SL Faculty

Economic crisis due to Covid Pandemic has made most of the firms to focus on price to compete with rival firms, non-price competitive methods have become insignificant”. Discuss.

2023-07-15T02:49:00.003-07:00

The COVID-19 pandemic has had a significant impact on the global economy, leading to a sharp decline in demand and increased competition. In this environment, many firms have focused on price as a way to compete, leading to a decline in the use of non-price competitive methods.

There are a number of reasons why firms have focused on price during the pandemic. First, consumers are more price-sensitive during economic downturns, as they are looking to save money wherever possible. Second, the pandemic has led to increased supply chain disruptions, which has made it more difficult for firms to differentiate their products on the basis of quality or features. Third, the pandemic has led to a decline in marketing and advertising budgets, which has made it more difficult for firms to compete on non-price factors.

As a result of these factors, non-price competitive methods have become less effective during the pandemic. For example, firms that have traditionally competed on the basis of customer service have found it more difficult to provide the same level of service during the pandemic, as their employees are working from home or with reduced hours. Similarly, firms that have traditionally competed on the basis of innovation have found it more difficult to develop new products and services, as their research and development teams have been disrupted by the pandemic.

While the focus on price is understandable during an economic crisis, it is important for firms to remember that non-price competitive methods can still be effective. For example, firms can still compete on the basis of quality, features, or customer service. Additionally, firms can use marketing and advertising to create a positive brand image, even if they have a limited budget.

In the long term, it is likely that the focus on price will decline as the economy recovers. However, the pandemic has highlighted the importance of non-price competitive methods, and firms that can effectively compete on these factors will be well-positioned for success in the future.

Here are some examples of non-price competitive methods that firms can use:

Quality: Sell high-quality products/services that meet or exceed customer expectations.

Features: Offer products or services with unique features that set them apart from the competition.

Customer service: Provide excellent customer service that goes above and beyond what is expected.

Brand image: Create a positive brand image that customers will be drawn to.

Innovation: Develop new products or services that meet the needs of customers.

By focusing on these non-price competitive methods, firms can still compete effectively in a price-sensitive environment.

International marketing part 1 - Factors that International Marketing make Different from Domestic Marketing

2022-04-10T09:19:00.001-07:00

Factors that International Marketing make Different from Domestic Marketing

As international marketing involves marketing across many countries, the differences in distance create many other differences such as time differences between domestic and international marketing. This session will explain the Basic differences one finds in overseas marketing compared with local marketing. A firm must determine whether domestic strategies will work and where and how these strategies will work and where and how those strategies may need to be changed. The society and the culture in which a person is brought up play a significant role in the way he behaves. International marketing involves dealing with consumers and dealers in approximately 200 countries. In this session, we will learn about socio-cultural differences in overseas markets. Firm offering products to a foreign country may be under the influence of political forces prevailing in that country. In this session, we will also learn about these political differences. Differences in economic characteristics also have a greater bearing on the strategies that marketers adopt. Therefore, we will also have to look at the differences in economic characteristics.

Basic Differences in overseas markets

Following are the basic differences that one could observe in international marketing when compared to marketing in a domestic environment.

· Sovereign political entities

Each country is a sovereign political entity and, therefore they impose several restrictions for

importing and exporting the goods and services to safeguard their national interest. So

those who are engaged in marketing in foreign countries must face the restrictions imposed

by the countries with which they are dealing.

· Different legal systems

Different countries operate different legal systems, and they all differ from each other. The

existence of different kinds of legal systems makes the task of businessmen more difficult as they are

not comfortable with which system will apply to their transactions.

· Different monetary systems

Each country has its own monetary system. Therefore, international transactions are based on

the prices of goods that are determined by the exchange rates. When the exchange rates

fluctuate the prices of the exports/imports also fluctuate involving risks for the marketer.

· Lower mobility of factors of production

Mobility of factors of production is comparatively less within a country itself. However the

development and advancements in infrastructure have reduced these barriers to a certain extent.

· Differences in market characteristics

What Makes International Marketing Different from Domestic Marketing In the domestic market we find many differences between and between various segments of customers. In the international context, each country constitutes segments with such differences.

· Differences in procedures and documentation

The differences in the legal systems of countries result in each such country having a separate set of laws. Therefore, the same transaction may be handled in a completely different manner in two different countries. This may demand different procedures and documentation requirements for the imports and exports of goods and services. These differences themselves necessitate the firms to adopt different strategies in different markets.

Differences in Strategy with different Markets

When a firm enters the international markets to do its business, it is operating in more than the domestic environment. The complexity of the surrounding factors in international business expands with the number of markets in which a country operates. There are mainly three such environments (uncontrollable by the firm) the company must operate in. They are the domestic environment immediately surrounding the company, the environment in the importing country, and the conditions in the international environment. These differences in environments may create many differences in consumer behavior. This ultimately results in the same marketing mix being unable to be used in every market. Therefore, a firm engaged in international marketing must consider these factors in deciding the marketing mix for its target market. In this context, the marketer must identify the areas where a uniform marketing mix could be developed.

GLOBAL ISSUES IN STRATEGIC MANAGEMENT

2022-01-11T06:49:00.004-08:00

During the recent past the number of firms engaged in business beyond the borders of their country had risen. Trade names and trademarks are becoming common over the world. Corporates operate their affiliates or subsidiaries in various countries and the numbers increase more and more, and are expect to continue further.

Operating in different countries make the strategies to look for new issues. “Different countries” make you think of different nations, cultures, rules, regulations, economics, etc. Strategists have to look for these aspects when making strategies to work in the countries beyond their borders. Therefore, there is a need for understanding the international management to help you when studying these issues related to global strategic management.

Business going out of the boarders

a) International Business

Organizations those conduct business operations across national borders are referred as international firms or multinational corporations (MNCs). The operations beyond the borders are conducted by way of business subsidiaries or business affiliates which engage in all types of operations including purchasing, warehousing, manufacturing, transporting, marketing and advisory services. Business organizations select various strategies to enter into other countries. You are already familiar with some of these strategies. Purchasing of local companies, open branches, joint ventures with local investors, invest in solely owned companies are among recent Sri Lankan business experiences. Why companies want to go beyond their countries? A firm operates in a small village wants to expand its operations beyond the village: firm operates in a province wants to expand its area of operations further. Likewise, you are already familiar with many instances where organizations want to expand their business. The need for expansion make businessman to look for new markets, new production facilities and profit making opportunities. When a business operates within a certain geographical location, they encounter limited market opportunities. They may find competition, limitation to access certain resources etc, which in turn will limit their profitability. Therefore, companies start looking into the opportunities which are beyond the limits of their region or country. They may find large markets and resources which can be used for expanding their income and profits. Further, such expansions can help the businessman in reducing their business risk and increase business stability.

b) Growth of International Business

When discussing the international operations in the strategic management process. It is required to understand what is meant by international management. International management involves the performances of management activities across the national borders where the business is located. This can be as simple as importing certain resources from foreign countries or marketing a product in a foreign country or as complicated as collaborating with foreign partners to manufacture (wholly or partly) and market products throughout the world. The technological advancements in transportation, information technology, communication (including television and other mass media) along with the developments in the economics, political, legal and cultural components of the business environment, have helped the organizations to expand their business beyond the borders of their country. The mission statements of certain organizations show that they have included components with regard to markets outside their country or invest in foreign countries to expand their business operations.

These international business operations have affected the day to day lives of many people.

The local market prices of Sri Lankan products such as rubber, tea and many other agricultural products get their prices from international markets which affects the income of those who engage in those industries. The imports, specially with fuel are again affected by international market prices, which directly affect the cost of living of people of this country. With the changes in the international economics and political situations, you would have experiences on the changes underwent in Colombo stock exchange (withdrawals of funds from Sri Lankan share market by foreign investors)

The managers today operate in an international environment and its international components tend to increase. This increase in internationalization pave way for more international trade, and demand less barriers for international trade such as high tariffsand duties imposed by the governments, this has even gone as far as duty free trade zones established by certain countries enabling them to facilitate international trade. As organizations try to organize themselves to be in line with the emerging international trends their managers have to evaluate and monitor the economic and political forces that drive the trends and their influence on the strategic management processes. Increasing trend for expanded international trade environment (less restrictions on international trade by the governments) demand managers to evaluate threats from competitors across the world. When carrying out the environmental scan, several additional information may be looked for international concerns: and amongst them are;

• What institutional environment may constrain competitors?

• What rule may govern the actions of competitors?

• What resources are available to minimize the damage (loss) from the actions of Competition?

• What government policies strengthen competitors?

• How can firms influence these government policies?

However, you should note that the multilateral and regional trade agreements from a foundation for all international business operations. You will understand them when studying this lesson further.

In carrying out business across borders, firms may expand gradually and the organization may grow from one step to another. Let us look at these expansions.

C) Different forms of international organizations.

You are familiar with domestic business organizations. They deal with activities within the borders of their home country. From the perspective of domestic business, business operation made outside the home country are international business. Eg. A Sri Lankan garment manufacturer who distributes his product outside Sri Lanka is in international business.

International trade is concerned with the flow of goods, services. Knowledge and capital across the borders of the home country. The focus of the international trade is on commercial and monitory conditions that affect balance of payment and resource transfers. A strategic has to give due concern on the international trade since the decisions of the governments have an impact on the economics of the international trade. In the case of international business, its literal sense signifies business takes between nations. Therefore, the world international can thus imply that a firm is not a corporate citizen of the world but it operates from home base. Therefore, multinational (or global) business is a preferred term, since nothing is foreign or domestic about the world market and global opportunities. (As far as this material is concerned our emphasis is on multinational organizations)

The domestic organizations face set of uncontrollable derived from the home country. Multinational organizations face much more complex environment since the managers are more sets of uncontrollable variables originating from various countries. They have to cope up with different cultural, legal, political and monitory systems. However, there may be similarities of certain uncontrollable factors in certain countries (e.g. Markets in certain European countries) with this perspective let us look at some common elements.

Impact of Inflation on a Project

2021-10-18T19:30:00.005-07:00

Impact of Inflation on a Project

Forecasting of future inflation is a difficult task and therefore, it is a risk for a Project. However, in order to minimize this risk, the project analyst has to estimate the probable rate of inflation during the project life and identify its effects on project variables. Failure to do so would mainly exert two types of risk on a project, i.e.; liquidity and solvency risk.

Liquidity risk

When a project cannot meet its commitments in time it faces liquidity problems. As a result of inflation, the costs of a project would increase and the project may not be able to meet its commitments in time and at the lowest cost. Consequently, its activities would not work as scheduled. For example, investment cost may go up with the inflation as discussed earlier and financing would be a problem in the short run or it may have to be done at a higher cost. Thus its activities cannot be implemented as expected.

Solvency risk

When the liquidity problems continues different problems would crop up. When the project cannot be implemented smoothly it may loose the market. The project may loose the confidence of the parties involved with it, as the project fails to meet its commitments. When the cost increases unexpectedly, forecasted costs of the project would increase and profitability will come down. These consequences ultimately affect the performances and profits targets of the project. Thus, the project may end up with negative net worth revealing its inability to meet even its outside liabilities (insolvent).

Accounting for Inflation

When project variables are valued at constant prices the analysis is earlier, but it ignores the effects of real changes in prices as well as inflationary effects. As these effects are Dot taken into consideration the analysis would give a misleading picture of a project. Therefore it is a necessary factor that price changes are included in the financial analysis. For this purpose, all the variables should be valued to effect the expected price changes in the economy and in a consistent manner. Then they could be suitably discounted to reflect the real value and present values. The steps required could be outlined as below.

a) Estimate expected changes in relative prices during the life of the project considering the demand and supply forces governing the variables considered.

b) Estimate the general level of inflation expected to be during the life of the project considering the other macro economic factors such as GDP growth, government policies and external environment.

c) Combination of above two factors provide an estimation for the changes in future prices or the changes in nominal prices and all the input and output variables should be valued at a price incorporating the above changes. (Price changes may not be same for all variables).

d) Use the above value of inputs and outputs to construct the Cash flow Statement.

e) Determine the nominal interest rate taking the price changes at ‘c' above into consideration.

f) Construct profit and loss accounts for the life of the project taking the nominal values and determine the tax liability of the project to be incorporated in the Cash Flow Statement. Depreciation, Stocks and Interest Expenses should be considered as discussed earlier.

g) Estimate the Cash requirements of the project and changes in the cash stock to be incorporated in the Cash Flow Statement.

h) Determine the financing requirements along with the repayment of principle and interest to be included in the cash flow taking the inflation into consideration.

I) Once you follow the above steps you complete the construction of Cash Flow Statement in terms of nominal prices. The next task is to bring the nominal net cash flow into real values. This can be done by deflating the nominal net cash flows by the price index (inflation).

j) Discount the real net cash flow using an appropriate discount rate.

The development of a cash flow as above allows you to incorporate inflation into the financial analysis so that they would reflect real picture of its performance. As the financial analysis provide a realistic picture of the project, the decision-makers are better informed and in a position to take more accurate decisions.

Project appraisal Questions and answers part 1 (brief proposal)

2021-06-11T06:50:00.005-07:00

Identify a social or commercial issue in your area emerging due to Covid-19 Pandemic and think about a solution to implement as a new project. Write a brief proposal of your project including a background of the identified issue, objectives of the project, proposed solution (method) and your own justification of project feasibility.

* Name of the project - Establishment of a new disinfection system to ensure the health and safety of public transport.

* Execution location – Central province of sri lanka

* Project duration – six months

Problem statement (Background of the issue)

The current COVID-19 epidemic has caused many major social and economic crises in the world and in Sri Lanka. Among them is the crisis situation in the public transport sector. Due to this epidemic, the public transport sector in Sri Lanka suffered a severe collapse. Private bus owners even decided to quit from the bus service. SLTB and Sri Lanka Railways also suffered heavy losses during the corona season. Also, there are a lot of workers in the workforce, including office workers and general workers who use public transport, were severely inconvenienced.

The main reason for the collapse of the public transport sector with the COVID was the lack of a proper system for hygienic passenger transport. Due to the high risk of the spread of COVID on public transport and the fears associated with it, the public began to turn away from public transport and turn to private transport. As a result, the revenue of the public transport sector fell sharply. It was also impractical to carry out passenger transport within the limits imposed by the government. This is due to the fact that there are not enough buses to limit the number of passengers and it is not profitable on the existing fares. At present, those rules do not seem to be working. The increase in private vehicles has led to an increase in traffic congestion, an increase in unsafe modes of transport such as three-wheelers / motorcycles, an increase in road accidents, and an increase in the risk of COVID due to overcrowding on buses during peak hours.

Solution (project description)

As a solution to this problem, the project proposes to establish a mechanical disinfection system with the primary objective of ensuring the corona free public transport sector. In three steps, the health of the passengers during the journey is ensured. The first thing to do here is to disinfect through a Disinfection Chambers near railway stations and bus stops. Only those disinfected in this way will be loaded onto buses and trains. The second step is to check the body temperature of the passengers as they board the train or bus. This allows only people with a good body temperature to enter the relevant mode of transport. Body temperature gauge equipments are provided to the conductors. The third step is to disinfect the bus or train at the end of each trip using the Disinfection fog machines. As the disinfection takes place in three stages, the public transport service will be able to maintain a completely corona-free transport service. By providing such a service at a slightly higher price or charge, public transport services will be able to attract a large number of customers.

The project is planned to be implemented in the Central Province and with the success, it is expected to be implemented in other parts of the country as well. This is expected to take effect over a period of 6 months, during which time the effects of COVID pandemic are expected to gradually subside. The project is expected to receive financial and technical assistance from the government, Security forces, NGOs dedicated to corona control and associations in the public transport sector.

Objectives of the project

The main objective of this project is to create a Corona free public transport service and thereby encourage people to use public transport. Other than that,

· Development of the public transport sector from a loss to a profit

· Minimize private bus owners leaving the bus industry

· Reduce traffic congestion and unnecessary fuel wastage

· Minimize the use of unsafe modes of transport by passengers and reduce road accidents

· Reducing the risk of COVID pandemic spread through public transport

· Maintaining a continuous passenger transport service fulfilling the needs of the public

· Minimize the possibility of government restrictions on travel

· Familiarize the general public with the use of modern technology

· Encouraging innovation and entrepreneurship

· Creating a situation where public transportation can continue even if the corona situation worsens

Justification

The risk of COVID-19 virus has increased in Sri Lanka as well as in the world and there is still no specific cure for this pandemic. It also shows an uncontrolled spread of the disease in neighboring India. In this situation, if the COVID situation escalates again in Sri Lanka, it will have to face a serious economic and social collapse. Therefore, it is time to make the public transport service, one of the main sources of spreading the epidemic, safer through such a project.

Considering the industrial feasibility of this project, the low cost Disinfection Chambers recently introduced by the Sri Lanka military police can be used to construct at bus stands and railway stations. This will enable the project to be implemented at a lower cost and will also provide an opportunity for innovators. Also, there is no foreign exchange outflow. Disinfect fog machines can also be used to disinfect buses and trains. These too can be manufactured by Sri Lankan technicians at a low cost.

A small increase in public transport fares to cover the cost of these services would not be a problem. This is because the small fare increase is not significant when comparing the cost of using a private vehicle. No additional staff is required to implement this and it can be done with the cooperation of the security forces.

When think about the financial feasibility of this project, the ability to bring back passengers who have discontinued public transportation services due to the risk of COVID will increase revenue, and will also attract people who have not previously used public transportation but are financially distressed by the pandemic.

Research methodology questions and answers part 1 - Research study

2021-06-11T04:13:00.004-07:00

Click here to view the given research study. or link 2

1) A research problem is an issue that a researcher presents and justifies in a research. The research problem arises from a social or organizational problem.

The research study states that the problem in promoting the Malaysian tourism industry is that meager consideration has been paid to the tourists’ travel destination satisfaction while enjoying benefits from internet usage. According to the research, the separation of study in a travel destination and the internet Influence is less sufficient to trigger tourist flows from the home country to the travel host destination.

“Functional benefits”, “complexibility”, “perceived risks” and “costs” from the internet usage used as independent variables in this study were being utilized to decide the satisfaction level of 211 universal visitors who were visiting Malaysia between Januarys to April 2013. There is a positive relationship between the functional benefits of using the internet towards perceived satisfaction among tourists, and the negative relationship between complexibility, perceived risks, and costs.

Lack of necessary IT knowledge disrupts the internet usage of ordinary tourists. Therefore, for some travelers, the Internet is a complex task that requires some training or guidance before it can be easily clicked. That is the reason for Complexibility. Many travelers use online payment methods for their bookings. The convenience of online transactions can lead to potential risks, for example, loss of personal information or loss of money due to technical breakdown or a hacker's plan. That is the reason for the risk of using internet transactions. Also, high costs reduce tourist satisfaction. When tourists come to a country, they have to pay a high price for the services provided in that country. As well as some people save the money of tourists even if they do not get an efficient service for tourists. For such reasons, tourists become dissatisfied.

During online bookings, travelers purchase travel services on a prepaid basis. Relevant travel services in anticipation of expected performance after purchase and consumption, the results are comparable to the initial expectations. In this case, the expected destination satisfaction will not be obtained from the purchased service, and it will lead to tourist dissatisfaction. Therefore, the promotion of the tourism industry will depend on the ability to meet the desires, aspirations, and needs of tourists in Relation to the destinations. . As well as they also need to develop the technology they need, failure to do so many result in travel dissatisfaction.

2) Research objectives describe what we expect to achieve and objectives should be closely related to the statement of the problem. Main objective of this given research is investigate about the tourists’(international) satisfaction of an overseas travel experience by the influence of internet. Research objectives of this study.

· Ensuring tourist destination satisfaction

· Promotion of Tourism in Malaysia

· Minimize the risk to tourists using the Internet

· Minimize the complexity of using the internet for tourists

· Cost reduction (in tourism)

· explores tourists internet usage behavior when using it for travel destination purpose

· Providing information on how the Malaysian tourism industry should "serve" its customers

· study further on the importance of the internet towards tourists’ decision making

· determine tourists revisit intention in the long run

· use internet properly for tourism marketing

3) The scope of study section of research project work contains the areas to be covered by the work. The main focus of this research was the international tourists’ satisfaction of an overseas travel experience by the influence of internet. The target sample is a group of international tourists who visited Malaysia from January to April 2013.In this study, 4 independent variables, namely “functional benefits of using internet”, “complexibility of internet usage”, “perceived risks of internet based payments” and “costs of internet usage” were being considered to determine the satisfaction level of tourists. By this study various travel and hospitality industry players, potential academicians and tourism researchers to study further on the importance of internet towards tourists’ decision making.

4) A variable means characteristic or feature that changes within a study. The independent variable is a variable that can be changed and controlled. The dependent variable is the variable that changes according to the change in the independent variable.

Independent variables of this study

· Functional benefits - enjoying benefits from the internet usage like brows travel destinations using web

· Complexity – some tourists face technical difficulties with using internet for travel purposes

· Perceived risk - the risks face by tourist, while they using e-payment, e-booking and sending personal information.

· Costs - Direct and Indirect costs that tourists have to pay during the traveling period

Dependent variables of this study

· Tourism destination satisfaction - overall travel satisfaction of tourists

5) Hypotheses for the study

If we consider “perceived satisfaction among tourists" as a dependent variable.

· Hypothesis 1: functional benefits in using internet = positive relationship

· Hypothesis 2: complexibility in using internet = negative relationship

· Hypothesis 3: perceived risks in using internet = negative relationship

· Hypothesis 4: costs in using internet = negative relationship

Managerial Economics - Question 1 Projected answer (Price and non Price competition)

2021-06-10T07:02:00.006-07:00

1) First, two concepts, price and non-price competition, need to be considered separately. According to law of demand, when the price of goods rise, the quantity demand will go down. If the price decreases, quantity demanded increases. The main reasons for that are the Substitution effect and the income effect. Due to the change in the price of the item under consideration, the change in consumption due to a change in the prices of relative goods calls substitution effect and the change in consumption due to a change in purchasing power call income effect. The quantity of demand (QD) will go up, if the price of goods decreased. The product is relatively more expensive than alternatives, and therefore people will switch to relatively cheaper products (Substitution effect). The increase in price of product reduces disposable income of consumer and this lower disposable income may reduce demand (income effect).

In price competition, the firms develop different price strategies to beat the competition. They generally decrease the price of goods or services than that of the competitors to gain the market share. Sometimes, prices are changed to recover the costs and sometimes for increase the demand. For instance, Bic razor and Gillette razors are close competitors, thus, they often engage in price wars.

In addition to the pricing method, firms try to attract customers through non-price competition methods. The non-price competition focuses on factors other than the price of the product such as features, quality, delivery, after sales service, and promotion. Thus, firms focus on these factors to increase the sale of products.

Given the current state of the economy in the face of the emerging corona virus situation, it is important to examine how companies use those price and non-price competitive tactics and their effectiveness. Given the socio-economic environment associated with this COVID-19 situation, there is a growing sense of social isolation, rising demand for health care and related products, Adverse effects on international trade, a lack of access to the physical market for consumers to buy goods, a slowdown in the income streams of many, and a drastic reduction in the sources of income and the collapse of the tourism industry. There were also some business closures and Dismissal of employees.

In the face of this crisis in the economy, many sections of the society are losing their sources of income and as a result are inclined to consume lower priced products. Also, there is a tendency for some goods to become unaffordable due to import restrictions. Therefore, there will be a wider market space for companies that are able to supply products at lower prices on this environment. There is also a decline in demand for goods and services due to social isolation and the loss of the tourist market. Therefore, there may be some surplus in some products, and the market can benefit by selling them at a lower price. Also, providing cheaper products during these difficult times will bring relief to the consumer, which will prevent the consumer from being attracted to other competing companies in the long run.

However, due to the social isolation caused by this epidemic and the consequent increase in consumers being tempted to buy goods online, it has become a very popular feature to go to the consumer and sell the goods and place orders online and deliver the goods to the customer's home. Here we can see that consumers are more concerned about delivery speed and ease of purchase than they are about price. Also, economically viable consumers are tempted to buy or pay more for products and services that are specifically based on health care practices. Firms prefer non-price competition. In spite of the additional costs involved, it is sometimes more profitable than selling at a lower price and avoids the risks of the price war. But in this case, the cost of the goods and services provided may go up due to the additional costs incurred in the non-price competitive system. As promotion costs, additional staffing costs, and additional transportation costs have to be borne, rising commodity prices can hamper competitive gains.

Considering the situation with this corona virus situation, especially in Sri Lanka, there is a huge demand for low-cost products. The best example of this is the large gathering of consumers around firms such as the Sathosa with the recent imposition of lower prices for canned fish and dhal. On the other hand, there is a specialized market for non-price competitive strategies, such as distribution and online transactions. For example, in the recent past, there has been a rapid increase in the sale of goods near villages, consumer homes and online sales in Sri Lanka.

Overall, there is a larger market for price-based competitive systems than non-price competitive ones. The main reason for that is the impact of this Corona virus on the cash and income flows of consumers. Although more expensive, higher quality products are available in the nearest market, there is a strong tendency to look for cheaper substitutes. Therefore, it can be concluded that the price system is ahead of the non-price system as mentioned in the above statement. However, non-price competitive methods have not become insignificant. They can only be shown to be lower than the price competitive methods.

Organizational behavior Assignment projected answer 2 ( Sandy’s health problem?/A Gnawing Stomachache case study)

2021-06-10T04:11:00.008-07:00

Click here to view case study

1) Optimum level of stress is necessary for human progress. Unfortunately, we have to experience either too high or too low levels of stress. Because of that we have to face many psychological, behavioral and physiological problems.

Studying this case, it can be concluded that sandy Celeste has stress. This stress also seems to be the cause of her severe headache and stomach ache. Severe headache and stomach ache are physiological symptoms of stress. Many of the organizational, group and individual stressors that caused her to have this stress can be seen in this case study.

The first of these was her divorce. As a result, she has to take care of her children on her own. It can be described as an individual stressor. She also seems to have minimal work experience and training as she has never worked full time away from home. It can also be said that training her for only 2 months is not enough. This reason also seems to have been a reason for her stress.

Organizational stress consists of four major potential stressors. They are organizational policies, structures, physical conditions, and processes. A key point that emerges in this case is the problematic nature of the organizational policies of this organization. It has caused a lot of stress in the employees of this company and also caused the stress of sandy. Even salespersons are not happy to deal with these policies. Consumers are also embarrassed. Despite the situation, Sandy is under a lot of stress as she continues to try to implement these inflexible policies.

Organizational structure is another main potential source of stress. In this case, problems with Devon's organizational structure have also contributed to this situation. For example, Devon's salesperson does not seem to have a chance to contribute to the decision-making process. Both customers and salesperson seem to be embarrassed by the lack of space for their ideas, which are always dealt with by customers. This will also have a direct impact on Sandy, an institution supervisor.

Also, there is no proper division of power and functions in this institution. Sandy has to work in 3 departments and there is a bit of confusion as all 6 departments are in a small range. Since there were 3 supervisors, each had the opportunity to be assigned to two departments, but for not doing so; Sandy had to work in 3 departments. This can be attributed to Sandy's stress due to the large number of tasks assigned to her.

Due to the rules and regulations in force in Devon’s organizational process, employees and supervisors are kept very busy. It is clear that the task demand of this company is very high. The case mentions supervisors and salesperson busy making remarking the merchandise as one sale stops and another start. It also seems that sandy has not received the required social support especially from salespersons and supervisors work autonomy is also low. All of these factors are the reasons for this situation where sandy has become.

2) The company can take several steps to alleviate the stress of its supervisors. Managers of this company can reduce stress of supervisors through making some adjustments to the macro level stressors such as organizational policies, structure, physical conditions, and organizational process.

To do this, the first task is to create a supportive organizational climate. For create a supportive organizational climate, decentralization and increase employee participation in decision making is an essential approach. Decentralization means the handling down of decision making authority to lower levels in an organization. It seems that the salesmen and supervisors of this company do not have the opportunity to get involved in the decision making process. They follow the rules of the company, but it is clear that they have been severely embarrassed by some of those rules. Supervisor Sandy also stressed because continuing to implement these strict organizational policies. Taking the views and suggestions of the lower level employees of the organization and changing the tough decisions taken by the top management will alleviate the company's predicament.

This case study shows that the company is over formalized. By studying Devon’s merchandising philosophy, it becomes very clear. If organization tasks are highly formalized, employees are unable to fulfill them and it causes stress. Creating an organic organizational structure reduces complexity and formalization and helps to alleviate stress.

Create healthy physical conditions at work is another important step that can be taken to control stress. One of the major shortcomings of this company is the limited space. Due to this, it seems that there is an overcrowding situation in the company. It can have a detrimental effect on stress. To alleviate this situation, several supervisors' private offices can be brightly colored, wall decorations, with higher ceilings and rectangular rooms, which can enhance privacy and reduce the feeling of overcrowding.

Utilization of training and development programs are an essential way to reduce stress. 'If an individual feels that he does not have enough knowledge and training to do his job he may experience job stress. This case study shows that Sandy, who was recruited as a supervisor, was given only 2 months of training. This is clearly not enough training period and eventually sandy was also under stress. By redirecting the supervisors of this company to a formal training process, the stress situation can be alleviated.

Introducing employee carrier counseling systems is another effective way to relieve stress. Carrier counseling can be defined as a process which enables people to recognize and utilize their resources to make carrier-related decisions and manage carrier-related problems. By implementing a career counseling program at Devon, supervisors such as Sandy, who work there, can reduce stress.

Individual copying strategies that Sandy can try

Sandy can use several Individual Coping Strategies to relieve the stress she is facing. The first of these is "Work hard, Play hard and Relax hard”. If an individual is working hard on his job and getting enough time to play and relax then that individual is in a better position to mange stress. Not only working hard but also includes physical exercises such as walking, jogging, swimming etc. If sandy can set aside even a little time for such physical exercises during work, it will help her in good health. Practicing relaxation methods such as meditation, yoga, can help Sandy to cope with any difficult situation and to have the mental concentration needed to make the right decisions. Creative diversions such as music, art, theatre also can calm down the mind and help relieve stress.

Behavioral self-control is another individual coping strategy that Sandy can use to relieve stress. If individual can manage his or her behaviors then he or she can manage his/her own stress levels also. For example Sandy may have steady stream of salesmen complains if she can manage them in calm and collected mood then she is a person who can manage and control her own behavior

Sandy can change her way of life and lifestyle, then she’ll be able to reduce her stress. She can incorporate the following into her daily life.

· Get enough sleep
· Review job or personal priorities regularly
· Talk positive about herself
· Take regular time off
· Keep fit
· Have pleasure time for family or friends and plan holidays

Sandy can cut out needless appointments and tasks, she had been involved before. There is a very busy environment in this company so that action will save the time required to work easily. Listening to relaxation music while working will also give her mental relief. Taking an occasional break for a short time while working and relaxing also reduces the risk of stress.

Social support is important individual coping strategy to manage and reduce job stress. It is very important for sandy to have a group of loyal, understanding friends within the company. They will listen to Sandy and work to boost Sandy's confidence. Through such strategies, sandy will be able to easily get rid of the stress she is facing.

Why Employee was unhappy despite his high income? Organizational Behavior Assignment projected answer

2021-06-08T08:22:00.010-07:00

Why Employee was unhappy despite his high income?

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1) In studying this case, we can identify several issues that occurred within ABC Company. Based on this incident, it can be concluded that there were some issues related to the company's brochures. That is why Mr. Ravi had to revise them. Another problem identified here is the poor level of writing skills of executives. There is uncertainty among executives about the correctness of writing tasks. That is why they always seek Mr. Ravi's support. This is a situation where the executive learning process is not done properly.

The next problem here is that many of the company's trainers are less motivated. Steps must be taken to change their improper attitudes and make them a motivated group. The company has also paid little attention to Mr. Ravi’s job satisfaction. Mr. Ravi’s supervisor, Mr. Ranil is said to have identified him as unhappy. It seems that Mr. Ravi's commitment has not been properly appreciated or valued. Another problem here is the negative attitude of the top executives of the company towards the lower-level employees. It also seems to show very little concern for lower level employees. Mr. Ravi's proposal to hold classes for lower level employees was approved. But there, top officials said, "Ravi could not get such a big salary if he worked with lower level employees" That is not a good sign. Lower level employees play a major role in the operations of the company. Therefore, it is essential to motivate lower level employees, increase their job satisfaction and improve their attitudes in order to increase the productivity of the company. Otherwise, issues such as employee turnover and absenteeism may develop.

It is also a wrong decision to reduce Mr. Ravi's salary while conducting English classes for floor workers. The company's productivity increased as a result of Mr. Ravi's program. Therefore, it was a situation to increase Ravi's salary, and the weaknesses in the decision making of the executives stand out here. Prior to the implementation of Mr. Ravi's course, there was no motivation or job satisfaction among the floor workers. They also take action on their promotions after this course. It is clear that Mr. Ravi is not money minded person and the company management has not properly identified his perception, attitudes, and needs. This shows that top management as a whole does not pay proper attention to interpersonal relationships and motivation of employs.

2) McClelland’s Theory of Needs can be used to explain this situation. Consider about McClelland’s Theory of Growth Needs, it describes three needs: need for achievement, power, and affiliation. Achievement need means behavior directed towards competition with a standard of excellence. McClelland identified the following characteristics of need achievers

Greater need to set and achieve challenging goals
Be prone to set difficult but achievable goals and take calculated risks
Desire to get regular feedback on their progress
They value their Achievement more than financial things

The need for power is the desire to influence others, the desire to change people, and the desire to make a difference in life. This type of people favors collaboration than competitive nature. They love to enhance their esteem and reputation and they want their views and ideas to be accepted and implemented over the views and ideas of others. These people are suitable for work as leaders.

The need for affiliation is defined as a desire to maintain friendly relationship with other people. They hope acceptance and approval from others. They usually avoid high-risk situations and uncertainty.

In this particular case, Mr. Ravi gets high income but he was unhappy because his achievement need and power need aren’t fulfilled. According to McClelland’s Theory Ravi can be considered a need achiever. Those kind of people consider their achievement valuable than financial ones. That is why he decided to hold classes for floor workers without thinking about his high salary. He wants to do better on teaching English, helping floor workers and build their careers successfully, and develop his status and recognition. But the top management did not properly identify Mr. Ravi's motivational needs. Such people have the ability to take risks and manage them successfully. This case study shows that. Ravi can be further motivated to take action to get the best out of the company, to give him the right goals, to give him a new position of leadership (to fulfill need for power), to give him a fair assessment of his program. He who is not only happy with the high salary can then be satisfied. According to this theory high income is not the correct criteria for the satisfaction of an employee.

The behavior of the employees of the organization changed after the commencement of English classes. This is because they are not properly motivated before attending English classes, and as their English knowledge grows, they become more aware of themselves and their opportunities for promotion. Employees need to develop their vital skills to change behavior. That is what happened with this program.

Employees will behave irrationally when they are dissatisfied with the organization or when there are unsuitable jobs. This situation also contributed to the decline in employee turnover and productivity of the company. However, with Ravi's program, the floor workers changed their attitude towards the company and their behavior changed positively as their awareness of the work environment increased. With the ability to handle the English language, there is a need for esteem in employees and they have to apply for new positions on company. Also, the educational qualifications of the employee are checked during the assignment of the job and the employees were eager to apply for this as knowledge of English is an essential factor for that.

Managerial Accounting - assignment number 1 - projected answers

2021-06-08T03:10:00.006-07:00

1) Cargills (Ceylon) PLC was used for this study. Current operations and products/services of Cargills (Ceylon) PLC.

Reference report link - https://cdn.cse.lk/cmt/upload_report_file/457_1596616183737.pdf

· Retail outlets , brand names of 'Food City', 'Food City Express' and 'Food Hall'.

· Manufacturing and distributing ice cream and other dairy products under the brand names of ‘Cargills Magic’, ‘Heavenly’ and ‘Kotmale’

· Fruit based products under ‘Kist’ Brand processed and fresh meat products under the brand names of 'Goldi', 'Cargills Finest' and 'Sams'

· Biscuit Products , brand name of ‘Kist’

· Operating , ‘KFC’ and ‘TGIF’ restaurants under franchise agreements

· Distribution of international brands such as ‘Kodak’, ‘Kraft’, ‘Cadbury’, ‘Bonlac’, ‘Tang’ ‘Oreo’, ‘Lotte’, ‘Loacker’, ‘Toblerone’, ‘Energizer’, ‘Bega’, ‘Langnese’, and ‘Indomie’ etc.

· Production, importation and distribution of agricultural seeds.

2) The company has identified growth opportunities in the Fast-moving consumer goods (FMCG) market sector, and the Group plans to capitalize on those opportunities through far-sighted investments. The FMCG division of the company has seen strong growth since last year and was primarily based on the activity of the dairy sub-sector and established itself as the leading milk collector in Sri Lanka within the third quarter, sourcing approximately 150,000 liters per day. As a result of this success, the company aims to further expand its market presence by investing heavily in the dairy sector. The dairy division of the company manufactures cheese, butter, ice cream and flavored RTD dairy products under the brands 'Cargills Magic', 'Heavenly' and 'Kotmale'.

Details of this investment prospect are given in the Chairman's Message heading the annual report of Cargills (Ceylon) PLC. Thus, for the future growth of the FMCH sector, it can be assumed that it will invest in new machinery to increase its production capacity.

3) Nature of the project -

The company expects to invest in the growth of the dairy sector, according to its annual report. As a result, a project to invest in modern machinery to increase production in that sector is assumed here. The project aims to increase production capacity and thereby increase profits.

Benefits of project

· Revenue and sales and production increases

· customer satisfaction due to enhanced production

· Competitive advantage or market share gained

Costs of project

· Cost of purchasing machinery

· Electricity costs incurred in operating the machinery

· depreciation

· cost of repair

· insurance and tax cost of machine

4) methods that can be used for financial analysis of the project

· Pay Back Period (PBP) :

The payback period method takes into account the time taken to recover the money invested through the annual cash flow. Thus the project with the time covered by the invested money very quickly is selected as good.

· Discounted Payback Period:

The discounted payback period is the number of years spent in recovering the investment cost based on present value basis.

· Net present value

The NPV is the difference between the present value of future cash inflows and the present value of the initial cash outlay, discounted at the firm’s cost of capital.

If NPV = + the project will be accepted, If NPV = - the project will be rejected

If NPV = 0, the project will be optimistic.

· Accounting rate of return

This method focuses more on the return on investment rather than trying to cover the investment.

There are numerous methods for calculating ARR. The general method of computing ARR is given below.

×100

5) To evaluate this hypothetical project, the company has used 5 years as the effective lifespan of the machine and 20 % as depreciation rate, based on the information provided in its annual report on depreciation. Furthermore, information about the cost of the machine and future cash flow is also based on assumptions.

year	income	expenditure	Net cash flow
0	-	(200,000)	(200,000)
1	150,000	( 50,000)	100,000
2	250,000	(100,000)	150,000
3	350,000	(100,000)	250,000
4	500,000	(200,000)	300,000
5	500,000	(200,000)	300,000

ye years	0	1	2	3	4	5	Simple PBP	Discounted PBP
Cacash floflow	(200,000)	100,000	150,000	250,000	300,000	300,000	1 year 8 months
pv@20%(P pv		0.83	0.69	0.57	0.48	0.40
pvPV		83,000	71,415	142,500	144,000	120,000
c Cumu: ; pv of cash flow		83,000	154,415	296,915	440,915	560,915		2 years and 4months

Thus the value of NPV = Cumulative present value of cash flow ̶ Initial investment

NPV = 560,915 ̶ 200,000 = 360,915

Accounting/Average Rate of Return (ARR):

×100

ARR = 220%

*It is proposed to implement this project on the basis of positive net present value. Also, under the Payback Period method, this can be described as a low risk investment as the cost is covered in a short period of time.

Reference - (https://www.cse.lk/home/financial-announcement-details/35864#st-35864)

Project appraisal part 2 - Recognize (or define) projects by looking at a common characteristics

2021-06-06T04:48:00.006-07:00

We can recognize (or define) projects by looking at a serious of common characteristics which include the following.

Photo by Alvaro Reyes on Unsplash

(a) An activity in which money is invested in the expectation of returns in the future. For example, take a young man in an urban area, investing Rs. 10000 for the setting up of a bicycle repair workshop. This project would cost him Rs. 10000 and he expects to recover that money with a reasonable return for his investment. Similarly, money spent on a village irrigation rehabilitation project in the dry zone of Sri Lanka is expected to generate a base economic rate return of 19.5 per cent.

(b) Recognition and measurement of main future costs and benefits of an activity. For example you can identify fixed and short term cost of a garment project and its future sales income throughout its economic life. When the government expanded the container terminal at the Colombo harbor a few years ago it had identified the total costs and benefits before launching the project.

(c) An activity which is capable of being planned, financed and implemented as a separate unit. For example, before the Puttalam cement factory was constructed it was first planned, the means of finance established and a corporation was created as the institution responsible for implementing the project· Planning a project requires looking at alternate courses of action and deciding on the best alternative.

(d) An activity which has a specific starting and finishing time in order to achieve a specific objective. This implies that all projects have certain objectives and goals to achieve and has a pre-determined life time. Because of this feature, activities which follow can be organized in a sequential order, thereby keeping the project cost and resources at a minimum. For instance, Japan-Sri Lanka friendship bridge (project) over the Kelani river had a specific starting and finishing time.

(e) An activity around which a conceptual boundary can be ascribed. For example, a re-settlement programme in a newly rehabilitated area, would have its conceptual boundaries in terms of income levels number of members in the family, skills and experience etc, in selecting suitable families for settlement.

(f) a specific location or aria of geographical location. In most industrial or agricultural projects, it is easy to identify a specific geographic location. The Ambewela Dairy farm and the Victoria project for example, are located in the central hills of the country. A satellite communication project or foreign exchange trading services project may not have a specific location or may operate from several places.

(g) An activity which generates benefits to a specific target group of beneficiaries, who can be identified separately. For instance, a special training programme arranged for the students taking up a project appraisal course in the Management Degree Programme of the Open University Of Sri Lanka.

(h) An activity where the inputs/outputs and time sequence of resource utilization can be identified, and well defined; e.g. the time sequence of inputs and outputs of Kandos chocolate factory were fairly defined before it commenced.

(i) An activity which is likely to have a partially or wholly independent administrative structure and a set of accounts. The size or nature of the project does not matter, as long as it has some form of administrative and accounting controls. For instance, a large biscuit manufacturing company may have a computerized production and accounting control system while a proprietor of a carpentry workshop will have his own administrative personal and accounting controls.

Project appraisal part 1 - What is a project? Its definition

2021-06-03T20:56:00.010-07:00

Picture by eroyka from pixabay

The word 'project' is commonly used in everyday conversation. A new factory building coming up in an industrial site is called a 'building project’, while a university student may be working hard to complete his research project required under the management course before the deadline. Governments and local authorities spend on infrastructure projects such as “road construction projects“ while the private sector is concerned with ‘commercial projects’. The health department organizes awareness programs under its rural sanitary and health education project. While a Regional Rural Development Bank provides loans to potential loans to potential entrepreneurs under its self employment project; Scientists work on research projects to invent new technologies, trying to find higher conditions of living or new planets to explore, whereas politicians concentrate on new project to raise the numbers in their political parties.

The above paragraph implies that a project is either an on-going activity or and activity which, one is going to commence in the future, and the planned activity may be a commercially motivated activity or a social welfare oriented activity such as distribution of dry rations among those affected by floods. Both projects will have pre-determined objectives. Commercial projects are expected to generate a reasonable return on investment which is generally measured in terms of profits on investment, whereas the return on a TV education project would be the number of viewers who are expected to watch the programs telecast under the project. This implies that regardless of their nature, there are certain factors common to all projects.

“ A project is a set of proposals for investment of resources into a clearly identified set of actions that seek to reap future benefits of a fairly specific kind, the whole series of actions being the subject of individual planning on examination before being adopted and implemented, within a single overall financial and management frame work”

Sometimes the word “program” is used to refer to a “project” interchangeably. However , a program differs from a project in the following manner.

A Program is,

(a) an on-going investment or service which is not limited in time (for example; AIDS Virus control program).

(b) a set of projects

Generally , a project is aligned to a program making it possible either to test it or to re-orient it on the basis of the lessons drawn from its implementation.

Commercial and social projects

Commerce and industries show a greater complexity of all the sectors of the economy. With the new economic thinking that private sector enterprises contribute efficiently and effectively towards the economic growth in a market economy, the importance of commercial and industrial projects has increased. Private sector will allocate their resources to the most viable project measured in terms of financial return. Higher the profit of the project, greater is its attractiveness to a private sector entrepreneur. In contrast, when allocating resources, the public sector would give priority to the social and economic returns of the projects. Many social projects such as health facilities, education, road, construction, power supply etc. may not be financially attractive but generate benefits to economy directly or indirectly. The public sector invests in such projects as they help achieve government objectives.

Interrelationship with other disciplines

Project Appraisal involves a set of theories, tools and techniques that are derived from other disciplines. When a project is viewed as a separate economic unit, the administration, control and implementation of such a project would require fundamentals and techniques used in other areas. When carrying out a market research to identify the target segment of the market, marketing research techniques would be used. Statistical tools would be used right throughout, from planning to export evaluation of a project in order to analyze the projects. Costing techniques can be applied in estimating, allocating and keeping the project cost at a minimum, while management strategies are used in implementing and controlling the projects together with advance techniques used in production management and quantitative analysis such as simulation, sensitivity and probability analysis. This implies that the project appraisal is a practical subject which cannot be used in isolation.