2. Chemical Consortium r&d Expenditure 2002-2011

1) Read this description of the amounts spent by Chemical Consortium on R&D between 2002 and 2011.

In 2002, Chemical Consortium spent forty million pounds on R&D. In the following year that figure went up by ten million pounds to fifty million. Over the next two years, 2004 and 2005, total expenditure on R&D increased by a further twenty-five million pounds. This upward trend continued in the following year when the figure reached ninety million pounds. In 2007, however, company spending on R&D remained the same as in the year before, and in the next twelve months it fell by ten million pounds. There was a further increase in 2009 of ten per cent on the previous year’s spending. This two-year trend ended in 2010 with a sudden increase to one hundred and twenty-five million pounds. In the final year of the period under review, the amount spent on R&D went up again to one hundred and fifty-five million pounds.

2) Now complete the following bar chart with the help of the information in the description above.

Critical thinking

1. Planning &Building a Factory by Network Analysis

1. Read the following list of activities that are required for the planning and building of a new factory. Notice that the time required to complete eachactivity is also given.

Activities Time in weeks

a) get planning agreement 5

b) get builders 2

c) get services (gas, water, etc.) 4

d) make roads and paths 3

e) build car park 2

f) get design drawings 3

g) paint factory 4

h) build factory 17

i) purchase land 5

j) plant gardens 3

k) negotiate for land 4

2. Place the eleven activities in an appropriate order of operations and complete this network analysis diagramme.

2. Think and discuss

1) ”One of the greatest industrial needs is R&D into better management techniques.” Do you agree? Why?

2) Do you think that all R&D should pay for itself in terms of better processes and improved products? Give your reasons.

3) When faced with new products in their markets, many companies put more money into their old products. Why do you think this happens? Why don’t they put money into new products?

Case

1. Work in small groups of three or four students. Study and discuss the case paying special attention to the questions below it.

2. Choose a spokesperson in the group to make a presentation to the whole class, summarising the opinions in the group and sharing your decisions of the issues with others.

3. Hold a Questions & Answers (Q&A) session.

A Trend Toward Small Production Facilities

In 1973, a book was written by E.F. Schumacher entitled Small Is Beautiful. In this book, Schumacher insisted that smaller production facilities were becoming more popular and were more efficiently run than larger production facilities. According to Schumacher, “while many theoreticians are still engaged in the idolatry of large size, with practical people in the actual word there is a tremendous longing and striving to profit from the convenience, humanity, and management of smallness.”

When Small Is Beautiful first appeared, it was mainly seen as an attack on big business. Basically, the book challenged the commonly held belief that bigger is better. Today, however, there is a growing number of business people who seem to be agreeing with Schumacher. They agree that “The big is coming out of manufacturing because a lot of business have discovered that small is beautiful” – easier to manage successfully.

Examples of companies moving toward smaller manufacturing facilities are easily obtained. For example, one pharmaceutical consumer-goods giant increased manufacturing efficiently by dividing its large plant into four smaller groups. An electric’s aircraft engine group shifted its production from two large manufacturing complexes to eight smaller satellite centers. As another example, a large manufacturing company has been shutting large assembly lines, over the last few years, in favour of smaller, automated facilities making specialised products.

Naturally, small plants are not for everyone. Some industries, like aircraft manufacturing, will always require very large manufacturing facilities. In a growing number of industries, however, smallness may be advantageous. Partly because of the difficulty in running large plants in some developed countries, manufacturing productivity growth fell drastically to. Perhaps reducing manufacturing facility size is one way to turn this trend around.

Issues for Discussion:

1. Is coordinating production easier for managers in large manufacturing facilities or in small manufacturing facilities? Explain in detail.

2. Is controlling production easier for managers in large manufacturing facilities or in small manufacturing facilities? Explain in detail.

3. List as many reasons as possible supporting management’s continued use of large manufacturing facilities as opposed to small facilities.

Project work

Work in a team of three or four students. With your team:

1. Choose a real company or business organisation that interests you. It may be a well-known company abroad or any company inside the country or in your region or in your city.

2. Find as much information as you can about:

• its form of ownership (e.g. private or public corporation, sole trader, partnership);

• its main businessactivities;

• location of its head office, branches/subsidiaries;

• its facilities and production caoacity;

• turnover, profits, investments in R&D, size of work-force, etc.;

• any other necessary information about the organisation.

3. Analyse the company’s performance and activities and discuss the results of your research in the team.

4. Make a presentation of the company and your findings to the rest of the class.

5. Hold a Questions & Answers (Q&A) session.