Economics and Contemporary Issues Essay Example | Topics and Well Written Essays - 1750 words

Economics and Contemporary Issues - Essay Example Behind this struggle, health care costs are skyrocketing, and two primary reasons for the increase find their roots in these same two groups. Life expectancies in the country are getting longer, and the aging boomers will require more health care for longer periods f time. Funding for the existing government health care systems is declining due to the same reasons that Social Security is facing implosion. More citizens receiving benefits are fewer citizens are paying into the system. The simple equation f higher demand -plus- lower funding -plus- longer lives -equals- higher costs. Secondly, the poor, uninsured and illegal immigrants who can receive health care at any hospital are creating increased drag on a system that is already suffering. Every hospital in the country will treat any person entering its emergency wards. If the services are not paid for, the loss is applies to the bottom line, and costs increase throughout the system. A third reason for the push for Universal healthcare is the pragmatic belief that in the long run it will reduce healthcare costs in general. If preventative care is available to everyone from birth, the result will be less-costly healthcare needs in people's later years. Early preventative measures also lessen the magnitude f epidemics; when more people are immunized and have access to treatment, disease cannot spread so easily. (University Wire, 2001) Former US Surgeon General C. Everett Koop recently stated: "I think I am right when I write that all Americans have the right to healthcare," Koop said. "If we agree that there is a right to healthcare, then we are also agreeing that someone must provide these rights," he said, noting that the right to healthcare is different than some other constitutional rights because it incurs a monetary cost on society. (Anand, 2000) Two year ago, in a survey f medical- school faculty and administrators published in the New England Journal f Medicine, 57 per cent said they like a single-payer universal healthcare system over either fee-for-service or managed care. Indeed, more and more doctors are now keen to work in coalitions where they learn from and fight for the needs f those whom they have traditionally considered inferiors or adversaries. (Gordon, 2000) As a result, when President Clinton ascended the podium, and declared that universal healthcare is a right which Americans shared, no one questioned where the money would come from to fund such a huge expansion f the federal bureaucracy. This has become the clearest argument for universal healthcare, the right f all people to receive healthcare, in the form f physician visits and pharmaceuticals, regardless f their socioeconomic status. (University Wire, 2001) A person who is poor should not be precluded from the benefit f healthcare simply because he or she cannot afford it. Boomers perceive universal health care as another program to benefit them, and the poor / uninsured thought they were looking at a savior. The core question to answer, however, is not whether healthcare coverage is a right or not. The costs f health care are skyrocketing, and the needs f the population are increasing. The question is: What is the most effective means f bringing down

Internal Controls Essay Example for Free

Internal Controls Essay The Company that held the most appeal and most overall steady growth of success was Amazon. com Inc. This company has had losses recently, but overall it has held firm among its management and profitability. The annual report for Amazon in the e-campus library showed phenomenal coverage for over the last fifteen years of reporting financials. In 2013, it has been ranked number 49 and the reason behind it is the technology factors of creating the Kindle Fire, which sold tremendously. The company’s earnings in 2013 has been in the billions. In 2012, the company made over $61 billion. That was a 27% increase due to the technology software that the smaller Kindle Fire introduced. Prime Instant Video Selection among Amazon which originated in 1998 has been steady with its growth. Now, as the Prime Video Selection makes its way into the spotlight within amazon. com for consumers, the results or profits are estimated to be outrageous for the company. Amazon. com not only has a company in the United States, but as well internationally. Electronic technology has allowed Amazon. com to start out as a small company and skyrocket and become a leading seller and company in America today. Digital media has expanded over 23 million people in television, books, and magazines. The company is doing exceptionally well. The company has over 88, 400 full time employees and shareholder numbers are at 3,075. ( University Library, Phoenix University XACC/210 May 29,2013 ) The company is an electronic shopping catalog type of business and its Internal Controls extend from management to data entry sophistication. I would think that since the website doesn’t give a precise use of how internal controls are conducted I would have to go with Enterprise Risk Management. This Internal Control is a type of software that links accounting and administrated functions into a total record keeping and reporting system that can be overlooked by management as well as the board of directors in that company. Often the board of directors, whose duty it is to oversee the ethical and commercial operations of a company and set policy, will access the ERM through their own intranet that allows them a secure online venue where they can review the companys books and operations, upload their own documents, make notes and discuss the company in private. Securities and Exchange Commission: Managements Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports) Overall I think that Amazon has good management internal controls pertaining to the type of business that it is. There are quite a few of employees, so management within this type of internal control can establish good reliability.

No Universally Agreed Definition Of Corporate Social Responsibility Management Essay

No Universally Agreed Definition Of Corporate Social Responsibility Management Essay With no universally agreed definition of Corporate Social Responsibility, myriad of terms Corporate accountability, Corporate sustainability, Corporate citizenship or Sustainable responsible business have been used interchangeably to describe the practice of CSR. Basically, CSR is a discharge of duty towards society. Business and society are interrelated rather than being distinct entities and therefore, society has certain expectations for appropriate business behaviour and outcomes (Wood, 1991). According to Mallen Baker (2004), CSR is about how companies manage business operations to produce positive impact on society. Consequently, companies need to account for the quality of their management (both in terms of people and process) and the nature of and quantity of their impact on society in various areas.1 In the 1950s, Howard Bowen first published a seminal book Social responsibilities of businessman in which he famously posed the question What responsibilities to society may businessman reasonably be expected to assume. This publication evidently marked the beginning of a modern era of CSR as it we know it today (Carroll, 1999). Since then, the notion of CSR has come to dominate the society-business interface and various theories and concepts have been proposed. According to Bowen (1953), social responsibilities refer to the obligation of businessman to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of objectives and values of our society. The most applied definition of CSR comes from Archie Carroll (1979) who argues that the social responsibility of business encompasses economic, legal, ethical and discretionary expectations that society has of organisations at a given point in time. This approach encompasses a whole range of responsibilities of a firm. In the same vein, Lichtenstein et al. (2004) and Lindgreen et al. (2008) consider that an organisation needs to define its role within the society and implement the necessary ethical, responsible, legal and social standards to their firm. Conversely, GÓssling and Vocht (2007) described CSR from a different viewpoint as an obligation of the business world to be accountable to its entire stakeholder customers, employees, shareholders, communities and ecological consideration in all aspects of their operations (Gokulsing, 2001). 2.1.1 Corporate Social Responsibility Corporate Social Performance The current globalisation trend and growing demand from stakeholders towards companies to adopt CSR practices within their business strategy have indeed encouraged companies involvement in such practices (Chapple and Moon, 2005). Therefore, companies that are considered as socially responsible are experiencing triple bottom line benefits associated with such social initiatives. Additionally, companies are not only assessed via traditional performance indicators but also by the way they interact with broad set of social demands. However, CSR being impossible to measure (Van Beurden Gossling, 2008), an observable and measurable outcome of CSR term Corporate Social Performance (CSP) is used to capture the performance of CSR strategies within the society. Carroll (1979) vaguely defines CSP construct as a three dimensional model that consisted of social responsibility categories, social issues and philosophies of social responsiveness. Building on Carrolls attempt to define CSP, Wartick and Cochran (1985) offer a general framework of CSP by defining CSP model as the underlying interaction among the principle of social responsibility, the process of social responsiveness and the policies developed to address social issues and show how several competing perspectives (economic responsibility, public responsibility, social responsiveness) can be incorporated into his framework. Nevertheless, Wood (1991) argues that although Wartick and Cochran (1985) model is innovative, it is still incomplete. Wood (1991) asserts that the term performance relates to actions and outcomes and not interaction and integration. Consequently, Wood (1991) refine Wartick and Cochrans (1985) model to integrate various theoretical perspectives into a coherent CSP model and as such, he defines CSP as a business organisations configuration of principles of social responsibility, process of social responsiveness and policies, programs and observable outcomes as they relate to the firms societal relationships. Wood (1991) affirms that the principles of social responsibility operates at three levels specifically; institutional, organizational and individuals. Conversely, Gond and Crane (2010) define CSP as an umbrella concept which includes organisational process of environmental assessment, stakeholder management and various measures of its external output and societal manifestations (Orlitzky, 2008). 2.1.2 Forms of CSR initiatives Basically, CSR includes a variety of socially responsible activities. Kotler and Lee (2005) identified six major initiatives under which most CSR related activities fall generating a positive impact on the company. The six different forms of CSR initiatives are as follows: 2.1.3 Main approaches of CSR In response to the question to whom an organisation has a responsibility, Marrewijk (2003) presents a sequence review of three corporate responsibility approaches Shareholder approach, Stakeholder approach and Societal approach. 2.1.4 Factors influencing level of CSR activities Review of prior literature indicates that companies actually differ in how they implement their CSR strategies. This can normally be explained using a range of company level attributes that influence the companys CSR participation. These attributes entail: Company size Waddock and Graves (1997) and Itkonen (2003) provide that company size is related to CSP since bigger companies have been found to be more socially responsible than smaller ones. Type of industry McGuire et al. (2003) argues that the type of industry plays an important role in identifying the level of CSR activities. For instance, the CSR activities differ from manufacturing sector to service sector (Kolk, 2003). Financial risk Orlitzky and Benjamin (2001) assert that a company with low CSP shall consider and manage its social responsibility since such a company will have an adverse impact in terms of risk. 2.1.5 Social Responsibility Models The Pyramid of CSR The professor Archie Carroll is one of the first academics to make a distinction between different kinds of organisational responsibilities. This distinction is referred to as a firms pyramid of Corporate Social Responsibility. The pyramid implies a hierarchy of responsibilities moving from economic and legal through more socially oriented ones of ethical and philanthropic responsibilities (Carroll, 1979; 1991). http://www.witszen.com/wp-content/uploads/2011/02/carrollCSR.jpg Source: (http://www.witszen.com/how-companies-should-use-social-media-for-better-corporate-social-responsibility/) Economic Responsibilities Carroll (1979) argues that business institutions are basic economic unit in society and have a responsibility that is economic in nature or kind. The economic responsibility is the most fundamental responsibility of a company which reflects the essence of a company as a profit-making business organisation. The remaining three kinds of social responsibility are based on the economic responsibilities. The economic responsibility implies that society expects business to produce those goods and services demanded and make a profit as an incentive or reward for the business efficiency and effectiveness. Legal Responsibilities The legal responsibilities entail expectations of legal compliance and playing the rules of the games. From this perspective, society expects business to fulfill its economic mission within the framework set forth by the societys legal system (Jamali, 2008). Crane and Matten (2004) further adds that all companies attempting to be socially responsible are required to follow the law. Ethical Responsibilities According to Schwartz (2011), the ethical responsibilities embody those standards, norms or expectations that reflect a concern for what consumers, employees, shareholders and the community regards as fair, just or in keeping with the respect or protection of stakeholders moral rights. Therefore, society expects corporations to act ethically towards its stakeholders (Crane and Matten, 2004). Philanthropic Responsibilities These responsibilities which represents the smallest layer of the pyramid, involves the corporations willingness to enhance the quality of living of their stakeholders through charitable donations and organisational support that are entirely voluntary and seen as desirable by society. The philanthropic responsibilities are sometimes on the same level as ethical. However, the difference is that it is not seen as unethical behaviour if business does not contribute their money to humanitarian programmes (Carroll, 1991). Carrolls CSR Pyramid in Developing Countries In a review of CSR in developing countries, Visser (2006) bases himself on the empirical studies undertaken by Pinkston and Carroll (1994), Edmondson and Carroll (1999) and Burton et al. (2000) to underline the fact that culture may have an important influence on perceived CSR priorities. As such, the widely accepted Carrolls pyramid is revisited in the context of developing countries as shown below: Source: Visser, W. (2006)  Revisiting Carrolls CSR Pyramid: An African Perspective, In E.R. Pedersen M. Huniche (eds.),  Corporate Citizenship in Developing Countries, Copenhagen: Copenhagen Business School Press Visser (2006) contends that the order of CSR layers in developing countries taken as relative emphasis assigned to various responsibilities differs from Carrolls classic pyramid. Hence, in developing countries, even if economic responsibilities still get the most emphasis, philanthropy is given the second highest priority followed by legal and then ethical responsibilities. This is explained partly by the traditional attachment to philanthropy by the fact that it is most direct way to improve living conditions in their immediate surroundings and also by a traditional culture of fatalism, dependence and assistance in developing countries (Ragodoo, 2009). Conversely, the pressure to comply with existing legislation is less as compared to the developed countries. Three Domain Model of CSR Schwartz and Carroll (2003) highlight certain limitations in Carrolls CSR pyramid. Firstly, the pyramid suggests a hierarchy of CSR domains whereby one may conclude that the domain at the top is more important than the domain at the base. This is clearly not the kind of CSR priorities that Carroll intended in his CSR pyramid. Secondly, the pyramid framework cannot fully capture the overlapping nature of CSR domains. Hence, extrapolating from Carrolls model, Schwartz and Carroll (2003) proposed an alternative approach to conceptualise CSR a three-domain model. The three-domain model is presented with three core domains of economic, legal and ethical responsibilities that are depicted in a venn model framework. Initially, it suggests that none of the CSR domains is prima facie more important or significant relative to the others. The venn model framework actually yields seven CSR categories from an overlap of the three core domains. However, the exception with this model is that the philanthropic category, if exist, is subsumed under the ethical and/or economic domains. The figure below illustrates the venn model framework originated from Schwartz and Carroll (2003) research: Source: Management for Social Enterprise, Bob Doherty,  George Foster,  Chris Mason,  John Meehan,  Karon Meehan,  Neil Rotheroe,  Maureen Royce 2.2 CSR Reporting Based on their research on CSR disclosure, Holder-Webb et al. (2009) assert that it is not enough for corporations to simply engage in CSR activities but it is also important and desirable to make information about these activities available to stakeholders. Additionally, the call for disclosure of non-financial information has grown in response to the awareness that financial statement omits salient information about the company (Adams et al. 2011). The financial statement actually portrays a limited picture of the company through providing merely financial metrics. Therefore, the relevance of non-financial information has increased markedly over the years. The emergence of non-financial reporting can be seen as an attempt to increase transparency with respect to corporate actions concerning social and environmental issues (Nielsen Thomsen, 2007). Further, it is acknowledged that the disclosure of non-financial information is essential to reduce information asymmetry that exists be tween management and key stakeholders (Narayanan et al. 2000) as well as to allow investors to better assess key areas of performance and support a broader view of corporate performance that encompasses society at large (Holder-Webb et al. 2009). 2.2.1 Motivation for CSR Reporting Along with the increased interest to engage in CSR activities, today corporations across the world are more voluntarily disclosing information about their CSR performance. Undeniably, numerous motivational bases can explain companies involvement in CSR reporting practices. Threat to the organisations legitimacy The legitimacy theory posits that there is a social contract between companies and the society in which they operate (Deegan 2002; Mathew 1993; Patten 1992). Therefore, corporation try to legitimise their corporate actions by engaging in CSR reporting to get the approval from society and thus, ensuring their continuing existence (Belal, 2008). Increase access to capital and shareholder value Roberts (1992) assert that one way that firms consider CSR disclosure is to increase access to capital and shareholder value by satisfying stakeholders expectation. Investors are choosing to invest in organisation that is demonstrating a high level of CSR (Baron, 2008). Enhance corporate reputation Branco and Rodrigues (2008) argue that CSR disclosure (CSRD) is an important mechanism to enhance the effect of CSR on corporate reputation as well as representing a signal of improved social and environmental conduct. In their research on CSRD and corporate reputation, Bayoud et al. (2012) confirms that a high level of CSRD is strongly associated with corporate reputation for stakeholder group. Risk Management According to Kytle et al. (2005), reporting practices have become a key management tool to the growing complexity to multinational business management. He further argues that reporting helps to integrate CSR activities into companies strategic risk management so that the impact of CSR activities can be maximised. Employee attraction, motivation and retention Waddock et al (2002) argue that employees perceptions about how a corporation accepts and manages its responsibilities are often part of the employees decision about where to work. Therefore, publication of sustainability related information can play a role of positioning a company as an employer of choice and as such, this status can enhance loyalty, reduce staff turnover and increase a companys ability to attract and retain high quality employees (Group of 100 KPMG, 2008). Financial performance Margolis and Walsh (2003) claim that corporations engagement in CSR activities and its disclosure can foster corporate performance and as such their research conclude a positive relationship between CSR performance and financial performance. Similarly, Balbanis, Philips and Lyall (1998) find that economic performance is related to both CSR performance and disclosure although having a weak relationship and lack of overall consistency. 2.3 Theories on CSR Various theories have been used over the years to demonstrate the behavior of economic units related to CSR issues. The relevant theories are: Agency theory Proponents of economic theories are among the first to write about corporate social involvement although considering it as a flaw in corporate thinking. Stewardship theory Social contract theory The social contract theory begins in the classic period of history and takes its modern form in the 16th and 18th centuries with best known philosophers like Hobbes, Locke and Rousseau. Legitimacy theory Deegan and Unerman (2006) assert that the legitimacy theory relies upon the notion that there is a social contract between an organisation and the society in which it operates. The social contract as explained by Deegan (2000), represents myriad of expectations that society has about how an organisation should conduct its operations. Stakeholder theory Freeman (1984) argues that managers should not just focus on stockholders need, but rather must satisfy a variety of stakeholders. As such, the stakeholder theory is used to analyse those groups to whom a firm should be responsible (Moir, 2001). 2.4 Corporate Financial Performance Price and Mueller (1986) assert that corporate financial performance (CFP) depicts the financial viability of an organisation. Therefore, corporations need to disseminate information about their financial performance as an account of managements stewardship as well as a means of assessing the entitys capacity to generate cashflows (Stein, 2000). Additionally, the financial performance is a subjective measure of the effectiveness with which an organisation makes use of its resources to attain its economic or financial goals. Basically, an organisations financial performance can be measured using three alternative approaches market-based measure, accounting-based measure and perceptual-based measure (Orlitzky, 2003). The market measure focuses on the firms stock price to evaluate its financial performance. McGuire et al (1998) argue that the market measure represents investors evaluation of the ability of a firm to generate future economic earnings. Alternatively, the accounting-based measure captures the firms competitive effectiveness and internal efficiency as well as optimal utilisation of assets. This measure represents financial performance using three divisions: (i) Return on Asset (ROA) and Return on Equity (ROE) (Waddock and Graves, 1997); (ii) profitability in absolute terms (Stanwick and Stanwick, 1998) and (iii) multiple accounting based measure with the overall index score of 0-10 (Moore, 2001). Finally, the perceptual measure uses subjective judgment about the firms financial performance wh ich is provided by survey respondents (Wartick, 1988). 2.4.1 Relationship between CSP and CFP The nature of the relationship between a firms socially responsible behaviour and its financial performance has extensively been debated till today and yet it remains unsolved (Margolis and Walsh, 2003). Preston and OBannon (1997) actually highlights two important issues in the relationship between CSP and CFP: Direction and Causality of the relationship. The direction of the relationship can be positive, neutral or even negative. The positive direction of the relationship can be explained using the instrumental stakeholder theory. This theory suggests that the satisfaction of various stakeholder groups is instrumental for the organisational financial performance (Donaldson and Preston, 1995). Conversely, the negative relationship is based on the neoclassical economic theory which argues that a socially responsible firms costs are considered unnecessary and thus can lead to a competitive disadvantage such that a decrease in firms profit and shareholder wealth (Preston and OBannon, 1997). Finally, the neutral relationship between the two constructs, as provided by Waddock and Graves (1997) exists by coincidence. McWilliam and Siegel (2001) further explain that a company acting responsibly to customers can have different demand curve as compared to a less responsible one. Therefore, the CSR activities are only a way to attain differentiation and thus, do not impact on companys profit. The causality of the relationship as pointed out by Preston and OBannon (1997) actually denotes whether CSP or CFP is an independent or dependent variable. Therefore, in such a case, if CSP is an independent variable, it comes first to affect CFP while if CSP is a dependent variable, CFP comes first to affect CSP. Such an argument is also raised by Griffin and Mahon (1997) who question whether a company is better off focusing on CSP or CFP first. In view of explaining the causality of the relationship, Waddock and Graves (1997) and Dean (1999) proposes two theories such as the slack resource theory and good management theory. The slack resource theory explains that a firm shall have good financial performance to contribute to the corporate social performance. It further posits that a company conducting social performance requires some funds that may result from the success of financial performance. Therefore, this theory argues that financial performance comes first and is an indepen dent variable to affect CSP. Conversely, the good management theory argues that social performance actually comes first. This theory provides that CSP is an independent variable resulting in CFP and companies having good reputation achieve good financial position through market mechanism. 2.5 Empirical review

Raymond Chandlers Writing Techniques in The Big Sleep Essay -- Chandl

Raymond Chandler's Writing Techniques in The Big Sleep      Ã‚  Ã‚   I sat at my desk, wondering what I could possibly write about The Big Sleep. I mean, there are so many possibilities. This guy, Raymond Chandler's writing style is so different from anything I have ever read before, that there are many things that I could talk about. I heard that Chandler once said, "I live for syntax!" It does not surprise me that he would say something along those lines. I mean, this writer is all over the page with different writing techniques. Whether it is his use of similes or the lack of punctuation, Chandler's novel is easy to read, process and enjoy.    I wouldn't say that this book requires an in-depth reading to understand the plot. The style that Chandler writes in is easily understood. His narrative voice is almost what I would consider conversational. Conversational, in the sense that everyday speech is very similar to the written language of this novel; it is uncommon to write the same way that one talks. It was easy for me to hear the voices of Marlowe and Vivian in my head; I could hear the sarcastic tones of the protagonist as I read. The flow of this novel does not have the normal novelistic style that most books consist of; that is, layered, detailed and a bit wordy sometimes. It is written very much how people talk to one another. Chandler uses a lot of slang, not in conversations, but in his narrative.    In order to easily describe the way Chandler writes it is best to break down a few bits and pieces of the text. For instance, the lack of punctuation throughout Chandler's text is an example of his style. It takes a while to find a semi-colon or a colon anywhere in the novel. I have already ... ...the spice of life, is it not? Chandler is probably one of the easiest writers to remember; once you have read Chandler, it is not easy to forget the style he writes in. The story itself may be forgotten, but his language, his rhythm, his style, never is. Chandler was lucky in the sense that he was in the right place at the right time, his books became well-known and well read almost immediately after publication.    These days, it is much harder to have such an instant success as Chandler did. Chandler was lucky indeed, but it was not entirely luck that put him at the top of the lists for one of the best hard-boiled detective writers ever. His witty, charismatic style did that for him.    Works Cited    Chandler, Raymond. The Big Sleep. New York: Vintage Books, 1996. Kemp, William. The Writing Process: Chandler 202. January 14, 1999

The History of the Metis :: World History

The History of the Metis The Metis were partly french and partly indian. Their leader was called Louis riel. Following the Union of the Hudson's Bay Company and the North West Company in 1821, trading had been reorganized in order to reduce expenses. Since there was no longer competition in the fur trade, it was unnecessary to have two or more posts serving a single trading district. For this reason, some posts had been closed and the number of brigades reduced. This reorganization had led to some unemployment amoung Metis who for years had been working in the fur trade. The Hudson Bay Company had attempted to assist these these men by encouraging them to engage in farming in what is now South Manitoba. A few families take to agriculture, but most of the metis found it difficult. To them, the excitement and the adventure of the buffalo hunt held more appeal than farming. Hundreds of Metis were content to earn a living by hunting buffalo, making pemmican or finding employment as freight drivers. After a while Canada bought Rupertsland from Hudson Bay Company. When the Metis heard this they were alarmed. They feared their religion,their language, their lands and their old, free way of* life. They had known for some time that Canada was busy constructing a colonists highway from Lake Superior to the Red River. The situation became tense surveyors were sent into the flow of settlers, and it was considered a wise move to have the surveying well under way before settlement began in earnest. It was decided to use a system or land survey similar to that used in the western part of the United States. Townships were to be divided into thirty-six sections, each containing one square mile or 640 acres. The sections were then to be divided into, the quarter-section was thought to be enough land for each family settling in the North West. (An interesting aspect of the survey system was the plan of the setting asside two sections in each township for the future support of education. The idea to sell these sections at a later date and use the money for the construction of schools.) When th survey began, friction occured in those areas where the french specking Metis had settled along the river, occupying long narrow strips in the manner common in New France. Attempts were made by the surveyors to avoid disturbing the pattern, but in some cases the survey lines crossed the narrow holdings,

International Trade Theory and Policy Essay

Multilateral trade negotiations forums are organizations established to regulate trade between many countries of the world. The agreement involves establishing organizations which regulate trade in the entire world. The increase in globalization has forced many countries to form regulatory organizations to avoid bad trade practices. To enhance trade many countries have created trade agreements to remove barriers to trade. Economic integration is the most important aspect discussed by the trade agreement organizations. The organizations aim at achieving an integrated economy where countries can trade with each other. After the World War II many leaders of the world felt that the economies of the destroyed countries could only be improved through trade. One of the proposals to improve trade was to create a laissez-faire global economy but this was rejected since it was not applicable. The leaders agreed to establish global trade organizations which would enhance trade by reducing the barriers to trade which had been placed by the countries. During the war many countries created strict barriers to trade to protect their economies from external influence (Anderson, 2005). The General Agreement on Trade and Tariffs was the first agreement to be established. The agreement was established to enhance trade between the member countries but was later converted into World Trade Organization (WTO). The International Monetary Fund was also created to regulate the economic status of the developing nations as well as regulate international economic activities (Smith, Sumner & Rosson, n. d. ). Reconstruction of the damaged economies after the World War II was the priority of these organizations. For many years several amendments have been made to accommodate the changing economic climate. Trade liberalization has been the most important aspect during the amendments. For example, according to Anderson. (2005, pg. 414), â€Å"the Uruguay Round of multilateral trade negotiations led to agreements signed in 1994 that contributed to trade liberalization over the subsequent 10 years. † Despite the many advantages accompanied by the establishment of the international trade organizations, there have been several disadvantages accompanied by the activities of opening up of domestic markets to international trade. An example is the global economic recession of the 2007-2009 that was experienced by the world economies after the banking industry and the mortgage industry collapsed due to poor financial practices by the U. S. banks. Importance of multilateral trade institutions The multilateral trade organizations were created to enhance trade and stability of the economies of the member countries. Initially they were established to reconstruct the economies which had been destroyed during the World War II. Many countries realized the importance of trade in improving the economies after the war. Trade was the only tool that could restore the original status of the economies. Before and during the war many countries had put a lot of trade barriers to prevent trade with other countries. Opening up domestic economies required negotiations with all countries of the world to enhance a more open economic system (Warnke, 1996). Multilateral trade institutions improve international trade since they encourage member countries to open up their domestic markets to international trade. Trade disputes are resolved more easily between and among conflicting countries, hence leading to a good relationship between countries. Production according to comparative advantage has been encouraged by the improvement in international trade. Countries are encouraged to produce goods which they can produce most economically. Different countries have different resources which give them the potential to create income generating products. Through international trade resources are utilized optimally since an economy will specialize in the production of products which it has greater advantages (Bernard et al. 2007). International trade has encouraged countries to specialize in the production of goods and services. The mobility of factors of production has been accelerated by globalization. More industries are encouraging division of labor to increase the productivity of labor factors of production. More industries have developed with the expansion of international trade. These industries create more employment opportunities to the citizens of a country. As the par capita income of the people increases their living standards is improved. Poverty alleviation campaigns have encouraged improved international trade as one of the strategies to enhance development of nations (Bernard et al. 2007). Opening up the domestic market to international trade creates more advantages than disadvantages. The international prices are lower than the domestic prices. The consumers obtain goods and services at lower prices. The competition created by the international trade encourages the domestic firms to be efficient in their production systems. The customers are provided with a wide variety of products to select from (Bernard et al. 2007). Multilateral trade organizations control the globalization of economies. Globalization refers to the international operation of business activities and the transfer of information between countries. Globalization has affected business activities both positively and negatively. Global markets have emerged and many companies are operating in several countries. This has created competitiveness of the companies since the global markets are larger than regional markets. Globalization is the process of integrating the global economies, societies and cultures by connecting communication and trade networks. Economic globalization refers to the integration of global economies by enhancing trade, foreign direct investment, sharing of technology, movement of people and flow of capital. The factors which influence the rate of globalization are the world economies, technology, and socio-cultural, political and biological aspects (Warnke, 1996). Globalization has improved the exchange of technologies and knowledge. This has increased the capacity of businesses to expand on the number of innovative products in the market. The public sector alone cannot accommodate all the skilled labor in a country and trade provides more employment opportunities for the people in a nation. As economies become more global people with skills can move to countries where there is high market potential for their labor. The introduction of internet has increased efficiency in trade by enabling people transfer information more easily. Trade attracts private investment and this generates more capital in the economy. The gross domestic product of a country increases with increase in trade. Growth and development of an economic is accelerated by trade since more income is generated and the living standards of the people are improved (Daniels, Radebaugh & Sullivan, 2007). Poverty levels in both developing and developed countries have declined by greater margins due to participation of countries in the international trade. Economies have acquired more wealth and the gross domestic product of countries has improved. WTO has become the custodian of international law on trade. The enforcement of trade laws about good trade practices has been possible after the creation of WTO. The establishment of regional and multilateral trade agreements was experienced after WTO was created. This has encouraged many countries remove barriers to trade (World Trade Organization 2010). Weaknesses of multilateral trade institutions Most of the multilateral trade organizations are affected by the political climate in the member countries. Any political war between the member countries can ruin the operation of the organizations. When the organizations support some political organizations; they affect the interests of the members and this reduces the delivery of the required obligations. Politically strong countries have dominated the operations of the multilateral organizations and this is causing a lot of concern to the global trade communities. Decision making at the trade organizations has become very difficult since many participants are not willing to accept rules which affect their economies negatively. Anderson (2005, pg. 417) suggests that â€Å"although trade can and should play an important role in allowing developing countries to lift themselves out of poverty, in reality international trade agreements and institutions have more often than not contributed to the continuation of global social and economic injustice. â€Å" The developed nations have dominated the multilateral trade organizations. For example, according to Anderson (2005, pg. 31) â€Å"with decision-making based on a consensus system, so each member has equal decision-making power, the WTO is held to be the most democratic of all the international institutions with a global mandate. In practice, however, the working methods of the WTO lack transparency, inclusiveness and equity. † There have been conflicts as the developing nations are becoming concerned about the great influence the developed nations have on the decisions in these organizations. Multilateral trade agreements are complicated to establish since many countries are involved. The interests of each country should be represented during the negotiations to ensure that conflicts do not arise afterwards (Amadeo, 2010). Despite the establishment of the trade organizations many countries continue to place more trade discrimination measures upon other countries. â€Å"They include not just trade taxes-cum-subsidies but also contingent protection measures such as anti-dumping, regulatory standards that can be technical barriers to trade, and domestic production subsidies† Anderson (2005, pg. 415). Many trade distortions have occurred since the global economies were established. Multilateral trade organizations have encouraged the opening up of economies to international market influence. The opening up of domestic markets has affected the global economies. Several disadvantages have been accompanied by the opening up of the domestic markets, for example, the global economic meltdown of the 2007-2008. The crisis started with the rise in prices for basic products due to the international increase in fuel prices. The prices of oil and food products increased within a short duration leading to an economic crisis which affected many people in US. The prices for many products increased and inflation was experienced all over the country. Many subprime borrowers had low incomes and the rise in prices for basic products increased the expenses for their living. Many companies retrenched employees to accommodate the increasing production costs. The borrowers were unable to repay the loans resulting to massive defaults. More than 100 subprime mortgage intermediaries filed for bankruptcy. Reacquisition of the houses from the defaulters caused a lot of people to become homeless (Platt, 2008). Subprime mortgages are policies which have a high risk of default. Subprime borrowers are the people with low incomes and have a poor credit history. They have higher risk of default compared to the prime borrowers. The US government had deregulated the real estate mortgages leading to massive investment in subprime mortgages. This caused the risky lending of subprime mortgages. The subprime mortgages were not popular initially but they became widely used in the 1990s. The climax of the sub prime mortgages was in 2006 when they accounted for more than 21 percent of all mortgages traded in the US market. The value of subprime mortgages in 2006 was valued at $600 billion. Many subprime mortgage intermediaries were established to reap the benefits of the expanding industry (Helleiner, 2009). The world economies have experienced a major decline due to poor performance of many industries. This is a crisis which has affected all sectors of the economy. Williams (2009) claims that the crisis was initiated by the subprime mortgage lending crisis in US. The banking sector issued many loans to subprime mortgage intermediaries. Due to the expanding market in the sub prime mortgage market many banks issued unsecured loans to the intermediaries. The climax of the boom was reached in 2007 when the prices of products started to increase and many subprime mortgage lenders were unable to repay their loans. This led to massive default of debts and banks registered huge losses. This reduced the lending capacity of many banks. The resulting effect was lack of credit in the economy and the collapse of many companies (Stapledon, 2009). The government of US is to be blame for the crisis. The 102nd Congress under the leadership of George W. Bush deregulated the housing sector in 1992 (Guttmann, 1994). The main aim was to increase the availability of money for buying housing. Fannie Mae and Freddie Mac companies were deregulated and could spend $97. 50 to buy housing loans. Banks with $100 could spend more than $90 buying mortgage loans. The companies had been ordered by the congress to retain more capital to for risk allowance but this was not practiced. Since 1992 the mortgage sector experienced the highest boom with many companies investing heavily in the sector. Subprime mortgage intermediary companies were developed to assist homeowners acquire loans from the banks (Stapledon, 2009). The banking sector was the worse hit by the crisis. Inter-bank lending declined and banks had no money to issue to their customers. Most of the banks collapsed while others registered huge losses. This was as a result of failure by many subprime mortgage intermediaries which defaulted the huge loans they had acquired from the banks. The central bank could not lead to all the banks due to the massive crisis that affected the entire country. Since US is a market for many commodities from other countries there was an extension of the crisis to other economies causing a global economic meltdown. Many economies declined since they had no market for their goods. Inflation increased as prices persistently increased. The entire world encountered economic crisis which resulted into failure by all sectors of the economy in the world (Stapledon, 2009). Many international organizations have intervened to eradicate the problem. The intervention by the World Bank has created better results in the efforts to reduce the impacts of the crisis. World Bank has issued loans to many countries to increase the income levels of the people. Many companies have been able to access loans due to the fun ding by World Bank. The availability of loans has increased since last year and many companies have regained their capacity (Bayne, 2008). The World Trade Organization has negotiated with the oil producing countries to reduce the oil prices as one of the measures to reduce the effects of the crisis. The global oil prices increased causing the prices of many products to rise. The high product prices caused inflation in the whole world. WTO has also encouraged trade by persuading some countries remove the trade barriers they had placed upon their trade partners when the crisis was at the climax (Stephen, T. 2008).

Euroland Foods Essay

Executive Summary: Euroland foods is a stable name in the market, it has grown well in the market over the years, but now it is planning to allocate the budget for the newly planned activities which are costing it more than 300 Million Euros but the company has to invest only 120 Million Euros. Various people from the upper management have come up with their suggestions for investment, few of them are very good and are acceptable in just a blink of the eye but many of them require greater search and evaluation for their validity. It is suggestible to first evaluate the alternatives and then rank them so that best of the activities could take place within the allocated budget. Strengths & Weaknesses: In replacement and expansion of the truck fleet, the company can increase the number of goods hauled on the truck and this could reduce the transportation costs in the long run, further it could possibly have a greater market coverage but it is very costly to go for this option as Klink is not doing any experiment and going directly for 100 new trucks. The acquisition of new plant is although a good option but yet it is not very useful option as the investment in the entire plant can be risky and can put a lot of burden on the entire company’s budget, it is suggested that the company should buy a warehouse to support the growing needs of the customers for ice cream and yogurt. Another problem would be related to the labor hiring which would result in more costs. The expansion of the plant is a good idea as the market needs are completely growing and cannot be supported by any other plant, the plant capacity would increase by 20% but the drawback is that it is supporting those products that are not having the highest share i-e mineral water and fruit juices. Morin has come up with a good suggestion as the processing of dried fruit and its launch would enhance the company’s portfolio and also it would be a brand extension, it has got a fair possibility of growth as Europe is a cold region, the IRR is also expected to be higher than the required but then again it is requiring company to spend much more then it should spend. Also it can take the company out of budget as the company’s current concern should be about the stability of its current activities. Leyden has come up with a good idea of plant automation and conveyer system, this could reduce the need of the labor and the threats of lawsuit due to any injury that may take place because of the old plant. The company cannot only reduce the labor requirements but also may increase the market penetration as the units would be produced more efficiently now. The drawback is again related to the high costs and further the company may disappoint the labor which could be unethical and can bring agitation in labor against the company. The effluent water treatment at four of the plants is again good action since it is categorizing the Euroland foods as environmental friendly. This would add itself as strength to the company as now company would be working ethically in many ways. The drawback is related to the issue of investing in a non-functioning area, which would not bring any profits. Ponti has although suggested to expand the market to southwards and eastwards, but it is dependent on many conditions such as if proposal of earlier plant extension would not accepted then it is possible for the company to incur greater costs for reaching those newly recognized areas, further it is not suggested to go for them because the company has already got itself in other hassles and it should look at those points which could further strengthen it position in the current positions. Morin has come under the pressure of competitors and is thinking about the company’s well being, but yet there lies the problem with such a heavy investment, the company should always test market the product. Although it would be the product development to some good extent but at the same time it can cause the company to loose big money in something which it is not sure about. Klink has come up with a wonderful suggestion of networking, these days the markets are based on programs such as SAP which can control every activity of the company, if the efficiency would be there then the company may take more initiatives as it would think ahead. The weakness is again related to the increased responsibility which can cause disturbance and further it can result in unemployment as many of the activities would be performed with the help of networking. Humbolt has given a solution which suits his nature and he has again provided the company with something that could increase the liability of the company and further create more complexed problems for it. However, it seems to be very lucrative but it is all about the management capability of the company which is not appropriate in relation to such extension. Ranking the Proposals: According to my analysis, proposal 3 (plant extension) should be ranked first as it has a fair possibility of increasing the market share for those products that are stable from a period and are not growing (mineral water, fruit juices). Proposal 4 (snack foods) should be ranked second as it has got a fair possibility of market acceptance due to weather condition in Europe. Proposal 5 (Plan automation) should be ranked third as it can reduce the number of employees and other threats and can bring more profits in. Proposal 10 (Networking) should be ranked fourth as it can increase efficiency and so can reduce the number of positions in the company. Proposal 6 (Effluent water treatment) should be ranked fifth as it is environmental friendly and â€Å"good ethics is good business†. Proposal 1 (Truck fleet) should be ranked sixth as it is requiring a direct investment for 100 trucks where as the company should look for such changes in a slow manner. Proposal 9 (Sweetened yogurt) should be ranked seventh as it is very risky as it would take a lot of research and can distract the firm from its other stability objectives. Proposal 2 (new plant) should be ranked eighth as it would associate exceeding costs with it such as new labor, transportation and many other costs. Proposal 7 & 8 (market extension southward and eastward) should be ranked ninth and tenth as it is again distracting the company from its current objectives and its too risky as the entering market characteristics are opposite and against the company’s favor. Proposal 11 (Schnapps) should be ranked eleventh as it is completing out of the scope of the company’s feasibility. Effluent Water Treatment: Since the effluent water is just something the company is willing to acquire as a mean to have good public relations and to be able to contribute to the environment. It is just something which cannot bring company the profits, it would cost 6 million Euros if the facility equipment would be purchased now but later on it can be costly and government at times does affect the company’s investing powers. So it is better to buy this equipment before the government makes it a mandatory for the company to buy it. Conclusion: The ranking shown above is itself suggesting what should be done. According to the analysis, proposal 1, 3, 4, 5, & 6 should be given utmost importance as it is feasible for the company to get them done within the allocated budget, so Mr. Verdin should give them more importance and recommend them to the board. They can also make the current position of the company stable and perhaps make it more efficient. Other projects have their own importance but they are not triggering the initial need of the company which is stability. The mentioned proposals would make the base of the company’s structure sounder and so it can look forward for other proposals in the future time period with more ease.