The Hindu Business Line : There's competition in fearing competition

"This is felt most acutely in Indonesia (50 per cent), where structural reforms to enhance the market economy probably account for this nervousness, India (40) and Greece (39)," notes Grant Thornton International as findings of its `Business Owners Survey' conducted across 26 countries.

"Companies in Hong Kong (47 per cent), Spain (41) and Poland (39) are most concerned about an economic downturn. New Zealand (21) is the most concerned about government regulation and Pakistan (20) is the most concerned about the threat of terrorism and war."

About 7,000 business owners were asked if they had formal, documented mechanisms in place for dealing with key risks. "Dealing with a major IT failure was the highest category with 63 per cent of businesses having a formal, written procedure in place.

This was followed by loss or destruction of property (62) and succession planning (47). Only around a third of companies, however, had plans in place for loss of key suppliers or a reputational or media crisis."

Interesting numbers.

Eco-check with teeth

SMALLER businesses in the UK generate about 60 per cent of commercial waste and are responsible for as much as 80 per cent of pollution incidents, reports AccountingWeb.

"Alarmingly, only 18 per cent of 8,000 small businesses recently questioned could name any environmental legislation." Environmental regulators have cautioned businesses that if they failed to comply with essential environmental legislation they would face hefty fines. A free Web site Netregs has been launched "to help businesses understand their environmental obligations."

The site has been developed by the Environment Agency, the Scottish Environment Protection Agency and the Environment & Heritage Service.

Now, seriousness must be in the air.

EU's continuing weaknesses

EUROPEAN Court of Auditors (CoA) has for the ninth year qualified its opinion on the reliability of the EU's accounts. And the UK National Audit Office is not too happy. It has issued "a damning report on the inadequacy of the European Communities financial controls and accounting systems," notes AccountingWeb.

"The CoA report identified continuing weaknesses in the systems used to report and value the European Commission's assets and liabilities. There was a material rate of error in the payments within four of the six commission's major expenditure areas — agriculture, structural measures, internal polices and external action — which together make up over 90 per cent of expenditure."

Shockingly, "the amount of fraud reported nearly doubled from £365m in 2001 to £700m in 2002, when more than 10,000 irregularities were reported." But strangely, because of inconsistency in reporting, they find it difficult "to assess whether fraud improved or worsened between 2001 and 2002."

Audit qualifications are expected to continue till the EU switches over to accrual from cash-based accounting system.

Cautiously optimistic

WHAT are CEOs doing, even as they keep their fingers crossed about world's economy picking up? "They are keeping their enthusiasm in check, taking deliberate steps to position their companies for growth while maintaining a constant focus on profitability," notes a recent report from Deloitte, after surveying 400 CEOs in technology, media and telecommunications (TMT) industry.

What exactly are the CEOs doing? "Shifting their focus from cost reduction and cash flow management to sales growth and market-share; expanding their workforces — but emphasising quality over quantity; capitalising on the real power of the Internet — without all the hype; and focusing their growth strategies on major opportunities within their own regional markets — instead of expanding abroad just for the sake of being global."

The firm calls it `cautious optimism.'

Leakages in procurement

TOTAL cost management is not a separate, siloed processes, but that's how many companies continue to approach the exercise, notes Aberdeen in a recent newsletter.

"As a result, even companies that have invested heavily in both labour and procurement software solutions still suffer significant `savings leakage' owing to a fragmented and sub-optimised procurement operating model."

A few instances of how leakages happen: Strategic sourcing principles applied to less than half of overall spending; 70 per cent of companies continuing to make sourcing decisions at divisional or site levels; absence of standardised sourcing or procurement processes; sourcing, procurement, and supply management activities being labour intensive, time-consuming, and manual; and procurement strategies not aligned with financial and business initiatives.

A `corporate epidemic', as Aberdeen puts it.

Buzzwords can drive away customers

THREE out of four employees think there are too many buzzwords flying around the office, according to research by a UK firm Dean Statham, reports Accountancy.

Thus, "Jargon dominates workplace and overused phrases include brainstorm and up the flagpole," even as clear English campaigners are working overtime.

Other phrases are: backburner, diversity, facilitate and brand management. "Jargon hampers communication in the workplace and causes confusion and frustration. All too often it is management who are guilty because they like to attempt what they perceive as superior management techniques." Dangerously, when jargon fills key messages, customers go away.

So chase the jargon out.

GlobeTrot@TheHindu.co.in

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