Corporations

Principal – agent conflict arise because managers & shareholders view the role of the corporation differently. Investors see corporation as investment vehicles. Shareholders want corporate managers to work diligently and efficiently towards the simple goal of maximizing the value of their ownership stake. However, the relationship between the managers of a corporation and its owners is complex. The principle of self-interested behavior tells that people, including managers and stockholders, work in their own financial self interest.

This is considered the main source of divergence between a manager’s and an owner’s goals. Each wishes to maximize wealth and benefits, often at the expense of the other party. The modern corporation separates ownership and control giving rise to the principal-agent relationship. However, this separation gives managers an opportunity to work in their own self-interest. There are six different types of agency conflicts briefed below. Major source of manager-owner conflict is a behavior called shirking.

Shirking is not putting forth the best effort to help stockholders realize the largest return possible. Perhaps managers are spending too much time enjoying perks and creating an opportunity cost of not working on projects and day-to-day operations. Whatever the reason, stockholders’ value decreases each time an opportunity for firm improvement is lost to shirking managers. Further, managers have different time horizons than the shareholders. The executives concerns largely on their tenure with the corporation, whereas shareholders concerns with value of infinite series of future cash flows.

Another source of manager-owner conflict occurs when managers and employees hold unique skills necessary for business operations. The abilities and skills held by employees are collectively known as human capital. Just like investment capital, it defines what a company is capable of and often creates an important vehicle through which a company may compete in the market. When employees of a firm become specialists over time, their skills become non-diversifiable. We know that diversification is a good thing, but specialty creates what is known as non-diversifibility of human capital.

One of the major sources of manager-owner goal divergence is found in the perquisites a manager enjoys as being a decision-maker in the organization. Perks are those aspects of the company that bring value to a manager but are not a part of the manager’s compensation package. Perks include club membership, company cars, and plush working environment. Excessively taking advantage of these perks erodes the value of the firm because they represent real costs to stockholders. The overinvestment problem occurs when managers creating assets for the firm at the expenses of shareholders without creating value for them.

However, managers choose not to make NPV investments in order to increase company’s cash holding, creating larger cash buffer to avoid future cash short fall. This is underinvestment problem. Correcting overvalued stock would destroying shareholder value rather than creating it, although the financial results are misrepresented. It become worse if manages have been compensated with stock options. There are three common ways to reduce the conflicts. Which are contracting, incentives and monitoring. Although none of this method eliminates the agency problem, it however reduces the conflict.

Contracting: It is difficult method to enforce executive assignment or guidelines since managers have to respond to the opportunity arises & also to make the decisions about future course during uncertainties. Without discretion over decision it would not be possible. Incentives: It is more promising method; however agent principal conflict arises because the two parties have different incentives. Equity based compensation combined with overvalued equity can create more problem than resolves. Monitoring: It can be effective in limiting excess perquisite consumption, the poor use of company assets and time horizon problem.

It is less effective in dealing with the shirking or effort problem. The separation of ownership of a firm and its control allows investors to invest money in multiple companies without having to concentrate on how each firm is actually run. This allows for diversification of assets by the investor to minimize risking all of his/her wealth. However, this separation creates agency problems which erode some of the value of being able to own a company but not having to spend the time to manage it. This value lost is often the result of managers taking too much liberty with perks and of shirking responsibilities.

This project has given us the opportunity to know numerous things about advertising strategies. This project has also helped us boost-up our self-confidence and competency. WE would like to take this opportunity to thank our Prof: Mrsfor giving us an opportunity to work on this project of marketing management for providing with valuable information and guidance wherever and whenever we required it. Finally, we would like to thank all the staff of BACHELOR OF MANAGEMENT STUDIES (BMS) for always helping us.

Introduction Amul(“priceless in Sanskrit. The brand name “Amul,” from the Sanskrit “Amoolya,” (meaning Precious) was suggested by a quality control expert in Anand. ) formed in 1946, is a dairy cooperative in India. It is a brand name managed by an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2. 8 million milk producers in Gujarat, India AMUL is based in Anand, Gujarat and has been an example of a co-operative organization’s success in the long term.It is one of the best examples of co-operative achievement in the developing economy[citation needed].

“Anyone who has seen … the dairy cooperatives in the state of Gujarat, especially the highly successful one known as AMUL, will naturally wonder what combination of influences and incentives is needed to multiply such a model a thousand times over in developing regions everywhere. “The Amul Pattern has established itself as a uniquely appropriate model for rural development. Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world.It is also the world’s biggest vegetarian cheese brand Amul is the largest food brand in India and world’s Largest Pouched Milk Brand with an annual turnover of US $1050 million (2006–07). Currently Unions making up GCMMF have 2. 8 million producer members with milk collection average of 10. 16 million litres per day.

Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries. Its bid to enter Japanese market in 1994 did not succeed, but now it has fresh plans entering the Japanese markets .Other potential markets being considered include Sri Lanka. The Taste of India, a brand so distinctively Indian has been a part of our lives for nearly five decades now and still is able to touch a chord in our hearts. As a brand AMUL has grown from being merely a differentiating factor to protect the interests of producers and consumers. AMUL inspired ‘Operation Flood’ and heralded the ‘White Revolution’ in India. It began with two village cooperatives and 250 liters of milk per day, nothing but ooze compared to the flood it has become today.

AMUL distributes over a million liters of milk per day, it also collects and processes various milk products, during the peak, on behalf of more than a thousand village individually owned by half a million farmer members. AMUL too has become a symbol of the aspirations of millions of farmers. AMUL sprung from the seeds sown in the black soil of CHAROTAR, an area in the KAIRA district of Gujarat, as a cooperative movement to empower the milk producers. At that time POLSON Dairy was the biggest buyer of the milk being produced in KAIRA. Polson was built on the basis of providing superior quality products to up-market consumers.However Polson’s products were not the reason that led to the rise of AMUL, it was its exploitative practices that started the cooperative revolution. For several years the KAIRA cooperative supplied milk and allied products without a formal distribution network leave alone a brand name.

The name Amul was most probably suggested by a quality control expert in Anand. It was derived from ”Amulya”, which in Sanskrit, Gujarati and many other Indian languages, means priceless, and implies matchless excellence. The name was short, memorable and easily pronounced.It could also serve as an acronym for the organization – the unusable KDCMPUL (Kaira District Cooperative Milk Producer’s Union Limited) taken from Kaira Cooperative’s full name, could be substituted by AMUL, standing for Anand Milk Union Limited. Even though AMUL products have been in use in millions of homes since 1946, the brand AMUL was registered only in 1957. SUCCESS As AMUL is recognised as the country’s largest milk producing cooperative it has tied up with global supermarket chain WALMART to sell its range of dairy products and have also tied up with Glaxo over the production of baby food in India.Amul added sweet buttermilk powder, a second brand of baby food and a high protein weaning food.

It also sells its products to Nepal. Now India is looking to capture neighbourhood markets like Pakistan, Bangladesh etc. These countries import over 50,000 tonnes of milk each annually ;amp; Sri Lanka is flooded with an Indonesian brand, which is said to be of an inferior quality and also costs less. These countries import tonnes of milk every year. AMUL’S Indian desserts are very well liked in countries like Singapore and Malaysia.Amul has list of products marketed to various countries few of its products are Amul butter, Amul cooking butter, Amul cheese spread, Amul pizza cheese, Amul shrikhand, Amul fresh cream, Amul fat milk, Amul pure ghee, Amulya dairy whitener, Sagar Tea and Coffee whitener, Amul butter milk, Amul ice creams like cassata , cool candy and frostik, Amul milk chocolate and Amul Eclairs. Amul has started preparing and selling pizza slices that prominently feature generous portions of Amul cheese.

Amul’s pizza slices are being sold through super markets and large departmental stores that have snack counters AMUL is considered as India’s best known local Brand across all categories. Indians prefer Dairy Ice cream rather than frozen desserts and Amul has a wide range in the dairy ice cream segment, 35% market share in the national Ice Cream market. Amul is biggest sourcing base for milk products in India, people are more comfortable buying products in the Value for Money segment and Amul is well present in this division.Amul has built up a terrifying image as a brand in which generations of customers have placed their trust, coming to pricing strategy Amul is the price warrior and currently has a very wide range of products to offer for all price points. Amul is recognized for well established distribution and delivery network for dairy products. AMUL’S success led to the creation of similar structures of milk producers in other districts of Gujarat. They drew on AMUL’S experience in project planning and finishing.

This patter was not only followed in KAIRA district but also in Baroda and Surat district.In these districts, they experienced and found easy and effortless ways to adapt Amul’s game plan to their respective areas. This led to the Creation of the National Dairy Development Board with the clear mandate of replicating the ‘Anand pattern’ in other parts of the country. Initially the pattern was followed for the dairy sector but at a later stage oilseeds, fruit and vegetables, salt, and tree sectors also benefited from it’s success. Gujarat Cooperative Milk Marketing Federation (GCMMF) is India’s largest food products marketing organization.Amul is state level apex body of milk cooperatives in Gujarat which aims to provide remunerative returns to the farmers and serves the interest of consumers by providing quality products. It has been awarded a “Trading House” status & has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 8 years.

Amul is in a position to manage these assets to effectively command the market leader’s position in the emerging fresh dairy products market because of its milk processing capacity.Amul has always been a model to which other cooperatives have looked up as an example and inspiration as well as one from which many have benefited. Success in Distribution: The major development on the distribution front was the development and alignment of four distribution highways-those of Fresh Products, Chilled Products, Frozen Products and Ambient Products. This is a significant achievement because it allows them to develop synergies among all product lines and to leverage these highways to introduce and distribute new products as per market demand.No other organization in India has been able to develop this kind of channel synergy so far Products Marketed: Breadspreads: ?? Amul Butter ?? Amul Lite Low Fat Breadspread ?? Amul Cooking Butter Cheese Range: ?? Amul Pasteurized Processed Cheddar Cheese ?? Amul Processed Cheese Spread ?? Amul Pizza (Mozarella) Cheese ?? Amul Shredded Pizza Cheese ?? Amul Emmental Cheese ?? Amul Gouda Cheese ?? Amul Malai Paneer (cottage cheese) ?? Utterly Delicious Pizza Mithaee Range (Ethnic sweets): ?? Amul Shrikhand (Mango, S affron, Almond Pistachio, Cardamom) ?? Amul Amrakhand ??Amul Mithaee Gulabjamuns ?? Amul Mithaee Gulabjamun Mix ?? Amul Mithaee Kulfi Mix ?? Avsar Ladoos UHT Milk Range: ?? Amul Shakti 3% fat Milk ?? Amul Taaza 1. 5% fat Milk ?? Amul Gold 4. 5% fat Milk ?? Amul Lite Slim-n-Trim Milk 0% fat milk ?? Amul Shakti Toned Milk ?? Amul Fresh Cream ?? Amul Snowcap Softy Mix Pure Ghee: ?? Amul Pure Ghee ?? Sagar Pure Ghee ?? Amul Cow Ghee Infant Milk Range: ?? Amul Infant Milk Formula 1 (0-6 months) ?? Amul Infant Milk Formula 2 ( 6 months above) ?? Amulspray Infant Milk Food Milk Powders: ?? Amul Full Cream Milk Powder ?? Amulya Dairy Whitener ? Sagar Skimmed Milk Powder ?? Sagar Tea and Coffee Whitener Sweetened Condensed Milk: ?? Amul Mithaimate Sweetened Condensed Milk Fresh Milk: ?? Amul Taaza Toned Milk 3% fat ?? Amul Gold Full Cream Milk 6% fat ?? Amul Shakti Standardised Milk 4.

5% fat ?? Amul Slim ;amp; Trim Double Toned Milk 1. 5% fat ?? Amul Saathi Skimmed Milk 0% fat ?? Amul Cow Milk Curd Products: ?? Yogi Sweetened Flavoured Dahi (Dessert) ?? Amul Masti Dahi (fresh curd) ?? Amul Masti Spiced Butter Milk ?? Amul Lassee Amul Icecreams: ?? Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi) ??Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza, Roasted Almond) ?? Nature’s Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh Strawberry, Black Currant, Santra Mantra, Fresh Pineapple) ?? Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae) ?? Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone, Chococrunch, Megabite, Cassatta) ?? Utterly Delicious (Vanila, Strawberry, Chocolate, Chocochips, Cake Magic) Chocolate & Confectionery: ?? Amul Milk Chocolate ?? Amul Fruit & Nut Chocolate Brown Beverage: ??Nutramul Malted Milk Food Milk Drink: ?? Amul Kool Flavoured Milk (Mango, Strawberry, Saffron, Cardamom, Rose, Chocolate) ?? Amul Kool Cafe ?? Amul Kool Koko ?? Amul Kool Millk Shaake (Mango, Strawberry, Badam, Banana) Health Beverage: ?? Amul Shakti White Milk Food Amul-Pricing Strategies At the time Amul was formed, consumers had limited purchasing power, and modest consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price strategy to make its products affordable and attractive to consumers by guaranteeing them value for money.Despite competition in the high value dairy product segments from firms such as Hindustan Lever, Nestle and Britannia, GCMMF ensures that the product mix and the sequence in which Amul introduces its products is consistent with the core philosophy of providing butter at a basic, affordable price to appeal the common masses. This helped AMUL BUTTER to create its brand image in the household sector of the society. Rs. 87 Rs.

18 PLACE: A Global Distributor GCMMF is India’s largest exporter of Dairy Products. It has been accorded a “Trading House” status.GCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 9 years. Currently Amul has 2. 41 million producer members with milk collection average of 5. 08 million litres/day. Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries.

Its bid to enter Japanese market in 1994 had not succeeded, but now it has fresh plans of flooding the Japanese markets. Other potential markets being considered include Sri Lanka. PROMOTION: Initial Promotional StrategyThe butter, which had been launched in 1945, had a staid, boring image, primarily because the earlier advertising agency which was in charge of the account preferred to stick to routine, corporate ads. They didn’t help in creating a brand image of AMUL butter which was their then motive. The image they presented was, well, boring. A brand – Amul – A Taste of India However, in 1966, a man named Sylvester daCunha, from the ad agency of ASP, took over the Amul account. And in 1967 it began, innocently enough.

In India, food was something one couldn’t afford to fool around with. It had been taken too seriously, for too long.Sylvester daCunha decided it was time for a change of image. Scott Bradbury, the marketing genius behind Nike and Starbucks, once said “ A great brand is a story that is never completely told. A brand is a metaphorical story that’s evolving all the time. Stories create the emotional context people need to locate themselves in the larger experience” He could easily have been talking about the Amul moppet. Advertising Strategy An advertising strategy is a campaign developed to communicate ideas about products and services to potential consumers in the hopes of convincing them to buy those products and services.

This strategy, when built in a rational and intelligent manner, will reflect other business considerations (overall budget, brand recognition efforts) and objectives (public image enhancement, market share growth) as well. As Portable MBA in Marketing authors Alexander Hiam and Charles D. Schewe stated, a business’s advertising strategy “determines the character of the company’s public face. ” Even though a small business has limited capital and is unable to devote as much money to advertising as a large corporation, it can still develop a highly effective advertising campaign.The key is creative and flexible planning, based on an indepth knowledge of the target consumer and the avenues that can be utilized to reach that consumer. Today, most advertising strategies focus on achieving three general goals, as the Small Business Administration indicated in Advertising Your Business: 1) promote awareness of a business and its product or services; 2) stimulate sales directly and “attract competitors’ customers”; and 3) establish or modify a business’ image. In other words, advertising seeks to inform, persuade, and remind the consumer.

With these aims in mind, most businesses follow a general process which ties advertising into the other promotional efforts and overall marketing objectives of the business. STAGES OF ADVERTISING STRATEGY As a business begins, one of the major goals of advertising must be to generate awareness of the business and its products. Once the business’ reputation is established and its products are positioned within the market, the amount of resources used for advertising will decrease as the consumer develops a kind of loyalty to the product.Ideally, this established and ever-growing consumer base will eventually aid the company in its efforts to carry their advertising message out into the market, both through its purchasing actions and its testimonials on behalf of the product or service. Essential to this rather abstract process is the development of a “positioning statement,” as defined by Gerald E. Hills in “Marketing Option and Marketing” in The Portable MBA in Entrepreneurship: “A ‘positioning statement’ explains how a company’s product (or service) is differentiated from those of key competitors. With this statement, the business owner turns intellectual objectives into concrete plans.

In addition, this statement acts as the foundation for the development of a selling proposal, which is composed of the elements that will make up the advertising message’s “copy platform. ” This platform delineates the images, copy, and art work that the business owner believes will sell the product. With these concrete objectives, the following elements of the advertising strategy need to be considered: target audience, product concept, communication media, and advertising message.These elements are at the core of an advertising strategy, and are often referred to as the “creative mix. ” Again, what most advertisers stress from the beginning is clear planning and flexibility. And key to these aims is creativity, and the ability to adapt to new market trends. A rigid advertising strategy often leads to a loss of market share.

Therefore, the core elements of the advertising strategy need to mix in a way that allows the message to envelope the target consumer, providing ample opportunity for this consumer to become acquainted with the advertising message.TARGET CONSUMER The target consumer is a complex combination of persons. It includes the person who ultimately buys the product, as well as those who decide what product will be bought (but don’t physically buy it), and those who influence product purchases, such as children, spouse, and friends. In order to identify the target consumer, and the forces acting upon any purchasing decision, it is important to define three general criteria in relation to that consumer, as discussed by the Small Business Administration: 1. Demographics—Age, gender, job, income, ethnicity, and hobbies. . Behaviors—When considering the consumers’ behavior an advertiser needs to examine the consumers’ awareness of the business and its competition, the type of vendors and services the consumer currently uses, and the types of appeals that are likely to convince the consumer to give the advertiser’s product or service a chance.

3. Needs and Desires—Here an advertiser must determine the consumer needs—both in practical terms and in terms of self-image, etc. —and the kind of pitch/message that will convince the consumer that the advertiser’s services or products can fulfill those needs.PRODUCT CONCEPT The product concept grows out of the guidelines established in the “positioning statement. ” How the product is positioned within the market will dictate the kind of values the product represents, and thus how the target consumer will receive that product. Therefore, it is important to remember that no product is just itself, but, as Courtland L. Bovee and William F.

Arens stated in Contemporary Advertising, a “bundle of values” that the consumer needs to be able to identify with.Whether couched in presentations that emphasize sex, humor, romance, science, masculinity, or femininity, the consumer must be able to believe in the product’s representation. COMMUNICATION MEDIA The communication media is the means by which the advertising message is transmitted to the consumer. In addition to marketing objectives and budgetary restraints, the characteristics of the target consumer need to be considered as an advertiser decides what media to use. The types of media categories from which advertisers can choose include the following: * Print—Primarily newspapers (both weekly and daily) and magazines. Audio—FM and AM radio. * Video—Promotional videos, infomercials.

* World Wide Web. * Direct mail. * Outdoor advertising—Billboards, advertisements on public transportation (cabs, buses). After deciding on the medium that is 1) financially in reach, and 2) most likely to reach the target audience, an advertiser needs to schedule the broadcasting of that advertising. The media schedule, as defined by Hills, is “the combination of specific times (for example, by day, week, month) when advertisements are inserted into media vehicles and delivered to target audiences. ADVERTISING MESSAGE An advertising message is guided by the “advertising or copy platform,” which is a combination of the marketing objectives, copy, art, and production values. This combination is best realized after the target consumer has been analyzed, the product concept has been established, and the media and vehicles have been chosen.

At this point, the advertising message can be directed at a very concrete audience to achieve very specific goals. Hiam and Schewe listed three major areas that an advertiser should consider when endeavoring to develop an effective “advertising platform”: * What are the product’s unique features? How do consumers evaluate the product? What is likely to persuade them to purchase the product? * How do competitors rank in the eyes of the consumer? Are there any weaknesses in their positions? What are their strengths? Most business consultants recommend employing an advertising agency to create the art work and write the copy. However, many small businesses don’t have the up-front capital to hire such an agency, and therefore need to create their own advertising pieces. When doing this a business owner needs to follow a few important guidelines.COPY When composing advertising copy it is crucial to remember that the primary aim is to communicate information about the business and its products and services. The “selling proposal” can act as a blueprint here, ensuring that the advertising fits the overall marketing objectives. Many companies utilize a theme or a slogan as the centerpiece of such efforts, emphasizing major attributes of the business’s products or services in the process.

But as Hiam and Schewe caution, while “something must be used to animate the theme …care must be taken not to lose the underlying message in the pursuit of memorable advertising. When writing the copy, direct language (saying exactly what you mean in a positive, rather than negative manner) has been shown to be the most effective. The theory here is that the less the audience has to interpret, or unravel the message, the easier the message will be to read, understand, and act upon. As Jerry Fisher observed in Entrepreneur, “Two-syllable phrases like ‘free book,’ ‘fast help,’ and ‘lose weight’ are the kind of advertising messages that don’t need to be read to be effective. By that I mean they are so easy for the brain to interpret as a whole thought that they’re ‘read’ in an eye blink rather than as linear verbiage.So for an advertiser trying to get attention in a world awash in advertising images, it makes sense to try this message-in-an-eye-blink route to the public consciousness—be it for a sales slogan or even a product name. ” Its advertising has also started using tongue-in-cheek sketches starring the Amul baby commenting jovially on the latest news or current events.

This formed a large chunk of the collective memory of us Indians. We grew with them as the ads grew with us. They are quirky, poke fun at no one in particular and are pure eye-candy!We almost admire the speed with which the ad-people come up with copy and illustration for the ads, that change every few days!! From the Sixties to the Nineties, the Amul ads have come a long way. While most people agree that the Amul ads were at their peak in the Eighties they still maintain that the Amul ads continue to tease a laughter out of them The Amul ads are one of the longest running ads based on a theme, now vying for the Guinness records for being the longest running ad campaign ever. Segmentation ?? Wide range of product categories caters to consumers across all market segments.For example, Amul Kool is targeted at children, while teenagers prefer Kool Cafe, as it has a cool imagery associated with it. ?? Segmentation is not as easy in curd and low fat products, due to mixed audiences, various culinary applications , eg.

ghee, butter and cheese. “In India, the most used spread is ghee, then butter, cheese, low fat butter, margarine, cheese spread and mozzarella cheese. Targeting ?? Changing retail environment ?? Striking out on its own, with Amul Outlets or parlours to deliver consumers total brand experience ??Launched in 2002, there are now 400 Amul parlours across the country, which contributed 3% to the brand’s total turnover last year. High profile locations: Amul parlours are today present on campuses of Infosys, Wipro, IIM-A, IIT-B, Temples, Metro rail and railway stations in Gujarat. Positioning • A mass market player, no premium offerings • USP – Quality with affordability • Up against niche players – value addition to customers • Sheer size and scale of operation • New offerings for health conscious and vibrant India – Health and energy drinks ??Stamina, a health drink made from milk with added vitamin C against Red Bull and Gatorade, milk better than cola. Aimed at youngsters, priced at Rs 12 Ice-cream ?? Probiotic and sugar-free variants Chocolates ?? sugar-free brand called Choco-Mini to target the diabetic MARKETING STRATEGIES 4 MAIN STRATEGIES First is quality. No brand survives long if its quality does not equal or exceed what the buyer expects.

There simply can be no compromise. That’s the essence of the contract. In the case of a food product, this means that the brand must always represent the highest hygienic, bacteriological and organoleptic standards.It must taste good, and it must be good. Second, value for money. If our customer buys an Amul product, she gets what she pays for, and more. We have always taken pride in the fact that while we earn a good income for our owners – the dairy farmers of Gujarat – we don’t do it at the cost of exploiting the consumer.

Even when adverse conditions have reduced supplies of products like butter, we have resisted the common practice of raising prices, charging what the market would bear. Rather, we have kept prices fair and done our best to ensure that retailers do not gain at the consumers’ expense.Third, availability. A brand should be available when and where the customer wants it. There is no benefit achieved in creating a positive brand image, and then being unable to supply the customer who wants to buy it. In our case, over the years we have built what is probably the nation’s finest distribution network. We reach hundreds of cities and towns through a cold chain that not only ensures that our products are available, but they reach the customer at the farthest end of the country with the same quality as you would find in Ahmedabad or Vadodara.

Fourth, service.We have a commitment to total quality. But, occasionally, we may make a mistake – or, our customer may think we’ve made a mistake, and the customer, as they say, is always right. That is why, for Amul, every customer complaint must be heard – not just listened to. And, every customer complaint must be rectified to the extent humanly possible. For close to fifty years now, Amul has honoured its contract with the consumer. The contract that is symbolised by the Amul brand means quality.

It means value for money. It means availability. And it means service. COMPETITORS Butter Britannia • Nestle Cheese • Britannia Baby Food • Nestle • Heinz Dairy Whitener Segment • Nestle • Britannia Ice creams • HLL Chocolates & Confectionaries • Cadbury • Nestle Curd • Nestle • Mother Dairy Ultra High Treated Milk • Nestle • Britannia Sweet Condensed milk • Nestle Milk Additives • Cadbury • Smithkline Beecham Flavored Milk • Britannia • Nestle Through all the events taking place in the country, Amul always had a reply to it. It is up to date with current affairs. The first escalator in Mumbai in 1979 was celebrated with a slogan ‘Automatically Amul’.When the city witnessed a power shortage, the Amul girl said ‘Ta ta power? , Amul, Unlimited Supply’.

When the Mumbai police were dealing with underworld don Dawood Ibrahim’s sister Haseena Parkar in cases ranging from extortion to cheating and forgery in May this year, the hoarding simply said ‘Haseena Maan Jayegi? ’ In the early ‘90s, when the colas were getting popular, the tongue-in-cheek remark was ‘Eat the Real Thing’. When the world feared a collapse on Y2K, Amul girl interpreted the phenomenon as ‘Yes to Khana’. The Amul girl, apart from promoting a $1-billion brand, has been bringing smiles to millions.And this smile has spelt a huge success and changed the livelihood of over 2. 5 million Gujarat farmers. The sales figures of Amul butter have jumped from a few lakh rupees in 1966 to over Rs 500 crore now. Apart from rapid growth and trustworthiness, the four-year-old girl has also ensured a virtual monopoly for Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) that sells Amul brand of dairy products.

In the last four decades, the girl has dealt with all the contemporary issues – be it politics, sports, society, entertainment, art, weather, infrastructure, science or technology.But despite the cut throat competition in FMCG sector, GCMMF is not spending more than Rs 2 crore on Amul butter advertisements annually on the country’s oldest running campaign. The agency, daCunha Communications, which gave a face to brand Amul, doesn’t need to run to the client every time for getting the art work approved. The agency claims that even the top management comes to know about the art work when the advertisement goes on the hoardings. From the Sixties to the Nineties, the Amul ads have come a long way.While most people agree that the Amul ads were at their peak in the Eighties they still maintain that the Amul ads continue to tease a laughter out of them. Where does Amul’s magic actually lie? Many believe that the charm lies in the catchy lines.

That we laugh because the humour is what anybody would enjoy. They don’t pander to your nationality or certain sentiments. It is pure and simple, everyday fun. The success story of Amul says one thing to all the other ad campaigns that did not manage to last too long or had to get a whole new look in order to stay in the market.Its a mixture of keeping with the times, humor and understanding the need of the hour of the people. Amul boardings are a thing of attractions in India. Who can forget the Amul Butter Girl? We have all at some point looked at the chubby-cheeked, round-eyed girl with the red polka dotted dress winking at us through the billboards and chuckled.

The longest running advertising campaign (holds a Guiness World Record) has still not lost its charm and we hope it stays that way. Originally used for Amul Butter, the mascot is now also used for other Amul products like chocolates and milk as well today.Even today the Amul mascot has remained the same and so has the tagline “Utterly Butterly Delicious. ” What is it about this ad that even after almost 30 odd years it still is popular among people? The answer would lie in the fact that the Amul ads focus on current events and news. The humorous take on the events and regular updates is what makes them very popular. They use billboards where the Amul girl jovially comments on the current affairs of the country. The puns made in these advertisements hit the right chord with the audience.

The X-factor of the Amul girl (keep it consistent…is it the amul baby or the amul girl? is the fact that it was made in a way that every housewife of India is charmed by the 4-year-old girl eating butter. Giving the Message: Butter is an essential part of breakfast in almost every household and people do discuss the current affairs on the dining table and Amul manages to capture these moments by showcasing the connection in their advertising. It is topical. Amul has been a social observer. Now that the summer heat is scorching high, we can see hoardings declaring, “Beat the heat. Just Eat. Amul The Cool Butter.

” They have also made one on the Reliance issue saying, “From Bye Bye To Bhai Bhai.Amul The Cool Butter. ” The tongue in cheek remarks about the issues, the puns made is what connects the product with the audience. The Amul Girl, not just brings business to the corporation but has also been spreading smiles. Amul’s sales figures are always jumping. It has created many job opportunities for people. Amul was also responsible for what is called ‘White Revolution.

’ The Amul Girl has dealt with all the possible contemporary issues-be it politics, sports, entertainment, social issues, crime etc. The Amul Girl has always had something to say about every issue that’s puzzling the nation.Yes, the magic of these advertisements lie in the catchy one-liners. It doesn’t fail to grab people’s attention. And who doesn’t love a little humor, anyway? Amul advertisements on the back of the butter covers are funny and catchy. These ads are not just a source of entertainment though; they also make us aware of the events going on around us, making us think about it. Amul (acronym for Anand Milk Union Limited) happens to be the brand name for one of the most successful co-operative organizations around India.

Amul has also been famous since decades for the adverts that it has launched all over the country.These adverts are related with the current happenings from around the planet and are always appreciated by the on-lookers. Even during the current global crisis Amul didn’t bring down the frequency of the advertisements which is another example of how to stay in touch with your customers even when the amount of cash is decreasing around the planet. Here I have collected the 125 MUST SEE Amul India adverts that has helped the brand gain exponential fame. A perfect example of dedicated marketing management. We will start from the year 1976 and continue till 2009.Different types of advertisements strategies which influence consumers behavior in making decision here are few mentioned On compulsory sterilisation introduced during Indira Gandhi regime.

When helmets were made compulsory in Bombay Indian Railways introduces cushioned chairs in the first class compartments. Bankers’ demand for increased Dearness Allowance. During the period when FSI was being misused. . Soft budget which pleased all sections of the society. Sunil Gavaskar did not go on a tour. Caught enjoying butter at home.

Transfer of official secretaries by the government.Pakistan infiltration into India. The rapid change of Prime Ministers in the Country MTNL increases rates for local calls. Mumbai city being cleaned up for the arrival of U. S. A. President Bill Clinton – March 2000.

“ Prince Charles understanding the famous Mumbai Dubbawalas delivery system in reaching food to its customers miles away from their residence on time every noon through the year – Nov. ’03. Tata Motors unveil “Nano” the world’s cheapest, cost-effective and technologically advanced car with affordable price tag of Rupees one lakh at the 9th Auto Expo in New Delhi, India – January ’08.

The Corporation, is about the modern-day corporation. It critiques that it is considered to be a person, but since it has so many disregards to the human well-being and only cares about making as much money as possible, if it were an actual person it would be considered a psychopath. The documentary starts off with showing the development of the contemporary business corporation, from beginning as a legal entity to then having the entitlement of having most of the legal rights of a person.Since a corporation is said to be a “person”, the documentary then was assessing the corporation as a “personality” and showed viewers everything a corporation was doing wrong in harming a real person. The film showed diagnostic criteria of a human psychopath, and many corporations had what it took to be labeled one. Some examples the film used in labeling a psychopath are “callous disregard for the feelings of other people,” “the incapability to maintain human relationships,” “reckless disregard for the safety of others,” “deceitfulness,” “incapability to experience guilt,” and “failure to conform to social norms and respect for the law.

The topics discussed that stood out most to me were when the soda Fanta by Coca-Cola was traded to Nazi Germany during World War II so that the soda company could make war profits like the car companies who were making machines and tanks for the war. Also during the same war, when IBM was sending over their machines that allowed Nazi’s working in concentration camps to have punch-card-like machines to help them keep track of their prisoners such as if their prisoners had been released, committed suicide, exterminated, sent to the gas chamber, etc.What bothered me most about it was someone from IBM had to come and set up the machine inside the concentration camp in order for anyone to use it. The topic that stood out to me the most was the use of Prosilac on cows. The drug Prosilac was given to cows to make them create more milk in order for dairy farms to make a bigger profit. Even though somehow initially the FDA approved it to be safe, the drug made the cows sick and it gave them an infection in the utters, called Mastitis. Having Mastitis can put puss in the milk produced by the sick cow which makes the milk have a lot more bacteria.

Then the cows were given antibiotics to prevent them from getting sick, but then the antibiotics ingested by the cows were then released through the milk. When people ingest the milk with all of the antibiotics still in it, the people can become immune to antibiotics for the future. If a person drinks this milk with all of the antibiotics in it and them somehow get a Staph Infection and need a simple antibiotic to get rid of it, they could die because they were immune to antibiotics. I always knew that corporations just wanted your money, but after watching the documentary I was pretty outraged at what many companies will do just to get it.The complete disregard for human health and well-being is flabbergasting to me. Kids in sweat shops, people dying from simple staph infections, and many more horrible things that companies do to make a buck are ridiculous. If companies are given most rights people do, then they should be given the same punishments that people would if they would do any of the things these corporations are doing.

Some of these companies aren’t getting away with it, but many are still and more needs to be done in order to stop harming the people.

The recent increase in the international activities of transnational corporations and non-governmental organizations has challenged state-centric models of international relations to explain the apparent contribution that non-state actors make to the international political system. NGOs influence the international system by introducing principles into discussions on the legitimacy of states’ behavior, while TNC capital movement affects states’ policy decisions more directly. Accordingly, one-dimensional state-centric theories are ill-equipped to account for our multi-dimensional world with its various actors and their interests. The 50 largest transnational corporations (TNCs) have an annual sales revenue greater than the gross national product of 132 member countries of the United Nations, and many non-governmental human rights advocacy organizations (NGOs) now count their members in the millions while at least 40 UN countries have fewer than a million citizens (Willetts, 2001). The involvement of such large transnational corporations and NGOs in international politics suggests that state-centric models of international relations, which propose states as the primary international actors, are outdated. The aim of this paper is to describe the involvement of TNCs and NGOs in international relations and to show that state-centric models are unable to explain many of the changes in the international political system.

The International Activities of NGOs

Numerous recent changes in the international system can be traced directly back to NGO activities. In the 1970s Amnesty International led an extensive worldwide campaign against state torture, which culminated in the 1984 signing of the international convention against torture. A second example is a group of NGOs and governments that campaigned for the banning of the use, stockpiling, production and transfer of landmines and cluster munitions. This process eventually resulted in the Ottawa mine ban treaty and the convention on cluster munitions that have now been signed by 160 and 108 countries respectively. A third example involves Child Soldiers International, a group of transnational NGOs that managed to bring about the 2000 UN “Protocol to the Convention on the Rights of the Child on the involvement of children in armed conflict”, currently signed by 129 countries. These three cases, among very many others, demonstrate that transnational NGOs contribute many changes to the international system and that they are, thus, important international actors. Robert Keohane and Joseph Nye (1971), Richard Mansbach (1976, 1981) and James Rosenau (1990) reached a similar conclusion following extensive quantitative analyses of the amount of NGO involvement in international decisions. Kenneth Waltz, on the other hand, argues that NGOs sometimes do play a role, but that the capabilities and power of states render them so much more significant that the international system can be understood without reference to non-state actors (1979).

The most powerful actors determine the structure of the international system and regulate the roles that others can play. States operate to ensure their survival in an insecure international environment, so when “the crunch comes, states re-make the rules by which other actors operate (Waltz, 1986). Accordingly, almost all countries use torture when they experience a substantial loss of security, employ landmines if no better weapons are available (Evans and Leigh, 2010) and utilise child soldiers if no other option presents itself (Human Rights Watch, 2011). This implies that NGOs can make contributions to international policies, but only to policies that governments are willing to change. Those policies that states are strongly attached to cannot be changed by non-state actors, and will be altered only when those states discover new methods to obtain the same benefits or avert the same threats. This state-centric view captures the foundational elements of the international inter-state security milieu, but cannot account for the international interactions that shape it. NGOs are gradually affecting a shift in the types of policies that states can legitimately and publically adopt without widespread mutiny.

Between the 1950s and 1970s, theUnited Statescould persuade most of its citizens that the war inVietnam, with its tens of thousands of American and millions of Asian deaths, was crucial to American interests. With much lower damage, the majority of Americans quickly opposed their wars inAfghanistanandIraq. Similarly, in 2006 and 2009,Israelreceived a more hostile civil society response to their killing of 1,100 Lebanese and 1,417 Palestinians than it received to the killing of 20,000 Lebanese in the 1980s. Even the Russian conduct inGeorgiain 2008 was more measured than its carpet-bombing of Afghan villages in the 1980s. Similarly, concerned reports of sanctions-related Iranian civilian suffering have already appeared in the European press. It is doubtful that civil society will tolerate thousands of deaths, let alone the hundreds of thousands of sanction-related deaths thatIraqsuffered during the 1990s. Over time, transnational NGOs have contributed to the debate on what can qualify as a security problem and what can pass as an acceptable response to it. By introducing information, norms and the language of rights into international policy debates, their contribution is tangible through their influence over those upon whom governments rely to carry out state policies.

The International Activities of TNCs

Transnational corporations exercise their influence in the international system through the movement of capital from states that curb their profits to states that do not. Accordingly, states tend to conceive of corporate interests as national interests and often implement business-friendly policies without being explicitly pressured (Korten, 1995, Ohmae, 1995, Willetts, 2001). The current reluctance of Europe and theUSto regulate the financial sector stems partly from the fear that large investors will transfer their investments from countries that do regulate to countries that do not. The same dilemma is noticeable in African debates about investors with poor human rights records. For example, while the trade unionists in the South African government opposed Walmart’s investment in the country, they were outvoted by ministers who argued that the country needed the investment. While Andrew Walter argues that academic literature often over-states the case for corporate influence, he cites only a few East Asian states as examples of states that manage to resist it successfully (Walter, 1999). A detailed investigation of the question is beyond the scope of this paper, but the prima facie case is certainly strong that corporate capital mobility has affected the contours of the international system.

Conclusion

While the state-centric model of international relations may have been appropriate to capture the post-world war II international system, it lacks the ability to account for a world where state security has to compete with human rights and financial profits for importance on the international stage. While it is true that states champion security issues, it is also true that NGOs promote human rights and that TNCs advance the goal of financial profit. A one-dimensional world fit for a one-actor theory has given way to a complex world of multiple issues and the multifarious actors that promote them.

References

1. Evans, R. & Leigh, D. (2010) WikiLeaks Cables: Secret Deal Let Americans Sidestep Cluster Bomb Ban. The Guardian. London. Human Rights Watch (2011) U.S., Don’t Fund Child Soldiers. New York.
2. Keohane, R. O. & Nye, J. S. (1971) Transnational Relations and World Politics, Cambridge, MA., Harvard University Press. Korten, D. (1995) When Corporations Rule the World, San Francisco, Berrett-Koehler.
3. Mansbach, R. W., Ferguson, W. Y. & Lampert, D. (1976) The Web of World Politics: Non-State Actors in the Global System, New Jersey, Prentice Hall.
4. Mansbach, R. W. & Vasquez, J. A. (1981) In Search of Theory: A New Paradigm for Global Politics, New York, Columbia University Press. Ohmae, K. (1995) The End of the Nation State, New York, Free Press.
5. Rosenau, J. N. (1990) Turbulence in World Politics, New York, Harvester Wheatsheaf. Walter, A. (1999) Globalization and policy convergence: the case of direct investment rules.
6. IN HIGGOTT, R. & BEILER, A. (Eds.) Non-State Actors in the Global Economy. London, Routledge. Waltz, K. (1979) Theory in International Politics, Reading, MA, Addison-Wesley. Waltz, K. (1986) Political Structures” and “Anarchic Orders and Balances of Power.
7. IN KEOHANE, R. O. (Ed.) Neorealism and its Critics. New York, Columbia University Press. Willetts, P. (2001) Transnational Actors and International Organizations in Global Politics.
8. IN BAYLIS, J. B. & SMITH, S. (Eds.) The Globalisation of World Politics. New York, Oxford University Press.

Black & Decker Corporation, incorporated in Maryland in 1910, is a leading manufacturer, of power tools and accessories, hardware and home improvement products, and technology-based fastening systems. Duncan Black and Alonzo Decker started the company, and in 1916 they developed the first handheld electric drill with pistol grip. That would be the foundation for the company’s success for most of the 20th century. Black ; Decker has products and services located in over 100 countries. The corporation has received worldwide recognition for their strong brand names and a superior reputation for quality, design, and value.

The company operates in three reportable business segments: Power Tools and Accessories, which includes electric lawn and garden tools and electric cleaning and lighting products; Hardware and Home Improvement, including security and plumbing products; and Fastening and Assembly Systems. As of December 31, 2001, Black ; Decker Corporation employed approximately 22,700 persons worldwide. Nolan D Archibald has been Chairman, President, and Chief Executive Officer since January 1990. Black ; Decker’s ticker symbol is BDK.

As of January 28, 2002, there were 15,923 holders of record of the Corporation’s Common Stock. Financial calculations can be done to show interested parties how a specific company is doing. I will discuss four different categories of measures: profitability, liquidity, activity, and financial leverage. Profitability consists of ratios that measure the ability of the business to make a profit. An example of these ratios would be Return on Interest (ROI), Return on Equity (ROE), Price/Earnings Ratio, and Dividend Yield. I will only go over ROI and ROE.

For Black ; Decker, ROI is 2. 7%. This describes the rate of return management was able to earn on the assets it had available to use during the year. ROE calculates out to 15%. ROE is important to stockholders and investors because it relates the company’s earnings to the owner’s investment. The next measure I would like to address is liquidity. Liquidity is the firm’s ability to meet it current obligations, and consists of working capital, current ratio, and the acid-test ratio, also known as the quick ratio. Working capital for BDK is $821 million.

Current ratio is used to judge the current bill-paying ability. The current ratio for this company is 1. 76. The quick ratio also expresses liquidity and it specifically excludes inventory. BDK has an acid-test ratio of . 89. Activity measures reflect the efficiency with which assets have been used to generate sales revenue. To analyze activity measures, you must look at receivable turnover and inventory turnover. Receivable turnover measures the number of times, on average, receivables are collected during a given period. This ratio for Black & Decker is 5. 8.

This equals out to approximately every 2 months, or every 60 days. Inventory turnover, on the other hand, is an indicator of how well the company’s products are succeeding in the marketplace. In general, the higher this number, the better. However, a high ratio can also mean there is a shortage of inventory. A low turnover may indicate overstocking, or obsolete inventory. BDK has an inventory turnover of 3. 65. This ratio needs to be compared to similar industries to see how the company rates. Financial leverage is the degree to which a company is utilizing its borrowed money.

Debt/Equity ratio and debt ratio are examples of measures of leverage. Debt/Equity shows the ratio between capital invested by the owners and the funds provided by the lenders. Black ; Decker has a debt to equity ratio of 4. 34. Debt ratio is a good indicator of the extent to which a business is leveraged. For this company, their debt ratio is 81%, which is very high. If this number is low, it usually means that the company is more conservative. If used judiciously, leverage can result in a higher return on assets, which means increased profitability.

Just like turnover, this ratio varies depending on the type of industry a company is. Black ; Decker, compared to other industries of the same type seems to be doing well. The corporation recently announced that they will be closing two power tools facilities and a plumbing products plant in the U. S. Additional restructuring actions taken by the Corporation will also result in the transfer of production fro the United States and England to low-cost facilities in Mexico and China. Company officials say the shifts to more overseas manufacturing will eventually save $100 million a year.

Restructuring actions will result in the elimination of approximately 2,400 positions; however, the Corporation will increase headcount in low-cost locations by 1,900 positions. The elimination of these positions relates to the Corporation’s actions to reduce its manufacturing cost base and selling, general, and administrative expenses. Net earnings for the year ended December 31, 2001 included a restructuring charge of $99. 8 million. Total sales decreased by 5%. Total unit volume had a 1% negative impact on sales during 2001.

Unit volume was negatively affected by weak economic conditions and inventory reductions by retailers in the United States. Pricing actions taken in response to customer and competitive pressures had a 2% negative effect on sales. Looking at the past three years, I have come up with estimates of what I feel the company will produce in the next few years. For 2002, 2003, and 2004, I predict revenue to be $4. 6 billion, $4. 5 billion, and $4. 62 billion respectively. My estimates for cost of goods sold are $2,856, $2,863, and $2,855. Dollar amounts are in millions.

Lastly, net income, I believe, will be $106 million for 2002, $105 million in 2003, and $108 million the year ending 2004. All together, I think that Black & Decker has a very promising future. After restructuring actions are completed, the company will be even more competitive with other corporations. BDK has about average safety with well above average upside potential. It reflects a stock, which is likely to give well above average, relatively consistent returns over the long term. My recommendation would be to hold, with the possibilities of a moderate buy.

This essay expounds the doctrine of ‘separate legal personality’ and analyses the rationale behind the fears that it has become irrevocably undermined, due to the plethora of exceptions that have heretofore arisen. In order to provide a thorough analysis of the situation, the doctrine and the exceptions, both statutory and judicial shall be analysed to explain how they have not undermined the doctrine, but instead merely sculpted it to fit with the practices of the modern commercial world.

Introduction

The doctrine of ‘separate legal personality’ continues to be of paramount importance to English company law, although arguably the doctrine may have lost some of its importance due to the number of exceptions that have arisen. This essay argues however, that these exceptions do not undermine the doctrine but are necessary for its functionality and that if the doctrine had no exceptions to it then this would be a more fatal undermining of the doctrine than any of its exceptions.

Separate legal personality

The doctrine of ‘separate legal personality’ is an essential principle of English company law and an intrinsic part of the act of incorporation. The doctrine, as founded by the House of Lords decision in Salomon v Salomon & Co Ltd (1897), elucidates that an incorporated company gains a separate legal personality quite distinct from that of its members and consequently renders it inter alia, capable of bearing its own obligations and rights. Although the Courts have been noticeably keen to uphold this doctrine, it has been necessary from time to time to deviate from this by ‘lifting the corporate veil’ (Wild and Weinstein, 2011). However, on analysis it does appear that while the Courts have allowed exceptions to the doctrine, it is also keen to remove exceptions that are no longer needed, as can be seen with the now defunct ‘interests of justice’ exception (Moore, 2006).

Facade

In the case of Gilford Motor Co Ltd v Horne (1933) the Courts developed the first exception to the doctrine of ‘separate legal personality’ wherein it was found that if a company is being used as a facade to conceal the true facts of a matter then the veil of incorporation shall be lifted. Interestingly, this principle was also reconfirmed recently in Linsen v Humpuss (2012: 680), in which the Court of Appeal explained that the corporate veil will indeed be pierced when it is being used as a facade. Thus, it is clear to see that the Courts take a strong line against fraud, which is to be expected as the law should not be utilised for the advantage of a rogue or the unjust. It is therefore evident that this exception does not undermine the doctrine but is instead a logical exception which is required in the interests of justice (Adams v Cape 1990: 534) and hence the ‘course of action is necessary to give legal effect to the “realities” of the business situation’ (Moore, 2006: 194).

Agency

This exception is used when it appears that a subsidiary company is in fact carrying out business simply as the agent of the parent company to avoid existing legal obligations. There were fears at first centring on the single economic entity argument as proposed in DHN v Tower Hamlets (1976) that it would severely undermine the doctrine of ‘separate legal personality’ by making redundant the distinction between parent company and subsidiary. However, Adams v Cape (1990: 532) clarified that the separate legal personality of a company can be disregarded only if a subsidiary is merely an agent of the parent company explaining that there is no general principle that all companies in a corporate group of companies are regarded as one. Thus, on analysis this exception can be seen to be yet another reasonable exception that does little to undermine the doctrine of ‘separate legal personality’ but merely assists the Court in getting to the bottom of certain matters.

Statutory provisions

It is arguable, that statutory provisions most fatally undermine the doctrine of ‘separate legal personality’. The variety of taxation legislation, the Companies Act 2006 and the Insolvency Act 1986 can all be seen to illustrate this and how the circumstances under which the corporate veil can be lifted are now agreed to a certain extent.

To demonstrate this, sections 213 and 214 of the Insolvency Act 1986 explicitly allow that the veil of incorporation can be lifted and that the separate legal personality of the company may be discarded. Indeed, section 213 states that this will happen in the event of fraudulent dealings. However, as the onus of proof is dependent upon the person seeking to rely upon it, this exception can be hard to prove and thus it is not commonly used. A further example of statutory exceptions are found in the Companies Act 2006, which also requires that company directors trading without a trading certificate will be personally responsible, despite the separate legal personality of the company.

Sealy and Worthington (2010) have expressed though that they do not consider making a company’s director liable quite the same as piercing the corporate veil. Accordingly, this essay agrees with this assessment and argues that statutory exceptions do not fatally undermine the doctrine of ‘separate legal personality’ as many do not in fact directly concern the doctrine.

Conclusion

It is clear that the doctrine of ‘separate legal personality’ as first espoused in the case of Salomon (1897) is one of the cardinal doctrines of company law regardless of the number of exceptions that have arisen since its inception. The doctrine is always upheld unless there is a necessity in a specific certain situation to pierce the corporate veil in the interests of justice. This essay argues that the judicial exceptions do not even undermine the doctrine but merely fine tune it to demonstrate when the doctrine applies and when it does not. Further, if these exceptions were not allowed then there would be a presumption that the doctrine of ‘separate legal personality’ can be used for unjust activities and this would be a fatal undermining of the doctrine. Accordingly, the doctrine of ‘separate legal personality’ has not been fatally undermined by the number of exceptions because the doctrine, for the most part, remains a fundamental principle of company law and the exceptions are necessary to the doctrines functionality in the modern commercial world.

References

1. Bourne, N. (2001) Bourne on Company Law, 5th edn,Oxford: Routledge
2. Birds, J. & Boyle, A. et al. (2011) Boyle and Birds’ Company Law, 8th edn,Bristol: Jordan Publishing Limited
3. Dignam, A. & Lowry, J. (2010) Company Law,Oxford:OxfordUniversityPress
4. Linklater, L. (2006) ‘“Piercing the corporate veil” – the never ending story?’, Competition Law Journal 27(3), 65-66
5. Moore, M. (2006) ‘A temple built on faulty foundations”: piercing the corporate veil and the legacy of Salomon v Salomon’ Journal of Business Law 180
6. Sealy, L. &Worthington, S. (2010) Sealy’s Cases and Materials in Company Law, 9th edn,Oxford:Oxford University Press
7. Wild, C. & Weinstein, S. (2011) Smith and Keenan’s Company Law, Oxford: PearsonCases
8. Adams v Cape Industries Plc [1990] Ch. 433 (CA (Civ Div))
9. Connelly v RTZ Corporation Plc (1998) 854
10. Creasey v Breachwood Motors Ltd [1992] B.C.C. 638 (QBD)
11. DHN Food Distributors Ltd v Tower Hamlets (1976) 3 All E.R. 462
12. Gilford Motor Co Ltd v Horne [1933] Ch. 935 (CA)
13. Jones v Lipman [1962] 1 All E.R. 442
14. Linsen International Ltd & others v Humpuss Sea Transport Pte Ltd & others [2012] BCLC 651
15. Salomon v A. Salomon & Co Ltd [1897] A.C. 22 (HL)

The essay is on Nucor Corporation. Nucor was established by an auto manufacturer Ransom E. Olds, first the name of the corporation was Oldsmobile, later it became Rep Motor Cars and eventually, it changed to Nuclear Corporation of America which was involved in nuclear instruments and electronics business. In the year 1965, the company faced bankruptcy but it was installed by Ken Iverson who later became the president of the company.

Throughout the time of Iverson the whole steel industry had to face problems like competition, labor relations and a decrease in the demand, but in spite of all these the sales of Nucor continued to grow around 17% per year and so he is named after the steel maker of the year by New Steel Magazine. Iverson divided the company in two businesses one of them is a production of steel from recycled scrap metal and the other one is putting together steel joists for use in nonresidential construction. In the year 1972, the company was named Nucor Corporation.

The vision of Iverson Iverson was the one who changed the direction and destiny of Nucor and because of his leadership and vision, the company has become successful. Iverson wanted the company to be successful in future also but he believed that it would be the biggest challenge for the company to grow at 15-20% per year with parallel earnings. The Four design elements Organizational structure: Nucor is a Flat organization with a decentralized structure and a short hierarchy that is as follows: Chairman / Vice Chairman / President Vice President / Plant General Manager

Department Manager Supervisor Besides this the structure is also divisional as each of the plants has separate general managers and employees who are responsible for those specific plants. In the year 1998 here were only 6 board members in the company, the head office consisted of 22 members including the clerical staff, Whereas there were around 250 to 300 employees at the company’s 25 plants with a general manager. The plants were given the rights to take their own day-to-day decisions without confirming from the head quarters as this will save a lot of time.

The communication between the employees was a

also informal in order to quickly solve the issues. At the pants, the employees were also given the chance to share their own ideas and views. Iverson believed that it was risky but the risk is worth taking as it may sometime be helpful and may contribute to betterment and success.

Systems:

Technology: Nucor had no specific Research & Development department with the special group and officer it outsourced R & D and used the technological advancement that they produced.

In the beginning, Nucor adopted the mini-mill concept which converted the scrap steel into finished steel with the help of small-sale electrical furnaces. The mini-mill system had a cost advantage. In the year 1987due to the demand of flat steel products, Nucor built a new mini-mill that had the capability to make flat steel. Nucor was also the first company to adopt the technology developed by SMS Schloemann-Siemag, a company from the western Germany. By 1977 Nucor had successfully built two more mini-mills using the SMS technology whose competition came in 1995. in 1987 Nucor formed a joint facility with Yamato Kogyo.

In 1994 Nucor established a plant in west-indies that manufactured iron carbide a substitute for scrap steel to reduce the cost, but in 1998 Nucor closed it as it was uneconomical. Nucor developed new plants as well as modernized the existing ones. To build new plants and modernizing the existing ones Nucor involved its employees even though they knew that some of them would be failures but still they did so believe that this will benefit them. They allow the employees to select the technology as technology is rapidly changing so in this way employees contribute to finding and adopting advanced technology.

In1991 Iverson was awarded National Medal of technology.

Financial: the financial systems of the company are also updated for its operations and plants in all states which include mini-mills and integrated steel producer. Information System: the information system of Nucor is also very efficient. Every week each plant sends data related to six variables that are related to operations to the headquarters these variables include: orders, bids, inventory, production, shipment, and backlog.

Each plant also sends a monthly report to the headquarters showing the compression of actual and budgeted figures of cost, contribution, return on asset and sales revenue. The company works very hard to keep the reports rationalized and it free from being overloaded by information. People: The people at Nucor are very happy with their companies they consider Nucor at the best employer. As Nucor takes care of the employees the employees also are loyal and motivated. It may appear strange that there is no labor union at Nucor but it’s true.

According to one of the employee himself they do not need the union as the management do not layoff the employees or fire them, At Nucor they all work together as a team, they do not need adversaries or divisiveness, they have the right to talk among themselves and solve the issues and problems easily. Due to these reasons, people like to work at Nucor.

Organization culture: An organizational culture is a distinct group of norms, beliefs, and values that are communicated and shared among the people and groups within an organization.

Usually, these values and norms direct the way people act among themselves, plus with the stakeholders of the company. The organization culture at Nucor is very strong, People at Nucor have trust in their company, and they are loyal and motivated and happy with their work environment. The company, on the other hand, takes cares of its employees, compensate them well. The company believes in learning from mistakes and failures. People there work together in unity and solve problems under mutual consensus which helps them to solve the problems in a better way.

Employees are also free to share their ideas and grievances with the management. There is a tradition that the general manager has to have an annual dinner with each and every employee and meeting with groups having of 25 to 100 people at a time where they can discuss problems related to business. (Schein, 2004)

Conclusion Under the guidance and leadership of Iverson Nucor has become a strong and successful company. Iverson has high hopes from the company; he has placed special attention on the four designing elements.

Because of the emphasis on these factors the company is at this stage. It is very important to have proper systems, technologically update, have continuous and proper information sharing, have relations with the employees, provide them job-security and incentives to motivate them and last but not the least it is very important to have a culture that is strong and has the capacity to change. References Schein, E, H. (2004). Organizational culture and leadership. 3rd edition. Location: John Wiley and Sons.