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Some useful notes for general administration students

The Business Vision and
Company Mission Statement


While a business must continually adapt to its competitive environment, there are certain core ideals that remain relatively steady and provide guidance in the process of strategic decision-making. These unchanging ideals form the business vision and are expressed in the company mission statement.
In their 1996 article entitled Building Your Company's Vision, James Collins and Jerry Porras provided a framework for understanding business vision and articulating it in a mission statement.
The mission statement communicates the firm's core ideology and visionary goals, generally consisting of the following three components:
  1. Core values to which the firm is committed
  2. Core purpose of the firm
  3. Visionary goals the firm will pursue to fulfill its mission
The firm's core values and purpose constitute its core ideology and remain relatively constant. They are independent of industry structure and the product life cycle.
The core ideology is not created in a mission statement; rather, the mission statement is simply an expression of what already exists. The specific phrasing of the ideology may change with the times, but the underlying ideology remains constant.
The three components of the business vision can be portrayed as follows:


Core
 Values 
Core
Purpose

Business
Vision

Visionary
Goals



Core Values

The core values are a few values (no more than five or so) that are central to the firm. Core values reflect the deeply held values of the organization and are independent of the current industry environment and management fads.
One way to determine whether a value is a core value to ask whether it would continue to be supported if circumstances changed and caused it to be seen as a liability. If the answer is that it would be kept, then it is core value. Another way to determine which values are core is to imagine the firm moving into a totally different industry. The values that would be carried with it into the new industry are the core values of the firm.
Core values will not change even if the industry in which the company operates changes. If the industry changes such that the core values are not appreciated, then the firm should seek new markets where its core values are viewed as an asset.
For example, if innovation is a core value but then 10 years down the road innovation is no longer valued by the current customers, rather than change its values the firm should seek new markets where innovation is advantageous.
The following are a few examples of values that some firms has chosen to be in their core:

  • excellent customer service
  • pioneering technology
  • creativity
  • integrity
  • social responsibility


Core Purpose

The core purpose is the reason that the firm exists. This core purpose is expressed in a carefully formulated mission statement. Like the core values, the core purpose is relatively unchanging and for many firms endures for decades or even centuries. This purpose sets the firm apart from other firms in its industry and sets the direction in which the firm will proceed.
The core purpose is an idealistic reason for being. While firms exist to earn a profit, the profit motive should not be highlighted in the mission statement since it provides little direction to the firm's employees. What is more important is how the firm will earn its profit since the "how" is what defines the firm.
Initial attempts at stating a core purpose often result in too specific of a statement that focuses on a product or service. To isolate the core purpose, it is useful to ask "why" in response to first-pass, product-oriented mission statements. For example, if a market research firm initially states that its purpose is to provide market research data to its customers, asking "why" leads to the fact that the data is to help customers better understand their markets. Continuing to ask "why" may lead to the revelation that the firm's core purpose is to assist its clients in reaching their objectives by helping them to better understand their markets.
The core purpose and values of the firm are not selected - they are discovered. The stated ideology should not be a goal or aspiration but rather, it should portray the firm as it really is. Any attempt to state a value that is not already held by the firm's employees is likely to not be taken seriously.


Visionary Goals

The visionary goals are the lofty objectives that the firm's management decides to pursue. This vision describes some milestone that the firm will reach in the future and may require a decade or more to achieve. In contrast to the core ideology that the firm discovers, visionary goals are selected.
These visionary goals are longer term and more challenging than strategic or tactical goals. There may be only a 50% chance of realizing the vision, but the firm must believe that it can do so. Collins and Porras describe these lofty objectives as "Big, Hairy, Audacious Goals." These goals should be challenging enough so that people nearly gasp when they learn of them and realize the effort that will be required to reach them.
Most visionary goals fall into one of the following categories:

  • Target - quantitative or qualitative goals such as a sales target or Ford's goal to "democratize the automobile."
  • Common enemy - centered on overtaking a specific firm such as the 1950's goal of Philip-Morris to displace RJR.
  • Role model - to become like another firm in a different industry or market. For example, a cycling accessories firm might strive to become "the Nike of the cycling industry."
  • Internal transformation - especially appropriate for very large corporations. For example, GE set the goal of becoming number one or number two in every market it serves.
While visionary goals may require significant stretching to achieve, many visionary companies have succeeded in reaching them. Once such a goal is reached, it needs to be replaced; otherwise, it is unlikely that the organization will continue to be successful. For example, Ford succeeded in placing the automobile within the reach of everyday people, but did not replace this goal with a better one and General Motors overtook Ford in the 1930's.














Corporate Social Responsibility
(A case of Kamana Bikas Bank, Kaski)
(Assignment: Emerging Concept on Management)

                        Prepared by: Bishnu Neupane & Pankaj Karna

To promote banking habits in village and develop rural area of kaski district especially lekhnath area Kamana vikash bank is established in 2064 conducted its operation from 2064, kartik 12 situated in dandakonakh, lekhnath municipality. It have mission to become leading regional bank with continuous contributing to regional and national development through banking service.

SOCIAL AND ETHICAL RESPONSIBILITIES

Organizations must consider the forces in the external environment in which they operate. They are responsible for the impact business activities have on the physical and social environment. Managers must identify and react to forces which affect organizations and the relationship between business and society. They are expected to anticipate and resolve social problems.
 Organizations are expected to have social responsibility, which enables them to protect the welfare of society, along with promoting its own interests. Organization adopts different methods to respond to social issues and handle them effectively. Contributing to society development, providing quality service, etc are some social responsibility.
Ethics is deals with moral and ethical standards. A number of factors influence an individual’s ethical behavior. What to do?        What not to do? , are consider in ethical approach. Organizations can adopt various methods like code of ethics, ethics committee, ethics audits and ethics training to improve the ethical behavior of employees.          


A newly established Kamana Bikash Bank Ltd. has approach to its social responsibility by contributing different activities in society. Some of them are:

1.      contributing to  development process in community hospital in Begnas tal,
2.      It also gives priority to needy and handicap for loan facility.
3.      It focuses on development of tourism sector.
4.      Since its vision to promote villages. It lunch different product to gives more facilities to rural people.

Bank also has approach towards ethical behavior in the organization. It adopts team work approach to maintain better relation among the employees. It also has maintained work standard and ethic code to maintain good working environment and sound relation among employees. since bank has no long history of operation, it haven’t faced employee conflict and has running in good relationship.

neubishnu@gmail.com        or      neubishnu@yahoo.com

Corporate Social Responsibility
(A case of Kaligandaki Hydropower, Mirmee, Syangja, Nepal)
(Emerging Concept on Management)

Prepared by: Bishnu Neupane
For more: neubishnu@gmail.com        or      neubishnu@yahoo.com

 Kaligandaki Hydropower project: the biggest hydro power plant in Nepal           


Kaligandaki Hydropower project is the biggeat hydro power plant in Nepal. It is situated in Krishna Gandaki VDC, Syangja district, Gandaki Zone, Nepal. Its potential power is 144 Megawatt. It diverted Kaligandaki river from Mirmee and its power production house i.e. power house is in Beltari (near Mirmee). *** for more, email.
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How Culture Impacts An International Business:

Many readers may not quite be here yet. But I thought this would be interesting to look at.

Are There Differences?

  • What makes an international business different?
  • Does an international business function differently from one that is not international?
  • Are there international growing pains?
Apart from the legalities of operating an international company, it is hard to identify any tangible differences.
In my personal experience, the differences are nuanced.  They center around collective “soft” skills.  This obviously stems from the nature of “international skills” and “cross-cultural skills”.

Cultural Influences

There are some obvious ways culture influences an international business:
  • The way how we present ourselves
  • How we express opinions
  • Assumptions based on the environment and context
  • Perceptions of voice, and other personal physical details
When you work inside an international company, you learn to adapt to these cultural differences.  They stop interfering with communication.

Cultural Conflict Within A Company

Some people may think that conflict within an international company is a result of the confrontation between cultures.
Although cultural personality issues and misunderstandings do happen, it is difficult to identify how culture influences teamwork within a company.
Most people learn to adapt to the different cultures and this enhances personal growth, interpersonal relations and intercultural interactions.
And this is where there may be differences in an international company and a company that is not international.
Most of the employees in an international company will be at a comparable level of personal growth. They will have similar interpersonal and intercultural skills.
And in a company that is not international, there could be wider differences in these areas.

Better Practices

Beyond soft skills…
What I have noticed from working with international companies, is that they seem to strive harder to implement standard and industry best practices.
Best practices seem to lessen the clash of cultures within a company.  These best practices are more widely accepted.  They can also help to create a collective identity.
Best practices can also lessen the clash of cultures outside the company when dealing with international clients.  It does not matter where your clients are from, they also appreciate dealing with people that follow standard best practices.
In the end it all comes down to working with good communication and within good business practices.
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  Tariffs and Tariff Rate Quotas

Tariffs, which are taxes on imports of commodities into a country or region, are among the oldest forms of government intervention in economic activity. They are implemented for two clear economic purposes. First, they provide revenue for the government. Second, they improve economic returns to firms and suppliers of resources to domestic industry that face competition from foreign imports. Tariffs are widely used to protect domestic producers' incomes from foreign competition. 

This protection comes at an economic cost to domestic
consumers who pay higher prices for import-
competing goods, and to the economy as a whole
through the inefficient allocation of resources to the
import competing domestic industry. Therefore, since
1948, when average tariffs on manufactured goods
exceeded 30 percent in most developed economies,
those economies have sought to reduce tariffs on
manufactured goods through several rounds of
negotiations under the General Agreement on Tariffs
Trade (GATT). Only in the most recent UruguayRound of negotiations were trade and tariff
Given current U.S. commitments under the WTO
restrictions in agriculture addressed. In the past, and
on market access, options are limited for U.S. policy
even under GATT, tariffs levied on some agricultural
innovations in the 2002 Farm Bill vis a vis tariffs on
commodities by some countries have been very large.
agricultural imports from other countries. Providing
When coupled with other barriers to trade they have
higher prices to domestic producers by increasing
often constituted formidable barriers to market access
tariffs on agricultural imports is not permitted. In
from foreign producers. In fact, tariffs that are set
addition, particularly because the U.S. is a net
high enough can block all trade and act just like
exporter of many agricultural commodities,
import bans.
successive U.S. governments have generally taken a
A tariff-rate quota (TRQ) combines the idea of a
strong position within the WTO that tariff and TRQ
tariff with that of a quota. The typical TRQ will set a
barriers need to be reduced.
low tariff for imports of a fixed quantity and a higher
tariff for any imports that exceed that initial quantity.
Non-Tariff Trade Barriers
In a legal sense and at the WTO, countries are
allowed to combine the use of two tariffs in the form
Countries use many mechanisms to restrict
of a TRQ, even when they have agreed not to use
imports. A critical objective of the Uruguay Round of
strict import quotas. In the United States, important
GATT negotiations, shared by the U.S., was the
TRQ schedules are set for beef, sugar, peanuts, and
elimination of non-tariff barriers to trade in
many dairy products. In each case, the initial tariff
agricultural commodities (including quotas) and,
rate is quite low, but the over-quota tariff is prohibitive
where necessary, to replace them with tariffs - a
or close to prohibitive for most normal trade.
process called tarrification. Tarrification of
Explicit import quotas used to be quite common in
agricultural commodities was largely achieved and
agricultural trade. They allowed governments to
viewed as a major success of the 1994 GATT
strictly limit the amount of imports of a commodity
agreement. Thus, if the U.S. honors its GATT
and thus to plan on a particular import quantity in
commitments, the utilization of new non-tariff barriers
setting domestic commodity programs. Another
to trade is not really an option for the 2002 Farm Bill.
common non-tariff barrier (NTB) was the so-called
"voluntary export restraint" (VER) under which
Domestic Content Requirements
exporting countries would agree to limit shipments of
a commodity to the importing country, although often
Governments have used domestic content
only under threat of some even more restrictive or
regulations to restrict imports. The intent is usually to
onerous activity. In some cases, exporters were
stimulate the development of domestic industries.
willing to comply with a VER because they were able
Domestic content regulations typically specify the
to capture economic benefits through higher prices
percentage of a product's total value that must be
for their exports in the importing country's market.
produced domestically in order for the product to be
sold in the domestic market (Carbaugh). Several
developing countries have imposed domestic content
Issues
requirements to foster agricultural, automobile, and
textile production. They are normally used in
In the Uruguay round of the GATT/WTO
conjunction with a policy of import substitution in
negotiations, members agreed to drop the use of
which domestic production replaces imports.
import quotas and other non-tariff barriers in favor of
Domestic content requirements have not been as
tariff-rate quotas. Countries also agreed to gradually
prevalent in agriculture as in some other industries,
lower each tariff rate and raise the quantity to which
such as automobiles, but some agricultural examples
the low tariff applied. Thus, over time, trade would
illustrate their effects. Australia used domestic
be taxed at a lower rate and trade flows would
content requirements to support leaf tobacco
increase.
production. In order to pay a relatively low import
duty on imported tobacco, Australian cigarette
China's National Cereals, Oil and Foodstuffs Import
manufacturers were required to use 57 percent
and Export Commission (COFCO).
domestic leaf tobacco. Member countries of trade
STEs can restrict imports in several ways. First,
agreements also use domestic content rules to ensure
they can impose a set of implicit import tariffs by
that nonmembers do not manipulate the agreements
purchasing imports at world prices and offering them
to circumvent tariffs. For example, North American
for sale at much higher domestic prices. The
Free Trade Agreement (NAFTA) rules of origin
difference between the purchase price and the
provisions stipulate that all single-strength citrus juice
domestic sales price simply represents a hidden tariff.
must be made from 100 percent NAFTA origin fresh
Import STEs may also implement implicit general and
citrus fruit.
targeted import quotas, or utilize complex and costly
Again, as is the case with other trade barriers, it
implicit import rules that make importing into the
seems unlikely that introducing domestic content
market unprofitable.
rules to enhance domestic demand for U.S.
Recently, in a submission to the current WTO
agricultural commodities is a viable option for the
negotiations, the United States targeted the trade
2002 Farm Bill.
restricting operations of import and export STEs as a
primary concern. A major problem with import STEs
Import Licenses
is that it is quite difficult to estimate the impacts of
their operations on trade, because those operations
Import licenses have proved to be effective
lack transparency. STEs often refuse to provide the
mechanisms for restricting imports. Under an import-
information needed to make such assessments,
licensing scheme, importers of a commodity are
claiming that such disclosure is not required because
required to obtain a license for each shipment they
they are quasi-private companies. In spite of these
bring into the country. Without explicitly utilizing a
difficulties, the challenges provided by STEs will
quota mechanism, a country can simply restrict
almost certainly continue to be addressed through
imports on any basis it chooses through its allocation
bilateral and multilateral trade negotiations rather than
of import licenses. Prior to the implementation of
in the context of domestic legislation through the 2002
NAFTA, for example, Mexico required that wheat
Farm Bill.
and other agricultural commodity imports be permitted
only under license. Elimination of import licenses for
Technical Barriers to Trade
agricultural commodities was a critical objective of
the Uruguay Round of GATT negotiations and thus
All countries impose technical rules about
the use of this mechanism to protect U.S. agricultural
packaging, product definitions, labeling, etc. In the
producers is unlikely an option for the 2002 Farm
context of international trade, such rules may also be
Bill.
used as non-tariff trade barriers. For example,
imagine if Korea were to require that oranges sold in
Import State Trading Enterprises
the country be less than two inches in diameter.
Oranges grown in Korea happen to be much smaller
Import State Trading Enterprises (STEs) are
than Navel oranges grown in California, so this type
government owned or sanctioned agencies that act as
of "technical" rule would effectively ban the sales of
partial or pure single buyer importers of a commodity
California oranges and protect the market for Korean
or set of commodities in world markets. They also
oranges. Such rules violate WTO provisions that
often enjoy a partial or pure domestic monopoly over
require countries to treat imports a nd domestic
the sale of those commodities. Current important
products equivalently and not to advantage products
examples of import STEs in world agricultural
from one source over another, even in indirect ways.
commodity markets include the Japanese Food
Again, however, these issues will likely be dealt with
Agency (barley, rice, and wheat), South Korea's
through bilateral and multilateral trade negotiations
Livestock Products Marketing Organization, and
rather than through domestic Farm Bill policy
as such, will not likely be a major issue for the 2002
initiatives.
Farm Bill. There have been many calls in recent
congressional testimony, however, to offset the
Exchange Rate Management Policies
negative impacts caused by a strengthening US dollar
with counter-cyclical payments to export dependent
Some countries may restrict agricultural imports
agricultural products.
through managing their exchange rates. To some
degree, countries can and have used exchange rate
The Precautionary Principle and Sanitary and
policies to discourage imports and encourage exports
Phytosanitary Barriers to Trade
of all commodities. The exchange rate between two
countries' currencies is simply the price at which one
The precautionary principle, or foresight planning,
currency trades for the other. For example, if one
has recently been frequently proposed as a
U.S. dollar can be used to purchase 100 Japanese
justification for government restrictions on trade in the
yen (and vice versa), the exchange rate between the
context of environmental and health concerns, often
U.S. dollar and the Japanese yen is 100 yen per
regardless of cost or scientific evidence. It was first
dollar. If the yen depreciates in value relative to the
proposed as a household management technique in
U.S. dollar, then a dollar is able to purchase more
the 1930s in Germany, and included elements of
yen. A 10 percent depreciation or devaluation of the
prevention, cost effectiveness, and ethical
yen, for example, would mean that the price of one
responsibility to maintain natural systems (O'Riordan
U.S. dollar increased to 110 yen.
and Cameron). In the context of managing
One effect of currency depreciation is to make all
environmental uncertainty, the principle enjoyed a
imports more expensive in the country itself. If, for
resurgence of popularity during a meeting of the U.N.
example, the yen depreciates by 10 percent from an
World Charter for Nature (of which the U.S. is only
initial value of 100 yen per dollar, and the price of a
an observer) in 1982. Its use was re-endorsed by the
ton of U.S. beef on world markets is $2,000, then the
U.N. Convention on Bio-diversity in 1992, and again
price of that ton of beef in Japan would increase from
in Montreal, Canada in January 2000.
200,000 yen to 220,000 yen. A policy that
The precautionary principle has been interpreted
deliberately lowers the exchange rate of a country's
by some to mean that new chemicals and
currency will, therefore, inhibit imports of agricultural
technologies should be considered dangerous until
commodities, as well as imports of all other
proven otherwise. It therefore requires those
commodities. Thus, countries that pursue deliberate
responsible for an activity or process to establish its
policies of undervaluing their currency in international
harmlessness and to be liable if damage occurs.
financial markets are not usually targeting agricultural
Most recent attempts to invoke the principle have
imports.
cited the use of toxic substances, exploitation of
Some countries have targeted specific types of
natural resources, and environmental degradation.
imports through implementing multiple exchange rate
Concerns about species extinction, high rates of
policy under which importers were required to pay
birth defects, learning deficiencies, cancer, climate
different exchange rates for foreign currency
change, ozone depletion, and contamination with toxic
depending on the commodities they were importing.
chemicals and nuclear materials have also been used
The objectives of such programs have been to reduce
to justify trade and other government restrictions on
balance of payments problems and to raise revenues
the basis of the precautionary principle. Thus,
for the government. Multiple exchange rate
countries seeking more open trading regimes have
programs were rare in the 1990s, and generally have
been concerned that the precautionary principle will
not been utilized by developed economies.
simply be used to justify nontariff trade barriers. For
Finally, exchange rate policies are usually not
example, rigid adherence to the precautionary
sector-specific. In the United States, they are clearly
principle could lead to trade embargoes on products
under the purview of the Federal Reserve Board and,
such as genetically modified oil seeds with little or no
reliance on scientific analysis to justify market
O'Riordan, Tim and James Cameron. "Interpreting
closure.
the Precautionary Principle," Earthscan
Sometimes, restrictions on imports from certain
Publications, Ltd., Island Press, 1994.
places are fully consistent with protecting consumers,
the environment, or agriculture from harmful diseases
or pests that may accompany the imported product.
The WTO Sanitary and Phytosanitary (SPS)
provisions on technical trade rules specifically
recognize that all countries feel a responsibility to
secure their borders against the importation of unsafe
products. Prior to 1994, however, such barriers were
often simply used as excuses to keep out a product
for which there was no real evidence of any problem.
These phony technical barriers were just an excuse to
keep out competitive products. The current WTO
agreement requires that whenever a technical barrier
is challenged, a member country must show that the
barrier has solid scientific justification and restricts
trade as little as possible to achieve its scientific
objectives. This requirement has resulted in a number
of barriers being relaxed around the world.
It should be emphasized that WTO rules do not
require member countries to harmonize rules or adopt
international standards - only that there must be
some scientific basis for the rules that are adopted.
Thus, any options for sanitary and phytosanitary
initiatives considered in the 2002 Farm Bill must be
based on sound science and they do not have to be
harmonized with the initiatives of other countries.

Leadership in a New Democracy

Durga Subedi
Political Analyst


Our country has witnessed both armed People’s War and peaceful people’s revolutions. Among them, the armed revolution had to be conducted remaining underground outside the country thus, it restrained its achievements. As a result, the Delhi accord was inked. And again, we had to live under the clemency of Delhi and sign treaties under its coercion.
In contrary to the armed revolution, the people’s movement of 2046 B.S. was held remaining within the country. Therefore, there was very less foreign intervention. All the achievements that we have received so far are the achievements of the same movement. The movement was successful to raise the consciousness, which we are applying till today. However, the people’s representives elected from the general elections after the movement followed the path to make themseleves and their family wealthy instead of making the people prosperous. They dispersed poverty to the people and inherited prosperity within themselves. Iniquity gripped the multi-party system. As a result, the then CPN (Maoist) initiated an armed People’s War on 2052 B.S. They hoisted the issue of poor and started the revolution bringing the same people ahead. However, the revolution once again concluded in Delhi just like the revolution of 2007 B.S. We remained under the hands of Delhi. So, this proves that the violent revolution always concludes under the safe haven of Delhi.
Had it been a peaceful movement, we would have been within Nepal or if it was supressed we would have been in jail. The people’s movement of 2062/63 was conducted inside the terrritory of our country. As a result, we were able to take historic decisions like abolishing monarchy and holding Constituent Assembly elections. The demands put forward by the Maoists surfaced in the forefront which was accepted everyone else. However, even after the CA election of 2064 Chaitra 28, same old faces dominated the leadership of political parties and CA. Those faces which were seen during 2046 BS, same faces were seen during the movement of 2063. They could never be loyal towards the people. That is why, the historic achievements have not been institutionalized and dreams of the martyrs have remain stranded. The CA elections was not held for governing power, but they thought it was election for government. Even the Maoists became tangled in the same. Due to which the parties have failed to draft the constitution on time. When we press them, they say yes we will infront of the people but the people have not digested their dirty game of not writing constitution on time. The people have always shown trust on them but they are betraying the same people. Those who betray are bigger criminal than who trust.
All the achievements anticipated cannot be met after any successful movement. However, there have been achievements from the movements in Nepal. The consciousness level of the people have increased. Around 5 hundred thousand people who are illetarate understand the daily happenings of the country with the help of communication media like radio, television etc. However, I doubt that the major achievemets will be institutionalized with the ledership gripped by power hunger.
The sons and daughters of the common citizens are always honestly ready to fight, die and sacrifice in the politics. Even I did the same during the people’s movement. Those involved in the People’s War also had the same spirit. However, we were addressed as ‘victims’ at that time. We were dishonoured as the ‘Political Victims’. I should have been proud to do politics. But we remained victims after being dishonoured. Other voracious and opportunists settled within Congress. That is why, the achievements were enjoyed by the opportunists, the people were left empty handed. A very small group of people enjoyed the power which is still the same. Those who fought for the nation, they were referred as ineligible while those who fought for the king were eligible. Those who fought for the people and politics were disqualified. Just like we were made victims, they were made ineligible. That is why, this also shows that the leaders of the political parties lack vision and are not loyal towards the people.
Every commissions that are formed are just meant to ……. According to the Interim Constitution, there should be an investigation of those missing during the insurgengy but it has been stalled. The suggestions of the commissions are not implemented. The Maoists, who lost many of its cadres, are not ready to form a committee for the investigation. Can there be any disgraceful thought than this? The Maoists have failed to show its developed form in the politics. I am not saying anything on personal level. These are all voices of the common people. We roam and learn in the society, we say what our sympathies are. The society is dynamic and it always searches a social and new enthusiastic leadership. This is the reason why the old political leadership have come to a state of failure. Our society is feudalistic in nature. We always have to bow before the son of a Brahmin. Similarly, we have a compulsion to bow before a leader and their siblings. In Nepali Congress, Ram Chandra is bowing before the one whom Girija Babu made his successor. Ram Chandra doesnot have his own identity. I think this is being applied in all walks of life. We show respect to our earlier traditions and treat it like a god. We worship them like a god if they become famous. We make their idols, worship them and eventually become their slaves.
We also actively participated in the movement launched by Nepali Congress after 2017 B.S. As my experience tells, election should be done by the people. However, the party activists act as a shepherds, lure the people like a folk of sheep and buy people and parliamentarians. Democracy develops slowly with new culture which does not include evil practices. Unfortunately, it did not happen here in Nepal. The history shows that it always takes place in small and country. 32 out of 33 seats in Sikkam were bought and it was integrated into India. Even in Nepal, the parliamentarians were bought in different issues. This is not democracy. It only seems that the feudalists have put on the veil of democracy. The democracy will be strong only if the leaders be accountable towards the citizens.
The politicians are always running after house, cars and money. We caste our votes and make them superior while we remain their slaves. Now this type of democracy cannot sustain. My experience tells that only the right to vote is not democracy. The life of the people does not move ahead without food and shelter. Therefore, in this new democracy, these basic issues must be hoisted and will be hoisted.



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The New Entrepreneurial Waves in Africa: A case to study

Early this month, Cisco announced that it was investing $10 million in Egypt. What made it different from other investments by multinational companies in Africa was that the network equipment maker structured it as a venture capital investment, not a donation. The beneficiaries will be small businesses that provide innovative products, services and solutions.

Right now in big African cities, technical college graduates are experiencing a new dawn. Gone were the days where careers were routed through banks and mining companies. A big alternative is evolving because our friends in America and Europe now understand what Africa wants — to share ideas and trade. And we will take care of our land and contribute to make the world a better place.

There is no week in big cities when a technology event is not happening. And I mean real programs where the best in the fields are training local talent — for free. Google runs its g-Africa program where it tours Silicon Valley engineers through all the big cities. Microsoft, through its Imagine Cup, has offered a huge opportunity for college students to dream big. From Nokia to Blackberry, everyone is asking the graduate to come and develop on their platforms. And they offer incentives through trainings. Result? Armies of talented people.

We have also observed more funding opportunities for technology companies. Legatum Foundation awards cash prizes in the range of $100,000. Having a good idea and competing for $10,000 has become easier these days. We are experiencing a boom in technology nonprofits that visit Africa to build capacity. It used to be only health, water, and food NGOs. Now Startup Weekend, Garage48, HumanIPO, IPO48, and many more nurture the African technology ecosystem through well-structured events.

Technology hubs are emerging and Silicon Valley continues to inspire. This optimism is real and will last because the foreign partners are coming at the level never seen before in Africa. When you see Microsoft and Google executives chatting with college students, you cannot help but be hopeful.

Africa will rise with the world in this age. Technology is enabling us to solve our problems in our unique ways. No longer are we importing a tool made for an American banker for a Lagos trader. When a mother can pay school fees via SMS, you can tell how far we have come.

This wave of entrepreneurship is building the foundations for the knowledge revolution in our continent and the next few years will herald the consolidation. Just as the industrial revolution was a quintessential period of innovation in transportation, production, energy and communication, the next quarter century will surely give Africa its turn. We can alter the human society, culturally and economically, as our abundant resources converge with technologically strong African knowledge base.

With some iconic private equity companies opening offices in Africa, the fertile environment is emerging. From all I have seen, we have the vision and fortitude to deliver. Instead of just coming for mines and hydrocarbons, funds are investing in tech firms. Even World Bank has been influenced in this redesign — they sponsor technology events and task entrepreneurs to go and solve their own problems. As never before, the lion is roaring from Nairobi to Lagos, Cape Town to Cairo.

Ndubuisi Ekekwe is a founder of the non-profit African Institution of Technology. He recently edited Nanotechnology and Microelectronics: Global Diffusion, Economics and Policy.



Level:  Masters

Programme: MBA
Full Marks: 100
Course: Macroeconomics
Time         : 4hrs.


Attempt any five questions.


1.  
Illustrate each of the following situations with IS/LM curve;
a)    An increase in Government Expenditure (G) with the money supply (Ms) held constant by the Nepal Rastra Bank.
b)   An increase in G with Rastra Bank accommodation designed to hold interest rate constant.
c)    The Government cuts G and increase Taxes (T) while the Nepal Rastra Bank expands Ms
d)   The Government increase G and holds (T) constant while the Nepal Rastra Bank holds Ms Constant during a period of inflation.
20
2.  
What is the theory of liquidity preference? Explain how an increase in the money supply affects the aggregate demand curve.
20
3.  
Explain the theory of the Philips Curve. In what sense, if any, do (or can) empirical measurements of the Philips Curve provide relevant evidence on inflation and unemployment?
20
4.  
It is observed that under-employment problem in Nepal is much serious than unemployment. In this context, describe the employment, unemployment and under-employment situation of Nepal and suggest policy measures to increase employment opportunities.
20
5.  
Using aggregate supply and demand curves to illustrate, describe the effects of the following events on the price level and on equilibrium GDP in the long run.
a)    An increase in the money supply above potential GDP
b)   A decrease in government spending and in the money supply with GDP above potential GDP
c)    An increase in government expenditure with the money supply held constant by the Nepal Rastra Bank.
20
6.  
Discuss the role of monetary policy in courtiers with flexible exchange rate and perfect capital mobility.
20
7.  
Define inflation and explain whether a little inflation is good for the economy or not. Discuss
20
8.  
Give short answers:
a)    Impacts of expansionary fiscal policy
b)   Foreign direct investment in Nepal
c)    Keynesian model of income determination.
20
.......................................................................................................................................................................

Level:  Masters


Programme: MBA
Full Marks: 100
Course: Microeconomics
Time         : 4hrs.


Attempt any five questions.


1.  
Nepal and Sri Lanka both produce shirt and sweaters. A Sri Lankan requires 5 hrs. to produce one shirt or 30 hrs. to produce one sweater while a Nepalese needs 6 hrs. to produce one shirt or 60 hrs. to produce one sweater.
a)      Which country has absolute advantage in producing each good?
b)      Which country has comparative advantage in producing each good?
c)      If Nepal and Sri Lanka decide to trade, which commodity should Nepal export to Sri Lanka and why?



5
5
5
2.  
Using supply and demand diagram, explain the following:
a)      A good that is not produced at all.
b)      A government announcement saying the commodity could not be sold at a price higher than Rs. c. (Assume that Rs. c is less than the market equilibrium price.)
c)      Effect on the trade of an open economy, if the world price is lower than the domestic price of a commodity.

5
5


5
3.  
State and explain the criteria of profit maximization for a firm. Is profit maximization the only objective of any firm? State and explain, in brief, if there are any other alternative objectives for a firm.
15
4.  
What is deadweight loss? Give two examples showing how the deadweight loss arises. Explain the relationship between size of tax and the resulting deadweight loss.
15
5.  
Explain the distinctive features of perfectly competitive and monopoly market. Also distinguish between the equilibrium price and quantity in the competitive market and monopoly market.
15
6.  
a)      State and explain the law of diminishing marginal returns to the variable input.
b)      How and why does a firm's average cost curve differ in the short run and in the long run?
7

8
7.  
"Government intervention in the competitive market can sometimes raise economic efficiency." Justify.
10
 ..............................



Programme: MBA
Full Marks: 100
Course: Management Accounting
Time         : 4hrs.



Attempt all the questions.


1. 
Princeton Company presents following profitability statement for the previous year ending 2002.
15

Princeton Company
Statement of Profits by Products



Products
Total Company



Plastic valves
Metal Valves
Specialty Valves



Sales Units
500,000
425,000
400,000
1,325,000


Revenues Rs
30,000,000
34,000,000
40,000,000
104,000,000


Variable Costs
23,000,000
27,625,000
34,800,000
85,425,000


Contribution Margin
7,000,000
6,375,000
5,200,000
18,575,000


Less: Direct Fixed Costs
6,100,000
4,500,000
5,300,000
15,900,000


Product Contribution
900,000
1,875,000
(100,000)
2,675,000


Less Joint Fixed Costs
1,000,000
1,000,000
500,000
2,500,000


Net Profit (Loss)
(100,000)
875,000
(600,000)
175,000


Required
a)    At what volume of sales units and sales revenues would the Princeton be in break-even point?
b)   Could net profits be increased by discontinuing either of the Plastic Valves or Specialty Valves? Why or why not? Show your calculations.
c)    Specialty Valves plant is operating at 80% capacity. A dealer of distinct market region proposes to buy 120,000 units (not less) if quoted at Rs. 90 per unit of Specialty Valves. As a business anager of Princeton Company, would you accept or reject this offer? Justify your answer.

2.
The country store is a retail outlet for a variety of hardware and housewares. The owner of the country store is eager to prepare a budget for the next quarter, which is typically quite busy. She is most concerned with her cash position because she expects that she will have to borrow to finance purchases in anticipation of sales. She has gathered all the data necessary to prepare the simplified budget. In addition, she will purchase equipment in April for $ 19,750 cash and pay dividends of $4,000 in June. Borrowing occurs at the end of a month when cash is needed. Repayment occurs at the end of month when cash is available. Interest is paid in cash at the end of the month at annual rate of 12% on the amount of note payable outstanding during that month.
Budget Data


Budgeted sales


March $60,000
April $70,000
May $ 85,000
June $ 90,000
July $50,000


 Balance Sheet


As of March 31, 20X1


Assets

Liabilities and Equities



Cash
$9,000
Interest payable
0


Accounts Receivable
$48,000
Note payable
0


Inventory
$12,600
Accounts payable
$18,300


Plant & Equipment (net)
$2,00,000
Capital Stock
$1,80,000




Retained Earning
$71,300


Total Assets
$2,69,600
Total liabilities & equities
$2,69,600


Budgeted Expenses (per month)
·         Wages and salaries                         $7,500
·         Freight out as a percentage of sales            6%
·         Advertising                                                            $6,000
·         Depreciation                                              $2,000
·         Other expenses as a percentage of sales    4%


Other date:
·         Minimum Inventory policy as a percentage of next months cost of goods sold                                                                 30%
·         Required minimum cash balance                  $8,000
Sales Mix:
·    Cash sales                                          20%
·    Credit sales (Collected the following month)  80%
·    Gross profit rate                                              40%
·    Loan interest rate (paid in cash monthly)         12%
Purchased disbursement policy
·         Month purchased                                                     50%
·         Month after purchased                                50%
Required
a)    Sales Budget for April, May, June
b)   Purchase Budget for April, May, June
c)    Cash Budget for April, May, June



















2

4

9

OR
Godavary Food Products Ltd. produces two brands of can foods; godavary Kids and Godavary Yoths. Both the products are processed in a machine and then packed manually. The total machine hours available per annum are 16,000 and the total man-hours available per annum are 20,000. Producing one unit of Godavary Kids requires 40 machine hours and 20 man-hours, and one unit of Godavary Yoths requires 20 machine hours and 50 man-hours.
The overall production conditions may be summed up as presented below:


Godavery Kids
Godavery Youths
Selling price per unit
Variable cost unit
Annual fixed costs are Rs.80,000
Rs.200
Rs.100
Rs.140
Rs.60




















The firm intends to maximize its total profit in the given production conditions. The problem confronted by the firm is to choose an optimal output-mix of two products that can yield maximum profit.


Required
a)    What is the optimal production mix to maximize profits?
b)   What is the total contribution margin at optimal mix?
c)    What is the break even point at optimal production mix?

9
3
3
3.
a)    The following are the information regarding the group of workers working 40 hours a week to produce 1000 units of output with following rate per hour.


Workers
No of Workers
Hourly Rate


Skilled
15
$5


Semi Skilled
10
$4


Unskilled
5
$3


In actual, following workers produced 800 units of output during a month.


Workers
No of Workers
Hourly Rate


Skilled
13
$4.75


Semi Skilled
11
$4.50


Unskilled
6
$3.10


All the workers remained idle for five hours due to electricity fail.


Required
i)   Labor Rate Variance
ii) Labor Efficiency Variance
iii)      Labor Mix Variance
iv)      Labor Yield Variance
v)    Idle Time Variance

2
2
2
2
2

b)   The flexible budgeting data regarding a manufacturing company are presented below:
     Flexible Budgeting Formula = Fixed Cost+(Unit Variable cost × Units)
                                                = $90,000 + $ 2× hours worked
            Other data:
            Normal capacity                      30,000 hours
            Hours worked                          32,000 hours
            Hours produced                                   28,000 hours
            Total overhead expenses         $1,46,000
Required
        Overhead Spending, Efficiency and Capacity Variance
OR
What is standard costing? Describe its application.










5

5
4.
Suppose a BMW executive in Germany is trying to decide whether the company should continue to manufacture an engine component or purchase it from Frankfort Corporation for $ 52 each. Demand for the coming year is expected to be the same as for the current year, 2,00,000 units.


Direct Material
$50,00,000


Direct Labor
$19,00,000


Factory Overhead (Variable)
$11,00,000


Factory Overhead (Fixed)
$25,00,000
$1,25,00,000


If BMW makes the components, the units costs of direct material will increase 10%. If BMW buys the components, 40% of the fixed costs will be avoided. The other 60% will continue regardless of whether the components are manufactured or purchased.
Required:
1)      Tabulate a comparison of the make or buy alternatives. Show totals and amounts per unit. Compute the numerical difference between making and buying. Assume that the capacity now used to make the components will become idle if the components are purchased.
2)      Assume that the BMW capacity in question can be rented to electronics firm for $12,50,000 for the coming year. Tabulate a comparison of the net relevant costs of the three alternatives: make, buy and leave capacity idle, buy and rent. Which is the most favourable alternative? By how much in total?




7.5



7.5
5.
Easy Living Industries manufactures carpets, furniture and cushions in three separate divisions. The company's operating statement for 2004 is as follows:


Easy Living Industries, Operating Statement
For the Year Ended December 31, 2004



Carpet Division
Furniture Division
Cushion Division
Total


Sales revenue
Rs.3,000,000
Rs.3,000,000
Rs. 3,800,000
9,800,000


Cost of goods sold (all variable)
2,000,000
1,300,000
3,000,000
6,300,000


Gross Profit
Rs.1,000,000
Rs.1,700,000
Rs.800,000
3,500,000


Operating expenses:






Administration (all fixed)
Rs.300,000
Rs.500,000
Rs.400,000
1,200,000


Selling (50% variable)
600,000
600,000
500,000
1,700,000


Total operating expenses
Rs. 900,000
Rs. 1,100,000
Rs. 900,000
2,900,000


Income (loss) from operation
Rs. 100,000
Rs.600,000
(Rs.100,000)
Rs.600,000


Required
a)      One of the Furniture Division's inputs is the output of Carpet Division. What price should the Carpet Division charge for its product to the Furniture Division if (i) the Carpet Division has excess capacity (ii) it has no excess capacity?
b)  The CEO of Easy Living Industries believes that the total income could be increased dropping the Cushion Division, as it is giving negative income. Is CEO correct? Show the differential cost-benefit analysis to justify your opinions.

8


7
6.
The Raymond Seed Production Company (RSPC) Ltd. is in the business of developing new varieties of seeds and their processing and marketing through a large network of dealers all over Nepal. It has recently developed a hybrid seed of rice. On the basis of the marketing of a small quantity of this seed, the company finds that the seed has a viable demand. Since the necessary processing facilities are yet to be developed, it has got the seeds processed on a plant hired from the National Trading Company (NTC) Ltd. which charges Rs. 125 per hour for 8 hours a day. The NTC Ltd. estimates that it will require 1250 hours working of the plant for 100 days so that the seeds reach the market at right time.
The RSPC Ltd. is considering setting up its own plant in order to economize the operations as well as to exercise a better control. The plant is expected to have a useful life of 5 years with a salvage value of Rs. 50,000 at the end of the fifth year. The cost associated with its acquisition and operations are detailed below.
            Acquisition cost, Rs. 325,000
            Installation cost, Rs. 75,000
            Additional working capital, Rs. 30,000
    Annual operating costs
a)      Maintenance cost, Rs. 25,000
b)      Energy consumption, Rs. 90,000
c)      Additional manpower, Rs. 80,000
d)      Additional overheads, Rs. 50,000
Besides using for own purpose, the plant can be rented out at least six hours a day for Rs. 150 per hour for 200 days in a year. Tax rate is 30 percent, the cost of capital is 10 percent and depreciation allowed is 25 percent on a double declining basis.
Required
Estimate the incremental net cash flows associated with the acquisition of own plant. Assess the financial viability of the proposal to install the plant. Base your answer on NPV, PBP and IRR.






















6+3+3+3
7.
Write short notes on (Any Two)
a)    Economic theory of pricing
b)   Management Control System
c)    Management by Exception
OR
10

Serchan Enterprises practices both absorption and variable costing systems for preparing income statements. Cost data of the enterprise are given below:



Year I
Year II
Year III


Beginning Inventory
0
?
?


Fixed overheads
Rs. 150,000
Rs. 150,000
Rs. 150,000


Units produced
14,000
15,000
16,000


Units sold @ Rs. 25 per unit
10,000
16,000
16,000


Variable manufacturing cost per unit
Rs. 12
Rs.12
Rs.12


Normal capacity in units
15,000
15,000
15,000


Required


Explain the difference in net incomes under variable and absorption costing for the three years and interpret.
10














........................................................................

International Business

When you first begin expanding your business abroad it can be a bit scary, it’s not always easy and there are often surprises. You’ll encounter cultural differences in even the most basic aspects of doing business.

It really is an exercise in learning how to notice the fundamental differences in business, how to adapt and how to manage the changes you’ll need to make.
The biggest problems I see with clients is they don’t have any idea how to begin the process. Part of the reason is because they don’t have a clear understanding of the international business models available to them.  Many businesses just never get over the first hurdles of developing more business outside of the environment they are used to.
It’s important to find the right international business development strategy for your business. Without a clear understanding of your current business model and how this impacts your ideal international business model you’re bound to encounter many little hurdles along the way.  These hurdles can be easily dealt with when you take the time to get off to a good start.