Question No. 1 - MMPC -002 - Human Resource Management

Solutions to Assignments

                MMPC -002 - Human Resource Management

MBA and MBA (Banking & Finance)

Question No. 1 Define human resource management in your own words. Describe the functions of a HR Manager citing real time examples.

Human Resource Management is the process of recruiting, selecting, inducting employees, providing orientation, imparting training and development, appraising the performance of employees, deciding compensation and providing benefits, motivating employees, maintaining proper relations with employees and their trade unions, ensuring employees safety, welfare and healthy measures in compliance with labour laws of the land and finally following the Orders / Judgements of the concern High Court and Supreme Court, if any.

Human Resource Management deals with the management functions like planning, organizing, directing and controlling

• It deals with procurement of human resource , training & development and maintenance of human resource.

• It helps to achieve individual, organizational and social objectives 

• Human Resource Management is a multidisciplinary subject. 

• It includes the study of management, psychology, communication, economics and sociology. 

• It also deals with building team spirit and team work. 

• It is a continuous process.

Human resource management as a department in an organisation handles all aspects of employees and has various functions like human resource planning, Conducting Job analysis, recruitment and conducting job interviews, selection of human resources, Orienting, training, compensating, Providing benefits and incentives, appraising, retaining, Career planning, Quality of Work Life, Employee Discipline, black out Sexual Harassments, human resource auditing, maintenance of industrial relationship, looking after welfare of employees and safety issues , communicating with all employees at all levels and maintaining awareness of and compliance with local, state and federal labor laws.

The historical rule of thumb for Human Resource staffing requirements is one full-time professional Human Resource person should be hired for every 100 employees. The actual ratio for a business can vary depending upon factors such as the degree of HR centralization, the geographic distribution of the employees served, the sophistication level of the employees, and the relative complexity of the organization.

FUNCTIONS OF HUMAN RESOURCE MANAGER

Human resources departments are often considered an essential part of many organizations. They are present in numerous industries, and take on many different functions in their day-to-day responsibilities.

HR departments act as a liaison between employers and employees to help ensure both are well equipped to do their jobs safely and effectively. While some organizations have their own in-house HR department, others may use an outside firm. In either capacity, HR managers help maintain the structural and organizational integrity of the workplace. While HR may sometimes be regarded as the disciplinary arm of a company, in reality, HR holds many supportive responsibilities like the ones we’ll discuss on this page. From making sure employees are paid and receive benefits to overseeing employee development, HR departments and managers aim to create workplaces where both employers and employees can thrive.

1. Recruitment and Hiring

For many organizations, attracting and retaining the best talent in the industry is a priority. HR managers play an important role in this, helping to build the future of the company by overseeing the recruitment and hiring process. To begin, HR may work with a department manager or supervisor to learn about an open position, including its requirements and ideal candidate qualities. The HR department may then set forth a recruiting strategy. This might include creating internal and external job postings, screening incoming applicants’ resumes and other application materials, and conducting initial interviews. HR may also be responsible for professional reference checks and background checks to verify that candidates are eligible to work for the company.

2. Training and Development

Hiring qualified employees is just one aspect of an HR department’s job. In order to retain talent and remain competitive, HR managers may also be responsible for launching employee development initiatives. This could entail additional on-the-job training, professional development programs, or educational opportunities that allow employees to grow and develop in their current roles—or prepare them for career advancement within the organization. HR departments know that investing in training and development benefits both employers and employees External link . For employers, it may mean higher employee productivity, and lower turnover rates. For employees, seeing the company invest in their development may help them feel more valued, increase job satisfaction, and incentivize them to stay with the company.

3. Employer-Employee Relations

Another aspect of the workplace that HR departments manage is employer-employee relationships. With this function, HR departments strive to help employers and employees see each other as mutual contributors to the company, fostering a positive dynamic between the two. HR managers may also help craft and determine company policies that ensure fairness and equity in the workplace.

When an employee has a workplace grievance—whether regarding compensation, benefits, workloads, work hours, or anything else—HR may step in to act as a liaison between the employee and employer, helping to settle any disagreements. Overall, when HR departments succeed in creating positive employee relations, employers may trust their employees and value their input more, and on the flip side, employees may respect and appreciate their employers more.

4. Maintain Company Culture

Elements of company culture may include sound hiring practices, ongoing development, and strong employee relations. However, it’s not necessarily something you can achieve and move on from. HR departments engage in ongoing work to ensure that their company culture remains solid overtime.

In the employee onboarding process, HR managers may share the company’s values, norms, and vision with employees—familiarizing them with the overall ethos of the organization. Team outings, community building, and any reward systems or recognition programs are additional ways HR departments might keep employee motivation and morale high. Maintaining company culture also means being equipped to identify any shortcomings within the organization and having the ability to address them effectively.

5. Manage Employee Benefits

On the administrative side, HR departments oversee both mandated and voluntary company benefits. While employers are required to provide some benefits like Social Security, unemployment, and worker’s compensation, other benefits like paid time off, disability income, and gym reimbursements, are provided on a voluntary basis—and serve as additional incentive for potential and current employees to work at the company.

Of course, employee benefit programs vary by organization. Some may offer employer matching programs (in which employers match an employee’s contribution to their retirement fund), while others may offer enticing comprehensive health insurance plans. Regardless of the specific benefits an employer may offer, managing all of these components is a complex job. It requires HR managers to be well-versed in their understanding of company benefit programs External link  and have the ability to clearly explain and answer any questions employees may have regarding their policies.

6. Create a Safe Work Environment

In addition to managing benefits, HR is responsible for protecting employees’ safety at work—both physical and emotional. In the physical sense, HR must ensure the workplace is free of danger External link , typically through worksite analysis and hazard prevention and control. HR may also establish safety programs through risk management training and provide information on procedures and protocol for any potential emergency scenarios.

Workplace safety also entails ensuring that the organization acts in accordance with federal and state employment rules and regulations. HR departments have a responsibility to maintain work environments that promote respect and dignity for all employees. They must also ensure that employees are protected from behaviors like harassment, discrimination, intimidation, and exploitation. They may provide training sessions for employees, managers, and supervisors to learn to identify harmful practices and know how to report them when needed.

7. Handle Disciplinary Actions

Disciplinary procedures and terminations are delicate and sometimes complicated matters. HR managers must know how to handle them fairly and consistently to keep situations running smoothly External link —and prevent any additional conflict or escalation. This may involve having a clear disciplinary process, whether that includes starting with a written warning and increasing in severity with suspensions or demotions—or following another proven system. Regardless of the specifics, HR managers must have a set system in place to hold employees accountable.

Additionally, HR may consult with legal counsel to ensure the company acts in accordance with the law, avoiding any mishandled situations and subsequent lawsuits. At the end of the day, HR departments have a responsibility to enforce an organization’s policies and the requirements of the law, while still maintaining the dignity and humanity of its employees.

MMPC -002 - Human Resource Management - MBA and MBA (Banking & Finance)

Solutions to Assignments

                MMPC -002 - Human Resource Management

Question No. 1 Define human resource management in your own words. Describe the functions of a HR Manager citing real time examples.                     CLICK HERE

Question No. 2 Explain the process of human resource planning. Describe how HR forecast is carried out in the organisation you are working with or an organisation you are familiar with. 

                                                                        CLICK HERE

Question No. 3 Discuss the concept of ‘career planning’. Explain the process of career planning that you are familiar with, citing suitable organisational examples. 

                                                                        CLICK HERE

Question No. 4 Define collective bargaining in your own words. Critically evaluate the state of collective bargaining in the present day business scenario. Explain with examples your answer giving due details of the organisations and the sources you are referring to. 

                                                                            CLICK HERE

Question No. 5 Discuss the relevance of the understanding of job design for developing organisational effectiveness.                                                         CLICK HERE

                

Question No. 5 - MCO-01 - Organisation Theory and Behaviour - Master of Commerce (M.Com)

Solutions to Assignments 

MCO-01 - Organisation Theory and Behaviour

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

Question No. 5 Comment briefly on the following statement:
(a) Redesigning jobs based on feedback is also a technique of job redesign.

Restructuring the elements including tasks, duties and responsibilities of a specific job in order to make it more encouraging and inspiring for the employees or workers is known as job redesigning. The process includes revising, analyzing, altering, reforming and reshuffling the job-related content and dimensions to increase the variety of assignments and functions to motivate employees and make them feel as an important asset of the organization. The main objective of conducting job redesigning is to place the right person at the right job and get the maximum output while increasing their level of satisfaction.

Job Redesign Process

Revising the Job Content: Job redesigning process involves recollecting and revising job-related information to determine the inconsistency between person and the job.

Analyzing Job-related Information: Once the job analyst is through with recollecting and revising the job content, analyzing the discrepancies is the next step. It is done to determine the hindrances in performing job-related tasks and duties and investigate why an employee is not able to deliver the expected output.

Altering the Job Elements: The next step is to amend the job elements. It may include cut back on extra responsibilities or addition of more functions and a higher degree of accountability. The basic aim of altering the job content is to design a job in such a manner that encourages employees to work harder and perform better.

Reformation of Job Description and Specification: After altering the job elements, a job analyst needs to reform the job description and specification in order to make sure that the worker placed at a particular place is able to deliver what is expected of him.

Reshuffling the Job-related Tasks and Duties: Next is to reallocation of new or altered tasks and functions to employees. It may be done by rotating, enriching, enlarging and engineering the job. The idea is to motivate the performers while increasing their satisfaction level.

Advantages of Job Redesigning

Enhances the Quality of Work-Life: Job redesigning motivates the employees and enhances the quality of their work life. It increases their on-the-job productivity and encourages them to perform better.

Increases Organization’s and Employees’ Productivity: Altering their job functions and duties makes employees much comfortable and adds to their satisfaction level. The unambiguous job responsibilities and tasks motivate them to work harder and give their best output. Not only this, it also results in increased productivity of an organization.

Brings the Sense of Belongingness in Employees: Redesigning job and allowing employees to do what they are good at creates a sense of belongingness in them towards the organization. It is an effective strategy to retain the talent in the organization and encouraging them to carry out their responsibilities in a better fashion.

Creates a Right Person-Job Fit: Job Redesigning plays an important role in creating a right person-job fit while harnessing the full potential of employees. It helps organization as well as employees in achieving their targets or goals.

Therefore, the purpose of job redesigning is to identify the task significance and skill variety available in the organization and reallocating the job-related tasks and responsibilities according to the specific skills possessed by an employee.

 

(b) Informal channel is the result of the operation of social forces at work place. 

Informal communication is casual communication between coworkers in the workplace. It is unofficial in nature and is based in the informal, social relationships that are formed in a workplace outside of the normal hierarchy of business structure. That is why informal business communication can take place between the CEO and an hourly worker. This type of communication is important in the workplace as it can help with employee morale and can encourage the feeling of belonging for the employees as well as a client or customer.

Good examples of informal communication in the workplace can be seen whenever one employee interacts with another employee in a casual and conversational way. They can talk about the game that was on last night or even about a company policy change.

One of the great informal communication examples is to think of it like a conversation between a family at a dinner table. Any child can turn to the mom or dad of the family (or the boss of the company) and casually ask them questions about something they brought up in a family meeting. It’s a calm and carefree scenario to discuss things.

Informal communication is casual and carefree while formal communication can seem cold and distant. Both these types of communication are important for the workplace, but informal communication is beneficial because it can bridge gaps between departments and create a sense of belonging. Informal communication is friendly and inviting and is a great sign that someone has a friend in the company.

Informal communication is an advantage to business because if employees have friends to communicate with they will enjoy their job more, which can increase productivity. A disadvantage to informal communication is just that, it’s informal. Unofficial or unconfirmed information can be spread to employees, leading to mass disinformation. A great benefit to informal communication is that employees have someone to go to when they don’t understand an aspect of the business. It is a great way for employees to feel connected and to keep abreast with how the business works.

Informal or Grapevine communication is an indispensable part of entire communication system. Formal communication is compared to arteries of a living being, whereas, grapevine or informal communication are like veins. The later is a supplement to the former. Where formal communication fails to operate, grapevine or informal communication is used.

Some­times, grapevine communication is more effective than the formal communication. In fact, it carries more information than formal communication. Not only is a large volume of information, important and vital information also conveyed through it.

In an organisation small groups of people work together. It is quite natural that they will become interested about each other and want to know various information regarding each other’s service condition, salary, facilities available, appointment, retirement, transfer, punishment, etc.

They will also be interested to know any private, secret and confidential information which includes any romantic affair, family disputes, marriage, birth of a child, examination results of their children, special treatment or favour by boss to any member and so on.

The employees generally exchange their views with their peers openly during lunch break or at an interval and get emotional relief from monotony and stress. Thus, the informal or grapevine communication promotes social relationship among the participants. It helps to build up unity, integrity and solidarity among them and boosts up their morale.

Grapevine or informal communication is faster than the formal communication. Being oral in nature, it has little or no cost and can reach maximum number of people irrespective of their positions within a very short time.

Since there is no official procedure and formalities it is not binding and compelling, rather it is flexible and spontaneous. The managers can get feedback from their subordinates quickly on the plan and policies through grapevine. New ideas, suggestions, opinions may come out as people can express their feelings without fear.

Effective Use of Informal or Grapevine Communication:

Since grapevine communication is an integral part of communication system it works side by side with the formal communication. The nature of grapevine communication can be guessed from its name. Like a grapevine plant it grows fast, spreads to any direction and goes a long way in creating informal relationship.

Here, information spreads very quickly in geometric progression from one to a few and from a few to many persons irrespective of their formal positions. Spread of half true information or rumor is not congenial to the organisational health.

It breeds conflict, weakens consolidation and unity, diminishes morale of the workers and creates a chaotic situation within the organisation. It becomes more harmful for an organisation when the managers take decisions depending upon such unreliable, inaccurate and incomplete information.

The efficient managers can make proper use of informal or grapevine communication and apply it for the well-being of the organisation if some general steps like the following are taken:

i. The managers should keep a watchful eye on the leaders who spread rumors and keep them well-informed about the actual situation.

ii. The managers should contradict rumors as soon as possible.

iii. They should involve the employees in decision-making, etc.

The managers, on the other hand, can supplement formal communication with grapevine communication. They can feel the pulse of the organisation through informal communication. They can even use it to convey any official information with a bit of care.

(c) Organisation Development is the modern approach to management of change for human resources development. 

Organizational development is a critical and science-based process that helps organizations build their capacity to change and achieve greater effectiveness by developing, improving, and reinforcing strategies, structures, and processes.

There are a few elements in this definition (adapted from Cummings & Worley, 2009) that stand out.

Critical and science-based process. OD is an evidence-based and structured process. It is not about trying something out and seeing what happens. It is about using scientific findings as input and creating a structured and controlled process in which assumptions are tested. Lastly, it is about testing if the outcomes reflect the intention of the intervention.

Build capacity to change and achieve greater effectiveness. Organizational development is aimed at organizational effectiveness. It, therefore, has a number of (business) outcomes. These can differ between organizations, but usually, they do include financial performance, customer satisfaction, organizational member engagement, and an increased capacity to adapt and renew the organization. These are not always clear-cut. Sometimes it is about building a competitive advantage, in whichever way we define that. We will explore these outcomes later in this article

Developing, improving, and reinforcing strategies, structures, and processes. The last part of our definition states that organizational development applies to changes in strategy, structure, and/or processes. This implies a system-approach, where we focus on an entire organizational system. This can include the full organization, one or more locations, or a single department.

 

Organizational design has become more crucial over time. Today’s world is characterized by Volatility, Uncertainty, Complexity, and Ambiguity (VUCA). This VUCA world requires new agility from organizations, and organizational development is the means to that end.

In organizational development, the main stakeholders are both internal and external to the company. Management and employees are internal stakeholders. External stakeholders include customers, investors, suppliers, communities and governments.  

Globalization leads to a much greater interconnectedness and opens up organizations to world-wide opportunities and threats. 

On top of that, IT is redefining how traditional business models work, creating innovative companies with the ability to scale their services to a worldwide audience in the timespan of only a few years. Just a year after launching, Facebook hit one million registered users. A few years later, Snapchat hit 10 million active users in its first year. This exposes incumbents to disruption.

Finally, business systems become better at measuring relevant data, changing the way success is measured. On top of that, advanced people analytics can help to further drive organizational outcomes.

Human Process Interventions

Human process interventions are change programs that relate to interpersonal relations, group, and organizational dynamics. These are some of the earliest and best-known OD interventions.

1. Individual interventions. These interventions are targeted to the individual, often aimed at improving communication with others. An employee is coached on interpersonal behaviors that are counterproductive. 

2. Group interventions. These interventions are aimed at the content, structure, or process of the group. The content is what the group is focused on. The structure is how a group is designed to act on the content. The process is the way in which the group carries out its core tasks. For example, a contact center focuses on taking complaints from customers. The contact center has a hierarchical structure with a director, managers, and customer service staff. The contact center’s process is to record as quickly as possible, all complaints. Only a certain percentage are escalated to management depending on how serious and complex, a complaint is.

3. Third-party interventions. Third-party interventions are often used when there are conflicts. Not all conflicts are bad, but bad conflicts should be resolved quickly. The third-party intervention helps to control and resolve the conflict. Often, the third party is the OD consultant.

4. Team building. Team building is the best-known OD intervention. It refers to activities that help groups improve the way they accomplish tasks. Examples of team-building activities are volunteering, team sports, and Pictionary. 

5. Organizational confrontation meeting. A confrontation meeting aims to identify problems and improvement targets, and set priorities. It is a starting point for addressing identified problems, across your organization. 

6. Intergroup relations interventions. Intergroup interventions are aimed at diagnosing and understanding in-group relations. Similarly, problems are identified and priorities and improvement targets are set, before working on the identified issues.

7. Large-group interventions. These interventions are somewhat in the middle, of confrontation and intergroup interventions.  The aim is to bring a large number of organization members and other stakeholders together. Internal and external stakeholders work together collaboratively. Large-group interventions may address organization-wide problems, or implement changes of structure or direction. For example, if you run a care home, you would seek feedback from service users, relatives, and staff on ways to improve the quality of life for residents. This could be starting new activities or changing the menu options. They are often referred to as “open space meetings”, “world cafes”, “future searches”, and “appreciative inquiry summits”.

Human Resource Management Interventions

These are organizational development techniques that focus on the way the individual is managed. Many of these are part of HRM functions.

1. Performance management. Good performance management includes techniques such as goal setting, performance appraisal, and reward systems.

2. Developing talent. This includes talent management practices like coaching & mentoring, career planning, development interventions, and management and leadership development.

3. Diversity interventions. Diversity is a source of innovation. This includes age, gender, race, sexual orientation, disabilities, and culture, and value orientation. These OD intervention techniques are aimed at increasing diversity.

4. Wellness interventions. Employee wellness interventions include stress management programs, and employee assistance programs. They address social factors and aim for a healthy work-life balance.

How Human Resources and OD relate

You can see that there are many OD interventions, relating to Human Resource Management functions. Policies such as performance management, goal setting, appraisal, and talent management practices are all important in achieving effective organizational development.

However, whereas HRM focuses specifically on people practices, OD takes a more holistic approach. Using tools like organizational design, individual and group interventions, work design, and more traditional people interventions, OD can operate at all levels of the organization. These levels are organizational, group, and individual. However, the focus is always on strategic themes, whereas HR is often a lot more operational.

Sometimes, OD functions are located in the HR function, but not always. Sometimes it’s part of a services department, corporate strategy, or internal consulting. External strategy consultants also frequently utilize OD techniques in change management projects.

Both HRM and OD have their roots in the business strategy – the mission, values, and vision of the organization. Both outline the actions needed to implement that strategy in their respective fields. In addition, many early people analytics initiatives originate from the OD department.  

What’s clear is that the OD techniques we listed above are very powerful. For an HR professional, there are huge benefits to mastering them. The term OD emerged in the 1960s, as a way to describe managing the behavioral aspects of people, within organizations. Understanding OD means you can identify which elements of core HR functions need to be focused on, in order to support the organization as a whole, in becoming more efficient. OD provides an integrated way of approaching these challenges.

(d) The components of organisational effectiveness are managerial policies and practices, employee characteristics, organisational characteristics and the environmental characteristics. 

Organizational effectiveness means to study the organizational structure in order to understand the basic working. It helps in evaluating and analyzing the performance of the organization. There are various components of organizational effectiveness they are:

1. Managerial Policies and Practices

2. Environmental Characteristics

3. Employee Characteristics

4. Organizational Characteristics

1. Managerial Policies and Practices: It helps to combine the organization as a whole in order to maintain a balance between the various interest groups in an organization and to accommodate them according to the environment of the organization. There are various policies and procedures which need to be formulated and implemented at various occasions of the organization they are:

a) Strategy: It refers to the plan in order to interact between the competitive companies to achieve the goals effectively. These strategies are selected on the basis of environmental needs, and then are redesigned by the top management to achieve the desired results.

b) Leadership: It enables to influence the employees towards the effective goal achievements. Leaders enable to identify the organizational goals and also try to initiate the steps towards them.

c) Decision Making: Managerial decisions play a very important role in the success of an organization which is taken out of the various alternatives available at a given point of time.

d) Rewards: Rewards are given to the employees to recognize their efforts towards effective achievement of the organizational goals. It is done to encourage the employees and boost their morale which enables them to improve the quality and quantity of work.

e) Communication: It contributes a lot in the event of organizational change as it helps in the proper communication and linkage between the members of the organization.

2. Environmental characteristics: The external environment plays a very important role in achieving organizational effectiveness. It has various characteristics of environment which helps in understanding the status of the organization they are:

a) Predictability: It refers to the state of certainty or uncertainty in an organization towards supply of human resources, human, raw material etc. Predictability is an element of external environment.

b) Complexity: It refers to the heterogeneity and the range of activities that proves relevant to the operations in the organizations.

c) Hostility: It is an environment in which the foundation of the organization is threatened. It refers to the view by which people view the organization.

3. Employee Characteristics: It is an important characteristic as the source of human resources can make or break an organization. Employee Characteristics reflects the success and failure of the organization and its major characteristics are goals, skills, motives, attitudes and values.

a) Goals: It refers to the direction in which an organization is inclined to go. They can be termed to as intentions that an individual of an organization would like to accomplish during his course of working. It provides directional nature to behaviour of the people and guides their thoughts and actions.

b) Skills: It refers to ability to engage in a set of behaviour that is related to one another. It is the ability that leads to a desired performance in a specified are and it can be technical, administrative, managerial, behavioral etc.

c) Motives: It is an inner state of mind that helps a person to be energized, motivated and directed towards the accomplishment of a pre-defined goal. It is observed that motivated employees have high zeal and enthusiasm to perform better to achieve their respective organizational goals.

d) Attitudes: They are evaluative statements (favorable or unfavorable) concerning objects, events or people and influences job behaviour as well effectiveness of the organization.

e) Values: It refers to as specific code of conduct or basic sincerity possessed by an individual in the organization. It is highly influential in individual attitude and behaviour. It influences the motivation of an individual as well as his behaviour in the organization.

4. Organizational Characteristics: It refers to the general conditions that exist within an organization. The various characteristics that influence the effectiveness of organizations are structure, technology and size.

a) Structure: It defines the formal division, grouping and coordination of the job tasks within the organization. There are six important elements in an organizational structure that are needed for organizational effectiveness. These six elements are work specialization, departmentation, chain of command, span of control, centralization and decentralization, and formalization.

b) Technology: It refers to the ways and means by which an organization transfers its inputs into outputs. The organizational efficiency is largely dependent on the choice of technology and its use.

c) Size: It refers to the number of people in an organization. In broader sense, it can also be referred to as the physical capacity of the organization, the personnel available to the organization, the organizational inputs or outputs and the optional resources available to an organization. The effectiveness and efficiency of an organization is dependent on the size of the organization.

Question No. 5 - IBO - 05 - International Marketing Logistics - Master of Commerce (M.Com)

Solutions to Assignments 

IBO - 05 - International Marketing Logistics

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

Question No. 5 Write short notes on following: 
a) Public Warehouse.

These warehouses are owned by government and semi government bodies and are made available to private firms to store goods on payment of rent. The public warehouses are usually set up to help small traders who are not in position to have their own warehouses due to financial constraints.

Therefore, in order to promote trade and industry, central or state governments come forward to cater such storage needs of traders/retailers. Anyone can avail these facilities to solve its short-term distribution needs. Retailers sometimes due to increased sales even find their private warehouses insufficient if their facilities have reached capacity or if they are making a special, huge purchase of products for some reasons.

For example, before festivals or before marriage seasons, retailers may order extra merchandise to avoid ‘out of stock’ situations. These warehouses are typically regulated by the government bodies. Costs incurred by the private firms for the use of public warehouses are considered as variable. These warehouses are mainly used by manufacturers/producers, exporters and importers.

 

b) Commercial Shipping 

Depending upon how fast you want to get cargo to your customer and how much he or she is willing to spend, you might ship by ocean or air. Accordingly, there are two types of bills of lading, the ocean bill of lading and the airway bill.

An ocean bill of lading serves both as a receipt for the cargo and as a contract for transportation between you (the exporter) and the carrier. It also symbolizes ownership; accordingly, if in negotiable form, it can be bought, sold or traded while the goods are in transit.

When you use air freight, an airway bill is issued in lieu of a bill of lading. It serves as a through bill of lading which covers domestic and international flights moving cargo to a specific destination. Your air transportation carrier will advise you of the house airway bill number and the master airway bill number assigned to your shipment. You must be sure to communicate these to your customer along with other transportation details.

Airway bills serve functions similar to those of ocean bills of lading, but they are only issued in non-negotiable form. This means that you and your bank have less protection because you lose title to the goods once shipment commences. Be sure to check with your logistics expert if you are shipping hazardous goods. Special forms are required.

We will be covering ocean bills of lading in detail because ocean freight is the most economical -- and therefore the most frequently used -- method of export shipment.

You must prepare and submit a Shipper's Letter of Instructions form to your freight forwarder so that they can issue an accurate bill of lading. This form indicates if the transaction is being made against a letter of credit, whether insurance is required and where to send documents, etc. Once you've finalized terms of payment with your customer, you will be able to furnish these facts to your freight forwarder.

Most bills of lading are issued with three originals and several copies.

There are numerous different types of ocean bill of lading, but you will find that the following are the most commonly used:

A "straight" (non-negotiable) bill of lading provides for delivery to the person whose name appears on it. It must be marked "non-negotiable." Only the person named can claim the goods upon arrival. This type of bill is usually used for goods shipped on an open-account payment basis when the exporter is not concerned about the importer receiving the goods without payment.

A "shipper's order" (negotiable) bill of lading is used when you want to impose conditions on delivery of the goods, such as acceptance of a draft. This type of bill of lading works well when payment has been secured by a letter of credit because you can make sure that the terms of the L/C are met before the goods are released.

A "clean bill of lading" is issued when the shipment is received in good order. If there is any damage or a shortage of product is found, a clean bill of lading will not be issued.

An "on-board bill of lading" is issued when the cargo has been placed aboard the named vessel. It is signed and certified by the master of the vessel. For a letter of credit transaction, this bill of lading is required in order for you (the exporter) to get paid.

Of course if the goods require packing or specialist rigging Infinity can assist with this.

In the case of personnel affects the whole procedure is simpler, how much you want to spend and how much time you have.

Very often fine art is shipped in the air due to its value and small size.

c) Multi-Modal Transport Document 

A document issued or signed by a carrier indicating carriage by more than one means of transportation. For example, a multimodal transport document for a door-to-port shipment with main carriage by vessel might indicate pickup at the place where the shipment originates (often the seller´s premises) with pre-carriage by truck and main carriage from the named port of loading to the named port of discharge by a named vessel. Depending on how the contact carriage was drafted, the document could be issued either on a received for shipment basis at any time after the goods entered the control of the main carrier, or on an on-board basis after the goods were loaded in the named vessel. As some ship lines accept liability only while the cargo is on their vessel, its is important to carefully read the contract of carriage.

With the advent of containers, the ocean carriers started extending their services to Inland locations, as containers, are smoothly and easily handled from one mode of transport to another. One of the most important ingredients involved in such Multimodal Transport is the existence of a legal regime to govern the terms of the contract and specify the basis of liability and responsibilities of the Multimodal Transport Operator. Previously, a documents called Combined Transport Document (CTD) was being issued. However, although the format of the document broadly conformed to a specimen prescribed by the International Chamber of Commerce (ICC), the CTD has not been adopted by all operators uniformly. Thus, there was an absence of uniformity of liability and other condition. In India the Foreign Exchange Dealers Association of India (FEDAI) has evolved its own rules laying down the responsibilities and liabilities of Combined Transport Operators from the inland container depots. However, these rules could not obtain wide acceptance mainly because the Combined Transport Document evolved by FEDAI did not confer negotiability and title to the goods and also because such documents were required to be exchanged for a regular on - board ocean bill of lading at the port unless the letter of credit specifically permitted the production of a combined transport Document in place of a regular Bill of Lading. Looking to the urgent need of Industry and keeping in view the provisions of the Multimodal Transportation of Goods Act 1993 which is substantially based on the rules framed by the ICC and also taking into account the provisions of the UN Convention of 1980 on Multimodal Transportation of Goods, the Director General of Shipping, with the approval of the Govt., has issued an Order on 17th March, 1994 prescribing a model for the Multimodal Transport Document (MTD). The document has been prepared for carrying out the provisions of the Act keeping in view the primary objective of the legislation that the carriers are thereto serve trade and not the other way around. The Multimodal Transport Document issued under the present law would be:i) a contract for the Transportation of Goods by Multimodal Transport.ii) a negotiable document unless it is marked non negotiable at the option of the consignor.iii) a document of title on the basis of which its holder can take delivery of the goods covered by it.The concerned parties who would have commercial interest who would be governed by the document once it is executed would be:i) The MTO who is the person responsible for the execution of the Multimodal Transport Contract.ii) The consignor who places the goods in question with the MTD for transporting the same and the consignee who is to take delivery at the destination.iii) The bankers who would provide the mechanism for documentary credit.iv) The insurers who insure the goods against loss or damage and the liability insurers who would cover the MTO's liability under contract.

MTD AS AN INSTRUMENT TO ENFORCE THE PROVISIONS OF THE ACT.

Once the Multimodal Transport Operator executes the Multimodal Transport Document, he immediately assumes the role of the owner of the goods, the Principal thereby authorizing the MTO to exercise the rights as that of the owner for claiming damages etc. and for other purposes, wherever necessary. The provisions of the Act shall have overriding effect over all other laws and any contract for MULTIMODAL Transport made in contravention of the provisions of the Multimodal Transport Act would be null and void.The issuance of the Multimodal Transport Document confers and imposes on all interested parties the rights, obligations and defences set out in the act. In issuing the MTD, the MULTIMODAL transport operator assumes responsibility for the execution of the contract as well as would be liable for the loss or damage to goods or delay in delivery as contained in the Multimodal Transportation of Goods Act 1993.

d) Privatisation of Ports  

In recent years a significant number of countries have implemented policies aimed at reforming their port industry. In the belief that it will improve efficiency and reduce the heavy financial burden placed upon governments that attempt to support such a capital-intensive industry, privatization has often formed an important strand of such policies. A key claim in favour of privatization is that the transfer of ownership from public to private hands will ultimately lead to an improvement in economic efficiency and, hence, financial and operational performance. This paper investigates the theoretical underpinnings and practical validity of this claim and concludes that privatization is only a partial cure for what ails the world's ports and that, if implemented in isolation, it simply cannot deliver the much-needed panacea for the industry's woes.

The Major Ports Authority Bill, 2020 was passed through ballot votes in the Rajya Sabha on Wednesday with 84 votes in its favour and 44 against it. The Lok Sabha had passed the bill on September 23 last year.

Taking a strong objection to some members' remarks that it is intended to benefit big corporate houses and would result in the ruining of the ports and their plunder, Mandaviya, in his reply to the debate on the bill, said rather, it would turn these ports into world-class ports and enable their boards to take decisions on their own.  

Various opposition parties, including the Congress, TMC, SP, RJD, DMK, AAP, CPI(M) and CPI raised objections on the bill in the Upper House of Parliament and alleged that it is aimed at privatising the ports and diluting the powers of the states on land use. However, the BJD, JD(U), YSRCP supported it, saying it is a welcome move to expand the port development infrastructure.

Question No. 4 - IBO - 05 - International Marketing Logistics - Master of Commerce (M.Com)

Solutions to Assignments 

IBO - 05 - International Marketing Logistics

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

Question No. 4 - Distinguish between the following: 
a) Domestic logistics and International logistics 

Logistic is a phenomenal practice of transporting goods to place within your country or overseas. Logistic companies are burgeoning in every alley around Australia. Whether you’re into business or have nothing to do with, understanding how logistic is important in our everyday life can help you in long run.  Logistic service can be broadly defined in two ways; domestic and international. It’s easy to assume the difference between these two just by their terms, but actually it isn’t when it comes to their different functional sphere.

The Basic Line:

Domestic logistics means distributing goods within you country, while international logistic deals is the transportation of goods beyond your country line. Dealing with domestic transportation is way different than that of international because of proximity involves in the process. Let’s take a look at the basic difference of these two operations.

Management:

When searching for local freight transport service you can book in many ways. Metro transport, full truck load and dangerous goods point to point delivery to down the road or to other part in Australia can be done easily within a day or maybe in week. On the contrary, international logistics requires different set of commercial operational managers who will set an entire plan for the delivery overseas.

Costs:

The costs involved in both the process should be considered individually. The price vary based on transportation modes, technology and man power involved. There are additional taxes involved in international process that make it bit too costly than that of domestic.

 Transportation:

When transporting within your country boundary, you would be able to choose many transportation options such as truck, metro and other road transportation facilities which are designed for palletized, fork-lifted and skidded. But you have very limited option when moving beyond country’s boundary.

b) Inland container depots and Container fright stations 

c) Weight ton and Measurement ton. 

The rates of individual commodities are expressed in different ways, namely, per weight ton (W), per measurement ton (M), and per weight ton or measurement ton (W/M), whichever gives higher revenue.

According to gross weight, i.e., weight ton, which is indicated by "W" in the tariff.

According to volume, i.e., measurement ton, which is indicated by "M" in the tariff.

The unit of measurement of different bases can vary. For example, a weight ton is usually defined as either a metric ton (100 kg) or a long ton (1,016 kg) and a measurement ton in some trades, is defined as 40 cu. feet, while in others 50 cu. feet, or else, as is usually the case today, as 1 cu. meter i.e., 35.5 cu. feet. According to normal practice, a commodity that is being charged on a weight basis will pay according to its weight irrespective of the volume it occupies and a commodity that is charged according to the volume will do so irrespective of its weight. 

d) Reorder Level (ROL) and Reorder Quantity (ROQ)

The reorder level is the level of the stock of a particular item, held by the firm, when an order is needed to be placed for avoiding the risk of being out of stock. It is based on the average time taken by the supplier for replenishment, maximum usage of the item during the replenishment time, and safety stock requirement. It is also known as reorder point.

The reorder quantity is the quantity of the order that is to be placed on a new purchase order for the particular item. The ordered quantity or the number of units needs to be optimum taking into account the various factors like cost of order, cost of transportation, carrying costs, etc. The reorder quantity is the quantity which, given the normal usage, provides the best balance between the various factors like quantity discounts, freight, storage costs, and working capital requirements. 

The main differences between Reorder Level and Reorder Quantity are as under:

• Reorder level is the stock level of a particular item of inventory, at which a firm needs to place an order for the fresh supply or replenishment of the item; whereas reorder quantity is the magnitude or the number of units to be ordered in a new purchase order for the fresh supply of a particular inventory item.
• While reorder level gives a signal regarding when to place a new order for the fresh supply of an inventory item; reorder quantity makes obvious the size of a particular order.
• The reorder level acts as a trigger or indication for placing the order for an item; whereas reorder quantity is the actual act of calculating and placing the size on a new purchase order.
• While in reorder level, the main element is time; in case of reorder quantity, the main element is quantity or number of units.
• While reorder level provides an answer to the question ‘when’; reorder quantity provides an answer to the question ‘how much’.
• While the internal factors involved in reorder level are maximum usage during the lead time, safety level, and replenishment period; the internal factors involved in reorder quantity are carrying cost of inventory per unit, cost of order, etc.
• Whereas the external factor involved in reorder level is lead time taken by the supplier; the external factors involved in reorder quantity are cost of freight, and big order quantity discounts.
• Reorder level has first precedence. first of all, we assess whether the stock level of an inventory item is above the reorder level or below it. if the stock level is below the reorder level, it is the trigger to place a purchase order; reorder quantity is calculated to be placed on the new purchase order, only after it has been decided that a purchase order is to be made.
• While reorder level is a strategic decision; reorder quantity is a tactical decision.
• Reorder level is a policy level or higher management level decision variable; whereas reorder quantity is an operational level and routine decision.
• While reorder level is not only an inventory management, but also business continuity issue; reorder quantity is purely an inventory management issue.
• Reorder level decision is more stable; whereas reorder quantity decision is less stable with more frequent changes.
• The main risk factor in reorder level is being out of stock; whereas the main risk factor in reorder quantity is high cost per unit of the inventory item ordered.
• The other risk factors in reorder level are disruption in production and foregone sales; whereas the other risk factors in reorder quantity are being uncompetitive in pricing of the final product or service offering, and reduction in profit margin per unit in case of higher costs of the inputs.