Monday, January 27, 2020
The Important Car Industry In Malaysia Marketing Essay
The Important Car Industry In Malaysia Marketing Essay The automotive industry is one of the most important industries in the manufacturing sector in Malaysia. Comparing with other manufacturing industries, the automotive industry is a promising one and contributes boosting and evolving economic and industrialization processes which leads Malaysia to change into a developed country in the foreseeable future. The automotive industry in Malaysia started in the 1960s and the Government of Malaysia began to encourage the establishment of the automotive industry in 1963. Initially, the assembly plants were mainly joint venture projects between European automobile manufacturers and local partners were previously their local distributors. Although at the beginning there was requirement to promote the growth of components manufacturing, but the industry was not very successful until 1980s. At that time there were some assemblers who just produced vehicles for European and Japanese manufacturers and there were large amounts of import. In fact the development in auto industry was started by launching of the National Car Project which was PROTON in 1983. Proton Company profile Proton which is the acronym of Perusahan Otomobil Nasional Berhad was founded in 1983 as manufacturing, assembling and selling motor vehicles and related products which were then produced Malaysias first car named Proton Saga. The main plant of the company was established in Shah Alam, with the capacity of 80000 units per year. Proton could increase this capacity to 230000 units per year in 1997 by constructing another factory next to its main plant. Today, the factory in Shah Alam has the capacity of producing 240000 vehicles per year. PROTON has a total of 11 subsidiaries and 11 associate companies, which are involved in manufacturing, research and development, as well as sales and service activities. Proton exports to 50 countries including the competitive markets of UK and continental European markets as its objectives include research and development capabilities, world class manufacturing and production standards, design capabilities as well as a presence in the global market. Considering Malaysias short and long term economic objectives, Proton was established to fulfill these goals with the help of technological knowledge and know-how. As a result, with the use of resources, technology, innovations, and design capabilities the national car project resulted in remarkable impact on automotive industry. PROTON was Malaysias dominant auto manufacturer until the establishment of PERODUA, in the year 1993. Now the Malaysian auto market is dominated by Malaysias national cars, PROTON and PERODUA which jointly accounted for 90 per cent of the vehicles sold annually. PROTONS production was based on technology and parts from Mitsubishi Motors, and it produced the first model which was Proton Saga in September 1985 at its first manufacturing plant in Shah Alam. At the beginning the components were made by Mitsubishi but gradually the company began producing those parts with the help of technological knowledge. PROTON also entered to international markets through exporting. For instance it began its exports from Malaysia to other right hand drive markets like New Zealand and UK as well as the Middle East, South-East Asia and Australasia, but it was mostly successful in UK. It is possible to say that proton which came as a national auto manufacturer 25 years ago, now evolved to an international auto maker. 1.2. Ethical considerations One of the important issues regarding proton is consideration of ethical issues as well as its social responsibilities. As a result, in addition to its focus on the profitability, it also focuses on human resource development, the environment and the society within its operations. Proton objectives include meeting expectations of good corporate governance, ethnical corporate values and responsible corporate citizens. MARKET STRUCTURE CHARACTERISTICS OLIGOPOLY Number of firms competing Small number Nature of the product Undifferentiated or differentiated Entry Many barriers Information availability Asymmetric Firms control over price Some An oligopolistic market is the one which is dominated by some large suppliers. Homogeneous products, mutual interdependence, few large producers and high entry barriers are oligopoly characteristics prevalent in such markets. The three most import characteristics of oligopoly include: Industry dominance by few large firms Products sold by these firms are either differentiated or identical in nature Various entry barriers depending upon the industry Few large firms is a very crucial oligopoly characteristics which states that these markets include few large firms which are dominant in existence, and each of these firms is comparatively larger than the market size. This particular oligopoly characteristic ensures that all these large firms have a fair amount of market control. The automobile industry is a very good example of an oligopolistic market. There are a few car manufacturers in the market across the world as against the demand for millions of cars every day. The dominant car manufacturers include General Motors, Honda, Chrysler, Toyota and Ford, to name a few. The automobile industry in an oligopolistic market is a Differentiate Product Oligopoly where the products manufactured are for personal consumption as consumers need a variety of products since they have different needs and wants. In Malaysia, the national automobile industry is dominated by the countrys two leading manufacturers, namely PROTON and PERODUA. PROTON is 42% owned by the Government. Rising car sales in 2010 has pushed up production in all car assemblers in Malaysia except for the national car maker, PROTON. PROTONs market share has reached 80% at its peak but now it has lost its market share to local and foreign competitors from 60% of the domestic passenger car market in 2001 to 26% for year 2010. Protons brand value has also dropped from RM239 million in 2007 (rank 19) to RM150 million in 2008 (rank 23). It was revealed in November 2009 that Protons ranking has dropped from Malaysias 30 Most Valuable Brand (MMVB) ranking. It was reported in the newspapers that PROTON is only operating at half of its capacity. PROTON Shah Alam was operating at 54% while PROTON Tanjung Malim is at 42%. The combined installed capacity production for PROTONs two plants is 350,000 units per year and PERODUA 250,000 per year that is about 48.7% and 79% respectively, accounting for about 61%, more than half of the total industry output. As reported by the Malaysian Automotive Association (MAA), UMW Toyota Motor Subsidiary, Assembly Services, was operating at 215 per cent production capacity, Honda at 212 per cent, Tan Chong Motors at 143 per cent, and PERODUA at 164 per cent. [i] For years, both PROTON and PERODUA have led charmed lives as national car companies, indulged by the Government and over-protected behind a wall of tariff and non-tariff barriers, tax exemptions, rebates, subsidies and other special favors. PROTON has only introduced four (4) new models in recent years the second generation Proton Saga in 2008, Exora in 2009 and Inspira in 2010. PROTON was knocked off as the top Malaysian car producer in 2006 by PERODUA which becomes Malaysias largest vehicle maker. PROTON is the second most popular marque for year 2010. PERODUA remains the most popular make in the passenger vehicle category while third-place Toyota is the most popular foreign car at 12.9% market share. PROTONs market share is 26% and PERODUA is 31.2%. Their combined market share has fallen to 57% today, with more than 30 foreign makers now in Malaysia competing for the remainder. [ii] PROTON remains handicapped by lack of scale, overcapacity, outdated technology, a limited product line up, and other disabilities. The company suffers from state protectionist policies and need a strategic partner for growth. PROTON also needs technology it does not have to produce attractive new models. Malaysias revised National Automotive Policy (NAP) that took effects on 1 January 2010 ostensibly to deregulate the domestic market attract more foreign auto makers into the country and would not likely meet the governments expectations. To sop up some of the excess capacity, PROTON managers are adopting an Asian multi-local OEM strategy focused mainly on expanding exports into Southeast Asia, China, India, the Middle East and North Africa. How well this will work is questionable given the intensifying competition among global auto makers for export sales, the models PROTON has to offer, and the minor role of exports so far in the auto makers operations. Proton exports 81,000 units of cars between 2008 2010. For year 2010, total export revenues amounted to only RM889 million. The Kinked Demand Curve A very common and important feature of oligopoly is that the action of, or on, one specific manufacturer will affect the other manufacturers, especially their sales. The kinked demand curve model best described PROTONs oligopoly behavior. PROTON faces a downward sloping demand curve but its elasticity may depend on the reaction of its competitors to changes in its prices or outputs. The competitors for example may not follow the increase in PROTONs prices in their attempt to maintain a high level of profits and market share. Demand therefore will be relatively elastic and a rise in price instead would lead to a fall in the total revenue of PROTON. On the other hand, the competitors might more likely to match a price fall by PROTON to avoid a loss of market share, causing demand to become inelastic leading to a fall in total revenue. As all these producers in an oligopolistic market are interdependent they need to consider the impact and reactions on other firms while determining their own pricing and investment policies. For example, when PROTON launches a new product (Exora) , it affects other producers and their sales causing them to react with a new product (e.g. PERODUA: Alza), which inflates the market price.   4.Competitive Environment For Proton Company The first Malaysia national car is PROTON. The main competitor in Malaysia in term of automobile companies and affordable car is PERODUA. The competitive environment as we can see approximately in Malaysia is affordable car where all native of a Malaysia can buy it and the car maintenances also cheap. You see, the porter five are been applied for more obviously because the competitive environment not only about the competitor. It can be about the economic decline, natural misfortune and etc. Porter five 1. Competitive Rivalry 2. Threat of New Entrant 3. Threat of Substitutes 4. Buyer Power 5. Supplier Power Competitive Rivalry In Malaysia, after PERODUA that is main competitor for proton , there is not too much competitor around affordable car. The low cost car as mentioned above is not have a lot of competitor in generally. The affordable car in Malaysia has a more potential to sell compared to luxury car that only specific people are used it. A family will have more than 1 car. Definitely, the first car they will choose the cheaper car and affordable car. New Entrant has a high threat  Recession the economic will be a big threat for PROTON. We know that, all big company will facing over budget or does not achieve the sale for that year. The government will lose a lot of money cause of policy and shareholders. By the way, economic downward tendency actually comes suddenly without notice. High threat from Substitutes Malaysia has tow national car. First : PROTON , second : PERODUA. The substitutes will high in term of car model and some of them looks similar. Buyer Power Buyer will choose the cheap car for the first car and buyer also actually are fragmented. Therefore, it will not has much influence. Supplier Power Nowadays compared to the many years ago, this is not giving a big threat for PROTON. Government and PROTON As a Government connected Company, Proton is protected in term of financial capabilities. Furthermore, as the first national automotive manufacturer they have more than 20 years of experience and backed by the more than 1000 suppliers and highly concentrated distributed the service and distribution way out. As financial year ender 31 March 2006 denoted, the net value of asset is more than RM 5 billion while the liabilities is only about RM 2 billion. Proton had begun on a project with the Lotus. Group to improve a hybrid vehicle proficient of running on both gasoline and electricity and others special projects that are concentrating on technology development. This program direct to raise high the technology to a level that is on par with their global rivals by creating an alternative vehicle for the future which provides customers with less fuel consumption, decrease emanation and uncompromising performance. The increase numbers of substantial order by the different overseas markets were far in surplus of the number shipped, the difference was due to restrictions in the supply chain. There is no uncertain that demand for Proton cars in the overseas markets exists. As such, looking forward into financial year 2007, the company predicts a meaningful improvement in the number of Proton cars sold overseas. International Market for Proton The objectives of the Malaysian National Car: à ¢Ã¢â€š ¬Ã‚ ¢ Rationalize the local automotive industry à ¢Ã¢â€š ¬Ã‚ ¢ Spearhead the development of a local component industry and to enhance greater use of local components. à ¢Ã¢â€š ¬Ã‚ ¢ Encourage the upgrading of technology, engineering knowledge and technical skills of the countrys workforce. à ¢Ã¢â€š ¬Ã‚ ¢ Assist and develop Bumiputera (the indigenous people of Malaysia) participation in the automotive industry. [1] Social, Economy, Politic and Technology analyses Proton Holdings Berhad Proton is a Malaysian national automobile manufacturer. Proton Holdings Berhad is the holding company which is listed on the Bursa Malaysia. 14,706 Proton cars were exported in 2006 to other countries/ Proton exports cars to the United Kingdom, South Africa, and Australia and the company is aggressively marketing its cars in several other countries including the Middle East. Proton cars has also been exporting a small volume of cars to other countries like: 1.Singapore 2.Brunei 3.Indonesia 4.Nepal 5.Sri 6.Pakistan 7.Bangladesh 8.Taiwan 9.Cyprus 10.Mauritius Proton has never succeeded to export their car to the US, because the cars required many changes to meet American safety standards in order to secure coverage from auto insurers and satisfy legislative requirements. In some countries,  Proton cars suffer somewhat from a poor public image because of their designs. Strengths Proton has over 20 years of experience in Automotive industry Many cars are exported by Proton to many countries every years, proves that proton has the experience of exporting cars. Did the financial crisis in 2008/09 have any impact on the group? What about the current economic turmoil in Europe? Mohd Nadzmi,( chairman),said : The global automotive industry was affected by the financial crisis in 2008/09, and this included Proton. However, in our case, being small was actually an advantage, and because of our size, we were able to minimise the impact on our business. Protons presence in Europe is also small, hence we were not affected by the economic turmoil there. Because Lotus has a bigger presence globally, the impact of the crisis on it is bigger. However, Lotus operates on small volumes, hence any financial damage was minimised. [2] Swot Analyze: The inability to succeed by Proton to find a foreign associate is a cautioning gesture that it is no longer a competitive and economically capable to living entity with present market condition and debatable management determinations that reason Proton to lose money when other finds profits. Hence, Proton Holdings Berhad requires to regard a foreign participation to more develop on its quality and service to the buyers. Khazanah Malaysia, the Malaysian governments investment arm, holding about 42.74% of Proton, followed by the Employees Provident Fund with 15.4 per cent and Petronas with 7.9 per cent. Price/Earnings: Not Meaningful Price/Sales: 0.3x (2/5 points) Price/Book: 0.4x (2/5 points) Price/Cash Flow: Not Meaningful TEV/Sales: 0.1x (3/5 points) A integrator has its profits economies of scale, market domination, etc. but an expand national car company could produce many duplications i.e. product, merchants network, sellers etc. Proton is finding it tough to decorate its network of providers and distributors.National car company Proton Holdings Berhad once dominated with a majority share in the market. It has since not only lost that majority, its sales in unit terms have even dropped below that of unlisted Perusahaan Otomobil Kedua Berhad (Perodua). UMW Holdings Berhad is the biggest in the sector, with a market value of RM5.9 billion, compared with Protons RM1 billion. Although, UMW has an important oil and gas division, it derives most of its profits from its Toyota division, the most profitable in the industry. In the other hand, Proton reported a loss of RM75 million in the October December quarter last year. It is surpassed in market value by Oriental Holdings Berhad (RM2.3 billion) and DRB-HICOM Berhad (RM1.4 billion), both of which are variegated motor-based groups. In my deduction, Proton should go on to strive strategic alliances and further expand its market in the whole world because of the finishing of conversations with Volkswagen AG in the year of 2007. In an outlook, Proton requires to basically join more into the global supply chain and the global market. Fundamentally, we have not attained the type of sell overseas permeation projected when the company was based. Global motor vehicle industry was enduring a solidification and Proton should be component of this mode. We require to be part of the greater family in a path that works for us.Up to now, there were not any explanation regarding The Public Accounts Committee (PAC) submit its report on Proton Holdings Berhads sale of Italian motorbike manufacturer, MV Augusta to GEVI s.p.a at one euro to Parliament because Proton had obtained a 57.75 percent risk in MV Augusta in December 2004 for 70 million euro (RM367.6 million). The factory is recently producing 240,000 units per year. Opened in 2005, a phase of the art assembly plant was put together at Tanjung Malim, 60 miles north of Kuala Lumpur. This area has been named Proton City and be made up of 500 hectare site containing the factory, plant, housing, a university and other commercial buildings to lodge part suppliers. This plant produces the 3 novel model ranges, the GEN-2, Savvy and Satria Neo. Protons total workplace in Malaysia totals just over 6,000 staffs working in all areas of vehicle design, RD, production and manufacturing. By way of a strong base built up since 1983, Malaysias car manufacturing industry is growing fast. Proton apparatus a major step forward in upgrading its engineering capabilities when it acquired a share in Lotus are closely involved in Protons new model development, with a group of engineers perpetually based at the design and development centre in Malaysia. The Company has come a long way since 1983, PROTON was publicly listed on the Kuala Lumpur stock conversion in 1992, and current day, Proton cars are sent abroad to more than 50 countries throughout the world. Key export markets contain Australia, Singappore, the far East and the UK, where during 2009 it celebrates 20 years in the market place. From 1989 until now, Proton Cars (UK) Ltd have been presenting the British public dependable value for money vehicles. 6. Market Power With governments protection and general tariff set up to protect Malaysias fragile automobile industry, Proton continue to record as one of the most profitable car in Malaysia and continue to profit and churn out new cars almost every year. Some of the best selling models, like the MyVi also continue to generate income to the Proton Holdings. In the early days of Proton, the market share was small compared to the other Japanese made cars which were highly used here. But, by 2002 Proton held a market share of over 60% in Malaysia, which was reduced to barely 30% by 2005 and is expected to reduce further in 2008 when AFTA mandates reduce import tariffs to a maximum of 5%. The national car company, Perusahaan Otomobil Nasional or Proton, was established in the early 1980s as a key component of Malaysias heavy industrialization program. From the onset of the projects implementation, the government tilted playing field in the domestic car market in Protons favor by exempting it from import duties on CKD kits. As a result, Proton was able to sell its cars at prices 20-30 percent cheaper than comparable cars produced by other car assemblers in the country. By the 1990s, Proton had become the dominant car producer in the Malaysian Market. Today, about 75 percent of vehicle sales are controlled by Proton (45 percent) and the second national car company Perodua (30 percent). This dominance was however threatened by Malaysias commitment under the ASEAN Free Trade Area (AFTA) agreement to reduce import duties to 20 percent in 2005 and between zeros to five percent in 2008. The implementation of these trade liberalization commitments would seriously affect Protons (and Peroduas) competitiveness vis-à -vis their competitors. The governments response in 2004 was to raise the excise duties to neutralize the reduction in import duty. The import duty on CKD passenger cars from ASEAN countries were reduced from 42%-80% to 25% while excise duty was increased from 55% to between 60%-100%. For CBU units from ASEAN countries, the import duty was reduced from between 140%-300% to 70%-190% while excise duty was increased by between 60%-100%. The above case illustrates how the impact of trade liberalization (e.g. via import tariff reduction) can be neutralized by the use domestic policies (such as excise tax) by the government to support its industrial policy. In Malaysias case, this strategy is probably an interim strategy aimed at buying some time for restructuring of the national industry. The restructuring, for example, may take the form of a future joint venture with a major foreign car producer. (a) Industrial Policy, Market Entry and Competition: The EON Proton Edar Case Industrial policy may also create anti-competition problems. The recent case of EON vs. Proton Edar illustrates this point. Cars produced by the national car company, Perusahaan Otomobil Nasional Berhad (Proton), have been traditionally distributed domestically by two firms, namely, Proton Edar Sdn Bhd (Proton Edar) and Edaran Otomobil Nasional Bhd (EON). EON was established in 1984 as the sole distributor of the national car (Proton Saga). The strategy adopted then was to separate the manufacturing activity from the distribution activity. Proton Edar was established in 1985 and it later evolved into a joint-venture between DRB and Proton Berhad in 1993 to distribute Protons cars (Proton Wira). Proton Edar became a wholly-owned subsidiary of Proton in 2000 and subsequently began to distribute other Proton models (Wira, Perdana and Iswara) that were previously distributed by EON. In the same year, the 10-year distribution agreement between Proton and EON ended. A new dealership agreement have since not been concluded. These changes set the stage for further intensification of the rivalry between EON and Proton Edar to distribute Protons cars. Problems arose with the launching of a new Proton car, namely the Gen.2 on 8th February 2003. Not surprising, Proton chose to initially distribute Gen.2 solely through its wholly-owned subsidiary Proton Edar. In addition, EON will have to obtain its supply of Gen.2 from Proton Edar Proton has also argued that EON should restrict itself to selling a single brand in a single showroom, referring to EONs current practice of selling Protons cars as well as that of Audi and Chevrolet. Anti-competitive conduct is fairly obvious in the EON-Proton Edar case. There is a severe conflict of interest due to Protons ownership of Proton Edar. It is in Protons commercial interest to favor its own subsidiary Proton Edar against EON. This has manifested in Protons conduct to vertically restraint EONs competitiveness by restricting its access to a new product. Worse, EONs only source of supply of the new product is now its rival Proton Edar. Furthermore, Protons insistence on the a single brand in a single showroom distribution policy is akin to market foreclosure to reduce inter-brand competition in the car market. There was no government intervention at the initial stages of these controversies surrounding the EON-Proton Edar case. As the above debate became more public and acrimonious, the government did intervene to hasten both parties to sign a five-year dealership agreement on 2 March 2004. Part of the government ability to intervene in the above case is due to the fact that it is a major shareholder in both Proton and EON. The dealership agreement signed may contain elements that should go under competition policy scrutiny. One such clause is the requirement that EON allocates 70 percent of its servicing capacity to Proton cars. This may be construed as the use of market power by the supplier firm (Proton) to force a buyer firm (EON) to limit the latters ancillary services to other competing suppliers. This is an important issue given the importance of the ancillary services to the actual sale of the primary product (cars). Industrial policy can also restrict competition via the promotion of strong vertically integrated structures. In the Proton case, this took the form of car production and distribution. The absence of a competition law obviously exacerbated these vertical restraint problems. If such a law had existed and if Proton was found to be guilty of anti-competitive conduct, it could have been forced to divests its distribution subsidiary. Furthermore, the government currently regulates these companies via its substantial shareholdings in these companies. If the government were to divest its controlling shareholding in these companies, these companies would need to be regulated by competition laws. Barriers to Entry The barriers to enter the automotive industry are substantial. For a new company, the startup capital required to establish manufacturing capacity to achieve minimum efficient scale is prohibitive. An automotive manufacturing facility is quite specialized and in the event of failure could not be easily retooled. Although the barriers to new companies are substantial, established companies are entering new markets through strategic partnerships or through buying out or merging with other companies. In fact, the barriers to entry for new (or different) markets may be quite low; in the 1980s, U.S. companies Team A 4 practically invited Japanese makers into the U.S. by failing to offer quality vehicles in the lower price markets. All of the large automotive companies have globalize and entered foreign markets with varying degrees of success. In the newer, undeveloped markets of Asia, Africa, and South America, the barriers to entry similarly exist. However, a domestic start up, with local knowledge and expertise, has the potential to compete in its home market against the global firms who are not yet well established there. Such an operation, if successful, would surely be snatched up by one of the global giants and incorporated into its fold. 1. The threat of new entrants in the auto manufacturing industry, this is generally a very low threat. Factors to examine for this threat include all barriers to entry such as upfront capital requirements (it costs a lot to set up a car manufacturing facility), brand equity (a new firm may have none), legislation and government policy (think safety, EPA and emissions), ability to distribute the product 2. The bargaining power of buyers/customers who has ever bought a car without bargaining? In early 1990s especially, Proton dealers were giving great deals to buyers to get the industry moving. While quantity a buyer purchases is usually a good factor in determining this force, even in the automotive industry when buyers only usually purchase one car at a time, they still wield considerable power. However, this may be different in other markets. In Singapore it sure is lower than in the US, creating a more favorable situation for the industry but not the buyers. Generally, however, its safe to say the customers have some buying power, but it depends on the market. 3. The threat of substitute products If buyers can look to the competition or other comparable products, and switch easily (they have low switching costs) there may be a high threat of this force. With new cars, the switching cost is high because you cant sell a brand new car for the same price you paid for it. A P5F analysis of the car industry covers the new market, not used or second-hand. But what about the threat of substitute products before the buyer makes the purchase? You need to know whether the market you are analyzing has many good alternatives to new cars. A vibrant used car market perhaps? Used cars threaten the new market. How about a very good mass-transportation system? Product differentiation is important too. In the car industry, typically there are many cars that are similar just look at any mid-range Toyota and you can easily find a very similar Nissan, Honda, or Mazda. However, if you are looking at amphibious cars, there may be little threat of substitute products (this is an extreme example!). I n Protons case, the substitute of this car remains low as its continuos support from the government being the national car of Malaysia plays an integral part in Protons operations. 4. The amount of bargaining power suppliers have In the car industry this refers to all the suppliers of parts, tires, components, electronics, and even the assembly line workers. We know that some suppliers are small firms who rely on the carmakers, and may only have one carmaker as a client. So this force can be tricky to evaluate. The Proton still commands a relatively stronger market despite the ample suppliers available thanks to the government policy. 5. The intensity of the competitive rivalry We know that in most countries all carmakers are engaged in fierce competition. Tit-for-tat price slashes, ad campaigns, and product developments keep them on the edge of innovation and profitability. Margins are low and pressure between rivals is high. All major car-producing nations experience this
Sunday, January 19, 2020
Ghana, the mixed capitalist Essay
Gold Coast, now Ghana had his independence in 1957 after a long struggle with our colonial masters, the British by Kwame Nkrumah and others who helped in diverse ways such as â€Å"the Big Six†and others. Colonized by the British, Ghana has gone through a lot of systems of governance; Monarchical, autocracy and now democracy. So is with economic systems which go with any form of governance system. Currently there are about four (4) economic systems in the world which are; socialist, capitalist, mixed economy (Socialist and Capitalist) and Islamic economic jurisprudence. The Economic Systems All these are economic systems and it is defines those who controls and owns the economic resources which forms the â€Å"means†in economics. Every economy is measured by the usage of its means and the nature of the â€Å"means†owners determines the kind of economic system the country runs. Socialist system of economy is a one that has its resources highly controlled by the central government. E. g. USSR (Russia, Ukraine, Yugoslavia etc), the Capitalist economy is that whose resources is highly owned and controlled by private individuals or a body other than the government. E. g. USA, UK, part of Europe etc. The Mixed economy is that which combines both the socialist and the capitalist economic systems to run the country’s economy. In that, the central government controls part of the economy whiles the other part is controlled by private participation. Functions of the Economic Systems There are multiple components to economic systems. Their interaction may be coherent or result in instability. Decision-making structures of an economy determine the use of economic inputs (the factors of production), distribution of output, the level of centralization in decision-making, and who makes these decisions. Decisions might be carried out by industrial councils, by a government agency, or by private owners. Every economic system represents an attempt to solve three fundamental and interdependent problems: What goods and services shall be produced and in what quantities? How shall goods and services be produced? That is, by whom and with what resources and technologies? For whom shall goods and services be produced? That is, who is to enjoy the benefits of the goods and services and how is the total product to be distributed among individuals and groups in the society. E. g. the current load management by the VRA and the ECG. Thus every economy is a system that allocates resources for exchange, production, distribution and consumption. The system is stabilized through a combination of threat and trust, which are the outcome of institutional arrangements. An economic system possesses the following institutions: Methods of control over the factors or means of production: this may include ownership of, or property rights to, the means of production and therefore may give rise to claims to the proceeds from production. The means of production may be owned privately, by the state, by those who use them or be held in common. A decision-making system: this determines who is eligible to make decisions over economic activities. Economic agents with decision-making powers can enter into binding contracts with one another. A coordination mechanism: this determines how information is obtained and used in decision-making. The two dominant forms of coordination are planning and markets; planning can be either de-centralized or centralized, and the two coordination mechanisms are not mutually exclusive and often co-exist. An incentive system: this induces and motivates economic agents to engage in productive activities. It can be based on either material reward (compensation or self-interest) or moral suasion (for instance, social prestige or through a democratic decision-making process that binds those involved). The incentive system may encourage specialization and the division of labour. Organizational form: there are two basic forms of organization: actors and regulators. Economic actors include households, work gangs and production teams, firms, joint-ventures and cartels. Economically regulative organizations are represented by the state and market authorities; the latter may private or public entities. A distribution system: this allocates the proceeds from productive activity, which is distributed as income among the economic organizations, individuals and groups within society, such as property owners, workers and non-workers, or the state (from taxes). A public choice mechanism for law-making, establishing rules, norms and standards and levying taxes. Usually this is the responsibility of the state but other means of collective decision-making are possible, such as workers’ councils. The Ghana’s Economy Ghana’s economy is purely a mixed type with the resources sharply divided between the public and private participation. The service sector is highly controlled by the government while the production sector is dominated by private and group participation. Decision making, which determines the direction of the economy and the type system, is done a lot of the times, through consultations with stakeholders of the economy. Example; when the power and water companies wanted to review utility tariffs to a certain percentage, there was a lot of consultations thereby; getting the rate we have now. Ghana, before the independence was purely capitalist. After independence, the then government focused on turning the economy into a communist/socialist system. They invested so much in agriculture which was the only sector controlled by the government and also reached out to industrialize the economy. Currently, Ghana is well-endowed with natural resources and agriculture accounts for roughly one-quarter of GDP and employs more than half of the workforce, mainly small landholders. The services sector accounts for 50% of GDP. Gold and cocoa production and individual remittances are major sources of foreign exchange. Oil production at Ghana’s offshore Jubilee field began in mid-December, 2010, and is expected to boost economic growth. Finally, I may agree with the statement but require more facts to completely justify its truth. Ghana is a mixed economy but capitalist oriented on the face assessment value of the various sectors. But can justify, if all percentages of public/private participation of the economic sectors are well defined. This will couple with the clear policy direction of the present governments which has state on record as being social democrats and has manifestoes seeking to provide a lot for the people.
Saturday, January 11, 2020
Organisational/Individual Environment Essay
The relationship between individuals and their workplace is largely determined by their motivation, the driving force behind actions. Therefore motivation is defined as the process that accounts for an individual’s intensity, direction and persistence of effort toward attaining a goal (Robins,). Research conducted in this area has a subsequent effect on management styles. Motivation theories are basically divided in two basic categories. The earliest ones focused on content, what actually motivates people, were followed by process theories where the focus is on the actual process of motivation. Maslow(1943) introduced the hierarchy of need motivation theory which is the most widely established theory and it still influences management today. Maslow suggested that people have five kinds of needs namely physiological, safety, love, esteem and self-actualisation. People are trying to satisfy them following an ascending order. It is necessary to satisfy a lower ranked need in order to move to a higher ranked one. Maslow’s theory was been criticised as little evidence was in support of that theory. Most people tend to be partially satisfied at each level and partially unsatisfied. In early motivational research physiological needs were linked with money. Gellerman suggested that security safety needs can be provided through fringe benefits and as life insurance. Taylor (1911) placed great emphasis on money and argued that motivation comes from economic needs. He also proposed that a science should be developed for each element of a man’s work. However research has shown that for low pay workers money is not a good enough motivator. To what extend and how important depends clearly on personal circumstances Taylor tried to eliminate human mistakes at work. Taylor’s theory still influences production lines today. However in industry today workers are seen as humans and emphasis is given on their training and professional development. Smith (1999) conducted a study in order to evaluate the strength of financial incentives and the content of employment as motivators to work, in ancillary staff in the NHS and Hotel and Leisure industry. It was found that the rates of pay had very little influence on participants job satisfaction and subsequent work motivation despite the contrary belief of their line managers. This suggests lack of communication between management and staff and non-awareness of their needs. Training opportunities did exist for ancillary staff but there was little information on them. Farren recognised salry and fringe benefits as extrinsic motivation while as intrinsic motivation when the individual has the opportunity to use his own ability and appreciation. Money in the form of incentives is not an adequate motivator for people however Hersey & Blanchard (1982) recognised the symbolic value of money as the buying power they can attribute to individuals. In support of the abstract value of money McClelland suggested that there are four basic motives that drive individuals, achievement, power and affiliation and avoidance. It was observed that individuals, which are high achievers, prefer situations where they have personal responsibility for their performance, can receive clear and unambiguous feedback and the task is of moderate task difficulty. In this theory money were seen as symbolising successful task performance and goal achievement [cited in Mullins(2002)]. As far as social affiliation needs are concerned it is a common finding that people like to interact and be with others in situation where they feel comfortable. They tend to compose small informal groups in order to find support when they have no support over work. This can result in reduction of productivity in which management cannot have control over. However when strategic goals are in accord with individual ones then those informal groups can work to the benefit of management. Managers are then invited to find ways to attract employees in sharing company objectives. The need for esteem is associated with prestige and power that comes from the position that someone has or it can be personal. Lastly Self-actualisation refers to competence and achievement. Alderler condensed Maslow’s five needs into three and came up with existence which refer to physiological and safety needs, relatedness which refer to love and growth which refer to the higher ranked needs esteem and self actualisation. He suggested that they form more a continuum rather than being hierarchical in order. If satisfaction of needs at one level is blocked then attention should be focused on satisfaction of needs at other levels. Following the same example of ranking of needs Harberg developed theory X and Theory Y. Herzberg (1959) conducted a study of 203 Accountants and Engineers where he asked them to describe situations where they felt good or bad about their jobs. Findings have shown that people were dissatisfied with their jobs when hygiene factors (extra-job factors) like salary, interpersonal relationships, supervision, company policy, working conditions job security, status and factors in personal life were not satisfied. However when there was the opportunity for growth people were extremely satisfied with their jobs itself, thus when motivators where in place. . It is noticeable the opposite of satisfaction or dissatisfaction is not dissatisfaction or satisfaction accordingly but simply lack of it. When hygiene factors are satisfied for example it does not mean that workers will feel motivated. This study was replicated with different groups as well and similar findings were found Process theories that were developed later focus on the actual process of motivation. Hawthorne studies sponsored by Harvand University and directed by Elton Mayo signalled the need for management to study and understand relationships among people. It emphasised delegation of autonomy, employee autonomy, trust and openness, interpersonal dynamics, and co-operation instead of competition (Reis &Pena, 2001). Vroom(2000) has introduced the Expectancy theory. According to that theory effort, performance, reward and personal goals are inter-linked and interdependent. People are influenced by the expected results of their actions. The choice of behaviour is based on expectancy of most favourable consequences. To describe that feeling of anticipated satisfaction out of a specific outcome Vroom used the term ‘valence’. The Cognitive Evaluation theory, which was developed subsequently, could be applied to jobs, which are neither dull nor interesting. Here what is important is self-efficacy not job satisfaction thus setting and achieving goals. In that process self generated feedback is a more powerful motivator. In that process of setting up goals and achieving them Adams with the Equity Theory found that people tend to compare them selves with others and therefore concerned with fair treatment [cited at Anderson, 2002]. For example employees compare the rewards and promotional opportunities that they have with other employees, which can result in feelings of disappointment when they perceive their performance equal but the financial rewards unequal. As a result of feeling inequity individuals might change the inputs and outcomes or might even distort them cognitively. They might decide to leave the field or become aggressive and act on others unrelated to the subject of comparison. Finally they might decide to change the object of comparison. The individual thinks that he should be awarded in a certain way, what Porter and Lawler names perceived equitable reward. When the perceived equitable rewards are greater than the actual ones dissatisfaction occurs. That is a state of mind rather that a permanent condition. Farren suggests that when needs or expectations are hindered the individual can react with either a constructive behaviour or frustration. The outcomes of constructive behaviour leads to problem solving or restructuring while frustration can cause aggression, fixation, withdrawal or even displaced aggression where the person in question is directing his aggression to a colleague other than the one who is the source of frustration. Following on from goal setting as a motivator Thomas has developed the theory of Intrinsic Motivation were emphasis was placed on the source of motivation. Individuals have a motivation, which stems from them selves rather than imposed by managers when a) they have the right of choice and can select form different activities b) can show competence, thus that they can skilfully perform the chosen tasks. This adds meaning fullness to the task and the feeling that a worthy task purpose is created. As individuals advance in achieving the task’s purpose they can demonstrate some progress [cited in Mullins, (2002)] Douglas McGregor(1960)made a major contribution to the history of motivation theory with his Theory X and Theory Y. According to theory X, which is the one traditionally followed by managers, most people prefer to be directed. They are not interested in assuming responsibility, what they need is safety. Managers structure, control and supervise external control appropriate for immature workers. This theory is questioned because as we live in a democratic society, with an increasing level of education and standard of living people must be capable of a more mature behaviour. In Theory Y however it is suggested that people are not by nature lazy and unreliable but can be self-directed and creative if motivated. That creates an essential task for management, which is to unleash this potential in individuals. Properly motivated people can achieve their own goals best by directing their own efforts towards accomplishing organisational goals. Argyris(1993) was in support of that theory and argued that following bureaucratic or pyramidal values leads to poor, shallow and mistrustful relationships. Humanistic and democratic values can nurture an environment for trusting and authentic relationships. Argyris suggests that as people grow up and mature the same process take place at work. People develop from a stage of dependency upon others as infants to a state or relative independence as adults. Their interests are becoming deeper and stronger. Furthermore they move from being subordinate to being equal or at a superior position. According to Argyris’ theoritical findings management is challenged to provide a work climate where everybody has the chance to grow and mature as individuals while working for the success of the organisation. In the 1980’s in America a new movement was to be initiated, Total Quality Management, which influenced management style of the two following decades greatly (Reis & Pena, 1999). It supported employee empowerment and decent treatment of people. After that movement the idea of re-engineering was due to influence management until today. According to that, work processes are re-thought and streamlined. Work satisfaction was to be enhanced by the creation of multi-skilled teams who accepted considerable responsibility. However as it was later proved in times of recession re-engineering became the synonymous of downsizing in businesses. Management was more interested in cutting costs by reducing work force and not improving the work processes. According to Reis & Pena ‘Management forgot the employee, the customer, and quality’ p. 673. Alternatively Reis & Pena suggest that managers should try and understand the people they work with and vice versa. The key here is to remove barriers to motivation. Rabey (2001) is warning us that there are some limits as to how much managers can motivate employees as they can only create the right environment for individuals to respond to motivation voluntary. Rabey continues by making some more practical suggestions about how to achieve that motivating environment in the workplace at different stages of employees’ work history from selection to retention. At the stage of interview he suggests that the interviewers as well as the interviewee must have an honest approach and disclose any information about the company and the applicant accordingly so that to achieve the best match. According to Rabey surveys of employees in recent years have shown that a workplace should meet some certain standards in order to stimulate motivation. These include goal setting, participation, recognition, and communication fair wages, training, teamwork and innovation. These preconditions for motivation are also included in the latest content theories, i.e Theory Y, Intrinsic Motivation, Expentacy Theory. Rabey goes one and defines the golden mean for a manager/leader. He reckons that a manager should be something between a manager where he manages and gets results from planning, control and compliance and a leader who leads and motivated followers choose to give commitment. Managers can play a unique role in building trust and co-operation with employees, which is the foundation to success. Tietjen and Myers(1998) conclude that ‘it is the work itself that brings fulfilment and Maslow’s higher order of needs into being’p.231. For management this means that they are challenged to create the necessary conditions so that the fulfilment gained from doing the job is expected daily. In the lines of effective interpe rsonal relationships at work Orpen (1997) found in a study that mentoring can improve motivation. Motivational research and organisational history suggests that management should adopt a more customer-focused style. During the last century research as well as management practice has moved from recognising as money incentives as the strongest motivator to placing emphasis on the employee and the intrinsic motivation that he has. The focus is now on the actual process of motivation and managers are called to create the necessary conditions in the workplace for their employees to achieve common company objectives. The ultimate goal is to have empowered workers, able to take an active role in the pursue of their career oriented goals and his objectives are in accordance with the ones shared by management. References Anderson, N. (Ed); O., Deniz S. (Ed); et-al. (2002). Handbook of industrial, work and organizational psychology, Volume 2: Organizational psychology. (pp. 53-76) Argyris,-Chris (1993) On Organisational Learning. Cambridge, MA, US: Blackwell Business/Blackwell Publishers. Hesley, P. & Blanchard, K. (4th edition) Management of Organisational Behaviour: Utilising Human Resources McGregor,-Douglas (1960) The human side of enterprise, New York, NY, US: McGraw-Hill. Mullins (2002), Management and Organisational Behaviour, 6th Edition, Pearson Education, pp 418- 448 Orpen, C. The Effects of formal mentoring on employee work motivation, organisational commitment and job performance in The Learning Organisation: An International Journal, 1997 Vol 4, No 2 pp. 53-60 Rabey G. B. Motivation is Response in Industrial and Commercial Training, 2001 Vol. 33, No 1 pp.26-28 Robins S. R. Organisational Behaviour (10th Edition) Pearson Smith, L. An Evaluation of programmes for staff motivation in NHS and hotel ancillary staff Facilities 1999, Vol 17, No 7/8 pp.264-271 Tietjen M. A. & Myers, R. M. Motivation and Job Satisfaction in Management Decision 1998, Vol 36 No 4, pp. 226-231 Vroom,V. H. Leadership and the decision-making process. Organisational-Dynamics. 2000 Vol 28(4): 82-94 Bibliography Wetherell M. (1996) Identities Groups and Social Issues Sage Publications: London
Thursday, January 2, 2020
Reviewing Classroom Management Plan - Free Essay Example
Sample details Pages: 6 Words: 1811 Downloads: 3 Date added: 2017/09/19 Category Management Essay Type Argumentative essay Did you like this example? Running Head: Final Project Reviewing Classroom management plan Julie Murray Kaplan University EP101-08 June 10, 2010 In reviewing this classroom management plan, I will be looking at the various elements that make up the plan. Such as the visual environment, physical arrangement, class rules and procedures as well as the types of instruction, communication plan and the teacher’s personal philosophy. Classroom management involves teacher actions to create a learning environment that encourages positive social interaction, active engagement in learning, and self- motivation. (Burden 2004) The management plan discusses how the visual environment will be set up to motivate the students to learn by having a star student board. That recognizes the student’s hard work both intellectually and socially. As well as having the walls decorated with posters and student’s artwork. There will also be plants and animals in the classroom that the students will be take care of in order to develop of sense of responsibility. It is important to make your classroom an attractive, comfortable place. (Burden, 2004) Sensory stimulation is another effect of a good classroom setting. For children, it is easier to learn in a very appealing classroom, because the elements of the things that would appeal to the senses are there. Pictures, colors, sound, and so forth. (Furniture, 2008)The physical arrangement is set up in groups so that the students can use it as a work space as well as centers. By putting the desks in group it promotes group cohesiveness as well as helping with behavior management. It also helps students with different learning needs, because students get the help that they need by having their peers and teacher to help them. Having different centers in the classroom is an excellent way to incorporate many skills and concepts, but it is also a great way to target students’ different learning styles. This plan gives students a c hance to express their different learning styles. By giving them a chance to work with other students in the book nook area or meet with them on the carpet at different designated times. The arrangement of furniture affects space allocation and space allocation has effects to the learning atmosphere. If the classroom looks narrow and small for students, they feel restricted and they do not interact well. On the other hand, if a classroom provides adequate space, students feel that there is space for interaction. (Furniture, 2008) The room is set up so the high traffic areas are free of congestion and there is plenty of space to be able to move around the room effectively. Some things that you could add to make the classroom more accessible for students in a wheel chair is by maybe adding a ramp outside the class room, and larger work space area for the student to be able work at instead of a traditional desk. The way the desks, tables, and other classroom materials are arrange d affects instruction and has an influence on order in the classroom. (Burden, 2004) The plan does not tell how the teacher developed the rules. Ways that you could have the students become involved in the process of making the rules is by asking the students what things that they think should be a rule. Depending on the age of children, the teacher may need to reword the rules in positive way instead of a negative. When teachers collaborate with their students to identify the need for rules and procedures in the classroom it helps to establish an orderly and safe place for learning. When they are given the opportunity to help create the list of rules, students are more motivated to follow them. Students will understand that the rules are meant to keep them safe and help them figure out what to do. Rules are general behavioral standards or expectations that are to be followed in classroom. They are general rules of conduct that are intended to guide individual behavior in an atte mpt to promote positive interaction and avoid disruptive behavior. Burden, 2004) For playground and cafeteria behavior the teacher has the students follow the classroom rules. Procedures are approved ways to achieve specific tasks in the classroom. (Burden, 2004) If students know the classroom procedures, the routine runs more smoothly and efficiently and less time is wasted. (Ashbaker, 2006) Establishing classroom procedures and rules helps teachers and students to stay organized. When the students have clear expectations there are fewer behavior disruptions. Procedures tell students how to perform routine instructional and housekeeping tasks. Sadlers, 2009) The teacher has set transitions for the students to follow for beginning of the school day, leaving the room, returning to the room and the ending of day. The transitions for starting the day is having the students put a card onto the bulletin board telling what they want for lunch, they will also find out what their job will b e for the day. By doing this it teaches the student’s responsibility for making sure that their job gets done and they get to chose what they want for lunch. The students next need to go to their desks and do their morning working which gives all the students time to put their lunch card onto the bulletin board and find out their job. As well as letting the teacher get any last minute things ready for the day of instruction. The students have a set way of leaving the room in which they need to do the appropriate sign language sign for their needs. Then once the teacher acknowledges them, they also need to sign out on the sheet by the door and take the hall pass. When returning to the room the students needs to enter the room quietly and sign back in on the paper and return the hall pass and then return back to their work. By doing this it also forces the student to take responsibility for remembering the right sign language sign and also to make sure that the teacher se es the sign before they can get from their desk. As well as making sure to remember to sign out and sign in and take the hall pass and return the pass when they return back to the room. Transitions are movements from one activity to another. A smooth transition allows one activity to flow into another without any breaks in the delivery of the lesson. To reduce the potential for disorder during transitions, you should prepare students for upcoming transitions, establish efficient transition routines, and clearly define the boundaries for the lessons. (Burden, 2003) The children are taught sign language for the words drinking fountain, sink, and bathroom, which are non-verbal cues that the students can use to let the teacher know of their needs. As well the teacher also uses cues by raising her hand in the air to let children know that the classroom is getting too noisy. The students will then raise their hands as well and put their finger over their lips and immediately stop wh at they are doing and put their eyes on the teacher. By using sign language as well as other non verbal cues, it is a way for the student as well as the teacher to express themselves without disrupting the class. The teacher states that she will using multiple intelligences to include all learning styles, She will be using a combination of direct instruction, small groups and center to teach the students. There is no mention in the plan of how the teacher creates or delivers her lesson plan. To meet the needs of diverse students, instruction cannot be one-dimensional. By using various methods of instruction it helps each student to reach their academic potential. (Burden, 2004)There is a communication plan set up to keep the teacher, students and parents up to date on the student’s progress. The students will receive feedback on their assignments as well as assignments will be displayed on the front board. Each student will keep track of their assignments in their own pers onal assignment books. If a student stops completing their assignments then there will be a pink slip that will be sent home to the parent. Which will explain the assignment that was not completed the consequences as well the slip needs to be signed by a parent before sending back to school. There will also be a star bulletin board set up where the teacher will give the student positive feedback. Parent conferences will be held as well as having report cards sent home. This plan help the students receive some positive feedback from their teachers as well as letting them stay up to date on their homework assignments. Although I think this plan needs to include more ways for students as well as parents to receive frequent positive and negative feedback. Providing positive feedback helps the child to feel good about what they have accomplished. As well from negative feedback learn what skill or behavior they need to approved upon. Overall I like this class management plan; I beli eve Classroom Management is the key component in any educational setting. I believe that if students are in a safe environment, then learning can take place. In this plan the teacher set the tone for the class, by preventing behavior problems with interesting and engaging curriculums and effectively including all students in the classroom so that their needs are met. Having the right environment for all students to learn should be every teacher’s major goal. In order to implement an effective classroom management plan in the classroom, without it the students would not be able to learn. The changes I would make are to include more feedback for students and information on how the rules and lesson plan were developed and implemented. Also let the students have a part in developing the rules, so that will have a better understanding of rules. They also will be more inclined to follow them and the consequences. Another thing that is missing is a behavior system that include s some certain of reward system for the students as well as the classroom for positive behavior and consequences for negative behavior. I would leave everything else the same; I think that the main components of the plan would work well with the needed changes that I have suggested. I think that a paraprofessional would be able to fit nicely into this plan by helping the teacher and students when needed. . References Ashbaker, B. Morgan, J. (2006). Paraprofessionals in the Classroom. Boston, MA: Pearson Education, Inc Burden, Paul R. (2003). Classroom management: Creating a successful learning Community (2nd). JohnWiley Sons. Maine Burden, P. (2004) An Educator’s Guide to Classroom Management. Boston, MA: Houghton Mifflin. Sadlers, Krista. (2009, November 2). How to Establish Classroom Procedures and Rules. Retrieved from https://classroom-organization. suite101. com/article. cfm/how_to_establish_classroom_procedures_and_rules Furniture Arrangement affects learning. (200 8). Retrieved from https://sugearup. com/2008/09/furniture-arrangement-affects-learning/ Don’t waste time! Our writers will create an original "Reviewing Classroom Management Plan" essay for you Create order
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