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Essay: Rehabilitating and managing sick units in Oman

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Sick industrial unit is defined as a unit or a company that have been in surviving for not less than five years and which is realized at the end of any financial year to have earned congregate losses equal to or exceeding its entire net worth.
The net worth is calculated as sum total of paid up capital and free assets of a company less the necessities and expenses, as may be approved.
An industrial unit is also considered as possibility sick or weak unit if at the end of any financial year, it has accumulated losses equal to or exceeding 50 per cent of its average net worth in the instantly previous four financial years and has failed to repay debts to its creditor(s) in three successive quarters on demand made in writing for such repayment.
In the Sultanate of Oman there is very high percentage of the sick units and this leads to the local community (Oman citizens) to give up or not involve in businesses, so many units have gone sick for this past 10 years and many more units has bankrupt, obviously it is because of lack of this specific knowledge (Rehabilitation and managing the sick industries and recognition to prevent the unit into fall a sick).
Sick industrial company/unit is a unit which at the end of any financial year accumulated losses equaled to or exceeding its entire net worth.
Industries that have gone sick have far-reaching consequences on the economy of the nation. The following study is done from 2003 to 2013
Lots of SME units nowadays fall under the category of SICK units. There has to be a logical and valid reason for the same. There are some psychological aspects involved in this.
The entrepreneur always feels that his/her business idea is perfect and flawless. When their business turn to loss, they will blame it on either bad luck or existing economic crisis the customers face or some other silly reasons!
This attitude hampers the proper analysis of the core issue. The non-willingness from the part of entrepreneurs to identify and accept the real problem areas in the business is the prime reason why sick units remain SICK.
If at all the entrepreneurs really acknowledges the problems in their business, they will immediately think that extra funding by means of loans, or finding a partner to shoulder the financial crisis will be a solution to overcome the issues.
Still that is not enough, the knowledge of how to manage your funding and your employees within your organization plays major role in controlling the unit to not fall sick.
But again the psychological factor plays the spoil sport. He/she will assume that availing loans or seeking a new partner will create additional burdens and responsibilities! The very psychological factor also prevents him or her from downsizing the company by shutting down non profitable divisions, cutting the employee work force etc
So, the first step to turn a business to profitable one is to have a clear understanding of the real problems areas and a clear vision on growth strategies by means of sharp analysis of the existing business and its processes. Proper identification of the real problem area is the catch word.
Oman officially called the Sultanate of Oman is an Arab state in southwest Asia on the southeast coast of the Arabian Peninsula. It has a strategically important position at the mouth of the Persian Gulf. It is bordered by the United Arab Emirates to the northwest, Saudi to the west, and Yemen to the southwest and also shares a border with Iran. The coast is formed by the Arabian Sea on the southeast and the Oman on the northeast. The Madha and Musandam exclaves are surrounded by the UAE on their land borders, with the Strait of Hormuz and Gulf of Oman forming Musandam’s coastal boundaries.
From the 17th century, Oman had its own empire, and vied with Portugal and Britain for influence in the Persian Gulf and Indian Ocean. At its peak in the 19th century, Omani influence or control extended across the Strait of Hormuz to Iran, and modern-day Pakistan, and as far south as Zanzibar. As its power declined in the 20th century, the sultanate came under heavy influence from the United Kingdom, though Oman was never formally part of the British Empire, or a British protectorate.
Omani people are ethnically diverse, the native Omani population consists of many different ethnic groups, including Arabs, ethnic Balochis, Swahilis, ethnic Lurs, Lawatis, Persians and Mehri people. The largest non-Arab Omani community are Balochi people, who are an Iranian people following the Sunni faith. At least 12 different languages are native to Omani citizens. Oman is an absolute monarchy in which the Oman exercises ultimate authority, but its parliament has some legislative and oversight powers. Oman is a member of Gulf Cooperation Council, United Nations, Organization of Islamic Cooperation and Arab League. It has long standing military and political ties with the United Kingdom and the United States.
Oman, compared to its neighbors, has modest oil reserves ranking at 25th globally, nonetheless in 2010 UNDP ranked Oman as the most improved nation during the preceding 40 years globally. Additionally, Oman is categorized as a high income economy and the 45th most peaceful country in the world.
Oman’s economic performance improved significantly in 1999 due largely to the mid-year upturn in oil prices. The government is moving ahead with privatization of its utilities, the development of a body of commercial law to facilitate foreign investment, and increased budgetary outlays. Oman liberalized its markets in an effort to accede to the World Trade Organization (WTO) and gained membership in 2000.
When Oman declined as an entrepot for arms and slaves in the mid-19th century, much of its former prosperity was lost, and the economy turned almost exclusively to agriculture, camel and goat herding, fishing, and traditional handicrafts. Today, oil fuels the economy and revenues from petroleum products have enabled Oman’s dramatic development over the past 30 years.
Oil was first discovered in the interior near Fahud in the western desert in 1964. Petroleum Development Oman (PDO) began production in August 1967. The Omani Government owns 60% of PDO, and foreign interests own 40% (Royal Dutch Shell owns 34%; the remaining 6% is owned by Compagnie Francaise des Petroles [Total] and Partex). In 1976, Oman’s oil production rose to 366,000 barrels (58,000 m??) per day but declined gradually to about 285,000 barrels (45,000 m??) per day in late 1980 due to the depletion of recoverable reserves. From 1981 to 1986, Oman compensated for declining oil prices, by increasing production levels to 600,000 b/d. With the collapse of oil prices in 1986, however, revenues dropped dramatically. Production was cut back temporarily in coordination with the Organization of Petroleum Exporting Countries (OPEC), and production levels again reached 600,000 b/d by mid-1987, which helped increase revenues. By mid-2000, production had climbed to more than 900,000 b/d where they remain. Oman is not a member of OPEC.
Natural gas reserves, which will increasingly provide the fuel for power generation and desalination, stand at 18 trillion ft?? (510 km??). The Oman processing plant located in Sur was opened in 2000, with production capacity of 6.6 million tons/YR, as well as unsubstantial gas liquids, including condensates.
Oman does not have the immense oil resources of some of its neighbors. Nevertheless, in recent years, it has found more oil than it has produced, and total proven reserves rose to more than 5 billion barrels (0.8 km??) by the mid-1990s. Oman’s complex geology makes exploration and production an expensive challenge. Recent improvements in technology, however, have enhanced recovery.
Agriculture and fishing are the traditional way of life in Oman. Dates and limes, grown extensively in the Batinah coastal plain and the highlands, make up most of the country’s agricultural exports. Coconut palms, wheat, and bananas also are grown, and cattle are raised in Dhofar. Other areas grow cereals and forage crops. Poultry production is steadily rising. Fish and shellfish exports totaled $34 million in 2000.
This is a chart of trend of the gross domestic product and gross domestic product per capita of Oman at market prices by the International Monetary Fund from 2000 to 2010.
Year Gross Domestic Product
(in millions US$) Per Capita Income
(US$) Per Capita Income
(as % of USA)
2000 19,450 8,097 22.97
2005 30,905 11,806 27.70
2010 58,814 23,351 49.88
Oman’s industrial sector started in 1975 – so it is very young – and the immediate target set for it was that of import substitution.
With Oman’s depleting oil wealth, the role of the manufacturing units and industries assumes greater importance in sustaining the country’s economy. Dr Hamad bin Hashim Al-Dhahab, Director-General of Industry, Ministry of Commerce & Industry, provides an overview of the Omani manufacturing sector and reveals the reasons behind the pervading sickness
It started off in small measures, and even today, most of the products are consumer products and not engineering goods. Right from that time onwards, the government has helped it get a foothold by providing infrastructure like electricity and means of communications etc. That is when the Industrial Estate Authority was formulated in an attempt to attract the private sector. The Rusayl Industrial Estate was the first one to come up and, today, there are six industrial estates throughout the Sultanate. Thus, the government has played the role of a catalyst for the private sector to invest in the manufacturing industry.
Now, the changing of a society from being trading-based to becoming industry-based takes time because it is a learning process. And so was the case with Oman, when third-generation traders invested in industry, which started catering to local consumers. From that point, the industry has come a long way and, in 1996, according to Vision 2020, a certain target was set for it. Of course that target has been broken up into five-year plans and, thus, while the horizon is longer, planning has been steady.
The manufacturing sector, which was contributing 4.6 per cent of GDP in 1996, has been set a target of 15 per cent of GDP in 25 years from now. Industry focus too has graduated from import substitution to diversification. Diversification to a non-oil based economy is a national priority and the country has clear targets for this. The manufacturing sector is a key area for achieving this. Of course, tourism is equally important. The local industry has gained expertise to remain competitive at the regional level and some even at a global level.
The way forward in that direction is the setting of what we call the strategic pillars of industry. The focus now is on hi-tech, capital intensive industries that mainly use local raw materials besides being export-oriented and, of course, those that provide consumers with more value-addition.
It is too well known that the home market is pretty small. Hence, without export, it was rather impossible to achieve economic scale of production. In the earlier years of industrialization of Oman, we had a lack of enough experience at the entrepreneurial or managerial level for playing in the export market, especially by operating from a land with very limited comparative advantages in terms of key industrial resources. But, as of now, development is not really dependant on resource endowment. It largely depends on the developmental strategies pursued by nations. To this extent, I think, Oman is geared to face the current challenges.
As of now, as part of a global economy, Omani companies also face severe competition in export as well as local markets. It is quite possible that our industries are not quite certain about their competitiveness in their respective sectors, as it is rather difficult to assume that we have low cost of production in Oman compared to other GCC countries or other parts of the world. We need to have some kind of benchmarking in certain key sectors within Manufacturing. We might embark upon some exercise in this direction. But we have already initiated sectoral studies in the manufacturing sector.
We have finished a detailed sectoral study on the plastic industry in Oman by which we have studied the industries in Oman in relation to the regional and to some extent the global performance. As a result of this, we have identified two issues to be addressed in this sector immediately. One, to initiate a program called ‘Quality Omanization’, which is aimed at enhancing the quality and productivity of Omani employment, wherein both skill and attitudinal issues will be addressed simultaneously through a structured HRD program. In this regard, we might seek the help of a well-known plastic research and training institution. The second issue is to explore the possibility of micro-enterprises in this sector in Oman.
Another problem facing industry is the unfair practices in global trade carried out by exporting countries and, of course, issues related to dumping. Although Oman initiated the process of evolving anti-dumping laws, in the current context of a single customs union within the GCC, probably this would be evolved at a regional level.
Productivity concepts, I suppose, still take a back seat when it comes to industrial performance. We need to have continuous productivity enhancement programs in various industrial sectors.
Industrial sickness is an incident found in any economy. Sometime back, the Ministry of Commerce & Industry had conducted a detailed study of 168 industrial units. Forty-eight per cent of the sample was found to be healthy and 20 per cent on a low performance level. If left unattended, this 20 per cent would be vulnerable to industrial sickness.
Thirty-two per cent of the sample was actually sick. However, the study was conducted during a period of economic downturn and this would have influenced the results. Analysis revealed that many of the reasons for sickness were management related.
Having understood the scale of the problem, rehabilitation of sick units has been given substantial importance. We now have a sick unit rehabilitation cell. I need to help through my study to those establishments which are in trouble. It will be wise on their part to make use of this valuable information and take corrective actions. The Ministry, since about a year, is facilitating to bring together all the stakeholders – promoters, banks and the government – to evolve revival plans.
All the companies identified as having problems have been considered for rehabilitation. Rehabilitation plans have been finalized for 21 units and are at various stages of restructuring; seven are under study now.
1-4. Summary of the study
The summary of this research has two types of data (primary data and secondary data)
Primary data are generated from the most current data. The obtained data will be analyzed and subjected to peer reviewing, the results of which will help formulate the conclusions.
Secondary data are gathered from previous studies from different sources, such as newspapers, magazines, proceeding papers, reports, statistical data, published journals, and Web sites.
Is to direct the focuses on the SME and how to assist them in
improving their abilities, and potential and by giving
special attention on how to prevent them from going under the sickness. And to educate the units about the major challenges facing lots of organizations, such as the gaining of logical capital and performance quality, it is also attempts to identify the impact of training strategies to develop human resources and its specifically identifies the most
important problems facing the organization and the view of success factors,
Its also instruct on how to deals with a new administrative term called management training if needed, which is an absolute necessity for Arab organizations in light of the current competition and challenges caused by globalization.
The scientific importance of this study is that it improves theoretical knowledge in the
study of the influence of management training to develop human resources in the SME, The study will provide results and recommendations that will benefit the administrative leadership within the industries in the country (Oman) when management training is applied.
To direct and provide the right knowledge on how to manage the industry/sme before it become sick, we can say pertaining to the factors which are within the control of management. This sickness arises due to internal disorder in the areas justified as Lack of Finance, This including weak justice base, poor utilization of assets, inefficient working capital management, and absence of costing & pricing, absence of planning and budgeting and inappropriate utilization or diversion of funds. Bad Production Policies : The another very important reason for sickness is wrong selection of site which is related to production, inappropriate plant & machinery, bad maintenance of Plant & Machinery, lack of quality control, lack of standard research & development and so on. Marketing and Sickness, This is another part which always affects the health of any sector as well as SSI. This including wrong demand, selection of inappropriate product mix, absence of product planning, wrong market research methods, and bad sales promotions. Inappropriate Personnel Management: The another internal reason for the sickness is inappropriate management policies which includes bad wages and salary administration, bad labor relations, lack of behavioral approach causes dissatisfaction among the employees and workers. Ineffective Corporate Management: Another reason for the sickness of SSIs is ineffective or bad corporate management which includes improper corporate planning, lack of integrity in top management, lack of coordination and control etc.
As for studies some limitations are there because of the different nature of the situation but for this study and research all means available are useful to gather information and This study will use the questionnaire’
-Development of the country
-Financial institutes
2-1. Introduction
Employee, Bankers, Financial institutes, Entrepreneurs, Businessmen, Industries, Investment, companies, SME, etc,’ take a big part in the development of the country, when the unit is performing well and it will increase its development and development of the citizen and the country in the way of hiring more local employees and help in growing the economy of the country, but to be able to maintain the unit into performing and take that big part in the country it needs to stay well and not fall sick because when it falls to a sick industry then it will affect the country’s development in a negative way including its citizen, what happens when a unit fall a sick is, usually it ends up in closed down and the owners ends up with loss of their capital, employees lose their job, and this will make the country’s development slow, if our country (The Sultanate of Oman) has more erudite citizen will help the country to have more vacancies for the society as mentioned above we need to control and maintain the industries from the sickness, there is a change in the development of the country but the percentage of the citizen whom doesn’t want to go into business is more than the ones doing and interested on doing, all this is because the experience and observation of how big of percentage of sick units exists.
Another serious problem being faced by majority of the sampled units is that of competition from
large scale industries, out of state and even from foreign countries. Recent
development has shown that trade has become inseparably linked with the development process. Any prolonged disturbance in the industries can destabilize the standard of living of the people significantly
2-2. Concept of the study
The need of knowledge is still needed way more in the Sultanate of Oman to help the development of the country and its citizen and to change the current situation and to form an organization within us Omani citizens to lean and be able to minimize the risk of the units into falling sick and to maintain and rehabilitation the sick industries,
This study has to be done to minimize the likelihood of error, manage costs, assess risks, and evaluate the potential success of the unit
2-3. Objective of the study
To master the knowledge of understanding the SICK units and how to overcome the problems within the organization.
-To get the knowledge of identifying the SICKNESS in the early stage.
-To be able to recognize the reason of the SICKNESS within the unit.
-Giving solution and help turning a SICK unit to a PROFITABLE unit.
2-4. Scope of the study
– Definition of initial sickness and sickness within units.
– Identification of sick units eligible for consideration under this policy.
– Restructuring of MSME (Including Service Enterprises).
– Concession and relief that could be extended under rehabilitation
– Formulation of Nursing and Rehabilitation package.
– Viability studies and determination of viability.
2-5. Viability study should be conducted taking into account the following aspects:
a. Causes for sickness.
b. Future market for products/services.
c. Managerial competence of the borrowers to implement the rehabilitation.
d. Technical Viability ‘ any technology up gradation is required.
e. Financial Viability ‘ whether the projections are acceptable.
f. Any concessions available from the State Government as per the rehabilitation policy of the State concerned.
g. Ability of the borrowers to bring in their contribution.
2-6. Trainings in Oman
Training is defined as a serious attempt to modify and improve the behavior in terms of professional, functional and behavioral patterns, and give in skills to increase and improve productivity so as to achieve the conditions required.
The planned effort is to provide the organization’s human resources a specific knowledge to improve and develop the industries skills, capabilities and to change their behaviors and trends in a positive and constructive way.
This is in order to reflect in improved performances in the organization.
Some of the industries fall in to sick because they are lack of knowledge on how important training takes part in the organization.
By having more knowledge in regarding the sick industries can provide an opportunity to train our community to develop the infrastructure of the country by buying the knowledge and skills from the other developed country with more experience in regarding this topic (rehabilitation and management of sick industries) for example India, In the 80’s and the 90’s the industrial sickness in India increased rapidly mainly in the small scale sectors (SSS). Small scale industries in India are the defined on the basis of investment in plants and machinery.
In general, Oman has limited capabilities in rehabilitating and managing the sick industries and the citizens have minimal modern knowledge and skills for development and maintain. Moreover, the government also engaged in bringing trainers from different nationalities to educate the community,
In terms of human development according to Ministry of commerce & industry (1999) explains that the government conducted an intensive campaign to educate Omanis on the importance of registering not just male but also female.
Trainings needs to be taken time to time by the researchers/analyzers to improve their ability to keep up to date with the globalization and the organization, also for them to be able to give trainings to the organizations human resources and their employees to improve and develop their skills and capabilities, in
addition to change their behaviors in a positive and constructive way for them to be capable to maintain and manage their industries, companies ,organizations , etc,
Training strategy is a vision to where or what you need your organization to achieve in the future and the focus that comes within, to give direction on how to your management team can plan and handle the documents and procedure towards the goals of the unit.
It is actually one of the key foundations to bear the optimization of the human resource capital and it is necessary to align it to the organization strategy and allow its vision to be recognized.
Many thing can be explained why training has to be taken time to time within the organization, development for example, an industry will increase their investment, manpower, etc but at the end of the day if the human resource haven’t improve their knowledge how to manage the organization then it doesn’t matter how much investment you add in the unit its most likely the organization will fall apart or turn to sick and that’s why the training needed for all SME, companies, industries, etc
The goal of training needs is to decide whether a need exist, who needs training and what tasks needs to be trained, when performing the training needs, it’s important to remember to include managers, trainers and employees, At one time, just trainers and training instructional designers were concerned with the process. Today, as training becomes increasingly used by companies to achieve their calculated goals, upper and middle managers are involved in the evaluation process as well.
Employees can feel convinced of their abilities to perform on the job and lack any inspiration to improve their performance. A properly designed and implemented training program will inspire both confidence and inspiration in the people you train.
Training based on a specific background and on techniques specific to the workplace will show that change is not only possible but also wanted, and thus will inspire employees to change and improve even more.
If you carry out some front-end assessments and design your training based on your assessment results, you should be able to make final adjustments before the training begins.
The analysis of training needs provides a health check on the skills, talent and capabilities of the organization.
The identification of training and talent development needs is based on the behavior of a formal or informal assessment of current levels of skills, attitudes and knowledge, and any current or expected gaps, to inform decisions about the learning provisions required at individual, team or organizational level. The achievement of a training needs also sometimes known by alternative terms such as training needs analysis (TNA) or training and learning needs analysis (TLNA) – may be seen as a health check on the skills, talent and capabilities of the organization.
It is based on the systematic gathering of data about existing employees’ capabilities and organizational demands for skills, alongside an analysis of the implications of new and changed roles for changes in capability.
Such a process should flow from business strategy, and its aim is the production of a plan for the organization to ensure that there is sufficient capability to sustain business performance. It is also important to consider statutory requirements, for example certain positions require specified levels of health and safety expertise.
A highly practical book which will help you implement a systematic approach to learning that delivers business results.
Learning Needs Analysis and Evaluation will help you to ensure that learning in your organization is focused in the right areas and on the right people. It will help you assess whether learning interventions actually work and deliver improved performances that make a difference to your business.
2-10. Causes of sickness
The discussions detailed on the causes of industrial sickness indicates that the number of sectors, both internal and external are responsible for turning an industrial unit a sick. The key causes pushing the industrial units towards sickness have been figured up in the following:
a. Internal sectors:
Internal sectors are the departments including management, production, marketing, finance and personnel which responsible with internal affairs within the unit/organization, business, industries, companies, etc, which takes big part to effect the development of the unit in positive way or negative way.
a-1. Management
Management is the procedure of getting or accomplishing organizational goals through people and other resources and the way of maintaining the system.
-Lack of proper knowledge
Knowledge is a key foundation in all matters; in conducting this research I found out lots of units has fallen sick or undergoing difficulties in managing and management because of having less knowledge within the human resources or the employees.
-Less skills
Skill is parallel with knowledge, as I mention above about knowledge, skill also takes major part in the developing the unit or individual, if the management of the unit or the employees have knowledge but have lack of skills then most likely the organization will undergo the difficulties in performance.
-Poor management
Poor management is when those ones who are responsible in managing the unit are failed to perform their managerial duties according to the business system, this happened when there is a misunderstanding within the management, misunderstanding with the employees, between the owner and the management or conflict within the unit, other reasons are like technical failures, impractical expectations from the workforce,
-unfortunate justice base
Unfair treatment foundation is one of the other known words for unfortunate justice base, when the owner favors other managers more than the others within the organization or some of the managers favors some employee/personnel more than the others within the unit.
-Less of reliability of funds
In order for the units to perform well in their activities or to produce proper productions they required enough funds according to the requirements and nature of their business, and when the organization experienced lack of reliability of funds it will most possible influence the negative development within itself and most likely fall a sick.
-Faulty mission preparation and assessment
Faulty mission preparation and assessment is when the unit/organization or an individual takes on a mission and wrongly maintain the research, wrongly calculate and wrongly prepare on how to accomplish the goal of that mission.
a-2. Production.
Production is a process of creating or making something from raw materials or from collected mix products and end up with finished and different product, for example, making a movie, music recording, television show, farming or growing, making something from natural products, etc.
-Inappropriate use of production capacity
Lots of units or organization are fond of taking the easy ways in accomplishing their goals of their mission and ending up on producing improper competence and capacity of their production.
-Imbalance and flawed machineries
Having machines(generators, cranes, lathe machines, milling machines, mixing roller, etc) in the unit is a big advantage in performance and development of the organization, but when the unit has inequity and faulty machines it will gain poor performance and negative development and experience difficulties in production.
-Wrong choice of technology
The term technology in this sector is appliances, tools, machines or instruments of technical performances, this factor applies when the unit decide to use improper equipments for their production and mostly it happened when there is lack of knowledge or lack of skills within the management or as I mention before about take the an easy way to accomplish goals of the mission, also if the unit doesn’t have enough investment to get proper technology.
-Poor material planning
Material planning is a technique of determining the requirements preliminary with raw materials, consumables, and all other materials that are necessary to achieve the given production plan for a convinced period, Material planning is resulting from the overall unit planning and therefore it is always a secondary plan of the extensive organizational plan. It is estimating and commencing the procurement of materials.
-Insufficient quality control
Any unit/organization or even individual has to have quality control of their productions or activities, therefore insufficient quality control can result a major error in the system even without knowing or realizing and finds the organization is suffering in its development.
-Poor labor relation
Labor relation is the communication and how situation is maintained between the management of the unit and the employees/labors, when the organization experienced lack of labor relationship it will result on the employees/labors to not perform their duty properly by knowing that after all, at the end of the month they will get their salary, so this situation will not take a big effect on the labor but it will take on the development of the organization.
-Location problem
When it comes to the production of the unit, if it is an industrial, whole sale, retail or any other business or organization it requires an appropriate location according to the nature, type and the targeted clients, for example; if you have your business far from where you are getting your daily raw materials or consumable materials then it will affect the time production of the unit products and if it is far from your targeted clients it will affect the finance of the unit(unexpected sales target, increased of marketing and promotion budget, extra fuel consumption for the vehicles, etc.)
a-3. Marketing
Marketing is a concept created as a procedure of selling goods or ideas from one organization to the other or from businesses to customers or from one individual to another.
-insufficient market survey
Market survey is way of gathering information/data from the targeted customers or on how to reach the targeted customers, clients or audiences for the unit/organization and it is very important to have sufficient market survey before conducting any business or if you want to guarantee the success of that unit, business or organization.
-Short of marketing planning
Short of marketing planning in this topic is having insufficiency plans of marketing or less preparation on how the unit is going to achieve and fulfill the correct full foundation of the market strategy which will lead to the right and targeted audiences.
-imperfect pricing
Right prices of the products produced by the unit has to be charged to the clients, not less or more, what will happened when the organization overcharge their products is the clients, customers or the audiences will not favor that unit or the products of that organization and the unit will fall in loss.
-Poor collections
Poor collections is the unfortunate gathering of information/data, instruments, and other assets that the unit needs for the management and the employees/labor to deliver their duty according to the policy and procedure of the organization.
a-4. Finance
Finance is a management of funds, business capital, investments, banking credits, large amount of money on how it has to be used within units/the organizations.
-Poor management of finance recourses
There are various sectors or departments which controls finance resources within the unit and all these departments are of course under the management of the organization, poor management occur when there is a conflict within the management.
– Delay in mobilization of equity funds
Lots of organizations these days are experiencing this problem (delay in draft of equity funds), for example; delaying of salary to the employees/labors, this also takes major part in the development of the unit, if the employees are not satisfied with the rotation of their finance from their employers then they will not deliver sufficiency work performance.
-Flawed costing
Flowed costing is when the unit/organization or even an individual tend to charge or pay in buying or selling a product with the wrong price, the spent money when it come to calculation it will result that expenses are more than the income.
-Unpleasant balance equity combination
Balance equity is to explain how much the shareholders invest and should earn from the organization, also the assets, liabilities, ownership, etc’of the unit, in other meaning can be known as balance sheet.
-Lack of proper accounting system
Lack of accounting system can give major damage to the unit; this comes to what I mention earlier about having less knowledge or experience, what is the right method to be used by the accounting department, what is system; a procedure or routine formed to perform duties or to solve problems.
a-5. Personnel
Personnel known as people or group of people hired by the unit or organization or its also known as a department in an organization responsible in hiring, training, educating or firing individuals.
-Lack of competence
Lack of competence is less ability of the a unit or even individual to perform or do their job properly, this results because of so many reasons in the organization (conflict within the management, delaying of salary to the employees, insufficient working materials, improper working equipments, etc’).
-Lack of loyalty
Lack of loyalty is when members of the organization or between one another have no
faithful to commitments or obligations.
A unit is about working together and support each other, be there for each other and be faithful to each other and the unit and to take responsibility of the duty (the owners have to be there for their management personnel and the employees/labors, and the same goes to the managers and the employees/labors) in order to form trust and make the best of the organization and the production or activities of the unit to succeed.
-Lack of professionalism
Professionalism based in so many factors in business, how the unit conduct its duties, how it is represents itself visually, how it delivered its services and so many more factors.
-Lack of dignity
You will ask how can a unit/organization have dignity? Yes it does, all those involve personnel has dignity, and when a unit cheats in production or in their products, don’t pay the personnel rights(what they deserve or earn), pricing more than it suppose to be in order to gain more income, etc’ this means that unit is lack of dignity.
b. External sectors:
External sectors are the procedures outside the unit/organization which can influence the positive way or the negative way to the unit which includes government policy implementation, bank and financial institutions, environment, etc.
b-1.Government policy and implementation
Government policy and Implementation are the system and rules, executions, carrying out a plan, a way of a government or political party, intended to influence and determine decisions, actions, and other matters. By itself, implementation is the action that must pursue any groundwork idea in order for something to really occur.
-Frequent policy changed
Policy changes also explained as changing of rules, plan, procedures or strategy of the country’s government, it effects the unit when for example; the ministry of labor changes the procedure of how to recruit manpower from abroad, (approve some nationalities and disapprove some others).
-Lack of proper execution of industrial policies
This factor is also lots of organization are lacking of; proper execution of industrial policies or improper implementation of business rules, there are some rules must be followed in conducting business or running the unit, without compromising, in order to achieve the positive development of the unit.
-Liberal import policies
Liberal import policies or implying rules and regulations those which are hard for other organization to follow but because they have to then the unit will obey and follow them, but at the same time will distress the unit, not all units but some, whose are not well experienced.
-Poor transportation
Poor transportation occur when the unit, organization or even to an individual doesn’t have the full control of the transportation, theory of lots of organizations is to sub-contract transportation to other companies in order to cut cost of buying the mobilization means, but actually this method it applies to some or especially big organization, the unit should have proper knowledge or conduct sufficient research or study to determine what will be beneficial for the organization; to invest in buying the means of transportation or to sub-contract/rent, buying the means of transportation it is an advantage for any unit, organization or an individual, it is counted as an asset, by owning the means of transportation the unit or the individual will have 100% control of the transportation and minimize the risk of the poor transportation situation.
-Economic irregularity
As an external sector, economic irregularity means imbalance of system to control available resources of the country (labour, capital and land resources) including manufacturing, distribution, trade, and consumption of goods and services of the country.
-Lack of co-ordination with some Government sectors
This occur basically with the foreign units operating in the country, especially in the Arab countries because some rules in some of the government sectors are not according to international rules and regulation (local rules).
-Over saturation of particularly industry sectors due to wrong policy
To avoid all these factors especially policies (rules and regulations) of the government, the system or procedure to run and maintain the successful unit, all units should have a legal consultant (lawyer) in order to understand government policies and all legal matters before taking any decision to avoid mostly this over saturation of particularly industry sectors due to wrong policy.
-Non availability of raw materials
Non availability of raw materials is also a regular issue in lots of organizations, but there are some ways to control this situation, for example; maintaining proper inventory at early time, sufficient raw materials research, buying a little bit extra raw material (more than needed) to stock.
b-2. Banks and financial institutions
Banks and financial institutions are the organizations in which the units or individuals including, (Employee, Bankers, Financial institutes, Entrepreneurs, Businessmen, Industries, Investment, companies, MSME) uses to control and maintain their finance affairs, for example; capital of the unit or individual, investment of the unit or individual, maintaining of employees salaries and assisting the monthly or yearly calculations of the unit or individual.
-Inadequate working capital
Working capital in other meaning is investment or finance of the unit to initiate the business; this is needed in all the organizations to budget for at least the coming first two years, if the unit has insufficient working capital it will most likely suffer to gain the positive development or fall in to sick unit.
-Lack of required financial assistance
Major problem with the units now a days is this, the organization can run successful for as long as 10 or 20 years but it will come a day the unit requires financial assistance, and that’s when the difficulties in getting it starts, the unit gets its finance assistance from the investors, banks and financial institutes but these days is not easy to find investors, banks and financial institutes have so many rules, regulations and requirements which some of the unit cannot or it is difficult to accomplish.
-High rates of interest on loans
As I mention in the topic above about the units getting finance assistance (loan), when a unit succeed to get the (loan) finance support from anyone of these means of finance assistance, the interest rate will be high to put doubts and second thoughts to the managers of the organization in if they should proceed and except or try to recover and manage without the finance assistance (loan).
-Poor timely decision by the bank and financial institutes
time given to recover the required supported finance (loan) from the banks and finance institutes to the unit in order to accomplish the goal of their mission is not enough and lead the unit to a struggle situation, also the lack of professionalism in some banks and financial institutes result on the banks and financial institutes to not finish their task on time, for example; not deliver the financial support to the unit according to the agreed time period.
-Dealing with a wrong bank or financial institute
Dealing in other words, doing business, arrangement, pact also known as treaty, what I mean dealing with a wrong bank or financial institute is when the unit is already signed up with these organizations (bank and financial institutes) especially for a long period of time they should be able to give a very well financial support to the unit without so many restrictions or hard rules and regulations, and if the unit is late to pay back the loan the right bank or institute that the unit is dealing with should take the matter in a way that is flexible for both (first party and the second party).
b-3. Environment
Environment in this case is actually meant as business environment, which means it is combination of factors or surroundings which effect the operation or performance of the unit or individual, environment can include (market recession, delay in project implementations, opinionate conflict, labor conflict, etc.)
-Market recession
When a market recession occur it will affect the unit or organization in a way that the unit will have to spend more than the income, the unit will have to increase marketing campaigns to have more customers or clients but at the same time it has to keep producing and pay employees salaries.
-Delay in project implementations
Delay in project implementations or delaying to complete the job on time, this normally happened when a unit experience problems between employees or labors and the management and also it occur when there is lack of availability of raw materials, consumable materials, construction materials, etc’ and there is a fee to be charge when the unit fail to complete the task on time which depends on what has been agreed in the contract.
-Opinionated conflict
Opinionate conflict happened within the organization when the unit has poor management, every department has to make their own decision and approved by the department manager before the chairman, if the management is poor and weak then everyone will think his idea is great and it should be the one to be executed, and that’s when the conflict happened and starting the delay commence of the project.
-Labor conflict
Labor conflict or disagreement between workers and the employer will lead the unit or organization to have poor performance of its activities or even might lead the unit to stop operating or producing, in other meaning of labor conflict is the difficulty of and restrictions in performing the work.
A project that has gone sick would have already swallowed huge scarce resources. In order to utilize the assets and infrastructure already created for the project, the project is to be revived from sickness.
There is no doubt that the project would have had some weak areas which would have been the cause for the sickness, rehabilitating the sick project is worth considering since the cost of setting up a new unit might be substantially higher as compare to the cost of rehabilitating a viable sick unit.
Of course, having known the factors that were the responsible for leading the unit to sickness, they can be properly addressed in the revival package.
Revival of a sick unit may be necessitated or justified in view of the underlying social-economic objectives such as:
-The project may be in sector that is vital to the economy, abandoning the project may lead to other social-economic ill effect
-Many ancillary units may depends on the unit that has gone sick., unless the sick unit is revived, it will have a chain effect of all such dependent ancillary unit becoming sick.
-Banks and financial institutions would have locked their money in sick ventures.
In order to get back the investment of banks and financial institutions, the project is to be revived and made to work again and generate surpluses.
Banks and financial institutions that support a revival program for the sick unit may be required to fund the project again, they will be prepared to implement revival packages if they are convinced that they will, apart from getting back their present investment with interest, but also get back their earlier investments that are locked up.
3. Research methodology
3-1. Introduction
Research methodology is to understand the use of information, one needs to know a little bit about investigational design or how a researcher conducts the search. A little knowledge about methodology will provide us with a place to keep our information. In other words, information (data) is generated out of research. Information is simply a tool to help us answer research questions. An understanding of methodology will ease our understanding of basic information.
3-2. Studied area
This study is undertaken within the Sultanate of Oman and all the information gathered are based on the GDP of the country by the Ministry of Commerce & Industry and research dependant on the information collected from, SME, Industries, Companies, Financial institutes, Bankers, Entrepreneurs, Businessmen, Employee, News regarding both successful and sick units.
As a matter of fact, industrial sickness in the small scale industries in the Sultanate of Oman is an area of great concern nowadays. These small scale industries are one of the means of support of providing a source of livelihood to the local public, a proper study of industrial sickness and finding its measures to stop it will be the only means of empowering the people for economic development.
Understanding the conditions
Location on where to focus
Sick industries
reasons of the sickness
Managing and rehabilitating
3-3. Establishing of the methodology framework
In order to establish the initial research methodology was to start with creating and establishing methodology framework, in quest of the framework some questionnaire had to be created in turn to have the proper plan and ease the project:
-What is the suitable research methodology to achieve a better understanding of the rehabilitation and managing sick industries in the Sultanate of Oman?
-What is the most suitable way of examine key subject, features and indicators of the sick units in the country?
-What is the source of data of the sick industries in the Sultanate of Oman and how to rehabilitate and manage them?
-What variety of information, evidence, data, etc’ has to be collected?
-What is the most suitable way to choose the background of the study?
-Where, when and how can the sick industries and how to rehabilitate and manage them can be investigate?
-To what present can access to this data be expanding?
Therefore, it was realized that the most excellent way to start this research was to design the study around a tactic including theoretical of qualitative and quantitative methods.
The qualitative method is based on reviews of related literature of past researches and the quantitative method is based on the real life performance and procedures of the units in the Sultanate of Oman. In this case , major information and data was mostly collected from these sources: key factors, development of the country, SME, Industries, Companies, Financial institutes, Bankers, Entrepreneurs, Businessmen, Employee, News, (newspapers, magazines, proceeding papers, reports), statistical data, published journals, and Web sites as it mention above.
3-4. Conceptual framework of the study
This consists of ideas that are positioned within a reasonable and chronological design and represents less formal formation and used for studies in which existing theory is irrelevant or insufficient., based on exact theories and suggestions, resulting from experimental observation and suspicion., may presume theories from a conceptual framework.
Abstracting the conceptual of the study in a way of explaining and group divided the topics by understanding the main ones to be focused:
3-5. Research design
Before investigative and try to recognize types of research designs it is important to be clear about the task and purpose of research design. We need to understand what research design is and what isn’t. Research design is cleared as the general plan for collecting and analyzing information including requirement for enhancing the internal and external of the topic and also refer as the plan used to inspect the question of importance, It is further imagined that research design submit to many ways in which research can be performed. Moreover is a set of proof verdicts that makes up the master plan specifying the techniques and procedures for gathering and investigating the needed information, it can include interviews, examination of records, experiment, reproduction, surveillance, all these are under data and information collection. In short description, this research was conducted in five stages:
-First stage: Research background including studied area and problem statement, summary and quality of the study, the importance and limitation of the study.
-Second stage: Literature review, objectives and scope of the study, including the study on the courses of the sickness and how to prevent, manage and rehabilitate.
-Third stage: Includes designing and distributing of questionnaire and gathering of information on how to conduct or how the study of sick industries has been conducted.
-Fourth stage: This includes analysis of data, preparation and screening, Reliability of the variables and background of the correspondent also Strategies for managing and improving the sick units.
-Fifth stage: Contribution of the study, conclusion and recommendation, data analysis and recommendation for further studies.
3-6. Data collection procedures
As it mention above regarding this topic, it includes two types of data collection, (Primary data collection and Secondary data collection),
-Primary data collection
in the method applied from the observation and the research on the existing successful units, sick units and the broke units in general, for example:
According to Dr. Rahel Falk, Vienna, August 17, 2005 research in Industrial Sickness in Indian Manufacturing, The Reserve Bank of India (RBI) estimates the amount of outstanding credit locked up in sick units to have increased at the rate of 17.8 per cent per year during the 1982-1990 period.2 More recently the total number of both sick and weak units declined by 20 percent from March 1999 to March 2001, but it still stood at just over a quarter of a million (Table 1-1)
Table 1-1: Industrial sickness in India: number of sick/weak units
End Large & medium enterprises
abs figures as % of total Small-scale enterprises
abs figures as % of total total
Dec. 1980
Sep. 1992
Mar. 1996
Mar. 1997
Mar. 1998
Mar. 1999
Mar. 2001 1,401 5.7
2,427 1.0
2,374 0.9
2,368 1.0
2,476 1.1
2,792 0.9
3,317 1.3 23,149 94.3
233,441 99.0
262,376 99.1
235,032 99.0
221,536 98.9
306,221 99.1
249,630 98.7 24,550
Source: Report on Currency and Finance (RBI), various issues, A closer look at the statistics for the period March 1999 to March 2001 reveals that indeed the extent of sickness, as measured by the number of units, declined in the small-scale industrial sector, but increased in the medium and large scale sector. More importantly, within the same period the amount of outstanding bank credit rose to Rs. 25,775 crore,3 an increase of 23 percent in real terms (see Table 1-2). While, in March 2001, the medium and large scale sector accounted for a meager 1.3 percent of total sick/weak units, its share in total bank credit outstanding to sick units amounted to 83 percent, so regaining its level in 1980.
Table 1-2: Industrial sickness in India: outstanding bank credit locked up in sick/weak units
Large & medium enterprises
in Rs. Crore Small-scale enterprises
in Rs. Crore Total
in Rs. Crore
End current constant as % of
prices prices total current constant as % of
prices prices total Current
price Constant
Dec. 1980
Sep. 1992
Mar. 1996
Mar. 1997
Mar. 1998
Mar. 1999
Mar. 2001 1,502 4,589 83.1
9,241 10,117 73.4
10,026 7,822 72.9
10,178 7,455 73.8
11,825 8,028 75.4
15,150 9,905 77.8
21,269 12,899 82.5 306 935 16.9
3,346 3,663 26.6
3,722 2,904 27.1
3,609 2,644 26.2
3,857 2,619 24.6
4,313 2,820 22.2
4,506 2,733 17.5 1,808
25,775 5,523
Source: Report on Currency and Finance (RBI), various issues; own calculations Of the total number of sick units in the small-scale industrial sector, a mere 8.6 percent were identified as ‘potentially viable’ (as of the end of March 1998). One should not conclude, however, that the remaining 91.4 percent have since been liquidated: even though firms which are determined to be non-viable are subject to an obligatory winding-up ‘recommendation’, actual liquidation hardly ever takes place; and when it does so, only after years (or even decades) of delays. Similarly, even though the corresponding share of companies in the non small-scale industrial sector was as low as 25 percent (as of the end of December 2000), this does not at all mean that the remaining firms were identified as viable, but only that, for most of them, viability studies have not yet been conducted.4 Also, it remains questionable whether a turnaround is in fact feasible even for those firms for which good chances for recovery have been attested. To understand why, one has to examine the investigation process that determines a firm’s viability. The former chairman of the Committee on Industrial Sickness and Corporate Restructuring, Omkar Goswami, notes that in many cases the bureaucrats in charge of the investigation process attest viability if the company’s debt service coverage ratio is not less than 1.33.5 Since the denominator, i.e. past and current debt plus interest thereon, is well-defined and fixed at the time of investigation, the bureaucrat would simply arrive at a level of current income that averages at least 1.33 times the denominator and then constructs revenue and cost streams to generate the numerator (Goswami, 1996, p. 83).
In any event, whether it is because the investigation process is marked by substantial delays, or rehabilitation proposals are based on wildly optimistic assumptions concerning expected income streams, or, in general, winding-up recommendations do not result in actual liquidation, in India sick firms rarely ever die. Idle investments in sick units involve a waste of resources no economy can afford over a long period ‘ certainly no developing country can do so. With a 1999 per capita GDP of 2,171.6 US-$ (purchasing power parities at constant 1995 prices), India ranks slightly above the Solomon Islands and Nicaragua (2,132.4 PPP US-$ and 2,105.7 PPP US-$) and just below Bolivia (2,174 PPP US-$).6 By comparison, Germany had a per capita GDP of 23,328 US-$ in 1999 (PPP at constant 1995 prices).7India’s social indicators are far from impressive8, with 1999 adult illiteracy rates ranging between 32 percent for males and 56 percent for females.9 In 1999/2000, the infant mortality rate was 68 per thousand, the mortality rate for children younger than five years amounted to 94 per thousand, and 47 percent of the children under age five suffered from malnutrition. Considering that at the beginning of the 21st century only 31 percent of the Indian population has access to improved sanitation facilities and 14 percent have no access to protected drinking water sources, the unproductive and wasteful use of public funds is inexcusable. We conclude that industrial sickness is not only a real problem, but also must be regarded as an important obstacle to the whole process of economic development in India.
-Secondary data collection
in this part the study relied on the secondary sources and resource of information about the guidance to support the research result, the secondary sources such us, articles, dig outs from newspapers, magazines, reports, journals, and accessible websites, (locally and internationally) were used to propose the study implements to defend the discovery and compare the results.
3-7. Data processing and analysis
The systematically applying statistical and/or logical techniques to explain and demonstrate, reduce, review, and evaluate data. According to Adil Shamoo and David Resnik 2003 various analytic procedures ‘provide a way of drawing introductive suggestion from data and unique the signal the fact of concern from the noise (statistical instability) present in the data’..
While data analysis in qualitative research can include statistical actions, many times analysis becomes an ongoing rotation process where data is continuously collected and analyzed almost at the same time. Indeed, researchers generally analyze for patterns in remarks through the entire data collection phase (Savenye and Robinson, 2004). The form of the analysis is resolute by the specific qualitative approach taken from field study, ethnography content analysis, oral history, biography, unremarkable research and the form of the data of field notes, documents, audiotape, and videotape. An indispensable part of ensuring data actuality is the accurate and appropriate analysis of research findings.
3-8. Summary
This chapter representing an overview of the methodological perspective of the research, it is described the research design based on a research questions and conceptual framework of this study, this chapter also presents the research design and data collection strategy and the coming chapter presents the analysis of the study.
4-1. Introduction
Data analysis and result is a method of investigating, filtering, converting, and forming data with the goal of discovering useful information, implying conclusions, and supporting decision making. Data analysis has various aspects and advantages, including miscellaneous methods under the mixture of names, in different business, science, and social science fields.
in this topic it is discussing and reports on the statistical testing results, including the background of the respondent and followed by the result of the rest of the analysis using the reliability analysis and descriptive analysis, also the result to answer research objectives are also mentioned.
4-2. Background of the respondent
all the responded in this research study were from deferent organizations, race, age and gender as it mention in the table below:
Organization Nationality Age Gender Frequency Percentage
4-3. Rentier economy mentality and the Development
Some of the respondents were asked in order to gather more information, mostly the citizens of The Sultanate of Oman about the industries, companies, organizations, the units in general, on how can we make this change and increase the development of the country by controlling the units also rehabilitate and managing the sick ones, after analyzing the results I found out that the problem is within the rentier mentality.
Rentier mentality according to the mentioned writers is a psychological condition with a profound result on the productivity, where for example civil servant see their principle duty as being available in their offices during working hours, and where businessman or industrialist abandons their activities and enter into real-estate speculation activities for quick profit or associate themselves with oil sectors, and where the best and the brightest persons seeks a public employment, rather than manual, technical or any other non clerical jobs which are considered to be demeaning by the people in rentier state and farmed out to foreigner worker.
This situation according to the above writers have created two stratum of workforce, the nationals who try to work in the public sectors as bureaucrats, and whom are considering private sector jobs to be demeaning and expatriate who work for private sector.
This mentality is amplified further by laws ‘ including the Sultanate of Oman, which only allows expatriate to work after they have been sponsored by the nationals, where these sponsors are known in the gulf states as (Kafeels) and where most of these sponsors work for the public sectors and only rent their names to the expatriate for the agreed fee.
This situation according to these writers have a critical effect on the national human resources training and development of the country, by taking into consideration, that, private sectors in rentier economy countries is controlled by expatriate, whom owing to their positions were able to create different human resource development, one of them is training barriers. The controlling and exploitation of training opportunities by expatriates either within the organization or outside of the organization provided those who have experience these trainings with competitive advantages and as the result empower them with more controlling powers of the private sector.
This dissertation argues that, the above situation will be cleared by examining a particular environment, and that is the Sultanate of Oman environment and the way in which the country is striving to solve it and where we turn.
4-4. Data preparation and screening
Data preparation and screening is about data screening procedures which include the detection of missing data and detection of outliers.
-Detection of missing data:
Missing data is unavailable information for a topic while other information is available, missing data for this research was condensed by checking for errors in all the variables at the point of time they were collected.
For the study, any answered question was referred back to the respondent to ensure that all the information were correct, regularity distribution and missing value analysis for each variable were performed.
-Detection of outliers:
By revising the thesis repeatedly is the method used to detect the outliers and to correct the information of this study / research as it’s known that, outlier is an observation that is well outside of the expected range of values in a study or experiment, and which is often discarded from the data set.
Outlier is also explained as an observation that lies outside the overall pattern of a distribution (Moore and McCabe 1999). Usually, the presence of an outlier indicates some sort of problem. This can be a case which does not fit the model under study or an error in measurement,
4-5. Reliability of the variables
To ensure the reliability of the scale, internal consistency confirmation of the scale was perform by checking the Cronbach’s alpha coefficient alpha of above 0.7 as recommended by (Sekaran and Bougie, 2010; Zickmund, 2009; Cresswell, 2008).
The table below exhibits the Cronbach coefficient alpha of the variables. All the variables in this research has value more than 0.7.
Table: Reliability Coefficients of the variables
Construct No. of item Cronbach Alpha
4-6. Normality test
Normality test is used to determine if a data set is very well-represented by a normal distribution and to calculate how probable it is for a random variable original the data set to be usually spread. Before applying statistical methods that assume normality, it is necessary to perform a normality test on the data to check residuals for normality. We imagine that our data follows a normal distribution, and only reject this theory if we have strong evidence to the opposing.
4-7. Descriptive analysis
Descriptive analysis is a regulation that explains the main characteristics of a collection of data. The aim of the regulation is to review a set of data. This is not like inductive analysis where the data is used to learn about the entities that the data is representing.
It is also known as a conclusion system that is used to explain some key features of data in a research study. They give a simple summary about a sample from the research study.
4-8. Correlation among variables
A correlation is the measurement of the relationship between two variables. These variables already occur in the group or population and are not controlled by the experimenter, or it is a statistical technique that is used to measure and described the strength and direction of the relationship between two variables.
Positive correlation
a positive correlation is a straight relationship where as the amount of one variable increases, the amount of a second variable also increases.
Negative correlation
a negative correlation is as the amount of one variable goes up, the levels of another variable go down.
In both types of correlation, there is no verification or evidence that changes in one variable cause changes in the other variable. A correlation purely specifies that there is a relationship between the two variables.
The most significant idea to take from this is that correlation does not equal causation. Many sources make the mistake of assuming that just because two variables are related, a causal relationship exists.
The Strength of a Relationship
A correlation coefficient measures the strength of the relationship between two variables. The Pearson Correlation Coefficient measures the strength of the linear relationship between two variables.
Two specific strengths are:
Perfect Relationship:
When two variables are exactly related the correlation coefficient is either +1.00 or -1.00. They are said to be perfectly linearly related, either positively or negatively.
No relationship:
When two variables have no relationship at all, their correlation is 0.00.
There are strengths in between -1.00, 0.00 and +1.00, though. That +1.00 is the largest positive correlation and -1.00 is the largest negative correlation that is possible.
The Direction of a Relationship
The correlation measure tells us about the direction of the relationship between the two variables. The direction can be positive or negative.
Positive: In a positive relationship both variables lean to move in the same direction: If one variable increases, the other leans to also increase. If one decreases, the other leans to also.
Negative: In a negative relationship the variables lean to move in the opposite directions: If one variable increases, the other leans to decrease, and vice-versa.
The direction of the relationship between two variables is recognized by the sign of the correlation coefficient for the variables. Positive relationships have a “plus” sign, whereas negative relationships have a “minus” sign.
4-9. Factors that affect unit performance practice
These factors are usually within the organization itself on how the management the employees and the labors carry out their duties, management and control of sub-contractors if the unit is dealing with, coordination within the unit itself, maintaining of housekeeping, implementation of rules and regulation, understanding the rules and regulations, awareness with the types and methods of working system, handling of tools, equipments, machineries and plants, adaptation to working environment,
4-10. Strategies for managing and improving the sick units
Once the unit has fall a sick a method or a procedure (strategy) has to be formed in order to manage and improving that unit,
first a research has to be conducted to determine many factors;
-What is the reason for the unit to fall a sick?
Tests have to be carried out beginning with the management and followed by the employees and the labors to measure the knowledge and the experience within the unit.
-What has to be done to execute that reason?
There are lots of reasons can be determine after conducting the research, the mainly reasons could be financial, managing experience, work experience, general knowledge of the nature of the business as I mention above.
-How can the unit be managed and maintained towards the right path.
Organization activities evaluation has to be performed more often than it was done before it fell a sick, to always be aware if there are any mistakes is managing or production.
-What measure needs to be taken to improve the unit?
Trainings and courses needs to be given to the management personnel, the employees and the labors in order to develop their knowledge and their working skills, different materials or products (better ones) to be used to result a better production, production tools, equipments and machineries has to be improved, also to increase the working capital of the unit.
5. Data Collection and Analysis
5-1. Introduction
5-2. Conclusion
5-3. Contribution of the study
5-4. Recommendations
5-5. Limitation of the study
6-6. Recommendation for further research

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