Project Resourcing Financial And Cost Benefit Commerce Essay

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In the following pages I am going to present a management project report outlining the key financial resources required for successful implementation of internationalization of a Pakistan based First Women Bank Limited (FWBL) with specific reference made on human capital cost etc, also carried out cost benefit analysis of the project for successful implementation of the project.

Internationalization is the process whereby an organization seeks to undertake overseas operations. The object of internationalization is to break new grounds, to seek new opportunities or two explore new market. Internationalization may be a prerequisite for survival or an opportunity to exploit an existing competitive advantage in a new market. In the first case, there is no alternative to internationalization whereas in the second, internationalization presents itself as an attractive option.

Strategies for implementation differ according to the type of motivation behind moves to internationalize. Usually the 'voluntary' approach allows more time to develop, test and implement a strategy, while perceived pressure to strengthen a company's position internationally may lead to quicker decisions and actions.


Successful internationalization requires a clear strategy.

Why does the company want to internationalize?

Which products will be launched in the international market?

What is the specific know-how the company relies on in its internationalization bid?

Will the company go international as a whole or only certain business division(s)?

Clear answers to these questions must be sought. To find the answers, the company should undertake a thorough analysis of potential new markets with the goal of establishing the company's competitive advantage in these markets. It is equally important to look at the company's workforce; its potential could well prove to be the most important asset in the internationalization process.

The development of a strategy must be followed by a comprehensive plan outlining in detail the financial and human resources required. At this stage, support from resource/information centers and government can be vital.


First Women Bank Limited is a unique financial institution, a scheduled commercial bank and a development financial institution for socio-economic empowerment of women. First Women Bank Limited is based in Karachi Pakistan.

First Women Bank Limited was incorporated as a scheduled commercial bank in public sector as public company limited by shares on 21st November 1989 under Companies Ordinance 1984 and commenced its business on 2nd December 1989 with a paid up capital of Rs.100 million (now enhanced to 200 million), 90% of which was contributed by five leading public sector banks and 10% had come from Federal Government.


TO BE THE LEAD BANK FOR WOMEN; Dynamic, adoptive and responsive to their special economic needs, offering the best financial services and the best banking practices


To be financially sustainable bank with a specialized focus on promoting economic prosperity and self-reliance in women of urban rural areas by

transforming the role of women

promoting asset ownership

promoting entrepreneur through computer literacy

facilitating women access to financial services

providing extensive banking training through FWBL's Training Institute to women


Why Internationalized?

FWBL is a leading bank in Pakistan. Its operations include lending to businesses run by women or in which 50% stake is owned by women. Its operations are currently restricted only to Pakistan. FWBL has played a significant role in the socio-economic development of women. Its business is growing at a significant pace. The loan recovery is as high as 80%. This is way above the other banks in Pakistan. Despite the recent financial meltdown, FWBL's financial position is better as compared to other banks. The bank's profits have shown an upward climb.

Which products to be launched?

FWBL is primarily directed towards strengthening the position of the women. Therefore, it is conducive for it to start overseas operations in countries where women are still financially unhealthy. There is no proper financial institution specifically directed towards the betterment of the women in the rest of the world. The products which will be launched will aim at providing credit to women for household, business, and personal needs.

In short the following products will be launched as part of internationalization process.

Business Credit

Car Financing

Personal Finance

Competitor Analysis

Competitor Analysis is an important part of internationalization efforts. Competitor Analysis has two activities.

Obtaining Information about important Competitors and

Using that information to predict Competitor Behaviour

The goal of Competitor Analysis is to understand:

With which competitors to compete

Competitors' strategies and planned actions

How competitors might react to a firms actions

How to influence Competitor Behaviour to the firms advantage


Going international is tricky and very demanding process for any organization and especially so for a small company based in Pakistan.

Hiring New Employees

FWBL is a women oriented bank and therefore in view of internationalization efforts it will need to hire new employees. The new employees and managers must be locals, as they are well aware of the local culture and values. They are able to conduct the business in a better way.

Sound Credit Policies

There is a stiff and cutthroat competition in the international financial services industry. FWBL needs to have sound credit policies designed to fulfill the needs of various customer segments. The interest rates should be competitive, for it to have any chances of survival.

Corporate Culture

FWBL needs to have a healthy corporate culture. The employees must be inculcated with trust and honesty. They should be taught to follow the norms of the workplace.

Capital Structure (Financial Leverage)

FWBL needs to have a strong capital cushion. It must have a capital of at least a billion Pak Rupees in order to safeguard against NPLs (Non Performing Loans/Bad Debts).

Changing the Outlook

The Bank must embark upon a comprehensive program in order to change the outlook of the management. It is an arduous task and requires hefty efforts to accomplish. The top management needs to arrange training programs to change the perception of the current employees.


FWBL will face the following challenges in future:

Developing a competitive edge in the new market

Setting up new branches


Customer's satisfaction in the new market

Financial Resources Required for Internationalization Project

Internationalization is a long term project and it does not come for free. The adequate financial resources are required to give the internationalization of FWBL the required dimension. Financial resources are the funds that help to fill the discrepancy that arises between a company's cash receipts and cash disbursements. These financial resources are provided by different investors like shareholders, lenders, and debt holders who have vested interest in the company in exchange for remuneration in form of dividends, interests, capital gains etc.

In the present era, the financial markets are becoming more vital every day. Begg et al (2003) suggest that the modern economy is no longer a credit-based economy, where bank loans are the predominant form of finance. Today it is rather a capital market economy, where companies obtain funding directly from investors by issuing shares and bonds. The estimate capital required by FWBL for internationalization is round about $1.5 million.

Thus the key financial resources to fulfill the fiscal needs for the successful launch of FWBL at international level could be its Shares and Bonds in the international stock markets.


FWBL is a women oriented bank and therefore in view of internationalization efforts it will necessitate to hire new employees. The new employees and managers must be locals, as they are well aware of the local culture and values. Knowledge assets are often referred to as intellectual capital. The general recognized categories of intellectual capital are:

human capital;

social capital (to include customer capital);

process capital; and

Intellectual property.

For the purpose of this paper the term knowledge asset is framed in the category of human capital and refers to each employee of an organization (Jackson, 2007).

What is human capital?

In the work of management scholars, the term "human capital" has been referred to as a key factor that helps improving an organization's assets and employees in order to increase productivity and sustain competitive advantage by means of people. The changed nature of human capital in the new economy requires workers, their managers and executives to possess different and sometimes unconventional characteristics to survive. However understanding what it is that drives the knowledge economy and how best people are attracted and attached to employment, what motivates them, the nature of the employment relationship requires a challenge to traditional conceptualizations of human resources (McGregor et al., 2004).

The traditional human capital accounting theories identify the following items of human capital investments:

Formation and acquisition costs at the early stages of development

Formation and acquisition costs of human capital are called human capital acquisition costs. These costs are divided into outsourcing acquisition costs and internal transfer costs. Outsourcing acquisition costs are the direct costs of human capital, i.e. directly related to human capital acquisition costs. They are made up of recruitment, selection, hiring and placement costs. Internal transfer costs, on the other hand, are expenses and housing expenses. They are the indirect costs of human capital. They are incurred for reasons related to human capital but not necessarily traced back to any specific event of human capital formation. These may include costs of promotion and transfer within a company.

Learning costs in the middle stage of development

The learning costs of human capital include:

Training costs for current and new employees,

On-the-job training (OJT) costs, and

The opportunity costs of trainers' time.

Training costs for current and new employees and OJT costs are direct costs of learning costs. However, OJT costs are the costs spent to increase employees' abilities to carry out their current tasks.

Replacement costs at the final stages of development

At the final stages of human capital development, the replacement costs include:

Discharge costs,

Inefficiency losses before discharges, and

The average costs of recruiting, hiring and training personnel to fill in the vacant positions,

The losses or opportunity costs incurred during the period when the positions remain vacant. These costs are incurred when there is someone leaving the organisation and the position needs to be filled up.


By focusing on and measuring the key characteristics of human capital costs the organisations are able to:

Link "human capital" to their business results

Identify with considerable precision the specific aspects of the work and learning environment that drive business results

Shift their focus from cost cutting to value creation.

There is a stiff and cutthroat competition in the international financial services industry. FWBL needs to have sound credit policies designed to fulfill the needs of various customer segments. The interest rates should be competitive, for it to have any chances of survival. However, it also needs to perform Cost Benefit Analysis to understand if it is feasible to enter an international market. Cost-benefit analysis is typically used by organisations to evaluate the desirability of a given project. It is an analysis of the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs (McGregor et al., 2004). The guiding principle is to list all aspects that are affected by the project and place a monetary value of the effect it has on their welfare as it would be valued by the organisation.

According to Wikipedia (2009), the process involves monetary value of initial and ongoing expenses vs. expected return. Cost-benefit analysis attempts to put all relevant costs and benefits on a common temporal footing. During cost-benefit analysis, monetary values may also be assigned to less substantial effects such as the various risks that could contribute to partial or total project failure, such as:

Loss of reputation,

Market penetration, or

Long-term enterprise strategy alignments

Cost-benefit calculations typically involve using time value of money formulas (Picket, 2005).


The typical costs associated with the launch of products of FWBL include Floor Space, interior, IT systems, Marketing costs, human capital costs, utilities. The benefits that are associated with the product include increased revenue, higher interest rates, and profits.

Cost Benefit Analysis - Implementation of products in international market

(Cost shown are per month and amortized over five years)

Purchase/ lease of floor space


Interior (includes furniture, security system and maintenance)


Setting up IT System


Marketing Costs


Human Capital Costs (Includes salaries, recruitment cost and other costs discussed above)




Increased revenue


Higher interest rates




Net gain per Month


The cost benefit analysis shows that the company would gain additional $100,000 per month by entering international market.

TO CONCLUDE, FWBL aims to achieve international expansion with limited financial material and human resources while at the same time motivating the workforce to embrace this change. This becomes more difficult because of the conservative bent of mind in Pakistan.

However, the biggest challenge for FWBL remains as envisaged in their vision viz to be the lead bank for the women.

* * * * *





Understanding the industry and market analysis


Day 1: looked at what is industry, segmentation and performance

Day 2: looked at porter's five forces models, industry attractiveness, tried to see how the five forces models could be used to ensure the new products that are launched in the international market prove beneficial for the company.

Day 3: looked at competitor analysis, tendencies in competitor analysis,



2 days

Day 1: Looked at various methods within the macro-environment analysis. Understood the numerous models within PEST analysis and how they change based on the industry as well. Some industries use it as STEP, STEEP, or PESTLE analysis

Day 2: Understood each of the PEST Analysis factors in detail. Looking at these aspects in detail also helped me to understand why the company needs to look at these aspects before it plans to venture into newer markets on the internal arena.


1 day

Learnt that why stakeholders interest is necessary before the company goes for internalisation, analysing the stake holders, understood external analysis, how power to achieve expectations becomes low, high and not met.

Definition and scope of international management

3 days

Day 1: looked at aspects of international management which include (culture, resources, environment, market and strategies)

Day2 (culture) understood language communication, cultural issues and taste difference. Individual country PEST analysis, potential international branding, need for local customizing.

Resources (understood access issues including location of production relative to markets, logistics, promotion/advertising possibilities

Environment (individual country PEST analysis, global/local issues, insight into market,

Market and strategies (potential international branding, market segment and niche opportunities, need for local customising

Day3: looked at globalization it also shows what factors are pushing globalization, brain potential Gain from globalisation.

The gains from globalisation and international business in which i personally learnt decreasing costs, differences in demand, increased competition, trade as `engine of growth`, non-economic advantages

Looked at why do businesses go multinational, globalisation and international business.

Globalisation and internationalisation business

1 day

Understood the definition of "global company" and what factors are pushing globalisation it ensured that distance is shrinking, lower cost of communication, flows of people across borders, government reforms, liberalization of trade and investment flows

Cost-benefit Analysis

1 days

Day1 Understood what is cost benefit analysis and why Cost Benefit Analysis is important and how it helps the company to grow their business. what are the benefits of it like for example (increase in productivity, reduction in costs , saving time, tangible and intangible benefits, direct positive effect(decrease road congestion)looked at the general steps for cost benefit analysis. And how we can do cost benefit analysis.


2 days

Strategic cost management

4 days

Day1: learnt the strategic management

Value Analysis/Value Engineering

Business Process Reengineering

Total Quality Management (TQM)

Day 2: Understood that value analysis aims at the assignment target cost by identifying improve product design, eliminating unnecessary functions that increase product cost and for which customers are not willing to pay etc.

Day3: Understood in detail, Business process reengineering identified examining process and making substantial changes, redesign of work is done through activities. The aims of reengineering are improve the key business process, simplification, cost reduction, improved quality and enhanced customer satisfaction.

Day 4: Understood that all business functions are involved in a process of continuous quality improvement ,TQM is high quality and on time ,earlier belief is that quality increases cost but it has saved many companies because of quality

Marketing planning process

Steps in planning process

Planning at different levels


Day 1:learnt about planning that market oriented strategic planning is a managerial process of maintaining a viable fit between the organization's objectives, skills and resources and its changing environment .understood that market planning is the process by which business analyse the environment and their capabilities, decide upon course of marketing action and implement those decisions, also understood that marketing planning provides the framework for the implementation a market orientation.

Day2: Understood the steps in planning process while analysing market opportunities ; by market information services, by marketing environment , by consumer markets , and by anticipating competitors

developing market strategies ; by positioning

planning marketing plane; by allocation of funds

managing the marketing efforts; by feedback and control

day3 ; understood planning at different level of an organisation by corporate planning, division planning, product planning ,

Corporate strategic plan is a frame work within division and business unit prepare their plans. Corporate and division strategic plan entails corporate mission , establish the strategic business units ,assigning resources to each SBU ,assessing growth opportunities

Day 4; understood Business unit planning identified. Business mission, SWOT Analysis, goal formulation, strategy formulation, program formulation, implementation, feedback and control.

I understood that what the Product Planning is and each product level must develop a marketing plan for achieving its goals.

Financial resource planning-

2 days

Day 1: Understood the need for financial resource planning and looked at various steps necessary for implementing strategic plan. One of them was financial resource planning which involved understanding human capital costs and other financial costs associated with the internationalisation project.

Day 2: Identified various resources needed for successful implementation of the internationalisation project.

The activities mentioned in the column 3 above were carried out within the college as well as at home. Although all these concepts were learned in the timeframe set, it is however to mention that these timeframes were not consecutive days as I had to spare time for other units also.


The experience of learning this unit was though quite cumbersome yet in the end it resulted in making me aware of various concepts which were totally unknown to me. It significantly enhanced my knowledge and competence which is noticeable from a management project report which we were assigned to prepare outlining the key financial resources required for successful implementation of internationalization with specific reference to be made on human capital cost and cost benefit analysis of the project for successful implementation of the project, based on the presentation regarding internationalization. As regard the aforesaid presentation, our group was supposed to choose an institution which had not undertaken any successful launch of a new product or service in international content of expanding operations overseas, we were required to develop proposals for the successful internationalization of the organization. Our group chose to purportedly internationalize First Women Bank Limited (FWBL)--a scheduled commercial bank and a development financial institution for socio-economic empowerment of women is based in Karachi Pakistan.

The following table shows that how I carried out the project and prepared the requisite report.


Time Framework

Progress monitoring

Understanding concepts associated with internationalisation

3 days

Day 1: looked at what internationalisation is all about

Day 2: looked at why companies would like to go for internationalisation

Day 3: looked at what all factors need to be considered by the company when it wants to go for internationalisation.

Understanding the company

1 day

Looked at information about the company that is looking to go for internationalisation. Understood their vision, mission statement, goals, strategy and planning.

Understanding the products to be launched

1 day

Looked at various products that are owned by the company. Then tried to get a detailed understanding of products that are to be launched in the international market. Looked at importance of SWOT analysis in understanding the product range that could be successful when used for internationalisation.

Understanding factors that impact the process of internalization

2 days

Day 1: Understood the need for internationalisation. Tried classifying information so that a decision could be made about whether the entire company goes for internationalisation or just a certain business division.

Day 2: Understood various tools that are available for an international manager to go through the process of internationalisation with fewer problems. Also looked at alternatives and problem solving approaches that might be required whenever there is a problem with the approach chosen. Though the assessment required us to look at 3 models I tried to look information on as many models as possible so that it would help me in future endeavour.

Conceptual understanding of Competitor and industry analysis

2 days

Day 1: Looked at the concepts associated with competitor analysis. Understood various factors that make competitor analysis important from internationalisation perspective.

Day 2: Looked at the various products available across the industry and the market stronghold of each of such product categories. Understood the areas of opportunities in different market scenarios and the right segment that is suitable for respective countries.

Conceptual understanding of tools and actions



2 days

Day1; Going international is tricky and very demanding process for any organization and especially so for a small company based in Pakistan so looked at what tools and actions are to be employed while going internationalized.

Day 2: made projection of the challenges which the FWBL might face after going internationalized. Sorted out the probable challenges and selected the most significant ones.

Financial Resources required for internationalization project

3 days

Day 1: Understood the need for financial resource planning. Looked at various steps necessary for implementing strategic plans. One of them was financial resource planning which involved understanding human capital costs and other financial costs associated with the internationalisation project.

Day 2: Identified various resources needed for successful implementation of the internationalisation project.

Day 3: took down all the resources and understood in the last two days and gave them final shape.

Cost-benefit Analysis

2 days

Day 1: Understood what cost benefit analysis is in the context of Internationalization of the First women bank limited and how to carry out in this specific case.

Day 2: on the basis of what I did the last day I finally performed the analysis for the internationalisation project to understand if the project is feasible for the company.


To conclude, the learning of this unit proved to be very productive for me in terms of understanding various concepts, including SWOT analysis, PEST, cost benefit analysis, understanding the industry and market analysis, financial resource planning and all other concepts related to the project of internationalization. I came on practical terms with concept such as internationalisation, financial resources, successful planning and implementation of an internationalisation plan.

Now I feel in a better position to develop a new vision and mission statement as well as setting meaningful and realistic objectives while undertaking an internationalisation programme. The unit was also beneficial in terms of other units as well such as "managing change in organisation". In short the project proved fruitful for me as a learning experience.