Question

1.The government owns and operates a banana chips factory in the capital of Corona. It has decided to privatize the business in order to enhance economic development.

a) explain Three ways in which the privitization of the banana chips business could benefit the economic development of PanJam.

2. Newstart Company Limited bought the banana chips business from the Government. The Board of Directors of Newstart wants to develop new vision and mission statements, and strategic objectives that will guide the business to profitability within the first 12 months.

b) Discuss Three ways in which a well-written mission statement for Newstart Co. Ltd could assist the business in becoming more profitable.

Answer 1

1.a) The three ways in which the privatization of the banana chips factory could aid in the economic development of PanJam are as below:

• With privatization of the banana chips business,the competition in the market is intensified.This makes the players in the market to compete more by providing high quality and low cost chips to stay relevant in the market.This leads to cost savings to consumers and increase in sales for the factory.
• Since the private players do not much constraints on the budget and influx of cash(in the form of investment),the operations can be scaled up very quickly.This lead to creation of more jobs for the people in the region.Thus leading to the increase in employment opportunites and higher disposable income.
• Since the private players are primarily driven by profits,they will ensure that they achieve the desire organization objectives by using latest technology,expertise and personnel.This will lead to higher profits for the factory and inturn higher taxes for the government.These taxes can inturn be used for the development of the PanJam region.

2. b) A well written mission statement for the Newstart Co.Ltd can assist in generating profits for the business in the following three ways :

• A well written mission statement is effective in communicating the organizational objectives to its employees.This inspires and motivates the employees towards achieving the desire targets-both monetary and non monetary.
• A mission statement that is aligned with the objectives and values of the company helps in promoting the company and captures the attention of the external stakeholders.A mission statement helps in effective marketing of the company leading to increased awareness and boost in the top line.
• A clear and well defined mission statement aids in the improvement of financial performance of a company.This is possible due to the impact of mission on the employees' behavior ,which would lead to a boost in their productivity, leading to higher profits for the organization.