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Working Papers | 1997

Working Capital Management in Sri Lanka

Pandey I M and Perera K L W

The study provides an empirical evidence of working capital management policy and practices of the private sector manufacturing companies in Sri Lanka. The information and data for the study were gathered through questionnaires and interviews with chief financial officers of a sample of manufacturing companies listed on the Colombo Stock Exchange. The main conclusions of the study are summarised below: · Most companies in Sri Lanka have informal working capital policy. The managing director plays a major role in formulating formal or informal policy. Company size has an influence on the overall working capital policy (formal or informal) and approach (conservative, moderate or aggressive) and review period. · Finance manager is the responsible for managing working capital components. Stretching of credit payment and ageing schedule are the primary tools of managing disbursement float and controlling debtors respectively. Material requirement planning (MRP) and perpetual inventory control (PIC) system are key techniques of inventory management. Company profitability and working capital policy influence the payable management and working capital finance respectively. Most of the companies take cash discounts, but their annual cost of working capital funds is high that ranges between 15-20%. · Current and cash budget are major techniques of working capital, planning and control. Company profitability has an influence on the methods of working capital planning and control. Companies sometimes consider working capital changes when they evaluate capital budgeting. Most of the companies in this study use bank interest rate as a hurdle rate for evaluating the working capital changes. · A comparison of the working capital practices of the Sri Lankan companies with the USA companies reveals a lot for similarities. The basic difference is in terms of the use of computerised system and the opportunity to invest surplus cash in the money market instruments.

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Working Papers | 1997

Human Development in India: A Macro Perspective

Chaudhari Shekhar and Kumar Sunil

During the 1950s and 60s the concept of development ignored the social dimension. However, during the last three decades several new concepts have emerged concerning “development” at the national and the global levels. Today the human factor is a central concern in “development”. This paper discusses some key aspects of the process of Human Factor Development (HFD) in India with a focus on the post independence period and identifies important influencing factors. We have analyzed HFD in the paper on the basis of four dimensions; (a) standards of living, (b) skill formation and knowledge acquisition, (c) utilization of skill and knowledge, (d) human values and ethics. Our analysis suggests that HFD in India has two disturbing trends. Firstly, it seems that actions by professionals and political leaders of the country are not governed by ethical and moral considerations. Secondly, a very small proportion of the country's population possesses sophisticated knowledge and skills. Moreover, these people are trained at the country's premier institutions at high cost to the society. But, their knowledge and skills are not being properly utilised and the country continues to have a high incidence of poverty, child labour, and illiteracy. Synchronised efforts are required from the academia, policy planners, political and religious leaders of the country to achieve the desired economic growth and development by concentrating on HFD.

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Working Papers | 1997

The Competitiveness Connundrum: Literature Review and Reflections

Chaudhari Shekhar and Ray Sougata

The concept of competitiveness has been studied by researchers from a variety of perspectives using different methodologies. Though there is a large volume of literature on the subject, there seems to be a dearth of systematic reviews of the extant literature. This paper is an attempt in that direction. It presents a classificatory scheme using two dimensions – level of analysis (nation, industry and firm) and types of variables used to explain and measure competitiveness. The implicit and explicit research questions addressed and issues related to definition, measurement and sources of competitiveness at various levels are also discussed. It is suggested that given its complexity and electic approach combining different schools of thought and using multiple measurement schemes would be appropriate for doing research on competitiveness.

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Working Papers | 1997

A Reconsideration of Some Properties of Solutions for Two Dimensional Choice Problems

Lahiri Somdeb

In this paper, we take up the outstanding problem of axiomatically characterizing what we have referred to in the paper as the additive choice function on the classical domain for choice problems. Apart from an impossibility result for the additive choice function, there is an axiomatic characterization, which as a by-product provides a counter example to a conjecture for the egalitarian choice function. In an appendix, we provide a proof of an axiomatic characterization of the egalitarian choice function using a superadditivity axiom. Further we show several non-rationalizability properties of utilitarian consistent solutions. In this paper, we also provide proofs of axiomatic characterizations of the family of non-symmetric Nash choice functions and the family of weighted hierarchies of choice functions. Our conclusion is that earlier axiomatizations are essentially preserved on the classical domain for choice problems. the proofs are significant in being non-trivial and very dissimilar to existing proofs on other domains.

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Working Papers | 1996

Axiomatic Characterization of Solutions for Rationing Problems

Lahiri Somdeb

Situations abound in the real world, where aggregate demand for a commodity exceeds aggregate supply. When such situations of excess demand occur, what is required is some kind of rationing. The literature on rationing problems has an interesting origin in the Babylonian Talmud. The purpose of this paper is to characterize axiomatically and analyze some Talmudic Solutions for rationing problems.

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Working Papers | 1996

The Focal Faculties of the Firm: Using Knowledge Power for Global Leadership

Thomas P S and T. Madhavan

There is indubitably more to the sources of sustained competitive advantage of corporations than meets the eye. Among the most promising of these are the focal faculties of the firm, the areas of expertise ingrained in organizations over long periods of time. If properly developed and managed these focal faculties can be mixed and matched, both internally as well as externally, to pioneer promising lines of business that can sustain the firm from one generation to the next. Previously many firms succeeded by combining the best features of the family, the school and the military which minimizing bureaucratic proclivities. In future, firms may also have to adopt the recognized strengths of the collegiate approach, fundamental to which is knowledge creation, dissemination and use in a truly democratic manner. What a firm produces will always be important. Increasingly, what it knows will be even more important. This knowledge will basically be about its environment, about itself and about creative strategies which combine the two for success over the long term. If crystallized meaningfully into focal faculties, the foregoing knowledge may help the firm not only to perform well currently but also to adapt to changing circumstances and to seize the opportunities which appear from time to time on distant horizons.

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Working Papers | 1996

Reciprocity: Making Development a Two Way Street

Anil K. Gupta

As a follow up of agenda 21, Government of Netherlands took an initiative of forming a four country partnership among Bhutan, Benin, Costa Rica and Netherlands. The idea was to explore what kind of reciprocity can be generated among developed and developing countries having different cultural, religious, social and economic conditions. Accordingly, Bhutan was requested to develop a conceptual paper with suggestions for concrete action in the field of reciprocity. The bilateral agreement emphasised part from reciprocity, a vision of equitable development that was respectual of the environment and a self-imposed conditionality towards fair and just development. This paper has been written at the invitation of Royal Government of Bhutan and Netherlands as well as other countries. In some sense, the paper provides a new perspective to look at north-south relations so that instead of pursuing these in the donor-donee framework, one can identify the respective strengths and pursue reciprocal relationships. Bhutan has preserved some of the unique biodiversity in the world. It has to be seen whether the development agencies would consider their contribution to the economic development of Bhutan as a token price to gain entitlement to benefit from Bhutanese culture, diversity and knowledge system.

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Working Papers | 1996

Managing Environments Sustainably through Understanding and Assimilating Local Ecological Knowledge: The Case of Honey Bee

Anil K. Gupta

Conceptually the developmental models can be arrayed on two dimensions: The time frame and decision making options or horizon. I have defined development as a process of well as the institutions (Gupta 1981, Gupta et al, 1995). The time frame refers to the period in which we appraise a technological or investment choice. The decision making horizon refers to the range of options that a decision maker is aware of and can access or avail of, in the given resource situation. The implication is that the sustainability requires both the longer time frame as well as wide range of choices. The next question is: How do we widen the range of choices and extend the time frame? If a household does not have certainty of tenure or clarity of property right vis-a-vis a given resource, it is unlikely that the person may have a long time frame. Alternatively, in the absence of clear property rights, customary rights and informal institutions may exist and these could help extend the time frame. The cultural context, spiritual values and ethical basis of local knowledge systems also contributes to extending the time frame. That is why we notice some of the poorest households growing some of the slowest growing tree species in the homestead land. The widening of choices depends upon the (a) Access households have to resources; (b) Assurances they have about others' behaviour vis-à-vis their own as well as about future returns from present investments; (c) Ability or Skills people have to use available choices and (d) Attitudes towards nature, resource use and towards the concern for future generations. To what extent the choices will be widened without impairing the ecological balance depends upon several factors which are summarized in part one. Several approaches to scouting innovations among children and adults are described. Seven principles of Sustainability are discussed in part two. It is concluded that while choice can be widened by the modern science when blended with informal science, the time frame can be extended by granting the right of future generations and the non-human sentient beings.

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Working Papers | 1996

Managing Research Networks: A Study of Inter-Organisational Linkages

Anil K. Gupta and Rais Mohammad

Higher the uncertainty in the environment for which technologies have to be developed, greater is the compulsion for inter-disciplinary research. Every discipline necessary for addressing the research problem may not exist in the same institute. Even if it does, the number of scientists may be so few that the peer group for critical scrutiny and growth of the discipline may become necessary also because the consumer of research may have a diversified resource use strategy. In rainfed, semi-arid and arid environments, most of the disadvantaged households have diversified portfolios. Technologies aimed at improving the performance of these portfolios will have to be evaluated on their effects on different sub-system of household portfolio. Such appraisal may not be feasible within one organization. Sustainability of technology may thus require three things, (a) client orientation, (b) location specificity, and (c) economic viability with attendant risk minimization together with minimum externalities. To achieve these outcomes, scientists may pool, exchange, segment or authorize use of resources, information, influence and opportunities. In the process, technologies requiring diverse skills, multiple scales of operation and complexity of tasks may be developed through inter-organizational networks. The skills, scale and complexity are independent in nature. Technologies requiring single skill may have to be developed for large scale and complex environments as well as resource management conditions. Similarly, technology at small scale such as micro watershed may require large number of skills and complex interactions. The implications of these interactions for inter-organizational networking remain to be identified. Many organizations have resources which may not be optimally used within the organization. Thus the redundancy of some resources and scarcity of others often generate the need for inter-organizational networks. At the same time distribution of power, authority and control over scarce resources and access to key decision makers may be such that some functional networks may not emerge while other dysfunctional networks may get established. Management of networks thus becomes a challenging proposition for the organizational leaders. In part one of the paper socio-ecological, institutional and public policy contexts of inter-organizational networking are introduced. Literature on evolution and functioning of networks in agricultural research is reviewed in part two. The findings from empirical research based on interviews with the scientists in ICAR and SAUs(State..) are presented in part three.

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Working Papers | 1996

Rewarding Creativity for Conserving Diversity in Third World: Can IPR Regime Serve the Needs of Contemporary and Traditional Knowledge Experts and Communities in Third World

Anil K. Gupta

Regions of high biodiversity are often inhabited by the poorest people. The irony is that many of local healers and other herbal experts do not even charge for their services to the community. They conserve biological diversity despite remaining poor themselves. Their superior ethics cannot be a reason for our inferior ethics. The fact that the younger people are no more inclined to acquire and improve this knowledge further increases the risk of knowledge erosion. The contemporary innovations suffer even worse fate compared to traditional knowledge. In the absence of any institutions to recognize, respect and reward the grassroots creativity, the intellectual properties are exploited by national and multinational corporations inviting charge of biopiracy. The projected losses to third world on this account could be many times more than the suspected loss to developed countries due to copyright and IPR piracy in third world. A registry will prevent any firm or individual to seek patent on community knowledge as well as on knowledge and innovations produced by individuals without some kind of cross licensing. It will be possible to achieve the following results from such a registry: (i) acknowledgment of individual and collective creativity, (ii) grant entitlements to grassroots innovators for receiving a share of any returns that may arise from commercial applications of their knowledge, innovations or practices with or without value addition, (iii) linking the golden triangle of entrepreneurshipby linking investments, enterprise and innovations. Small scale investors in north and south cannot afford to go to various countries, scan diversity of knowledge and resources, negotiate contracts and invest up from huge investments for value addition, (iv) an autonomous authority of which local community representative will be the majority members could be entrusted with the responsibilities of having access to all the contracts, (v) each entry in the register will be coded according to an universal system like ISBN. The postal pin code of the habitat of the community or individuals registering innovations will be incorporated in the indexation system so that geo-referencing of innovations can be done, (vi) the entry in the register will in the first stage be mere acknowledgment of creativity and innovations at grassroots level. Essential purpose of this innovation also is to enable the potential investors (a cooperative of consumers, producers, an entrepreneur, or a large firm in private or public sector) to access the innovations and explore opportunities of joint ventures or licensing of innovations for research and commercialization. The transaction costs of both the investors and innovators will be reduced through the registry, (vii) the award of certificate will also increase entitlement of innovator/s for access to concessional credit and risk cover so that transition from collector, or producer of herbs to developer and marketer of value added products can take place in cases where innovators deem that fit, (viii) the registration system will also be part of knowledge Network linking problem solving people across the world at grassroots level. The patentees in the case of innovations like the ones based on neem trees should agree to share part of their profits with an International Innovations Support and Biodiversity Conservation Fund. The paper makes a case for adapting patent systems to not only accommodate the creative urges of local communities but also ensure that this vibrant and dynamic laboratory for developing sustainable technologies and products does not die down just because a community of IPR experts could not fathom its long term potential.

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IIMA