Symptoms of sick projects-early warning signals-Business Communication & Banking Correspondence!

Identification of Non-Performing:

Identification of Non-Performing/sick projects, symptoms of sick projects, early warning signals and early alert process, causes of non-performing/sick projects, rehabilitation measures.                         

+ A Non-performing/sick project is a unit, which is incurring losses or fails to generate internal surplus or cannot generate sufficient fund from its operation to meet its obligation frequently.

Symptoms of Non-performing/Sick Project:

The following symptoms at different phases are to be carefully observed to identify the projects as sick or non-performing:

1. Production Phase:
   1. i) Piling up of inventories/slow turnover
   2. ii) Under utilization of capacity/stoppage of production
   3. iii) Poor quality of products
   4. iv) Going out of production
   5. v) Receipt of adverse comments on the workers of the company from the consumers or competitors.

2. Financial Management Phase:

   1. i) Persistent irregular drawings and frequent demand of funds
   2. ii) Continued default in payment of instalments
   3. iii) Failure to meet liabilities on due dates
   4. iv) Inability to retire bills/unusual delay in retirement of bills
   5. v) Borrowing from market at exorbitant rate
   6. vi) Frequent issue of post dated cheques
   7. vii) Lending bills for amount in excess of genuine business transaction
   8. viii) Request for reduction of bank margin
   9. ix) Showing over valuation of stock
   10. x) Diverting banking transactions
   11. xi) Unexpected delay in submission of periodical statements and the balance sheet
   12. xii) Failure to maintain up to date accounts.

3. Sales Phase:

1. i) Fall in quality/volume of sales
2. ii) Fall in market share

• iii) Piling up of products

4. iv) Unfavorable market reports.
5. Profit Phase:
6. Profit margin per unit falls continuously
7. Volume of profit drops down.

5. Other Phases:
6. Manipulation in stock statements
7. Retrenchment of workers

• Lay off of the unit

1. Closure of the unit
2. Turn over of key personnel
3. Stock-exchange price goes below par.

• Early warning signals indicate risks or potential weaknesses of an exposure requiring monitoring, supervision or close attention by management.
• If these weaknesses are left uncorrected they may result in deterioration of the repayment prospects.
• Early identification, prompt reporting and proactive management of early warning unit are prime responsibilities, which must be undertaken on continuous basis.
• At any stage the project may become troubled. Therefore, it is essential that early identification and prompt reporting be done to ensure swift action to protect interest.

Causes of Sickness of Project:

A project may become sick during or after implementation. The main reasons for non-performance or sickness of project may be internal and external under different phases:

Construction Phase:

Business Communication & Banking Correspondence:

Communication plays a vital role at every level of our life. Without communication there can be no organization since the organization can not function without communication. Management function in an organization are carried out through communication.

• First we will attempt to understand what and why communication and different environment – how it works and how it does not work.
• Second – how to apply communication process to writing business and reports etc.
• Finally – examine the technology and how it affects business communication.
• The extend of business communication depends on:

1. a) The nature of business
2. b) The nature of organization
3. c) The people involved.

• Every human being is different. Each has unique communication needs and abilities.
• • Peoples‘ minds are unique because not two people have identical experience, thoughts,   perception and emotional makeup’s.
  • We perceive reality differently. No two perception exactly the same.
  • Our perception of reality differ because our positions of references differ. (Example of dev. of draft) (giving order without confidence)
  • Our knowledge, experiences, level, age, technique, abilities differ.
  • Extreme forms of blocked minds prevent good communication because blocked minds are adamant in their stand on certain issues

  – they imply that only they have the true/facts that only they are right.

Thus meaning depends on —— and differ.

• We must unblock our minds only to improve communication and avoid miscommunication and misinterpretation.
• The word is so complex that it is not possible to know everything about anything. So, there is a risk involved with incomplete information and it is also to be kept in mind when we prepare various types of business communication.
• There are three categories of business communication:

1. i) Internal operational
2. ii) External operational

iii) Personal communication

i)Internal operational communication within an organization pertaining to achieving goals, targets to be explained, jobs to be performed etc.

ii)External operational communication within the people outside the organization in an effort to accomplish goals, such as personal selling, telephonic customers, advertising, writing letter.

Both internal and external communication are vital for business success.

iii) Personal communication may be business related or non business related – exchange of ideas, feelings and information among the people within the organization.

• Personal communication affects peoples’ view point.
• And peoples’ view point affects their performance
• Excessive personal communication can interfere directly with their work effort.
• Personal communication can also help form view point. (Motivation, options, attitude, belief)

Factors to be considered for good, effective business communication through correspondence, reports, notes, memorandum etc.:

1. Language: Simple & clear, having reality, certainty avoiding complexity etc.
2. Care in word choice: Selecting words the reader will understand:

But meaning exist in mind not in words. If words had meaning we would have one language- meaning of same word varies differently in different areas. (Circa)

• Many write at too difficult a level.
• Usually the writer knows the subject better than the reader.
• Use familiar words: Example:

ØUnfamiliar words: The conclusion ascertained from a perusal of the pertinent data is that a lucrative market exist for the product.

ØFamiliar words: The data studied show that the product is in good demand.

• Choose the short over the long word: Generally short communicate better. (ofcourse there might be some exceptions) Example:

Long word

Definitive action was effected subsequently to the reporting data

Short Simple word

Final action was taken after the reporting data

• Use technical words with caution: These words are useful when you communicate with people in your own field. [Example: Railway Engineer]
• Use strong, vigorous words: Which produce just the right effect of reader’s mind.

Use concrete word: Example:

Abstract

A significant loss or substantial amount

Concrete

A 53 present loss or Tk. 3,517 etc.

• Favor active over passive voice/verbs: Example:

Passive

This policy has been supported by our union

Active

Our union has supported this policy

• Avoid overuse of camouflaged verbs: Example:

Action

Acquire

Noun form

Acquisition

Camouflaged verb

Make an acquisition

• Selecting words for precise communication:

Ø  Writing require a knowledge of language

Ø  Different meanings of similar wards

Ø  Specific meanings of other words

• Use correct idioms: Example:

Faulty idiom

Authority about

Correct idiom

Authority on

• Avoid sexist words: Example:

Sexist

If a customer pays promptly he is placed on preferred list

Non sexist

A customer who pays promptly is placed on preferred list

• Emphasis on short & clear sentences: which have several qualities

– Easy reading and easy understanding,

– Less time consuming

• Economizing on words: Examples:

Long/surplus/round about

a)In the event that payment is not made by January, the operation will cease.

b)He ordered desks that of the executive types.

c)The department budget can be observed to be decreasing each year.

a)If payment is not made by Jan. operation will cease.

b)He ordered executive-type desks.

c)The department budget decreases each year.

• Unnecessary repetition: Example:

Needless

The provision of section 5 provides for a union shop

Without repetition

Section 5 provides for a union shop.

• Sentence unity and coherency in the letter.
• Avoiding excessive detail.
• Arrangement of sentences for clearity

Care in paragraph design: (for report, memorandum, notes etc.)

• Giving the paragraph unity
• Each para must be independent but coherent
• Keep the paragraph short
• Putting topic sentence i) first, ii) last or iii) middle
• Omitting unnecessary detail
• Make the paragraph move forward
• Care for sufficient/required margin/space
• Executive summary may be necessary in some reports

* Exercise good thinking in applying the principles of word selection, sentence construction and paragraph design.