Strategic management Essay Example | Topics and Well Written Essays - 1750 words - 2

Strategic management - Essay Example In general, a case study on a particular business organization provides an in-depth analysis on its operation, structure, and situation. However, a study accomplishes more than just that by giving us a view of a company copes with the internal pressures and the external trends, challenges, and opportunity. This paper will focus on the case study entitled South African Beverages (SAB): Achieving Growth in the Global market. The main focus is to expose the central issues on the business organization’s alternative strategic directions. The case lays out the significant information that SAB needs to consider before it can make any strategically efficient choice. Looking closely, this wealth of information can either be classified as products of internal or environmental scanning. Internal scanning essentially looks at the vision, mission, objectives, structure, strategy, core competence, strengths and weaknesses of a company while environmental scanning refers to the analysis of t he external factors which affects the business organization such as opportunities, threats, trends, changes, and developments. Any strategic direction taken by SAB should always be in line with how it wants to see itself in the future and its strategic goals. The company’s vision is to be one of the top five brewers in the world. In terms of organizational structure, it is apparent that SAB is employing a decentralized strategy in managing its human resource.

Limited Liability Partnerships Essay Example | Topics and Well Written Essays - 1250 words

Limited Liability Partnerships - Essay Example While a limited company is formulated as a legal entity where limited liability exists, this was not so in the case of partnerships, which were not legal entities and thereby made partners legally liable for all the firm's debts. The Limited Liability Partnership has the following features (a) it has a separate legal personality (b) liabilities of individual members are limited to the amount they agree to pay in the event of an insolvency (c) partners are expected to adhere to the duties and obligations currently imposed upon Directors of Companies (d) the LLP is not expected to hold AGMs or observe the rules for shareholder protection set out in the Companies Act and (e) agreements about how the affairs of the LLP will be run are left to the discretion of individual members, but partners are entitled to share in the management of the firm on an equal basis (Davies, 2001). Dr. Michael Twomey, a partnership lawyer, points out the advantages of a partnership. Firstly, it allows the partners the freedom and flexibility to conduct the Company's affairs as they wish and are not subject to the provisions of Company law. Secondly, they are not required to file accounts; hence their accounts are not publicly scrutinized. Thirdly, since a partnership is not a legal entity, hence no partnership tax is levied and the firm does not pay tax, only the partners do(MOE, 2002). But this singular advantage offered by partnerships, of privacy in the manner in which internal operations of the firm are conducted, is eliminated by way of the LLP, because such privacy can no longer be retained when LLPs are required to file audited accounts at the Companies House and to also disclose information about profits and the share of profits accruing to the highest earning partner (Davies, 2001). As a result, the financial affairs of partnerships will now be brought under public scrutiny and partners will be required to divulge details of profits accrued as well as shares of such profits that are being routed to the partners. One of the reasons why the LLP has been advanced is to mitigate the legal liability of partners for the debts of the firm. This need was especially highlighted in the aftermath of scandals such as Enron, where the Arthur Anderson partners who were not theoretically related to the Enron case, could still be held liable for repayment of debts. But in practice, companies in Britain have not demonstrated any eagerness in coming forward to be incorporated as LLPs. As pointed out by Towmey (MOE, 2002), Clifford Chance, the biggest law firm in London, chose to become an LLP based in America rather than an LLP based in Britian, because in effect, the LLP in Britain has lost all the advantages of financial privacy and flexibility of a partnership. While a partnership was earlier not taxed, most of the principles of Company law have now been applied to it under the LLP format, as a result of which it has to function as if it is a Company rather than a partnership. Thus, it may be noted that the LLP has failed to address one of the most pressing reasons why it was introduced, i.e., the need to ensure that partners are not held liable for the firm's debts. This aspect was vital especially in the case of small businesses where incorporating as a Company is not a feasible option because it involves too much expense and

How can Employees be Empowered to Increase Productivity?

How can Employees be Empowered to Increase Productivity? 1.Preliminary title: Empowerment is essential to increase productivity among employee. 2.Research purpose: The out come of employee empowerment in service industry can bring long-term success. The purpose of this research is to analyse and achieve in-depth knowledge and understanding on employee empowerment in the context of service industry by comparing the perspective of manager and employee. And provide suggestions to service industry how to gain more productively through empower the employee. This result will be obtained by testing the efficiency of the employee empowerment variables. The earlier discussion on employee empowerment in the service industry has lead to the main research question. How employee can be empowered for increasing productivity? What competitive advantage ‘employee empowerment can bring for the company? 3.Rational On this era, the arrival of an information-based, knowledge-intensive, service driven economy has forced a massive of change on companies worldwide, most dramatically in the way they must redefine their relationship with their employees (Bartlett 2002). Hill and Huq (2004) argued that specifically, it emanated from the realization that traditional hierarchical ‘command and control organizations were struggling to meet the growing demands for flexibility and demands for flexibility and quality. The employees respond most excellent and creatively not when management does tightly control them, placed in narrowly defined job and treated like unwelcoming necessity. But instead, when they are given broader responsibilities, and encouraged to contribute and help to take satisfaction in their jobs (Walton 1985). Thats why now a day, employee of organization and how management manages them are becoming more important because many other source of competitive success is less powerful than they once were. Traditional sources of success- technology, protected or regulated market, access to financial resource and economies of scale can still provide competitive advantage, but to a lesser degree now than in the past, leaving organizational culture and capabilities, derived from how people are managed, as comparatively more vital (Henry and Maryle, 2002). As, organizations sustainable competitive advantage is its people that why management need to engage all the human resource to active companys long time success. In the modern world Empowerment is one of the key tools, which a manager can use frequently to involve and manage organizations people to achieve competitive advantage. As Campbell (2009,p8) pointed out that ‘‘People are your most valuable asset. To get the most out of employees, empower is essential. 4.Literature review: 4.1.What is employee empowerment? The aim of Empowerment to create a culture where employee have freedom to express themselves and have the liberty to make decisions about how they work, where there is always the opportunity to give constructive feedback, and where everyone is equal and approachable (Beaven 2009). So Empowerment implies give up central control, which will encourage speed, flexibility and determination of the employee. According to Campbell (2009), main meaning of empower employees is to give up some aspects of control. In return for giving up that control, managers will have more scope and time to look at the big picture and engage in strategic thinking. Styhre (2001) illustrated that empowermentis depicted by its proponents as the common denominator for recent managerial techniques and activities that acknowledge the individual employee as an intelligent, accountable, creative being, and therefore a productive resource for the company. Lashley (1997) argued that it is intended that through empowerme nt employees will be more committed to successful service encounters and will have the necessary discretion and autonomy to do whatever is needed to satisfy the customer. 4.2 .How to apply empowerment to increase productivity among employee? Different organizations choose to empower their employees to different degrees; at the lowest level empowerment the employee has no autonomy to take decision. On the other hand, at the highest level the employee is given decision-making authority and can control their own performances( Daft ,2001). All these employees are often able to affect organizational goals, structure, as well as reward systems. In order to empower employees, four different factors are Important. Those different factor work as an element to empower employee. Which will give the employees space to act more independently in accomplishing their jobs. According to Daft (2000) those are: information, knowledge, power and rewards. Information: In any organizations where the employees are fully empowered, no information about the company is held secret for employee. Thats why employees must receive every information about the performance of the company. 2.Knowledge: Before and after empowering employees every company need to give training for increasing knowledge and skills of employee. Which build up their problem solving decision-making capability. As by having power of knowledge and skills, an employee can be able to contribute to the goals of the company. Power: To make substantial decisions, employees must have the power. Which will increase employee involvement, confidante. Rewarding: The employees need to get rewarded on the basis their performances and companys performance. The employees can be more committed towards the company by having true appreciation through psychologically and physically. 4.3.Advantages: According to the literature, empowerment bring many positive result for the company like, quicker response to customer, communication and teamwork, employee satisfaction and increase their working value, reduce costs and economic profits, involvement, customer satisfaction/ recovery, increased employee efficiency, customer loyalty and new innovative idea for the organization (Campbell, 2009; Beaven, 2009; Bowen Lawler, 2002; Styhre ,2001; Lashley, 1997). Empowered employee is more productive, psychologically and physically healthy, proactive and innovative, persistent in the work place, trustworthy, interpersonally efficient, intrinsically motivated, and have higher morale and commitment than employee who are not empowered (Whitten , 2007). Earlier literature review has illustrated that empowerment can play a very vital rule in order to increases productivity among employees. Research need to be taken in order to gain better understanding this phenomenon on the context of present service industry. Now, research method need to chosen in order to complete the research successfully. 5.Research Methodology 5.1.Research approach Rossman and Rallis (2003) stated that there are two different research methods that are frequently used when researchers are about to conduct research: the qualitative and the quantitative method. A quantitative method is mostly concern with measurements and to generalize the result.This means that qualitative research mostly humanistic research, which makes it possible to interpret as well as understand a phenomenon. The purpose of this research is to analysis and achieves depth knowledge and understanding on employee empowerment in the context of service industry by comparing the perspective of manager and employee. And provide suggestions to service industry to gain more productively through empower the employee. As this is a humanistic research qualitative approach will be very effective to do in-depth investigation. 5.2.Sampling The researcher will select two service-oriented company to carry on sampling process. The reason for exploring different venues is to gather valuable data from different source. The method of contact to manager of relevant company for arranging interview session with manager and employee will through face-to-face, phone, or e-mail. 5.3.Data collection method According to Silverman (2001), there are four main methods used in qualitative research are: Observation Analyzing texts and documents Interviews Recordings and transcribing. The data will be conducted for the research in two distinct stages by the researcher to carry on this research. A short period of observation there will be done in the first stage. Marshall and Rossman (1999) demonstrated that observation entails the systematic nothing and recording of events, behaviours and artifact (objects) in the social setting chose for the study. At the second stage of the data collection will be involved a series of semi-structured, in-depth face to face interview with employee and manager with in selected organization. 5.4.Data analysis procedures: Marshall and Rossman (1999) suggest that data analysis is the process of bringing order, structure and interpretation to the mass of collected data. Miles (1994) have demonstrated two models for analysis. The first one is researcher can analyze a separate case (within-case analysis). Then presents results by creating tables, checklists and matrix around collected, qualitative data by comparing the theory with empirical data in these tables and checklists. It will be easy to see similarities and differences on this model. At The second model, the researcher compares the results from different cases in a cross-case analysis. Researcher will follow the first model where comparison will be made between literature and empirical data which be collected from manager and employee. The comparison will be done in order to identify patterns that would similar or different from the theory or literature. 5.5.Data capture At the time of depth face-to-face interviews with interviewees, research will use voice recorder that he can give more attention on interview. Then researcher will transcribe date fordata analysis procedure, it has probable that the result would bring more accuracy. 5.6.Reliability and validity To ensure reliability and validity, every face-to-face interview will be recorded and transcribed. Silverman, D (2001) argued that the quality of recording and transcripts has important implications on the reliability of conversation analytical research. For this reason, every transcription will be coded. 5.7.Proposed time schedule Assuming 12 weeks of period has allocated for conducting this masters research. Following this a proposed time schedule would be as follow: Period Activity 1st 2 week Initial literature review Next 2 week Complete participant observation Next 4 week Arrange and conduct interviews; transcribe and analyse interview data Next 2 Literature and further analysis of data Rest of the week Write up and submit completed thesis Reference: Bartlett, Christopher A., Ghoshal and Sumantra (2002). BuildingCompetitiveAdvantage ThroughPeople. MIT Sloan Management Review. Vol. 43 Issue 2.pp.34-41. Beaven, D.2009. People make the difference.Logistics Transport Focus. Vol. 11 Issue 6, pp45-47. Bowen, D.E. and Lawler, E.E. 2002. The empowerment of service workers: What, why, how and when. In: Henry. J and Mayle.D.ed. Managing innovation and change, Open University Business School, in association with sage, pp.243-273. Campbell, G.2009.Employee Empowerment. Quality.Vol.48 Issue 4, p 8. Daft, R. 2001. Organization Theory and Design, 7th Edition. South-Western College. Thompson Learning. Henry, J., Mayle, D.2002. Managing innovation and change. Open University Business School, in association with SAGE.pp61-73. Hill, F., Huq, R.2004. Employee Empowerment: Conceptualizations, Aims and Outcomes. Total Quality Management and Business Excellence, Vol. 15 Issue 8, pp1025-1041. Lashley, C.1999.Empowering service excellence in service. London: Cassell Publications. Miles, M.1994.Qualitative data analysis: an expanded sourcebook / Matthew B Miles. : Sage Publications, Inc. Marshall, C. and Rossman, G.B .1999. Designing Qualitative Research. 3rd Ed.London; Sage Publications. Rossman, B. G. Rallis F. S. 2003. Learning in the Field: An Introduction to Qualitative Research.2nd ed. California: Sage Publications, Inc. Silverman, D .2001. Interpreting Qualitative data, Methods for Analyzing talk text and Interaction. 2nd Ed.sage London, p.14. Walton, Richard E.1985. Fromcontroltocommitmentintheworkplace. Harvard Business Review, Vol. 63 Issue 2. pp77-84. Whetten, David A and Cameron, Kim S.2008. Developing management skills. 7th edition, Prentice hall.

Essay --

In the round four match of AFL 2012, Port Adelaide vs. Collingwood. Midfielder Robbie Grey suffered from shredding the anterior cruciate ligament in his right knee after his leg horrifically buckled when landing from a marking contest in the final minute of the Power's round four loss to Collingwood. This injury has led to Robbie Grey to miss the first month of the premiership season. This report is from the perspective of the Sports trainer, Doctor, Physiotherapist and the coach and the steps it will take to get him back out on the field again. As soon as I saw Robbie Grey land and scream out in pain I could see that an injury had occurred. As a sports trainer I am required to assess any injury on field. While running over to him I was going through my head the steps I would need to assess his injury. The following procedure are needed while assisting with any injury on the field, DRABC, STOP, TOETAPS and RICER. The first procedure I performed was DRABC. While Robbie is still out on the field injured I had to be aware that there was no DANGER surrounding him. Which meant no play, players or footballs; this was a caution as I didn’t want Robbie to increase the damage of his injury. Then I had to look for a RESPONSE, this was clearly seen as he was gritting his teeth together due to the pain and was holding onto his injury. Because he was conscious and was able to respond we didn’t have to continue with the DRABC procedure and then we were able to move on to the STOP procedure. While out on the field the STOP procedure was our next step to assess Robbie’s injury. Robbie was in that much pain that it was a too big of a risk for him to walk or move. We called for the game to STOP and we called for the stretcher. While waiting for... ...ced into football drills, trainings and exercises to build up the strength and flexibility that is required in football. As the coach it is my responsibility to make sure that all players are fit and healthy enough to be out on the field. When an injury has occurred it is up to me to make sure that Robbie is doing the exact exercises the physiotherapist gave him and that he is doing them correctly. As a coach I am to test, watch assist Robbie with his recovery back into the sport. This is done by Robbie completing fitness activities like walking in a straight line, jumping, landing, skipping, figure eight, dodging, jogging and running. If Robbie is unable to complete any of these tasks he is not ready to play and will have to keep building up the strength in his ACL. I will have to increase his drills to help slowly build up the strength to help him gain movement.

Inclusive Growth of India: a Study of the Informal Sector in India Essay

India’s post 1990’s economic growth has made it one of the world’s fastest growing economies in the world. Its GDP growth rates of about 9% in the last few years are historically unparalleled except by the neighbo ring China. With the rapid growth rates, however, come new challenges and new questions. One such challenging question concerns the spread of the benefits of growth across different segments of society. To ensure that growth has been well distributed, India’s Planning Commission has made Inclusive Growth their explicit goal in the eleventh five-year plan. The concept of Inclusive Growth has dominated discussions across India. Its popularity has sparked intense discussions among politicians, economists, policymakers and the general public. In addition, Inclusive Growth has been the focus of studies by bilateral and multilateral aid agencies such as the UN, World Bank, Asian Development Bank, Foundations such as the ICICI Foundation, NGOs, and Civil Society Organizations alike. However, Inclusive Growth should not be confused with Poverty Reduction Strategy Papers (PRSP). Despite all the attention that Inclusive Growth has received in the last few years, there lacks a precise and agreed upon definition of the te rm. Overall, the literature is divided between two concepts; whether the benefits reach the poor and whether the benefits reach the poor proportionately more than it reaches the non-poor. By the first definition, India may have performed quite remarkably i n the last two decades, although the magnitude is hotly debated. By the second definition, India’s performance against inclusive growth seems more lackluster. Gini coefficient indicates that income inequality in India has increased from 0. 209 in 1980-81 to about 0. 257 in 2005-06 both at an overall level as well in almost all f the states both for urban and rural areas . There are evidences suggesting that growth in the lower income states is relatively lesser than the growth in high income states. Not only this, but studies have shown that the rising disparity is also present at an intra-state level too. To address these challenges going forward, evidence suggests that there are a number of macro and micro level interventions that are poverty reducing and th us conducive to Inclusive Growth. At macro level, there is little doubt about the usefulness of the augmented Washington Consensus (Rodrik, 2006). At micro level, evidence suggests that improving the following factors will help accelerate poverty reduction : reduction of inequality, not limited to income inequality, access to public infrastructure and services especially health and education, access to markets, accountability and voice, good governance, and the role of civil society organizations, women empowerment. Inclusive growth can also be studied as a clash between the informal as the formal sector. Various literatures are available in the following context by noted economists and policy makers. A firm stand to improve the condition of the economy is subsided in the entrepreneurship sector of the country, which holds huge potential. The Indian economy today boasts of many magnificent opportunities but sadly enough, not many of them are fully utilized. The entrepreneurship front of the country epitomizes such a condition. Liberalization of economy started by the PV Narasimha Rao government in 1991 and the Information Technology boom of the mid and late 90? s have ushered in tremendous changes and set the stage for a wave of entrepreneurship taking India by storm. The capacity of Indians for entrepreneurship is substantial. However, the society and government have not been very encouraging towards entrepreneurship in India. The rankings of India have also been deteriorating in the recent years. From a rank of 2 in the field of Total Entrepreneurship Activity (TEA) according to the Global Entrepreneurship Monitoring Reports, India’s position has been slipping ever since and has reached a level rather close to the world average. In spite of the shortcomings, it ranked ninth in the survey of entrepreneurial countries by Global Entrepreneurship Monitor (GEM). India ranks the highest among a group of countries in n ecessitybased entrepreneurship, which is associated with developing countries. Conversely, it ranks fifth from the bottom in opportunity -based entrepreneurship. Indians have entrepreneurial capacity. However the society and government are not very encoura ging towards entrepreneurship. To a large extent, the Indian society is risk averse. People usually seek secure and long -term employment, such as government jobs. The physical infrastructure needs to be improved. Social Attitudes, lack of capital, inadequa te physical infrastructure and lack of government upport are major factors of hindrance. While the growth trends of India and China are similar, both had initiated different policies in their approaches. While China was mostly growing on FDIs, India was b uilding a rather self-sustaining model for growth as it concentrated on the institutions that supported private enterprise by building a stronger infrastructure for its development. The Government has encouraged entrepreneurship by providing training and also the facilities to succeed, particularly in the rural areas. One style of innovation that really works in a country as large and diverse as India, is grassroots innovation: this includes inventions for a milieu that is quintessentially Indian. The middle-class Indian has been growing rapidly in context to the global economy. In an era of globalization, a middle class of 250million and rising can be considered a â€Å"veritable gold mine†. The G7 economies account for almost 67% of the global GDP at a market exchange rate and this has been the scenario since 1965. Underpinning the performance of the G7, and indeed driving the global economy, is a large middle class. The midd le class is an ambiguous social classification, broadly reflecting the ability to lead a comfortable life. The middle class has played a special role in economic thought for centuries. It emerged out of the bourgeoisie in the late fourteenth century, a group that while derided by some for their economic materialism provided the impetus for an expansion of a capitalist market economy and trade between nation states. Ever since, the middle class has been thought of as the source of entrepreneurship and innovation—the small businesses that make a modern economy thrive. Middle class values also emphasize education, hard work and thrift. Thus, the middle class is the source of all the needed inputs for growth in a neoclassical economy — new ideas, physical capital accumulation and human capital accumulation. The role of Asia, who accounts for just les s than 1/4th of the middle class population of the world, could boast of doubled figures of the same by 2020, accounting for around 40% of the global middle class GDP. With the exception of Japan and Oceania, Asia’s rapid growth has not been driven by a la rge domestic middle class. The expansion of factors of production driving potential output has happened without a significant middle class. Saving and education have been willingly undertaken even by poor households, in the face of large returns to such ac tivities in a globalized world, as well as by governments. Technology has been imported from abroad by corporations through FDI, imported machinery and participation in global supply chains. Thus with the American consumers retreating back after facing fears of a double dip recession now, it suits well for the emerging Asian economies like China and India to step up and fill the consumption voids. Within Asia there is significant talk of rebalancing towards domestic demand (more specifically domestic consumption) as a way of sustaining growth in the face of potentially sluggish exports. But the policy prescriptions to achieve such a rebalancing are not easy. They involve creation of a social safety net, medical insurance schemes, and better public education services. In short, Asian consumption is tied in the minds of many analysts to long -term institutional changes. Given the difficulties of implementing such changes, it is hard to be very confident that this rebalancing will happen in the medium term. The lack of inclusivity is again clearly shown in the Indian scenario. The middle class consumption levels are far below the average global levels. There exist such disparities on the expenditure side due to the fact that the middle class is largely inactive in this process. Moving back to the production side of the economy, the retail industry in India has been showing tremendous potential amidst the bullish growth trends of the economy as a whole. To prove this point, we see that the penetration of the organized retail sector in the US is about 85% while that in India is just about 8% (Velagapudi, 2011). The retail industry can be divided into registered as well as unregistered sectors. The unregistered sector, which usually includes all the small grocery shops, street vendors etc, accounts for over 93% labor force. Although as seen earlier, the value added to the SDP and consequently the GDP isn’t even comparable to that by the organized sector. The initial target is to bring the contribution of the organized sector to 9-10%. Retail industry is also the 2 nd largest employment provider in India after agriculture. The penetration of organized retail will happen much faster in the coming decade, even in tier and tier 3 cities, because of the changing demographic s of our population and a healthy rate of economic growth. With good underlying economic growth, increase in disposable income, increased awareness due to penetration of broadband and mobile devices with internet accessibility, the demand for consumer goods will rise. With better systems and processes in place, all this is bound to assist in increasing the penetration of the organized retail sector in India. The organized retail market in India is expected to grow to 14-18% by 2015 of the total retail market in India from 8% in 2008. Its value is estimated to be around US$450 billion by 2015 (Mckinsey Reports). The BMI India Retail Report for the first quarter of 2011 forecasts that the total retail sales will grow to US$ 674. 37 billion by 2014, from US$ 392. 63 billion in 2011. The growing wealth with the middle-class in India, the population size and the big percentage of population being in 30s, makes immense possibilities for entrepreneurial growth in the retail sector. Some of the fastest growing segments of this industry are food & beverages, electronics and apparels. The consumer electronics segment is expected to grow at about 55% between 2011-2014, with most of the growth driven by demand for TVs, mobile devices and laptops and desktops. With changing lifestyles and habits, food segment is also expected to double to US$ 150 billion by 2025. Inclusive Growth: A Review of Literature This section is a review section of the disproportionality between the registered and the unregistered manufacturing secto rs. The causes that have been suggested by various authors through their studies have been put forward with an aim to assemble and study the registered as well as the unregistered sector thoroughly. The section starts off with the causes of differentiatio n between the registered as well as the unregistered sector and their differences in productivity , followed by how a thrust can propel the unregistered sector into the registered sector. This is followed by literature about the employment scenario in India for both the sectors and how there exists a large disproportionality. Finally the section ends with a study of the registered manufacturing sector and a study on the role of infrastructure in the economic developments. The growing divergence between the i nformal and the formal sectors, especially in the manufacturing sector can be seen as one of the major causes for lack of inclusive growth in the country. The paper by Goldar, Mitra and Kumari shows us useful evidences regarding the same. The paper claims that the economic reforms of 1991 had a negative impact on the informal sector since import restrictions had been removed and the informal manufacturing sector started facing even more stringent competition from producers whose products were of a better qu ality. It shows evidences that the value added by the informal nonagricultural sector kept on falling even though the employment rate increased from 76% in 1983 to 83% in 1999-2000, thus exhibiting a downward trend in productivity. Empirical data study suggests that the growth of employment in the informal manufacturing sector has always been higher than the employment growth rate of the total manufacturing sector (3. 3% over 3. 1% in 1961-87) which includes the period of â€Å"Jobless Growth† in the 1980s where the employment rate of the organized manufacturing sector was -0. %per anum. But when it comes to value added, the informal sector lags behind, which is the chief cause of serious concern of the Indian economy. Data trends show us that post liberalization, the value added by the informal manufacturing sector fell from 6. 1% (1980 -90) to 4. 89%(1990-2005). In this context, a paper by Sreepriya S. lays emphasis on the development of the informal sector and how government policy measures should be taken to increa se the productivity of the sector. The paper points out that in an economy which is labor abundant and is developing, the significance of the small -scale sector which is less capital intensive and generates employment for over 86% of the workforce of the country is of utmost importance. The informal sector constitutes a major component of the small sector industries in the manufacturing sector. The problem lies in the fact that 86% of the workforce only adds on 25% value to the economy, 20. 5% of the fixed capital and 16. 9% of the total output produced. A particular significant result in this context can be seen in the agricultural sector. A study by the NSSO shows us that even in 2009-10 around 67% of the rural population as well as 6. 7% of the urban populat ion is dependent on the agricultural sector even though it contributes to only 14% of the GDP. This further enhances the stand on the widening disparity amongst the distribution of income amongst the population. In a paper by Maiti & Mitra ( January 2011), the proposition is put forward that since the informal sector only caters to the local and regional demands and with ubstantial exposure to education and technical skills, the producers in the informal sector will be elevated to the formal level. With this perspective, the paper looks into the supply push component of the informal sector across Indian states. But a paper by Chowdhury (EPW August 2011) on the employment structure of India suggests that that there has been a decline in the labor force participation rate (LFPR) for both rural and urban women in the NSSO surveys of 2004-05. This, he concluded, was due to the increased interest in attaining education for the women were the cause of the fall in LFPR. Similar is the explanation for the slow gro wth in LFPR for women through 2004-05 and 200910. But this explanation does not adequately explain the employment scenario of the country. This is because the gap created by the fall in employment of the age group 15-24 due to the desire of attainment of education should have been filled up by the other age divisions. This brings forth the point that in order to attain inclusive growth the employment structure needs to be structured on stronger grounds so as to accommodate the growth as well as the metamor phosis of the informal sector. Another interesting paper by Rana Hasan shows how the Indian employment scenario is condensed in either small or large enterprises where the medium enterprises lose out completely. He suggests that the formal sector with la rge enterprises offers better perks and incentives but the layoff risks are much higher resulting in lesser job security. While in the case of the unregistered sector, it accounts for most of the total manufacturing employment. This contradiction, he explained, is due to the labor regulations which are in place within the country. A strong urge here is made to liberalize the labor market finally. Hasan used empirical and statistical data to show that 85% of the workforce of India is working in firms with a total workforce of less than 50. This suggests a strong implication that large enterprises are more productive and pay more to their workforce (as per statistics). Thus the dominance of the work force in smaller informal sectors suggests that most of the workforce has to settle for a low wages as per comparisons. Rana uses the concept of economies of scale to explain the problem of the â€Å"missing middle†. He shows as to how the highly productive large sectors are usually more capital intensive, maintaining a very low labor to capital ratio while the other traditional industries like textiles is more labor intensive. Hence since the textile industry employment rate is 12times more than that of the automobile industry; it has a significant claim on the total emp loyment structure of the economy. As our economy is more dominated by industries like the textile industry rather than capital intensive automobile industry, we can see why the middle economy is still undeveloped. A study by Das &Kalita shows empirical evidences regarding the context of inclusivity of growth in the registered sector. The paper addresses the issue of declining labor intensity in India’s organized manufacturing in order to understand the constraints on employment generation in the labor intensive sectors. Using primary survey data covering 252 labor intensive manufacturingexporting firms across five sectors—apparel, leather, gems and jewelry, sports goods, and bicycles for 2005-06, they attempted to find out the factors which constrain employment generation in labor intensive firms. Their study shows several constraints in the path of employment generation in labo r intensive sectors—non-availability of trained skilled workers, infrastructure bottlenecks, low levels of investment, labor rules and regulations, and a noncompetitive export orientation. They also shed light on the decade of â€Å"jobless growth† where the economy was witnessing an increase in output and value added in the manufacturing sector but there was no increase in the employment scenario of the sector. As per statistics, only 484,000 jobs were created in the registered factory sector between 1980-90. There are many a reasons cited amongst which it can be considered that maybe the difficulty in labor retrenchment post the job security regulations in 1970 which forced employers to shift to a more capital intensive mode of production. They also cited another reason as the capital deepening technique adopted by firms which increased the real cost of labor in the 1980s. Their study also points out towards the inefficiency of the economic reforms in migrating the majority of the workforce from the unregistered sector to the registered sector. A mere 13% employment generation of the registered manufacturing sector after a decade of liberalization highlights the inefficiencies. This was not however the case throughout the decade. As per Nagraj, the initial years of the reforms showed us a growth in the employment of the registered sector but this boom soon turned bust as the momentum could not be sustained in the latter half of the decade. As per statistics, around 1. 1 million people of around 15% of the workforce of the registered sector lost their jobs during 1995 2000. The problem of inclusive growth is again witnessed as we face a quest ion as to why the labor intensive section of the organized sector failed to generate employment potential despite good performances by some of these sectors individually.

Harvey Norman

Harvey Norman Holdings Limited Group case study [pic] Tutor: Dr. Mahesh Joshi Group members: JIN CHEN 3350416 MINGFENG CHI 3316768 JINGHAN REN 3365087 TABLE OF CONTENTS Executive summary3 Introduction4 Source of Finance and financial segments4 Industry and competitor analysis5 Key highlights of financial and operational performance5 Highlights and change of financial performance5 Highlight of operational performance5 Change in accounting policies6 Assets – PPE and Intangibles6 eased assets and liabilities9 Auditor and auditor report11 Reference13 Executive summary Harvey Norman Holdings Ltd, a public company, is one of the most successful retail companies in Australia. They use a unique franchise model with granting franchises to independent business operators, and there are approximately 700 franchisees in Australia. As a retailer, their products include electrical, bedding, computers & communications, bathrooms & home improvements, furniture, small appliances, carpet & floor ing and lighting.In recent years, the company has begun expanding the international market, and there are an increasing number of Harvey Norman stores in New Zealand, Ireland, Slovenia, Malaysia and Singapore. The aim of this report is to show an overview of Harvey Norman’s business based on the 2011 Annual Report of Harvey Norman. This report will mainly focus on their core business, industry, operating activities, financial performance, PPE & intangible and leased assets & liabilities. Finally, independent auditor’s report will discuss their compliance with the AASB standard.COMAPNY Introduction Being a leader in retail stores of electrical, computer, furniture, entertainment and bedding goods, Harvey Norman was founded in 1982, Australia. At first, it is only a single store which sells electrical goods and appliances; however, the opening has proved to be a great success. With more and more stores open, Harvey Norman changed its operation into superstore format at t he beginning of the 1990s. After that Harvey Norman has been expanding its business globally and keepsincreasing the diversity of its products.In the financial year of 2011, Harvey Norman has gained an after tax net profit of 252. 26 million. And this makes it to be ranked at the 126th position out of 2000 large companies in Australia. (IBIS World, 2011) Source of Finance and financial segments Harvey Norman Holding LTD generally generates its revenue from those four segments below: †¢ Franchisee: with holding 195 franchise stores in Australia, it contributes the largest part to its company’s sales revenue. This revenue is consisting of the franchise fee and interest of franchise loans.However, due to the downturn of the whole economic environment, the franchisees themselves are struggling to keep their business alive. In my opinion, it is dangerous for Harvey Norman to be too rely on the franchising revenue. †¢ Retail store: excluding the 195 franchise outlets with in Australia, the company is running 96 complexes department by the time of 30 of June 2011, which are 26 more than 2010. †¢ Property: the property income Harvey Norman LTD is mainly coming from the rental of the franchisees and some other outlets who are renting their complex. Other businesses: as a public listed company, Harvey Norman also earns a good amount of revenue from trading its listed securities. Industry and competitor analysis As the main services the company is retailing. The industry it involves would be retailing industry of computer and software, household appliances and furniture. However, as the integrating of online services and strength of Australiandollar, the retailing industry has been very much affected. Even the chairman of Harvey Norman had commented the macro-environment to be challenging and difficult.Fortunately, as introduced above, although retailing has always been the core business activity of the company, it does not constitute the major part of its financial performance. The diversity of business activities leads a multiple option of financial growth. The main competitors of Harvey Norman Holding LTD is the group of J B HI-FI, who has declared a sales revenue from 2. 73Bn to 2. 96Bn as an increase of 8. 3% (P. 2, JB HI-FI annual report 2011), compares to the increase of 9% of Harvey Norman.According to the figure,it seems Harvey Norman is doing better than J B HI-FI, but the business segment for J B HI-FI is much less diversified than Harvey Norman, therefore, J B HI-FI is actually doing better in just viewing the computer and software segment. Key highlights of financial and operational performance †¢ Highlights and change of financial performance There is no significant increase or deduction in terms of financial performance. There is a slightly downturn showing in the franchising sales revenue from 5. 9bn to 5. 08bn contributed by almost the same amount of outlets. Basic earnings per share have increased from 21 . 78c to 23. 75c whilst a decrease of 2c in dividend per share compared with 2010. After closing date of report, the company announced 7 Clive Peters and Rick Hart may close and the rest of 18 stores will be changed into Harvey Norman format. The shutdown of 7 stores is to estimate to incur a charge around $10 million in the financial report of 2012. †¢ Highlight of operational performanceA very significant key operational activity occurs after the reporting date of 2011, which is Harvey Norman, launched its online retail store in the October of 2011. The company has fully confidence in this action and believes it will make a good difference in the financial report of 2012 Change in accounting policies According to Australian Accounting Standards, a few accounting policies have been put out recently but have not yet shown its effect on the report of 2011 will result an impact on 2012. Assets – PPE and Intangibles PPE 1. The carrying amount of each class of PPE, at report ing date, of Harvey Norman a. PPEIn accounting system, property, plant and equipment are belong to tangible asset and recorded as non-current asset if they are kept for more than one year or beyond the normal cycle of the entity. According to AASB116, if the cost of an item can be measured reliably and the future benefit will flow to the entity, then the items of property, plant and equipment can be recognized as PPE. b. Each class of PPE It can be seen from the HN’s note 12 that the PPE of HN was classified into: (1) Land and Buildings; (2) Plant and Equipment; (3) Lease make good asset. And the carrying amount of each class of PPE is showed in the below table: Category |Land and buildings | Plant and Equipment ($’000) |Lease make good asset |Total | | |($’000) | |($’000) |($’000) | |Year | | | | | |2010 |230,595 |206,563 |1,875 |439,033 | |2011 |257,765 |254,714 |500 |512,479 |According to the table, the total amount of PPE was about $512 million in 2011, which was much higher than the amount of 2010 about 73 million. 2. The accounting policies relating to PPE adopted by Harvey Norman. HN used cost model, under the AASB116. 73, to disclose items on PPE that each item was measured at historical costs or deemed costs less accumulated depreciation and accumulated impairment losses. (Statement of Significant Accounting Police 1(d)(v)) The land and buildings were measured at fair value, then less the accumulated depreciation.After that, the impairment loses were recorded when the revaluation was done. Besides, the straight- line method was used to calculate the asset’s depreciation during the estimated useful life. According to AASB116. 73 (e), each class of PPE should disclose a reconciliation of the carrying amount at the beginning and end of the period, and the changes include additions, disposals, impairment and amortization. In the HN’s report, the assets’ residual values, useful lives and amortization methods were adjusted in the end of financial year.Intangible assets 1. The intangible assets reported by Harvey Norman and their composition and relevance to this company’s business. Intangible assets are usually treated as non-monetary assets without physical substance. Therefore, they must be separately stated in company’s financial statement. By following the accounting standard, HN’s intangible assets are classified into three categories: (a) Computer Software; (b) Goodwill; (c) Licence Property; Category |Computer Software ($’000) |Goodwill |Licence Property |Total | | | | |($’000) |($’000) | |Year | |($’000) | | | |2010 |23,745 |11 |473 |24,229 | |2011 |57,791 |9 |494 |58,294 |HN’s report demonstrated that there was about $58 million in intangible assets in 2011, which showed a huge increase when compared to $24 million in 2010. Besides, it is clearly showed in the table that the Computer Software took the most part of t he intangible asset 2. The accounting policies relating to Intangible Assets adopted by Harvey Norman. All the disclosed intangible assets should comply with the AASB 138. 3/4/9, and the intangible asset which has an infinite useful life cannot be amortized in the annual report, based on AASB138. 107. Furthermore, in accordance with AASB 136. 08, an entity is required to test an intangible asset with an indefinite useful life for impairment by comparing its recoverable amount with its carrying amount annually or there is an indication of impairment. In the annual report, the intangible assets of HN in its annual report consist of two parts: (a) Identifiable intangible assets:Computer Software and Licence Property (which have a finite life and are amortised using the straight-line method over the useful lifes, computer software is no greater than 7. 5 years). (b) Unidentifiable intangible assets: Goodwill which accounts for only a little proportion of its total intangible assets. Goo dwill is not amortised, but it should be tested about impairment on an annual basis). The gains or losses from both two kinds of intangible assets are measured as the difference between the net disposal amount and carrying amount. 3. The items of impaired PPE or Intangible Assets of Harvey Norman According to AASB116, under cost model, the carrying amounts of assets should be reviewed during every financial reporting period to determine whether there is impairment. An impairment gain or loss should be recognized immediately if the carrying amount is lower or higher than the recoverable amount. PPE (a) Impairment of Plant and EquipmentUnder this standard, a review of the recoverable amount of assets resulted in an impairment gain of $968,000. Intangible Assets The computer software has a finite life and is amortised over the useful life, but goodwill has an infinite life, then, it is only subject to impairment test if there is an indication of impairment. (a) Impairment of Computer S oftware Under this standard, a review of the recoverable amount of assets resulted in an impairment loss of $674,000. leased assets and liabilities The lease liabilities consist of finance leases, AASB 117 – par 11, and operation leases, AASB 117 – par 12.This paper will analyze finance leases first, and then followed by operation leases. Firstly, the detail of the finance leases, numeric disclosure required by AASB117. In 2011 are: [pic] (Annual Report 2011, p104, p105) Secondly, the detail of operating leases, numeric disclosure required by AASB 117. In 2011 are: [pic] (Annual Report 2011, p105) Finance lease receivables are reconciled to amounts receivable in respect of finance leases as follows: [pic] (Annual Report 2011, p77) According to the information illustrated in 2011 Annual report page 63, amounts due from lessees under finance leases are recorded as receivables.Finance lease receivables are primarily recognized at amounts equal to the present value of any unguaranteed residual value expected to accrue at the end of the lease term plus the minimum lease payments receivable. Finance lease payments are apportioned between reduction of the lease receivable over the term of the lease and interest revenue so that it can reflect a constant periodic rate of return on the net investment outstanding in respect of the lease (Annual Report 2011, p63). Leases where the lessor retains substantially all the rewards and risks of ownership of the asset are recognized as operating leases.Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as the lease income. Operating lease payments are classified as an expense in the income statement on a straight-line basis over the lease term (Annual Report 2011, p63). Auditor and auditor report Ernst & Young is the independent auditor which is appointed to Harvey Norman Ltd. They have high reputat ion to satisfy the credible auditor requirements. We can find the auditor’s opinion on page 140 of annual report.According to the content in the auditor’s report and opinion issued by the auditor. This annual report is definitely an unqualified report because the auditor claims in their report that the financial report of Harvey Norman Ltd complies the Corporations Act 2001 and Australian Accounting Standards by giving a true and fair view of the company’s financial position. The financial report is also in accordance with International Financial Reporting Standards. An unqualified opinion also represents that any differences between management and auditor with accounting matters have been resolved to the auditor’s satisfaction.Conclusion This report states a lot of important information about the business performance of Harvey Norman, which can be compared with competitors and within the retail market. As one of the most successful retail companies in Au stralia, Harvey Norman’s core business include leasing properties, granting franchises to independent business operators who retail all kinds of products for home and office. In the financial year of 2011, Harvey Norman has gained an after tax net profit of 252. 26 million. Its financial statements complied with the accounting standards and the accounting methods were generally discussed.PPE and Intangible assets were also explained to associate with all the related requirements of AASB involving their disclosures. Moreover, the company followed the Corporations Act as well as International Financial Reporting Standards, and disclosed all the information required, which can be proved by unqualified auditor report issued by Ernst& Young. All the information given by 2011 Annual report can be relied by public to make decision on general purpose. Reference Harvey Norman Holdings Ltd, IBIS World (2011) Harvey Norman Holdings Ltd-Premium Company Report Australia, viewed 20 August 2012,J B HIFI, J B HIFI (2011) J B HIFI ANNUAL REPORT 2011 P. 2, viewed 20 August 2012, < http://www. jbhifi. com. au/documents/reports/110_2011-09-09_4-04-34. pdf> Harvey Norman Holdings Limited, Harvey Norman Holdings Limited Australian Packaging Covenant Action Plan 2010 – 2015 Revised March 2012, viewed 23 August 2012, Harvey Norman Holdings Limited, Company Profile, viewed 23 August 2012, Australian Standard Aboard, AASB 116, 117, 136, 138 2011 Accounting standards, viewed 23 August 2012, Harvey Norman Holdings Limited, Annual report 2011, p63, p77, p104, p105, viewed 22 August 2012,