Effectiveness of Executive Compensation Scheme Assignment

Effectiveness of Executive Compensation Scheme - Assignment Example The Tournament theory suggested that a small and a minute difference in ability basically leads towards high compensation. In simple terms, this definition basically fails to consider the main and the important significance of the executive compensation scheme or ECS in the overall governance of the organizations, for instance how and why these kinds of different bonuses are basically awarded and what actual benchmark is used.   ECS have basically four main and important components which are:- The base fixed salary.- The stock options.- The long term incentive plans.- The annual bonuses which are usually being monetary or shares.All the stock options are normally based on the company's overall performance. Although the presentation and the features of the stock option are usually vivid and clear, the exact amount of the compensation can also be unclear as the amount could have been set many years ago and the share prices may also have changed. Furthermore, the executives may circum vent this in order to improve their performance with the help of accounting decisions in the earlier years before the turnover, which basically increases the reported results, or with the help of income-smoothing practice, which basically borrows the income from the future.   Bonuses are basically shown separately to the share options in the company proxy statements. Although the cash compensation and all the other types of the compensation are disclosed separately in different other places like footnotes it is therefore termed as the complexity of the separation that can usually cause the reports to be more unclear for all the shareholders long term interest.   This basically suggests that the executives wield at least some kind of pressure on both the level and also on the structure of their compensation.   For instance, most large US firms have a well-organized remuneration committee which basically consists of two or more two outside directors.   Although all the major d ecisions which are related to the top-level compensation are passed through this organized committee, the committee then rarely conducts the market studies of the competitive compensation levels or the initiates or they propose new ECS or the executive compensation schemes.

Are the Risks of Derivatives Manageable Essay Example | Topics and Well Written Essays - 1250 words

Are the Risks of Derivatives Manageable - Essay Example The ideas of Thomas A. Bass, who considers that the risks of derivatives are manageable are compared and evaluated with the ideas presented by Justin Welby who argues that the risks of derivatives are not manageable. As per the idea presented by Justin Welby, it can be said that if proper policies and procedures are implemented and maintained derivatives can be used as an effective way to cater and manage a lot of financial risks. However, strong controls are required so as to protect speculation and heavy losses to corporations because of the wrong or unethical use of these heavy duty financial instruments. Are the Risks of Derivatives Manageable? Derivatives and Risks of Derivatives Derivatives are financial instruments or contracts that are settled on occurrence or non occurrence of an event. As explained by Hu in his paper derivatives are the contracts that ‘allow or obligate’ the user / drawer of the agreement to buy or sell the underlying asset at any time in future at the specified cost / price. Hu also explained in his paper that changes in the value of the assets also changes the value of the said contract. This underlying asset can be interest rates, exchange rates, stocks, commodity, goods, etc. (Hu, 1993). Derivatives are either traded in derivative markets or can be directly made or created through any Financial Institution (including banks). Derivatives are widely used these days by corporate entities and other users in order to manage and control the risks associated with financial transactions and hedge the risks of changes in rates of commodities, interest rates, market conditions or foreign currency rates. Hu in his paper also points out the reasons to opt for the derivatives which are: 1. The costs of entering into derivatives contracts (also known as the transactional costs) are much less than buying the underlying assets; (Hu, 1993) 2. Further the risks of change in the price differential between the derivative and underlying assets can be arbitraged; and (Hu, 1993) 3. Derivatives help the users to ‘transfer the market risks’. (Hu, 1993) Derivatives can be in many forms and types ‘including futures, options, swaps, forwards, structured debt obligations and deposits, etc’ (Comptroller of the currency administrator of national banks website, 1997). These financial instruments pose many risks on the users and both the parties involved (that is the drawer and the drawee of the derivative contracts) which include the following risks as presented in the Comptrollers Handbook: 1. Risk of change in the price of investment portfolios, commodities or underlying assets / commodities; (Comptrol ler of the currency administrator of national banks website, 1997) 2. Risk of change in interest rates that may lead to increase or decrease in the prices of investment and earnings; (Comptroller of the currency administrator of national banks website, 1997) 3. Risk of changes in foreign exchange rates specially in case of currency derivatives or where more than one currency is involved; (Comptroller of the currency administrator of national banks website, 1997) 4. Risk of changes in equity or commodity prices in case of equity derivatives lead to risks on the prices and returns on derivatives; (Comptroller of the currency administrator of national banks website, 1997) 5. Risk of Liquidity or credit risks, which means the inability to discharge derivative obligations; (Comptroller of the currency administrator of national banks website, 1997) 6. Transactional risks that means the inability of the parties involved to carry out the derivatives transactions in an effective and efficien t manner. (Comptroller of t

Fashion Management Design Lulu Lemon Brand Essay

Fashion Management Design Lulu Lemon Brand - Essay Example The paper "Fashion Management Design Lulu Lemon Brand" concerns the Lulu Lemon's Fashion Management Design. The toolkit is implied by the Three Pillars of Sustainability, which contains Economic, Ecological and Social dimensions. The term ‘sustainable development’ was born in 1987 by United Nations Commission on Environment and Development. The idea of equal attitude towards the three pillars is grounded on the hypothesis, that human needs cannot be met by one single pillar; economy, ecology and social issues are the three interconnected systems which are to remain stable. In reality, such equality doesn’t exist and economic side tends to be more convincing. Ecological and social pillars are less disputed, but ironically, they are the ones to be stressed in the first place, and the profitability is to follow naturally. In case of Lulu Lemon brand, the past experience and failures in particular need to be traced and analyzed; they are the indicators to show the dir ection to be followed in order to develop a sustainable strategy. The brand known as Lululemon Athletica was established in early 1998 by Chip Wilson. It is a Canadian company, specialized in yoga and athletic clothing. The targeted segment is the educated woman leading healthy and active lifestyle. Basically, Lululemon has developed a community-based strategy, promoting healthier, longer and fun lives. Basically, the Lululemon brand is not just about selling clothing, it is targeted at building loyalty by means of grassroots marketing.

Professional standards outline Essay Example for Free

Professional standards outline Essay Professional standards outline the auditors consideration of material misstatements due to errors and fraud. a) What responsibility does an auditor have to detect material misstatements due to errors and fraud? The purpose of assurance engagement is enhancing the reliability of the subject matters. So it is auditors responsibility to provide a reasonable level to assure the financial report is true and fair. Financial report is a data assembling which reflect the position of the business. Therefore these users, including investors, managements, shareholders and the other parties can make decision base on the information provided by the financial report. Then the information which impacts on the process of decision making for the uses of the financial report is defined as materiality (Kimmel, Carlon, Loftus, Mladenovic, Kieso, Weygandt, 2006). The fairness and trueness of the material is important to the users of financial reports. The major task of auditor is to identify the misstatement in the financial report. By definition, misstatement is a difference between the amounts, classification, presentation or disclosure of a reported financial report item and the amount, classification, presentation or disclosure that is required for the item to be in accordance with the applicable financial reporting framework. There are two kinds of misstatements and they rise from error or fraud respectively (Auditing, Assurance and Ethics Handbook, 2010). But by the limitation of auditing, financial report audit only provides reasonable assurance instead of total responsibility to the fairness and trueness of the reports. The auditors can assure about whether the financial report is prepared in all material respects in accordance with a financial reporting framework. The reason of the limitation is determined by the nature of financial reporting, the nature of audit procedures and the need for the audit to be conducted within a reasonable period of time and at a reasonable cost (Moroney, Campell, Hamilton, 2011). b) What two main categories of fraud affect financial reporting? By definition, fraud is an intentional act through the use of deception to obtain an unjust or illegal advantage. These two main categories of fraud are financial reporting fraud and misappropriation of assets fraud. Generally say misappropriation of assets fraud involves some form of theft. Therefore misappropriation of assets fraud will decrease the assets and increase the expenses then it will reduce the owner’s equity of the company (Auditing, Assurance and Ethics Handbook, 2010). Financial reporting fraud is intentionally misstating items or omitting important facts from the financial report (Moroney, Campell, Hamilton, 2011). In Cendant case, the fraud is the accounting department manipulating the revenues to meet the expectation of Wall Street analyst. Than the company can have more opportunities to merge other companies. The affect of the financial reporting fraud will increase sales therefore increase the profit of the company. The financial reporting with fraud will indicate the future earning ability to the share market therefore rising the share price in the exchange market. c) What types of factors should auditors consider when assessing the likelihood of material misstatements due to fraud? First the auditors should consider the company economical environment to identify whether there are incentives and pressures to commit a fraud (Moroney, Campell, Hamilton, 2011). CUC is in the travel service industry which is highly competitive. And CUCs revenue has dramatic doubled in the mid-1990s. To merge the other company, the companys profit has to keep increasing to meet the analysts’ expectation. So the managements of CUC have pressures to create more profit by fraud financial figures. Second the auditors should look into the financial report whether there are opportunities to perpetrate a fraud. (Moroney, Campell, Hamilton, 2011) In this case, CUC made various year-end adjustments to the general ledger. Those significant adjustments created great opportunities to make a fraud. Finally, attitudes and rationalisation to justify a fraud need to be assessed by the auditors. (Moroney, Campell, Hamilton, 2011)CUC has been required to amend its financial statements by the Securities and Exchange Commission several times for using aggressive accounting practices in later 1980s and early 1990s. And from CUCs high speed expand, the companies top management showed high enthusiasm to maximise the share price. So the top level managements have created a flexible environment for the financial fraud. d) Which factors existed during the 1995 through 1997 audits of CUC that created an environment conducive for fraud? Seeking the incentives and pressures to commit a fraud, material stated in the early and mid-1990s CUC acquired several companies to expand market share. Those acquisitions included Entertainment Publications in 1992, Net Market in 1994, Welcome Wagon International, Home Shopping Travel Club, Privacy Guard in 1995, Sierra On-Line, Davidson Associates in 1996. CUC also came into the new contracts with big companies such as Intel, Time Warner and American Airlines. CUC had doubled revenues from 738m in 1993 to 1.4b in 1996 and at same time CUCs net income rose from 25m to 163m (CUC International Inc. Company Profile, Information, Business Description, History, Background Information on CUC International Inc.). CUC was in highly increasingly competitive industry. To maintain high growth rate hut pressures on the managements. However, for year-end reporting purposes, CUC made various year-end adjustments to incorporate the misstatements into the general ledger. Those adjustments are the opportunities to perpetrate a fraud. Question 2: Entitys 5 interrelated components of internal control a) What responsibility does an auditor have related to each of these five components? Internal control is the process designed, implemented and maintained by those charged with governance, management and other personnel to provide reasonable assurance about the achievement of the entitys objectives with regard to reliability of financial reporting, effectiveness and efficiency of operations and compliance with applicable laws and regulations. Internal control framework is one of the independent reference for auditors to gather. The auditors need to test the five components of the internal control to identify the level of risk to error or fraud. The auditors need to test the effectiveness, consistent, inspection of documents for evidence of authorisation, inspection of documents for evidence that details included have been checked by appropriate client personnel, personnel performing,how they perform their tasks and re-performing control procedures. 1) The control environment The control environment is the attitudes, awareness and action of management and those charged with governance concerning the entitys internal control and its importance in the entity. And the control environment sets the foundation for effective internal control, providing discipline and structure and includes several elements such as, communication and enforcement of integrity and ethical values, commitment to competence, participation by those charged with governance, managements philosophy and operating style, organisational structure, assignment of authority and responsibility, human resource policies and practices. The auditor should consider each of these areas and their interrelationships. Especially, the auditor need to identify the significant deficiencies. 2) The entitys risk assessment process The entitys process for identifying and responding to business risks, in the financial reporting area, is how management find risks in the preparation of a financial report that is true and fair. There are three kinds of risks, inherent, control and detection risks. Inherent risk is the susceptibility of an assertion to a misstatement that could be material, either individually or when aggregated with other misstatements, assuming there are no related controls. Control risk is the risk that a clients system of internal controls will not prevent or detect a material misstatement. Detection risk is the risk that the auditors testing procedures will not be effective in detecting a material misstatement. And auditors need to assess the combined inherent, control and detection risks to evaluate the risk of the material misstatements. 3) The information system, including the related business processes, relevant to financial reporting, and communication. The role of information systems is to capture and exchange the information needed to conduct, manage and control an entitys operations. Auditors will test the information system related to the financial reporting objectives as same as initiating and recording transactions, balance and events. 4) Control activities Policies and procedures that help ensure that management directives are carried out. An audit need to categorise activities such as performance reviews, information processing, physical controls, segregation of incompatible duties. Those activities are easier to be test by the auditors compare those entity-level control activities. 5) Monitoring of controls After establishing and maintaining internal controls, an important responsibility of management is to monitor the controls to assess whether they are operating as intended and modified for changes in conditions on a timely basis. An audit needs to collect evidence about the design and effectiveness of internal controls. Those considerations include periodic evaluation, person in charge, communication channel, management implements, correcting significant deficiencies, implements reports and recommendations from regulators, function of internal audit and evaluations or observations made by the external auditors (Moroney, Campell, Hamilton, 2011).

The Competitive Strategy Of British Airways Economics Essay

The Competitive Strategy Of British Airways Economics Essay Any business has challenges from different elements like globalisation, information and technology, socio and cultural factors, political factors and so on. To meet these challenges a clear strategy is very crucial for any organization. A strategy is a clear vision of what the organisation will be based on a sustainable competitive advantage. Actually, strategy is a road map for future directions and scope. It is a long range plan for five years and more. It develops mission, objective and goals for an organisation. To develop an effective strategy any organisation must set an account with different factors. Environmental analysis, present analysis, strength, weakness, opportunities and so on are the factor through which a strategy can be developed. Are looking to buy products or services, they are looking for a wide range of products and services. They also want easy accessibility and hope to buy good quality products and services at a competitive price. They are really important as they provide money for the business in order to be successful. Suppliers stock the business with the supplies the business needs, if they are late then it will cause a conflict between business and suppliers. Therefor it is vital that all the business suppliers are on time. Suppliers are probably the third important part in a business, they provide the products/services and if they are not in time it poses to be a threat to the financial state of the business. On the other hand, suppliers arent that important in decision making because they are scared of losing their contract with British Airways. An economic system is loosely defined as a countries plan for its services, goods, and the exact way in which its economic plan is carried out. Basically there are three major/different types of economic systems prevailing around the world and they are: Market Economy: In a market economy, national and state governments play a minor role. Instead consumers and their buying decisions drive the economy. In this type of economic system, the assumptions of the market play a major role in deciding the right path for a countrys economic development. Market economies aim to reduce or eliminate entirely subsidies for a particular industry, the pre-determination of prices for different commodities, and the amount of regulation controlling different industrial sectors. The absence of central planning is one of the major features of this economic system. Market decisions are mainly dominated by supply and demand, the role of the government in a market economy is to simply make sure that the market is stable enough to carry out its economic activities properly. Planned Economy: A planned economy is also known as a command economy. The most important aspect of this type of economy is that all major decisions related to the production, distribution, commodity and service prices, are all made by the government. The planned economy is government directed, and market forces have very little say in such an economy. This type of economy lacks the kind of flexibility that is present a market economy, and because of this, the planned economy reacts slower to changes in consumer needs and fluctuating patterns of supply and demand. On the other hand, a planned economy aims at using all available resources for developing production instead of allocating the resources either for advertising or marketing. Mixed Economy: A mixed economy combines elements of both the planned and the market economies in one cohesive system. This means that certain features from both market and planned economic systems are taken to form this type of economy. This system prevails in many countries where neither the government nor the business entities control the economic activities of that country both sectors play an important role in the economic decision making of the country. In a mixed economy there is flexibility in some areas and government control in others. Mixed economies include both capitalist and social economic policies and often arise in societies that seek to balance a wide range of political and economic views. http://www.economywatch.com/world_economic-indicators/type British Airways operates in the Mixed economic system as British Airways was privatised on February 1987 and the government has less intervention as its a private company the only intervention that the government would have is only setting the prices of the air tickets. What is Social Welfare: Social welfare is about how people, communicate and institutions in a society take action to provide certain minimum standards and certain opportunities. It is generally about helping people facing contingencies. Social welfare which British Airways does for its employees. Social Welfare Policy: Is basically to improve and protect the standard of living of the people or citizens as a whole. In the United Kingdom the Name Social Policy is used to apply to the policies that the government uses for welfare and social protection and the ways in which welfare is basically developed in a society. There are various social welfare policies that the United Kingdoms adopts and they are: Social welfare policy that British Airways has adopted/follows: Health and social protection Employment Law Work place regulation Social fund Social security The impact that social welfare initiates on British Airways as well as the wider community is firstly that British Airways adopting the work place regulation is that it benefits the employees of British Airways and that the employees can work without any head aces as British Airways has provided all it employees with training in safety measures, plus rest time is given to the employees and to the crew members of British Airways accommodation is given because the crew is normally flying for endless hours/long journeys. The workers are also made alert about the basic terms and conditions of the organisation which are basically ethics, code of conduct, and the responsibility of the organisation. The other social welfare policy which British Airways provides its employees is social security for its employees similar to contribution benefits (Retirement pension, maternity allowances) and also non contributor benefits (social fund, working tax benefits) to its employees, which gives the employees the freedom to do whatever in their personal life. The Employment Law in British Airways states and illustrates the normal working hours, conditions, and the acts of the organisation. What is Industrial Policy: Industrial policy comprises all government interventions which consist of: Directed towards the supply side of the economy that consists of enterprises, industries, sectors). Aims to influence the industrial structure of the economy and its industrial changes. Industrial policy purposefully affects incentives to produce specific goods or incentives to enter or exit a specific goods market. It is not limited to manufacturing and includes all types of commercial economic activities. Industrial policy interventions have to be justified because if competitive markets worked adequately, any such intervention would: Distort optimal allocation, Distort dynamic competition and its benefits (innovation, flexibility, consumers sovereignty etc.). Privilege specific enterprises or industries or sectors at the expenses of others, Would disadvantage taxpayers and consumers. (An European industrial policy: concepts and consequences, Oliver Budzinski). Industrial policy is concerned; it is the government sponsored economic program in which the public and private sector coordinate their efforts to develop new technologies and industries. Government provides the financial support and capital to the private sector by direct subsidies, tax credits or government- run developmental banks. Industries policy emphasise cooperation between government, banks, private enterprise, and employees to strengthen the national economy. http://encyclopedia2.thefreedictionary.com Impact of Industrial policy on British Airways: In the United Kingdoms the Industrial policy has affected a lot of industries but the Industry that suffered the most was the aviation industry including all the airlines even British Airways. Therefore British Airways has changed its strategy of working and has been successful as British Airways adopted new policies. One of the policy that states to reduce Co2 emissions by 15% by all airlines and British Airways has decided to reduce by 50% as they are working on creating a new kind of fuel which is known as bio diesel which is pollution free and environment friendly. Fiscal Policy: Government spending policies that influences macroeconomic conditions. These policies affect tax rates, interest rates and government spending in an effort to control the economy. Monetary Policy: The action of a central, bank currency or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate, or changing the amount of money banks need to keep in the vault or bank reserves. Impact of fiscal and monetary policy on airline industry as well as British Airways: The principles of economics tell us that governments can sometimes improve market outcomes. Methods of influencing market outcomes can come in the form of monetary and fiscal policies. Monetary policies influence shifts in aggregate demand for goods and services by increasing the money supply, reducing the equilibrium interest rates and stimulating investment spending or decreasing the money supply, raising equilibrium interest rates, lowering investment spending (Mankiw, 2004). Fiscal policies shift the aggregate demand curve by increasing or decreasing government spending or through the increase or decrease in taxes (Mankiw). Because these policies influence aggregate demand, the government uses such policies to try and bring stabilization to the economy. Such polices affect different industries on many different levels. Some industries have positive effects and some negative. In analysing how monetary and fiscal policies affect the airline industry, we can look at how these policies affect employment, growth of the industry, and product prices. Many fiscal policies directed toward the airline industry have had profound effects. One such policy is represented by the excise taxes and fees levied on air carriers. Such taxes and fees are allocated by the Government to fund improvements of airports, provide security for the airlines and airports, allocate funding for the FAA, provide for services for international customers, and support operations at airpark facilities. These fees represent roughly 26% or $52 of a standard 200-dollar round-trip airline ticket (Air Transport Association, 2005). Current economic conditions of the airline industry are dismal, especially due to the tragic events of September 11th. The Air Transport Association (ATA) argues that such fiscal policy in these trying times hinder the air carriers ability to right themselves through a self-help policy. The ATA further explains that in an effort to stabilize the industry, such taxes and fees can account for the elimination of over 129,000 jobs, forced many carriers into bankruptcy, and, because consumers react heavily to price increases in this industry, hinder their ability to allocate funds by raising ticket prices. With this current fiscal policy, air carrier s have little manoeuvrability of funds to meet the demands of an operating budget. Mike Smith (personal communication, June 10, 2008), former owner of Pacific Crest Aviation in Big Bear Lake, CA, adds that governing agencies institute other fees to generate operating revenues for airports. On example of this is landing fees. Landing fees vary from airport to airport, but play a key role in the determination of where air carriers decide to base their operations. In attempts to accumulate more funding through fiscal policy, Mr. Smith explains that the FAA continues to suggest the implementation of user fees. Still to be determined how such a fee would impact the airline industry; present fiscal policies have air carriers screaming for reform. Deregulation is another fiscal policy that has considerably impacted areas of the airline industry. Since deregulation in 1979, the airline industry experienced substantial growth. With the emergence of new competition in the industry this created numerous amounts of jobs, drove ticket prices down, and expanded the available market for various air carriers. Through an industrial wide growth of over 200%, new carriers were able to open positions to thousands of new employees in various parts of the nation. Average ticket prices in 1979 remain relatively unchanged today. As an extremely competitive market emerged, the rally for passengers on each carriers flights kept ticket prices down as carrier created connecting flights through this new open sky policy; reaching more consumers, minimizing opportunity cost, and offering competitive pricing. The Airline industry continues to be affected by the overall condition of the nations economy. When healthy spending exists and pleasure travel is frequent, air carriers are able to fill flights, raise prices, and maintain a stable economic environment. However, when condition of the nations economy falls, so do the buying habits of the consumer. This is where the airline industry finds itself today. Struggling to fill flights in a slow economy and fighting heavy fiscal policy. Recent monetary policies made by the federal government to improve market conditions are sure to have an effect, but how it will impact employment, growth, and prices in the airline industry are still unknown. The most Recent monetary policy made by the government came in the form of economic stimulus checks. This in-flow of money into the economy in an attempt to stimulate the purchase of goods and services throughout the United States may help diminish the effects of our current sluggish economy. Little to no data exists to show how this has impacted any growth in the airline industry. So far, there seems to be little change in the spending habits of the consumer to travel via air. Because the economic position of the airline industry has been struggling for so long, improvements due to any single event may be impossible to track. Whether changes in fiscal policies, monetary policies, or internal carrier structure help to improve conditions in the airline industry, changes will happen slow and will reflect economic condition in the nations marketplace. By successfully managing opportunity cost, and adapting to an ever changing economic environment, airline industries can have economic success. However, the well-being of the nations economy will have a direct impact on the level of success experienced in the airline industry. During economic shortfalls in the nations economy, travellers will have fewer resources available to travel for pleasure. Contributing to the negative economic influences in the airline industry, future and existing policies targeting the airline industry will continue to hinder the industrys ability to recover losses in periods of economic hardships. http://www.taxreformpanel.gov Makiw, N.G. (2004) Principles of economics (3rd edition). Chicago, 2: Thomson South-Western. PESTLE Analyses on British Airways: PESTLE Factors Key Points Implications for British Airways Political Heavy regulation (AEA, 2009). Increased security due to past terrorist threats (DFT, 2008) Compliance is essential if British Airways wants to continue. Sufficient security measures should be in place to ensure consumer confidence and competitive advantage in maintenance. Economic Global economic crisis: world growth is projected to just over 2 per cent in 2009 (IMF, 2008). Pound weakness especially against the Euro. Oil prices declined by 50% since their peak retreating to 2007 levels. Decline in fuel prises the dollar strengthens (IMF, 2008). UK Consumer spending saw its sharpest decline for 13 years between July and September 2008 (Channel 4, 2008) Possible reduction in the amount of business travel as companies are cutting costs and using alternative means of communication such as telecom fencing. British Airways is vulnerable as a United Kingdom operating airline to a poor exchange rate. Fluctuation in oil prices and exchange rates will directly affect British Airways cost base. More intense competition. Social The United Kingdom has an aging population. Increasing Unemployment Potential opportunities for growth as older generations have more time to spend on leisure activities such as international travel. Increased bargaining power as an employee. Technological A recent survey revealed that 34% of online consumers plan to use price- comparison sites more in 2009 (NMA, 2009) Online booking services and check-in is becoming increasingly used by the airline industry. Increased consumer awareness and therefore bargaining power. British Airways must ensure that they remain up to date with these technological advances whilst avoiding becoming overly reliant, as this may isolate certain consumer markets (i.e. the elderly) who dont feel comfortable using such technology. Environmental/Ethical Noise pollution controls and energy consumption controls. Cancellations of flights and loss of baggage. New legislation (e.g. climate change bill) enforcing tighter environmental regulation may increase operational costs each year. Such ethical issues could have a detrimental effect on reputation if left unresolved. Legal Collusion and price fixing. Recognition of trade union and industrial action e.g. cabin crew strikes. Open skies agreement. Restriction on mergers will have an impact on British Airways proposed alliance with American Airlines. Good employee relations are essential if British Airways wants to avoid industrial action and interrupted operations. Opportunity for British Airways and its competitors to freely transport aircrafts between the European Union and the United States. Part 3 Investigate the behaviour of organizations and the market environment. What is Oligopoly: Oligopoly is a market which is normally dominated by a few numbers of large suppliers. The degree of market concentration is very high. Firms within an oligopoly produce branded products and also sometimes there is a barrier to new entries. Advantages as general: Firms or companies are able to reap economies of scale, due to large scale competition. Products cannot produce by individual firms on a small scale. There is an incentive to engage in research and development. They have the ability to earn super normal profits and capture large market share. Firms enjoy lower costs due to technological improvement. This results in higher profits which will improve the firms or companies capacity to withstand price war. http://www.blurtit.com/q2774865.html Disadvantages as general: Firms and companies are concerned with the activities of their competitors. If one firm or company reduces its prices the other companies would have to. How oligopoly has impacted the airline market and British Airways: In the late 1990s the European airline market was liberalised, lowering the barriers to entry. Traditional firms then faced competition as firms could enter the market more easily. New entrants used leased aircrafts to keep costs low. Firms have merged (such as Liberia Airways and British Airways did in 2000) to improve the firms horizontal integration. What is monopoly: A situation in which a single company owns all or nearly all of the market for a given type of product or service. This would happen in the case that there is a barrier to entry into the industry that allows the single company to operate without competition. In such an industry structure, the producer will often produce a volume that is less than the amount which would maximize social welfare. www.investwords.com/3112/monopoly.html . Advantages of monopoly as general: There is no risk of excess production. There is sufficient capital for research. Price of goods are reduced. The market can be controlled. Disadvantages of monopoly as general: The consumers are exploited. There is hardly and consumer choice. The price is high on products. As there is no competition it leads to inefficiency. The labour is exploited as the price charged is higher than the marginal cost. How monopoly has impacted the airline market and British Airways: There is no competition which would make the airlines inefficient. As there is no choice the consumer would have to take that one airline only. As the ticket prices could be high the consumers would prefer to take a train to their destination if the consumers destination is in Europe and this would cause a loss for the company. What is perfect competition: An ideal market structure characterized by a large number of small firms, identical products sold by all firms, freedom of entry into and exit out of the industry, and perfect knowledge of prices and technology. This is one of four basic, market structures. The other three are monopoly, oligopoly, and monopolistic competition. Perfect competition is an idealized market structure that is not observed in the real world. While unrealistic, it does provide an excellent benchmark that can be used to analyse real world market structure. In particular, perfect competition efficiently allocates resources. http://www.amosweb.com. Advantages of perfect competition as general: Optimal allocation of resources. Competition encourages efficiency. Consumers charged a lower price. Responsive to consumer wishes, change in demand, leads extra supply. Disadvantages of perfect competition as general: Insufficient profits for investment. Lack of product variety. Lack of competition over product design and specification. Unequal distribution of goods and income. Externalities .e.g. pollution. How perfect competition impacts airlines market and British Airways: As in the Airlines Industry there are many airlines and there is competition there can be either positive effects as well as negatives effects the positive effects of perfect competition is that the resources of the airlines is allocated to the point as there is competition the other airlines as well as British Airways is encouraged to work harder to beat the competition and there for the airlines charge its customers with a lower cost to gather more of the customers. The negative effects of perfect competition is that sometimes the return on the investment can be poor there is noise pollution being created by the noise of the plane engines and can affect the society with air pollution as it can harm the society. Part 4 Explain the significance of international trade and the European dimension for UK businesses. What is trade: Trade is the transfer of ownership of goods or services from one person to another person. Trade is also known as commerce or financial transaction or barter like in the old days. Trade can only take place in a market. A market is a place where buying and selling takes place it could be either in a shop, house or even the internet. Advantages of trade: Can increase international ties. Leads to specialisation and therefore increases efficiency. Increases standards of living. Disadvantages of trade: As there is excess production it leads to pollution. Can lead to a possible economical imperialism. Can cause a balance of payment problem which can lead to international debt. Why is trade important: To trade is important for a country because through trade a country gets its resources which it cant provide for itself, or its cheaper for a country to import than to produce locally. A country trades its resources to other countries that cannot produce them this means that its a big cycle where everyone trades until all the countries have what they exactly need while making some money by selling what they dont need. The country basically does it for the development of the country so that its people can get their daily bread and butter, clothes and necessities which they need that their country does not have access to, and to even do business with other countries through trade. What is international trade: International trade is exchange of capital, goods, and services across overseas boarders or territories. It basically refers to exports of goods and services by firms to a overseas buyer also known as a importer. In most countries it represents a significant share of gross domestic product also known a (GDP). Advantages of international trade: Improve domestic competitiveness. Helps to gain global market share. Reduces the dependency on existing market. Increases chances to expand. Disadvantages of international trade: Can take a very long time to gain. Additional cost can be incurred. Payments come after long. Licenses are need and deal has to be done in regulations. Why is international trade important: International trade is important because it allows other countries to take advantage of something known as comparative advantage. Comparative advantage means that a country is able to produce something by giving less for something else they want. Therefore even if a country in not able to produce the best quality product of anything, comparatively the countries can produce without giving up something. When countries take advantage of comparative advantage, the total output in the world increases and therefore everyone benefits from extra output and therefore international trade helps establish a higher standard of living. What is economic integration: Economic integration is the elimination of tariff and nontariff barriers to the flow of goods and services and the factors of production between a group of nations or various different parts of the same nation.

Theories of Reward and Motivation

Theories of Reward and Motivation Psychology, derived from ancient Greek roots â€Å"psyche† and â€Å"logos†, which means â€Å"mind† and â€Å"knowledge or study† respectively, is defined as the scientific study of behaviour and mental processes, in which the behaviour refers to anything we do (Coon Mitterer, 2012, p. 14). Psychologists uses systematic observation to gather empirical evidence to derive a scientific theory. Not until 130 years ago, when William Wundt set up a laboratory to study conscious experience in a scientific manner, that psychology started as a science (Coon Mitterer, 2012, p. 26). For thousands of years individuals have been informally observing human behaviours. Recently, many individuals claim that the theories on human behaviours and mental processes psychologists had invested much time and effort to discover are merely â€Å"common sense† (Coon Mitterer, 2012, p. 15). For instance, performance can be improved by giving rewards, is a common sense that society perceive as the truth. However, the act of enhanced performance by giving rewards to individual is confined within a small social circle, or are derived from a person’s attempt to make sense out of their physical world (Qian Guzzetti, 2000, p. 1). The higher the value of rewards, the higher the drive levels or motivation of an individual, the better the results achieved. Rewards are generally attractive to people, and hence would force them to put in effort to obtain it. This wrong â€Å"common sense† theory which still persists today, giving rewards, especially material rewards, will enhance one’s performance, is inaccurate. This theory is first rejected by Sam Glucksberg in his experiment. In Glucksberg’s (1964) research, he investigated the influence of strength of drive (motivation) on functional fixedness strength, which is defined as a type of cognitive bias that involves a tendency to see objects as only working in a particular way (Cherry, n.d.). Glucksberg seek to prove that rewards do not allow an increase in problem-solving time. In his experiment, Glucksberg set up different scenarios to compare the effect of rewards: A group of people were tested for time taken to solve problem when offered incentives, and another when incentives are not offered. These two groups were then divided into further subgroups where the subjects put into test in two other scenarios: when the solution is more straightforward and when the solution requires more thought process. This ensured that there was no biasedness in the experiment and that the increase in functional fixedness strength was only due to incr ease in drive levels. Through this experiment, it was concluded that participants used relatively longer time to solve problems requiring more thought process when given rewards. Also, in his research, Glucksberg concluded that there was no effect of rewards on an individual when the solution to the problem is straight forward. Similar timings were recorded and the difference are relatively smaller as compared to those of complex problem solving. Throughout many years, numerous researches upon this topic had been conducted and they concluded with the same observation (e.g. Bijleveld, Custers, Aarts, 2011; Hagger Chatzisarantis, 2011; Jordon, 1986; Panagopoulos, 2013). In the society, economists generally believes that incentives enhances performance (Panagopoulos, 2013, p. 266). To this day, it has been proven many times by psychological researches, which suggest the opposite to this theory. While this is true in some cases, for example, when the task is simple and only requires memory work or has a straight forward solution (Bijleveld, Custers, Aarts, 2011, p. 865), it does not work in others. Rewards function as a barrier when individuals are faced with complex problem-solving tasks. Material rewards stale an individual’s ability to solve complex problems (Glucksberg, 1964). Glucksberg (1964), concluded in his research that rewards influence drive levels and hence impair problem-solving performance. Similarly, research has also shown that monetary incentives not only does not improves one’s performance, it might cause drastic results as well (Bijleveld, Custers, Aarts, 2011). When introduced to the monetary rewards consciously, i ndividuals tend to consciously reflect on the reward, and hence thwart one’s performance (Bijleveld, Custers, Aarts, 2011). This research has refute the effectiveness of a powerful motivator – money. Several research also assess the effect of material rewards on motivation, and results turn out to be undesirable as it actually undermines it (e.g., Hagger Chatzisarantis, 2011; Jordon, 1986). Hence giving rewards does not enhance performance in many cases. The fact that giving rewards does not enhance, or might harm performance can be explained psychologically. Individuals are unable to focus on the task when given rewards. Bijleveld, Custers and Aarts (2011) indicates that consciously perceived rewards cause people to reflect on what is at stake, hence prompt people to more strongly concentrate on task stimuli and details. However, being too focussed in the task can be harmful to an individual’s performance. Enhanced concentration might interfere with thought process and hence effective performance, for example, processing of unnecessary and irrelevant ideas, hence thwart the enhancement of performance (p.866). Presence of distractions is a reason behind divided attention, which causes problem solving cannot take place effectively. This supports the consistent finding where rewards do not result in higher performance. This can also be explained by a research done by Olivers and Nieuwenhuis (2006), that such distractions from th e main problem â€Å"is due to an overinvestment of attentional resources in stimulus processing, a suboptimal processing mode that can be counteracted by manipulations promoting divided attention† (p. 364). Hence, increased focus and concentration due to higher motivation levels, can hurt performance. It is not uncommon to observe individuals being motivated by rewards. This might be the source of the theory. However, such observations are confined to a certain fixed situation in the individual’s social setting. In this kind of observation, individuals tend to avoid taking into account of situations which is inconsistent with their â€Å"findings† (Taylor Kowalski, 2004). They are easily refuted by experiments and research as they are conducted systematically and did not come from mere human observation. Various scenarios and control experiment are involved to ensure that the results have no room for disputes. Differing from the flawed â€Å"common sense† theory of human behaviour, the results which proved that rewards does not enhance performance are unchallengeable as they are supported by facts which can be tested and reiterated by professionals (Coon Mitterer, 2012). Only by involving in psychological research can one actually see a fair and non-biased p erspective of human behaviour. Reasons behind thwart performance can be explained scientifically through experiments. They are supported by the science behind human behaviour. Therefore rewards does not give, or rather impair performance. References Bijleveld, E., Custers, R., Aarts, H. (2011). Once the money is in sight: Distinctive effects of conscious and unconscious rewards on task performance. Journal of Experimental Social Psychology, 47, 865-869. Cherry, K. (n.d.). What is Functional Fixedness in Psychology? Retrieved from Psychology Complete Guide to Psychology for Students, Educators Enthusiasts: http://psychology.about.com/od/problemsolving/f/functional-fixedness.htm Coon, D., Mitterer, J. (2012). Introduction to Psychology: Active learning through modules. Wadsworth, Ohio: Cengage Learning. Glucksberg, S. (1964). Problem solving: Response competition and the influence of drive. Psychological Reports, 15, 939-942. Hagger, M. S., Chatzisarantis, N. L. (2011). Causality orientations moderate the undermining effect of rewards on intrinsic motivation. Journal of Experimental Social Psychology, 47, 485-489. Jordon, P. C. (1986). Effects of an extrinsic reward on intrinsic motivation: A field experiment. Academy Of Management, 29(2), 405-412. Olivers, C. N., Nieuwenhuis, S. (2006). The beneficial effects of additional task load, positive effect, and instruction on the attentional blink. Journal of Experimental Psychology: Human Perception and Performance, 32, 364-379. Panagopoulos, C. (2013). Extrinsic Rewards, Intrinsic Motivation and Voting. The Journal of Politics, 75(1), 266-280. Qian, G., Guzzetti, B. (2000). Conceptual change learning: A multidimentional lens. Reading Writing Quarterly, 1-3. Taylor, A., Kowalski, P. (2004). Naive psychological science: The prevalence, strength, and sources of misconceptions. The Psychological Record, 54(1), 15-25. Neo Ruo Ting

Communication Behavior in Boomerang and Quayamat Se Quayamat Tak :: essays papers

Communication Behavior in Boomerang and Quayamat Se Quayamat Tak In this paper I will attempt to discover how cultural differences affect communication in two movies of differing cultures. I will keep the names of the characters formal for both movies and for the Indian movie I will translate their lines to English directly. The first movie is of the Indian culture entitled Quayamat Se Quayamat Tak, which roughly translates to â€Å"From Armageddon Till Armageddon.† This has a classic Romeo and Juliet theme. I will focus on what I consider are the three main relationships in this movie: 1) Raj, the main male character, and Reshmi, the main female character, 2) Raj and his family, and 3) Reshmi and her family. The second movie is of the African American culture entitled Boomerang. This is in essence about a lady’s man who is in search for a perfect woman. Along the way to finding Miss Right he romances other women and as soon as he finds who he believes is the right one, she romances him. I’ve chosen three main relatio nships from this movie as well: 1) Marcus, the main male character, and Angela, the women he ends up falling in love with, 2) Marcus and Jacqueline, the female he believes is the perfect women, and 3) Marcus and his friends Gerard and Tyler. This essay will discuss how the friends of each movie communicate with each other, what good and bad communication behaviors they have, compare and contrast the relationships depicted in the movies, talk about how the theories of friendship in the course text apply to the friendships in the movies, converse about how each film portrays the culture of the characters, and lastly discuss what each film says about the communication habits of their respective cultures. Both movies have similar means by which the characters communicate with each other. In Quayamat Se Quayamat Tak Raj and Reshmi begin their relationship with Reshmi taking pictures of Raj jogging. He notices her taking the pictures and hides, and then he comes up behind her and scares her. When he realizes who was taking the pictures he strikes up a conversation. He apologizes for scaring her and refers to his thoughts by asking, â€Å"Do you always take pictures of people jogging (Khan, 1988)?† In this first encounter neither of the characters disclose their names to each other, yet Raj asks Reshmi to meet him at the same place at the same time the next day. Communication Behavior in Boomerang and Quayamat Se Quayamat Tak :: essays papers Communication Behavior in Boomerang and Quayamat Se Quayamat Tak In this paper I will attempt to discover how cultural differences affect communication in two movies of differing cultures. I will keep the names of the characters formal for both movies and for the Indian movie I will translate their lines to English directly. The first movie is of the Indian culture entitled Quayamat Se Quayamat Tak, which roughly translates to â€Å"From Armageddon Till Armageddon.† This has a classic Romeo and Juliet theme. I will focus on what I consider are the three main relationships in this movie: 1) Raj, the main male character, and Reshmi, the main female character, 2) Raj and his family, and 3) Reshmi and her family. The second movie is of the African American culture entitled Boomerang. This is in essence about a lady’s man who is in search for a perfect woman. Along the way to finding Miss Right he romances other women and as soon as he finds who he believes is the right one, she romances him. I’ve chosen three main relatio nships from this movie as well: 1) Marcus, the main male character, and Angela, the women he ends up falling in love with, 2) Marcus and Jacqueline, the female he believes is the perfect women, and 3) Marcus and his friends Gerard and Tyler. This essay will discuss how the friends of each movie communicate with each other, what good and bad communication behaviors they have, compare and contrast the relationships depicted in the movies, talk about how the theories of friendship in the course text apply to the friendships in the movies, converse about how each film portrays the culture of the characters, and lastly discuss what each film says about the communication habits of their respective cultures. Both movies have similar means by which the characters communicate with each other. In Quayamat Se Quayamat Tak Raj and Reshmi begin their relationship with Reshmi taking pictures of Raj jogging. He notices her taking the pictures and hides, and then he comes up behind her and scares her. When he realizes who was taking the pictures he strikes up a conversation. He apologizes for scaring her and refers to his thoughts by asking, â€Å"Do you always take pictures of people jogging (Khan, 1988)?† In this first encounter neither of the characters disclose their names to each other, yet Raj asks Reshmi to meet him at the same place at the same time the next day.