Question No. 3 - IBO-03 - India’s Foreign Trade - Master of Commerce (M.Com)

Solutions to Assignments 

IBO-03 - India’s Foreign Trade

Master of Commerce (M.Com) - 1st Year 

Question No. 3 ”Garments have emerged as the star-performer in the Indian textile export scenario.” Elaborate.

Garments have emerged as the star-performer in the Indian Textile export scenario by

the sheer magnitude of the achievement recorded by this industry. Look at Table below which

allows India’s exports of readymade garments. The exports have increased from $2583.41 in

1993-94 to $4807.92 in 1999-2000. The garment sector has achieved an impressive export

performance over the years despite stiff international competition. It must also be mentioned that

the Indian garment industry is primarily in the small scale sector with a fairly low capital

investment. Even though the total exports of India in this sector may be far lower than many of its

competitors like Hong Kong, South Korea or Taiwan, the growth rate achieved by this country is

reported to be far higher than most.

Table: Exports of Ready-made Garments

Year                         Exports (US $ Million)

1993-94                     2583.41

1994-95                     3282.83

1995-96                     3681.04

1996-97                     3756.45

1997-98                     3880.85

1998-99                     4363.96

1999-2000                 4807.92

The Indian garment export sector has maintained a pattern of steady growth over the years. A

number of reasons have been mentioned for the escalating exports from this industry. Some of the

factors responsible for the export growth of this sector are recounted below.

1. Rising Labour Costs in Development Markets: Studies conducted by various research

agencies in the past had found that many of the developed markets found it difficult to maintain

their garment manufacturing operations due to rising labour costs. In fact many of these nations

found it more economical and cost-effective to import their requirements of clothing from the

developing countries where there was relative abundance of labour and whose wages were also far

lower.

2. Shift to Technology Intensive Industries: The 1970’s was also the period when many

developed nations shifted their focus to the creation and strengthening of some of the hi-tech

industries like computer hardware and Software, electronics, ship building etc. Certain industries

which were basically labour oriented and pollution prone like textiles, clothing and leather

industry were progressively de-emphasised since these did not basically fit into the economic

profile of many of the developed countries. Developing nations like India stepped in to fill the

vacuum so created.

3. Special appeal to Indian Fabrics: Indian made fabrics created considerable impact on

foreign buyers’, particularly the Western designers by virtue of their rich colours and design

variations. In fact, it was the Indian handloom fabrics which triggered the garment export boom inthe early 1970’s. Two well known handloom fabrics of that time – “Madras checks” and

“Cannanore crepes” captured the imagination of the western designers and clothing made out of

these items became extremely popular in. Europe. Though the phenomena was short lived, it did

reveal to potential exporters in India the opportunities abroad in the garment export trade and they

did capitalise on this discovery during the subsequent years.

4. Swing towards natural fibres: There has been a gradual swing towards natural fibres and

blends thereof as opposed to synthetics (nylons etc.) ‘initially due to the oil crisis and the rising

cost of petro-chemical based items in the mid-1 970’s and later on owing to factors like comfort in

wearing apparel and health/environmental reasons. Cotton apparel derived a definite advantage

from such swings in consumer preferences and Indian exporters also availed of opportunities

thrown open.

5. Ability to cater to small orders: Import orders for garments emanate not only from the

large importers and department stores abroad but also from ethnic shops and small boutiques.

Despite the fact that the individual orders emanating from such sources may be small, collectively

they account for a bulk of the import orders for clothing. The type of orders from these sources

also differ from the larger stores in the fact that they indent for a variety of designs and colour

combinations. The Indian garment sector being small in size and decentralised is extremely

flexible and in an ideal position as compared to many of its competitors, to cater to small orders

for diversified varieties. Most of our competitors who have set up composite clothing units with

assembly line operations find such small orders for varied designs and colour combinations

unavailable.

6. Improved Publicity and Promotional Campaigns: Having realised the potential of

garment export Government of India has also stepped up its publicity and promotional efforts to

popularise Indian made garments among importers and prospective overseas markets. lndia has

been a fairly regular participant in several of the specialised clothing exhibitions abroad.

Organisations like the Apparel Export Promotion Council which has been set up by the

Government to direct exclusive attention to the cause of export promotion of garments and the

Clothing Manufacturers Association have been holding periodic buyer – seller meets in the

important production centres and conclusive business deals have been arrived at in such venues.

7. International Travel and Personal Contacts: The relative ease and volume of

international travel in the recent years have also bridged the North-South divide and brought

prospective sellers and buyers closer together. There is also a greater realisation of Indian

capabilities in certain fabric designs and variety of clothing, especially summer wear. It has also

been pointed out that the garment export sector rose to prominence due to private initiative i.e,,

the direct inter-face between the Indian entrepreneur and the overseas importer. Government

assistance and incentive came later, once the industry established itself to some extent

8. Wage cost push in competing countries: In the early nineties and immediately thereafter

the rising labour costs in some of the competing countries like Hong Kong, Taiwan and South

Korea made exports of certain labour intensive goods like clothing unattractive for its exporters.

Some of these countries had also shifted emphasis to technology intensive industries like

electronics and automobiles and the accompanying spurt in their economy and exports had

resulted in a sharp appreciation of their currencies. Indian exports of clothing therefore became

relatively more competitive

It is evident from the preceding facts that there is no single factor but a cumulative set of factors

which have led to the boom trade in garments. However, when we consider the fact that India as

yet, accounts for only around 3% of the international trade in garments, it points to some inherent

weaknesses in the industry as also the scope for expanding our share in international trade of such

items. The reasons for India’s small share in the international trade in garments is not far to seek.

World trade in clothing is largely in terms of polyester /cotton blends whereas India’s exports isvirtually confined to cotton based clothing. Secondly, the export sector of the garment industry in

India is dominated by merchant-exporters and small size units who have shown not much of an

inclination to diversify their product range. Most of the competing nations have established large

scale garment units with assembly line production facilities (i.e. starting from production of

fabrics, fabrication of garments, final processing and merchandising of garments) with a capacity

to manufacture and process a wide range of garments. Thirdly, the cut throat competition from the

power loom sector and the fear of imposition of additional quotas seem to have acted as a

deterrent for many of the large scale units particularly in the Indian mill sector from entering the

export garment trade.

The share of some of the important exporting countries of garments like Hong Kong , Korea and

Taipei (Taiwan) have shown a progressive decline over the years, while share of some of the new

suppliers like China, Turkey, Thailand and Indonesia have registered a definite growth. China’s

performance has been the most impressive having risen from a modest 4% share of the world

trade in garments to a significant 15% in 1996. China’s performance may be due to the number of

foreign investments that it has been able to attract for its various industrial sectors, including

textiles and garments, particularly from the overseas Chinese. It has also apparently been able to

modernise its textile sector at a much faster pace than India and this coupled with the fact that it

also enjoys the benefits of cheap labour has provided that country with a distinct competitive edge

in certain labour-intensive sectors.

Indian garments are currently exported to all parts of the world. However, the developed Markets

notably the USA and the European Union countries account for the major proportion of our

clothing exports. Indian exports are more or less in conformity with the international import trade

in this sector since the developed countries account for the bulk of the trade in garments.

Look at following Table which shows major markets for India’s exports of readymade garments.

USA is the leading market for India’s readymade garments followed by UAE, UK, France and

Germany. They accounted for 63% of India’s total export of readymade garments

Table: Major Markets for India’s Exports of Readymade Garments

Countries                                            Year

                                    1996-97         1997-98         1998-99         1999-2000

USA                             1273.49         1297.59         1426.06            1491.92

UAE                             133.56            173.81         403.98                 482.41

UK                                 356.27            311.12          291.76             405.92

France                         263.98             287.30             312.03             347.88

Germany                     429.27                380.360         393.33             321.84

Question No. 2 - IBO-03 - India’s Foreign Trade - Master of Commerce (M.Com)

Solutions to Assignments 

IBO-03 - India’s Foreign Trade

Master of Commerce (M.Com) - 1st Year 

Question No. 2 How has the new tariff policy of the government of India helped improving competitiveness in the industries? Describe its salient features.

                                        Source: Egyankosh 

                        

Question No. 1 - IBO-03 - India’s Foreign Trade - Master of Commerce (M.Com)

Solutions to Assignments 

IBO-03 - India’s Foreign Trade

Master of Commerce (M.Com) - 1st Year 

Question No. 1 What do you mean by WTO? What is its role in in world trade? Describe India’s efforts for integrating itself with the world trade.

What Is the World Trade Organization (WTO)?

Created in 1995, the World Trade Organization (WTO) is an international institution that oversees the global trade rules among nations. It superseded the 1947 General Agreement on Tariffs and Trade (GATT) created in the wake of World War II.

The WTO is based on agreements signed by the majority of the world’s trading nations. The main function of the organization is to help producers of goods and services, as well as exporters and importers, protect and manage their businesses. As of 2021, the WTO has 164 member countries, with Liberia and Afghanistan the most recent members, having joined in July 2016, and 25 “observer” countries and governments.

The WTO is essentially an alternative dispute or mediation entity that upholds the international rules of trade among nations. The organization provides a platform that allows member governments to negotiate and resolve trade issues with other members. The WTO’s main focus is to provide open lines of communication concerning trade among its members.

For example, the WTO has lowered trade barriers and increased trade among member countries. On the other hand, it has also maintained trade barriers when it makes sense to do so in the global context. Therefore, the WTO attempts to provide negotiation mediation that benefits the global economy.

Once negotiations are complete and an agreement is in place, the WTO then offers to interpret that agreement in case of a future dispute. All WTO agreements include a settlement process, whereby the organization legally conducts neutral conflict resolution.

On Feb. 15, 2021, the WTO’s General Council selected two-time Nigerian finance minister Ngozi Okonjo-Iweala as its director-general. She is the first woman and the first African to be selected for the position. She took office on March 1, 2021, and her term will end in August 2025.

No negotiation, mediation, or resolution would be possible without the foundational WTO agreements. These agreements set the legal ground rules for international commerce that the WTO oversees. They bind a country’s government to a set of constraints that must be observed when setting future trade policies. These agreements protect producers, importers, and exporters while encouraging world governments to meet specific social and environmental standards.

Role of WTO

1. Progressive opening and regulation of markets

The WTO's mission is to open markets gradually while ensuring that rules are respected.  The origin of the organization dates back to the end of World War II when the idea of peaceful cooperation among peoples was emerging. In 1947, a number of countries decided to open up their markets on the basis of common principles, and founded the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT). In the current round of trade negotiations, the WTO is seeking to make further advances in equitable trade.

2. The WTO acts as conductor, tribunal, monitor and trainer

a. Orchestra conductor

International trade is governed by very precise rules developed by the WTO's members. Countries must apply these rules when trading with one another. The WTO acts as the orchestra conductor, ensuring that rules are respected. The WTO was founded in 1995, but its origins date back to 1947 and the creation of the GATT. Since then, WTO members have adapted these rules to keep up with new developments. For example, services have developed considerably since the 1980s, and have now become one of the most important economic sectors. As a result, WTO members established rules governing international trade in services. Adapting or changing the principles of international trade means reaching consensus among WTO members through a round of negotiations. The latest round   the ninth since 1947   was launched in 2001

b. Tribunal

One of the main roles of the WTO is to settle disputes between its members. The WTO plays the role of trade tribunal, where members may file complaints against other members who fail to abide by the principles of international trade. There are three stages to dispute settlement. To begin with, the disputing countries try to settle their differences by themselves. If that fails, the case is decided by a panel made up of three experts, which issues a ruling. That ruling may be appealed. Once a definitive ruling has been issued, the losing party must comply. If it does not, it is liable to sanctions. Since 1995, over 400 complaints have been filed by WTO members.

c. Monitor

The WTO regularly reviews the trade policies of its members. These reviews assess whether WTO members are abiding by WTO rules and measure the impact of their domestic policies on international trade. The purpose of these reviews is not so much to solve problems as to prevent them from occurring in the first place.

d. Trainer

The WTO provides training programmes for government officials from developing countries   for example, ministry staff or customs officials. The WTO currently spends about 35 million Swiss francs annually on these programmes.  Africa is the main beneficiary, followed by Asia and Latin America. In 2011, approximately 26 per cent of training activities took place in Africa.

India's Integration with WTO

The government on Tuesday said that India’s permanent mission to the World Trade Organization, the Centre for Trade and Investment Law (CTIL) of the Indian Institute of Foreign Trade, and the Centre for Trade and Economic Integration of The Graduate Institute, Geneva have signed a tripartite Memorandum of Understanding to begin collaboration towards research and capacity-building in the field of international trade law and policy.

The MoU seeks to provide academic and research opportunities to the professional staff of CTIL and the officials of the Indian government in the field of international trade and investment law, and would establish collaboration channels between CTIL and CTEI while the mission will play a facilitative role for activities.

“For the next three years, various capacity-building programmes and activities will be carried out under the MoU to enhance the understanding of the government officials and CTIL’s research staff and academics on contemporary issues of international trade and build support for India’s positions on international trade and investment law,” the commerce and industry ministry said in a statement.

The MoU aims to enhance India’s capacity in formulating its foreign trade policy and contribute towards ensuring stability in the global trade regime.

Besides exchange of faculties and staff for study, research or teaching purposes, there will also be an internship programme for CTEI students at CTIL and submission of India focused projects to CTIL/CTEI TradeLab, a clinical legal education project on trade and investment law.

Question No. 5 - IBO - 02 International Marketing Management Mcom 1st Year

Solutions to Assignments 

IBO-02 International Marketing Management

Question No. 5 Comment briefly on the following statement: 

(a) In addition to the general considerations in packaging, there are certain special factors to be considered in export packaging. 

There are certain special factors to be considered in export packaging design. These factors relate to

1. Language

A package does promotion functions too. The literature printed on the package material must be in local language. Then only a majority of the users can understand the product information the package label bears. Thus, language is one of the important considerations to be borne in mind while designing export packaging

2. Regulations in the foreign countries

Packaging is subject to government regulations in foreign countries. Packaging standards are specified for certain commodities. If packaging does not comply with foreign regulations, it may attract punitive action.

3. Buyer’s specifications

Sometimes, buyers specify their requirements with regard to packaging. They may like to purchase the product in a specific form which may be convenient to them. When the package is in the form of a tube rather than a jar, it would be easy for the buyers to handle the package of the product till it is used up.

4. Length of the distribution channel

Channel distribution is the pathway of reaching goods to the ultimate consumers. A lengthy distribution channel involves too many middlemen taking a longer time between production and final consumption. Then the package must endure the rigors of travel and handling in the long distribution channel. Stronger packaging is preferred in such cases.

Depending upon the time factor involved in the distribution channel, packaging must be designed. A package should be capable of withstanding the stresses of handling in transport and storage.

5. Environmental factors

Environmental factors like weather and climatic conditions greatly influence the package design. A tropical country requires different packaging than for a country with cold climate.

6. Disposability of packages

Generally, consumers in developed countries prefer disposable containers. If the package is disposable immediately after use, then due care must be given to the package material. The package material should not cause environmental hazards. It would be better if the material could be recycled.

7. Size of package

The size of the package is one of the important considerations in designing packages. It depends upon the buying characteristics of consumers. If buyers purchase regularly at short intervals, then the size of the package can be small. On the other hand, buyers with freezers at home may prefer big packages.

(b) International marketing displays an interesting paradox with respect to control situation. 

Marketers assume that the else choices they offer, the more likely guests will be fit to find just the right thing. They assume, for illustration, that offering 50 styles of jeans instead of two increases the chances that shoppers will find a twain they really like. International marketing displays an interesting paradox with respect to control situation. Notwithstanding, probe now shows that there can be too substantial choice; when there is, consumers are less likely to buy anything at all, and if they do buy, they're less satisfied with their selection.

 It all began with jam. In 2000, psychologists Sheena Iyengar and Mark Lepper published a remarkable study. On one day, shoppers at an upmarket food request saw a display table with 24 strains of gourmand jam. International marketing displays an interesting paradox with respect to control situation. Those who tried the spreads took a ticket for$ 1 off any jam. On another day, shoppers saw a resembling table, except that only six strains of the jam were on display. The large display attracted further interest than the small bone. But when the time came to take, people who saw the large display were one-tenth as likely to buy as people who saw the small display.

 Other studies have Vindicated this result that other choice isn't always better. As the variety of snacks, soft drinks, and beers offered at convenience stores increases, for specimen, transactions volume and punter satisfaction shrinkage. Either, as the number of withdrawal investment options available to workers increases, the chance that they will choose any shrinkages. International marketing displays an interesting paradox with respect to control situation. These studies and others have shown not only that undue choice can produce “ choice palsy,” but also that it can reduce people’s satisfaction with their verdicts, yea if they made good bones. My confreres and I've start that increased choice decreases satisfaction with matters as trivial as ice cream flavors and as significant as jobs.

These results challenge what we suppose we know about natural nature and the determinants of well- being. Both psychology and business have operated on the supposition that the relationship between choice and well- being is straightforward International marketing displays an interesting paradox with respect to control situation. The other choices people have, the better off they are. In psychology, the benefits of choice have been tied to autonomy and control. In business, the benefits of choice have been tied to the benefits of free requests more generally. Added options make no bone worse off, and they're bound to make someone better off.

 Choice is good for us, but its relationship to satisfaction appears to be more complicated than we had assumed. There's lowering frontier usefulness in having volitions; each new option subtracts a little from the feeling of well- being, until the frontier benefits of added choice standing out. What’s more, psychologists and business academics similarly have largely ignored another product of choice Fresh of it requires increased time and trouble and can lead to anxiety, rue, monstrously high expectancies, and nature- blame if the choices do n’t work out. When the number of available options is small, these costs are negligible, but the costs grow with the number of options. Ultimately, each new option makes us feel worse off than we did anteriorly.

(c) The revolutionary changes in the information technology is sweeping across global business. 

The effects of technological change on the global economic structure are creating immense transformations in the way companies and nations organize production, trade goods, invest capital, and develop new products and processes. Sophisticated information technologies permit instantaneous communication among the far-flung operations of global enterprises. New materials are revolutionizing sectors as diverse as construction and communications. Advanced manufacturing technologies have altered long-standing patterns of productivity and employment. Improved air and sea transportation has greatly accelerated the worldwide flow of people and goods.

All this has both created and mandated greater interdependence among firms and nations. The rapid rate of innovation and the dynamics of technology flows mean that comparative advantage is short-lived. To maximize returns, arrangements such as transnational mergers and shared production agreements are sought to bring together partners with complementary interests and strengths. This permits both developed and developing countries to harness technology more efficiently, with the expectation of creating higher standards of living for all involved.

Rapid technological innovation and the proliferation of transnational organizations are driving the formation of a global economy that sometimes conflicts with nationalistic concerns about maintaining comparative advantage and competitiveness. It is indeed a time of transition for firms and governments alike. This book provides a broad overview of these issues and seeks to shed light on such areas as the changing nature of international competition, influences of new technologies on international trade, and economic and social concerns arising from differences in national cultures and standards of living associated with adoption and use of new technologies.

At the institutional level, private enterprises are the principal instruments in many countries for developing and using technology, although governments play an important enabling role. The task of private enterprises is to be knowledgeable about the current state of science and technology, to understand the needs of the marketplace, and then to create technologies, products, and services that best meet those market needs. Morris Tanenbaum pointed out that this endeavor embraces many disciplines (basic science, engineering, production, distribution, marketing, and finance) and individual motivations. Many participants and observers of the contemporary technological scene propose that we are going through a period of discontinuous change as the breadth of technological applications expands and the time scale of change becomes shorter. For example, markets are becoming more global as transportation and communication speed the flow of knowledge of new products, and greater investment is being made in research and development (R&D) as technological capability has expanded. This process has placed new demands on organizations as they strive to obtain quick and effective market information and access, recoup their R&D investment more quickly, and recognize the importance of sharing technological capabilities. This is particularly true with regard to the information technologies—the one technology most rapidly changing other technologies. It achieves its greatest power when it is most global; where it provides the means to obtain access to the information systems of other countries and establish arrangements that promote the transfer of technology.

Government plays a central role in technology issues at the national level. Technology has now become a part of almost every political discussion as politicians have realized the impact of technology on world events. Governments vary in the way they influence and exploit technological changes, for example, through regulation, procurement, protectionist policies, and support of R&D. Public attitudes among various countries also differ, and these differences can affect governmental technology policy. “Given the fact that there is no ‘correct’ way of dealing with technologies which is applicable to all countries,” Sir Robin Nicholson commented, “each country must find its optimum way depending on its history, institutions, and public attitudes.” This implies that countries will move forward at different speeds, creating imbalances among nations. In this respect, multinational corporations, responsibly managed and sensibly treated by the countries in which they invest, and transnational joint ventures serve an important function by promoting global equilibrium.

From an international perspective, the main issue is to sustain and improve world growth and improve growth per capita. This breaks down into the problems of Western Europe, Japan, the United States, Eastern Europe and the Soviet Union, and the problems of the more and less advanced developing countries. Robert Malpas noted that it becomes essential for all these players to harness technology for growth; however, this effort is frequently constrained by protectionism, concerns about intellectual property, the demands of international marketing and finance, and, of course, national security. The net result appears to be that emerging nations, with a few exceptions, have even more difficulty achieving the growth necessary to close the gap with leading nations. Among the trends at the international level that can help sustain and improve world growth: the rebirth of interest in manufacturing, the spread of expert systems which multiply skills and help in the industrialization process, the acceptance of multinational corporations, the privatization of various industries, and the increased interest of governments in technology.

(d) A market research report must use the format that best fits the needs and desires of its readers. 

In essence, a market research report is a document that reveals the characteristics of your ideal customers, their buying habits, the value your product or service can bring to them, and the list of your top competitors.

The marketing research report paints a picture of what kinds of new products or services may be the most profitable in today’s highly competitive landscape. For products or services already available, a marketing research report can provide detailed insights as to whether they are meeting their consumers’ needs and expectations. It helps understand the reasons why consumers buy a particular product by studying consumer behavior, including how economic, cultural, societal, and personal factors influence that behavior.

Furthermore, the purpose of writing a marketing research report is to make calculated decisions about business ideas – whether they’re worth pursuing or not. This requires one primary skill which is observing the pattern which is hidden in the User Generated Content (UGC) written in different tones and perspectives on the social web.

Simply put, writing a market research report is a vital part of planning business activities and serves as a neat way to assimilate all the information about your target market and prospective customers.

Now, there are two key varieties of marketing research report formats – primary and secondary.

Primary vs. Secondary Market Research

Let’s take a look at the main recipes of how to make a market research report in detail:

Primary Research

This method of marketing research involves gathering firsthand information about your market and prospective clients. You study your customers directly by conducting:

• Interviews (either by telephone or face-to-face)
• Surveys and polls (online or by email)
• Questionnaires (online or by email)
• Focus groups discussions with a sample of potential customers and getting their direct feedback
• Some crucial questions that you need to ask your prospective customers in your primary research are:

What are the factors that motivate you to purchase this product or service?

What do you like or dislike about this type of product or service already available on the market?

Are there any areas you’d like to suggest for improvement?

What according to you is the appropriate price for this product or service?

Primary research also involves analyzing competitors’ strategies, so you can find gaps and weaknesses that you can turn into your strengths.

Secondary Research

The second method of writing a marketing research report is all about analyzing the data that has already been published and using the available information on the web. That is, secondary research is done from reliable reports and statistics found on the websites of other organizations or authority blogs in your industry.

Sources can be:

Public: This includes all the free sources like social media and forums, Google Trends, YouGov, and government sources such as the United States Census Bureau.

Commercial: This includes industry insights compiled by research agencies like Pew, Gartner, Forrester, and so on. Typically, these are paid.

Internal: This is the historical market data your organization already has in-house, such as the Net Promoter Score, customer churn rate, and so on.

Secondary data can help you identify competitors, establish benchmarks, and determine target customer segments or demographics – people who live a certain lifestyle, their income and buying patterns, age group, location, etc.

How to Prepare Market Research Report

Now, here are some concrete steps and guidelines for writing a marketing research report.

Step 1: Cluster the Data

First off, compile all the relevant data you’ve accumulated from your primary and/or secondary research efforts. Survey results, interview answers, statistics from third-party sources – bring it all together and then analyze the information to sketch out the profile of your target market.

Step 2: Prepare an Outline

Next, create a skeleton of the report so that you understand what information will go where. An outline with sections and subsections will help you structure your marketing research report properly. A typical report includes an introduction, background and methodology, executive summary, results, and a conclusion with links to all references.

With an outline in front of you, start by writing the front matter of your report – an introduction that provides a brief overview of your business and the reason you conducted the market research. Include a summary of the market research process and the results you have analyzed. For instance, you might have been gauging the feasibility of a new product, so summarize that your market research report is for a new product launch.

Step 3: Mention the Research Methods

An important next step is to clearly mention the methods used to conduct the research. That is, if you conducted polls, specify the number of polls, the percentage of responses, the types of people or businesses targeted, and the questions included in the poll. Tag all the resources for demographic information, such as census data.

Step 4: Include Visuals With Narrative Explanation

Visuals such as charts and graphs are an important part of any research paper. They make sure that the findings are easy to comprehend.

So, create tables, graphs, and/or charts illustrating the results of the research. Accompany it with a narrative explanation of the visual data. Highlight the inferences you made based on this data.

Step 5: Conclude the Report With Recommendations

Finally, conclude your report with a section that lists actionable recommendations based on the research results to facilitate decision making. For example, all the numbers may point to the conclusion that your customers desire a particular feature that no other product on the market is currently offering. In this case, it is clear that it’s a good idea to invest your resources in providing that feature and gain a competitive edge.

At the very end of the report, include reference links to all the sources and an appendix for supplementary materials and further reading.

Question No. 1 - MCO-01 - Organisation Theory and Behaviour

Solutions to Assignments 

MCO-01 - Organisation Theory and Behaviour

Master of Commerce (M.Com) - 2nd Year 

Question No. 1 What is organisational change? Discuss the forces influencing the organisational change? “As the change is introduced in an organisation, it may face the resistance by the organisational members”. Elaborate. 

Organizational change is the movement of an organization from one state of affairs to another. A change in the environment often requires change within the organization operating within that environment. Change in almost any aspect of a company’s operation can be met with resistance, and different cultures can have different reactions to both the change and the means to promote the change. To better facilitate necessary changes, several steps can be taken that have been proved to lower the anxiety of employees and ease the transformation process. Often, the simple act of including employees in the change process can drastically reduce opposition to new methods. In some organizations, this level of inclusion is not possible, and instead organizations can recruit a small number of opinion leaders to promote the benefits of coming changes.

Organizational change can take many forms. It may involve a change in a company’s structure, strategy, policies, procedures, technology, or culture. The change may be planned years in advance or may be forced on an organization because of a shift in the environment. Organizational change can be radical and swiftly alter the way an organization operates, or it may be incremental and slow. In any case, regardless of the type, change involves letting go of the old ways in which work is done and adjusting to new ways. Therefore, fundamentally, it is a process that involves effective people management.

Managers carrying out any of the P-O-L-C functions often find themselves faced with the need to manage organizational change effectively. Oftentimes, the planning process reveals the need for a new or improved strategy, which is then reflected in changes to tactical and operational plans. Creating a new organizational design (the organizing function) or altering the existing design entails changes that may affect from a single employee up to the entire organization, depending on the scope of the changes. Effective decision making, a Leadership task, takes into account the change-management implications of decisions, planning for the need to manage the implementation of decisions. Finally, any updates to controlling systems and processes will potentially involve changes to employees’ assigned tasks and performance assessments, which will require astute change management skills to implement. In short, change management is an important leadership skill that spans the entire range of P-O-L-C functions.

1. Workplace Demographics

Organizational change is often a response to changes to the environment. For example, agencies that monitor workplace demographics such as the U.S. Department of Labor and the Organization for Economic Co-operation and Development have reported that the average age of the U.S. workforce will increase as the baby boom generation nears retirement age and the numbers of younger workers are insufficient to fill the gap. What does this mean for companies? Organizations may realize that as the workforce gets older, the types of benefits workers prefer may change. Work arrangements such as flexible work hours and job sharing may become more popular as employees remain in the workforce even after retirement. It is also possible that employees who are unhappy with their current work situation will choose to retire, resulting in a sudden loss of valuable knowledge and expertise in organizations. Therefore, organizations will have to devise strategies to retain these employees and plan for their retirement. Finally, a critical issue is finding ways of dealing with age-related stereotypes which act as barriers in the retention of these employees.

 

2. Technology

Sometimes change is motivated by rapid developments in technology. Moore’s law (a prediction by Gordon Moore, cofounder of Intel) dictates that the overall complexity of computers will double every 18 months with no increase in cost. Such change is motivating corporations to change their technology rapidly. Sometimes technology produces such profound developments that companies struggle to adapt. A recent example is from the music industry. When music CDs were first introduced in the 1980s, they were substantially more appealing than the traditional LP vinyl records. Record companies were easily able to double the prices, even though producing CDs cost a fraction of what it cost to produce LPs. For decades, record-producing companies benefited from this status quo. Yet when peer-to-peer file sharing through software such as Napster and Kazaa threatened the core of their business, companies in the music industry found themselves completely unprepared for such disruptive technological changes. Their first response was to sue the users of file-sharing software, sometimes even underage kids. They also kept looking for a technology that would make it impossible to copy a CD or DVD, which has yet to emerge. Until Apple’s iTunes came up with a new way to sell music online, it was doubtful that consumers would ever be willing to pay for music that was otherwise available for free (albeit illegally so). Only time will tell if the industry will be able to adapt to the changes forced on it.

3. Globalization

Globalization is another threat and opportunity for organizations, depending on their ability to adapt to it. Because of differences in national economies and standards of living from one country to another, organizations in developed countries are finding that it is often cheaper to produce goods and deliver services in less developed countries. This has led many companies to outsource (or “offshore”) their manufacturing operations to countries such as China and Mexico. In the 1990s, knowledge work was thought to be safe from outsourcing, but in the 21st century we are also seeing many service operations moved to places with cheaper wages. For example, many companies have outsourced software development to India, with Indian companies such as Wipro and Infosys emerging as global giants. Given these changes, understanding how to manage a global workforce is a necessity. Many companies realize that outsourcing forces them to operate in an institutional environment that is radically different from what they are used to at home. Dealing with employee stress resulting from jobs being moved overseas, retraining the workforce, and learning to compete with a global workforce on a global scale are changes companies are trying to come to grips with.

4. Changes in the Market Conditions

Market changes may also create internal changes as companies struggle to adjust. For example, as of this writing, the airline industry in the United States is undergoing serious changes. Demand for air travel was reduced after the September 11 terrorist attacks. At the same time, the widespread use of the Internet to book plane travels made it possible to compare airline prices much more efficiently and easily, encouraging airlines to compete primarily based on cost. This strategy seems to have backfired when coupled with the dramatic increases in the cost of fuel that occurred begining in 2004. As a result, by mid-2008, airlines were cutting back on amenities that had formerly been taken for granted for decades, such as the price of a ticket including meals, beverages, and checking luggage. Some airlines, such as Delta and Northwest Airlines, merged to stay in business.

How does a change in the environment create change within an organization? Environmental change does not automatically change how business is done. Whether the organization changes or not in response to environmental challenges and threats depends on the decision makers’ reactions to what is happening in the environment.

5. Growth

It is natural for once small start-up companies to grow if they are successful. An example of this growth is the evolution of the Widmer Brothers Brewing Company, which started as two brothers brewing beer in their garage to becoming the 11th largest brewery in the United States. This growth happened over time as the popularity of their key product—Hefeweizen—grew in popularity and the company had to expand to meet demand growing from the two founders to the 11th largest brewery in the United States by 2008. In 2007, Widmer Brothers merged with Redhook Ale Brewery. Anheuser-Busch continues to have a minority stake in both beer companies. So, while 50% of all new small businesses fail in their first year, those that succeed often evolve into large, complex organizations over time.

6. Poor Performance

Change can also occur if the company is performing poorly and if there is a perceived threat from the environment. In fact, poorly performing companies often find it easier to change compared with successful companies. Why? High performance actually leads to overconfidence and inertia. As a result, successful companies often keep doing what made them successful in the first place. When it comes to the relationship between company performance and organizational change, the saying “nothing fails like success” may be fitting. For example, Polaroid was the number one producer of instant films and cameras in 1994. Less than a decade later, the company filed for bankruptcy, unable to adapt to the rapid advances in one-hour photo development and digital photography technologies that were sweeping the market. Successful companies that manage to change have special practices in place to keep the organization open to changes. For example, Finnish cell phone maker Nokia finds that it is important to periodically change the perspective of key decision makers. For this purpose, they rotate heads of businesses to different posts to give them a fresh perspective. In addition to the success of a business, change in a company’s upper-level management is a motivator for change at the organization level. Research shows that long-tenured CEOs are unlikely to change their formula for success. Instead, new CEOs and new top management teams create change in a company’s culture and structure.

Resistance to Change 

Change is constant and unavoidable. However, human behaviour has repeatedly shown a resistance to change in the existing methods and ways of doing work. Organizations, for the advancement of business processes, require constant adaptation to changes. However, organizational resistance to change acts as a major hindrance in the path of development and success of an organization. Such resistance to organizational change brings in the need for defined change management. Before we move on to discuss the resistance to change theory, the reasons for resistance to change and the ways of managing the resistance to change, let’s take a quick look at the main causes of change in an organization:

Business strategy and structure changeMergers and acquisitionsProduct reaching the end of the life cycleChanges in government priorities

So, the influencing factors for organizational change can be both internal as well as external.

Resistance to Change Meaning in Organizational Context

The resistance to change meaning can be defined as a major obstacle in the way of development with new technology and methodologies. Change in the techniques and organizational structure comes at regular intervals. However, with pre-existing methods, individuals become reluctant to learn and implement the new techniques bringing in a resistance to change. Resistance can be in the form of protests and strikes by employees, or even in the form of implicit behaviour. The organization with its managers must take up initiatives in managing resistance to change and in the process develop a gradual adaptation to change ensuring productivity as well as efficiency at work. 

Reasons for Resistance to Change

The common causes of resistance to change in all organizations are stated below:

- People are not willing to go out of their comfort zones defined by some existing methods for learning something new.

- Changes in methods and techniques come with a change in power, responsibilities as well as influence. Organizational resistance to change comes in from people negatively affected by the changes implemented.

- Insecurity, laziness and lack of creative approach make people cling to the pre-existing customs there by resisting changes.