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The seven principles of good economic management

The seven principles of good economic management

There is an old adage that no one seriously argues whether two plus two equals four. In contrast, the more dubious the argument, the more violent the discussion.

For many years, economics had a solid repository of reasonably uncontentious claims. In terms of macroeconomic management, these claims could be summarized in seven straightforward principles:

1. We cannot inflate our way out of a recession.

2. Faster monetary growth leads to higher inflation.

3. Large fiscal deficits mean higher government borrowing, which pushes up interest rates, and discourages private sector investment.

4. A large public sector debt stock imposes huge interest rate costs on the taxpayer, and limits socially important public expenditure such as health and education.

5. Banks will always sacrifice liquidity for higher profitability and therefore must be closely regulated.

6. Negative interest rates discourage savings, reduce investment, and constrain long-term economic growth.

7. State guarantees on loans encourage banks to take excessive risks and generates moral hazard.

Although these principles didn't quite have the reliability of arithmetic, they did a decent job at ensuring economic staiblity. Before the crisis, economists did not debate the validity of these principles. Nor, for that matter, did the government or the Bank of England.

From the moment Gordon Brown became Chancellor he talked about fiscal prudence and the need to limit large government deficits. Countless speeches from members of the monetary policy committee warned against the dangers of allowing inflation to run out of control and how sound monetary policy was the key to a stable economy.

Today, the UK government and the Bank of England have abandoned sound macroeconomic management. Instead of following these seven tried and tested principles, Brown, Darling and King have a new guide for policy. Simply stated, credit is the lifeblood of the economy and it must be sustained at all costs.

However, credit is just another word for debt, which has to be repaid. If the solution is more indebtedness today, then we must expect more misery in the future.

It is time to return to what works; it is time to rein in the deficit, limit the growth of the money supply, and ensure that interest rates are positive. It is time to stop state intervention in the financial system, and cut out the guarantees and implicit subsidies.

It is time to return to orthodoxy and put an end to experimentation.

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Privacy Policy for http://my-economics-one.blogspot.com/ If you require any more information or have any questions about our privacy policy, please feel free to contact us by email at akumpulblogger@gmail.com. At http://my-economics-one.blogspot.com/, the privacy of our visitors is of extreme importance to us. This privacy policy document outlines the types of personal information is received and collected by http://my-economics-one.blogspot.com/ and how it is used. Log Files Like many other Web sites, http://my-economics-one.blogspot.com/ makes use of log files. The information inside the log files includes internet protocol ( IP ) addresses, type of browser, Internet Service Provider ( ISP ), date/time stamp, referring/exit pages, and number of clicks to analyze trends, administer the site, track user’s movement around the site, and gather demographic information. IP addresses, and other such information are not linked to any information that is personally identifiable. Cookies and Web Beacons http://my-economics-one.blogspot.com/ does not use cookies. DoubleClick DART Cookie .:: Google, as a third party vendor, uses cookies to serve ads on http://my-economics-one.blogspot.com/. .:: Google's use of the DART cookie enables it to serve ads to users based on their visit to http://my-economics-one.blogspot.com/ and other sites on the Internet. .:: Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy at the following URL - http://www.google.com/privacy_ads.html Some of our advertising partners may use cookies and web beacons on our site. Our advertising partners include .... Google Adsense Adbrite These third-party ad servers or ad networks use technology to the advertisements and links that appear on http://my-economics-one.blogspot.com/ send directly to your browsers. They automatically receive your IP address when this occurs. Other technologies ( such as cookies, JavaScript, or Web Beacons ) may also be used by the third-party ad networks to measure the effectiveness of their advertisements and / or to personalize the advertising content that you see. http://my-economics-one.blogspot.com/ has no access to or control over these cookies that are used by third-party advertisers. You should consult the respective privacy policies of these third-party ad servers for more detailed information on their practices as well as for instructions about how to opt-out of certain practices. http://my-economics-one.blogspot.com/'s privacy policy does not apply to, and we cannot control the activities of, such other advertisers or web sites. If you wish to disable cookies, you may do so through your individual browser options. More detailed information about cookie management with specific web browsers can be found at the browsers' respective websites.

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Project Management


Project Management

While project management skills are obviously important for project managers, interestingly the methods and tools that project managers use can be helpful for everyone.
A 'task' does not necessarily have to be called a 'project' in order for project management methods to be very useful in its planning and implementation. Even the smallest task can benefit from the use of a well-chosen project management technique or tool, especially in the planning stage.
Any task that requires some preparation to achieve a successful outcome, will probably be done better by using a few project management methods somewhere in the process. Project management methods can help in the planning and managing of all sorts of tasks, especially complex activities.
Project management is chiefly associated with planning and managing change in an organization, but a project can also be something unrelated to business - even a domestic situation, such as moving house, or planning a wedding.
Project management methods and tools can therefore be useful far more widely than people assume.
Project management techniques and project planning tools are useful for any tasks in which different outcomes are possible - where risks of problems and failures exist - and so require planning and assessing options, and organizing activities and resources to deliver a successful result.
Projects can be various shapes and sizes, from the small and straightforward to extremely large and highly complex.
In organizations and businesses, project management can be concerned with anything, particularly introducing or changing things, in any area or function, for example:
  • people, staffing and management
  • products and services
  • materials, manufacturing and production
  • IT and communications
  • plant, vehicles, equipment
  • storage, distribution, logistics
  • buildings and premises
  • finance, administration, acquisition and divestment
  • purchasing
  • sales, selling, marketing
  • human resources development and training
  • customer service and relations
  • quality, health and safety,
  • legal and professional
  • technical, scientific, research and development
  • new business development
  • and anything else which needs planning and managing within organizations.
Successful project management, for projects large or small, tends to follow the process outlined below.
The same principles, used selectively and appropriately, also apply to smaller tasks.
Project management techniques are not just for project managers - they are available for anyone to use.


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How great Are Your Project Management level?


How great Are Your Project Management level?




Project managers need a broad range of skills.
Whether or not you hold the official title of project manager, chances are you'll be called upon to lead some sort of project at some time. From initiating a procedural change in your department to opening a branch office in a different city, projects come in all shapes and sizes. As the complexity increases, the number of details you have to monitor also increases. However, the fundamentals of managing a project from start to finish are usually very similar.
This short quiz helps you determine how well you perform in the eight key areas that are important to a successful project. The quiz is aimed at people who manage projects of a significant size, but who are not full-time project managers. However, everyone can use their answers to make sure they're applying best practices.





How Great Are Your Project Management level?
Top of Form
  Total of weighted scores

No
Statement
Not
At all
Rarely
Some
times
Often
Very
often


1
I communicate what needs to be done by what deadline,
and expect the people to whom I assign the work to be responsible for breaking down
 the work packages into smaller and more manageable pieces.






2
When I choose suppliers,
 I base my decision on their ability to deliver on time as well as on price.






3
I prepare a specific timeline and sequence of activities, and I use this schedule to manage the overall project to ensure its timely completion.






4
When a project begins, I work with its sponsor to negotiate and agree specific deliverables.






5
Project teams are only temporary, so I don’t worry too much about personalities. I select team members based on the technical skills I need.






6
At the start of a project, I formally outline what, why, who, how, and when with a Project Initiation Document – so everyone can understand how the elements of the project fit together.






7
I consider a variety of cost alternatives when developing my original project budget plan.






8
I outline clear expectations for the project team, and I manage their individual and collective performance as part of the overall project evaluation process.






9
When a project gets behind schedule, I work with my team to find a solution rather than assign blame.






10
I identify as many potential project risks as I can, and I develop a plan to manage or minimize each one of them, large or small.






11
Because projects involve so many variables that change so often, I let the plan develop on its own, as time passes, for maximum flexibility.






12
I use customer/stakeholder requirements as the main measure of quality for the projects I manage.






13
I routinely monitor and reevaluate significant risks as the project continues.






14
I give people a deadline to complete their project work, and then I expect them to coordinate with others if and when they need to.






15
I keep all project stakeholders informed and up-to-date with regular meetings and distribution of all performance reports, status changes, and other project documents.






16
I define specifically what the stakeholders need and expect from the project, and I use these expectations to define and manage the project's scope.






17
Forecasting costs is more art than science, so I include extra funds in the budget and hope that I’m under cost at the end.






18
I present project status information in an easy-to-use and easy-to-access format to meet stakeholders' information needs.






19
Delivering on time and on budget are the most important things for me.






20
When I contract for goods or services, I often choose suppliers based on familiarity and the past relationship with my organization.







 Total = 








Bottom of Form
Score Interpretation
Score
Comment
20-46
Oh dear. Right now, you may be focusing mostly on day-to-day activities rather than the bigger picture. If you spend more time on planning and preparation, you'll see a big improvement in your project outcomes. And you'll have more time to spend on productive work rather than dealing with last-minute surprises. As part of planning more for your projects, take time to create a development plan for the specific skills on which you scored lowest (you'll see these below).
47-74
Your project management skills are OK, and when projects are relatively simple, your outcomes are often good. However, the more complex the projects you manage, the less control you will have and the more likely you are to deliver below expectations. Take time to improve your planning skills and prepare for the unexpected. The more time you spend on your up-front planning, the better your project outcomes will be.
75-100
You are an accomplished project manager. Few things that happen will upset you, or hurt your confidence in your ability to lead the project to a successful end. Use your mastery to help others on your team develop their project management skills. Lead by example, and provide opportunities for other team members to manage parts of the project. Also, be aware of your own strengths and weaknesses. Just as you review a project at its completion, make sure that you review your own performance, and identify what you can do better next time.
Project Integration
(Statements 6, 11)
At the beginning of a project, it's important to develop a solid understanding of the project's goals, and how the various elements will fit together for a successful outcome.
Start by producing a Business Requirements Analysis, and then develop a comprehensive Project Initiation Document, which covers the basic project needs and outcomes, so that everyone can understand the project's goals.
To prepare this critical, high-level document, you need to understand the phases and processes of project management. This overview will help you become better prepared for what's ahead. Understanding the planning cycle is also important, because it helps you appreciate how important your project plan is to a successful outcome.



Scope Management
(Statements 4, 16)
Projects have a nasty habit of expanding as they go along, making it impossible to hit deadlines. To control this “scope creep,” it's essential to define the scope at the very start of your project based on the Business Requirements Analysis, and then manage it closely against this signed-off definition. For more on how to do this, see our article on scope control.
Schedule Management
(Statements 1, 3, 9, 14)
A project's scope can easily grow, and so can the time needed to complete it. For a project to be completed successfully, despite all of the unknowns, it's important to clearly define the sequence of activities, estimate the time needed for each one, and build in sufficient contingency time to allow for the unexpected. It's also important to monitor full completion of each activity – it's shocking how long it sometimes takes for an activity to move from “80% complete” to 100% complete!
With this information, you can develop a Project Schedule and then begin breaking it down into very specific pieces of work using a Work Breakdown Structure. A schedule often isn't enough, particularly when different people do different things and their work output becomes the input for another piece of work. To keep track of the various activities, Gantt Charts and Critical Path Analysis are often helpful. These tools allow you to prepare and manage your schedule for maximum efficiency.
Cost Management
(Statements 7, 17)
To determine what a project will cost, you must be systematic with your estimating, budgeting, and controlling.
Also, be aware that many project decisions will have an impact on cost. Therefore, it's important to understand what's driving your costs and to develop a system for monitoring the project's financial performance. Managing project finances requires many tools and strategies, and it's very important to set up a reliable control system to keep track of the costs and required changes.
Quality Management
(Statements 4, 12, 19)
Projects must be delivered not only on time and on budget, but also to specification (this is what “quality” means in project management). As part of this, ensure that you actively manage project benefits. By continuously referring to the benefits that the project will provide, you keep client quality at the forefront – and you won't waste precious time and resources trying to achieve an inappropriate level of quality.
An effective project manager knows the importance of checking that project outcomes are consistent with needs. The Deming Cycle (Plan-Do-Check-Act) and Business Testing are important tools for this, as they both force you to consider the needs of the end users.
People Management
(Statements 5, 8)
The people on your project team can make or break the final outcome. Here, getting the right mix of interpersonal and political skills is just as important as the right technical skills. To help your new team start working together effectively as soon as possible, develop a Team Charter and outline performance expectations. Use well-informed task allocation and appropriate team management skills to keep the project team on track and working productively. And be prepared to help people through the Forming, Storming, Norming and Performing stages that so many teams go through.
Communication
(Statements 15, 18)
As with most situations, effective project communication means communicating with the right people at the right time and in the right way. To do this, Stakeholder Management is essential. When you analyze your stakeholders, you identify who must be kept informed in full, and who needs less intensive communication. This can save you a lot of time, and helps you maintain good relationships with people involved in the project.
Project Dashboards are great for presenting project updates in a way that people can quickly understand. For longer projects that require periodic status reports, Milestone Reporting is effective for capturing the essentials of a project's status.
Risk Management
(Statements 10, 13)
Project managers must understand which of the risks to their plans are significant. An Impact/Probability Chart will help with this.
From there, develop a plan for monitoring and controlling the major risks involved in your project. Using your Risk Analysis, develop options to reduce risks, prepare Contingency Plans, and decide who is responsible for which parts of risk response.

Project Procurement
(Statements 2, 20)
Unless your project is in-house, external suppliers will generally have a large impact on your costs. Suppliers will also affect whether the project delivers on time and to specification.
Take the time to define your needs in a Request for Proposal document, and then use an appropriate Procurement Management approach to select the best supplier.
For more on these project management skills take a look at the Project Management Body of Knowledge (PMBOK).
General Project Management Skills
(Statements 4, 9)
This quiz also highlights some general skills that you should be aware of while developing your project management skills. Negotiation – specifically, Integrative Negotiation – is very important for dealing with suppliers and getting the in-house resources you need, when you need them.
Conflict resolution is another important general skill. From resolving conflict within your project team to managing conflict that arises during negotiation, this is a fundamental skill for project managers. And, ultimately, your problem-solving skills are essential. They will not only improve negotiation and conflict resolution skills, but also help with risk management, time management, and quality management.
Key Points
Project management is a complex process that requires a wide range of skills.
Whether you manage projects on a regular basis or only once or twice a year, the skills learned in project management are applicable to many managerial and leadership positions.
Understanding client needs and meeting their expectations in a timely manner are universal requirements. Use the information you gain here to improve specific project management skills – as well as your general workplace skills.

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