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International Trade Management

International trade can be defined as either the buying (importing) or selling

(exporting) of goods or services on a global basis.

The manager needs to know about following things about export compliance:


Export Controls are based on item, destination, end-user and end-use.
Export controls are designed to protect the national security, foreign policy and
economic interests of the United States

Criminal: 20 years imprisonment, $250,000 fine ($1,000,000 corporation)
Civil:$250,000 max per violation or 2 x value of export and potential or Denial of
export privileges

Compliance program design – there is no “one size fits all”
 Use Export Management System Guidelines
– Cited in 15 CFR sec 766 sup. 1
– Described in detail on the BIS Web Site
 Use Internal Compliance Plan Guidelines
– 15 CFR sec 752.11
 Industry Best Practices
Principles of an effective complaince program

1. Whether the company has performed a meaningful risk analysis.

2. Existence of a formal written compliance program.
3. Appropriate senior officials responsible for compliance program.
4. Adequate training provided to employees.
5. Company effectively screens customers and transactions.
6. Company meets recordkeeping requirements.
7. Existence of internal system for reporting export violations.
8. Conducts and maintains results of export compliance audits.
9. Appropriate remedial activity taken in response to violations.


 Correct product classification: This is the exporter’s responsibility – classify,
verify, and document!
 Identify all parties to a transaction; verify legitimate intermediaries and
name ultimate consignee on export records.
 Be Aware of Diversion Risks!
 Lists you must check prior to export:
 Denied Parties
 Embargoed countries
 BIS Listed Entities
 BIS General Orders
 Exercise due diligence where Red Flags are present; refrain from/report
questionable transactions.
 Research customers – internet is a great place to start.
 Whenever practical talk to new customers about their markets and product
 Learn to identify and recognize “Red Flags”.
 If there are “Red Flags” inquire.
 Identify all license conditions and identify any conflict with the sales
 Resolve any conflicts before proceeding with transaction. Even if this means
amending the license!
 Notify intermediate and ultimate consignees of all BIS license conditions.
 Submit all reporting as required by BIS license.
 If you identify a violation, immediately assess and contain problem, work with
your management to evaluate the benefits of voluntary disclosure to
 Disclosures related to failure to obtain one-time review for use of the ENC
exemption receive favorable treatment and are encouraged.

Perspective management
To be an effective strategic manager in the industry a person should have following
perspectives of management :

 Commitment to Diversity and Integrity

Champions diversity and embeds a fair and ethical approach within the organisation in all
– Is a champion of diversity and takes action to embed a fair and ethical approach within
their organisation
– Demonstrates and supports fair and ethical behaviour (e.g. ensures objective gathering of
facts regardless of personal views or background; where required, keeps information
– Maintains an open approach with others, taking account of, and having respect for,
individual differences such as age, ethnicity, gender, religious beliefs, social background,
disability, sexual orientation and physical appearance
– Uses an awareness of the community and its needs to deliver organizational objectives
(e.g. is aware and respectful of differing cultures and backgrounds)
– Is committed to Fire & Rescue Service values and demonstrates this commitment within
all situations and with all groups.
– Is honest and accepts accountability for own actions when working with others (e.g. takes
responsibility for own mistakes; follows up commitments with appropriate actions)
– Proactively challenges unacceptable behaviour inconsistent with Fire & Rescue Service
values, stating own and organisation’s position clearly and implementing appropriate
action (e.g. providing education or, if necessary, using disciplinary action in line with
organisational policy)
– Has respect for confidentiality with all sensitive information

 Openness to Change

Drives and manages the change process, seeking opportunities to create and implement
improved organisational effectiveness
– Challenges accepted practices or existing procedures (e.g. looks for new opportunities to
increase organisational effectiveness; looks for ways in which existing systems could
deliver additional benefits; identifies deficiencies in current procedures)
– Identifies, drives and seeks to support change, coming up with or contributing to,
innovative solutions (e.g. uses change as an opportunity to reduce risk; seeks to become
involved in the early stages of new initiatives)
– Seeks information about changing circumstances or future developments (e.g. in order to
ensure that own position or action plans reflect the most recent data available)
– Encourages and explores change initiatives from others
– Checks that change is in line with current and future organisational aims and objectives

 Confidence and Resilience

Consistently projects and promotes a confident, controlled and focused attitude
– Initiates and promotes a calm and controlled approach during difficult situations (e.g.
pace of information delivery is calm; where it is not possible to verify information,
provides sufficient information to counter any challenge from others)
– Persists in looking for ways to overcome problems (e.g. looks for alternative routes
through which to progress issues which have hit opposition)
– Maintains focus on key results to be delivered despite pressure (e.g. competing
political demands / deadlines; other conflicting strategic agendas)
– Is willing to be confronted with alternative views (e.g. promotes open discussion
without becoming defensive)
– Recognises that some tasks or objectives cannot be achieved in the short term, and
looks for ways to overcome barriers (e.g. stresses positive outcomes for individual or
organisation; deals calmly with conflict resolution by establishing the facts and
suggesting options for a way forward)
– Acts assertively (e.g. is willing to say no to unreasonable requests)
– Demonstrates confidence by taking control of situations and events

 Working with Others

Leads, involves and motivates others, creating and implementing strategies for
influencing them both within the Fire and Rescue Service and in the community
– Able to inspire, support and energise others to achieve a common purpose or vision
– Proactively generates positive working relationships both internally (e.g. champions
an environment that ensures effective working relationships) and externally (e.g.
promotes an open and transparent organisation)
– Encourages interaction, looking for opportunities to involve groups of individuals in
joint tasks (e.g. promotes interdepartmental involvement in brigade working groups
and projects)
– Is able to influence others (e.g. supports and motivates others by driving initiatives;
seeks to understand individual and team motivation and relate this to intended project
outcomes; promotes the use of interdepartmental systems to identify team and
individual strengths and weaknesses)
– Anticipates and is sensitive to the feelings and well-being of others, taking action to
support them (e.g. recognises organisational culture and welfare needs and ensures
policies to support these are implemented)
– Empowers others (e.g. appoints or promotes staff, delegating authority where
– Uses a variety of techniques to promote involvement and increase morale (e.g.
delegates tasks to appropriate personnel; gives space to others to make decisions;
keeps others informed about plans and progress)
– Is approachable and presents a positive image of themself and the Fire & Rescue
Service irrespective of individual differences such as age, ethnicity and gender
– Consistently presents a positive image of themself and the Fire & Rescue Service to
all groups (e.g. when representing the Fire and Rescue Service to external agencies)
irrespective of their background

 Effective Communication
Communicates effectively both orally and in writing
– Communicates verbal and written messages clearly, concisely and in a structured
fashion, emphasising critical information so that the message is understood (e.g. when
speaking to principal managers uses the available IT systems to communicate
effectively with others)
– Is sensitive to the needs of the audience and chooses and tailors mode of
communication which recognises the needs of the audience and situation (e.g. with
regard to key change messages, disseminates information in an appropriate method
for the recipients of those messages)
– Communicates in measured, tactful and diplomatic way (e.g. when communicating
with external agencies)
– Uses appropriate style when communicating with both small (2 people) and large
groups (over 20 people) (e.g. takes account of audience and prevailing internal or
external factors)
– Listens actively to others to convey interest and gather key information (e.g.
demonstrates listening by making appropriate responses to others’ comments)
– Oral communication is supported by appropriate and effective body language (e.g.
adopts open posture when seeking feedback or delivering positive message).
– Monitors and checks audience reaction to confirm acceptance and understanding,
(e.g. asks open questions)
– Uses systems which provide regular updates and shares information, monitoring the
effectiveness of communication channels (e.g. benchmarks communication systems
with other Brigades or organisations)
– Presents technical or complex information in a way that promotes understanding (e.g.
simplifies complex information through use of images, diagrams, analogies etc) or by
summarising information (e.g. ensures that briefings are clear and concise)

 Commitment to Development
Committed and able to develop self, individuals and units to improve organisational
– Proactively reviews own and others’ performance (e.g. regularly seeks and acts on
feedback on own and others’ performance)
– Identifies development needs in own and others’ knowledge, skills and
understanding and takes or recommends action to improve (e.g. accepts feedback
without becoming defensive; seeks to identify and learn new methods from
colleagues; helps others see ways of improving)
– Recognises differences in the ways that people learn, using this information to
choose the most appropriate approach to promote their own and others’ development
– Is proactive in creating and using learning opportunities for themself and others (e.g.
encourages others to experience additional responsibility; shares new information
– own experiences; provides additional support or resources if required)
– Creates a supportive environment for development by listening to and acting upon
others’ ideas and contributions (e.g. recognises achievements in order to inspire
others to develop; allows people to learn from poor performance)

 Problem Solving
– Gathers information in order to predict future requirements and make realistic
– Seeks objective evidence from recent and relevant diverse sources in order to
clarify and validate information (e.g. compares data from national and
international external organisations, academic institutions etc)
– Looks for patterns or links between pieces of information which are not obviously
related in order to gain new insights (e.g. links between current policies and
research re future developments)
– Uses information gathered or thinks ahead to predict potential benefits and
problems (e.g. targets research to provide arguments that will overcome likely
opposition and facilitate future working relationships)
– Able to adapt previous experience and knowledge to different sets of
circumstances when making decisions, using this information to anticipate likely
course of events
– Predicts potential impact and longer term implications of actions (e.g. understands
links between different functions within the service or with external groups;
anticipates potential impact on local community; considers implications for other
functions of tying up limited resources)
– Recognises where further information is required prior to making a decision or
planning a response (e.g. establishes pilot studies to inform specific issues and
– Seeks concise and accurate information when faced with an ambiguous situation
(e.g. establishes the known facts from the most relevant source)
– Willing to take a quick risk critical decision in a generic environment where key
strategic results can be achieved
– Makes swift, appropriate and authoritative decisions despite being restricted by
pressures of time or situation or where information is limited
– Able to use arithmetical calculation correctly (i.e. addition, subtraction, division
and multiplication), compile and interpret numerical information (e.g. tables and
charts) and identify trends in statistical data to apply task procedures (e.g. to
inform IRMP)

 Situational Awareness
Maintains an active awareness of the environment to promote safe and effective
– Initiates and implements measures to ensure the environment is constantly
checked and takes action to ensure safe working (e.g. looks for threats to safety of
self and others)
– Has awareness of a range of related information without becoming unduly
focused on any one piece of information
– Seeks and provides timely information to take account of changing circumstances
– impact on safety (e.g. keeps team informed at incidents of changing
– Able to judge space and distance to deploy equipment and people safely and

 Commitment to Excellence
Leads organisation and contributes to joint working to achieve excellence
– Establishes what organisational standards can be achieved in a given context (e.g.
willing to say no to unreasonable requests)
– Explains reasons underlying expected behaviour and performance (e.g. explains
the reasons for existing standards and the benefits of having those)
– Reinforces the importance of defined standards through setting a positive personal
– Anticipates issues which may have an effect on current and future performance
requirements (e.g. the effect of financial forecasting and anticipated settlements)
– Addresses reasons why organisational standards are not being met (e.g. makes
appropriate changes to plan or priorities to reduce pressure on personnel)
– Takes personal responsibility for own and organisational decisions and standards
(e.g. does not blame systems or other people for unpopular actions or negative

 Planning and Implementing

Creates and implements effective plans to deliver long-term organisational strategic
– Takes an incremental approach to introducing a long term initiative whilst
maintaining an awareness of the need to ensure early visible results (e.g. when
implementing policy recognises where objectives may take a long time to achieve,
setting milestones and benchmarks to monitor and provide short term results in
key areas)
– Prioritises tasks, activities and resources based on relevant information in line
with organisational objectives
– Plans in ordered sequence of steps using clear, achievable objectives
– Divides complex tasks into manageable pieces to achieve objectives
– Puts systems in place to monitor and review plans to ensure successful delivery
and inform future actions
– Is able to switch between tasks in order to deliver in line with changing
organizational objectives
– Can plan across activities rather than sequentially; able to assess the impact of
each activity on other related activities

 Political / Organisational Awareness

Anticipates and shapes the political environment from a strategic perspective
– Explores and develops the links between different functions, groups or individuals
to promote organisational objectives
– Has an awareness of what is politically acceptable within the boundaries or
agenda of each stakeholder group (e.g. issues of national or local politics)
– Clear appreciation of wider political scene and local and national issues/initiatives
– Recognises the potential impact of the short-term political agenda on long-term
organisational needs (e.g. will be prepared to say ‘no’ to a political agenda that is
to the long-term detriment of the organisation)
– Anticipates that stakeholder decisions may be counter to key objectives, taking
steps to discuss why and establish ground work for future progress
– Recognises the key groups (internal or external) who will be affected by a
decision, taking steps to ensure their understanding of the implications (e.g.
workload, financial restrictions, service provision)
– Recognises where others may have more influence over key stakeholders (i.e. will
take a back seat to allow others to achieve core objectives)
– Is willing to compromise over a short-term objective in order to promote wider
longterm organisational

Bank automation
Bank automation starts with Branch automation. Branch automation is, generally,
the process of increasing mechanization within the branch of a bank or at a bank
location. This has traditionally involved the use of machines and computer systems
such as automated teller machines (ATMs) that allow customers to utilize self-
service options rather than interactions with people. Such automation can
sometimes be resisted by customers or viewed as a reduction in personal attention
from those employed by the bank. Branch automation, however, typically increases
the amount of time and effort tellers and other branch employees can spend with
customers, as it reduces time spent on simpler transactions.

The process of branch automation usually begins at a corporate level for most
banks, and the decision to increase the use of computers and automated machines
within the branches of the bank. In some areas this process can be tested at one or
two locations before being implemented on a wider scale, which allows for bugs in
the system to be found more quickly and can work to ensure customer satisfaction
before broader implementation. While branch automation often implies the
incorporation of ATMs and similar machines into a bank branch, it can also include
greater use of computers and networks or the Internet to improve services offered
by the bank.

Steps to be taken for Bank automation process:

Step I. Situation analysis

 What is the existing System?

– Presently the organization is using a manual system.
– Customer's accounts are handled with the help of registers and files.

 Advantages & Disadvantages

– The Manual System is Economical in use.
– The Manual System does not require much User Training.
– The Manual System is Traditional & Conventional.
– Searching and Sorting of Data is highly time Consuming.
– Maintenance of Data Stored in form of Files and Registers is Expensive.
– Storage capacity of manual System is limited.

 Proposed System
– The Proposed System for the Automation of the Bank is a Computerized
banking system which will Take care of the Accounting information and
 Advantages
Following are the advantages of the Proposed Computer aided system:

1. Speed: Computerization helps in processing the data placed in several

data files in no time.

2. Accuracy: The data processed by the computer are highly accurate. The
programs written on the system checks and controls data before and
during processing. Flexibility: The modern digital computers can be used
for a variety of purposes. E.g. online processing, multiprogramming etc.

3. Choice of Configuration: Wide ranges of peripherals are available for

many computer systems, which allow business organization to select
those which most suit its processing requirements.

4. Storage capacity: Large volumes of data can be conveniently stored,

accessed and altered.

5. Management information: They can be used to provide useful

information of management for control and decision making.

6. Data Processing: Computer has lifted the heavy data processing

constraint with the manual system and has opened up new avenues for
planning, control and data experimentation.

7. Volume: Computers can store volumes of data and can retrieve the
desired information quickly.

8. Database: Computer facilities the establishment of database. Such a

database integrates data records and reduces data redundancy.

9. Reduction in paper work: The use of computers for data processing has
helped the management of business organizations to cope with increasing
problem of paper handling.

Future Scope:

As the Competition in Every field is increasing and need of information is also

increasing so the organization is required to maintain its information in a well
organized manner such that access to that information should be convenient to
authorized persons.

Hence computerization will help the organization to achieve its goal.

Step II. Feasibility Study of automation process

After analyzing the organizations budget and other capacities following is the
feasibility report.

 Technical Feasibility:
Technically the computerization is feasible as the organization satisfies the
technical system's requirements like

– 10 to 15 computer having 20 GB HDD and 128 MB of RAM

– Proper Power Supply
 Behavioral Feasibility:
Behaviorally the computerization is feasible as the organization satisfies the
Behavioral system's requirements like

– 1 Person per PC having Basic Knowledge of Computers

 Economical Feasibility:
Economically the computerization is feasible as the organization has a sound

Step III. Requirements Analysis- Requirements for the process to be


 Input
– Login Form: A Valid Username and Password.
– Creation and Deletion of Account: Account number of customer and Customer's
 Output
– Output will be as per the Input
 Process
– Processing is done in consideration of input and the data stored in the database.

Step IV. Structured Analysis

 Database Design
– The Database which is used to support the Application is totally based upon
Microsoft Access.
– It consists of Two Tables which are as follows:
o Security: It Consists of all the usernames and there respective Passwords.
o Accounts: It Consists of the data regarding all the Accounts like account
number, customer name and current amount.
 Tools Used:
– The Application is developed using the following tools:
o Microsoft Visual Basic 6.0
o Microsoft Access Database

Information Technology
(Creating impact of information technology in organization and do international business)

 Introduction

Computerization has changed the way business is conducted the world over. No
aspect of business has remained untouched by the information technology (IT)
revolution. This is especially true of international business where people located in
different parts of the world conduct transactions with each other. The activities of
international business include manufacturing, in-land transportation, customs and excise
matters, port operation, shipping, clearing and forwarding, etc. During the course of
these transactions, a large number of documents are created and exchanged, many of
these documents or the information contained therein is repeated, while creating and
mailing these documents before the advent of IT., hundreds of man-hours would be lost
in repetitive operation, innovations in IT have revolutionized international business; the
use of technology in managing and processing information. Especially in large
organizations helps save time, bring down costs, and reduce manpower, manual data
input and transfer has now become not only obsolete, but also irrational.

 Areas

In international business today, IT finds maximum utility in the following areas:

1. Electronic procurement

2. Electronic marketing

3. Electronic logistics

A modern competitive enterprise seeks to hold an edge over the market. IT helps
provide this competitive advantage through its various applications tools. By adapting
these tools in various areas of business, the organization can gain many advantages in
terms of accessibility to a customer or supplier in any part of the world, speed of
operations, reduction in man power, etc. due to the reach of the internet it is possible to
conduct buying and selling transactions irrespective of geographical location. Internet
banking helps in the speedy execution of payments and settlement of accounts. A website
can be a virtual showroom, where products can be displayed, demonstrated, and sold.
Such a website can also provide various after- sales service tips and suggestions, launch
discussions forums, ask for customer feedback, and educate the customer. IT application
such as electronic data interchange (EDI) has also enabled logistics operations to be

1. Electronic Procurement

E-procurement essentially comprises a number of inter-related methods for improving the

procurement process through the use of electronic systems and processes. The need for
e-procurement stems from the fact that in today’s globalized world, a manufacturer can
source inputs such as raw materials, components, machinery and consumables from any
part of the world. The manufacturer is constantly looking for suppliers who can offer
quality materials at the most competitive rates. The internet has become a favourite
hunting ground for the best bargains. Small companies can purchase their inputs through
various websites, which sell a variety of items. However, for the larger organizations,
electronic procurement is a systematically outlined process. Here, enterprises use
automated applications to streamline buying both production and non-production goods
and services.

The entire electronic procurement process can be divided into three major
components: pre-purchase, purchase, and payment activities. Pre-purchase activity can
begin with a Request For Purchase (RFP) generated by the user department and sent to
the purchase department. The electronic platform helps to plan pre-purchase activities
starting with the vendor pre-qualification process. Vendors are invited to register their
interest in a prescribed application form. They are asked to provide information about
their organization, availability of resources, such as manpower, machinery, and monetary
resources. Reference letters from their bankers help establish their standing in the market.
A list of their present customers is also sought to gauge their market base. The short-
listed vendors are registered and whenever there is a requirement of their services, a
Request For Quote (RFQ) is sent to them. In case of very large purchase orders, venders
are invited to bid in a competitive bidding process. Tender evaluations tools help identify
the most suitable bid. A number of companies resort to reverse auctions, whereby, they
announce the auction process on their website and ask the vendors to make their bids
before the deadline. The bids are then opened and evaluated, before the contract is
awarded to the selected vendor with the most suitable offer. This process is called a
reverse auction because in this case the auction is for procurement instead of a sale.

Benefits of Electronic Procurement

– Reduction in Manpower Cost

– Reduction in Purchase Cycle Time
– Wider Choice of Vendors
– Better Prices for the Purchased Goods
– Reduction in Transaction Cost
– Fewer Human Errors
– Better Relations with the Vendors
– Better Compliance with Regulations

2. Electronic Marketing

Internet has changed the way we exchange goods for money. It has broken
geographical barriers between buyers and sellers. The internet enables a manufacturer in
India to sell his/her goods to a customer in any part of the world through the World Wide
Web. It is necessary, however, that the buyer has access to internet and has the necessary
know-how and desire to make online purchases.

The internet has provided a very effective platform for electronic marketing or e-
marketing. E-marketing means using digital technologies to help sell your goods or
services. This is different from a conventional market place, where sellers display their
goods and buyers can touch and feel the goods and bargain with sellers. In case of e-
marketing, sellers can display photographs, video films and specifications of their
products. In most cases, the prices are also displayed so that buyers have a clear idea
about the product and price.

Benefits of E – Marketing

24*7 Connectivity – The buyer can access the seller’s website 24 hours a day and 7 days
a week.
Less Expensive – E-Commerce websites can be launched with a very small budget. The
expenses involved are website development charges, web-space rental, hosting charges
and website maintenance charges.
Worldwide Reach – The biggest benefit of business over the internet is its global reach.
Online Payment Facility – The buyer can make online payments via credit card. This
facility speeds up the transaction, assuring the seller of payment.
Measurement of Effectiveness – By putting a counter on the website, the seller can count
the number of visitors to the website and the number of buyers who actually made on-line
Ease of Operation – The buyer need not leave the comfort of office or home to purchase
goods on the internet. The payment can be made with a click of the mouse and the goods
can be delivered at the buyer’s door step.
User-Friendliness – Most e-marketing websites are very easy to use. The buyer is guided
through various procedures to purchase the good on-line. Many sellers have established
call centers to be in direct touch with the buyer.
Personalized Service – Visitors to the websites are normally advised to register
themselves, so that each time they visit the website they are recognized and provided
suitable services.
Creation of Consumer Databases – The seller can keep a data base of the name, age,
address, sex, contact numbers and important dates, such as birthdays and marriage
anniversaries of online buyers.

3. Electronic Logistics

Electronic logistics is use of web –based technologies to support warehousing and

transportation management processes. E-logistics enables distribution to couple routing
optimization with inventory tracking and tracking information.

In international trade and distribution, computerization is slowly but surely

tacking hold of every aspect of business. From computerized trade leads available
through the department of commerce, to electronic letters of credit, to telecommunicated
documents, to computerized freight booking, tracing and documentation system, to
electronic freight tariffs, automated freight payment systems, computerized loss and
damage reporting.

There is a tremendous scope of the application of IT in logistics. In fact, modern

supply chains are held together by the strength of IT, through its ability to transmit huge
amount of data speedily, or make global data available to expedite the decision making
Due to the advantages offered by IT, many logistics providers are planning to
handle majority of their commercial transactions electronically. Also, exporters are
already using IT for various activities ranging from e-procurement of goods to availing
transportation services on the net.

Important Electronic Tools

Shipping lines are keen to encourage their customers to use the internet and have
developed a number of attractive tools. The biggest benefit of these tools is that both
shippers as well as shipping lines gain by using them. Following are some of the
important tools:

– Electronic receipt of vessel schedule information

– Tracking and tracing of cargo
– Remote bill of lading (B/L) printing
– Single data entry reporting
– Exception reporting
– Online tendering, etc.

1. Electronic Receipt of Vessel Schedule Information

Shippers can visit a logistics portal to check the schedule of different shipping
lines and choose what suits their supply chains the best. This saves shippers time and
effort. The shipping lines, too, benefit as they do not have to inform individual shippers
about their voyage schedules. At present, the only limitation to this system is that not
every portal maintains information about every shipping line, nor does every shipping
line provide updated information on their sites or related portals.

2. Tracking and Tracing of Cargo

The biggest benefit shippers enjoy as far as e-logistics is concerned, is tracking

and tracing the cargo. With e-connectivity they need to spend less time per enquiry with
shipping lines about the status of their cargo and significantly improve their supply chain
visibility. However, different portals offer different services.

3. Remote Bill of Lading Printing

The main benefits of this facility are reduced production and distribution costs for
the carriers. The shipper’s gain is fast and error-free receipt of documents. More and
more shippers are using this facility and are demanding simplified transmission of
transport documents. One of the reasons for this is error-free transmission of Bill of
Lading. Shipping lines normally dispatch the Bill of Lading within 48 hours of vessel

4. Single Data Entry Reporting

With the aligned system of documentation, the format of various shipping
documents is now standardized. Information once keyed in any document will
automatically appear in all aligned documents. This system saves repetitive data entries
and also saves substantial time and cost.

5. Exception Reporting

Shippers across the world, who work tirelessly towards manufacture of quality
products, also want reliable delivery schedules. Exception reporting by the shipping line
helps the shipper to know if there are any deviations from the instructions, which he/she
has given to the shipping line.

6. Online Tendering

To find out the ocean freight rates from various shipping lines, the shipper has to
send an enquiry separately to each shipper. Online tendering helps the shipper to send
out rate enquiries to as many shipping lines as desired by merely pressing a button.
Today, in the era of rationalization, mergers and acquisitions, the shipper’s global
requirements are getting increasingly complex. Online tendering helps them get
competitive quotations from shipping lines operating on various routes. These
multinationals maintain databases of such quotations in order to choose the most
competitive rates on various routes.


Technology is changing at a very fast pace. Various aspects of electronic

business such as e-procurement, e-marketing, e-logistics use a number of technology
products. The life cycle of technology products is very short. We are living in a
knowledge-driven era, where everyone has access to information thanks to internet and a
variety of other sources of information. However, the market is dominated by those, who
translate information into knowledge and use the knowledge to improve productivity and
efficiency of their enterprises. India is enjoying an enviable position because of its
leadership in the area of information technology. A number of business solutions are
developed in India for world wide applications. However, such applications take a long
time to be implemented in India itself.

Case study: Points to keep in mind for recruiting new personnel into your organization if you are
the HR manager of a footwear manufacturing company

The Indian Footwear manufacturing sector is a major industry; it ranks second in the
world, next only to China. Owing to the size of the industry, it makes significant
contributions to the Indian economy by way of export income, trade, manufacturing and
retail along with the future potential in terms of national consumption and international
demand. More importantly, it also has the social benefit of providing employment to
many people – in the organized sector as well as the unorganized sector. Keeping this in
mind, an attempt has been made to understand the trends of Recruitment Practices
prevalent in the footwear manufacturing industry, especially in the organized sector in
India. Wherever possible, comparative notes have been made with prominent
International footwear manufacturers.
The trend until recent years was to have semi-skilled and unskilled labors in the
manufacturing units – possibly due to lack of competition and the resulting need to not
offer the customers diverse options in terms of footwear choices. However with
increasing globalization as well as customer awareness and demand for more trendy
footwear, it has become imperative for the manufacturers to employ more skilled
employees – especially in the ‘shoe design’ section. Recruitment is also required for other
functional departments, which is mostly undertaken according to prevailing practices.
The role of HR manager has also now grown to focus on training and developing the
employees as well as other concerns like health & safety of workers, conducive work
environment etc. The factors affecting the recruitment practices – both internal and
external factors, have been identified along with some upcoming trends in the recruitment
practices. Finally, top skills relevant for the recruitment purpose have been identified.

Indian Footwear Industry

India is a huge domestic market for Footwear Industry, which is largely untapped –
especially for ladies / kids wear. Moreover, with increasing spending power of the youth
owing to economic growth, as well as the changing preferences as influenced by western
cultures, the Footwear Industry is bound to have prominent growth. With low cost of
production and ready access to the raw materials, the industry will also see export
oriented growth.
The Indian Footwear Industry can be broadly classified into
( i) Footwear Manufacturing Sector and
( ii) Footwear Retail Sector
The Footwear Manufacturing Sector is a significant segment associated with the Leather
Industry in India. Some details pertaining to both the Manufacturing and the Retail sector
is discussed as follows.

Footwear Manufacturing Sector:

India ranks second among the footwear producing nations, next only to China. India
produces more footwear for males while the world’s major share of production is in
ladies footwear. The production centers in India are major cities like Chennai, Mumbai,
Kanpur, Agra, Delhi as well as in small towns like Ranipet and Ambur in Tamil Nadu –
depending on the type of manufacture required. The industry is both labor intensive and
capital intensive. India’s export of Footwear touched US $ 1533.66 million in 2008-09,
with a share of 42.62% in India’s total export from the leather sector. India’s export is
growing at a CAGR of 13.91% in the last five years ending 2008-09. Nearly 95% of its
production goes to meet its own domestic demand.

Footwear Retail Sector:

The Indian footwear retail market is expected to grow at a CAGR of over 20% for the
period spanning from 2008 to 2011.
– Footwear is expected to comprise about 60% of the total leather exports by 2011
Presently, the Indian footwear market is dominated by Men's footwear market that
accounts for nearly 58% of the total Indian footwear retail market.
– By products, the Indian footwear market is dominated by casual footwear market
that makes up for nearly two-third of the total footwear retail market.
– As footwear retailing in India remain focused on men's shoes, there exists a
plethora of opportunities in the exclusive ladies' and kids' footwear segment
– The Indian footwear market scores over other footwear markets as it gives
benefits like low cost of production, abundant raw material, and has huge
consumption market.
– The footwear component industry also has enormous opportunity for growth to
cater to increasing production of footwear of various types, both for export and
domestic market.
The footwear market consists of the total revenues generated through the sale of all types
of men's, women's and children's shoes. The Indian footwear market generated total
revenues of $4 billion in 2008, an increase of 12% since 2007. Looking forward, the
Indian market is forecast to accelerate its current performance in terms of value, with an
anticipated CAGR of 10.1% for the five-year period 2005-2010 expected to drive the
market to a value of $4.4 billion by the end of 2010.

Current HR Practices in Recruitment

The HR Department of a Footwear company strives to align the efforts of recruitment to
the vision of the company. Common vision of such companies is to offer customers the
best in footwear, high in style and quality at the right price with the best and most
professional sales assistance. For this, the companies invest a great deal in human
resources, with specially organized training to bring out those fundamental features such
• Technical preparation
• Team work
• Constant drive for the results
• Organizational and managerial capacity

Recruitment Philosophy
HR Department at Footwear Manufacturing Companies, meets its customers' needs by
selecting the following attributes in prospective employees.
1) knowledge
2) imagination
3) skills
4) diversity
5) teamwork
6) integrity of people
While recruiting and retaining the best people is going on, HR Department also is guided
by the principles of non-discrimination and respect for human rights and individual
freedoms for all employees.
Many companies show commitment to being socially responsible employers and their
human resources programs are driven by this commitment. This includes focusing on
issues like child labor, hygienic work environment, cruelty on animals, etc especially in
India where legal enforcement is not always properly implemented.
Most companies look for honor, education, skill, experience and above all, commitment
to the organization and its success. Some manufacturers with specific customer focus also
recruit people according to their customers’ preferences – e.g. Rinaldi Designs, Mumbai
caters only to ladies footwear – and therefore tends to hire women designers who can
identify and relate to the customer requirements.

Training and Advancement

Many companies provide opportunities for personal development and advancement.
They typically do this by:
• Running local courses for training and improving skills
• Organizing several national and international courses at all levels on a regular basis for
teaching new technologies and systems
• Encouraging lifelong learning
Training is also imparted especially if a new employee is hired, without specific
background in the industry. Big manufacturers like Bata, Liberty Shoes, Action Shoes,
etc also have to train their employees in the importance of the appropriate requirement of
customers, identifying and understanding the more than 30 parts of the shoe, as well as
the manufacturing process, details of materials used, the styles of footwear, etc in order to
better serve the customers.

How Companies Hire?

– Merit is the sole criteria for selection

– Attitude is given as much weight-age as functional competencies.

– Panel interviews comprising of Functional Head & HR Head

– Sources for recruitment are through campus, consultants, employee referrals,

internal job postings and the Internet.
– Antecedent verification is an integral part of the recruitment process.

– Medical fitness is pre-requisite for all positions.

– Equal opportunity employer and non-discrimination on the basis of gender

Focus on Value Addition

Many companies focus on value addition to enhance competencies. They believe
professional growth is the responsibility of both the individual and the organization. They
provide opportunities for value addition through:

– Exposure to World Class Manufacturing Facilities and Practices

– Exposure to Internationally Benchmarked Marketing Practices

– Formal Training and Development programs in India and overseas

– Membership of Multidisciplinary Task Forces and Project Teams

– Cross Functional and Cross Business Opportunities

Companies like Nike, Reebok, Adidas, etc add value for the customer by allowing them
to directly participate in the manufacturing process in order to have customized footwear.
Other companies like Rinaldi Designs consistently look out for the changing preferences
and trends of their target market. Companies such as Liberty and Action emphasize the
importance of the footwear in association with customer well-being.

Changing Nature of Human Resource Management

The field of HR management is undergoing transition because organizations themselves
are changing. The explosion of information technology has changed the nature of HR
information usage. Just a few years ago, most HR information had to be compiled and
maintained on mainframe computers. Today, many different types of information
technology like Human Resources Information Systems (HRIS) and ERP related HR
Modules, are being integrated and used so that HR professionals can access real-time
HR-related data and communicate it to other managers and executives.

 Recruitment at Nike
Nike is one example of a company using computer-assisted interviewing. The
company has used an Aspen Tree product to hire employees for Niketowns, retail
stores that showcase Nike products. In one instance, 6,000 people responded to
ads for workers needed to fill 250 positions. Nike used IVR technology to make
the first cut. Applicants responded to eight questions over the telephone; 3,500
applicants were screened out because they weren't available when needed or didn't
have retail experience. The rest had a computer-assisted interview at the store,
followed by a personal interview.

The computer interview identified those candidates who had been in customer
service environments, had a passion for sports and would make good Nike
customer service representatives. Interviews were done in batches. The computer
interview (which includes a video showing three scenarios for helping a customer
and asks the applicant to choose the best one) was given every 45 minutes to a
group of applicants. As applicants completed the interview a printer in the next
room printed their responses. Areas that needed to be probed further were flagged,
as were areas that indicated particular strengths.

While the applicant completed an application form online, the interviewer used
the printout to prepare for the applicant's human interview. Some applicants
would be given only a short interview; other more likely candidates would be
interviewed at greater length. The computer not only helped interviewers screen
for people who lost their temper in work situations or who demonstrated other
undesirable behaviors, but it also helped the interviewers to determine what to ask
to reconcile inconsistencies in the computer interview or to probe applicant
strengths in desired areas. Because Nike uses behavioral-based interviewing,
applicants must document their areas of strength with examples from their work.
Some applicants were offered jobs on the spot. Others were called back for
second interviews.

 HR Function at Relaxo Footwear

Another example is Relaxo Footwear, the famous manufacturers of Hawaii

Chappals. The HR function at Relaxo entails the following:
Expert Management Team:
The company is empowered by a team of experienced, mature, dynamic and
result oriented professionals with an experience in varied fields of marketing,
finance, production, HRD and administration. It is headed by 6 Directors, a
President (operations), 5 GMs and over 30 managers.

Trained workforce:
Relaxo employs over 2500 personnel who are well trained in their respective
production activities including 400 officials spread over all 9 manufacturing units
and the corporate office.
Employees are induced to in house training programs and outside workshops
sponsored by leading institutions to broaden their existing working knowledge
and experience

Factors affecting Recruitment

HR Manager should design the recruitment strategy by understanding whether the

Organization is into Footwear Manufacturing or Footwear Retailing. Some MNC’s like
Nike, Adidas, Bata, Reebok, Rinaldi, etc are both manufacturers as well as retailers –
therefore, the recruitment needs to cater to both the Strategic Business Units as per
The recruitment function of many footwear organizations is affected and governed by a
mix of various internal and external forces. The internal forces or factors are the factors
that are controlled by the organization. And the external factors are those factors that
cannot be controlled by the organization.

1) Internal Factors
The internal forces that HR Manager should consider are:
A) Recruitment Policy: The recruitment policy of an organization specifies the
objectives of recruitment and provides a framework for implementation of
recruitment program. It may involve organizational system to be developed for
implementing recruitment programs and procedures by filling up vacancies with best
qualified people.

Factors Affecting Recruitment Policy:

• Organizational objectives
• Vision and Mission
• Current Requirements
• Personnel policies of the organization and its competitors
• Preferred sources of recruitment
o Internal – Promotion, Transfers, Grooming

o External – Consultants, Advertisements, Head Hunting

• Need of the organization

• Recruitment costs and financial implications

B) Human Resource Planning

Effective Human Resource Planning helps in determining the gaps present in the
existing manpower of the organization. It also helps in determining the number of
employees to be recruited and what qualification they must possess. Moreover, a
detailed Human Resource Plan can also help identify the various needs that might
arise in the future, providing ample time to source the same.

C) Size Of The Firm

The size of the firm is an important factor in recruitment process. If the organization
is planning to increase its operations and expand its business, it will think of hiring
more personnel, who can handle its operations. The services of key personnel who
have been with the organization for long can also be considered to foster and cultivate
the culture. Organization must employ or think of employing more personnel if it is
expanding its operations.

D) Cost
Recruitment incurs cost to the employer, therefore, organizations should try to
identify a source of recruitment which will bear a lower cost to the organization for
each candidate.

2) External Factors to Remember

The external forces are those which cannot be controlled by the organization. The
major external forces are:

A) Supply and Demand

The availability of manpower both within and outside the organization is an
important determinant in the recruitment process. If the company has a demand for
more professionals and there is limited supply in the market for the professionals
demanded by the company, then the company will have to depend upon internal
sources by providing them special training and development programs.

B) Labour Market
Employment conditions in the community where the organization is located will
influence the recruiting efforts of the organization. If there is surplus of manpower at
the time of recruitment, even informal attempts at the time of recruiting like notice
boards display of the requisition or announcement in the meeting etc will attract more
than enough applicants.

C) Image / Goodwill
Image of the employer can work as a potential constraint for recruitment. An
organization with positive image and goodwill as an employer finds it easier to attract
and retain employees than an organization with negative image. Image of a company
is based on what organization does and affected by industry.
D) Political-Social-Legal Environment
Various government regulations prohibiting discrimination in hiring and employment
have direct impact on recruitment practices. For example, Government of India has
introduced 17 legislation for reservation in employment for scheduled castes,
scheduled tribes, physically handicapped etc. Also, trade unions play important role
in recruitment. This restricts management freedom to select those individuals who it
believes would be the best performers. If the candidate can’t meet criteria stipulated
by the union then union regulations can restrict recruitment sources.

E) Unemployment Rate
One of the factors that influence the availability of applicants is the growth of the
economy (whether economy is growing or not and its rate). When the company is not
creating new jobs, there is often oversupply of qualified labour which in turn leads to

F) Competitors
The recruitment policies of the competitors also effect the recruitment function of the
organizations. To face the competition, many a times the organizations have to
change their recruitment policies according to the policies being followed by the
Recent Trends in Recruitment
The following trends are being seen in recruitment:

In India, the HR processes are being outsourced more as outsourcing firms help the
organization by the initial screening of the candidates according to the needs of the
organization. These firms create a suitable pool of talent for the final selection by the
organization. Outsourcing firms develop their human resource pool by employing people
for them and make available personnel to various companies as per their needs. In turn,
the outsourcing firms or the intermediaries charge the organizations for their services.
Advantages of outsourcing are:
• Company need not plan for human resources much in advance.
• Value creation, operational flexibility and competitive advantage
• Turning the management's focus to strategic level processes of HRM
• Company is free from salary negotiations, weeding the unsuitable resumes/candidates.
• Company can save a lot of its resources and time

Many big organizations are using Internet as a source of recruitment. E- recruitment is
the use of technology to assist the recruitment process. They advertise job vacancies
through worldwide web. The job seekers send their applications or curriculum vitae i.e.
CV through e mail using the Internet. Alternatively job seekers place their CV’s in
worldwide web, which can be drawn by prospective employees depending upon their

Advantages of this type of recruitment are:

• Low cost.
• No intermediaries
• Reduction in time for recruitment

HR Consultants at Alternative Workplaces

Recent trends in HR Recruitment have shown that consultants have come to play a
significant role. These consultants participate not only in the recruitment but also in
operations and other functional departments in the footwear industry. Former employees
who have more than 20 – 25 years of experience in the same industry tend to leave their
jobs and commence a consulting business. They conduct one–off projects / assignments,
on part time / full time or even seasonal basis on various aspects like risk assessments,
overseas assignments, cost reductions, design management, sourcing of candidates, etc.
As part of overall efforts to play a leading role in the global trade, the HR Manager in
Indian Footwear industry must focus on key skills in employees such as innovative
design, consistent record in delivering superior quality and effective time management.
The HR Department should invite industry and institutional support in the areas of
technological development, design and product development and human resource
development, through premier institutions like:
i) Central Leather Research Institute, Chennai
ii) Footwear Design & Development Institute, Noida
iii) National Institute of Fashion Technology, New Delhi

Recruitment Planning
1. A team of senior HR managers reaffirms the companies objectives and identifies
future performance results areas critical to the business and strategic plans of the
organization. Panel groups are composed of members knowledgeable about the jobs in
the company.
2. A facilitator from HR or an outside consultant interviews the panel members to get
specific examples of job behaviors and actual occurrences on the job. During the
interview the individuals are also asked to communicate their thoughts and feelings
during each of the described events.
3. The facilitator then develops detailed descriptions of each of the competencies. This
descriptive phase provides clarity and specifics so that employees, supervisors, managers,
and others in the organization have a clearer understanding of the competencies
associated with jobs.
4. The competencies are rated and levels needed to meet them are identified. Then the
competencies are specified for each of the jobs. After identifying recommendations, the
HR personnel drafts job duties and specifications.
5. Finally, standards of performance are identified and tied to the jobs. Appropriate
selection screening, training, and compensation processes focusing on job specifications
must be developed and implemented. This process should be continuous, and adaptive to
the organizational needs with periodic review of job duties.

Top Nine Skills To Consider in Recruitment

1) Research and development
The candidate should have skills to focus on key areas of product, process,
material development, footwear moulds, and tannery technology with emphasis
on pollution free environment. This research and detail oriented skills results in
breakthrough product with comfort, wind and flexible technologies.

2) Marketing Specialization
Brand value is one core competency that companies are looking for. For
example, Bata India limited (BIL) created very strong brand value and positioned
that name to connect only to shoe manufacturing company. Bata had 60 % market
share in organized sector, which shows the customer perception about BIL.

Some companies are repositioning in the current markets to be consideredaway

from manufacturing oriented company. Marketing specialists are in high demand
as they are required to change this image of production oriented company to
affordable, market driven, fashion conscious, lifestyle brand. Among such
companies are Bata and Liberty.

3) Ability to Optimize Cost

Companies are looking for competent people who can focus on margin
improvement and cost effectiveness programs to yield results. Companies in
losses such as Bata, Relaxo, Adidas and Action want to clear old merchandize
through discount sales, write offs, etc. which will enable them to focus on
improving sales.

4) Knowledge of SCM and Operations Management

Prospective employees must have good knowledge of Supply Chain Management
and Operations Management to optimize utilization of production facilities. As
part of a new logistics team, the employees must focus on obtaining specific
orders from the market for best selling designs and sizes. Employee must ensure
that all raw materials are available in the factories well in time so that the
Company can produce and place in shops the products that consumers want. Thus
the Company has been focusing on personnel who understand consumers and
market demand which will reduce inventories and improve sales-to-stock

5) Negotiating Skills
Good negotiating skills are required to deal with various vendors and distributors.
Cost efficiency necessitates negotiation on procurement of raw materials to create
finished products. In this industry, it is also important to optimize transport costs
to ensure a competitive cost of the Company’s products to the sales outlets.

6) Knowledge of Legal and Regulatory Framework

A part of the outsourcing, manufacturing is now routed by many companies from
contract manufacturers based in Himachal Pradesh and Uttaranchal which are
both states offering concessions in excise, sales tax and corporate tax. Companies
are also looking at and negotiating with third party manufacturing facilities in two
other tax-free states of Assam and Jammu and Kashmir. Therefore the HR
Department must look at knowledge of prospective personnel in legal and
regulatory framework of footwear industry in India.

7) Technological Proficiency
Knowledge of Enterprise Resource Planning (ERP) such as SAP, Oracle, Baan
etc. will also attract candidates to the footwear industry. Such technological
products for example, Point of Sale (POS) Management Information System
(MIS) help many companies to update about inventory level, sales figures,
delivery schedules etc. in real-time.

8) Design Capabilities
Candidates with design and presentation skills in products such as Adobe, MS
Front Page, Corel Draw can also add value to footwear manufacturing companies.
Continuous introduction of new designs in shoes for men, ladies and children is
necessary to beat competition. Candidates with skills to encompass both style and
quality should be preferred.
9) Knowledge of Mergers and Acquisitions
While the retail trade industry in India faces one of its worst crises in recent years,
more M&A’s are occurring in the market to maximize profits and geographic
markets. Knowledge in implications of such M&A’s is an attractive skill that HR
department must look into while recruiting prospective candidates. The skills
required for such tasks includes financial acumen, managing change, fostering
synergies, etc backed by professional experience on the field with the customers
as well as other significant stakeholders.

The changing nature of jobs and work has led to additional approaches being used to
analyze jobs and work. The recruitment approach to job identifies competencies, which
are the basic characteristics that are linked to performance of individuals or teams. Once
competencies have been identified, they can be used for HR selection, development,
compensation, and performance management.

Recruiting must be viewed strategically, and discussions should be held about the
relevant labor markets in which to recruit. The future growth of the footwear industry in
India will continue to be market-driven, and oriented towards EU and US markets. With
technology and quality of the footwear improving year after year, Indian Footwear
industry is stamping its class and expertise in the global footwear trade.