized business environment at present, operations managers of modern era forced to interact with diverse customers and hence the success of operations managements at present depends on how well the operations managers are able to manage the multiculturalism and diversity in business. This paper briefly analyses the current operations management issues with respect to multiculturalism and diversity management. Some of the issues the host foreign country could face as a result of the expansion   The major issue in internationalising a business is the issues with respect to diversity and multiculturalism. No two individuals are alike; same way no two cou ntries are alike. Countries may differ socially, economically, politically, legally and culturally. All these aspects have a big say in operations management and hence success of international business depends on how well a country deal with these issues. ... ternational business (Victor, 2009) Communication is one of the vital segments of every business activities and language barriers often spoil effective communications. Communication may occur between the organization and its customers and the knowledge of a common language is necessary for effective communication. The business environment in different countries is different because of the economical, political, legal and social differences. For example, America and China are two entirely different countries politically, economically and socially and hence while doing business with China, America should consider the issues related to diversity and multiculturalism seriously. Social organizations in America and China are entirely different because of the cultural differences. In America, religion is a big entity whereas in China, it may not be the same. It is not necessary that two parties in a communication process may have similar knowledge or level of information (Contexting) in the topic of negotiation, especially when they happen to be of two different cultures. In other words, Americans and Chinese may have different levels of contexting and the knowledge of these differences is essential while conducting business negotiations. Authority and leadership styles are other areas in which America and China may differ. Americans are more dominating types compared to Chinese people. â€Å"The view of authority in a given society affects communication in the business environment significantly as it shapes the view of how a message will be received based on the relative status or rank of the message's sender to its receiver† (Victor, 2009). Non verbal communication, and the understanding the importance of time etc are also different in different countries which should be

APT- Arbitrage Pricing Theory and CAPM-Capital Asset Pricing Model Research Paper

APT- Arbitrage Pricing Theory and CAPM-Capital Asset Pricing Model - Research Paper Example In the action of comparing investments’ returns and risks, if CAPM or APT is well utilized, they will reflect on whether one ought to invest in a given firm or another. The formulas to these two methods are given under; CAPM Re= Rf + ÃŽ ²*(Rm – Rf) Where; Re = Required return rate Rf =Risk-free return rate ÃŽ ² = Beta, which is the market risk factor premium Rm = Expected overall market return rate (valuebasedmanagement.net, 2011) APT Re = Rf + (Individual risk factor premium*Relationship between the factor and price) + (Individual risk factor premium*Relationship between the factor and price) Generally, these two methods are different in that one (CAPM) uses beta- which is the risk factor of a given stock in relation to that of the market. Therefore, if beta equals 1 this stock is equally risky with the market, if it is 2 the same stock is twice risky in comparison to the market. While on the other hand, APT utilizes individual factors in place of beta. Also APT does not apply the market return rate and thus considered to be more particular to a given stock in focus. CAPM’s data is objective while APT applies data from a single stock. Thus, CAPM is recommendable to an investor who is relatively dormant as compared to APT, which if correctly applied is better placed to assess projects. (Grover, 2010) Some authors have applied APT and compared the resultant estimates with those of CAPM. Patterson notes one of the cases where such has been done is the electric utility’s, written by Ross and Roll in their 1983 book. According to Patterson the end results of APT were credible in comparison to those of CAPM. But, this was without enough justification of the results. (Patterson, 1995 p151) Besides the first two, there are methods of assessment like the Dividend Growth Model and Modern Portfolio Theory. The Dividend Growth Model shows the value of ordinary shares in present value of the prospected future flows of cash which has been invested by an investor. The receivable cash inflows are taken as dividends as well as the expected price in future while the stock will be disposed. An ordinary share usually does not possess maturity and thus, it is held for numerous years. Therefore, a general ordinary shares’ valuation introduced by Gordon would be as below; P0 = ?t= 1â₠¬ ¦? Dt/ (1+r)t Where; Dt = dividend in duration t P0 = current stock price in the market r = constant yearly rate of growth of dividends t = number of given durations of periods (Siegel, et al 1997 p140) Just to mention, the other model investment assessment is known as MPT- Modern Portfolio Theory. This is a theory applied by investors who are risk averse and at the same time they want to achieve maximum or optimum level of expected return which is based on the market risk level. It emphasizes that risk is inherent in the process of getting the rewards associated with it. MPT is sometimes called the ‘Portfolio Management Theory’. As per the argument of this model, it is a possibility to come up with an efficient frontier that depicts optimal levels of a portfolio giving the maximum rate of expected return at the given risk levels. (investopedia.com, 2011) The study is set out to explain that the most recommendable model in the assessment of investment projects is CAPM . First things first, though, since lack of consideration of the assumptions would not lead to a comprehensive outcome of the study. The model of CAPM has the assumptions mentioned below forming its basis; Persons seek to achieve maximum utility of their investment portfolio over a given duration of planning horizon, Persons involved are risk averse, Persons have expectations