IMPORTANCE OF FDI IN PAKISTAN

The Asian currency crisis that erupted in Thailand in July 1997 and has since spread to other countries, particularly Indonesia, Republic of Korea (Korea), and Malaysia, renewed the significance of prudential management of foreign capital flows in developing countries where domestic financial markets are not yet fully developed. The crisis poses many challenges to developing countries, including how to best supervise financial institutions, how to efficiently manage foreign exchange reserves/systems, and how to prudentially manage foreign debt and investments. From the viewpoint of foreign resource mobilization, the crisis highlights the urgent need to reexamine the optimal combination of foreign capital, i.e., proper composition of concessional public loans, commercial loans, portfolio investment, and foreign direct investment. Volatile movements of portfolio investment triggered the Asian crisis, which was reinforced by panic withdrawals of short-term commercial loans. However, it did not have any relation to foreign direct investment (FDI) due to its high stability. This underscores the importance of FDI in the developing member countries (DMCs), particularly the group of least developed DMCs where domestic financial markets are fragile and liquidity is limited. Pakistan belongs to this group. The size of its financial market is very small and its foreign exchange and debt position is precarious. Over the last two years, foreign exchange reserves in Pakistan have remained at less than $1.3 billion, which was equivalent to only 4-5 weeks of imports of goods.1 Short-term debt has also increased from 12% of total debt in the early 1990s to 20% at present. These developments increase the need for attracting FDI into Pakistan. FDI is a significant long-term commitment and a part of the host economy itself. In the difficult circumstances described above, Pakistans policy on foreign capital mobilization must attach priority to (i) official multilateral assistance; (ii) official bilateral assistance; and (iii) FDI, given its very limited absorptive capacity for portfolio investment and commercial bank loans. However, concessional long-term development assistance, both multilateral and bilateral, will become increasingly scarce due to domestic financial constraints in major donors, such as Japan, and Pakistans increased competition with other least developed countries such as Bangladesh, Mongolia, Sri Lanka, and Viet Nam. Multilateral development organizations including the Asian Development Bank will focus on poverty alleviation and soft sectors (i.e., agriculture, rural development, education, environment, poverty, and health), while the hard sectors (manufacturing and large-scale physical infrastructure) are expected to be invested in by the private sector and foreign investors as well as the Government of Pakistan (GOP). The positive developmental role of FDI in general is well documented (see, for example, Chen 1992). FDI produces a positive effect on economic growth in host countries. One convincing argument for that is that FDI consists of a package of capital, technology management, and market access. FDI tends to be directed at those manufacturing sectors and key infrastructures that enjoy actual and potential comparative advantage. In those sectors with comparative advantage, FDI would create economies of scale and linkage effects and raise productivity. For FDI, repayment is required only if investors make profit and when they make profit, they tend to reinvest their profit rather than remit abroad. Another benefit of FDI is a confidence building effect. While the local economic environment determines the overall degree of investment confidence in a country, inflows of FDI could reinforce the confidence, contributing to the creation of a virtuous cycle that affects not only local and foreign investment but also foreign trade and production. This phenomenon well matches the directions of historical flows of

FDI in the Asian and Pacific region. Initially, FDI had surged into the newly industrialized economies (NIEs) (Hong Kong, China; Korea; Singapore; and Taipei, China) and thereafter moved to ASEAN countries. Recently, it has been changing its direction to Peoples Republic of China (PRC), India, and Viet Nam. This changing stream of FDI flows suggests that the degree of confidence building, inflows of FDI, and the pace of economic growth seem to have a positive interrelation in the Asian and Pacific region. The inflow of FDI into Pakistan is small and concentrated only on a few areas, mostly in the power sector. In 1997 Pakistan accounted for 0.2% of world FDI, less than one percent of developing country and Asian country FDI, and 18% of South Asian countries FDI.2 In spite of liberalizing its formerly inward-looking FDI regime, tempering or removal of obstacles to foreign investors, and according various incentives, Pakistans performance in attracting FDI has been lackluster. Why could Pakistan not succeed in attracting sufficiently large FDI despite liberalizing its payments and exchange regime as well as inward FDI regime? The present study attempts to find out the answer. Rather, a relatively large inflow of FDI into the power sector since 1995 has created some adverse effects, most important of which was the large increase in imports of capital goods for construction of power plants, and the ongoing conflict between the government and foreign independent power producers (IPPs) on the power rate the government needs to pay to IPPs under the purchase contract. Another negative effect of FDI concentration on the power sector was that as the remittances by IPPs began to increase, it severely constrained the balance of payments, given that foreign exchange earnings through exports of goods and services remain low.3 From this undesirable pattern of FDI in Pakistan, very important lessons could be drawn for developing economies: they should be careful in allowing a large amount of FDI to non foreign-exchange earning sectors during a short period of time; and FDI should be promoted in the foreign exchange- earning sector at the initial stage and to the domestic-oriented sector at the subsequent stages, or, at least, to both sectors simultaneously.

CNBC
About CNBC (officially the Consumer News and Business Channel until 1991 is a satellite and cable television business news channel in the U.S., owned and operated by NBC Universal. The network and its international spinoffs cover business headlines and provide live coverage of financial markets. The combined reach of CNBC and its siblings is 390 million viewers around the world. In 2007, the network was ranked as the 19th most valuable cable channel in the U.S., worth roughly $4 billion. It is headquartered in Englewood Cliffs, New Jersey.

Internationalization at CNBC
The CNBC channel originally had its beginnings around 1980 as the Satellite Program Network (SPN), showing a low-budget mix of old movies, instructional and entertainment programs. The channel later changed its name to Tempo Television. After initially signing a letter of intent to acquire Tempo, NBC eventually opted for a deal to lease the channel's transponder in June 1988. On this platform, and under the guidance of Tom Rogers, the channel was relaunched on April 17, 1989 as the Consumer News and Business Channel. NBC and Cablevision initially operated CNBC as a 50-50 joint venture, choosing to headquarter the channel in Fort Lee, New Jersey. CNBC had considerable difficulty getting cable carriage at first, as many providers were skeptical of placing it alongside the longer-established Financial News Network. By the winter of 1990, CNBC was only in 17 million homes - less than half of FNN's potential reach despite having the muscle of NBC standing behind it. However, around this time, FNN encountered serious financial difficulties. After a protracted bidding war with a Dow Jones-Westinghouse Broadcasting consortium (the former's assets would be used to build a rival channel almost two decades later),CNBC acquired FNN for $154.3 million on May 21, 1991 and immediately merged the two operations, hiring around 60 of FNN's 300-strong workforce. The deal increased the distribution of the newly enlarged network to over 40 million homes. Cablevision sold its 50% stake to NBC upon completion of the deal. With the full name "Consumer News and Business Channel" dropped, the network's business programming was at first branded "CNBC/FNN," although this was phased out before the mid-1990s. Under Rogers' leadership, CNBC began to grow during the 1990s, launching Asian and European versions of the channel in 1995 and 1996 respectively

Strategic Alliance
In 1997, CNBC formed a strategic alliance with Dow Jones, including content sharing with Dow Jones Newswires and The Wall Street Journal and the rebranding of the channel as "a service of NBC and Dow Jones". CNBC's international channels were then merged into a 50-50 joint venture with their Dow Jones-owned rivals, London-based EBN (European Business News) and Singapore-sited ABN (Asia

Business News) in 1998 while ratings grew on the U.S. channel until the new millennium's dot-com bubble burst in 2000.

CNBC Pakistan
CNBC Pakistan is Pakistan's 24-hour bilingual Urdu and English language business and news channel which reports financial and business information, presenting in-depth and up-to-the-minute coverage of regional and international affairs from a Pakistani economic perspective. CNBC Pakistan was founded in 2004 by CNBC Asia to broaden their reach into Pakistan's expanding capital markets, and inaugurated by the Pakistan's former Prime Minister Shaukat Aziz. CNBC Pakistan's initial broadcast began on November 15, 2005 and is owned by Vision Network Television Limited. Approximately 250 employees work with CNBC Pakistan. Its headquarters are located at the Techno-city Corporate Tower in Karachi. Smaller bureaus are also found in Islamabad and Lahore. CNBC Pakistan uses a three band ticker with the upper and central band for stocks and the lower band for news.

DOING BUSINESS IN PAKISTAN

Strategic Alliance in Pakistan
CNBCs channels include CNBC Asia, CNBC-TV18 (India), CNBC Awaaz, CNBC Pakistan, Nikkei-CNBC (Japan) and SBS-CNBC (South Korea). CNBC also has a strategic alliance with China Business Network, a wholly owned subsidiary of the Shanghai Media Group and collaboration with China Central Television (CCTV). CNBC Pakistan is owned by VNTV - a Pakistani company - and has access to the CNBC global network and the resources of Dow Jones. VNTV, which is a public limited company with a paid-up capital of $14 million, will offer its shares to the general public for subscription by the end of year 2005. A total of four slots - two each at Pas-2 and Pak-Sat have been booked to air the transmission for the viewers across the globe.

Reviewing the Political Conditions of Pakistan

A political system may be seen as consisting of two components: structure and culture. It is on these components and how they interact that the effectiveness of a political system hinges. The political structure is the set of roles created by the constitution and laws made there under that are formalized into offices and institutions. Political culture is the psychological dimension of the political system and consists of attitudes, beliefs and values prevalent in the polity and society. To use a figure of speech, whereas structure is the form or body of the political system, culture is its substance or soul. A given political system may have all the ingredients of a democratic dispensation, such as a written constitution distributing powers among various state organs and defining the relationship between the governors and the governed through fundamental rights and duties, political parties, which offer alternative solutions to public problems, an election commission to conduct polls in a free, fair and transparent manner, parliament, which expresses the popular will, the executive to carry out that will, and the judiciary to ensure the rule of law, justice and expeditious settlement of disputes. But the real test of a political system is to have the corresponding culture. It is easier to establish a democratic political structure than to have a democratic political culture. It is easier to set up political institutions than to strengthen them. It is easier to draw up a democratic constitution than to work it in a democratic fashion. It is easier to hold elections than to conduct them fairly and squarely. It is easier to form a political party and keep it intact than to run it democratically. For a political system to be effective, the elaborate political structure must be supported by a vital political culture. When the written provisions of the constitution are not backed by healthy constitutional conventions; when parliament passes laws and adopts resolutions but is deficient in the will to enforce them; when the institutions fail to draw respect from those who are supposed to uphold them; when politics becomes no more than a corporate affair; when political parties are reduced to a platform to prop up relatives; when governance becomes the instrument of rewarding cronies and

penalizing opponents; when elections have a per-determined outcome; when candidates get votes not because of their credentials but because they can use to their advantage the carrot or the stick; when the courts feel shy of bringing the high and mighty to the book, or when they set about doing so their decisions are disregarded or ridiculed; when leaders are revered as saints beyond criticism and beyond error; when demagogues are regarded as saviors; and when there is law but not the rule of law. The political system of Pakistan is the victim of the same structure-culture, form-substance, and body-soul dichotomy. A strong political system embodies a consensus among political forces against political authoritarianism, which is the hallmark of a truly democratic polity. In India, for instance, there are parties of the right, center and the left, which may differ on this point or that but all agree that the country should be a multiparty democracy. Probably it is this agreement that, more than any other factor, has prevented any military adventurer from stepping in. Conversely, in Pakistan military takeover has always found a lot of political support and sympathy. Even today there is strong political support for the armed forces political role.

Reviewing the Economic System of Pakistan

In Pakistan, we have neither of the two extreme systems but our economic system is a via media compromise of both the systems of capitalistic and socialistic patterns. It can safely be said that it is a mixed economy.

Salient Features of Economic System of Pakistan

1. Co-Existence of the Public and Private Sectors In the economy both public sector and the private sector function together. In one part are those industries, the responsibility for the development of which is entrusted to the state and they are owned and managed by the state. Other industries are left under the authority and control of the private entrepreneurs. The private sector is free to develop them and start new enterprises in this sector. 2. Role of Price System And Government Directives So far as the public sector is concerned, economic decisions relating to production, prices and investment are made by the government or authorities appointed by the government. In industries in the private sector, the decisions regarding investment, production, prices, etc, are made by private entrepreneurs with the object of making maximum profit on the basis of the price system. 3. Government Regulation and Control of Private Sector In a mixed economy, the government adopts necessary measures to regulate and influence the private sector, so that it may function in the interests of the nation rather than exclusively in the interests of the private entrepreneurs.

4. Consumers Sovereignty Protected The consumers are free to buy commodities of their choice and the private entrepreneurs produce commodities according to consumers demand or preferences, although the government can control their prices in public interest so that they can be prevented from rising unduly high. Besides, the government can also ration the commodities in short supply so that the limited available quantities can be fairly distributed. 5. Government Protection of Labor In a mixed economy, Government saves labor from exploitation by the exploitation by the capitalists. Several factory acts have been passed to regulate the working conditions of labor. The government also takes necessary steps to prevent industrial disputes. 6. Reduction of Economic Inequalities The governments in mixed economics take necessary steps for the reduction of inequalities of income and wealth for promoting social justice and social stability and social welfare, increasing production and for providing equal opportunities for all. 7. Control of Monopoly A charge against monopolies is that they reduce output and raise prices in order to get maximum profit leading to miss-allocation of productive resources of the community, economic inequalities, and unemployment and hampering of industrial development. The government tries to control and regulate monopolies in order to remove the above evils and make them function in public interest. Also, when the government considers it necessary in public interest, it takes over monopolies and operates them in public interest. 8. Government Provision of Public Services The government provides certain indispensable public services without which community life would be unthinkable and which by their nature cannot appropriately be left to private enterprises. Examples are the maintenance of national defense, of internal law and order and the administration of justice etc.

Government Control of Assets

Privatization in Pakistan is aimed to achieve the following: Enhance the quantity and quality of goods and services Strengthen public finances Broaden and deepen capital markets Reduce opportunities for corruption.

Steps Taken For Effective Privatization

1. Legal framework (Privatization Commission Ordinance, 2000) established for investors' comfort, assured transparency, and increased accountability. 2. 90% of the privatization proceeds will be used for debt retirement and 10% for poverty alleviation. 3. Privatization Commission (PC) has acquired specialized expertise and business acumen from the private and public sectors. 4. Stature of PC has been improved by making it a Ministry. 5. PC's comprehensive program for privatization stands approved 6. Regulatory agencies for power, gas and telecommunications established along with the 7. Securities & Exchange Commission of Pakistan 8. Economy under constant deregulation through price and import liberalization. 9. Communications with stakeholders have been improved.

Economic Integration in Pakistan

In Pakistan ECO provides the facility of Economic integration. Economic Cooperation Organization is an intergovernmental regional organization established in 1985 by Iran, Pakistan and Turkey for the purpose of promoting economic, technical and cultural cooperation among the member states. It was the successor organization of what was the Regional Cooperation for Development (RCD), founded in 1964, which ended activities in 1979. In the fall of 1992, the ECO expanded to include seven new members, namely Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. The status and power of the ECO is growing. However, the organization faces many challenges. Most importantly, the member states are lacking appropriate infrastructure and institutions which the Organization is primarily seeking to develop, to make full use of the available resources in the region and provide sustainable development for the member nations. The Economic Cooperation Organization Trade Agreement (ECOTA) was signed on 17 July 2003 in Islamabad. ECO Trade Promotion Organization (TPO) is a new organization for trade promotion among member states located in Iran (2009). Activities Activities of ECO are conducted through Directorates under the supervision of Secretary General and his Deputies which considered and evolve projects and programs of mutual benefit in the fields of: Trade and Investment Transport and Telecommunications Energy, Minerals and Environment Agriculture, Industry and Tourism Human Resources & Sustainable Development Project & Economic Research and Statistics

Objectives Sustainable economic development of Member States; Progressive removal of trade barriers and promotion of intra- regional trade; Greater role of ECO region in the growth of world trade; Gradual integration of the economies of the Member States with the world economy; Development of transport & communications infrastructure linking the Member States with each other and with the outside world; Economic liberalization and privatization; Mobilization and utilization of ECO region's material resources; Effective utilization of the agricultural and industrial potentials of ECO region; Regional cooperation for drug abuse control, ecological and environmental protection and strengthening of historical and cultural ties among the peoples of the ECO region; and Mutually beneficial cooperation with regional and international organizations.

Principles of cooperation Sovereign equality of the Member States and mutual advantage; Linking of national economic, development plans with ECO's immediate and long-term objectives to the extent possible; Joint efforts to gain freer access to markets outside the ECO region for the raw materials and finished products of the Member States; Effective utilization of ECO institutions, agreements and cooperative arrangements with other regional and international organizations including multilateral financial institutions; Common endeavors to develop a harmonized approach for participation in regional and global arrangements; Realization of economic cooperation strategy; and Exchanges in educational, scientific, technical and cultural fields

Localization of Business
The launch of CNBC Pakistan not only localized one of the most respected names in business news, it also inaugurated TV production facilities that are possibly the most advanced in Pakistan. To achieve its goal, in early 2005 CNBC Pakistan approached TSL to suggest an all new design and project plan to meet a demanding on air schedule. TSL were then engaged to integrate and install the complete facility in Karachi. CNBC Pakistans operation is built around the Pebble Beach Neptune automation platform and ENPS. In the networks Karachi Transmission Suite, Neptune controls an Omneon storage area network, five DVCAM VTRs, and an NVision router. CNBC Pakistan Karachi headquarters also uses AP's ENPS newsroom system, with Neptune interfaced directly into ENPS using the MOS protocol. This allows newsroom-based producers to adjust the video playout order on the fly and have direct access to graphics. TSL specified Ross Vision Mixers for the two Karachi studios. Following successful technical

acceptance, training took place at TSL UK headquarters with the full system laid out and configured as if it were in situ on site in Karachi. The new CNBC staff put the full system through its paces in conjunction with TSL and some manufacturer specialists. Following successful technical acceptance, training took place at TSL UK headquarters with the full system laid out and configured as if it were in situ on site in Karachi. The new CNBC staff put the full system through its paces in conjunction with TSL and some manufacturer specialists.

CNBC AND ELEMENTS OF CULTURE OF PAKISTAN

Ethnic Make-up: Punjabi, Sindhi, Pakhtun (Pathan), Baloch, Muhajir (immigrants from India at the time of partition and their descendants) Religions: Muslim 97% (Sunni 77%, Shi'a 20%), Christian, Hindu, and other (inc. Sikh) 3%

1. Language in Pakistan
Urdu is the only official language of Pakistan. Although English is used instead of Urdu in this regard. English is the lingua franca of the Pakistani elite and most of the government ministries. Urdu is closely related to Hindi but is written in an extended Arabic alphabet rather than in Devanagari. Urdu also has more loans from Arabic and Persian than Hindi has. Many other languages are spoken in Pakistan, including Punjabi, Siraiki, Sindhi, Pashtu, Balochi, Hindko, Brahui, Burushaski, Balti, Khawar, Gujrati and other languages with smaller numbers of speakers.

2. Pakistani Society & Culture

Islam
Islam is practiced by the majority of Pakistanis and governs their personal, political, economic and legal lives. Among certain obligations for Muslims are to pray five times a day - at dawn, noon, afternoon, sunset, and evening. Friday is the Muslim holy day. Everything is closed. During the holy month of Ramadan all Muslims must fast from dawn to dusk and are only permitted to work six hours per day. Fasting includes no eating, drinking, cigarette smoking, or gum chewing

The Family
The extended family is the basis of the social structure and individual identity. It includes the nuclear family, immediate relatives, distant relatives, tribe members, friends, and neighbors. Loyalty to the family comes before other social relationships, even business. Nepotism is viewed positively, since it guarantees hiring people who can be trusted, which is crucial in a country where working with people one knows and trusts is of primary importance. The family is more private than in many other cultures. Female relatives are protected from outside influences. It is considered inappropriate to ask questions about a Pakistani's wife or other female relatives. Families are quite large by western standards, often having up to 6 children.

Hierarchical Society
Pakistan is a hierarchical society. People are respected because of their age and position. Older people are viewed as wise and are granted respect. In a social situation, they are served first and their drinks may be poured for them. Elders are introduced first, are provided with the choicest cuts of meat, and in general are treated much like royalty. Pakistanis expect the most senior person, by age or position, to make decisions that are in the best interest of the group. Titles are very important and denote respect. It is expected that you will use a person's title and their surname until invited to use their first name.

3.

Etiquette & Customs in Pakistan

Meeting and Greeting

Greetings are therefore often between members of the same sex; however, when dealing with people in the middle class, greetings may be across sex lines. Men shake hands with each other. Once a relationship is developed, they may hug as well as shake hands. Women generally hug and kiss. Pakistanis take their time during greetings and ask about the person's health, family, and business success. Pakistani names often include a name that denotes a person's class, tribe, occupation, or other status indicator. They may also include two names that have a specific meaning when used together, and the meaning is lost if the names are separated. . It is best to ask a person how they wish to be addressed. In general, this is not a culture where first names are commonly used, except among close friends.

Gift Giving Etiquette

If invited to a Pakistani's home, bring the hostess a small gift such as flowers or good quality chocolates. Men should avoid giving flowers to women. Do not give white flowers as they are used at weddings. If a man must give a gift to a woman, he should say that it is from his wife, mother, sister, or some other female relative. Do not give alcohol. Gifts are not opened when received. Gifts are given with two hands.

Dining Etiquette
If invited to a home you will most likely have to remove your shoes. Check to see if the host is wearing shoes. If not, remove yours at the door. Dress conservatively. Arrive approximately 15 minutes later than the stipulated time when invited to dinner or a small gathering. You may arrive up to one hour later than the stipulated time when invited to a party. Show respect for the elders by greeting them first. In more rural areas, it is still common to eat meals from a knee-high round table while sitting on the floor. Many people in urban areas do not use eating utensils, although more westernized families do. When in doubt, watch what others are doing and emulate their behavior. Guests are served first. Then the oldest, continuing in some rough approximation of age order until the youngest is served. Do not start eating until the oldest person at the table begins. You will be urged to take second and even third helpings. Saying "I'm full" will be taken as a polite gesture and not accepted at face value. Eat only with the right hand.

4. Business Etiquette & Protocol in Pakistan

Building Relationships & Communication
Third-party introductions are a necessity in this relationship-driven culture. Pakistanis prefer to work with people they know and trust and will spend a great deal of time on the getting-to-know-you part of relationship building. You must not appear frustrated by what may appear to be purely social conversation. Pakistanis are hospitable and enjoy hosting foreign guests. Relationships take time to grow and must be nurtured. This may require several visits. Pakistanis often ask personal questions as a way to get to know you as a person. If possible, it is best to answer these questions. Pakistanis do not require as much personal space as most western cultures. As such, they will stand close to you while conversing and you may feel as if your personal space has been violated. Do not back away. Pakistanis are generally indirect communicators. Always demonstrate deference to the most senior person in the group. In general, Pakistanis speak in a roundabout or circuitous fashion. Direct statements are made only to those with whom they have a long-standing personal relationship. They also use a great deal of hyperbole and similes, and go out of their way to find something to praise.

Be prepared to flatter and be flattered. Pakistanis prefer to converse in a non-controversial manner, so they will say they "will try" rather than admit that they cannot or will not be able to do something. Therefore, it is important to ask questions in several ways so you can be certain what were meant by a vague response. Silence is often used as a communication tool. Pakistanis prefer to do business in person. They see the telephone as too impersonal a medium for business communication.

Business Meeting Etiquette

Appointments are necessary and should be made, in writing, 3 to 4 weeks in advance, although meetings with private companies can often be arranged with less notice. The best time to schedule meetings is in the late morning or early afternoon. If at all possible, try not to schedule meetings during Ramadan. The workday is shortened, and since Muslims fast, they could not offer you tea, which is a sign of hospitality. You should arrive at meetings on time and be prepared to be kept waiting. Pakistanis in the private sector who are accustomed to working with international companies often strive for punctuality, but are not always successful. It is not uncommon to have a meeting cancelled at the last minute or even once you have arrived. In general, Pakistanis have an open-door policy, even when they are in a meeting. This means there may be frequent interruptions. Other people may wander into the room and start a different discussion. Meetings are formal. Business meetings start after prolonged inquiries about health, family, etc. Never inquire about a colleague's wife or daughters. During the first several meetings, business may not be discussed at all as the relationship is still being developed. Maintain indirect eye contact while speaking.

Negotiating
Companies are hierarchical. Decisions are made by the highest-ranking person. Decisions are reached slowly. If you try to rush things, you will give offense and jeopardize your business relationship. The society is extremely bureaucratic. Most decisions require several layers of approval. It often takes several visits to accomplish simple tasks. If you change negotiators, negotiations will have to start over since relationships are to the person and not the company that they represent. Pakistanis are highly skilled negotiators. Price is often a determining factor in closing a deal. Pakistanis strive for win-win outcomes.

Maintain indirect eye contact while speaking. Do not use high-pressure tactics. Pakistanis can become highly emotional during negotiations. Discussions may become heated and even revert to Urdu (the national language). It is imperative that you remain calm.

Cultural Dimensions in Pakistan

Power Distance Index (PDI)
Research findings on Power distance index (PDI) illustrates that Khyber Pakhtoon Khawa (KPK) province is the highly power distanced province 79.62, followed by Punjab province by 76.13, Sindh by 43.08 and Baluchistan by 32.50. The result findings suggest that the tendency o expecting or accepting unequal distribution of power by less powerful members is high KPK and Punjab provinces is higher than Sindh and Baluchistan provinces.

Individualism Index (IDV)

The data obtained on comparison of Individualism vs. Collectivism, indicate that all the four provinces of Pakistan possess a strong index on Collectivism over Individualism. Their respective scores on individualism are Punjab=31.94, Sindh=40.77, Baluchistan=3.75, and KPK=18.08. The findings indicate that Collectivism is a national culture and the people living in the country possess a strong urge towards in group cohesiveness and expect loyalty.

Masculinity Index (MAS)

Uniformity between provincial and national culture is observed while studying the data on Masculinity vs. Feminity. The data indicates a strong cultural behavior towards strong masculinity for KPK and Punjab province with 80.38 and 74.84 respectively while Sindh and Baluchistan provinces show a relatively low masculinity tendency by 67.69 and 62.50. In the other words, KPK and Punjab provinces are weak in femininity, as compared to Sindh and Baluchistan.

Uncertainty Avoidance Index (UAI)

The data on Uncertainty Avoidance Index (UAI) suggests that the society by and large dont feel threatened by uncertainty, unknown, ambiguous or unstructured situation. The findings of such data amidst terrorist attacks being going on around the country, high level of political instability, ever increasing inflation etc is very interesting. This phenomenon can be understood by two variable that affect severely Locus of Control and Faith in Religion.

Long Term Orientation Index (LTO)

KPK province is having the highest index on Long term orientation (LTO) while province Punjab being the lowest on the scale. Sindh and Baluchistan are relatively on medium on LTO. The findings indicate that the people living in province KPK have nurtured strong desires towards future rewards etc. as compared

to Sindh, Baluchistan and Punjab. There is a common perception among the people of Pakistan that Punjabis are lively people who enjoy their life at best they spend their time in leisure, merrymaking with friends, spending and consuming. By this we may deduce that by and large Punjabis want to live in present instead of thinking about the future.

Indulgence versus Restraint Index (IVR)

Punjabi, KPK, and Sindhis have show healthy sings on Indulgence and the data suggests that people belonging to these societies would show free gratification of their desires and feelings, during leisure time pass, consumption, spending and merrymaking with friends. Baluchistan people show a weak index value on IVR indicating that there exists a strong Restraint Culture. However, we have to take into account that the meaning of Indulgence and Restraint would be slightly different than what it may apply in West. Pakistan is basically wrapped into three strong layers that control the emotions of the individuals regarding IVR. Countrys religion Cultural bindings Class consciousness.

STRATEGY FORMULATION
External Environment
Environmental Domain CNBC Pakistan is an open system and operating in a competitive environment. External environmental variables like telecommunication industry competitors, government rules and regulations, customers, and other stakeholders etc do affect the CNBC domain.

Task environment
CNBC's task environment includes Industry Sector, Market Sector, Human Resource and these sectors have a direct impact on the ability of CNBC to achieve its goals. Industry Sector The major competitors of CNBC Pakistan are Samaa, Geo, and Express While Paktel and Instafone are also competitors of CNBC but right now they are not in position of being the headache of CNBC. Market Sector Market sector or the customer sector is the main sector that influences all the telecommunication companies. For a telecommunication company it is very important to satisfy its customer and to make long term relations with them. Marketing department has the responsibility of establishing long term relationship with the customers through public relation. Marketing department also has the responsibility of advertisement which is very important to grasp the attention of its customers. Human Resource Sector CNBC Pakistan has been very successful in obtaining Human Resources; hence the organization is very successful in this sector. There is a separate human resource department to hire new employees, to retain them with the organization and satisfy them.

General Environment
Financial Sector CNBC has no issues obtaining the finances. The organization has no debts; hence it is pretty stable in this sector. CNBC Pakistan is the subsidiary of CNBC International that is among the world largest telecommunication firms therefore, CNBC is having to financial problems.

Socio-Cultural Sector
This is the sector that so far has influenced CNBC Pakistan more than any other factor. CNBC's parent company, which is CNBC international, is mainly owned by Norway and Denmark. As Pakistan is an Islamic country, so after the publication of cartoon in the newspapers of Norway and Denmark related to Holy Prophet S.A.W influenced CNBC Pakistan. The offices of CNBC were burnt down in Pakistan. After that mishap, CNBC built its goodwill with great hard work and consistency.

Technology
Telecommunication industry is influenced heavily by the technology introduced and being used in the market by the company and its competitors. So far CNBC is dealing well with this factor and it is far ahead as compared to its competitors. Mobile TV is one example and Edge service in another one. So, CNBC is having no problems related to technologies.

Environment Uncertainty
The environment of CNBC is Complex and Unstable, with high uncertainty. There are only many external elements to compete with, and they all are dynamically active.

Adapting to Environmental Uncertainty

The structure of CNBC suggests that it is adapting to environmental uncertainty. For this it has increased the number of its departments and positions, and also pays emphasis on communication and coordination between these departments.

Framework for Organizational Responses to Environmental Uncertainty

The Environment for the organization is Complex. The organization has many competitors, like Samaa, Express, Geo etc., and the competition is high with its competitors. Due to this reason the environmental changes become unstable. To counteract the changes in the environment the organization has organized into Cross-functional Teams. The Uncertainty is high, and hence the organization has an Organic Structure.

Strategic Alliance in Pakistan

In Pakistan CNBC has strategic alliance with TSL, leading international independent broadcast systems integrator and manufacturer, has been selected by brand new channel CNBC Pakistan as the system integrator for the construction of the facilities to support the new ventures launch. CNBC Pakistan is owned by Pakistani company VNTV, is supported by NBC-Universal-owned CNBC and will have full access to the CNBC global program network. With a planned third-quarter launch, the channel will broadcast a 24-hour mixture of locally-sourced and international business television in both Urdu and English. CNBC Pakistan will provide world class programming with the associated high production values provided by this TSL-designed system.

TSL has been contracted to design and build the complete new production and playout facility in Karachi. There will also be regional news gathering bureau in Islamabad and Lahore. TSL is constructing two studios, a transmission suite, MCR, and post production facilities. The system includes technology from Pebble Beach, Omneon Video Networks, NVision and Trilogy. Post production is based on edit suites using the latest version of Apple Final Cut Pro HD, with graphics software also supplied by Apple. TSL is also installing voiceover booth. The facility also comprises a small newsroom position for financial updates and this integrated directly with the Pebble Beach Neptune Lite automation system using MOS.

Competitive Edge
The launch of CNBC Pakistan not only localized one of the most respected names in business news, it also inaugurated TV production facilities that are possibly the most advanced in Pakistan. To achieve its goal, in early 2005 CNBC Pakistan approached TSL to suggest an all new design and project plan to meet a demanding on air schedule. TSL were then engaged to integrate and install the complete facility in Karachi. The system is a fully featured digital newsroom facility designed to produce fast paced business news. The system comprises two fully featured news studios, a newsroom, automated playout, post production, and graphics; with links to news sub bureaus in Islamabad and Lahore. The system allows transmission of a combination of CNBCs international programming, plus locally-produced content. CNBC Pakistans operation is built around the Pebble Beach Neptune automation platform and ENPS. In the networks Karachi Transmission Suite, Neptune controls an Omneon storage area network, five DVCAM VTRs, and an NVision router. CNBC Pakistan Karachi headquarters also uses AP's ENPS newsroom system, with Neptune interfaced directly into ENPS using the MOS protocol. This allows newsroom-based producers to adjust the video playout order on the fly and have direct access to graphics. TSL specified Ross Vision Mixers for the two Karachi studios. Following successful technical acceptance, training took place at TSL UK headquarters with the full system laid out and configured as if it were in situ on site in Karachi. The new CNBC staff put the full system through its paces in conjunction with TSL and some manufacturer specialists. Following successful technical acceptance, training took place at TSL UK headquarters with the full system laid out and configured as if it were in situ on site in Karachi. The new CNBC staff put the full system through its paces in conjunction with TSL and some manufacturer specialists. CNBCs nationwide ENG crews are divided among the networks Karachi headquarters, plus the news bureaus in Islamabad and Lahore. In Karachi, news rushes are ingested into the video server then edited on one of four Final Cut Pro nonlinear editing workstations, which was the most cost-effective platform to meet CNBCs broadcast production standards. Final Cut Pros price point also meant that CNBC could have a system in its Islamabad and Lahore bureaus. Finished news packages are sent to Karachi for ingest directly to the video server, which are then immediately available to play out to air under ENPS and Neptune control.

ORGANIZATIONAL STRUCTURE
The structure of CNBC is mechanistic structure. As being told, during the interview with Human Resource Manager, there are strict rules and regulations, which the company's employees have to follow. Decision-making is highly centralized and empowerment is not appreciated. The structure of CNBC is functional as there are seven departments. A Senior Executive Vice President or Executive Vice President heads every department. Each executive in charge is responsible for all the services that are related to him. Every department is headed by a separate manager, which controls overall operations of that department. Flat structure for each department is adopted to enhance mutual operations and co-operations between lower staff and managers. Wide span of control in whole organization makes it easy for lower staff to access top managers and enhance coordination between them

CEO
Vice President Strategy Executive Vice President Corporate & Regulatory Affairs

Regulatory & Interconnect

Legal Affairs

Vice President Human Capital Division

Public & Government Affairs

Corporate Communications

People Excellence & Business Process Improvement

Safety and Security

Organizational Support Services

Chief Finance Officer / Vice President Finance Division

Chief Information Officer / Vice President IT Division

Chief Technical Officer / Vice President Technical Division

Chief Marketing Officer / Vice President Commercial Division

Business Planning & Finance

Accounts

Business Support System

Network Planning & Design

Sales & Distribution

Procurement

Treasury and Financial Operations

IT Operations

Implementation

Marketing

Revenue Assurance & Fraud Management

Audit and Internal Control

IT Security

Operations & Maintenance

Customer Relations

Real Estate & Site Acquisition

Segments & Pricing

Credit Control

Products & Platforms

TYPE OF STRUCTURE: VERTICAL DIFFERENTIATION

Hierarchical levels
There are seven hierarchical levels as the size of the organization approaches 2500 to 3000 employees. Roles and responsibilities are clearly defined at the time of joining the organization; employees are selected against defined criteria. Roles can be added later but employees have a fair idea about their job responsibilities from the beginning.

Hierarchical Levels At CNBC Pakistan

Seven layers do not create communication or motivation problems due to the open culture. There are no instances of de-motivation though in certain areas like Customer Relationship Department or Customer Service Centre different customer queries and complaints can raise frustration levels. Managers in these departments intervene to solve problems. Whenever an employee has a new idea, he/she is encouraged to approach the CEO management and share it with them. Vice Presidents Idea drop boxes are also placed at Directors various locations where employees Managers leave their suggestions. The Communications Department works out Assistant Managers if the ideas can be implemented and Executives then discusses them with the Officers employees. There is also a formal platform at the group level known as SEED where innovation is encouraged and new ideas about revenue concepts and cost efficiency can be discussed. Employees are welcome to participate and submit their ideas. If the ideas handed in are feasible then they are implemented in the organization (at country level or global level, depending on the nature of the proposal). Employees are then rewarded financially for their helpful contributions.

SPAN OF CONTROL
Span of Control is determined by the role and job responsibilities of managers. It varies from department to department. On average, the span of control is 4-5 people under a manager.

INTEGRATING MECHANISMS
Cross-functional teams are a major integrating mechanism. Further there are temporary project teams. No ad-hoc committees have been formed to date. Team-building is enhanced by Away Days when members of different divisions and departments take some days away from work to meet other geographically spread employees of Telenor. Sometimes the whole department goes away from work

for 2-3 days to have fun. Employees get to know those with whom they have communicated before but not met in person. Formal team evaluation does not exist. Employees on teams, for instance finance teams, are rewarded individually.

Centralization & Decentralization

Apart from STRATEGY, all other functions are de-centralized. People at CNBC Pakistan are motivated to take their responsibilities especially in cross functional projects. Managers in each department oversee that the employees take up their roles and duties and their performance is monitored accordingly. If an employee is losing focus from his core job by taking added responsibilities, he/she is instructed to readjust his/her priorities.

Standardization & Mutual Adjustment

At CNBC Pakistan, the level of standardization and mutual adjustment varies across functions. Generally strict obedience to rules is not required as long as results are not affected. As long as individual responsibilities and deadlines are met, there are flexible hours of work. Work is important instead of the number of hours worked. Employees can select their work timings which can even be from afternoon to evening. Instead of being bound by office hours, a sense of responsibility is inculcated in them to achieve self-assigned goals. This brings a sense of comfort in working in such organizational structure. Rules and procedures are present to control the behavior of employees and to facilitate smooth working of the organization. A level of standardization is required to be maintained in certain vital functions such as Budget Control. SOPs are documented in the case of the financial control or HR related policies. Genuine requests from external customers are taken into account by the CRO (Customer Relationship Officer) at Service Centers. The CRO does all he/she can or is possible within authority to process the request or complaint. If the customers request is beyond the authority of the CRO, then managers are there to aid the customer or provide some sort of non-monetary compensation to appease him.

Formalization
Although the organization has a functional structure, the level of Formalization is not very high. Written Rules & Procedures do exist at the office Level, but at higher levels, Informal channels of communication are most visible. The Policy Manual currently needs to be updated. CNBC has well defined job descriptions that give the details of every job.

Specialization
CNBC is highly specialized, since the organizational tasks are subdivided into separate jobs and there is a visible division of jobs between employees.

Standardization

Standardization is high at Telenor, the procedures are well defined, and the employees perform their tasks in a uniform manner. Standardization is mostly visible in lower and middle level of employees.

Centralization
Strategic Decisions are highly centralized, where as certain decisions may be decentralized to lower levels. For example, HR decisions are highly centralized. On the other hand decisions taken for the marketing of brand are highly decentralized. The decision is done on the spot, whether to display the Billboard on that specific place or not.

Professionalism
CNBC has a high level of Professionalism. Formal education and Training of the employees and requites is given major importance.

Complexity
Since the organization has a Functional structure as described earlier and has several levels of hierarchy.