ALLAMA IQBAL OPEN UNIVERSITY

Course BUSINESS MATHEMATICS & STATISTICSCode (8532)Semester Spring, 2015Level MBA Marketing (3½ Years)Tutor Sir Sohail JavaidName waQas ilYasRoll # BA 582702

Assignment # 02Topic =Contingency table analysis and its benefit for organization.

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ACKNOWLEDGEMENT

All gratitude and thanks to almighty “ALLAH” the gracious, the most merciful and beneficent who gave me courage to undertake and complete this task. I am very much obliged to my ever caring and loving parents whose prayers have enabled to reach this stage. I am grateful to almighty ALLAH who made me able to complete the work presented in this report. It is due to HIS unending mercy that this work moved towards success. I am highly indebted to my course instructor for providing me an opportunity to learn about the “which is vital ingredient” of MBA program. I am very grateful to my teacher (Sir Sohail Javaid) for providing me guideline for the completion of this report.

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I feel great pride and pleasure on the accomplishment of this report.

ABSTRACT

This report is the Practical part of the most vital practice of our MBA-Marketing program. The sole objective of my activity is to familiarize with the practical manipulation of business organization. This report has been written to know how big organizations like Muslim Commercial Bank manage their teams to achieve their common goals. In the first phase of the report there is the general introduction about the company and then different terms have been explained, then the mission, values, different services and different strategies of the organization have been explained. In the next part, SWOT analysis of the firm have been done by the help of which it is identified that what are the strong areas of the company and where it lacks so that it can improve, and then in the end most important my experience while visiting in the MCB.

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DEDICATION This report is dedicated to the greatest man in the world that shows us the right path. Who is the great patron of the mankind that is Holy Prophet Hazrat Muhammad (PBUH). I would also like to dedicate this small effort of extract to my Parents and Teachers. They have always been a shining star to look upon, to give light and to show me the directions whenever I am lost. May Allah give them more strength and long life to guide me forever. Ameen!

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Table of Contents

Introduction of Topic 06Practical Review of Company 10Vision Statement 16Mission Statement 16Application of Topic 17SWOT Analysis 18 Conclusion 19Recommendations 19

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Introduction of Topic:

Contingency table analysis and its benefit for organizationStatistics

“The practice or science of collecting and analysing numerical data in large quantities, especially for the purpose of inferring proportions in a whole from those in a representative sample.”.

Business statistics

“Business statistics is the science of good decision making in the face of uncertainty and is used in many disciplines such as financial analysis, econometrics, auditing, production and operations including services improvement, and marketing research.”

Chi-Square

“A statistical method assessing the goodness of fit between a set of observed values and those expected theoretically”.

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Chi-Square Statistics

The Chi-Square Distribution

If the null hypothesis is true then the sampling distribution of the Chi-Square statistics can be closely approximately by continues curve known as a Ch-Square distribution. The Chi-Square distribution is a probability distribution. Therefore the total area under the curve in each chi-square distribution is 1.0 so many different chi-square distribution are possible that is not practical to construct a table that illustrates the area under the curve for all possible value of the area. There is a different chi-square distribution for each different number of degrees of freedom.

Determining the Degree of Freedom

Contingency Table Analysis

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Contingency table analysis is a common method of analyzing the association between two categorical variables. Consider a categorical variable that has r possible response categories and another categorical variable with c possible categories. In this case, there are r × c possible combinations of responses for these two variables. The r × c cross tabulation or contingency table has r rows and c columns consisting of r × c cells containing the observed counts (frequencies) for each of the r × c combinations. This type of analysis is called a contingency table analysis and is usually accomplished using a chi-square statistic that compares the observed counts with those that would be expected if there were no association between the two variables.

Appropriate Applications of Contingency Table Analysis

The following are examples of situations in which a chi-square contingency table analysis would be appropriate.

A study compares types of crime and whether the criminal is a drinker or abstainer.

An analysis is undertaken to determine whether there is a gender preference between candidates running for state governor.

Reviewers want to know whether worker dropout rates are different for participants in two different job-training programs.

A marketing research company wants to know whether there is a difference in response rates among small, medium, and large companies that were sent a questionnaire.

Design Considerations for a Contingency Table Analysis

Two Sampling Strategies

Two separate sampling strategies lead to the chi-square contingency table analysis discussed here.

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Test of Independence

A single random sample of observations is selected from the population of interest, and the data are categorized on the basis of the two variables of interest. For example, in the marketing research, this sampling strategy would indicate that a single random sample is selected, and each selected sample is categorized by size (small, medium, or large).

Test for Homogeneity

Separate random samples are taken from each of two or more populations to determine whether the responses related to a single categorical variable are consistent across populations. In the marketing research, this sampling strategy would consider there to be three populations of companies (based on size), and select a sample from each of these populations. Then test to determine whether the response rates differ or not.

The two-way table is set up the same way regardless of the sampling strategy, and the chi-square test is conducted in exactly the same way. The only real difference in the analysis is in the statement of the hypotheses and conclusions.

Expected Cell Size Considerations

The validity of the chi-square test depends on both the sample size and the number of cells. Several rules of thumb have been suggested to indicate whether the chi-square approximation is satisfactory. One such rule suggested by Cochran (1954) says that the approximation is adequate if no expected cell frequencies are less than one and no more than 20% are less than five.

Combining Categories

Because of the expected cell frequency criterion in the second sampling strategy, it may be necessary to combine

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similar categories to lessen the number of categories in your table or to examine the data by subcategories.

Practical study

MCB Bank Limited (formerly Muslim Commercial Bank) previously named as a (Mansoor Co-operative Bank) was incorporated by the Adamjee Group on July 9, 1947, under the Indian Companies Act, VII of 1913 as a limited company. The bank was established to provide banking facilities to the business community of South Asia. The bank was nationalized in 1974 during the government of Zulfikar Ali Bhutto. This was the first bank to be privatized in 1991 and the bank was purchased by a consortium of Pakistani corporate groups led by Nishat Group. As of June 2008, the Nishat Group owns a majority stake in the bank. The president of the bank is Imran Maqbool. The group has a presence in business sectors of the country such as banking, textile, cement and insurance.

Profitability

MCB is Pakistan's fourth largest bank by assets having an asset base of USD 7 billion as at quarter 1, 2012, and the largest by market capitalization having a market capitalization recorded at USD 1.2 billion at year end 2011 which was comparatively lower than USD 1.8 billion the year before, mainly on account

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of lower market value. The bank has a customer base of approximately 4 million and a nationwide distribution network of 1,190 branches including 22 Islamic banking branches (December 31, 2011) within Pakistan and eight branchesoutside the country (December 31, 2011 including the Karachi Export Processing Zone Branch), and over 650 ATMs in 110 cities, in a market with a population of over 190 million. In 2011, MCB reported a profit after tax of PKR 19.4 billion (appx.USD 205 million) and generated a return on average equity of 26.23% and a return on assets of 3.18% (2010: 3.13%) The bank's asset quality isstrong with a gross NPL ratio of 8.64%. MCB has 1165 branches (December 31, 2011) including local branches, and business establishments in SriLanka and Bahrain including newly established Rep. Office in Dubai, UAE. The bank has also formed a private company in Hong Kong (fully owned subsidiary of MCB) in partnership with Standard Chartered Bank, handling trade transactions of select countries in the Asia-Pacific region. To further strengthen its financial services base, MCB incorporated an asset management company in year 2005 known as MCB Asset Management Company. MCB has also incorporated a leasing company in Azerbaijan in 2009. Fully owned subsidiaries of MCB are:Muslim Commercial Financial Services (Private) Limited,MNET Services (Private) Limited,MCB Trade Services Limited,MCB Asset Management Company Limited,MCB leasing (Closed Joint Stock Company).

Business strategy

The bank has also established an Islamic Banking unit to offer Shariah compliant products and services, with dedicated Islamic banking branches in six cities. The Wholesale Banking Group caters to the top tier of local and multinational companies. The Retail Banking Group focuses on trading and middle market segment primarily for building risk assets and trade related business. MCB caters to the financing of foreign and local trade, funds transfer and other seasonal requirements. The Bank has renovated a large number of branches and staff has been trained for meeting the

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requirements of SMEs and other retail customers. An SME Financing Division has been set up to provide customized financing solutions. The group also focuses on the development of consumer asset products for satisfying the needs of the customers. MCB has a significant share of consumer financing business with its House and Car Financing schemes. The running financing facility against the mortgage of property is also expected to go a long way in increasing the quality consumer credit portfolio of the bank. Other areas such as Bancassurance set newer records as well by crossing the Rupees 1 billion benchmark in 2011. Islamic Banking outperformed in terms of improved profitability and volumes with introduction of additional 11 products and expansion with 8 new branches in 2011 and Privilege Banking, an elite setup, is a benchmark in the industry. They have nine branches across major cities.

Account opening department

In my first two weeks I'll work in the account opening departments. It is important department of the bank because all the working of the bank base on account and the bank account shows the deposit of the bank if any person working with the bank or the organization then first step is the account opening and my work is in the department is to open the new account for a valuable customer and I learned that there is few many document which is use in the opening of new account. There are many type of accounts the MCB bank (Ltd) is offered to its customer in which include Current account, Saving account, (PLS) Profit and loss account, BBA (Basic Banking Account), KBA(Khushali Bachat Account) these have different specification of the customer which will gave benefit of him. For account opening the minimum amount required is 1000 Rs. The document which is used in the opening a new account is as under. The most important in account opening is SS Card signature because we grudge it may which customer withdraw the money is original customer or not, and other step is KYC Form in this form we collect all secret information like client Father and mother name, income of the business, his email

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address, postal Address, and content number. The last one is CNIC required of KIN for those person who have a blood relation of client like father, mother, brother, sister, in this there is no required for friend or other person NIC only for those who have a blood relation of the client.

Cash department

During my internship I spent my 3rd week in the cash department and cash department is totally deals with the cash whether the cash comes in the bank or out from the bank during the learning in the cash department I learn the all the activities which is perform in the cash department .in the cash department there is various sub department according to the categories which are performing by the different persons in the department in the cash department there are four to five counters in which include During my learning process I learned that first of all issue the token to the customer and then in the receipt counter receive the cash and maintained the account and then if a customer have a check then the cheque is verifies by the verification person and then the casher makes the payment against the cheque and also transfer the money online and maintained the all activities which is casher duties i.e. give the cash to the valuable customer and the bill and the fees receive counter receive the bill payment and the fees and maintain all the activities related to bill and fees collection. This is the most important department of the bank I leaned while working in this department that there is all about maintains of the cash in this department in the staff work very carefully make sure there is no mistake and in the closing at evening both the sides of the cash account is balanced or equal then the banks makes the profit.

Credit department

My 4th week during my internship in the credit department the credit department is the one of the most important department of the bank. The credit department is works with maintain the loan and credit and also issue the credit after necessary

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verification and the security and the guarantee to the desire limit and there is the rule and the regulation to issue the credit and loan to the customers. Credit department of MCB bank (Ltd) deals with different type of running finance and the type of loan is as under. If the individual wants to take the loan from the bank then there is the limits of the loan which provided by the bank to any person or the organization. I leaned that for the purpose of loan giving by the bank there is few many document and the guarantee required by the bank according to the loan type the requirements is as under.

Cleaning department

My 5th week is all about the clearing department. I learned the work and the function which is performed in the clearing department. This department the important department of the bank. There are two types of clearing going in the bank Inward clearing and the Outward clearing .we can say that the clearing is clear those Cheque which cannot be cash at the cash counter of the bank . The representative of the respective bank collect all the Cheque and the instrument which drawn on there and settle the account and doing the clearing function this assembly of the representative of the bank is called Clearing house NIFT perform the clearing on the behalf of the commercial banks in all the cities throughout the country.

Inward clearing

The instrument and the settlement or the claim by the other banks or the other branches of MCB on our Branch of MCB bank in which include the cheque draft and etc, are drawn by the other bank customer or by the MCB bank branches in clearing in the inward clearing process there is few thing include which is mentioned as under

Outward clearing

The local clearing, a bundle cover is arranged manner the branch code stamp, total amount and number of instruments.

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This amount should match the one that is kept in the Clearing Register. The cheques or the instrument with bundle cover and outline are packed in NIFT bag. Before putting these items in the bag, a plastic seal number is required and should be written on the bundle cover and the same seal should be used to close the NIFT bag. This is to ensure additional safety as when the seal is opened, it is nonreplicable. If the seal number on the bag and on the bundle cover does not match, it is a suggestion that the bag has been tamper with. Strict action can be taken by NIFT and the Bank consequently.

Remittances Department

My last week is about working in the remittances department. It is very important department in the current scenario in this department the bank deals with transfer money and different type of fund and also receive fund from abroad form the Pakistani community and others as well which is called remittances The MCB bank transfer different type of fund through the different services in which the sum is mentioned below.

Western Union

During my work in this department I deals with the customer which transfer their money through the western union. Through the use of the western union one can get money from all cities in the Pakistan from western union branches or any bank or post office or the money changer. When person sent the money, the concerned company or bank give the PIN number to the person against the name of the person and the cell number who received the money through western union. When the receiver go to bank for receiver of money the bank takes the PIN number and the original CNIC copy from the receive and give him money.

Telegraphic transfer (TT)

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Telegraphic transfer is that after filling the application form the concerned officer fills the telegraphic transfer form after that it is sent to the required bank and then the concerned bank makes the payment immediately to the customer and after that the voucher sent to the bank by the mail.

Demand draft (DD)

Demand draft is like an instrument as issue on the will of the customer because avoid the extra burden of the currency and it is payable on the demand when the customer want it its issue by the one branch of the bank a payable by another branch of the same bank.

Vision of the Foundation To be the leading financial services provider, partnering with our customers for a more prosperous and secure future

Mission of the Foundation

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We are a team of committed professionals, providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. In doing so, we ensure that our shareholders can invest with confidence in us.Review of theoretical and practical situation with respect to topic

Following research groups are actively working in the department of statistics:

Statistical inference Bio Statistics Industrial statistics Time series analysis and forecasting Econometric models Probability distribution

Statistics Society

The statistic society was established in 1987 to solve the problems of students and to encourage academic and co-curricular activities at the department. The society arranges seminars on different topics by eminent professionals on a regular basis.

Statistics Laboratory

The department has set up its own well equipped computer lab divided into two sections. Latest statistical packages like SPSS, MATHEMATICA, E-VIEWS, STATA, MINITAB AND R-language etc. are available in the laboratory.

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Future Prospects

A Higher Degree in the subject of statistics in the need of the day. Degree Holder can join departments in the public and private sectors like Education, Provincial and Federal Bureau of Statistics, State Bank of Pakistan, Agriculture Census and the National Database Registration Authority (NADRA), medical colleges and hospital as bio-statisticians, marketing research organizations etc.

SWOT AnalysisStrength

Integrated approach with tax deduction from all sources of income at one rate.

Resolution of Agency and moral hazard problems by developing provincial governments/local budgeting, accounting and auditing frameworks.

Avoidance of deduction through withholding tax as it distorts horizontal tax equity.

Weaknesses Contingency approach suffers from inadequately of

literature. Determination of situation in which managerial action is to

be taken involves analysis of a large number of variables with multifarious dimensions.

Contingency approach being complex, presents problems in testing the percepts of the theory.

Contingency approach is basically reactive in nature.

Threats

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If well managed the provincial/local govt. bond market can be developed independent of national bond market.

Regulatory, supervisory, legal and tax framework should correspond to the regulations pertaining to corporate bond market as provincial/local govt.

Opportunities Clearly defined dual personality of Repos in Legal, Fiscal

and Accounting systems for establishment of effective Repo market.

Avoidance of Tax incentive on financial instruments to stimulate saving as they distort prices and lead to inefficient resource allocation.

Benefits of private sector bond market are enormous as the issuance to debt security of private sector to contribute towards economic development through more efficient re-allocation of capital.

Conclusion & Recommendations

The chi-square test of significance is useful as a tool to determine whether or not it is worth the researcher's effort to interpret a contingency table. A significant result of this test means that the cells of a contingency table should be interpreted. A non-significant test means that no effects were discovered and chance could explain the observed differences in the cells.

To improve management of Government cash flows to maintain better liquidity management by the central bank

Same tax treatments for federal/provincial/local/corporate bonds.

Issuance of securities for both monetary and fiscal policy. To define and adhere to the principles of broad market

access and transparency in Government funding operations.

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To define clear objectives and debt management strategy that involves market finance and introduction of risk management objectives

To identify how technology can be used to create new channels for securities distribution.

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