Return On Investment ( Roi )

Contemporary globalization of businesses and growing global market competition has made effective human resource planning as one of the major strategies to forge ahead and remain proactive. It can be said that an organization 's success lies to a great extent to the knowledge, skills, creativity, and dedication of its workforce. Every aspect of an organization needs human capital to drive its activities or operations to achieve individual strategic goals and objectives towards its purpose of existence, growth, and competitive status. Companies can compete at all levels of the marketplace through improved commitment not only through creativity, innovation, and research, but also human resource development (Truong, Heijden, & Rowley, 2010). In this regard, the human resource planning is needed to ensure a systematic analysis of human resource needs so that the right quantity and quality of employees are always available when required. Fundamentally, organizations are looking for the best people that would help drive them to their desired destination of achieving their missions. Therefore, it is important to develop human resource strategies to support organizational strategies, through measures such as forecasting human resource requirements, and effective strategic staffing. Technically, an organization 's mission, goals, and objectives drive its strategy and human resource (HR) and staffing strategy in an interactive manner. The purpose of this

Based on the above calculations, the company should reject the offer. Manufacturing the carburetors is $6 per unit less expensive which calculates to $90,000 less expensive over the period.

How well a business manages its assets and resources predicates its overall success. Companies that spend financial resources foolishly are apt to find themselves in bankruptcy. Companies that work capital equipment resources beyond the machine’s capabilities or for other than intended purposes are apt to experience downtime and/or lose the equipment to failure. The same premise holds true for a company’s human assets. However, unlike other company assets, which depreciate over time, human assets appreciate over time when managed properly. The article, Importance of Human Resource Investment for Organizations and Economy: A critical Analysis, explains the importance of managing human assets as follows:

Most organizations do not follow-up on the benefits of training as regards staff performance. As a result of this they don’t take training and development as an important factor in organizational growth and survival. Most manages do not know how to assess the return on investment in training, nor are they equipped with the necessary management tools to monitor the decision making process of such investment. It has been discovered that training and development budget is the first cut when the organization is faced with difficulties because most of them are of the opinion that investment in the area of training and development is not linked to the bottom line of the business. Globalization and rapid technological development has changed the conditions for companies and increased competition in the world markets. The quality of a company’s human resources is the key driver for sustained top-level performance. It has become crucial to continually invest in human resource development in order to guarantee success in the global market. As earlier said, managers engage in minimal training thereby not giving quality training to their employees, this in turn affects the overall outcome of the training and the performance of the staff. Most organizations that have a competitive image see more reasons to train their workers than those who are on the lower rung of the ladder of recognition, but training and development is still needed to create a niche. In the light of the above,

Human capital plays a vital role in providing the organisation with a valuable competitive advantage; in addition a reward and pay system concerning the employment relationship, is often viewed as a key method in obtaining maximum human capital, and thus a central part of managing a business.

This case, as the Happy Chips Case does, illustrates the point that it is important to know where your costs and profits come from. It extends the point of Happy Chips by also introducing consideration of asset investments and return on assets. In this case, a new cost accountant introduces segmental profitability, contribution margin, and the strategic profit model to Cooper Processing Company to aid in analysis of two different distribution channels. Note to Instructors: Because this case is short and the required math is quite simple, we often use this case as part of an exam or an in-class quiz!

Human capital plays a considerable role in the economic environments. It is not cash, assets, but it is people, which are the critical differentiators of a business enterprise (Fiz-enz, 2000). It is an organisation’s possess individual tacit knowledge (Nelson and Winter, 1982). There are four factors involved by human capital: genetic inheritance, education, experience and attitudes about life and business (Hudson, 1993). All of these factors are intangible and can be invaluable. Human Capital is a source of innovation and strategic renewal, such as improving personal skills, re-engineering new process or just daydreaming at the office (Hudson, 1993). According to Figure 1 (Bontis, 1998), Human Capital is about the intellect of human. It is an internal control and development

Organizations’ success is relying on the critical value of human resources. Competitive advantage can be earned by giving more effective utilisation of human resources in organizational context (Guest, 1987). When the organisation becomes a success, it will spring from organisational capabilities such as speed, agility, employee competence and learning capacity but it is an issue to achieve these organisational capabilities (Leonard-Barton, 1995). A lot of people arguing the traditional training function with focus on operational level are not compatible with the organisations’ demands for core competency in new economy (McCracken and Wallance, 2000).

Return of investment or ROI is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. In finance ROI is a way to measure to see if an investment is worth the risk. ("Investopedia", 2012).

Today’s business world is very competitive. This can be attributed to more organizations entering the market and the current economic climate. This has many companies thinking of ways to increase productivity and gain a competitive advantage. In order to successfully continue to operate and grow, organizations often have to change strategies and better develop employees. This applies to any size organization. However, small businesses must ensure that these strategies are in place in order to attract and maintain a good customer base. Small businesses need to consider human resources as one of the most important determinants of profitability. They must provide competitive

1.1 Cost and Return on Investment: Implementing a data warehouse to consolidate both Virtual World Insurance Company, and Maxon Insurance Company, is probably the best way to combine their data. As this is a new merger, comparing both company’s previous performance data with the performance after the merger will outweigh the cost of the data warehouse. Since they both use different means to store their data as well as two different CRMs, the flexibility of a data warehouse will be able to combine all these different types of data into one consolidated system. Both companies could have their data integrated without using a data warehouse but there would be multiple duplicate accounts added to preexisting ones. Having a data warehouse allows for SQL queries that can provide easy access to important statistics such as data analytics, customer satisfaction ratings, and financial records. Specific operations areas that will benefit from having a data warehouse are the sales, marketing, finance, and management departments of the auto insurance company. The sales department will be able to analyze how many new customers they are acquiring each quarter based on customer satisfaction ratings, and market growth. Marketing and management will be able to pin point peak times in auto sales to release more ads enticing new customers to purchase their auto insurance from this new merger. Management will know when or if new staff needs to be hired to compensate for times of increased sales

Overall in terms of return on investment (R.O.I.), market share, and profitability, Pfizer performed well in 2014. Pfizer generated a 7.01% R.O.I., a 28.3 % return on equity (R.O.E.), and a 12.78% return on assets (R.O.A.). In the last four years shareholders have witnessed their shares more than double totaling: 23, 858, 089 shares. And as a matter of fact, in terms of profitability, Pfizer has generated more revenue than any other pharmaceutical company in the world. Pfizer has a gross profit margin of 81.42%, an operating profit margin of 29.44%, and a net profit margin of 42.65% (CSI Market, 2014).

Another key ratio to gauge how effectively the management is utilizing its resources is the Return on Investment (ROI) ratio. This indicator shows how successful the firm is at generating profit from its investments. Typically, its expected that whatever investment the firm makes, would be successful enough to pay for itself and make a profit. The industry standard for this sector is 3.47. The six companies in this report are all above average with Nordstrom in the lead with 15.97 and the lowest being Macy’s with only 3.55, which is barely above the industry average.

In light of the above excerpts, human capital theory suggests that it is through education and or through training, that is accredited for improving workers’ productivity. This is due to the imparting of necessary knowledge and skills to which end is the improvement. To this end, the future income of the employees is increased (Becker, 1964). This notion thus suggests that man is assured of better pay depending on their level of knowledge in their field of employment. This thus has been the core reason why continuous education and training of employees has been a core role in a company’s management to ensure that their workforce is equipped well enough on their tasks.

Grieves and Redman (1999) took a critical look on the characteristics of human resource development, and its purpose. They stated that human resource development facilitates competitive advantage, because it