Foreign Licensing


The method of going global through the use of contractual agreements is foreign licensing. Such an agreement grants foreign marketers the right to distribute a firm’s merchandise or use its trademark, patent, or process in a specified geographic area. These arrangements usually set certain time limits, after which agreements are revised or renewed.

Licensing offers several advantages over exporting, including access to local partners’ marketing information and distribution channels and protection from various legal barriers. Because licensing does not require capital outlays, many firms, both small and large, regard it as attractive entry strategy. Like franchising, licensing allows a firm to quickly enter a foreign market with a known product or concept. The arrangement also may provide entry into a market, which government restrictions close to imports or international direct investment.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Warranty


In general, a warranty is the assumption of responsibility by the seller for the quality, character, or suitability of the goods he or she has sold. The seller may assume this responsibility by agreement with the buyer. In this case the warranty is created by contract, and the rights of the buyer and the liabilities of the seller are contractual in nature. Such a warranty is called an express warranty. In addition, certain responsibilities for the quality of goods sold are imposed on the seller by Uniform Commercial Code. These warranties arise whether or not the seller has made express promises as to the quality of the goods. The warranties imposed by law are known as implied warranties.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Release of Free Cash Flow


The project entry typically has a finite life. Its dividend policy is usually specified contractually at the time any outside equity financing is arranged. Cash flow not needed to cover operating expenses, pay debt service, or make capital improvements—so-called free cash flow—must normally be distributed to the project’s equity investors. Thus, the equity investors, rather than professional managers, get to decide how the project’s free cash flow will be reinvested.

 When project is financed on a company’s general credit, the project’s assets become part of the company’s asset portfolio. Free cash flow from the project augments the company’s internal cash resources. This free cash flow is retained or distributed to the company’s shareholders at the discretion of the company’s board of directors.

 Project financing eliminates the element of discretion. Investors may prefer to have the project company distribute the free cash flow, allowing them to invest it as they choose. Reducing the risk that the free cash flow might be retained and invested without the project’s equity investors’ approval should reduce the cost of equity capital to the project.

 The sponsor is not necessarily placed at a disadvantage under this arrangement. If the sponsor is considering additional projects that it believes are profitable, it can negotiate funding for these projects with outside equity investors. If they agree to fund any of these additional investments within the project entity, the dividend requirement can be waived by mutual agreement and the funds invested accordingly.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Public-private partnership


In this era of modernization in many aspects of public administration, most developing countries continue to follow century-old concepts and structures. They seriously need structural adjustment thereby launching legislative and administrative reforms, which stress a reconsideration of the role of the public administration in the conditions of democratization and market-economy. A greater emphasis needs to be placed on effectiveness of the public administration. The practice and legislation of such countries should affect patterns of the role of public sector and influence fundamental features of the system of governance. A common goal should be to introduce a more contractual, participative, discretionary style of relationship: between different levels and agencies in administrative apparatus; between the decision-making authorities and operating units; and between administrative agencies and producing units, public or private.

A major reform objective in public sector management should be to increase, within the framework of democratic accountability, cost effectiveness in the public provision of goods and services. Both citizens and public administration accept the need for improved quality in the public sector.

They need to hold high the aim of structuring an effective mechanism for achieving policy objectives, determined at central, provincial and local levels for increasing efficiency, effectiveness and accountability in providing public services.

The legality and the efficiency of providing such public services are of great concern. Local authorities are empowered to do something that is intended to assist the carrying out any role.

Outsourcing is a way of contracting out one or more functions to specialist companies. This allows the public entity to concentrate on its core activities. There are three primary reasons for the public administration to outsource. The first is to achieve cost-effective provision of services. The second is to provide a choice for the citizens of producing and supplying public services of different qualities and kinds. The third is simply because there is no alternative due to a lack of staff with the requisite skills; need of relaxing the administrative burden, which somebody other could deal with even better and concentrating the attention on the core administrative matters; short deadlines for implementation. This last reason for outsourcing is to meet the needs, which exceed the capability of the public administration staff, because of a shortage of either staff or skills, or which give added flexibility to the administrative organization.

Thus, the outsourcing can be seen as a process through which relationships are managed and adjusted according to arrangements specified and conditions planned by the administrative authority in the contract documentation. The focus here is not on the legal issues of the contract rather than on the quality of contracting as a mechanism for achieving policy objectives determined at all levels of government for increasing efficiency, effectiveness and accountability. From this perspective the outsourcing by public administration can be considered as a joint commitment to partnership between public and private sector operating as a co-operative device for providing public goods and services.

The trend towards greater satisfaction of public needs and consumer empowerment underlies the role of outsourcing by public administration. The outsourcing is encouraged to secure higher quality of public works and services, whereby contracting managers are located closer to the consumer and so are better able to respond to their needs in actual delivery. The role of consumers and end-clients with respect to outsourcing can thus be increased. The strategies of improving responsiveness through outsourcing on the one hand, and hierarchical distribution of the administrative functions on the other, can be combined in a successful model of public service delivery. The administrative authorities – at federal, provincial and local levels – might participate in the specification of services and in the determination of contractual standards and terms of agreement.

As part of administrative reform outsourcing by public administration should be a high priority. The corresponding legislation should be based on three main principles—transparency, non-discrimination involving open selection criteria and open standards, specifications and standards regulated by law; and open competition.

The framework agreements are significant for ensuring the execution of the administrative power intent of the outsourced functions. The federal, provincial or local governments can use outsourcing as a tool for providing public services when carrying out their functions. They use outsourcing to get public results, which should be achieved when the governments exercise their administrative powers.

The outsourcing in some way can replace the direct administrative action. Such outsourcing has the compulsory nature same as this of the executive action which it replaces. The administration can use administrative or seek lawmaking authority to bring about the result it desires, if it is nonetheless outsourcing. A realistic view is that the process of deciding to outsource as well as the very process of outsourcing is a valid exercise of administrative power. The offered and agreed terms of the contract are also exercising of the administrative power. Once the contract signed, however, the particular relationships issued by outsourcing are moved under the regulations of the private law.

The government functioning can be improved by redefining its role: Policy-making instead of operative decision-making. It should stimulate tools for establishment of working, efficient, rational and fair practice, design of efficient allocation of financial and administrative wherewithal; transparency and control. The government must also realize that developing a training strategy for skills and incentives is badly needed.

The overall proportion of outsourcing in the field of public administration is generally expected to growing. Demand will increase for a variety of reasons.

Successful outsourcing, however, presupposes the existence of an efficient market. In

Pakistan the market for some categories of public goods and services is deficient of professionalism, integrity, and fair play. Such situation is creating conditions for corruption.

From another side, outsourcing itself contributes to developing the market.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight