National Institute of Business Management
Ist Floor, Swathandrya Samara Smrithi Bhavan, Nandavanam
Road
Palayam P.O. Trivandrum 695 033
E-mail: [email protected] 4014294, 4014298
Assignments of Two year MBA Program
Semester - IV1. Students are requested to go through the
instructions carefully.
2. The Assignment is a part of the internal assessment.
3. Marks will be awarded for each Assignment, which will be
added to the total marks. Assignments carry equal marks.
4. Assignments should submit in your 'portal' on/before the
'completion date' mentioned.
5. Case study project is based on the elective subject selected.
Please submit your case study also in the portal on the 'completion
date' of forth semester assignments.
Assignments
Total Marks :100
1. International Trade Management
Which are the basic information you should have if you are to be
an effective International Trade Manager in an exporting firm?
Ans : FOLLOWING BASIC INFORMATION YOU SHOULD HAVE TO BE AN
EFFECTIVE INTERNATIONAL TRADE MANAGER IN AN EXPORTING FIRM ::
1. Regulations
Exporters can be sole proprietors,partnershipsor companies. The
regulations, permits orlicenceswhich affect exports apply to the
goods or servicesexportednot to the individual or organisation
exporting them. There are no restrictions on who or what type of
business may export from INDIA but the goods or
servicesexportedmust comply with existing export regulations.
In an export context the over-riding regulation is that all
consignments leaving INDIA, must be declared to the Indian Customs
Service to check any duty needs to be paid. The declaration to
Customs can be made by exporters or by their appointed freight
forwarder .
It is advisable to contact the Indian Customs Service or an
international freight forwarder to ascertain if any export
regulations apply to your specific product or service before
proceeding further with your export plans.
Registration
Registration with Reserve Bank Of India: No longer required.
Registration with Regional Licensing: Authorities (obtaining IEC
CodeNumber) The Customs Authorities will notallowyou to import or
export goods into or from India unless you hold a valid
IECnumber.
Register WithExport Promotion Council
In order to enable you to obtain benefits/concession under the
export-import policy, you are required to register yourself with
anappropriateexport promotion agency by obtaining registration-cum-
membership certificate.
Registration With Sales Tax Authorities
Goods which are to be shipped out of the country for export are
eligible for exemption from both Sales Tax and Central Sales Tax.
For this purpose, you should get yourself registered with the Sales
Tax Authority of your state after following the procedure
prescribed under the Sales Tax Act applicable to your State.
Excise Procedure
All excisable goodsexportedout of India are exempt from payment
of Central Excise Duties, for which two different procedures have
been approved
Rebate of Duty on Goods Export Procedure
Under the first procedure, known as 'Rebate of duty on Goods
Export. The manufacturer has first to pay the excise duty on goods
meant for export and then claim refund of the same after
exportation of such goods to countries except Nepal and Bhutan.
Export under Bond Procedure
Under the second procedure known as "Exports Under Bond" goods
can beexportedout of India except to Nepal or Bhutan without prior
payment of duty subject to the execution of the Bond with security
/ security for a sum equivalent to the duty chargeable on the goods
to beexported.
2. Market Research
Extensive research is necessary in order to assess the potential
market for a given product or service in a defined region. It may
be conducted by employees of a business or by an external
consultant appointed bythe business. The ultimate aim of the market
research program should be to provide comprehensive, accurate
information on which to base a successful export marketing
strategy.
Export market research can be divided into two phases, desk
research and overseas research.
Phase 1 Desk Research
This is the process of gathering information from sources within
India. There are many such sources able to provide a wealth of
information.
These include:
banks
bilateral, social and business organisations
chambers of commerce
consulates/embassies
Department ofForeign Affairs and Trade
export consultants
international freight forwarders
international business and telephone directories
the Internet
Universities or other tertiary institutions.
Phase 2 Overseas Research
This is the process of gathering information in the market
itself. A first hand evaluation of the sales potential for the
product or service in the overseas market is essential. This may
involve discussions with potential buyers, agents, distributors,
joint venture partners and government authorities, attendance at
trade fairs and exhibitions, product testing in the market place,
customer surveys, etc.
This phase of the research programme should only be commenced
after every aspect of Phase 1 has been exhausted.
Ultimately the information gathered must result in the
production of a practical export marketing strategy, which is
capable of implementation by the company for which it was
designed.
Preliminary Export Research Program
A typical research program should seek to ascertain:
preferred target market
economic overview of the target market
demographic overview of the target market
cultural and religious environment
basic import regulations
tariffs, taxes and quotas
transport infrastructure
distribution networks
potential customers within the target market
entrenched competition
pricing policy
preferred trading terms
packaging and presentation.
This list is by no means exhaustive but these are the prime
factors you should be aware of before venturing into an export
market.
3. Terminology
Every field of endeavour has its own vocabulary and export is no
exception. It is important to know the terms used in international
trade, not only in order to understand exactly the offer which is
being made or accepted, but also in order to present a fully
professional approach to your potential trading partners.
The most important part of the export vocabulary is the set of
terms universally known as Incoterms.
Trading Terms (Incoterms)
The most commonly used rules for the interpretation of trading
terms in international trade are those defined by the International
Chamber of Commerce (ICC). They are internationally recognised and
are known as Incoterms. Incoterms signify to the buyer what is, and
more importantly what is not, included in the selling price. They
also indicate where the exporter's responsibility ends and the
importers responsibility begins in respect of the
goodsexported.
Which term will apply to a particular export transaction is a
matter for negotiation between buyer and seller. However, inclusion
of theappropriateterm in export quotations is crucial in order to
determine the responsibilities of both parties in the contract of
sale.
4. Export Prices, Offers and Contracts
Export Prices
Calculation of export prices is usually based on the
differential costing method. This method treats exports as
additional business; incremental to the main core of domestic
trading. Exports therefore bear a reduced contribution to the
manufacturer's fixed costs.
Export prices may also be affected by duty drawback. Where an
export product contains imported material or components on which
duty has been paid, the amount of duty paid can be claimed back
from Indian Customs Service when the product is ultimatelyexported.
The export price will reflect this reduction in cost.
These are matters of accountancy and should be discussed in
detail with your accountant.
Additional costs such as bank charges, cost of Forward Exchange
Cover, etc., may also have to be taken into account before arriving
at a firm export price.
A cautionary word: it is unwise to set an artificiallylow
pricewhen trying to enter an export market because it is usually
very difficult to raise this to a realistic level at a later date.
It is preferable to enter the market at a realistic level with an
undertaking to hold prices firm for a fixed period of time, say 90
or 120 days after the date of the quotation.
Ultimately export pricing will be determined having regard to
two fundamental points; the price the exporter needs to cover all
costs and make a reasonable margin of profit, and what price the
market is prepared to pay. There is little point in sacrificing
profit if the market is willing to pay a higher price.
Export Offers :
Tocorrectlyevaluate an export offer, an importer requires the
following basic information :
Description of the Goods
A detailed description of the goods is necessary to avoid
misunderstanding between exporter and importer and so that the
importer cancorrectlyclassify the goods for Customs purposes.
Price
Exporters should always specify the currency in which the price
is quoted.
Trading Term
The price should always be accompanied by the appropriate
trading term indicating which elements of the transport and
insurance costs are included in the quoted price.
Delivery Schedule
Delivery schedules should set out the quantity which can be made
available for shipment within a specified period eg "3,000 units
within 2/3 weeks of receipt of firm order and 2,000 every week
thereafter". It is preferable that delivery schedules be slightly
conservative; much better to deliver ahead of time than after the
promised date.
Packing Specification
Sets out how the goods will be packed, the number of units per
carton or pallet and the weight and dimensions of the packages.
This will enable the importer to determine how the goods will be
warehoused upon arrival and to ascertain the cost of transporting
the consignment if this is not included this in the quoted
price.
Payment terms
It is important to state your preferred payment terms for two
reasons:
so that there will be no misunderstanding as to how the importer
is to make payment; and
because some methods of payment will involve the importer in
significant additional expense and this must be taken into account
when costing imports.
The most commonly used payment terms are:
Prepayment - Absolutely secure from the exporter's point of
view. Payment is received prior to dispatch of the goods.
Documentary Letter of Credit - Almost completely secure for the
exporter. A Letter of Credit (more correctly called a Documentary
Credit) is an arrangement whereby a bank, operating on the
instructions of an importer, authorises another bank to pay a fixed
sum to an exporter on production of specified documents. The rules
governing the use of Letters of Credit are contained in Uniform
Customs and Practice for Documentary Credits (ICC No. 400)
available from most Banks.
Bills of Exchange/Cash Against Documents - From an exporters
point of view not as secure as Prepayment or Letter of Credit.
Bills of Exchange are accompanied by shipping documents are
usually referred to as documentary collections.
Open Account - No security of payment. Payment is made by the
importer after the goods have been despatched by the exporter.
A number of excellent publications are available from the major
banks, which give a detailed explanation of the various methods of
payment used in international trade.
Validity
Indicates the period during which the export offer will remain
unchanged.
Warranty
A certification as to quality.
Other
Provision of samples for testing etc.
Export Contacts come into being by a process of offer and
acceptance. When an offer has been accepted by the buyer, the
contract exists and is legally binding on both buyer and seller. It
is difficult to withdraw or amend an incorrect offer after it has
been accepted. Accurate pricing and careful preparation of the
export offer is, therefore, essential given that this represents a
formal offer of goods for sale.
5. Insurance
In an export context insurance can be said to fall into two
types:
Insurance against loss or damage
Consignments with anything over minimal value should be insured
against loss or damage during transit. Who has responsibility for
effecting insurance is totally dependent upon the terms of the
contract of sale negotiated between exporter and importer. In a FOB
or CFR contract this responsibility lies with the importer, in a
CIF contract with the exporter .
The extent of cover, whether it is from wharf to wharf or
warehouse to warehouse, will vary from contract to contract.
It is customary in most types of international trade to insure
goods for CIF value plus 10% in order to recover all costs
associated with the shipment including the cost of the premium paid
to the insurance company.
Insurance against default of buyer
If the payment terms negotiated with an overseas buyer are less
than secure, it is possible to insure against the risk of non
payment through private insurers.
The risks covered by this type of insurance include:
default by the buyer
buyers refusal to accept delivery
buyer insolvency
inability to deliver due to unforseen circumstances
war, hostilities or civil disturbances
government intervention.
Exporters should also be aware that if their product has the
propensity to cause damage or personal injury, it is advisable to
explore the possibility of taking out product liability insurance
to cover this risk. This is particularly advisable when considering
export to markets where litigation is common.
6. Freight
Freight is the name usually given to cargo which is to be
transported from one designated point to another, but the term is
also used to denote the cost of transport. In view of this,
exporters should make absolutely clear what is meant by use of the
term "Freight".
Freight Rates (air and sea) - While it is almost always true
that kilo for kilo sea freight will be less expensive than
airfreight, it is also true that the minimum freight payable for
dispatch by sea is usually much higher than the minimum payable for
dispatch by air. This means that it is often less expensive to
dispatch small consignments by air than by sea.
Conference Rates - Ship owners operating vessels on a particular
run - say India to West Coast USA - form a cartel to fix freight
rates and sailing schedules. This cartel is called a Shipping
Conference and is one of the few forms of price fixing cartel,
which is deemed to be legal . This is because it ensures stability
of freight rates which enables exporters to prepare export
quotations in the knowledge that the freight rate will not change
without adequate warning. It also rationalises sailing schedules
thus ensuring that sailings to a particular destination will be at
regular intervals. It follows that all shipping lines that are
members of the Conference will offer identical freight rates for
the carriage of cargo.
It should be noted that the conference system does not operate
in respect of airlines so rates for airfreight can differ. It is
advisable to obtain several quotes for airfreight consignments in
order to take advantage of the best available rate.
Weight Measurement Ratio - The total amount of freight payable
for the transport of cargo is usually calculated by applying the
quoted freight rate to the weight or measurement of the cargo,
whichever offers the greater return to the shipping company or
airline.
Hazardous cargo - Freight rates will always vary depending upon
the type of cargo to be carried. If the cargo is deemed to be of a
hazardous nature, eg. volatile, noxious, injurious to health,
likely to contaminate other cargo, etc., then special rates will
apply and the carrier may require special packing to prevent
damage. Check with your freight forwarder as to the standards or
regulatory requirements which may affect the transport of your
cargo.
Because of the above it is recommended that exporters seek the
services of a reputable international freight forwarder when
considering selling into overseas markets.
International Freight Forwarders
The services usually offered by international freight forwarders
are:
Booking space
Forwarders will make the necessary bookings with shipping
companies or airlines to ensure that the cargo is transported in
the correct manner with the minimum amount of delay.
Freight savings
Most forwarders make regular "block bookings" of space on ships
and aircraft. They are thus able to consolidate the cargo from a
number of individual exporters and, in some circumstances, pass on
the savings achieved to their clients in the form of reduced
freight rates.
Costing
They are able to assist exporters in calculating the cost
involved in exporting goods to a particular destination. They can
also advise on the most economical means of transport, ie. air
versus sea or a combination of both. They can also advise if
savings can be achieved by deferring dispatch, for example, until
the next consolidated consignment leaves.
Cargo monitoring
Forwarders are able to monitor the movement and location of
particular cargo from the time it leaves the exporters premises to
the time it arrives at the importer's premises.
Documentation
It is essential that export documents be absolutely free of
error if international transactions are to be trouble free.
Forwarders are able to produce documents which comply with
exporter's instructions, letters of credit and the regulatory
requirements in the importers country. Where speed is essential in
the transmission of documents, forwarders are able to fax or email
copies to importers or their agents thus ensuring faster customs
clearance and delivery. This in turn reduces the risk of incurring
storage charges at the port of destination.
Storage
Most forwarders have the facility to store outgoing and incoming
cargo and this facility usually extends to Bond Storage. They are
also able to arrange inspection by the Indian Customs Service or
other agencies if this cannot be conveniently accomplished at the
exporters premises.
Market information
Because of their strong overseas connections, forwarders are
often able to provide their clients with information about market
conditions, export and import requirements, duty rates, etc. The
amount of duty paid in the importer's country will depend upon how
the product is classified in terms of the customs tariff. Your
freight forwarder can advise on ways to achieve the best tariff
classification in order to legitimately minimise customs duty.
When using the services of a Forwarder your instructions should
be clear and concise. Most forwarders have their own forms on which
to provide instruction.
When seeking information from Forwarders about freight rates, it
is essential to provide accurate and adequate details with regard
to the nature of the cargo, its destination and packing
specification.
It is also important that you obtain from the Forwarder written
confirmation of the rates quoted and the range of services offered
in order to avoid confusion and misunderstanding in the future.
7. Export Marketing
There are many ways in which a product or service can be
marketed to buyers overseas. These fall into two main categories,
direct and indirect marketing.
The main distinction between direct and indirect export
marketing lies in the contractual relationship between the parties
concerned. By direct exports we mean those transactions where the
manufacturer or exporter has a direct contractual relationship with
the importer overseas. Indirect exports are those arranged by
contractual relationship with an intermediary, usually in the
country of export. An important test in determining if the
transaction is direct or indirect is whether the exporter will be
paid from a local (indirect export) or an overseas (direct export)
source.
In the main export marketing options are:
Direct export to an importer
Where the exporter identifies a buyer overseas and negotiates a
contract for the sale of goods or services.
Direct export using a commission agent
Similar to the above but using a commission agent in the
overseas market to solicit orders and provide after sales service.
This can either be a one step or multiple step distribution
process.
Indirect export through local merchants
Sales are negotiated with a trader in the manufacturer's
country, with payment being made in local currency from the traders
office. For example a great deal of trade between India and Japan
is done through the Indian offices of Japanese companies. There are
many such trading companies ranging from the very large Japanese
trading houses to small single operators. Most traders will
specialise in a specific product type and/or geographic area.
Manufacture under licence
The Indian company sells technical know-how to an established
manufacturer overseas who is licensed to produce the product or
service in that country.
Joint Venture
The Indian company enters into an arrangement with a company
overseas to set up a third business entity, the joint venture
company, which will be responsible for production and/or
distribution of the product or service in the overseas market
place.
Wholly owned company in the export market
The Indian company establishes a branch or subsidiary in the
overseas territory.
8. Exclusive Agreements
It is customary for agents, distributors to require some form of
exclusive right in the product or the territory in which the
product is to be sold. The agreements which convey these exclusive
rights should be negotiated with great care because once made they
can be difficult to revoke and it is vital that you appoint the
best possible people to represent your product in the market place.
. Such agreements will vary considerably depending upon the market,
the nature of the product and many other factors.
Clauses which are common to all such agreements are:
Nature of agreement
Is the agreement an exclusive distributorship, licence
arrangement or agency agreement?
Territory
This clause defines the territory covered by the agreement.
Period
This clause defines the period over which the agreement will run
and also any review options; for example - agreement to run for 5
years with a review after 1 year.
Remuneration
In an agency agreement this clause defines how commission will
be calculated and how and when it will be paid.
Exceptions
In an exclusive distributorship or agency agreement this clause
details any exceptional circumstances when the exporter may deal
directly with importers in the market.
Warranties and repairs
This clause details the warranties, which the supplier offers to
the distributor and which the distributor may in turn offer to the
end user. It also details the after sales service available in the
market place.
Promotional expenditure
This clause defines who will pay for advertising and sales
promotional material including samples. It should also define the
limit of expenditure, which can be incurred by the agent without
authorisation from the principal.
Dispute resolution
This clause determines which legal or arbitration system will
apply in the case of a dispute that cannot be resolved by the
parties to the agreement themselves.
Performance level
Defines the minimum level of sales to be achieved in a given
period. If this level is not achieved the agreement may be
reviewed.
Rights
Defines the parties rights to use brand names, trade marks
etc.
Having determined the type of agreement required and the
principal points to be covered, it is essential that you consult a
legal firm with experience in the area of international agreements.
They will ensure that the final agreement reflects the wishes of
both parties thus avoiding potentially disruptive and costly
disputes.
9. Export Finance
The amount of finance required to enter overseas markets will
vary from business to business and depend largely upon the export
strategy which individual companies adopt. However, it is true that
in all circumstances, export will require additional financial
resources.
In an export context additional financial resources may be
required for the following:
Pre-shipment Finance
Finance required for the purchase of product, raw materials or
components prior to manufacture and export of the goods.
Post-shipment Finance
Finance required to continue operations in the period between
dispatch of the goods and receipt of payment.
Working Capital
To facilitate the day to day operation of the firm, ie.
overheads, wages, maintenance of plant and equipment etc. In an
export context this may also involve documentation charges,
entertainment for overseas visitors, market research, overseas
visits, translations etc.
Applying for Finance
Banks and other lending institutions will usually provide their
own forms on which to apply for finance. Naturally these will vary
from bank to bank. However, most loan applications will require the
following details:
the amount of money required
the purpose for which it is required
preferred repayment terms
security offered
cash flow projections
details of existing debt
financial details of the business
trading history
stock valuation
experience/qualifications of the proprietors
management structure
short term objectives
long term objectives
market research findings
other relevant considerations, such as contracts, intellectual
property, etc.
lending institutions will probably also require a copy of your
export strategy
10. Documentation
Export documents form a very important aspect of international
trade. It is usually true to say that without the correct documents
the exporter may not be paid and the importer may not be able to
take possession of the consignment. An understanding of the most
commonly used documents in international trade is essential for
successful export operation.
The most important export documents are:
Letter of Credit
A Letter of Credit (more properly called a documentary credit)
is an advice issued by the importers bank authorising payment of a
specified sum of money by a correspondent bank to a named
beneficiary upon delivery by the beneficiary of specified
documents. The internationally accepted rules for the use of
Letters of Credit are contained in "Uniform Customs and Practice
for Documentary Credits (commonly called UCP). Most Banks provide a
booklet which contains these rules.
Bill of Lading
This is probably the most important document in international
trade. It performs two completely separate functions. It defines
the contract between the exporter and the ship owners to carry the
goods from one named port to another. It is also the document of
title to the goods and as such is fully negotiable. Legitimate
transfer of the Bill of Lading effectively transfers ownership of
the goods from one party to another.
Air Waybill
In the case of dispatch by air performs roughly the same
function as a Bill of Lading with one notable exception. An Air
waybill is not fully negotiable, so passage of the cargo to an
importer is not dependent upon production of the original Air
waybill. Cargo will be delivered to the importer immediately it
arrives at the airport in the importers country.
Certificate of Origin
May be required for some destinations.
Bill of Exchange
In effect a Bill of Exchange is a demand for payment which the
exporter prepares and presents to the importer. The importer will
pay at sight or, if it is a term Bill, on the date it matures.
Certificates of Insurance
In a CIF contract, insurance is effected by the seller who will
usually be required to provide to the importer a certificate to
this effect.
THESE ARE THE BASIC INFORMATION , YOU SHOULD HAVE TO BE AN
EFFECTIVE INTERNATIONAL TRADE MANAGER IN AN EXPORTING FIRM.
---------------------------------------------------------------------------------------------------------------------2.
Banking Management
Imagine yourself as the manager of a Bank where automation is to
be made. Explain the steps you will take to do it.
Ans : IMAGINE YOURSELF AS THE MANAGER OF A BANK WHERE AUTOMATION
IS TO BE MADE . EXPLAIN THE STEPS YOU WILL TAKE TO DO IT.Following
steps I will take as a Bank Manager to do Automation in my Bank
:
Today, money has evolved beyond physical form, and can be
measured by
electronic pulses.
This electronic representation of money has made it easier to
progressively increase the use of information technology forbanking
operations.
Introduction of automation will liberate my bank from a lot of
paper-work.
* The first step would be to invite presentations from various
technology Companies which specialises in Bank Automation to become
our technology partner/ partners for setting up Automation in my
Bank .
* The Second step would be to choose from these Companies
thebest technologypartner/partners , who would provide cost
effective and efficient Automation System to my Bank .
Following are all the cases of transactions that involve
businesses and consumers who are either initiators or recipients,
are done:
B2B transactions are large-value, and recurring transactions,
while B2C are low-value, large-volume transactions. C2C
transactions are low-value and low-volume. Worldwide, B2C
transactions have come to the forefront due to high awareness
levels and, as in any other new development, prudence has prevailed
to test the waters with low-value transactions. However, the big
one is B2B, which is waiting to explode. As a Bank Manager ,I need
to capture all three streams.
I will have to create the field to achieve this, and achieve
some first-level requirements such as:
High levels of automation
Centralised database management and processing
Onlineconnectivity across delivery channels
Front-office and back-office integration
Surveillance and security Systems
Back-up systems
Following would be the steps taken for creating Automation in
Bank :
Automation
Choosing a technology partner is very critical to achieve the
efficiencies derived out of automation such as low-processing
costs, better turnaround times, ability to handle excessive
volumes, zero-error rates, better customer deliveries and so
on.
Any bank embarking on such automation projects should ask the
following
questions and try to get answers for better clarity :
Is automation for :
Reducing back-office load?
Improving staff working conditions?
Improving customer service?
Enhancing business levels?
Higher levels of automation decrease the load on the back-office
in accounting, reconciliation and so on, and there by set free
resources for enhancing business levels. While the evaluation has
to be clearly all of the above, each bank will need to look inward
at its priorities and accordingly select the right system being
open-ended, Web-enabled and scalable with the right functionality
is crucial.
As a Bank Manager my answers to all the above questions would be
Yes ( positive) for all . Hence Accordingly , I would choose my
Automation system which would provide all of the above 4 benefits
to my Bank.
Centralised database management and processing
The Internet clearly throws historical debates
oncentralisationvs de-centrali
sation out of the window. We are now talking of the flow of
information and
transactions through the clouds where a de-centralised
environment is not conducive and hence there is a basic need to
take the centralised route.This requires business process
re-engineering (BPR) and creation of centralized back-offices with
re-defined process-flows to/from branches. The basic organisational
structure needs to undergo radical changes with more emphasis on
empowerment at branches with centralised control.
Keeping above things in my mind , we would set up centralised
processing, through a hub-and-spoke concept, with regional
processing centres at the main metros, and a national processing
centre at one of our center.
Onlineconnectivity
There is a need to connect customers, front-offices,
back-offices and other
external agencies and determineaccess levelson a need-based
system (real-time, batch, dial-up and so on). This requires a huge
infrastructure to run alongside, and hence has to be carefully
thought through. With an increasing number of delivery channels
such as branches, ATMs, phones, the Internet and so on, the
estimations on volumes transacted through each of these channels
play a vital part in the determination of bandwidth to ensure
acceptable response times.
Through a combination of terrestrial lines, VSAT and ISDN, we
will achieve totalonlineconnectivity at our Bank, where all
branches and other channels we use access the centralised
database.
Front- and back-office integration
Workflow requires to be defined clearly with the over-riding
objective of cus-
tomer service, which should remain at the forefront. Processes
have to be transparent, and one has to set up customer service
standards, and service level agreements (SLAs) between various
internal groups with strong audit systems for service quality.
Surveillance and security
All of the above will fall flat withoutonlinesurveillance and
security. Access-
control, authentication and encryption mechanisms will be built
around each of the systems. Technology , including firewalls ,
private and public key
certifications and data encryption are available, and a
judiciously blended selection will be put in place, up-front. It is
not just enough to have the security set-up. Monitoring mechanisms
to tackle the hacker menace and on-going surveillance is a
must.
Back-up systems
At this stage, when all of the above are running, the bank
becomes dependent on technology. What this means is that it cannot
do away with these systems and it requires a near-100 per cent
up-time for staying in business. Hence, the need to have adequate
back-up systems and telecommunications, contingency procedures
during times of system un-availability, disaster recovery sites and
so on which we will put in place.
I will take all the above steps as a Bank Manager with the help
of my banks technology partner(s) for setting up above Automation
system for my Bank .
Apart from the above Automation System , I would choose
otherAutomation systemsavailable for better and efficient
productivity .
Let us see another problem faced by my bank and how i will solve
it usingAutomation systems:
Business Challenge:
My bank like many of other organization today face significant
challenges on providing continuousavailabilityof its services for
the customers. In order to compete and provide differentiation from
the competitors my bank need to provide a fully automated fail-over
mechanism that eliminates outages as this represented a huge loss
in both revenue and customer trust. Service
interruptions examples such as if ATMs were not available,
customers cannot withdraw money from their bank account or if a CPU
was down, the affiliates are technically out of work. Without the
automated fail-over my bank would continue to serve clients but
there would be inherit risks by doing so without having aviewof the
customers financial situation.
Solution :
I as a Bank Manager would choose Automation system like
Unicenter CA-OPS/MVS Event Management and Automation(CA-OPS/MVS) to
provide the automation for fail-over processing.
CA-OPS/MVS integration with Unicenter Automation Point and
Unicenter CA-Sysview will enable my bank to achieve
continuousavailabilitywith a high available processing
environment.
Benefit :
My Bank with this high available environment will be able to
provide its customers with best inclassserviceability. This
environment will also remove processing risks that were created in
past due to service interruptions like CPU failures.
TangibleBusiness Value( with example ) :
My Bank for an example will use only 0.6% of its CPU resource
with Automation system like CA-OPS/MVS after its implementation
instead of 5% which is our resource consumption .
In particular with the CA-OPS/MVS Printerautomation
solutionafter its implementation in my bank , we will be able to
optimise manpower.
Now without Automation system , we need to work with 4 very
expensive printers and 3 groups of 9 people working manually
24h/24h on printing the generated outputs and reports, sorting
documents, activating new jobs, etc. The whole process is very slow
with printers being IDLE for long times. Each time a new job is
started, the printers needed a warm-up of 30 seconds per document,
Therefore the over 12.000 documents per day represent a huge
non-productive time.
But with implementation of this Automation solution , we will be
able to work with 2 printers and 2 groups of 4 people working from
6 to 19h in two shifts. We will be able to manage to print 400
pages continuously per minute; jobs will be launched in batches
without interruption and manual intervention. Documents will be
sorted automatically per destination and printer delays due to warm
up will be dramatically reduced to the strict minimum.
Hence , a bank Manager who is looking for Bank Automation should
choose the right Automation Solution available with various service
providers only after carefully checking and testing the Automation
systems to get optimum Results.
Similarly , as a Bank Manager I will also avail Automation
systems from various Automation service providers for :
1) Mortgage payment processing which would give my bank speed,
consistency and accuracy in processing payments, and reduce
overhead costs. This wiil add up to customer benefit , associate
benefit and share holder benefit .
Examples of some automated systems for Banks from a Service
provider :
a) MaxMilion Payments application for Mortgage payment
processing
b) Director, MSP, Passport, for core retail banking systems.
c) Enterprise Lending solutions such as Advanced Lending
Solutions(ALS) Servicing Manager for processing retail lending
accounts.
All of these are provided by Fidelity Solutions a Automation
Service provider which a Bank Manager like me can approach to get
the Automation done.
2) Automation of Accounting, Loan, Finance, Exchange management,
Treasury, Bond, Budget, Risk Management will be done by me for my
bank by using Automation system from any service provider that is
better than my Competitors and best for my bank for better
efficiency and productivitiy.
Hence , I will take all the above steps as a Manager of a Bank
to do Automation in my Bank.
------------------------------------------------------------------------------------------------------------------3.
Information TechnologyHow will you create an impact of Information
Technology in your organization and do international business?Ans
Information technology (IT) is dramatically changing the business
landscape. Although organization cultures and business
strategiesshapethe use of IT in organizations, more often the
influence is stronger the other way round. IT significantly affects
strategic options and creates opportunities and issues that
managers need to address in many aspects of their business. This
page outlines some of the key impacts of technology and the
implications for management on:
Business strategy - collapsing time and distance,
enablingelectronic commerce Organization Culture - encouraging the
free flow of information
Organization Structures - makingnetworkingandvirtual
corporationsa reality
Management Processes - providing support for complex decision
making processes
Work - dramatically changing the nature of professional, and now
managerial work
The workplace - allowing work from home and on the move, as
inteleworkThere is also the outline of anexecutive presentation,
that has been used to increase awareness of these issues.
The Impacts
Business StrategyIT creates new opportunities for innovation in
products and services. Services which used to be delivered in
person can now be delivered over networks. Among the
keyleversare:
resequencing:including parallel processing of data-bases
simultaneity:making information instantly available in several
systems (e.g via OLE)
time extension:offering 24 hour a day; 365 days a year
service
portability:taking service and products closer to the user
reusability:using information captured for one purpose (e.g.
transactions), and using for others (e.g. customer targeting)
Organization CultureNewer types of IT such as electronic mail
andgroupwareare creating significant changes in the way that
information flows around group ware, and between them and their
customers and suppliers. It can hasten the development of more open
and innovative cultures. However, as experts like Davenport warns,
and surveys from companies like Reuters confirm, the notion that
"information is power" still reigns large in many orggroup warelso,
our experience shows that many new systems fail to become accepted
by their users, because the systems developers have not
beenculturally sensitiveto the department or group ware, in which
the new systems are to be used.
Organization StructuresFor many years it has been argued that IT
will enable larger spans of control and the flattening of group
ware. This has at last happened, but due as much to initiatives
like BPR (business process reengineering) and the drive to cut
costs. Research on whether IT encourages cencentralization
decdecentralizations produced ambivalent results. Many companies
have cencentralizedckroom operations (for efficiency) while at the
same time decdecentralizingher activities. It now seems clear
thatIT enables a greater variety of structures. In particular it
enables more flexible and fluid structures -networked structures,
dispersed team and teams that come and go as needs change (as in
thevirtual corporation).
Management ProcessesIT is rapidly entering the era where it
supports unstructured management processes as well as highly
routinized business processes. It provides more effective ways of
accessing information from multiple sources, including use of
external information on databases and the Internet. However, group
decision support systems that operate in a meeting room environment
can help enhance decision making, but it does need someone who is
an expert facilitator to help the group master the technique
ofstructured discussion.
WorkIT is dramatically changing the nature of professional work.
There are few offices where professional do not make use of
personal computers, and in many jobs involving extensive
information and knowledge based work, the use of the computer is
often a core activity. Becoming effective not only requires
traditional skills of organizing, thinking, writing etc., but
knowing how best to use the power of IT for researching sources,
accessing information, connecting to experts, communicating ideas
and results, and packagingthe knowledge (asset)for reuse. One
aspect of this is the need for hybrid managers- people who are
competent at both their discipline and IT.
The WorkplaceThe way in which IT diminishes the effect of
distance means that it creates a variety of options for
reorganizing the workplace. At a basic level, it can provide more
flexibility in the office, allowing desk sharing and a degree of
location independence within a building (this will develop as CTI
(Computer Telephony Integration) and wireless PCs become more
firmly established. At another level it permits the dispersion of
work teams, thus saving costs of relocation and travel. It has also
created the mobile professional and also allows people to work
effectively from home. SeeInsight No. 4 - Teleworkfor more
discussion of these aspects.
Implications for Management
These IT impacts have implications for managers of all
organizational functions, and not just MIS managers. Among the most
important are:
Understanding the Changing Context of IT- as well as the direct
impact on their business managers need to be able to see these
developments in the context of the wider environment in which their
business operates.
Keeping abreast of Developments- not about the details of the
technologies, but about the business impacts; for example by
meeting suppliers business consultant's, attending conferences, or
receivingcustomized presentationsfrom independent analysts.
Integrating IT and Business Planning- the IT strategy should
support the business strategy and vice versa. This may need new
planning processes, hybrid teams, and a increased incorporation of
theleversinto business plans.
Addressing Culture Issues- the dimensions of existing and
desired culture need to be understood and how proposed systems will
affect them. In particular attention needs to be paid to the
organization'sinformation culture Experimenting with new
Structures- using IT to remove some of the limitations of hierarchy
and to encourage the development of innovative teams, using experts
located in different functions and places. Managing dispersed teams
is challenging but rewarding.
Ensuring that new systems arecustomized change proof- our
studies have shown many new systems to be developed around existing
customized structures and responsibilities. Since these change very
rapidly, new systems should be built with orgacustomizedxibility
and change in mind.
Developing New Skills- more of tomorrow's managers will need to
becomehybrid managers, combining the knowledge and skills of
general management, their own discipline and IT.
Using IT as a management tool- initiating personal use of IT
into every day work. This should include use ofdecision support
tools,groupware, knowledgeandexploiting the Internet.
Exploiting Information as a Strategic Asset- using the
techniques ofInformation Resources Managementto develop it as a
valuable resource for internal use, for adding value to customer
activities or services, or for creating saleable products.
IntroducingKnowledge Managementand Innovation- going beyond
information to developingnetworks of knowledge expertswho evolve
the organization'sknowledge assetsto create extra capabilities and
value.
Reorganizing the Workplace- by introducing flexible working
andtelework. The business benefits of this in terms of productivity
and cost savings are such that there are many personal benefits to
be achieved by a successful implementation.
-----------------------------------------------------------------------------------------------------------------
4. Perspective Management
Which are the aspects you will keep in mind about the
perspective of management to be an effective Strategic Manager in
an industry?
Ans: FOLLOWING ARE THE VITAL ASPECTS WHICH I WILL KEEP IN MIND
ABOUT THE PERSPECTIVE OF MANAGEMENT TO BE AN EFFECTIVE STRATEGIC
MANAGER IN AN INDUSTRY
1 . Planning:
Managers are responsible for the efficient Use of organizational
resources including People, plant , equipment and supplies .The
effective use of such resources Requires managers to devise
communicate implement and monitor Plans to achieve organizational
aims and objectives.
Following should be kept in mind :
A.Developing plans
Prioritising and organizing work activities in line with
organizational aims and objectives.
B.Monitoringperformance
Monitoringand reviewing performance against organizational aims
and objectives.
C.Focusing on results
Maintaining a focus on achieving organizational aims and
objectives
D.Managing change
Planning for and implementing change to achieve organizational
aims and objectives
E.Managing improvement
Taking action to improve performance by acting on the lessons
from past successes and failures
2. Communication :
The principles and processes of effective communication underpin
the role of the manager. Managers need to be able to communicate
effectively with a range of people, including team members,
colleagues, line managers, customers and suppliers. It is important
that managers are able to organise, present and communicate their
views, ideas and plans according to the needs of the people with
whom they interact.
Following should be kept in mind :
A.Explaining clearly
Presenting ideas, plans and problems in ways that promote
understanding .
B.Influencing others
Presenting views and opinions clearly and positively to others,
resulting in agreement and consensus .
C.Resolving conflict
Understanding the problems and concerns of others and working
towards an appropriate resolution.
D.Listening
Seeking and listening to the views and opinions of others.
3. Team-working :
Managers achieve organisational aims and objectives through the
work of other people and in particular teams. Setting up and
managing effective teams requires managers to inspire and motivate
team members, ensuring that everyone understands whatthe teamis
trying to achieve.
Following should be kept in mind :
A.Building teams
Involving team members in planning and organising their work to
meet team objectives
B.Leading teams
Providing teams with a clear understanding of their purpose and
objectives
C.Encouraging team-working
Minimising conflict and problems to enablethe teamto perform
D.Representing teams
Presenting a positive image ofthe team.
4. Leadership :
Managers are leaders of people and need to inspire commitment
and enthusiasm in others in order to achieve organisational aims
and objectives. To be effective, managers need to build strong
working relationships which means providing clear guidance and
direction, acting as a role model and respecting the views and
opinions of others.
Following should be kept in mind :
A. Leadingby example
Acting as a role model for others
B. Providing guidance
Providing support and advice to others in order to enable
theachievementof organisational aims and objectives
C. Motivating others
Enthusing, and gaining the commitment of others to decisions and
plans.
D. Building trust and respect
Maintainingconfidencesand honouring commitments and promises
made to others.
E. Leadership style
Usingdifferent leadership stylesaccording to the needs of people
and situations.
F. Communication
Ensuring people are aware of and fully understand plans and
decisions .
G. Resolving conflict
Understanding the problems and concerns of others and working
towards an appropriate resolution.
5.Personal effectiveness:
Personal effectiveness enables to achieve results and meeting
personal and organisational objectives. Managers are literally
faced with hundreds of decisions to make every day: choices about
how to prioritise activities, how to allocate their time and how to
communicate and present their plans and opinions to others. An
important part of improving personal effectiveness is recognising
and addressing personal development needs.
Following should be kept in mind :
A. Acting assertively
Presenting views and opinions clearly and taking responsibility
for initiating action
B. Managing time
Maximising the use of time to achieve aims and objectives
C. Developing self
Improving personal performance and skills by recognizing
weaknesses and areas for improvement
D. Decision-making
Obtaining and analysing accurate information in order to make
effective decisions.
6. Managing people:
Managing and developing people is perhaps the hardest part of
management. Managers must be able to agree clear, measurable
objectives, manage the performance of both individuals and teams
and provideregularandconstructivefeedback on their performance.
Managers must provide timely and appropriate support for people,
ensuring that they possess the right knowledge and skills to
achieve their objectives.
Following should be kept in mind :
A. Setting objectives
Negotiating individual and team objectives which are challenging
and achievable
B. Managing performance
Reviewing individual and team performance to ensure that
objectives are achieved
C. Developing others
Helping others to improve their knowledge and skills in order to
achieve their objectives
D. Providing feedback
Giving individuals and teamsconstructivefeedback designed to
improve performance.
7. Managing Change:
Managers are increasingly required to not only manage, but to
initiate organisational change. Managers need to be able to gain
peoples commitment to change, plan and implement change and to
monitor the impact of change in relation to the organisations aims
and objectives.
Following should be kept in mind :
A. Leading change
Identifying the need for change to achieve organizational aims
and objectives
B. Planning change
Preparing plans to implement change programmes
C. Implementing change
Putting into practice a strategy and plans to achieve change
D. Monitoringchange
Reviewing progress against change plans
8. Managing projects:
All managers manage projects whether they are large or small,
short-term or long-term. Project management involves developing and
agreeing aproject planandmonitoring and controlling the
implementation of and changes to theproject planto achieve the
projects Outcomes.
Following should be kept in mind :
A .Project planning
Determining the scope of the project and its outcomes and the
required resources and critical time lines
B. Project implementation
Managing the resources to achieve the projects outcomes on time
and on budget
C. Managing project progress
Monitoringproject progress and adjusting theproject planas
required to achieve project outcomes .
D. Managing project closure
Confirming satisfactory project completion and identifying the
lessons that can be learned for the future
9. Service Performance:
Managers need to deliver service levels as set out in their
organisations plans and strategy. Effective planning andperformance
managementcombined with a strategy of continuous improvement
enables managers and organisations to consistently satisfy and
exceed the needs of customers both external and internal.
Following should be kept in mind :
A. Developing plans
Prioritizing and organizing work activities in line with
organizational aims and objectives
B. Monitoringperformance
Monitoringand reviewing performance against organizational aims
and objectives
C. Managing performance
Reviewing individual and team performance to ensure that
objectives are achieved
D. Managing improvement
Taking action to improve performance by acting on the lessons
from past successes
10.Developing people:
Managers deliver organizational aims and objectives through
theachievementsof the people they manage. To be effective, people
need to have clear objectives anda sense of directionand the
knowledge, skills and confidence to perform. The role of the
manager in developing people is more important now than at any time
in the past; managers need to be developers of people.
Following should be kept in mind :
A. Setting objectives
Negotiating individual and team objectives which are challenging
and achievable
B. Managing learning
Creating a supportive learning environment where people can
develop new skills and confidence
C. Performance coaching
Building confidence levels, knowledge and skills through
one-to-one coaching
D. Providing feedback
Giving individuals and teams constructive feedback designed to
improve performance
11.Customer Focus:
Managers need to be customer focused in order to deliver the
level of service and performance that is required of their
organization and team. Customer service requires an understanding
of the needs of both internal and external customers, taking action
to meet customer needs and implementing strategies to improve
customer service levels.
Following should be kept in mind :
A. Understanding customer needs
Identifying the needs of both internal and external customers
.
B. Meeting customer needs
Addressing customers needs by taking action.
C. Resolving customer issues
Taking responsibility for investigating and resolving customer
issues
D. Improving customer service
Identifying and implementing strategies to improve customer
service
ABOVE GIVEN ASPECTS I WILL KEEP IN MIND ABOUT THE PERSPECTIVE OF
MANAGEMENT TO BE AN EFFECTIVE STRATEGIC MANAGER IN AN INDUSTRY
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