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- Management Dynamics : Journal of the Southern African Institute for Management Scientists
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- Volume 21, Issue 4, 2012
Management Dynamics : Journal of the Southern African Institute for Management Scientists - Volume 21, Issue 4, 2012
Volume 21, Issue 4, 2012
The calculation of free cash flow, using the real replacement cost of capital expenditure required to maintain productive capacitySource: Management Dynamics : Journal of the Southern African Institute for Management Scientists 21, pp 2 –13 (2012)More Less
The generation of a positive free cash flow is vital for the long-term success of an enterprise. The amount of free cash flow available after providing for the maintenance of the productive capacity of the enterprise is a measure which management can use to determine how much cash can be distributed to shareholders or used for other discretionary purposes.
However, it should be borne in mind that the amount required for the maintenance of the productive capacity when based on actual figures from the financial statements may reflect neither price increases to replace the non-current assets, nor present the actual replacement necessary to support the current productive capacity. The reason may, for instance, be that management have managed their scarce cash resources sparingly during an economic downturn.
In this study, a proxy for replacement investment is developed which management can use in the calculation of free cash flow. This proxy takes price level increases as well as required replacements into consideration. The model developed in this study can be used by management for different categories of non-current assets, using actual and estimated price increases for the specific types of non-current assets. The application of this model will result in a smoothing effect in the calculation of free cash flow.
Source: Management Dynamics : Journal of the Southern African Institute for Management Scientists 21, pp 14 –30 (2012)More Less
Worldwide, evidence suggests that the number of copreneurs (husbands and wives in business together) is on the increase and that spousal partnerships are becoming a preferred entrepreneurial route for many. However, research concerning these types of family businesses is limited and as a result little is known about the factors that influence their success. One of the main challenges facing husbands and wives in business together is to successfully manage both their personal and professional relationship. Based on this contention, the primary objective of this study is to consolidate and integrate existing literature on relational-based factors influencing the successful functioning of copreneurial businesses into a hypothesised model. This model is then empirically tested among copreneurial businesses to assess the relationships that exists between selected independent variables (Spousal relationship, Open communication, Mutual respect and trust, Fairness, Commitment to the business, Balance between work and family, and Non-family involvement) and two dependent variables (perceived Financial performance and Satisfaction with working relationship in the copreneurial business). A positive relationship emerged between the independent variables Mutual trust and commitment to spouse, Open communication, Balance between work and family and Non-family involvement and the dependent variable Satisfaction with working relationship. Perceived Financial performance is positively influenced by Non-family involvement and Commitment to business.
A managerial framework for relationship management in the business-to-business financial services industrySource: Management Dynamics : Journal of the Southern African Institute for Management Scientists 21, pp 31 –52 (2012)More Less
The purpose of the study was to develop a comprehensive framework that could guide the management of financial services relationships within a business-to-business (B2B) context. Trust, commitment and intention to stay are proposed as key dimensions. A survey was used to empirically assess the 13 hypothesised relationships in the model. Two samples were drawn: a relationship manager sample and a client sample, both from a leading South African B2B financial services provider. Data from the relationship manager sample were analysed using a regression analysis, while data from the client sample were analysed using structural equation modelling (SEM).
Although relationship management is a complex process, relationship managers and clients agreed on the impact of the majority of the dimensions on their intentions to stay in the relationship. It is especially interesting to note that relationship managers believe that it is possible to build commitment without the presence of trust. Relationship managers appear to over-estimate their ratings of clients' perceptions, and marketers should be cautious to base marketing strategies on the perceptions of relationship managers only. The originality of the contribution lies in the concurrent consideration of the perceptions of both financial services providers and their clients.