U.S. automobile industry.

U.S. automobile industry. EXECUTIVE SUMMARY Car is great invention of human development. After more than two centuries of development and innovation, automotive products remain irreplaceable in the transportation. Automobile industry is always one of the most important industries of each country and the world in general. The U.S. automobile industry was born in the beginning of 19th century, contributes a huge amount in GDP of American as well as one of the domination industries in American particularly and globe generally. This project provides an overall and comprehensive view about the U.S. automobile industry. Through application of appropriate strategic analysis tools, this topic focus on analyze four following parts: Firstly, the overall current macro-environment of this industry is provided, especially the key forces driving change in the U.S. automobile industry. Secondly, using the Michael Porter model to analyze the competitive environment or also called task or industry environment, the strengths and extent of competitive forces, which affect the attractiveness of the U.S. automobile industry. Next, map of the key strategic group in the U.S. automobile industry and analysis of the competitors in a main strategic group. Finally, based on the analysis of both environments, this report offers comments of the key opportunities and threats facing by the firm in the U.S. automobile industry and its attractiveness of the present incumbents and potential new entrants. I. INTRODUCTION The United States, with its total current resident is about 308 million, is the third most populous country in the world. It is the second largest country in Western Hemisphere, and the third or fourth largest in the world by total area. With an estimated 2008 gross domestic product (GDP) of US $14.4 trillion (a quarter of nominal global GDP and a fifth of global GDP at purchasing power parity), the U.S. economy continuingly occupies the most important position in global economy. Based on these advantages, the U.S. automobile market is one of the third largest markets, after China and Japan, both of manufacturing and consumption. The U.S. automobile industry has long historic development from the early decades of the 19th. There were over 1800 automobile manufacturers in the United States in the past. Although very few can survive and only a few new ones were started after that period, they are on the top automakers of the world. Moreover, it attracts most of the biggest foreign automakers to locate factories and invest, such as Toyota, Honda, BMW, Mitsubishi, etc. Recently, the automobile industry dramatically down caused the shortage resource and the current economic crisis. The U.S. automobile cannot avoid this trend. However, the general industry and Big Three U.S. automakers General Motors, Chrysler, and Ford recover gradually whereby the timely auto industry bailout and restructuring of the President Barack Obamas government. II. THE CURRENT MACRO-ENVIRONMENT OF THE AUTOMOBILE INDUSTRY There are many external forces that can affect an industrys performance and hence to know well about the environment is the best way for improving the strength as well as reducing the weaknesses of companies in the field. This analysis of Socio-cultural, Technological, Economic, Ecological, Political and legal forces that affect the automobile manufacturing industry will be presented as follows. 1. Socio-cultural forces It cannot be deny that in todays society, people are judged on the type of cars they drive. Anyone who drives a nice and expensive vehicle is thought to be wealthy and success. People will find them-selves more valuable and feel better when they drive a nice and new car and therefore, car manufacturers target their markets by these thoughts. For example, with Mercedes-Benz, the producer launched three types of cars, which represent the brands value: luxury, safety, innovation. They are A-Class, F400-Carving and C-Class which being able to appeal the significant diversity of Mercedes-Benz in conquering the customers. Another thought provoking issue of the socio cultural is the environmental concerns for the need of fuel-efficient vehicles. Many environmentalists are worried about the impact that the gas cars have on the environment. The lower amount of gas emission emits into the air, the better the environment becomes. Therefore this problem also is taken into consideration by specialists of automobile companies. 2. Technological forces The U.S. is the worlds largest producer and consumer of motor vehicles with production of 16 million units every year. To increase its scale, the U.S automotive industry continues to experience technological change by investing on research and develop projects every year. These plan aim at finding out clean and renewable energy resources so that car can be used in the most efficient way. In addition to this, improving the quality of engine, making new more functions, changing technical innovation and styles for cars are also the objects that car-manufacturers want to bring to customers. Getting success as today, automobile industry should consider Internet as an important and useful instrument that make the business easier and more convenient. Thanks to its functions, the business of automobile industry becomes more efficiency and lower cost by e-booking, payment, connecting suppliers and customers online. For example, Ford, GM, and Daimler Chrysler created a global online exchange for suppliers and the original equipment manufacturers. 3. Economic forces In the past, the automobile manufacturing industry is regarded as one of the largest and vital industries within the U.S due to its great contributing to this economy in employment and productivity. Reports indicate that motor vehicle production represents over 5 % of the U.S. private sector GDP. However, because of the global crisis and the increase in oil price, 2008 and 2009 are the most difficult periods for automobile companies all over the world. In US, the number of cars sold is significantly reduced to be lower than 30% in 2008 and predicted 50% in 2009, making many automobile companies got into trouble, especially big ones like General Motors, Ford and Chrysler. 19.4 billion aid from the U.S. government with 9.5 billion from Canada government can not help General Motors avoid from breaking in 1/6/2009. The car consumption of Ford Corporation also decreased significantly, they had to close four plants in the U.S. and thousands of workers to leave work until now. The head of corporate manufacturing automotive components Continental (Germany) Karl-Thomas Neumann is predicted, the crisis in the automobile industry could take up to the next 5 years. This means that over 50 million people live based on the automobile industry will have to face unemployment in this period. 4. Ecological forces After the crisis, major technology trends that automobile production corporations want to aim at are comfortable, friendly environment with consumption of fuel savings cars. In present, Hybrid vehicles with fuel economy of fuel consumption at 35 km per liter gasoline are taken into consideration and eventually moving to the car model that does not use fuel as crude oil is development direction of the automobile industry in the near future. Besides, Pollution Prevention Project will be carried out regularly with the hope of finding innovative ways to keep our environment healthier and cleaner. 5. Political and legal forces Since the 1960s, the U.S. government has issued regulations that affect the production and consumption of cars in this country. Accordingly, almost all of the provisions are about environmental related problems and the safety of the drivers as well as passengers. The first National Traffic and Motor Vehicle Safety Act that forced manufacturers to improve the safety for the passengers, the driver visibility, and the braking of the car were approved in 1966. After that, there was also growing concern for the environment, many Acts were introduced in order to set standards for automobile pollution and decrease in automobile emission such as The Vehicle Air Pollution and Control Act, Clean Air Act. Then, after the oil crisis in the 1970s, The Energy Policy and Conservation Act stated that all automobiles must meet a certain mileage per gallon to ensure that the amount of energy could be saved as much as possible. III. THE COMPETITIVE ENVIRONMENT In todays fierce competitive environment, the firms need to achieve competitive advantages for competing, existing and growing. Accordingly, the firms must recognize the environment that powerfully influences the firms. In American automobile industry, the automobile manufacturers have realized the environments influence to automotive industry. At the same time, they must look at the main sources of competitive forces and how high or low competitive force is. As stated by Wheelen and Hunger (2008, p. 83) about the six sources of competition in Porters Five Forces model. This framework is used to identify the opportunities and threats for entering in to a particular industry. It is featured as follow: Rivalry amongst existing firms in the industry The American automobile industry includes three major manufacturers, General Motors, Fords, and Daimler Chrysler. On the other hand, it has also two Japanese biggest competitors, Honda and Toyota. Now we will discuss about how strong each competitive force is and which they affect on the attractiveness of the American automotive industry. 1. The threat of new entrants-Barriers to entry New entrants can threaten the market share of existing competitors. One reason new entrants pose such a threat is that they bring additional production capacity, reducing the attractiveness. (Hitt, Ireland and Hoskinsson, 2008). The threat of new entrants is low in the American automobile industry because of some main reasons. First, the American automobile industry now is mature and it has attained economies of scale. Although Honda and Toyota have invested heavily in America to produce cars, now the crisis in the auto industry and the slow sluggish state of the global economy lead to small demand; therefore, new entrants are not interested to enter this sector. Besides, this heavy industry requires a significant amount of capital for producing automobiles as well as research and development new designs. It also demands modern technologies, management and marketing skills. Besides, establishing the intermediaries for distributing the products is not the simply problem in America. The firms must look for the dealership to sell their automobiles. These entry barriers are substantial that make it difficult for new automakers. Accordingly, it is not easy for any new entrants to enter the American automobile industry. 2. Bargaining power of suppliers According to Hill and Jones (2008), the bargaining power of suppliers is the suppliers ability to raise input prices or the costs of the industry by providing poor quality inputs or poor services. In the automobile industry, the bargaining power of suppliers is low. The auto manufactures need several components from suppliers. Moreover, there are many suppliers in this sector. We can see that suppliers in the U.S automobile industry have little power. Therefore, the auto manufacturers have many options for bargaining prices and deliveries. If suppliers do not meet some main qualifications such as quality and delivery, the auto manufacturers can switch to other suppliers. Besides, the automakers can have many opportunities to force down input price as well as demand higher quality inputs. 3. Bargaining power of buyers Wheelen and Hunger (2008) mentioned that buyers could have an effect on an industry through their ability to force down price, bargain for high quality or more services. Thus, powerful buyers should be viewed as a threat of the industry. The bargaining power of the buyers in the American automobile industry is high. Nowadays, customers easily get information and have many options in choosing brands and models of cars between auto suppliers. Some of qualifications that they based on in choosing cars are quality, price, appearance, efficient, and so on. Because of the variety of lifestyle, customers purchase the cars in different ways. Besides, the switching costs are low in automobile industry. As a result, the buyers can play off the supplying company against each other to force down price. Whats more, a buyer has the potential to integrate backward by producing the product itself as a bargaining tool. Ford and General Motor have used the threat of manufacturing a component themselves instead of buying it from suppliers. 4. The threat of substitute products Hitt, Ireland and Hoskinsson (2008) pointed out that substitute products are goods or services from outside a given industry that perform similar or the same functions as a products that the industry produce. The threat of substitute products in U.S automobile industry is medium. Although people can travel by several public transportation means such as subways, trains, buses, the need of automobiles is inevitable in todays modern life. Traveling by automobiles bring conveniences and dependences for people whenever and wherever they want to go. Moreover, in using subways, trains, buses, the switching costs are high in considering of time, money and convenience. The cost of fuel consumption, the maintenance costs, the annual insurance fee, and so on in using automobiles may be higher than traveling by public transportation means. Thus, we can see that the threat of substitute products is depend on personal preference and it can be seen mild in automobile industry. 5. Rivalry among existing firms in the industry Rivalry refers to the competitive struggle between companies in an industry to gain market share from each other (Hill and Jones, 2008). Rivalry among competitors is extremely intense in the American automobile industry. There are few competitors in this sector and they are roughly equal in size. We can consider that American automobile industry is a consolidated industry because a small number of large automobile companies dominate this industry. They are General Motors, Fords, and Daimler Chrysler. In todays economic recession with slow market growth, each auto company watches each other carefully and fights to take market share from each other. They compete with each other by offering long-term warranties to customers. Besides, the rivalry among existing firms is high in this industry because of not much differentiation opportunities. General Motors, Fords, and Daimler Chrysler produce automobiles and sport utility vehicles. They evaluate about the price, quality, product design, and after-sales services and support of each other in competing to gain market share. Overall, the competition between American automakers can strengthen the attractiveness of automobile market as well as improve the product quality and after-sales services in automobile industry. 6. Relative power of other stakeholders The US government has low power over the automobile industry. General Motors, Fords have plants outside the United States, where U.S laws are not applicable. Forces driven by market demand are the only forces that significantly affect profit potential of auto industry. Accordingly, the relative power of other stakeholders ability to affect profit potential is low. After analyzing the Porters Five Forces model in the American automobile industry, we can see that the threat of new entrants is low through high entry barriers. The rivalry among existing firms is extremely intense because of few automakers in this sector. The overall impact from buyers bargaining power to the industrys attractiveness is high because customers have many options. Suppliers have limited bargaining power in this industry. The threat of substitute products is moderate and the relative power of other stakeholders is low. IV. MAPPING OF THE KEY STRATEGIC GROUPS AND ANALYSIS OF THE COMPETITORS According to Anthony Henry (2007) and Gregory, Lumpkin Marilyn (2002), the purpose of strategic group mapping is help organization identify their directly competitors, recognize mobility barriers, indicate the direction in which their strategies are moving to determine industry competition and analyze trends in the general and competitive environment. Automotive industry is one of the most complicated industries in which the giant corporations own many brands and focus on many different market sectors. The price of the product in the automotive industry is not only depended the cost but also related to the brand image of the firm. Those are the reason why this report chose the brand image and product ranger as the two variances for the two dimensions. Base on two dimensions as mentioned above, five strategic groups are formed. These groups are mainly formed base on the difference of brand image. However, the criterion of product ranger is very useful when mentioning about the luxury and extreme luxury group. The first group includes firms that have the brand image as low class / low price (Hyundai, Kia, Tata†¦). However, this group is the second highest wide range of product cluster. All most of those firms are defender. The short-term strategy of the companies mostly is cost orientation. The strategy of these organizations is try to clear the image of the low class, low quality brand and endeavor to enter to the second group which is middle class brands. The way that Hyundai try to do is build a new image of a quality brand when they offer an extensive warranty (7 years, 100,000 miles) (Gregory at all, 2002) The second group is the most powerful cluster. They have the most wide range of product which cover all most of segment of the automotive market exclude S-segment (Appendix I car classification). Majority of them are analyzers type. Toyota is a typical example. They have a wide range of current traditional engine product, which can give it a stable fundamental for them to innovate in the other sector. On the other sector, Toyota innovate the new generation hybrid engine (Toyota Prius), which is the solution in the world of traditional energy shortage nowadays. In the future, as the competitors in the same strategic group, Honda and Ford are going to introduce the new generation hybrid cars to compete with Toyota. To reach to the higher class of customers, these firms that stick with the image of middle class car try not to introduce a new high-class line but create a new higher-class brand or purchase an existence higher-class brand. With this purpose, Toyota creates Lexus, Nissan owns Infiniti, Volkswagen has Audi, Bentley and Bugatty etc. The third group is the high-class cluster. The price is higher than the middle-class mainly because the brand image and the performance of engine. In this group, the ranger of product is narrower than the middle class group because of the focus on the higher income group. To reach the higher class of customer, those firms also implicate the same strategy with the second group, which create new brands or purchase new ones. For example, BMW owns Rolls Royce. The fourth and fifth group is the luxury and extremely luxury car. Those two groups differ between each other not only on the price but also on the target customer although they are seemed in the same position when we mention in the ranger of product. The fourth group mainly focuses on the sport car, which has the high speed and hi-end technology. The target customers are young successful businessperson and celebrities. On the other section, the target customers of fifth group are people have the high state in the society, successful executives and of very rich. Because of the difference in the target customer and brand history image, the barrier of motivation is very high between those two groups. The group that this report focus on is the middle class which is the most profitable and innovative group in the automotive industry FORD Henry Ford in June 16, 1903 founded Ford Motors Company, which would go on to become one of the most profitable and largest companies in the world. As known one of the largest family-controlled companies, Ford family has been continuous controlling this company for over 100 years. The company locates the head-quarter in Dearborn, Michigan, United States. Ford is currently the fourth-largest automaker in the world and the third in US based on number of vehicle sold annually which records 1,602,011 in the U.S. market and 5,407,000 in the global market. In 2008, Ford employed about 213,000 employees at around 90 plants and facilities worldwide. STRENGTHS WEAKNESSES Well-known brand and history Product diversification Offering hybrid and environmental friendly cars Good marketing plan: Bold Moves Sponsoring and financing for big event. Product has a good review: quality, reliability, moderate price. Firestone tire recalls. CEO Jacques Nasser and Chairman Bill Ford Jr. cannot get along. Their overseas allocation and outsourcing creates fewer jobs in America. Their products are getting lower quality due to use cheap ways to make them. HONDA Soichiro Honda found the Honda Technical Research Institute in Hamamatsu in October 1946, to develop and produce small 2-cycle motorbike engines. Two years later, Honda Motor Company, Ltd. was born, and in 1959, Honda opened its first storefront in Los Angeles with six industrious employees. Today, Honda employs nearly 27,000 people in all 50 states. STRENGTHS WEAKNESSES Good brand in producing high quality products from cars to motorcycles to lawn mowers. One of the largest manufacturers of motorcycles in the world Awards for initial quality and customer satisfaction Pioneer in engineering low emissions internal combustion and hybrid technology. Higher price for non-luxury vehicles. Non-attractive in truck product. High technology cost cause over-price for consumer. MITSUBISHI MOTOR Basically, Mitsubishi Motors is one member of Mitsubishi group was found on April 22, 1970, and was based on the successful introduction of the first Galant. Until now, MMC has 33,202 employees and 12,761 non-consolidated employees, as of March 2008. The Mitsubishi brand was introduced to the American market for the first time in 1971. Until now, they employ about 18,500 employees across United States. Nearly two-thirds of the Mitsubishi vehicles are sold in the U.S; particularly this number is 58,963 in the end of 2008. STRENGTHS WEAKNESSES 4th largest automaker in Japan Restructuring Recovery plan. Strong brand awareness. Member of Mitsubishi Group. Poor model awareness. Loss of RD engineers. Weak uncertain leadership. Eclipse brand strongly associated with Female buyers. History of product recalls TOYOTA Toyota Motors Corporation was established on 28 August 1937 as independent company, headquarter is being located in Toyota city, Japan. The founder of Toyota was Kiichiro Toyoda. Nowadays, Toyota is basing 26 factories to produce vehicles, and marketing distribution in more than 170 countries in the world. In 2008, Toyota passed General Motors to become the No1 automaker in USA and the worlds largest automaker in global sales for the first time in history. STRENGTHS WEAKNESSES Well-trained employees. Strong leadership. Global organization, with a strong international position in 170 countries worldwide. High financial strength. Strong brand image based on quality, environmental friendly (greener), customized range. The largest automaker. Well culture-friendly, family†¦ encourages employees. Product diversification, developing the hybrid- motor product ranges. Japanese car manufacturer seen as a foreign importer. Quality issues due to rge-scale re-call made in 2005. Most products targeted to the US and Japan only shifting attention to the Chinese market. VOLKSWAGEN Founded by Ferdinand Porsche on May 28, 1937 as â€Å"Grsellschaft zur Vorbereitung des Deutschen Volkswagens mbH† and renamed as â€Å"Volkswagenwerk GmbH† in 1938, from a small car company, nowadays Volkswagen becomes the largest automobile maker in the world by vehicle production (Autocar, 2009) STRENGTHS WEAKNESSES Aggressive and talent leadership High financial strength. The largest automaker. High reputation German quality engine Cost-control with the purchasing list Non-stop requirement for the new project Special production testing process (manager attend the test drives) Lower position than Toyota and Honda in the market share Bad public image because of GM sue Not good relationship with their investors V. THE COMMENTATION VI. CONCLUSION Automobile industry is one of the most important industries contributed the U.S. worldwide dominated position. However, this industry now is facing the worst crisis of the car industry in the past decades. The most urgent task is recovering this crisis. Moreover, finding out the new developed trend is the main strategic for whole the industry.

Physics of Snowmachine Clutches :: sport physics snowmobile clutch

* A snowmachine clutch actually consists of two separate clutches connected together by a rubber belt. o The primary clutch is connected to the engine's crankshaft o The secondary clutch is mounted on the end of the jackshaft (which connects to the drive shaft via a chain and gears). * The primary purpose of the clutch is to smoothly transmit power from the engine to the jackshaft and to remove the connection when the engine is idling so that the machine is not always rolling. * This type of system is also referred to as a continuously variable transmission. It is called this because as the engine speed increases the final drive ratio increases. That is, the difference between the engine speed and track speed decreases. It is equivalent to an automatic transmission on a car with an infinite number of gears that you never felt shift. Let's take a look at how this "infinite gearing" process works: 1. At idle the primary clutch just spins and does not "grab" onto the belt. As engine RPM (revolutions per minute) increases to engagement speed (the RPM where the snowmachine starts moving), the primary clutch begins to pull together and start squeezing the belt. 2. Now the belt is turning. This makes the secondary clutch turn, which causes the track to turn and the snowmachine to move forward. 3. As engine speed increases above engagement, the primary clutch squeezes together some more and pushes the belt so that it moves to a larger radius on the primary. Because the two clutches rotate about fixed points, the belt gets pulled into the secondary, spreading it farther apart and moving the belt to a smaller radius. * Note that the primary clutch (on the left) never stops spinning, but the secondary (right) does stop spinning at idle speeds. * In case you are curious, the engine rpm got up to about 7000 rpm and the track speed got up to about 60 mph or more during this clip. I supported the track with a stand and ran the throttle while an observer ran the camera.

Investigating how business works Essay

Philip Markham Ltd is a family firm. It is traditional manufacturers of classic men swear and produces a wide range of exclusive shirts and ties. It also sells a more limited range of trousers, jackets, overcoats and sweaters. Only shirts and ties are manufactured in the factory in Marlington. Other items are obtained by placing orders with specialist manufacturers. Philip Markham aims to manufacture and sell high quality men’s clothing at fair, competitive prices and to all its customers. Objectives are to use high quality fabric for the shirts and customers can select which style of sleeve of collar they prefer, which type of sleeve fastening and even the length of the sleeve. The four functional areas I will be looking at are: – Resources and IT Finance Production Human Resources Resources and IT The company operates from a large factory, which was purchased by Philip Markham in the 1920s. Jack’s father, the great grandson of Philip Markham refurbished it in the 1970s and the offices are quite spacious and pleasant. The company first introduced computers in the 1980s. Kim Fields was appointed in 1992 and the company now has a small-networked computer system. Computers are used for: * Recording purchases and sales * Preparing financial and management accounts * Recording payroll information and calculating salaries and wages each month * Recording orders received from mail order customers analysing these * Keeping a database of all personnel employed by the company * Preparing letters and memos * Sending e-mails between departments. At the time the IT facilities were introduced it has been planned to locate them within the finance function. Finally, however, it was decided that it should be linked to Administration, as it involved all areas of the business. Marsha Webb is currently investigating how IT could help her to monitor manufacturing levels more easily. Finance The ten staff that works in finance are very important to the success of the company’s Philip Markham. Above all they make sure that they receive the money they are owed, they pay employee bills – and you receive your salary each month. They also make sure that each department does not spend more than it has been allocated. Each department has a budget, which is monitored by its administrator and director – as well as by finance – which can give up-to-date information on the level of expenditure at any time. Finance also has the task of preparing all the accounts each year so that they comply with their legal responsibilities to the Inland Revenue. Pete Martin, however, undertakes number-crunching activities on a far more regular basis. He is their management accountant and his responsible for checking that their production levels and sales are on target. He advises all the directors about the current financial health of the company on a weekly basis. Typical job title Function and responsibilities Financial director Giving advice to senior managers on the overall financial policy of the organisation. Overseeing the company budget. In charge of all the finance function in the organisation. Financial manager Managing the finance function and staff. Advising on financial resources. Chief accountant Overseeing the preparation of the final accounts of the organisation. Management accountant Producing continuous financial information for management. Credit controller Advising on credit policies. Ensuring that money owing to company is kept within agreed levels. Chief cashier Responsible for the receipt, safe keeping, banking and accounting of all cash received. Payroll administrator Responsible for overseeing the company payroll and salary/wage section. Wages clerks Assist the payroll administrator in the production of salary and wage details. Ledger clerks Assist the chief accountant in the recording of all financial transaction. Credit control clerks Assist the credit controller in checking the credit status of new customers and existing accounts. Reminding customers of overdue payments. Production In the induction programme Philip Markham show people who visit their Production area and show them all the different operations that are carried out. The layout of the area has been designed to maximise the flow of materials when they are producing shirts, from cutting to finishing. After shirt material has been cut it is clipped with either a blue ticket – for standard shirts – or a red ticket, for customised shirts. Blue ticket items are passed to the machinists who carry out all the main sewing operations. Red ticket items go to a different group of machinists who also carry out the alterations required. The finishers are responsible for adding all the finishing touches – from the buttons to the label – and they will also carry out any special finishing instructions noted on red ticketed items. Quality control is very importance at Philip Markham and each team – cutters, machinists and finishers – is responsible for ensuring that quality is right at every stage of the process. Then the shirts and ties pass to the packing department, which is part of despatch. Shirts used to have to be folded by hand. But now this has been partially mechanised and is much quicker. The shirts are boxed and labelled – it is at this stage that the goods have to be linked to the correct paper work and the dispatchers ensure that each box includes the correct delivery note and advise note for the haulier. Philip Markham subcontracts the delivery of its goods. This works out cheaper than keeping a fleet of vehicles and maintaining them. Also parts of Production are the purchasing staff and the designers. Purchasing is responsible for obtaining the best quality fabrics at the best prices and making sure all of their raw materials are delivered on time. How much to stock, what to stock and for how long are critical decisions. They only have limited storage place and keeping too much cloth in stock is expensive – so they need to maintain good relationships with reliable suppliers. Their designers are also part of the production team. They have a keen eye on fashion and aim to produce new designs each year. This also means choosing new fabrics and new designs, which will appeal to Philip Markham customers. The design team is busy all year and works at least six months ahead – so that the new ranges can be include in their catalogues which are produced each January (for spring and summer wear) and July (for autumn and winter). Design links very closely with Sales and Marketing as we try to incorporate customer feedback and suggestions into their new designs. Typical job title Job role Production director Responsible for the entire production function and its operations. Operations or Works manager Responsible for the production of all goods as scheduled and to the quality required. Purchasing manager Responsible for the acquisition of raw materials. Chief engineer Responsible for all maintenance staff and for scheduling equipment maintenance and recommending modifications. Chief designer Responsible for the design team and the design of the finished products Production planners Plan all production to maximise machine use and staffing, taking account of customer requirements. Production controllers Check production is going to schedule. Quality controllers Check quality is to the required standard. Buyers/order clerks Buy the raw materials required for production. Stores staff Store and monitor stocks of all raw materials and components and issue these as required. Draughtsmen Responsible for the technical design of manufactured equipment. Foremen Supervise the maintenance staff and factory operatives. Despatch clerks Responsible for the despatching the finished goods. Designers Responsible for the actual design of the product. Engineers Responsible for carrying out equipment maintenance. Factory operatives Undertake the production and assembly of manufactured items by machine or by hand. Human Resources Philip Markham would not be successful if it did not have the commitment of its entire staff. In Human resources they focus on the needs of all the staff and try to do all they can to help to recruit the best people they can – and look after them whilst they work there. These are the most important functions of this department. Their legal experts are Mark butler (for employment law) and Kate Parks (for health and safety). The company operates an equal opportunities policy and aims to treat all its employees fairly and equally in all aspects relating to their employment. Administration at Philip Markham is carried within each department, but in HR/admin they coordinate central services, such as the switchboard, reception, mail room, security, cleaning and building maintenance and last – but by no means least – the staff canteen. Janet Gregory and her team run this. Janet is always keen to receive suggestions from staff and feedback on different types of snacks and meals they would like to see on the menu. IT services is also part of their function. Kim is IT services Manager and Graham, her assistance, helps by developing their range of IT applications – when he is not supporting users, answering queries, solving problems and trouble-shooting in general! Philip Markham sees IT as a developing and rapidly growing area because of the benefits it can bring to the company as a whole and staff operations in particular. If you will be a computer user at Philip Markham your staff training on IT will be organised by Graham and if you have any problems with your computer, the number to call is 4080. The larger the organisation is, the more likely to have a several staff working in the Human Resources. For example: – Human resources director who is a senior manager in the organisation and this is more likely to be found at a large manufacturing organisation which employs thousands of workers. A medium company will have human resource manager who overseas a much smaller number of staff. Human resources function is to deal with the employee who works for the company. Wise organisation regard staff as the most important resource. The reason why I think human resources make their employees an important figure in their company is because their employees are well trained, keen to do their best and committed to the aims of the business. Supposed employees of one organisation are not motivated at their work then all the money and best equipment in the world wouldn’t make that organisation successful. The A-Z of Human Resource services – A flavour of what we do A. For application forms, absences and appraisals B. Covers benefits and bonuses C. Concerns contracts of employment, conditions of service, counselling services D. To discuss your development, your rights under discrimination or disability legislation E. All areas relating to your employment, earning, equal opportunities, eye sight tests and exit interviews F. To talk to us about fairness at work G. If you’ve grievance, perhaps H. For holiday entitlement, hours and health I. For illness, interviews and industrial relations J. For job descriptions and job share opportunities K. If you want to improve your knowledge and know how L. For leave of absence, if you need it M. For maternity, medical examinations and mentors N. For notice periods and National Insurance information O. To check on overtime and off-the-job or on-the-job training opportunities P. Perhaps for pay, pensions, probationary periods or paternity leave Q. For qualifications and queries R. For references, recruitment, retirement, resignations and your rights in general S. Search us out for information on salaries, sickness pay, self-certification T. For tax, training, trade union membership, time off U. For understanding your rights, for knowing what is and is not unfair V. For victimisation and vocational training W. For welfare and wages, works council and working conditions X. For extra special attention when you need it Y. For you – a person we like to see Z. For zappy – the way we operate – and zilch – because nothing is too much trouble! Typical job title Function and responsibilities Human resources director Deciding the overall staffing policies of the organisation. Advising senior management. Setting the HR budget. In charge of all the HR functions in the organisation. Human resources manager Managing the HR department and staff, involved with industrial relations and trade union negotiations, implementing the organisation’s HR policies. Recruitment officer Responsible for the recruitment and selection of staff. Training/staff development officer Responsible for training and staff development. Personnel/staffing officer Keeping staff records, monitoring staff welfare. Health and safety officer Overseeing all health and safety matters, accident monitoring and prevention. Security officer General security, responsible for all security staff. HR administrative assistants Administrative work relating to the human resources function. Orpington College Comparing to Philip Markham LTD Management Structure ——— Organisation Chart Academic year 2002/2003 Why have an organisation Structure? * Employees know what job to do. * Who they are responsible for. * What the responsibilities are. * To whom they are responsible. * How the employee links with other members of staff. There is no ‘right’ or ‘wrong’ organisation structure, as long as it helps people to work efficiently, communicate easily and assists the business to achieve its aims and objectives. Orpington College is a flat structure organisation and Flat structure does not have many layers, which means information is sent quickly; with less complication or misunderstanding; therefore it produces the correct result. Having a Flat structure communication is easier {clear information, understanding} between each layer, therefore when decisions are made, they will be specific to advice/order instructions. It has 13 managers in the College, Chief executive, 3 levels management, span of control between 2 and 4 and 4 top level of management in (guidance &marketing manager – assistance principle, staff & Resources and Clerk to the corporation – assistance principle, finance and information systems – assistance principle, curriculum & Students) Philip Markham is Hierarchical structure is based on distinct chain of commands from Managing director to sales director (according to Philip Markham). Decisions are made at the top and pass down. This kind of organisational is usually based on clearly defined procedures and roles. It has 10 managers in the company, no chief executive, managing director, 5 levels management, span of control between 2 and 4 and 4 top level of management in (financial director – production director – HRM/administration director and marketing and sales director.) Communications at Philip Markham Internal communications Every Monday mourning there is a meeting between Jack Markham and his directors. Minutes of this meeting are produced by Maria Forbes and sent to all staff. Each director holds a weekly team briefing with his/her staff to update them on the latest developments in the organisation. These are unofficial, relatively short affairs, just to keep people informed. There are weekly meetings each Wednesday mourning between Production and Sales/Marketing about sales and production targets. Any problems in production that are affecting orders are also discussed. Internal communications are mainly by memo, e-mail and telephone. All senior staff has pagers as well as those who are regularly away from their desk or may need to be called urgently, e.g. the health, safety and security officer, the manufacturing manager and the buildings supervisor. There is a notice board in Human Resources which contains information on staff events as well as details of job vacancies which are always advertised internally as well as externally. All staff has an annual appraisal interview with their own line manager but regular discussions are also held on individual staff performances and opportunities for staff training and development. External communications External communications are mostly by letter, telephone and fax. Senior sales staffs visit important potential business customers. Existing business customers are contacted by telephone at least once a month as well as being sent promotional material. Private customers are sent routine mailshots by sales and marketing as well as new mail order catalogues, as these are produce. In an organisation with dozens of employees, it is important that each member of staff knows exactly what to do, and how this links up with work carried out by other members of staff. People are therefore grouped into functional areas which relate to their job, so that people doing similar jobs work in the same area. These areas are then linked in an overall structure. In a large organisation we are likely to find more functional areas than in a small or medium-sized one. In this case we may find that there are only a few departments performing a variety of functions. Within a functional. The advantages of Ict upon communication internal and external communication at Cadbury are: * Fast (compared to other methods such as writing a letter) * Can be more accurate (easier to correct errors) * Allows people to use the information quickly and efficient * Can get access to a wide range of information easily * Easy and cheap to store information * Can access information where ever you are in the world (and can communicate with people where ever they are) * Often cheap to access * Quality of information can be better Disadvantages: * Messages can be misunderstood * Can take time to clarify misunderstanding * Chance that messages can be sent to the wrong people * People can be unfamiliar with the system * Employees may need training (costly) * Employees may feel de-motivated/ stressed by new technology * Messages can be held up due to technical problems * Lack of visual communication can hinder the quality of communication * Employees can suffer from information over load Ways to avoid some of these disadvantages are by * Training staff * Use face-to-face communication (maybe through the performance management system) * Make sure employees feel they can get to see their manager * Have technical support * Help employees, by satisfying their social needs e.g. through social club * Make sure employees are only given training that will be useful. Equal Opportunities Legislation and Other Employment Law Equal opportunities has been a legal requirement since the 1970s at Philip Markham yet a large engineering firm recently paid a substantial amount out of court because other female personnel manager was paid à ¯Ã‚ ¿Ã‚ ½10,000 less than a male colleague doing exactly the same job. This situation is under a Sex Discrimination Act 1975 where this act makes it illegal for anyone to be discriminated against on grounds of gender (or gender reassignment) – either directly or indirectly. In a record settlement just before an ET hearing in Newcastle-upon-Tyne in April 2000, Mark Hedley agreed an estimated à ¯Ã‚ ¿Ã‚ ½300,000 compensation from his ex-employers, the cut-price grocery chain ALDI. This is the highest sum awarded to date under Disability Discrimination Act 1995 and it is understood ALDI settled to avoid damaging publicity. Mark Hedley had been prevented from returning to his à ¯Ã‚ ¿Ã‚ ½34,000 store manager job after being diagnosed HIV positive – even though he was fit for work. A report from the Trades Union Congress argues that people of African, Afro-Caribbean and Asian ethnicity don’t get their fair share of promotions at work despite having better qualifications. According to the race issues policy officer at the TUC, black people are less likely to be turned down for a job as ‘held back’ from promotion. People already in work – bring most cases to tribunals not just for being turned down for promotion but also for conditions of work, lack of training and racial abuse. This situation is under The Race Relation Act 1976. This act makes it unlawful for anyone to be discriminated against on grounds of colour, race, nationality or ethnic origin. An increasing number of lawyers are offering a no-win, no-fee service to employees who think they have been unfairly dismissed (The Employment Rights Act 1996). This helps those who don’t belong to a union to obtain free advice. This, plus the fact that the maximum compensation limit an employee can expect from a tribunal has increased to à ¯Ã‚ ¿Ã‚ ½56,000, appears to be the reason for the huge rise in cases. Between July 1998 and 1999 ACAS recorded 136, 000 notifications of industrial tribunals – a 30% increase on the previous year. Since 1986, harassment has been classed as an act of discrimination. It is not only the employee who harasses who is guilty but also the employer if nothing has been done to take ‘reasonable steps’ to stop it. Firms must make it clear that harassment amounts to gross misconduct. The Equal Opportunities Commission received 700 complaints about harassment in 1999. Some cases are settled out of court – Dee Mazurkiewica, a former police detective, won a reported à ¯Ã‚ ¿Ã‚ ½300,000 from Thames Valley police. This was a serious case but smaller settlements – from à ¯Ã‚ ¿Ã‚ ½5 to à ¯Ã‚ ¿Ã‚ ½20,000 – can result from acts of ‘belittling’ – such as making inappropriate or sexist comments or behaving in away that another person finds sexually threatening or insulting.

Budgeting of Capitale Example For Free - Free Essay Example

Sample details Pages: 4 Words: 1278 Downloads: 5 Date added: 2017/06/26 Category Business Essay Type Narrative essay Tags: Budget Essay Did you like this example? Capital budgeting can be defined as the process of analyzing, evaluating, and deciding whether resources should be allocated to a project or not. Capital budgeting addresses the issue of where funds should be disbursed over a long period of time. The process of capital budgeting ensures the optimal placement of funds and resources. It also helps management work toward the goal of maximizing shareholder wealth. The method used by most large companies to evaluate investment projects is called the net present value (NPV). It is a standard method for the monetary worth of long-term projects. It measures the surplus or deficit of cash flows, in present value (PV) terms, once financing charges are met. The NPV is used for budgeting and is widely used throughout economics. The way NPV works is simple. When firms make investments, they are spending money they have obtained from investors. Investors expect a return on the money that they give to firms, so a firm should accept an investment only if the present value of the cash flow is greater than the cost of making the investment. However, decision-makers must somehow verify that any decisions made based on the NPV can be flexible. This flexibility is in place in the event that factors affecting the decision later change. NPV compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account. Â   If the NPV of a prospective project is positive, it should be accepted. Â   However, if the NPV is negative, the project should probably be rejected because cash flows will also be negative. Internal rate of return (IRR) is the expected rate of return that can be earned on a capital project. The IRR is a calculated interest rate based on the cash flows of a project or investment. The calculation estimates what the future rate of return is but translates it into present cash value. IRR is typically a calculation for businesses to use in dete rmining the NPV of its money when considering income and initial costs for starting a business. IRR is typically an estimate and will often differ from the actual execution of a project. Â   However, stronger growth would still be expected from a project with a greater IRR. Like the NPV calculation, the IRR evaluation also determines if a company should accept or reject a project proposal. A project should be accepted when the IRR is greater than the rate of return and should be rejected if the IRR is less than the rate of return. When evaluating mutually exclusive project, the projects with the greatest IRR should be accepted .The project with the greatest IRR would be assumed to provide the most cash flow growth. An IRR calculation for a project can also be compared against prevailing rates of return for alternate investments such as an investment in the securities market. Â   If a company cannot generate project alternatives with IRRs greater than the returns that can be gen erated from alternate investments, it may invest its retained earnings in the market or alternative investments to internal projects. Many advantages accompany the use of IRR. One would be that it is considered to be straight forward and easy to understand. It also recognizes the time value of money. IRR also uses cash flows. One disadvantage of internal rate of return is it often gives unrealistic rates of return and unless the calculated IRR gives a reasonable rate of reinvestment of future cash flows, it should not be used as a reason to accept or reject a project. Another disadvantage to the use of IRR is that there may not be one singular rate. Depending on the cash flow structure, if there are different cash flow signs in different years (positive and negative), then the math will not add up. In essence it entails more problems than a practitioner may think. Another disadvantage is that the IRR could be quite misleading if there is no large initial cash outflow. The prof itability index for a project proposal is compared to the present value of future inflows with the initial outflow, in ratio terms. To calculate the profitability index take the present value of all future cash flows and divide that by the initial cash investment. Calculating the profitability index only requires the initial investment figure and the present value of cash flows figures. The decision to undertake or reject a project relies on whether the profitability index is greater than or less than 1. Any profitability index value less than 1 would mean that the projects present value is less than the initial investment and the relationship between costs and benefits is not positive. A project should be accepted when the PI is greater than 1 and should be rejected if the PI is less than 1. When evaluating a mutually exclusive project the project with the greatest PI should be accepted as the project with the greatest PI would be assumed to provide the greatest financial benefit. The profitability index is easily understood by people with minimal background knowledge in finance-because it uses a simple formula of division. A major disadvantage of the profitability index is that it may lead to incorrect decisions when comparing mutually exclusive projects. These are a set of projects for which at most one will be accepted the most profitable one. Decisions made from the profitability index do not show which of the mutually exclusive projects has a shorter return duration. This leads to choosing a project with longer a return duration. The profitability index requires an investor to estimate the cost of capital in order to calculate it. Estimates may be biased and therefore inaccurate. Because there is no systematic procedure for determining cost of capital of a project this may lead to inconsistent decision making when the assumptions do not hold in the future. The payback period is the time it takes to recover the initial investment in a project while it is operating. The payback period is used to assess projects and to calculate the return per year from the beginning of the project until the investment is said to have been paid back. That is usually when the accumulated returns are equal to the cost of the investment. The payback method is computed as follows: Payback Period= Initial Investment Cash Inflow per Period. The payback decision rule states that acceptable projects must have less than some maximum payback period designated by management. Payback is said to emphasize the managements concern with liquidity and the need to minimize risk through a rapid recovery of the initial investment. It is often used for small expenditures that have obvious benefits, and projects which the use of more sophisticated capital budgeting methods is not required or justified. Some advantages of the payback period are that it is widely used and easily understood and it favors capital projects that return large early cash flows. There are als o safe-guards against risk and uncertainty in this area. The payback method also allows a financial manager to deal with the risk by investigating how long it will take to get back the initial investment, although it does not treat risk directly. It addresses capital control issues easily. The payback method remains a major supplementary tool prevalent in the investment process. Along with advantages, there are also disadvantages associated with the payback method. One disadvantage is that it ignores any benefits that occur after the payback period, thus it does not measure total revenue. Another disadvantage of the payback period is its disregard of moneys varying value. Inflation and deflation change the value of money over time. The payback method over-emphasizes short run profitability. Don’t waste time! Our writers will create an original "Budgeting of Capitale Example For Free" essay for you Create order