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Challenges

Budgetary Challenges Faced by Higher Education Institutions

Higher education institutions covering colleges and universities face budgetary challenges encompassing the reduction in the annual budget of public institutions from the decreased appropriation of the state government and decline in revenue generation from investment in private institutions; reallocation and rationalization of their areas of spending to meet the decreasing budget; and improving accountability practices. These challenges have a number of implications for higher education such as increasing the tuition fee burden of students, limiting student welfare services, and affecting quality of education.
The economic recession greatly felt by almost all the states since 2003 have strongly affected the budget of higher education institutions. In the case of state-run colleges and universities, these experienced unprecedented decreases in the budget appropriations of the state allotted to education. Although, it has always been difficult to obtain an increase in annual budget and state colleges and universities have previously experienced budget cutbacks, the economic recession has exacerbated the situation leading to the highest levels of decreases to date. (Trombley, 2003)
With regard to private higher education institutions, shifts in the stock market and the slowdown of the economy has resulted to lower returns from its investments that in turn led to a lower budget for allocation (Pratt, 2003). Although investments involve risks and the areas of investments of higher education institutions are always board-approved to prevent reckless investments, the economic recession has heightened the investment risk resulting to varying levels of losses and lower budget of private higher education institutions.

Due to a lower budget, higher education institutions needed to re-think their areas of budget allocation and look for ways of obtaining additional budget or cutting-back expenditures. One common response to a decrease in budget is to raise the tuition fee of students in order to raise funds to meet institutional expenses (Trombley, 2003). However, raising the tuition fee creates other problems. Since higher education institutions cut back on welfare services such as scholarships, they cannot support students experiencing hardships in meeting the increased tuition.
This is a problem in both private and public higher education institutions. Another solution to the decrease in budget is the reorganization of the administrative and academic personnel that in turn involves curriculum changes to remove or downsize courses with smaller number of enrollees (Pratt, 2003). Again, this creates new problems. Motivation for administrative and academic personnel decreases and education of students enrolled in the affected courses suffer. Overall, quality of education suffers with the solution applied to the decrease in budget.
Apart from the problems of decreases in budget and reallocation of limited resources, higher education institutions also face the problem of in efficient budget allocation and accountability problems. Inefficient budget allocation means non-optimization of financial resources because of overlapping tasks, bureaucratic systems, poor maintenance of assets, and other causes of inefficiencies in budget allocation and spending. Moreover, poor accounting systems also open opportunities for corruption and other means of resource wastage. (Pratt, 2003)
In private higher education institutions, poor and high-risk investment decision eventually affects its budget while resource wastage in public higher institutions also affects its budget. Even if higher education institutions have sufficient budget, this does not necessarily mean that these experience the maximum benefit from its financial resources.
As such, there is room for improvements in the methods of allocating financial resources that involves not only the implementation of budgeting and accounting standards but also changes in decision-making processes.
Reference List
Pratt, L. R. (2003). Will budget troubles restructure higher education?. Academe Online, January-February. Retrieved March 20, 2008, from http://www.aaup.org/AAUP/pubsres/academe/2003/JF/Feat/Prat.htm.
Trombley, W. (2003). The rising price of higher education. National Center for Public Policy and Higher Education. Retrieved March 20, 2008, from http://www.highereducation.org/reports/affordability_supplement/affordability_1.shtml.

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Challenges

Evaluating the ethos and challenges facing family business organizations: The case of Cengiz Holding

Company overview
Cengiz Holding is a family owned, leading multinational company with its headquarters in Istanbul, Turkey. Ever since its inception in 1980, the company has operated under the chairmanship of Mr. Mehmet Cengiz (Cengiz, 2012). Since its incorporation, the company has grown to become one of the leading investment companies in Turkey. Its main investments are in finance tourism, mining and energy sectors and are spread over twelve organizations. The company’s largest investment is in the construction industry. Most of its construction projects include airports, subways, motorways, dams, pipelines, bridges, railways, tunnels and telecommunication infrastructures alongside tourism abodes and amenities (Cengiz, 2012). In ddition to these, Cengiz Holding has recently diversified into insurance and aviation, yielding an effectual success within a very short time.
Abstract

The following paper seeks to evaluate the ethos and challenges facing family business organisations with Cengiz Holding as the company of study. The study critically analyses the scope and significance of family owned businesses highlighting both the advantages and disadvantages related to it. Further, the study presents the challenges faced by Cengiz Holdings in relation to family business organisations. In conclusion, recommendations are provided as to what Cengiz Holdings needs to do to help curb the escalating problems associated with family owned businesses.
The scope and significance of family business
In most companies, (Cengiz Holdings for example), family owned businesses are born out of the desire and autonomy for a family’s financial independence. For the last two decades, the aspect of family businesses has being subject of research and development with continued support from countries governments. The current developments can be attributed to an increased research and study on the subject, changes in policies and developments in cooperation networks (Kelin et al, 1997). The scope of family business has recently gained a lot of attention not only in the European Union but globally.
Family business account for over 70% of all business in the European Union Block creating an employment level of over 40% of the population leading to an increase on its benefits in the social economic development of countries economies. This has led the countries governments to form policies to foster the growth of family run business. An example of these policies includes the implementation of the 2008 European Council’s Small Business Act (kosgeb, 2012). This act was meant for European nations to help create viable environments for the development of family owned businesses (Quentin, 2010). The Competition and Innovation framework Programme (CIP) for 2007-2013 recognizes Cengiz Holding as a key example of successful family owned business despite its relenting woes and associated lawsuits.
Advantages of family businesses
Currently, it is estimate that family owned businesses contribute up to 70% of the every county’s Gross Domestic Product. These constitute a basis for significant advantage in terms of growth and development of the host country. These advantages include:
Common values among family members: Just like in most family run businesses, the Cengiz’s seem to possess similar ethos and beliefs on how the business should be conducted. This has helped in the solidification in the relationship among the family members creating strong business acumen amongst them.
Strong business commitment: The Cengiz’s Family members are known to commit a lot of time and resources for the development of the business than non-family members.
A sense of loyalty: It is evident that the Cengiz’s Family members are loyal to their own business. This loyalty has created a bond between them and the business fostering continued loyalty to the business and on to one another, creating a technique for endurance and determination for success at all costs. This can be proven at the 2009 Nokia and Motorola Lawsuits at which both family members boycotted the hearing process. This signified unity among family members.
Decreased operational costs: This is mainly realized through reduced labor requirements as Cengiz’s Family members constitute the largest number of employees of this business empire. The Cengiz’s Family members are also known to have made huge financial sacrifices towards the development of the company, reducing the cost of acquiring funds from elsewhere. i.e. loan costs and interests.
Creation of independence: being in a family business means that decisions are made by family members at their own interests. This limits external pressure in the business and all the profits realized are streamed to the business owners (Quentin, 2010).
Disadvantages of family businesses
There are certain disadvantages associated with family owned businesses. They include but are not limited to:
Lack of interest: Not all members of the family are born with a strong business sense. Sluggish family members might lead to the demise of the business.
Unfair rewarding system; Family members are likely to accept lower wages than non family members. This can limit financial incomes for the family members.
Lack of professionalism: Family owned businesses are unlikely to attract unprofessionalism from the family members as they are reluctant to employ professionals from the outside. This is the case in most of the major investments of Cengiz Holdings as the top management is mostly constituted of family members.
Financial constraints: Mostly, family businesses are faced with financial constraints in the case where family members are not in a position to raise the desired amount of cash for the development of the business.
Challenges faced by Cengiz Holding as a family business
Emotions from family members: Emotional outbursts from family members are known to affect non-family members who are employees of the institution. In return, this may lead to the formation of warring camps in the institution just like the case in the Cengiz holdings Business or family; which is which?: This is a major problem realized in Cengiz Holding just like any other family owned business entity. This can be affiliated to emotional attachment among family members in managerial positions. Business scholars and researchers have being engaged in debates to consider the involvement of women in the management of family owned business citing their leniency towards family than business which is likely to ruin their concentration in the affairs of the business (Kosgeb, 2012).
Succession planning: This is another key challenge realized in family businesses. As generations pass on, different family members have different opinions as to who should the management of the business be left to.
Unprofessionalism amongst family members: Family run businesses are usually faced by the dilemma in retaining unprofessional members of the family in the business. The Cengiz holdings family business has been faced with a range of law suits most of which are attributed to various members of the family. The company has faced cases of fraud, libel and even racketeering both termed to have been steered by members of the family. Also, the chairman, Mr. Mehmet Cengiz has being blamed for using his strong business empire to bolster his political activities (Hurriyet Daily News, 2012).
Organization structure: The lack of a well defined organizational culture has depleted the Human Resources department in the institution of most of its functions i.e. Despite various misdeeds, lawsuits and criticisms on the company’s chairman, he still retains the top seat. The 2009 Nokia and Motorola lawsuit against the company cost the company an enormous amount of money raising issues of management competence (Quentin, 2010).
Huge compensation plans for family members: Family members affiliated to the company are known to receive larger wages and salaries compared with other management professionals in the company. The company also suffers from financial constraints brought about by the misdeeds from its chairman and family members. During the 2009 Nokia and Motorola lawsuit, family members were issued with an arrest warrant should they set their foot in US soil. The chairman uses allowances from the company to cover his political asylums like the 2008 France asylum.
Conclusions and recommendations
The case of Cengiz Holding is one among many cases relating to family owned business. Having a business being operated by family member can either break or make the business. Cengiz Holding has been faced with various criticisms from the public and government citing misconducts among family members. According to the above findings, it is true to state that the unrelenting woes at Cengiz Holding can only come to an end if only the company could be left to operate without the participation of family members in its activities (Kosgeb, 2012). However, it is important to consider the fact that the business is highly advantaged in having a hand in knowledge on what is best for the company, a feature that is mostly missing in partnership and corporation businesses. Another dimension of a demeaning factor affecting the business is in social issues.
References
Cengiz Holding. 2012. Available on-line from

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Challenges

The Core Challenges of Managing Change in the Workplace Today

I am writing this article in order to identify how change is managed in business, given today’s economic downturn. In order to do this I am going to compare the experiences of a manager in a large business, which is faced with challenges and change nearly everyday.
This will give me an insight into the real challenges of a manager and how these compare to the examples given in the literature that is written around this topic. I have also chosen this topic, as it is appropriate for the module I study and I have to complete such research in order to further me in this module.Change is ‘an event that occurs when something passes from one state or phase to another. ’ (Worldnetweb – change definition) Although change does cause challenges which are difficult to overcome and can have negative outcomes as well as positive ones, ‘organizational success requires integrating both change and stability’ and ‘some cultures warn that organizations must change or dies’ therefore suggesting that ‘stability breeds complacency. ’ (Paula J. Caproni – Page 284) An expansion on change is change management, which is the part that the managers of companies are in control of.This management of the change is the process that prevents problems and deals with the challenges faced.
Change management is ‘an integral part of all managerial work that copes with the changing patterns of resource input and knowledge available to work organizations and the shifting demands made upon them by the parties with which they deal, and initiates changes that manager perceive to be in their interests or the interests of those who employ them. ’ (Tony Watson – Page 448) A challenge is ‘a demanding or simulating situation. (Worldnetweb – challenge definition) Challenges are a struggle for someone like a manager to deal with but are something that someone in such power becomes used to as they occur so often in a working environment. Sometimes challenges can be seen as beneficial as managers thrive on the completion of them. For example, according to psychologist Mihay Csikszentmihalyi ‘We are more likely to feel engaged in a task if it requires skill that stretch out abilities yet are still within our reach. (Paula J. Caproni – Page 395) I believe the challenges of change within a business to be and an important topic as the handling of such challenges is what makes a good or bad manager.

A manager who can efficiently sort out the challenges faced by a business and can draw positives from the results of the change that has occurred is a manager who is useful for the business and who can drive them to success.Studying in depth into some of the changes that occur within a business an the challenges that arise and how they are dealt with gives an insight into how badly or poorly managers deal with situations and can be used as a case study for managers to take note and incorporate the good techniques and prevent the bad ones. Some changes that come about in a business can be difficult to just enforce, therefore creating challenges for the manager in charge.The key challenges that arose from my research were, the laying off of long serving members of staff, the adjustment of staff to new technology, the litigation involved with splitting with a joint venture and also the struggle of the economic downturn on a market which has particularly struggled, the housing market. For the first scenario the manager took the decision to lay off the workers, although they were long standing, as this was what was best for the business in the current downturn of the economic climate.The positives of the actions of the manager are that they looked at the overall positive not the individual negative therefore benefiting the company. The process of reducing the workforce in a business is one that takes strong leadership and a great deal of thought.
‘The leaders of structural changes must implement a process that ensures equity and due consideration to employees. ’ (Garg, Rajiv Kumar, Singh, T P – Dec 2002) This example being similar to that of the manager I interviewed whereby the selection of who should be told to leave and who shouldn’t rests solely on their shoulders and it’s a decision that takes a strong character.Weakness in the leader can result in the wrong decision being made, for example selecting close friendship employees to stay on rather than a more capable worker. Secondly the introduction of new IT technology brought about challenges as some of the older more longer standing members of staff were used to the training for the old software. This was dealt with well by instead of employing more staff and getting rid of the less capable staff, the manage decided to mix up the work teams so that experience was mixed with inexperience, allowing on the job training to occur from employee to employee.The journal of managing change (Harding P, 2004) states that ‘ for change to be effective it needs to be implemented at all levels; embedded in the culture of the organization. To keep colleagues with you on this they need to be motivated and you need to understand what motivates them.
’ This is linked to the challenge this manager experienced as they had to implement a new IT system across the whole of the company whether people wanted it or not and in order to make sure they worked with it and kept their work rates up they had to make sure they were motivated to understand the technology.As mentioned before this was done by integration of teams which will have helped to motivate staff as on the job training is usually successful in these situations. Another challenge for the manager was the split with a joint venture in which the joint venture decided to take legal action against the process of the split. This can cause major problems within the business if the process wasn’t taken out correctly.The manager has learnt from this experience and the challenges it presented, that before legal binding with someone they should be researched thoroughly deciding whether they are right for the venture required and has similar goals to themselves. ‘In joint ventures the interfirm relationship between the parents plays an important role. Van der Meer-Kooistra and Vosselman (2000) argue that in addition to transaction characteristics, it is the characteristics of the co-operating parties which shape control.
In a joint venture there are four important relational characteristics: parental differences, information asymmetry, trust, and bargaining power. ’ (Pieter E. Kamminga – Jan 2007) These four points relate to the challenge of the manager as they struggled when splitting with a joint venture. This was down to a lack of trust, differences in views and bad information on the type of business the joint venture were. It is mistakes like this that will train the manager for the future and therefore improve the businesses potential at getting a more suitable joint venture.Challenges regularly occur when working to a deadline on a major project and this was apparent when the manager had to deal with the process of the purchase of a large competitor and the deadline work involved so that the transaction went through smoothly. In this instance a team had to be made and this team had to effective and efficient in order to complete before the deadline but make sure they were accurate and precise with the work they did.
This team had to be managed and put together through a selection process, in order to make sure the task was carried out correctly.This is a prime example of what was once said by Dwight D Eisenhower, ‘Leadership: The art of getting someone else to do something you want done because he wants to do it. ’ (Thinkexist. com – quotes) This quote relates to this real life example as the change and leadership that occurred was something that both the manager and the employees wanted to do, as the manager wanted the task complete in order to better the business and the workers were incentivized by the bonus that was available for successful completion on time. This motion of both parties wanting to make something happen can improve efficiency and quality dramatically.Finally the challenge which has been present throughout all the other challenges discussed and has also been one of the main factors affecting decisions made is the challenge of dealing with the current downfall in the economic climate, which has hit the housing market harder than most. This has been a challenge for the manager as they have had to adjust targets accordingly as customers have less incentives to purchase houses in the current climate, they have also had to keep staff happy as the downturn has caused loss of jobs and therefore a fall in morale.
Financial and economic collapses in 2007-2008 and 1929-1930 followed unprecedented residential mortgage credit expansions. Industry suffered from declining expenditures on housing and durable goods, and income fell when production and employment declined. ’ (Vernon L. Smith and Steven Gjerstad – Jan 2010) This is the result of the economic crisis that occurred whereby housing was one of the hardest hit industries. This put extreme strain on the workforce and the managers themselves, as they had to incorporate skills that weren’t necessary before hand.All of the changes above that the manager had to go about sorting and controlling came about because of a business trying to better itself and improve its current ways. The changes were therefore highly affected throughout by the economic crisis and the effects it had on businesses.
Budgets had to be reassessed, jobs had to be taken into consideration and downsizing in some departments had to be done. All of these in order to keep costs low, profits high and make sure the business survived. Most of these decisions have to be made by the manager as they have control of the different teams, including the finance and the HR.From the challenges that the manager has gone through I have been able to come to the conclusion about what the manager has done well and what could be improved in certain situations. Concluding the first situation, what the manager did well was that he decided who was made redundant based upon their ability to the job rather than whom they liked or were close to. This therefore meant the sacking of people he was friendly with but in order to make the decision and change beneficial this had to be done.This therefore suggests that the manager has the businesses long-term success in mind and shows a strong character.
The second challenge was also dealt with well as the manager incorporated change with as little detrimental effect as possible. Instead of spending more money on training or having to get rid of the staff that couldn’t use the technology, the teams of people was mixed and training took part this way for no cost. In this certain circumstance this was highly beneficial as the staff that were unable to use the technology were the long-standing taff that had greater knowledge and experience of the industry and other pieces of older technology. With the next challenge the manager openly admitted that they had made a mistake when entering into joint venture with a company that weren’t suitable to be joined with them. This problem came about due to lack of research into the business and this meant, as described by the manager ‘acrimonious split. ’ In the future the manager should set a team to research the business thoroughly throughout its past and also how it markets itself.Also a face-to-face meeting would allow the manager to get a realistic opinion on what their morals and ethics are around business and customers.
The fourth challenge that was discussed by the manager was the merging with a large competitor and the process of leading up to it, assessing if the takeover was going to be beneficial or detrimental. This was done well on the face of things as it was said that the team was selected and offered a bonus based on performance, both of which are high motivators.However the fact that some people were picked and some people weren’t picked could have a damaging effect on the people who weren’t as they feel below fellow workers, on the other hand it could motivate them more as they may be determined to prove their ability to the manager. Finally the final challenge which overall as the main challenge as it was one that ran throughout the others, this was the economic crisis/downturn that occurred worldwide but more importantly nationally. The manager’s positives and negatives are hard to measure in this case, as currently it is an ongoing problem.The best way to asses how well they have done is looking at the over all results of the other challenges as most of these have been done in the current economic climate, so have had to shape their changes round that. The high experience and educational background allowed the manager to be able to quickly assess the economic situation and come up with solutions to the ongoing problems it creates.
ReferencesChange definition – http://wordnetweb. princeton. edu/perl/webwn? s=change Caproni, Paula J (2005) – Management skills for everyday life 2nd edition: Why change is important (Page 284)Harding, P. – Managing change 2004 (http://www. oursouthwest.
com/SusBus/mggchange. pdf) James M. Kouzes, Barry Z. Posner – Encouraging the heart (http://media. iley. com/product_data/excerpt/40/07879418/0787941840-1. pdf)C.
Dean Pielstick – The Transforming Leader: A Meta-Ethnographic Analysis (http://www. ila-net. org/Publications/Proceedings/1998/Pielstick. pdf)

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Challenges

A Shout Out to Tech Innovators! Take Up the Intel & DST Innovate For Digital India Challenge 2.0

Ever since the inception of Prime Minister Narendra Modi’s ambitious “Digital India” campaign in 2015, several initiatives have been made to spread digital literacy across the country across various categories.
Several efforts have been made to enable Indians access government schemes and services electronically. Renowned Indian companies and global multi-nationals have come down and extended their support and desire to participate in this initiative.
Working on these lines, Intel & the Department of Science & Technology, Government of India (“DST”), have come together again to foster a new wave of disruptive innovation which will help empower citizens and transforms India by announcing the 

 This challenge will benefit from the continued support of MyGov and Ministry of Electronics and Information Technology (“MeitY”) and will be anchored by T- Hub Foundation, among India’s largest incubators.
 
What does the Intel-DST Challenge offer
The Innovate for Digital India Challenge 2.0 aims to foster local innovation and encourage the creation of easy to use and scalable solutions IoT and / or Data centre and / or Cloud and / or Connectivity Platform and / or Big Data and/ or Open Data and/ or Analytics.
Entrepreneurs who believe they have disruptive ideas in any of these categories must enroll themselves, thereby becoming a part of Modi’s ambitious Digital India vision.
 Solutions developed during the course of the challenge are to be based on Intel Architecture and should address problems faced by Indian citizens across one of the following fields: E-Governance, Agriculture Solutions / Agritech, Healthcare Solutions / Healthtech, Education Solutions, Financial Inclusion / Fintech, Manufacturing/Engineering, Services and Logistics, Sustainability including resources as water, energy, and Smart City.
Register here 
Here’s why you need to enroll!
Startups and entrepreneurs who have registered themselves in India and have a sound team in place are eligible to participate. The startup should have a prototype or conceptual prototype to demonstrate proficiency and should develop solutions based on the Challenge Themes that are mentioned and have a scalable business plan in mind.
The startups/entrepreneurs should be willing to develop their prototypes based on Intel’s Architecture and additional weightage will be given to teams who have been shortlisted at other Tech Events / competition in the last 24 months.
The Intel & DST – Innovate for Digital India Challenge 2.0 will feature advisors and mentors across industries. Up to 20 teams will be shortlisted based on predefined criteria and invited (two per team) to pitch their solutions to a panel of experts at Hyderabad and up to top ten teams will be identified at the end of this phase.
T- Hub will shortlist and invite up to top 20 teams to Hyderabad for presenting their concepts for evaluation and ten teams will be identified post this phase and at the end of this phase the selected teams will receive prototyping grants of up to Rs. 300,000.
The accelerator phase will be managed by T-Hub and will aim to develop MVPs (Minimum Viable Products) based on Intel Architecture and will include a residential boot camp at Hyderabad, virtual team management and mentoring by a panel of experts from across Government, Intel, T- Hub and Industry. At the end of this phase three teams will be identified.
The shortlisted teams will again receive grants of up to Rs. 500,000 per team along with market access support. Up to top three teams (2 per team) will be given an opportunity to visit USA for a duration of about two weeks for go-to-market support from experts in Silicon Valley*. The winning team will be announced at the end of the event and be eligible to receive a final grant of up to Rs. 2,000,000.
You need to hurry!
The collaboration has received an overwhelming response with more than 300 applications till date. The entry  process will end in October 2016.