HOME - TERM PAPERS

 
FREE TERM PAPER - MANAGEMENT
 

STRATEGIC ADVANTAGES OF CSR

Project ShaktiRural products of India are unique, innovative and have good utility and values. Large number of these rural products (like handicraft items, food products, embroidery, clothes & other products) sustains a significant segment of the population in the rural areas. Several attributes of rural products can be identified, for which, it has a demand in the market. Out of the lots, ‘ethnic origin’ and ‘indigenous design & appearance’ are two traits of rural products, attracting a premium in the market. But, contrary to this, the non-uniformity of rural products (from one another) and lack of its quality control measures has been creating a negative demand. Besides, the small sized and dispersed production units of these rural products hinder realization of the economies of scale in marketing and result in high transaction costs per unit of output. Niche-based products have no local market. Products in local use are also not marketed horizontally; they often first travel down to market through a long chain of intermediaries and then up to more difficult locations in the rural areas. In the process, the people in rural areas suffer from both low prices as producers and high prices as consumers. In this conflict, rural products loss its equilibrium and the supply side becomes exponentially high. Because of this hazard, rural entrepreneurs face acute economic loss and rural markets become stagnant. Therefore, there is an emergent need for Building sustainable market linkages for rural products, so that, it can be connected to larger markets and farmers can get a sustainable livelihood.

Project Shakti

Organisation Name unlevel-PROBLEM

Approximately 700 million people, or 70% of India's population, live in around 650,000 villages in rural areas. 90% of the rural population is concentrated in villages with a population of less than 2,000 people. Success for the groups, however, depends not only on access to this small-scale funding, but also on finding viable and sustainable investment opportunities, which are few- and -far in many parts of rural India.

SOLUTION;

Local, small-scale sellers of its products. With a loan from a self-help group or a micro-finance bank (facilitated by HLL), each entrepreneur buys a small stock of items such as lifebuoy soap, wheel detergent or clinic shampoo, which are then sold direct to consumers in their homes. Working in conjunction with the local district authorities, HLL provides free training on the basics of business management and selling techniques. Ongoing support once the business is up and running is also provided. Many of the women have little or no education and no experience of running a business so such training support is an essential component in enabling the business to succeed.

Benefits

Through the nature of the products sold, the project is helping to increase awareness on health, hygiene and nutrition, thus improving the standard of living of the rural community. In addition, health educators known as `Shakti Vanis', talk to self-help groups about HLL's brands and the importance of good nutrition and hygiene practices in combating diseases.
Learning’s from the pilot stage of the project indicated that there was a significant need for information amongst the rural community in areas such as agriculture, education, health and hygiene, veterinary, etc. In 2003 HLL piloted I-Shakti, an IT-based rural information service providing access to these key rural information needs. Currently, there are over 400 I-Shakti kiosks and it is planned to have 3,000 of such kiosks in place by the end of 2005.

HUL Project Shakti - Presentation Transcript


Project Shakti SHAKTI - Changing Lives in Rural India


HUL has been proactively engaged in rural development since 1976 with the initiation of the Integrated Rural Development Programme in the Etah district of Uttar Pradesh, in tandem with the company’s dairy operations. This Programme now covers 500 villages in the district. Subsequently, the factories that HUL continued establishing in less-developed regions of the country have been engaged in similar programmes in adjacent villages. These factory-centered activities mainly focus on training farmers, animal husbandry, generating alternative income, health & hygiene and infrastructure development.
Shakti is HUL's rural initiative, which targets small villages with population of less than 2000 people or less. It seeks to empower underprivileged rural women by providing income-generating opportunities, health and hygiene education through the Shakti Vani programme, and creating access to relevant information through the iShakti community portal.
Shakti is a pioneering effort in creating livelihoods for rural women, organised in Self-Help Groups (SHGs), and improving living standards in rural India. Shakti provides critically needed additional income to these women and their families, by equipping and training them to become an extended arm of the company's operation.

Started in 2001, Shakti has already been extended to about 80,000 villages in 15 states
Shakti already has about 25,000 women entrepreneurs in its fold. A typical Shakti entrepreneur earns a sustainable income of about Rs.700 -Rs.1, 000 per month, which is double their average household income. Shakti is thus creating opportunities for rural women to live in improved conditions and with dignity, while improving the overall standard of living in their families.
The model was piloted in Nalgonda district of Andhra Pradesh in 50 villages in the year 2000. The Government of Andhra Pradesh took the pioneering step of supporting the initiative by enabling linkages with the network of DWACRA Groups of rural women set up for their development and self-employment. Most SHG women view Project Shakti as a powerful business proposition and are keen participants in it. It has since been extended to in Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tamilnadu, Uttar Pradesh and West Bengal with the total strength of over 40,000 Shakti Entrepreneurs.

OTHER ACTIVITIES: To improve the business skills of the SHG women, extensive training programmes are being held. Such workshops have already covered a large number of Shakti Entrepreneurs in Andhra Pradesh, Karnataka, Gujarat, Madhya Pradesh, Uttar Pradesh, Tamilnadu, Chhattisgarh and Orissa
As part of their training programme, all HUL Management Trainees spend about 4 weeks on Project Shakti in rural areas with NGOs or SHGs. Assignments include business process consulting for nascent enterprises engaged in the manufacture of products such as spices and hosiery items.
Participated States, Andhra Pradesh, Karnataka, Madhya Gujarat, Chhattisgarh, Maharashtra, Orissa, Punjab, Rajasthan, Tamilnadu, Uttar Pradesh, West Bengal, Bihar, Haryana, Jharkhand,

Support Shakti

Woman who they believe will be suitable as a SA. After training she is asked to put up Rs 20,000 as investment which is used to buy products for selling. The products are then sold door-to-door or through Shakti are working closely with the rural development departments of the state governments, as well as large number of NGO’s across the geographies it currently operates in. A list of the NGO’s who are working with HUL on Project Shakti is provided below
Hindustan Unilever Limited (HUL) to tap this market conceived of Project Shakti. This project was started in 2001 with the aim of increasing the company’s rural distribution reach as well as providing rural women with income-generating opportunities. This is a case where the social goals are helping achieve business goals.
The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the executives of HUL identifying the uncovered village. The representative of the company meets the panchayat and the village head and identify the petty shops at home. On an average a Shakti Amma makes a 10% margin on the products she sells.

Economic and Social Benefits


Sales $250/month $3,000/year
Earnings about 7%, after 3% goes towards principal ($250) and interest
Improves her per-capita income by about 50% to 100%
100,000 entrepreneurs by 2010
So, Social Benefit equals $20 to $30 million
Shakti Entrepreneur
Sales Turnover of about $250 million
If all goes well, Net Margins of about $25 million
HLLChallenges
Scaling up for economic profit. Moving from variable cost to fixed cost model.
Significance of Partnerships with NGO sector and Government sector in
Building Commercial infrastructure (even Competitors).
Sustainability and Attention.


Market linkages for rural products


There are, broadly speaking, three ways in which they can be connected to the markets. They can do it on their own — through cooperatives. Or, the state can do it for them — through its procurement engines. Stages one and two, in a manner of speaking. Today, developmental thinking on market linkages has reached stage three — linkages through companies or industries. Rural markets are regarded as organizations for marketing of non-farm products in a traditional setting. Developing rural markets is one of the major concerns of government and non-government origination in India. This subject has attracted large number of research studies over past. Among which noted contributions are made by raja opal PhD FRSA; faculty members of Institute of rural management Anand IIMA and others.
In this scenario, companies can use the social infrastructure (the self help group et al.) as an alternative procurement and distribution chain and vice versa.


Industry’s role in building market linkages

To make an effective market linkage, industries have to play as an engine of market, which can generate a brand image of the rural products. This initiative of industries will also strengthen the backward and forward linkages of the rural market, besides, accelerating the innovations of the rural products. Definitely, this strategy will also give a remarkable dividend to the industries & profit making companies. In micro level, it is observed that to create a sustainable market linkage for rural products, industries can develop an ecosystem of Self Help Groups (SHGs) by involving the local communities through village level empowerment. It is nothing less than the next phase in the democratization of commerce. Under this paradigm, industries can create a network with viable marketing channels covering all the linkages from villages to the global level. This architecture provides the right value of procurement through the village procurement centers and rural entrepreneurs can sell their products faster with better price realization. Moreover, in the current era of information technology, industry and private companies can also creatively use ICT for building sustainable marketing linkages. This approach creatively leverages information technology (IT) to set up a meta-market in favor of small and poor producers/rural entrepreneurs, who would otherwise continue to operate and transact in 'uninvolved' markets where the rent-seeking vested interests exploit their disadvantaged position. ITC e Chou pal is the best example in this context. Through creative use of Information Technology, ITC echo pal has been creating sustainable stakeholder value by reorganizing the agric-commodity supply chains simultaneously improving the competitiveness of small farmer agriculture and enhancing rural prosperity.


Scope & opportunities

The basic scope of this novel initiative will be the mutual benefits of the rural entrepreneurs and industries. The entrepreneurs – primary beneficiaries, SHGs – bridge with the community, participating companies/industries and rural consumers have befitted through a robust commercial relationship. These models of marketing linkages demonstrate a large corporation which can play a major role in reorganizing markets and increasing the efficiency of a rural product generation system. While doing so it will benefit farmers and rural communities as well as shareholders. Moreover, the key role of information technology—provided and maintained by the industry/company for building linkages, and used by local farmers—brings about transparency, increased access to information, and rural transformation. Besides, this strategy of market linkage, addresses the challenges faced by rural entrepreneurs due to institution voids, numerous intermediaries and infrastructure bottlenecks. Moreover, the prime scope of this model is the creation of opportunities for the rural entrepreneurs for product differentiation and innovation by offering them choices. Because of this sustainable market linkages, rural producers can participate in the benefits of globalization and will also develop their capacity to maintain global quality standard. Nonetheless, it creates new stakeholders for the industry sector. And subsequently, they become part of the firms’ core businesses. The involvement of the private /industry sector at the rural product and market development can also provide opportunities for the development of new services and values to the customers, which will find application in the developed markets. It will be worth mentioning that building a sustainable market linkage through industry’s intervention will also empower the rural mass (producers, farmers & entrepreneurs) to cope with socio-economic problems in the rural society and will ensure economic self –reliance.

Challenges

There are significant challenges to the entire process the most important being the capacity building of the rural entrepreneurs. For decades, the entrepreneurs associated with very conventional/traditional knowledge of business, humiliation with government, so they are likely to look at these initiatives with skepticism. Only consistent performance can convince the skeptics. Therefore, the industries must play a catalytic role to cope with this challenge and should also train the entrepreneurs to develop their managerial and IT skills. On the other hand, the products of the existing and popular brand also stand as threat to the rural products. These global giants (brand) may try to suppress the rural products in the markets with its communication hype. Therefore, developing alternative and additional market linkages for these products is an absolute necessity. Moreover, the low volumes of rural products, high operating costs, high attrition, and absence of local know how and relationships may also create problem in the process. Henceforth, it is essential to make a way out to cope with these odds.

LITERATURE REVIEW:

Distribution playas an important role in all organizations, due to Globalization many companies Entered into different economies and all.
India has become world’s largest markets for consumer goods. The country’s market forconsumer durables stood at $4.8billion in 2005, it is going to be expecting $ 9.7 billion by 2010. Indians attracting attention of consumer companies around the around the world.
The consumer durables,stood at $4.8billion in 2005, is expected to grow $9.7billion by 2010.Appearal,at$20billion in 2005,isexpected to grow to more than $9.7 billion by 2010.Apparel,at$20 billion in 2005,is expected to grow approximately 18%per year, around 46 billion. The overall retail market worth more than $230 billion in 20005 and growing 6%per year, is projected to reach almost$308 billion by2010.
Talks are on with Companies like Nippo, TVS Motors, and Insurance companies. HLL also Operates I-Shakti an IT-based rural information service that will provide solutions to key rural needs in the areas of agriculture, education, vocational training, Health and hygiene. Gangai Vattara Kalanjia Mutuals’ – a mutual trust, aims at providing social Security services to the poor in rural areas. It draws inspiration from the Mutual Insurance Association of Netherlands (MIAN). A unique feature of the insurance cover is that all claims are settled within hours, sans much of the paper work. As a new venture, SHG members are entering the arena of health, especially in Identifying hearing impaired persons by joining hands with project Shakti of HLL and affordable hearing aid project centre. SHGs took an important step towards financial independence by attending 12- day training programmed on setting up information kiosks. After training the Women on basic computing skills besides operating photocopiers and fax 15 Machines, Tamil Nadu Corporation for Development of Women Limitless The special schemes from government and financial institutions to assist women (TNCDW) will offer financial assistance to the women. in creating enterprises and the conducive platform provided by the X plan by virtue of its thrust on women’s social and economic empowerment and gender justice.

Microfinance and Women Empowerment Links between microfinance and women's empowerment are viewed as Optimistic, limited by design, cost effective in eliminating poverty, and a Misplaced diversion of resources. Microfinance programs range from small scale Self-help groups to large poverty-targeted banks. One model may vary in delivery, group functions and structures, and complementary services. There could be 3 contrasting approaches to microfinance and women's empowerment: The financial sustainability approach, the integrated community development Approach and the feminist empowerment approach. However, program evaluations revealed the need to question the assumptions underlying all 3 approaches. In most programs, women benefited to a limited degree. Many Women did not control the loan use. Most women were engaged in low paid, traditionally female activities, and increases in income were small. Resources and time invested in economic activity were limited by responsibility for Household consumption and unpaid domestic work. International year of Microcredit 2005’s fact sheet, Microfinance and the Millennium Development Goals, notes that a review of microfinance literature Points to several specific conclusions about its impact on poverty reduction and Several other MDGs. Some of them are highlighted here:
(a) Shahidur R.Khandker’s 1998 seminal study for the World Bank notes that, ‘In Bangladesh, 5 % of the grameen bank’s clients graduated out of poverty every year by participating in microfinance programmers and, more importantly, households were able to sustain these gains over time.
(b) Save the Children’s 1999 study in Honduras showed that microfinance Clients increased earnings, which enabled them to send their children to School.
(c) Women empowerment programmed in Nepal found that 68% of its Members were making decisions on poverty, family planning and Daughter’s education and also negotiating their children’s marriages.
(d) Microfinance contributes to improved nutrition, housing and health, especially among women clients. Access to a wide range of financial Services can have significant positive effects on a wide variety of Manifestations of poverty. Financial services for the poor includes besides microcredit, other services like savings, money transfers, Remittances and insurance. As in India, these service providers include savings and credit cooperatives, commercial banks, community finance institutions, NGO-MFIs, consumer credit companies, insurance Companies and other types of institutions including the private sector Companies. E-Banking and other emerging technologies offers a huge Opportunity in this sector which resulted in growing number of commercial financial institutions initiating efforts to serve the low income market. There are more than 1000 private MFIs operating in the country today. However, not more than 1-2% of these have an outreach of 1, 00,000 microfinance clients. It is estimated that the MFIs share of the total institution-based microcredit portfolio is about 8%. NGO-MFIs are unable to offer a range of financial services And focus primarily on credit. However, many numbers of NGO-MFIs are Transforming into NBFCs to offer wide array of services and others are trying to Offer the same through the route of agency agreements with other players in the Market like insurance companies. But these services are offered at very high Interest rates (12 – 36% p.a) due to the nature of offering these services at the Village level and lower business volumes which causes the transaction costs of These services to be exorbitant than that of formal banking channels. Most of the 18 MFIs in India have thus far not able to significantly scale up the operations and-Bank Linkage.

The credit linked rural entrepreneurial development programmed of NABARD is Gaining in rural Karnataka and has helped promote entrepreneurship, particularly among women.
During 2003, of 75000 SHGs that received financial assistance, 3628 have become micro-entrepreneurs (< 5%). Of 3628 micro-entrepreneurs, 2476 were women (68%). Almost all the people involved in various activities were earning over Rs.10, 000 per month and had enhanced their business and Marketing skills. To provide financial assistance to artisans and small Entrepreneurs in investment and working capital requirement, NABARD had 19 Formulated a special credit card scheme called Swarojgar Credit Card (SCC). Under the scheme, Rs.25000 could be borrowed. There is a long way to go and a very conservative estimate suggests that, in India, at most, just 20% of all the eligible low-income people have access to Financial services from formal financial institutions, MFIs and other such Stakeholders. Considering the increased competition in micro-credit and the pressure to reduce Interest rates, it is time to move to considering moving beyond group lending. And this reduction interest would really be helpful and the increased competition in the credit pressure is more become competitive.

Women Entrepreneurs


Empowering Women has become the key element in the development of any Economy. It is been found that there are various forums and NGOs that are working hard towards this direction. There are lots of research studies supposing The Indian Economy has been substantially liberalized in recent years with an Increasing role for small-scale private enterprise. Alongside economic Liberalization has come a drive to enhance the role of women with moves to Ensure that women have at least 30% of seats in local councils and many other Elected bodies (though not as yet in the national parliament). As a result women are playing a more important economic role. There has always been a tradition of education for middle class women in India and increasingly there is a strong and growing group of professional women holding Positions in Indian Universities and Government service. However, there are no Sex discrimination laws within the labor market. Women have also traditionally been involved in the informal economy, working in Family businesses without formal position or pay. Thus their economic Contribution is often undervalued or just not mentioned at all. The Indian Government and the state governments have taken some steps to encourage Women to set up small businesses. For example the Karnataka State Government was offering help to widows to set up knitting Businesses in 1997.
To develop the workforce; less concerned with outward trappings. Women also faced different problems. Simpson (1991) found that their partners do not help with domestic chores or the business, whilst the reverse is true for men. Simpson Also suggested that women have to work harder to gain credibility. Truman 21 (1994) found that the advice services for entrepreneurs do not gear themselves for women. They also have problems with childcare and raising finance. However The Microcredit Programmed run by the India Government does help provide Finance for small businesses. Rajasekhar in his study of NGOs has produced some research on the effects of the Micro Credit Programmers Qn Poverty, Wellbeing and Gender Equality This study would therefore focus on the different Motivation of women entrepreneurs in India and their contribution to the local Economy for which there does not appear to be specific research. There are many studies that provide insights into the impacts of Micro-credit And/or Microfinance on poverty alleviation and the empowerment of women. Some of the notable studies were ‘Towards Women’s Empowerment And Poverty Reduction: Lessons from Andhrapradesh South Asia Poverty Alleviation Programme; Micro-Credit and Women’s Empowerment: A Case Study Of SHARE Microfinance Limited; Social Mobilization And Micro-Credit For Women’s Empowerment: A Study Of The DHAN Foundation; Awareness, Access, Agency: Experiences Of Swayam Shikshan Prayog In Micro-Finance And Women’s Empowerment; Micro-Credit And Women’s Empowerment: The Lokadrusti Case; And Social Mobilization And Micro-Finance For Women’s Empowerment-Lessons From The ASA Trust’. These studies concluded that there is no linear Relationship between the three. Collective strategies beyond micro-credit to Increase the endowments of the poor/women enhance their exchange outcomes Vis-à-vis the family, markets, state and community, and socio-cultural and Political spaces are required for both poverty reduction and women empowerment.‘NABARD initiatives turn rural women into entrepreneurs.

Conclusion

These issues gain added complexity under globalization, where markets are characterized by extreme competition and volatility. While rural products has been perceived traditionally as catering to the local market, or at best, to a wider national market through limited formal channels, the reality of globalization since the 1990s introduced a new dimension to the market for such products. The issue of rural product generation through industrialization, therefore, needs to be viewed from a new angle and on far more scientific lines. The core of a scientific approach is to understand the market opportunities for rural products along with the country's development priorities and to chalk out a strategy where rural industries have an important role to play. While rural products are forced to increasingly become part of global supply chains, these products need to adapt themselves, not only according to the changing tastes of the national market, but also according to changes in tastes in the international market. Therefore, a process is essential to explore the market linkages and capacity building for SHGs through a bottom up approach and continuous dialogue with stakeholders of rural enterprise. This process should ensure the participation of rural people as consumers and producers in the globalization mechanism, with better livelihoods and global access to markets. The real challenge of building a sustainable market linkage starts here.

References and Bibliography

Neera Burra, Joy Deshmukh-Ranadive and Ranjani K.Murthy, 2005, ‘Microcredit, Poverty and Empowerment: Linking the triad’ Sage Publications
Jean Dreze and Amartya Sen, 2002, ‘India: Development and Participation’,
Oxford University Press
K.G.Karmakar, 1999, ‘Rural Credit and Self-Help Groups: Micro-finance needs
WWW.mann deshi.org Reference
Sukhpal Singh. Rural Marketing Management from K L K Rao, Ramesh G Tagat. Rural Marketing: A Developmental Approach. Vikalpa. Jul-1985.

DOWNLOAD FREE TERM PAPER » » »

Besplatni Seminarski Radovi

FREE TERM PAPERS