Beruflich Dokumente
Kultur Dokumente
Unit 4.
Agricultural finance
1.Importance of agriculture finance
2. rural credit structure
Demand
Supply
Source
Forms
3.estimation of credit requirement
4. cost of credit/ capital
5. credit appraisal
5a. 3 Rs
5b. 3 Cs.
6. reforms in agriculture credit policy.
7. innovations in agriculture financing
8. microfinance
9. kisan credit card
10. role of institutions in agri finance
10 a. public sectors banks
10 b. private sectors banks
11. co operatives
12. micro finance institutions (MFS)
13. SELF HELP GROUP (SHGs)
14. International financial institutions
15. principal of agricultural financial management.
16. success and failures of cooperative sectors in India
17. role of cooperatives under emerging economic scenario
18.agricultural project analysis
19. internal rate of return (IRR)
20. Benefit cost ratio (B-C) ratio analysis.
unit 9;
production and operations management
1. operations management of an agro- industrial unit including
operations system and processes
2. productivity of operations
3. work force productivity
4. fascilities management
5. operations planning and control
6. material and supply chain management
7. quality management.
Unit 10
strategic management
1. meaning
2. concepts
3. scope
4. framework for strategic management
5. industrial (external) and organizational (internal) environment
factors influencing strategy
6. scanning the external and internal environment
7. strategy formulation
8. swot analysis
9. strategy implementations
10. strategy and structure
11. strategic analysis
12. strategy and technology
13. strategy and leadership
14. total quality management
15. the customer resources
16. development of strategy
17. creating competitive advantage strategy
18. evaluation of strategy
ENTREPRENEURSHIP
Or
concept of entrepreneurship
a combination of creativity and innovation. It is a stance taken within the business
applying inherent creativity as the act of 'thinking of' new things. It involves coming up
with innovative ideas and trying out new methods within the operations. The concept of
entrepreneurship is also concerned with new ways of looking at opportunities and
identifying a new approach towards solving problems. Entrepreneurship requires the
entrepreneur to shift paradigms and do away with old assumptions and perspectives. The
entrepreneur basically adopts techniques to stimulate creativity amongst employees.
Small business
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A small business is a business that is privately owned and operated, with a small number
of employees and relatively low volume of sales. Small businesses are normally privately
owned corporations, partnerships, or sole proprietorships. The legal definition of "small"
varies by country and by industry, ranging from fewer than 15 employees under Fair
Work Act 2009, 50 employees in the European Union,[citation needed] and fewer than 500
employees to qualify for many U.S. Small Business Administration programs.[1] Small
businesses can also be classified according to other methods such as sales, assets, or net
profits.
Small businesses are common in many countries, depending on the economic system in
operation. Typical examples include: convenience stores, other small shops (such as a
bakery or delicatessen), hairdressers, tradesmen, lawyers, accountants, restaurants, guest
houses, photographers, small-scale manufacturing etc.
The smallest businesses, often located in private homes, are called microbusinesses
(term used by international organizations such as the World Bank and the International
Finance Corporation) or SoHos. The term "mom and pop business" is a common
colloquial expression for a single-family operated business with few (or no) employees
other than the owners. When judged by the number of employees, the American and the
European definitions of a microbusiness are the same: under 10 employees. There is a
notable trend to further segment different-sized microbusinesses; for instance, the term
Very Small Business is now being used to refer to businesses that are the smallest of the
smallest, such as those operated completely by one person or by 1-3 employees.[citation needed]
A project feasibility study is a process that must be undertaken after the stakeholders
conceive of the idea for a deliverable, but before any serious planning is started. This is
basically the economics of the project and its deliverable on whether it will make the
company money and for whom the deliverable will be sold to.
There are many different areas a project feasibility study must uncover, such as specific
information so an informed decision on proceeding can be made by the stakeholders. The
technology and systems that will be needed to take the deliverable from its initiation to a
successful conclusion must be readily available. This is to say the production facilities of
a company can handle or be modified to accommodate the needs necessary for the
production of the deliverable.
After it has been determined that a company can produce the deliverable for a profit with
little to no deviation for the company’s core business practices, the next step in a project
feasibility study will involve the consumer. This is the part that requires extensive field
work.
The field work part of a project feasibility study examines the target audience in depth.
Part of this is the cost-based study that examines the exact costs of manufacturing the
deliverable and what will be the benefit or profits that the deliverable provides the
stakeholders and the company.
The cost that needed to be examined in the project feasibility study should include not
only the manufacturing of the deliverable, but also the advertising of the product and the
transportation costs of supplying the deliverable to the target audience. An example of
this would be transporting the deliverable to Alaska. If the profit per unit was $10 and the
transportation cost per unit was $9.50, it is not very economical to conduct the business
deal. It the transportation cost was over $10 then it would be disastrous and the company
would lose money on this business venture.
A project feasibility study is designed to take all the guess work out of who the
deliverable will be sold to and how much it will cost to do so. It can also be called the
economics of the project. Business plan preparation is not as complex as it may seem to
the new entrepreneurs. Begin by asking yourself a few core questions.
Business plan preparation is not as complex as it may seem to the new entrepreneurs.
Begin by asking yourself a few core questions.
o Which product or service are you going to make available? (Name the needs they will
fulfill.)
o Who all form your customer base? Why will they be willing to purchase your good or
service?
o From where will you get the initial funding for the business?
Business plan preparation calls for a settlement of these issues in an honest and realistic
manner. Besides these central questions, you will also need the answer to some short-
term questions.
o What kind of customer base are you looking for: wide or steady?
o Does advertising have a big role to play in your business? Will it greatly affect your
profit margins?
o If yes, which form of advertising suits your business? Which media will you employ for
the publicity of your product or service?
Use of the appropriate information and a detailed analysis will help in systematic
business plan preparation. After organizing your thoughts and concerns, pen down the
answers to the raised questions. If available, make good use of relevant financial data.
Record your income and expenditures in the plan; this will serve as a benchmark when
you review your performance at a later date.
Maintain a fluid mindset that allows you to accommodate the changes as it is not wise to
commit yourself totally in the beginning. Aggressive revisions dictated by the changing
circumstances, and an increase in the knowledge and experience make the plan a living
document. A dynamic plan lends great momentum to the business.
Since 1999, Growthink's business plan consultants have developed more than 1,500
business plans. Growthink clients have collectively raised over $1 billion in venture
capital funding, and Growthink has become the firm of choice for venture capital firms,
angel investors, corporations and entrepreneurs in the know. To learn more about our
business plan services, call 877-BIZ-PLAN (877-249-7526). Growthink has also
developed a business plan template that allows entrepreneurs to quickly and cost-
effectively develop professional business plans.
The Small Scale Industrial Sector has emerged as a dynamic and vibrant sector of the
economy during the eighties. At the end of the Seventh Plan period, it accounted for nearly 35
percent of the gross value of output in the manufacturing sector and over 40 percent of the
total exports from the country. It also provided employment opportunities to around 12 million
people.
The primary objective of the Small Scale Industrial Policy during the nineties would be to
impart more vitality and growth-impetus to the sector to enable it to contribute its mite fully to
the economy, particularly in terms of growth of output, employment and exports. The sector
has been substantially delicensed. Further efforts would be made to deregulate and
debureaucratise the sector with a view to remove all fetters on its growth potential, reposing
greater faith in small and young entrepreneurs.
All statutes, regulations and procedures would be reviewed and modified, wherever necessary,
to ensure that their operations do not militate against the interests of the small and village
enterprises.
1.1 Government have already announced increase in the investment limits in plant and
machinery of small scale industries, ancillary units and export – oriented units to Rs 6 million,
Rs 7.5 million, and Rs 200 thousand respectively. Such limits in respect of "TINY"
ENTERPRISES would now be increased from the present Rs 200 thousand to Rs. 500
thousand, irrespective of location of the unit. Limit in plant and machinery for determining the
status of SSI/Ancillary units as on date is Rs 10 million. For tiny it is Rs 2.5 million and for
SSSBE Rs 500 thousand.
1.2 Service sub-sector is a fast growing area and there is need to provide support to it in view
of its recognized potential for generating employment. Hence all Industry-related service and
business enterprises, recognized as small scale industries and their investment ceilings would
correspond to those of Tiny enterprises.
1.3 A separate package for the promotion of Tiny Enterprises is now being introduced. This
constitutes the main thrust of Government’s new policy.
1.4 While the small scale sector (other than ‘Tiny Enterprises’) would be mainly entitled to
one-time benefits (like preference in land allocation/power connection, access to facilities for
skill/technology up gradation), the ‘Tiny’ enterprises would also be eligible for additional
support on a continuing basis, including easier access to institutional finance, priority in the
Government Purchase Programme and relaxation from certain provisions of labour laws.
1.5 It has also been decided to widen the scope of the National Equity Fund Scheme to cover
projects up to Rs. 1 million for equity support (up to 15 per cent). Single Window Loan
Scheme has also been enlarged to cover projects up to Rs 2 million with working capital
margin up to Rs 1 million. Composite loans under Single Window Scheme, now available
only through State Financial Corporations (SFCs) and twin function State Small Industries
Development Corporation (SSIDCs), would also be channelised through commercial banks.
This would facilitate access to a larger number of entrepreneurs.
2.1 Inadequate access to credit – both short term and long term – remains a perennial problem
facing the small scale sector. Emphasis would henceforth shift from subsidized/cheap credit,
except for specified target groups, and efforts would be made to ensure both adequate flow of
credit on a normative basis, and the quality of its delivery, for viable operations of this sector.
A special monitoring agency would be set up to oversee that the genuine credit needs of the
small scale sector are fully met.
2.2 To provide access to the capital market and to encourage modernization and technological
up gradation, it has been decided to allow equity participation by other industrial undertakings
in the SSI, not exceeding 24 per cent of the total shareholding. This would also provide a
powerful boost to ancillarisation & sub-contracting, leading to expansion of employment
opportunities.
2.3 Regulatory provisions relating to the management of private limited companies are being
liberalized. A Limited Partnership Act will be introduced to enhance the supply of risk capital
to the small scale sector. Such an Act would limit the financial liability of the new and non-
active partners/entrepreneurs to the capital invested.
2.4 A beginning has been made towards solving the problem of delayed payments to small
industries by setting up of ‘factoring’ services through Small Industries Development Bank of
India (SIDBI). Network of such services would be set up throughout the country and operated
through commercial banks. A suitable legislation will be introduced to ensure prompt payment
of Small Industries’ bills.
3.2 A Technology Development Cell (TDC) would be set up in the Small Industries
Development Organization (SIDO) which would provide technology inputs to improve
productivity and competitiveness of the products of the small scale sector. The TDC would
coordinate the activities of the Tool Rooms, Process-cum-Product Development Centers
(PPDCs), existing as well as to be established under SIDO, and would also interact with the
other industrial research and development organizations to achieve its objectives.
3.3 Adequacy and equitable distribution of indigenous and imported raw materials would be
ensured to the small scale sector, particularly the tiny sub-sector. Policies would be so
designed that they do not militate against entry of new units. Based on the capacity needs,
Tiny/Small Scale units would be given priority in allocation of indigenous raw materials.
3.4 A proper and adequate arrangement for delivery of total package of incentives and services
at the District level will be evolved and implemented.
4.1 In spite of the vast domestic market, marketing remains a problem area for small and tiny
enterprises. Mass consumption labour intensive products are predominantly being marketed by
the organized sector. The tiny/small scale sector will be enabled to have a significant share of
such markets. In addition to the existing support mechanism, market promotion would be
undertaken through cooperative/public sector institutions, other specialized/professional
marketing agencies and consortia approach, backed up by such incentives, as considered
necessary.
4.2 National Small Industries Corporation (NSIC) would concentrate on marketing of mass
consumption items under common brand name and organic links between NSIC and SSIDCs
would be established.
4.3 Government recognizes the need to widen and deepen complementarily in production
programmes of large/medium and small industrial sectors. Parts, components, sub-assemblies,
etc. required by large public/private sector undertakings would be encouraged for production
in a techno-economically viable manner through small scale ancillary units. Industry
associations would be encouraged to establish sub-contracting exchanges, in addition to
strengthening the existing ones under the SIDO. Emphasis would also be laid on promotion of
a viable and competitive ‘component’ market.
4.4 Though the Small Scale Sector is making significant contribution to total exports, both
direct and indirect, a large potential remains untapped. The SIDO has been recognized as the
nodal agency to support the small scale industries in export promotion. An Export
Development Centre would be set up in SIDO to serve the small scale industries through its
network of field offices to further augment export activities of this sector.
5.1 A greater degree of awareness to produce goods and services conforming to national and
international standards would be created among the small scale sector.
5.2 Industry Associations would be encouraged and supported to establish quality counseling
and common testing facilities. Technology Information Centres to provide updated knowledge
on technology and markets would be established.
5.3 Where non-conformity with quality and standards involves risk to human life and public
health, compulsory quality control would be enforced.
5.5 Indian Institutes of Technology (IITs) and selected Regional/other Engineering Colleges
will serve as Technological Information, Design and Development Centres in their respective
command areas.
6.1 Government will continue to support first generation entrepreneurs through training and
will support their efforts. Large number of EDP trainers and motivators will be trained to
significantly expand the Entrepreneurship Development Programmes (EDP). Industry
Associations would also be encouraged to participate in this venture effectively.
6.2 EDP would be built into the curricula of vocational and other degree level courses.
6.3 Women entrepreneurs will receive support through special training Programme. Definition
of "Women Enterprises" would be simplified. The present stipulation regarding employment
of majority of women workers would be dispensed with and units in which women
entrepreneurs have a majority shareholding and management control, would be defined as
"Women Enterprises".
product reservation, fiscal concessions, preferential allocation of credit (by including the
same in
Priority Sector) and regulated rate of interest (for total credit requirement upto Rs 2 lacs),
launch of
Credit Guarantee Fund Trust for Small Industries, [later rechristened as Credit Guarantee
Trust for
Micro and Small Enterprises (CGTMSE)], extension of business and technical services,
preferential
procurement by the government. Small Industries Development Bank of India (SIDBI) has
been set up
in April 1990 as the principal financial institution for promotion, financing and
development of the small
enterprises sector and for coordinating the activities of other institutions engaged in
similar activities.
Several expert committees namely Narsimham Committee, Nayak Committee, Kapoor
Committee,
Ganguly Committee, Khan Committee, Murthy Committee, Kohli Committee and
Rangarajan
Committee have also been set up over the last few years to analyse the problems of the
small
enterprises sector and suggest remedial actions. The pace of de-reservation of small
enterprise items
has been accelerated so as to ensure that size does not remain a constraint to higher
production,
cost-efficiency and technological upgradation. The Government can now focus on smooth
migration of
small enterprises to medium enterprises and then to large enterprises progressively. It
should act as a
catalyst for such migration in addition to its role as facilitator for setting up new
enterprises and
sustaining them.
The recent policy packages for improving the flow of credit and growth of the sector are
as under.
2.1.7 Announcements in Union Budget 2008-09
a. Creation of a Risk Capital Fund of Rs. 2000 crores with SIDBI.
b. Creation of a fund of Rs. 2000 crores with SIDBI for providing refinance to MSME sector
c. Reduction in CGTMSE guarantee fee from 1.5% to 1% and annual service fee from
0.75%
to 0.5% for loans upto Rs. 5 lacs.
d. Allowing retired bank officers and ex-servicemen to act as Business Facilitators /
Business
Correspondents and Credit Counsellors.
e. Provision of Rs 100 crores for development of six Mega Clusters at - Varanasi &
Sibsagar
for handlooms, Bhiwandi & Erode for Powerlooms and Narsapur & Moradabad for
handicrafts.
2.1. 8 Package for Promotion of Micro and Small Enterprises, 2007
The Ministry of MSME announced a package for promotion of Micro and Small Enterprises
in
February 2007. The major features of the package are as under:
a. Implementation of the measures for 20% year on year growth to be closely monitored
by
the RBI and the Government.
b. SIDBI, assisted by scaled up Government grant, to cover 50 lakhs additional
beneficiaries
over the five years beginning 2006-07.
c. Creation of Risk Capital Fund by the Government with SIDBI
d. SIDBI to increase the number of branches from 56 to 100 in two years beginning 2006-
07.
e. Eligible loan limit under the Credit Guarantee Fund Scheme raised to Rs.50 lakhs. The
credit guarantee cover raised from 75 per cent to 80 per cent for micro enterprises for
loans
up to Rs. 5 lakhs. The corpus of the Fund to be raised from Rs.1,189 crores as on 1 April
2006 to Rs.2,500 crores over a period of five years.
Strategic management is a level of managerial activity under setting goals and over
Tactics. Strategic management provides overall direction to the enterprise and is closely
related to the field of Organization Studies. In the field of business administration it is
useful to talk about "strategic alignment" between the organization and its environment or
"strategic consistency". Strategic management includes not only the management team
but can also include the Board of Directors and other stakeholders of the organization. It
depends on the organizational structure.
“Strategic management is an ongoing process that evaluates and controls the business and
the industries in which the company is involved; assesses its competitors and sets goals
and strategies to meet all existing and potential competitors; and then reassesses each
strategy annually or quarterly [i.e. regularly] to determine how it has been implemented
and whether it has succeeded or needs replacement by a new strategy to meet changed
circumstances, new technology, new competitors, a new economic environment., or a
new social, financial, or political environment.”
Strategic management operates on several time scales. Short term strategies involve
planning and managing for the present. Long term strategies involve preparing for and
preempting the future. Marketing strategist, Derek Abell (1993), has suggested that
understanding this dual nature of strategic management is the least understood part of the
process. He claims that balancing the temporal aspects of strategic planning requires the
use of dual strategies simultaneously.
General Approaches
defination
the art and science of formulating, implementing and evaluating cross functional
decisions that enable an organization to achieve its objectives
* Management process. Management process as relate to how strategies are created and
changed.
* Time scales. The strategic time horizon is long. However, it for company in real
trouble can be very short.
Strategic management process involves the entire range of decisions. Typically, strategic
issues have six identifiable dimensions:
* Strategic issues are likely to have significant impact on the long-term prosperity of the
firm
Or
(1) To fix mission of the unit: There is certain objectives, behind establishment of the
each company. To achieve such objectives, long term as well short-term purposes and
goals are fixed. On achieving purposes and goals gradually, mission of the unit is
achieved, at last. As per example, within a span of 15 years, to make a full-fledged
motor-car, running on road by solar energy, so that, one can help in the social as well
national aim of controlling pollution, arose out of burning of fuel viz. petrol, diesel,
within a span of 20 years. A strategy is prepared to achieve mission of the company by
long term as well short-term goals and aims.
(5) Selection of new alternatives to achieve mission: For achievement of mis¬sion of the
company, proper selection of an alternative should be made out of many alternatives
found out for benefit of achievement of mission. At this stage, best alternative is selected,
keeping company’s capacity, weaknesses, risks, and business opportunities into
consideration, e. g. For mission of preparing motorcar running by solar energy, first of all
preference should be given, for preparing small machines or vehicles run by solar energy,
after getting success on it, mission of preparing “solar motor-car” can be achieved.
(7) To fix short-term annual targets: For success of company’s top mission, a short-term
targets are required to be ascertained. Generally, they are of half-year or annual duration.
For this a time schedule and budget is prepared. During annual period, a time table is
prepared that, production of which product, when and how much would be made e. g.
when production of machineries or vehicles is to be made, it is necessary to fix targets,
that during how much period, how many and what vehicles would be manufactured.
(8) To raise resources and facilities: To achieve targets as per time schedule, it is
necessary to raise required resources and facilities. In relation to increase in production, it
is required to increase employees and their facilities. At this stage, proper distribution of
financial as well non-financial resources is to be made after ascertaining their availability,
necessary changes in administration to be made, to encourage employees in relation to
achieve targets etc. such matters are taken into account.
(9) Evaluation and control on activities: It is necessary to evaluate regularly that, short-
term targets, within decided period, for success of entire strategy, are achieved, at what
rate. If activities are not progressing towards direction of decided goals, steps, viz.
training to related employees, guidance, leadership and encouragement should be taken.
By comparing results with original targets, activities can be made more effective by
controlling steps, if results are not favorable, e. g. as controlling steps, necessary changes
in technology, providing training, making contracts with traders, changes in policy,
procedure and methods may be made.
From above stated points, it can be state that, in process of strategic management, matters
starting from clarification of mission up to its (achievement, are included.).
SWOT Analysis:
Strategic analysis
An objective analysis and understanding of your markets and your
costs and capabilities forms the bedrock for the strategy
development process. From this analysis and by applying creativity
will come a number of options and opportunities that can be used
to build and implement a solid strategic plan for new or existing
markets.
Customers: Existing customers and potential customers and markets. What do they do?
What would help them do what they do better? What are their needs? Where are the most
profitable customers?
Competencies: Skills, knowledge and relationships. What do you do well? What abilities
could you draw on? What costs do you have to carry? Where do you make money?
Some companies will have all this knowledge to hand easily and readily. Others will
require information and analysis to be carried out in order to bring together the
knowledge together into one place.
The main difference between TQM and Six Sigma (a newer concept) is the approach.
TQM tries to improve quality by ensuring conformance to internal requirements, while
Six Sigma focuses on improving quality by reducing the number of defects and
impurities.[1
Total Quality Management (TQM) is an approach that seeks to improve quality and
performance which will meet or exceed customer expectations. This can be achieved by
integrating all quality-related functions and processes throughout the company. TQM
looks at the overall quality measures used by a company including managing quality
design and development, quality control and maintenance, quality improvement, and
quality assurance. TQM takes into account all quality measures taken at all levels and
involving all company employees.
Origins Of TQM
Total quality management has evolved from the quality assurance methods that were first
developed around the time of the First World War. The war effort led to large scale
manufacturing efforts that often produced poor quality. To help correct this, quality
inspectors were introduced on the production line to ensure that the level of failures due
to quality was minimized.
After the First World War, quality inspection became more commonplace in
manufacturing environments and this led to the introduction of Statistical Quality Control
(SQC), a theory developed by Dr. W. Edwards Deming. This quality method provided a
statistical method of quality based on sampling. Where it was not possible to inspect
every item, a sample was tested for quality. The theory of SQC was based on the notion
that a variation in the production process leads to variation in the end product. If the
variation in the process could be removed this would lead to a higher level of quality in
the end product.
After World War Two, the industrial manufacturers in Japan produced poor quality items.
In a response to this, the Japanese Union of Scientists and Engineers invited Dr. Deming
to train engineers in quality processes. By the 1950’s quality control was an integral part
of Japanese manufacturing and was adopted by all levels of workers within an
organization.
By the 1970’s the notion of total quality was being discussed. This was seen as company-
wide quality control that involves all employees from top management to the workers, in
quality control. In the next decade more non-Japanese companies were introducing
quality management procedures that based on the results seen in Japan. The new wave of
quality control became known as Total Quality Management, which was used to describe
the many quality-focused strategies and techniques that became the center of focus for
the quality movement.
Principles of TQM
TQM can be defined as the management of initiatives and procedures that are aimed at
achieving the delivery of quality products and services. A number of key principles can
be identified in defining TQM, including:
• Executive Management – Top management should act as the main driver for
TQM and create an environment that ensures its success.
• Training – Employees should receive regular training on the methods and
concepts of quality.
• Customer Focus – Improvements in quality should improve customer satisfaction.
• Decision Making – Quality decisions should be made based on measurements.
• Methodology and Tools – Use of appropriate methodology and tools ensures that
non-conformances are identified, measured and responded to consistently.
• Continuous Improvement – Companies should continuously work towards
improving manufacturing and quality procedures.
• Company Culture – The culture of the company should aim at developing
employees ability to work together to improve quality.
• Employee Involvement – Employees should be encouraged to be pro-active in
identifying and addressing quality related problems.
Many companies believe that the costs of the introduction of TQM are far greater than
the benefits it will produce. However research across a number of industries has costs
involved in doing nothing, i.e. the direct and indirect costs of quality problems, are far
greater than the costs of implementing TQM.
The American quality expert, Phil Crosby, wrote that many companies chose to pay for
the poor quality in what he referred to as the “Price of Nonconformance”. The costs are
identified in the Prevention, Appraisal, Failure (PAF) Model.
Prevention costs are associated with the design, implementation and maintenance of the
TQM system. They are planned and incurred before actual operation, and can include:
Appraisal costs are associated with the vendors and customers evaluation of purchased
materials and services to ensure they are within specification. They can include:
Failure costs can be split into those resulting from internal and external failure. Internal
failure costs occur when results fail to reach quality standards and are detected before
they are shipped to the customer. These can include:
External failure costs occur when the products or services fail to reach quality standards,
but are not detected until after the customer receives the item. These can include:
2. Venture Planning answers the question, should I be doing this and why?
3. The Venture Feasibility process examines seven key factors in any venture.
e. Financial Resources identifies and evaluates the financial resources need to pursue
alternative venture models.
f. Entrepreneurial Assessment to find out if the entrepreneur and the venture are in
alignment with respect to goals rewards, compelling interests and the ventures mission.
4. What Venture Planning is not? It is not about writing a Business Plan. Sometimes a
business plan is not needed.
5. Venture Planning does not require detailed funding source analysis, professional
opinions, entity formation or detailed market analysis.
a. Which venture concept produces the most sales, the best margins, the highest net profit
and the lowest breakeven?
d. Which produces the highest "Return on Investment" and the best liquidity?
e. Which model requires the entrepreneur to give up the least equity?
f. Identify and quantify the risks involved with execution of each model.
The SWOT analysis provides information that is helpful in matching the firm's
resources and capabilities to the competitive environment in which it operates.
As such, it is instrumental in strategy formulation and selection. The following
diagram shows how a SWOT analysis fits into an environmental scan:
Environmental Scan
/ \
Internal Analysis External Analysis
/\ /\
Strengths Weaknesses Opportunities Threats
|
SWOT Matrix
Strengths
A firm's strengths are its resources and capabilities that can be used as a basis
for developing a competitive advantage. Examples of such strengths include:
• patents
• strong brand names
• good reputation among customers
• cost advantages from proprietary know-how
• exclusive access to high grade natural resources
• favorable access to distribution networks
Weaknesses
In some cases, a weakness may be the flip side of a strength. Take the case in
which a firm has a large amount of manufacturing capacity. While this capacity
may be considered a strength that competitors do not share, it also may be a
considered a weakness if the large investment in manufacturing capacity
prevents the firm from reacting quickly to changes in the strategic environment.
Opportunities
The external environmental analysis may reveal certain new opportunities for
profit and growth. Some examples of such opportunities include:
Threats
Changes in the external environmental also may present threats to the firm.
Some examples of such threats include:
A firm should not necessarily pursue the more lucrative opportunities. Rather, it
may have a better chance at developing a competitive advantage by identifying a
fit between the firm's strengths and upcoming opportunities. In some cases, the
firm can overcome a weakness in order to prepare itself to pursue a compelling
opportunity.
To develop strategies that take into account the SWOT profile, a matrix of these
factors can be constructed. The SWOT matrix (also known as a TOWS Matrix) is
shown below:
Strengths Weaknesses
• S-O strategies pursue opportunities that are a good fit to the company's
strengths.
• W-O strategies overcome weaknesses to pursue opportunities.
• S-T strategies identify ways that the firm can use its strengths to reduce
its vulnerability to external threats.
• W-T strategies establish a defensive plan to prevent the firm's
weaknesses from making it highly susceptible to external threats.
or
Organizational environment consists of both external and internal factors. Environment
must be scanned so as to determine development and forecasts of factors that will
influence organizational success. Environmental scanning refers to possession and
utilization of information about occasions, patterns, trends, and relationships within
an organization’s internal and external environment. It helps the managers to decide
the future path of the organization. Scanning must identify the threats and opportunities
existing in the environment. While strategy formulation, an organization must take
advantage of the opportunities and minimize the threats. A threat for one organization
may be an opportunity for another.
As business becomes more competitive, and there are rapid changes in the external
environment, information from external environment adds crucial elements to the
effectiveness of long-term plans. As environment is dynamic, it becomes essential to
identify competitors’ moves and actions. Organizations have also to update the core
competencies and internal environment as per external environment. Environmental
factors are infinite, hence, organization should be agile and vigile to accept and adjust to
the environmental changes. For instance - Monitoring might indicate that an original
forecast of the prices of the raw materials that are involved in the product are no more
credible, which could imply the requirement for more focused scanning, forecasting and
analysis to create a more trustworthy prediction about the input costs. In a similar
manner, there can be changes in factors such as competitor’s activities, technology,
market tastes and preferences.
While in external analysis, three correlated environment should be studied and analyzed
—
Strategic managers must not only recognize the present state of the environment and their
industry but also be able to predict its future positions.
Development of strategy
A strategy is an organizations plan to achieve its mission - which is the purpose for the
organizations existence.
The development process involves three conceptual ways in which firms achieve their
missions:
• Differentiation
• Cost Leadership
• Response
Effective strategies are also developed through proper evaluation of a S.W.O.T. analysis
to gain competitive advantage.
unit 9;
production and operations management
Principles
Customer focus
Since the organizations depend on their customers, therefore they should understand
current and future customer needs, should meet customer requirements and try to exceed
the expectations of customers.[4]
Leadership
Leaders of an organization establish unity of purpose and direction of it. They should go
for creation and maintenance of such an internal environment, in which people can
become fully involved in achieving the organization's quality objective.[4]
Involvement of people
People at all levels of an organization are the essence of it. Their complete involvement
enables their abilities to be used for the benefit of the organization.[4]
Process approach
The desired result can be achieved when activities and related resources are managed in
an organization as process.[4]
Continual improvement
Effective decisions are always based on the data analysis and information.[4]
Since an organization and its suppliers are interdependent, therefore a mutually beneficial
relationship between them increases the ability of both to add value.[4]
These eight principles form the basis for the quality management system standard ISO
9001:2008.[4]
Quality improvement
There are many methods for quality improvement. These cover product improvement,
process improvement and people based improvement. In the following list are methods of
quality management and techniques that incorporate and drive quality improvement:
Quality terms
Another definition is provided by the APICS Dictionary when it defines SCM as the
"design, planning, execution, control, and monitoring of supply chain activities with the
objective of creating net value, building a competitive infrastructure, leveraging
worldwide logistics, synchronizing supply with demand and measuring performance
globally."
Definitions
• Global Supply Chain Forum - Supply Chain Management is the integration of key
business processes across the supply chain for the purpose of creating value for
customers and stakeholders (Lambert, 2008)[4].
Supply chain execution means managing and coordinating the movement of materials,
information and funds across the supply chain. The flow is bi-directional.
[edit] Activities/functions
Several models have been proposed for understanding the activities required to manage
material movements across organizational and functional boundaries. SCOR is a supply
chain management model promoted by the Supply Chain Council. Another model is the
SCM Model proposed by the Global Supply Chain Forum (GSCF). Supply chain
activities can be grouped into strategic, tactical, and operational levels . The CSCMP has
adopted The American Productivity & Quality Center (APQC) Process Classification
FrameworkSM a high-level, industry-neutral enterprise process model that allows
organizations to see their business processes from a cross-industry viewpoint[6].
[edit] Strategic Level
• Daily production and distribution planning, including all nodes in the supply
chain.
• Production scheduling for each manufacturing facility in the supply chain (minute
by minute).
• Demand planning and forecasting, coordinating the demand forecast of all
customers and sharing the forecast with all suppliers.
• Sourcing planning, including current inventory and forecast demand, in
collaboration with all suppliers.
• Inbound operations, including transportation from suppliers and receiving
inventory.
• Production operations, including the consumption of materials and flow of
finished goods.
• Outbound operations, including all fulfillment activities, warehousing and
transportation to customers.
• Order promising, accounting for all constraints in the supply chain, including all
suppliers, manufacturing facilities, distribution centers, and other customers.
• From production level to supply level accounting all transit damage cases &
arrange to settlement at customer level by maintaining company loss through
insurance company.
Organizations increasingly find that they must rely on effective supply chains, or
networks, to compete in the global market and networked economy.[7] In Peter Drucker's
(1998) new management paradigms, this concept of business relationships extends
beyond traditional enterprise boundaries and seeks to organize entire business processes
throughout a value chain of multiple companies.
During the past decades, globalization, outsourcing and information technology have
enabled many organizations, such as Dell and Hewlett Packard, to successfully operate
solid collaborative supply networks in which each specialized business partner focuses on
only a few key strategic activities (Scott, 1993). This inter-organizational supply network
can be acknowledged as a new form of organization. However, with the complicated
interactions among the players, the network structure fits neither "market" nor
"hierarchy" categories (Powell, 1990). It is not clear what kind of performance impacts
different supply network structures could have on firms, and little is known about the
coordination conditions and trade-offs that may exist among the players. From a systems
perspective, a complex network structure can be decomposed into individual component
firms (Zhang and Dilts, 2004). Traditionally, companies in a supply network concentrate
on the inputs and outputs of the processes, with little concern for the internal
management working of other individual players. Therefore, the choice of an internal
management control structure is known to impact local firm performance (Mintzberg,
1979).
In the 21st century, changes in the business environment have contributed to the
development of supply chain networks. First, as an outcome of globalization and the
proliferation of multinational companies, joint ventures, strategic alliances and business
partnerships, significant success factors were identified, complementing the earlier "Just-
In-Time", "Lean Manufacturing" and "Agile Manufacturing" practices.[8] Second,
technological changes, particularly the dramatic fall in information communication costs,
which are a significant component of transaction costs, have led to changes in
coordination among the members of the supply chain network (Coase, 1998).
Many researchers have recognized these kinds of supply network structures as a new
organization form, using terms such as "Keiretsu", "Extended Enterprise", "Virtual
Corporation", "Global Production Network", and "Next Generation Manufacturing
System".[9] In general, such a structure can be defined as "a group of semi-independent
organizations, each with their capabilities, which collaborate in ever-changing
constellations to serve one or more markets in order to achieve some business goal
specific to that collaboration" (Akkermans, 2001).
The security management system for supply chains is described in ISO/IEC 28000 and
ISO/IEC 28001 and related standards published jointly by ISO and IEC.
Six major movements can be observed in the evolution of supply chain management
studies: Creation, Integration, and Globalization (Lavassani et al., 2008a), Specialization
Phases One and Two, and SCM 2.0.
1. Creation Era
The term supply chain management was first coined by a U.S. industry consultant in the
early 1980s. However, the concept of a supply chain in management was of great
importance long before, in the early 20th century, especially with the creation of the
assembly line. The characteristics of this era of supply chain management include the
need for large-scale changes, re-engineering, downsizing driven by cost reduction
programs, and widespread attention to the Japanese practice of management.
2. Integration Era
This era of supply chain management studies was highlighted with the development of
Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s
by the introduction of Enterprise Resource Planning (ERP) systems. This era has
continued to develop into the 21st century with the expansion of internet-based
collaborative systems. This era of supply chain evolution is characterized by both
increasing value-adding and cost reductions through integration.
3. Globalization Era
The third movement of supply chain management development, the globalization era, can
be characterized by the attention given to global systems of supplier relationships and the
expansion of supply chains over national boundaries and into other continents. Although
the use of global sources in the supply chain of organizations can be traced back several
decades (e.g., in the oil industry), it was not until the late 1980s that a considerable
number of organizations started to integrate global sources into their core business. This
era is characterized by the globalization of supply chain management in organizations
with the goal of increasing their competitive advantage, value-adding, and reducing costs
through global sourcing.
Specialization within the supply chain began in the 1980s with the inception of
transportation brokerages, warehouse management, and non-asset-based carriers and has
matured beyond transportation and logistics into aspects of supply planning,
collaboration, execution and performance management.
At any given moment, market forces could demand changes from suppliers, logistics
providers, locations and customers, and from any number of these specialized
participants as components of supply chain networks. This variability has significant
effects on the supply chain infrastructure, from the foundation layers of establishing and
managing the electronic communication between the trading partners to more complex
requirements including the configuration of the processes and work flows that are
essential to the management of the network itself.
Outsourced technology hosting for supply chain solutions debuted in the late 1990s and
has taken root primarily in transportation and collaboration categories. This has
progressed from the Application Service Provider (ASP) model from approximately 1998
through 2003 to the On-Demand model from approximately 2003-2006 to the Software
as a Service (SaaS) model currently in focus today.
Web 2.0 is defined as a trend in the use of the World Wide Web that is meant to increase
creativity, information sharing, and collaboration among users. At its core, the common
attribute that Web 2.0 brings is to help navigate the vast amount of information available
on the Web in order to find what is being sought. It is the notion of a usable pathway.
SCM 2.0 follows this notion into supply chain operations. It is the pathway to SCM
results, a combination of the processes, methodologies, tools and delivery options to
guide companies to their results quickly as the complexity and speed of the supply chain
increase due to the effects of global competition, rapid price fluctuations, surging oil
prices, short product life cycles, expanded specialization, near-/far- and off-shoring, and
talent scarcity.
SCM 2.0 leverages proven solutions designed to rapidly deliver results with the agility to
quickly manage future change for continuous flexibility, value and success. This is
delivered through competency networks composed of best-of-breed supply chain domain
expertise to understand which elements, both operationally and organizationally, are the
critical few that deliver the results as well as through intimate understanding of how to
manage these elements to achieve desired results. Finally, the solutions are delivered in a
variety of options, such as no-touch via business process outsourcing, mid-touch via
managed services and software as a service (SaaS), or high touch in the traditional
software deployment model.
Supply chain business process integration involves collaborative work between buyers
and suppliers, joint product development, common systems and shared information.
According to Lambert and Cooper (2000), operating an integrated supply chain requires a
continuous information flow. However, in many companies, management has reached the
conclusion that optimizing the product flows cannot be accomplished without
implementing a process approach to the business. The key supply chain processes stated
by Lambert (2004) [10] are:
• Customer relationship management
• Customer service management
• Demand management
• Order fulfillment
• Manufacturing flow management
• Supplier relationship management
• Product development and commercialization
• Returns management
Much has been written about demand management. Best-in-Class companies have similar
characteristics, which include the following: a) Internal and external collaboration b)
Lead time reduction initiatives c) Tighter feedback from customer and market demand d)
Customer level forecasting
One could suggest other key critical supply business processes which combine these
processes stated by Lambert such as:
b) Procurement process
Strategic plans are drawn up with suppliers to support the manufacturing flow
management process and the development of new products. In firms where operations
extend globally, sourcing should be managed on a global basis. The desired outcome is a
win-win relationship where both parties benefit, and a reduction in time required for the
design cycle and product development. Also, the purchasing function develops rapid
communication systems, such as electronic data interchange (EDI) and Internet linkage to
convey possible requirements more rapidly. Activities related to obtaining products and
materials from outside suppliers involve resource planning, supply sourcing, negotiation,
order placement, inbound transportation, storage, handling and quality assurance, many
of which include the responsibility to coordinate with suppliers on matters of scheduling,
supply continuity, hedging, and research into new sources or programs.
Here, customers and suppliers must be integrated into the product development process in
order to reduce time to market. As product life cycles shorten, the appropriate products
must be developed and successfully launched with ever shorter time-schedules to remain
competitive. According to Lambert and Cooper (2000), managers of the product
development and commercialization process must:
The manufacturing process produces and supplies products to the distribution channels
based on past forecasts. Manufacturing processes must be flexible to respond to market
changes and must accommodate mass customization. Orders are processes operating on a
just-in-time (JIT) basis in minimum lot sizes. Also, changes in the manufacturing flow
process lead to shorter cycle times, meaning improved responsiveness and efficiency in
meeting customer demand. Activities related to planning, scheduling and supporting
manufacturing operations, such as work-in-process storage, handling, transportation, and
time phasing of components, inventory at manufacturing sites and maximum flexibility in
the coordination of geographic and final assemblies postponement of physical
distribution operations.
e) Physical distribution
f) Outsourcing/partnerships
This is not just outsourcing the procurement of materials and components, but also
outsourcing of services that traditionally have been provided in-house. The logic of this
trend is that the company will increasingly focus on those activities in the value chain
where it has a distinctive advantage, and outsource everything else. This movement has
been particularly evident in logistics where the provision of transport, warehousing and
inventory control is increasingly subcontracted to specialists or logistics partners. Also,
managing and controlling this network of partners and suppliers requires a blend of both
central and local involvement. Hence, strategic decisions need to be taken centrally, with
the monitoring and control of supplier performance and day-to-day liaison with logistics
partners being best managed at a local level.
g) Performance measurement
Experts found a strong relationship from the largest arcs of supplier and customer
integration to market share and profitability. Taking advantage of supplier capabilities
and emphasizing a long-term supply chain perspective in customer relationships can both
be correlated with firm performance. As logistics competency becomes a more critical
factor in creating and maintaining competitive advantage, logistics measurement becomes
increasingly important because the difference between profitable and unprofitable
operations becomes more narrow. A.T. Kearney Consultants (1985) noted that firms
engaging in comprehensive performance measurement realized improvements in overall
productivity. According to experts, internal measures are generally collected and
analyzed by the firm including
1. Cost
2. Customer Service
3. Productivity measures
4. Asset measurement, and
5. Quality.
Currently there is a gap in the literature available on supply chain management studies:
there is no theoretical support for explaining the existence and the boundaries of supply
chain management. A few authors such as Halldorsson, et al. (2003), Ketchen and Hult
(2006) and Lavassani, et al. (2008b) have tried to provide theoretical foundations for
different areas related to supply chain by employing organizational theories. These
theories include:
In the study of supply chain management, the concept of centroids has become an
important economic consideration. A centroid is place that has a high proportion of a
country’s population and a high proportion of its manufacturing, generally within 500 mi
(805 km). In the U.S., two major supply chain centroids have been defined, one near
Dayton, Ohio and a second near Riverside, California.
The centroid near Dayton is particularly important because it is closest to the population
center of the US and Canada. Dayton is within 500 miles of 60% of the population and
manufacturing capacity of the U.S., as well as 60 percent of Canada’s population[11]. The
region includes the Interstate 70/75 interchange, which is one of the busiest in the nation
with 154,000 vehicles passing through in a day. Of those, anywhere between 30 percent
and 35 percent are trucks hauling goods. In addition, the I-75 corridor is home to the
busiest north-south rail route east of the Mississippi.[12]
Tax Efficient Supply Chain Management is a business model which consider the effect
of Tax in design and implementation of supply chain management. As the consequence
of Globalization, business which is cross-nation should pay different tax rates in different
countries. Due to the differences, global players have the opportunity to calculate and
optimize supply chain based on tax efficiency[13] legally. It is used as a method of gaining
more profit for company which owns global supply chain.
For example, in July, 2009 the U.S. based Wal-Mart corporation announced its intentions
to create a global sustainability index that would rate products according to the
environmental and social impact made while the products were manufactured and
distributed. The sustainability rating index is intended to create environmental
accountability in Wal-Mart's supply chain, and provide the motivation and infrastructure
for other retail industry companies to do the same.[15]
The SCM components are the third element of the four-square circulation framework.
The level of integration and management of a business process link is a function of the
number and level, ranging from low to high, of components added to the link (Ellram and
Cooper, 1990; Houlihan, 1985). Consequently, adding more management components or
increasing the level of each component can increase the level of integration of the
business process link. The literature on business process re-engineering,[16] buyer-supplier
relationships,[17] and SCM[18] suggests various possible components that must receive
managerial attention when managing supply relationships. Lambert and Cooper (2000)
identified the following components:
Consequently, Lambert and Cooper's framework of supply chain components does not
lead to any conclusion about what are the primary or secondary (specialized) level supply
chain components (see Bowersox and Closs, 1996, p. 93). That is, what supply chain
components should be viewed as primary or secondary, how should these components be
structured in order to have a more comprehensive supply chain structure, and how to
examine the supply chain as an integrative one (See above sections 2.1 and 3.1).
Reverse Supply Chain Reverse logistics is the process of managing the return of goods.
Reverse logistics is also referred to as "Aftermarket Customer Services". In other words,
any time money is taken from a company's warranty reserve or service logistics budget
one can speak of a reverse logistics operation.
Supply chain systems configure value for those that organise the networks. Value is the
additional revenue over and above the costs of building the network. Co-creating value
and sharing the benefits appropriately to encourage effective participation is a key
challenge for any supply system. Tony Hines defines value as follows: “Ultimately it is
the customer who pays the price for service delivered that confirms value and not the
producer who simply adds cost until that point” [20]
Global supply chains pose challenges regarding both quantity and value:
• Globalization
• Increased cross border sourcing
• Collaboration for parts of value chain with low-cost providers
• Shared service centers for logistical and administrative functions
• Increasingly global operations, which require increasingly global coordination
and planning to achieve global optimums
• Complex problems involve also midsized companies to an increasing degree,
These trends have many benefits for manufacturers because they make possible larger lot
sizes, lower taxes, and better environments (culture, infrastructure, special tax zones,
sophisticated OEM) for their products. Meanwhile, on top of the problems recognized in
supply chain management, there will be many more challenges when the scope of supply
chains is global. This is because with a supply chain of a larger scope, the lead time is
much longer. Furthermore, there are more issues involved such as multi-currencies,
different policies and different laws. The consequent problems include:1. different
currencies and valuations in different countries; 2. different tax laws (Tax Efficient
Supply Chain Management); 3. different trading protocols; 4. lack of transparency of cost
and profit.
Operational planning and control decisions involve scheduling and control of labor,
materials, and capital input to produce the desired quantity and quality of output most
efficiently.
Operational planning and control are based on forecasts of future demand for the output
of the system. But even with the best possible forecasting and the most finely tuned
operations system, demand cannot always be met with existing system capacity in a given
time period. Unexpected market trends, new product developments, or competitors’
actions can throw the forecasts off, and problems in the operations system can reduce
capacity. At these times, shorter term managerial decisions must be made to allocate
system capacity to meet demand. This is what the hoteling system at Ernst & Young
makes possible. At these times, as well, managers must also think about the longer term
implications of the changes in demand and capacity needs. United Parcel Services (UPS)
and Federal Express are two organizations where long term trends in package volumes
are the ever present concerns of managers.
Facility management
The term facility management is similar to property management although not exactly the
same. While both manage the day to day operations of a facility the property such as
cleaning, maintenance and security, similar to Janitors, one must not confuse it with such
a title. The property manager has an expanded role which includes leasing and marketing
activities whereas the facility manager role focuses on existing tenants who usually are
owner occupants. An important feature of facility management is that it takes account of
human needs of its tenants in the use of buildings and other constructed facilities. These
softer factors complement the harder factors associated with the maintenance and care of
engineering services installations.
Facility management is performed during the operational phase of a building’s life cycle,
which normally extends over many decades .A major challenge facing facility owners is
reducing demand for energy for economic reasons, but also because energy consumption
goes hand-in-hand with carbon emissions. Reducing energy during the operational phase
of a facility's life similarly reduces carbon emissions. When considering that 30-40% of a
country's total carbon emissions is attributable to buildings and other constructed
facilities, it is clear that operations and, hence, facility management have a significant
role to play.
Role
The discipline of facility management and the role of facility managers in particular are
evolving to the extent that many managers have to operate at two levels: strategic-tactical
and operational.
• Waste Removal
• OSHA (Occupational Health and Safety)Regulations (could be a different
organization depending on type of building i.e. hospital)
• HAZMAT (Hazardous Material) compliance
• Building Cleanliness: This sub-discipline of facility management includes routine
cleaning (restrooms, common areas) as well as more specific emphasis on dust
control [2] and hygiene maintenance.[3]
Mechanical Systems
Power Systems
• Normal power
o Electrical Substations
o Switchgear
• Emergency power systems
o Uninterruptible power supply (UPS) systems
o Standby generators
Building Systems
Life/Safety Systems
• Sprinkler systems
• Smoke/fire detection systems
• Fire Extinguishers
o Gaseous Extinguishers
o FM-200
o FE-25
o Halon
• Signage
• Evacuation Plans
Space Management
Definitions
Another broader definition provided by IFMA is: "The practice or coordinating the
physical workplace with the people and work of the organization; integrates the
principles of business administration, architecture, and the behavioral and engineering
sciences."
The British Institute of Facilities Management has formally adopted the CEN definition
but also offers a slightly simpler description:
"Facilities management is the integration of multi-disciplinary activities within
the built environment and the management of their impact upon people and the
workplace".
Workforce productivity
Workforce productivity is the amount of goods and services that a worker produces
in a given amount of time. It is one of several types of productivity that economists
measure. Workforce productivity can be measured for a firm, a process, an industry, or a
country. It was originally (and often still is) called labor productivity because it was
originally studied only with respect to the work of laborers as opposed to managers or
professionals.
The OECD defines it as "the ratio of a volume measure of output to a volume measure of
input".[1] Volume measures of output are normally gross domestic product (GDP) or gross
value added (GVA), expressed at constant prices i.e. adjusted for inflation. The three
most commonly used measures of input are: hours worked; workforce jobs; and number
of people in employment.
Measured labour productivity will vary as a function of both other input factors and the
efficiency with which the factors of production are used (total factor productivity). So
two firms or countries may have equal total factor productivity (productive technologies)
but because one has more capital to use, labour productivity will be higher.
Output per worker corresponds to the "average product of labour" and can be contrasted
with the marginal product of labour, which refers to the increase in output that results
from a corresponding (marginal) increase in labour input.
Measurement Issues
Whilst the output produced is generally measurable in the private sector, it may be
difficult to measure in the public sector or in NGOs. The input may be more difficult to
measure in an unbiased way as soon as we move away from the idea of homogeneous
labour ("per worker" or "per standard labour hour"):
These aspects of productivity refer to the qualitative, rather than quantitative, dimensions
of labour input. If you think that one firm/country is using labour much more intensely,
you might not want to say this is due to greater labour productivity, since the output per
labour-effort may be the same. This insight becomes particularly important when a large
part of what is produced in an economy consists of services. Management may be very
preoccupied with the productivity of employees, but the productivity gains of
management itself might be very difficult to prove. Modern management literature
emphasizes the important effect of the overall work culture or organizational culture that
an enterprise has. But again the specific effects of any particular culture on productivity
may be unprovable.
“The factors affecting labour productivity or the performance of individual work roles are
of broadly the same type as those that affect the performance of manufacturing firms as a
whole. They include: (1) physical-organic, location, and technological factors; (2)
cultural belief-value and individual attitudinal, motivational and behavioural factors; (3)
international influences – e.g. levels of innovativeness and efficiency on the part of the
owners and managers of inward investing foreign companies; (4) managerial-
organizational and wider economic and political-legal environments; (5) levels of
flexibility in internal labour markets and the organization of work activities – e.g. the
presence or absence of traditional craft demarcation lines and barriers to occupational
entry; and (6) individual rewards and payment systems, and the effectiveness of
personnel managers and others in recruiting, training, communicating with, and
performance-motivating employees on the basis of pay and other incentives. The
emergence of computers has been noted as a significant factor in increasing labor
productivity in the late 1990's, by some, and as an insignificant factor by others, such as
R.J. Gordon. Although computers have existed for most of the 20th century, some
economic researchers have noted a lag in productivity growth caused by computers that
didn't come until the late 1990's.”[6][1]
The macroenvironment ;-
–Demographic
–Economic
–Natural
–Technological
–Political
–Cultural
Rural Marketing
The concept of Rural Marketing in India Economy has always played an influential
role in the lives of people. In India, leaving out a few metropolitan cities, all the districts
and industrial townships are connected with rural markets.
The rural market in India is not a separate entity in itself and it is highly influenced by the
sociological and behavioral factors operating in the country. The rural population in India
accounts for around 627 million, which is exactly 74.3 percent of the total population.
The Registrars of Companies in different states chiefly manage: The rural market in
India brings in bigger revenues in the country, as the rural regions comprise of the
maximum consumers in this country. The rural market in Indian economy generates
almost more than half of the country's income. Rural marketing in Indian economy can be
classified under two broad categories. These are:
• The market for consumer goods that comprise of both durable and non-durable
goods
• The market for agricultural inputs that include fertilizers, pesticides, seeds, and so
on
The concept of rural marketing in India is often been found to form ambiguity in the
minds of people who think rural marketing is all about agricultural marketing. However,
rural marketing determines the carrying out of business activities bringing in the flow of
goods from urban sectors to the rural regions of the country as well as the marketing of
various products manufactured by the non-agricultural workers from rural to urban areas.
To be precise, Rural Marketing in India Economy covers two broad sections, namely:
• With the initiation of various rural development programmes there have been an
upsurge of employment opportunities for the rural poor. One of the biggest cause
behind the steady growth of rural market is that it is not exploited and also yet to
be explored.
• The rural market in India is vast and scattered and offers a plethora of
opportunities in comparison to the urban sector. It covers the maximum
population and regions and thereby, the maximum number of consumers.
• The social status of the rural regions is precarious as the income level and literacy
is extremely low along with the range of traditional values and superstitious
beliefs that have always been a major impediment in the progression of this
sector.
• The steps taken by the Government of India to initiate proper irrigation,
infrastructural developments, prevention of flood, grants for fertilizers, and
various schemes to cut down the poverty line have improved the condition of the
rural masses.
The area covered by a "hat" usually varies from 5 to 10 miles. Most of "hats" are very
poorly equipped, are uncovered and lack storage, drainage, and other facilities. It is
important to observe that only small and marginal farmers sell their produce in such
markets. The big farmers with large surplus go to the larger wholesale markets.
The arhatiyas of these mandies sell off the produce to the retail merchants. However,
paddy, cotton and oilseeds are sold off to the mills for processing. The marketing system
for sugarcane is different. The farmers sell their produce directly to the sugar mills.
4. Co-operative marketing
To improve the efficiency of the agricultural marketing and to save farmers from the
exploitation and malpractices of middlemen, emphasis has been laid on the development
of co-operative marketing societies. Such societies are formed by farmers to take
advantage of collective bargaining.
A marketing society collects surplus from it members and sell it in the mandi
collectively. This improves the bargaining power of the members and they are able to
obtain a better price for the produce. In addition to the sale of produce, these societies
also serve the members in a number of other ways.
VIII. Improvement of Agricultural Marketing System
1. Marketing surveys
In the first place the government has undertaken marketing surveys of various goods and
has published these surveys. These surveys have brought out the various problems
connected with the marketing of goods and have made suggestions for their removal.
A Central Quality Control Laboratory has been set up at Nagpur and eight other regional
laboratories in different parts of the country with the purpose of testing the quality and
quality of agricultural products applying for the Government's "Agmark" have been
created The Government is further streamlining quality control enforcement and
inspection and improvement in grading.
or
The term agricultural marketing is composed of two words -agriculture and marketing.
Agriculture, in the broadest sense means activities aimed at the use of natural resources
for human welfare, and marketing connotes a series of activities involved in moving the
goods from the point of production to the point of consumption. Specification, the subject
of agricultural marketing includes marketing functions, agencies, channels, efficiency and
cost, price spread and market integration, producers surplus etc. The agricultural
marketing system is a link between the farm and the non-farm sectors.
In India Agriculture was practiced formerly on a subsistence basis; the villages were self
sufficient, people exchanged their goods, and services within the village on a barter basis.
With the development of means of transport and storage facilities, agriculture has become
commercial in character, the farmer grows those crops that fetch a better price. Marketing
of agricultural produce is considered as an integral part of agriculture, since an
agriculturist is encouraged to make more investment and to increase production. Thus
there is an increasing awareness that it is not enough to produce a crop or animal product;
it must be marketed as well.
Agricultural marketing involves in its simplest form the buying and selling of agricultural
produce. This definition of agricultural marketing may be accepted in olden days, when
the village economy was more or less self-sufficient, when the marketing of agricultural
produce presented no difficulty, as the farmer sold his produce directly to the consumer
on a cash or barter basis. But, in modem times, marketing of agricultural produce is
different from that of olden days. In modem marketing, agricultural produce has to
undergo a series of transfers or exchanges from one hand to another before it finally
reaches the consumer.
The farmer has realized the importance of adopting new techniques of production and is
making efforts for more income and higher standards of living. As a consequence, the
cropping pattern is no longer dictated by what he needs for his own personal consumption
but what is responsive to the market in terms of prices received by him. While the trade is
very organised the farmers are not Farmer is not conversant with the complexities of the
marketing system which is becoming more and more complicated. The cultivator is
handicapped by several disabilities as a seller. He sells his produce at an unfavorable
place, time and price.
Preface
I. Introduction
II. Importance and Objectives of Agricultural Marketing in India
III. Facilities Needed for Agricultural Marketing
IV. Inadequacies of Present Marketing System
V. Characteristics of Agricultural Products
VI. Methods of Sale and Marketing Agencies
VII. Agricultural Marketing in India
VIII. Improvement of Agricultural Marketing System
IX. Cooperative Marketing in India
X. Warehousing in India
XI. Ideal Marketing System
XII. Scientific Marketing of Farm Products
XIII. Conclusion
Preface
The term agricultural marketing is composed of two words -agriculture and marketing.
Agriculture, in the broadest sense means activities aimed at the use of natural resources
for human welfare, and marketing connotes a series of activities involved in moving the
goods from the point of production to the point of consumption. Specification, the subject
of agricultural marketing includes marketing functions, agencies, channels, efficiency and
cost, price spread and market integration, producers surplus etc. The agricultural
marketing system is a link between the farm and the non-farm sectors.
Introduction
In India Agriculture was practiced formerly on a
subsistence basis; the villages were self sufficient, people
exchanged their goods, and services within the village on
a barter basis. With the development of means of
transport and storage facilities, agriculture has become
commercial in character, the farmer grows those crops
that fetch a better price. Marketing of agricultural
produce is considered as an integral part of agriculture,
since an agriculturist is encouraged to make more
investment and to increase production. Thus there is an
increasing awareness that it is not enough to produce a
crop or animal product; it must be marketed as well.
The farmer has realized the importance of adopting new techniques of production and is
making efforts for more income and higher standards of living. As a consequence, the
cropping pattern is no longer dictated by what he needs for his own personal consumption
but what is responsive to the market in terms of prices received by him. While the trade is
very organised the farmers are not Farmer is not conversant with the complexities of the
marketing system which is becoming more and more complicated. The cultivator is
handicapped by several disabilities as a seller. He sells his produce at an unfavorable
place, time and price.
In order to have best advantage in marketing of his agricultural produce the farmer should
enjoy certain basic facilities.
2. He should have holding capacity, in the sense, that he should be able to wait for times
when he could get better prices for his produce and not dispose of his stocks immediately
after the harvest when the prices are very low.
3. He should have adequate and cheap transport facilities which could enable him to take
his surplus produce to the mandi rather than dispose it of in the village itself to the village
money-lender-cum-merchant at low prices.
4. He should have clear information regarding the market conditions as well as about
the ruling prices, otherwise may be cheated. There should be organized and
regulated markets where the farmer will not be cheated by the -dalals- and
-arhatiyas-.
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