EFFECTIVE RESOURCE UTILIZATION (TUE/WED: NOV 2022

Resource utilization is the process of strategically measuring how effective resources are used in
an enterprise. It describes the process of planning business activities in a way that ensures that
the available resources in the organization are being used to their highest potential. It helps firm
managers identify which resources are being over-utilized or under-utilized so they can allocate
such resources optimally.

What is a resource?

Typically resources are materials, money, services, staff, or other assets that are transformed to
produce benefit and in the process may be consumed or made unavailable.

In economics a resource is defined as a service, or other asset used to produce goods and services
that meet human needs and wants. Three most basic resources are land, labor, and capital.

Other resources include energy, entrepreneurship, information, expertise, management, and time.

Natural and artificial/Manmade

Natural Resources: Natural resources are the resources that are present in nature and are not
made by humans such as trees, mountains, oceans etc.
From a human perspective a natural resource is anything obtained from the environment to
satisfy human needs and wants.

Commonly exploited natural resources include: Water, Oil, Coal, Forests, Iron, and energy from
the Sun.

Artificial resources: When humans use natural things to make something new that provides
utility and value, it is called a made-made resource. For instance, when metals, wood, cement,
sand, and solar energy are used to make buildings, machinery, vehicles, bridges, roads, etc. they
become man-made or artificial resources. Artificial resources make up plenty of the vital
resources used in the business world today.

Effective and Efficient utilization of resources.

The Cambridge dictionary defines “efficiency” as “good use of time and energy that does not
waste any” and being “effective” is defined as “successful or achieving the results the business
wants”.

Resource efficiency therefore is maximizing the supply of money, materials, staff, and other
assets by an organization in order to function effectively, with minimum waste and expenses.
This can help business firms to reduce costs, improve efficiencies, and boost productivity.

The Benefits of Resource Utilization 

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Creating a robust framework for assessing the quality of business resources is crucial for the
success of any organization, profit or not-for-profit. The following are some of the benefits
resource utilization:
 Effective utilization of resources maintains productivity since idle capacity is reduced
and employees are not underperforming or overburdened; and other resources are not
over or underutilized.
 Resource utilization allows for business activities to be managed with better visibility,
meaning that the risks associated with oversights could be reduced drastically.
 The use of resources to their maximum potential yield a better Return on Investment
(ROI) for firms.
 They allow business managers to be agile and reschedule resources as quickly as
possible, avoiding problems coming up or situations worsening.
At the end of business, the following are derived:
 increased wealth,
 market needs or wants are met,
 proper functioning of a system,
 improved firm image,
 enhanced wellbeing of both business and society.

BUSINESS RESOURCES

i) Financial Resources
Financial resources concern the ability of the business to "finance" its chosen strategy. For
example, a strategy that requires significant investment in new products, distribution channels,
production capacity and working capital will place great strain on the business finances. Access
to adequate funds opens the door for the company to engage in growth-related activities that
include:
 the purchase of new plants and machinery,
 increase stock of ‘sellable’ items.
 take advantage of market opportunities (Market development).
 construction projects aimed at fulfilling the vision of the company in terms of capital
growth, and other related factors.
 qualified personnel.

Islamic and Asian businesses in Kenya have this advantage over local businesses because
Islamic banking practices are supportive and don’t impose punitive interest rates to borrowers.
Asian companies pool financial resources. For small businesses, financial bootstrapping can help
entrepreneurs to get their ideas off the ground.

firms that lack adequate funding often encounter financial roadblocks in their quest to expand
due to the lack of resources with which to carry out any expansionary plans.

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ii) Human Capital
The heart of a firm lies in human resources in terms of the skills set they possess. The reason
why human capital is such an important strategic resource is due to the fact that such gifted
employees can serve as an engine that will propel the business into greater growth through their
innovative abilities. And it starts at the top. Creative and innovative business managers also
know how to identify skill and competence in junior employees.
What skills do employees possess? In today’s business world, competent employees are those
with wide business exposure including industry knowledge, marketing orientation and creative
abilities.
iii) Physical Resources
The category of physical resources covers wide range of operational resources concerned with
the physical capability to deliver a strategy. These include: Location of business production
facilities and appropriate methods of production or service delivery systems and IT.
B Intangible Resources
It is easy to ignore the intangible resources of a business when assessing how to deliver a
strategy - but they can be crucial. Intangibles include:
Goodwill The difference between the value of the tangible assets of the business and the
actual value of the business (what someone would be prepared to pay for it)
Reputation Does the business have a track record of delivering on its strategic objectives?
If so, this could help gather the necessary support from employees and
suppliers
Brands Strong brands are often the key factor in whether a growth strategy is a
success or failure
Intellectual Key commercial rights protected by patents and trademarks may be an
Property important factor in the strategy.

C Information Resources

What Types of Information Resources Does a Business Usually Need?

Knowing the types of information resources that are most critical to business can help companies
plan for capturing, analyzing and using that information most effectively.

Every business needs information to help it succeed. A combination of internal and external
business information resources can provide the background necessary to evaluate current
performance and plan future progress.
1. Internal
 Employee information
 Sales information

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  Customer information
 Product information

Setting up systems and processes for gathering the right information can help business owners
track, trend, analyze and act upon business that gives them clues into such issues as what drives
employee satisfaction, the products most demanded by customers, areas of employee and
customers satisfaction and dissatisfaction.
2. Industry Information
Every business must gather industry information based on Michael porter’s five forces to
measure its attractiveness. In Kenya, KNBS has vital information that covers industry trends and
population statistics in general.
3. Competitive Information
No business is without competition and gathering information about competitors is critical.
Fortunately, this is easier than ever to do with the advent of the Internet. Through search and
through participation in social media--sites including Twitter, Facebook and LinkedIn--
businesses can gain competitive intelligence about what others are doing.
4. Government
The government provides an enormous amount of information of use to small businesses, much
of it available online. Keeping up with legal and regulatory trends is a key area of business
information need and one that can be managed effectively
 Economic trends
 Industry trends
 Money markets
 Population distribution
 Tendering procedures, business registration and tax laws.
D) Reputable Influence
Business strategic resources also refer to the reach of the business organization in terms of its
influence in the specific industry, or in the global business world. Such an influence can be
converted to a form of strategic resource that will benefit the company. Reputation assists
business firms to build relevant networks.

Minimizing wastage of Resources

The three R's of- reduce, reuse and recycle - help to cut down on the amount of waste businesses
accumulate. The R’s conserve natural resources and, landfill space and energy. They also save
land and money communities must use to dispose of waste in landfills.

Siting a new landfill has become difficult and more expensive due to environmental regulations
and public opposition.

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Missouri has a goal of reducing the amount of waste going into landfills by 40 percent. Everyone
can help meet this goal and save natural resources, energy, and money by following the three R's.

How to Reduce-Reuse-Recycle
Reducing Waste Production
The most direct way to cut your disposal costs is with source reduction: that is, by reducing the
amount of waste your business produces. You have less to get rid of if you purchase and discard
less material. By analyzing your business' waste stream, you will probably discover that you can
eliminate much of the waste your business produces. 

Reusing Waste Material 

A cost-efficient method of reducing waste is to reuse products in their present form. It is usually
cheaper to clean or repair products so that they can be reused rather than to buy new or recycled
ones.
Recycling
Many of the products that cannot be eliminated or reused can be recycled. Energy and natural
resources are saved and environmental pollution is reduced when products are made from
recycled rather than new materials. Your business can also cut disposal costs greatly by
recycling.
Simple Ways to Reduce Waste

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Here are examples of some easy ways to reduce the amount of waste that your business
produces. Most of them involve simple changes in procedures and work habits.

Writing and Printing Paper

 Buy recycled paper.
 Reuse manila envelopes.
 Circulate memos, documents, periodicals, and reports rather than making or buying
individual copies for all personnel.
 Use outdated letterhead for in-house memos.
 Proofread documents on the computer screen before printing them
 Save documents on floppy disks instead of making hard copies.
Equipment
 Invest in equipment that helps reduce waste, such as:
 high quality, durable, repairable equipment
 copiers that make two-sided copies
 Use dish washing equipment (so that you can use durable dinnerware).
 Install reusable furnace and air conditioner filters.
Landscaping and Organic Wastes
 Choose a landscape design that requires little maintenance and water.
 Compost grass clippings and leaves to make a valuable soil amendment (or make sure
your landscape contractor composts).
 Purchase compost for use as a topsoil amendment (or request that your landscape
contractor do so).
 Use a worm bin to convert non-fatty food wastes into high-quality potting soil
(vermicomposting).
Food and Personal Services
 Instead of paper, use cloth towels, tablecloths, and napkins.
 Avoid using disposable tableware when serving food and drinks to the public; use
durable dishes, flatware, cups, and glasses. You will need a dishwasher, but the cost
savings will quickly pay for it.
 Use cloth roll towels in the restrooms.
 Encourage employees to use durable cups and dinnerware for their food and beverages. 
You and your business can also help reduce waste by influencing your customers’ behavior.
Here are some ideas
 Teach your customers about the importance of reducing waste. Effective tools for getting
across the message include promotional campaigns, brochures and newsletters (printed
on recycled paper), banners, newspaper advertisements, product displays, store signs, and
labels.

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  Encourage reuse of shopping bags by asking customers if they have their own bag,
complimenting customers who reuse bags, providing a financial incentive for reuse, and
implementing a promotional campaign.
 Offer customers waste-reducing choices alongside their waste-producing counterparts.
Examples include 
 solar-powered items, such as watches, calculators, and flashlights
 Reward your customers with a rebate when they return grocery bags, containers for bulk
items, or coffee mugs and soda cups to be refilled.
Production and Operations management
Operations management is an area of management concerned with overseeing, designing, and
controlling the process of production and redesigning business operations in the production
of goods or services. It involves the responsibility of ensuring that business operations
are efficient in terms of using as few resources as needed, and effective in terms of meeting
customer requirements. It is concerned with managing the process that converts inputs (in the
forms of materials, labor, and energy) into outputs (in the form of goods and/or services). The
relationship of operations management to senior management in commercial contexts can be
compared to the relationship of line officers to highest-level senior officers in military science.
The highest-level officers shape the strategy and revise it over time, while the line officers
make tactical decisions in support of carrying out the strategy. In business as in military affairs,
the boundaries between levels are not always distinct; tactical information dynamically informs
strategy, and individual people often move between roles over time.
Production and Operation Management
Production vs. Operation Management 

Sometimes it becomes confusing to be talking about production management inside operations

management but they are separate and distinct entities in the study of management as ultimately,
production is a part of the whole cycle of operations. Read on to clarify the doubts.

Operations Management
The study of set of activities comprising supervision, planning and designing of business
operations in the field of manufacturing of goods and services is termed as operations
management.
The purpose of operations management is to make certain that the operations of a business are
efficient and effective and result in minimum of wastage. Operations management tries to cut
down resources involved in operations while at the same time making operations more effective
and productive. In fact operations management is more concerned on processes than people or
products. Operations management in a nutshell is using physical resources in an optimum
manner, converting input into output, so as to supply to the market the desired and finished
product.

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Production Management
Production management on the other hand focuses specifically on the production of goods and
services and is concentrated upon churning output from input. It is a broad sum of activities that
go into turning raw material into final, finished product. 

The operations manager is responsible for ensuring the overall efficiency of these services to the
rest of the business.  Production manager is usually responsible for some aspect of the life cycle
of a product or products. The specific role will depend upon the size of the company, the
organization structure and the type of products that are produced. The production manager works
very closely with the engineering manager and the marketing department. A production
manager’s role can be summarized as essentially bringing products to market.

POM incorporates many tasks that are interdependent, but which can be grouped under five main
headings:
PRODUCT
Marketers in a business must ensure that a business sells products that meet customer needs and
wants. The role of Production and Operations is to ensure that the business actually makes the
required products in accordance with the plan. The role of PRODUCT in POM therefore
concerns areas such as:

- Performance
- Aesthetics
- Quality
- Reliability
- Quantity
- Production costs
- Delivery dates
PLANT
To make PRODUCT, PLANT of some kind is needed. This will comprise the bulk of the fixed
assets of the business. In determining which PLANT to use, management must consider areas
such as:
- Future demand (volume, timing)
- Design and layout of factory, equipment, offices
- Productivity and reliability of equipment
- Need for (and costs of) maintenance
- Health and safety (particularly the operation of equipment)
- Environmental issues (e.g. creation of waste products)
PROCESSES

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There are many different ways of producing a product. Management must choose the best
process, or series of processes. They will consider:
- Available capacity
- Available skills
- Type of production
- Layout of plant and equipment
- Safety
- Production costs
- Maintenance requirements
PROGRAMMES
The production PROGRAMME concerns the dates and times of the products that are to be
produced and supplied to customers. The decisions made about programme will be influenced by
factors such as:
- Purchasing patterns (e.g. lead time)
- Cash flow
- Need for / availability of storage
- Transportation
PEOPLE
Production depends on PEOPLE, whose skills, experience and motivation vary. Key people-
related decisions will consider the following areas:
- Wages and salaries
- Safety and training
- Work conditions
- Leadership and motivation
- Unionization
- Communication
Distinction between Manufacturing Operations and Service Operations
Following characteristics can be considered for distinguishing manufacturing operations with
service operations:

1. Tangible/Intangible nature of output

2. Consumption of output
3. Nature of work (job)
4. Degree of customer contact
5. Customer participation in conversion
6. Measurement of performance.

Manufacturing is characterized by tangible outputs (products), outputs that customers

consume overtime, jobs that use less labour and more equipment, little customer contact, no

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 customer participation in the conversion process (in production), and sophisticated methods
for measuring production activities and resource consumption as product are made.

Service is characterized by intangible outputs, outputs that customers consumes immediately,

jobs that use more labour and less equipment, direct consumer contact, frequent customer
participation in the conversion process, and elementary methods for measuring conversion
activities and resource consumption. Some services are equipment based namely rail-road
services, telephone services and some are people based namely tax consultant services, hair
styling.

Objectives of Production Management

The objective of the production management is ‘to produce goods services of right quality
and quantity at the right time and right manufacturing cost’.

1. RIGHT QUALITY
The quality of product is established based upon the customers’ needs. The right quality is
not necessarily best quality. It is determined by the cost of the product and the technical
characteristics as suited to the specific requirements.

2. RIGHT QUANTITY
The manufacturing organization should produce the products in right number. If they are
produced
in excess of demand the capital will block up in the form of inventory and if the quantity is
produced in short of demand, leads to shortage of products.

3. RIGHT TIME
Timeliness of delivery is one of the important parameter to judge the effectiveness of
production department. So, the production department has to make the optimal utilization of
input resources to achieve its objective.

4. RIGHT MANUFACTURING COST

Manufacturing costs are established before the product is actually manufactured. Hence, all
attempts should be made to produce the products at pre-established cost, so as to reduce the
variation between actual and the standard (pre-established) cost.

5. CUSTOMER SERVICE

To provide agreed/adequate levels of customer service (and hence customer satisfaction) by

providing goods or services with the right specification, at the right cost and at the right time.
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 The first objective of operating systems is the customer service to the satisfaction of
customer wants. Therefore, customer service is a key objective of operations management.
The operating system must provide something to a specification which can satisfy the
customer in terms of cost and timing. Thus, primary objective can be satisfied by providing
the ‘right thing at a right price at the right time’.

6. RESOURCE UTILISATION
Another major objective of operating systems is to utilize resources for the satisfaction of
customer wants effectively, i.e., customer service must be provided with the achievement of
effective operations through efficient use of resources. Inefficient use of resources or
inadequate customer service leads to commercial failure of an operating system.

Classification of Production System

Production systems can be classified as Job Shop, Batch, Mass and Continuous Production
systems.

JOB SHOP PRODUCTION

Job shop production are characterized by manufacturing of one or few quantity of products
designed and produced as per the specification of customers within prefixed time and cost.
The distinguishing feature of this is low volume and high variety of products.

A job shop comprises of general purpose machines arranged into different departments.
Each job demands unique technological requirements, demands processing on machines in a
certain sequence.

Characteristics
The Job-shop production system is followed when there is:
1. High variety of products and low volume.
2. Use of general purpose machines and facilities.
3. Highly skilled operators who can take up each job as a challenge because of uniqueness.
4. Large inventory of materials, tools, parts.
5. Detailed planning is essential for sequencing the requirements of each product, capacities
for each work centre and order priorities.

BATCH PRODUCTION
Batch production is defined by American Production and Inventory Control Society (APICS)
“as a form of manufacturing in which the job passes through the functional departments in
lots or batches and each lot may have a different routing.” It is characterized by the
manufacture of limited number of products produced at regular intervals and stocked
awaiting sales.
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 Characteristics
Batch production system is used under the following circumstances:
1. When there is shorter production runs.
2. When plant and machinery are flexible.
3. When plant and machinery set up is used for the production of item in a batch and
change of set up is required for processing the next batch.
4. When manufacturing lead time and cost are lower as compared to job order production.

MASS PRODUCTION
Manufacture of discrete parts or assemblies using a continuous process are called mass
production. This production system is justified by very large volume of production. The
machines are arranged in a line or product layout. Product and process standardization exists
and all outputs follow the same path.

Characteristics
Mass production is used under the following circumstances:
1. Standardization of product and process sequence.
2. Dedicated special purpose machines having higher production capacities and output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and without any back tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.

CONTINUOUS PRODUCTION
Production facilities are arranged as per the sequence of production operations from the first
operations to the finished product. The items are made to flow through the sequence of
operations through material handling devices such as conveyors, transfer devices, etc.

Characteristics
Continuous production is used under the following circumstances:
1. Dedicated plant and equipment with zero flexibility.
2. Material handling is fully automated.
3. Process follows a predetermined sequence of operations.
4. Component materials cannot be readily identified with final product.
5. Planning and scheduling is a routine action.

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 SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT
Production and operations management concern with the conversion of inputs into outputs,
using physical resources, so as to provide the desired utilities to the customer while meeting
the other organizational objectives of effectiveness, efficiency and adoptability. It
distinguishes itself from other functions such as personnel, marketing, finance, etc., by its
primary concern for ‘conversion by using physical resources.’ Following are the activities
which are listed under production and operations management functions:

1. Location of facilities
2. Plant layouts and material handling
3. Product design
4. Process design
5. Production and planning control
6. Quality control
7. Materials management
8. Maintenance management.

LOCATION OF FACILITIES
Location of facilities for operations is a long-term capacity decision which involves a long
term commitment about the geographically static factors that affect a business organization.
It is an important strategic level decision-making for an organization. It deals with the
questions such as ‘where our main operations should be based.

The selection of location is a key-decision as large investment is made in building plant and
machinery. An improper location of plant may lead to waste of all the investments made in
plant and machinery equipments. Hence, location of plant should be based on the company’s
expansion plan and policy, diversification plan for the products, changing sources of raw
materials and many other factors. The purpose of the location study is to find the optimal
location that will results in the greatest advantage to the organization.

PLANT LAYOUT AND MATERIAL HANDLING

Plant layout refers to the physical arrangement of facilities. It is the configuration of
departments, work centres and equipment in the conversion process. The overall objective of
the plant layout is to design a physical arrangement that meets the required output quality and
quantity most economically.

According to James Moore, “Plant layout is a plan of an optimum arrangement of

facilities including personnel, operating equipment, storage space, material handling
equipments and all other supporting services along with the design of best structure
to contain all these facilities”.
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 ‘Material Handling’ refers to the ‘moving of materials from the store room to the machine
and from one machine to the next during the process of manufacture’. It is also defined as the
‘art and science of moving, packing and storing of products in any form’. It is a specialized
activity for a modern manufacturing concern, with 50 to 75% of the cost of production. This
cost can be reduced by proper section, operation and maintenance of material handling
devices. Material handling devices increases the output, improves quality, speeds up the
deliveries and decreases the cost of production. Hence, material handling is a prime
consideration in the designing new plant and several existing plants.

PRODUCT DESIGN
Product design deals with conversion of ideas into reality. Every business organization have
to design, develop and introduce new products as a survival and growth strategy. Developing
the new products and launching them in the market is the biggest challenge faced by the
organizations.

The entire process of need identification to physical manufactures of product involves three
functions: marketing, product development, manufacturing. Product development translates
the needs of customers given by marketing into technical specifications and designing the
various features into the product to these specifications. Manufacturing has the responsibility
of selecting the processes by which the product can be manufactured. Product design and
development provides link between marketing, customer needs and expectations and the
activities required to manufacture the product.

PROCESS DESIGN
Process design is a macroscopic decision-making of an overall process route for converting
the raw material into finished goods. These decisions encompass the selection of a process,
choice of technology, process flow analysis and layout of the facilities. Hence, the important
decisions in process design are to analyses the workflow for converting raw material into
finished product and to select the workstation for each included in the workflow.

PRODUCTION PLANNING AND CONTROL

Production planning and control can be defined as the process of planning the production in
advance, setting the exact route of each item, fixing the starting and finishing dates for each
item, to give production orders to shops and to follow up the progress of products according
to orders.

The principle of production planning and control lies in the statement ‘First Plan Your Work
and then Work on Your Plan’. Main functions of production planning and control includes
planning, routing, scheduling, dispatching and follow-up.

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 Planning is deciding in advance what to do, how to do it, when to do it and who is to do it.
Planning bridges the gap from where we are, to where we want to go. It makes it possible
for things to occur which would not otherwise happen.

Routing may be defined as the selection of path which each part of the product will follow,
which being transformed from raw material to finished products. Routing determines the
most advantageous path to be followed from department to department and machine to
machine till raw material gets its final shape.

Scheduling determines the programme for the operations. Scheduling may be defined as
‘the fixation of time and date for each operation’ as well as it determines the sequence of
operations to be followed.

Dispatching is concerned with the starting the processes. It gives necessary authority so as
to start a particular work, which has already been planned under ‘Routing’ and ‘Scheduling’.
Therefore, dispatching is ‘release of orders and instruction for the starting of production for
any item in acceptance with the route sheet and schedule charts’.

QUALITY CONTROL
Quality Control (QC) may be defined as ‘a system that is used to maintain a desired level of
quality in a product or service’. It is a systematic control of various factors that affect the
quality of the product. Quality control aims at prevention of defects at the source, relies on
effective feedback system and corrective action procedure.

Quality control can also be defined as ‘that industrial management technique by means of
which product of uniform acceptable quality is manufactured’. It is the entire collection of
activities which ensures that the operation will produce the optimum quality products at
minimum cost.

The main objectives of quality control are:

_ To improve the companies income by making the production more acceptable to the
customers i.e., by providing long life, greater usefulness, maintainability, etc.
_ To reduce companies cost through reduction of losses due to defects.
_ To achieve interchangeability of manufacture in large scale production.
_ To produce optimal quality at reduced price.
_ To ensure satisfaction of customers with productions or services or high quality level, to
build customer goodwill, confidence and reputation of manufacturer.
_ To make inspection prompt to ensure quality control.
_ To check the variation during manufacturing.

MATERIALS MANAGEMENT
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 Materials management is that aspect of management function which is primarily concerned
with the acquisition, control and use of materials needed and flow of goods and services
connected with the production process having some predetermined objectives in view.
The main objectives of materials management are:
_ To minimize material cost.
_ To purchase, receive, transport and store materials efficiently and to reduce the related cost.
_ To cut down costs through simplification, standardization, value analysis, import
substitution, etc.
_ To trace new sources of supply and to develop cordial relations with them in order to
ensure continuous supply at reasonable rates.
_ To reduce investment tied in the inventories for use in other productive purposes and to
develop high inventory turnover ratios.

MAINTENANCE MANAGEMENT
In modern industry, equipment and machinery are a very important part of the total
productive effort. Therefore, their idleness or downtime becomes are very expensive. Hence,
it is very important that the plant machinery should be properly maintained.
The main objectives of maintenance management are:

1. To achieve minimum breakdown and to keep the plant in good working condition at the
lowest possible cost.
2. To keep the machines and other facilities in such a condition that permits them to be used
at their optimal capacity without interruption.
3. To ensure the availability of the machines, buildings and services required by other
sections
of the factory for the performance of their functions at optimal return on investment.

MANAGING GLOBAL OPERATIONS

The term ‘globalization’ describes businesses’ deployment of facilities and operations around
the world. Globalization can be defined as a process in which geographic distance becomes a
factor of diminishing importance in the establishment and maintenance of cross border
economic, political and socio-cultural relations. It can also be defined as worldwide drive
toward a globalized economic system dominated by supranational corporate trade and
banking institutions that are not accountable to democratic processes or national
governments.

There are four developments, which have spurred the trend toward globalization. These are:
1. Improved transportation and communication technologies;
2. Opened financial systems;
3. Increased demand for imports; and
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 4. Reduced import quotas and other trade barriers.

When a firm sets up facilities abroad it involve some added complexities in its operation.
Global markets impose new standards on quality and time. Managers should not think about
domestic markets first and then global markets later, rather it could be think globally and act

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