Posts Tagged ‘business ethics’
A consumer package is one which holds the product for ultimate consumption and is within the means of a buying household. In other words, the consumer has the option to purchase the pack size which he considers adequate for the consumption of his family over a length of time and which does not involve extra investment during that period. A bulk package is opposite. It is either for the industrial consumer’s use, e.g., steel drums for paint or 4gallon or 18 liter kerosene oil can, a sack of rice, etc. The consumer package itself very often requires an outside package in which it is transported which is sometimes referred to as a transmit package or an outer container. An industrial package may either be described as a bulk package or a package for durable consumer goods. It is a basic package type, although many sub-divisions can be listed, e.g. a strip package or a multiple package. A dual use package is one which has a secondary usefulness after its contents have been consumed. Drinking glasses, boxes of jewelry or cigarettes, wastepaper baskets, refrigerator dishes, cloth from flour, and feed sacks are examples of this type of package.
No business firm is completely static, like a building or a machine with stationery framework and standard parts that may be replaced from the ready stock or got from outside. Instead shift in demand, in competition, and in other external forces call to continuous adaption, and the ambition and drives of executives within the company keep it evolving. And as changes are made in one part of the company, compensating adjustments are needed in other parts. Consequently, each company should be thought of as a dynamic, integrated entity. Each of these business entities develops character and an individual personality of its own. This personality is shaped, not only by physical resources and technology, or financial inputs but also by some basic objectives which may be set for it by the top management. Objectives are the ends towards which enterprise activities are aimed the end points of planning.
The management at different levels should take measures to make the business plan effective due to the possibility of limitations. These measures include:
i) Establishment of co-ordination between long-terms plans and short-term plans
ii) Bringing co-ordination among all the departments in the organization in formulating and implementing plans.
iii) Formulating a comprehensive plan linking all the departmental plans with the corporate level plans.
iv) Giving proper attention to the departmental level plants.
v) Ensuring the commitment and involvement of all managers at all levels in the organization.
vi) Train and develop the managers in analyzing and understanding external environment, formulate the plans effectively.
vii) Foresee the environmental changes; feed the information forward to all the levels in the organization.
viii) Ensuring effective team work and empower the mangers to formulate effective plans.
There is a gap between the objectives those are sought and those realizable to be analyzed with a view to bridging it. Bridging the gap is essential in order to achieve the pre-determined objectives. The following are the measures to analyze and bridge the gap.
. Identifying the products and markets which fit into the existing technologies and production processes and thus developing them at a faster rate. Also, development of products which are already planned.
. Increase the sales volume: Increase the volume of sales by introducing new features to the existing products, developing new users to the existing products, finding new customers and markets, changing the price, improvements in distribution, sales promotion, expansion of production capacities, etc.,
. Increase profit on sales: Increase in profit on sales is possible through increasing the selling price, reduction in cost of production per unit, marketing cost per unit, reduction in inventory increase in productivity etc.,
. Minimize assets through better turnover of inventory: Identify excess inventory in all items and reduce it to the extent possible. Inventory of new material can be reduced to the extent of closer to production or just in time level.
. Value analysis: Value analysis involves a consideration of cost reduction without reduction in the value of the product to the customer. Use of low cost raw material, change in design, and more productive equipment are the ways of doing it.
. Reducing the Fat: This involves reduction of unnecessary, available and controllable costs. These are labor costs, general wastage, non-performing assets, etc.
The management has to evaluate the available courses of action through SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) and rank the alternatives. After ranking the alternatives, the management has to select the best business plans.
Developing Derivative Plans: The management after selecting the best business plan, it should formulate the other policies and plans which are the sub plans to the main plan. Management should involve and consult the lower level managers while formulating the derivative plans.
Implementation of the Business Plans: After the development and selection of the plans and derivative plans, management has to take initiative to implement the business plan.
Measuring and controlling: After the business plan is put into action, the management has to measure the progress of the plan and compare it with the standards, observe the deviations, if any and correct the deviations.
Internal Premises include sales forecasts, policies and programs of the organization, capital investment, managerial competency, human resource skills, and other organizational resources. External premises include general business and economic environment, technological changes, government policies and regulations, population growth, political stability, and social factors. Management would identify the objectives to be achieved or where should we go? Where are we? The gap between these two as gap analysis. Many companies have used gap analysis by setting the objectives and identifying the gap between them and the prospective growth of the present. The firms should achieve high performance in orders to fill the gap.
The systematic business planning helps the business to derive its advantages and get benefits out of them. The benefits of business planning include
. Business Planning helps the company to formulate objectives and goals clearly. The company formulates objectives after discussing thoroughly with superiors, colleagues and sub-ordinates. These objectives help the company to achieve stability of business and maximize profits.
. Business planning helps to avoid piece-meal approach and to have integrative approach.
. Business planning helps to view the organization in total rather than department wise
. Business plan aims at the long range plan rather than short-range plan
. Business plan integrates the company plan with the national plans and priorities
. Business plan takes in to consideration the environmental factors. Technological factors influence the business plan significantly.
Technology has been upgraded continuously. The changes in technology are pivotal, resulting in high technology.
. Liberalization, privatization and globalization not only brought significant changes in the economy, but they have intensified the competition. This resulted in tough competition between domestic and foreign companies.
. Business plan help the company to anticipate the political changes and developments in the national and international scenarios and their possible impact on the business
. Effective business plan helps the company to achieve its objectives and goals
. Effective business plan certainly contribute for the achievement of high rate of profits and increases in earnings per share
. Business Plan helps to determine potential growth and profit
Private sector plays major role in capitalist or market economic system. Private investment, management and control dominate in private sector. The forms of business firms in private sector include partnership firms, sole proprietorship, private limited companies and public limited companies. The sole proprietor or sole trader is an individual who invests, owns, manages and controls the business. The individual invests his own and or borrowed capital, manages and business, bears all the risks alone, enjoys all the profits and suffers from all the losses. Thus the sole proprietor is the sole owner, manager, controller, strategist, policy maker, risk-bearer, financier all rolled in to one. The advantages of sole proprietorship form of business include ease facility of formation, quick decision making prompt, action, establishment of maximum personal contact with customers, confidentiality of business decisions, flexibility, lower costs of management etc.
By economic system is meant the different forms of economic organizations that arise in the community from the organization or mode of product. It is a set up which comprises various institutions and bodies, with the ultimate purpose of satisfying the wants of the people having within a particular territory and in the way in which those people want. The basic features of economic system are that they are not static; they are relative to the needs of the people and hence are of a changing nature. They have fundamental uniformity of problems within a mechanism of great diversity. They are all evolving patterns of human relations.
With the help of institutions, property, money system, labor organization, government agencies, production unit, etc, they try to secure maximum production from scarce human and natural resources. Their goal is to satisfy individuals and public by production of goods and services required by them. economic system arise and are modified, from time to time, by various factors such as the laws of the land, the decisions of the judicial agencies, the contractual arrangements people set up among themselves in order to carry on exchange, the customs, habits, set of beliefs that people develop within the social and political set up of the country, and the public opinion about the wages and means through which people wish to satisfy their wants.
Public visibility: This refers to the extent that an organization’s activities are known to persons/public outside the organization. The activities of the organization may be directly observed, such as polluted atmosphere when smoke is seen coming out of a mill-chimney or a smokestack or purchase of a product which is adulterated or of short weight or measure. Incidentally, these activities may be communicated by news media, neighbors and other sources. The idea of public visibility is that it makes business activities subject to public examination, discussion, and judgment for unless the activities are known they cannot be judged.
Social Values: Business normally operates in an environment of social values both and society and those of the business itself. For business, such values are derived from various sources such as the mission of the business as a social institution, the country in which the business is located, the type of industry in which it is active, the nature of its employees, the management philosophy, the customs and its traditions of society and normal practices of other business. In course of time, these values become institutionalized, i.e., they are accepted by a large number of people in the organization and also the society and consequently they take the shape of an official policy of the business.