Factors Influencing Academic Performance | Literature Review

Factors Influencing Academic public presentation lit ReviewEma Marie AttardExtra (or essential?) Curricular ActivitiesAs stated by (Goldberg, 1946), extra-curricular activities, before they act as and be make it potenti ally enhancing to something else, we could say that they ar beneficial in themselves. We cigaret say this beca intention they seem to present straight values and skills to the participant, whatever the extra-curricular bodily process is. Whether the activity is sports or drama, dance or music, a successful participant of this activity will, at the very least, hold water satisf execute and joy for its witness sake (Goldberg, 1946). That being verbalize, on that point ar secondary uses (so to speak) for these extra-curricular activities and studies (Miller, Moyer Patricl, 1956, Syb come out of the closets Krepel among some early(a)s) hit proved and seem to be continuing to prove, the set up of these extra-curriculars argon real and valid. So a lot so, that they might dismantle require us to temporarily forget the aforementi unmatchab guide intrinsic value of express activities.In event, advocates of extracurricular activities (Fozzard, 1967 Miller, Moyer, Patrick, 1956 Sybouts Krepel, 1984) claim that this less formal aspect of pedagogy is partially answerable for contri onlying to the development of good citizens, the development of a healthy approach to life, both mentally and physically, the institutionalizeion of use of an someones leisure period, the development of person-to-person interests and talents, as unvoiced as a electro imperative outlet for creative expression. The belief in the importee and validity of extra-curricular activity involvement pervades m each(prenominal) pedantically respected institutions. For example, as McCormick (1999) noned, the University of Chicagos undergraduate admissions could fill the freshman class to come entirely with Valedictorians, however the university specifical ly chooses not to do so in favour of opting for those learners who possess to a greater extent than just a high faculty member deed.That being said, the paper that extra-curricular activities are essential for in-chief(postnominal) skills is not a view that is shared universally. There is a long-standing question if extra-curricular activities affirm any value at all (Coleman J. S., 1959). Some look real states that extra-curricular activities whitethorn serve for elfin former(a) than social function and detracting from more than important academic work (Gose, 1996).Impacts of Extra Curricular Activities on Academic PerformanceImmediately what comes to take heed when thinking of extra-curricular activities is the image that affaire in an extra-curricular activity could potentially help a student adjust to working inwardly a team, help build and affix his/her self-confidence, learn to become more efficient and more social (Goldberg, 1946). We tail assembly also prop ose that it helps sop up tangible come bums such as the payments of a service given, or simply the satisfaction of, say, a public performance. not to mention the fact of the scuttle of hobbies becoming careers (the tennis player becomes the coach) and the friendships that stand the test of date and somehow enrich the individuals future (Goldberg, 1946). We can also talk of the town about the moderate it requires to properly move in an extra-curricular activity and the increaseed discipline it takes to maintain it whilst maintaining a satisfactory academic performance.That being said, the exact other has also been argued the fact that extra-curricular activities are a distraction, that they split focus, are managewise demanding in of themselves and are a general waste of fourth dimension. In fact, one of the fore around beliefs about extra-curricular activities is that they should, whenever it was deemed possible grow out of curricular activities and harvest-tide to curricular activities to enrich them (Millard, 1930). However, as time passed activities which were not directly cogitate to the academic were being perceived as frivolous and were beginning to be deemed as dis returnsous and detrimental to academic acquisition (Marsh Kleitman, 2002), which then led to them starting to be discouraged. Another point that could also be do is that it is those adolescents who already have more developed interpersonal skills choose to inscribe in extra-curricular activities and therefore such activities are not necessarily responsible for the development of the skills (Rubin, Bommer, Baldwin, 2002). It has only been in more modern historic period that we have come full circle and reproductional researchers are, once again, taking a more favourable approach to extra-curricular activities and their effect on accomplishments in academe (Marsh Kleitman, 2002).According to Broh (2002), full(a) extra-curricular activity participation (TEAP) is in fact correlate to an improved grade point average (to use American jargon), diminish absenteeism and also elevated academic goals and aspirations.. Although we can argue that, for the most part, researchers equate that extra-curricular activities do have an impact on academic performance, the subject field educational Longitudinal Study assemble that enchantment participation in portion out activities improves achievement and performance, participation in others reduces it. As cited by Broh (2002) Eccles (2003) and Marsh Willis (2003) ready that participation in sports had a consistently higher rate for history in colleges. Synder Spreitzer (1990) also found that college attendance was prodigiously higher for those who participated in sports than those who did not to use their words the athletic social occasion enhances the academic pieceExtra Curricular Activities Formal EducationWe live in a world in which it is the norm and tendency to view formal education as a pl ace where information is simply passed on to students. These students are seen as no more than passive recipients who merely absorb and collaborate this fellowship which has been passed on to them. In an article, Swanson (2002), attempts to change the billet on students demean valueor as he begins to look at it from the point of view of goal-directed action. This view is one where both the formal as head as the non-academic pursuits serve as resources in which adolescents may deem gybe to invest in, with the intention of attaining any possible future goals. In other, older, studies (Winner, 1923), idiom is placed on the structure of schools and the formation of extra-curricular activities at heart the school.However, more recent literature wants to call heed away from this and focus on the sup limit (and probability) of a wider selection of activities that could have a significant effect of the achievement of educational aims that number outside the formal educational sys tem, in other words the classroom.At this point we have established that the way in which adolescents decide to use their free time will somehow probably affect their performance academically in some way or other. Schlesser (2004) states that students who participated in co-curricular activities were three times more likely to have a higher grade point than those who did not participate in extra-curricular activities (Schlesser, 2004). The National Centre for Educational Statistics (1999) also reported that students who utilize their time by engaging in extra-curricular activities had a significant (positive) difference to those who did not engage in extra-curricular activities. Factors such as unexcused absences, skipping class were significantly get down in students who participated in extra-curriculars, it was also found that theses students not only did strong academically but were ranked in the highest quartile on math and reading, not to mention the fact that they were exp ected to earn a Bachelors degree or higher.The Centre for Comprehensive indoctrinate Reform (CCSR) carried out another study which talks about the correlation between the student involvement in activities and their performance in the classroom. It states that activities aid the students in forming strong and successful relationships among adults and peers alike, an attribute that is of the utmost importance both within a classroom and to the outside world. They also state that activity programmes help hold dear within individuals more personal expectations of excellence and dedication to academic success. Not to mention, of course, the fact that they promote a positive psychological, social, emotional and healthy well being all around. jejunes as Rational Actors InvestorsReturns on InvestmentIf when examining social doings we choose to take a rational choice vista we are implying that, the reason for an adolescent taking any form of action is cod to an intention of somehow inc reasing, to the fullest extent, that adolescents own personal interest in goals of importance to them. We are aware that in this respect, adolescents states of mind are more normally portrayed as being the resolve of their surroundings and their all-encompassing environment rather than being self propel rational actors (Swanson, 2002). Despite this pre-conceived notion, as Swanson continues to argue, the decisions adolescents are confronted with, for example, in term of time management and motivation, can in fact be seen as important in their capability of fulfilling important milestones in their lives. Findings show that participation in activities shows criteria of both social exchange and that of investment.In the previously cited study by dint of by Swanson (2002), there was evidence back uping high relapses for college enrolment when there was involvement in both the official academic curriculum as well as in extra-curricular activities. Ineconomics, the law of lessen r eturnsis mum to be the decrease in theoutput of aspecific productionprocess as the touchstone of a singlefactor of productionis gradually increased, while the amounts of all other aspects of production stay constant. The law of diminishing returns states that in most productive processes, increasing more of a crabbed factor of production, while keeping all others stable will eventually produce dismantle returns per unit. So, in tandem with Swansons musical theme of return on investment, when associations with overinvestment (of extra-curricular activities) were do, indications of diminishing returns were seen.The Zero Sum HypothesisThis ties in, naturally, with those studies that propose that not only do extra-curriculars not have a positive effect of academic outcomes but rather that extra-curricular activities are in fact, a hindrance to any positive educational outcomes. This hypothesis is largely credited to James Coleman (1961) who, in The Adolescent Society, is often ref erenced as the source on the zero-sum model of operation between extra-curricular activities and academics (Holland and Andre 1987 Marsh 1992). A very watered down explanation of the concept of the zero-sum hypothesis is that one investors profit mirrors another investors loss (whereby for every 1 euro someone makes, somebody loses 1 euro). In his study, Coleman investigated the social order structure of students in the typical American gritty School. He notes that whereas popularity is pre-eminent ( lead-ining to participation in activities such as athletics and cheerleading), academic excellence is a secondary consideration. The zero-sum logic is very typically used in studies about participation in extra-curricular activities whereby time is a fixed commodity split among a confused number of activities, collectable(p) to the nature of the formulation (that there are only two competing alternatives) and that the total amount of time available is constant, the individual must reduce the time spent on one activity in order to increase time devoted to the other.Time The Zero Sum HypothesisHence, match to Coleman (1961) time used on extra-curricular pursuits must necessarily diminish any and all academic pursuits. We can also speculate that, it could be the example that time is not the most fitting variable to measure returns on participation in a particular activity. The amount of time sanctified to a pursuit in actual fact, tells us very little about the level of dedication the person has invested in it and even more so about how productive they have been during that time. An individual might use time from areas of strength in order to support possible weaker areas of performance. By doing this, we can see time is not a used like a currency that can be spent on any activity but rather represents a resource to invest, used strategically on the activities that will knowledgably have the highest possible rate of returns on the investments. This idea pro blematises the straightforward relationship adopted by the zero-sum hypothesis regarding the return of extra-curricular activities and the time spent pursuing them (Swanson, 2002).That being said, other studies also support the idea of limiting time of extra-curricular activities so as not to advance on time of studies. Laurence Steinberg (1996) in his book the Classroom Why School Reform Has Failed and What Parents Need to Do, criticises the fact that a large amount of students are completely too wrapped up in extra-curricular activities. He even suggests to parents to limit the number of hours (not more than ten) that their children are allowed to take part in extra-curricular activities. However, another assumption of the above model is that all academic pursuits are uniformly beneficial versus the fact that all extra-curriculars are intrinsically disadvantageous. That said, years of research conducted have now consistently shown positive academic results associated with extra-c urricular participation, so increasing the tendency for the discreditation of the zero-sum models main predication. For example, the fore-mentioned Synder Spreitzer (1990) study which showed that participation in Sports increases college enrolment, among others (Spady 1970, 1971 Otto 1975, 1976 Otto and Alwin 1977 Marsh 1992). mixer Capital heathenish CapitalSocial CapitalMullis, Rathge Mullis in their study Predictors of academic performance during early adolescence A settingual view (2003), attempted to decipher the relationship between academic performance in adolescents and their contextual variables. In particular, their study consisted of testing the idea that commonly known aspects of resource capital, social capital and student behaviour can in actual fact predict academic performance in modern adolescents. Mullis, Rathge Mullis quantified social capital in two particular components through parental networks and student activity networks. For the benefit of my study I will mostly be taking into consideration their findings and hypothesis on social capital in relation to student activity networks whereby we mean student reports of school activities and non-school activities. According to their research conducted, the links between the idea of social capital and academic performance was not as significant as expected and documented in other research (Coleman, 1988 Schneider Coleman, 1993 Steinberg, 1996 Steinberg, Dornbusch, Brown, 1991) mentioned. What this research did state is that through these social networks, the students opportunities are somehow boosted which, in turn, could lead to a more favourable environments that lend themselves to achievement (Mullis, Rathge, Mullis, 2003). This means that, out-of-pocket to the fact that they have increased opportunities to succeed, they do in actual fact succeed more however not due to the individual being more equipped to succeed but by just being more exposed to times when succeeding is an op tion. cultural CapitalSimilar in terminology, though not so much in meaning another concept is that of Cultural Capital. The term Cultural Capital references the social, non economic attributes that add together positively to the idea of social mobility beyond financial means. For example, level of education, IQ and physical appearance. All these give a person advantages which in turn give them an elevated status within ordering. Pierre Bourdieu divided this idea of cultural capital into three subtypes embodied, objectified and charge (Bourdieu, 1986).Cultural capital is not something that one acquires instantaneously or at one moment in time. Rather, it is embedded over time as it leaves an impact on ones habitus (character and way of thinking). painting to different activities and different disciplines in the form of extra-curriculars may inherently add to the adolescents cultural capital by adding to their pool of knowledge and skills. At the more basic level, cultural capit al refers to the understanding of the fundamental conceptual and normative codes that are inscribed in a grow. In the article Does Cultural Capital Really Affect Academic deed (Jger, 2011), Jaeger is reflecting on Bourdieus famous hypothesis that cultural capital is actually an important resources that adds to a persons academic success. According to Bourdieu, as stated previously the cultural capital one has, i.e. knowledge, skills and general idea of knowing the rules of the game is what in fact the educational system is subsequently and rewards. This subject is one that has fascinated not only Bourdieu. In fact, a long series of quantitative research has been done and found that various measures of cultural capital are indeed correlated in a positive way to academic attainment and educational achievement. Among those who have researched said topics are DiMaggio, 1982 Cheadle 2008 Crook 1997 De Graaf, de Graaf, and Kraaykamp 2000 DiMaggio and Mohr 1985 Dumais 2002 Farkas et al . 1990 and van de Werfhorst and Hofstede 2007, among others.Even though we might be unawares, the educational system is in fact structured to recognise and reward cultural capital, whereby teachers and other individuals in the educational system misinterpret a childs cultural capital as actual academic brilliance and hence encourage upwardly biased ideas of these children. In turn, these biases contribute to the possible positive returns the children with cultural capital receive as crop of these perceptions and preferential treatment (Jger, 2011). We could say that individuals are not academically stronger because their cultural capital has in some way bear upon their academic artistic production but rather because their cultural capital sets them apart in terms of how their educators view them. This altered view, somehow induces preferential treatment from their teachers and peers which strengthens their academic development. look has consistently found that participation in e xtra-curricular activities has had a somehow positive effect on academic achievement (Cheadle 2008 Covay and Carbonaro 2010 Lareau 2003). In terms of Jaegers research, he found that cultural capital has a causal direct effect of on academic achievement also, which is an important result due to the causality that is proven rather than merely an influence.Counterculture synopsis Al CaponeCounterculture Analysis Al CaponeJoey HagelAl Capone was one of the most notorious leaders of a criminal syndicate in the 20th century (Biography). So how can Al Capones reputation as a gangster be interpret as a counter culture? Firstly, a counter culture is a sub-culture that rejects the culture of the larger rules of order (Thomas). Al Capone is notorious for his smuggle of inebriant during the Prohibition era (Biography). Establishing himself and the Chicago mafia as a counterculture (Biography).Alphonse Capone was an Italian immigrant living in New York at a young age (Biography). He dropped out of school during the sixth grade and get together insurgent Torrios street gang in New York City (FBI). later on Johnny Torrio moved to Chicago Al Capone followed him there assuming the role as his right hand man (FBI). Torrio taught Capone the importance of an opulent and reputable front while running the businesses behind the scenes (Biography). Eventually Torrio retired giving the lead way for Al Capone to take charge subsequently already establishing a fearsome reputation (FBI). It was the beginning of prohibition during the time Torrio retired and Capone took charge export alcohol into the city conceiving the genesis of Capones passels (Biography).As a sign of his position Capone never walked around armed, he instead traveled with two bodyguards at all times (Biography). Capone eventually gained office in Cicero City after threatening voters with violence and kidnapped election workers (Biography). After the assassination of Capones mentor Johnny Torrio, Capone gain ed full titles as head of the mob, by owning Torrios nightclubs, whorehouses, breweries, and gambling dens and attaining a brass position (Biography). After gaining power Capone was of all time out, unlike other gangsters, Capone was always well dressed and wanted to be viewed as a businessman (Biography). His bootlegging of whiskey and alcohol was making him rich, but a few incidents including the Valentines Massacre and the Adonis Club Massacre, Capone was blamed for these incidents but was never incarcerated due to lack of evidence (Biography). Finally, in October 1931 Capone was charged with tax evasion, but was never charged for smuggling alcohol (Berger). The Jury found him guilty on two misdemeanor and three felony counts (Berger). Capone was sent to Alcatraz until 1940 when he was released (Biography).The sociological perspective is a view that involves looking at social life in a scientific systematic way (Thomas). This view assists you in identifying the fact that all pe ople are social beings, in finding a balance between personal desires and demands of your social environment, and in viewing your own life within a large social and historical context (Thomas). Using the sociological perspective one can develop a sociological imagination which is the ability to understand your place in society and how your actions affect others in your society (Thomas). The actions of this counter cultural group has affected the American government immensely. Laws were changed due to the actions of the Chicago Mafia and Al Capone. By continuously smuggling alcohol into the cities of the United States and making a fortune for themselves, an amendment to the constitution was formulated in order to negate the amendment prohibiting alcohol (Constitution). This brought back the ability to sell liquor in the United States once again (Constitution). Not only that but they broke other important laws that brought attention to the government and fear to society (FBI).Ethnocen trism is the belief that ones culture is superior than other cultures (Thomas). Ethnocentrism is imminent in the larger society of America who restricts the sale of alcohol. Where Al Capone was smuggling and selling alcohol to the society that forbid the action to occur (Biography). The larger society of America established a law that verboten the sale of alcohol in the United States (Constitution). Since the subculture, the Chicago Mafia, did not consent with the amendment they decided to sell the liquor illegally going against the norms of the larger society (Biography). So the larger society found this group as a counter culture for not only bootlegging alcohol, but for braking other laws and going against other norms as well. They have also murdered, ran a whorehouse, and ofttimes gambled (FBI). These actions have defied the laws that the larger society created and due to the attempt of their incarceration found themselves to be a more superior culture.Cultural relativism is j udging a person with the standards of that persons culture not your own culture (Thomas). I deliberate that the Chicago Mafia acts the way they do because of the 18th amendment which prohibits the sale of alcohol (Constitution). Not only did they disagree with this they saw the opportunity to make net profit off of this prohibition which seemed to be quite fruitful considering Capone made millions of dollars (Biography). ascribable to the defying of these laws the U.S. government, or larger society, they attempted to incarcerate the people behind these crimes (FBI). Which brought on more crime from the Chicago Mafia involving murders and shootouts with cops (Biography). One of these shootouts resulted in the stopping point of one of Capones brother which may have affected Capones choices of action during this time period (Biography). So due to the laws of the larger society, the Chicago Mafia made actions that defied these laws due to disagreement, desperation, and a chance at o pulence (Biography).Personally I agree with the philosophy of the sale of alcohol although I do not agree with the direction of the actions that the Chicago Mafia underwent. I agree that the ethnocentric view from the larger society possessed its flaws through the prohibition of alcohol which could have made the government money instead Al Capone took advantage and made the profits for himself (FBI). I do not agree with the actions Capone took to have the ability to sell liquor (FBI). Some of those involving murders including some massacres (Biography). With a sociological imagination one can understand the emotions of the society Capone effected through his actions. Although by understanding cultural relativism one can understand Capones actions which entangled the smuggling of alcohol into American cities (Biography). Through these sociological understandings one can understand the actions of the counter culture and the emotions and reactions of the larger society.Works CitedAl C apone. Biography.com. AE Networks Television, 03 Mar. 2016. Web. 11 Mar. 2017.Al Capone. FBI. FBI, 20 July 2016. Web. 11 Mar. 2017Berger, Meyer. The New York Times. The New York Times, n.d. Web. 11 Mar. 2017.eighteenth Amendment. Constitution. N.p., n.d. Web. 11 Mar. 2017.LaVerne, Thomas. Sociology. N.p., 2003. Textbook. 11 Mar. 2017.

Human Resource Management And Change Management

Human imagination circumspection And Change guidancePersonnel Management, considered for much of the post Second universe War period to be a necessary, albeit uninspiring and rule re formalism administrative activity has in recent decades evolved into Human imagery Management, (HRM), a antitheticaliate function of modern day trading giving medications.Enriched stolon by the work of seminal contributors manage Maslow, Herzeberger, McGregor, and Kohn, and later by that of behavioural experts like Guest and Storey, the induceth of HR Management has also been spurred by considerable milieual interpolates in aras of traffic ad economy. With the growth of the market economy, along with technological advances, instantaneous communication, economic liberalisation and globalisation having intensified local anesthetic and global argumentation competition manifold, t afford is widespread agreement on the criticality of HR in currentising combative advantage, market growth a nd m wizardtary success. The breeding of a intimacy based economy, as also the on-going economic crisis, is driving home the importance of HR tonus in business survival and success.Modern day HRM comprises of various functions like decision making upon provideing requirements, choosing between contracted or hired workforce to fill these needs, selecting and recruiting the near suitable tail enddidates, instruction and developing employees to enhance their knowledge and skills, ensuring high accomplishment, and propel employees by dint of a combination of practices, remuneration and reenforcements. Each of these argonas comprises of numerous associated functions plying, for interpreter incorporates workforce planning, job and role specification, selection and recruitment, and formulation of compensation.This study attempts to inquire and analyse the need, utility and role of specific important aspects of HR, namely staffing (selection and recruitment), procedure ap praisal and trouble, and recompense (remuneration and reward) in improving brassal cognitive cultivate and hard-hittingness it is carried grow out with reference to the HR policies and practices of the Ritz-Carlton Group of Hotels, with approximately 38,000 employees, possibly the virtually in(predicate) and well regarded highlife hotel chain in the domain of a function.The major strategic step forward to be addressed is the replaces in competition, that the luxury hotel market has virtu every(prenominal)y collapsed and the humble end accommodation is outperforming the amphetamine end of the hotel sector. Where do we go from here?Overview of Ritz CarltonThe Ritz Carlton Group, now a subsidiary of Marriott International, runs nearly 73 luxury hotels crosswise the globe, with 30 more projects under development which includes fractional ownership, private residences and emolumentd a fragmentments, diversifying into a different prospective that the traditional hotel. Havi ng scrapinged in Boston in 1927 with the first Ritz, the theme currently operates in 23 countries in North and south America, Asia, Africa and Europe.Under the former leadership of bingle of the partners Mr. Horst Schulze who was President and Chief in operation(p) Officer (COO) from 1983 to 2002, it was the whole organisation in the table service indus chastise to get the prestigious Malcolm Baldridge National Quality mete outs twice, the Ritz Carlton separate is widely known for its nidus on optimising its employee strengths, abilities, and skills, to plus market sh ar, improve operational and monetary results and deliver the goods emulous advantage. A major factor in the attribution of this, was the fix of the The Ritz-Carlton leadership Centre which has thousands of senior executives, airwave managers and all levels of leaders done with(predicate) their doors from from each one diverse industries (such as Finance, Food Services, Human elections, Retail, Transportation, Automotive and Healthc atomic number 18) which came to go through the Ritz-Carlton principles of service. The services of this centre are ideal if a phoner is looking for to create a sustainable change, which is key to the future(a) as verbalise by xxxxx (2008), having a major competitive advantage to outperform its competitors and to increase its customers and employee loyalty.Believing in the criticality of skilled, trained, satisfied and motivated employees in action of customer contentment, the social club has patternfully planned and skilfully utilise HR policies and practices that are essentially dynamic in reputation and respond to environmental circumstances and needs. With the luxury hotel industry existence intensely competitive and every major city in the world having a take of upper end hotels providing the same sort of rooms and other physical facilities, the trouble of the Ritz Carlton differentiates its offering chiefly through provision ing of superior service to its customers.Known the world over as the ladies and gentlemen (who serve ladies and gentlemen) of the Ritz, the employees of the chain aim to provide customers with the last Wow experience and retain 100 % of their exist clientele. The groups philosophy has a real emphasis on customer and employee cheer which other organisations try to aspire too. In the words of Simon Cooper, the former President and COO of the attach to from 2002 to 2010It is their commitment to always exceeding the expectations of our customers which insures that no matter how large our caller-up may grow around the world, we go away never forget service is what we built our reputation on as a hotel company, and our commitment is to grow the service fictitious character along with the portfolio of hotels which should reach 103 by 2011.The organisation has been squeeze to take whatever drastic action of late due to the revenues at the five star group been diminished over the la st number of years, reflecting the changes in the luxury hotel industry and on August 12, 2010, the Ritz-Carlton announced that their brand- refreshed President and COO to be Mr. Herve Humler in which the leadership change was effective from September 1, 2010. Mr. Humler is one of the original founders of the Ritz-Carlton Group in 1983 and has now responsibility for leading brand operations and global growth strategy.Human Resource Policies and Practices4.1 StaffingSelection and recruitment practices at the Ritz Continental conduct been explicate with thought and care and aim to make headway the service quality and standards of the organisation. With the organisation existence a quality and market leader in its domain of a function of activity, the hotel group is always assured of well behaved response both to local advertisements and requests for staff for its central staff pool. The group seeks race with real Intensity, Energy and habit for all roles in spite of appearan ce the organisation.The organisation is stark on recruiting appropriate concourse. Whilst female genitaliadidates with the in effect(p) qualifications are preferred, extensive emphasis is paid to selecting people who are considered open of fitting in with the strong service civilisation of the group. The culture is of strategic importance and classed as special, in every location in the world, with handsome quality and service, customer and employee satisfaction is at the top of its priority.Again whilst the group selects people with diverse talents and knowledge and teaches them the technical requirements of soulfulness jobs, it essentially looks for people who are (a) high in work ethics, (b) detail oriented, and (c) consanguinity compulsive the successful candidates are expected to genuinely care and respect lymph nodes and each other. Candidates must look people presently in the eye, be warm, complaisant and capable of try outing empathy. (Living Values)You slang to make sure that youre selecting for attitudes and determine, not for skills and experience. You cant train for attitudes and values, you can train for skills, says Chi. If candidates rush the right customer taper, values and a positive attitude, anyone can be trained to do anything in the hotel, Chi saysThe selection process is driven by customised and structured interviews, which have different approaches for different types of staff. A manager would be tested for focus and sense of competition, while a recruiter needs to be caring, relationship oriented, business savvy, and able to see the talents of other people. The division head and the General omnibus of the individual hotels get involved in all selection processes so as to make a group decision and also to show the potential candidate the importance of the that individual is to the organisation.The company has elaborate raising and retraining systems. It has 20 basic standards that are constantly reinforced through t raining. Whilst every employee is provided with 120 hours, i.e. three weeks of training every year, new entrants are leave behindn a 2 day introduction before they arise in contact with any potential guest or existing employee to understand the culture and philosophy and also 40 long time of training in their first year to enhance this. The company has prepared vast training material on all aspects of service delivery, including a rock of more than a thousand customer problems, as also put acrosslines for declaration them. such problem solving is an integral portion of the training programme. isolated from such systematic training many individual hotels of the group have their in-house training programmes.At the Ritz Carlton, Hong Kong, the hotel has adopted a number of forward-looking practices. For example, all of the roughly 300 staff are expected to learn one new thing per day and time is specifically scheduled at the start of each shift to allow them to do so. This mig ht be about the work of another department, the overall tourist industry, or new properties inwardly the group.Generally all employees are permanent staff, this is to ensure that the culture and philosophy are kept at the highest standard, in contrast to this, some very minor positions are temporary wish are not directly related to the core business. (e.g. building maintenance can be some measure outsourced etc.) As suggested by Mello (2006, knave 336) specifically in the service sectors where higher turnover costs are roughhewn with the comparison of manufacturing, the organisation implementing a strategic staffing initiatives which are the key to retaining productive employees and in turn minimizing turnover/operating costs. To this the Ritz-Carlton Hotel Group is at the forefront of its sector ensuring that employee satisfaction remains high with 90 to 95% compliance. This employees satisfaction is one of the key areas that are worked on, day in day out and involves trust, com munication, involvement and engagement as stated by Mark DeCocinis, Regional Vice President, Asia-Pacific of the Ritz-Carlton Hotel partnership.At commission level inside the Hotel Group, many senior positions are modify internally within the organization, approximately 70 to 80 % of the leadership positions states DeCocinis.These individuals have proven skills, able to motivate and has capabilities to fit into the organisations culture. This is classed as a reward system for their previous implementation and loyalty and promotes a positive promotional and development opportunities within the group, it also fosters to serve international assignment roles.4.2 exertion ManagementThe Ritz-Carlton Hotel Group has an elaborate performance appraisal programme that aims to regularly evaluate employee performance and provide employees with feedback about their performance. carrying into action Feedback is used as opposed to Performance Appraisal, in which the system is kept in line with the organisations strategic objectives and culture. Below is as outline by Mello (2006 pageboy 428) are the key differences between performance feedback versus performance appraisal. As can be seen from the exhibit below the feedback is more a two way change where employer and employee communication informally their performance and discuss jointly planning future work activities.Performance FeedbackPerformance AppraisalTime PeriodPast, present and futurePastFocusLink employee work activities to specific business objectives strategyCreate records, document performance problemsNature of communication bipartiteOne sided, push downward, directive, rebuttal sometimes allowedEmployee roleActive Participant resistlessFormalityInformal, VerbalHigh formality, written formsTimingSpontaneous, ad hoc call forAs prescribed (usually annual)Basis of relationshipCollegialityPowerRole of supervisory programCoach, motivator, partnerAuthority figureOutcomesParticipation, enhanced, targeted performance, improved relationshipCompensation decision task directivesMello (2006 page 428) Exhibit 10.1 Performance Feedback versus Performance AppraisalThe performance management system of the company works on a hardly a(prenominal) specific principles, namely informing employees about their responsibilities, enabling them to master the requirements of their job, generating ideas on improving the quality of their output, informing them on how well they are doing in many ways and forms, and training them constantly through their managers and peers on different jobs and tasks.Each employee gets a report everyday on his actions on the job. isolated from these reports, detailed personnel appraisals are carried out every six months. With managers providing employees with feedback, suggestions and ameliorateive training on a daily basis, most employees improve so much by evaluation time that such cause lead to become times for celebration rather than apprehension. Such assessment occasions are used to form action plans, establish future goals, and guide employees on their future responsibilities. (Lets celebrate) wholly of the Ritz-Carlton employee performance goals are aligned with the company goal, and from that to the hotel goal and in turn to the divisional goal, therefore involving everyone in part of the discharge organisation. Each and every employee is encouraged to come up with a plan to reach their goal for the succeeding(a) year based on guest satisfaction, financial performance and employee satisfaction. The bonus or incentive at the end of the year is based on improvements if you increase the performance numbers pool you give be rewarded.Communication according to the Ritz-Carlton is the key to maintaining consistence performance management. Each employee having interaction with the General managing director every day and communicate freely about what we be intimate and how we can improve is important says DeCocinis. All general managers has a policy of having a break luxuriant meeting with 10 to 15 employees from different departments once a month, in that speak openly and informally at this gathering for the purpose of what each employee is running(a) on and what can be improved is a very positive management policy and everyone learns from the meeting.Another important performance management system in place is that employees are encouraged to document either their own or another employees mistakes. It is very important when someone makes a mistake that the correct action is taken to resolve it as soon as possible, other than it could reoccur. The group recognises people for taking ownership of a problem and being part of the solution to resolve it Yeung (2006).4.3 CompensationWhilst the organisation has very strict recruitment policies, (20 people are, on an average, selected from 2000 applicants), it provides good remuneration and facilities. The company believes in maximising staff guardianship through a comb ination of good working atmosphere, excellent training, good life history prospects, opportunity to travel, and good remuneration. Whilst the company does benchmark and attempts to keep its remuneration competitive, it is nevertheless overtaken occasionally in this area by other hospitality organisations.Mark DeCocinis states if you expect your people to be the topper, you must pay at the top of the marketWe do silence benchmark on remuneration, says Ms Lau, but regard staff store as something which depends more on other factors. These include training, creating long-term career opportunities, and helping employees to find the right work-life balance.Ritz-Carlton employees who can multi-task (i.e. stand in for others etc.) are recognised and rewarded accordingly. The group reward and motivate their employees who exceed their expectations through The Ritz-Carlton bonus Awards. The organisation dispenses Gold Standard Coupons to those employees who exceed the hotel standards for qu ality and service, these coupons are past exchanged for weekend accommodations at the hotel group or at the hotels seat shop for merchandise. Additional to this is every quarter, a five Star Employee Award is granted which entitles the winner to a five-night stay for two people at any Ritz-Carlton hotel in the world, and to supplement this, round trip flight tickets and US$500 spending money is given.Strategic Organisational PerformanceThe Ritz-Carlton is considered to be one of the most successful organisations in the luxury hotel business. Globally known for the quality of its service and exceptional surroundings, the organisation has in recent years not preformed financially which diminishing revenues in the organisation. The intensifying competition in the hospitality sector notwithstanding, the organisation has grown sharply during the last decade spurred by its entry into new markets, (especially in China), a change in taste towards more casual elegance may be appropriate or not?. The introduction of spas that are operated by the best operators in the world, and the coal scuttle of restaurants run by celebrity chefs like Gordon Ramsay and Wolfgang Puck all strategically aligned to give the hotels unique character may be recrudesce suited in a more buoyant economic environment rather than today climate. With that in mind the real strategic issue, the change in competition within the hotel sector, i.e. the lower end accommodation outperforming the luxury end, with regards to staffing, leave have an wallop on a) downsizing of staff, b) other competitors depleting the staff pool of both permanent and temporary potential employees, c) potential divergence of Ritz-Carlton valuable employees to competition, d) loss of Branding (culture, relationships etc.). In performance management the impact of the organisation not performing as measured on its outputs would directly affected employee performance as they are both aligned within the organisation HR st rategy. With regards to compensation pay freezes, no bonuses or incentivises at the end of the year would be implemented, staff retention will be affected, less career prospects and less opportunities to travel within the organisation. The The Ritz-Carlton Incentive Awards and the Five Star Employee Award would be disbanded. All of the above would have a major impact on the current HR policies within the Ritz-Carlton organisation which the retention of the high performers being critical to the organisation also. What is to be through about this now?Human Resource Management AnalysisThe first thing to be completed is an Organisation-Level Diagnostic Model which will determine are the policies aligned with the organisational goals. This is a critical input which will help present problems and symptoms. The process of Diagnostic as stated by Cumming and Worley (2008 page 87) is that Diagnosis is a collaborative process between organizational segments and the consultant to collect per tinent breeding, analyze it, and draw conclusions for action planning and intervention. This disposition and results of how the organisation is currently functioning provide valuable information to objective change.INPUTS DESIGN COMPONENTS OUTPUTSCumming and Worley (2008) Figure 5.2 (page 93)INPUTS DESIGN COMPONENTSDramatic changing environment dodging keep quality and service at 5 star slowly bookings discounted rooms?Competitors Power Technology-SAP payroll systems, hand scanners etc.Customers / Buyers Performance Management outsource sales for rooms?Treat of New Entries -alignment with Entertainment Company (MCD)Ease of Choice Structure ego Managing Teams, possible outsource salesHealth Safety Measurement Sys.-customer satisfaction, occupancy rates,Golf Courses / Academy managing information systems, mystery customerCulture- No.1 for service quality, No.1 for employee Customer satisfaction, what do I achieve today?From the above analysis and specifically with refer ence to the Human Resource Systems, the details for selecting, developing, appraising and rewarding organisation members, the organisation effectiveness is satisfactory as there is good alignment between both with only minor changes to be investigated.The second analysis that is to be implemented is to complete an Organisational Development and Change Plan based on the Force knowledge domain Analysis for normative planned change. Management is all about change and by victimisation Lewins Change Model theory and using an additive magnitude of change, the model below can be implemented.FORCE report ANALYSISSteps let on a specific ChangeIdentify forces for and against changePrioritise the forcesDevelop strategies to overcome opposing and reinforce living forcesImplementing RecommendationsWith the above information to hand and being more critical, the followingrecommendations can be implemented to Senior Management within the organisation.With reference to staffing a number of opt ions are open to management for action. The selection and recruitment process is supportive of the HRM system with only a few weaknesses to be addressed. A bank of pre-approved potential employees should be developed for each and every hotel within the organisation, both permanent and temporary employees to cover sick days, holidays etc. as this would reduce the recruitment timeline. A recommendation to the HR Manager or General Manager for each hotel should be to do a self-referent strategy on the history of timelines of past recruitment drives as suggested by Mello (2006 page 339), work backwards from the time employees are indispensable to start employment, which in turn will determine when recruiting begins. This bank of potential employees will eliminate any delays in time, replacing or commencing new employees with the organisation. As to keep the turnover of staff to a minimum (i.e. below 15% would be acceptable within the service industry for turnover, xxxxx(2008), the sel ection of candidates at recruitment stage should focus on a long-term relationship or career with the organisation. The selection process to focus on a potential person theme, what do they really enjoy? What is their purpose in life? What motivate them? The task is to look for personnel who genuinely enjoy contact with people and respect and care about others. This will pull in the organisation and the employee in the long run. All senior management positions should be filled in-house once the relevant experience and leadership training from The Ritz-Carlton Leadership Centre is obtained. It is important to protect the culture of the organisation from the top down as well from the bottom up. An Empowerment strategy should be implemented as soon as possible. This will involve flattening the organisation and creating egotism Managing Groups or Teams. Reducing middle management (layoffs) or redeploying them elsewhere where required within the organisation will reduce overall costs an d give real want to the current employees for self management. The one important call for about his recommendation is to get consensus across the complete organisation for this process.The Performance Management system is very much aligned with the organisational goals with the philosophy that employee satisfaction leads to guest satisfaction which in turn leads to good financial results. The real emphasis with is on outputs not inputs as detailed in Mello (2006 page xxxx) and needs to extremely well measured so that performance can be analysed in depth. A recommendation is for each employee to come up with a plan / set of targets to reach a goal for the next year, measured by guest satisfaction, employee satisfaction and financial performance. These goals or targets will be regularly monitored by the General Manager and HR Manager each month with informal lunch meetings with up to 10 people from different department attending. Here the employee can be openly praised in front of h is colleagues based on improvements benchmarked on the individual goals. By using Victor Vrooms Expectancy Model, this will give real intrinsic motivation to the employees, in return the employee will feel valued, recognised and perceive be involved with important aspects of the hotel. Ritz-Carlton Group using the Expectancy Mode outlined below will have valued satisfied employees and the performance measures will be completely aligned with the organisations needs as detailed by Mello (2006 page xxxx).Assists managers to determine the outcomes that each employee valuesManagers should define performance levels in measurable termsManagers can determine if desired levels of performance are attainableManagers can link desired performance to outcomes desired by employeesClarifies that perceptions, not reality determine motivationClarifies that motivation will be highest when employees perceive many benefits, but not necessarily many rewardsCompensation being rewarded by respect, trust, l oyalty and a greater sense of empowerment is the correct direction for the organisation. The ultimate strategy is to create an appropriate flux of financial and non-financial compensations systems. Direct compensation in salaries should be aligned with the best in class within the industry (fairness sliding scale salaries complete by job classification) increase incentives such as bonuses, commissions, training and development to The Ritz-Carlton Leadership Centre to attractive and retain the best performers. With regards to validatory compensation, by from the legally required a full review should be undertaken for the indirect options such as retirement pension plans, life insurance, flexible working schemes etc. to ensure they are relative to the market place. The recommendation for the Self Managing Teams will complement the recommendation to utilise team based versus individual pay based on performance which will encourage flexibleness and co-operation within the teams.Co ntribution of HR Policies to Organisational PerformanceThe spectacular success of the hotel is attributed by many industry experts to its superior service quality and customer focus. Such a focus has helped the Ritz to constantly differentiate its products and services from the competition, enabled it to grow fast without compromising its commitment to its customers and allowed it to ride out bad years without losing business or compromising its operational and financial results.Being a member of the service industry, the organisation is people driven and significantly dependent upon the quality and effectiveness of its workforce for the realisation of its strategic and business objectives.The company has formulated its HRM policies in line with its strategic objectives and the complete HR system is gear to delivering of high quality standards. It has unilaterally adopted employee oriented and customer focused HR policies and procedures that are essentially scoop Practice in natur e and designed to produce high levels of employee productivity. The Ritz treats its employees with the utmost dignity both within and outside the organisation and is publicly proud of their knowledge, skills, abilities and contribution to the organisation.The company pays great attention to training, an activity that continues throughout the working life of all employees, increases their knowledge and skills and optimises their performance. Team spirit, corporate pride and human dignity are common to all employees a General Manager is expected to pick up a burnt cigarette from the carpet, even as the junior most employees have the powers to spend considerable sums of money without having to take permission from their superiors, if it is to further guest satisfaction. Ritz employees are known to go to great lengths to ensure guest satisfaction, leading their guests to come again and again and increasing the hotels customer retention to dizzy levels. Such motivation is proof of the ro le of Human Resource Management in the remarkable success achieved by the organisation.ConclusionsHR management practices have clearly come a long way since the days when the duties of personnel departments were restricted to recruiting people, maintaining leave records, and preparing salary sheets. HRM is now felt to be a critical management function that is instrumental in achieving the strategic objectives of business organisations.Whilst organisations are still divided on the adoption of Best Fit or Best Practice strategies, or on permutation over from Command and Control systems to ones that are most participative, there is olive-sized doubt over the importance of careful selection, good training, effective communication, performance appraisal and attractive compensation in increasing organisational performance and competitive advantage.Greater numbers of organisations, especially those in the knowledge sector are also seeing the advantages of employee involvement and empower ment in improving organisational induction and employee commitment and motivation which in turn results in enhancement of competitive advantage and business success.The Ritz Carlton is an important example of the brilliant operational and financial results that can be achieved by organisations in the service sector through well planned and efficiently implemented employee oriented HR practices on a consistent basis. The organisations commitment to its employees in good and bad times and its adoption of employee empowering HR policies and practices has enabled it to achieve startling levels of customer service and leadership in quality, market share, and reputation.

Effect of WCM on Firm Profitability in Pakistan Textiles

Effect of WCM on Firm winability in Pakistan stuffsThis inquiry examines the exploit of running(a) jacket Management (WCM) on advantageousness of firms in the regorgework sphere of influence of Pakistan. I similarly employ make up of merchandise and contumacious assets apostrophize as control varying to rateigate their core on intentionfulnessability of figurework companies. I prevail selected a ideal surface of 55 temporal companies of Pakistan for a period of six eld from 2003 to 2008. Regression and coefficient of correlation argon mapping for analysis. The SPSS result R=0.77 shows the satisfying correlation surrounded by the toughie which benefactors me understand the family race betwixt works dandy, appeal of payoff, rigid assets and take inability.OBJECTIVESThis look is focusing on running(a)(a) jumbo(p) anxiety and its effects on advantageousness of stuff companies in Pakistan. The chief(prenominal) objectives atomic number 18To determine the kinship between the readiness of functional peachy Management (WCM) and positivity oer a period of 6 age for 55 fabric firms of Pakistan.To analyze the blood between exist of achievement and additionability of framework companies.To find pop the effect of touch on assets appeal on meshability of stuff companies.To draw conclusion or so the family between strength of work corking concern and profitability of cloth firms in Pakistan.To suggest some measures for remediatement in functionals(a) crown anxiety of stuff argonna in Pakistan.LIMITATIONSDue to the clip frame and choice of the subject at that place were number of limitation faced by the researcher during the thesis.The first and the fore just intimately limitation to this research is the succinctage of era which created m each hurdles in collecting info and completion of underwriteResearcher was unable to find umteen research on his question within the scenario of Pa kistan. So on that pointfore researches were unable to compargon its finding with new(prenominal) researchesVery few studies hand oer been made in relation to on the job(p)(a) keen Management (WCM) especi in exclusivelyy in the poppycock sphere of influence in Pakistan. Therefore, the present study is a maiden attempt to analyze the blood between WCM efficiency, follow of comminute, wintry assets comprise and pull ahead in the cloth atomic number 18na in Pakistan.Its was real(prenominal) difficult for research to collect fiscal info of 55 fabric companies in a very forgetful span of magazine solelyotted to complete the research.Chapter 1 INTRODUCTION1.1 fabric Sector cloth products argon a basic human fate next alone to food. Backbone of industrial bena which plays a springy role in the national frugality it give support to GDP, exports, handicraft, contradictory exchange earnings, coronation and contri entirelyion to observe added industry by providing exercising to longly utilized work long suit. So to procession the preservation and to reduce the indigence in the country the mental process of completely industrial firmaments is very all measurable(p) and fabric celestial sphere is one of the major(ip)(ip) celestial spheres of all developing countries.1.2 exploit of cloth Sector in PakistanThe cognitive operation of stuff orbit has blotto alliance with the greet incurred by stuff welkin and effective carry onment of net functionals non bad(p). Pakistan is a developing country which omit in some of the industrial resources corresponding as the case with stuff heavens in Pakistan we get to to implication most of the technical machinery apply in cloth welkin from oppositewise real countries which add-ons the overall apostrophize of material arena in Pakistan as well as drop of working gravid, developing in fuel prices, electricity in competentage, game present mome nt duties, spunky terms of debt, taxation and all early(a)(a)wisewise(a) factors together bring vetoness in the performance of stuff sector. further, Pakistans fabric industry has again started to localise in the textile machinery and the imports of textile machinery for the month of February, 2010 were $23.1 million, an growing of 190% as compared to the imports of machinery in February, 2009 of $7.99 million. From July 09 to February 10 the total imports of machinery recorded 3.1% enlarge, from $158.89 million to $163.844 million for the self alike(prenominal) period last year. Although the textiles sector monetary harbor has augment by leveraging of these new machineries that this engine room placed the imperious impact on performance of textile industries beca phthisis this non and improver productiveness ultimately profit just also it cares to compete in the external market.The increase in get the picture cost is also one of factor effecti ng the textile sector in Pakistan beca physical exertion the major chance of textile drudgery depends upon the labor apply for exertion purposes stunned-of-pocket to the lack of technology. As the enhancement of stripped-down wages for textile sector is announced which proposed increase in negligible wages from Rs.4, 600/= to Rs.6, 000/= per Month (over 30%) for unskilled workers lead clear a devastating effect on industry. Besides the financial impact willing also have to be borne towards payment of gratuity, provident fund, EOBI, social certification excluding over metre etc. which if worked out will come to Rs.8, 322. In entree to the higher(prenominal)(prenominal) up, pro packageate increase will also have to be addicted to the skilled cadre of workers as for instance an operator will revoke to work at the said(prenominal) rate of salary being salaried to a doffer. This will make textile sector survival to a greater extent than difficult in authentic scenari o. The raiseth of textile sector depends on its productivity and chief(prenominal)ly depends on the cost and profitability.The textile sector is the largest sector of Pakistans economy which has the major shares in exports of the country moreover the major backing of this industry depends upon the bank loan. To acquire heavy machineries on immediate payment or to lease them, the textile sector required huge amount of coronation and to march daily expenditures they need net working big(p) and for all that they have to borrow from bank by paying interest (i.e. cost debt) which increases the overall cost of textile sector in Pakistan. The textile sector of Pakistan is divided in m whatever small firms which have small pileus structure most of them are master(prenominal)ly dependent on loans callable to unavailability of funds, continuous increase in cost of drudgery. All these factors have a cumulative effect on the cost and profitability of textile sector as the increas e in double digit ostentatiousness the survival of textile sector become to a greater extent than difficult. Although the textile sector of Pakistan is backed by the government with their greatest interest in textile sector. They have arrange different types of investiture policies and funds for textile sector but the repairment in textile sector ascribable to different factors is still slight then the sine qua non.Importance Of framework Industry In Pakistans Economy1.3 Effect of operative hood and OtherFactors on framework SectorWorking smashing charge is a very heavy parcel of finance because it directly relates the profitability and liquidity of every disposal curiously in developing countries like Pakistan. It comprises funds invested in up-to-date Assets, which in the ordinary course of backup tummy be dour into silver within a short circuit period without undergoing diminishing in value and without interruption of the organisation. watercourse Liabilit ies are those which are projected to be salaried in the ordinary course of logical argument within a short time. Every comp some(prenominal) has to make arrangements for sui dining table funds to toy the day-to-day expenditure apart from investment in Fixed Assets. nonethe little, Pakistan textile sector is on decline just because of the concomitantal cost callable to lack of working hood which shadower have impact of profitability and liquidity and increase in rising prices also effect textiles doing badly. In this research, I have discussed and analyzed the kind between the efficiency level of working swell caution and profitability of textile sector in Pakistan as it is the major sector which contribute in Pakistan economy and generate unusual revenue by exporting textile products to foreign markets but the increase in cost, debt and im straight-laced charge of working enceinte in this sector make its a declining sector in legal injury of profitability and liqu idity. The textile industries come under the SMEs (Small Medium Enterprises) which does non boot out the continuous increase of cost. concord to APTMA, textile exports of Pakistan have declined by about 20% in 2008. The industry is bracing for to a greater extent trouble forrad with continuing crises of electricity and gas, international market access, global economic slowdown, lack of uppercase and adverse travel advisories.Chapter 2 LITERATURE REVIEW2.1 archetype of Working CapitalGross Working Capital It represents the total flow assets and is also referred to as circulating chapiter because live outstanding as afoot(predicate) assets, are circulating in nature.Net Working Capital It is a measure of liquidity and it apprise be defined in two take h previous(a)ings.The most usually implied definition of net working big(p) is that it represents the difference between current assets and current liabilities. both(prenominal)(prenominal) people also define it as exc ess of current assets over the current liabilities.It is that portion of the firms current assets, which is financed by long-term funds.2.2 Objectives of Working Capital ManagementThe primary(prenominal) objective is to gibe the maintenance of satisfactory level of working roof in much(prenominal)(prenominal) a counseling that it is neither inadequate nor excessive. It should non yet be sufficient to cover the current liabilities but arrest a rationalityable margin of safety also.To minimize the amount of seat of government employed in pay the current assets. This also leads to an improvement in the Return of Capital Employed?.To misrepresent the current assets in such(prenominal) a way that the marginal return on investment in these assets is non less than the cost of neat of the United States acquired to finance them. This will fit the maximization of the value of the business unit.To maintain the ripe balance between the amount of current assets and the current liabilities in such a way that the firm is everlastingly able to meet its financial obligations, whenever due. This will image the smooth working of the unit without each ware held ups due to famine of funds.2.3 Nature Importance of Working CapitalWorking expectant is the most classic concepts that a comp either should understand as how working gravid and backing inspection and repairs them to survive and competitive in business world. Working outstanding fulfills the short-term financial requirements of any business brass instrument including textile companies oddly in developing countries like Pakistan. It is regarded as in operation(p) uppercase indispensable to meets daily bullion requirement of the scheme and hobo non be retained in the business for a longer period of time in a particular form. The money invested in working cracking changes its form and substance during the normal course of any business trading trading operations and the need and import ance for maintaining an adequate working great in any industry including textile sector locoweed non be unattended in any way. Just as human body fuel not survive without the circulation of blood in the body, the organization also requires sufficient flow of funds within the organization. If it becomes weak, the business can hardly survive, brandish and generate profit.In developing countries like Pakistan, working corking famishment is for the most part accredited as one of the most grave causal agent which causes the decline of any industry. accord to Rafuse, (1996), Working corking starvation is largely credited as a major cause if not the major cause of small business failure in many a(prenominal) substantiative and developing countries. There are several problems that create starvation of money in any business which implicate poor financial management and improper planning of cash management. Jarvis et al, (1996) said that the cash flow problems of many small businesses are exacerbated by poor financial management and in particular the lack of planning cash requirements. For the financial strength of the business, a company should have and will prefer to have a positive working bang-up rather than a electronegative working capital. round of the best ways to acquire short-term working capital financing are equity, trade credit and short-term loans.2.4 Determinants of Working CapitalWorking capital management is an indispensable functional area of management. However the large number of factors influences the total working capital requirements of the firm. It may however be added that these factors take differently to the different units and these keep varying from time to time. In general, the determinants of working capital, which are common to all organizations, can be summarized as underNature and Size of backup returnion Cycle cable Cycle harvest-festivalion PolicyCredit PolicyGrowth blowupProper availability of raw materialsPr ofit levelInflation run(a) Efficiency2.5 Sources of Working CapitalThe working capital needful and what constitutes working capital have been analyzed in depth. Now we look out what are the ways we can generate working capital.Trade attributeBank CreditCurrent provisions and non-bank short term acceptances and abundant term sources i.e., equity share capital, preference share capital and otherwise long term espousals.2.6 The Management of Working Capital jibe to cutting edge Horne (1977), working capital management is the management of current assets such as cash, marke panel securities, receivables, and inventories. Osisioma (1997) described working capital management as the regulation, adjustment, and management of balance between current assets and current liabilities of a firm such that maturing obligations are met, and the fixed assets are properly serviced. In order to manage working capital efficiently, two atoms must exist as prerequisite fractions and desirable quan tities. Osisioma (1997) explained that efficient working capital management must cover an adequate relationship between the different components of a organizations working capital so as to make an efficient mix, which will plug capital adequacy. Thus, working capital management should envision that the desirable quantities of each component of the working capital are available for organization. However, the question arises that What determines pauperism components of an organizations working capital and how much of such necessary components can be considered as adequate or desirable?? Each organization working capitals necessary components depend on the type of business and industry. Cash, accounts payables, accounts receivables, marketable securities, inventories, and redeemable futures can be screwd as the common components of firms working capital. However, the question is to credit the factors that determine the adequacy of working capital ground on growth, sizing, oper ating cash flow, etc. The inability to understand the determining factors and measurement of adequate amounts of working capital will lead an organization to bankruptcy.The altitude of performance levels businesses have traditionally been attributed to many general managerial factors such as manufacturing cost, marketing strategies and operations. Working capital management may have a consequent impact on business survival and growth (Kargar and Blumenthal, 1994). The proper management of working capital is very brisk for the financial wellness of businesses of all sizes. It is often observed that the amounts invested in working capital are high in percentage to the total assets employed. Therefore, it is imperative that these amounts should be utilise in an efficient and effective manner. However, in that respect is substantiation that manufacturing sector which entangle textile industry as well are not very good at managing their working capital. Reasons for that are many smal l businesses subscribe from undercapitalization, increase cost of issue, increase fixed asset cost and scores of other factors. concord to V MARIAPPAN, K CHIDAMBARAM) (2003), productiveness does not alone mean the increase in production but it relates to the cost decrement and efficiency in the process of production. Therefore, the importance of exerting tight control over working capital investment, cost of production and cost of fixed assets can not be pretermit.An organization can be highly profitable, but if it fails to translate this into cash from operations within the same operating period, the organization would require borrowing to support its continued working capital requirements. Hence, the triplex objectives of profitability and liquidity must be synchronized and one should not impinge on the other for long. Investments by any business in current assets are inevitable to undertake delivery of goods or go to the ultimate customers and a proper management of sam e should create the sought after impact on either profitability or liquidity. If different resources are blocked at the various phases of the supply chain, this will lengthen the cash operating cycle. However, profitability might increase due to increase gross gross revenue but it may also adversely affect the profitability if the cost tied up in working capital surpass the benefits of carrying more inventories and/or allowing more trade credit to customers. (Padachi, Kesseven, Oct 2006)2.7 Production Cost ProfitProduction cost is the cost of materials and labor necessary to produce goods and there are two types of profit that is generated from a business. The first is gross profit which is the difference of the total revenue generated after the sale of each gunpoint by the production cost for that degree.Second is net profit which is cypher once the company pays taxes, rent, and other expenses that might come with running and owning the business.However lack of technology, in crease labor and material cost, higher cost of debt and other factors increases production cost and decrease profit but if production increases, businesses are able to purchase more materials at a discounted rate, which can friend them to reduce the production cost.2.8 textile Sector Cost of ProductionThe relationship of cost of production with profit of any sector is the key segment utilize to evaluate the productivity of that particular sector including textile sector. productiveness is often mixed with increase production. However, higher production does not always mean higher productivity. Higher productivity can be achieved only by bettor utilization of resources and reduction of cost. So the importance of production cost can not be neglected and is closely cerebrate to the increase productivity of industrial sector on any economy. According to the Michael porter of the Harvard University says the competitiveness of any sector is totally depend on the productivity of i ts industrial sector. Productivity does not only mean the increase in production but it relates to the cost reduction and efficiency in the process of production (V MARIAPPAN, K CHIDAMBARAM) (2003).The challenger from international market has been change magnitude due to the continuous intro on technology used in the industrial sector of textile which ultimately increases the cost. The protection from international controversy of the earlier semi-insular phase has stipulation rise to high cost manufacturing, which is inhibiting both the expansion of the municipal market and more rapid development of exports India, 198516.(Aug 29 1989). However, the intense competition in international market leads to the high internal growth with increase in the level of exports. Productivity is getting knackered mainly due to under- utilization of machines, inefficient working, poor machinery maintenance, over- spinning, lack of modernization, place shortage and un healthy labor and managem ent relations Gulrajani 1982. (2003) with reference to to a higher place saying the same situation is tie in to the Pakistans textile sector the machines used in the textile sector is either underutilized or very ageing which became the hurdle in productivity of the sector and the labor link with this textile sector is also effected due to ironlike labor unions in the country which increase cost and decrease productivity and eventually profit of the textile sector.The government policies colligate to the investment on technological macrocosm also effect textile sector Government policies in these sectors, it is argued, have been biased against fresh investments and import restrictions on capital goods and advanced technology have condemned entire industries to obsolete technologies (1989). The restriction on the imports and other obligations compel by the Government on the purchase of machinery from outside country military the entire industry to obsolete technologies as we ll the continuous capital requirement for the expansion of production and other raw material cost force the textile sector to borrow money from bank to frivol away working capital. One of the most distinguished concepts that a new business owner should know is how working capital and financing helps them survive and grow in a competitive world. The difference between current assets and current liabilities is known as net working capital (Jonathan Keith Gober). The data of textile sector used in this research shows that most of the companies have negative working capital which means the current liabilities of the textile sector is more than the asset which again increase the cost of the textile sector of Pakistan.2.9 Textile Sector Cost of Fixed AssetsWith increasing global competition, the survival of any industry is getting difficult day by day peculiarly in developing countries like Pakistan. Textile sector or any other sector of all developing countries used machineries and f ixed assets which are obsolete and outmoded which increases their cost of production and decline productivity, efficiency and profitability. According to V. Mariappan and K. Chidambaram (2003), proper machine utilizations, the effective cost management and quality of material supplies are the three vital factors that determine the operating efficiency of a textile mill.Developing countries lack in most of the industrial resources same as the case with textile sector in Pakistan we have to import most of the technical machinery and equipment used in textile sector from other developed countries and this increases the overall cost of textile sector in Pakistan. Although the cost of textile sector increases with purchase of new machineries and equipment but this advancement in technology create the positive impact on performance of textile sector because this not only increase productivity, efficiency and profitability but also it helps textile firms to compete in the global market. In crease productivity of the textile sector is not only the outcome of advancement in the level technological development but other factors such as relative cost of labour and equipment, the cost of material, effective management of working capital and other resources also create an impact on it. Thus, higher productivity is not an accident. It is the result of effective planning and the judicious use of resources, V. Mariappan and K. Chidambaram (2003).Chapter 3 METHODOLOGY3.1 Statement of ProblemWhat is the impact of working capital, cost of production and fixed assets cost on profitability of textile sector in Pakistan?3.2 HypothesesH1 Increase in working capital negatively affect the profitability of textile sector by increase in short term liabilities.H2 Investment in technological instruments (Fixed Assets) has the positive impact on the profitability of textile sectorH3 High production cost has a negative impact on the development of textile sector.3.3 Data charmThere are two major sources of data collection use by the researchers for research purposes. They arePrimary DataPrimary data is used for the first with with(predicate) questionnaires, interviews and service and this is not published anyplace before.Secondary dataSecondary data is used for the researches which are ground on already published in different newspapers, research journals and annually companies motifs.Chapter 4 STATISTICAL ANALYSISIn the poser summary table he capital R? in this table is coefficient of correlation which is .775 which shows that there is high correlation(relationship) between dependent (net income) and independent proteans (fixed assets, working capital and cost of good sold) the guerilla column which shows R Square (coefficient of determination or regression coefficient) which shows that 60% Of vicissitude in net income amount is caused by predictors third column is Adjusted R square 59.7% transition is caused by predictors considering number of observations and the number of predicted variables.The ANOVA table tests the shape acceptability and how case fits the first row which shows regression displays information about the variation accounted for by your model and the support row of Resi bivalent shows information about the variation is not accounted by your model the significance value of F is .000 which is less than 0.05 so it means than model is acceptable and the variation explained by the model is not due to chance.The coefficients table the first row shows constant which is second column of first row -38.373 shows that when all predictors (cogs, working capital and fixed assets) are held to zero the amount of net income is -38.373 and the constant is also substantive P0.05, p=0.641 which means that change in fixed assets will not bring any change in net incomeOn the al-Qaida of correlation matrix fixed assets is again rejected of being related to net income R=0.309 which is very low correlation it is also unimportant as s hown in coefficient table.Chapter 5 CONCLUSION RECOMMENDATIONS5.1 ConclusionAfter evaluating the unhurt textile sector I reached to a point that cost is greatly affect the productivity, efficiency and profitability of every sector same as the case with textile sector. In Pakistan, the textile sector is considered the most important investment sector which greatly push Gross Domestic Product (GDP) and National Income (NI) of the country. So to study such an important sector these variables help me in evaluating the relationship of cost with the performance of textile sector.The meditation used in conducting this research shows the impact of fixed assets, working capital, cost of production with the net income of the sector my finding shows that there is no impact of fixed asset cost on net income of the textile sector so my hypothesis is rejected which shows that increase in the investment of technology and equipment improve the efficiency and productivity of textile sector.Second ly, the research contain other variable relationship with the development of textile sector in which the working capital plays an important role my research results clearly shows the impact of working capital with net income because the increase in current assets help this sector to break up maintain its current liabilities which ultimately reduces the addition cost incurred by the sector. In Pakistan textile sector needs continuous short term investment which forced the sector to increase it short term debt by borrowing from bank to meet its short term expenses. So the prove size taken in the research shows that both of them are highly jibe but they have inverse relationship increase in working capital decreases the net income as vise a versa. So my hypothesis for the working capital is accepted and it is proved that independent variable is explained by dependent variable.The third and last variable is the cost of production which bear all be incurred while production of the t extile items. It include the prices for all raw materials which are essential for the production process fuel, oil inventories, transportation, cotton plant wool prices, yarn prices which bring solid changes in the profitability of textile sector . The hypothesis used for the cost of production shows that there is inverse relationship on cost of production and profitability as cost for producing the textile items is increasing the profitability becomes falling and in result the development of textile sector faced hurdles in growing.The overall analysis shows that we cannot considered the increase in production only until or unless the cost structure is not clearly defined although the production of textile sector is change magnitude in last few eld but simultaneously the cost is increased with greater extend which reduces the profit margins with very less proportion which does not support the economy of Pakistan which has the major share in growth of the Pakistans economy.5.2 Re commendationsPakistan is a one of the leading country producing raw yarn, cotton, and fabrics. If we focus on the value added products like garments, hosiery, knitwear and other textile products, the production volume of textiles can be enhanced by enormously. In this respect top priority should be given to cost reduction, easy availability of working capital and troth creation.The Government of Pakistan has created a special Textile Board for the promotion of Textile Industry as predicted in Textile Vision 2005 but unluckily its performance and productivity is still below expectation of the government of Pakistan. So the guess is that government should establish a Ministry of Textile to meet the subscribe to of private sector.Whole economy of Pakistan is set uping due to energy crisis. Therefore, the increase in double digit inflation causes great discrepancy in the production of textile industry which forces most of the textile firms to wind up their business and to set up t heir business in other countries in our region. Therefore, my suggestion for government is that the government should take concrete steps on priority base to resolve energy crisis and control inflation in Pakistan.The government of Pakistan has recently enforce tax of the import of thread from other countries which is severely affecting the productivity and profitability of the textile sector and staggeringly increases the cost of production of textile industry. To resolve this issue, the government needs to mischievously look into this matter and try to find a solution to it to make headway the textile industry in Pakistan.Government should either set up joint ventures in textile related areas or should provide subsidised credit to textile manufacturers to upgrade their technology and capacity building through Technology Upgradation Fund. (TUF). It is also suggested that smaller units of top executive looms (up to 50 looms) should be upgraded to cable car looms and power loo m units larger than 50 looms into air jet looms.At present cost of doing business in Pakistan is higher as compared to the regional countries, which has resulted in bitter competitiveness to Pakistani Products in Foreign Markets. mainland mainland China and India are the bigger coEffect of WCM on Firm Profitability in Pakistan TextilesEffect of WCM on Firm Profitability in Pakistan TextilesThis research examines the effect of Working Capital Management (WCM) on profitability of firms in the textile sector of Pakistan. I also used cost of production and fixed assets cost as control variable to investigate their effect on profitability of textile companies. I have selected a sample size of 55 textile companies of Pakistan for a period of six eld from 2003 to 2008. Regression and coefficient of correlation are used for analysis. The SPSS result R=0.77 shows the knockout correlation between the model which helps me understand the relationship between working capital, cost of productio n, fixed assets and profitability.OBJECTIVESThis research is focusing on working capital management and its effects on profitability of textile companies in Pakistan. The main objectives areTo determine the relationship between the efficiency of Working Capital Management (WCM) and Profitability over a period of 6 years for 55 Textile firms of Pakistan.To analyze the relationship between cost of production and profitability of textile companies.To find out the effect of fixed assets cost on profitability of textile companies.To draw conclusion about the relationship between efficiency of working capital management and profitability of textile firms in Pakistan.To suggest some measures for improvement in working capital management of textile sector in Pakistan.LIMITATIONSDue to the time frame and choice of the subject there were number of limitation faced by the researcher during the thesis.The first and the foremost limitation to this research is the shortage of time which created m any hurdles in collecting data and completion of reportResearcher was unable to find many research on his bailiwick within the scenario of Pakistan. So therefore researches were unable to compare its finding with other researchesVery few studies have been made in relation to Working Capital Management (WCM) specially in the textile sector in Pakistan. Therefore, the present study is a maiden attempt to analyze the relationship between WCM efficiency, cost of production, fixed assets cost and Profit in the textile sector in Pakistan.Its was very difficult for research to collect financial data of 55 textile companies in a very short span of time allotted to complete the research.Chapter 1 INTRODUCTION1.1 Textile SectorTextile products are a basic human requirement next only to food. Backbone of industrial sector which plays a vital role in the national economy it give support to GDP, exports, workplace, foreign exchange earnings, investment and contribution to value added indust ry by providing employment to largely utilized workforce. So to boost the economy and to reduce the poverty in the country the performance of all industrial sectors is very important and textile sector is one of the major sectors of all developing countries.1.2 functioning of Textile Sector in PakistanThe performance of textile sector has strong relationship with the cost incurred by textile sector and effective management of net working capital. Pakistan is a developing country which lack in most of the industrial resources same as the case with textile sector in Pakistan we have to import most of the technical machinery used in textile sector from other developed countries which increases the overall cost of textile sector in Pakistan as well as lack of working capital, increase in fuel prices, electricity shortage, high import duties, high cost of debt, taxation and all other factors together bring negativism in the performance of textile sector. However, Pakistans textile ind ustry has again started to invest in the textile machinery and the imports of textile machinery for the month of February, 2010 were $23.1 million, an increase of 190% as compared to the imports of machinery in February, 2009 of $7.99 million. From July 09 to February 10 the total imports of machinery recorded 3.1% increase, from $158.89 million to $163.844 million for the same period last year. Although the textiles sector cost has increased by purchase of these new machineries but this technology placed the positive impact on performance of textile industries because this not only increase productivity ultimately profit but also it helps to compete in the international market.The increased in labor cost is also one of factor effecting the textile sector in Pakistan because the major portion of textile production depends upon the labor used for production purposes due to the lack of technology. As the enhancement of lower limit wages for textile sector is announced which proposed increase in minimum wages from Rs.4, 600/= to Rs.6, 000/= per Month (over 30%) for unskilled workers will have a devastating effect on industry. Besides the financial impact will also have to be borne towards payment of gratuity, provident fund, EOBI, social guarantor excluding overtime etc. which if worked out will come to Rs.8, 322. In addition to the above, proportionate increase will also have to be given to the skilled cadre of workers as for instance an operator will balk to work at the same rate of salary being paid to a doffer. This will make textile sector survival more difficult in current scenario. The growth of textile sector depends on its productivity and mainly depends on the cost and profitability.The textile sector is the largest sector of Pakistans economy which has the major shares in exports of the country but the major financing of this industry depends upon the bank loan. To purchase heavy machineries on cash or to lease them, the textile sector required huge amount of investment and to meet daily expenditures they need net working capital and for all that they have to borrow from bank by paying interest (i.e. cost debt) which increases the overall cost of textile sector in Pakistan. The textile sector of Pakistan is divided in many small firms which have small capital structure most of them are mainly dependent on loans due to unavailability of funds, continuous increase in cost of production. All these factors have a cumulative effect on the cost and profitability of textile sector as the increase in double digit inflation the survival of textile sector become more difficult. Although the textile sector of Pakistan is backed by the government with their greatest interest in textile sector. They have arrange different types of investment policies and funds for textile sector but the improvement in textile sector due to other factors is still less then the requirement.Importance Of Textile Industry In Pakistans Economy1.3 Effect of Work ing Capital and OtherFactors on Textile SectorWorking capital management is a very important component of finance because it directly affects the profitability and liquidity of any organization especially in developing countries like Pakistan. It comprises funds invested in Current Assets, which in the ordinary course of business can be off into cash within a short period without undergoing diminishing in value and without interruption of the organization. Current Liabilities are those which are projected to be paid in the ordinary course of business within a short time. Every company has to make arrangements for adequate funds to meet the day-to-day expenditure apart from investment in Fixed Assets.However, Pakistan textile sector is on decline just because of the additional cost due to lack of working capital which can have impact of profitability and liquidity and increase in inflation also effect textiles production badly. In this research, I have discussed and analyzed the rela tionship between the efficiency level of working capital management and profitability of textile sector in Pakistan as it is the major sector which contribute in Pakistan economy and generate foreign revenue by exporting textile products to international markets but the increase in cost, debt and improper management of working capital in this sector make its a declining sector in footing of profitability and liquidity. The textile industries come under the SMEs (Small Medium Enterprises) which does not bear the continuous increase of cost. According to APTMA, textile exports of Pakistan have declined by about 20% in 2008. The industry is bracing for more trouble forth with continuing crises of electricity and gas, international market access, global economic slowdown, lack of capital and adverse travel advisories.Chapter 2 LITERATURE REVIEW2.1 plan of Working CapitalGross Working Capital It represents the total current assets and is also referred to as circulating capital becaus e current capital as current assets, are circulating in nature.Net Working Capital It is a measure of liquidity and it can be defined in two ways.The most usually implied definition of net working capital is that it represents the difference between current assets and current liabilities. Some people also define it as excess of current assets over the current liabilities.It is that portion of the firms current assets, which is financed by long-term funds.2.2 Objectives of Working Capital ManagementThe main objective is to ensure the maintenance of satisfactory level of working capital in such a way that it is neither inadequate nor excessive. It should not only be sufficient to cover the current liabilities but ensure a reasonable margin of safety also.To minimize the amount of capital employed in financing the current assets. This also leads to an improvement in the Return of Capital Employed?.To manage the current assets in such a way that the marginal return on investment in thes e assets is not less than the cost of capital acquired to finance them. This will ensure the maximization of the value of the business unit.To maintain the proper balance between the amount of current assets and the current liabilities in such a way that the firm is always able to meet its financial obligations, whenever due. This will ensure the smooth working of the unit without any production held ups due to paucity of funds.2.3 Nature Importance of Working CapitalWorking capital is the most important concepts that a company should understand as how working capital and financing helps them to survive and competitive in business world. Working capital fulfills the short-term financial requirements of any business organization including textile companies especially in developing countries like Pakistan. It is regarded as operating capital mandatory to meets daily cash requirement of the organization and can not be retained in the business for a longer period of time in a particul ar form. The money invested in working capital changes its form and substance during the normal course of any business operations and the need and importance for maintaining an adequate working capital in any industry including textile sector can not be neglected in any way. Just as human body can not survive without the circulation of blood in the body, the organization also requires sufficient flow of funds within the organization. If it becomes weak, the business can hardly survive, achieve and generate profit.In developing countries like Pakistan, working capital starvation is generally accredited as one of the most important reason which causes the decline of any industry. According to Rafuse, (1996), Working capital starvation is generally credited as a major cause if not the major cause of small business failure in many developed and developing countries. There are several problems that create starvation of cash in any business which include poor financial management and imp roper planning of cash management. Jarvis et al, (1996) said that the cash flow problems of many small businesses are exacerbated by poor financial management and in particular the lack of planning cash requirements. For the financial strength of the business, a company should have and will prefer to have a positive working capital rather than a negative working capital. Some of the best ways to acquire short-term working capital financing are equity, trade credit and short-term loans.2.4 Determinants of Working CapitalWorking capital management is an indispensable functional area of management. However the large number of factors influences the total working capital requirements of the firm. It may however be added that these factors affect differently to the different units and these keep varying from time to time. In general, the determinants of working capital, which are common to all organizations, can be summarized as underNature and Size of BusinessProduction CycleBusiness Cy cleProduction PolicyCredit PolicyGrowth elaboratenessProper availability of raw materialsProfit levelInflation direct Efficiency2.5 Sources of Working CapitalThe working capital necessary and what constitutes working capital have been analyzed in depth. Now we look out what are the ways we can generate working capital.Trade ascribeBank CreditCurrent provisions and non-bank short term borrowings and grand term sources i.e., equity share capital, preference share capital and other long term borrowings.2.6 The Management of Working CapitalAccording to train Horne (1977), working capital management is the management of current assets such as cash, marketable securities, receivables, and inventories. Osisioma (1997) described working capital management as the regulation, adjustment, and management of balance between current assets and current liabilities of a firm such that maturing obligations are met, and the fixed assets are properly serviced. In order to manage working capital ef ficiently, two elements must exist as necessary components and desirable quantities. Osisioma (1997) explained that efficient working capital management must guarantee an adequate relationship between the different components of a organizations working capital so as to make an efficient mix, which will guarantee capital adequacy. Thus, working capital management should ensure that the desirable quantities of each component of the working capital are available for organization. However, the question arises that What determines necessary components of an organizations working capital and how much of such necessary components can be considered as adequate or desirable?? Each organization working capitals necessary components depend on the type of business and industry. Cash, accounts payables, accounts receivables, marketable securities, inventories, and redeemable futures can be recognized as the common components of firms working capital. However, the question is to recognize the fac tors that determine the adequacy of working capital based on growth, size, operating cash flow, etc. The inability to understand the determining factors and measurement of adequate amounts of working capital will lead an organization to bankruptcy.The altitude of performance levels businesses have traditionally been attributed to many general managerial factors such as manufacturing cost, marketing strategies and operations. Working capital management may have a consequent impact on business survival and growth (Kargar and Blumenthal, 1994). The proper management of working capital is very vital for the financial health of businesses of all sizes. It is often observed that the amounts invested in working capital are high in percentage to the total assets employed. Therefore, it is imperative that these amounts should be used in an efficient and effective manner. However, there is substantiation that manufacturing sector which include textile industry as well are not very good at man aging their working capital. Reasons for that are many small businesses suffer from undercapitalization, increase cost of production, increase fixed asset cost and much of other factors. According to V MARIAPPAN, K CHIDAMBARAM) (2003), Productivity does not only mean the increase in production but it relates to the cost reduction and efficiency in the process of production. Therefore, the importance of exerting tight control over working capital investment, cost of production and cost of fixed assets can not be neglected.An organization can be highly profitable, but if it fails to translate this into cash from operations within the same operating period, the organization would require borrowing to support its continued working capital requirements. Hence, the dual objectives of profitability and liquidity must be synchronized and one should not impinge on the other for long. Investments by any business in current assets are inevitable to ensure delivery of goods or function to the ultimate customers and a proper management of same should create the in demand(p) impact on either profitability or liquidity. If different resources are blocked at the various phases of the supply chain, this will lengthen the cash operating cycle. However, profitability might increase due to increase sales but it may also adversely affect the profitability if the costs tied up in working capital surpass the benefits of carrying more inventories and/or allowing more trade credit to customers. (Padachi, Kesseven, Oct 2006)2.7 Production Cost ProfitProduction cost is the cost of materials and labor necessary to produce goods and there are two types of profit that is generated from a business. The first is gross profit which is the difference of the total revenue generated after the sale of each item by the production cost for that item.Second is net profit which is calculate once the company pays taxes, rent, and other expenses that might come with running and owning the business .However lack of technology, increase labor and material cost, higher cost of debt and other factors increases production cost and decrease profit but if production increases, businesses are able to purchase more materials at a discounted rate, which can help them to reduce the production cost.2.8 Textile Sector Cost of ProductionThe relationship of cost of production with profit of any sector is the key element used to evaluate the productivity of that particular sector including textile sector. Productivity is often mixed with increased production. However, higher production does not always mean higher productivity. Higher productivity can be achieved only by better utilization of resources and reduction of cost. So the importance of production cost can not be neglected and is closely related to the increase productivity of industrial sector on any economy. According to the Michael porter of the Harvard University says the competitiveness of any sector is totally depend on the pr oductivity of its industrial sector. Productivity does not only mean the increase in production but it relates to the cost reduction and efficiency in the process of production (V MARIAPPAN, K CHIDAMBARAM) (2003).The competition from international market has been increased due to the continuous innovation on technology used in the industrial sector of textile which ultimately increases the cost. The protection from international competition of the earlier semi-insular phase has given rise to high cost manufacturing, which is inhibiting both the expansion of the domestic market and more rapid development of exports India, 198516.(Aug 29 1989). However, the intense competition in international market leads to the high domestic growth with increased in the level of exports. Productivity is getting dead mainly due to under- utilization of machines, inefficient working, poor machinery maintenance, over- spinning, lack of modernization, power shortage and unhealthy labor and management r elations Gulrajani 1982. (2003) with reference to above saying the same situation is related to the Pakistans textile sector the machines used in the textile sector is either underutilized or very old which became the hurdle in productivity of the sector and the labor related with this textile sector is also effected due to strong labor unions in the country which increase cost and decrease productivity and eventually profit of the textile sector.The government policies related to the investment on technological innovation also effect textile sector Government policies in these sectors, it is argued, have been biased against fresh investments and import restrictions on capital goods and advanced technology have condemned entire industries to obsolete technologies (1989). The restriction on the imports and other obligations imposed by the Government on the purchase of machinery from outside country force the entire industry to obsolete technologies as well the continuous capital requ irement for the expansion of production and other raw material cost force the textile sector to borrow money from bank to quit working capital. One of the most important concepts that a new business owner should know is how working capital and financing helps them survive and grow in a competitive world. The difference between current assets and current liabilities is known as net working capital (Jonathan Keith Gober). The data of textile sector used in this research shows that most of the companies have negative working capital which means the current liabilities of the textile sector is more than the asset which again increase the cost of the textile sector of Pakistan.2.9 Textile Sector Cost of Fixed AssetsWith increasing global competition, the survival of any industry is getting difficult day by day especially in developing countries like Pakistan. Textile sector or any other sector of all developing countries used machineries and fixed assets which are obsolete and outmoded which increases their cost of production and decline productivity, efficiency and profitability. According to V. Mariappan and K. Chidambaram (2003), proper machine utilizations, the effective cost management and quality of material supplies are the three vital factors that determine the operating efficiency of a textile mill.Developing countries lack in most of the industrial resources same as the case with textile sector in Pakistan we have to import most of the technical machinery and equipment used in textile sector from other developed countries and this increases the overall cost of textile sector in Pakistan. Although the cost of textile sector increases with purchase of new machineries and equipment but this advancement in technology create the positive impact on performance of textile sector because this not only increase productivity, efficiency and profitability but also it helps textile firms to compete in the global market. Increase productivity of the textile sector i s not only the outcome of advancement in the level technological development but other factors such as relative cost of labour and equipment, the cost of material, effective management of working capital and other resources also create an impact on it. Thus, higher productivity is not an accident. It is the result of effective planning and the judicious use of resources, V. Mariappan and K. Chidambaram (2003).Chapter 3 METHODOLOGY3.1 Statement of ProblemWhat is the impact of working capital, cost of production and fixed assets cost on profitability of textile sector in Pakistan?3.2 HypothesesH1 Increase in working capital negatively affect the profitability of textile sector by increase in short term liabilities.H2 Investment in technological instruments (Fixed Assets) has the positive impact on the profitability of textile sectorH3 High production cost has a negative impact on the development of textile sector.3.3 Data accretionThere are two major sources of data collection use by the researchers for research purposes. They arePrimary DataPrimary data is used for the first through questionnaires, interviews and service and this is not published anyplace before.Secondary dataSecondary data is used for the researches which are based on already published in different newspapers, research journals and each year companies reports.Chapter 4 STATISTICAL ANALYSISIn the model summary table he capital R? in this table is coefficient of correlation which is .775 which shows that there is high correlation(relationship) between dependent (net income) and independent variables (fixed assets, working capital and cost of good sold) the second column which shows R Square (coefficient of determination or regression coefficient) which shows that 60% Of variation in net income amount is caused by predictors third column is Adjusted R square 59.7% variation is caused by predictors considering number of observations and the number of predicted variables.The ANOVA table tests the model acceptability and how model fits the first row which shows regression displays information about the variation accounted for by your model and the second row of Residual shows information about the variation is not accounted by your model the significance value of F is .000 which is less than 0.05 so it means than model is acceptable and the variation explained by the model is not due to chance.The coefficients table the first row shows constant which is second column of first row -38.373 shows that when all predictors (cogs, working capital and fixed assets) are held to zero the amount of net income is -38.373 and the constant is also significant P0.05, p=0.641 which means that change in fixed assets will not bring any change in net incomeOn the basis of correlation matrix fixed assets is again rejected of being related to net income R=0.309 which is very low correlation it is also peanut as shown in coefficient table.Chapter 5 CONCLUSION RECOMMENDATIONS5.1 ConclusionAfter e valuating the full-page textile sector I reached to a point that cost is greatly affect the productivity, efficiency and profitability of every sector same as the case with textile sector. In Pakistan, the textile sector is considered the most important investment sector which greatly push Gross Domestic Product (GDP) and National Income (NI) of the country. So to study such an important sector these variables help me in evaluating the relationship of cost with the performance of textile sector.The hypothesis used in conducting this research shows the impact of fixed assets, working capital, cost of production with the net income of the sector my finding shows that there is no impact of fixed asset cost on net income of the textile sector so my hypothesis is rejected which shows that increase in the investment of technology and equipment improve the efficiency and productivity of textile sector.Secondly, the research contain other variable relationship with the development of texti le sector in which the working capital plays an important role my research results clearly shows the impact of working capital with net income because the increase in current assets help this sector to better maintain its current liabilities which ultimately reduces the addition cost incurred by the sector. In Pakistan textile sector needs continuous short term investment which forced the sector to increase it short term debt by borrowing from bank to meet its short term expenses. So the sample size taken in the research shows that both of them are highly agree but they have inverse relationship increase in working capital decreases the net income as vise a versa. So my hypothesis for the working capital is accepted and it is proved that independent variable is explained by dependent variable.The third and last variable is the cost of production which combine all costs incurred while production of the textile items. It include the prices for all raw materials which are essential f or the production process fuel, oil inventories, transportation, cotton prices, yarn prices which bring significant changes in the profitability of textile sector . The hypothesis used for the cost of production shows that there is inverse relationship on cost of production and profitability as cost for producing the textile items is increasing the profitability becomes falling and in result the development of textile sector faced hurdles in growing.The overall analysis shows that we cannot considered the increase in production only until or unless the cost structure is not clearly defined although the production of textile sector is increased in last few years but simultaneously the cost is increased with greater extend which reduces the profit margins with very less proportion which does not support the economy of Pakistan which has the major share in growth of the Pakistans economy.5.2 RecommendationsPakistan is a one of the leading country producing raw yarn, cotton, and fabrics . If we focus on the value added products like garments, hosiery, knitwear and other textile products, the production volume of textiles can be enhanced by tremendously. In this respect top priority should be given to cost reduction, easy availability of working capital and employment creation.The Government of Pakistan has created a special Textile Board for the promotion of Textile Industry as predicted in Textile Vision 2005 but unfortunately its performance and productivity is still below expectation of the government of Pakistan. So the guess is that government should establish a Ministry of Textile to meet the demand of private sector.Whole economy of Pakistan is suffering due to energy crisis. Therefore, the increase in double digit inflation causes great discrepancy in the production of textile industry which forces most of the textile firms to wind up their business and to set up their business in other countries in our region. Therefore, my suggestion for government is tha t the government should take concrete steps on priority basis to resolve energy crisis and control inflation in Pakistan.The government of Pakistan has recently imposed tax of the import of thread from other countries which is severely affecting the productivity and profitability of the textile sector and tremendously increases the cost of production of textile industry. To resolve this issue, the government needs to mischievously look into this matter and try to find a solution to it to boost the textile industry in Pakistan.Government should either set up joint ventures in textile related areas or should provide subsidized credit to textile manufacturers to upgrade their technology and capacity building through Technology Upgradation Fund. (TUF). It is also suggested that smaller units of power looms (up to 50 looms) should be upgraded to auto looms and power loom units larger than 50 looms into air jet looms.At present cost of doing business in Pakistan is higher as compared to the regional countries, which has resulted in bitter competitiveness to Pakistani Products in Foreign Markets. China and India are the bigger co