Plagiarism Definition and Effects

One definition of plagiarism as offered by one web article quotes â€Å"plagiarize means to steal and pass off either ideas or words of another as one’s own. It is the use of another’s production without crediting the source and the committing of literal theft.† (What Is Plagiarism?).Advertising We will write a custom essay sample on Plagiarism Definition and Effects specifically for you for only $16.05 $11/page Learn More Many individuals view the topic of plagiarism as basic ‘copying and pasting’, which masks the reality of such a serious and prosecutable offense. Considering the nature of how such an act is committed, it has common occurrences; a vast amount being in schools, the music industry and even the workplace. There has been a rapid increase in the amount of plagiarism cases reported in schools recently, which is believed to have doubled compared to two years ago. The issue of cheating has caused a majority of schools to start utilizing plagiarism-detection software to catch up with students. (Williams). Despite having such software, some very tech savvy students still manage to evade detection. The occurrence of plagiarism in schools has significant effects on Education which may include; loss of a degree or job and poor critical thinking skills. Once plagiarized work is passed on as original, the student stands a great chance to lose their degrees and in addition to that, they develop a poor ability to engage in critical thinking which is important in being an individual. (Hall) Plagiarism in the workplace or professional plagiarism is common mainly in industries like marketing or any other that involves drawing, writing, taking pictures or just creative thinking. An example of such an incident took place at the Researcher’s place of work. The Researcher once explained a method of solution to her boss; her boss then relayed the information to her immediate superior and took cred it for it. In other words, this incident adequately defines the topic of plagiarism. Plagiarism in Music probably has the second highest number of occurrences behind Education. There have been numerous reports of celeb singers who have been accused of and prosecuted for plagiarism in their music. Lady Gaga who is a very popular pop singer was recently accused for plagiarism in her new hit single ‘Judas’ by singer/songwriter Rebecca Francesscatti. Francesscatti claims Gaga copied portions from her music and is now seeking recognition for her creation and an undisclosed amount in damages. (Lund) Whether intentional or unintentional, ‘Plagiarism’ is a prosecutable crime which occurs often in varying environments. As the saying goes â€Å"prevention is better than cure†, it is better to try and prevent committing such an act than to deal with the consequences. There are a number of measures one may take to prevent plagiarism.Advertising Looking for essay on education? Let's see if we can help you! Get your first paper with 15% OFF Learn More For individuals particularly involved in education, it is imperative that you know how to paraphrase, quote and cite sources properly. Once you know how to do that, you have significantly lowered your chances of such occurrences. In addition to that, there is a vast amount of software that helps you to correctly cite your sources and check for plagiarism. Furthermore, the Researcher believes that once an individual understands the concept of plagiarism and how unethical it is, they will try harder to produce an original paper. Works Cited Hall, Shane. â€Å"Effects of Plagiarism on Education† ehow.com. n.d. Web. Lund, Anthony. â€Å"Lady Gaga Faces Judas Plagiarism Claims†. Musicrooms. 2011. Web. What Is Plagiarism? Plagiarism.org. n.d. Web. Williams, Rachel. â€Å"Internet Plagiarism Rising in Schools†. guardian.co.uk. 2010. Web. This essay on Plagiarism Definition and Effects was written and submitted by user Korath to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Effects and Solutions to the Eradicating of Illiteracy Essays

Effects and Solutions to the Eradicating of Illiteracy Essays Effects and Solutions to the Eradicating of Illiteracy Paper Effects and Solutions to the Eradicating of Illiteracy Paper Words: functional literacy, earnings determinants, Ghana, Sub-Sahara Africa Abstract This article analyzes the determinants of literacy and earnings in Ghana. It links literacy and earnings with a variety of factors, including age, gender, family educational background, distance to school, and income. Literacy and age are negatively correlated, suggesting that efforts at strengthening the supply and quality of basic education programs in recent years have been successful in raising literacy rates. Females are less literate than males, controlling for other actors. Parents education is positively associated with literacy. Distance to the nearest primary school, residency in a rural area, and poverty affect literacy negatively. Functional literacy appears to be a prerequisite for entering the labor market, Which may partly explain the lack Of return to education Other than middle school and technical/professional training. The policy implication of the study is that basic education and literacy programs should target females and poorer households, especially in rural areas. We would like to thank Rosemary Bellmen and Helena Rib for invaluable support. We are also indebted to Rocco Castro; Ronald Reneging; Nicolai Christensen; our discussant, Inhabitant Data Guppy; and the other participants at the conference on the Economics of Education and Human Capital, held by the Centre for Labor Market and Social Research and the Argus School Of Business, Denmark, in June, 1399, for helpful comments and suggestions. The views expressed here are those Of the authors and should not be attributed to the World Bank or any of its member countries. Addresses: Department of Economics, The George Washington University, 2201 G street, Washington, DC 20052, USA and world Bank, 1818 H street, NW, Washington, DC 20433, USA E-mail: [emailprotected] Org, [emailprotected] Org. 1. INTRODUCTION Significant and rapid increases in earnings and education have taken place over the past hundred years in industrial economies. In developing economies the picture is different: High illiteracy rates and very low incomes, and thus widespread poverty, are realities for large parts of the world. Literacy and income are closely linked. Establishing and assessing the nature of these links may help increase both literacy rates and earnings, thereby eradicating poverty. In this article, we analyze the determinants of literacy and earnings in Ghana based on two household surveys. Our results link literacy and earnings with a variety factors, including age, gender, family educational background, distance to school, and income. Literacy and age are found to be inversely correlated, implying that younger generations are more literate than older generations. This relationship indicates that recent efforts to strengthen the supply and quality of basic education programs have been successful. Females are found to be less literate than males, controlling for Other factors. Parents education is positively correlated with their childrens literacy. Distance to the nearest primary school and residency in a rural area, are negatively correlated with literacy rates. Poverty and literacy are also negatively correlated. Our analysis Of the determinants Of earnings reveals no significant returns to education other than middle school and technical/professional training. This result may indicate that the quality of education in Ghana generally is poor. Alternatively, it could suggest that education is not serving as a signaling device in Ghana. Functional literacy affects selection into the labor market. In evolving countries, jobs are rationed (that is, demand-side determined). We therefore interpret this result to indicate that functional literacy is a prerequisite for entering the labor market. This interpretation may partly explain the lack of returns to education. The policy implications of these results are that greater efforts should be devoted to developing functional literacy skills and basic education. Policymakers should aim to increase both the supply and the quality of basic education and literacy programs. Basic education and literacy programs should target females and poorer households, especially in rural areas. The article is organized as follows. Section 2 describes changes in and determinants of literacy. Section 3 describes the Ghanaian economy. Section 4 presents the economic model and the econometric methodology underlying the analysis. Section 5 presents the data and descriptive statistics, and section 6 presents the regression analysis. Section 7 summarizes the articles findings and draws policy conclusions. 2. CHANGES IN AND DETERMINANTS OF LITERACY opinions differ widely over how best to define literacy. Unesco defines a functionally literate person as any person 15 or older who can read and write a simple statement on his or her everyday life (Unesco 1993, p. 24). The World Development Report (1997) also adopts this definition of functional literacy. Others propose a broader and more explicitly political definition. Paulo Ferrier, the Brazilian educator, sees literacy as a process of concentrations that involves reading the world rather than merely reading the word (Ferrier and Macedon 1987). Widespread literacy is a twentieth century phenomenon. Before the nineteenth century, when public school systems were developed, education was reserved for the few. School systems developed in industrial countries largely in response to increased and more peccadillo industrialization, which in turn lead to increased economic growth and demand for an even more educated labor-force. Over the past decade, education worldwide has exploded, as a result of the overstraining demand for still more specialized labor. Attitudes toward education have also shifted. Less than 50 years ago, education, especially higher education, was reserved largely for men. Today people in industrial countries believe the entire population has the right to education. 2. 1 Developments in Literacy in the United States Literacy progressed in stages in the united States. Initially, according to Has (1996), literacy spread because radical Protestants wanted to read the Bible. Their need for literacy lead to agitation for general public education in the nineteenth century. Literacy rates later rose as a result of several societal changes, beginning with Reconstruction (Coy 1988). Immigration during the Industrial Revolution and the Progressive reform movement increased literacy later in the nineteenth and early twentieth centuries. World War and the Depression forced the federal government into a more active and direct role, and literacy rose even farther. The civil rights event of the 1 *ass shifted the focus to minority groups, broadening efforts to fight illiteracy. Coy believes that the concept of functional literacy developed during this period and that the formalization of that concept helped increase the number of adult literacy programs. 2. 2 Developments in Literacy in Great Britain In Great Britain literacy also progressed in stages, Street (1995) identifies three distinct stages in the modern development of adult literacy programs. First, the recognition of adult illiteracy being a widespread phenomenon in the sass lead to increased focus on the issue. Government grants were provided, a national Right to Read Campaign was launched, and local practice and experience Vass developers During the sass and early sass the government-funded agency Adult Literacy and Basic Skills Licit emerged. The unit provided materials and guidelines for good practice and funded small research projects. Since the late sass there has been a shift in policy and focus, aiming at adjusting education toward changing national and economic needs. 2. 3 Rates of Literacy in Developing Countries Substantial regional differences in illiteracy rates exist. The rate of illiteracy is relatively low in Latin America and the Caribbean (13. 4) and very high in South Asia (50. 6 percent) (table 1). Ghana is in the middle of the spectrum, with an illiteracy rate of 35. 5 percent. Regions with high illiteracy rates also tend to have low per capita GNP and high philanderer ratio. Within Sub-Sahara Africa, substantial differences exist between Anglophone and Francophone countries (table 2). Illiteracy rates in Anglophone countries are 16 percentage points lower than in Francophone countries. Average per capita GNP in Anglophone countries is more than twice as high as in Francophone countries, school enrollments are higher, and pupil teacher ratios are lower (37. 8 pupils per teacher in Anglophone countries versus 47_3 pupils per teacher in Francophone countries). Table 1. Selected Social and Macroeconomic Indicators, Ghana and Six Regional Groups, 1995 Middle East Latin Europe Cubans America and North South Sahara and the East Asia Central Africa Asia Caribbean Africa Asia Ghana and Pacific Indicator Adult illiteracy rate (percent) 35. 16. 9 -? 13. 4 38. 7 50. 6 44. 0 GNP per capita 350. 0 807. 8 -? 3,419. 8 -? 354. 1 485. 6 Gross primary enrollment ratio 76. 0 1154 99. 6 Ill . 5 96. 5 egg. C 74. 6 (percent) Ratio of primary school pupils to 27. 6 24. 2 20. 0 24. 5 27. 8 62. 7 40. 6 teachers Notes: -? Not available, gross primary enrollment ratio and ratio Of primary school pupils to teachers for Ghana are for 1993. Source: World Bank Detests database. Table 2. Selected Social and Macroeconomic Indicators, Ghana and Anglophone and Francophone Countries in Substandard Africa, 1995 Indicator Ghana Anglophone countries Francophone countries in Sub-Sahara Africa in Sub- Sahara Africa Adult illiteracy rate (percent) 35. 5 36. 1 51. 9 GNP per capita 350. 0 675. 7 333. 4 Gross enrollment ratio (percent), primary 76. 88. 8 64. 4 Ratio of pupils to teachers, primary 27. 6 37. 8 47. 3 Notes: Gross primary enrollment ratio and ratio of primary school pupils to teachers for Ghana are for 1993, Source: World Bank Detests database. 2. Worldwide Increases in Literacy For the world as a whole, illiteracy rates have declined significantly, falling from almost 40 percent in 19/0 to just AS percent in 1990. Rates of illiteracy fell even more dramatically in developing countries, declining from SO percent in 1970 to AS percent in Gigs (Limb; 1996). Wide differences across gender, geographical region, and age exist within countries, however. Or the most part, m ales have higher literacy rates than females, urban areas have higher literacy rates than rural areas, and younger generations have higher literacy rates than older generations. Limb (I egg) also draws attention to the fact that while total illiteracy rates have been falling, the proportion of women in the Worlds total illiterate population has been rising. Three reasons for this tendency are suggested: the technologies of goods production, the nature Of human reproduction, and institutionalizing Of violence in the state. 2. 5 Literature on the Determinants of Literacy Little has been written on he determinants Of literacy. Law, Sprat, and Laborer (1995) analyze the determinants of literacy in Morocco. They find that illiteracy is more widespread among females than among males, higher in rural areas than in urban areas, and inversely correlated with age. The negative relationship between age and literacy may reflect both deteriorating literacy skills over time and improvements in the quality of education. Cavy, Sprat, and Laborer also find that parents literacy and household expenditure level positively affect the level of childrens literacy, suggesting that poverty and family background are important determinants to literacy. Verne (1999) analyzes the determinants of worldwide literacy rates by applying a human capital framework. She finds that enrollment rates, average years of schooling of adults, and life expectancy at birth are the main determinants of literacy, Income affects literacy in a nonlinear fashion, with a negative impact until a threshold of about $2,000 income per year per capita, after which the effect is positive, Institutional and regional variables are not very important in explaining literacy across countries. Literacy rates differ widely across regions, a finding that can be explained by social and economic notations 3. AN OVERVIEW OF THE GHANAIAN ECONOMY Ghana is a low-income country, With per capita income Of 5406 in 1998 (World Bank 199%). It relies heavily on the agricultural sector, in particular cocoa, which accounts for almost half of GAP (World Bank Bibb). From the mid. CSS to the mid. sass, declining cocoa production and trade restrictions stalled economic growth in Ghana. The return of more than a million Ghanaian from Nigeria in 1982-83 and a prolonged drought in 1982 caused growth rates to fall to laetrile low levels by about 1984 In conjunction with the MIFF and the World Bank, the Ghanaian government initiated he Economic Recovery Program (ERR) in 1983. The program implemented a number of policy reforms aimed at restoring macroeconomic stability, encouraging savings and investment, providing an enabling environment for the private sector, and improving public sector management, including prevarication of some of the many publicly owned enterprises, The ERR places significant emphasis on education. The Education Sector Reform Program, established in 1987, improved the efficiency, quality, and relevance of education. The program also increased access to education and shortened the length of pre-university schooling from 17 to 12 years. As a result of the reform program, spending on education rose from 1. 4 percent of GAP in 1983 to 3. 8 percent of GAP in 1934. The governments plans for additional reforms are outlined in its development starter, Ghana-vision 2020 (Republic of Ghana 1935). A substantial part of the programs social agenda is aimed at basic education. Specific goals include achieving universal basic education and adult literacy, increasing access to secondary and tertiary education, and strengthening laborer skills by increasing technical and vocational training. To achieve these goals, the overspent, With the assistance Of the World Bank and Other donors, launched the Basic Education Sector Improvement Program in 1996. The program plans to increase investment in school facilities and teacher housing in rural areas and to strengthen science and math in the curriculum by raising education expenditures from 3. 8 percent of GAP in 1998 to 4. Percent in 2001. 4. THE ECONOMIC MODEL AND THE ECONOMETRIC FRAMEWORK The framework tort the analysis is standard human capital theory, in which individuals build up knowledge and skills through education and experience specific on-the-job experience as well as general experience (Becker 1975: Minced 1974). According to the theory, individuals who invest in human capital are subsequently rewarded with higher earnings. Formally, the economic model may be derived from the theory of either household or individual demand for schooling, both of which view education as an investment in human capital. In industrial economies, in which subsidies for education are common, the investment decision may be viewed as an individual decision; in developing economies the relevant decision unit may be the household (Chandler, Lava, and Filmier 1994; Mason and Chandler 1997). Households will invest in education up to the point at which the marginal benefit from an additional year Of schooling equals the marginal cost of an additional year of schooling. In the traditional human capital literature, earnings are determined by education and Other individual, household, and, possibly, community characteristics. Earnings are observed, however. Only for individuals who have positive earnings (that is, who actually supply labor). To take this into account, we specify a labor supply function. Our model then becomes: (1) (2) Ii Is E(lie, HI, Chi) S(lie, Hair Chi) This implicitly assumes that the household decommissioned possesses perfect information and that capital markets are perfect. Both assumptions are very restrictive and appear unrealistic in developing economies. Where Ii (earnings of individual i) and Is (the labor supply of individual i) are the dependent variables; is a vector of individual characteristics, such as age and age squared (to capture possible nonlinearities), gender, the individuals level of education, and the level of education of the individuals parents; H is a vector of household characteristics, such as the wealth of the household: and C is a vector f community variables, such as urban versus rural location. Literacy, L, is then determined by the following simple model: (3) Lie = L(lie, Hi, Chi) The explanatory variables are similar to those in the earnings equation, with some differences. In order to investigate the possible link between poverty and literacy, we include earnings and the poverty quintile of the household in H. We also include a measure Of the distance to the nearest primary school in C To analyze the determinants of earnings, we use a Hickman selection model (1976, 1979), which can be briefly described as follows. Consider the earnings regression: (4) In Wi = Xi; * Ii here In Wi is log-earnings for individual i, Xi is a vector of explanatory variables for individual i, is a vector of parameters, and Ii is an error term capturing unobserved variables, The problem in estimating equation 4 is that we implicitly apply a sample selection rule because we observe only earnings of individuals who work; potential earnings of people who do not supply labor are not incorporated. If the sample has characteristics that dieter from those of the underlying population in a nonrandom fashion, it will suffer from a selection bias, which, if not taken into account, will lead to biased parameter estimates. Hessians solution to this problem is to incorporate the labor supply choice in the earnings equation. The earnings and labor supply choice equations thus become: In Wiz = Uzi where equation 5 is the earnings equation (equivalent to equation 4), in equation 6 is a latent variable that reflects the excess utility from participating in the labor market, and Uzi is a vector of variables explaining the labor supply decision of individual i. The latent variable l* corresponds to the indicator variable: lie- 1 if > 0, 0 otherwise The model is estimated by first estimating the inverse Mills ratio and then including it as an additional regresses in equation 5: (7) In Wi Kip -t- Ii where ski is an estimate of the inverse Mills ratio for individual i. The Hickman model views labor supply as an individual choice. This view may be inappropriate in a development context, where the absence of (public) safety nets means that there is not likely to be much of a choice involved in the labor supply decision. The labor actually supplied to the market is likely to be determined more from the demand sid e than from the supply side. This contrasts with industrial economies, in which the labor supply decision is likely to be made in a different Skilled workers are more likely to supply their labor than unskilled workers since they forgo more income than do skilled workers by staying idle (given that there is a social safety net whose benefits are high enough not to force them into working). We applied the maximum likelihood version of the Hickman selection model -? rather than the Two-Step version in order to be able to weight the data. We view the Hickman model as the general model, the validity of which must be tested against the reduced model, The reduced model here is the standard earnings equation, which is nested within the selection model. That is, the standard earnings equation is a special case of the selection model in which the selection correction terms, Ai, are statistically insignificantly different trot zero. S. THE DATA AND DESCRIPTIVE STATISTICS We test the model using data from two household surveys, the 1931192 Ghana Living Standards Survey (GILLS) and the 1997 Core Welfare Indicators Questionnaire (CSCW). GILLS aims at obtaining measures of the living standard in Ghana on several dimensions, including health and education/literacy_ The survey is very extensive and includes 4,565 schooled. The CSCW aims mainly at providing data applicable for analyzing factors affecting poverty, education, and labor markets issues. It contains a much smaller number of questions (questions about earnings, for example, are not included) but a larger sample of households (14,514) and individuals (60,686). 5. Results on Literacy Investigating literacy and its covariates for the GELS data enables differentiating between several types Of literacy and reveals that being able to read and write in English is associated with higher earnings than is being able to read and write in one or more Ghanaian languages (table 3). The various measures of literacy are highly correlated, however. A problem that is likely to cause collinear in the regression analysis of the next section. To circumvent these problems, we comb ine the various literacy variables into a single composite measure of functional literacy.

The Chocolate War Essay Example | Topics and Well Written Essays - 250 words

The Chocolate War - Essay Example Archie Costello heads The Vigils and the group is specialized in giving assignments that have to be completed by other students. Depending on the individuals, the assignments are different from one person to the other and are intended to inflict as much psychological torture as possible. For instance, when Goober, Jerry’s friend is given an assignment of unscrewing desks, chairs and hinges, he undergoes negative emotional consequences when the desks and chairs fall apart the moment the students come to class the following day. Apathy is indeed infectious. When Jerry refuses to sell the chocolates, he is considered a hero, since his fellow students also refuse to sell their chocolates 1st Student remarks that â€Å"I never thought of saying ‘no’ like you did. That was awesome† (Robinette 56). This clearly indicates that other students were infected by apathy. Jerry proves Archie right when he tells Obie that Jerry is emotionally strong since after loosing his mother, he has stood on his feet by joining school in such a short period of time. Archie claims â€Å"Don’t let him fool you. He is a tough one. Gets wiped out all day, then gets right back up on his feet† (Robinette 12). During certain instances, it is imperative that an individual violates the society around him/her, particularly when the society goes against his/her personal norms. Jerry decides to embrace the assertions of a poster in his locker that reads â€Å"Do I dare disturb the Universe?† (Robinette 39). This was wise of him since every individual has the right to choose what is consciously right for him/her. When Jerry remarks that refusing to sell chocolates is a kind of perversion, he is right, since perversion is an aspect that best describes the behavior of human beings that are considered to be deviating from what is regarded as being normal. At the Trinity school, it was evident that The

The Global Significance of the Middle East Essay

The Global Significance of the Middle East - Essay Example The global significance of the Middle East in a broader sense is defined by religious, economic, and political factors. This religion has enormously contributed in past global civilizations. Its economic hub has benefited uncountable nations through the resources held in this region. Most importantly, the emergence and spread of Islam, and the rise of terrorism threats have placed Middle East at a critical global focus. A notable example here is the 9/11 terrorist attacks in the U.S2. Essentially, the political organization of the region has continued to inform the region’s global influence. The realized global significance of the Middle East is based on its strategic location, resources held, and its relations with the rest of the world. The region is rich in oil and natural gas, resources that drive a great deal of people’s lives globally. Its location also stands in a path that offers global connectivity through transport. Most importantly, linking of a number of countries in Middle East with terrorist activities has made the region significant to consider. Religious and political scrutiny of the region has attracted global attention. Middle East’s global significance has strained its ties and relations with some countries, while streamlining those of its allies. This has resulted in variant views and perspectives regarding this region. Proof of terrorism emanating from the region could justify such strained relations. However, global interdependence holds the significance of Middle East as a positive

Lisa and The Two-Sues Case Study Example | Topics and Well Written Essays - 1000 words

Lisa and The Two-Sues - Case Study Example Even on arrival at the hostel, she gets confused with the reception she gets from her roommates. These conditions are normal for most people and they ignore them for good. However, the inhibitions and low self-esteem complicate Lisa’s life there, and she tries to see her as a passive person but with a high sense of dignity. 2. Lisa’s greatest challenge should be identified as her reluctance to adapt to the changing circumstances. This is a part of her personality that makes her choose a confined lifestyle away from the reach of even the least cases of unpleasant situations. When Lisa enters the No.92 room, her expectations get wounded by the responses of the Sues. From the further days of life in the room, Lisa understands that the two girls are careless about her and they possessed little regards for the newcomer. The two girls were already friends and they had a lot of things in common. Lisa was indifferent towards the girls in the beginning, but when they brought their boyfriends to the room, the conditions changed altogether. Even though Lisa does not describe her friends, her choice for going home on the weekends indicates that she dislikes the girls for their character and low-self esteem. 3. Lisa never likes to stay in the room at weekends, particularly because of the fear that Sues may bring their boyfriends for a night stay. Also as the girls spoke too little to her, the most desirable thing she could do was to get home at the earliest. She says she misses Jane a lot because she likes only Jane on the campus. The stressful life in the common room has every potential to challenge the quality of her results and it may also throw her into depression. Therefore, Lisa has to tell choose between quitting the room and adapting herself to the existing environment. The former case is not practically easy as the room allotment is normally fixed for the complete academic session.

Why Is Organizational Design Important Management Essay

Why Is Organizational Design Important Management Essay Organizational design is selecting and managing the culture, structure, processes and positions in organization so that organization can control the activities. The final aim is to achieve goals and objectives and to make organization successful (Sargent and McConnell, 2008). The design works best if it is effective and it has a positive impact on individuals (Nadler and Tushman, 1998). The organizational design is important because it shapes the behavior of members working in organization (Jones, 2010, p31) and managers acquired desired behaviors through managing organizational design. The two components of design are; Structural components include goal, strategy, and structure and Human components include work processes, people, communication, coordination and control, and incentive mechanism (Burton, DeSanctis and Obel, 2006). But it is not only about formal structure it also includes informal structures and managers integrate both into business strategy. The Ford Company makes a record loss of $13.3 billion in 2006, the tall hierarchy and culture based on empire building was found to be the reason of low productivity. The behavior of managers in Ford because of empire building structure is that they do not admit mistakes and protect their interests; the managers do not like their subordinates to ask questions. The new CEO from outside the company looks at the problem and ordered managers to share information across different departments (Jones, 2010, p36). Organizational design is a continuous processes because globalization, technological breakthrough and tough competition is continuously changing the way organization work and new forms of organizational designs are emerging such as learning, virtual, cellular, alliance, network, modular or spaghetti etc. (Burton, DeSanctis and Obel, 2006). Organizations have limited resources, have internal constraints, external pressures and even face conflicting goal situations and organizational design makes the balance between internal and external pressures (Jones, 2010), manage the resources in such a manner that it will achieve high performance and give best possible outcomes (Daft, Murphy and Willmott 2010, p22). It also increases productivity, allows innovation and gives competitive advantage. When organizations are not performing, managers redesign and restructure the organization so that it will reveal its potential. There is no specific best design for organizations it emanates from overall vision of organization. What will happen if there is no design in company? A Brazilian company Semco has no organizational design, structure, charts, hierarchy, goals and mission statement but still performing well and making profits (Semler, 2007). But Semco has only 150-200 employees, when organizations grow and expands, employ large n umber of people then gradually it becomes more complex. If a manager puts less attention, a flawed design will emerge and it hinders productivity. The factors managers should take into account while designing the organization are vision, strategy, size, environment, communication, control and incentive systems. Finally have a fact in mind that organizational behavior is result of organizational design. REFERENCES Burton, R. M., DeSanctis, G. and Obel, B. (2006) Organizational Design A Step-by-Step Approach. Cambridge University Press, New York. Daft, R. L., Murphy, J. and Willmott, H. (2010) Organization Theory and Design. Andover: South-Western/Cengage Learning. Jones, G. (2010) Organizational Theory, Design and Change. 6th edn. Upper Saddle River, N.J: Pearson/Prentice Hall. Nadler, D. A. and Tushman, M. L. (1998), Competing by design, Executive Excellence, vol. 15, no. 8, pp. 12-12. [Online] Available at http://search.proquest.com/docview/204590420 (Accessed 22 November 2012) Semler, R. (2007), Out of this world: Doing things the Semco way, Global Businesses and Organizational Excellence, vol. 26, no. 5, pp.  13-21. [Online] DOI:  10.1002/joe.20161 (Accessed 30 November 2012) Sargent, A. and McConnell, T. (2008), Practical approaches to organization design,  CMA Management,  vol. 81, no. 9, pp. 22-25. [Online] Available at http://search.proquest.com/docview/197815281 (Accessed 22 November 2012) In what ways is the managerial role changing in the 21st Century? The economic fluctuations, change in technology, increasing socializations and demands for employees codetermination is continuously posing challenges to managers (Agthe, 1972) and in past two decades managerial roles had been gone through a notable transformation (Pearson and Chatterjee, 2003). The modern management has seen the shift from dictatorial style to team based approach. Top managers do not only stay in corporate offices but they handle employees from ground levels like Costcos top managers works and administer employees from retail floor (Buffington, 2009). Managers now empower, motivate, educate and coach their subordinates and manage resources strategically. If subordinates do not satisfy with the role of their managers then there is a high employee turnover in organization. The number one reason for which employee leaves job in USA is because of dissatisfaction with their managers and immediate bosses, found in Gallup survey of over 1 million employees (AgriMarketing, 2009). Managers guide and control their subordinates but on the same time take orders from top management; they transfer the vision of top management to employee and communicate goals and objectives. Adam Smith argued managers play unimportant role in organizational performance (Horowitz, 1994) and they just adds hierarchical levels, raise cost and put burdens on organization. But as we have seen in past, managers make organizations economically and technically effective, they manage inputs and processes to maximize the output (Bern et al, 2009). They deals with human, physical and financial resources, makes work done by others and make the job of others easy, practical and possible through demonstrating their competencies in terms of knowledge, skills and abilities. The traditional approach states that managers in organizations perform four general roles planning, organizing, leading and controlling. Mintzberg (1980) had suggested ten managerial roles and are categorized in three d imensions; the first is interpersonal which includes liaison, leader and figurehead. Second is decisional which includes disturbance handler, resource allocator, negotiator and entrepreneur. The last dimension is informational which includes monitor, spokesperson and disseminator. In addition Douglas  McGregor mentioned two styles of managers. Theory X in which managers push employees to do work, think employees are lazy, show dictatorial role and perform hard management practices. Whereas managers in Theory Y feels employees enjoy their work, wish to grow and that is why managers select soft management practices (Holloman, 1974; Weisbord, 2011). It is not necessary that traditional management roles only improve productivity. In 1914 Ford doubled wage rates from $2.5 to $5 and shortened work hours from nine to eight hours, the result was high productivity and cost went down. It was an out of box phenomenon practiced by managers in Ford. In 21st Century, the managers are seen as ca talyst; have a strong impact on profitability and policies, they are more adaptable, proactive, innovative, mobile and committed (Eric, 1998) for minimizing the threats and grabbing the opportunities. Managers also start giving attention on cultural diversity issues, work life balance, equality, strong laws and regulations affecting organizations which has been given less attention in past. REFERENCES Agthe, K. (1972) The changing role of Europes managers, Business Horizons, vol. 15, no. 6, pp. 89-94. [Online] Available at http://www.sciencedirect.com/science/article/pii/0007681372900675 (Accessed 1 December 2012) Bern, D., Leeds, M., Leeds, E., and Mondello, M. (2009), The Role of Managers in Team Performance,  International Journal Of Sport Finance, vol. 4, no. 2, pp. 75-93. [Online] Available at http://web.ebscohost.com/ehost/detail?sid=db8b93aa-e99d-4788-ad67-bbe34d70cf93%40sessionmgr113vid=1hid=112bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=s3hAN=40508510 (Accessed 1 December 2012) Buffington, J. (2009), Rethinking Management for the 21st Century,  Industry Week,  vol. 258, no. 9, pp. 54. [Online] Available at http://search.proquest.com/docview/219760478 (Accessed 2 December 2012) Eric, R. G. (1998) The compleat manager, 21st century style.  Management Review, vol.  87, no. 1, pp. 9-9. [Online] Available at http://search.proquest.com/docview/206689809 (Accessed 2 December 2012) Holloman, C. R. (1974) What McGregor Really Said, Business Horizons, vol. 17, no.6, pp. 87-92. [Online] DOI: 10.1016/S0007-6813(74)80014-5 (Accessed 2 December 2012) Horowitz, I. (1994) On the manager as principal clerk, Managerial and Decision Economics, vol.  15, no. 5, pp. 413-413.   [Online] Available at http://search.proquest.com/docview/206626208 (Accessed 2 December 2012) Mintzberg, H. (1980) The nature of managerial work. Englewood Cliffs; London: Prentice-Hall. Pearson, C. A. L. and Chatterjee, S. R. (2003) Managerial work roles in Asia: An empirical study of Mintzbergs role formulation in four Asian countries, Journal of Management Development, vol. 22, no. 8, pp. 694-707. [Online] DOI: 10.1108/02621710310487864 (Accessed 2 December 2012) Weisbord, M. (2011),Taylor, McGregor and me, Journal of Management History, vol. 17, no. 2, pp. 165-177. [Online] DOI: http://dx.doi.org/10.1108/17511341111112578 (Accessed 2 December 2012) (2009), A Managers Role,  AgriMarketing,  vol. 47, no. 4, pp. 18-18. [Online] Available at http://search.proquest.com/docview/214008047 (Accessed 1 December 2012) In your view, does team working enhance or detract from enhanced organizational performance? Illustrate your key arguments with organizationally based examples. According to Oxford Dictionary Teamwork is the combined action of a group, especially when effective and efficient. Whereas Team is collection of more than one individual strive to achieve goals, they had a coordination of activities and had a specific performance objectives (Conti and Kleiner, 1997). People rarely work in isolation; they work as teams in organizations. In USA nearly 80% of organizations (having more than 100 employees) organized some employees to work in teams (Bishop and Mahajan, 2005; Plessis, 2011). Organizational performance depends on what are the objectives of organization and can be seen as productivity, higher outputs, financial and operational results (Delarue et al, 2008). Team works for achieving their objective and on the same time it contributes in organizational performance (Bishop and Mahajan, 2005). Managers increasingly organize work around teams because it gives synergy; give greater level of performance as compare to the individual input (Fincham and Rhodes, 2005, p276). Boeing gathered members of design team from dozen countries for its 777 project and synergy is clearly observed in outcomes of teams. The new Boeing is 33% fuel efficient and 25% less costly (Benson-Armor and Hsieh, 1997). It is also important to mention social loafing; the sum of team efforts can be less than the sum of individual efforts, individual puts less efforts when team expands. Teamwork also raises the level of trust because employees depend on each other for completing tasks and projects. According to SHRM (Strategic Human Resource Management) theories, a well-planned HR system which usually includes teamwork will raise employee satisfaction, motivation and commitment which results in positive behavioral changes and leads to enhanced organizational performance (Delarue et al, 2008). On the other ha nd, team often leads to negative results such as conflicts, poor decisions and low productivity (Campion et al, 1993), which harms organizational performance. Buchanan and Huczynski (2007, p284) mentioned overall success of a company is depending on performance of teams working in it. Effective team leads to enhanced organizational performance. According to Guzzo and Dickson (1996), the effectiveness of team depends on goals, team cohesiveness, composition, leadership and motivation. It is important to keep the team on track, the reason for their existence. Teams exist to achieve goals objectives, they exist to perform tasks and it is the major reason for creating teams (Ilgen, 1999). The second performance-dependent factor is team cohesion, the more cohesive team leads to higher performance and teams with cohesion are efficient and effective. Smith et al (1994) found the positive correlation between team cohesion and financial success when he studies the cohesiveness in top management teams. The team composition means the characteristics and nature of team members. Campion et al (1993) mentioned composition is process of designing the te am in terms of the size, heterogeneity, flexibility, tasks and roles of members. Effective teams are of relative size, highly flexible, heterogenic in term of skill and experience especially when tasks are diverse and need different expertise (Hillmann, 2005). He showed through empirical study that composition of team leads to effectiveness. Leaders can also affect the performance of team, sometimes the higher expectations of leaders regarding team performance raise the actual performance of team and leaders often intervene in team processes only to boost the individual performance of members (Guzzo and Dickson, 1996). On the other hand unrealistic expectations may makes members of teams frustrated and often put them in stress. The last factor is motivation; it can be individual or group level motivation. Teamwork raise work morale and the level of involvement of members, whereas incentives and rewards for team performance can raise group level motivation. The 385 employee company S helby Die Casting, automobile manufacturing in Mississippi is 16 months away from closure, for saving the company employees had been organized into workplace teams. The result of teamwork is clearly observed, scrap reached to 12% (which was 40% two years ago) and performance is up, this teamwork saves the company from closure (Caudron, 1994). Another example is of Wellman International, a 450 employee company manufactures synthetic fiber. They improved quality and solve problems by implementing effective teamwork (Ingram, 1996). Guzzo and Dickson (1996) had also challenged the assumption that improvement in team performance simply leads to organizational performance is not always true. Sometimes teams are working well but results are not seen in larger organizational context. If the company invests in IT infrastructure, it may increase team performances but it does not imply that it will have an effect on organizational performance. Team-Organization relation is very vital, the positive changes in team results in organizational performance. On the other hand changes in organization also affects working of teams exist in it. Nurmi (1996) claimed that teams often slow down the decision making process, if members are not empowered. Teams also face conflict situations and they spent huge amount of their time and efforts in resolving conflicts. Teams spend their time in improving communication and attending team meetings which divert them from their original goals, conflict is linked with low effectiveness in org anizations (Dennis et al, 1999). Consensus and compromises are usually seen in teams for resolving conflict scenarios. Team concept is not necessarily applicable in all type of organizations. Gosen Corp organized its employees in cross functional team but after eight years employees did not find the reason for working in team when they are performing well individually and team concept is very ambiguous in company (Caudron, 1994). Caudron, S. (1994) argued bringing the individuals in a group creates barrier for achieving success. Individuals are often become an obstacle in implementing teams, they do not want to be a part of team, rather likes to perform tasks alone and shows reluctance for taking responsibility and decision making, These reluctant employees can be a reason for low performance (Berman, 1999). If the individual employees are organized in teams they look for their interest such as career and salary and they do not put more attention on team objectives. From HR perspective, hiring individuals is easy but getting those individuals perform in teams is hard. Lencioni (2006) had explained the problems in team and explained factors of team dysfunction such as lack of trust, fear of conflict, commitment issues, absence of accountability and inattention to results. These problems are affecting the performance of organization and hard to manage but still they are curable. In present era, teams have become an essential element in organization. Teamwork assists management, improves communication, encourage innovation, save time and hence enhance organizational performance (Nurmi, 1996). For making team perform and make them feel their higher potential, UK organizations invest heavily in team building exercises (Read, 2007). Organizations can work effectively only if there is strong collaboration and coordination among its team members (Mullins, 2011; Brooks, 2009). The self-assessments tool should apply in teams; each team member feels accountable for their work and evaluates their performance critically and member should give feedback to one another. Team roles should be clear among members and managers should make sure that there will no role clashes (Belbin, 2010). Another tool is Gap Analysis; the gap between current position and what should be the future position of tasks and goals then plan accordingly to lower down the gap. If teams are designed, managed and evaluate very well it will give better results and leads to higher organizational outcomes.

Maria Mitchell Essay -- Essays Papers

This paper will discuss the life of Maria Mitchell and how she became the first woman astronomer in the United States. It will tell of where she grew up. How she climbed the ranks to achieve her goals and how she came into discovering her true passion of astronomy. By describing the events that made this courageous woman, we can see clearly how she set an example for her gender in the Nineteenth century. Women have always been at the forefronts of science, even though they have not always taken the credit for it. One of the defining marks of humanity is our ability to affect and predict our environment. Science - the creation of structure for our world - technology - the use of structure in our world - and mathematics - the common language of structure - all have been part of our human progress, through every step of our path to the present. Women and men together have researched and solved each emerging need. But in beginning of this paper, we will begin at the beginning and reveal the location of her birthplace to tell of her origins to seek the woman who broke many gender stereotypes. Maria Mitchell, an American astronomer, â€Å"was born August 1, 1818 in Nantucket, Massachusetts, USA.† (McPherson p.12) Her father, a member of the Quaker religion felt strongly that girls should receive education equal to that of boys. When Maria was sixteen she was already a teaching assistant to a schoolmaster. â€Å"It was this strict schoolmaster that gave Maria the advantage over the others,† (Weatherford p.144) in that she could quickly find problems and solve them. He was Cyrus Peirce, the founder of the first normal school in America, nowadays called a teacher's college. When she was seventeen she decided to open a school of her own. She rented a room and put an advertisement in the newspaper. The school closed after a year when Maria was offered a job as a librarian of Nantucket's Atheneum Library. This job was perfect for her, because she was earning a good salary and had time to study and read books. Her father also was â€Å"hired as cashier of the Pacif ic Bank.† (p.54) With his new job came the living quarters attached to the bank. Mr. Mitchell built an observatory on the roof and installed a brand-new four-inch telescope. He used it to do star observations for the United States Coast Guard and Maria helped her father with the measurements. One night in the Au... ...ollege. A crater on the moon was named for her. Posthumously, a tablet with her name was put in the New York University Hall of Fame, her name was carved in a frieze at the Boston Public Library, and she was inducted into the National Women's Hall of Fame. With all of these accomplishments in her career, it is not a wonder that she became the first woman astronomer in the United States of America. By proving herself worthy of what a man could do, she excelled beyond the call of duty and met all of the criteria that a man was supposedly only capable of doing. By having the courage and faith to do what she loved, she set the example for many women in the future to rise through the ranks of men and become just as successful. Bibliography: Gormley, Beatrice, Maria Mitchell: The Soul of an Astronomer, Eerdmans, William B. Publishing Company, December 1995. McPherson, Stephanie, Hetty Mitchell (Illustrator), Rooftop Astronomer: A Story about Maria Mitchell Lerner Publishing Group, The, June 1990. Mitchell Kendall, Phebe, Lee and Shepard, Maria Mitchell: Life, Letters and Journals, 1896. Weatherford, Doris, American Women's History, Prentice Hall General Reference, 1994.

Generic Strategy – Porter

THEME 8: GENERIC STRATEGIES 1. Introduction. 2. The Porter's approach: competitive strategies (cost advantage, differentiation advantage and specialization). 3. The Ansoff's approach: the Growth Matrix (market penetration, product development, market development, and diversification). 4. An integrating approach.  © Alfonso VARGAS SANCHEZ 1 Hope is not a strategy, specially when internationalizing the company is the intention 2 Strategic Analysis: Compulsory Questions What business is the organisation in? manufacturing/retail, etc. Who do they compete with, and how do they compete? Who are the organisation’s stakeholders?Key stakeholders & their influence. What are the external drivers for change? – PEST model, macro environment. – Five Forces model, micro/industry environment. How does the organisation gain value? – Resource audit, tangible & intangible. – Value Chain and Value System analysis. Assess the balance in the corporate portfolio, BCG ma trix. How should I compete? Porter’s generic strategies: low cost, differentiation, specialization. What are my strategic movements? Mergers/Acquisitions, etc. 3 Mission – Vision – Values PEST analysis Competitive Forces P. C. Industry Attractiveness S C. C. S. P. B (threats & opportunities)Value Chain: activities & linkages F. I. T. D. HH. RR. PR. Value System (linkages): other SBUs (synergies) & suppliers buyers’ value chains Strategy formulation, at three levels: C–B–F Company’s Competitive Position (Resourcebased View): cost advantage or uniqueness (strengths & weaknesses) I. L. OP. O. L. M&S A-S. S. STRATEGY ELEMENTS LEVELS BUSINESS SCOPE RESOURCES & CAPABILITIES COMPETITIVE ADVANTAGES SYNERGIES CORPORATE (1) (1) (1) BUSINESS (2) (2) (2) FUNCTION (3) (3) 5 STRATEGIC ADVANTAGE PORTER’S APPROACH Exclusivity perceived by the customer Position of low costs COMPETITIVE SITUATIONBroad (the whole DIFFERENTIATION sector) Reduced ( only one segment) COSTS LEADERSHIP FOCUS or NARROW SEGMENTATION 6 THE LOW COST PHENOMENON Two basic ways: -Productivity. -Economies of scale & learning/experience. 7 8 9 COSTS LEADERSHIP RESOURCES AND APTITUDES -Sustained investment of capital and favourable access to financial markets. ORGANISATIONAL REQUIREMENTS -Strict control of costs. -Detailed and frequent control reports. RISKS OR LIMITATIONS -Technological change that cancels out the experience gained or investment made. -Competitors who learn easily and rapidly. -Stagnation of the product or of the marketing. Inflation of costs that annuls the previous price differential. -Clearly defined organisation -Special aptitudes for and responsibilities. process engineering. -Incentives based on meeting -Close supervision of quantitative objectives. work and operations. -Products designed for ease of manufacturing. -Low cost of distribution. 10 Reading: â€Å"Designers on quest to build $12 computer† 11 DIFFERENTIATION RESOUR CES AND APTITUDES ORGANISATIONAL REQUIREMENTS RISKS OR LIMITATIONS -Significant aptitudes -Coordination between the functions of R&D, product in marketing and in product engineering. development and marketing. Strong investment -Qualitative assessments in R&D. and incentives. -Prestige in quality -Capacity for and technology. understanding the market -Full cooperation of and how it changes. the distribution -Appropriate channels. organisational structure for -Long tradition in the stimulating and rewarding sector, or a unique creativity. combination of aptitudes obtained in other business activities. -Competitive levels of product prices, in accordance with a strategy of minimum global cost. -The customers no longer value the product's factors of differentiation. -As the industry matures, imitation reduces the perceived ifferentiation. 12 Mention some brands for which you are willing to pay a premium price 13 SPECIALISATION RESOURCES AND APTITUDES -Resources and aptitudes of special application and interest in the company's area of operation. -Dominance of the relevant technology and of the engineering of the product. -Marketing capacity. -Ability in the use of limited resources. -Other competitors are specialized in part of the market of the already specialized company. ORGANISATIONAL REQUIREMENTS -Flexible and efficient organisation structure. -Corporate culture relevant and specific to its areas of specialisation (products and markets).RISKS OR LIMITATIONS -The differences in costs compared with nonspecialized companies are so wide that the advantages of specialisation are eliminated. -Close coordination between -The market in which the functions. company is specialized reduces its differences -Rapid response to changes with respect to the global market. in the environment. 14 15 16 A niche strategy within a declining industry Reading: â€Å"Cassettes linger long after expected demise† 17 Segmentation variables Varieties of products. Types of purchas er. Distribution channels. Geographic areas. Example: olive oil market. 18Segmentation matrix (1) TYPE OF PURCHASER VARIETIES OF PRODUCTS (QUALITY) Olive Oil Virgin Olive Oil Extra Virgin Olive Oil Final customer (bottled product) Restaurants, etc. (bulk product) 19 Segmentation matrix (2) TYPE OF DISTRIBUTION CHANNEL VARIETIES OF PRODUCTS (QUALITY) Olive Oil Virgin Olive Oil Extra Virgin Olive Oil Generic Specific 20 Combining segmentation matrixes (1+2) TYPE OF DISTRIBUTION CHANNEL VARIETIES OF PRODUCTS (QUALITY) Virgin Olive Oil for final customers (bottled product) Extra Virgin Olive Oil for final customers (bottled prod. ) Generic Specific 21 Segmentation matrix (3)GEOGRAPHIC AREA VARIETIES OF PRODUCTS (QUALITY) Virgin Olive Oil for final customers using a generic distribution channel Extra Virgin Olive Oil for final customers using a specific distribution channel National Market (a) International Market (c) (b) (d) 22 The choice of a segment/s ATTRACTIVENESS: within the same i ndustry there are segments with different levels of attractiveness. INTERRELATIONSHIPS: choose the most beneficial combination of segments. SUSTAINABILITY: your business scope should lead to a strong (defensible) position. (1) Structural attractiveness (competitive forces). (2) Size and growth. 3) Position of the company. (4) Advantages in costs or in differentiation. (5) Costs of coordination, of commitment and of inflexibility. Against: (6) Competitors with broader objectives. (7) Imitation. (8) Substitution. 23 Example: olive oil market SEGMENTS / CRITERIA ATTRACTIVENESS INTERRELATIONS SUSTAINABILITY (1) (2) (3) (4) (5) (6) (7) (8) (a) (b) (c) (d) 24 Criticisms of Porter’s framework Hybrid strategies could be employed without â€Å"stuck in the middle†. Cost leadership alone does not sell products. Differentiation strategies can be used to increase sales volumes rather than to charge a premium price.Price can sometimes be used to differentiate. A â€Å"generic† strategy can not give a competitive advantage. Arguably, the resource based strategy has superseded this generic strategy framework. 25 â€Å"A company must produce at low cost, while also innovating; it must deploy the massed resources of a large corporation, while showing the entrepreneurial flair of a small start-up; it must achieve high levels of reliability and consistency, while also being flexible† (Grant, 2012). 26 OPTIONS FOR GROWTH ANSOFF’S APPROACH CURRENT PRODUCTS NEW PRODUCTS ANSOFF’S APPROACH CURRENT PRODUCTS NEW PRODUCTS CASE STUDY:CURRENT MARKETS Market Penetration Product Development CURRENT MARKETS Expansion†¦ †¦of Products NEW MARKETS Market Development Diversification NEW MARKETS †¦of Markets Diversification 27 The Growth Matrix Sub-strategies Existing Market Penetration: -Intensification. -Relaunching. -Imitation. -Reduction of costs/prices. -Disaggregation. Product Development: -New products (R&D, innovation). -New product lines. -New services. MARKETS New Market Development: -New territoriesINTERNATIONALIZATION. -New segments of purchasers. -New distribution channels. -New possibilities for utilization. Diversification: -Concentric (or related). By conglomerates (or unrelated). Existing PRODUCTS New 28 INTERNATIONALIZATION & GLOBALIZATION 29 INTERNATIONALIZATION & GLOBALIZATION Reading: â€Å"China’s budding food industry faces scrutiny† 30 International Strategy Opportunities and Outcomes Identify International Opportunities Explore Resources and Capabilities Use Core Competence Strategic Competitiveness Management Outcomes Problems and Risks International Strategies Increased Market Size Return on Investment Economies of Scale and Learning Location Advantage International Business-Level Strategy (*) Multidomestic Strategy Global Strategy Transnational StrategyModes of Entry Exporting Licensing Strategic Alliances Acquisition Establishment of New Subsidiary Higher Performance Returns Innovation (*) Low cost or Differentiation. Standardization vs Adaptation. Multidomestic vs Global. Management Problems and Risks Strength of Market Drivers Aircraft Computers Automobiles Soft Drinks Toothpaste Retail Banking Book Publishing Baked Goods Low Multidomestic High Global Strength of Cost Drivers Pharmaceuticals Aircraft Computers Automobiles Toothpaste Retail Banking Baked Goods Soft Drinks Low Multidomestic High Global Corporate-Level International StrategiesMulti-Domestic Strategy Strategy and operating decisions are decentralized to strategic business units (SBU) in each country. Products and services are tailored to local markets. Business units in each country are independent of each other. It assumes markets differ by country or regions. Focus on competition in each market. Prominent strategy among European firms due to broad variety of cultures and markets in Europe. Corporate-Level International Strategies Global Strategy Products are standardized across national markets. Decisions regarding business-level strategies are centralized in the home office.Strategic business units (SBU) are assumed to be interdependent. Emphasizes economies of scale. Often lacks responsiveness to local markets. Requires resource sharing and coordination across borders (which also makes it difficult to manage). Corporate-Level International Strategies Transnational Strategy Seeks to achieve both global efficiency and local responsiveness. Difficult to achieve because of simultaneous requirements for strong central control and coordination to achieve efficiency and local flexibility and decentralization to achieve local market responsiveness. Must pursue organizational learning to achieve competitive advantage.International Corporate Strategy When is each strategy appropriate? High Global Strategy Need for Global Integration Transnational MultiDomestic Low Low High Need for Local Market Responsiveness Effective Standardization Coca-Cola McDonalds Barbie: The †Å"All-American† Girl Goes Overseas Barbie is more than 40 years old. Sold in 130 countries. National adaptations: – Physical features. – Costumes. – Activity sets. Standardized physique: – Scaled to 6’2†, 110 lbs. – 38-18-28. Effective Adaptation McMutton Pie in Australia. Wendy’s shrimp sandwich in Japan. Campbell’s noncondensed soups in the UK. Coca-Cola’s 175 ml containers in Japan.Cadillac Seville 1997 Asian edition: Right-hand drive, shorter seats, closer pedals, 10† shorter & retractable mirrors. Limits to International Expansion (beyond political and economic risks) Management Problems Cost of coordination across diverse geographical business units. Institutional and cultural barriers. Understanding strategic intent of competitors. The overall complexity of competition. DIVERSIFICATION Why? Growth, Profitability and Risk Reduction: Don‘t put all your eggs in one basket !! 42 DIVERSIFICATION Three essential tests for judging diversification (Porter): -The attractiveness test: Is the target industry attractive?Use the 5forces model to assess its attractiveness. -The cost-of-entry test: Is the cost of the diversification worth it? Will the diversified firm create enough additional value to justify the cost? -The better-off test: Does the diversification move produce opportunities for synergies? Will the company be better off after the diversification than it was before? How and why? Potential advantages: 1. Economies of scope (cost savings from using a resource in multiple activities carried out in combination). 2. Internal market (for capital and staff). Reading: â€Å"Perils of diversification†. The era of diversification, 50s-80s. – Refocusing, 90s-onwards. 43 DIVERSIFICATION Because of its high risk, many companies attempting to diversify have led to failure. However, there are some good examples of successful diversification: -Virgin Group moved from m usic production to travel and mobile phones. -Walt Disney moved from producing animated movies to theme parks and vacation properties. -Canon diversified from a camera-making company into producing an entirely new range of office equipment. 44 DIVERSIFICATION Reading: â€Å"Toyota tunes up violinplaying robot† 45 Diversification & PerformanceThe findings of empirical research: How do diversified firms perform relative to specialised firms? -No consistent, systematic relationship has been emerged. -High levels of diversification are associated with deteriorating profitability. -Timing is key. Does related diversification outperform unrelated diversification? -Diversification into related industries should be more profitable than diversification into unrelated industries. -Peters and Waterman’s golden rule: â€Å"Stick to the Knitting†. Empirical studies have defined relatedness in terms of similarities: Operational relatedness.Strategic relatedness. 46 Related Di versification Businesses are distinct but their value chains possess strategic â€Å"fit† in operations, marketing, management, R&D. distribution, labor, etc. Therefore, they tend to exploit economies of scope. Tend to (historically) outperform unrelated diversifications. 47 Unrelated Diversification No common linkage or element of strategic fit among SBUs — i. e. , no meaningful value chain interrelationships. Dominant logic: spreads businesses risk over multiple industries, stabilizing corporate profitability (in theory).Strategic approach: any company that can be acquired on good financial terms & offers good prospects for profitability is a good business for diversification. Conglomerates (clusters of businesses under central, mainly financial, management control), such as GE. 48 Example: GE â€Å"Diversification helps to strengthen General Electric; when one business is going badly, the other goes well, which contributes to the stability and growth of the company †. These words of Ricardo Artigas, Vice President of the General Electric Company, clearly reflect the sense behind this trategic option, the result of which is a company configured into twelve divisions: 1. Aircraft Engines; 2. Appliances (domestic electrical appliances); 3. Capital Services (financing services for customers); 4. Lighting; 5. Medical Systems; 6. NBC (television channel); 7. Plastics; 8. Power Systems (electrical energy generation); 9. Electrical Distribution and Control (power cables, transformers, etc. ); 10. Information Services; 11. Motors & Industrial Systems; 12. Transportation Systems. 49 AN INTEGRATING APPROACH Leadership in costs Differentiation Maintenance Growth Restructuring Internal External ExpansionDiversification of Products of Markets Concentric Conglomerate Vertical Integration Horizontal Integration 50 AN INTEGRATING APPROACH GROWTH STRATEGIES Expansion Internal Diversification Expansion External Diversification of Products of Markets Concen tric Conglomerate of Products of Markets Concentric Conglomerate Strategic Advantage Costs Differentiation Readings from the textbook: Pascual & Lagasa -internal growth based on diversification-; Fontaneda & La Casera -external 51 growth based on the expansion of products and markets-. â€Å"Progress is when things get simpler, not more complicated† Bruno Munari, Italian artist. 52

Bajaj Case Study

Financial Management at Bajaj Auto Bajaj Auto Limited is one of India's largest two-wheeler manufacturers. As the dominant player until the early 1990s, Bajaj's market share declined from 49. 3% in 1994, to 38. 9% in 1999 with the entry of major competitors like Hero Honda. Bajaj has initiated several measures to regain its market share and strengthen its competitive position. The case discusses the financial strategy pursued by Bajaj. Financial Management at Bajaj Auto We want to get back the leadership position in the two-wheeler segment and will use the cash if required to do so.However, in current volatile market conditions (not to forget the Japanese and their huge cash reserves), we would rather have the security of cash any day. We are competing not only with Indian companies, but also with large foreign two-wheeler companies, many of whom have much deeper pockets than ours. While our surplus cash will assist us in future growth, it also acts as a deterrent to others from indu lging in predatory pricing tactics – Sanjiv Bajaj, Vice-President Finance, Bajaj Auto Limited. 1 IntroductionIn 2003, Bajaj Auto Limited (Bajaj) was one of India’s largest manufacturers of both two and three-wheelers. The three-wheelers, also known as autorickshaws, were unique to the South Asian region. The company recorded revenue of Rs. 5125. 73 crores representing a 13% increase over the previous year 2. Once the unchallenged market leader, Bajaj trailed Hero Honda in the late 1990s. Bajaj’s market share declined from 49. 3% in 1994, to 38. 9% in 1999. 3 Thereafter, Bajaj had initiated several measures to regain its market share and strengthened its competitive position.In 2003, Bajaj had a workforce of 12,000 employees and a network of 422 dealers and over 1,300 authorised service centers. 4 The Indian Two-Wheeler Industry Two-wheelers had become the standard mode of transportation in many of India’s large urban centers. Use of two-wheelers in the ru ral areas had also increased significantly in the 1990s. The birth of the Indian two-wheeler industry could be traced to the early 1950s, when Automobile Products of India (API) started manufacturing scooters in the country.While API initially dominated the scooter market with its Lambrettas, it was Bajaj which rapidly emerged as the unchallenged leader in the scooter industry. A number of government and private enterprises who entered the scooter segment, had disappeared from the market by the turn of the century. The License Raj that existed prior to economic liberalization (1940s-1980s) in India, did not allow foreign players to enter the market, making it an ideal breeding ground for local players. But the Raj also hurt the growth of the industry by imposing various restrictions.In the mid-80s, the government started permitting foreign companies to enter the Indian market, through minority joint ventures. During this period, the twowheeler market witnessed a boom with Japanese p layers like Honda, Suzuki, Yamaha and Kawasaki, entering the market through joint ventures. 1 2 3 4 M. Anand, ? Is Munjal Being Too Generous Businessworld, 19th May 2003. B1 Source: Prowess Database. Gita Piramal, Sumantra Goshal and Sudeep Budhiraja, ? Transformation of Bajaj Auto Ltd,? Lessons in Excellence Case Contest, www. thesmartmanager. om, February-March, 2003. Source: Bajaj Auto Limited Annual Report 2003. 109 Financial Insights Figure (i) Indian Motorcycle Market Source: Honda Annual Report 2003. Foreign players quickly changed the rules of the game. From a supplier’s market, it became a buyer’s market. Companies tried to outdo each other in terms of style, price and fuel efficiency. The technological expertise that the foreign collaborators brought to the market place helped increase the overall quality of the products quite significantly. In the early 2000s, the competition intensified further.In 2000, Honda announced its intentions to set up a 100% subsid iary to manufacture scooters and motorcycles. Exhibit I Comparative Valuation of the Leading Companies Source: Motilal Oswal, Equity Research, February 2003. The Indian two-wheeler industry witnessed remarkable growth rates since 2000, due to a host of factors like fall in interest rates, availability of finance and affordable prices relative to the growing purchasing power. Despite the impressive growth rate of the last few years, two-wheeler penetration still remained low in the country.Analysts believed, increasing urbanization, expanding cities, lack of other modes of transportation and favourable demographics would support double-digit growth in the coming decade. The Indian two-wheeler industry could be broadly classified into three major segments— scooters, motorcycles and mopeds5. Until the early 1990s, locally manufactured scooters with gears dominated the markets. But in recent times, demand 5 Mopeds were small motorcycles, with less engine power which were priced l ow and were aimed at the low-income market. 110 Financial Management at Bajaj Auto or scooters had tapered off, while that for motorcycles looked buoyant. The motorcycle market in India had about tripled in size over the past 10 years 6. In 2002, the two-wheeler industry demand totaled 5 million units, making India the second largest market in the world after China 7. Exhibit II Two Wheelers Industry: Changing Dynamics Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Total Two wheelers (unit sold) 1,503,172 1,763,210 2,208,231 2,660,005 2,965,474 3,042,347 3,403,471 3,776,719 3,745,516 4,318,531 5,053,562 Geared scooters 41. 8% 43. 3% 42. 6% 40. 6% 38. 4% 35. 4% 32. % 25. 9% 16. 0% 12. 3% 6. 7% Ungeared scooters 9. 4% 7. 9% 8. 6% 9. 1% 8. 9% 8. 8% 8. 3% 10. 0% 10. 9% 9. 5% 10. 5% Motorcycles 20. 2% 21. 6% 23. 9% 24. 8% 27. 1% 30. 0% 34. 6% 42. 7% 54. 1% 66. 2% 74. 4% Mopeds 20. 0% 17. 6% 15. 1% 16. 8% 16. 5% 15. 5% 14. 6% 14. 1% 12. 9% 8. 7% 6. 2% Stepthrus 8. 6% 9. 6% 9. 8% 8. 7% 9. 1% 10. 3% 9. 8% 7. 3% 6. 1% 3. 3% 2. 2% Source: Bajaj Auto Annual Report 2002-03. Background Note The Bajaj group was founded by Jamnalal Bajaj in the 1930s. His eldest son Kamalnayan established Bajaj Auto, the flagship of the Bajaj group, in 1945, as a private limited company.From 1948 to 1959, Bajaj imported scooters and three wheelers from Italy and sold them in India. In 1959, the company obtained a license to manufacture scooters and motorized three wheeler vehicles. In 1960, it entered into a technical collaboration with Piaggio of Italy and got the right to manufacture and market Piaggio’s Vespa brand scooters and three wheelers in India. The same year, it went public. Bajaj’s first full-fledged manufacturing facility at Akurdi (Bombay-Pune Road) was inaugurated in 1960. Scooter production commenced in 1961, followed by three wheeler production in 1962.Bajaj’s scooters and three wheelers started selling under the Bajaj brand name only in 197 1, when the agreement with Piaggio expired. Till the 1980s, Bajaj scooters were so popular that the basic strategy was long production runs along with a constant focus on costs. In 1984, Bajaj established its second plant (1000-acre plant) at Waluj, Aurangabad. Scooter production at this plant started in 1986, followed by three wheeler production in 1987 and scooterettes and motorcycle production in 1990 & 1991, respectively. 6 7 Source: Honda Annual Report 2003.China was number one with an annual production and sales of over 10 million. 111 Financial Insights As Bajaj’s products were in great demand, the company did not feel the need to introduce new products or upgrade its old models. The Chetak, which accounted for 60% of Bajaj’s scooter sales, did not even have an electronic ignition. The model’s 2stroke engine also had an emission problem that was quite serious by international standards. As competition became intense and the market was flooded with increas ing numbers of models, Bajaj’s market share declined.During this period, Bajaj also followed a highly centralized, paternalistic management style. In the early 1990s, as the motorcycle market began to expand and became an attractive proposition, Bajaj lost ground. Though Bajaj had a presence in the motorcycle segment with its KB100 and 4S Champion, it did not take the segment seriously enough. Bajaj believed, motorcycles were a temporary aberration and people would return to scooters. But the scooter market kept shrinking and Bajaj was relegated to fourth place in the motorcycle market. Exhibit III Comparative Analysis: Motorcycle Sales (Number)Year 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Bajaj Auto 32,028 34,672 42,080 75,067 89,675 129,263 137,717 200,132 255,129 421,966 670,117 % Share 10 14 14 17 16 18 17 19 17 22 23 Hero Honda 134,801 127,803 150,456 183,131 230,194 168,936 407,563 530,607 761,700 1,029,391 1,425,302 % Share 44 51 50 42 40 38 50 50 50 53 5 0 TVS Motors 33,744 30,085 42,080 53,120 125,286 164,083 211,667 268,099 326,357 354,497 450,113 % Share 11 12 18 20 22 23 26 25 21 18 16 Others 108,601 59,066 56,894 89,643 132,922 146,625 60,674 64,529 177,704 123,472 312,547 Total 309,174 251,626 302,550 435,053 578,077 708,907 817,621 1,063,367 1,520,890 1,929,326 2,858,079Source: Society of Indian Automobile Manufacturers. In the late 1990s, Bajaj with the support of Kawasaki, started producing motorcycles. The result was an aggressively priced Boxer 100cc motorcycle in 1997, about Rs. 8000 cheaper than Hero Honda. As Bajaj’s volumes increased, it started pushing prices down by value engineering, localization and better capacity utilization that cut its costs by Rs. 4000 per vehicle. Exhibit IV Bajaj: Major Models Category Motorcycle Wind BYK Pulsar Eliminator 112 Products Year of Introduction 2003 2003 2002 2001 Financial Management at Bajaj Auto Category Caliber Products Boxer CT Boxer AT 4S Champion KB 100 LegendYear of Introduction 1998 1997 1997 1991 1987 1998 1976 1972 2000 1998 1990 1986 1987 Geared Scooters Super Chetak Saffire Ungeared Scooters Spirit Sunny M80 Major M80 Major 4S Step-Thrus Source: www. bajajauto. com In early 1998, Bajaj established a new plant (Rs. 3. 15 billion investment in 200-acre plot) at Chakan near Pune for its future generation vehicles. The new plant specialized in plastic bodied and tubular structure scooters. Bajaj’s relatively high level of backward integration helped it to keep raw material costs well below the industry average. For example, the company bought raw materials in bulk for itself as well as for its suppliers.For most of the two-wheeler companies, material costs accounted for about 70% of operating income, but for Bajaj it was only 57% in 1998, the lowest in the industry. In 1998, Bajaj was ranked India’s fifth most valuable company 8. Internationally, it was the world’s largest scooter producer and the fourth largest two-whe eler manufacturer after Hero Honda, Yamaha and Suzuki. But the delay in realizing the potential of motorcycle segment by Bajaj, allowed Hero Honda to race ahead to become the market leader in 2001. During 2000-01, Bajaj entered into non-life and life insurance business along with Allianz AG of Germany, one of the largest insurance companies in the world. Two companies were set up: Bajaj Allianz General Insurance Company Ltd and Allianz Bajaj Life Insurance Company Limited.Bajaj and Allianz signed two separate joint venture agreements for these two businesses and respectively committed 74% and 26% of the initial share capital of Rs110 crore in case of the general insurance venture and Rs150 crore in case of the life insurance venture. Bajaj received Rs. 1. 17 billion from Allianz as goodwill. In 2001-02, Bajaj Allianz General Insurance issued the largest number of policies among all private players in the non-life segment, and became the leader in this line of business. Allianz Bajaj Life Insurance commenced operations in October 2001. 8 ?The BT 500,? Business Today, 7th September 1998. 113 Financial Insights Exhibit V Bajaj vs. Competitors: Major Models in Different Segments in 2003 Segments BYK Economy (Priced Rs. 27,000 – Rs. 37,000) Executive (Priced Rs. 38,000 – Rs. 5,000) Premium (Priced Rs. 45,000 – Rs. 75,000) Style (Priced above Rs. 75,000) Boxer AT Boxer AR (K-Tec) Boxer CT Delux (KTec) Caliber (K-Tec) Caliber Croma Caliber 115 Pulsar 150 Pulsar 150 (self-start) Pulsar 180 CD100 SS Dawn Splendor Passion Ambition Disc CBZ Disc CBZ (selfstart) Bajaj Auto Hero Honda TVS Motors No Competition Samurai Max 100R Max DLX Victor Fiero Fiero DLX Fiero ES Crux Crux R Libero Enticer Yamaha Eliminator No Competition Note: List is not exhaustive. Source: Compiled from various sources by ICFAI Knowledge Center. The shift in preference from geared to nongeared scooters continued in 2002, resulting in a 35% decline in yearly sales.The company†™s market share in the ungeared scooter market declined due to lack of models. Both LML and Honda Motorcycles strengthened their foothold in 2002 after the launch of ‘Nova' and ‘Dio' respectively. Bajaj Auto's ‘Spirit', the ungeared scooter, commanded around 25% market share in the below 100 cc category. Bajaj was one of the very few companies manufacturing three-wheelers in the world. It commanded a monopoly in the domestic market with a market share of above 80%. The rest was shared by Bajaj Tempo, Greaves Ltd and Scooters India. The company saw a sharp rise in three-wheeler demand. In early 2002, the market grew by 23%. Bajaj had also commenced the commercial production of goods carriers.In 2002, this segment generated 22% of the company’s profits. The profit per three-wheeler was estimated to be 2. 5-3 times that of a motorcycle. Bajaj gained market share in the motorcycle segment through its models like ‘Pulsar' and ‘Boxer AR'. Boxer virtu ally created the four-stroke economy segment and Pulsar expanded the lifestyle segment. Pulsar’s volumes surpassed the most optimistic expectations in terms of volumes. In February 2003, Bajaj launched ‘Caliber 115' and steadied its presence in the executive motorcycle segment. The new model registered sales of 25,706 units in March 2003. 114 Financial Management at Bajaj Auto Financial ManagementBajaj earned bulk of its revenue from the automotive business. In 2003, motorcycles dominated the automotive segment, accounting for 55 % of its revenues. In 2002-03, Bajaj achieved a turnover of Rs. 5071 crore and earning before interest, taxation, depreciation and amortization (EBITDA) of Rs. 817 crore. EBITDA as a percentage of net sales and other operating income increased from 16. 8 % in 2001-02 to 19 % in 2002-03. Return on operating capital, which had dipped to a low of 14% in 2000-01, increased to 60% in 2002-03. Bajaj continued its efforts to drive top-line growth, imp rove operational efficiency, cut costs and improve economies of scale.Working Capital Bajaj continued to minimize its overall working capital. Debtors declined from Rs. 198 crores on 31st March 2002, to Rs. 167 crore on 31st March 2003 – a reduction of 16%. Bajaj succeeded in reducing inventory levels by using the direct on-line delivery of materials from vendors. Inventory of raw materials and components declined from seven days as on 31st March 2002, to six days as on 31st March 2003, and spare parts for replacement market from 42 days to 31 days. The inventory of finished goods however increased from six days to nine days because of the sluggish market. 9 Exhibit VI Bajaj: Operating Working Capital (Rs Million)Source: Bajaj Auto Annual Report 2002-03. Cost Structure Raw materials, advertising and marketing, and indirect taxes (excise, etc) were the major cost heads for Bajaj. During 2002-03, through its continuous efforts in value engineering and improving relations with t he vendors, Bajaj was able to reduce its 9 Bajaj Auto Annual Report 2002-03. 115 Financial Insights material costs. The share of materials to net sales and other operating income reduced from 63. 3 % in 2001-02 to 62 % in 2002-03, while the share of stores and tools was contained at 1. 5 % of net sales and other operating income. 10 Labor costs for 2002-03 included a sum of Rs. 461 million (Rs. 3 million in 2001-02) towards compensation paid to employees under the voluntary retirement scheme. A total of 1,106 employees opted for the scheme, which had a payback period of two years. Bajaj’s labor costs made up 4. 66% of its total revenue in 2002-03. 11 Despite a 16. 5% increase in net sales and other operating income – from Rs. 36. 96 billion in 2001-02 to Rs. 43. 06 billion in 2002-03, factory and administration costs had come down from 5. 3% of net sales and operating income to 4. 3%. This was the result of a thorough review of fixed costs with each plant head. Sales a nd after sales expenses were around 6. 7 % of net sales and other operating income. In 2003, Bajaj’s advertising and marketing expenditures were Rs 233. 9 crore (8. 61% of its total revenue), whereas Hero Honda’s expenditures were Rs. 147. 01 crore (4. 16% of total revenue) and TVS’ were Rs. 212. 49 crore (11. 06% of total revenue). Bajaj’s total indirect tax expenses were Rs. 601. 22 crore in comparison to Hero Honda’s Rs. 9. 75 crore and TVS’ Rs. 435. 77 crore in 2003. 12 Investments Bajaj invested its surplus funds in secured and fixed investment securities like G-Secs, T-Bills, etc. The return earned by Bajaj on its treasury portfolio was comparable with the return earned by the top mutual funds. During 2002-03, Bajaj reduced its equity investments and concentrated more on the G-Sec and bond market.Thus, the market value of the portfolio changed from a diminution in value to cost in 2002, to an appreciation in value to cost of Rs. 343 mi llion in March 2003. During 2002-03, Bajaj provided Rs. 26. 7 million towards impairment in the carrying costs of its investment portfolio. In addition, continuing its efforts to liquidate non-performing assets, Bajaj booked a total loss of Rs. 853 million. This loss was set off against gains on sale of assets of Rs. 1, 067 million that resulted in a net gain of Rs. 214 million. 13 Figure (ii) Bajaj: Liability Structure, 2003 Source: Prowess Database. 10 11 12 13 Bajaj Auto Annual Report, 2002-03. Source: Prowess Database.Source: Prowess Database. Bajaj Auto Annual Report, 2002-03. 116 Financial Management at Bajaj Auto Exhibit VII Bajaj: Investment of Surplus Funds (Rs. million) Source: Bajaj Auto Annual Report, 2002-03. Exhibit: VIII Income from Investments (Rs Million) 2002-2003 Dividends Interest on debentures and bonds Interest on government securities Interest on inter-corporate deposits and other loans Income from mutual fund units Lease rent and equalization Profit on sale o f investments Interest on fixed deposits Others Total Interest on tax refunds Total non-operating income Non-operating expenses Net non-operating income Source: Bajaj Auto Annual Report, 2002-03. 17 127 408 405 239 44 214 2 11 1,450 1,450 274 1,176 2001-2002 592 291 18 364 79 234 6 1,584 18 1,602 436 1,166 Financial Insights Return on Capital In early 2003, Bajaj maintained a free cash reserve of Rs 2,700 crore. The management had no intention of reducing that cash pile in the near future. Meanwhile, analysts argued14 that retaining surplus cash would only dilute a company's Return on Capital Employed (ROCE) and, over a period of time, destroy shareholder value. Bajaj had a capital employed of Rs 4,000 crore, of which only Rs 1,300 crore was deployed in its two-wheeler operations. This generated an excellent ROCE of 60%. But the remaining Rs 2,700 crore of idle cash, earned a return of only 17%.As a result, Bajaj Auto's overall ROCE was 31%, far lower than Hero Honda's 95%. Exhibit IX Return on Operating Capital (Rs. Million) As at 31, March 2003 Fixed assets Technical know-how Working capital Total Operating profit after interest and depreciation Pre-tax return on operating capital exmployed Source: Bajaj Auto Annual Report, 2002-03. As at 31, March 2002 10,910 128 699 11,737 4,834 41% 10,502 107 638 11,247 6,744 60% Exhibit X Dividend Payouts (%) Company Bajaj Hero Honda TVS 1999 19. 18 22. 89 21. 96 2000 20. 88 23. 08 23. 92 2001 35. 69 26. 74 32. 54 2002 27. 34 75. 53 42. 47 Source: Businessworld, 19th May 2003. Capital Structure Bajaj’s debt-equity ratio was 0. 6 and interest coverage was 717. 76 times in 2003. Bajaj mostly relied on internal generation rather than external funding. In 2003, Bajaj had Rs. 3139. 42 crore of reserve & surplus (49% of it total assets), where as Hero Honda and TVS had only Rs. 821. 09 crore and Rs. 399. 85 crore respectively. Bajaj deployed bulk of its funds in investments (44. 02% of total assets) and fixed assets (20 . 57% of total assets). 14 M. Anand, ? Is Munjal Being Too Generous Businessworld, 19th May 2003. 118 Financial Management at Bajaj Auto Exhibit XI Bajaj: Equity Holding, December 2003 Equity Holding Indian promoters Mutual funds and UTI Banks, FI's, Insurance Cos.FIIs Private corporate bodies Indian public NRIs/OCBs Any other Total equity holding Source: Prowess Database. No of Shares 29516461 1612731 3829868 19318255 13264490 29054237 401776 4185692 101183510 % of Total Shares 29. 17 1. 59 3. 79 19. 09 13. 11 28. 71 0. 40 4. 14 100 In September 2000, Bajaj had spent about Rs 720 crore to buy back 15% of its equity. The offer was announced at a price of Rs 400 per share when the prevailing price was around Rs 320. Though prices fell to Rs 200 immediately after the buyback, it had later recovered to about Rs 500. Bajaj believed buy back was a better way to distribute profits to shareholders than dividends.Bajaj had a cash reserve of $ 575 million and paid a final dividend of 120% an d a special dividend of 20% in 2002 (paid on account of the one-time premia received from Allianz AG, Germany, the company's partner in the two insurance joint ventures)15 and a final dividend of 140% in 2003. The amount of dividend and the tax aggregated to Rs. 1,598 million. The company’s dividend yield i. e. , (dividend per share by the market price) showed that Bajaj had a yield of 2. 7%. 16 Looking Ahead In the motorcycles segment, ‘Boxer' had performed well and had increased its market share to 45% in the entry-level market, which was estimated at 102,000 units (35% of total motorcycle sales). But growth was primarily led by ‘Pulsar', the premium-end motorcycle. Against the company's estimate of 10,000 units per month at the beginning of 2002, the model notched sales of around 17,000 units per month in late 2002.Encouraged by the success, Bajaj planned to ramp up sales to 25,000 units per month by early 2004 and expected to achieve total leadership in the mo torcycle segment, aiming at a growth rate of 15%. Bajaj expected to improve its relationships with customers by expanding its product range and widening its dealer network. It planned to launch a 125 cc motorcycle with Kawasaki Heavy Industries Ltd, which was in the final stage of development. A rear engine diesel goods carrier was in the testing stage 15 16 Source: Prowess Database. Chetan Soni & Nandini Sen Gupta, ? Rolling stock: Payouts put auto investors in top gear,? Times News Network, 4th June 2003. 119 Financial Insights and would be launched in 2004. Bajaj also planned to broaden its vision and work towards being a truly global player.Effective management of the company’s finances would play an important role in this regard. Figure (iii) Bajaj: Closing Share Price & Traded Quantity Source: Prowess Database. Figure (iv) Bajaj: Traded Quantity Source: Prowess Database. Figure (v) Bajaj: Dividend Yield & Earning Per Share Dividend Yield 6 5 4 3 2 1 0 Dec-97 Dec-98 Dec- 99 Dec-00 Dec-01 Dec-02 Dec-03 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Earning Per Share 80 60 40 20 0 Dec-97 Jun-98 Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Source: Prowess Database. 120 Financial Management at Bajaj Auto Figure (vi) Bajaj: Assets Structure Source: Prowess Database. Exhibit: XIIBajaj: Capital History Issue Month Issue Type Face Value (Rs. ) 10 10 Security Amount (Rs. Crore) 0 0 Additional Increased Paid up Paid up Capital Capital (Rs. Crore) (Rs. Crore) 18. 81 37. 63 37. 63 75. 25 Security Type Sep-91 Bonus Jun-94 Bonus Euro Oct-94 Issue Sep-97 Bonus Equity Equity Global Depository Receipts Equity 10 10 10 345. 07 0 0 4. 34 39. 8 0 79. 59 119. 39 101. 18 Buybac Sep-00 k Equity Source: Prowess Database. Exhibit XIII Bajaj: Ratios Bajaj Auto Ratios Liquidity Ratios Current ratio Quick ratio Solvency Ratios Debt-equity ratio Interest coverage 0. 26 0. 22 0. 20 45. 04 0. 16 33. 85 0. 17 21. 23 0. 11 11. 83 0. 29 18. 43 0. 52 5. 63 0. 6 4. 58 2. 07 1. 20 1. 88 1. 01 1. 69 0. 69 1. 11 0. 16 1. 20 0. 25 1. 44 0. 81 1. 01 0. 34 1. 12 0. 47 1. 16 0. 36 2003 2002 2001 Hero Honda 2003 2002 2001 T V S Motor 2003 2002 2001 717. 76 161. 91 121 Financial Insights Bajaj Auto Ratios 2003 2002 2001 Hero Honda 2003 2002 2001 T V S Motor 2003 2002 2001 Efficiency Ratios (in Days) Average days of finished goods stock Average days of debtors Average days of creditors Net working capital cycle Profitability Ratios PBDIT (NNRT) as % of sales PBIT (NNRT) as % of sales PAT (NNRT) as % of sales Return on net worth Return on capital employed 20. 19 16. 65 11. 07 17. 50 21. 47 16. 87 13. 12 8. 63 13. 3 16. 74 13. 07 9. 18 8. 24 10. 26 9. 98 17. 59 16. 45 10. 02 67. 10 94. 64 16. 77 15. 63 9. 72 67. 67 95. 27 14. 46 13. 07 7. 87 47. 52 70. 98 9. 23 6. 66 3. 94 32. 89 42. 10 6. 79 4. 57 2. 47 8. 18 5. 78 3. 47 9. 90 13. 80 42. 40 -5. 68 10. 27 13. 95 43. 47 0. 69 11. 38 15. 42 49. 54 6. 61 3. 91 8. 62 35. 57 -7. 47 3. 53 5. 80 32. 71 - 4. 79 3. 93 4. 28 31. 10 14. 09 8. 14 52. 96 14. 97 13. 13 15. 95 19. 82 52. 05 44. 89 -1. 24 7. 54 2. 05 -14. 15 16. 05 18. 80 20. 86 20. 74 90. 00 80. 00 Dividend rate (sum of interim and final) 140. 00 140. 00 Market Ratios P/E P/B 16. 61 3. 19 9. 54 1. 63 80. 00 900. 00 850. 00 150. 00 120. 00 9. 25 1. 32 3. 46 7. 63 9. 27 5. 62 13. 66 6. 21 18. 41 5. 02 10. 35 10. 39 3. 08 0. 99 Source: Prowess Database. Exhibit XIV Common size Income statement Commonsize Income Statement 2003 Total Revenue Sales Other income Change in stocks Non-recurring income Bajaj Auto 2002 2001 Hero Honda 2003 2002 2001 2003 TVS 2002 2001 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 94. 22 3. 51 0. 64 1. 64 92. 27 4. 22 -0. 67 4. 18 91. 85 6. 18 0. 36 1. 61 97. 76 0. 44 0. 40 1. 40 98. 24 1. 04 -0. 13 0. 85 98. 75 0. 33 0. 56 0. 35 97. 76 0. 67 1. 25 0. 31 98. 96 0. 89 0. 15 0. 01 98. 04 1. 05 0. 90 0. 01 122 Financial Management at Bajaj AutoCommonsize Income Statement 2003 Exp enditure Raw materials, stores, etc. Wages & salaries Energy (power & fuel) Indirect taxes (excise, etc. ) Advertising & marketing expenses Distribution expenses Others Non-recurring expenses Profits / losses PBDIT Financial charges (incl. lease rent) PBDT Depreciation PBT Tax provision PAT Bajaj Auto 2002 2001 Hero Honda 2003 2002 2001 2003 TVS 2002 2001 52. 84 4. 66 1. 19 11. 73 51. 39 5. 12 1. 41 11. 80 52. 79 6. 20 1. 80 14. 57 67. 59 3. 86 0. 49 0. 19 68. 80 3. 71 0. 56 0. 12 72. 87 3. 67 0. 73 0. 19 60. 37 3. 27 0. 66 13. 69 63. 29 3. 37 0. 69 13. 86 73. 20 3. 46 0. 90 1. 72 8. 61 0. 86 3. 50 1. 63 19. 3 8. 62 0. 82 5. 28 0. 69 19. 06 9. 83 0. 90 4. 93 2. 85 10. 77 4. 16 1. 89 4. 57 0. 07 18. 51 2. 99 1. 88 5. 55 0. 22 17. 10 2. 74 1. 81 4. 12 0. 46 14. 18 11. 06 2. 08 3. 92 0. 10 9. 23 8. 37 2. 12 4. 65 0. 04 6. 69 8. 76 1. 60 4. 69 0. 04 7. 99 0. 02 19. 01 3. 34 15. 67 5. 24 10. 43 0. 07 18. 99 3. 47 15. 52 4. 06 11. 46 0. 19 10. 58 3. 57 7. 01 0. 68 6. 33 0. 48 18. 04 1. 11 16. 93 5. 81 11. 12 0. 72 16. 38 1. 12 15. 26 5. 08 10. 17 1. 09 13. 09 1. 38 11. 72 4. 04 7. 67 0. 35 8. 88 2. 51 6. 36 2. 30 4. 06 0. 80 5. 89 2. 20 3. 69 1. 28 2. 41 1. 24 6. 75 2. 35 4. 40 1. 03 3. 37 Source: Prowess Database. Exhibit XV Common size Balance SheetCommon size Balance Sheet 2003 Total assets Gross fixed assets Land & building Plant & machinery Other fixed assets Capital WIP Bajaj Auto 2002 2001 Hero Honda 2003 2002 2001 2003 TVS 2002 2001 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 41. 62 4. 02 35. 09 2. 45 0. 06 46. 97 4. 65 39. 56 2. 69 0. 07 53. 65 5. 30 44. 99 2. 88 0. 48 35. 60 5. 77 28. 21 1. 20 0. 42 40. 72 6. 96 31. 96 1. 25 0. 55 54. 82 7. 93 43. 57 1. 68 1. 64 77. 80 12. 72 58. 45 4. 01 2. 63 78. 81 10. 14 63. 09 4. 22 1. 35 77. 23 10. 39 59. 41 4. 40 3. 04 123 Financial Insights Common size Balance Sheet 2003 Less: cumulative depreciation Net fixed assets Investments In group / associate cos.In mutual funds Other investments Inventory Raw materials Stores and spares Finished goods Semi-finished goods Sundry debtors Accrued income Advances / loans to Group / associate cos. Advances / loans to Other cos. Deposits with govt. / agencies Advance payment of tax Other receivables Cash & bank balance Deferred tax assets Intangible assets & deferred revenue expenditure not written off Bajaj Auto 2002 2001 Hero Honda 2003 2002 2001 2003 TVS 2002 2001 21. 05 20. 57 44. 02 4. 13 3. 50 36. 39 3. 30 0. 89 0. 34 1. 82 0. 25 2. 65 0. 32 21. 67 25. 30 36. 82 4. 75 2. 29 29. 78 3. 31 1. 00 0. 57 1. 44 0. 30 3. 66 0. 47 24. 30 29. 35 25. 89 1. 46 2. 64 21. 79 5. 46 1. 96 0. 91 2. 23 0. 36 2. 60 0. 71 12. 47 23. 13 54. 3 0. 16 54. 37 0. 00 9. 18 5. 10 1. 14 2. 51 0. 43 6. 46 0. 00 12. 74 27. 98 41. 41 0. 20 41. 21 0. 00 10. 17 6. 17 1. 54 1. 94 0. 52 5. 69 0. 00 15. 55 39. 27 26. 18 0. 30 25. 88 0. 00 17. 18 10. 62 2. 32 3. 16 1. 08 3. 66 0. 00 28. 15 49. 65 8. 19 5. 60 2. 57 0. 02 19. 95 3. 89 4. 13 10. 36 1. 58 4. 87 0. 00 28. 18 50. 63 1. 66 1. 60 0. 00 0. 05 17. 15 4. 24 2. 50 8. 44 1. 97 9. 97 0. 00 24. 69 52. 54 1. 79 1. 68 0. 00 0. 12 18. 32 5. 49 2. 13 8. 46 2. 25 12. 89 0. 00 1. 68 3. 56 0. 11 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 1. 16 1. 60 8. 21 0. 00 0. 00 0. 00 1. 43 4. 49 1. 86 0. 06 0. 40 0. 41 0. 01 0. 01 0. 11 0. 08 0. 02 3. 93 21. 99 2. 52 0. 8 1. 08 21. 04 2. 28 0. 47 0. 84 21. 71 4. 74 0. 46 0. 00 0. 52 4. 48 1. 11 0. 04 0. 59 7. 31 6. 21 0. 05 0. 88 7. 08 3. 90 0. 00 0. 00 7. 59 7. 69 0. 55 0. 59 6. 48 8. 56 0. 41 0. 77 5. 93 1. 92 0. 00 0. 17 0. 24 0. 35 0. 53 0. 58 1. 75 0. 00 0. 03 0. 05 124 Financial Management at Bajaj Auto Common size Balance Sheet 2003 Total liabilities Net worth Paid-up equity capital Reserves & surplus Secured borrowings Unsecured borrowings Deferred tax liabilities Current liabilities Sundry creditors Interest accrued / due Other current liabilities Provisions Tax provision Dividend provision Dividend tax provision Other provisions Bajaj Auto 2002 2001He ro Honda 2003 2002 2001 2003 TVS 2002 2001 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 51. 36 1. 60 49. 75 0. 85 12. 46 3. 81 7. 21 6. 56 0. 00 0. 65 24. 30 21. 01 2. 25 0. 29 0. 76 52. 99 1. 87 51. 12 0. 59 10. 99 4. 36 8. 41 7. 60 0. 00 0. 81 22. 65 19. 56 2. 62 0. 00 0. 47 56. 80 2. 18 54. 62 1. 21 9. 86 0. 00 10. 07 7. 70 0. 00 2. 37 22. 06 19. 77 1. 74 0. 18 0. 37 39. 34 1. 82 37. 52 0. 00 6. 14 3. 53 31. 14 18. 73 0. 00 12. 41 19. 86 0. 50 16. 42 2. 10 0. 84 39. 10 2. 28 36. 82 0. 00 6. 64 4. 07 34. 97 22. 73 0. 00 12. 24 15. 22 0. 48 13. 66 0. 00 1. 08 54. 44 3. 46 50. 98 0. 00 5. 75 0. 00 31. 63 22. 03 0. 00 9. 60 8. 18 0. 82 5. 18 0. 3 1. 64 39. 42 2. 15 37. 27 3. 82 7. 54 8. 27 37. 87 37. 81 0. 00 0. 06 3. 08 0. 00 1. 51 0. 19 1. 38 37. 27 2. 66 34. 61 10. 50 8. 74 9. 14 33. 31 33. 08 0. 00 0. 24 1. 04 0. 00 0. 00 0. 00 1. 04 43. 06 2. 78 40. 28 19. 09 9. 09 0. 00 25. 55 25. 51 0. 00 0. 05 3. 20 0. 00 2. 23 0. 23 0. 75 Source: Prowess Database. Exhibit XVI Comparative Income Statement Comparative Income Statement 2001 Total Revenue Sales Other income Change in stocks Non-recurring income 3628. 74 4172. 1 4829. 37 3177. 2 4471. 87 5107. 7 1820. 98 2213. 59 3111. 28 244. 19 190. 61 179. 85 14. 13 -30. 4 32. 58 83. 93 10. 63 18. 17 11. 42 47. 21 -5. 81 38. 54 23. 24 21. 08 72. 8 19. 57 16. 65 0. 27 19. 8 3. 27 0. 23 21. 4 39. 82 9. 94 Bajaj Auto 2002 2003 Hero Honda 2001 2002 2003 2001 TVS 2002 2003 63. 66 189. 21 125 Financial Insights Comparative Income Statement 2001 Expenditure Raw materials, stores, etc. Wages & salaries Energy (power & fuel) Indirect taxes (excise, etc. ) Bajaj Auto 2002 2003 Hero Honda 2001 2002 2003 2001 TVS 2002 2003 2085. 47 2323. 71 2708. 23 2344. 39 3131. 72 3531. 81 1359. 65 1415. 78 1921. 32 245. 14 231. 48 239. 05 117. 96 168. 94 201. 63 64. 26 75. 37 104. 05 71. 03 63. 64 61. 12 23. 4 5. 98 25. 61 5. 39 25. 82 9. 75 16. 63 15. 44 20. 85 575. 8 533. 48 601. 22 31. 88 309. 94 435. 77Advertising & marketing expenses 204. 94 200. 41 233. 29 Distribution expenses Others 35. 46 37. 02 44. 23 64. 17 58. 1 93. 73 147. 01 119. 04 118. 49 212. 49 85. 39 98. 92 29. 64 47. 36 66. 27 194. 82 238. 63 179. 61 132. 45 252. 48 238. 84 31. 25 83. 7 14. 65 10. 24 3. 86 87. 15 103. 91 124. 72 0. 83 0. 86 3. 28 Non-recurring expenses 112. 59 Profits / losses PBDIT Financial charges (incl. lease rent) PBDT Depreciation PBT Tax provision PAT ppropriation of profits Dividends Retained earnings 425. 47 861. 9 975. 28 456. 32 778. 31 967. 36 148. 39 149. 74 293. 69 7. 4 3. 38 1. 12 35. 1 44. 27 32. 92 51. 01 24. 82 57. 98 303. 8 22. 97 43. 73 81. 69 19. 12 62. 7 17. 96 49. 22 28. 61 11. 24 79. 91 73. 19 418. 07 858. 52 974. 16 421. 22 745. 39 942. 54 125. 42 131. 78 282. 45 141. 12 156. 68 171. 16 276. 95 701. 84 803 376. 95 694. 38 884. 56 82. 56 202. 54 53. 95 129. 35 27 183. 68 268. 36 130. 08 231. 45 249. 95 518. 16 534. 64 246. 87 462. 93 580. 76 89. 21 141. 66 159. 81 160. 74 66. 01 349. 67 405. 49 20. 36 42. 21 22. 91 31. 04 29. 79 99. 56 376. 5 374. 83 180. 86 113. 26 175. 27 Source: Prowess Database. Exhibit XVII Comparative Balance Sheet Comparative Balance Sheet (Rs Crore) Assets Gross fixed assets 2001 Bajaj 2002 2003 Hero Honda 2001 633. 61 2002 714. 21 2003 779. 25 TVS Motor 2001 641. 3 2002 683. 85 2003 834. 7 2490. 26 2540. 08 2626. 18 126 Financial Management at Bajaj Auto Comparative Balance Sheet (Rs Crore) Land & building Plant & machinery Other fixed assets Capital WIP Less: cumulative depreciation Net fixed assets Investments In group / associate cos. In mutual funds Other investments Inventories Raw materials Stores and spares Finished goods Semi-finished goods Receivables Sundry debtors Accrued income Advances / loans to Group / associate cos. Advances / loans to Other cos. Deposits with govt. / agencies Advance payment of tax Other receivables Cash & bank balance Deferred tax assets Intangible assets (goodwill, etc. Deferred revenue expenditure not written off 245. 85 Bajaj 251. 53 Hero Honda 253. 42 Mar-00 May-00 May-00 503. 59 19. 45 18. 95 179. 76 453. 85 302. 59 3. 46 299. 13 0 198. 54 122. 79 26. 81 36. 47 12. 47 135. 54 42. 29 0 560. 54 21. 89 9. 69 223. 47 490. 74 617. 32 26. 37 9. 19 273. 01 506. 24 TVS Motor 86. 24 493. 09 36. 49 25. 21 204. 92 436. 11 14. 89 13. 92 0 0. 97 152. 03 45. 53 17. 65 70. 2 18. 65 210. 64 106. 95 0. 04 88. 03 547. 47 36. 66 11. 69 244. 54 439. 31 14. 39 13. 92 0 0. 47 148. 79 36. 76 21. 73 73. 23 17. 07 187. 09 86. 52 0 136. 47 627. 07 42. 97 28. 19 302. 03 532. 67 87. 92 60. 08 27. 58 0. 26 214. 07 41. 71 44. 32 111. 1 16. 94 149. 87 52. 21 0 088. 17 2139. 11 2214. 16 133. 81 22. 43 1127. 91 145. 48 3. 96 154. 59 4. 01 1171. 8 1327. 95 1362. 35 1368. 28 1298. 23 1201. 65 1991. 42 2777. 68 67. 62 122. 77 257. 02 123. 99 260. 88 220. 77 726. 29 1193. 52 3. 46 3. 46 722. 83 1190. 06 0 178. 36 108. 27 26. 96 34. 02 9. 11 238. 52 99. 72 0 0 200. 92 111. 67 25. 04 54. 84 9. 37 251. 26 141. 49 0 1011. 26 1610. 41 2296. 03 253. 43 91 42. 17 103. 49 16. 77 179. 1 54. 32 30. 57 77. 95 16. 26 207. 98 56. 16 21. 15 114. 63 16. 04 1786. 88 1785. 53 1917. 13 120. 72 33. 01 198. 17 25. 34 167. 04 20. 24 5. 3 380. 88 19. 24 192. 75 86. 6 21. 73 106 73. 11 3. 87 1387. 8 159. 07 30. 03 68. 06 10. 68 0 1. 26 10. 14 81. 85 45. 09 0 0 0 0 0. 21 10. 34 128. 25 108. 96 0. 81 0 0 0 0. 32 11. 31 98. 14 24. 33 0. 89 0 0 15. 43 32. 66 6. 38 49. 18 15. 91 0 0 0 39 0. 14 5. 16 56. 27 74. 27 3. 57 0 0 15. 3 0. 86 0. 03 81. 47 82. 46 5. 9 0 1007. 75 1137. 62 219. 98 21. 32 0 0 123. 32 25. 2 45. 48 12. 8 16. 03 0 0 20. 2 10. 22 11. 52 0. 44 0. 3 0 127 Financial Insights Comparative Balance Sheet (Rs Crore) Share issue expenses not written off VRS expenses not written off Other misc. expenses not written off Total assets Net worth Authorized capital Issued equity capital Paid-up equity capital Bonus equity capital Buy back amount Buy back shares (nos. Reserves & surplus Free reserves Specific reserv es Borrowings Bank borrowings Short term bank borrowings Long term bank borrowings Govt. / sales tax deferral borrowings Debentures / bonds Fixed deposits Other borrowings Secured borrowings Unsecured borrowings Bajaj Hero Honda TVS Motor 0 0 0 0 0 0 0 0 0 0 0 0 0. 44 0 0. 3 0 0 0 16. 03 0 0 20. 2 10. 22 11. 52 0 830. 02 357. 41 25 23. 1 23. 1 0 0 0 334. 31 291. 81 42. 5 233. 95 107. 37 76. 12 31. 25 0 0 4641. 66 5407. 81 6309. 79 1155. 81 2636. 53 2865. 79 3240. 61 150 101. 18 101. 18 114. 17 18. 21 1820730 4 2535. 35 150 101. 19 101. 19 114. 17 0 0 150 101. 19 101. 19 114. 17 0 0 629. 19 50 39. 94 39. 94 23. 96 0 0 589. 25 589. 25 0 66. 48 0 0 0 1753. 9 2188. 68 685. 76 50 39. 94 39. 94 23. 96 0 0 645. 82 645. 2 0 116. 44 0 0 0 861. 03 50 39. 94 39. 94 23. 96 0 0 821. 09 821. 09 0 134. 28 0 0 0 867. 72 1072. 89 323. 39 25 23. 1 23. 1 0 0 0 300. 29 270. 59 29. 7 166. 94 53. 64 34. 89 18. 75 422. 95 25 23. 1 23. 1 0 0 0 399. 85 380. 05 19. 8 121. 89 16. 13 16. 13 0 2764. 6 3139. 42 2515. 39 2744. 64 3121. 21 19. 96 513. 71 55. 97 55. 97 0 19. 96 626. 09 31. 83 31. 83 0 18. 21 840. 23 53. 91 53. 91 0 451. 64 0 6. 1 0 55. 97 457. 74 588. 96 0 5. 3 0 31. 83 594. 26 781. 9 0 4. 42 0 53. 91 786. 32 66. 48 0 0 0 0 66. 48 116. 44 0 0 0 0 116. 44 134. 28 0 0 0 0 134. 28 0 85 0 41. 58 158. 49 75. 46 0 59. 4 0 53. 9 91. 11 75. 83 0 39. 6 0 66. 16 41. 03 80. 86 128Financial Management at Bajaj Auto Comparative Balance Sheet (Rs Crore) Current portion of long term debt Total foreign currency borrowings Deferred tax liabilities Current liabilities & provisions Current liabilities Sundry creditors Interest accrued / due Other current liabilities Share application money Provisions Tax provision Dividend provision Dividend tax provision Other provisions Total liabilities Bajaj Hero Honda TVS Motor 0 0 0 0 0 0 65. 38 36 11. 48 0 0 0 236. 05 0 240. 47 0 0 0 0 71. 47 77. 16 0 0 0 79. 35 0 88. 72 1491. 42 1679. 88 1988. 48 467. 55 357. 29 0. 11 110. 15 454. 93 411. 13 0. 1 43. 7 454. 9 413. 86 0. 08 40. 96 460. 14 365. 62 254. 61 0 111. 01 880. 3 1116. 21 613. 32 398. 61 0 214. 71 681. 52 409. 94 0 271. 58 238. 66 212. 1 211. 71 0 0. 39 298. 04 289. 05 287 0 2. 05 439. 33 406. 26 405. 65 0 0. 61 0 0 0 0. 02 94. 52 9. 51 59. 9 6. 11 19 0. 02 266. 91 8. 34 239. 64 0 18. 93 0 434. 69 10. 9 359. 44 46. 05 18. 3 0 26. 56 0 18. 48 1. 88 6. 2 830. 02 0 8. 99 0 0 0 8. 99 0 33. 07 0 16. 17 2. 07 14. 83 1023. 87 1224. 95 1533. 58 917. 58 1057. 94 1325. 98 80. 95 8. 26 17. 08 141. 66 0 25. 35 141. 66 18. 15 47. 79 4641. 66 5407. 81 6309. 79 1155. 81 1753. 9 2188. 68 867. 72 1072. 89 Source: Prowess Database. 129 Financial Insights Bibliography 1. 2. ?The BT 500,? 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