The Hero with a Thousand Faces Essay Example | Topics and Well Written Essays - 1750 words

The Hero with a Thousand Faces - Essay Example As per Campbell’s Monomyth, the journey of a hero is confined to a sequence of actions that includes three main stages, namely, - Departure, Initiation and Return. From these sequences, we could get a better idea about the phases that a hero undergoes and how his life would probably get transformed with each phase. Now let’s take a stance to discuss about two real life personalities, Daniel Suelo, the protagonist of the book The Man Who Quit Money and Abdulrahman Zeitoun, the primary character of the book Zeitoun. Could they be considered as a hero, on the schema of Campbell’s Monomyth? Let’s analyze this question further ahead to sort out the possibilities of these two characters to be claimed as a hero. Dave Eggers, in his book, Zeitoun portrays the life of Abdulrahman Zeitoun as a simple and loving man who lives in New Orleans with his family. However, the arrival of Hurricane Katrina collapses the lives of the people residing in the coastal regions in New Orleans. With his small canoe, Zeitoun aids his neighbors by rescuing them and even their animals, and also make arrangements to provide food, water and other essentials to the needy. Soon after the hurricane, abrupt changes encounter his life. He was fallaciously arrested by the police officials on account of suspicion for withholding possessions. During his incarceration, the torments he faced at the hands of the police were merely intolerable. He was treated inhumanely mainly on the basis of his ethnicity. Finally, he was released after the authorities understood his innocence. When the life of Zeitoun is focused, it conforms well to the Campbell’s notion of a hero. He lives in an ordinary world, with his wife and four children, holding his own business in the New Orleans. The departure phase of his journey is started with the onset of hurricane. He set forth his way crossing the threshold to face various challenges, which included imprisonment and eventually he returned back to his community. At the start, the call for adventure arrives for him in the form of a destructive hurricane that hit the coast. The awakening call for him was the natural calamity which gave him the arousal and pushed him to aid the needy people during the hurricane. It brought out the kindness and the generosity in him, and made him to deliver to his people and help them in the times of need. As a hero, he went forth on his own volition to accomplish the adventure. (Campbell 48). In his initiation stage of journey, he is destined to face various trials that reveal the true ch aracter within him. As Campbell states, â€Å"The composite hero of the monomyth is a personage of exceptional gifts. Frequently he is honored by his society, frequently unrecognized or disdained† (Campbell 29). These quotes aptly fit to the life of Zeitoun. Being hailed as a rescuer by his community people during the hurricane, soon after, he was imprisoned wrongly by the officials of the state and made to undergo intolerable trials. It was during his incarceration that he has to withstand all his emotional as well as physical temptations in order to endure the suffering. He was detained in a Greyhound bus stand on the suspicion of him being a terrorist, which was primarily due to his ethnicity or religion. During the imprisonment, he was denied medical aids and was even prevented from informing his family about his imprisonment.

Procter Gamble Company Merger Case Study

Procter Gamble Company Merger Case Study The project deals with the analysis of mergers and acquisitions in an FMCG sector. Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. A merger is the combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. This project deals with the merger of Procter Gamble and Gillette, acquisition of Balsaras hygiene and home product by Dabur and Acquisition of Nihar brand from HLL by Marico. The methodology deals with the various ways in which the data for this project was collected. Due to the limited scope of information and time constraints, secondary and not primary data sources has been used including journals, articles, reference sites, etc. The project guide proved very vital in the successful completion of my report. The next section deals with the individual introduction of both companies involved in the process of merger. It further includes the different terms of the merger and various synergies created through the merger. Furthermore the next section deals with scenario after the merger and analysis of financial statements of acquiring company post merger. Building a brand from scratch in the FMCG space can be quite an expensive exercise. Mature categories such as personal care or household products are already dominated by one or two strong incumbents and wresting market share away from them is quite a challenge. With growth rates in markets such as skin care, hair care and household products suddenly moving into high gear, companies also cannot afford to lose time on the trial-and-error method that usually accompanies new launches. Given this scenario, domestic players seem to view brand acquisitions and mergers as the quickest way to step into new categories and acquire a well-rounded product basket, without squandering their surpluses on brand-building expenses. Market shares apart, many of the buyouts have been motivated by the need to acquire better distribution reach whether within India or overseas. Introduction I. MERGER A merger is the combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. A merger occurs when two or more companies combines and the resulting firm maintains the identity of one of the firms. One or more companies may merge with an existing company or they may merge to form a new company. Usually the assets and liabilities of the smaller firms are merged into those of larger firms. Merger may take two forms- Merger through absorption Merger through consolidation. Absorption: Absorption is a combination of two or more companies into an existing company. All companies except one lose their identity in a merger through absorption. Consolidation: A consolidation is a combination if two or more combines into a new company. In this form of merger all companies are legally dissolved and a new entity is created. In consolidation the acquired company transfers its assets, liabilities and share of the acquiring company for cash or exchange of assets. II. ACQUISITION A fundamental characteristic of merger is that the acquiring company takes over the ownership of other companies and combines their operations with its own operations. An acquisition may be defined as an act of acquiring effective control by one company over the assets or management of another company without any combination of companies. III. TAKEOVER A takeover may also be defined as obtaining control over management of a company by another company.Merger of Procter Gamble Company and Gillette CompanyAbout the merging companies: Procter Gamble Procter Gamble Company is asoap opera. PG was named 2008 Advertiser of the Year by Cannes International Advertising Festival. Effective July 1, 2007, the companys operations are categorized into three Global Business Units with each Global Business Unit divided into Business Segments according to the companys March 2009 earnings release. Beauty Care Beauty segment Grooming segment Household Care Baby Care and Family Care segment Fabric Care and Home Care segment Health and Well-Being Health Care segment Snacks, Coffee, and Pet Care segment PG has gone into an aggressive mode. It has launched two new variants on 2nd Dec 2009, one in the detergent segment, which is called Tide Naturals and also another one in skin care segment under the Olay brand. Gillette Company The Gillette Company is a globally focused consumer products marketer that seeks competitive advantage in quality, value-added personal care and personal use products. It is the world leader in the mens grooming product category as well as in certain womens grooming products. Although more than half of company profits are still derived from shaving equipmentthe area in which the company startedGillette has also attained the top spots worldwide in writing instruments (Paper Mate, Parker, and Waterman brands) and correction products (Liquid Paper), toothbrushes and other oral care products (Oral-B), and alkaline batteries (Duracell products, which generate almost one-fourth of company profits). Gillette maintains 64 manufacturing facilities in 27 countries, and its products are sold in more than 200 countries and territories, with more than 60 percent of sales occurring outside the United States. The Merger: On October 1, 2005, Procter Gamble finalized its purchase of The Gillette Company. As a result of this merger, the Gillette Company no longer exists. Its last day of market trading symbol G on theOral-B, among others, which have also been maintained by PG. The Terms of the Merger: Date of merger: The merger came into effect from July 1st, 2007. The new company formed : The Gillette Companys assets were initially incorporated into a PG unit known internally as Global Gillette. In July 2007, Global Gillette was dissolved and incorporated into Procter Gambles other two main divisions, Procter Gamble Beauty and Procter Gamble Household Care. Gillettes brands and products were divided between the two accordingly. The Share Swap Ratio : Under the deal announced, Procter Gamble will pay 0.975 share of its common stock for each share of Gillette common stock. On Wall Street, shares in Gillette closed up nearly 13%, while PG slid 2.1% after the announcement. The Management: Gillettes chief executive James Kilts is to join the board of the merged company, becoming PG vice chairman, while PG chief executive A.G. Lafley will remain chief executive of the merged company. Examining the merger: Type of merger: Procter Gamble being number one in consumer products went into acquiring and merging with other companies like, Germanys Wella AG hair care line in 2003 and it also acquired Clairol for its hair-care lines and Iams Co. for its pet foods. The merger in question; between Procter Gamble and Gillette is thus a merger where the acquiring company is expanding in size of operations and also product offerings. This is thus a horizontal merger. Operational Synergies of the merger: The merger of the two companies will create the worlds largest consumer products conglomerate. Both companies are strong, diversified companies, so one wonders what uncaptured synergies there could be here. PG is adept at taking innovations from one product and transferring it to another product, so there may be opportunities to improve existing Gillette products. In addition, the companies are stating that the merger will give them more negotiating power with the most powerful buyer of consumer products. The deal would give the company even more control over shelf space at the nations retailers and grocers, real estate that is at a premium. Executives at the companies said they believe theyll both be able to grow faster together than separately, with PG opening doors for Gillette in markets such as China and Japan while Gillette bringing PG some product segments that are growing faster than the companys overall current portfolio of products.The merger will make PG the worlds biggest household goods maker, pushing Unilever into second place Financial Synergies: The merger would create a company with revenues of more than Rs.2700 billion that would have even greater clout against mass-market retailers like Wal-Mart Stores Inc., which have been pressuring consumer product suppliers to keep costs low. Because of expectations from the deal, PG raised the annual revenue growth outlook to 5 to 7 percent, rather than its earlier target of 4 to 6 percent. The companies said they expected cost savings and synergies of about Rs.630 billion to Rs.720 billion US over three years. PG and Gillettes combined market capitalization of about Rs 8325 billion US, would be by far the largest in the FMCG sector. HR Synergies: As part of the cost-cutting that would follow the deal, the merger would result in the elimination of about 6,000 jobs, or 4 percent of the combined work force of about 140,000. It said most of the cuts would come from eliminating management overlaps and consolidation of business support functions. Gillettes chief executive James Kilts is to join the board of the merged company, becoming PG vice chairman, while PG chief executive A.G. Lafley will remain chief executive of the merged company. Scenario Post Merger: Procter Gamble is the worlds largest producer of household and personal products by revenue, with its products reaching 4 billion people worldwide and its product line includes 23 brands across beauty, healthcare, and food including Tide detergent, Pampers diapers, and Gillette razors, that generate over $1 billion in revenue annually, with the companys total revenue at Rs.3555 billion in 2009.In 2005, PG expanded its portfolio to include razors and blades as well as batteries with its acquisition of the Gillette Company.The companys 2010 first quarter net income fell 1% to Rs.148.95 billion (Rs.46.35 per share) as higher prices offset lower sales volumes and foreign exchange effects, beating analyst expectations of Rs.43.65 per share. Revenue fell 6% to Rs.891.45 billion, though organic sales rose 2%. One of the key areas of growth for the company is in emerging markets worldwide. Sales in developing nations have increased steadily from 20% of total revenue in 2002 to 32% in 2009.PG already owns large and growing market share in countries includingglobal economic downturn, PG has announced it will focus its growth strategy on emerging markets, opening almost all of its 20 new manufacturing facilities outside its established markets. Procter Gamble attempts to maintain its competitive edge by focusing on product innovation. To this end, PG spends almost twice as much on research and development spending Rs.90 billion in 2009 as its closest competitor, Unilever, spent about Rs.58.5 billion USD in 2008.Through itsConnect + Developinitiative, PG looks to bring in new product ideas from outside the company. Connect + Develop has led to the development of 42% of new PG products in recent years. In fiscal 2009, PGs Net sales fell 3% to Rs.3555 billion driven by a 3% decline in unit volume and a 4% decline in net sales from the rising US dollar. Organic sales, a closely watched figure which excludes the impact of acquisitions, divestitures, andforeign exchange, increased 2%, which is below its target organic sales range of 4-6%.Earnings for fiscal 2009 increased 11% to Rs.603 billion. In July 2009, CEO A.G. Lafley stepped down from his post after 29 years with Proctor Gamble.He was succeeded by current COO Bob McDonald.The company expects sales to be up 0 to 3% in fiscal 2010,with sales back up in the fall of 2009, fed by price cuts, new products, and value-focused promotions. PG divides its business into three Global Business Units (GBUs) that develop and produce products and its corporate group which handles the operation and administration of the company. Beauty (33% of 2009 sales, 36% of 2009 net income): The Beauty GBU includes all hair and skin products, medications, razors, electric shavers, and batteries. This business unit includes several product lines acquired when the PG bought consumer products company Gillette in 2005. Proctor Gambles global market share in blades and razors is 70%, primarily centered on its Mach3, Fusion, Venus, and Gillette brands.In June 2009, PG further expanded its mens grooming business with the acquisition of the high-end shaving company The Art of Shaving and the mens skin care line Zirh. Health and Well-Being (21% of 2009 sales, 24% of 2009 net income): The Health and Well-Being GBU provide oral care, feminine health, pharmaceuticals, snacks, coffee, and pet care products. In oral care, the company has the number two market share position at 20% globally.In potato chips, the companys Pringles brand holds a market share of approximately 10%. Household Care (46.8% of 2009 sales, 43% of 2009 net income): The Household Care GBU manufactures a wide range of products from laundry detergent to diapers. The companys baby care market share in 2008 was 29%. Business Growth and Divestitures Folgers Sale On June 4, 2008, PG sold its Folgers coffee unit toJ.M. Smucker Companyfor Rs.132.75 billion.As part of the deal, PG shareholders will receive a 53.5 percent stake in Smuckers and the company will assume Rs.15750 million of Folgers debt. Gillette Acquisition Procter Gamble acquired Gillette in 2005 for over Rs.2250 billion in its largest acquisition to date. In 2004, the last full year before the acquisition, Gillette generated over Rs.450 billion in sales, about Rs.270 billion of which came from razors and Duracell and Braun products and the remainder sourced from the Oral-B brand, which was moved into the Health Well-Being segment. A key piece of the acquisition beyond Gillettes product lines was its distribution network and supply chain. Gillettes distribution network and supply chain in emerging markets had been extremely successful for Gillette and, once acquired, has worked to complement PGs own distribution network. Sale of Pharmaceutical Unit In 2009 PG sold its pharmaceutical unit to Warner Chilcott Plc for Rs.139.5 billion in cash.The company expects to book a 43 cent per share earnings boost in Q2 of fiscal 2010 as a result of the sale.The deal allows PG to focus on its personal care, beauty, and household product divisions. In 2006, the company started winding down its discover-phase pharmaceutical products in favor of licensing late-stage compounds, and announced in 2008 it would exit the drug industry entirely. PG 2008 Net sales by Geographic Region(Post merger) PG has a well-established market presence in developed countries such as the United States and Western Europe and is looking to its presence in emerging markets. In fiscal 2009, 32% of total net sales came from developing nations,a figure that has increased steadily from 2002 when sales in developing nations accounted for only about 20% of total revenue (approximately Rs.360 billion). In China and Russia, PGs market share has been consistently increasing in the past five years as Procter Gamble has put an increased emphasis on establishing its products in those markets. In 2008, the companys distribution network reached 800 million people in China and 80% of the population in Russia. PG has created products designed specifically to target developing nations. The average Mexican spends about Rs.9000 a year on PG products, Chinese per-capita spending is only about Rs.135 and India per-capita spending Rs.45.Increasing sales in China and India to the levels in Mexico would add Rs.1800 billion in sales to the companys overall revenue. Research Development focuses both inside and outside the company In 2009, PG spent approximately Rs.91.8 billion on Research Development, nearly Rs.45 billion more than its closest competitor, Unilever.The two most important factors in PGs innovation process are its practice of consumer demand research and its Connect and Develop RD structure. First, when entering new markets, PG sets up in-home visits with consumers in order to fully understand the needs and desires consumers have for household and personal products. This way, PG gets directly to its customers and is able to cater to their needs. PG also incorporates consumers input into the RD process through its Connect and Develop initiative. Through Connect and Develop PG has an online interface set up where people can submit product ideas and provide input on topics that PG places on the web-portal. PG staff then sorts through the ideas and work with the most promising ones. This process is not responsible for the entire RD that PG does, but approximately 42% of new products in the last sev eral years were influenced by or originated from Connect and Develop. Tide Stain Release, a stain-removing detergent released in July 2009, has garnered 10% market share in the US as of November 2009.The Bounce Dryer Bar, an automatic laundry freshener released in August 2009, has captured 7% of the North American fabric sheet market as of November 2009. Commodity Prices A diversified consumer products manufacturer, PG depends heavily on a wide basket of global commodities for manufacturing its goods, the prices for which have risen nearly 50% since 2002. Nearly half of the companys cost of goods is directly related to commodity goods. The company has increased prices due to higher costs of oil and other raw materials. In its conference call, the company stated that it expected raw material costs to increase Rs.135 billion in 2009.The company has raised prices on Cascade dishwashing detergent, Iams pet food, and Gillette razors to counter the increasing cost of oil in the first half of 2008.PG instituted broad price adjustments in Q1 2010 to close widening price gaps in several businessesincluding North American laundry, tissue, andtowel, and several Eastern European markets. Competition Procter Gamble provides the broadest and biggest portfolio of products in the household and personal care industry with 24 billion-dollar brands. PG generates 43% more revenue than its closest competitor,LOreal, and Reckitt Benckiser. Here are somekey factsabout the two firms. Cincinnati-based Procter Gamble was established in 1837 and made its name selling soap and candles to U.S. government soldiers during the civil war. Boston-based Gillette spends around Rs.2700 million annually on advertising. In May the razor-maker paid a reported 40 million pounds (Rs.3393 million) to sign international soccer star David Beckham to a three-year deal as its global face. Procter Gamble employs a workforce of 110,000 worldwide and has a market capitalization of Rs.6345 billion. Gillette employs 29,400 employees worldwide and has a market capitalization of Rs.2025 billion. Gillettes profit beat market expectations last October after Hurricane Ivan spurred the buying of Duracell batteries. Limitations: Due to lack of data the financial statements analysis of Procter Gamble was not carried out. Conclusion Thus the acquisition and integration of Gillette was the largest and most successful in the history of Procter Gamble. PG acquired Gillette, which is best known for its shaving products, in 2005 for Rs.2565 billion. The merger between Procter Gamble and Gillette is a horizontal merger where the acquiring company is expanding in size of operations and also product offerings. The merger created various synergies like financial, operation and human resource synergies. After the merger Procter Gamble integrated systems in 26 countries, spanning five geographic regions, representing about 20% of sales. Gillette is a catalyst that makes PG a better brand-builder and a stronger innovation leader. There is no doubt that PG and Gillette are stronger together than alone, and both the companies together can deliver accelerated growth targets over the balance of the decade. Acquisition of Balsarashygiene and home product by Dabur About the merging companies: Dabur Company Dabur India Limitedis the fourth largest FMCG Company in India and Dabur had a turnover of approximately Rs.2,834 Crore Market Capitalisation of over Rs 10,000 Crore, with brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. The company has kept an eye on new generations of customers with a range of products that cater to a modern lifestyle, while managing not to alienate earlier generations of loyal customers. Dabur has global presence in 50 countries; products are available in the markets of Middle East, South-East Asia, Africa, the European Union andAmerica. Dabur is an investor friendly brand as its financial performance shows. The companys growth rate rose from 10% to 40%. The expected growth rate for two years was two-fold. Theres a great sense of responsibility for investors funds on view. This is a direct extension of Daburs philosophy of taking care of its constituents and it adds to the sense of trust for the brand overall. The company, through Dabur Pharma Ltd. does toxicology tests and markets ayurvedic medicines in a scientific manner. They have researched new medicines which will find use in O.T. all over the country therein opening a new market. Dabur Foods, a subsidiary of Dabur India is expecting to grow at 25%. Its brands of juices, namely, Real and Active, together make it the market leader in the Fruit Juice Category. Dabur Ranked AmongIndias Most Trusted Brands of 2007 By Economic Times-Brand Equity. Products of Dabur Ø Under health care products it has brands like Hajmola, Pudin Hara, Dabur Chyawanprash, Glucose D, Dabur Lal tail,etc. Ø In home care range consist of product like Odinil,Odomos,odopic,etc. Ø Under personal care range it has product like Vatika,Gulabri,Dabur Red Toothpaste,etc. Ø In food range it has brands like Real Active ,HOMMADE-range of ready made pastes, soups, coconut milk tomato puree Ø Dabur has guar gum plant,a natural gum used in foods industrial applications. Ø Dabur also produces ayurvedic medicines. Balsara Company The Balsara Group manufactures and markets its products, in India and Internationally. The Group has a domestic annual sales turnover of Indian Rs. 2 billion, and a rapidly growing international sales turnover of Indian Rs. 350 million. The Group is professionally managed, with manufacturing, sales, distribution and administrative facilities located throughout India, in addition to its international operations. In the Indian market, 60% of the Balsara Groups sales turnover of Indian Rs. 2 billion comes from Personal Hygiene Products (Promise, Babool and Meswak oral care ranges) and 40% is derived from Household Products (Odomos insect repellents, Odonil Air Fresheners, Sani Fresh toilet cleaners and Odopic dish washing products). Balsara has a wide national sales and distribution system that makes products available in 10, 54,000 retail outlets. The system is supported by a distribution network of 4 Zonal Offices, 13 Branches, 24 Regional Warehouses, and 1700 Distributors in 1500 towns. The mission of the Balsara Group of Companies is to be a leading provider of superior quality personal and household products, ingredients and packaging materials to consumers and customers on the Indian sub-continent and throughout the world. The Acquisition: On January 27, 2005 Dabur India today announced the acquisition of Balsara Hygeine and Home Care businesses for Rs. 143 crores and said it would look at more buyouts to capitalise on the consolidation in the sector. The company board of Dabur approved the acquisition of controlling stake in three Balsara group companies Balsara Hygiene Products, Balsara Home Products and Besta Cosmectics. With the acquisition of the Rs. 143-crore Balsara Group in an all cash deal, Dabur India will have oral care brands such as Promise, Babool, Meswak; mosquito repellents such as Odomos and household products such as Odonil and Odopic under its fold. Dabur India will acquire the entire promoters stake in the three companies 99.4 per cent in Balsara Hygiene, 100 per cent in Balsara Home Products and 97.9 per cent in Besta Cosmetics. The Terms of the Acquisition: Date of the acquisition: The merger came into effect from 1st April 2006. The new company formed : According to the deal Dabur will take full control of Balsaras entire brand portfolio which consists of oral care brands like Promise, Babool, Meswak; mosquito repellants like Odomos and household products like Odonil, Odopic. The deal also includes takeover of Balsaras operations consisting of three manufacturing facilities at Kanpur, Silvassa and Baddi and about 600 employees. Dabur India will also acquire the entire promoters stake in the three companies 99.4 per cent in Balsara Hygiene, 100 per cent in Balsara Home Products and 97.9 per cent in Besta Cosmetics. The Share Swap Ratio : Under the deal announced, Dabur India Ltd will acquire Balsaras hygiene and home product businesses in an Rs 143 crore all-cash deal. While Rs 120 crore will be funded through internal accruals, the balance Rs 23 crore will be raised through debt. Examining the Acquisition: Type of merger: The Rs 1,300-crore fast-moving consumer goods major Dabur India acquired Mum Procter Gamble Company Merger Case Study Procter Gamble Company Merger Case Study The project deals with the analysis of mergers and acquisitions in an FMCG sector. Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. A merger is the combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. This project deals with the merger of Procter Gamble and Gillette, acquisition of Balsaras hygiene and home product by Dabur and Acquisition of Nihar brand from HLL by Marico. The methodology deals with the various ways in which the data for this project was collected. Due to the limited scope of information and time constraints, secondary and not primary data sources has been used including journals, articles, reference sites, etc. The project guide proved very vital in the successful completion of my report. The next section deals with the individual introduction of both companies involved in the process of merger. It further includes the different terms of the merger and various synergies created through the merger. Furthermore the next section deals with scenario after the merger and analysis of financial statements of acquiring company post merger. Building a brand from scratch in the FMCG space can be quite an expensive exercise. Mature categories such as personal care or household products are already dominated by one or two strong incumbents and wresting market share away from them is quite a challenge. With growth rates in markets such as skin care, hair care and household products suddenly moving into high gear, companies also cannot afford to lose time on the trial-and-error method that usually accompanies new launches. Given this scenario, domestic players seem to view brand acquisitions and mergers as the quickest way to step into new categories and acquire a well-rounded product basket, without squandering their surpluses on brand-building expenses. Market shares apart, many of the buyouts have been motivated by the need to acquire better distribution reach whether within India or overseas. Introduction I. MERGER A merger is the combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. A merger occurs when two or more companies combines and the resulting firm maintains the identity of one of the firms. One or more companies may merge with an existing company or they may merge to form a new company. Usually the assets and liabilities of the smaller firms are merged into those of larger firms. Merger may take two forms- Merger through absorption Merger through consolidation. Absorption: Absorption is a combination of two or more companies into an existing company. All companies except one lose their identity in a merger through absorption. Consolidation: A consolidation is a combination if two or more combines into a new company. In this form of merger all companies are legally dissolved and a new entity is created. In consolidation the acquired company transfers its assets, liabilities and share of the acquiring company for cash or exchange of assets. II. ACQUISITION A fundamental characteristic of merger is that the acquiring company takes over the ownership of other companies and combines their operations with its own operations. An acquisition may be defined as an act of acquiring effective control by one company over the assets or management of another company without any combination of companies. III. TAKEOVER A takeover may also be defined as obtaining control over management of a company by another company.Merger of Procter Gamble Company and Gillette CompanyAbout the merging companies: Procter Gamble Procter Gamble Company is asoap opera. PG was named 2008 Advertiser of the Year by Cannes International Advertising Festival. Effective July 1, 2007, the companys operations are categorized into three Global Business Units with each Global Business Unit divided into Business Segments according to the companys March 2009 earnings release. Beauty Care Beauty segment Grooming segment Household Care Baby Care and Family Care segment Fabric Care and Home Care segment Health and Well-Being Health Care segment Snacks, Coffee, and Pet Care segment PG has gone into an aggressive mode. It has launched two new variants on 2nd Dec 2009, one in the detergent segment, which is called Tide Naturals and also another one in skin care segment under the Olay brand. Gillette Company The Gillette Company is a globally focused consumer products marketer that seeks competitive advantage in quality, value-added personal care and personal use products. It is the world leader in the mens grooming product category as well as in certain womens grooming products. Although more than half of company profits are still derived from shaving equipmentthe area in which the company startedGillette has also attained the top spots worldwide in writing instruments (Paper Mate, Parker, and Waterman brands) and correction products (Liquid Paper), toothbrushes and other oral care products (Oral-B), and alkaline batteries (Duracell products, which generate almost one-fourth of company profits). Gillette maintains 64 manufacturing facilities in 27 countries, and its products are sold in more than 200 countries and territories, with more than 60 percent of sales occurring outside the United States. The Merger: On October 1, 2005, Procter Gamble finalized its purchase of The Gillette Company. As a result of this merger, the Gillette Company no longer exists. Its last day of market trading symbol G on theOral-B, among others, which have also been maintained by PG. The Terms of the Merger: Date of merger: The merger came into effect from July 1st, 2007. The new company formed : The Gillette Companys assets were initially incorporated into a PG unit known internally as Global Gillette. In July 2007, Global Gillette was dissolved and incorporated into Procter Gambles other two main divisions, Procter Gamble Beauty and Procter Gamble Household Care. Gillettes brands and products were divided between the two accordingly. The Share Swap Ratio : Under the deal announced, Procter Gamble will pay 0.975 share of its common stock for each share of Gillette common stock. On Wall Street, shares in Gillette closed up nearly 13%, while PG slid 2.1% after the announcement. The Management: Gillettes chief executive James Kilts is to join the board of the merged company, becoming PG vice chairman, while PG chief executive A.G. Lafley will remain chief executive of the merged company. Examining the merger: Type of merger: Procter Gamble being number one in consumer products went into acquiring and merging with other companies like, Germanys Wella AG hair care line in 2003 and it also acquired Clairol for its hair-care lines and Iams Co. for its pet foods. The merger in question; between Procter Gamble and Gillette is thus a merger where the acquiring company is expanding in size of operations and also product offerings. This is thus a horizontal merger. Operational Synergies of the merger: The merger of the two companies will create the worlds largest consumer products conglomerate. Both companies are strong, diversified companies, so one wonders what uncaptured synergies there could be here. PG is adept at taking innovations from one product and transferring it to another product, so there may be opportunities to improve existing Gillette products. In addition, the companies are stating that the merger will give them more negotiating power with the most powerful buyer of consumer products. The deal would give the company even more control over shelf space at the nations retailers and grocers, real estate that is at a premium. Executives at the companies said they believe theyll both be able to grow faster together than separately, with PG opening doors for Gillette in markets such as China and Japan while Gillette bringing PG some product segments that are growing faster than the companys overall current portfolio of products.The merger will make PG the worlds biggest household goods maker, pushing Unilever into second place Financial Synergies: The merger would create a company with revenues of more than Rs.2700 billion that would have even greater clout against mass-market retailers like Wal-Mart Stores Inc., which have been pressuring consumer product suppliers to keep costs low. Because of expectations from the deal, PG raised the annual revenue growth outlook to 5 to 7 percent, rather than its earlier target of 4 to 6 percent. The companies said they expected cost savings and synergies of about Rs.630 billion to Rs.720 billion US over three years. PG and Gillettes combined market capitalization of about Rs 8325 billion US, would be by far the largest in the FMCG sector. HR Synergies: As part of the cost-cutting that would follow the deal, the merger would result in the elimination of about 6,000 jobs, or 4 percent of the combined work force of about 140,000. It said most of the cuts would come from eliminating management overlaps and consolidation of business support functions. Gillettes chief executive James Kilts is to join the board of the merged company, becoming PG vice chairman, while PG chief executive A.G. Lafley will remain chief executive of the merged company. Scenario Post Merger: Procter Gamble is the worlds largest producer of household and personal products by revenue, with its products reaching 4 billion people worldwide and its product line includes 23 brands across beauty, healthcare, and food including Tide detergent, Pampers diapers, and Gillette razors, that generate over $1 billion in revenue annually, with the companys total revenue at Rs.3555 billion in 2009.In 2005, PG expanded its portfolio to include razors and blades as well as batteries with its acquisition of the Gillette Company.The companys 2010 first quarter net income fell 1% to Rs.148.95 billion (Rs.46.35 per share) as higher prices offset lower sales volumes and foreign exchange effects, beating analyst expectations of Rs.43.65 per share. Revenue fell 6% to Rs.891.45 billion, though organic sales rose 2%. One of the key areas of growth for the company is in emerging markets worldwide. Sales in developing nations have increased steadily from 20% of total revenue in 2002 to 32% in 2009.PG already owns large and growing market share in countries includingglobal economic downturn, PG has announced it will focus its growth strategy on emerging markets, opening almost all of its 20 new manufacturing facilities outside its established markets. Procter Gamble attempts to maintain its competitive edge by focusing on product innovation. To this end, PG spends almost twice as much on research and development spending Rs.90 billion in 2009 as its closest competitor, Unilever, spent about Rs.58.5 billion USD in 2008.Through itsConnect + Developinitiative, PG looks to bring in new product ideas from outside the company. Connect + Develop has led to the development of 42% of new PG products in recent years. In fiscal 2009, PGs Net sales fell 3% to Rs.3555 billion driven by a 3% decline in unit volume and a 4% decline in net sales from the rising US dollar. Organic sales, a closely watched figure which excludes the impact of acquisitions, divestitures, andforeign exchange, increased 2%, which is below its target organic sales range of 4-6%.Earnings for fiscal 2009 increased 11% to Rs.603 billion. In July 2009, CEO A.G. Lafley stepped down from his post after 29 years with Proctor Gamble.He was succeeded by current COO Bob McDonald.The company expects sales to be up 0 to 3% in fiscal 2010,with sales back up in the fall of 2009, fed by price cuts, new products, and value-focused promotions. PG divides its business into three Global Business Units (GBUs) that develop and produce products and its corporate group which handles the operation and administration of the company. Beauty (33% of 2009 sales, 36% of 2009 net income): The Beauty GBU includes all hair and skin products, medications, razors, electric shavers, and batteries. This business unit includes several product lines acquired when the PG bought consumer products company Gillette in 2005. Proctor Gambles global market share in blades and razors is 70%, primarily centered on its Mach3, Fusion, Venus, and Gillette brands.In June 2009, PG further expanded its mens grooming business with the acquisition of the high-end shaving company The Art of Shaving and the mens skin care line Zirh. Health and Well-Being (21% of 2009 sales, 24% of 2009 net income): The Health and Well-Being GBU provide oral care, feminine health, pharmaceuticals, snacks, coffee, and pet care products. In oral care, the company has the number two market share position at 20% globally.In potato chips, the companys Pringles brand holds a market share of approximately 10%. Household Care (46.8% of 2009 sales, 43% of 2009 net income): The Household Care GBU manufactures a wide range of products from laundry detergent to diapers. The companys baby care market share in 2008 was 29%. Business Growth and Divestitures Folgers Sale On June 4, 2008, PG sold its Folgers coffee unit toJ.M. Smucker Companyfor Rs.132.75 billion.As part of the deal, PG shareholders will receive a 53.5 percent stake in Smuckers and the company will assume Rs.15750 million of Folgers debt. Gillette Acquisition Procter Gamble acquired Gillette in 2005 for over Rs.2250 billion in its largest acquisition to date. In 2004, the last full year before the acquisition, Gillette generated over Rs.450 billion in sales, about Rs.270 billion of which came from razors and Duracell and Braun products and the remainder sourced from the Oral-B brand, which was moved into the Health Well-Being segment. A key piece of the acquisition beyond Gillettes product lines was its distribution network and supply chain. Gillettes distribution network and supply chain in emerging markets had been extremely successful for Gillette and, once acquired, has worked to complement PGs own distribution network. Sale of Pharmaceutical Unit In 2009 PG sold its pharmaceutical unit to Warner Chilcott Plc for Rs.139.5 billion in cash.The company expects to book a 43 cent per share earnings boost in Q2 of fiscal 2010 as a result of the sale.The deal allows PG to focus on its personal care, beauty, and household product divisions. In 2006, the company started winding down its discover-phase pharmaceutical products in favor of licensing late-stage compounds, and announced in 2008 it would exit the drug industry entirely. PG 2008 Net sales by Geographic Region(Post merger) PG has a well-established market presence in developed countries such as the United States and Western Europe and is looking to its presence in emerging markets. In fiscal 2009, 32% of total net sales came from developing nations,a figure that has increased steadily from 2002 when sales in developing nations accounted for only about 20% of total revenue (approximately Rs.360 billion). In China and Russia, PGs market share has been consistently increasing in the past five years as Procter Gamble has put an increased emphasis on establishing its products in those markets. In 2008, the companys distribution network reached 800 million people in China and 80% of the population in Russia. PG has created products designed specifically to target developing nations. The average Mexican spends about Rs.9000 a year on PG products, Chinese per-capita spending is only about Rs.135 and India per-capita spending Rs.45.Increasing sales in China and India to the levels in Mexico would add Rs.1800 billion in sales to the companys overall revenue. Research Development focuses both inside and outside the company In 2009, PG spent approximately Rs.91.8 billion on Research Development, nearly Rs.45 billion more than its closest competitor, Unilever.The two most important factors in PGs innovation process are its practice of consumer demand research and its Connect and Develop RD structure. First, when entering new markets, PG sets up in-home visits with consumers in order to fully understand the needs and desires consumers have for household and personal products. This way, PG gets directly to its customers and is able to cater to their needs. PG also incorporates consumers input into the RD process through its Connect and Develop initiative. Through Connect and Develop PG has an online interface set up where people can submit product ideas and provide input on topics that PG places on the web-portal. PG staff then sorts through the ideas and work with the most promising ones. This process is not responsible for the entire RD that PG does, but approximately 42% of new products in the last sev eral years were influenced by or originated from Connect and Develop. Tide Stain Release, a stain-removing detergent released in July 2009, has garnered 10% market share in the US as of November 2009.The Bounce Dryer Bar, an automatic laundry freshener released in August 2009, has captured 7% of the North American fabric sheet market as of November 2009. Commodity Prices A diversified consumer products manufacturer, PG depends heavily on a wide basket of global commodities for manufacturing its goods, the prices for which have risen nearly 50% since 2002. Nearly half of the companys cost of goods is directly related to commodity goods. The company has increased prices due to higher costs of oil and other raw materials. In its conference call, the company stated that it expected raw material costs to increase Rs.135 billion in 2009.The company has raised prices on Cascade dishwashing detergent, Iams pet food, and Gillette razors to counter the increasing cost of oil in the first half of 2008.PG instituted broad price adjustments in Q1 2010 to close widening price gaps in several businessesincluding North American laundry, tissue, andtowel, and several Eastern European markets. Competition Procter Gamble provides the broadest and biggest portfolio of products in the household and personal care industry with 24 billion-dollar brands. PG generates 43% more revenue than its closest competitor,LOreal, and Reckitt Benckiser. Here are somekey factsabout the two firms. Cincinnati-based Procter Gamble was established in 1837 and made its name selling soap and candles to U.S. government soldiers during the civil war. Boston-based Gillette spends around Rs.2700 million annually on advertising. In May the razor-maker paid a reported 40 million pounds (Rs.3393 million) to sign international soccer star David Beckham to a three-year deal as its global face. Procter Gamble employs a workforce of 110,000 worldwide and has a market capitalization of Rs.6345 billion. Gillette employs 29,400 employees worldwide and has a market capitalization of Rs.2025 billion. Gillettes profit beat market expectations last October after Hurricane Ivan spurred the buying of Duracell batteries. Limitations: Due to lack of data the financial statements analysis of Procter Gamble was not carried out. Conclusion Thus the acquisition and integration of Gillette was the largest and most successful in the history of Procter Gamble. PG acquired Gillette, which is best known for its shaving products, in 2005 for Rs.2565 billion. The merger between Procter Gamble and Gillette is a horizontal merger where the acquiring company is expanding in size of operations and also product offerings. The merger created various synergies like financial, operation and human resource synergies. After the merger Procter Gamble integrated systems in 26 countries, spanning five geographic regions, representing about 20% of sales. Gillette is a catalyst that makes PG a better brand-builder and a stronger innovation leader. There is no doubt that PG and Gillette are stronger together than alone, and both the companies together can deliver accelerated growth targets over the balance of the decade. Acquisition of Balsarashygiene and home product by Dabur About the merging companies: Dabur Company Dabur India Limitedis the fourth largest FMCG Company in India and Dabur had a turnover of approximately Rs.2,834 Crore Market Capitalisation of over Rs 10,000 Crore, with brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. The company has kept an eye on new generations of customers with a range of products that cater to a modern lifestyle, while managing not to alienate earlier generations of loyal customers. Dabur has global presence in 50 countries; products are available in the markets of Middle East, South-East Asia, Africa, the European Union andAmerica. Dabur is an investor friendly brand as its financial performance shows. The companys growth rate rose from 10% to 40%. The expected growth rate for two years was two-fold. Theres a great sense of responsibility for investors funds on view. This is a direct extension of Daburs philosophy of taking care of its constituents and it adds to the sense of trust for the brand overall. The company, through Dabur Pharma Ltd. does toxicology tests and markets ayurvedic medicines in a scientific manner. They have researched new medicines which will find use in O.T. all over the country therein opening a new market. Dabur Foods, a subsidiary of Dabur India is expecting to grow at 25%. Its brands of juices, namely, Real and Active, together make it the market leader in the Fruit Juice Category. Dabur Ranked AmongIndias Most Trusted Brands of 2007 By Economic Times-Brand Equity. Products of Dabur Ø Under health care products it has brands like Hajmola, Pudin Hara, Dabur Chyawanprash, Glucose D, Dabur Lal tail,etc. Ø In home care range consist of product like Odinil,Odomos,odopic,etc. Ø Under personal care range it has product like Vatika,Gulabri,Dabur Red Toothpaste,etc. Ø In food range it has brands like Real Active ,HOMMADE-range of ready made pastes, soups, coconut milk tomato puree Ø Dabur has guar gum plant,a natural gum used in foods industrial applications. Ø Dabur also produces ayurvedic medicines. Balsara Company The Balsara Group manufactures and markets its products, in India and Internationally. The Group has a domestic annual sales turnover of Indian Rs. 2 billion, and a rapidly growing international sales turnover of Indian Rs. 350 million. The Group is professionally managed, with manufacturing, sales, distribution and administrative facilities located throughout India, in addition to its international operations. In the Indian market, 60% of the Balsara Groups sales turnover of Indian Rs. 2 billion comes from Personal Hygiene Products (Promise, Babool and Meswak oral care ranges) and 40% is derived from Household Products (Odomos insect repellents, Odonil Air Fresheners, Sani Fresh toilet cleaners and Odopic dish washing products). Balsara has a wide national sales and distribution system that makes products available in 10, 54,000 retail outlets. The system is supported by a distribution network of 4 Zonal Offices, 13 Branches, 24 Regional Warehouses, and 1700 Distributors in 1500 towns. The mission of the Balsara Group of Companies is to be a leading provider of superior quality personal and household products, ingredients and packaging materials to consumers and customers on the Indian sub-continent and throughout the world. The Acquisition: On January 27, 2005 Dabur India today announced the acquisition of Balsara Hygeine and Home Care businesses for Rs. 143 crores and said it would look at more buyouts to capitalise on the consolidation in the sector. The company board of Dabur approved the acquisition of controlling stake in three Balsara group companies Balsara Hygiene Products, Balsara Home Products and Besta Cosmectics. With the acquisition of the Rs. 143-crore Balsara Group in an all cash deal, Dabur India will have oral care brands such as Promise, Babool, Meswak; mosquito repellents such as Odomos and household products such as Odonil and Odopic under its fold. Dabur India will acquire the entire promoters stake in the three companies 99.4 per cent in Balsara Hygiene, 100 per cent in Balsara Home Products and 97.9 per cent in Besta Cosmetics. The Terms of the Acquisition: Date of the acquisition: The merger came into effect from 1st April 2006. The new company formed : According to the deal Dabur will take full control of Balsaras entire brand portfolio which consists of oral care brands like Promise, Babool, Meswak; mosquito repellants like Odomos and household products like Odonil, Odopic. The deal also includes takeover of Balsaras operations consisting of three manufacturing facilities at Kanpur, Silvassa and Baddi and about 600 employees. Dabur India will also acquire the entire promoters stake in the three companies 99.4 per cent in Balsara Hygiene, 100 per cent in Balsara Home Products and 97.9 per cent in Besta Cosmetics. The Share Swap Ratio : Under the deal announced, Dabur India Ltd will acquire Balsaras hygiene and home product businesses in an Rs 143 crore all-cash deal. While Rs 120 crore will be funded through internal accruals, the balance Rs 23 crore will be raised through debt. Examining the Acquisition: Type of merger: The Rs 1,300-crore fast-moving consumer goods major Dabur India acquired Mum

Fear in One Flew Over the Cuckoos Nest and The Scarlet Letter :: comparison compare contrast essays

Fear in One Flew Over the Cuckoo's Nest and The Scarlet Letter To live with fear and not be overcome by it is the final test of maturity. This test has been "taken" by various literary characters. Chief Bromden in Ken Kesey's One Flew over the Cuckoo's Nest and Reverend Arthur Dimmesdale in Hawthorne's The Scarlet Letter both appear to have taken and passed this test. It first seemed as though the Chief was going to fail this test of maturity in the mental ward that he was committed to. He had locked himself up by acting deaf and dumb. He had immense fear of the "Combine," or society, that ruined things and people and treated them like machines, giving orders and controlling them. Soon enough to "save" the Chief, McMurphy arrived. He was lively, and not scared; the complete opposite of the Chief. This courage eventually passed on to the Chief. At a meeting, when McMurphy was holding a vote to prove that the patients wanted to see the World Series, the Chief voted for it. At first he said that McMurphy controlled his hand. Later on he admitted that it was he who raised it. He even talked to McMurphy one night, and began laughing at the situation at hand. One day when McMurphy and the Chief tried to help another patient who was being taken advantage of by orderlies, they were caught and sentenced to electro-shock therapy (EST). The Chi usually blacked out in a fog when confronted with problems; however, this time (he had endured over 200 EST sessions previously) he did not. However, McMurphy was deteriorating, and the two seemed to be reversing positions. McMurphy eventually was sentenced to a lobotomy, which left him as a helpless, pathetic person, as the Chief had once been. The Chief now had the courage to put McMurphy out of his misery, despite what the head nurse, Nurse Ratched, the symbol of the combine to the Chief, would do to him. He smothered McMurphy, and afterwards, escaped by lifting the control panel, which McMurphy told him that he could lift but the Chief saw himself as "small," a symbol of his strength against the combine, and breaking a window with it. The mere fact that the Chief could lift the panel was

Classical Model of Decision Making

International Journal of Business and Management June, 2008 The Classical Model of Decision Making Has Been Accepted as not providing an Accurate Account of How People Typically Make Decisions Bin Li Foreign Languages Department, Guang Dong University of Finance Guangzhou, 510521, China E-mail: [email  protected] com Abstract Decision making is an accepted part of everyday human life. People all make varying importance decisions every day, thus the idea that decision making can be a rather difficult action may seem so strange and unbelievable. However, a large number of empirical studies have shown that most people in organizations are much poorer at decision making. Therefore, people began to pay more attention to understand hot to make a suitable decision. Keywords: Decision making, Rational decision-making, Demonstrate classical decision making 1. Introduction Decision making is one of the most central processes in organizations and a basic task of management at all levels. According to Cole (2004:151), decision making is â€Å"a process of identifying a problem, evaluating alternatives, and selecting one alternative. During the whole process, people are making the best choice from among several option based on the current situation. Additionally, Rollinson (2002) considered that decision making is the process of producing a solution to a recognized problem. There are three basic activities involved in decision making: intelligence activity, design activity and choice activity. Although all the decisions are made based on these three main activities, not all decisions are the same (www. bized. ac. uk). Some are relatively simple and others involve a more complex range of considerations. Consequently, people need an approach to understand decisions making. Good decision making is an essential skill for career success generally, and effective leadership particularly. 2. The classical decision making model The traditional approach to understanding individual decision making is based upon classical decision making theory or the rational economic model (Huczynski & Buchanan, 2001). The classical view of decision making has always integrated the concept of rationality and rational decisions within the whole process of discussions and prescriptions. Obviously, a rational decision-making process is often suggested as the way in which decisions should be made trough those three activities, and it involves the following strictly defined sequential process shown in Chart 1 (Heracleous, 1994). It begins with seeking to ask the right questions, continues by discovering creative answers and finishes by making sure that the chosen solution is valuable and useful. According to Hucaynski & Buchanan (2002:740), â€Å"rationality is equated with scientific reasoning, empiricism and positivism and with the use of decision criteria of evidence, logical argument and reasoning†. And the rational decisions are decisions which are based on the rationality. The advantage of the classical model is to indicate a rational approach that can be applied to the business of reaching decisions in organizations. On the other hand, Lee et, al. (1999:18) considered that â€Å"classical decision theory views the decision maker as acting in a world of complete certainty. † It assumes that â€Å"decision makers are objective, have complete information and consider all possible alternatives and their consequences before selecting the optimal solution. (Huczynski 2001:738) Based on the definition above, it is clear that classical decision making theory is derived from several assumptions. However, all those assumptions are not reality within this modern information age. Herbert (1981) agreed that this process is underlain by certain assumptions and characteristics, which are highly unrealistic in practice and are widely argued among managerial field. In the managerial f ield, how to make a suitable decision is very important. Faulty strategic and operational decisions can and must seriously weaken companies’ competitiveness. It is possible misleading to a completely wrong developing direction. According to the research by Robbins (2003), he considered that classical model of decision making could not fully represent how people make decisions in organizations, because people do not know how accurate the data is used to make decisions, how reliable are the estimates of the probabilities and how useful the data is related to the event. 151 Vol. 3, No. 6 International Journal of Business and Management Besides all above reasons, there are others evidence to challenge classical assumptions, which to demonstrate classical decision making model is not providing an accurate account of how people typically make decisions. In general, based on the research by Robbins (2003), he summarized all the assumptions of classical decision making model illustrated in Chart 2. Robbins (2003) considered that all these assumptions are subjective and can not represent the real situation in the practice. Cole (2004) also agreed with that all these assumptions would be correct as people in a completely perfect world where does not exist. Moreover, all these assumptions would be disadvantages as people could not discover this model entirely relies on the accuracy of the data used and must require qualitative input to give complete picture. Based on the disadvantages of classical model of decision making, in the following section, it is going to stick to the sequence of classical model of decision making to challenge its assumptions in details one by one. 3. Further analysis in the decision making model In the first step of classical model of decision making, people have to identify what problem they face or deal with. And the model assumes that all the problems are easy to be defined and discovered. In fact, there are two types of problem. One is bounded problems, which means that â€Å"problems that can be more easily defined and treated as separate from the context in which they exist† (Rollinson, 2002:254). Under this situation, people can easily define the problem, because the problem is usually small, less important and is not complex without limitation by time or cost. Obviously, these kinds of problems will have actual solutions in practical experience; people have enough knowledge to define the nature of the problem, such as an organization makes a decision to purchase a new machine to replace the old one, which is an easy decision to make without more limitation by others factors. Thus people can continue to make decisions through the classical model. However, there is another kind of problem which is unbounded problems. In general, these kinds of problem are much more complex then ounded problems in terms of scale, implications or time of problem. It is necessary to recognize the nature of the problem before identification. Rollinson (2002) defined that unbounded problems are â€Å"ambiguous problems that are harder to define and which cannot easily be separated from the context in which they exist† (Rollinson, 2002:254). Therefore, in the first step of the classical decision making process, people are hard to clearly define the nature o f every problem, so that there is a trap within the first step, because there are many unknown factors surrounding the problem. People in any organizations who make decisions have to be care about the real nature of the problem and various factors which influence the development of the whole problem before defining. Moreover, unbounded problems may be new problems which people do not have any kinds of knowledge and solutions. Under this situation, people are lacking knowledge to handle the problem leading to making wrong decisions. To illustrate an unbounded problem in organization, Koran electric giant Samsung Electronics has some worries about its ageing product line in the early stage of its development. This scale of the problem is much larger and has potentially serious implications for the whole organization, which has strong influence in the future. However, although Samsung has noticed about the age of its products, there is little clarity about whether a problem actually exists or what its nature might be. Also, management team did not find out a clear solution at that time, hence a replacement range of products cannot be selected, because the cost, sales and production implications are not known. In the case of this example, it is proved that the nature of problem is quite different. Only under the situation, which people can easily define the actual nature of the problem, people can apply the first step of classical decision making. Through discussing the bounded problem and unbounded problem, it is clear that the nature of each of those problems is different. It is not just the size of the issue that is significant. Consequently, the first assumption of classical model, which problem is clear and unambiguous, did not come into existence. As to the third stage of the classical model, that comprehensive search for alternative courses of action and their consequences is feasible and is carried out is completely wrong. It assumes that the decision maker have entire information about the consequences of alternatives. This assumption is the most serious mistake in decision making theory. To illustrate its mistake, there are several aspects to challenge decision makers’ abilities and awareness. One is that some alternatives will not have occurred to the decision maker, since there are too many. Cole (2004) suggested that everything in the world is changed all the time. Decision makers can not catch all the information by his or her ability. When decision makers intend to legitimize their chosen courses of action, by the appearance of rationality, â€Å"empirical studies show that memory search is the initial tactic followed, and only if the problem persists is a more extensive search undertaken†(Heracleous1994:18). This statement indicated that most people making decision depend on their brain. And this kind of search for possible solutions and their consequences is largely informal, qualitative and conditioned by the organizational nature and regulations. 152 International Journal of Business and Management June, 2008 However, the brain is not a stable and mature tool to process all the information. In fact, it is totally out of ability to process information that is related to decision maker. Morse (2006:42) indicated that â€Å"the primitive, emotional parts of people’s brains have a power influence on the choices people make†. Decision makers are not rational beings, because individuals are lacking of the mental capacity to store and process all the information related to the decision (Huczynski & Buchanan, 2001). Additionally, personal background will drive decision maker from clear objective to confused objective due to their desire, because they do not know how to deal with personal preference when it has conflict with decision. On the other hand, every decision is made within a decision environment, which is defined as a sequence of collecting information, alternatives, values, and preferences available within the time of the decision (Daft 2001). However, both the development of alternatives and the selection of an optimum solution will be limited by organizational objective and polices, and by the attitudes of managers and other employees, even by the external environment. This statement indicated that fail to bring the right approach to collect information leading to overlooking information hey are not expecting and obeying others regulations. 4. Conclusion In short, in terms of people’s abilities, it is impractical to collect all the information due to many external and internal factors around the organizations (Huczynski & Buchanan, 2001). As to people’s awareness, it still has limitations. The emotional parts of people’s brain still have strong influence on decision makers’ behaviour and choices (http://cogsci. uwaterloo. ca). Thus making a practical decision is not just collect as much as information which is impractical to estimate many of the consequences considered. It is considered that most people are not aware that the approaches they used are limited within their awareness. References (2008). http://cogsci. uwaterloo. ca/Articles/Pages/Emot. Decis. htm [Accessed 27 January 2008] Bazerman. M. H. (2006). Judgment in Managerial Decision Making; 6th ed. , New York; Chichester: Wiley. Belmonte, Joe. Circuits Assembly. (2006). What Do We Control? Vol. 17 Issue 4, p20-21, 2p Cole, G. A. (2004). Management Theory and Practice 6th ed. , London: Thomson Corbett. J. M. (1994). Critical Cases in Organisational Behaviour; Basingstoke: Macmillan Daft . R. L. (2001). Organization Theory and Design; 7th ed. , Cincinnati, Ohio: South-Western College Publishing Heracleous. L. T. (1994). Management Development Review, Vol. 7. No. 4. p 15-17 MBC University Press Herbert. T. T. (1981). Dimensions of Organizational Behaviour; 2nd ed. , London; New York: Macmillan: Collier Macmillan Huczynski, A & David Buchanan. (2001). Organizational Behaviour: An Introductory Text. 4th ed. , Financial Times, Prentice Hall Lee, D. ; Philip, Newman. ; and Robert, Price. 1999). Decision Making In Organizations; Financial Times, Prentice Hall Luthans. F. (1995). Organizational Behaviour. 7th ed. , London; New York: McGraw-Hill Morse. K. l. (2006). Introduce Organizational behaviour. 5th ed. , London: Thomson Robbins, S. P (2003). Management 7th ed. N. J. : Prentice-Hall Simon, H. A. (1978). The New Science of Management Decision; Revised ed. , London (etc. ); Englewood Cliffs: Prentice -Hall, 153 Vol. 3, No. 6 International Journal of Business and Management Figure 1. Classical decision model Figure 2. Classical model of decision making 154

Crafting a Livelihood in India

building sustainability for indian artisans CRAFTINGALIVELIHOOD/ JANUARY2013 Tableof Contents Foreword Executive Summary 1 2 I. Craftspeople – The Backbone of India's Non-Farm Rural Economy Sector Overview, profile of indian artisans, crafts value chain and key challenges 4 In Sanskrit, Dasra means Enlightened Giving. Dasra is India’s leading strategic philanthropy foundation. Dasra works with philanthropists and successful social entrepreneurs to bring together knowledge, funding and people as a catalyst for social change.We ensure that strategic funding and capacity building skills reach non profit organizations and social businesses to have the greatest impact on the lives of people living in poverty. www. dasra. org II. Government, Private Sector and Non Profit Initiatives Role of key stakeholders in enhancing artisans’ sustainability 15 III. Harnessing the Potential of India's Crafts Sector Four cornerstones of artisans’ sustainability and recommended interventions for philanthropic support 26 IV. Mapping Non Profits and High Impact Interventions AIACA Avani 43 45 46 47 48 49 50 51 52 53 54 55The Edmond de Rothschild Foundations continue developing a modern view of philanthropy through which they defend the dignity and empowerment of each individual. The Foundations’ primary focus is on education, with projects in a range of areas: arts and culture, social entrepreneurship, intercultural dialogue, health and research and philanthropic education. Through their geographic locations and range of projects, the Foundations represent a rich, multicultural network. They endeavor to identify local initiatives and provide close monitoring of their numerous stakeholders while sharing this experience internationally.By applying an entrepreneurial method to the universe of philanthropy, the Edmond de Rothschild Foundations contribute to the growing professionalism of the social sector. They moreover work towards the recognition of th e pluralism inherent to all societies and the respect for their citizen’s many identities. www. edrfoundations. org Craft Revival Trust Dastakar Earthy Goods Foundation Gramshree Kala Raksha Khamir ORUPA SAHAJ Shrujan Concluding Thoughts Appendices A. Methodology and Selection Criteria B. End Notes C. Bibliography D. Acknowledgments and Organization Database 6 58 60 61 62 Report published in: January 2013 Cover Photo Credit: KHAMIR Foreword One of the biggest issues in India is that our markets do not recognize the true value of craft. When this value is recognized, and if people are willing to pay a higher price for craft-based products, this should translate into higher wages for weavers and craftspeople and act as a boost to millions of rural-based livelihood opportunities associated with this sector. The economics however is not as simple, as finally it comes down to the conflict between pricing and sales.If you out-price goods, you sell only a limited number. If you don' t give crafts people enough work, it kills the craft. Sustainable livelihoods will ultimately depend on finding a fine balance between the two. Fabindia follows an inclusive model of capitalism, placing craft at the center of the quest for profitability and growth. I grew up watching my father build this company. I was also very idealistic so I started a co-operative in 1989 and ran it till 1991. While I soon realized this was not the answer, this experience helped me understand what I wanted to do with my role at FabIndia.If you look at business, success is generally defined by measurable outcomes, financial profit and the material impact. We are taught to squeeze each and every opportunity as hard as we can to maximize profit. In a conventional way, all of this makes a lot of sense. But my experience in business has been different. I operate a business, which is one of the most profitable businesses in the retail space in India. Yet, it is also one in which the central theme is to enable all our producers to become stakeholders and beneficiaries of the larger wealth creation process.When we created this idea, every business analyst who saw it said it would not be viable. But instead it has opened up new avenues for business, which are collaborative. It has connected people in new ways, allowing them to give very differently of themselves. The business operates from the principle that people are not just instruments. When people feel they are valued, respected, a part of something bigger than their own immediate interest, the nature of their contribution changes. And this is at the heart of interdependence that Fabindia recognizes.We are building a very transformative model, and we need to take that to scale. Our greatest motivation has come from the 100,000 artisans that we see affiliated to it – that’s the big picture, needle moving idea that uses mainstream retail to give relevance to this sector. There are several very successful small scale stories in the crafts space. Taking these to the next level necessitates investment and resources which recognize the value of craft and the socioeconomic returns it generates for craftspeople. This is the perspective that this Report and its authors bring to the fore-front.And I wish this initiative every success. WilliamBissel ManagingDirector,Fabindia 1 Executive Summary India's industrialization and participation in the modern world economy is decades old. Nevertheless, millions of Indians still depend on indigenous modes of production, traditional skills and techniques to make a living based on handmade products. These craftspeople or artisans are the backbone of the non-farm rural economy, with an estimated 7 million artisans according to official figures (and upto 200 million artisans according to unofficial sources) engaged in craft production to earn a livelihood. Despite some instances of well-known design houses using handmade products and successful crafts-based busines ses such as FabIndia and Anokhi, the majority of craft production remains unorganized and informal with its full market potential untapped, especially by the artisan, who more often than not struggles for sustenance. Propelled by loss of markets, declining skills and difficulty catering to new markets, a large number of artisans have moved to urban centers in search of low, unskilled employment in industry.According to the United Nations, over the past 30 years, the number of Indian artisans has decreased by 30%, indicating the need to re-invest in artisans to safeguard history, culture and an important source of livelihood. 2 The Indian Government, the private sector and the non profits are each involved in the sector but their roles have evolved in silos, with little specialization and much duplication. On a policy level a cohesive and concerted effort is required to overcome the challenges faced by the crafts ecosystem through funding and programs.Simultaneously, the private sect or has a significant role to play in uplifting artisans through different market-led efforts made by retail chains, high end-fashion designers and a relatively more recent wave of social businesses. Non profits have been particularly active in the crafts space since the early 1960s and have evolved numerous models to support artisans in earning better livelihoods. To realize the full potential of the crafts sector, the gaps, overlaps and challenges in the value chain must be overcome to create an ecosystem that enables crafts to thrive.The different stakeholders involved need to come together to build what we call the four cornerstones of artisans’ sustainability. Philanthropy has a key role to play in supporting the creation of such an ecosystem. Harnessing the potential of this sector requires different types of investments to preserve traditional crafts, strengthen the sector, and improve the incomes of artisans. Investment should focus on building the four cornerstones of artisans’ sustainability: 1. 2. 3. 4.Handholding the Artisan through the Value Chain Increasing Demand for Crafts and Strengthening Market Linkages Strengthening the Decentralized Production Model Building a Multi-Stakeholder Approach This would realize the tremendous opportunities the crafts sector in India provides to improve economic, environmental and social conditions of rural communities. These include: Economic Opportunities : Employment and income: The crafts sector has the potential to provide stable employment and income generation to diverse communities and to those with different levels of education. ? ? Migration: Promoting hand production in rural areas can effectively check migration of rural labor to urban centers and prevent loss of skills Economic growth: The global market for handicrafts is USD400 billion, of which India's share is below 2%, representing a tremendous growth opportunity. 3 Competitive advantage: Artisans can serve as key drivers of speci alization and competence in precision manufacturing, similar to Japan and Korea. Economic Opportunities Environmental Benefits: Low energy requirement: Production processes used in crafts typically ave a low carbon footprint and promote the use of locally available materials as well as natural and organic materials where possible. Environmental Benefits Social Empowerment: ? Women's empowerment: Crafts production represents an opportunity to provide a source of earning and employment for otherwise low skilled, home-based women, improving their status within the household. Return for future generations: Investing in artisans leads to a trickle-down effect of improving the health and education outcomes for future generations of the most marginalized populations. Handicrafts embody India's history and diversity: Over many centuries, an extraordinary legacy has nourished Indians crafts across religious, ethnic and communal boundaries. They highlight the country's unique cultural mosa ic and offer a powerful tool for pluralism and co-existence. There is an urgent need for philanthropy to realize the economic potential of the crafts sector by investing in high impact scalable models that have the potential to strengthen livelihoods in a sustainable manner. Social Empowerment 2 3 major categories in craft hadi (cloth that is woven from handspun yarn) cotton handlooms processing of cotton textile by hand silk handlooms processing of silk textiles by hand zari (silver and gold threadwork) and embroidery carpets miscellaneous products made of wood, bamboo, cane and grass leather manufacture earthenware plating/polishing/ engraving metals jewelry and related products making of musical instruments I. CHAPTER Craftspeople: The Backbone of India's Non-Farm Rural Economy 4 â€Å"To write about Indian handicrafts is almost like writing about the country itself.So vast, complex and colorful, and yet with a simplicity and charm, difficult to attain under comparable condition s† – Upadhyay, M. N. : Handicrafts of India. 4 India has one of the most diverse and ancient traditions of handmade products, and its handicrafts industry is an important economic and cultural asset. According to the Twelfth Five Year Plan, handicrafts production is expected to double between 2012 and 2017 and exports are projected to grow at the compounded annual rate of 18% during the same period. As a result, the craft sector will employ an additional 10% of individuals per year up to that time. 6 The crafts value chain encompasses the full range of activities required to bring a handicraft product from conception through production to delivery to consumers. The Government, the private sector and non profits have played and continue to play an important role in the sector's development, although their efforts remain isolated and thus limited in their impact.From Vishwakarma's Children to Poverty: A Socio-economic Profile of Artisans Chart1: The story of Indian crafts is deeply embedded in mythology, history and culture as can be seen in Chart 1. Artisans are considered to be the descendants of Vishwakarma the presiding deity of crafts and architecture. During the Vedic Age craftspeople enjoyed a high social standing and were part of the landed gentry, responsible for the creation of temples and palaces. In the caste hierarchy that evolved during the post Vedic period, craftspeople were associated with Shudras or the lowest caste due to the manual nature of their work.While Hindu artisans occupied the lower echelons of the caste system, due to the menial nature of their work, artisans from other non Hindu religious communities were equally stigmatized. This adverse status led to a deeply rooted stigma which persists today long after the abolition of the caste system. Nevertheless, in subsequent eras when India was inhabited by princely kingdoms, crafts continued to flourish because of their utilitarian nature, royal patronage and the organizatio n of artisans into guilds. Until the second half of the 17th century, crafts enjoyed a steady market.With the decline of princely states, the entry of the East India Company and colonization, employment in crafts especially handloom declined due to trade between India and the UK which was organized and regulated largely by colonial powers. The result was the fragmentation of the artisan community, marked by inequality between those that could produce for British markets, traders and those that were only exposed to local markets. Subsequent industrialization marked the steady decline in crafts markets and livelihood potential for artisans.Despite the central role played by crafts in the freedom movement, where Mahatma Gandhi incited the nation to produce by hand, and subsequent welfare measures implemented by the Indian Government, artisans (with the exceptions of traders, and extremely specialized master craftspeople) never regained the social status and sustainable income they once possessed. The uniqueness of India's craftspeople has been their ability to work across religious, caste and cultural divides. Such a meeting of distinctive traditions has fostered dialogue, social inclusion and an extraordinary creativity.ROYALPATRONAGE Craftsusedtoreceiveroyalpatronage, whichhasnowdisappeared. Further,folk craftsnolongerfitintoeverydayusageas theyoncedidduetoincreasing urbanization. Thehandicraftand handloomsectorsarea `24,300crore (USD4. 48bn) industrycontributing `10,000crore (USD1. 85bn) toIndia'sexportearnings of`1. 62lakhcrore (USD300bn). 8 An important economic and cultural asset India's myriad crafts traditions and living crafts skills are vehicles of its cultural identity, passed on from generation to generation and a means of sustenance for numerous communities engaged in production.Crafts constitute one of the primary sub-sectors within Creative and Cultural Industries, defined by UNESCO as â€Å"industries which produce tangible or intangible artistic and creative outputs, and which have a potential for wealth creation and income generation through the fostering of cultural assets and the production of knowledge-based goods and services. â€Å"7 The crafts sector encompasses diverse activities ranging from embroidery and painting to leatherwork and pottery, with variations and regional specificities within each group.There are thousands of living crafts in India. For simplicity, these can broadly be understood as handlooms and handicrafts. Together handicrafts and handlooms play an important role in the Indian economy. Handicrafts typically refer to artifacts made by hand for decorative, religious or functional purposes. These products are often found in diverse markets from runways in Paris, and highend designer stores to domestic retail outlets and tourist emporiums. SWADESHIMOVEMENT Handproductionwasstronglyrootedinthe independencemovementandGandhi’sprinciples.However,themovementlostsignificanceinthe public’spe rceptionafterthe50sand60s. INDUSTRIALIZATION Thefactorysectorhas inherenteconomiesof scaleandgreater bargainingpowerfor cheaperhigherquality rawmaterials,whichhas adverselyaffectedthe craftssector. Further, thissectorhasbeen divertinglaboraway fromskill-based occupations. GLOBALIZATION Challenge:Lackof consumerawareness abouttheimportance ofcrafts Opportunity:Crafts providecompetitive edgeandunique identitytoIndiaina globalmarketplace 5 6Broadly, artisans are divided into the following categories with a rigid hierarchical division of labor between more and less skilled artisans in a particular craft : ? Skilled master craftsman ? Wage-worker ? Fully self-employed artisan ? Part-time artisan An estimated 63% of artisans are self-employed while 37% are wage earners. 9 Traditional knowledge and craft skills are passed down from one generation to another, so that whole families and communities are engaged in production. An estimated 71% of artisans work as family units and 76% attribute their profession to the fact that they have learnt family skills. 0 It is important to note that most official figures count only the head of the production unit and wage earners in official figures, leaving out the 5-6 family members who are also dependent on crafts for sustenance, thus creating an incomplete understanding of the sector's size and importance. The vast majority of artisans operate in informal work settings. In fact, according to one study, Vishwakarma's Children in 2001 only 9% of craftspeople benefited from formalized employment, while 42% worked out of their homes. 11 Most artisan production units tend to be micro enterprises.In fact, 39% of artisans incur production expenditures of less than INR 12,000/ USD 215 a year and only 19% spend above INR 50,000/ USD 900 a year. 12 Typically artisans sell their products to diverse markets including local markets, city outlets, private agents, wholesalers or retail traders and exporters. A meaningful analysis of the secto r requires focusing on particular geographies and crafts. For this report, we focused on the crafts sector in the states Gujarat, Uttar Pradesh, Rajasthan and Odisha. These have among the largest number of artisans, as shown in the chart 2.In addition, Dasra's mapping of non profits involved in the sector, revealed the highest concentration of non profits working at scale in these states. The Crafts Value Chain is Fragmented For a comprehensive understanding of the current state of the crafts sector, as well as areas that need improvement, it is important to understand the crafts value chain. The crafts value chain shown in Chart 3 has been created based on our observations on the ground as well as inputs from sector experts. It aims to demonstrate the different stages in craft production from producers to markets and inputs required at each stage.It must be noted, however, that each craft will have a slightly different set of processes. The stages explained below have therefore bee n simplified to a certain degree to provide a general understanding of how the crafts sector functions. Chart3:TheCraftsValueChain PROCESS INPUTSREQUIRED Organization Human Resources ? LegalEntities ? Procuring and Processsing RawMaterials ? ? ? Credits Facilities Technology Chart2: DistributionofIndianArtisans 40% 29% 13% Production ? ? ? ? Design Technology Skills Enterprise Development Aggregation and Intermediary Trade Transport toMarkets ? Quality Checks ? Storage ? ?ODISHA UTTARPRADESH GUJARAT-RAJASTHAN Markets Marketing and Promotion 7 Source:ExportPromotionCouncilforHandicraftsand CouncilofHandicraftCorporationsandDevelopmentCommissioner(GovernmentofIndia) 8 1. Organization Artisans are usually structured into groups through informal contracts between traders, master artisans and low-skilled artisans. More formal systems of artisans’ organization involve four main types of entities:13 ? Self Help Groups (SHGs) are set up with the help of external technical intermediar ies such as non profits or through Government schemes, and typically comprise 10-20 artisans, usually women.SHGs serve as a form of social collateral, enabling artisans to establish linkages with input providers such as raw material suppliers, microfinance institutions and banks, and downstream players such as aggregators and retailers. Organization are often forced to rely on local traders who provide them with raw materials against orders, albeit at high prices, or switch to non-traditional raw materials. 3. Production Although techniques and processes vary widely from one craft to the next, crafts production generally takes place in households, with multiple family members engaged in different aspects of the process.Even where organized artisan structures exist, artisans typically produce within community settings. Production is generally seasonal, with crafts activity being suspended during harvest season, as most artisans are also engaged in agriculture to supplement their live lihoods. 4. Aggregation and Intermediary Trade ? Mutually Aided Co-operatives (MACs) are created to provide artisans with a platform for equitable participation. Legislated at the state Government level, MACs enable artisans to pool funds as equity and own their production units.However, due to strong Government influence, this structure has failed to gain popularity in most states other than Andhra Pradesh and Kerala. ` ProcuringandProcessing RawMaterials ? Producer Companies were created as a for-profit legal entity in the Companies Bill in 2002 to enable primary producers to participate in ownership and contribute equity. ? Private Limited Companies are for-profit legal entities that allow artisans to participate in ownership as shareholders, while enabling external funders to invest capital.Aggregation involves bringing together products from decentralized production units to enable economies of scale in transportation, storage and retail. Due to the dismal status of infrastruct ure and communication in India, aggregating products is a challenging task, and leads to many of the bottlenecks in the crafts supply chain today. Buyers and retailers lack incentives to overcome upstream, supply-side issues, which results in a loss of opportunities for artisans to access markets. Aggregationand IntermediaryTrade Markets 5. MarketsThe markets for the craft products can be broadly understood as local, retail shops – high-end as well as mainstream, exhibitions and exports. Among these, local markets are still the common markets for many artisans. 14 The contemporary markets, domestically as well as internationally, have grown with an expanding demand for ethnic products that have a story linked to them. However, these products are in low supply due to supply chain inefficiencies. However, most artisans continue to work independently as there is a widespread lack of awareness about the advantages of being organized into the above forms. ProductionDemand 2. Procu ring and Processing Raw Materials Traditionally, raw materials used by artisans were widely available due to the close linkages between evolution of crafts and locally available materials. Further, the jajmani system, which consisted of a reciprocal relationship between artisanal castes and the wider village community for the supply of goods and services, provided artisans with access to community resources. However, with the breakdown of these traditional structures, along with competition from organized industry, artisans find it challenging to buy quality raw materials at affordable prices.In the absence of raw material banks, they 6. Demand With the advent of globalization and the availability of cheaper and more varied products, crafts face severe competition in contemporary markets. They are typically perceived as traditional, old-fashioned and antithetical to modern tastes. There have been limited efforts to reposition the image of crafts and build consumer appreciation of th e history and cultural identity associated with handmade products. In addition, there are few instances of traditional crafts being â€Å"contemporized† to fit with changing consumption patterns. 10 India's Crafts Sector is in Disarray While crafts received royal and aristocratic patronage during pre-Independence days and played a central role in Gandhi's independence struggle, they have slowly lost relevance with the advent of industrialization. Currently, the sector carries the stigma of inferiority and backwardness, and is viewed as decorative, peripheral and elitist. This is compounded by the Government's treatment of crafts as a sunset industry, which has resulted in a lack of well-developed policies and programs to protect and strengthen the ecosystem for artisans.Traditional crafts have largely been marginalized by massproduced consumer goods, which tend to be cheaper due to the economies of scale associated with mechanization. The nature of the crafts sector and chall enges faced by artisans reduces their ability to compete with machine-made products. Catering to the mainstream market often necessitates a decline in quality and/or workmanship, leading to the eventual loss of skills over a few generations. There are very few instances like pashmina shawls where a traditional craft has successfully â€Å"contemporized† itself for Indian or overseas markets.Artisans were traditionally an essential part of the village economy, producing everyday utilitarian objects catered towards local markets, using designs and motifs that were of significance to their communities. However, with the advent of industrialization and increasing urbanization of markets for crafts, the historical artisan-consumer relationship has broken down, and largely been replaced by traders. This has rendered artisans' knowledge and skill, acquired over generations, virtually useless and made crafts an unsustainable source of livelihood.The five main challenges facing artisa ns in creating sustainable livelihoods in today's economy can be described as follows: low education levels for the family overall. The lack of education makes it difficult to manage inventory, access Government schemes and market information and bargain with traders and middlemen. It is estimated that in 2003 around 50% of household heads of crafts producing families had no education whatsoever, and more shockingly, around 90% of the women in these households were completely uneducated. 5 Outdated Production Methods- Artisans may also lack the financial capability to upgrade technology in production, or undergo necessary training on a regular basis, as would be available to them in a formal work setting. This compromises the quality of their products and raises the cost of production. 2. Inadequate Inputs Inadequate Inputs There are three main issues: Lack of Quality Raw Materials- Rural artisans often lack access to quality raw materials. Due to the low volumes required, they have low bargaining power and are forced to buy substandard materials at a higher price.In crafts such as weaving, handloom weavers have to compete with the power loom industry for high quality raw materials, which are more easily accessible to the power loom industry as a result of Government subsidies. Further, many raw materials used commonly by craftspeople such as wood, cane, silk, scrap and virgin metal are become increasingly difficult to acquire. The costs of some of these materials are rising faster than the wholesale price index. Lack of Funding- Craft producers suffer greatly from lack of working capital and access to credit and loan facilities.Often, producers are unable to fulfill bulk orders because they lack the capital to purchase raw materials, and simultaneously support their family's living needs while the order is being executed. While there are several Government schemes intended to fill this gap for artisans through institutions such as National Bank for Agricultur e and Rural Development (NABARD) and Small Industries Development Bank of India (SIDBI), it is difficult for the uneducated artisans to access these programs and manage the necessary collateral or funds for bribes.Banks cite poor recovery rates, wrong utilization of funds, lack of marketing facilities for finished products and lack of education on part of the borrowers as reasons for the low proportion of loans made to artisans. In general, this forces artisans to borrow from their local moneylender or trader at high interest rates. The All India Debt and Investment Survey (2002) showed that the proportion of money borrowed by rural households from money lenders rose by over 10% from 17. 5% in 1991 to 29. 6% in 2002. 16 1.Low Productivity The sector's informal nature and the low education of most artisans create issues such as: Unorganized Production- As a largely unorganized sector, handicrafts faces problems such as a paucity of professional infrastructure such as work sheds, stor age space, shipping and packing facilities. Low Education- Many crafts require the entire household to participate in production in some capacity. For example, in weaver households, women and girls traditionally undertake warping of the yarn, winding the thread onto bobbins, and share with men the task of starching the thread.In many cases, crafts also serve as a seasonal source of income for agricultural households. This means that children miss school, resulting in LowProductivity 11 12 Artisans' financial weakness also hampers their ability to sell they have low bargaining power at the marketing point and are forced to sell to buyers at a low price in order to recover costs and support themselves. Design Inputs- In most traditional societies, design evolved in the interaction between the artisan and the consumer.Further, the artisan was aware of the sociocultural context of the consumer, and could thus design products that suited their needs and tastes. Due to the breakdown of th e historic artisanconsumer relationship, and the increasing urbanization and globalization of markets for crafts, artisans have difficulty understanding how to tailor their products to changing demands. The artisan may not speak the same language as the consumer, both literally as well as metaphorically. An example of this includes women in SEWA's craft cooperatives who design block printed table napkins and mats, but may have never used these products themselves. f this, retailers have to directly source from select producers, which is often not viable in the long run, resulting in the loss of a large percentage of the market for artisans. 5. Lack of an Enabling Environment Information Asymmetry 3. Information Asymmetry Neglect by Central and State Governments- Rural artisans are neglected by both Central as well as State Governments, as is evident in the lack of available records regarding their numbers and socioeconomic status. The Government views the sector as a sunset industry , no longer relevant in India's technologydriven economic growth.Thus, schemes designed for artisans tend to have low priority in terms of execution and assessment. Within crafts, the Government's priorities are skewed towards the export market, with 70% of its crafts budget going towards development of environments to enable export. 17 Further, the fact that the crafts sector falls under the purview of 17 different Government ministries, ranging from the Ministry of Textiles to the Ministry of Women and Children, results in confusion and inaction. Lack of Interest by Second Generation- Rural youth are increasingly disinterested in continuing their family craft traditions, for three main reasons.First, having seen their parents struggle to find markets and fair prices for their products, they are inclined to pursue other trades. Second, the school system today does not integrate lessons regarding the importance of crafts into the school curriculum, and instead students are pushed to wards white collar office jobs, even if they are lower paying. Finally, crafts are strongly associated with a family's religion. In many cases, such as leatherwork, artisans are ostracized for being from the lowest caste, which further dissuades rural youth from joining the family trade.Reducing the obstacles faced by the sector can provide employment for millions of citizens especially those traditionally excluded from the mainstream, while restoring one of India's key cultural and economic strengths, a diverse and rich handicrafts industry. At the same time, it will provide the economy with key drivers of specialization and competence in global manufacturing. Lackofan EnablingEnvironment Due to their low education, artisans often cannot identify potential new markets for their products, nor do they understand the requirements for interacting with these markets.This reduces their understanding of the market potential of their goods, the prices of their products in different markets , Government schemes instituted for their welfare and diversification opportunities. 4. Fragmented value chain Lack of Market Linkages- While consumers of crafts products are increasingly becoming urbanized, crafts continue to be sold through local markets; artisans have few opportunities to reach new consumers through relevant retail platforms such as department stores and shopping malls.Further, due to their rural orientation, artisans are often unable to access training and technology to supply their products to online markets. Dominance of Middlemen- Although middlemen are necessary to enable effective market linkages, they often, if not always, exploit artisans by paying them a fraction of their fair wages. This may be due to lack of information on the part of middlemen about true manufacturing costs, or merely due to their ability to coerce artisans, who often lack bargaining power.Lack of Aggregation- Crafts production typically takes places in scattered clusters in rural are as, while markets are usually in urban centers. Currently, there is a lack of organized systems to efficiently aggregate goods from small producers, carry out quality checks, store approved goods in warehouses, and supply them to wholesalers and retailers in urban areas. In lieu Chart4: OverviewofKeyChallenges FacedbytheArtisans Fragmented ValueChain LackofMarket Linkages Lackofan enabling environmentNeglectby CentralandState Governments LackofInterest bySecond Generation LowProductivity Unorganized Production LowEducation Inadequate Inputs LackofQuality RawMaterials LackofFunding Fragmented ValueChain Information Asymmetry Dominanceof Middlemen Lackof Aggregation OutdatedProduction Methods 13 14 II. CHAPTER Government, Private Sector and Non Profit Initiatives Photo Credit: Sahaj 15 The Indian Government, the private sector and the non profits are each involved in the sector but their roles have evolved in silos, with little specialization and much duplication.Since independence, t he Indian Government has created a number of institutions, schemes and welfare programs for the crafts sector. However, on a policy level there has been no concerted and cohesive effort to address the challenges faced by the crafts ecosystem, with most governmental offerings mired in bureaucracy and inefficiencies. Simultaneously, the private sector has contributed to uplifting artisans through different market-led efforts made by retail chains, high end-fashion designers and a relatively more recent wave of social businesses.Non profits have been particularly active in the crafts space since the early 1960s and have evolved numerous models to improve artisan livelihoods. The chart below provides an overview of the evolution of crafts policy and programs in India. Government Program Although Government-led initiatives are often criticized, it cannot be denied that India is in a much more fortunate situation today in the preservation of its crafts than most other nations because of G overnment efforts immediately following Independence.During this period, the Government placed great emphasis on rural artisans, setting up the All India Handicrafts Board in 1952 to study the technical, organizational, marketing and financial aspects of crafts and design measures for improvement and development of crafts. The impetus for these efforts came in part from Mahatma Gandhi's legacy of the swadeshi movement and preserving cottage industries as a symbol of India's diversity and unity as a nation-state. Pioneering efforts were made to provide marketing support to artisans, and make regional crafts available at a national level through state-run emporiums.With industrialization becoming a foremost national priority in the 1960s and 1970s, the Government came to view crafts as more of a â€Å"sunset industry† and began to focus mainly on welfare schemes rather than approaching it as a sector capable of contributing to India's economic growth. Several divisions were mad e between State and Central Government responsibilities, and separate administrative bodies were set up for Khadi, Handloom, Handicrafts, Silk, and so on, all of which contribute to inefficiencies and inertia in policymaking for the sector today.At present, crafts are almost artificially bifurcated into Handicrafts and Handlooms, with two separate Development Commissioners in charge of each under the ministry of Textiles. In addition, 16 other ministries have crafts within their purview, including the Ministry of Agro and Rural Industries, Ministry of Tribal Development, Ministry of Rural Development and the Ministry of Women and Child Development.These bodies have often been pitted against each other on issues such as power loom versus handloom production, anti-dumping duty on foreign silk yarn to protect the interest of silk rearers versus removal of duty for handlooms and power looms and interest of petty traders versus greater control for home-based producers, leading to ineffic iencies and policy juggernauts. 19 Governmentefforts havechanneled anestimated `752crore intothecraftssector duringtheEleventh FiveYearPlan(200718 2011). Anumberofinstitutions havebeeninvolvedin fundingandimplementing developmentworkfor artisansthroughdifferent schemes.Suchas: 1. Councilforthe AdvancementofPeople's ActionandRuralTechnology (CAPART) 2. KhadiandVillage IndustriesCommission (KVIC) 3. SmallIndustries DevelopmentBankofIndia (SIDBI) 4. NationalBankfor AgricultureandRural Development(NABARD) Chart4:StakeholdersintheCraftsValueChain PROCESS Procuring and Processsing RawMaterials Aggregation and Intermediary Trade STAKEHOLDERS Organization InputSuppliers Production Markets LocalTraders IndependentArtisan SHG’sCo-operatives, Producercompanies NonProfits SocialBusinesses Government Exporters Retailers 16 17Despite these challenges, the majority of Government funds have been utilized in the following areas, largely with the support of non profits working in the sector: ? Welfare- Government efforts in the crafts sector are often designed with the intention of large-scale poverty alleviation. Schemes such as the Rajiv Gandhi Shilpi Swasthya Bima Yojana and the Janshree Bima Yojana for Handicrafts Artisans, under which artisans in the age group of 18-60 receive health and life insurance in association with the Life Insurance Corporation of India for themselves and three dependents, provide some social security.Market Linkages- One of the most widely lauded efforts of the Government in the crafts sector has been the establishment of Dilli Haat, an open-air crafts bazaar in the national capital modeled on a traditional village market where artisans from around the country can rent space and display their wares for two weeks at a time. Set up in cooperation with Dastkari Haat Samiti, a non profit organization that works with artisans across the country, Dilli Haat has provided artisans with much-needed market linkages and access to consumers.In addition , the Development Commissioners for Handicrafts and for Handlooms run a number of emporiums across the country, which are retail outlets for crafts from different regions. Capacity Building- In recent years, the Government has moved its focus towards sustainable development of crafts through the participation of artisans. Capacity building efforts such as the Artisan Credit Card scheme and the Baba Saheb Ambedkar Hastshilp Vikas Yojana scheme are generally led by the Development Commissioner of Handicrafts.Efforts include skills development, technological intervention, design and marketing support and reviving languishing crafts. The Development Commissioner for Handlooms runs Weavers Centers in many parts of the country along with the National Center for Textile Design to provide marketbased design input for handloom weavers. Awards- Each year, the Ministry of Textiles recognizes the work of several master craftspeople through the distribution of national awards. These are highly c oveted accolades that enhance the reputation enjoyed by master craftsmen and function as a quality approval of sorts. Private Sector InitiativesThe private sector has been the main conduit for crafts with over 95% of crafts production taking place through some form of private enterprise. Broadly, private involvement in the crafts sector is of four types: ? ? Traditional Intermediaries: Historically, private involvement in the crafts sector has been dominated by master craftsmen, traders and exporters who aggregated production, provided market linkages and offered financing mechanisms to artisans. Although not always the case, these relationships have often been exploitative to the artisan, who realized little of the value of his products.Design Entrepreneurs: These include high-end fashion houses that have imbedded traditional crafts in their collections. Designers such as Ritu Kumar, Tarun Tahiliani and Manish Malhotra have worked closely with master craftsmen to create product off erings for high-end domestic and international markets. However, none of these efforts have placed crafts distinctly at the center of their enterprises but rather integrated crafts into their work. Their impact on promoting crafts has therefore been largely indirect. Other fashion designers such as Anita Dongre have created a istinct crafts-based collection, Grassroots, that aims at marketing clothing that promotes the skills and knowledge of traditional artisans, and has been made using organic materials and eco-friendly processes. Mainstream Retail: There have been a few successful examples of crafts-based businesses, which have not only contributed to improving numerous artisans' livelihoods but have also provided unique blueprints for future market-based endeavors. However those that exist are success stories that need to be more systematically replicated.Social Businesses: These are a more recent wave of businesses that have originated out of non profits or hybrid models that c ombine social and commercial goals. ? ? ? ? ? ? Photo Credit: Sahaj Photo Credit: Sahaj ? ? ? The Role of Mainstream Retail While relatively few, a handful of retailers such as FabIndia, Anokhi and Contemporary Arts and Crafts have played a pivotal role in keeping crafts relevant and linked to contemporary consumers. These companies have developed 18 For Government efforts to have the maximum impact, Government bodies mplementing programs need to be reformed and a policy environment more conducive to greater participation and specialization by different stakeholders needs to be created. 19 socially conscious business models wherein they work closely with artisans and ensure that they are equal stakeholders in the business. Due to their relatively well-organized supply chains and focus on profitability, they are able to provide consumers with quality products better suited to urban tastes as compared to subsidized crafts available at Government-run emporiums.The success of these mode ls has been built on the zeal of their founding members, who have overcome challenges in the crafts value chain through innovative strategies that not only ensure bottom-line growth for businesses but also fair and consistent wages to artisans. These models include: ? Fabindia, founded by John and Bissell in 1960, India's largest private crafts business that has taken tradition techniques, skills and hand-based processes to global markets. The company has been recognized worldwide for its socially responsible business model that links over 80,000 craft producers to markets.This has been achieved through its innovations in supply chain management through Community Owned Companies (COC), which serve as intermediaries and are owned by communities. Artisans form a significant part of the shareholding of these companies. Fabindia's supply chain (in the chart below) consists of numerous backward and forward linkages in a multi-layered supply chain from suppliers or artisans to Fabindia st ores. These linkages ensure that products sold cater to consumer tastes, a quality standard and timely delivery. The multi-layered supply chain ensures that each group's strengths are leveraged efficiently. Anokhi, founded by Faith Singh, is a clothing chain well known as an alternative role model for good business practices, and the ongoing revival of traditional textile skills. The company works closely with the Jaipur Virasat Foundation that provides capacity building inputs to artisan suppliers on design, techniques, quality control and enterprise development. In addition, the foundation works in other areas of Rajasthan's cultural industries such as folk art, music and dance to promote livelihoods and preserve heritages.Contemporary Arts and Crafts (CAC), founded by Vina Mody and run in partnership with Feroza Mody, is a boutique retail outlet that provides unique and rare craft products to urban consumers. CAC's success is based on its strong relationships with artisan communi ties in Gujarat and Rajasthan from where products are sourced. The CAC team invests significant time in understanding craft products and working with artisans to create outputs that will be appreciated in urban markets.In addition to these efforts, stores such as Shopper's Stop and Lifestyle have expanded their selections of handmade products and ethnic wear, providing much needed market opportunities for the crafts. However, for a deep and sustainable impact on the artisan, retailers and mainstream businesses need to leverage their business acumen in tackling supply chain issues and creating a larger demand for these products. ? 6 The SRC repleshnishes the stock by getting more of the fabric from the weaver Fabindia’sSupply ChainStructure The weaver weaves some yardage and shows it to a regional supplier region company (SRC) HOWTHEFABRIC REACHESTHESHELVES Fabindia’s Supply Chain is split into 17 regional supply companies The Role of Social Businesses The emergence of the social business model has provided a new opportunity to revive the sector. With their emphasis on the end consumer, social businesses have a greater incentive to bring in efficiencies in quality control and production management, which are often lacking in non profit organizations.Pre-production, social businesses may offer access to quality inputs, equipment, financing and training. Post-production, they improve market linkages through procurement, storage, transport and retail. Social businesses achieve this by focusing on three main areas, which essentially sets them apart from non profits: ? Supply Chain Efficiencies: Given the scattered and homebased nature of crafts production, enterprises often face challenges in ensuring a regular supply chain for their products. Social businesses have focused on fixing the rural supply chain for crafts, either by filling in missing or Through an order booking system, the store manager books the quantity needed. From the SRC warehouse st ock moves to the Fabindia regional warehouse Around 40,000 artisans supply goods for Fabindia It now has 144 stores in 35 top towns 2 The SRC calls the designers; they approve the fabric, work with the weaver to develop some samples. Photo Credit: Top – Anokhi Bottom – CAC 4 20 The weaver brings the completed order to SRC warehouse 3 Designers show samples to Fabindia's product selection committee, the price is finalised and an order is placed with the weaver 21 eak links in the value chain through their own operations, or by establishing creative partnerships with non profits, Government bodies, corporations and community groups. ? Artisans’ Ownership: The advantage of functioning as a business rather than a non profit in the crafts space is the ability to involve artisans as owners by giving them shares in the company. This ownership brings with it an increased sense of responsibility and efficiency, which is sometimes difficult to achieve in a non profit. In this way artisans are not only vested in the company's growth but also financially benefit from it through issue of dividends.Market Linkages: Due to their focus on standardization and supply chain management, social businesses are in a better position than non profits to create and maintain links between artisans and markets – domestic as well as international. Corporates typically prefer to partner with social businesses to bring crafts products to market due to more efficient processes in the company. This ownership brings with it an increased sense of responsibility and efficiency, which is sometimes difficult to achieve in a znon profit.Further, in this way artisans are not only vested in the company's growth but also financially benefit from it through issue of dividends. The biggest advantage faced by social businesses is their ability to raise capital from artisans in the form of shares, as well as external investors such as venture capital funds and corporates. In re cent years, businesses in the crafts sector have attracted funding from impact investors such as Avishkaar, Grassroots Business Fund and Villgro, who invest in social enterprises with the dual expectation of social impact and financial returns. Industree- Linking Artisans to Mainstream Markets: Industree, a social enterprise that connects rural producers to urban markets has been able to rapidly scale up operations through equity investment by Kishore Biyani's Future Group. This has enabled them to set up a retail brand called Mother Earth, and increase the number of clusters from whom they source crafts as well as provide artisans an opportunity to link to mainstream urban markets. ? Support from Multi-lateral Agencies and FoundationsThe international development community and private foundations have been pivotal in providing support to many non profits working in the crafts sector. United Nations agencies such as UNESCO have provided platforms for sharing best practices, research and documentation such as the Jodhpur Symposium. These initiatives have typically focused on project design and building frameworks to build a movement that strengthens creative and cultural industries. Others such as the World Bank channel funding to crafts organizations.A number of private foundations such as Aid to Artisans, Sir Dorab Tata Trust and the Ford Foundation provided long term grants to crafts non profits to scale their impact. Innovative approaches include Friends of Women World Banking’s funding strategy of credit provision to artisans through non profits. Together these efforts have helped sustain non profits’ work and strengthened models creating an impact on artisans incomes. Thecooperativemovement spearheadedbyElaBhatt, founderofSelf-Employed Women'sAssociation (SEWA),inthe1970s alsohadapositiveimpacton thelivesofself-employed womenartisansthroughthe formationofcraft cooperatives.Thesemembership structuresallowedthemto workwithinequitable structure sandreceivecredit, designandmarketinginputs, withoutfearofexploitation bymiddlemen. The Evolution and Role of Non Profit Interventions Non profit organizations have been the strongest supporters of the craft industry, both in terms of livelihoods promotion as well as cultural preservation. Following post-independence industrialization, the crafts industry was no longer viewed as an economic priority by the Government, which created a void in terms of support and finance available for the sector.A number of non profits were established in the 1970s and 1980s to fill this void and enhance the sustainability of artisans livelihoods. Many of these were run with the help of volunteers and were able to grow and thrive under a strong, charismatic leader with a clear vision for the sector. Examples of successful social businesses in the crafts sector include: ? Rangsutra- Enabling Artisans to Own a Share of their Crafts: Rangsutra was set up as a company of artisans, all of them shareholder s, from remote parts of the country.It seeks to be a bridge between â€Å"artisans and customers, tradition and contemporary, and change and continuity† and ensures a fair price to the producer and quality products for customers. It currently has 1,100 shareholders and has attracted investments from Avishkaar and Artisan Microfinance Private Limited (AMFPL), a subsidiary of Fabindia. Photo Credit: Sahaj 22 23 Most non profits functioning in the crafts space today are registered as trusts, societies or Section 25 companies. They are broadly of two types, based on their scope of work: ?Producer Groups: A majority of non profits in this space ? work directly at the grassroots level, organizing crafts producers into collectives to realize various economies of scale in financing, marketing and product development. Examples are URMUL, Kala Raksha and SEWA Ahmedabad. ? Apex Organizations: These focus on enhancing the sector ? by providing services ranging from design interventions t o market linkages to groups of producers, who typically serve as part of their membership base.They vary in scale and level of outreach from national to state to local levels. Many apex organizations are well-positioned to act as a bridge between producer groups and Government bodies, both by channeling information regarding relevant Government schemes as well as by influencing Government spending. Prominent examples are Dastkar, AIACA, Dastkari Haat Samiti and Sasha. Non profit approaches have evolved significantly in two main areas: focus of the model and financial sustainability.Most non profit groups have focused on all parts of the value chain from organizing artisans to marketing products, largely due to a lack of other players specializing in certain areas. This has resulted in limited capacity to scale their operations. Fresher non profit approaches focus on one or two parts of the value chain such as aggregation or working closely with artisans’ groups. Further, ther e has been a realization in recent years that traditional grant funded projects for creating crafts production structures have not succeeded in establishing commercially sustainable structures.Newer non profits have attempted to embrace this change in perspective by incorporating fee-based enterprise development projects into their scope of work, others have spun off business models that target aggregation and marketing, while the non profit focuses on building artisan capacity. The different stakeholders described above have each made significant contributions to the crafts sector. However, since they act in isolation from each other, their impact remains limited and they have not been able to halt the downward slide of India's crafts sector. 24 25 III. CHAPTERHarnessing the Potential of India's Crafts Sector Photo Credit: Jaipur Rugs Foundation 26 The crafts sector in India has vast potential to improve livelihood opportunities, generate additional income and strengthen the purcha sing power of rural communities. For this potential to be fully realized, the gaps, overlaps and challenges in the value chain must be overcome to create an ecosystem that enables crafts to thrive. The different stakeholders involved need to come together to build what we call the four cornerstones of artisan sustainability. Non profits have a particularly important role in such a program.Based on Dasra’s research, interviews with experts in the crafts sector and advisory committee discussions, Crafting a Livelihood suggests four key actions with the potential to transform artisans’ livelihood in India. The four cornerstones are: 1. Handholding the Artisan through the Value Chain Any investment in improving the craft ecosystem as a whole must pay particular attention to strengthening the individual artisans and enterprises engaged in production. Since challenges faced by artisans are pushing them into other dailywage earning jobs, concerted efforts are needed to upgrad e the current piecemeal nature of production.Crafts promotion efforts should focus on making artisans aware of the value of their skill, which would make them take greater pride in their work and encourage the second generation to enter the sector. Further, it is essential to help artisans continuously upgrade their skills and product offerings. This requires design inputs and skills development efforts. 2. Increasing Demand for Crafts and Strengthening Market Linkages There is an urgent need to revive consumers’ interest in crafts and make crafts relevant to increasingly urban lifestyles.Efforts are needed to sensitize the emerging middle class consumer to the history and value of crafts in India to ensure a robust domestic market. Strengthening branding efforts and introducing geographical indicators such as a â€Å"Handmade in India† classification, will enable Indian crafts to compete in increasingly global markets. Crafts can be branded on the national, regional o r local, and enterprise level. On the national or regional level, some countries are known or even famous for their excellence in handicrafts, or in specific crafts.The branding of a country's handicraft image depends on the public perception of that country's culture and handicraft skills. Countries that, for different reasons, de-emphasize their indigenous culture and traditions and focus on their modernism create a much tougher environment for the promotion and export of their indigenous handicrafts. 21 Crafts lies well within the informal sector, bringing with it challenges of taking a completed product to market. Most artisans produce at relatively low volumes and at irregular intervals, creating few opportunities to market products at scale.New business models are needed that blend social and commercial goals to provide value added services to artisans particularly in aggregation of products and intermediary trade. As artisans are scattered across geographies, there is a need for players who can source products from them in a centralized fashion and introduce economies of scale into the supply chain. These intermediaries will provide the essential bridging Asartisansareoftenproducing formarketsthatarealiento them,theyneedsupport servicessuchastechnicaland designskillbuildingtohelp reachtheincreasinglyurban consumer.Theseinputswill increasetheirbargaining powerandbuildtheircapacity tosupplydifferentmarkets. Dasra'sfieldresearchhas shownthatbuildingthe capacityofartisansinthis mannercanresultinuptoa ten-foldincreasein incomes. 1. Handholding the Artisan through the Value Chain 2. Increasing Demand for Crafts and Strengthening Market Linkages AconsumersurveyinEurope revealedthat40%of consumerssurveyedwere willingtopayapremiumof 10%fororigin-guaranteed products. SalesofIndian craftsstandtoincrease 20 fromsuchefforts. 3. Strengthening the Decentralized Production Model 4. Building a Multi-Stakeholder Approach 7 28 services between small producers and the diff erent markets where products can be sold and thereby smoothen seasonality of production. Creativeclustershavebeen identifiedasanimportant meansformicroandsmall enterprisestogrowstrongly throughmutualstimulation andleveragingofcommon knowledgeandmarkets. Typicallytheybenefitfrom lowerVAT,tariffsandexcise dutiesonhandmadeproducts. Creativeclustershavethe potentialtonotonlycreate productionefficienciesbut alsoprovideaplatformfor artisanstoaccesslocaland domesticmarkets. 3. Strengthening the Decentralized Production ModelThe fragmented supply chain, lack of organization and seasonal production characteristic of the craft sector need to be overcome to maximize production potential. Geographically scattered production, which is typical of the crafts sector, requires services at artisan's doorsteps. Leveraging technology for information as well as for innovations in process will infuse efficiencies in craft production and enable artisans to produce more. Limited education and low exposure to the skills essential to running a business prevent artisans from scaling up their operations.Providing business support in areas such as quality control, standardized processes, inventory management, cashflow management and securing credit would help them create strong enterprises. To this effect, capacity building cooperatives and producer owned companies would ensure standardized systems and processes, quality control, and professionally run businesses that can access capital and enable them to compete in markets. Dasra's field research has demonstrated a potential three- to five-fold increase in individual income through these efforts.Moreover, fragmentation in the value chain can be overcome with clusters such as Special Economic Zones (SEZs) for crafts. These are defined as a combination of production and distribution activities operating within a common structure, capable of promoting creativity, research applications and distribution systems. Historically, clusters in Indi a have been created for production and bureaucratic efficiencies, ignoring their function as a sales platform. While the sales focus has been tried at Bhujodi in Kutch, creative clusters are generally the exception in India. ensitizes them to crafts, deepens their understanding of tradition in a way that they can implement in the mainstream. This fosters the perseveration of culture by continuously adapting it to modernity. Setting up academies for