General

Working capital is the comparison of current assets to current liabilities. For most organizations, current assets exceed current liabilities and working capital therefore represents the liquid reserves for meeting current obligations. Creditors prefer high levels of working capital since they are concerned about receiving payment. However, management prefers low levels of working capital since working capital earns an extremely low rate of return. Some companies are now driving working capital to record low levels, so-called Zero Working Capital. By keeping working capital at zero, funds are released for many other opportunities.

Effective decision making is paramount to the creation of value. And as things get more and more complicated, it's harder and harder to make effective decisions. So what are the key elements to effective decision making? According to Peter Drucker, the decision making process should make a distinction between generic conditions and unique situations. For the most part, many decisions are made as generic; i.e. you are facing a situation which is similar to another decision and you can therefore apply a set of rules and principles to the decision. A unique decision is not generic and thus you have no real guidelines to solve the problem. The biggest problem according to Drucker is that most managers try to force their generic type conditions into a unique situation. Peter Drucker also advocates the importance of feedback to make sure your decisions achieve their anticipated results.

Almost every organization says the same thing: People are our most valuable asset. However, when you see how people are actually managed, you have to conclude otherwise. Most organizations fail to manage their human assets for optimal performance.

Managing human resource capital is now mission critical. One of the most effective tools for managing human resources is the 360-degree evaluation process. Traditionally, an employee is evaluated from a sole source (1 degree), namely the immediate supervisor or manager. However, employees interact with numerous sources: Co-workers, customers, Managers outside the employees department, vendors, contractors, and others. The 360- degree evaluation process relies on these multiple sources, providing a more balanced and objective approach to measuring employee performance. This leads to higher productivity, better customer service, and enhanced organizational performance.