ALITA (BD.)

Alita Bangladesh Ltd. 1

Industrial Tour ReportO n

LOCATION: CHITTAGONG EXPORT PROCESSING ZONE (CEPZ)

----PROJECT----

Industrial Tour Report

Prepared by:

Mohammad Ahasan KabirClass roll and ID no:093030444th year BBA Session: 2008-2009Department of Finance

Prepared by:Mohammad Ahasan KabirClass ID:09303044 4th year BBA Session: 2008-2009

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Overall Management practice ofAlita Bangladesh Limited

I n d u s t r i a l T o u rR e p o r t

OVERALL MANAGEMENT PRACTICE ON ALITA (BD.) LIMITED

Prepared for:Prof.S.M.Nasrul QuadirDepartment of Financeand BankingUniversity of Chittagong

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Course no: 410

Project: Alita Bangladesh Limited, CEPZ(An Export Oriented Bicycle Manufacturing Company)

DEPARTMENT OF FINANCE AND BANKING

UNIVERSITY OF CHITTAGONG

Letter of Submission

Date: 29th November, 2014

ToS.M.Nasrul QuadirprofessorDepartment of Finance and BankingUniversity of Chittagong.

Subject: Submission of report based on industrial tour.

Dear sir,It is a great pleasure for me to submit you myReport on “Management Practices in ALITA (BD)

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LIMITED to fulfill the requirement of 4th year BBAprogram.

For constructing a complete report, I tried my bestto gather relevant information and data asoutlined. The preparations of this report enable meto a great extent to complement my theoreticalknowledge with practical analysis. I would like toexpress my gratitude for cordial guidance inpreparing my report in the given time.

Thanks a lot for your cordial co-operation.

Sincerely Yours

Mohammad Ahasan Kabir4th year BBA (F & B)Class Roll No and ID :- 09303044Department of Finance and BankingUniversity of Chittagong.

Bismillahir Rahmanir Rahim

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Dedicated To our -Beloved Parents And Teachers

Table PageNumber

Preface 6

6

Acknowledgement 7Methodology 8Objectives and Functions 10Scope And Sources 11Limitations 12

Chapter1Introduction Part 14Company’s brief history & background

14

Department and Division 17Chapter 2

Human Resource Development 22Chapter-3

Marketing Management Part 34

Chapter-4Management Practice Part 39

Chapter-5 Financial Management Part

42Chapter-6

Analysis of Problems 47Chapter-7

Recommendations and Suggestions 51Conclusion Bibliography 57 Appendix =========

TABLE OF CONTENT

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PREFACE

Now a days there says that present businessenvironment is changeable .To understand thisstatement every small and large industry followvarious rules, principles, strategy and theiroperation procedure. To capable and understandevery student the authority of Finance and bankingDepartment arrange totally practical education andinclude into the text syllabus in the 4th yearB.B.A. (F&B) in Chittagong University. Thisinvestigation is one of the parts in the syllabus.Every year arrange such like of program. After theprogram every student asked to prepare a tour paperreport. This program actually compliment able thatwas made for 4th year B.B.A. (Finance and Baanking)student in Chittagong University. Student canobtain practical knowledge after study thisinvestigation, which would not be possible in theway.

I visited ALITA (BD) LIMITED and collectedvarious information about it. This Tour Paperreport is based on that collected information.

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Acknowledgement

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On submitting this Tour Report of 4th year BBA,

I would like to express my heartiest gratitude and

indebtedness to several persons.

First of all I would like to express my deepest

gratitude and heart-felt thanks to my honorable

supervisor Prof.Dr.ZAHANGIR ALAM, ,and

Prof.S.M.Nasrul Quadir Department of of Finance

and Banking , University of Chittagong. It is a

great fortune for me in receiving encouragement and

co-operation from him. I am indebted to him for

kind guidance, valuable advice, instructions and

persuasion and encouragement to assist me in all

stages of preparing this report. Frankly speaking,

I was not able to complete this study without his

advice and kind co-operation.

It is an excellent opportunity to heartiest thanksto Mr A H M Ferdous, General Manager Alita (BD) Limited & Bicycleplant at Chittagong, port city of Bangladesh., who helped me togather information.

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I also extended my sincere acknowledgement to Mr.

Zahedul Haque, Unit Management in manufacturing,

ALITA (BD) LIMITED for helping me through providing

necessary information and data.

METHODOLOGY

At the time of the tour on ALITA (BD) LIMITED, I

have followed several procedures. We know to

complicate any kind of task; there is one best way.

That is why I have followed a number of procedures

for my knowledge. The methodology can be portrayed

as below –

Personal observation

Discussion with the concerned officer and

employee of the ALITA (BD) LIMITED.

Through the questionnaire.

Analysis of collected information.

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INTRODUCTION

Industrial tour is a field project for a student of Business

Administration of final year that gives the student a chance

to apply business theory in practice in any organizational

environment. The objectives of the tour are:

Practical fulfillment of BBA program.

Application of theoretical knowledge into practice.

Gaining work experiences

Having an exposure for searching a good job in future.

Knowing / understanding gap between theoretical

knowledge and practical situation.

OBJECTIVES & FUNCTIONS

Tour report is a most valuable way for earning

practical knowledge of a professional degree. So, I

have also some objectives of this tour. The main

objective of the tour is to gather practical

knowledge and experience on management practices of

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a multinational company. The objectives behind the

tour are mentioned below:

1. To find out necessary data of an

organization ,

2. To know the company’s Human Resource

Management System.

3. To know about the marketing policy of the

organization,

4. To evaluate the performance of this

company’s management systems

5. To know the overall performance of

financial activities,cost- sales, and co-

ordinates.

6. To find out the strengths, weaknesses,

opportunities and threats of the company

and Problems Analysis.

7. To find out some necessary recommendations

for the company.

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Scope & Sources

The current study is conducted primarily in

Participatory Research Analysis (PRA) method and

secondarily on practical and theoretical analysis.

Research topic was proposed as per the group

decision and so to the questionnaire. This

questionnaire was placed before the officials of

Alita Bangladesh Ltd. subject to the approval of

the research supervisor to provide their answers.

Practical visit took place subsequently. Primary

and secondary data was collected from every

possible source. The sources are:

Primary sources: Observation of the production and management of

the company,

Interview of officials and concerned experts,

Question-answer session with the General

Manager of the company,

Secondary sources:

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Bike engineering Norman,

Related books,

Journals,

Newspaper reports etc.

Finally, the collected data are classified,

tabulated, interpreted, analyzed and presented in

the form of tour report thereafter.

Limitations

Every project \Program has some limitations. I faced some

constraints during the course of my Industrial Tour Report.

These are as follows:

1. The rate of success of my study may be limited as I

may have failed to collect proper information due to

lack of my experience.

2. Some data could not be collected for their

confidentiality and official secrecy.

3. Time was not sufficient for preparing this report.

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4. Collection data is very expensive.

5. Employees are not interested to provide actual

information.

6. Production data is relatively applicable for related

field.

7. Alita (BD) Limited has no direct sales; as a result

we don’t get actual figure of cost of goods sold,

inventories control and account receivable.

Chapter - 1

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I N T R O D U C T I O N

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INTRODUCTION AND BRIEF HISTORY OF THE COMPANY:

Alita (BD) Ltd. (Alita) & Ace Bicycles (BD)

Ltd. (Ace) are 100% export oriented manufacturing companies

located at Chittagong Export Processing Zone. Alita engage

in exporting own produced international standard bicycles,

while Ace manufactures necessary parts and components for

Alita.

Promoters of Akoko Sdn. Bhd. could successfully interpret

the upward import trend of EU market and threat of

increasing operating cost of developed country and to take

the benefit of upward import trend of EU market more

competitively they set up Alita in Bangladesh. The industry

is 1st of its kind in the country as a result there was no

supporting industry to supply necessary parts for the

company, and to overcome this promoters simultaneously setup

Ace.

Alita and Ace incorporated in Bangladesh with the Registrar

of Joint Stock Companies & Firm on January 04, 1994 and

commenced operation in April 1995. Authorized capital of

Alita and Ace are TK. 160 million and TK. 6.66 million

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respectively, subscribed & paid up capital of the two

companies are TK. 19.97 million and TK. 80 million

respectively.

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20

Department and Divisions

F I N D I N G S & A N A L Y S I S

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The following are the major organizational part in ALITA (BD) LIMITED.

1.Human Recourse Development

2.Marketing Management

3.Management Practice

4.Financial Management

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Production process:

Rawmaterials from

1.RimBar

3. RimBandin

5. Spokehole

7. Valve Hole

2. Rim Cutting

4. Rim Joining

6.Valve

8.Q.C.

Complete

Figure: Rim Section

How toAssembl

eSuspens

1. Plug/Dust

3. AntiDust Tube

5. Slide Sleeve Up

7.Spring

2. MufferDisk

4. ErringClip

6. SlideSleeve

8. SpringWasher

SuspensionFork

Figure: Fork Section

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Chapter –2

H U M A N R E S O U R C E M A N A G E M E N T

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INTRODUCTION:

Human Resource Management (HRM) is an extremely

important area in management, as modern management concepts

are increasingly becoming people oriented in character.

The term ‘HRM’ has been defined in different ways. The

British Institute of HR has defined it “as that part of the

management concern with people at work and with their

relationship within an enterprise”. It has also been defined

as:-

The part of the management process which is

concerned with the human constituents of an

organization. - E. F. L. Breach.

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OBJECTIVES:

The objectives of Human Resource Management are as follows:

a) It is concerned with the optimum utilization of human

resources within an organization.

b) It is concerned with the creation of conditions in

which each employee is encouraged to make his best

possible contribution to the effective working of the

undertaking.

c) It also concerned with the development of a sense of

mutual respect and trust between management and workers

through sound relations.

d) It endeavors to increase the productive efficiency of

the workers through training, guidance and counseling

and

e) It tries to rise the morale of the employees.

Current Terminology:

The terms ‘HRM’, ‘Industrial Relations’, Manpower

Management’, ‘Labor Management’ etc is frequently used as if

they are all synonymous.

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Responsibility:

The responsibility for performing functions to achieve

desired objectives has in the foregoing been placed upon

management. The primary responsibility for personnel

management in a company must be assumed by its top

management. Evaluation of the effectiveness with which

desired objectives have been attained shows where (1) future

personnel plans can be improved and (2) responsible

executives can be appropriately rewarded or penalized.

Principles of HRM:

The basic principles are given below:

a. Deal with people as complete individuals. Employees

may be hired for their technical and economic

usefulness.

b. Make employees feel worthwhile and related. “People

do not live by bread alone” applies to workers too.

Perspective of HRM:

Human resource management must deal with the present

and be concerned with the future. It must build programs

that solve problems in the framework of today and tomorrow.

But if it is to perform its tasks as effectively as

possible, it must also be aware of the past.

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Forces and factors and experiences in the past have

their impact upon the present and future.

Findings of the study:

In my visited company, ALITA (BANGLADESH) LIMITED there

is a separate human resource management department. The

structure of that HRM department is as under:

Operation

FinanceManager

Production officer

A/ P/O A/PO

MD

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Job Analysis:

Job analysis is the procedure by which the facts with

regard to each job are systematically discovered and noted.

In short, it is a procedure for obtaining pertinent job

information. This information is recorded basically on two

forms to make a permanent record-one is called Job

Description and the other is called Job Specification. This

is the primary and pre-condition before recruiting and

selecting a person. ALITA (BD) LIMITED follows job analysis

before employee recruitment.

Job Description:

Job description is a factual statement of the duties

and responsibilities of a specific job. In other words, it

describes the work performed, the responsibilities involved,

the skill or training required.

Job Specification:

Job specification is a statement of the human qualities

necessary to do the job. Usually it contains such items as

education, experience, training and physical skills. ALITA

(BD) LIMITED follows job analysis, job specification and job

description.

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Employee Recruitment:

Recruitment is the process of searching for prospective

employees and stimulating them to apply for jobs in the

organization. The sources of recruitment can be broadly

classified into two categories:

i) Internal source

ii) External source

Findings:

ALITA (BD) LTD. usually searches from internal sources

for recruiting the required candidates. There are some

advantages and disadvantages of internal sources. They are:

Advantages:

1. It increases employees’ performance because employee

can go higher position than previous one.

2. Internal recruitment provides opportunity for

establishing essential relations with employees.

3. It increases morale, job satisfaction and

organizational citizenship.

4. It increases facilities for good person job-fit.

Disadvantages:

1. Restriction in case of new employees.

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2. Sometimes recruited employees from internal sources

have lower stimuli than recruiting from other sources.

Employee Selection:

After completing the recruitment of employees, then the

selection procedure starts. There are various types of

selection test for employee selection. These are:

Written (subjective type) test,

Written (objective type) test,

Oral test

Medical test

Others

Findings:

But ALITA (BD) LIMITED makes firstly a short list of

applicants from among all before selection test. And this

short list is prepared on the basis of experience and

qualification. Then the company follows the following tests

for employee selection:

Written (subjective type) test,

Oral test

Medical test

But this selection procedure can vary person to person. Such

that

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For worker: In YSL, there is no written test for selecting

workers.

For staff: Departmental manger is responsible for selecting

fight people.

For Junior Manager/Brand Manager :

Human resource department takes a series of tests. All

the candidates are required to sit for written test. Besides

this, written test, interview, physical test, group

performance test, physical examination is also included.

For Senior Manager :

This post is filled up through promotion and hiring

from other manufacturing concerns.

The sequence of selection procedure of this company is as

follows:

Advertising in daily newspaper

Written test taking from short listed candidates

Oral test

Medical test

Final selection

Training and Development:

Training is a corner-stone of sound management.

Employees must be systematically trained if they are to do

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their jobs well. Moreover, a training program gives

management an opportunity to explain carefully and clearly

its policies, rules and regulations. In a large company,

however, the personnel

Manager usually delegates the responsibilities for the

training to a manager or an officer in charge of the

training section of the Personnel Department. There

are various kind of training methods that constitute the

content of the training programs. These are:

1. On the job training

2. Off the job training

3. Apprenticeship training

Findings:

ALITA (BD) LIMITED

maintains on the job training.

This training is conducted by the supervisors or by a senior

employee who is responsible for instructing the employee.

One major advantage of the on the job training method is

that the employee have first-hand experience with the job

and learns by doing.

Performance Appraisal:

Performance appraisal is a systematic appraisal of an

employee by his supervising officer who is conversant with

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the employee’s job performance. In other words, it is a

process of evaluating performance of an employee by his

superior with relation to his job requirements.

The main purposes and uses of performance appraisal are as

follows:

1. Employee performance

2. Employee development

3. Supervisory understanding

Findings:

ALITA (BD) LIMITED maintains the employee performance

evaluation regularly. The company has professional

appraisers to evaluate the performance.

ASSESSMENT RATING:

The appraise (employee under assessment) and appraiser

(Supervisor) are required to make joint assessment of theperformance demonstration by

the appraisee during the period.

WAGES AND SALARY ADMINISTRATION:

In a broader sense, it is used to describe all types

and forms of compensation and benefits. It includes hourly

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pay of production workers and monthly supervisory, clerical

staff, executives etc.

According to popular usage of the two terms, salary

normally refers to those payments that are computed on a

weekly, monthly or yearly basis for “white collar

workers 'whereas wage refers to those payments that are

computed on an hourly or a daily basis for “blue collar

workers”.

Personnel department has its own policy for salary and

wage administration.

There are some bases for setting pay. These are as follows:

a. Seniority

b. Experience

c. Performance

d. Position

e. Geographical distance

f. Academic qualificationg. Personal relation

Findings:

In ALITA (BD) LIMITED, there is a specified salary

structure for employees in the organization. The main basses

for setting basic pay in this organization are seniority and

performance. But this salary varies employee to employee.

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Employee Benefits and Services:

Nearly every organization provides its employees certain

tangible benefits over and above the basic pay. The term

benefits and services is very widely used to designate this

area of personnel management practice. The benefits may be

financial and also may be non-financial benefits and

services. The financial benefits may be-

1. Salary

2. Bonus

3. Allowance

4. Incentives

5. Insurance or provident fund.

Again, the non-financial benefits may be-

1. Communications/transport

2. Medical services

3. Death insurance

4. Accommodation

5. Entertainment

6. Others

Motivation:

Motivation is a general term applying to the entire

class of drives, desires, needs, wishes and similar forces.

To say that managers motivate their subordinates is to say

that they do these things which they hope will satisfy these

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drives and desires and include the subordinates to act in a

desired manner.

Again, motivation can be defined as the process that

account for an individual’s intensity, direction, and

persistence of effort toward attaining a goal. The three key

elements in this definition are important.

Motivation-Hygiene Theory –

This theory is also called two-factor theory of

motivation and was proposed by psychologist Fredrick

Hertzberg. According to him, Intrinsic factors such as the

work itself, responsibility, and achievement, seems to be

related to job satisfaction, while Extrinsic factors such as

supervision, pay, company policies, and working conditions

are associated with dissatisfaction.

Findings:

ALITA (BD) LIMITED. Follow the two factor theory of

motivation. They usually give the importance in to the

intrinsic factors of the employees. Intrinsic factors or

Motivational factor which is related to job satisfaction

such as recognition, growth, advancement, work itself and

achievement etc. The organization motivates the employees by

the following things:

Handsome basic pay

Extra allowance

Increment in basic pay

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Job security

Job status

Good behavior

Better working environment

Promotion\Demotion:A promotion is the movement of an employee to another job at

a higher level, normally to one that carries increased

prestige, pay and performance requirements. On the other

hand, promotion is the advancement of an employee to a

better job- better in terms of greater responsibility, more

prestige or status, greater skill and especially increased

rate of pay or salary. There are basically three factors as

a basis for promotion.

They are:

Merit

Seniority

Merit & Seniority

Findings:

ALITA basically considers the merit and seniority as a

basis for promotion of an employee. In this system,

experienced and senior employees both are satisfied. As a

multination organization it is essential and effective.

Interpersonal Relationship:

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It improves employee’s morality and organization’s

citizenship. ALITA (BD) LIMITED improve their interpersonal

relationship through party, meeting, counseling, annual

picnic and official festival.

Fringe Benefit:

Fringe benefit can be constructing to include all

expenditures designed to benefits employees over and above

regular based pay and direct variable compensation related

to output.

In our practical finding, ALITA (BD) LIMITED provides

such fringe benefits.

There are a lot of fringe benefits which are provided to the

employees by this company. They are:

1. Rest room

2. Reward for long service

3. Uniform

4. Medical facilities

5. Hazard protection

Management-Workers Relationship:

Management and worker relationship are good which

indicates high job satisfaction. Good relationship also

indicates high morality, productivity and group cohesiveness

in this team-oriented organization. ALITA (BD) LIMITED

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follows counseling, training in order to establish good-

management relationship.

Chapter –3

M A R K E T I N G M A N A G E M E N T

40

MARKETING MANAGEMENT

MARKETING:

Marketing embraces all the business activities involved in

getting commodities of all kinds, including services, from

the hands of producers and manufacturers into the hands of

final consumers. ALITA (BD) LIMITED also practices the

marketing management as their marketing mix. But they do not

follow the traditional marketing strategies because it is a

100 % export oriented manufacturing company.

Bicycles Market :

Bicycle as a sports & leisure items is very popular all over

the world, and has very wide market. With continued

increasing trend world bicycles consumption is over 100

million per year. Among various types of bicycles MTB, ATB,

BMX, City Bikes, Trekking bikes, are very popular with major

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market share. As a leisure product bicycle is very design

sensitive and due to the sports uses qualitative sensitive

too. As safety measures bicycles needs to qualify certain

standards sets by different regulatory body such as BS6002.

America, European Union, Australia and Japan are the major

consumer and importers of bicycles. Major exporters to these

markets are Taiwan, China, Philippines & Mexico.

Bicycle Consumption and import of EU countries for last few

years were as follows:

Year Consumption Import

2012 17,167,000 4,831,000

2013 15,593,000 4,471,000

2014 14,892,000 5,066,000

Companies:

Production and Product line:

ALITA (BD) LIMITED is basically a Bicycles manufacturing

company. It actually produce bicycles based on buyers

requirements.

Target Market:

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The process of evaluating each market segment,

attractiveness and selecting one or more segments to enter

the present market is known as the target market.

In ALITA (BD) LIMITED, there target market is especially for

foreign market. They are marketing their products to CHINA,

INDIA and according with requirements.

Promoters of Akoko Sdn. Bhd. could successfully interpret

the upward import trend of EU market and threat of

increasing operating cost of developed country and to take

the benefit of upward import trend of EU market more

competitively they set up Alita in Bangladesh. The industry

is 1st of its kind in the country as a result there was no

supporting industry to supply necessary parts for the

company, and to overcome this promoters simultaneously setup

Ace.

Alita :

Built-up area of the factory is 31,966 Sq.ft, situated on a

land measuring 61,230 sq.ft. The factory is well equipped

with necessary machinery and equipment imported from Taiwan,

Hong Kong & Malaysia, which includes computerized robotic

machine and high-speed paint shop. Plant attainable capacity

is 180,000 set bicycles, operating 300 working days on a

single shift of eight hours per day.

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Ace :

Built-up area of the factory is 27,378 Sq.ft, situated on a

land measuring 56,375 sq.ft. The factory is well equipped

with necessary machinery and equipment imported from Taiwan,

Hong Kong & Malaysia to produce a variety of parts and

components for bicycles. Products of the company includes,

Frame, Fork, Paddle, Saddle, Grips and Alloy Rims etc.

Sales Target:

The sales target is fixed by the marketing department.

In that case, it is ascertained the target in the different

terms of period such as monthly, half yearly and yearly

shipment. Another is to make shipment according to their

demand. The target sales or export and the actual

performance of the company are the year wise report.

Promotional Measures:

Promotional decision occupies significant position in the

element of marketing mix skillful promotion can help to

increase sales export in the market and to create expected

level image. ALITA (BD) LIMITED attaches much importance to

promotional activities. Three types of promotional program

simply taken of the company deserve mention:

1. Sales promotion (Export or trade oriented)

2. Customer or buyer oriented

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3. Online based

Sales Performance and Policies:

Selling is the best marketing task of a company. ALITA

(BD) LIMITED lays stress on promoting sales position of the

company. It always makes concerned efforts to achieve

expected sales and keeps the supply position steady. Since

ALITA (BD) LIMITED is 100% export oriented company so it

always tries to develop the sales on global market.

Grading Concept of the Company:

This case has taken by the company in regard to the

products. It is followed on the capable of being divided

assorted, group or classification in to certain common lots

that show similarities. We observed that ALITA (BD) LIMITED

maintains grade very strongly on their products size and

quality.

Market Structure:ALITA (BD) LIMITED is a production oriented manufacturing

concern. The nature of production is sports and luxuries

bicycles.

Production Performance and Analysis:

The production target for the whole year is controlled

by the marketing department. The annual target is divided as

45

weekly basis. The change in manufacturing target is occurred

from time to time as per the change of the world market

situation. In order to ensure the requirement of production

target regarding product quality and quantity a weekly and

regular review is made.

Advertisement:

The company does not follow any advertisement strategy,only for creating Markets’ demand ALITA (BD) LIMITED always maintains product quality.Transportation:

Transportation is a necessary function of marketing because

most of the markets are geographically separated from the

area of production. On the basis of products, there is

required the various types of mode of transports to the

place of consumption. In this context the company likes the

sea, air and land transportation to carry on their products.

But the company normally prefers the sea transportation

because it contains the large volume of products at a time.

46

Chapter –4

M A N A G E M E N T P R A C T I C E

47

Management Body:

The companies are managed by its Board of Directors headed

by Mr. Yeh Cheng Min, founder and CEO of the companies.

Corporate goal, policy and planning of the companies are set

by the CEO and are executed by a group of professionals from

various disciplines with sufficient working experience.

Mr. Yeh, a business graduate, is a pioneer promoter of the

company. He is engaged in international bicycles business

for last two decades. Over the period Mr. Yeh setup Akoko

Sdn. Bhd. in Malaysia, an OEM for European market, Jen Min

Mfg. Co. Ltd., in Taiwan, a manufacturing cum trading house

supplying parts and component to Bicycles industries and

Alita & Ace in Bangladesh. Mr. Yeh is also one of the

promoters of “The Premier Bank”, Bangladesh.

Mdm Chang Min Wei, wife of Mr. Yeh is another pioneer

promoter and director of the companies. She is engaged with

bicycles business along with Mr. Yeh and takes care of

finance and material control of the companies.

48

Mr. Chu Say Kar, General Manager of the companies has been

in the bicycles industry for last ten years. He started his

carrier in financial sector and worked in Australia, New

Zealand, Malaysia, & Bangladesh in various capacities in

multiple disciplines. Apart from other functions he takes

care of International marketing.

Goal or Objective:

ALITA (BD) LIMITED considers production for setting

organizational goal and objectives. Company has establishing

rules, procedures, policies or strategies but do not

encourage participative decision-making.

MISSION:

The mission or purpose identifies the basic function or task

of an enterprise or agency or of any part of it. Every kind

of organized operation has, at least should have if it is to

be meaningful, purposes or missions.

In our practical findings, the main mission or purpose of

ALITA (BD) LTD is to create or increase profit as a

production oriented company.

Specialization:

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This company follows work specialization for every employee.

Work specialization refers to every employees should

specialized in the particular field. ALITA (BD) LIMITED does

not emphasize generalization.

Policies and Procedures:

One of the most comprehensive definitions of policy

refers to the determination of basic long term objectives

and of courses of action and allocations of resources to

achieve these aims.

Decision Making:

Decision making is defined as selection of a course of

action from among alternatives. Decision making may be

either centralized or decentralized. The decision making

process of ALITA (BD) LIMITED is centralized by the

authority. The lower level managers can not participate in

the decision making.

Span of Control:

The number of subordinates a manager can effectively and

efficiently direct.

Wider span are more efficient in term of cost. However at

some point wider pan reduce effectiveness. That is, when the

span becomes too large, employee performance suffers because

50

supervisors no longer have the times to provide the

necessary leadership and support.

Chapter –5

F I N A N C I A L M A N A G E M E N T

51

Financial Planning Process:Planning involves selecting missions and objectives and

the actions to achieve them, it requires decision making.

Alita BD Ltd. has also a strong financial planning process

in which the authority has to formulate these plans. Most of

the time top-level management makes decisions.

Financial Statement:

Financial statement is a statement that contains the

financial transactions for a specified time period. Every

company has various kinds of financial statements but the

company did not provide any kind of financial statement

because of their financial secrecy.

52

CEO of the company Mr. Yeh, is engaged in international

bicycles business for last two decades and has wide

experience in every aspect of bicycles business and has

gained reputation as a supplier of quality bicycles at

competitive prices. As a result Alita could easily penetrate

into European market within commencing commercial production

through major European importers like E.Reece & Moore &

Large Co. Ltd. and continue to increase its share in the

world market.

Development of the company was seriously effected by the

outcome of unfortunate prolonged political instability in

1996, resulting in difficulties in bringing in raw materials

and its ability to supply on time was badly affected.

However due to good relations with the customers and by

improved planning in procurement and logistics, the company

regained reputation within a short time.

Financial position of the companies as per latest audited

accounts as on June 30, 2013 of million (Taka) is as

follows:

53

At the end of the 1st quarter of the current financial year

on September 30,2014 the position is as follows:

Particulars Alita Ace

Combined

Sales 244 91 335

Gross Profit 24 31

55

Operating Profit 6 26

32

Retained Earnings (14) 34

20

Fixed Assets 61 39 100

Net Assets 4 40

44

54

Associates companies: Shareholders of the companies also promoted and own whole

share capital of the following companies

Name of the Company : Akoko Sdn. Bhd.

Particulars Alita Ace

Combined

Sales 158 66 224

Gross Profit 13 26

39

Operating Profit 10 25

35

Retained Earnings (7) 57

50

Fixed Assets 61 40 101

Net Assets 9 62

71

55

Address : LotNo.6695,Batu7,Jalan

Kebun,

42450 Klang, Selangor,

Malaysia

Activity : Bicycles manufacturing

Banker : Public Bank Berhad

Ground Floor

28-32, Persiaran Sultan

Ibrahim

41300 Klang, Selangor

Darul Ehsan, Malayasia

Name of the Company : Jen Min Mfg. Co. Ltd

Address : Yu Shih Industrial Zone

33, Kung Chiu Road,

Tachia, Taichung

Taiwan

Activity : Trading in Bicycles parts.

Banker : The First Commercial Bank

Taichung Branch, Taiwan

56

Capital and Capital Structure:

Foreign investment is the main source of capital of the

company. The capital structure normally follows paid up

capital. Since the company is always export oriented so the

source of capital must be the foreign investment.

Findings:

The company does not provide any type of financial

statement due to their business secrecy.

Market Share:

ALITA (BD) LIMITED does not enter share market

Short term and Long term Financing:

Most of the company use short term financing to meet

their financial requirements, while long-term (long term

dept and equity) is used to meet long-term capital

requirement. There are four basic source of short term

financing.

57

1. Account payable

2. Bank loan

3. Commercial paper

4. Accruals

ALITA (BD) LIMITED always uses the short term finance

from company’s own sources. Long term finance is basically

supplied by foreign investment.

Chapter – 6

58

Problems in Alita

To identify the major problems in production department

we have to conduct a SWOT Analysis, which refers

identification of a company’s internal strengths and

weakness. It also identify a company’s external

opportunities

and threats. Here is the SWOT analysis.

Analysis of problems

59

SWOT ANALYSIS:

SWOT Analysis holds for the analysis of Strengths

Weaknesses

Opportunities

Threats

STRENGTHS: 1. It has skilled human resources.2. It can collect required raw materials easily.

3. It has updated machineries.

4. The quality control system of the company is updated.

5. The company is able to supply goods to the customer as

the desire of customer.

6. It has access production capability.

7. It has a reputation of good export service. 8. The company is competence in MIS.

9. Its inventory management is good.

10. It possesses a strong financial management.

WEAKNESSES:

60

1. The level of job satisfaction in the factory is very

low.

2. The working condition of the factory cannot be termed

as suitable.

3. Power supply is not smooth.

4. High manufacturing cost.

5. Poor material management.

6. Inadequate skilled human resources.

7. As a modern group of companies has no sound

administrative policy to maintain all its operations and

authority is not always delegated and reviewed.

8. Alita has no clear cut way to coordinate among its

related companies.

9. Minimum level of promotional activities is undertaken

here.

10. Alita has no separate marketing department.

Opportunities:

1. Withdrawal of quota system – which has created an

opportunity to import more products in America.

1. Cost of differentiation advantage – which may help

to reduce over all cost of production.

2. Vertical integration – Forward / Backward; that

may help to get raw material at cheaper price.

61

3. One stop service facility of Chittagong port

authority – that may ensure availability of row

materials at least time.

4. Alita can expand its production capacity if demand

necessitates that.

5. The company can use the image of its M.D. in

creating new market.

6. It has still enough export possibilities.

THREATS:

1. It is competing with the existing reputed

companies.

2. Increasing foreign competition

3. Political instability.

4. Traffic jam in the city roads.

5. Hazard and corruption in Chittagong port.

6. Fluctuation of price of raw materials.

7. High conspiracy in the administration of the

country.

62

63

Chapter - 7

Recommendations & Suggestions

64

Recommendations

In the wake of mountainous challenges for producing goods we

need to formulate a well-planned policy to face it. The

manufacturing challenges may be faced by devising well-

thought strategic moves. The following strategies may help

in overcoming growing manufacturing challenges.

Developing strong strategic production planning:

The company has to develop a strong strategic production

planning which will ensure available out put at a right time

within optimal cost. For this purpose the company can follow

the EOQ in purchasing raw materials. The company can also

predict about the necessary output after analyzing the

previous demand of output through out the year.

Introduce up dated mechanical technology:

As a member of world market the company is facing

competition from the firms of world wide. The customers of

world market always emphasis on quality and then never

compromise with it. So the company must ensure such kind of

quality that is accepted to customer of world market at a

65

reasonable cost comparing with world competitors. For this

purpose the company must have to install the updated

machineries.

Ensure efficiency of workshop technicians: The company sometimes fails to provide quality goods as

customers expected. For this condition lab technicians are

liable to a grate extend. Some times they fail to provide

out put as customers expected quality though the production

facilities are able to produce such kind of out put. So the

company should recruit more competence technicians in

workshop. The company also can provide an opportunity to the

present technicians to gather required training.

Develop job satisfaction of workers and officers:

The company should take attempt to develop the job

satisfaction among the worker and officers. For this purpose

the company can provide them more incentives. But what is

more effective in developing satisfaction in case of weak

position of the company is informing. The company should

inform the workers about the actual condition of the

organization.

Recruit adequate human sources:

66

Though the company has a group of skilled worker they are

not sufficient at present condition. So the company should

recruit adequate human resource thus it would be able to

utilize it full capacity.

Develop high level of manufacturing skills:

Manufacturing skills must be developed to a desired level

among the executives through scientific manufacturing

Seduction and time- befitting training to face the

manufacturing challenges properly.

Emphasize on quality and design in products:

Firms are in need of producing goods at the desired quality

level in keeping with international standards to serve the

domestic & international buyers effectively.

Stress on cost economy:

To survive and thrive in highly competitive environment, the

ability to produce goods or services at reasonable

competitive cost must be attained. The application of value

analysis, computerization in operations and optimal resource

allocation may help achieve cost economy by the firm.

67

Develop sound marketing infrastructure:

An efficient infrastructure must be developed to ensure

efficient marketing of products or services to the target

market. The development of efficient transportation, tale-

communication and port facilities may facilitate smooth

marketing as per the demand of time.

Sound R & D activities:

Sound R & D may enable the firms to bring out time-befitting

products & services. The product obsolescence may be largely

reduced and better consumer satisfaction may be achieved

through well-developed R & D activities in a firm.

Search for exploring new markets:

Recent trend in global politics is indicating to the

necessity of diversified market for our textile products

reducing over-dependence on the USA market. So, company

should launch a market-searching program in Japan,

Australia, Russia, East Europe, Nordic countries, Mid Asia

Africa and Middle East to take an upper hand in meeting

their demand for related products.

IT, research and lobbying:

The company should formulate a cell for research for market

of its product employing experts. This cell will accumulate

68

necessary information and prepare recommendations derived

out of its research works. The top level management should

take steps to implement these recommendations the lobbyist

firms in foreign countries like the USA.

69

Alita was set up in 1995 as an export-oriented facility

focusing exclusively on the European market. Last year, the

company supplied one of the UK based Falcon Group

subsidiaries 30,000 bikes. With the second unit coming up,

we want to intensify our focus on the European market. 2009

was a difficult year, but fortunately the market is picking

up now.

Meanwhile, Alita is also stepping up the production of its

mid-end range. Currently, offering bikes in the € 36 - 40

range and planning to shift our focus to alloy bikes in the

price range of € 54 - 75. Owned by a Malaysian group, Alita

currently manufactures around 110,000 to 120,000 units

annually at its Chittagong based plant.

Currently some 15 companies in Bangladesh, employing over

3,000 workers, are manufacturing and assembling bicycles for

export. Some of the world’s leading companies including

Britain’s Raleigh, PCM, Motor and Sports, Aldi the

Netherlands, Bachtenkirch Interbike of Germany, M&F De

Scheemaeker and Formula Cycling of Belgium are importing

bicycles from Bangladesh. The small country on the eastern

C O N C L U S I O N

70

border of India, manufactures all bike categories and has an

export capacity of 2 million units per year.

According to Export Promotion Bureau (EPB) of Bangladesh,

the country’s bicycle export value reached € 25.6 million

between July 2012 and June 2013, a growth of 61.15% compared

with the same period of 2011-2012.

In the view of management practices of ALITA (BD) LIMITED we

are also provided with various informations as necessary of

sound management. In the following discussion, we have

observed that the company usually practices the sound

management in their working environment. And we also

observed that the company always very much conscious about

the human rights. The code of conducts of the company which

were mentioned earlier indicates that clearly. The

production,marketing,human resource management department of

the company is also strength in view of the employee and

customer concern.

71

However, this tour has helped me to learn a lot of

practical knowledge about the management and financial

practices of the reputed multinational company. Finally, I

would like to render gratitude to my honorable teacher and

supervisor Prof. Dr. ZAHANGIR ALAM, and Prof.S.M.Nasrul

Quadir Department of Finance and Banking, University of

Chittagong, for arranging this program and support to made

this tour report.

BIBLIOGRAPHY

1. David, A. Decenzo, Stephen P. Robin Personnel / Human

Resource Management.

2. The Handbook on service & code of conduct published by-The youngone

72

Humane resource Department .

3. Balcher, David W.Wage and Salary Adminstration,

England: Naji. Printice Hall. 1964.

4. Mastor, Abrenham, Motivation and personally New York:

Harpur and Row, 1964.

5. Yoder, Dle, Personnel management and Industrial

Relations: New Delhi ; Printice Hall India 1972.

6. Flippo, Edwin B, Personnel Management, New York; Megraw

Hill Bllk Company 1984.

7. Haque S,A, Personnel Management Dhaka: Kalpona

publishers 1982.

8. Pigors Pound C.A Myers, Personnel Administration: A

point of new and a methop, New York; Magraw Hill Bllk

company, 1956.

9. John D. Danuls and lee H Radelbaugh, International.

Business: A managerial perspective, Printice Hall

International inc, New York, USA.

10. Koontz Harold, Donald‘s o Cyril and weihrch Heing:

Principles of Management; An Analysis of management

functions.

11. Philip Kotler, Marketing Management, 11th edition

(2003). Printice Hall Englewood cliffs N.J USA.

THE END