Moral Hazard and the Financial Crisis Research Paper

Moral Hazard and the Financial Crisis - Research Paper Example In the present business phenomenon, moral hazards have emerged as a major issue of concern which needs enthusiastic initiatives to develop awareness among the industry participants. Moral hazards normally occur when people file more claims or stick longer to a particular claim irrespective of the consequences likely to occur due to such perseverance causing massive disruptions to the smooth functioning of the industry operations (Butler and Gardner 1). Contextually, it has often been argued that moral hazards have been one of the fundamental reasons for the recent financial crisis where various operations conducted by the financial institutions were observed to disregard their ethical responsibilities towards the various community groups. As stated by Dowd (1), policy measures adopted by financial institutions practicing free markets were the underlying causes to the financial crisis witnessed in 2008. Based on this context, the paper will intend to discuss the moral issues related w ith the occurrence of the financial crisis in 2008 signifying the importance of ethical concerns when designing and implementing policy measures at a country-level. Theoretical Explanation of Moral Hazards as a Cause of Financial Crisis Moral hazards are said to occur when the interests and rights of one party is compromised for the benefits or interests of the other party(s) engaged in the process In the current day context, critiques often argue that moral hazards have today become a persistent and unavoidable occurrence in the financial system of any country that in turn severely affects the stability of any economy. It is worth mentioning in this context that moral hazards are the apparent consequences of intentional or unintentional ethical misconducts by decision makers associated with the various business dimensions. However, in common instances, unethical behaviors conducted at the organizational level by company executive are scrutinized for the critical assessment of the f inancial and social positioning of a particular brand. Although in the context, ethical misconducts may also occur at country level policies fundamentally those which are directed with the intention to manage industry operations in monetary terms (Nowak and O’Sullivan 147-150). In the country-level assessment, occurrences of moral hazards have often been considered to play a prominent role in financial crisis situations. Historic evidences have also revealed that moral hazards within the policy making dimension have caused serious disruptions in the regular business functioning in a particular economy (Isard 193-200). These evidences can be further assessed from two perspectives, i.e. the social perspective of moral hazards and the economist perspective of moral hazards. From a social perspective, moral hazards are criticized as the fundamental causes of systematic risks in the business context. It is in this context that socialists have often depicted their concern towards t he role played by moral hazards in causing industrial threats for systematic risks which is recognized as an initial

Hyperlocal journalism Essay Example | Topics and Well Written Essays - 500 words

Hyperlocal journalism - Essay Example A proper example of a hyperlocal journalism site is the inclusion of an article about a baseball team that is found within the local little league. It may also include conducting an interview with a veteran who took part in the Second World War and lives within the region. In addition, the sale of a home along the street also forms part of the hyperlocal news and journalism (Fidgerald, 2010). The biggest challenge that is faced by hyperlocal journalists is the funding and hence the ability to sustain the model. However, each day, there are new models that are being developed alongside the present ones. One of them is the advertising-only model. A good example is the Post-gazette, which in the year 2011 was launched by a pilot in Sheffield, as one of the startups that were ad-funded. It still possesses a twitter, Facebook and Website links. However, they are no longer operational. It indicates that the model, which was aiming at delivering hyperlocal news at broader perspective across the nation was responsible for much smaller areas. The whole idea was supposed to be done with the use of mobile devices, which were produced by numerous publishers. In general, it is important to have at least one publisher for every 5,000 people rather than one person covering a single town or a handful of people covering one town. Also, there should be a particular target amount for a single place. However, one of the challenges that will be experienced with this strategy is the lack of enough skills among the people (Craft & Davis, 2013). This model of business possesses varying degrees of success. Initially, it was thought to be an innovative way through which the information that is often ignored by the local newspapers is brought to the members of the community. However, hyperlocal journalism happens especially at a time when most of the news outlets are laying off their journalist and reducing the amount

National ( the U.S.) and Oklahoma medicaid Dissertation

National ( the U.S.) and Oklahoma medicaid - Dissertation Example Per-enrollee growth exceeded economy-wide inflation by nearly 11% (Klemm, p107). Amendments to the Social Security Act were passed in 1971 and 1972 creating Supplemental Social Security Income and nearly all beneficiaries also received Medicaid. Optional amendments began covering intermediate care services for the mentally retarded and psychiatric services for patients under 22. By 1976 enrollment reached 20.7 million with an average growth rate of 5% a year which did not vary greatly for the next ten years. Because of this considerable growth the Reagan administration began to consider ways to curve deficit. The Omnibus Budget Reconciliation Act in 1981began a three year reduction in and also reduced some eligibility for Welfare benefits. States begin to attempt Health Maintenance Organizations and community based waiver programs and focus began to shift more towards managing services and controlling the costs of care. Enrollment rates remained stable though expenditures continued t o increase and rise. In 1984 congress decided to implement expansions that continued to increase throughout the eighties. ... Medicaid spending was approximately 275.5 billion dollars in 2003 (Holahan and Ghosh, p 26) and became a major target for the 2005 budget debate. Spending increased by 10 % between 2000 and 2003; thus being attributed to welfare reform. Growth was noted among the non-disabled and children; as the economy began to decline the population experienced job losses and loss in income. State Medicaid cutbacks were made, insurance premiums rose and employee sponsored coverage declined. The Patient Protection and Affordable Care Act of 2011 was tailored with the expectation that sixteen million people would gain access to health care. Obama care has created two basic paths towards universal health care access (Reno, p 61). Obamacare has increased funding for the public side of the current health care system though many worry that private insurers will end up absorbing increased health care costs. Oklahoma Medicaid Program Medicaid provides acute health care and long term care services to over 600,000 low-income families and elderly individuals. The Oklahoma health care vision is ‘for Oklahoman’s to enjoy optimal health status through access to quality health care regardless of their ability to pay,’ (Connell, 2012). The Oklahoma Health Care Authority has administered and overseen the Oklahoma Medicaid program since 1995 and is responsible for rule making and policy development. The Oklahoma Medicaid State Plan includes coverage for the following services: Ambulance and ambulatory surgery center services Substance abuse and behavioral health services Case management services Radiation and chemotherapy services Renal dialysis services Certain dental services Durable

Understand Group Dynamics Essay Example for Free

Understand Group Dynamics Essay I.Introduction To understand Organizational Behavior and Management, we must study three different levels. The first is the individual level, because every individual has its own unique perception of the world and what surrounds him. Individuals behave following how they interpret this and their environment. Each individual is different from the next one, because of its personality and characteristics. However, it’s possible to organize them by categorizing their perceptions. Categories such as Appearance, Social behavior and Status are often considered. Individual’s motivations must be analyzed to understand the next level : the Group. A Group is composed by 2 or more individuals, who come together to accomplish a particular task or goal, which is why their behavior is very important and has to be studied first. A manager leading a group will have to take into account each of the individual characteristics in order for it to work. As individuals join and create a group, shall it be a formal or informal one, we slowly change focus. The individual needs, perceptions and motivations get absorbed and the Group creates its own norms of acceptable behavior for all the individuals to follow for as long as they are part of the Group. They don’t, however, chance the individual itself when he is by himself. As Groups develop its own norms and statuses, its behavior evolves. The third level, is Organizations. That level is different from the Group one because it involves systematic efforts and organizations are engaged in the production of goods and services. It’s also different from the sum of the individuals perceptions because it can impact how individuals behave with each other, thus influencing their perception. An organization though, is comparable to an individual because each is unique and has its own culture. Moreover, if the values of the organization match the values of the individuals, they will enjoy being part of it more than if it’s not the case. The second level, Group Dynamics, is the one that will be focused on in this report. II.Group Characteristics. a)Formal and informal groups. There are different kind of groups, but they can mostly be split into two categories : Formal and Informal. Formal groups are groups officially planned and created by the organization to do a specific task. At ESSEC, we could compare them to the individuals who, in groups, did the OB presentations. They were officially planned in the course to do a presentation. In an organization, a formal group could be the Marketing (or any other) Department. In a formal group, there is a structure. Often, individuals are given specific tasks to complete within the main final task. Sometimes, there is a hierarchy and written rules. Informal groups are not official per say. They are natural social formations established by individuals rather than organizations, and unplanned. In a workplace, it could be a group of employees meeting once a month for dinner to discuss their Fishing hobby. At ESSEC, it could be an unofficial football team made especially for a tournament within the school. The purpose of an informal group can be pursuing a special interest, be social, or even just have fun. b)Group effectiveness Group dynamics concern how groups form, their structure and process, and how they function. Some groups are more successful than others. Why ? A common mistake would be to say that if your group members or employees are hard working, happy, competitive or smart, the group only can function well. But as a matter of fact, that doesn’t mean they are honest, productive, loyal or creative. However, teamwork and communication between members is capital. Managers can help increasing a work group’s performance when they create it by taking into consideration the characteristics of members they assign to particular groups. The members should have tasks assigned to them according to their domain of expertise and appropriate interpersonal skills to facilitate interaction and communication with others. Moreover, a degree of diversity among group members has shown to usually add to performance. If members are attracted to the group because they like members of the group, or the group activities/goals or just because it fills a need for affiliation, they are more likely to be productive. The size of the group also has an influence on the group’s performance. According to recent research, medium sized groups of 5 to 7 people seem to have the higher performance in organizations. If the group is smaller, there’s a chance it can highlight the individual differences and harm the group cohesiveness. If group are too large, people tend to work more by themselves (â€Å"Free riding†) rather than with the whole group, or create smaller teams within the group. c)Group norms. Norms are acceptable standards of behavior within a group that are shared by the members of the group. Norms define the limits of what is acceptable and what is not in terms of behavior. They are typically imagined in order to facilitate group survival, make behavior more predictable, avoid embarrassing situations, and express the values of the group. Each group will establish its own set of norms that may determine anything from the appropriate clothes to wear at a dinner to how many comments to make in a meeting. Groups pressure members to force them to conform to the groups standards. The norms often reflect the level of commitment, motivation, and performance of the group. The majority of the members of the group must agree that the norms are appropriate in order for the behavior to be accepted. There must also be a shared understanding that the group supports the norms. However it may happen that the norms are broken from time to time by some members. If the majority of members do not adhere to the norms anymore, then there is a chance they will eventually change and will no longer serve as a standard to study the group’s behavior. From there, group members who do not conform to the norms risk being excluded, ignored, or asked to leave the group. d)Group Roles Having a diversity of skills and ideas within a group often enriches the group process and can improve the final product. It can, however, also be seen as a challenge to work with people different from ourselves and avoid exacerbating individual characteristics. One way to structure group functioning and benefit from each other’s expertise is to assign roles to each member of the group based on individual’s strengths. It can also be a good idea to switch roles between members periodically so every member understands why those roles are important. I have found that four roles that have the potential to maximize group performance and help understanding group’s dynamics and behavior in the workplace. A group should not be composed of just those 4 people, but the others would only have tasks assigned to them. They are as follow : The first is the Leader, also called Facilitator. He’s the one who clarifies the aims of the group and helps the members set smaller tasks for themselves to work on. Leaders also make sure that all group members understand the concepts of the project and that the group’s conclusions make sense. If the group has meetings, he is the one who introduces the agenda of tasks to complete until the next meeting, mind oriented towards the final goals. Then, the Monitor, also called Arbitrator. Its key role would be to monitor carefully if the group is functioning well. Regularly, he will initiate discussions on group climate and process, especially if he senses tension or sees there could be a conflict between two or more members. During disagreements or conflicts, he will explain each sides arguments and suggests solutions to resolve the conflict. He makes sure that all group members have a chance to participate and learn from the process. There’s also the Note/Time Keeper. Note and Time Keeping are two different things, but the role could be taken by just one person. He keeps a record of what has been decided, shall it be tasks that are assigned to who or other any other information by taking notes when the group meets or when talking to group members. He makes a summary of previous discussions/decisions and makes it available for all the members to see. He also presents the group progress to the supervisor regularly to make sure the group is headed in the right direction. The Time Keeper keeps track of time during meetings to avoid spending excessive time on one topic. This is best handled by deciding how much time will be allocated to each issue in the agenda, and letting everyone know when this time is up. It is also useful to point out when time is almost up so that issues can be wrapped up appropriately. Finally, there’s the Devil’s Advocate. It’s someone who takes a position he does not necessarily agree with, for the sake of argument. In taking such position, the individual taking on the devils advocate role seeks to engage others in an argumentative discussion process. The purpose of such process is typically to test the quality of the original argument and identify weaknesses in its structure, and to use such information to either improve or abandon the original, opposing position. He must keep his or her mind open to problems, possibilities, and opposing ideas at all times. e)Group or Team ? We could say a group is just a collection of people whereas a team is that same collection of people who are working together on a common goal. Example: A group of people get in an elevator. They all have different goals and agendas for being on the elevator, they don’t even know each other, or maybe they do, it’s irrelevant. The group becomes a team when the elevator breaks down. Now they all have the same goal : figure out how to get out of the elevator. The difference between Group work and Team work can be resumed as follow. A group will focus on individual goals. Each member will produce individual work products. Individual tasks, roles and responsibilities will be assigned. Also, in a group, the manager is the one who sets up the purpose, goals, approach to work. A team is slightly different. The focus is on team goals. It also defines roles, responsibilities, and tasks but will often share and rotate them to help team do its work. The goals and approach to work w ill be shaped by the team members together.

Approaches to Financial Crisis Management

Approaches to Financial Crisis Management LITERATURE REVIEW The following Literature review starts with past studies and researches based on the crisis in general. Different types of crisis are referred and what kind of effects do they cause to businesses and people. Additionally are past studies on management strategies in period of recession and what does a business has to follow, not only old businesses but also new. Furthermore we focus on the new start up businesses that decide to grow in period of crisis. What Past studies and researches found and proved through history, when again in the past there was a recession. Crisis A crisis is an adverse incident with an unpredictable outcome (Campbell, 1999; Coombs, 1999; Coombs Holladay, 2002; Ruff Aziz, 2003). Interestingly, it should be pointed out that there is a wide range of crisis categories, from a basic ‘internal versus external’ introduced by Evans and Elphick (2005, p. 135), to a more complex system proposed by Henderson (2007) who categorized crises into economic crisis; political crisis; socio-cultural crisis; environmental crisis; technological crisis; and commercial crisis. Although there are numerous approaches to crisis categorization, The Pacific Asia Travel  Association (2003) has suggested that crises can be largely categorized into two major types, which are human-made and natural-made crises. It is crucial for one to understand that not all types of crisis lead to the same consequences, differing from one another in terms of the scope and extent of damage caused (Aktas Gunlu, 2005). Different public reactions to both human-made and natural crises provide a clear example of the critical differences in the public’s reaction to different types of crisis. The public normally reacts more negatively to the effects of human-made crises than to those of a natural crisis. While it is generally conceded that organizations have little control over natural crises, human-made crises can devastate the established reputation of an organization. As human-made crises are usually preventable, this type of crisis therefore often receives severe public condemnation (Pearson Mitroff, 1993). Furthermore, different crisis types, particularly both natural and human induced crises, are neither absolutely predictable nor avoidable. This means while crises occur rarely and randomly, it is also true that no industries are unaffected by those crises. In  response to the near certainty of experiencing crises, it is suggested that organizations come up with a plan for minimizing the damage of, and accelerating the recovering from, such crises through the development of crisis management strategies (Faulkner, 2001). Therefore the concept of crisis management is discussed below. Crisis Management Being able to effectively respond to a crisis is critical for the survival of an organization. Whether an organization is prepared or not for a possible crisis usually depends on senior officials and other private operating within organizations. More importantly, studies have shown that organizations with an established crisis management approach are able to effectively communicate and respond in the event of a crisis (King III, 2002). Clearly, it is crucial for an organization to have a crisis management approach in place. In general, a crisis management approach can be viewed simply as involving the  Ã¢â‚¬Ëœ4 Rs’ of a four-stage process, which are reduction, readiness, response and recovery (Evans   Elphick, 2005). The Pacific Asia Travel Association (2003) has summarized and described each stage as follows: Reduction. In this phase, an organization’s analysis of strengths, weakness, opportunities, and threats (a SWOT analysis) will help the managers to assess a potential crisis and to prepare a contingency plan. After identifying potential crises, organizations need to be prepared by developing strategic, tactical and communication plans. Readiness, the second phase, crisis response and crisis simulation exercises are very important in order to acquire and maintain crisis management skills as managers and staff need to be ready for the impact and stress from crises. Response, the third phase, a contingency plan is implemented immediately after a crisis occurs, as organizations that have a well-established crisis management plan tend to be more successful in handling crises. A crisis communication strategy should be utilized to communicate with not only the customer, but also the stakeholders and the public. Recovery. In the last phase, the crisis recovery could be measured by the speed with which an organization resumes full business operations; the degree to which a business recovers to pre-crisis levels, or the amount of crisis-resistance added since the crisis occurred. Whilst corporate managers are faced with the reality of trying to implement this process (Evans Elphick, 2005), it should be noted that all stages of the crisis management process need to be flexible, which allows for potential evaluation and modification, depending on the nature of the crisis/disaster (its magnitude, scale and time pressure) and stakeholder response to strategies. Although crisis management is a requirement for organizations, and although business leaders recognize this, many do not undertake productive steps to address crisis situations. Managers who do take productive steps however will be in a much better position to respond when a crisis or disaster affects an organization or destination (Ritchie, 2004). So, because a start up business in time of a recession has knowledge of all the stages, it is easier to handle the crisis as they are aware of the consequences a bad economy has on a business. Measurement are been taken before they have any bad influence on the ir business from the recession. Start-ups business and existing business in time of recession First of all, we are going to study past studies that were done during a period of recession and see how they coped during the period. Small businesses in their starting period are responsible for the New England turnaround and the Massachusetts miracle in the early 1980s. Small businesses had the willingness to expand and form and were the reason the economy became so strong (Lamp, 1988). It was found by Birch (1987) that the keys to new job creation are pioneering firms. Stable economies that can offer a proper environment for start-ups and existing firms to expand and grow but on the other hand those that cannnot offer such an environment usually suffer. With the reason that large businesses are reengineering, resizing and most importantly, downsizing, many people are leaning towards small business as a reason of economic expansion. In 1994 Dun Bradstreet anticipated that 3.1 million new jobs would be created with 72.4 percent following up from new firms with less than 100 employ ees. New small firms with less than 20 employees have also been seen as the creators of new markets for large firms and as the nations job creators (Phillips, 1993). As from this example, it is clear that new businesses and especially a small one can survive and also take advantage of the recession, if handled in the right way. Small businesses are considered to add to the local economy and therefore invigorate the economy (Violaris, Harmandas and Loizidis, 2012). When there is an economic recession, it is a period where all firms are struggling for their survival, especially for new firms and start-ups the failing rate proved to be higher compare to larger companies (Latham, 2009 p180-201, Lawless and warren,2005). However, some scholars have argued that smaller firms (start-ups) can have their own unique competitive advantage since they are closer to the market and realize the customers’ needs more easily (Young and Shepherd, 2005, Tavakoli and McKierman, 2009) There are several success factors that new companies can adopt in order to survive the crisis or event to expand in this recessionary environment. According to professor, John Quelch (2012), a success factor during a recession is that the firms should continue spending on marketing and in order to survive a firm should be able to realize how the needs and preferences of customers change in order to adopt their strategies. They should keep 8 factors in mind when making the marketing plans: research the customer, focus on family values, maintain marketing spending, adjust product portfolios, support distributors, adjust pricing tactics, stress market share and emphasize core values. A research of (Srinivasam, 2009) on six recessions that took place in US, from 1969 to 2007, showed that increases in RD (research and development) decreases profits for B2B and B2C, while there is no change for service firms. However, more expenditure in advertising increases the profits to B2B and B2C but not for firms that are in service. Also another research agreed that increases in advertising spending increases returns during recession but disagrees that increases on RD decreases returns (Graham and Frankenberger, 2008). Another strategy for start ups to follow during recessionary environment is a â€Å"Lean start-up† strategy. Many start-ups do not manage to survive because they spend a lot of money and time trying to produce products to customers that they might don’t like and therefore will mathematically drive the company out of business ( Eisenman, 2011). The methodology on start-up businesses is all about avoiding waste in terms of money and time. A good example is through the Toyota Production System (Dennis 2002). Important factors, for the success of small firms, especially in recessionary environment are the role of education, training and prior knowledge and experience. There are evidences that prove entrepreneurs having previous experience in the industry and knowledge of the market will have positive impact on the firms (Harada, 2002). A research that took place by Simpson, Tuck and Belammy, 2008, shows that only one group out of the four( â€Å"the empire builder†, â€Å"the happiness seeker†, â€Å"the vision developer† and â€Å"the challenge achiever†) showed clear evidence that education and training had a positive impact on the success of the business. He found out that motivation and teamwork is a key factor for success. According to Fiol (2001) employees are recognised as one of the most valuable resources to the business in order to achieve their objectives. For some small firms the key point for success is happiness. Entrepreneurs must be happy at wor k as well the employees and the customers must enjoy the experience at the place of work (Simpson, Tuck and Belammy, 2008). Analysts have researched on firms choosing to start during recession by following investment strategies. In antithesis with downsizing, firms like to take recessions as opportunities to innovate, expand and invest into new markets in order to extend or expand in a competitive advantage during the recession. Most of today’s household names had successfully launched businesses during recessions in the past. In the oil and steel industries that were emerging during the 1870s recession Rockefeller and Carnegie took advantage of steel production and technologies and of the weakness of various competitors from the same industry (Bryan and Farrell, 2008), and Edison also established General Electric which is until today a big and successful business (Lynn, 2009). Hershey started up their brand and distribution during the 1893-97 depression. Everybody also know until today Kellogg’s which grew out of another period of depression in the 1920s (Rumelt , 2008). The electrical, che mical and motor industries that were very important to post-war British industry expanded during the 1930s. Also two massive companies today, Microsoft and Apple corporations were also both founded in the 1970s, following from the oil-crisis. A lot of different studies disagree that firms adapt to recession conditions by applying business strategies based on new investment, market diversification and innovation, and a a strategy such as that usually leads to higher levels of business performance. Such examples are :targeting new market niches ,increased marketing spending and new product development (Roberts, 2003; Srinivasan, 2005; Pearce II and Michael, 2006); pricing strategies that centre the value, whereby rich resource firms highlight brand and quality instead of low prices to attract customers, or even, adopting ‘acquisitive pricing’ policies, to control low prices in sensitive markets that are influenced by prices (Chou and Chen, 2004). On a macro-level, quantitative studies of quantities and asset prices show that quantities differ more than prices do over the business’s cycle, including time between the periods of recession (e.g. Bhaskar, 1993; Geroski and Hall, 1995). From the above it is referred that most firms respond to macroeconomic shocks from a recession by prices maintenance, leading to quantities sold eventually to decrease. For a lot of firms, this is more likely to consequent into lower sales and, to extreme cases, exit. Studies like this show important data on the response of firm under financial crisis conditions but offer a small insight on why firms pick to respond in this way or if the price maintenance is advised by efficient measures. For the new business, more recent studies claim that a recession is normally an opportunity, not a threat for them, if handled correctly (Rumelt, 2008; Williamson and Zeng, 2009). The recent recession the whole world is facing is characterised by its nature globally and the risk that companies in rising markets take are becoming more active than expected. But research also show businesses not doing very well. Williamson and Zeng (2009) said that a key strategy business might be adopted to avoid this by focusing on developing what rising markets know to do well by offering value for money. They also suggest that companies should invest in research that is aimed at service and product innovation offers similar purposes but at lower expenses and costs. To sum up, a new business has to have a strategy to begin with. The proof on start up businesses adopting investment strategies to grow through recession is not so clear. Taking on strategies in the beginning and especially in a recession is under risk and most businesses are more likely to be very busy with short-term survival to think correctly about way to innovate and grow. Investments need resources –managerial skills, technical expertise and especially finance –and businesses with no or fewer resources are more likely not to be able to implement them. On the other side, history has proved that companies can adapt competitive advantage though a recession period from innovating into services, business models, products and also by getting into new and growing markets. As seen from previous studies they make very little efforts in explaining the reasons why particular firms do so very well when starting up their business in time of recession. No explanation is clearly given why they take the risk in the first place and avoid the potential risks of attempting such investment. It is consequential from the various researches that when a business adopts investment strategies from the beginning, success without any doubt follows. But the procedures a business has to take to imply these investment strategies and also having profitable outcomes is more likely to be more complicated than just said. However, such suggestions ignore the external issues: if all new firms start up by adopting investment strategies, would all succeed? In such crucial times of a recession, when nearly all customers turn to cheaper products, market conditions may not be able to support a wide range of unique and new innovations or a large number of firms looking for diversity, or new business wanting to grow and succeed. It is known that new business cannot lower their costs as they have more expenses than a mature business. REFERENCES Aktas, G. Gunlu, E. 2005, Crisis Management in Tourist Destinations, in Global Tourism,  3rd edn, ed. W. Theobald, Elsevier Inc., New York, pp. 440-55. Bhaskar, V., Machin, S. and Reid, G. (1993) ‘Price and Quantity Adjustment over the  Business Cycle: Evidence from Survey Data’, Oxford Economic Papers, vol. 45, no 2, pp. 257-268. Bryan, L. and Farrell, D. (2008) Leading through uncertainty, McKinsey Quarterly, online  at: http://www.mckinseyquarterly.com/Leading_through_uncertainty_2263 Campbell, R. 1999, Crisis Control: Preventing Managing Corporate Crises, Prentice Hall,  Australia. Chou, T-J. and Chen, F-T. (2004) ‘Retail Pricing Strategies in Recession Economies: The  Case of Taiwan’, Journal of International Marketing, vol. 12, no. 1, pp. 82-102. Coombs, T. 1999, Ongoing Crisis Communication: Managing, Responding and Planning,  Sage Publications, London. Coombs, T. Holladay, S. 2002, Helping Crisis Managers Protect Reputational Assets:  Initial Tests of the Situational Crisis Communication Theory, Management  Communication Quarterly : McQ, vol. 16, no. 2, pp. 165-87. Evans, N. Elphick, S. 2005, Crisis Management: Evaluation of their Value  for Strategic Planning in the International Travel Industry, The International Journal  of Tourism Research, vol. 7, no. 3, pp. 135-51. Faulkner, B. 2001, Towards a Framework for Disaster Management,  Management, vol. 22, no. 2, pp. 135-47. Geroski, P. and Hall, S. (1995b) ‘Price and Quantity Adjustments to Cost and Demand  Shocks’, Oxford Bulletin of Economics and Statistics, vol. 57, no. 2, pp. 185-204. Henderson, J. 2007, Crises: Causes, Consequences, and Management, Butterworth-  Heinemann, Oxford. King III, G. 2002, Crisis Management Team Effectiveness: A Closer Examination,  Journal of Business Ethics, vol. 41, no. 3, pp. 235-50. Lynn, M. (2009) The new capitalism, Sunday Times, 17 May, p.4.  Pacific Asia Travel Association 2003, Crisis: It Wont Happen to Us, Pacific Asia Travel  Association, Bangkok. Pearce, J. II and Michael, S. (2006) ‘Strategies to Prevent Economic Recessions From  Causing Business Failure’, Business Horizons, vol. 49, no. 3, pp. 201-209. Pearson, C. Mitroff, I. 1993, From Crisis Prone to Crisis Prepared: A Framework for  Crisis Management, The Executive, vol. 7, no. 1, pp. 48-59. Ritchie, B. 2004, Chaos, Crises and Disasters: A Strategic Approach to Crisis Management  in the Retail Industry, Retail Management, vol. 25, no. 6, pp. 669-83. Roberts, K. (2003) What Strategic Investments Should you make During a Recession to  Gain Competitive Advantage in the recovery?’ Strategy Leadership, vol. 31, no. 4, pp. 31-39. Ruff, P. Aziz, K. 2003, Managing Communications in a Crisis, Gower Publishing Limited,  England. Rumelt, R. (2009) Strategy in a Structural Break’, McKinsey Quarterly, no. 1, pp. 35-42. Simpson M., Tuck N., Bellamy S. 2004. Success factors of small businesses: the role of education and training Srinivasan, R., Lilien, G and Rangaswamy, A. 2005, ‘Turning Disaster into Advantage:  Does Proactive Marketing During a Recession Pay Off?’ Journal of Research in Marketing, vol. 22, no. 2, pp.109-125 Williamson, P.J. and Zeng, M. (2009) Value-for-money Strategies for Recessionary  Times, Harvard Business Review, vol.87, no.3, pp: 66-74.

The Cultural Invasion of Kenya Essay -- American Culture Traditions Es

The Cultural Invasion of Kenya A screeching yell ripped through the house that Wednesday evening, "Ahhhhh, we're being invaded!". My mother rushed into the living room. I pointed to the flickering television screen. "Look," I whispered in disbelief. A few seconds of silence followed. There they were, the words I never thought would appear on our 29 inch Sony screen: "Sizzlin' Hot Country". The appearance of American country music on the Kenyan airwaves was the latest sign that American culture had penetrated the borders of my country. The airing of Garth Brooks and Dolly Parton on the local television station is not the only evidence of the rapid spread of American culture in Kenya. One look at a large portion of its youth and this cultural invasion will become apparent. Baggy pants, Nike, pop music and malls, symbols of American youth culture can now be associated with the Kenyan teenagers. The Nike phenomenon hit Kenya several years ago. My classmates in primary school were obsessed with the American brand name that had rocked the global shoe industry. Their school desks had the Nike name and logo painted on in every color imaginable. Not being able to afford some of the merchandise, many resorted to drawing the logo on bags, clothes, shoes and other visible possessions. Turning up to a class party with the trademark tick appearing on one's footwear simply made one the center of attention. My favorite pair of shoes, I have to admit, were a pair of black Nikes which raised many brows and turned just as many heads. Secondary school had its fair share of examples of the cultural invasion. In most schools in Kenya, students dress in uniforms. For example, in my school it was compulsory to wear a white shirt, gra... ...ols of success. While hip hop and baggy pants may not epitomize American success, Kenyan youth adopt this aspect of American culture perhaps because of the common roots and racial background the majority share with African Americans. Wearing Nike shoes or sagging one's pants may seem to be meaningless gestures. However, wearing shoes that many popular, rich American sporting icons don or sagging pants like the famous hip hop artists makes one different from the rest. It allows one to adopt an American identity, one defined by success and importance. While some would argue that such a spread of American culture would be beneficial because it would, in a sense, create a global village, I think this cultural invasion creates more harm than good. It would result in the demise of local cultures and languages. And this is certainly not a good thing.

Home Depot Analysis

Home Depot – 2010 Financial Report For fiscal year ended January  30, 2011 (â€Å"fiscal 2010†), Home Depot reported Net Earnings of $3. 3  billion and Diluted Earnings per Share of $2. 01 compared to Net Earnings of $2. 7  billion and Diluted Earnings per Share of $1. 57 for fiscal year ended January  31, 2010 (â€Å"fiscal 2009†). The results for fiscal 2010 included a $51 million pretax charge related to the extension of our guarantee of a senior secured loan of HD Supply, Inc. (the â€Å"HD Supply Guarantee Extension†). The results for fiscal 2009 reflected the impact of several strategic actions initiated in fiscal 2008. These strategic actions resulted in store rationalization charges related to the closing of 15 underperforming U. S. stores and the removal of approximately 50 stores from their new store pipeline, business rationalization charges related to the exit of our EXPO, THD Design Center, Yard birds and HD Bath businesses (the â€Å"Exited Businesses†) and charges related to the restructuring of support functions (collectively, the â€Å"Rationalization Charges†). These actions resulted in pretax Rationalization Charges of $146 million for fiscal 2009. The results for fiscal 2009 also included a pretax charge of $163 million to write-down our investment in HD Supply, Inc. Additionally, fiscal 2009 included earnings of $41 million from discontinued operations, net of tax, for the settlement of working capital matters arising from the sale of HD Supply. Home Depot reported Earnings from Continuing Operations of $3. 3  billion and Diluted Earnings per Share from Continuing Operations of $2. 01 for fiscal 2010 compared to Earnings from Continuing Operations of $2. 6  billion and Diluted Earnings per Share from Continuing Operations of $1. 5 for fiscal 2009. Excluding the HD Supply Guarantee Extension charge from their fiscal 2010 results, and the Rationalization Charges and the write-down of their investment in HD Supply from their fiscal 2009 results, Earnings from Continuing Operations were $3. 4 billion and Diluted Earnings per Share from Continuing Operations were $2. 03 for fiscal 2010 compared to Earnings from Continuing Oper ations of $2. 8 billion and Diluted Earnings per Share from Continuing Operations of $1. 66 for fiscal 2009. Net Sales increased 2. 8% to $68. 0  billion for fiscal 2010 from $66.   billion for fiscal 2009. Home Depot’s comparable store sales increased 2. 9% in fiscal 2010, driven by a 2. 4% increase in their comparable store customer transactions and a 0. 5% increase in their comparable store average ticket to $51. 93. Comparable store sales for their U. S. stores increased 2. 5% in fiscal 2010. In fiscal 2010, Home Depot focused on the following four key initiatives: Customer Service: Home Depot’s focus on customer service is anchored on the principles of taking care of their associates, putting customers first and simplifying the business. The roll out of their Customers FIRST training to all store associates and support staff in fiscal 2009 has brought simplification and focus across the business, and they repeated and refreshed the Customers FIRST training during fiscal 2010. The Customers FIRST program is part of their ongoing commitment to improve customer service levels in their stores, and they continued to see the benefit of this training in improved customer service ratings for fiscal 2010 compared to fiscal 2009. Also in fiscal 2010, Home Depot completed the deployment of their FIRST Phone, a new hand held device that provides multiple functions such as inventory management, product location and mobile checkout. The core purpose of this new device is to reduce tasking time for their store associates to allow them more time to focus on customer service. Home Depot ended fiscal 2010 with more than half of their store payroll allocated to customer facing activities rather than tasking activities. They have a customer facing store payroll target of 60%, and they believe they will achieve that by 2013. Product Authority: Our focus on product authority is facilitated by our merchandising transformation and portfolio strategy, including innovation, assortment and value. In fiscal 2010, we made significant progress on our merchandising tools in the U. S. that helped us manage markdown and clearance activity and better control inventory. Our inventory turnover ratio was 4. 13 times at the end of fiscal 2010 compared to 4. 06 times at the end of fiscal 2009. Additionally, we continued to form strategic alliances and relationships with selected suppliers to bring a number of proprietary and xclusive brands across a wide range of departments. Productivity and Efficiency: Home Depot’s approach to driving productivity and efficiency starts with disciplined capital allocation focused on building best-in-class competitive advantages in information technology and supply chain, as well as building shareholder value through higher returns on invested capital and total value returned to sh areholders in the form of dividends and share repurchases. At the end of fiscal 2010, they completed the roll out of their Rapid Deployment Centers (â€Å"RDCs†) and now have 19 RDCs that serve 100% of their U. S. stores. Also during fiscal 2010, they repurchased 80. 9  million shares for $2. 6 billion, and on February  22, 2011 Home depot announced a six percent increase in their quarterly cash dividend to 25 cents per share. Interconnected Retail: Home Depot’s focus on interconnected retail is based on the view that providing a seamless shopping experience across multiple channels will be a critical enabler for future success. Their multiple channel focus is allowing them to greatly expand their assortment of merchandise, and they are making the investment to build these capabilities, including the roll out of â€Å"buy on-line, pick-up in store† next year. Home depot is committed to having a best-in-class website, and during fiscal 2010 their site was named as a Most Improved Website for customer satisfaction by Foresee, a leading customer satisfaction analytics firm. Home Depot opened eight new stores in fiscal 2010, including one relocation, and closed three stores, bringing our total store count at the end of fiscal 2010 to 2,248. As of the end of fiscal 2010, a total of 272 of these stores, or 12. 1%, were located in Canada, Mexico and China compared to 268 stores, or 11. 9%, at the end of fiscal 2009. Home Depot generated approximately $4.   billion of cash flow from operations in fiscal 2010. They used this cash flow along with cash on hand to fund $2. 6 billion of share repurchases, pay $1. 6  billion of dividends and fund $1. 1 billion in capital expenditures. At the end of fiscal 2010, Home Depot’s long-term debt-to-equity ratio was 46. 1% compared to 44. 7% at the end of fiscal 2009. Their return on invested capita l for continuing operations (computed on net operating profit after tax for the trailing twelve months and the average of beginning and ending long-term debt and equity) was 12. 8% for fiscal 2010 compared to 10. % for fiscal 2009. This increase reflects the impact of the Rationalization Charges which they included in their operating profit for fiscal 2009. Excluding the Rationalization Charges, their return on invested capital for continuing operations was 12. 7% for fiscal 2010 compared to 11. 1% for fiscal 2009. Week 2 Activity Ratios of Home Depot vs. Lowe’s One key to profitability is how well a company manages and utilizes its assets. Some ratios are design to evaluate a company’s effectectiveness in managing assets. Of particular interest is the activity, or turnover ratios, of certain assets. The greater the number of times an asset turns over, the higher the ratio the fewer assets are required to maintain a given level of activity (revenue). Given that a company incurs costs to finance its assets with debt (paying interest) or equity (paying dividends), high turnovers are usually attractive. |Receivable Turnover | |Year |2009 |2010 |2011 | |Home Depot |68. |63. 9 |53. 9 | |Lowe’s |0. 0 |0. 0 |0. 0 | Receivable Turnover ratio is calculated by dividing a period’s net credit sales by the average net accounts receivables. The receivables turnover ratio provides an indication of a company’s efficiency in collecting receivables. The ratio shows the number of times during a period that the averages accounts receivable balance is collected. The higher the ratio, the shorter the average time between credit sales and cash collection. As we can see above, Lowe’s has zero receivables, which can be translated to no credit sales. |Inventory Turnover | |Year |2009 |2010 |2011 | |Home Depot |4. 21 |4.. 19 |4. 34 | |Lowe’s |4. 0 |3. 72 |3. 63 | Inventory Turnover is an important measure for a merchandising company. The ratio shows the number of times the average inventory balance is sold during reporting period. It indicates how quickly inventory is sold. The more frequently a business is able to sell, or turn over, its inventory, the lower its investment in inventory must be for a given level of sales. The ratio is computed by dividing the period’s costs of goods sold by the average inventory balance. The denominator, average inventory, is determined by adding beginning and ending inventory and dividing by two. A relatively high ratio, as in the case of Home Depot compare to Lowe’s, usually is desirable. A high ratio indicates comparative strength, perhaps caused by a company’s superior sales force or maybe a successful advertising campaign. However, it might also be caused by a relatively low inventory level, which could mean either very efficient inventory measurement or stock outs or lost sales in the future. Comparing the two industries, we can conclude than Home Depot turns over their inventory a bit faster than Lowe’s. Asset Turnover | |Year |2009 |2010 |2011 | |Home Depot |1. 73 |1. 62 |1. 73 | |Lowe’s |1. 48 |1. 43 |1. 41 | Asset Turnover is a broad measure of asset efficiency. The ratio is computed by dividing a company’s net sales or revenue by the average total assets available for use during a period. The denominator, average assets, is determined by adding beginning and ending total assets and dividing by two. The asset turnover ratio provides an indication of how efficiency a company utilizes all of its assets to generate revenue. Also, it shows how many sales dollars are generated for every dollar invested in the company’s assets. Lowe’s had relatively lower asset turnover than Home Depot because their recent investment in PP&E has not yet reached their potentials. Home Depot is a financially sound company and performs well when compared to its competitors. Based on current business conditions and the potential growth opportunity facing Home Depot, we feel that the bottom line will continue to grow at a healthy rate above the competition in the near future. We believe that the relatively low levels of debt, slightly wider margins, and lower costs make Home Depot an attractive investment for the long run. Shares of Home Depot are currently trading at $33. 92 to what we believe is gaining momentum in the market. This increase is possibly derived from the market’s belief that better than predicted growth will be seen from expansion into foreign markets, specifically China. Week 4 Home Depot – Accounting Policies The retail industry, in general, presents a very competitive market with high price competition and low product differentiation. Although almost any retailer, from supermarkets to superstores, can offer home improvement items at a competitive price, the home improvement industry currently provides a great opportunity for differentiation in regards to the types of services home improvement retailers offer. To successfully maximize sales and increase revenues in the home improvement industry, retailers such as Home Depot must successfully combine product variety, quality and price and specialized services. As discussed earlier, Home Depot has adopted a business strategy based on these key factors. Consequently, as we look at Home Depot’s overall financial results, it is necessary to focus on key accounting policies adopted by the company to measure critical factors and risks. In the â€Å"Management’s Discussion and Analysis of Results of Operations and Financial Condition† of The Home Depot, Inc 2011 Annual Report (www. omedepot. com), management identified three major areas as areas of critical accounting policy and discussed the adoption of four different accounting pronouncements. In addition to the four recently adopted accounting pronouncements identified in the management’s discussion, The Home Depot identified four other major accounting policy change s in it’s â€Å"Notes to Consolidated Financial Statements†. Specifically, The Home Depot adopted four different accounting pronouncements in regards to service revenue recognition, vendor allowances, goodwill amortization and stock based compensation. The three critical accounting policies, as identified by The Home Depot management refer to the treatment of merchandise inventories, self insurance and revenue recognition. Merchandise Inventory policy is specifically addressed by The Home Depot management in â€Å"Management’s Discussion and Analysis of Results of Operations and Financial Condition† and is assessed in two different ways. Approximately 93% of total inventory is valued at the lower of cost or market utilizing FIFO under the retail inventory method with the other 7% valued under the cost method. The Notes section of the Financial Statements accounts for the two different methods. According to the Notes, the 7% of inventory valued under the cost method was due to inventory policy of certain subsidiaries and distribution centers. In addition, The Home Depot, Inc. takes a physical inventory count on a regular basis at each store to verify that inventory amounts in the merchandise inventory section of the Consolidated Financial Statements are accurate. Lastly, in regards to merchandise inventory, the company does account for possible inventory shrinkage or swell based on historical results and industry trends. Self Insurance accounting policy for Home Depot addresses it’s treatment of â€Å"losses related to general liability, product liability, workers’ compensation and medical claims†. The total liability is estimated on the total cost incurred as of the specific balance sheet date and is not discounted. The estimate is based on â€Å"historical data and actuarial estimates†. The company also explains in it’s Management Discussion that they ensure estimates of liability are as accurate as possible by having both management and third-party actuaries review the estimates on a quarterly basis. Revenue Recognition is the third critical accounting policy identified by The Home Depot management. Revenue recognition at the Home Depot follows the industry norm of recognizing revenue when the customer takes possession of the merchandise or, if a customer makes payment prior to take ownership of the merchandise, Home Depot records the sale as Deferred Revenue on the balance sheet until the sale is finalized when the customer takes possession of the paid merchandise. Additionally, because The Home Depot also provides a variety of services through their installation and home maintenance programs, they also recognize service revenue at the time when the service is completed and also record any customer pre-paid service revenue as Deferred Revenue on the balance sheet. Week 5 Internet The internet has completely changed the way companies communicate and market to their prospects. Home improvement businesses in the U. S report that the ways they have traditionally generated leads (i. . yellows pages, direct mail, print media, tv and radio) aren’t working like they use to. In fact, 85% of all products and service inquiries now start online and 97% of U. S internet users gather shopping information online and of those more than half characterize their behavior as ‘Shop Online, Purchase Offline. ’ The convenience of online shopping and the ability to make price comparisons on the internet has completely changed retail trends in the p ast decades. Even though most people tend to shop for building materials by visiting physical locations, still Home Depot cannot ignore e-commerce because people increasing buy items of nearly any kind online. Home depot being the largest home improvement retailer is expanding in the online channel aggressively and targeting it as a major growth opportunity. Home depot made it’s biggest e-commerce investment over the last two years since it started internet sales in 2001. According to research, 45% 0f the 9. million consumers who visited Home Depot’s website on average in any given week said their next step was a trip to a Home Depot store, which translates to about 225 customers a day per location. However, e-commerce for the home improvement industry is an underleveraged opportunity. A lot of people think of home Depot as a place you go on a Saturday, or when you do window treatment or carpeting. As such, they can do a better job online for things like branded power tools and repl enishable items and also offer delivering services for those items. Home Depot’s operating cost will decrease if customers interacted through the use of the internet due to the folllowing: †¢ Online customers are used to doing their own shopping without any salesperson assistance; therefore the cost of the salesperson would be eliminated as such. †¢ The range of products that can be offered through the website can be far greater than what one could find at Home Depot’s location, thereby giving customers a clear reason to prefer the internet. These are all advantages that Home Depot can benefit from as a result of the internet. As with the advantages, there are also disadvantages (issues) that Home Depot needs to put into consideration and work diligently to address them. The foremost of these issues are lack of site maintenance and lack of integration between the e-commerce site and the corporate back-office systems. As such, Home Depot must work through these issues in detail in order to arrive at the true cost-benefit for an e-commerce.