A Comparative Study Of The Banks In Nepal - Free Essay Example

Sample details Pages: 12 Words: 3601 Downloads: 9 Date added: 2017/06/26 Category Statistics Essay Did you like this example? A well-structured financial sector is of special importance for the economic growth in both developed and developing countries. The commercial banking sector should be well organized and efficient for the growth of an emerging economy. Commercial Banks which forms one of the backbones of the financial sector are the intermediary link in facilitating the flow of funds from the savers to investors. Don’t waste time! Our writers will create an original "A Comparative Study Of The Banks In Nepal" essay for you Create order By providing a means of mobilizing domestic savings and proficiently channeling them into productive investments, they lower the cost of capital to investors and accelerate the economic growth of a nation. No underdeveloped country can well progress without setting up a sound system of commercial banking system.[1] Nepal is an agrarian based economy with a GDP of $ 33.26 billion[5]. Nepalese banking industry has considerable changes over past decades because of liberalization, deregulation, improving information technology and globalization. The financial sector liberalization resulted in the entry of new firms in the market, which also added more pressure on competitiveness of individual banks; deregulation widened the scope of activities and expanded the banking activities; advancement in technology resulted into new methods to perform banking activities. Furthermore, the banks, these days, are entering into non-banking markets while other financial institutions are entering into the banking markets that have conventionally been served by the banks. These changes have altered the structure and market behavior of Nepalese banking industry. Currently there are 26 commercial banks out of which 6 are joint venture banks, 63 development banks and 77 financial institutions in Nepal. At present there is only one international bank operating in Nepal which is Standard Chartered Bank Limited. It started operation in Nepal since 1987 as a joint-venture operation and today it is a part of Standard Chartered Group having an ownership of 75% in the company and 25% shares owned by the Nepalese public. Nepal after its commitment to the World Trade Organization (WTO) during its accession in 2004, has allowed foreign banks to make their foray in Nepal to do only wholesale banking  from Jan. 1, 2010. Initially before the agreement with WTO (GATS), the Central Bank regulation allowed foreign shareholders to acquire maximum of 51% shares. Later the regulation changed which allowed foreign ownership of 75% and the recent regulation of 2010 allows 100% foreign ownership (i.e. allows a local entity to be a branch of a foreign company) in the banking industry. Entering of foreign firms is likely to generate benefits to financial sector as well as the economy as a whole (Chau HB, 2003). The effects can be seen mainly through an increase in efficiency and technological advancements as mentioned above. Over the past decade, the Nepalese banking industry has been doing well and has a number of new firms entering into the market. However, there is only one foreign bank and 6 joint-venture banks in the banking sector, though the government has liberalized the financial sector and allowed foreign banks to have 100% foreign ownership. With limited number of foreign banks in Nepal, it is still unclear whether entering of foreign banks, including joint venture, helps to improve overall performance of banking sector as well as to spillover some benefit to domestic banks in Nepal. Objectives To answer the key question above, there are two objectives of the research paper. To measure and analyze the performance of three types of banks namely domestic bank, joint-venture bank, and foreign bank and to explain the variation in performances of these banks. To identify whether the entry of foreign banks, including joint venture, banks would be beneficial for domestic banks which still dominate the financial market in Nepal. 1.3. Scope and limitations of the Study This study will only focus on three types of banks, i.e. domestic bank, joint-venture bank, and foreign bank, and it will offer an insight on the advantages of foreign banks in Nepal. Furthermore it will provide the reasons pertaining to variations in performance of the banks. The main limitation in this study is that there is only one foreign bank in Nepal till date, so the interpretation of the performance of the foreign bank in Nepal could be restricted to some degree. 1.4. Research Methodology This section develops research methodology to reach the objectives of the study. The banking sector in Nepal will be divided into three groups, namely foreign owned banks; joint-venture banks, and domestic banks. For this research, foreign-owned banks will be classified as those which have started a branch or subsidiary in the host country where the share of foreign bank ranges from 51% to 100% while joint venture banks will be classified as those in which foreign investors own the total equity of 50% or less and domestics banks are those which are purely owned by the Nepalese. The foreign owned banks are separated from joint-venture banks in this study because these two types of banks tend to have different operational management, resulting in their different performance. The research methodology is composed of both quantitative and qualitative analysis. First, the qualitative approach is applied to examine the structure and development of financial sector in Nepal during 2000-2010. The financial policy, especially competition-restriction regulation in Nepalese banking sector is also reviewed, mainly through official documents from central bank and international organization. Then the quantitative approach is developed to measure the performance and efficiency of banking sectors in Nepal. This is done by conducting various financial indicators of three types of banks in Nepal namely foreign bank, joint venture banks and domestic banks. Comparison of the indicators among these three types of banks over the past decades will provide the clear analysis of different performance between foreign-owned and domestic banks. The indicators can be grouped into four aspects, namely profitability; operational costs; staff productivity; risk prevention. Table 1 shows financial indicators that will be conducted according these four aspects. Table: 1    Indicators Rational Profitability Profitability à ¯Ã¢â‚¬Å¡Ã‚ ·Profit Margin (Net Profit/Total Income) Profit margin is very useful when comparing  companies in similar industries. A higher profit margin indicates a more profitable company that  has better control over  its costs compared to  its competitors. Profit margin is  displayed as a percentage; a 20% profit margin, for example, means the company has a net income of $0.20 for each dollar of sales. Profitability à ¯Ã¢â‚¬Å¡Ã‚ · Return on Asset (Net Profit/Total asset) ROA figure gives investors an idea  of how effectively the company is converting the money  it has  to invest into net income. The higher the ROA number, the better, because the company is earning more money on less investment. For example, if one company has a net income of $1 million  and total  assets of $5 million, its ROA is 20%; however, if another company earns the same amount but has total assets of $10 million,  it has  an ROA of 10%. Based on this example, the first company  is better at converting its investment into profit. Profitability à ¯Ã¢â‚¬Å¡Ã‚ ·Ãƒâ€šÃ‚  Return On Equity (Net Profit/Equity) The amount of net income  returned  as a percentage  of shareholders equity.  Return on equity  measures a corporations profitability  by revealing how much  profit a company generates  with the money shareholders have invested.  Ãƒâ€šÃ‚  Higher The ROE better the company. Profitability à ¯Ã¢â‚¬Å¡Ã‚ · Interest Rate Spread (Interest Earning Ratio-Interest Expense Ratio) The difference between the average yields a financial institution receives from loans and other interest-accruing activities and the average rate it pays on deposits and borrowings. The greater the spread, the more profitable the financial institution is likely to be; the lower the spread, the less profitable the institution is likely to be. Risk prevention Risk Prevention à ¯Ã¢â‚¬Å¡Ã‚ ·Capital to Risk Weighted Assets (CRAR) Total Capital/ (RWAs) This ratio is used to protect depositors and promote the stability and efficiency of financial systems around the world. à ¯Ã¢â‚¬Å¡Ã‚ ·Core CRAR = Tier I Capital / RWAs Tier one capital is that which can absorb losses without a bank being required to cease trading. This measures the capital standard of the bank à ¯Ã¢â‚¬Å¡Ã‚ ·Adjusted CRAR = (Total Capital Net NPAs)/(RWAs Net NPAs) This relates to the bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s ability to sustain the losses due to risk exposures is the bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s capital. The intermediation activity exposes the bank to a variety of risks. Staff productivity Staff Productivity à ¯Ã¢â‚¬Å¡Ã‚ ·Profit per employee (Net Profit/ No. of Employee) This helps to measure how productive the employees are in the bank by calculating profit generated by every employee. Higher the figure better for the company. à ¯Ã¢â‚¬Å¡Ã‚ ·Net Income per employee (Net Total Income/ Number of Employees) This also helps to measure income generated by every employee in the company Operational costs Overhead Expense à ¯Ã¢â‚¬Å¡Ã‚ · Overhead expense/total income The accurate accounting and allocation of over-head expenses are very important factors in calculating the true cost of the company Operating Expense Ratio à ¯Ã¢â‚¬Å¡Ã‚ · Operating Expense/ Net Income The Operating Expense Ratio is usually viewed as a measurement of management efficiency.   This is because management usually has greater control over operating expenses than they do over revenues. In addition to analyzing different performance between foreign-owned and domestic banks, this study further analyze whether entering of foreign banks helps to improve efficiency of domestic bank. This is done by (1) Structured interviews with managers of central bank and commercial banks. Specifically, the interview will provide detailed analysis on which factors do help to improve performance of domestic banking sector in Nepal; could foreign-owned banks influence performance of domestic banks; and which channels do foreign-owned banks influence domestic banks, and (2) by à ¢Ã¢â€š ¬Ã…“Granger causality testà ¢Ã¢â€š ¬? between domestic bank performance and foreign bank performance. This will be done on profitability, staff productivity and operational costs. 1.5. Organization of the study There will be five chapters in the study. Chapter 1 provides introduction, objective, scope and limitation, and methodology of the study. Chapter 2 reviews relevant theoretical and empirical literature on foreign bank penetration and domestic bank performance in both developed and developing countries to lay the groundwork for developing analytical framework and methodology in examining the impacts of foreign bank penetration on domestic bank performance in Nepal. Chapter 3 examines the structure and development of financial sector in Nepal as well as financial policy over the past decades. The results of banking performance are shown in this chapter. Chapter 4 discusses the impacts of foreign banks to domestic banks, both qualitative and quantitative. Chapter 5 provides conclusion and policy inferences. Chapter 2 Literature Review This section reviews relevant theoretical and empirical literature on foreign bank penetration and domestic bank performance in both developed and developing countries. This is done in order to lay the groundwork for developing analytical framework and methodology in examining the impacts of foreign bank penetration on domestic bank performance in Nepal. Penetration of foreign bank can come in different forms, such as branch offices, subsidiaries, joint ventures, or strategic partnerships. Branch offices, for instance, are an integral part of the parent company, that is, they have no capital of their own. Subsidiaries, however, are their own corporate entities, which are fully owned by the parent company. Similarly, joint ventures are separate corporate entities owned jointly by more than one parent company. Finally, foreign banks may establish a strategic partnership by buying a majority stake of an already existing domestic bank. Weller Scher (1999) The main difference between the various operational forms of foreign banks is their regulatory treatment. The regulatory treatment of the banks differs amongst domestic banks, joint-venture banks and foreign owned banks. Although there are different forms of foreign bank penetration, foreign owned banks are defined as those in which foreign investors own more than 50% of the total equity. Okuda and Rungsomboon, (2004). Decree on Foreign Banks, Phillip Fox 2006, distinguished foreign banks as Foreign Bank Branches (FBB), Foreign Invested Banks (FIB) and Joint Venture Banks (JVB). FBB is a dependent subsidiary of a foreign bank, for which the foreign bank has provided written guarantee that it will be responsible for all obligations and undertakings under FBB. A 100% FIB is established as a separate legal entity with capital being contributed from only foreign entities. Amongst the foreign investors, there must be a à ¢Ã¢â€š ¬Ã…“parent bankà ¢Ã¢â€š ¬? and it must hold more than 50% charter capital. A JVB is established as a separate legal entity, with capital being contributed from one or more foreign banks and domestic banks. Capital is not divided into shares. In JVBs, the capital contribution rate by the foreign bank(s) is capped at 50% of the capital of the bank. The regulations and supervision of financial sector in a host country are crucial in affecting the penetration of foreign banks. Over the past decade, most of the banks throughout the world have started standardizing their policies relating to financial sector according to Basel committee (Basel II Basel III)[7] Although Basel system has been introduced and regulations and supervision of banking sectors began to be standardized, regulations relating to competition within the banking sector, which influence the penetration of foreign bank and market structure of banking sector, vary significantly across countries and regions. According to Barth, Caprio and Levin (2001), there are three key aspects of the regulations relating to competition within the banking sector, namely 1) Limitations on Foreign Ownership of Domestic Banks determine (whether there are any limitations placed on the ownership of domestic banks by foreign banks); (2) Limitations on Foreign Bank Entry determine (whether there are any limitations placed on the ability of foreign banks to enter the domestic banking industry) and (3) Entry into Banking Requirement determine (whether there are specific legal submissions required to obtain a license to operate as a bank). The restrictions on overall bank activities and ownership vary from country to country. The research on Regulation and Supervision of Banks around the World by Barth, Caprio and Levine (2001) mentions that there are two measures of the size of a countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s banking industry. First measure is total bank assets as a percentage of GDP and the other is the number of banks per 100.000 people. . Both these measures show substantial variation across countries. Countries like Germany, Switzerland, Netherlands, and United Kingdom have very high total bank assets as a percentage of GDP whereas United States and Asian countries are much lower. However the number of banks per 100,000 people is not much different in the countries mentioned above. The following Table shows the differences in restriction on banking system in some countries.[8] Countries Percent of total bank assets government owned Percent of total bank assets foreign owned Overall bank activities and ownership restrictiveness Professional Supervisor per bank Bangladesh 70 6 3.0 8 India 80 0 2.5 5.5 Nepal 20 35 2.0 4 Sri Lanka 55    1.8                   Cambodia 16 71 3.5    Indonesia 44 7 3.5 3 Malaysia 0 18 2.5 4.7 Philippines 12 13 1.8 7 Thailand 31 7 2.3 10 Singapore 0 50 2.0 1                New Zealand 0 99 1.0 0.6 Australia 0 17 2.0 2                United States 0    1.3 0.7                Germany 42 4 1.3 1 United Kingdom 0    1.3 0.7 Belgium       2.3 0.7 Switzerland 15 9 1.3    The table clearly shows that the countries in ASEAN region have higher restrictions on banking activities and ownership in comparison to countries like New Zealand and United States. The regulations are different in each country and do not match even if the countries are in the same region. But Professional supervision per bank is lower in developed countries like United States, New Zealand, United Kingdom whereas developing counties have higher no. of supervision per bank. According to the research the highest restrictions on overall bank activities and ownership are imposed by countries like Bhutan, Cambodia, China, Indonesia, Vietnam and lowest restrictions by New Zealand then Germany, Austria and United Kingdom. In countries like New Zealand and United states the government ownership of banks is zero percent whereas India, Bangladesh has very high percent of government-owned banks. Although the regulations on banking competition vary, over the last decades, restrictions on foreign bank penetration have been relaxed as part of financial reform and foreign bank penetration increased substantially in many countries. This could be because the host country expects the positive impacts of increased foreign bank penetration in the host countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s banking system. Trade agreements have also played a major role in liberalization of market entry for foreign banks as financial services are required for international trade, production and investments. Governments usually support flow of foreign investment and this has been evident especially after various financial crises. Many countries in Southeast Asia started liberalizing foreign investment after the Asian financial crisis. The Asian crisis appeared to have catalyzed the liberalization of FDI restrictions in the banking sector across several ASEAN countries. Chau H.B (2003) A number of empirical studies analyze the impacts of foreign bank entry on domestic financial sector in a host country. The impacts can be grouped into three aspects. Firstly, foreign banks promote efficiency (competition and new technology) in domestic financial sector. A larger foreign bank presence can improve the competitiveness of the banking sector. Greater competition is advantageous for many reasons: to enhance the efficiency of financial services; to stimulate innovation; and to contribute to stability. It can also widen access of qualified borrowers to financing, which may increase aggregate lending and so enhance growth. A competitive and well-organized banking system can also improve the effectiveness of monetary policy transmission by tightening the link between policy rates and deposit/lending rates. (BIS paper No. 23) Foreign banks also help in availability of funds and acquisition of consumer-marketing skills. Chau (2003) In addition, foreign bank entry introduces new technology; financial services and advanced management skills, which existing domestic banks lack. The new technology and skills introduced by foreign banks include new financial products, advanced IT technology, and sophisticated bank management techniques. These are expected to contribute to lower operational expenses, amplified profitability, and better bank risk management. Forced by market competition, domestic banks may emulate the new financial products and management skills. Okuda Rungsomboon (2004). The presence of foreign bank also improves the corporate governance structure of the domestic banks. This includes breaking down the family-controlled structure and improving the decision making process. Chau H.B (2003) Unite and Sullivan (2001) has found that increase in foreign bank entry narrows the interest rate spreads and also reduces operating expenses. Foreign banks induces domestic banks to be more efficient, the increased competition forces domestic banks to take in less creditworthy customers and foreign participation induces domestic banks to spend more on improving their operations. However, Okuda Rungsomboon (2004) found that the entry of foreign banks is expected to negatively affect the operations of domestic banks but overall performance is likely to progress in the long run. Secondly, the entry of foreign banks is associated with reallocation of loans. Findings suggest that foreign banks improves credit access for many credit-worthy firms but some firms with positive net present value without opaque information will have difficulty obtaining loans. More developed countries, such as the U.S., Japan, and those in the European community, argue that Less Developed countries should allow foreign banks to enter into their economies. By increasing competition, foreign bank entry may boost the supply of credit and improve efficiency. Gormley (2006) Foreign banks are comparatively less likely to lend to à ¢Ã¢â€š ¬Ã…“soft informationà ¢Ã¢â€š ¬? firms, and more likely to lend to à ¢Ã¢â€š ¬Ã…“hard informationà ¢Ã¢â€š ¬? firms. à ¢Ã¢â€š ¬Ã…“Soft informationà ¢Ã¢â€š ¬? refers to information that cannot be easily publicly verified by a third party. à ¢Ã¢â€š ¬Ã…“Hard informationà ¢Ã¢â€š ¬? on the other hand refers to credible and publicly verifiable information, such as a foreign firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s authentically audited balance sheets, or government guarantees. Mian(2003.) The loan portfolio of foreign banks consists of only credible clients which mean that the chances of default are very less. The domestic banks will be compelled to give loans to non-credible clients because the credible clients will be mostly handled by foreign banks. This will have greater chances of loan defaults for domestic banks. Thirdly, foreign banks are geographically spread relative to domestic banks; therefore they are less affected by adverse shocks in the domestic country. Both foreign and private domestic banks have similar low probabilities of being assisted by the government in times of difficulty but foreign banks are considerably more likely of being bailed out by their parent bank. For example, if the local subsidiary in a developing country of a foreign bank runs into trouble, it may get an injection of new capital from its parent bank to bail it out. This access to liquidity directs to a lesser deposit cost for foreign banks. Furthermore, foreign banks have access to advanced technology, outside resources and expertise which facilitates them in providing better service than the domestic banks. However, there might be some drawbacks that make the foreign banks perform worse than domestic banks in the host country. Firstly, a large foreign banking existence could mean that information available to host country supervisors can be reduced and the decision-making and risk management shifts to the parent bank. The delisting of the equity of local partner on the local exchange removes an important source of market intelligence for the foreign bank. In addition, if the integrated firmsà ¢Ã¢â€š ¬Ã¢â€ž ¢ equities are delisted in the local market, host country controllers can also lose access to key foreign bank decision-makers. Secondly, a country might be more exposed to shocks due to foreign banks presence. External events which affect the parent bank will affect the branches or subsidiaries. The factors that determine exposure to such external shocks, whether it is greater with onshore foreign banking as compared to traditional cross-border bank lending, and the propositions for regulatory and supervisory policy also demand further investigation. Lastly Accounting Standards could also be a problem for foreign banks unlike the domestic banks which have clear set of accounting standards set within its organization. There is a need for transparent and reliable accounting and financial reporting but for foreign banks; usually parent banks and their foreign subsidiaries often have different accounting standards, which can lead to discrepant financial balances, even when they are based on the same financial information. This might lead to complexity in comparison between international financial statements which could raise doubt in the reliability of banks financial statements. Differences may occur in different tax treatment, deferred taxes, valuation and accounting of repos, amortization of goodwill, treatment of past due loans and from provision and inflationary accounting adjustments. Moreno and Villar (2005)

Mt St Helens 1980 Eruption

At 8:32 a.m. on May 18, 1980, the volcano located in southern Washington called Mt. St. Helens erupted. Despite the many warning signs, many were taken by surprise by the blast. The Mt. St. Helens eruption was the worst volcanic disaster in U.S. history, causing the deaths of 57 people and approximately 7,000 large animals. Â   A Long History of Eruptions Mt. St. Helens is a composite volcano within the Cascade Range in what is now southern Washington, approximately 50 miles northwest of Portland, Oregon. Though Mt. St. Helens is approximately 40,000-years old, it is considered a relatively young, active volcano. Mt. St. Helens historically has had four extended periods of volcanic activity (each lasting hundreds of years), interspersed with dormant periods (often lasting thousands of years). The volcano is currently in one of its active periods. Native Americans living in the area have long known that this was not an ordinary mountain, but one that had fiery potential. Even the name, Louwala-Clough, a Native American name for the volcano, means smoking mountain. Mt. St. Helens Discovered by Europeans The volcano was first discovered by Europeans when British Commander George Vancouver of the H.M.S.Discovery spotted Mt. St. Helens from the deck of his ship while he was exploring the northern Pacific Coast from 1792 to 1794. Commander Vancouver named the mountain after his fellow countryman, Alleyne Fitzherbert, the Baron St. Helens, who was serving as the British ambassador to Spain. Piecing together eyewitness descriptions and geologic evidence, it is believed that Mt. St. Helens erupted somewhere between 1600 and 1700, again in 1800, and then quite frequently during the 26-year span of 1831 to 1857. After 1857, the volcano grew quiet. Most people who viewed the 9,677-foot tall mountain during the 20th century, saw a picturesque backdrop rather than a potentially deadly volcano. Thus, not fearing an eruption, many people built houses around the base of the volcano. Warning Signs On March 20, 1980, a 4.1 magnitude earthquake struck underneath Mt. St. Helens. This was the first warning sign that the volcano had reawakened. Scientists flocked to the area. On March 27, a small explosion blew a 250-foot hole in the mountain and released a plume of ash. This caused fears of injuries from rockslides so the entire area was evacuated. Similar eruptions to the one on March 27 continued for the next month. Though some pressure was being released, large amounts were still building. In April, a large bulge was noticed on the north face of the volcano. The bulge grew quickly, pushing outward about five feet a day. Though the bulge had reached a mile in length by the end of April, the plentiful plumes of smoke and seismic activity had begun to dissipate. As April drew to a close, officials were finding it increasingly difficult to maintain the evacuation orders and road closures due to pressures from homeowners and the media as well as from stretched budget issues. Mt. St. Helens Erupts At 8:32 a.m. on May 18, 1980, a 5.1 magnitude earthquake struck under Mt. St. Helens. Within ten seconds, the bulge and surrounding area fell away in a gigantic, rock avalanche. The avalanche created a gap in the mountain, allowing the release of pent-up pressure that erupted laterally in a huge blast of pumice and ash. The noise from the blast was heard as far away as Montana and California; however, those close to Mt. St. Helens reported hearing nothing. The avalanche, huge to begin with, quickly grew in size as it crashed down the mountain, traveling around 70 to 150 miles per hour and destroying everything in its path. The blast of pumice and ash traveled northward at 300 miles per hour and was a raging hot 660Â ° F (350Â ° C). The blast killed everything in a 200-square mile area. Within ten minutes, the plume of ash had reached 10 miles high. The eruption lasted nine hours. Death and Damage For the scientists and others who were caught in the area, there was no way to outrun either the avalanche or the blast. Fifty-seven people were killed. It is estimated that about 7,000 large animals such as deer, elk, and bears were killed and thousands, if not hundreds of thousands, of small animals died from the volcanic eruption. Mt. St. Helens had been surrounded by a lush forest of coniferous trees and numerous clear lakes before the blast. The eruption felled entire forests, leaving only burned tree trunks all flattened in the same direction. The amount of timber destroyed was enough to build about 300,000 two-bedroom homes. A river of mud traveled down the mountain, caused by melted snow and released groundwater, destroying approximately 200 houses, clogging up shipping channels in the Columbia River, and contaminating the beautiful lakes and creeks in the area. Mt. St. Helens is now only 8,363-feet tall, 1,314-feet shorter than it was before the explosion. Though this explosion was devastating, it will certainly not be the last eruption from this very active volcano.

Career Development The Career Opportunity - 955 Words

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Organizational Systems for Continuous Improvement

Questions: 1.Discuss How Organisational Systems and Procedures can Support Effective Continuous Improvement.2.Discuss How Continuous Improvement Systems and Processes relate to Other Business systems and Requirements including knowledge management, quality, performance management and sustainability.3.Think about a job that you had in the past or that you currently have. How would you measure productivity in that job?4.Reflect on a Past work Experience and Describe an Instance where Continuous Improvement was applied Answers: 1.Organizational Systems and Procedures can support effective continuous Improvement In business organizations, different types of organizational systems and procedures are used for organizing information. The knowledge based organizational systems are used to organize materials that are used for the purpose of retrieval and for managing collection. Further in this report, we will discuss how organizational systems and procedures supports effective continuous improvement. 2.Organizational Systems support continuous improvement at workplace There are wide variety of organization systems available that helpful to support continuous improvement at workplace. That organizational systems and procedures are discussed as below: Hierarchical System This organizational system is helpful in large business organizations where employees and owners have too much work to do. By using this organizational system, workers work under guidance of supervisor and owner handles other business activities. Under this systems, different skilled employees are hired by management to handle different business tasks and every team is supervised by supervisor. This is an effective way to improve workplaces (Ashe-Edmunds, 2017). Divisional Systems A business organization that has multiple products or businesses that implement divisional organizational systems. In this way, each division might operate by using its own marketing and production functions and each division will be responsible for its own work. This is an effective way to improve workplaces environment. By Department Besides above discussed organizational systems, an organizational procedure can also be created that should be based on different functions within a company. These functions will include marketing, office administration, finance and human resources etc. Examples of how organizational systems can be applied for continuous improvement at workplace. As we have discussed above, different organizational systems can be applied for continuous improvement at workplace. Now, in this segment of report we will emphasize on examples of each organizational system to understand that how it can be applied at workplaces (Thinkperform.com.au, 2017). In case of hierarchical Systems, if an employee has charge of marketing, then that employee will also responsible for creating and managing budget of department and also overseeing staff members such as webmasters and graphic designers (Schron.com, 2017). In case of divisional systems, an organization handles different businesses. Adidas Company provides different sportswear for every sport such as cricket, hockey etc. Relation of Continuous Improvement Systems and Processes to business systems and requirements The above discussed organizational systems are not only helpful for continuous improvement systems but also helpful to manage knowledge management, quality, performance management and sustainability in a way that these systems provide a strategic way to manage all business tasks and operations appropriately by dividing them into employees according to their knowledge and skills under an effective leadership. By doing this, knowledge and performance of employees can be judged and quality and sustainability of their work can be estimated easily (Referenceforbusiness.com, 2017). 3.How I measure productivity of my Job? Currently, I am working as a Web Programmer in a company and I am satisfied with this job. It is a productive job because due to this job, I am not only earning good amount but also getting so much knowledge in my field. We work on a project in team and every team member is responsible for his/her task. We have a good team leader who guides to achieve project goals successfully and within time. Due to usage of continuous improving system at our workplace, every employee is handling his responsibility properly and providing desired results. It improves productivity of work (Carr, 2017). 4.Past Work Experience where Continuous Improvement was applied? At my previous workplace, flat organizational system were used for continuous improvement, but it was a loose organizational structure and here responsibility of most areas was handled by owner or different employees. Under this structure, there was lack of supervisor and manager who could guide employees to work effectively. Therefore, it was not a good way for continuous improvement at workplaces. Therefore, organization was shifted to another organizational system i.e. hierarchical system for better performance of employees and for improving workplaces environment. This was a major change that have done at my previous organization and various positive changes are encountered (Managementhelp.org, 2017). References Ashe-Edmunds, S. Ashe-Edmunds, S. (2017). What Are Organizational Systems? | eHow. eHow. Retrieved 10 March 2017, from https://www.ehow.com/info_8403547_organizational-systems.html BusinessDictionary.com. (2017). Developing Organizational Systems for Better Efficiency. (2017). Retrieved 10 March 2017, from https://www.businessdictionary.com/article/473/developing-organizational-systems-for-better-efficiency/ Thinkperform.com.au.(2017). Organisational Success the Continuous Improvement Process. (2017). Retrieved 10 March 2017, from https://www.thinkperform.com.au/continuousimprovement/ Referenceforbusiness.com. (2017). Continuous Improvement - strategy, organization, levels, system, business, system, History of continuous improvement. Retrieved 10 March 2017, from https://www.referenceforbusiness.com/management/Comp-De/Continuous-Improvement.html A Framework for Organizational Knowledge Systems. (2016). International Journal Of Business And Administrative Studies, 2(6). https://dx.doi.org/10.20469/ijbas.2.10004-6 Carr, C. (2017). How Continuous Improvement can Benefit Your Business | Kanbanize Blog. Kanbanize Blog. Retrieved 10 March 2017, from https://kanbanize.com/blog/how-continuous-improvement-can-benefit-your-business/ Managementhelp.org.(2017). Thinking About Organizations as Systems. Retrieved 10 March 2017, from https://managementhelp.org/organizations/systems.htm Smallbusiness.chron.com. (2017). Different Types of Organizational Structure. Retrieved 10 March 2017, from https://smallbusiness.chron.com/different-types-organizational-structure-723.html