Managed investment scheme Essay Example

Managed investment scheme Essay In Australia, investor can choose from a wide vvariety of investments which include managed investment schemes (MIS) and direct investment which consist of shares, debt and hybrid securities. Each investment scheme will a set of corporation act to protect its investor, as it is important to make iinvestors feel confident and secure. Iinvestors can choose the types of investments to invest in depending on their personal traits and ambition as the different investment contains different characteristic. We will dive in more on MIS, direct investment and hybrid investment together with each of their advantages and disadvantages next. Managed investment schemes Manage investment schemes, otherwise known as collective investment schemes, are schemes in which funds are gather from different investor to invest in a common investment, usually a high risk investment that deals with huge amount of money. Under s 9 of the corporation act 2001, a manage investment schemes consist of three elements. Investor contributes money or moneys worth, theres a generation or intended generation of a financial return or benefit and the investor do not have day- to-day control over the use of the money. We will write a custom essay sample on Managed investment scheme specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Managed investment scheme specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Managed investment scheme specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Under s 601 EA(4) states that a registered MIS requires to have a responsible entity (RE) which would be responsible for any losses or damages from violating Ch 5c. The RE is also a trustee of the scheme. The RE also have to fulfil his duties, under the s 601 FC (1), he must act honestly, exercise a degree of care and diligence, act in the best interest of the members, treat all members equally and he cant make use of information gathered as RE to gain improper advantage or cause detriment to members. Under s 601 MB, Contracts is considered as voidable at the option of the investor if the MIS is found guilty of violating any of the act. The advantage of MIS is that the investment will be undertaking by a professional investment manager which could offer a better returns and risk management because of his experience and knowledge. Moreover, it can help reduce risk by diversification, it works by investing in different company, usually companies that has a negative co-relation, reducing losses if the price of one company drop. Another benefit is that it the cost is shared among the other investor. The disadvantages of MIS is the loss of owners rights, allocation and uses of funds will be determine by the fund manager. Although MIS is a very lucrative piece of investment, the amount of returns will be reduce because of the cost of the fund manager, normally they will expect a ppercentage of returns from the overall earnings. Debt financing Debt financing is a type of tool companies used to raise capital through borrowing. Creditors are entitled to fixed interest pay out and will be able to get back the invested amount at the maturity date. Debt financing are usually considered as a stable and low risk investment thus the return are lower than the others. Debt financing consist of bank finance, trade finance, debentures and private debt. Debentures is the rights to enforce a companys undertaking to repay the debt owe as stated in s 9 or the corporation act. Section 124 of the Corporations act 2001 allow companies to issue debentures and to borrow through the use of the debentures. Deoentures can De rea011y transTer ana can De llstea on tne Australlan stock exchange (ASX). The advantage of the form of investment is that the interest pay-out is fixed and the investor will be able to get back the amount invested at the predetermined maturity date. Lenders are place ahead of equity holder in the event of liquidation. The downside to this is that there wont be any growth on the principle of loan because it is fixed. Unlike equity holders, creditors cant get involve in the day to day operation of the company or vote. Equity Equity financing is one of the ways a company can use to raise money through the sales of shares. Shares consist of ordinary shares and preference shares. By buying the shares of a company, investor will also gain owinership of company, the size of the owinership will depend on the amount of shares one held. Under section 124 of the corporation act 2001, any of the company will be able to issue shares but only a ublic company will be able to offer its shares to the public. Disclosure document such as the prospectus, profile statement and offer information statement are required under chapter 6d of the corporation act. The prospectus offers protection to the investor who wish to purchase shares from a company by disclosing all information. The benefits of investing in shares is the ability to collect dividends, dividends will be decided by how much the company has made. Another major benefits is the ability to make capital gain by selling shares, because shares are known to be volatile, prices may move up and down at any time, capital gain can be ade if shares is sold when it is rising. The negative side of investing in shares is that it is risky. Shares prices might crash and investor would suffer losses. Furthermore, equity holders are ranked before bond holders when the company goes into liquidation, shares holder may or may not be able to get their money back. Hybrid securities Hybrid securities are a form of securities that combines debt and equity instruments. The most common form of hybrids is convertible bonds. Convertible bonds allows the owner to convert bonds into shares at todays price. The main advantages is that it as a fixed interest repayment like a bond, iinvestors can also choose to convert it to a shares if the company is doing well. Making a profit from the dividend or by capital gain. The downside is that it has a low interest pay out as compared toa bond and it is ranked after bonds holder in the event of liquidation. I would invest the $10 000 into government bonds. Government bonds are consider as one of the safest investment and it will be logical to invest in it as I wanted income first and growth second. Besides, I would be able to collect the interest pay out and the invested amount at the maturity date.

Organizational Diagnostic Models Congruence Model

Organizational Diagnostic Models Congruence Model Congruence Model The congruence model developed by Nadler and Tushman is an organizational diagnostic model that is seen to be similar to the open systems theory which stipulates that organizations are social systems that depend on the environment for their inputs. Nadler and Tushman (1980) described congruence as â€Å"the degree to which the goals, objectives, needs and demands of one organizational component are consistent with the goals, needs and demands of another component† (p.16).Advertising We will write a custom report sample on Organizational Diagnostic Models: Congruence Model specifically for you for only $16.05 $11/page Learn More Inputs within the congruence model include factors such as the organizational resources, the internal and external environment, history of past organizational behavior and organizational strategies. Nadler and Tushman (1980) describe the resources of an organization to be capital, technology and employees. Orga nizational strategies are the inputs that will be used in the model while the organizational environment is made up of the individuals, groups and institutions outside the organization that will be analyzed. History of past behavior involves looking at previous performance and whether it will affect the organizations present activity while inputs are viewed to be the most important strategies an organization incorporates. The system components in the Congruence model that will be used in the transformation model include factors such as formal and informal arrangements, individual components, tasks which will be performed by the organization and the informal organization. The outputs include individual behavior and how this behavior affects the organizational tasks, group and inter-group behavior and system functioning. The weakness of this model is that the congruence or fit between the internal variables at times presented a challenge to the organization. McKinsey 7S Framework The McKinsey framework was developed by Pascale, Athos, Peters and Waterman in the 1980’s. They worked as consultants for the McKinsey Consulting Company. The 7s model was developed around seven factors that created an awareness on the basis that when the seven factors are used together they are able to assist in the formation of a better organization. The seven factors or components of the 7s model are structure, systems, strategy, shared values, skills, style and staff. Strategy involves determining the proper course of action that will be used to achieve a desired goal or objective. Structure highlights the relationship between an organizations process and human resources that are used to fulfill objectives and goals. Systems are the infrastructures that are used by the organization such as machinery, or technology while staff is the human resources of a company.Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper wi th 15% OFF Learn More Skills are the unique characteristics that each staff member possess while shared values are concepts that an organization uses to achieve a common purpose through common goals and objectives. The weakness of this model is that most companies focused mostly on the strategy, structure and system components of an organization neglecting staff, staff skills, shared values and style. Also most organizations saw changing one variable would change all the other variables which was a false misconception (Falleta, 2008). Burke Litwin Model This causal model was developed by Litwin, Stringer and Tagiuri in 1968 for the purpose of organizational change and performance and was later refined by Burke in 1980. The model is made up of twelve organizational variables, distinctions between culture and climate of an organization as well as transformational and transactional dynamics, and specifications on the nature and direction of the organizational variables. The twelve variables include mission, external environment, strategy, culture, work climate, leadership, organizational structure, systems, individual skills, motivation, needs and values, individual and organizational performance (Falletta, 2008). The external environment is considered to be the input of the model while individual and organizational performance is considered to be the outputs in this organizational diagnosis model. The remaining variables represent throughputs in the open systems theory. The strengths of this model are that it represents the reality of organizations in a more accurate way; the relationships between the variables represent an accurate picture of what goes on in the organization. The weakness of the model is that the relationships between the variables keep changing with time and the model has to be refined to adapt to the changing organization. Organizational Intelligence Model This model is a more recent diagnostic tool developed by Falletta in 20 04. The intelligence model includes several elements that are similar to the Burke Litwin model as well as additional elements that define employee performance.Advertising We will write a custom report sample on Organizational Diagnostic Models: Congruence Model specifically for you for only $16.05 $11/page Learn More This model is made up of eleven variables which are environmental inputs, leadership, strategy, culture, organizational structure and adaptability, information technology and systems of the organization, the direct manager or supervisors effectiveness, measures and rewards, employee engagement, growth and development and performance outcomes. The environmental inputs affect the organization from the outside while the strategic factors such as strategy, culture and leadership, structure and adaptability, direct manager effectiveness, rewards, growth and development affect the inside. While this model is viewed to be similar to the Burke Litwin model, there are several notable differences which are that the intelligence model emphasizes the concept of employee engagement, and it depicts and emphasizes on growth and development as a key feature of recruiting and retaining employees (Falletta, 2008). Force Field Analysis This model was developed by Kurt Lewin in 1951 as an analytical model for managing organizational problems. The model is simplistic in that it represents few factors within the organization which are the driving and restraining factors. The driving forces are the environmental factors that push for change in the organization while the restraining factors which act as barriers to change are found within the organization. The model relies on organizational change with the main goal being to shift the organization to a more desirable state by adding driving forces and eliminating restraining forces. These changes are thought to occur simultaneously within the organization. The major strength of this model is th at it offers a simplistic view of diagnosing an organizational situation. A major weakness is that a case of disequilibrium might occur during the transformational process (Falletta, 2008). Leavitt’s Model Fourteen years after Lewin developed the force field analysis model, Leavitt designed another simple model in 1965 with similar concepts. The model specified particular forces or factors within an organization which were task variables, human variables, technological variables and structural variables. The major weakness of this model was that even though Lewin described the four variables to be interdependent and dynamic, the model was too simplistic to make any causal statements regarding the variables. The model suggested that making changes to one variable would result in a retaliatory change in the other three variables. This was seen to oppose the driving and restraining forces in Lewin’s model. The Leavitt model did not address the role of the external environ ment in bringing about change.Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Issues affecting Palm Company Palm has been facing various issues mostly related with its finances and products; it was facing financial difficulties which saw it being bought by Hewlett Packard for $1.2 billion dollars (Patel, 2010). Some of its products such as the Palm Pre and handheld devices have features that are similar to Nokia’s smart phone products and Microsoft’s pocket PC’s. Nokia and Microsoft are viewed to be the major competitors of Palm because of the similarity of products. This has created a challenge for Palm to differentiate itself from its rivals. Another issue affecting Palm Company is the ever changing technology industry which sees new innovations coming out everyday. Companies such as Nokia have introduced the PDA feature into some of their phones which has given them a competitive advantage over Palm. Customers will most likely go for the Nokia phone that has PDA function rather than opt to buy separate Palm devices that have smart phon e and PDA devices (Palm Inc. 2010). Recommendations To deal with the issues faced by Palm, the management executives should use the organizational intelligence model for the organizational diagnosis of Palm. This is because this model portrays an accurate representation of the modern day organization which is one of its major strengths. The close similarity of the variables found in this model with the Burke-Litwin model gives it a stronger basis to be used in solving Palm’s problems. This model considers variables such as the structure and adaptability of the organization, information and technology, growth and development as part of its components which are not evident in the other organizational diagnostic models. Such variables are important to deal with Palm’s current problems. The technology issue experienced by Palm especially with its products being similar to those of Microsoft and Nokia will be solved by carrying out diagnostics on the throughputs of informat ion and technology and also the structure of the organization to enable it to adapt to the changing technological climate. The intelligence model will allow for diagnostic operations to be done on the IT infrastructure of the Company as well as the business systems that are in place. The structure and adaptability variables will allow for the diagnosticians to see whether the current organizational structure is working for Palm or not. After the acquisition, the organizational structure should change to reflect new levels and responsibilities that will see the development of new and unique product lines. Growth and development will see employee skills in technology being developed and improved to meet the changing market. References Falletta, S.V. (2008). Organizational diagnostic models: a review and synthesis. HR  Intelligence Report. Web. Nadler, D. A. Tushman, M. L. (1980). A model for diagnosing organizational behavior.  Organizational Dynamics, Vol. 9, No. 2, pp 35-51. Pa lm Inc. (2010). About Palm: mobile products for extraordinary lives. Web. Patel, N. (2010). HP bought Palm after a five-company bidding war. Retrieved from engadget.com/2010/05/16/hp-bought-palm-after-a-five-company-bidding-war/