Business strategy: A guide to Effective Decision making Essay

Strategies decisions depends highly on perceptions, people’s attitudes and assumptions, therefore they are rarely straightforward or simple. Strategic decisions determine the direction as well as success of an organization, which is why it is essential for decision-makers to understand the decision-making process in order to make the right decisions. Chapter 2, 3, and 4 focus on introducing forces which will form a decision, including ideas, developments and potential pitfalls. In chapter 4, a practical and useful framework is also created to guide step by step in a decision-making process. Chapter 8 outlines insights and techniques for implementing and improving decisions in order to have a competitive strategy. Chapter 12 introduces forces which will have affection in sales, marketing and brand management decisions. It is necessary to understand the decision-making process and other involved factors to be able to create a practical and competitive strategy. Right decisions will make a huge impact on company’s directions as well as success in the future. Chapter 2: Ideas at Work Setting a strategy has always been complex due to the changes that company has to face over time. There are several factors that will affect the decision making process. Decision-making approaches The classical administrator The classical administrator, which was founded by Henri Fayol, has become the most traditional model of the decision-makers or strategists. A set of common activities and principles of managements was developed and divided into five sections: planning, organizing, commanding, coordinating and controlling. Planning involves setting the goals of the organization and developing an action plan for future success. Organizing involves structuring the organization and using necessary resources to achieve these aims. Commanding makes sure the optimum return from people, which is usually considered the most expensive component of a business. Coordinating involves focusing on people’s effort to achieve the goals. Control makes sure that everything is going according to plan, making adjustment when necessary to ensure success. The design planner When the strategy is planned, the techniques of the classical administrator would be used to implement the strategy. Design planning will help the implementation process and it requires expertise in two areas: Analyzing and anticipating the future environment, techniques and models. Be aware of the external opportunities and threats; internal strengths and weaknesses. The role player The role player involves in the strategic decision-maker’s job as a reflective and analyzing planner and controller, to make sure the plan is realistic and practical. The competitive positioner It is crucial for competitive positioner to understand the power of the external environment in order to achieve competitive advantage. Customers and suppliers, substitute products, present and potential competitors are considered competitive forces. The competitive positioned should be able to eliminate barriers to enter its market, set a competitive prices, reduce operating costs and be aware of its rivals. The visionary transformer Vision is one of the fundamental tools to make a strategic decision, and it should focus on answering the following questions: Where in the market should the organization position itself? Brand positioning? How should the organization achieve its goal? However, visions should be achievable and visionary transformers should be able to ensure that they are achieved. The self-organizer The self-organizer needs the ability to network, innovate and collaborate with people to achieve the organization’s goal. The turnaround strategist The turnaround strategist focuses on turning around the performance of an organization once a visionary leader has failed. It is important to adapt new control systems quickly, find out the reasons for failing and be able to reverse them. Financial issues There are three financial issues that influence strategic decisions, they are: cash management, risk management and budgeting. It is important for company to be able to manage its cash flow and have an effective financial control while implementing strategic decisions. Controlling costs Controlling costs, by saving money, making cost-cutting is one way to boost profits and reduce losses. Managing for value: implementing the balanced scorecard The balances scorecard takes into account four important perspective of activity, they are: financial perspective, customers, internal processes, innovation and learning perspective. The main stages of implementing the balanced scorecard include: Preparing and defining the strategy, deciding what to measure, finalizing and implementing the plan, publicizing a d using the results, reviewing and revising the system. The rise of technology and the impact on technology on decision-making The rise of technology has opened up a multiple ways to add value, increase sales, reduce costs and manage more efficiently, therefore technology has made a huge and diverse impact on business decisions. Factors that affect a business and decision-making such as: adding value, understanding customer needs, competitive advantage and assessing costs can be done much faster and more efficient with the help of technology. That is why it is definitely important to use and manage information systems properly to take the best out of it. Chapter 3: Pitfalls In this chapter, several types of failure may be encountered in decision-making process, such as: thinking flaws, leadership flaws and cultural flaws. Behavioral flaws In order to avoid traps made by human brain while making decisions, common traps should be recognized and understood which ones are likely to influence decision-maker’s thinking. Some common traps which were mentioned in this chapter were: the anchoring trap, the status quo trap, the sunk-cost trap, the confirming-evidence trap, the overconfidence trap, the framing trap, the recent event trap, and the prudence trap. Leadership flaws Leadership flaws can also affect strategic decisions. One of them is failure of understanding, when the leader does not properly understand a problem. Another common flaw is rationalistic planning, when everybody assumes that there is only one effective choice, therefore, leads to only one conclusion. Decision-making pitfalls Cultural flaws The culture of an organization can make a negative effect on strategic decision, and fragmentation occurs when people are in disagreement. In the other hand, groupthink is when an idea is given because it is supposed to harmony with the majority. Such behaviors are common and therefore, decisions may be affected by the cultural of an organization. Failure to respond to change It is important to sense when to change before the business goes down and gets bankrupt. Responding to the need to change may be not easy, due to other external factors, but changing in the right way and at the right time is crucial to remain the business in the market. Overcoming decision-making problems It is usually much more difficult to over problems than just pointing them out. When looking for a solution, two main factors should be considered seriously: the ability of the decision maker and the importance of testing and perfecting decisions. Some other ways to overcome problems and aim to effective decision-making are: being aware (and raising awareness among others), avoiding subjective or irrational analysis, being sensitive, establishing clear priorities and objectives, fostering creativity and innovation, understanding substantive issues and last but not least, focusing on the relevance and potency of the business idea. Organizational learning and scenarios Two popular approaches that can be used to avoid the pitfalls of strategic thinking are adaptive organizational learning and scenario thinking. Adaptive organizational learning means continuing the process by adapting new changes to suit the organizational environment and to improve performance. Scenario thinking is a process which is divided into two parts: a formal element designed by managers, and an informal part, characterized by casual conversations. Chapter 4: Rational or intuitive? Frameworks for decision-making The rational approach Assessing the situation Assessing the situation is the first step of rational decision-making process. It starts by asking whether the decision relates to a permanent issue or it is the result of an isolated event, therefore the decision-maker may have some idea of what to do in the next step. Defining the critical issues When considering a decision, all aspects should be taken into account, and funneling is a useful and rational technique to be used. The method involves collecting information, then prioritizes and eliminates issues that aroused based on the data that were collected and analyzed. Specifying the decision This step defines what the decision must achieve. By defining the minimum set of goals, this helps to ensure focus and smooth implementation. Making the decision Compromise is usually involved in the decision-making process. In this stage of the process, embracing with creativity and innovation may ensure the strategic decision will be implemented successfully. Implementing the decision After defining the decision, executing it is usually the most critical and time-consuming phase. These following factors are involved: planning how it will be implemented, assigning the tasks clearly and specifically, communicating, motivating and rewarding, managing resources to ensure that people carrying out the decision have the necessary equipment to complete their task. Monitoring and making adjustments It is very important to monitor the implementation so that everything is going according to plan and adjustments can be made in time. Decision-making is a cycle, from the last step comes back to the first step again, therefore the assessment of the next decisions should start will the monitoring of current ones. The intuitive approach

Discrimination and Equal Employment Opportunity Essay

At a subsiding workplace, a young female employee is assisting with closing up her section of a store. Going into the stock room alone, a fellow male worker corners her into a caged section of the area. Here, the male assistant makes unwanted physical and sexual advances towards the young and scared female worker. What can any person do who is subjected under these horrible workplace conditions that clearly violate their personal rights? As early as 1965, The Equal Employment Opportunity Commission (or EEOC) has ensured the protection, promise and safety of those persons exposed to discrimination in disreputable workplaces (U.S. Equal employment Opportunity Commission, 2000). This presentation will include a description of a lawsuit against an organization while giving a brief summary of the EEOC’s important functions. Further on, this report will include the role of the EEOC in relation to the lawsuit along with determining if the case promotes social change and justification. Finally, a comparison will be included between the EEOC and press related accounts describing the incidents of the case while implementing strategies to ensure future compliance with the issue in a multicultural workplace. EEOC Civil Action Case No. 3:11-cv-00920 In Franklin Tennessee, a civil issue was required because a 38-year old general manager of a Finish Line apparel store was outrageously, sexually harassing, three teenaged female employees whose ages ranged from 16-17 (U.S. Equal employment Opportunity Commission, 2000). The Finish Line is a family oriented Indianapolis based sports store that sells sporty shoes and athletic apparel. Subsequently, in Nashville Tennessee the United States jury and officials found the Franklin store general manager guilty for statutory rape and sexually harassing the three, young female assistants who worked under his supervision. On the second of January 2013, the EEOC released a National press statement that awarded the three teenaged workers 30, 000 dollars compensation which included back pay for the endangerment of the criminal acts that were placed against them in the workplace. The crime acted upon the young women was unfortunate, and no one should ever have to work under these conditions of sexual assault and harassment. The Equal Employment Opportunity Commission was highly committed to ensuring reparations to their clients and victims of workplace oppression. Equal Employment Opportunity Commission and its Commitment Like the story from above, everyday people are exposed to workplace discriminations and oppressions. The commitment of the Equal Employment Opportunity Commission is to ensure persons are not being discriminated or categorized under Title legislation VII of the Civil Rights Act of 1964 (U.S. Equal employment Opportunity Commission, 2000). The Commissions responsibility is to justify and put into action provisions of legislation VII against criminal occupation practices. The EEOC is also in control of managing Federal legislations that make it illegal to discriminate against those because of disability, gender, race, color or ethnic background (U.S. Equal employment Opportunity Commission, 2000). Overall, the Equal Employment Opportunity Commission sets an example reprimanding those who illegally act on workplace discrimination and harassment. The Role of the EEOC in the Nashville Tennessee Finish Line Harassment Case The role of the Equal Employment Opportunity Commission was to reinforce Title VII in the case of the three young women filling against the charges placed on the Finish Line store manager in Franklin Tennessee. The lawsuit case indicted Finish Line with endangering three teenaged female workers to unlawful sexual harassment. The EEOC implements federal laws that prohibit employment discrimination and categorization placed on defenseless employees. A statement documented from Kenneth Anderson, EEOC lead trial attorney exclaimed that, â€Å"It is unfortunate that any woman has to deal with sexual harassment in the workplace, especially teenagers. Equally reprehensible is the fact that the harassment was at the hands of their much older male supervisor. We commend these three young women for the tremendous courage they displayed in confronting egregious sexual harassment by their supervisor† (U.S. Equal employment Opportunity Commission, 2000). Press Related Comparisons between the EEOC and other News Accounts Due to the unspeakable acts placed on the three teenaged girls in Franklin Tennessee, discrepancy is requested which protects and provides little information about the entirety of the Nashville Tennessee Finish Line case. Most news accounts support the Equal Employment Opportunity Commissions case that involves the two parties present at the U.S. District Court Jury. With both news reports, there are no names provided which preserves the safety of all individuals involved.

Measuring Entrepreneurship

A strong inclination continues to be present, especially among the professionals managing enterprise development to measure entrepreneurship through some techniques. These measurement efforts can vary from plain checklists going up to intricate and exhaustive computer programs. (Defining Entrepreneurship) Achievements in business can be equivocal. You might flag off with the most excellent of intent in mind, recognize objectives, fix targets, build plans and implement them. At times you pull off the preferred result, however on other occasions deficiencies do happen without in fact knowing the cause. The feedback gives the measurement, which is vital for reviewing the advancement and making the enhancements, as also running strategy and providing the proposed outcomes. (Measuring Their Results) In order to measure business achievement, the most usual procedure employed is monetary valuation. The achievement of the entrepreneur is measured on the basis of his personal and business valuation. The extremity of this would be the assessment of an entrepreneur†s publicly traded company. Nevertheless, only financial valuation is by no way a suitable measure of entrepreneurial achievement. A lot of smart individuals, business owners and people who are not associated with business also, measure their achievement on the basis of the amount of money they put aside from the yearly incomes. In this manner, somebody whose yearly income is $1, 00,000, but putting aside $20,000 may think they are smarter compared to someone whose income is double the amount but able to put aside only $25,000. The financial achievement of an entrepreneur is ideally measured by concentrating on the company†s profits for the year. Some sanction might be made for the extent of investment the company makes toward future growth and profits, such that a company is not fined for investing in the future. (Measuring Success in Small Business and Entrepreneurship) Financial analysts always attempt forecasting the earnings of the company. Apart from profits, a lot of other measures of achievement are available that can be assessed by going though the various financial statements of the company. Rising profit margins, loans repayments, increasing advertisement effectiveness are some of the instances. Under every situation, the entrepreneur must contrast the performance of the current year with that of the previous year. The entrepreneur must observe the sales growth, the number of new clients and so on. Ed. Martin belonging to About. com Guide to Small Business refers that expansion is one important reason representing the long-term existence of an entrepreneur. Only those enterprises that expand have a long-term existence. Several entrepreneurs measure their achievement by their company†s rank within the industry. Measuring Success in Small Business and Entrepreneurship) However, for the majority of the small businesses, rank within the industry although significant, is hard to hunt out. However, in case you are one of the leaders in your category within the industry, then an entrepreneur is likely to be thriving. The above constitutes the more conservative measures of entrepreneurial achievement. But they are short of the just the only measures employed by the entrepreneurs. One of the most excellent achievements is the quality of the products you offer. Becoming proud of the products, intently feeling about its utility, and providing significant enhancements in your company†s products and services are major reasons rendering a lot of entrepreneurs experience genuine success. Customer satisfaction, whether measured by customer surveys or recurring business is yet another measure of success. If the customers see that your products have utility and like buying your products, the future achievement of your company regardless of the manner of its measurement is more expected to be guaranteed. Satisfaction of the employees is an added measure of achievement. The flourishing entrepreneurs are likely to have a workforce who is proud to be employed with the company. Think about what your company has contributed for its employees round the year. Of course any internal enhancements made within the company renders your company more profitable and the reason to commemorate. Majority of the entrepreneur who has attained success feel proud of the daily functional improvements. Achievement is also measured by your performance within your company. Hence entrepreneurial achievement has a lot of features and capable of measurement in a lot of ways. It can be attained by introducing a flourishing business, accomplishing considerable monetary benefits, or achieving a sense of individual accomplishment. It can even be a consequence from surmounting an intimidating challenge, learning from hardship, and creating a concrete professional standing. (Success Stories) Are there any means to find out if they can be a successful entrepreneur, or they can live comfortably in a job? Unfortunately, there is no recipe for becoming victorious. But, nearly every successful entrepreneur share the uniqueness stated below: Successful entrepreneurs believe success. To achieve the type of success which they so desire they think big. Every account of successful episode begins with big dreams. Successful entrepreneurs have big dreams for themselves which they would like to be someone who is affluent, famous or accomplished. They posses a distinct mental picture of what they would like to be. However, the matter doesn†t end there in dreams alone. They enthusiastically envisage success in their mental plane, which they can nearly experience it, feel it or it is well within their control. They execute this mental picture at every chance. What is the feeling when the current income grows three times as more? How will their lives transform? What will their business appear in case they attained the million-dollar point? (10 Secrets of Successful Entrepreneurs) Successful entrepreneurs have an openness mindset and a belief in themselves that they can achieve what they aspire if they can just imagine it as the initial move on the road of action to having it. Management leaders have taught us the power of dreams – seeing themselves in their mind as having achieved their dreams. Moreover, the path of visualizing success for them was a routine activity. The entrepreneurs who are successful consider themselves to be successful throughout their waking periods. A personal improvement guide shared her secret to assist her regularly envision her goals every passing moment: while going up the stairs, spell out their goals while treading every step they take. Successful entrepreneurs remain obsessive with what they accomplish. This is to initiate a business, to transform any or every segment of their life. To achieve this modification, they grow or unleash a deep, individual passion to alter the situation and to live life in its full. Success is easier to attain when people love their activities. What might be the reason for this? Since we are increasingly persistent in our search for goals regarding matters we love. In case we harbor revulsion regarding our job at the moment, we may not be ever victorious at all, not also after a million years might have elapsed. Entrepreneurs might tread wearily, also they might turn into experts in the activities, but they will at no point be a great success at all. Their achievement will reach a summit and perform to attain success only when they are doing something which appeals them most or something they care about. Entrepreneurs attaining success do not regret toiling 15 to 18 hours per day devoting to their businesses since they love what they perform. Achievement in business comes with patience and diligence that can solely be achieved when they are obsessive and fanatical with their responsibilities and actions. 10 Secrets of Successful Entrepreneurs) Successful entrepreneurs concentrate on their strong points. Everybody has his or her own strengths and weaknesses. To be efficient, successful entrepreneurs recognize their strengths and focus on it. They attain more success, if they are capable to guide their endeavors into spheres in which they perform superlatively. In business, for instance, once they are aware that they possess good marketing sense, they exploit this strength and take optimum use of it. Successful entrepreneurs look forward for help or support in spheres in which they might be lagging like accounting or bookkeeping. To convert their weakness to strength, they think about taking practical learning or formal training. In the minds of successful entrepreneurs, the probability of disappointment never comes. Ayn Rand, in her novel The Fountainhead, penned: – It is far from the instincts of human beings or of any living organism for that matter, to begin by losing all hopes. As an entrepreneur, successful entrepreneurs are completely confident about their objectives, and that they are certain about it. Successful entrepreneurs believe that what they are accomplishing will play a significant part in the improvement of their surroundings and their own self. They repose an ardent belief in their concepts, their potential and their own self. They have a 100% confidence within themselves and the potential to identify and satisfy them. With increasing growth of belief regarding their capability to attain their objectives, they achieve with increasing rapidity. Nevertheless their confidence is equated with planned risks they must shoulder to attain higher accolades. Successful entrepreneurs can be said to those who examine and ensure risk minimization in the quest for profits. They subscribe to the view â€Å"no guts, no glory. † (10 Secrets of Successful Entrepreneurs) Successful entrepreneurs make their planning in view of that. They possess a vision, and they are loaded with sufficient belief within themselves that they can be successful in their vision. However, are they aware the manner in which to reach their vision? In order to accomplish their vision, they have actual objectives which will give the launching pad towards their final vision. Successful entrepreneurs write down their objectives; and failing to do such merely makes them as elusive daydreams. They make a programming of each day in such a manner that their every action goes into inching towards their vision. They envision themselves as being the upcoming Martha Stewart of hand-made home furnishing fame? Maybe today, they visualize an artist to support them have an idea regarding the new range of hand-made linens which they expect to introduce. Strong direction of goal is the quality of every successful entrepreneur. They possess a vision and they have knowledge the manner in which to attain it. Their capability to frame objectives and concretize plans for their attainment is the expertise necessary to emerge successful. They stick strongly to planning in the absence of which disappointment is assured. Successful entrepreneurs go to every extreme to work. Every successful entrepreneurs toil very hard. No body attains success merely by being comfortable in a chair and blankly looking at the wall throughout the day. According to Brian Tracy, they toil daily for eight hours for existence; anything in excess of eight hours is definitely towards success. Check with any successful businessperson and will divulge instantly that were engaged more than 60 hours every week during launching phase of their business. Successful entrepreneurs are ready to utter a definite no to beyond office drinks daily, or a usual travel during the weekend. In case they are in a nascent stage, they are totally attached to their business till the point it is able to get up on its feet. Toiling hard will be simple as they possess a vision, transparent objectives and are obsessive with what they perform. Successful entrepreneurs are always seeking means to network. 10 Secrets of Successful Entrepreneurs) In the arena of business, they are rated by the people with whom they are associated- from their management team, board of directors, and strategic partners. For running a business there is always the urgency for support and this is more pronounced in case of small businesses. Perhaps the gentlewomen they came across in a trade association meeting can assist them assure financial support, or the man at a seminar can extend them with a management guidance. Successful entrepreneurs create coalitions with people who can support them and whom they can also reciprocate their support. To achieve in business, they possess excellent networking expertise and all the time are cautious about the scope to enlarge their acquaintances. Successful entrepreneurs are keen to learn. It is not mandatory that they are armed with a MBA degree or a PhD qualification to be successful in their business. Examples abound about several entrepreneurs who did not cross the threshold of secondary education and yet went on to be successful. It has been revealed by researches that a majority of millionaires who charted their own success had normal intelligence. Even so, these individuals attained their zenith, realized their monetary and personal objectives in their respective businesses, as they never turned away their face from learning. In order to achieve success they were eager to put questions, be inquisitive, keen, and have an open mind to new knowledge. This eagerness to learn comes to be more important due to the speedy modifications in technologies and methods of accomplishing businesses. Successful entrepreneurs have keep on trying and possess confidence. Nobody holds that the path to success is rosy. Regardless of their good motives and diligence, occasionally they are chances of failure. Several entrepreneurs had experienced holdups and huge beating, also insolvency, however coped up and emerge victorious in their respective disciplines. Their guts to stick around in the midst of hardships and the potential to stage a turnaround following a short period of lull guarantee their achievement. They learn how to tie the loose ends and gather themselves and resume from scratch. Their doggedness is the measure of their confidence in their inner being. Bear in mind, they keep at it and none is able to impede them. Successful entrepreneurs know the art of self-discipline. At some point of time Thomas Huxley stated, â€Å"Do what they must perform, when they must perform it, regardless of they prefer it or not. † (10 Secrets of Successful Entrepreneurs) The watchword to success is self-discipline. The power of willpower to compel them to pay the price of success – performing what other would be sloth in doing, staying ahead in race compared to others, combating and emerging triumphant in the lonely struggle with their self. Prof. John B. Miner of State University of New York conducted research the findings of which revealed which of the entrepreneurs† attained success and who fell short. Ultimately he segmented the thriving entrepreneurs into four separate â€Å"personalities†, and evaluated the strategies each category applied to achieve success. The four different types of personalities propounded by him are The Personal Achiever, The Super Salesperson, The Real Manager and The Expert Idea Generator. What do these indicate? Personal achievers are the ones who think about an urgency to be successful in their lives. They are the â€Å"typical† idea of an entrepreneur which a lot of people cultivate. They shower a huge amount of vigor into their companies, and do not harbor any reservations about devoting extended hours to work that might be expected of them. They prefer to move towards a target according to a plan for future success, and wish to receive feedback regarding their actions. They think that they can be in charge of their own lives, and none else have the power over them. Bill Gates almost certainly a superb illustration of a powerful â€Å"personal achiever† It is evident that he thinks a powerful psychological urgency to attain his objectives. This comes to be rather obvious when you go through his history prior to his founding Microsoft Corporation. He pushed to the very extreme regardless of whatever he performed, and turned into an overachiever. Anita Roddick, who began the Body Shop, might also be the same. (Four Types of Successful Entrepreneurs – Some Details) The founder of Southwest Airlines Herb Kelleher in 1967 is one more instance. Triumphing several extremely hard initial years, the company has grown to be one of America†s top ten airlines and not like any other airline in the industry, through applying some very innovative ideas and a distinctive approach to its functioning, it has achieved 29 consecutive years of profitability. Even though Herb was earlier a trained lawyer, he has been successful in inculcating an entrepreneurial energy all through his organization and is regarded by several in the current era to be one of the most brilliant business leaders in America. His singular endeavors have played a significant part in the profitability of Southwest Airlines. The next group of Super salespeople has a huge amount of compassion in store for others. They have an inclination towards social atmospheres and people in groups, and they understand the value of relationships tremendously. They think selling as an important constituent of business. An outstanding illustration of Super Salesperson is almost certainly Ross Perot who plunged into the world of sales emerging as one of the most successful salespeople at IBM, thereafter quit IBM to launch his own company named as Electronic Data Systems –EDS. Thirdly, the Real Manager is the ‘assume-charge† categories. They are leaders in the corporate world; they might prosper in companies, and begin entrepreneurship from those categories or ranks. Their potency is managing corporations into major growth. Michael Bloomberg maybe an instance of a Real Manager. He started his career with Salomon Brothers for 16 years. In that company he was in charge of equity trading and sales department and subsequently became the chief of the systems development. He was retrenched during 1981 and then started Bloomberg. Finally, the Expert Idea Generator constitutes the genuine ideas guys. They conceive new products, discover new positions, and continue to be genuine leading lights. A brilliant illustration will be Jim Clark, who started Silicon Graphics, Netscape, and Healtheon. Besides, the people who established Apple Computers Steve Jobs and Steve Wozniak almost likely to come into this group also. However, triumphant entrepreneurs are narrowed down to be included to these four groups. Moreover, several people will have the characteristics of more than a single category. However, these groups can be thought provoking. (Four Types of Successful Entrepreneurs – Some Details) To conclude, you have to look to just four things for emerging successful as an entrepreneur: First of all is vision. The concept- as you will see while you come across the next point on expressiveness – it is not necessary to be outstanding, however, an idea must be present. A lot of people possess the ability to generate product ideas, frequently by identifying uncovered market wants. Other people regrettably do not possess this capability. Second is persistence and sticking around. There are a lot of entrepreneurs attempting to capture the same markets. The people who emerge successful possess the power to keep it up. Moreover, above all, they possess the potential on the theme in their control without dissuading thoughts or episodes worrying them. Nothing is able to dissuade them. Successful entrepreneurs are frequently found to be bachelors. The third factor is expressiveness and control. I believe that expressiveness/control is crucial to business entrepreneurial achievement. It might be included under the caption Emotional Intelligence as more and more research favors the concept that individuals having high Emotional Intelligence turn out to be more successful entrepreneurs compared to those with low Emotional Intelligence. Expressiveness is regarded as a higher ability compared to sales potential. It is a thorough knowledge of the psychology of urging and swaying. Fourth is the capability to have an idea with regard to finances. The only means to check business liquidation is to have a thorough knowledge of cash flow, capital structures, and the process to go through financial statements. Completely understanding finances even has another crucial role: in money matters, do not trust anybody.

Financial Resources Management Essay Example | Topics and Well Written Essays - 2000 words

Financial Resources Management - Essay Example It is the relations between the Dollars or Euros that an entrepreneur has borrowed and Dollars or Euros invested in the business. The more the investment by the owners the more they attract the financing. When the equity to debt ratio of the firm is high then debt financing should be taken. If the proportion of the debt to equity ratio of the firm is high then it is advised that the owners should increase their equity investment, that way they cannot jeopardize firm's survival. Limited equity financing is used by most of the small or growth stage businesses. Whereas in debt financing, funds pour in from different quarters like from friends, relatives, etc. Venture capitalists are the most common source of equity funding. Venture capitalists may be institutional risk takers, financial institutions, wealthy persons, etc. and most of them specialize in industries. Venture capitalists are risk takers and show interest only in three to five year old companies that result in more than average profits. These venture capitalists are called as investment gurus whose interest lies in those companies that have major regional and national concerns. Commercial finance companies, financial institutions, banks, savings and loans, Lloyds Bank small business, etc. are some of the sources for debt financing. Because of their positive impact on the whole economy local and state government encourage the growth of the small companies. In debt financing additional funds comes from friends, family, relatives, and industry colleagues, etc when capital investment is smaller. Generally banks formed as a major source for loans for the establishment of small businesses. Banks don't offer long term loans to small firms instead they grant short term loans for machinery and equipment, they also offer demand loans to small firms that reduces the risk of leveraging the funds available. Applying for a loan Loan application should be well written, so that the reader could get a clear picture of what your plans are. The presentation should be of the best quality in the initial loan proposal and application. Only industry specific details should be included so that reader can easily understand. Business description: a. Organization type. b. Information date. c. Location. d. Product or service. e. Firm's previous commitments (if any). f. Future plans. g. Competition. h. Customers. i. Suppliers. Management experience Resume of the owner and important employees should be included. Personal Financial Statements Care should be taken that the financial statements are not older than 90 days and financial statements of all principal owners and guarantors should be included. A copy of last year's income tax return should also be included. Loan Repayment The method of repayment of loan should be included and supporting documents of cash flow schedules, budgets and

Drug Trafficking Cartels Essay Example | Topics and Well Written Essays - 1750 words

Drug Trafficking Cartels - Essay Example The cartels have a reliable supply of guns and other weapons used while conducting their business. Mexico is the hub of this business and almost all the illicit drugs used in the United States comes from Mexico. This paper looks at the policies set by the two governments and the extent they have gone to reduce or prevent the crime. The paper also compares the rate of drug trafficking between Columbia and Mexico and their impacts in the world. In addition to this, this paper also discusses the politics and political impacts affecting the rate of drug trafficking within these countries. Government policies The current policies used by these countries in bid to control this crime are unsatisfactory. United States has the highest demand for illicit drugs in the world. It is for this reason that Mexico and Columbia has identified the country as their best destination for selling their drugs. It is clear that prohibiting the use of illicit drugs is not an option to combat this deadly crime . However, possible strategies proposing legalizing the drugs and embracing health and treatment as control measures are under intense debate. This is only possible if these countries agree. Increased crackdown of drug users and cartels has led to increased cases of drug trafficking between these two countries. It is also crucial to note that since then the avenues of drug trafficking have increased making the prices of drugs cheaper. This encourages more participants in the market. During the reigns of president Bush of America, Columbia and America organized a five-year plan that aimed at cutting or reducing narcotic production by half. With most of refugees migrating to Colombia, it has been a problem to reduce drug trafficking in the country (Hylton). The relationship between Columbia and US weakened 4-5 years ago due to the collapsing talks concerning drug trafficking. The failing administrative policies between these two countries pose serious security threats to the US. Mexico country is currently receiving aids inform of military personnel, guns and other resource with the aim of overcoming the cartels. United Nation International Narcotics Control Board has also played a significant role in employing policies aiming at reducing drug trafficking in Columbia and Mexico. However, such organizations and other multinational organizations have failed in their quest to control drug trafficking because of their reliance on interdiction and use of force rather than use of public health approaches and other related options. Use of drugs becomes addictive with time and, the only way to reduce its consumption is by offering counseling and guidance to users. Countries like the US begin offering guidance and counseling to children as low a s 9 years old with the aim of preventing them from indulging in illicit drugs. US is also reported to be contributing to increased drug trafficking rates in the world due to the readily accessible weapons. Most of the weapons confiscated in Mexico have their roots in US. With this problem, it is even more difficult for Mexican officials to control drug trafficking since they are not able to inspect the weapon database in the US. Crime level and drug trafficking continue to rise in Mexico due to the low education levels and poor enforcement agencies. In 2001, Capo Guzman escaped from jail while the

Diabetes Type 1 Research Paper Example | Topics and Well Written Essays - 2500 words

Diabetes Type 1 - Research Paper Example The World Health Organization (WHO) estimates that there are over 177 million cases worldwide and this number will increase to at least 370 million by 2030 (Gad et al., 2003). Further, the disease is associated with a series of secondary health complications. Diabetes Mellitus (DM) Diabetes Mellitus (DM) is characterized by persistent and variable hyperglycemia (high blood glucose levels). Type 1 Diabetes Mellitus (T1DM), also known as insulin-dependent DM, childhood DM, or juvenile-onset DM, most commonly presents in children and adolescents. The typical age of onset is less than 25 years (Pepper, 2006). Also, in contrast to T2DM, T1DM occurrence is typically in individuals who are lean rather than obese (Myers, 2005). T1DM constitutes approximately 10% of all individuals with DM and occurs mainly in populations of Europe and North America (Champe et al., 2005; Gillespie, 2006). T1DM is increasing in incidence globally at a rate of about 3% per year (Champe et al., 2005). Like all t ypes of DM, T1DM is associated with increased risk for and a high incidence of certain complications. Hence, DM in general has been considered a syndrome of metabolic abnormalities (i.e. metabolic disorder of glucose, protein, lipids, water and electrolytes), microvascular disease (i.e. retinopathy, neuropathy, and nephropathy), and macrovascular disease (i.e. ... T1DM patients are often young at the time of diagnosis. Although the pathogenic factors are active early on, complications usually develop later as the disease progresses and are not as common during early stages. Etiology of T1DM Type 1 diabetes is the result of the loss of ? cells, which subsequently leads to insufficient secretion of insulin. It is generally accepted that Insulin-Dependent Diabetes Mellitus (IDDM) is an autoimmune disease. The exact cause or causes of the disease are still unclear, however, a combination of genetic and environmental factors seem to be involved. Evidence for a genetic susceptibility to IDDM is shown through family studies. Approximately 6% of siblings of people with T1D will also develop the disease, as compared with a prevalence of .4% in the general population (Levin and Tomer 2003; Leoni 2003). Children of diabetics also have a higher risk of acquiring diabetes: about 3-6% of diabetic offspring get diabetes, compared with .4% of the general popu lation. Intriguingly, the gender of the diabetic parent also seems to contribute to disease transmission, with offspring of diabetic fathers being at a greater risk (about 9%) than those of diabetic mothers (about 3%). Data from twin studies (i.e. Levin and Tomer 2003; Leoni 2003) also seem to strongly suggest a genetic predisposition to IDDM. Concordance rates for monozygotic twins vary between 35 - 70%, while the concordance rates for dizygotic twins is about 11 %. These rates increase with the time since proband diagnosis; for example, concordance is 43% within 12 years of proband diagnosis, and 50% within 40 years. Age of proband diagnosis also seems to be a crucial factor: the concordance rate for twins of

The power of non violence Essay Example | Topics and Well Written Essays - 750 words

The power of non violence - Essay Example Men are unique beings capable of moral reasoning. Due to this, people should strive to ensure that they use this capability to come up with solutions for problems which might arise. Violence is an extreme form of problem solving. Violence has led to destruction in the world with issues which could be solved in a respectable manner being solved by violent means. People should strive to ensure that violence is not used in any situation. Many people see violence as important in problem solving This is due to the notion that forcing people into compliance is the best and fastest method of getting someone to conform to a certain laws or regulations. Violence is also perceived to be the best way of fighting for a person’s rights. However, recent evidence has shown that non-aggression is the better way of fighting against oppression and for ones rights. These writings have changed my thinking in that it has led to me to believe that violence should not be the solution to solving any problems which may arise. Non-violence is a better means of solving problems that was overlooked by most people. Mahatma Gandhi was able to use nonviolence means to gain independence for the Indian people. Mahatma Gandhi popularised nonviolence as a way of solving problems. These writings show the importance of nonviolence as a way of coming up with solutions o common problems. Nonviolence is a way of fighting oppression which has been in for many years. A person who voluntarily agrees to suffer for a certain belief moves people around him. This leads to a change in heart where people begin to share the beliefs of the sufferer. People may even begin to feel attached to the sufferer Nonviolent means are steady and bound to attract more followers. This is similar to how the blood of the martyrs was the foundation of Christianity. (Richard Gregg, 1960, pg. 28) The writings mourn how people have become inconsiderate of each other. The writings show us that people are willing to live wit h the bad things in the society. This is as long as such negative effects do not touch on the lifestyle of the people. According to Emma Goldman, people are responsible for the problems they encounter. This is as most people are not ready to stand for what they believe is correct. Lack of ideals which guide a certain society leads to be prone to manipulation by external forces. The writers mourn the state with which people live and the neglect governments have on people. The writer shows this through several examples such as the one of the Italian weaver who killed the king. This story shows us of how an Italian weaver decided to go back home and kill the king as a result of the suffering he saw his people undergoing. (Goldman Emma 1917) The writings lament the fact that courts have been used as a tool for violence. When you look at the situation from the defendants view, you find the justice system to be violent. The legal system is designed to instil fear of consequences in the ge neral public. The writer mourns the legal system for being a tool for oppression of people in a given society. The legal system is used to intimidate people into following certain policies at the expense of other better policies. (Cover, 1986) The writers have used parables in their works. The use of parables is seen whereby the writers represent social evils with things which are easily accepted. In his second letter to his German friend, Albert Camus says that night is a time for meditation. By this the writer implies that solutions to problems come when the problem affects you the most. Parables are also used by the writers in showing how the people in the society have become effective in causing pain and suffering to one another. (Camus Albert 1943) These readings enable a person to think of the possibilities of making the world better for future generations that will live here. Fanon shows us that the fate of the world depends on all who live in it and not just leaders of diffe rent people in the soc

Public Procurement Law Essay Example | Topics and Well Written Essays - 6000 words

Public Procurement Law - Essay Example Under this option, there are several procurement methods that the procuring entity can utilize to source for goods and service, but this essay will focus on open tendering and restricted tendering. The open tendering method is of key importance because of its high value in the process of procurement and because it exerts a significant amount of cost from public resources. This method sets transparency principle to a very high standard. It requires tenders for proposals on how projects will be approached and quality will be met1. Article 28(1) stipulates that unless article 29 to 31, the entities shall use open tendering. Article 10 of the Module law deals with the specification of the tendering process. Article 43(2)(c) establishes that the tender is considered responsive if all requirements conform to the tender documents for solicitation. Article 43 (1)(b) states that minor deviations are possible while not material changes are allowed in terms, conditions, characteristics and any set of requirements in the documents2. When specifications are considered as unlawful, then the procuring entity is required to use the European Union law, to re-issue under lawful forms the specifications are carried out lawfully. For the open tendering method, the Specifications and conditions should be finalized in a clear and concise way, and notices must used to advertise the projects publically. The advertisement should be adequately made to all including international suppliers. This will promote wider competition and place better value for money. The procuring entity will have an understanding of the entity’s needs by establishing a short-term strategy, followed by a definition of the technical direction and requirements of the process.  

Toyota in the path of Globalisation Dissertation

Toyota in the path of Globalisation - Dissertation Example And those facts are giving huge competitive advantage to Toyota over its rival’s automobile manufacturer in domestic market as well as global market. Globalisation in today’s world is more effective than anything else in the world. Globalisation means doing business all over the world. Not only business means goods and services but also it is an exchange of cultures, thoughts, ideas and views of the people of one location with the people of other locations. As more and more organisations are following that path so business is getting more competitive in everyday. Several strategies were included in the production line of Toyota to be more effective on the way of globalisation and to be more competitive in world market. Company Overview In 1937 Toyota was founded. It is a manufacturer of automobiles, headquarter is in Toyota, Aichi, Japan. In 1957 Toyota entered into United States market at first. In last seventy six years it introduced itself in one hundred and seventy countries all over the globe. Most promising markets of Asia and developed markets of North America and Europe, Toyota made its presence. As export grown heavily firm made its production bases in several regions according to that regions demand. This policy is widely known as "producing vehicles where the demand exists" (toyota-global.com). Currently Toyota has fifty one manufacturing base in twenty six different locations of the world. Not only manufacturing units all over the globe, but also Toyota now have nine different research and development bases all over the globe and developing "from development and design to production, as well as sales and service, Toyota has now achieved consistent globalization and localization" (toyota-global.com). Q.1. Marketing Mix of Toyota: To make its business global Toyota had several hurdle in developing that system. First thing that come up in the process is assurance in quality. Toyota achieved that by introducing one statement in its manufac turing unit that is â€Å"no matter where Toyota vehicles are made, they must have the same high level of quality." This company does not put any ‘Made in USA’ or ’Made in Japan’ tag over its cars. They only put one statement in their vehicles, which is ‘Made by Toyota’. This is a ‘Toyota Way’ kind of promotion in its every product throughout the globe. They do not bring highly educated or qualified or skilled labours or employees for production but they trained their own manufacturing people by themselves to enhance their level of skill. Just for that reason Toyota in 2003 opened a Global Production Centre (GPC) in its Toyota city inside of its Motomachi Plant. In 2006 to increase its presence in Asia Pacific, Europe and North America Toyota opened more Global Production centre in United Kingdom, Thailand and United States. Below diagram is showing the Toyota’s research and development units and manufacturing units in sev eral locations of the world- Source: http://www.toyota-global.com/company/profile/in_the_world/ There are two major principles on which Toyota’s manufacturing process is depending on; they are continuity in improvement and proper respect and remuneration to its employees. The main slogan in Toyota’s manufacturing system is ‘making thing’ and that is followed by a most innovative and productive process that is "lean manufacturing system" or it can be called as "Just-in-Time (JIT) system†. Constant improvement system is followed in production units to achieve "making the vehicles ordered by customers in the quickest and most efficient way, in order to deliver

FMC Green River case study Organizational Behavior Essay

FMC Green River case study Organizational Behavior - Essay Example In that case organizational change must be planned, monitored and controlled throughout its lifecycle, with completion occurring on full implementation and evaluation. Organizational change decisions are often complex, multi-faceted, and involve many different stakeholders with different priorities or objectives. Most people, when confronted with such a problem will attempt to use intuitive approaches to simplify complexity until the problem seems more manageable. In the process, important information may be lost, opposing points of view may be discarded, elements of uncertainty may be ignored -- in short, there are many reasons to expect that, on their own, individuals (either lay or expert) will often experience difficulty making informed, thoughtful choices about complex issues involving uncertainties and value tradeoffs. This fact, and the tendency of change issues to involve shared resources and broad constituencies, means that group decision processes are called for. These may have some advantages over individual processes: more perspectives may be put forward for consideration, the chances of having natural systematic thinkers involved is h igher, and groups may be able to rely upon the more deliberative, well-informed members. However, groups are also susceptible to the tendency to establish entrenched positions (defeating compromise initiatives) or to prematurely adopt a common perspective that excludes contrary information - a tendency termed "group think." (McDaniel's etal., 1999). For change management projects, decision makers may currently receive four types of technical input: modeling/monitoring, risk analysis, cost or cost benefit analysis, and stakeholders' preferences. However, current decision processes in Green River typically offer little guidance on how to integrate or judge the relative importance of information from each source. Also, information comes in different forms. While modeling and monitoring results are usually presented as quantitative estimates, risk assessment and cost-benefit analyses incorporate a higher degree of qualitative judgment by the project team. Structured information about st akeholder preferences must be presented to the decision-maker, and should be handled in a perfect manner that minimizes the difficulty of defending the decision process as reliable and fair. If the structured approaches are employed, they may be perceived as lacking the flexibility to adapt to localized concerns or faithfully represent minority viewpoints. As a result,

Nuclear Weapon and Cold War Essay Example | Topics and Well Written Essays - 2500 words

Nuclear Weapon and Cold War - Essay Example The debate on nuclear policy has addressed the deterrence of aggressive nations and the proliferation goals of nuclear weaponry. The Cold War, which took place following World War II, was a power struggle between the world powers, more specifically the United States and the Soviet Union. During the Cold War, nuclear proliferation became inevitable as the world powers and their allies struggled to obtain the resources necessary to build their own nuclear weapon. As other nations developed the capability to produce nuclear weapons, limiting nuclear proliferation to the greatest degree possible became one of the primary goals of American foreign policy. The events following World War II, inadvertently changed the international politics of the United States by requiring the American government to take a more active role in the affairs of the nation. In the long run, the proliferation of nuclear weapons increased the Cold War but diminished the desire for a hot war. For centuries, the United States' foreign policy was isolationism, however, the Americans' international politics changed dramatically by the end of World War II.2 The United States rarely developed international policies, military advancements, or technological advancements before other nations. "The United States through most of its history had hardly led the world in developing new war-fighting technologies. Americans had tended to imitate rather than to originate weaponry"3 As the war came to a close, the United Stated tested the first nuclear weapon, an atomic bomb. The Americans' development of the first nuclear weapon was unprecedented, but the United States was trying to find a fast and cost effective solution to bring World War II to an end. "Having acquired this awesome weapon, the United States used it against Japan for a simple and straightforward reason: to achieve victory as quickly, as decisively, and as economically as possible Hiroshima and Nagasaki were destroyed"4 This devastating demonstration of the atomic bomb ended World War II only weeks after the creation of the United Nations. The United States government started to take an active role in the world and the security of the nation instead of maintaining its isolationist views. The United States government enacted organizations, policies, plans, and treaties to insure the safety and security of themselves and their allies, therefore taking on a very untraditional role. At the end of the Second World War, the major concern was the containment of communism and the security of the United States and its allies. In 1946, Winston Churchill warned the United States about the Iron Curtain. The Iron Curtain was a "symbolic separation of Europe" between countries that were controlled by the Soviet Union and those that were not controlled by the Russians.5 The fear was that a "domino effect"6 (one country falls to communism then they all

Poverty Alleviation Strategy Essay Example for Free

Poverty Alleviation Strategy Essay Poverty anywhere is a threat to prosperity everywhere. It is a scrooge and one of the worst curses and miseries that a human can face. According to Homer. This , this is misery! The last, the worst that man can feel. Poverty can be measured either in absolute terms, for example, the number of those who cannot afford more than two pairs of shoes, or in relative terms, for example, the number of the poorest ten percent of house holds. In either sense it is a concept, which is defined arbitrarily . Poverty exists not only because incomes are low, but also because the needs of ertain low income households are high. Poverty has many dimensions, which include economic, political, social, environmental and human dimensions. In economic terms a county, a region or a household is poor when the per capita income of purchasing power of a poor country or household is below a certain minimum standard, there are low medical care and health facilities, productivity is very low and there is illiteracy. In political terms a country, a regionor a group of people are poor when they do not have a voice in the community or dependent on other more powerful groups or individuals in order to express their own rights and hoices. In social terms poverty in a country a region o a household breeds all types of socially unacceptable behaviors like drug addiction, crime, position, violence ad terrorism in a family or in a community, These factors degrade human self respect, moral and social values of the society as a whole and as a result more and more people in the community become intolerantand rude towards each other in their day to day life. In environmental dimension, poverty destroys the living environment not only of those who live in poverty but of all other human beings as well as non-human iving things that depend on the same resources and ecosystem on which those living in poverty depend and survive. People living in poverty cannot change their behaviors easily because of lack of resources, knolwledge about their own surroundings and education. Thus by destroying their own living environment, the poor in reality are destroying their own resources on which they survive in the long run. Poverty in its human dimension is the most important of all, because poor people live in conditions that are miserable, conditions in which some members of their family die of hunger, disease of famine. Poverty in tis human dimension exists, when a child is down with a curable disease and the parents have to take a decision whether to take the child to a doctor and buy expensive medicines or purchase other essentials of daily use. It exists when parents of a child sell their child into slavery or prostitutionbecause of lack of resources to feed or care for that child and when government institutes fail to protect the rights of the poor. Poverty has emerged as the most important issue for Pakistan. Poverty redressal requires economic growth accompanied by an improvement in access to social services. The reason that economic growth has failed to trickle down to the poor in Pakistan is the slow improvement in social indicators Economic growth and social sector development are interdependent as one reinforces the other. In fact economic growth is necessary for poverty reduction but poverty reduction itself is necessary for sustained growth. The estimates ot poverty are not consistent in Pakistan. According to caloric based calories per person), the incidence of poverty declined sharply from 46. 5 percent in 1969-70 to 17. 3percent in 1987-88. However , poverty increased significantly in 1990s ising from 17. 3 percent in 1987-88 to 22. 4 percent in 1992-93 and further to 31 percent in 1996-97. The recent estimates suggest that poverty ahs further increased from 32. percent in 1998-99 to 33. 50 percent in 1999-2000. This shows that the incidence of poverty has increased in 19990s. similar trends have been observed in the case of urban and rural poverty. The main reasons for increase in poverty during 1990s can be attributed to the relatively lower rate of economic growth, rising unemployment, stagnant real wages, declining flow of workers remittances and bad overnance. In addition to the factors menti oned above the high population growth also puts pressure on the merge social services thereby causing social distress. Painting a broad picture of third world poverty is not enough. Before anyone can formulate effective policies and programmes to attack poverty at its source, one needs some specific knowledge of poverty groupsand their economic characteristics, It is not sufficient simply to focus on raising growth rates of Gross National Product in the expectation or hope that this national income growth will trickle down to mprove levels of living for the very poor. On the contrary many observers argue that direct attack on poverty by means of poverty focused policies and plans can be more effective and one cannot attack poverty directly without detailed knowledge of its location, extent and characteristics. National Economic development is central to success in poverty alleviation. But poverty is an outcome of more than economic processes. It is an outcome of economic, social and political processes. To attack poverty requires action at local , national and global levels. The following actions are equired to be taken y poor people, government, private sector and civil society organizations. Growth is essential for expanding economic opportunities for the poor. The question is how to achieve rapid, sustainable and pro-poor growth. A business environmental conducive to private investment and technological innovation is necessary, as is political and social stabilityto invite public and private investments. The poor should be empowered in the true sense. Empowerment means enhancing the capacity of the poor to influence the states institutions that affects their lives by trengthening their participation in political process, and local decision-making. It also means removing the barriers political, legal and social that work against particular groups and building the assets of poor people to enable them to engageeffectively in markets. Enhancing security for poor people which means reducing their vulnerability to such risks as ill health, economic shocks and natural disasters and helping them cope with adverse shocks when they occur. The ultimate cause of the unequal distribution of personal incomes in most third world countries s the unequal and highly concentrated patterns of asset ownership (wealth). The principal reason why less than 20 percent of their population receives over 50 percent of the national income is that this 20 percent probably owns ad controls over 90 percent of the productive and financial resources, especially physical capital and land but also financial capital (stock and bonds) and human capital in the form of better education. It follows that perhaps more important line of policy to reduce povertyand inequality is to focus directly on reducing the concentrated control of ssets , the unequal distribution ot power, unequal access to education and income earning opportunities. Policies to enforce progressive rates of direct taxation on income especially at the highest levels are, what are most needed in this area of redistribution activity. Unfortunately, in many developing countries the rich do not show a larger part of their income and assets. Further , they often also have the power and ability to avoid paying taxes without the fear of government. Pakistan is facing twin challenges of reviving growth and reducing poverty. This requires rapid conomic growth keeping in view the factors responsible for slow growth and rising poverty, the government has formulated a comprehensive economic revival programmed aimed at reviving economic growth and social development. The government has adopted a multi-pronged approach to promote pro-poor economic growth and reduce poverty. Engendering growth by correcting macroeconomic imbalances and stabilizing the economy has been made the central pillar of the governments economic revival program. The government has adopted a sound macroeconomic framework aimed at both stabilizing the economy and stimulating growth. It comprises five building blocks namely tax reforms, expenditure management, prudent monetary policy, external adjustment and debt management. Implementing broad based governance reforms are essential ingredients of he governments poverty alleviation strategy. Without governance reforms thee enormous tasks of reviving growth and reducing poverty cannot be addressed. Sagging growth and rising poverty are in partresults of the poor performance of the government institutions in Pakistan. In fact, poverty in Pakistan is not merely an outcome of economic ills but also a result of mis-governance over the past years. The main element of reforms are devolution of power at grass roots level, civil services reforms, access to Justice and financial transparency. The care principle of Pakistan poverty alleviation strategy is to empower the people and to create greater opportunities for increasing real income by improving access to productive assets mainly housing, land an credit. Access to credit is the surest way of empowering thepoor and improving their income generating opportunities. In addition to the already existing financial intuition, thegovernment has now established the Khushhali Bank or Micro Finance Bank for the provision of micro credit to poor communities. The effects of sluggish economic growth are clearly reflected in Pakistans performance in the social sectors, Human development is essential for attracting investment and generating the capacity for future sustainable growth. pakistans progress on almost every social indictor e. g. education, health and nutrition is poor as compared with that of other developing countries. In order to address this situation, the government has prepared comprehensive human development strategies aimed at the effective utilization of the available resource s hrough improved institutional mechanisms.

Analysis Of The Problem Of Evil Philosophy Essay

Analysis Of The Problem Of Evil Philosophy Essay In the paper written by Collins entitled, The Problem of Evil Basics, It has been noted that reconciling the concept of existence of a perfectly good God and evil is necessary in solving the problem of evil. Collins presented two valid arguments in clarifying the problem of evil in the theistic perspective. One argument is coming from theodicy. Theodicy argues that God exists and He permits evils in this world. The Defense argument proposes that the existence of evil is not dependent on the notion that God exist. The Defense argument further claims that if there is God and He is good, then evils in the world would not exist. However, since evils exist, then there is no God because the existence of a supreme being presupposes that good would prevail. With this, should we justify evils in relation to the existence of God? Or should we deny the existence of God in order to justify evils? Basically, the analysis of this paper would revolve around the above contentions. Basically, the problem of good and evil is quite a complicated and complex topic. It has no definite answer since it goes beyond the sphere of the material world and human knowledge is limited. This is not to say that the finite capacity of the human knowledge is inadequate in comprehending the said topic. Plausible explanations can still be formulated and accepted in responding to the issues mentioned above. Accordingly, if we would provide a justifiable explanation about the problem of evil, ones personal analysis is necessary but it has to be coupled with the arguments coming from the philosophical claims of the experts. Of course, everybody has his/her own explanation about the existence of evils in this world. Evils are usually viewed as something harmful or destructive to the normal flow of things. It can be caused by man or by nature. The issue of morality would also be tackled in line with the existence of evil. In this sense, it is inevitable that the concept of right and wrong actions when it comes to human actions would have to be explained. On the other hand, natural occurrences such as floods, typhoons, earthquakes, tsunamis and the like are judged based on the harm done to man, other living creatures and the planet in general. In short, harm as a result of a natural phenomenon is equated with evil. In addition, the natural inclination of other primitive creatures such as lions, tigers, sharks and other ferocious animals could also be seen as evil producing actions. This is because the actions of these predators normally bring more harm than good to their prey. If deeply analyzed, the survival of the fittest within the world of the primitive creatures inevitably create destructive condition in the wild. Though they are part of the evolutionary process, as argued by most biologists or other natural scientists , the whole process can be equated to an evil producing condition where subduing other species is a natural phenomenon. Now, how does the concept of God situate in the mentioned assumptions? In the paper entitled, In Connection Building Theodicy Handout, the Greater Good Principle is explained in relation to the problem of evil. This principle suggests that if God is perfectly good then He has all the power to eliminate evils in the world. Consequently, God allows evils but those which are freely chosen by man. This strengthens the proposition that God doesnt exist because evils are ever-present in this world. On another angle of the debate, the Theodicy argument has been criticized by many experts. In the paper of Collins, the flaws of theodicy argument were explicated. It is said that suffering in this world is a result of committing sin. This is why by committing sinful acts, man receives certain kind of punishment in the form of suffering. Thus, suffering is inevitable and should be accepted. However, as argued by Collins, this argument is flawed because it does not explain clearly why God allows evil and the reason why the innocents have to suffer also. The second theodicy argument is the fall theodicy which states that suffering was a result of the fall of man. This line of thinking claims that man has to suffer because of the original sins committed by Adam and Eve. However, this is also flawed because no concrete explanation could be extracted as to why God allows evils to happen. The third argument is the Satan theodicy which declares that suffering is a consequence of the rebellion of Satan from God. This is another invalid argument simply because it would be hard to prove that such situation is real. Also, it does provide any concrete explication as to the reason why God has to allow evils to exist in this world. In a related academic paper, Evolution and the Problem of Evil, the Intelligent Design argument in the creation of the universe as perfect has been debated by the natural scientists and advocates of evolutionary theory. It is argued in this perspective that the Intelligent Design theory conveys that God is cruel since He allows sufferings of lower forms of animals. The anatomy of the ferocious animals such as tigers, lions, and the like is basically designed to cause sufferings to other creatures. Thus, this implies that the God we know who created the universe is either evil or doesnt exist. In an article, Why Does God Allow Evil? written by Eric V. Snow , it was explained the basic reason why God allows evil to exist in this world based on the Christian perspective. The premise of the article is that God created man in his own image and with 100% free will. As Gods creation, man has to choose to be 100% righteous. It was based on the thesis coming from Genesis 1:26 which states that Then God said, Let Us make man in Our image, according to Our likeness; let them have dominion over the fish of the sea, over the birds of the air, and over the cattle, over all the earth and over every creeping thing that creeps on the earth. This is one of the basic arguments of the theist. This proposes a belief that God created man in his own image which has a righteous path. However, the goodness of man should be chosen because of free will. Being righteous is not an easy and immediate process. It has to be intended and calculated by man. Man must also know and will it. Moreover, the ar ticle argued that God created man with free will like himself. Without free will man would be nothing like God. Incidentally, total obedience to Gods laws is the only way to be righteous. Hence, pain and suffering are caused by mans free will as a result of bad motive, ignorance and miscalculated intentions. In connection, the article further explains that suffering would make man trust God. Pain is experienced so that faith in God would be attained. It was also the position of the article that mans knowledge is inadequate enough to understand why God allows evil. Man is not in the position to question the intention of God. Like Job, man has to believe and obey God without question. Since death is inevitable, we would be judged by God based on our actions in the material world. Hence, God allows evils in this world because of His benevolent intention for us whatever it may be. Free will is given to man in order for him to know and obey Gods laws. Pain and suffering are merely temporary tests in attaining the rightful path, as argued by the article (Snow). In another article, The Problem of Evil, by P.J. McHugh (2006), the same argument was put forward about the problem of evil. As stated by McHugh (2006), the common ground of all who believe why God allows evil to prosper in this world is the free-will defence. Man is a self-directing agent with a limited source of freedom that would make him responsible for his every decision. With freedom, man is free to choose between right and wrong as a moral agent. However, with free will it also recognized by McHugh (2006) that evil actions are unavoidable. Good cant be separated by bad actions. This is why man has to be careful in making decision because every decision has an accompanying good and evil consequences. Accordingly, the free-will defence is challenged by the idea that if free will is God-given and that it is the cause of evil actions, then it is logical to assume that God is also responsible for creating a creature that produces harm because of free will. The question still arises, why did God create a being that can do harm to the world? McHugh (2006) presented the Augustinian Theodicy in answering the above question. According to McHugh (2006), Augustine (354-430 A.D.) formulated explanations that influence the thoughts of the Christians for many centuries. One of the fundamental premises of the philosophical view of St. Augustine is that the universe is good because it was created by a good God with a good intention. Every creation has a good purpose in line with Gods good intention. Evil is a result of an on-going process of attaining good that is innate in all the things created. The universe is perfect and out of that perfection is the ultimate purpose of goodness. In short, evil is an intended consequence of taking the path of goodness which is divine. However, those who dont abide with the divine path imposed by God, would be punished as they would be judged at the end of human history. McHugh (2006) claims that the Augustinian theodicy seems to be removing the responsibility from God when it comes to evil act ions of man. The Augustinian theodicy further assumes that evil is the consequence of free will as misused by man. McHugh (2006) also presented criticisms of the said theodicy by St. Augustine. According to him, the universe that God created might have gone wrong. With all the evils in the world that we would observe, this universe might not have went to the things that God wanted it to be. It is either God committed a mistake of creating the universe or He did not really intend to make the universe perfect as assume by some Christians. The second criticism offered by McHugh (2006) is the one proposed by the scientific perspective about the evolution of mankind. As explained by the Augustinian point of view, man was created perfect and good. However, the scientific evidence would prove that man evolved from the lowest form of animals that can be argued as imperfect and hostile creatures. Primitive man has crude knowledge of morality and that hostility seemed to be his natural response to his environment. In the same argument, natural disasters and calamities existed long before man came into this world, as proposed by the evolutionary perspective. These natural phenomena certainly cause evils and sufferings. Consequently, if these phenomena already existed before man, then it is logical to assume that they were not caused by man. If they were not caused by mankind, then God was the one responsible for evil effects of such natural calamities. The third argument against the Augustinian theodicy is the existence of hell as a venue for those who will not abide by the law of God. The concept of hell is a punishment for those who will choose to do wrong. This concept is challenged because it only show how Gods justice works. Sinful acts are punishable according to St. Augustines argument that is why man is compelled to do good which is the main intention of God. If this is true, then majority of the human race might be tormented in hell since humanity now is characterized by immorality and sinful acts. Is this the justice that God wants man to realize? Whatever the answer to this question, it is certain that the concept of hell acquits of Gods purpose of punishing the disobedient. In a related article, The Problem of Evil, written by Vincent Cheung (2004), it discusses the problem and solution in the issue of the existence of evil. Cheung (2004) also recognizes that the basic problem of the Christian point of view about good and evil is that there is a God who is omnipotent and omnibenevolent. In this line of thinking, if God is all-powerful, then He has the ability to eradicate all the evils in the world. If God is a loving supreme being, then He would not allow evil to thrive that causes pain and suffering to mankind. What complicates the Christian perspective is the notion that God and evil are irreconcilable concepts. If God really exists then there is no evil, as argued by Cheung (2004). Accordingly, if evil exists, then there is no God who is ever loving. In case that God really exists and evil also prevails in this world, then the God that really exists is not an ever-loving supreme being. In this line of thought, the God that exists might be a being wh o loves suffering and pain because He allows evils to prevail. In short, it is a choice between God or evil. Cheung (2004) offered insightful analysis in reconciling they contradictions of God and evil. It was argued in his article that the flow of argument of the problem of evil cant be answered by the Christian perspective. The Christian point of view of God is illogical and cant be accepted because it has many flaws. If one has to take the route of the Christian perspective an all-powerful and all-loving God would not exist with the evil prevailing in this life. This is why in the article, Cheung presented a more logical argument that emanated from the fundamental premises of the Christian perspective. In a gist, Cheung (2004) argued that there is God who is all-powerful and all-loving. With Gods power, He is capable of eliminating suffering and pain. His benevolence would result to His intention of eradicating evils. Consequently, evil still exists because God a good purpose for it. With Gods power and goodness, He would eventually end all these sufferings and pains in life. The prevalence of evils doesnt mean that God doesnt exist. It merely implies that it would eventually be eliminated because God is good. Analysis and Conclusion With the surveyed articles presented above, this paper has formulated its own analysis to answer the quite controversial issue of the existence of evil. First and foremost, this paper proposes that there is God. If we would formulate a notion of God, it is always good and logical to assume that He is all-powerful and all-benevolent. It would be difficult and more painful to imagine that there is supreme being who exists for the sole purpose of punishing us. There is God because there is a creation. The cause and effect analysis of St. Thomas Aquinas is quite a convincing argument for this. It would be natural for a creator to produce something with no good intention. For instance, a sculptor would not create a work of art with bad intention on his/her mind creating it. It is innate to him/her to produce a beautiful and as much as possible perfect masterpiece. Of course, the actual product would not be as perfect as it is in his/her mind. However, this doesnt imply that the sculptor is evil. He may be innately good even if there is imperfection in his/her creation. Needless to say that this analogy also applies with the existence of a n all-loving and all-powerful God. There is a supreme creator who made man in his own image. As an all-powerful being, God couldnt interfere with the affairs of man because of free will. Free will has unintended consequences, that we call evils. Inasmuch as God wants to eradicate evils and harms in this world, His authority could have superseded by the power of free will which He gave to man as a sign of love. Through free will, man make choices so as not being controlled by God. If free will doesnt exist, man is like a puppet that is being controlled by a puppet master. Subsequently, since God loves man, He took his control out of mans life. In connection, free will doesnt mean doing evil. It is a powerful instrument of choosing the right path. With it, man should take the right path. Although evils seem to reign in life, they could be viewed as temporary. It is logical to assume life is meaningless if we are just expecting bad things to happen. We might have to annihilate humanity if that would be true. However, it is the position of this paper that every choice that we make has an accompanying equally balanced results that may good or evil. There are no options that have purely good or bad consequences. In other words, there is no situation in this world that would only produce an unpleasant result because that would mean complete annihilation of everything. The result would come from a balance of good and evil actions. Now, when it comes to the nature of things in the lower form of animals, harm really exists. It is the normal flow of things that other creatures to subdue other species. It is part of the grand design. It is a design that can only be sustained if man would not interfere in it. It would be valid to assume that mans interference with nature has caused destruction to the planet. This is because the natural laws are perfect. It has all the necessary functions for the planet to survive. Typhoons, earthquakes, and the like are natural occurrences that are caused by the overproduction and overconsumption of man through the utilization of the environments resources. The natural inclinations of the lower forms of animal are also necessary for the survival of each and their own species and for the emergence of the new species. These phenomena are all beneficial to the existence of the planet. Man seems to be the unnecessary component in sustaining the equilibrium of the planet if free will would not be used properly. It is certainly true that man is capable of moral actions. Mans actions may interfere or not with the natural flow of things in nature. However, as mentioned earlier, there are actions that are good-producing. These actions may contribute to the well being of the planet if man would only realize the power of free will. In contrast, evils caused by man are unintended consequences of the free will given by God. This is why free will is coupled with superior intellect. Man is guided by free will and a superior intellect for him to do good and avoid harm to others. The superior intellect is here to compensate with mans free will. There are no absolute standards of good and evil. It has to depend on the ability of man to evaluate a particular situation. It can be judged based on the motive, actual behavior and the consequences of the action. In short, actions should be based on the use of the ability of man to calculate, rationalize and good intention. Man has to plan his actions with the intention of doing good. In relation to theodicy, it is the position of this paper that there is God but He doesnt want evils to happen. Evils can be speculated as a result of unintended consequences of free will and superior intellect of man. With regards to the Defense argument, it is more valid to claim that evils dont have to be equated with the non-existence of God. The problem of evils doesnt depend on whether there is God or not. It is a necessary result of the free will, miscalculation or ignorance of man. Definitely, there are choices to be made in life. The best choice is coming from many choices with the use of the intellect and free will. Evils would arise because of irrationality, lack of planning, miscalculation or ignorance. Equating evil with the non-existence of God is like blaming God for mans mistakes. In this line of thinking, man is removing himself from accountability that makes God his scapegoat. Finally, it is the position of this paper that part of the theodicy argument is valid more particularly the argument that God exists but he has no intention of bringing harm to this universe. Evils, as emphasized above, are unintended consequences brought about by mans ignorance, miscalculation and bad intention. It is also the point of this paper that it is illogical to accept the Defence argument since the existence of evil cant be equated with the denial of God. Of course, it would be noted that this paper doesnt assume that it provided all the absolute answers nor it has figured all out the problem of evil. The problem of evil is quite complicated issue that it cant be discussed easily in a single paper. The analysis of this paper has been deduced from several articles and from the finite capacity of the writer. Message from client: Can I have a rewrite? None of my sources were used and they need to be in the paper. Please just use the sources I provide in the rewrite and no other sources. Thank you.

Theories of Foreign Direct Investment (FDI)

Theories of Foreign Direct Investment (FDI) This assignment tries to discuss various theories concerning foreign direct investment and give the statement as to whether the theories provide a successful explanation of the main determinants of such activity In real sense the main theories of FDI does not provide successful explanation of the main determinants for such activity, as explained by Dunning and Lundan (2008:81) Multinational Enterprises and Global Economy 2nd Edition. Definition of foreign direct investment According to Graham and Spaulding (website information) direct foreign investment in its classical definition is defined as the company from one country making physical investment into building a factory to another country. Foreign direct investment (FDI) plays an extraordinary and growing role in global business. It can provides a firm with new markets and marketing channels, cheaper production facilities, access to knew technology, products, skills and financing. For a host country or the foreign firm which receives the investment, it can provide a strong impetus to economic development. The direct investment in building, machinery and equipment is in contrast with making a portfolio investment, which is considered an indirect investment. In recent years, given rapid growth and change in global investment patterns, the definition has been broadened to include the acquisition of lasting management interest in a company or enterprise outside the investing firms home country. As such, it may take many forms, such as a direct acquisition of a foreign firm, construction of a facility, or investment in a joint venture or strategy alliance with a local firm with attendant input of technology, growing, licensing of Ewe-Ghee Lim (web information) The paper tells about two aspects of direct foreign investment (FDI): its correlation with economic growth and its determinants. The first part focuses on positive spillovers from FDI while the second deals with the determinants of FDI. The paper finds that while substantial support exists for positive spillovers from FDI, there is no consensus on causality. On determinants, the paper finds that market size, infrastructure quality, political/economic stability, and free trade zones are important for FDI, while results are mixed regarding the importance of fiscal incentives, the business/investment climate, labour costs, and openness. Dunning (1993:3), explain that there is less disagreement about FDI THEORIES globalisation as a process of towards the widening of the extent and form of cross-border transactions; and the deepening of the economic interdependence between the actions of globalising entities located in other countries. The FDI theories explain the reason why FDI occurs and the determinants of FDI. The theories have traditionally emphasises market imperfection (Hymer, 1960; Kindlebeger, 1969) and firm specific advantages or ownership advantages derived from the ownership of intangible assets such as technologies, management skills, and organisational capabilities (Caves, 1971). Hymers market imperfections theories suggested that a firm may have certain advantage that may be generated from the fields of technology, management or marketing A. L Calvet (1981:43-59) Journal of International Business Study (hhtp://teaching.ust.hk/ Accessed on 07.11.2009. He assert that Kindleberger provided the first comprehensive survey of the various theories of foreign direct investment along with the lines expressed by Hymer. He approached the question of direct investment from the standpoint of the perfectly competitive model of neoclassical economics by asserting that in a world of pure competition direct investment could not exist. Kindleberger (1969, p13) Indeed, when all markets operate efficiently, when there are no external economies of production or marketing, when information is costless and there are no barriers to trade or competition, International trade is the only possible form of international involvement. Logically, it follows that is the departures from the model of perfect competition that must provide the rationale for foreign direct investment. The first deviation had been noted by Hymer (1960/1976), who postulated that local firms have better information about the economic environment in their country than do foreign companies. According to his argument, two conditions have to be fulfilled to explain the existence of direct investment: (1) foreign firms must possess a countervailing advantage over the local firms to make such investment viable, and (2) the market for the sale of this advantage must be imperfect. It was, thus, a natural step for Kindleberger later to suggest that market imperfections were the reason for the existence of foreign direct investment. Specifically, he came up with the following taxonomy: Imperfections in goods markets, imperfections in factors market, scale economies and government imposed disruptions. This classification may be called the market paradigm; To encompass new developments in the field of determinants of foreign investment, a somewhat different taxonomy from that of Kindleberger was proposed to distinguish among four classes: (1) market disequilibrium hypotheses, (2) government-impose distortions, (3) market structure imperfections, and (4) market failure imperfections. The common feature found in all the hypotheses in group (1) will be the transitory nature of foreign direct investment. FDI is an equilibrating force among segmented markets which eventually comes to an end when equilibrium is re-established; that is when rates of return are equalized among countries. The unifying characteristic in group (2) will be the role played by either host or home governments in providing the incentive to invest abroad. Group (3) will include theories in which the behaviour of firms deviates from that assumed under perfect competition, through their ability to influence market prices. Finally, in group (4) will be classified theories which depart from the technical assumptions behind the model of perfect markets; that is, the assumptions about production techniques and commodity properties. This last category will deal basically with those phenomena which lead to market failure or, cases where the decentralizing efficiency of that regime of signals, rules and build in sanctions which defines a price market system will fail. (Bator 1958, p. 352) Market disequilibrium hypotheses: The notion of a perfect economy and perfect competition requires the assumption that prices everywhere are adjusted to bring supply and demand into equilibrium. It may well be that because of segmentation in world markets rates of return are not equalized internationally. In a disequilibrium context flows of FDI would take place until markets return to stability. Instances of disequilibrium conditions that provide incentives to invest abroad are those which apply to factor markets and foreign exchange markets. Ragazzi (1973:491) State that Currency overvaluation is perhaps the most salient example of these disequilibrium hypotheses. A currency may be defined as overvalued when at the prevailing rate of exchange production costs for tradable goods in the country are, on the average, higher than in other countries. Such an occurrence creates opportunities for profit-making by holding assets in undervalued currencies with the expectation that, once the equilibrium in the foreign exchange market is re-established, capital gains will be realized. In meantime, there is an incentive to locate production of internationally traded commodities in countries with undervalued currencies and to purchase income producing assets with overvalued money. The important point is that, once exchange rates return to equilibrium, the flow of FDI should stop. Even more foreign investors should sell their foreign assets, pocket the capital gains, and return to domestic operations. Foreign direct investment may be attracted toward areas where the average rates of profit are higher. This is basically the capital markets disequilibrium hypotheses. It implies that, for a given level of risk, rates of return on assets are not equalized internationally by portfolio capital flows, due to inefficiencies in securities markets-such as, thinness or luck of disclosure. According to Piggott and Cook (1999:260-261) International Business Economics: A European Perspective 2nd Edition It is difficult to fit into one neat theory because of the problem of definition; secondly any theory of FDI is almost inevitably a theory of MNCs. as well, and thus inseparable from the theory of the firm. Thirdly, the nature of FDI makes it a multidimensional subject within the sphere of economics as well as an interdisciplinary one. It involves the theory of the firm, distribution theory, capital theory, trade theory and international finance as well as the discipline of sociology and politics. It is therefore not possible to identify any single theory of FDI due to many explanations of FDI. Also not easy to classify these explanations into distinct and neat groups, due to substantial overlapping between some of the explanations. They grouped the theories into three categories. 1).Traditional theories 2).Modern theories and 3).Radical theories Traditional theories are based on neo-classical economic and explain FDI in terms of location-specific advantages. Morden theories emphasise the fact that product and factor markets are imperfect both domestically and internationally and that considerable transactional costs are involved in market solutions. Also they acknowledge that managerial and organisational functions play an important role in undertaking FDI. The radical theories, these take a more critical view of Multinational National Corporation (MNCs). Let 1st examine the ownership, Location and Internalisation advantages, sometimes referred as paradigm of OLI. To explain the activity of MNCs there is three different types of advantages which is important. 1).Ownership-specific advantages (OSA) These refer to certain types of knowledge and privileges which a firm possesses and are not available to its competitor. These arise due to the imperfections in commodity and factor market. Imperfections in commodity markets include product differentiation, collusion, and special marketing skills, and in factor markets appear in the form of special managerial skills, differences in access to capital market, and technology protected by patents. Imperfect market may also arise from the existence of internal or external economies of scale or from government policies regarding taxes, interest rates and exchange rates. The market imperfection gives rise to certain ownership-specific advantages, grouped under the following headings: Technical advantages-include holding production secrets such as patents, or unavailable technology or management-organisational techniques. Industrial organisation-relates to the advantages arising from operating in an oligopolistic market such as those associated with joint RD and economies of scale. Financial and monetary advantages-includes preferential access to capital markets so as to obtain cheaper capital. Access to raw materials-if a firm gains privileged access to raw materials or minerals then this becomes an ownership-specific advantage 2).Location-specific advantages (LSA)-This refer to certain advantages which the firm has because it locates its production activities in a particular area: a) .Access to raw materials or minerals this normally represents an LSA. This advantage, however, applies to all the firms established in the locality and is not sufficient to explain FDI in itself pg 261 b). Imperfections in international labour markets-these create real wage-cost differentials which provide an incentive for the MNC to shift production to locations where labour costs are low. Example electronics component firms using South East Asian locations for assembly production. c). Trade barriers-These provide an incentive for MNCs to set up production in Europe to avoid CET. Similarly, high Canadian tariff barriers have been used in the past to attract US direct investment. c). Government policies-such as taxation and interest rate policies can influence the location of FDI. Internalisation-specific advantages (ISA) occur when international market imperfections make market solution too costly. This means the market is too costly or inefficient to undertake certain types of transactions, so whenever transactions can be organised and carried out more cheaply within the firm than thorough the market they will be internalised and undertaken by the firm itself. The benefits of internalisation are as follows:- a). the advantages of vertical integration cover such things as exploitation of market power through price discrimination and avoidance of government intervention by devices such as transfer pricing. b). the importance of intermediate products for research-intensive activity: the firm appropriates the returns on its investment in the production of new technology by internalising technology. c). the internalisation is not entirely costless. It creates communication, co-ordination and control problems. There is also the cost of acquiring local knowledge. FDI theories 1). Traditional theory Capital arbitrage theory The theory states that. Direct investment flows from countries where profitability is low to countries where profitability is high. It means therefore that capital is mobile both nationally and internationally. But sometimes implication is that countries with abundant capital should export and countries with less capital should import. If there was a link between the long-term interest rate and return on capital, portfolio investment and FDI should be moving in the same direction. International trade theory-the country will specialise in production of, and export those commodities which make intensive use of the countrys relatively abundant factor. 2). Modern theory Product-cycle theory New products appear first in the most advanced economy in respond to demand conditions. The maturing product stage is described by standardisation of the product, increased economies of scale, high demand and low price The standardised product stage is reached when the commodity is sold entirely on price basis. The internalisation theories of FDI The theory explain that why the cross-border transactions of intermediate products are organised by hierarchies rather than determined by market forces. The theory of appropriability. The theory explains why there is a strong presence of high-technology industries among MNCs 3).The electric theory of FDI The theory tries to offer a general framework for determining the extent and pattern of both foreign-owned production undertaken by a countrys own enterprises, and that of domestic production owned or controlled by foreign firm. Dunning and Lundan(2008) Robock and Simmonds (1989:48) International Business and Multinational Enterprises 4th Ed Assert that, the electric theory of international production enlarges the theoretical framework by including both home-country and host-country characteristics as international explanatory factors. It argues that the extent, form, and patterns of international production are determined by the configuration of three sets of advantages as perceived by the enterprises. First Ownership (O) advantage 2nd Location (L) and 3rd Internalization (I) advantage in order for the firm to transfer its ownership advantages across national boundary Diamond Porter Theory Daniels, Radebaugh and Sullivan (2009:287) 12th Edition. International Business: Environment and Operations: Pearson International Edition This is the theory which shows four conditions which is important for competitive superiority: demand conditions; factor conditions; related and supporting conditions and the firm strategy, structure and rivalry. Demand conditions whereby the company start up production at near the observed market for example an Italian ceramic tile industry after World War II: At that time there were post-war housing boom and consumers wanted cool floors because the climate was hot. Another factor is factor conditions which recall natural advantage within absolute advantage theory and the factor-proportions theory Conclusion Theories of Foreign Direct Investment (FDI) Theories of Foreign Direct Investment (FDI) This report has discussed different theoretical framework of FDI that takes place. These theories briefly explain why firms go to trouble when establishing or acquiring abroad. Theories that use on this report are Hymers contributions, product life-cycle theory, caves theory, internalisation theory, the eclectic paradigm, strategic motivations of foreign direct investment and investment path development (IDP) theory. This report also evaluates Honda automotive as an example on how they survive and compete in the competitive international markets nowadays with using FDI models, statistics and theories. Based on these analyses, I feel that FDI takes an important role to both foreign and host countries and also impact firm behaviour or effects on host economies. Introduction This report will discuss Foreign Direct Investment theories and evaluate the FDI of a leading player industry that chosen, Toyota, Japan. Foreign direct investment (FDI) is the name given to process where a firm from a country provides capital to an existing or newly-created firm in another country (Jones, 2006 #1). For example, a foreign firm may decide to set-up production in the UK and by so doing will engaging in the process known as FDI. Firms locating production in more than one country are often referred to as multinational enterprises (MNEs). Dunning (1981) notes there are two main problems with viewing FDI. First, FDI is more than just the transfer of capital, since just as importantly it involves the transfer of technology, management and organizational skills. Second, the resources are transferred within the firm rather than between two independent parties in the market place, as is the case with capital (Jones, 2006 #1). These factors give FDI own a unique key theories an d often cited as Hymer (1960) international operations of national firms; Vernons (1966) product life-cycle theory; Caves (1971) horizontal and vertical theories; Buckley and Casson (1976) Internalization theory; Dunning (1977) eclectic theory; Graham (1978) strategic behavior of firms and John Dunning (1981) investment development path (IDP) theory. This report will begin by examining the Hymer (1960) theory. (Keywords: Foreign Direct Investment, FDI, theory, Japan FDI, Honda) Literature Review 1.1 Hymer (1960) international operations of national firms Hymers (1960), who saw flaws in the prevailing view that direct investments and portfolio were synonymous with one another. Hymer noted that direct investment was mainly performed by firms in manufacturing, whereas there was a predominance of financial organisations involved in portfolio investment (Jones, 2006 #1). Hymer was also explained why direct investments across various countries (Kogut, 1998 #2). Hymer (1960) expressed his dissatisfaction with the theory of indirect (or portfolio) capital transfers to explain the foreign value-added activities of firms (Dunning, 2008 #3). In particular, he identified three reasons for his discontent. The first was that once uncertainty and risk, the cost of acquiring information and volatile exchange rates and making transactions were incorporated into classical portfolio theory, many predictions, for example, with respect to the cross-border movements of money capital in response to interest rate changes, became invalidated. This was becaus e such market imperfections modified the behavioural parameters affecting performance of firms and the conduct and, in particular, strategy in servicing foreign markets (Dunning, 2008 #3). Second, Hymer stated that FDI involved the transfer of a package of resource (i.e technology, entrepreneurship, management skills, and so on), and not just finance capital which portfolio theories such as Iversen (1935) had sought to explain. The third and perhaps most fundamental characteristic of FDI was that it involved no change in the ownership of resources or rights transferred, whereas indirect investment, which was transacted through the market, did necessitate such a change. In consequences, the organisational modality of both the transaction of the resources, for example, intermediate products, and the value-added activities linked by these transactions was different. Moreover, Hymers theory of FDI draws its influence from Bains (1956) barriers to entry model of industrial economics (Tee ce, 1985). Hymer begins by noting that there are barriers to entry for a firm wanting to set-up production abroad. These are in the form of uncertainty, risk, and host-country nationalism (Kogut, 1998 #2). Uncertainty gives rise to costs in overcoming informational disadvantages associated with unfamiliarity with local customs. Each country has its own languages, legal system, economy and government, which place firms from outside of the country at a disadvantage compared to firms that are naturally resident to the country. The second barrier is nationalistic discrimination by host countries, which may occur by the government with a protectionist agenda, or by consumers of the host country who prefer to purchase goods from own national firms for reasons of patriotic or loyalty tendencies. The final barrier manifests itself as an exchange rate risk (Kogut, 1998 #2). As the firm has to pay a dividend to its shareholders in the home country it has to repatriate the profits back to its own currency. Given these barriers to international productions, why do firms engage in foreign direct investment? According to Hymer there are two reasons, whether of which could apply, and both of which are expected to increase its profits (Kogut, 1998 #2). First, the firm removes competition from within the industry, by taking-over or by merging with firms in other countries. Second, the firm has advantages over other firms operating in a foreign country. Examples of the latter are the ability of the firm to acquire factors of production at a lower cost, the use of better distributional facilities, the ownership of knowledge not known to its rivals or a differentiated product that is now known in the other country. Both reasons stress the importance of market imperfections (Dunning and Rugman, 1985), and underlying these the investor has direct control of the investment. Overall, these reasons are not sufficient for a firm to engage in direct foreign investment, as what is necessary is that it must enter the foreign market in order to fully appropriate the profits, for example, a firm could license its product to a firm in the foreign country, so that it need not directly invest in the market. However, there are problems with licensing the product. These include the failure to reach an agreement with the licensing firm over the levels of output or prices, or the costs involved in the monitoring an agreement made between the firms. 1.2 Product Life-Cycle Theory Vernon (1966), argued that the decision to locate production is not made by standard factor-cost or labour-cost analysis, but by a more complicated process (Kogut, 1998 #2, p.29). The product cycle model was introduced in the 1960s to explain market-seeking production by firms of a particular ownership or nationality (Dunning, 2008 #3). On the other hand, the product cycle was the first dynamic interpretation of the determinants of, and relationship between, international trade and foreign production (Dunning, 1996 #5). It also introduced some novel hypotheses regarding demand stimuli, technology leads and lags, and information and communication costs, which have subsequently proved useful tools in the study of foreign production and exchange (Dunning, 1996 #5). According to Vernon, a product has a life cycle that has three main stages. These stages are important as they have implications for the international location of a product as follows. Stage One: Product development process. In other words, the nature of the product that the firm is making is not standardised (Kogut, 1998 #2). Stage Two: Maturing product. This means that the need for the product to be situated near to its market declines, which allows for economies of scale. These impact on the locational decision of the firm, especially as the demand for the product is likely to grow in other countries, and the firm will have to decide whether it is worth setting up production abroad. Furthermore, this could even mean that the home country experiences exports back to it from the foreign plant. Stage Three: Standardised product. This is an extension to the maturing product stage, where the standardisation of the product has reached its zenith, and a final framework of the product has been found (Kogut, 1998 #2). 1.3 Caves Theory Caves (1971), expanded upon Hymers theory of direct investment, and placed it firmly in the context of industrial organisation theory (Jones, 2006 #1). The importance of Caves work is that this theory will linked Hymers theory of international production to the then current theories of industrial organisation on horizontal and vertical integration. Caves identify between firms that engage in horizontal FDI and those that undertake vertical FDI (Dunning, 2008 #3). Horizontal FDI takes place when a firm enters into its own product market within a foreign country, whereas vertical FDI happens when a firm enters into the product market at a different stage of production (Jones, 2006 #1). 1.4 Internalisation Theory Coase (1937), examines the role that transaction costs play in the formation of organisations known as internalisation theory (Jones, 2006 #1). In brief, Coase was concerned with why firms exist and why not all transactions in a n economy occur in the market. Coase also answered this in terms of the transactions costs involved in using the market, where this is the cost of searching and determining the market price, or, once the price is found, the cost of negotiation, signing and enforcement of contracts between the parties involved in the transaction. The process of internalisation is developed to explain international production and FDI, and one of the leading proponents is Buckley and Casson (1976). They present the MNE as essentially an extension of the multi-plant firm (Dunning, 2008 #3). Bucley and Casson note that the operations of firm, especially large firms, take the form not only of producing services and goods, but activities such as marketing, training, development and research, management techniques and involvement with financial markets. These activities are interdependent and are connected by intermediate products, taking the form of either knowledge or material products, and expertise. A key intermediate product in the internalisation theory of FDI is knowledge. One reason is that knowledge takes a considerable period of time to generate, for example through development and research, but is highly risky, so that futures markets do not exist. Sellers of markets may be unwilling to disclose information, which has uncertain value to the buyer, causing market fail. Further, sellers and buyers of knowledge can often hold a degree of market power, which leads to a bilateral concentration of power (Williamson, 1979), and uncertain outcomes (Dunning, 2008 #3). These problems indicate the severe difficulties in licensing and contracting where information is crucial. In regards to internationalisation, the public good property of knowledge means it is easily transmitted within the firm, regardless of whether it is inside or across national boundaries. This creates internal markets across national boundaries, and as Buckley and Casson state, as firms search for and exploit knowledge to their maximum potential they do so in numerous locations, with this taking place on an international scale, leading to a network of plants on a world-wide basis (Jones, 2006 #1, p.45). The internalisation theories of FDI played an important role in advancing and developing the theory of FDI in the 1970s and have remained popular since that time (Dunning, 2008 #3). 1.5 The Eclectic Paradigm (Please refer to table 2.1 and 2.2 in reading this section) Reflecting upon the history of the theory of FDI, Dunning (1977) noted that it was very much couched in terms of either the structural market failure hypothesis of Hymer and Caves or the internalisation approach of Buckley and Casson (Dunning, 1996 #5). Dunning provided an eclectic response to these by bringing the competing theories together to form a single theory, or paradigm as it is more often referred. The basic premise of Dunnings paradigm is that it links together Hymers ownership advantages with the internalisation school, and at the same time adds a locational dimension to the theory, which at the time had not been fully explored (Jones, 2006 #1). Further, Dunning does manage to introduce some new considerations, such as the impact that different country and industry characteristics have on each of the ownership, locational and internalisation advantages of FD (Jones, 2006 #1). The eclectic paradigm of FDI states that a firm will directly invest in a foreign country only if it fulfils three conditions. First, the firm must possess an ownership-specific asset, which gives it an advantage over other firms and which are exclusive to the firm. Second, it must internalise these assets within the firm rather than through contracting or licensing. Third, there must be an advantage in setting-up production in a particular foreign country rather than relying on exports (Blomstrom, 2000 #8). Different types of ownership (O), locational (L) and internalisation (I) factors are given in Table 1 (collectively known as OLI) (Jones, 2006 #1). Internalisation advantages are the ways that a firm maximises the gains from their ownership advantages to avoid or overcome market imperfections (Dunning, 1996 #5). Internalisation-specific advantages results in the process of production becoming internal to the firm. Reasons for internalisation include the avoidance of transaction costs, the protection of the good, market and finance, avoidance of tariffs and the ability to capture economies of scale from production (Dunning, 2008 #3). Moreover, not all of the OLI conditions for FDI will be evenly spread across countries, and therefore each condition will be determined by the factors that are specific to individual countries (Dunning, 1996 #5). Links between the OLI advantages and the country-specific characteristics are summarised in Table 2. For example, the ownership-specific advantage of firm size is likely to be influenced by market size in the firms home country (Dunning, 1996 #5). This is because the larger the market is, the more likely will a firm be able to gain ownership-specific advantages in the form of economies of scale. In terms of location-specific factors, labour costs will vary across developed and developing countries, while transport costs are determined by the distance between the host and home countries. Finally, country-specific factors are likely to affect the degree to which firms internalise their advantages. 1.6 Strategic Motivations of Foreign Direct Investment Despite the advances made by the eclectic approach to FDI, the theory has been criticised for ignoring another aspect of FDI theory. Knickerbocker (1973), and then advanced by Graham (1978, 1998). The distinguished feature of the strategic approach to FDI is that is believes that an initial inflow of FDI into a country will produce a reaction form the local producers in that country, so that FDI is a dynamic process. The process from the domestic producers can either be aggressive or defensive in nature. An aggressive response would be a price war or entry into the foreign firms home market while a defensive response would be an acquisition or merger of other domestic producers to reinforce market power (Dunning, 1996 #5). 1.7 Investment Development Path Theory John Dunnings investment development path (IDP) theory (1981) and its latest version (Dunning an Narula 1994) are implicitly built on the notion that the global economy is necessarily hierarchical in terms of the various stages of economic development in which its diverse constituent nations are situated. The IDP essentially traces out the net cross-border flows of industrial knowledge, the flows that are internalised in foreign direct investment (FDI) and that restructure and upgrade the global economy, although there is also the non-equity type of knowledge transfer such as licensing, turn-key operations, and the like. In this way, the IDP can thus be view as a cross-border learning curve exhibited by a nation that successfully move up the stages of development by acquiring industrial knowledge from its more advanced neighbours. A move from the U-shaped (i.e negative NOI) portion to the wiggle section of the IDP indicates an equilibration in knowledge dissemination (Dunning, 1996 # 5, p.143) and that is, a narrowing of the industrial technology gap between the advanced and the catching-up countries. Thus, IDP curve conceptualised by Dunning is an idealised pattern based on free-market exchanged of knowledge among countries (Dunning, 1996 #5). Japan Automotive Industry 2.1 Components-intensive assembly-based manufacturing and FDI (first, trade-conflict-skirting, but later rationalising type) Automobiles and auto-parts had long been targeted by the Japanese government as one of the most promising industries in which both higher technological progress and productivity were possible and whose products were highly income elastic. In addition to automobiles, another components-intensive, assembly-based industry that successfully emerged in Japan in the 1970s was consumer electronics (Dunning, 1996 #5). Both automobiles and consumer electronics came to capitalise very adroitly on Japans dual industrial structure in which numerous small and medium-sized enterprise coexisted alongside a limited number of large-scale firms; the former specialised at the relatively labour-intensive end, while the latter operated at the relatively capital-intensive, scale-based end of vertically integrated manufacturing (Dunning, 2008 #3). Furthermore, it was also in Japans auto industry (at Toyota Motor Co., to be exact) that a new manufacturing paradigm, lean or flexible production, originated as a superior alternative to Fordist mass production (Womack, Jones and Roos, 1990). This technological progress came to be reflected in rising technology exports in the transport equipment (mostly, automobile) industry. But the very success of building up the efficient, large-scale (hence exploitative of scale/scope economies) hierarchies of assembly operations in highly differentiated automobiles and electronics goods, along with increased RD and technological accumulation (which is reflected in increasing technology exports), resulted in Japans export drive and expanding trade surplus. These situations in turn quickly led to trade issues and the sharp appreciation of the yen (Dunning, 2008 #3). To circumvent protectionism, Japanese producers of automobiles and electronics goods began to replace their exports with local assembly operations in the Western markets, mainly in North America and Europe. Meanwhile, they also started to produce fairly standardised (ie. Relatively low value added) parts and components, or those that can be cost-effectively produced, locally, both in low-wage developing countries, especially in Asia, and in high-wage Western countries- in the latter, with the installation of labour-cost-reducing and labour-quality-augmenting automation equipment mostly shipped from Japan. Therefore, a network of Japanese overseas ventures began to straddle the advanced host countries and the developing host countries at the same time (Dunning, 2008 #3). Recently, these assembly-based FDIs are going beyond the trade-conflict-skirting phase to reach a new phase of rationalised cross-border production and marketing. More and more components are produced at supplied home to the overseas manufacturing outposts. Also, low-end products (models) are assigned to production and marketing in the developing host countries, especially in Asia; some are imported back into Japan. Thus, we can discern a more refined or more sharply delineated and specialised form of trade within an industry (i.e intra industry) or more appropriately within a firm (i.e intra- firm trade) and within a production process (i.e inter-process trade), a new form of trade made possible by rationalisation-seeking type of FDI (Dunning, 1996 #5). 2.2 Toyota (Please refer to appendix 1 2 in reading this section) The Japanese market is the most consolidated of all triad markets. Toyota, is a transnational Japanese international car manufacturer where headquartered in Aichi, Japan (Dunning, 2008 #3). According to appendix 1, in 2011, Toyota was the fifth biggest transnational companies with foreign sale as 60.8 percent of total. Also, it has 38% of its 326,000 workers abroad (Economist, 2012 #7). In 2009, Toyota alone has 36.88 percent of the passenger car market, 18.29 percent of the truck market and 79.72 percent of the bus market (M.Rugman, 2012 #6). Excluding Japan, Toyota is the market leader in two of the six largest countries in Asia Pacific which are Malaysia and Thailand (M.Rugman, 2012 #6). Furthermore, in 2009, two regional markets accounted for 78 percent of Toyotas revenue Asia (with Japan at 48.3 percent of revenues) and North America (at 29.70 percent of revenues); Europe was only at 14.1 percent of revenues and rest of the world 7.9 percent, and hence, it is a bi-region-focused company. According to appendix 2, In term of units sold, the geographic distribution is similar where Asia and Oceania account for 14 percent, North America 32 percent and Europe 14 percent. Therefore, in terms of revenue and units sold, Toyota is a bi-regional company (Dunning, 1996 #5) . Over 10 years, Toyotas intra-regional percentage of sales has decreased from 57.1 percent to 46.2 percent. One major reason for this is the Japanese market itself, where sales decreased for 48.4 percent of total revenues in 1993 to 38.3 percent in 2002. As comparison, North American, European, and non-triad sales have steadily increased in importance. Toyota manufactures locally over two thirds of the car sells in United States. Local responsiveness is important for Toyota. Toyota introduced its luxury models to accommodate the wealthier and aging North American baby boomers in the 1990s. Today, the company is introducing cars to target the young American customer, the demographic echo of the baby boomers. Since 60 percent of US car buyers remain loyal to the brand of first car, it is thus imperative to service this young market (M.Rugman, 2012 #6). Furthermore, american consumers, have been responsive to the companys reputation for lower price and quality at which Toyotas cars are sold (M.Rugman, 2012 #6). Also, the resale value is also higher for Toyota cars. One major advantage for Toyota is that is has some of the best manufacturing facilities in the world, and it combined this with excellent relationships with its suppliers. Until recently, Toyota was one of the most efficient companies at outsourcing production to suppliers with whom it enjoys amicable long-term, sometimes keiretsu-style, relationship (Dunning, 2008 #3). If the auto industry is to become more like the electronics industry, vehicle brand owner (VBOs), such as GM, and VW, will be the equivalent of original equipment manufacturers (OEMs) in the electronics industry, such as Nokia, and will concentrate on designing, engineering, and marketing vehicles to be sold under their brand while others take care of manufacturing (Dunning, 1996 #5). Toyota is probably fu rther along this outsourcing route than other triad auto makers. Overall, although Toyota has much intra-regional trade and FDI, this does not mean that trade or FDI between them has declined (M.Rugman, 2012 #6). As discussed, all of them have invested large amounts of money in each other. For example, in 2008, the EU country has $1,622.911 billion of FDI in the United States and $86.915 billion in Japan. The United States imports $377 billion from the EU and $143.4 billion from Japan. So they are closely linked in terms of both trade and FDI (M.Rugman, 2012 #6). 3. Conclusions Overall, this report has reviewed the theoretical literature on foreign direct investment and Honda automotive in the FDI international markets. Since Hymer, there have been attempts to address a number of issues, such as why FDI occurs and where it locates. This report has also take on board developments in Dunnings eclectic paradigm of FDI, which not only encompasses ownership and internalisation advantages of multinational enterprise, but the role that location plays in a firms decision to invest abroad. Since the time of the eclectic paradigm, other theories have emerged that have stressed the importance of the role of strategy in FDI in the face of globalisation and a corresponding growth in competition between firms. In this, the role of the traditional barriers to entry across countries, such as the differences in the legal, economic environments and linguistic, have become less important, and FDI is now be viewed as competition between a few firms on an international stage (D unning, 1996 #5). Dunnings IDP paradigm provides a thought-provoking framework to examine the Japanese industry experience, because the case of Japan seems so deviant from the norm set forth in the macro-IDP pattern. The Asian NIEs and the new NIEs (ASEAN-4) and now new new NIEs (China, Vietnam and India) have moulded their developmental strategies along the line of MNE- facilitated development in order to swing up. Indeed, Japan automotive seems to have been a role model for other East and South East Asian countries to match in their drive to economic modernisation. In addition, to the high level of international business conducted across the triad, companies in the triad are constantly looking for new ideas from other regions that will make them more competitive. In the United States, for example, the head of the Federal Reserve System has expressed the belief that US antitrust practices are out of date and that competitors should be allowed to acquire and merge with each other in order to protect themselves from world competition (Dunning, 2008 #3). This idea has long been popular in Japan where Keiretsus, or business groups, which consist of a host of companies that are linked together through ownership and/or joint ventures, dominate the local environment and are able to use their combined connections and wealth to dominate world markets. (2000 words) Table 1 The Three Conditions of the Eclectic Theory Ownership-specific advantages (internal to enterprises of one nationality) Size of firm Technology and trade marks Management and organisational systems Access to spare capacity Economies of joint supply Greater access to markets and knowledge International opportunities such as diversifying risk Location-specific advantage (determining the location of production) Distribution of inputs and markets Cost of labour, transport and materials costs between countries Government intervention and policies Commercial and legal infrastructure Language, culture and customs (ie psychic distance) Internalisation-specific advantages (overcoming market imperfections) Reduction in search, negotiation and monitoring costs Avoidance of property right enforcement costs Engage in price discrimination Protection of product Avoidance of tariffs Source: Dunning (1981) Table 2 Characteristics of Countries and OLI-specific Advantages Owbnership-specific advantages Country characteristics Size of firm Large markets Liberal attitudes to mergers Technology and trade marks Government support of innovation Skilled workforce Management and organisational systems Supply of trained managers. Educational facilities Product differentiation High income countries Levels of advertising and marketing Location-specific advantages Country characteristics Costs of labour and materials Developed or developing country Transport costs between countries Distance between countries Government intervention and policies Attitudes of government to FDI Economies of scale Size of markets Psychic distance Similarities of countries languages and cultures. Internalisation-specific advantages Country characteristics Searching negotiating monitoring costs. Greater levels of education and larger markets make knowledge type ownership-specific advantages more likely to occur. Avoid costs of enforcing property rights. Protection of products. Source: Dunning (1981) Appendix 1 C:UsersuserDesktop20120714_woc582_5.png