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Business  


 

Formulate economic policy the Chinese way
Lanka Business Online reported how China formulated its economic policies as stated by a Chinese economist here in an address to local businessmen. The central planning model used during the heydays of Communism is no longer used. The Chinese Government submits its economic proposals to various thinktanks both in the private and public sectors. It obtains their comments and suggestions and makes decisions entirely on the basis of such advice and comments.

Under the earlier Communism there was no freedom for intellectuals to state their minds and express views critical of any plans or projects of the authorities. But China after Deng Hsiao Peng realised the need for independent thinking and expression on all matters other than the purely political. So Chinese Science and Chinese Economics have flourished as the best Chinese scientists and economists re-settled in their motherland instead of continuing to live in the West.

The government is quite enamoured of the achievements of the Chinese not only in adopting modern technology but in alleviating poverty. A large middle class has emerged in the last twenty-five years. The JVP too has often stated that they would imitate the Chinese model of development. But what prevents us from adopting the Chinese methods in formulating economic policy?
Our governments have tended to depend on individuals to advise them on economic policy. But however brilliant they are, they are no substitute for consultations with thinktanks. After the Second World War the USA encouraged the establishment of thinktanks in the private sector with grants. Herman Kahn’s think tank was quite famous among many others in USA. But we do not have a single think tank in the private sector. We have the Institute of Policy Studies but it has not been used or its usefulness is not appreciated. When the UNP was in office they got down second rate economists or depended on the World Bank for economic expertise. But these men however eminent did not have an in-depth knowledge of the country, its resources or economic opportunities.

One of the problems, of course, is that we don’t encourage independent thought preferring sycophants who sing hosannas to the government in power. So one set of economists are booted out and replaced by another set after each change of government. The private sector complains that there is no continuity in our economic policies. True, indeed, and inevitable with the type of intellectual climate we have created over the years since Independence. We have still to appreciate the value of new ideas and modes of thinking. Today it is brain power more than brawn power that propels development. Brain storming is a useful method adopted in intellectual fora. What we have instead is a seminar where some worthies who have grasped some ideas from textbooks lecture to a captive audience. There is no discussion and no feedback. It is a practice not even suitable for modern universities.

Very often the so-called experts are persons who do not have practical experience in the field they are talking about. They are big names built up on publicity rather than achievements. We have still to appreciate that creative thinking cannot flourish in a climate of fear or cringing. Look around and you can hardly find a handful of independent minded persons in any institution in either the public or the private sector. This is certainly not conducive to formulating good economic policy.

Sadly, the knowledge of economics in the country is still wrapped in the old Marxist ideology. We introduced the open economy in 1977 – a free market economy open to the world for trade and investment. But the economists turned out in our universities do not appreciate or even understand the problems of the market economy. Government ministers assume that when a tax on a commodity is removed its price must come down immediately ignoring the resultant effects through higher demand and the time lag in the adjustment process. Supply and demand determines the equilibrium price and the market price tends to settle towards it over the adjustment period. Similarly, policy makers who are ignorant of the dynamics of the export trade fail to understand that a change in the cross rate - the dollar-euro cross rate depreciation benefit will not necessarily accrue to local exporters who invoice goods in US dollars.

The late N.U. Jayawardene used to say that there are two kinds of economists in Sri Lanka - those who understand markets whom he called market economists and those who don’t whom he branded as socialist economists. This is still the situation. Some universities in the USA teach the theory of supply and demand by getting students to go out to the marketplace and sell a product. They then get a feel for the theory which cannot be obtained by merely reading the textbook. So it is with the whole gamut of economics. Economist Austin Robinson used to point out that in the former days students visited factories to understand and learn Economics. Economics as a field of knowledge was born after the Industrial Revolution. It is alien to our traditional fields of knowledge and it has to be acquired in the context of markets and not in a vacuum.

Economic policy making also requires consensus. The country has suffered because the old ideological battles between the Right and the Left are still being fought here when they are forgotten in the rest of the world. Whichever party wins will have no choice but like China to integrate with the global economy and adopt free markets.

 

Quality management in training
Dr. N. Yogaratnam Tree Crops Agro Consultants
Quality is not a new issue in training, but the use of international standards within an organisation, in order to create new institutional cultures, is. In the framework of the implementation of total quality management strategies, more and more training institutions are using international standards, quite successfully, to certify the quality of their training processes.

They have always been interested in the dissemination of new tendencies and routes as well as in the dissemination of good practices which provide better results to users. Along these lines, this article seeks to disseminate this phenomenon. It intends to reveal what is going on and to call the attention on the characteristics that quality management trends are showing regarding training.

The concept
Quality management has always been one of the main concerns of Training Institutions. As private and public centre institutions, their interest in offering an adequate answer to national needs implies good quality. The concept of management is a step forward in the route towards quality.

Those interested in training, and even more, the customers of the institutions, expect that the provided training is related to the abilities and competences required. The growing demand for training and the rapid and changing conditions have imposed to the training, offer the need to show that they do a good job. Also, the funds assigned to training have become so important and limited that frequently an analysis of their correct application and specially, of their impact is required.
This transforms quality management in the training process into a relevant issue.

Key aspects
Customer centered, Quality policy, Responsibility, authority and communication, Resources provision and management, Competent human resources, Infrastructure and working environment, Product planning and realization, Design and development, Marketing process, Control of the follow up and measuring devices and Customer’s satisfaction.
Many training institutions have defined a quality policy explicitly and as a consequence developed quality management strategy. This implies to have external and internal referents and to combine both, in order to advance in the achievement of goals. The implementation of a quality management system requires the application of various basic principles:

  • A clear orientation towards the customer: to understand and satisfy the customer’s needs
  • Continual improvement of the institution activities: quality as a philosophy that never ends
  • Defined and consistent processes: Processes are defined and its achievement is guaranteed
  • Quality guarantee of the processes: The quality of a process comes from the preceding processes and in the same way, the quality of a training service reflects the control applied to its process.
  • To prevent instead of to supervise and correct: The costs of preventive measures are lower than the costs of a close supervision and correction

The organisations, which have implemented the Quality Management, have adopted in general, the principles of; Commitment to the direction Team Work Quality is everybody’s task Decisions are based in facts and knowledge of objective data Systematic solution of problems. Problems are understood as “everything that can be improved.”

Standards and quality assurance
Quality assurance usually implies a comparison between a certain product or service and a standard, previously defined, which establishes the criteria to assess the quality of this product or service. In this context, the ISO 9000:2000 standard is being increasingly used. This standard refers to the quality assurance from a general perspective, not specifically associated to a certain product or service. Users are the starting points. Currently, there is a high valuation of the ISO standards as “quality hallmarks,” among other reasons this valuation has extended their usage to the training institutions. The 2000 version of the standard advanced, from the concept of quality assurance of the 1994 version, to the design of a quality management philosophy, which incorporates an emphasis in continual improvement.

In fact, the ISO standards refer fundamentally to the consistency and systematisation of the processes. They constitute a method to standardize the organisation activities and to offer reliability to customers over the expected quality of products and services .The group of ISO 9000 standards is applied in quality management; in fact, the ISO standards are not related to the intrinsic features of a given good or service. In other words, even if a TI is certified by ISO 9000, competency certification related to the performance of its trainee is required.

Institutional learning
In many experiences of ISO standards application, it has been documented the need of a training process for workers. This learning is linked to the structure arrangement, improvement and documentation of the processes. In this procedure, overlapping and voids are found in different activities and the search for solutions by the work in-group results in the application of new knowledge and of previous experiences. The analysis of the processes introduces new ways of learning. Training institutions can, therefore, take advantage of the generated knowledge and reapply it in order to promote learning.

In this sense, learning forms such as “learned lessons” or “good practices” shape what is known as “knowledge generated in the working processes”. The documentation of processes, its analysis and continual improvement offers an extraordinary opportunity to learn to the TI and to make explicit the knowledge that is usually applied.

The above is exemplified in the activities of development of processes of enrolment, registration, evaluation, didactic and material development. The analysis and improvement of these processes has allowed for the development of institutional capacities that today are reflected in the design of training workshops and centres, electronic training media, evaluation material, etc. It is true that the standards are vulnerable to the permanent risk of over definition, and that these debate should not be avoided.

Knowledge management
Today, knowledge is valued as a resource, probably the most valued one in the context of TIs. TIs are organisations devoted to the generation of knowledge related to training. Their more valuable asset is to translate the work demands into training programs: codified knowledge, which has the capacity to foster the development of labor competences. After the nineties, when all kind of remarks were done to the training institutional model, the alternative models showed its deficiencies regarding their ability to generate knowledge related to training. The capacity to gather knowledge, educational capacities, design and training methodologies, qualified trainers and processes of training/learning is a product of the know-how of the institutional organization of training.
TIs have shown, since the second part of the early twenties, that they have that capacity and they have applied their knowledge to develop new ones, to innovate in the programs and to apply new methods. Undoubtedly, the codification developed in the processes of quality management allows for this accumulation and for the usage of it in training. This is one of the potential advantages of the use of a quality certification system in the TIs.

Quality Management
The increasing entry of new actors in the training scene, the availability of a blend of new financial funds and the necessary specificity sought from training programs are, among others, the factors that have influenced in the genesis of the modernisation processes of the institutions. Currently, the processes of transformation and adaptation to change are priority issues in the TIs’ agenda. The customers, training users in a diverse market, increasingly require knowing the best and more quality guaranteed offers. Both entrepreneurs and workers seek for efficiency signals. Financial resource providers are also interested in the best usage of the invested funds in training.

Quality-managed institutions represent a social guarantee to the efficiency of the public expenditure in training. The same reasoning can be applied to the private funds: they must go to agencies that develop relevant, efficient and effective training processes.
Japanese quality management system oriented towards the promotion of order and cleaning.
The 5 “S” refer to: Seiri - to tidy, Serton - to order, Seisou - to clean, Seiketsu - to mantain, Shitsuke - to discipline, are relevant here.

The modified mission:
“We are the leader institution in training of workers and of human resources that will enter into the labour market. We see the institution’s future related to the design and development of training plans and the promotion of productivity in order to contribute significantly to the country’s development. These actions are developed expediently, with quality and excellence, going beyond our customers’ expectations”

Quality Development
The growing interest in improving the efficiency and relevance of their activities is reflected in the adoption of quality management mechanisms and certification of quality .This tendency is expressed by the adoption of institutional actions towards the development of a quality culture. Such actions, usually embedded in the philosophy of continual improvement or in the processes of institutional modernisation, imply training activities for the personnel, search for critical factors, and clarification of mission and objectives, which in turn lead to institutional quality improvement.

On the other hand, some key aspects regarding organisational competitiveness are reflected clearly in the workers’ labor performance. Nevertheless, the courses of the training programmes do not necessarily represent such aspects. Many times these aspects have to do with the learning environment.

In issues related to occupational health and safety, a series of standards, which seek to preserve adequate - working conditions, have been developed. If the learning environments reflect conformity to the standards, certain capabilities of the participants, which have to do with their competent performance, can be developed. In this way, a training institution which develops a good practice of conformity to international standards on occupational health and safety in their workshops will be contributing to the development of participants’ core skills.

Something similar is taking place, for example, in the area of environmental protection and 14000standards. In fact, many training activities are developed according to those standards which foster the generation of core skills and the employability of participants.

Training of trainers
The constant evolution and changes of the market, technology, innovation and customers requirements and expectations which can impose to the organisation the necessity for an analysis of needs regarding competences is the starting point of the standard. Training of trainers is an effective option to overcome the changing context mentioned above, allowing for the closure of the gap generated between required and existent competences in an organisation. It defines training as a process that produces and develops knowledge, know-how and necessary behaviours to fulfill requirements. It understands competences as putting into practice the knowledge, know-how and behaviors during the execution.

Therefore, the training process would make it possible to improve the organisation’s capabilities and to achieve the organisation’s objectives regarding quality, producing and developing competences. If training is under stood as a continual progress factor, it emerges as an effective and productive inversion.

Training: A four- stage process
First stage: Defining training needs, Second stage: Designing and planning training, Third stage: Supply of training, Fourth stage: Evaluating training outcomes and Follow up. The standard defines the scope, the regulative references, the terms and definitions. It describes the general guidelines regarding personnel training of an organisation (training understood as a four stages process), training purchase, personnel involvement and finally the four stages of the training processes are detailed.

Stage 1: Defining training needs
The organisation should define the competencies needed for each task that affects the quality of products, assess the competency of the personnel to perform the task, and develop plans to close any competency gaps that may exist. The definition should be based on an analysis of present and expected needs of the organisation compared with the existing competencies of its personnel.

Stage 2: Designing and planning training
The design and plan stage provides the basis for the training plan specification .It implies that defining relevant items (legal, financial and availability aspects) which constrain the training process should be determined and listed in order to design resources.

Stage 3: Supply of training
The responsibility of the training provider is to carry out all the activities specified for the delivery of the training in the training plan specification, as well as providing the resources necessary to secure the services of the training providers. The role of the organisation in supporting and facilitating the training might include supporting both the trainer and the trainee and monitoring the quality of the training delivered. The training support may include activities such as providing relevant tools, equipment, documentation, software or accommodation to the trainee or the trainer, providing adequate opportunities for the trainee to apply the competence being developed and giving feedback on task performance as requested by the trainer and/or trainee.

Stage 4: Evaluating training outcomes
The purpose is to confirm that both organisational and training objectives have been met. Within a specified time period after the trainee has completed the training, the management of the organisation should ensure that an evaluation takes place to verify the level of competence achieved. Evaluations should be carried out on both short- term and long term basis and should include the collection of data and the preparation of an evaluation report which also provides an input to the monitoring process.

Monitoring and improving the training process
The main purpose is to ensure that the training process, as part of the organisational quality system, is being managed and implemented as required so as to provide objective evidence that the process is effective in meeting the organisational training requirements. Monitoring involves reviewing the entire training process at each of the four stages and the identification of further opportunities for improving effectiveness of any stage
In conclusion, the quality models that have been discussed, were based on the process management and highlights, the importance of customer’s satisfaction. Training is part of the needs of organisations that adopt quality management. This reinforces the role of the TIs as providers of training services and reveals the necessity of a provision of quality services.