MANAGERIAL ECONOMICS Final Project (fauji cement company)

Presented To:

Professor: Kanwal Zahra

Presented By:

Zaira zahid Ahmed bilal Yasir shoaib

(L1F10MBAM2025) (L1F10MBAM2017) (L1F10MBAM2269)

Munazza tabassum (L1F10MBAM2032) Faryal sami (L1F09MBAM2118)

Section:

Date:

16th January 2013

Introduction:A longtime leader in the cement manufacturing industry, Fauji Cement Company, headquartered in Rawalpindi, operates cement plants at Jhang Bahtar, Tehsil Fateh Jang, District Attock in the province of Punjab. The Company has a strong and longstanding tradition of service, reliability, and quality that reaches back more than 15 years. Sponsored by Fauji Foundation the Company was incorporated in Rawalpindi in1992.

Fauji Cement is operating two lines of Cement Plants, one each from FLS Denmark & POLYSIUS Germany. The plants are well renowned for their high efficiencies, best quality production and are well maintained with annual total production capacity of 3.3 million tons of cement. FAUJI Cement enjoys the reputation of being the Best Quality Cement in the Country and is preferred in the construction of Mega Projects like Dams, Bridges, Highways & Motorways, Commercial & Industrial complexes, Residential Housing Societies, and a myriad of other structures needing speedy strengthening bond, fundamental to Pakistan's economic vitality.

In addition to the Pakistan market, Fauji Cement is expanding its promising coverage in the neighboring regions /countries like Sri Lanka, India, Afghanistan, South Africa, Middle East & Africa.

Human Resource Management

During the last decade there has been a remarkable shift in the field of strategic human resource management. The fields dominant focus has been to make clear the importance of efficiently managing the human resource of organization.
Although scholars have yet to reach agreement about how best to define human resource management, there is, however, broad agreement that it involves designing and implementing a set of internally constant policies and practices that ensure a firm's human capital contributes to the accomplishment of its business objectives (Baird and Meshoulam, 1988).

By tackling HR issues with the proper tools and knowledge, a company can improve its odds of success. Arthur (1994) claims that HR practices can influence organizations significant outcomes such as productivity and profitability (Arthur, 1994).

Delery and Doty (1996) examined the relationship between HR practices and profitability. In testing universalistic, contingency, and configurational approaches to HR, they found that in general, HR practices were positively related to profitability.

Marketing (Advertisement)

Marketing has become such a great influence, no longer is anything or anyone accepted without it. Effective marketing allows a business to reach its potential customers by fulfilling their needs at the right time. Marketing is commonly associated with endeavors such as branding, selling and advertisement.

Advertising is one of the marketing elements that affect sales. According to Aaker and Myers (1982), advertising is part of a total marketing program and its function is usually to communicate to large audiences, and it often performs this function very efficiently. Advertising can also have an indirect influence on firm performance by virtue of its ability to influence sales and profitability of a firm (Srinivasan and Hanssens, 2009). Businesses that keep

on advertising regardless of rise or fall in the economic times get a competitive advantage over those that cut their ad budgets.

David et al., (1988) recognizes that many scholars have heard different views on the effect of advertising on sales performance, however most of them agree that effective advertising will eventually increase sales revenue. Therefore you have to invest money to make money, and advertising should be an investment that must be included in a businesss annual budget.

Schematic diagram
Human Resource Practices 809

Marketing

Sales Revenues

Corporate Social Responsibility

Effects of financial policies on sales Fauji cement

Time Period 2007 2008 2009 2010 2011

Sales (000,000)
3,463,283

Financial policies (000)

207.1 05 146.9 54 224.7 16 41.20 6 103.922

3,545,902 5,314,538 3,808,455 4,742,593

Descriptive Statistics Mean sales financial cost 4174954.20 144.7644 Std. Deviation 815071.972 75.28890 N 5 5

Correlations sales Pearson Correlation sales financial cost Sig. (1-tailed) sales financial cost N sales financial cost 1.000 .245 . .346 5 5 financial cost .245 1.000 .346 . 5 5

Variables Entered/Removed Variables Model 1 Variables Entered financial cost

a

Removed

Method . Enter

a. All requested variables entered. b. Dependent Variable: sales

Model Summary Adjusted R Model 1 R .245

a

Std. Error of the Estimate 912459.482 Durbin-Watson 1.652

R Square .060

Square -.253

a. Predictors: (Constant), financial cost b. Dependent Variable: sales

ANOVA Model 1 Regression Residual Total Sum of Squares 1.596E11 2.498E12 2.657E12 df

Mean Square 1 3 4 1.596E11 8.326E11

F .192

Sig. .691
a

a. Predictors: (Constant), financial cost b. Dependent Variable: sales

Coefficients

Standardized Unstandardized Coefficients Model 1 (Constant) B 3790851.214 Std. Error 967497.928 Coefficients Beta t 3.918 Sig. .030

financial cost a. Dependent Variable: sales

2653.297

6059.721

.245

.438

.691

Residuals Statistics Minimum Predicted Value Residual Std. Predicted Value Std. Residual a. Dependent Variable: sales 3900167.00 -877066.063 -1.376 -.961 Maximum 4387047.00 927490.875 1.062 1.016

Mean 4174954.20 .000 .000 .000

Std. Deviation 199763.835 790213.091 1.000 .866

N 5 5 5 5

interpretation There is a positive relationship between sales and financial expenses of fauji cement as shown in the regression analysis. The value of coefficient is positive and having t statistics less than 1.96. The model shows the best fit because the value of R square is 0.60 which is greater than 0.50 and in the same way we can say that increased financial cost will lead to an increase in sales.

Effects of HR policies on sales Fauji cement

Time Period 2007 2008 2009 2010 2011

Sales In millions
3,463,283

Hr policies (000)

71.75
93.27 206
223 152.08

3,545,902 5,314,538 3,808,455 4,742,593

Correlations humen resource sales policy .596 1.000 .144 . 5 5

Pearson Correlation

sales humen resource policy

1.000 .596 . .144 5 5

Sig. (1-tailed)

sales humen resource policy

sales humen resource policy

Variables Entered/Removed Variables Model 1 Variables Entered humen resource policy

a

Removed

Method . Enter

a. All requested variables entered. b. Dependent Variable: sales

Model Summary Adjusted R Model 1 R .596

a

Std. Error of the Estimate Durbin-Watson 3.305

R Square .355

Square .140

755847.682

a. Predictors: (Constant), humen resource policy

Model Summary Adjusted R Model 1 R .596

a

Std. Error of the Estimate Durbin-Watson 3.305

R Square .355

Square .140

755847.682

a. Predictors: (Constant), humen resource policy b. Dependent Variable: sales

Coefficients

Standardized Unstandardized Coefficients Model 1 (Constant) humen resource policy a. Dependent Variable: sales B 3088819.256 7278.749 Std. Error 910285.531 5664.103 .596 Coefficients Beta t 3.393 1.285 Sig. .043 .289

Residuals Statistics Minimum Predicted Value Residual Std. Predicted Value Std. Residual a. Dependent Variable: sales 3611069.50 -903525.313 -1.161 -1.195 Maximum 4711980.50 726296.438 1.106 .961

Mean 4174954.20 .000 .000 .000

Std. Deviation 485657.317 654583.294 1.000 .866

N 5 5 5 5

Interpretation

There is a positive relationship between sales and human resource management (provident funds) expenses of fauji cement as shown in the regression analysis. The value of coefficient is positive and having t statistics less than 1.96. The model is not showing the best fit because the value of R square is 0.355 which is less than 0.50 and in the same way we can say that increased HR cost will lead to an increase in sales.

Effects of marketing policies on sales Fauji cement

Time Period 2007 2008 2009 2010 2011

Sales In millions
3,463,283

Marketing policies (000)

2029
2207
2,430 3,048

3,545,902 5,314,538 3,808,455 4,742,593

3919

Descriptive Statistics Mean sales mkt 4174954.20 2726.60 Std. Deviation 815071.972 769.694 N 5 5

Correlations sales Pearson Correlation sales mkt Sig. (1-tailed) sales mkt N sales mkt 1.000 .416 . .243 5 5 mkt .416 1.000 .243 . 5 5

Variables Entered/Removed Variables Model 1 Variables Entered mkt

a

Removed

Method . Enter

a. All requested variables entered. b. Dependent Variable: sales

Model Summary Adjusted R Model 1 R .416

a

Std. Error of the Estimate 855783.076 Durbin-Watson 2.847

R Square .173

Square -.102

a. Predictors: (Constant), mkt b. Dependent Variable: sales

ANOVA Model 1 Regression Sum of Squares 4.603E11 df

Mean Square 1 4.603E11

F .628

Sig. .486
a

Residual Total a. Predictors: (Constant), mkt b. Dependent Variable: sales

2.197E12 2.657E12

3 4

7.324E11

Coefficients

Standardized Unstandardized Coefficients Model 1 (Constant) mkt a. Dependent Variable: sales B 2973293.152 440.718 Std. Error 1563351.930 555.924 .416 Coefficients Beta t 1.902 .793 Sig. .153 .486

Residuals Statistics Minimum Predicted Value Residual Std. Predicted Value Std. Residual a. Dependent Variable: sales 3867509.50 -508145.875 -.906 -.594 Maximum 4700466.00 1270300.750 1.549 1.484

Mean 4174954.20 .000 .000 .000

Std. Deviation 339217.944 741129.884 1.000 .866

N 5 5 5 5

Interpretation

There is a positive relationship between sales and marketing policies (advertisement and sales promotions) expenses of fauji cement as shown in the regression analysis. As the value of coefficient is positive and having t statistics less than 1.96. The model is not showing the best fit because the value of R square is 0.173 which is less than 0.50 and in the same way we can say that increased HR cost will lead to an increase in sales.

Conclusion
Human Resource Management (provident fund), Marketing (Advertisement and sales promotion) financial cost play a vital role for an organization to increase its profitability through more sales. The success and failure of an organization depends greatly on the effectiveness of these three forces. Spending a significant amount on the provident funds for employees, advertisement and sales promotions and in financial policies which are affected can increase the sales which results in profit maximizations. This is often correlated with sales growth. From our findings we conclude that the future will be bright for those organizations which will pay attention to its HR, Marketing.

Bibliography: Ali, I., Rehman, K.U., Yilmaz, A.K., Nazir, S., and Ali, J.F. (2010). Effects of Corporate Social Responsibility on Consumer Retention in Cellular Industry of Pakistan. African Journal of Business Management, 4(4), 475-485. Delery, J.E., and Doty, D.H. (1996). Modes of Theorizing in Strategic Human Resource Management: Tests of Universalistic, Contingency and Configurational Performance Predictions. Academy of Management Journal, 39, 802-835 Srinivasan, S., and Hanssens, D.M. (2009). Marketing and Firm Value: Metrics, Methods, Findings, and Future Directions. Journal of Marketing Research, 46, 293312.

Uadiale, O.M., and Fagbemi, T.O. (2011). Corporate Social Responsibility and Financial Performance in Developing Economies: The Nigerian Experience. The 2011 New Orleans International Academic Conference.