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Introduction

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It¶s the link between human resources with strategic goals and objectives in order to improve business performance and develop organizational culture. It fosters innovation, flexibility and competitive advantage. In an organization that has adopted HRM accepts and involves the HR function as a strategic partner in the formulation and implementation of the company's strategies through HR activities such as recruiting, selecting, training and rewarding personnel.
Profitability: Profitability is the assessment of a company¶s ability to generate earning in comparison to its expenses and other relevant costs incurred during a specifies period of time for measuring some important tools are: profit margin, return on equity and return on assets. Strategic HRM addresses the issues related to profitability. Raising the income or getting higher return on investment while keeping the cost at a minimal level is a task of the people with great knowledge and. skills. Recruiting employees with knowledge and competency to increase assets and minimizing costs and regular training to enable them to achieve higher profits and return on investment. One of the important aspects of strategic HRM is that it identifies the incentives of human resource as an investment.

From the context of Adamjee Jute Mills:
Adamjee Jute Mill was established in Narayanganj, Bangladesh in 1951, by Adamjee Group, immediately after Bawa Jute Mills (the first jute mill in Bangladesh). Gradually, the mill became the largest jute mill in the world preceding the jute mills of Kolkata, India and Dundee, Scotland. Adamjee Jute Mills was set up by Abdul Wahid Adamjee, Pakistan's foremost industrialist, and scion of the wealthiest family in the country. Initially, the said project was a partnership between the Adamjee's and the PICIC (the governments industrial arm) - The Adamjee family, however, soon took control of the project, and eventually built it into the largest Jute Mill in the world. The Adamjee family lost control of the Mill in 1971 during the Pakistan-Bangladesh war of Independence. It employed over 26,000 workers at its height. Bangladesh won its independence on 16 December 1971 after a nine month long liberation war. Much of the country¶s infrastructure was devastated during the war. A large number of industrial and commercial

. As a result. the polypropylene products start to substitute traditional jute products and the fall of Adamjee Jute Mills start. transport and communication sectors in March 1972.950 according to the present market price. The under-valuation of the machinery and properties of the closed Adamjee Jute Mills has caused a Tk 10. However. Further. Narayanganj was the largest or second largest jute market of the world. it has managed to survive 1980s with nominal margin. As part of the programmed. The total value of the properties of the mill would be at least Tk 10. As therer are many rivers and was a gateway to Dhaka. During the start of 1970s. Adamjee Jute Mills was officially declared dead in 2002. The death of Adamjee Jute Mills started during the 1990s. In a difficult situation. The jute sector was dominant in the economy in terms of manufacturing sector output. the government tried to move the wheels of commerce and industry by undertaking their management by its own hand. creating a managerial vacuum. the general secretary of the Bangladesh Economic Association.enterprises were damaged and abandoned by their Pakistani owners. Narayanganj's economic activities were largely contributed by Adamjee Jute Mills and it was also called the Dundee of the East.038crore. It contributed 87% of total merchandise export earnings at the time of independence. Adamjee Jute Mills was established to utilize the relatively finer jute fibers of Bangladesh (East Pakistan of that time) region. After a strong battle for survival. employment and foreign exchange earnings. the State came to own 92% of the fixed assets of the modern manufacturing sector.´ said Professor Abul Barkat. banking. but the valuation was not proper. finance. the socialist ideology of the leading Awami League led to the nationalization of the manufacturing. ³The inventory committee has estimated the total price of the properties of Adamjee Jute Mills at Tk1.450 crore to the government. all 77 jute mills of the country were nationalized.

There is no chance of improving the operational efficiency of public sector mills. But the details of this initiative are not known. Public sector jute mills are assisted by the government and no assistance is available to the private sectors mills. It is true that jute industry is associated with livelihood of many people. We may have feelings for the jute sector but this will not help us to become competitive and without this there is no future for jute industry. Farmers lost interest in jute for not getting fair price. It is argued that coordinated initiative can solve the problem of the jute sector. . There was a minimum price of jute in the past but now it is not enforced because of open market economy policy. Bangladesh Jute Mills Corporation (BJMC) cannot buy jute in July for lack of money which becomes available in September / October. During Pakistan time. It is said that 30% loss of the jute sector is caused by power shortage and another 30% is attributed to interest charges. This will eliminate the loss of the government.Reasons of Shutdown : The main thrust of this proposal is on providing financial assistance to the jute sector. The government can adopt a uniform policy for the private sector if all the jute mills are in the private sector. the government will have to pay to many agencies. Even if these mills are closed. cement and many other sectors are operating profitably inspire of power problem and high interest rate. Readymade garments. In order to have a balanced jute policy public sector mills may be privatized. But this will be onetime payment. the jute sector can stand on its own legs. This is because India is competitive. It is forcefully pointed out that given the government assistance. This is nice arithmetic. Farmers got good prices during the last two years. It is time that India is getting the market for jute goods and Bangladesh is losing. it was argued that the then West Pakistan was being developed with the earnings of jute products but where the money is going now. India is successful in the jute sector but Bangladesh is unable to do the same. ceramics. Jute sector itself is responsible only for another 30% of the losses. Environment friendly products are wanted by international buyers but we do not have enough research and capability to produce such goods. Donors are blamed for the failure of the jute sector.

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especially in spinning operations. it can be inferred that reduction of labor alone cannot enhance productivity of labor and capital. Long term employment in a .Focus on some facts: Workers in Operation Number of workers declined by 13 per cent while it increased in the private sector mills (especially in BJSA mills) by 24 per cent . unless inefficiency in other areas is simultaneously reduced. while managers working in private sector jute mills. Some reductions of productivity in BJSA mills were observed possibly because of relatively higher growth of labor in numbers compared to the achieved output. etc. Low labor productivity is the resultant effects of low capacity utilization. Changes in Managerial Aspects It is important to examine operational efficiency of jute mills through examining efficiency of the management. mainly in the winding and batching sections. inefficient use of time and raw materials. labor productivity. Managers working in public sector jute mills were found to be working only for a short period of time (not more than six years). Survey showed that managers of public and private sector jute mills tended to be highly experienced as they were engaged in the jute sector for a longer period of time. tended to work for longer periods of duration (between 10 and 20 years).In order to achieve higher levels of Output mills recruited more workers in their mills. level of understanding of different critical issues and level of performance in terms of way of execution of various activities. it is hard to rationalize such increases in view of declining production in BJMC mills. especially in BJMA mills. Labor Productivity During the period under consideration. i. Interestingly. managers¶ experiences in their present workplace widely varied between different types of jute mills (Table 37). However. Mills also increased their workforce.8 per cent. In general. low productivity of machineries. output per unit of labor declined by 7.e. Efficiency of the management depends on the manager¶s duration of experience and service in a particular jute mill.

When taking into account those privatised firms that closed. Since they lost their jobs. Furthermore. the workers used to live reasonably good lives. There are few jobs available and there is little retraining of workers to facilitate reemployment. they have faced adversities.000 workers were laid off during the 1995-97 period. some workers have entered the informal labour market doing odd jobs like rickshaw pulling and working as day labourers. Many of them have not been able to feed their children properly let alone send them to schools or provide them with needed healthcare services. It has been very hard for the workers who have lost their jobs to find alternative employment. Social impact The social impact of privatisation has been heavy. While the Adamjee mills were in operation. as most of them are living on borrowed funds. . decreasing the job security of those who remain. there has been a tendency to replace permanent workers with temporary workers. which was difficult to achieve during short term tenures in public sector mills. laid-off workers face rising indebtedness.mill allowed better understanding of the operations in a particular mill and also added to its efficiency. nearly 40% of the workers previously employed in the SOEs lost their jobs. Studies of the employment situation based on a survey of 205 privatised enterprises indicate that the workforces of the firms still in operation have been reduced by about 25%. Some of the workers have sold the assets accumulated during their working lives. In addition to losing their assets. About 89. and some have sold the land inherited from their parents. Consequently.

Donors are not imposing jute policy on the government. Reputation: Crossover customers between markets . Global competition requires an organization to understand the culture & laws of the foreign countries. Risk : macroeconomic and operational risks. to produce geo-textiles. to release money to buy raw jute. being innovative in terms of product and efficient in manufacturing. to pay the due of the workers. All of these things demands some competent human resources that could give the organizations strategies a real form. . Strategic: developing and adopting successful strategies. use of resources. Learning: learning oppurtunities provided by the broaden operating environment. This is where the strategic Human Resource Management excels. Global organization is constantly in search of competitive advantage. product development. to re-open the closed mills.reputation and brand identification. In a recent seminar the following proposals were made: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) to waive the interest charges of public sector jute mills. to reduce power shortage. to nationalize the privatized jute mills and to provide assistance for jute farming and diversification of jute products. Organizations strive to achieve operational effectiveness. This is a political statement. Sources that could help to achieve a competitive advantage are: Efficiency: in production.flexibility in operation.Recommendation: Increased global competition Organizations are now under the demands to expand their market to cope up with the global competition. to set up modern jute mills.

The government has not made any allocation for jute sector in the budget. A left-oriented politician has suggested for an allocation of Tk. It is argued that jute is part of our culture. I think no commission is called for. Without addressing the jute sector as a whole. and mills were sold at a very low price through an . y The allocation of Taka 3. Just prior to privatisation. y It has been proposed to set up a jute commission to deal with the entire situation. But the amount of bonus voucher may not be adequate to recover losses. He also said that the money spent on the closure of Adamjee jute mills could have been utilized for making the mill viable.0 billion (300 crores) for the jute sector in the coming budget. y The excuse given for loss-making jute mills is not acceptable. There was no open bidding. But this is an emotional statement and is far from reality. If the government is convinced about revival of the jute sector. y The caretaker government is in the best position to take such a decision. bonus voucher was given to jute goods exporters in Pakistan for making the mills profitable. 3. The privatisation process was not transparent.These are all good proposals. y According to him. fuel and other material for production. profitable SOEs became losing concerns. spares. then only they should make this allocation. This decision was taken perhaps on the basis of the fact that there is no viable project in the jute sector. New jobs will be created in the Adamjee area. and the valuation of jute mills that were privatised was not done in a transparent manner. It is alleged that there is a conspiracy to destroy the jute sector. But who will bear the cost of implementing these proposals. It must take a hard decision once for all about the Adamjee jute sector. The government has enough information for taking decision. This was abolished after independence. y The government may examine the reintroduction of bonus voucher. He did not realize that a financial disaster was averted by closing down the Adamjee Jute Mills. Piecemeal allocation of money will go down the drain. y Private sector may consider funding viable jute diversification projects.0 billion was proposed to purchase raw jute. this money will go into the black hole. y Adamjee area has been converted into an Export Processing Zone (EPZ) and a number of industrial units are already under implementation.

inexperienced entrepreneurs. The privatisation process was itself non-transparent. Some of the mills that had been restored to their former owners were later sold to new. The ordinary labourers have suffered and their sufferings have increased with the closure of the mills. outdated machinery.unholy alliance between the owners and policymakers. resulting in the loss of jobs and production. It very often happened that the owner himself overvalued the price of purchased jute or other raw materials. including the jute mills. . and showed a loss on the balance sheet. Privatisation was not to be the answer to the problems of the ailing jute industry. This has resulted in continuous losses and closure of some mills. the government undertook privatisation of the SOEs. Conclusions Management vacuums and socialist ideologies motivated nationalisation of enterprises in manufacturing and commerce. Furthermore. This enabled the owner to default on bank loans. Government should undertake effective safety net programmes to safeguard labour interests. as well as the machinery. Throughout the whole period the politically powerful were able to appropriate the assets of the mills and get richer. The sector suffered from weak management and corruption from the beginning. corruption took place in managing the mills even after they had been privatised. including the jute manufacturing sector. Instead of addressing the real problems of the nationalised sector. Declining demand in both domestic and international markets. and the private owners proved to be as inefficient and corrupt as their predecessors. The situation of the Adamjee mills has also been made worse by some other factors such as y y y Excessive manpower.