Why have you decided to pursue a career as a solicitor?

Having undertaken extensive and varied work experience and placements in the commercial environment, I feel that becoming a solicitor is a natural progression for me. I have gained an insight into the workings of commercial organisations at an international level and have highly developed analytical skills. By pulling together both my academic experience and practical experience, I believe that I am able to provide the balance required by solicitors in terms of technical accuracy, whilst also retaining focus on the practical impact of such advice and decisions.

With this in mind, I have decided to utilise my commercial experience in a way that can allow me to develop my skills, but will also ensure that clients benefit from my commercial understanding. To me, a career as a solicitor provides the perfect challenge and opportunity to grow, whilst maximising the benefit obtained from my previous experiences. Commercial law, in particular, is of interest to me, specifically where cross-border issues are prevalent or where there is a need to draw on cultural knowledge and experience.

I have both the necessary academic skills and the practical knowledge which makes the choice of becoming a solicitor an obvious yet challenging route.

Why have you chosen to apply specifically to Covington?

One of the most attractive elements of Covington as a firm is its forward thinking and innovative approach. Whilst I am keen to make the most of my practical experience, to date, it is also very important to me to be part of a forward thinking and constantly adaptive firm that will challenge me at every stage of my career. Having had considerable international experience, it was also important to me to join a firm that shares this outward looking approach and encourages cross-border co-operation. With offices in key cities across the globe, it is clear that Covington has a focused and successful strategy regarding international development; this, in my view, is a particularly attractive feature of the firm.

During my years with Rifsons Group, I was heavily involved in the compliance aspects of its operation. This gave me a thirst for understanding the legal background to these regulations as well as a desire to develop my skills in this area. With this in mind, Covington was an obvious choice due to its internationally recognised work in this area. I was also particularly impressed with the award issued by the Indian Business Law Journal, in 2009, recognising Covington as one of the leading foreign firms in India.

All of these factors, combined with the clear level of satisfaction that is seen from those working within the firm make Covington an excellent organisation and one in which I would like to grow and develop as a lawyer from the start.

What distinguishes you from other applicants for a summer scheme or training contract place at Covington?

Unlike many other students, I have the benefit of several years’ experience within a different sector as well as the academic expertise which is necessary to work in a firm of this calibre. I am able to combine both academic excellence and real life experience, in a way that many other students will not.

Prior to beginning my studies in Law at Keele University, I spent a period of approximately five years working full time in finance-based roles, often with a heavy emphasis on compliance and regulation. By undertaking this period of work, I not only matured as a person, but I also learnt valuable lessons in terms of how regulations can impact on a business from a practical point of view. This insight will enable me to communicate more effectively with clients and have a much more client-based approach to my work in the legal field.

Further experience gained in temporary roles such as with a lettings agency and an accountancy firm have also enabled me to develop a key range of transferable skills such as the ability to be self-organising and also the capacity to communicate effectively at all levels. I retain information quickly and am highly self-motivated, both in my academic pursuits and in a working environment.

I feel that these experiences make me a particularly good fit for Covington, as I have the desire to learn and develop within a new sector, but also have considerable background and transferable knowledge and skills which I can use to the best advantage of both the firm and myself as a trainee solicitor.

What achievement in the past 5 years are you most proud of and why?

Although I have developed considerably on a personal level, in the last five years, one of my proudest experiences has been my involvement in the fund raising events for Palestine. This was done whilst at university and was a particular challenge due to the heavy competition in obtaining charitable funds from students during a period of economic difficulty. Furthermore, the issues in Palestine are not always fully recognised and therefore there was an added need to educate and explain the problems, while also raising funds.

I was the team and project manager for this fundraiser and pulled together the team of individuals helping me, while at the same time managed to gain the support of a commercial partner (Krispy Kreme) and the university itself. Through a combination of negotiation and persuasion, we were able to obtain enough doughnuts to sell to students at a key location on campus, immediately outside the library. Our target of raising £1,000 in two days was exceeded.

I am particularly proud of this achievement, as it drew on a range of skills in order to be ultimately successful. I was relying almost entirely on goodwill from those involved as there was little commercial benefit in it for them, making it a particularly challenging task. Ensuring that the day ran smoothly and that the volunteers were all motivated and unified in their desire to help, as well as dealing with the sponsors and university personnel, required a great deal of organisation as well as highly developed management skills. Pulling all of this together and running such a successful event gave me a huge sense of achievement and plenty of experience that I will take away with me for future endeavours.

Outline your main interests and social activities. Why do those particular activities fulfil you?

Outside of my academic work, I have multiple interests and participate in social activities with my peer group. Specifically, I enjoy team sports such as rugby and football, both of which give me a physical release and enable me to retain a high level of discipline and fitness, but also enable me to work in a team and gain a sense of being part of something bigger. Regular training sessions are organised which I find particularly beneficial, as it gives structure to my fitness regime, but also gives me a chance to socialise with the rest of the team, many of whom have become close friends, over the years.

As well as team sports, I also enjoy going to theatre and training in the gym. Both of these activities give me a chance to relax and reflect on my own thoughts. Individual gym training is also important to me from a fitness point of view and in ensuring that I can give of my best when it comes to the team sports in which I am involved.

As previously mentioned, I am also involved in voluntary organisations in the area of Islamic Relief, as I feel that this is an important charitable cause that is often overlooked. I have an interest in different cultures and this activity enables me to gain a greater understanding of the cultures, whilst also giving me the chance to improve matters and to put something back into what I believe to be a worthy cause.

I am a sociable and active person and I feel that this is reflected in the range of interests that I pursue outside of my immediate academic and professional life.






Photography: Film Review



The image above shows a great sense of contrast between the whiteness of the snow and the dark lines created by the outline of the trees; the dark box to the left also shows a minor focal role in the entire image in terms of its size and off-centered positioning. The sensory effect of the above image is rather mystical and almost fairy-like, save for what seems like a garbage can as the side of the path which anchors the image to an immediate sense of reality.

How the trees are bent towards each other creates a tunneled effect, especially with the line of sight directed forward due to the path. The trees look graceful yet frozen. As the trees are partly covered with the snow, there is an effect in which it seems that these objects partially fade into the whiteness of the ground. The tunnel the trees create also give the illusion of a powder-like arch, like the whiteness is something that floats in mid-air, seeming like a distant mist that further adds to the enchanting effect of this photograph.


In looking at this photograph, the stark-red colour of the bus against the grayscale of the background immediately draws my attention. Hence, the bright color draws my eyes; from the general “redness” of the bus, my eyes go to the next bright detail and that is the front of the bus with the bright yellow lettering, showing the bus number and the destination. The contrast created by the yellow-against-black effect further focuses my attention on this detail. From there, the next detail that I notice is the strip of white on the side of the bus. At some point, I had to think in terms of the hierarchy of focus whether it was this strip and the bus’s yellow-black combination that would get my attention first, and then I realize it is because the orientation of the bus that makes me look first at the front (where the bus number is) and then my eyes trace from left to right, thus, my eyes register this white strip which creates a bigger impact than the bus number.

In looking at this photograph, there are therefore two elements that I immediately take notice of: the contrast of the colour of the object against the background, and then the size and orientation of the object against the background. Since the bus dominates the image, all the grayscale background gives support to the object of the photograph. Very few details from the background did get my attention, and these are the whiteness of the clouds and the white markers on the street. Hence, the details of the background are only secondary.


When it comes to describing the visual and audio elements of this particular photograph, what usually comes to mind is how this image has captured in a moment that is specific to this young girl. Hence, when it comes to the emotional effect of this photograph, this shows a sense of intrusion because what this image represents is a moment that this young girl was having at the point when it was shot. The relationship therefore is how the visual aesthetics of the photograph gains some substance because of its audio elements. In this case, a viewer can feel certain emotions provoked by this photograph by means of memory (memories of childhood or memories of another child) or by means of realization such as the joys of having this moment of happiness as a child.

A picture can then give a viewer a range of emotions, depending on the subject at hand and how the picture becomes a representation or a proof of that specific moment that highlights an emotional context. It can be observed that pictures such as the one above are an example of such art, especially when the captured image brings forth an appreciation of the small things that convey the aspects of daily life. Although visually it “freezes” the object, the audio elements of the image give this fleeting moment a great sense of depth to the object; for instance, in the image above, although it shows that the girl seems to be caught by someone outside the scene, the joy in her eyes and smile can convey the curious nature of the girl and even her playfulness amidst the presence of the towering adults around her.


In the above picture, it can be observed that the depiction is quite two-dimensional. As the camera was focused on the branches of the tree with “The Eye” in the background, the challenge in such shot is how to introduce depth. This is further challenged with the use of black and white instead of coloured.

A. The important approach when a photographer decides to take a shot of something like the above image is to ensure depth. One approach is by defining the foreground and background. The main subject can be either located at the front of the back, but this is up to how the camera is focused. In the example above, the subject is the tree, and in order to create depth, it is set against a different object which is the Eye. The challenge in such shot is how to make the tree not flat against the eye. Hence, as the foreground, the camera focused on the subject thus blurring the background.

  1. When it comes to the use of frame, it is important to take note of how it can magnify certain objects and how it includes and excludes certain elements. In the above image, the framing only captured a portion of the tree and a portion of The Eye. A small portion of the sky also lets the composition of the two “breathe”, thus not entirely taking up the frame. By putting the portion of the sky in the frame, it creates further depth because the Eye gets to have a spatial relationship with something else. Hence, the hierarchy of the visual relationship, through framing, that helps in the depth of the photograph goes: the tree with the The Eye, and then The Eye with the sky.

  2. Perspective is one of the critical components of art and design because it also determines depth and the spatial relationship of the objects in the frame. In the above example, perspective can be seen by means of size and emphasis on the subject. As the tree is nearer, it tends to look bigger than The Eye; although in reality the Eye is bigger than the tree. What the picture shows is in order for the tree to look bigger, it appears heightened through its darker colour, and the Eye’s silhouette makes it look much farther than the tree.


  1. Positive and negative space – the dynamics between positive and negative space demonstrate how the relationship of the subject and the background can give way to formation of an image that is neither the subject nor the background. It is a strategy in composition which takes advantage of how two-dimensional space can be re-created by means of simulating certain images or illusions.

  2. Figure-ground relations – artists are very strategic when it comes to creating an image based on the relationship of the background and the major figure/s. This relationship can determine the success of the photograph, especially in terms of how it creates the degree of emphasis on the major and minor figures, and how the background serves as a support visual. Such can be seen in the image of the red bus above. It also helps in that way that the orientation of the bus is directed by the street markers on the road, thus the relationship between the ground and the figure are harmonious.

  3. The rule of thirds is one of the basic applied principles in photography; its purpose is to ensure that a certain balance is achieved by means of composing the objects according to the “thirds” of the visual plane. As can be seen in the image of the girl below, by imagining three lines that “cut” the plane equally vertically and horizontally (thus a total of three vertical lines, three horizontal lines and three sub-planes), the subject should be placed within a specific “third” of the image. In the image of the girl below, she is placed in the third “vertical third” and first “horizontal third” of the plane. However, it can be noted that the positioning on the thirds is a bit off-set, which is to say it is not smacked in the middle but rather it tends to border to the next plane. Some artists do this to throw off a bit the idea of a perfectly balanced image.


The strongest visual force in this photograph is road that cuts through the hills covered with white snow. The combination of the dark road with the white strip of snow in the middle can be regarded to create a strong visual force that pulls the viewer forward. This is therefore the implied directional movement of the image. In terms of the quadrant, the upper left quadrant is the strongest because it is the terminating point of the line and that the number of cars that seems to be clustered in the area creates a visual weight albeit the cars looking smaller from this angle.

  1. In this composition, the rule of three is no longer necessary because the strongest visual force is right in the middle. The emotion elicited by this image is cold, not just because of the snow but because of its colour, but also a sense of wetness and haste due to the movement of the cars on the road. The placement of the horizontal lines at this point is minimal as it is only used to establish the horizon in the distance, but the slope of the left is also a horizontal element.

  2. The verticals in this image are strongly emphasized through the winding road heading upward/forward. Because of the thickness of the two roads with the strip of snow in the middle, the emotion elicited is that of an attractor which, as previously mentioned, makes the viewer feel the forward movement.

  3. The sense of motion in this image is strong because of the road and the moving cars. The image itself is also about movement. Because the road defines the movement and the vehicles are contained in the road, the image shows a stable sense of motion.

  4. When the two roads “converge” due to the perspective, it creates a triangular shape.

  5. The important masses in this image are the snow-covered hills/mountains. This is highlighted by the road because it cuts through the mountains at ground level and the uneven coverage of snow takes the form of the side of the mountain in addition to the presence of the vegetation that dots the outline of the mountain.


Photographs inevitably use shapes, lines and forms as a means to define the relationships of the objects in the image and to also highlight what the subject is about. Due to the photography usually containing these components, the eye needs to finally determine where it should rest, and ideally, the eye rests on the subject.

The emphasis serves as the resting place for the eye. Even if the picture has many elements, in the end, the eye should return there. As can be seen in the picture, there are two potential emphases on this photo: the girl in the foreground and the girl in the background. The eye tends to see the girl in-front first, and then go to the girl at the back; and then, because the girl at the front is emphasized, she becomes the focal point.

The human form can be considered as the most interesting thing in the image; in this photograph, the detailed ground mainly serves as a ground albeit its spatial dominance in the picture; this is also because the human form is an intricate subject. What makes this emphasis also workable is that the girl is set against a simple background; although the ground is textured, it is not domineering. Hence, the girl is further highlighted because in terms of texture, the girl is more textured. Another important point as to why the girl in-front is emphasized is because of movement; she is walking forward.


Texture plays an important role in photographs because it adds different degrees of intricacy on the subject or among the objects found in the frame. It also creates the dynamics of contrast between background and foreground.

In the photo, it can be observed that the object itself is much textured as compared to the other two figures beside her. Because of these details, in addition to the fact that she is wearing bright colours, the object manages to stand out of the image despite the fact that she is not in the foreground and that the colour of the dress of the woman further back is also as bright.

How lines create a sense of texture and shadowing can be seen in the outline of the clothes of the two women. The folds of clothes of the woman in blue creates specific depth to her clothes, thus making her image textured. The grouping of the folds around the neck area of the woman in blue creates a visual movement and effect to her figure, especially as it wraps around and below the woman’s head. The same can be also said to the woman in red in which the lines of the details of her clothes further make the entire figure demonstrate a great sense of depth specific to the figure itself.


Contrast plays an important visual impact because it highlights the details of the object and the visual hierarchy which the eye can trace while looking at the photograph.

  1. The contrast of scale allows the eye to establish and understand the relationship of the objects with respect to the background and other objects. It also helps the viewer to orient himself or herself based on the associated reality of the object. For instance, in this photo of the tree branch against The Eye, the visual reality is that the Eye is bigger than the tree, but the photographer makes the tree seem bigger or as big as The Eye in this image. Hence, the contrast of scale may be helpful in this photograph, but through the use of depth, the image is not disorienting.

  2. The contrast of shape is another important element in photography; this helps determine the differences among the objects in the frame, and at the same time, it creates a visual impact. For instance, in the picture of the rose against the dress, the contrast of shape helps the viewer make sense of the object behind the emphasied bouquet. From there, seeing that the bouquet is being held by a woman in a dress, the understanding and meaning of the photograph becomes deeper.

  3. Contrast of colour is another important factor, especially as colour creates a significant impact on the image. In this photo, by preserving the color of the rose and turning the background to black and white, the rose becomes emphasized. Another example is that the contrast of the lights of the buildings, the Eye against the dark sky and river creates a dramatic overall effect to the image.

  4. Contrast of texture also highlights the beautiful details of the objects in the frame. Going back to the photo of the rose, the emphasised texture of the rose highlights the beauty of the flower. However, the dress against the rose is textured as well. By means of controlling the colour, the rose becomes the focus, thereby turning down the visual impact of the dress as brought by its texture.

  5. The contrast of the tone of the image is a means to control the impact of the objects in the image. This can be seen in the photo of the rose in which the heightened tone of the smaller object makes it the emphasis of the photograph. By toning down the background (woman, dress and man) by means of turning them to greyscale, the photograph then defines the subject.


Unity is achieved in this photograph despite the differences in the shape of the objects in the frame. By means of highlighting the focus and the strategic visual function of the other objects, unity is achieved. The rhythm can be seen in the dotted lights of the building at the bottom of the Eye. This progression creates a line that helps the eye stay focused on the subject yet at the same time, the rhythm also creates a visual merit of its own.


Elkin, J. Photography Theory (Routledge, London, 2007).






The Legal System and Scientific Misconduct
Scientific misconduct is any form of violation of the accepted codes of intellectual and ethical conduct in scientific research profession. According to the Danish definition of scientific misconduct, the practice is typical of gross negligence or intentional acts in the profession which lead to the fabrication of scientific outlook, award of false credit or giving prominence to scientists. It is Denmark which took lead in handling issues of scientific misconduct. To serve this role, the Denmark government established in 1998 the Danish Committees on Scientific Dishonesty.1 However, in 1st August 2005, the Danish legislature declared a new law restricting the functions of the Committees due to the political consequences which resulted from the manner Lomborg case was handled. The Danish definition however, does not differ very much from the Swedish one. The Swedish definition identifies scientific misconduct as intentional fabrication of hypothesis, text, data or experimental procedures by using publications or manuscripts of another researcher thus distorting them.
In the contemporary society, the intentional date falsification or provision of any research information which is misleading or reporting false research results is regarded to be scientific misconduct. In another version, scientific misconduct involves fraud which includes the invention or fabrication of data with the aim of deceiving or misleading the audience in question. Another form of scientific misconduct involves piracy which is the intentional exploitation of the work or ideas of other researchers without proper acknowledgement. Plagiarism is another form of scientific misconduct. Here, scientists are involved in intentional copying of other authors’ materials and making them their own without acknowledging the ideas, text and data. In plagiarism, the scientists obtain and use other peoples work without any granted permission from the source. Other forms of conducts in the scientific community which are not scholarly include the falsification of documents or credentials and the misrepresentation of scientific ideas.
Following the advent of science over the past decades, there has been an increased need for litigating the whole practice of scientific conduct and thus mounting the role of the legal system in the advances. A large number of universities, source of research funding, societies, congregational committees and federal agencies have shown concern about the ever increasing cases of scientific misconduct.
2 As a result, some of the organizations have documented specific standard which define such misconducts and also giving the appropriate guidelines in dealing with scientific misconduct allegations.
Researchers who commit crimes related to scientific misconducts have a common form of motivation. With science being a very strong career driven field, scientists often find themselves striving to acquire decent reputations in order to obtain funding and support from various sponsors. This situation which scientists find themselves in can be associated with career pressure which demands that a scientist comes up with a high profile publication of scientific paper. This practically means that a scientist is supposed to either publish decent papers or perish.
3 This career pressure makes most scientists to fabricate scientific publications and data in order to earn big. Apart from publications, scientists fabricate experiment procedures so as to be the first to find solutions.
The legal system should consider the instances of scientific misconducts as these often come due to laziness among the scientists. Some of the scientists may be too lazy to perform experiments in the required codes and end up going the easy way without undergoing any difficulty or trouble. This is undue means of obtaining fame or financial benefit. Sometimes, scientists get it so hard to reproduce results accurately without chances of being obscured by extraneous data or artifacts. This reasoning makes the scientist to get away with the guiltiness of scientific misconduct as they can defend themselves on this point. This protection gives scientists the freedom to falsify scientific acts or sometimes claim that they are innocent in their actions. Another problem is that there is no police trained specially trained to manage scientific issues.
The increasing trend of scientific misconduct calls for a critical role of the legal system to be able to recognize instances of scientific misconduct. Scientific codes of good practice should be practiced to enable development of research concepts in an appropriate manner. This is because a platform for graven conducts of scientific operation of a scientist can easily develop after ignoring minor irregularities by management and colleagues. Scientists often forget to properly report the source of ideas and experiments or sometimes giving inadequate acknowledgment.
4 These minor offenses are typical to researchers who have not yet received any prior basic rules for the required scientific practice.
There are several state laws governing the inhabitant’s behaviors and it should be noted that laws are not a form of punishment. Instead, state laws are meant to prevent the undesirable behavior in the community we live. Criminal activities has in deed been taking place which calls for the civil society to have enhanced legal systems to be dealing with incidences of crime in an appropriate way.
The similar way the society needs a legal framework in dealing with criminal offenses is the same way scientific community requires legal system to address issues of misconducts in science practice. It is true that scientific misconducts have been occurring within the scientific society and it sounds naïve to deny its existence. There are examples in history which best illustrate this concept of scientific misconduct. These examples involve some scientists who stepped out of the line to have illegal scientific practices in their fields of specialization.
One of the known examples is the case of Charles Darwin and his theory of
‘The Origin of Species’. It is known that the British naturalist who became very famous in 1859 after his theory of natural selection as a mean of explaining the origin of species. It is was later confirmed that Charles Darwin discovered his mechanism of explaining the origin of species from the letters he received from Alfred Russel Wallace which explained concepts of biological evolution. After Darwin making his discoveries, he never gave adequate credit to Russel regarding his concepts on biological evolution. Darwin, in 1858, organized to prepare a publication on the origin of species which was a joint paper covering the concepts of Wallace and himself before he could publish his main paper in 1859. What exempts Darwin from acts of scientific misconducts is that Wallace later accepted that the theory was purely Darwin’s work.5 Another way to defend Darwin is that he did his individual research for two decades and that Wallace’s contribution was received after Darwin lost his child. Furthermore, since there was an agreement between Wallace and Darwin, there should be no conception that Darwin performed any scientific misconduct.
Misinformation in the field of science, shown by a typical example of Darwin’s discovery, clearly indicates how false attitudes are supported and built up among scientists in the modern society. These attitudes present that everyone can commit scientific misconduct even the prominent Darwin. As a result of this, the legal system should be on alert to check on the scientists who show poor codes of scientific practice. It is also the duty of senior scientists to react to this menace so that the problem of scientific misconduct can be prevented.
One of the most scientific discovery which made headlines and changed the whole course of biological research was the deciphering of the genetic code through the understanding the Double Helical structure of DNA (Deoxyribonucleic acid).this great discovery was believed to have been made by Francis Crick and Maurice Wilkins joined by James Watson, an American biophysicist and geneticist. It is unfortunate to note that the true discoverer, Rosalind Elsie Franklin who was a British molecular biologist was never in the mention.
6 In 1962 when the three scientists received a Nobel Prize, Rosalind had died of cancer four years down the line when she was thirty seven. It was revealed that Franklin was working on the project of developing the X-Ray crystallography which enabled the taking of the photographs used in molecular biology texts today. Franklin had been employed by Wilkins to work in his laboratory. The photographs taken by Franklin lay in her drawer until Wilkins discovered it and went on telling Watson and Crick about it. Crick and Watson became so excited and took it public and claiming the idea to be theirs. This typical example shows clearly the case of plagiarism, fraud or can as well be termed as insensitivity of women in the field of science by gender sensitive lobbying groups. The case of Franklin shows why there is need to bring sanity in the field of scientific research by strengthening legal systems in states. Had this been done earlier, Franklin would have been the one we sing about as the discoverer of the structure of DNA as a double helix.
The discovery of the telephones we use today had some form of scientific misconduct. It was Philip Reis who was a German professor and an inventor who first developed the telephone and went further to demonstrate how it functioned to people. Alexander Graham Bell, an American inventor was one of the witnesses who saw Reis’ demonstration.
7 Immediately, Graham rushed to imitate Reis discovery and make his own telephone. With the laws that existed in the US at the time, Bell imeiately patented the idea to be his original thinking on 14th February, 1876. Just a few hours after Bell registered his patent, Elisha Gray rushed to have his patent too be registered but it was too late. Elisha and other scientist sought to oppose the patent registration by Bell. Bell backed up by mighty lawyers and financial supremacy, suppressed the opposition from Elisha and the other contesters.
The cases of telephone invention and the discovery of the double helix structure of DNA indicate a great problem brought by improper intellectual property rights appropriation in the field of science. The improper appropriation saw Bell patenting an idea which was not his but only gained through a stolen concept during Reis’ demonstration. In the modern case, wily research scientists have often come up with publications based on lecture materials presented by other scientists without giving credit to them. This is an example of plagiarism which should attract legal dealing.
In the examination of Lysenko affair finally came to be a case of fraud in the research practice. Trofin Lysenko, a Ukrainian agricultural experimentalist carried scientific experiments without prior scientific concept backing. Ukraine suffered a lot of famine in 1930s and Lysenko managed to impress the dictator Joseph Stalin who ruled the former Soviet Union. Lysenko had wild claims that he had made discoveries in key methods of carrying out crop farming without the need of applying fertilizers or manures or other forms of minerals. Lysenko also suggested to have found a mean of growing crops under the unfavorable conditions of vernalization. The ideas of Darwin and Lamarck were totally twisted by Lysenko and instead developed own biological theories which disagreed with all the theories that were proposed by all the scientists in the exterior the Soviet Union. However, although Lysenko theories seemed wild ideas, they actually managed to please Stalin. Furthermore, they fitted well into the political conceptions of Stalin that environmental factors are determinants in the performance of crops in the fields and not the inheritance factors which were identified later as genes. Since Stalin trusted Stalin by a very high degree, Lysenko was crowned as the leader of all biological science and research in the entire Soviet Union. Lysenko was also awarded the highest ranks and benefits in recognition of his scientific research ‘achievements’. Lysenko’s experiments results of corn growing and other experiments were applied in Siberia and had massive failure. When tried in Russia, the results obtained from Lysenko experiments led to severe hunger.
9 It was only after Stalin died in 1953 that it became to be recognized that Lysenko conducted a fraudulence act since the ideas were widely known to the Soviet Union biologist scientists for many years although they could not be revealed during the rule of Stalin.
The case of Lysenko did not receive criticism due to great immunity that was provided during the rule of Stalin. However, this immunity ended in the year 1964 after Khrushchev, the successor of Stalin as the Soviet leader got dismissed as a leader. The dismissal was after Andrei Sakharov who was a physicist talked openly against Lysenko in the General Assembly of the Academy of Science. In his speech, Andrei held Lysenko responsible for the deteriorating state of biological knowledge of the Soviet Union. Lysenko had also contributed to the defamation, arrest, firing and death of several genuine scientists according to the speech of Andrei. After the speech of Andrei, a committee of experts was called by the Academy of Sciences to look into the work done by Lysenko. After a few months of investigation the critique on Lysenko’s work finally became public and that was the end of Lysenko’s era.
It is the responsibility of the judicial system to consider scientific misconduct as serious crime as it affects the entire state and even globally. For I stance in the case of Lysenko, the government and the political system played a key role in the deterioration of the states economy by embracing and supporting ideology based research instead of backing scientific method based research.
10 The system gave privileges to Lysenko and through this Lysenko persecuted any scientist who showed signs of opposing him. This is another typical example of scientific misconduct although in the real sense Lysenko never had proper scientific training backup.
The United States is one of the nations to be recognized to have taken steps towards dealing with scientific misconduct. The offices for handling issue of lack of honesty and integrity were installed by two federal institutions in 1989. These federal institutions were the Public Health Service and the national Science Foundation. Since inception, majority of cases have been handled within the category of Public health Service where the Office of Research Integrity is administered. The Office of Research Integrity is responsible for handling cases of fraud and forms of misconduct in behavioral and biomedical research projects funded by the government.
The legal system in various nations should consider recognizing the scientific misconduct. The case of Baltimore shows how the issue of creating awareness of scientific misconduct is necessary. The case of David Baltimore, a prominent researcher in the field of biomedicine and 1975 Nobel Laureate was meant to resign his capacity as the president of the Rockefeller University in 1991. David Baltimore served as the president since 1989. His case traced back to 1986 when he was an MIT director in the centre of biomedical research. It was in 1986 that David Baltimore together with other co-authors made a publication of a paper explaining various mechanisms induced by the passing of the genetic material from one strain to other using mice as experimental animals. Later in May 1986, Theresa Imanishi –Kari, one of Baltimore’s co-authors also got accused of scientific frauds after reporting some genetic material data.

During the case hearing in the Congress, Baltimore strongly defended Theresa on the ground that scientists were purely judges on their own. Although Baltimore had this idea that scientist were responsible being able to make judges of their own, the congress had a different observation and instead took initiative to establish the Office of Research Integrity. Baltimore case was decided in 1996 and Imanishi-Kari was completely acquitted while Baltimore was forced to resign as the president of the Rockefeller University in the year 1991.12 Baltimore received what may be termed as rehabilitation in the year 1997 after he got nominated as the president of California Institute of Technology. Baltimore’s case shows how complex it is to deal with cases of scientific misconduct in our society without well set legal framework.
An important case in Denmark which made the problem of scientific misconduct to be highlighted was the Lomborg case. The case had great international attention which was all about the accusation of Bjorn Lomborg a social scientist of scientific dishonesty in his writing. In his book, “The Sceptical Environmentalist”, Lomborg argues and further seeks to prove that there is no much serious harm caused by environmental abuse by human beings. He claims that the problems like pollution of air are not very serious and it is fair to invest resources on poverty alleviation and access to clean water. Lomborg’s case was brought before the Danish committee which was involved in scientific matters of dishonesty in the wake of 2002.
13 The case covered all the three areas of interest, the natural, health social and health sciences and therefore it was agreed to serve the complaints at collective meetings which were common to the committees. The committee ruled in January 2003 that Lomborg had gone outside the circles of the accepted scientific standards. Later, Lomborg appealed to the Ministry of Science and Technology and Innovations, Denmark.

In December, 2003, the Ministry ruled as per the legal aspects which involved the rationale for considering Lomborg’s book a scientific research work. The Ministry’s ruling also criticized the committee’s concept of good practice in scientific discovery. However, the Ministry left it a responsibility of the committee to decide whether the case should be reopened although this was not possible because of the legal requirements. The reason why the Committee could not reopen the case was that the committee found itself with minimal chances that new investigations would lead to great changes prior to the original ruling which acquitted Lamborg as to have committed scientific misconduct.
The operations of scientists have required the recognition of the legal system owing to the nature of the field. The competitiveness and the sensitivity of carrying out science experiments and research require some kind of regulations. Science which has intense effects on the society needs to have control of law lest scientists go about having too much freedom t do whatever they choose. The case of nuclear research in all states has to be controlled by the law to avoid scientists having to perform tasks out the accepted ethical codes. Issues of embryonic stem cell research have taken another perspective which is greatly controversial. There are ethical implications and on the other side there is an issue of saving lives. There should be a strike of balance but first considering the legal issues associated with embryonic stem cell research. These legal issues cut across all fields of science which are imperative.


Bucchi, M. Science and the Media: Alternative Routes in Scientific Communication. London, Routledge, 1998

Cao, C. China’s Scientific Elite. London, Routledge, 2004

Charles, M. investigating Scientific Misconduct: The Laboratory Is Not a Courtroom. Brookings Review, Vol.10, pp.1-19

Festa, R, Aliseda, A. & Jeanne, P. Cognitive Structures in Scientific Inquiry. New York, Radopi, 2005

Goldner, J. The Enending Saga of Legal Controls over Scientific Misconduct; a Clash of Cultures Needing Resolution. American Journal of Law and Medicine, Vol.24, 1998, pp.167-181

Hackett, E. A Social Control Perspective on Scientific Misconduct. Journal of Higher Education, Vol.65, 1994, pp.60-72

Kohn, S. Conceptions and Procedures in Whistleblower Law. Westport, CT, Quorum Books, 2001

Krebs, R. Scientific Development and Misconceptions through Ages: A Research Guide, New York, Greenwood Press, 1999

Palca, J. Scientific Misconduct: Ill-Defined, Redefined. The Hastings Center Report, Vol.26, 1996, pp.243-259

Shamoo, A. & Resnik, D. Responsible Conduct of Research. Oxford: Oxford University Press, 2003

Steneck, N. Research Universities and Scientific Misconduct: History, Policies, and the Futur. Journal of Higher Education, Vol.65, 1994, pp.45-58

Wible, J. The Economics of Science: Methodology and Epistemology as if Economics Mattered. London, Routledge, 1998

1 Shamoo, A. & Resnik, D. Responsible Conduct of Research. Oxford: Oxford University Press, 2003, p.11

2 Cao, C. China’s Scientific Elite. London, Routledge, 2004

3 Steneck, N. Research Universities and Scientific Misconduct: History, Policies, and the Future. Journal of Higher Education, Vol.65, 1994, p.49

4 Palca, J. Scientific Misconduct: Ill-Defined, Redefined. The Hastings Center Report, Vol.26, 1996, p.245

5 Krebs, R. Scientific Development and Misconceptions through Ages: A Research Guide, New York, Greenwood Press, 1999, p.24

6 Bucchi, M. Science and the Media: Alternative Routes in Scientific Communication. London, Routledge, 1998, p.33

7 Hackett, E. A Social Control Perspective on Scientific Misconduct. Journal of Higher Education, Vol.65, 1994, p.66

8 Festa, R, Aliseda, A. & Jeanne, P. Cognitive Structures in Scientific Inquiry. New York, Radopi, 2005, p.14

9 Wible, J. The Economics of Science: Methodology and Epistemology as if Economics Mattered. London, Routledge, 1998, .61

10 Charles, M. investigating Scientific Misconduct: The Laboratory Is Not a Courtroom. Brookings Review, Vol.10, p.7

11 Kohn, S. Conceptions and Procedures in Whistleblower Law. Westport, CT, Quorum Books, 2001, p.38

12 Goldner, J. The Enending Saga of Legal Controls over Scientific Misconduct; a Clash of

Cultures Needing Resolution. American Journal of Law and Medicine, Vol.24, 1998, p.175


13 Cao, C. China’s Scientific Elite. London, Routledge, 2004, p.21

Malaysia in the International Business


Globalization has resulted in many socio- economic and political, technological and cultural changes in the world. It has resulted in the internationalization of the national economies through migration, capital flows, FDIs, trade and the spread of technology. In this paper, I attempt to explore the effects of globalization and economic progress on developing nations. Here I take the specific case of Malaysia to understand the effects of globalization on developing nations.

History and background of Malaysia

Malaysia has a rich and a diverse cultural history. The Malay lands of Rich natural resources have been home to many ethnicities. The Malay Peninsula was home to Chinese and Indian kingdoms in between 2nd and 3rd Centuries CE. The Buddhist kings of Ligor are known to have ruled the country in around the 11th century.

The ancestors of the people that now inhabit the Malaysian peninsula first migrated to the area between 2500 and 1500 B.C. Those living in the coastal regions had early contact with the Chinese and Indians; seafaring traders from India brought with them Hinduism, which was blended with the local animist beliefs. As Muslims conquered India, they spread the religion of Islam to Malaysia. In the 15th century, Islam acquired a firm hold on the region when the Hindu ruler of the powerful city-state of Malacca, Parameswara Dewa Shah, converted to Islam. (Pearson Education)

The British established their first colony in Malay Peninsula in 1786 when the Sultan of Kedah leased and Island to the British East India Company. With the Anglo-Dutch treaty of 1824, Much of Malaysia was controlled British colonized most part of the Malay Peninsula. The British introduced rubber plantations in this region from Brazil. With the industrialization in the west and increased popularity of automobiles, Rubber was a major export from the British colonies in Malaysia.

The Japanese occupied Malaysia during the Second World War. Malaysia witnessed a growing nationalist movement during this period. This prompted the British to establish a semiautonomous federation of Malaya in 1948. However the communist nationalists took up a resolution to quell the foreign powers out of their country. They declared a state of emergency which lasted till 1960.

Malaysia was formed in 1963 when the former British colonies of Singapore and the East Malaysian states of Sabah and Sarawak on the northern coast of Borneo joined the Federation. The first several years of the country’s history were marred by a Communist insurgency, Indonesian confrontation with Malaysia, Philippine claims to Sabah, and Singapore’s secession from the Federation in 1965. During the 22-year term of Prime Minister MAHATHIR bin Mohamad (1981-2003), Malaysia was successful in diversifying its economy from dependence on exports of raw materials to expansion in manufacturing, services, and tourism. (CIA)

The Malaysian economic growth story

Malaysia along with other Southeast Asian countries such as Singapore has been a center for trade for many centuries. Malaysia saw high trading activity in commodities like porcelain and spices much before Singapore rose to prominence. The British introduced rubber and palm oil trees for commercial purposes in Malaya; when they took control of the region. Eventually Malaysia became the largest producer of rubber, tin and palm oil in the world. Malaysia was one of the major sources of many raw materials to the world along with these three commodities.

With Malaysia becoming independent, its Government started implementing economic five year plans. Trying to imitate the economic success stories of the Asian Tiger economies like South Korea, China, Taiwan and Singapore; Malaysia set itself on a path to convert itself from an economy dependent of agriculture and mining to an economy that is driven by manufacturing. Heavy industries flourished in Malaysia in a matter of years with Japanese investments in the region.

By the late 1960s, Malaysia was torn by rioting directed against Chinese and Indians, who controlled a disproportionate share of the country’s wealth. Beginning in 1968, it was the government’s goal to achieve greater economic balance through a national economic policy. (Pearson Education)

The government introduced a controversial “New Economic Policy” with which it aimed to eradicate poverty. It main intention was to eliminate the association of race with economic function. Success or failure of this polity is a much debated topic. This policy was replaced by National Development Policy in 1990. The National Economic Policy discriminates and favors the ethnic Malays over other races. This gives them a preferential treatment in terms of education, employment, business, etc…

The Asian financial crisis shook the country in 1997. The Prime Minister Dr. Mohammad Mahathir refused to follow the economic prescriptions from the IMF and the World Bank. He refused to accept any assistance from these foreign institutions. He instead opted for fixed exchange rates and capital controls. The Malaysian currency was pegged to the US Dollar. The success of these measures was seen in the late 1999 when Malaysia was set on a path to economic recovery.

As with other countries affected by the crisis, there was speculative short-selling of the Malaysian currency, the ringgit. Foreign direct investment fell at an alarming rate and, as capital flowed out of the country, the value of the ringgit dropped from MYR 2.50 per USD to, at one point, MYR 4.80 per USD. The Kuala Lumpur Stock Exchange’s composite index plummeted from approximately 1300 points to around 400 points in a matter of weeks. After the controversial sacking of finance minister Anwar Ibrahim, a National Economic Action Council was formed to deal with the monetary crisis. Bank Negara imposed capital controls and pegged the Malaysian ringgit at 3.80 to the US dollar. Malaysia refused economic aid packages from the International Monetary Fund (IMF) and the World Bank, however, surprising many analysts. (Wikipedia, 2009)

Malaysia chose to adopt a managed float system in July 2005 abandoning its earlier fixed exchange rate system.

The current economic status of Malaysia

2000 2005 2007 2008
World view
Population, total (millions) 23.27 25.65 26.55 26.99
Population growth (annual %) 2.3 1.8 1.7 1.7
Surface area (sq. km) (thousands) 329.7 329.7 329.7 329.7
Poverty headcount ratio at national poverty line (% of population) .. .. .. ..
GNI, Atlas method (current US$) (billions) 80.18 133.45 170.49 188.06
GNI per capita, Atlas method (current US$) 3,450 5,200 6,420 6,970
GNI, PPP (current international $) (billions) 194.35 287.49 351.21 370.83
GNI per capita, PPP (current international $) 8,350 11,210 13,230 13,740
GDP (current US$) (billions) 93.79 137.95 186.72 194.93
GDP growth (annual %) 8.9 5.3 6.3 4.6
Inflation, GDP deflator (annual %) 8.9 4.6 5.2 10.3
Agriculture, value added (% of GDP) 1 8 10 ..
Industry, value added (% of GDP) 48 50 48 ..
Services, etc., value added (% of GDP) 51 42 42 ..
Exports of goods and services (% of GDP) 120 117 110 ..
Imports of goods and services (% of GDP) 101 95 90 ..
Gross capital formation (% of GDP) 27 20 22 ..
Revenue, excluding grants (% of GDP) 18.5 .. .. ..
Cash surplus/deficit (% of GDP) -3.0 .. .. ..
States and markets
Time required to start a business (days) .. 30 24 13
Market capitalization of listed companies (% of GDP) 124.7 131.4 174.4 96.0
Military expenditure (% of GDP) 1.6 2.3 2.1 2.0
Mobile cellular subscriptions (per 100 people) 22 76 88 100
Internet users (per 100 people) 21.4 48.6 55.7 62.6
Roads, paved (% of total roads) 76 78 .. ..
High-technology exports (% of manufactured exports) 60 55 52 ..
Global links
Merchandise trade (% of GDP) 192.1 185.3 173.1 182.8
Net barter terms of trade (2000 = 100) 100 101 100 ..
External debt stocks, total (DOD, current US$) (millions) 41,874 51,981 53,717 ..
Total debt service (% of exports of goods, services and income) 5.6 5.6 4.6 ..
Net migration (thousands) 498 150 .. ..
Workers’ remittances and compensation of employees, received (current US$) (millions) 981 1,281 1,803 1,920
Foreign direct investment, net inflows (BoP, current US$) (millions) 3,788 3,966 8,456 ..
Official development assistance and official aid (current US$) (millions) 45 27 200 ..

(The World Bank)

Malaysia is a state oriented market economy. The government through its economic plan plays a significant reducing role in guiding the economic activity of the country. The Malaysian economy is the 29th largest in the world in terms of Purchasing power parity. It had a gross domestic product of 194.93 in 2008 and it was growing at a rate of 4.6% per annum.

The country has a labor force of 11.09 million which is ranked as 46th in the world. Currently only 13% of the Malaysian labor force is into agricultural sector. While 36% of the labor is in the industrial sector, a major portion of about 51% is into services. The unemployment rate in here was 3.3% in 2008 as compared to 3.2% in 2007. The government revenues in 2008 were $48.49 billion and the estimated expenditures in the same year were $58.85 billion. In Malaysia, approximately 30% of the goods are price controlled and the 2008 estimate of the inflation was 5.4% while it was just 2% according to 2007 estimates. The commercial bank prime lending rates in Malaysia is 6.08%. The market value of publicly traded shares was valued at $187.1 billion by the end of Dec 2008.

The major agricultural products of the Malaysia are rubber, timber, pepper, coconuts, cocoa and rice. The major industries here are rubber and oil palm processing and manufacturing, tin mining, petroleum production, electronics, smelting, agriculture processing, and refining. The exports of Malaysia were valued at $198.7 billion in 2008 and the country is ranked 22nd in the world in terms of exports. The major export commodities of the country are chemicals, natural gas, electronic equipment, wood and wood products, textiles, rubber and palm oil. The imports of the country were valued at $154.7 billion according to 2008 estimates and Malaysia is ranked 29th in the world in terms of its imports. Malaysia mainly imports steel products, vehicles, iron, plastics, petroleum products, machinery and electronics. Its major import partners are China, Japan, Singapore, US, Thailand, Germany, Indonesia and South Korea.

Effect of globalization on Malaysia

On major institutions

Globalization has lead to weakened regional institutions like the APEC (The Asia Pacific Economic Cooperation) and the ASEAN (Association of Southeast Asian Nations). Many questions were raised about APEC’s future relevance when it was not able to forge a response to the financial crisis.

Globalization has led to instability of the currencies and the financial markets. The local banks of Malaysia like the Proton Saga have seen increased competition form the multinational foreign banks.

On the rural sector

In the case of Malaysia, globalization has resulted in opening up of large areas of fertile land for oil palm and rubber plantation. As a result, the indigenous people’s right and culture have been eroded to make way for development which benefits local elite and consumers abroad. (Dass, 2002)

The Malaysian agricultural sector along with those of many other developing countries is suffering due to the globalization. The paddy farmers are not getting proper price to sell their produce in the market as the market prices of rice have fallen due to the increased inflow of rice imports from other countries. On the contrary, the demand for palm oil fluctuates with the global palm oil prices. This provides a good price for palm oil producers in times of higher global demand and a lesser price during lesser demand.

T hough majority of the countries are feeling the effects of globalization recently, the concept and effects of globalization are nothing new to the Malaysian economy. When the British introduced rubber and palm oil plantations in Malaysia, they brought with them many laborers from countries like India to work on those plantations in order to compensate for the shortage of local labor force. Although many of the workers left the country after their tenure of work; many stayed by. Eventually in the 1960s much of Malaysia’s businesses were owned by the Chinese and the Professional jobs like Doctors and Lawyers were taken up by Indians; leaving the local Malays only few agricultural jobs. It was this parity that lead to rioting in the late part of the 60s. However the current scenario in Malaysia is totally different. Thanks to the constant effort of the government in terms of its policies (New economic policy and National development policy) and initiatives. However the current government following the foot prints of other Asian tigers like China is now reducing its regulatory role due to liberalization and globalization.

Challenges and opportunities facing Malaysia

Tourist Arrivals & Receipts to Malaysia
Year Arrivals Receipts (RM)
2008 22.0 Million 49,561.2 Million
2007 20.9 Million 46,070.0 Million
2006 17.45 Million 36,271.1 Million
2005 16.4 Million 31,954.1 Million
2004 15.7 Million 29,651.4 Million
2003 10.5 Million 21,291.1 Million
2002 13.2 Million 25,781.1 Million
2001 12.7 Million 24,221.5 Million
2000 10.2 Million 17,335.4 Million

(Toursim Malaysia )

With the spread of globalization and the dissolving of the national borders, Malaysia is actively trying to promote and market itself as one of the most attractive tourist destinations for people all over the world. With its campaigns such as Malaysia – Truly Asia, and through its constant efforts it has been able to remain as one of the popular tourist destinations. This is reflected in the number of tourist inflow or arrivals to the country every year. It has been constantly increasing year by year as can be seen in the above table.

170 thousand rooms, 180 hotels & 70% occupancy. US$15 billions, the Malaysian Tourism income 2007, the second national income after industry (Arabian Business, 2008)

This is a country that depends mainly on tourism. It might not be a successful business model for a country to thrive on tourism. The industry could be affected by any negative events. The best example was seen when the Malaysian tourism industry was worst affected due to SARS (Severe Acute Respiratory Syndrome). Apart from the erratic nature of this industry towards its contribution to the national income, there are many countries competing with Malaysia to be the tourist hot spots.

Malaysia has the advantage of being in a strategic location which connects the continents of Asia, Australia, Africa, and America. Thus it could become an attractive sea port adopting the Singapore model. Unlike Singapore, Malaysia does not have the shortage of space. Thus Malaysia has a huge potential to become a trading hub for the economic activities across the globe.

Other interesting facts about Malaysia

  • LEMBAH Bujang in the foothills of Gunung Jerai is believed to be the location of an old Malay Langkasuka empire, holding ruins that may date back 1,500 years.
  • “TUN” is the most senior federal title and there can be no more than 25 living recipients at any one time.
  • THE largest cave chamber in the world is the Sarawak Chamber in Gunung Mulu National Part in Sarawak, which can easily accommodate a Boeing 747-200
  • MALAYSIA shares with Qatar the world’s lowest death rate of respiratory diseases, at 7.5 death per annum per 100 000 people.
  • SABAH (in Malaysia) is home to the Rafflesia, the largest flower in the world.
  • There are more than 60 sub-ethnic groups in Sabah and Sarawak.
  • BURSA Malaysia, formerly known as the Kuala Lumpur Stock Exchange, dates back to 1930 when the Singapore Stockbroker’s Association was set up to deal in securities in Malaya.
  • THE Belum rainforest has more Malayan tigers per square kilometer than any other animal sanctuary here.
  • THE largest insect egg in Malaysia comes from the 15 cm Malaysian Stick Insect (Heteopteryx dilitata), which lays eggs that measure 1.3 cm, making them larger than a peanut.
  • MALAYSIA produces a meager 15 feature films annually but churns out 300 to 400 television dramas and serials. There are 250 movie theaters and cineplexes nationwide.
  • ONLY 0.85% of 218,004 people in Malaysia use broadband services.
  • The life expectancy of Malaysian men and women in 1957 was 55.8 years and 58.2 years respectively. Today, it is 71 for men and 74 for women.
  • MALAYSIA is home to 14,500 species of flowering plants and trees, more than 200 species of mammals, 600 species of bids, 140 species of snakes and 60 species of lizards.
  • MALAYSIA has 18 ports: Bintulu, Kota Kinabalu, Kuantan, Kuching, Kudat, Labuan, Lahad Datu, Lumut, Miri, Pasir Gudang, George Town, Port Dickson, Port Kelang, Sandakan, Sibu, Tanjung Berhala, Tanjung Kidurong and Tawau.
  • AT 421 metres high, the Kuala Lumpur Tower is the fourth tallest in the world and tallest in Southeast Asia.
  • PENANG’S St. George Church, built in 1818, is the oldest Anglican church in Southeast Asia.
  • MANY global brands are produced in Malaysia, including Intel Pentium chips and Brooks Brother’s shirts.
  • THE longest King Cobra in the world, measuring 5.54 meters, was captured alive in Port Dickson in April 1937 but later grew to 5.71 meters in captivity in London Zoo.
  • Penang Bridge, the longest bridge in South East Asia
  • The word ringgit means “jagged” in Malay, and originally referred to the separated edges of Spanish silver dollars widely circulated in the region.
  • SEVENTEEN-YEAR-OLD Kok Shoo Yin became the first Malaysian citizenship certificate holder when he received the document on Nov 14, 1957. (Kgomez)


Malaysia has felt both positive and negative effects of globalization on its economy. On one side its agricultural sector and banks have suffered. On the other hand the Malaysian hardware and electronics industry is one of the top producers and suppliers in the world. Globalization has lead Malaysia to become one of the major tourist destinations of the world. Thus globalization has shown a combination of effects on a developing economy like Malaysia. As time passes by, Globalization will have more positive effects on this economy than the negative effects.


Arabian Business. (2008, May 8). INDUSTRY PRESS RELEASES. Retrieved Nov 21, 2009, from

Arabian Business: http://www.arabianbusiness.com/press_releases/detail/18041

CIA. (n.d.). Malaysia. Retrieved Nov 21, 2009, from CIA – The World Fact Book:


Dass, R. P. (2002, Apr). Globalization: Effects in Asia and Beyond. Retrieved Nov 21, 2009, from Christian

Conference of Asia: http://www.cca.org.hk/clusters/egy/resource/rpd-global.htm

Kgomez. (n.d.). 48 Interesting facts about Malaysia. Retrieved Nov 21, 2009, from kgomez:


Pearson Education. (n.d.). Malaysia: History, Geography, Government, and Culture. Retrieved Nov 21,

2009, from infoplease: http://www.infoplease.com/ipa/A0107751.html?pageno=1

The World Bank. (n.d.). Data Profile. Retrieved Nov 21, 2009, from World Bank: http://ddp-


Toursim Malaysia . (n.d.). Tourism Malaysia. Retrieved Nov 21, 2009, from tourism.gov.my:


Wikipedia. (2009, Nov 18). Malaysia. Retrieved Nov 21, 2009, from Wikipedia:


Economic Recession & Hotel Industry

Table of Contents


Overview of Hotel Industry…………………………………………………………………6

Influence of Economic Recession on Hotel Industry………………………………………10

Management Practices of Hotels……………………………………………………………14

Marketing Strategy………………………………………………………………………….15

Human Resource Strategy……………………………………………………………………24

Financial Strategy……………………………………………………………………………30

Customer Service Strategy……………………………………………………………………33

Hotel Strategy in Present Scenario…………………………………………………………..38





Hotel industry is a part of the hospitality industry mainly oriented towards the provision of recreation, amusement and accommodation. It maintains the facilities for the potential customers that are tourists and local people. The most important segment for the success of this industry is the number of customers seeking their services. The cost and the quality of services in the hotel industry vary on the basis of the range of services opted by the customers. This industry requires intense concentration on the facilities offered to the customers, so as to develop a good image in the competitive market (Rutherford & O’Fallon 2006).

The hotel industry has formed a well defined system of the services based on the internationally established standards. The luxuries and quality of services avails the hotels with the competitive advantage, which is essential for being successful in the intense competition within the industry. Therefore, the hotel industry is getting equipped with innovative information technology based systems for the management of the operations and facilitating the customers to seek their services (Loannides & Debbage 1998).

The current business scenario accompanied by the economic recession has drastically affected the operations and business status of different industries. The hotel industry has also got affected by the economic recession. The efficiency and profitability of many companies got reduced significantly, which intended the companies towards cutting the cost and reducing the labor force. In spite of the drastic conditions imposed by the economic recession, the hotel industry managed to survive in the market.

The hotel industry is directly influenced by the tourism industry. It is due to the reason that with a decrease in the number of tourists, the arrival of customers at the hotels gets reduced, which directly affects the profitability of the hotels (Raymond 2001). For the analysis of the industry, it is necessary to assess the competence level and current players operating in the industry. Therefore, it is essential for the operators in the hotel industry to focus on the encouragement of the characteristics among the employees to establish direct contact with the customers (Rutherford & O’Fallon 2006).

The major advantage for the hotels comes from the maintenance of the facilities and the respective luxuries accordingly. The themes of the hotels are managed and promoted through the marketing activities, which creates a positive image of the theme in the market. It is essential for the hotels to focus on the genuineness and professional behavior for the customers accompanied by the positive concern and well being of the customers. It is essential to represent the positive image of the hotel in the market and being successful through the competitive advantage provided by the strategy (Seaton & Bennett 1996).

In concern to this, the hotel industry has managed to survive during the economic recession effectively. The hotel industry has growth opportunities in the current business environment due to the promotion of the hotels significantly at the international level. In order to recover from the influence of economic recession, the group of hotels mainly focused on making optimal investment on the marketing of services. The strategic planning and operations are mainly developed by the hotel managements on the basis of the survival in the industry (Peters & Pikkemaat 2006).

The hotels are positioning themselves for attaining sustainability in the operations and transforming the recession based status to the growing status. The price and revenues were managed by the hotels through the involvement of new and more refined facilities within their portfolio, so that the potential customers can be attracted significantly. The main aim of the hotels is intended towards the enhancement of the occupancy rates, which is attainable through the integration of tourism related resources with the operations. It will aid in the prioritization of the sector based objectives in order to enhance the market competitiveness (Pizam & Ellis 1999).

The human resource strategy of the hotels is also necessary to be developed in accordance with the goal of achieving the expected occupancy rate and maximum benefits from the determined market share. The main challenge for the human resource is related to the fulfillment of the requirements of the customers effectively, so that the customers will have a good experience of the services. Highly trained and motivated work force is essential for the hotels for the survival in the industry and facing the challenges from the market environment. Therefore, business conventions are required to be considered by the hotel industry in a proper manner (Hoque 1999).

In order to analyze the overall status of the hotel industry, it is essential to assess the management practices adopted by the hotels for effective survival during the last economic downturn. The paper will mainly focus on the description of the strategy of hotels for managing their survival during the recession period. It will assist in analyzing the management practices of the hotels for successfully overcoming the threats posed by the economic downturn conditions. It will also facilitate in understanding the strategy of the hotels for becoming competitive in the adverse economic conditions (Zhang, Pine & Lam 2005).

The description of human resource, marketing, finance and customer service strategies will be helpful in gaining an insight of the core areas of the hotel industry. The elaboration of the marketing strategy will include the marketing tactics and policies adopted by the hotels for maintaining their positive image in the competitive market place. The budgeting and cash flow management strategy will aid in assessing the optimum allocation of money for the promotion of the services of the hotels. The paper will be helpful in the evaluation of the business strategy of the hotels, which enabled them to survive in the adverse economic situations and sustaining the operational efficiency from the future business aspects in the market (Rutherford & O’Fallon 2006).

Overview of Hotel Industry

Hotel industry is one of the most important segments of hospitality industry, which offers accommodation, amusement and recreation facilities to the potential customers. The main aim of the hotel industry operators is to provide quality services, maintaining the adjustable facilities and directing the lodging related operations for the customers. The hotel industry provides different kinds of facilities, such as restaurants, entertainment, bars, organization of social functions, accessibility to internet, etc. The hotel rooms are also equipped with varying facilities on the basis of the level and standard of accommodation (Medlik & Ingram 2000).

The major contributor to the product line of hotels involves the hotel rooms for accommodation, sale of food products, soft drinks, alcohols and commodities. The major contribution in revenues is obtained by the hotels from the hotel room’s fee. The fundamental operations of hotels comprise of the room availability for stay, upkeep, personal services and housework. Along with this, the hotel operations also include meeting rooms, business based services and holiday resort based services, such as golf, fitness centers, tennis, swimming pools, etc (Rutherford & O’Fallon 2006).

In the hotel industry, the expenses on the management of labor force are also significant and come under the operating expenses. It is essential to be employed for the management of the key human resource in an efficient manner. The performance and profitability of the hotel industry are measured in terms of the occupancy rates, retail sales, average price of rooms and the respective revenue attained as per the availability of the rooms. In order to manage the business operations of the hotels, some companies provide their hotels to the different owners on franchise and lease.

Most of the hotels implement information technology based systems and provide the online reservation facility to the potential customers. For the management of online business operations, hotels have their own websites, which play an important role in the marketing and promotion of the services offered by the hotels. The reservation system provides the facility of online check-in and check-out, charges for the different rooms, availability of rooms, etc., which makes the communication process between the customers and the hotel management effectively recognizable (Rus & Toader 2008).

The hotels also provide the facility of internet accessibility to the customers due to the involvement of large number of business travelers and tourists as the customers. The accommodation in the hotels also differs on the basis of the customer’s requirements. The services offered in the hotel are also different for the customers with respect to their stay and purpose for coming to the hotel. Therefore, the services are categorized to be full service and limited service. Full service includes the room service, food and beverages service, retail shopping and accompanying additional services (Zhang, Pine & Lam 2005).

Large hotels also provide the facility of banquet hall, ballrooms, conference halls, garden areas for conducting social gatherings and other recreational facilities. These services are considered to be full service properties. Limited service includes the arrangement for vending machines, accessibility to internet, breakfasts, unattended gaming rooms and swimming pools accompanied by the regular housework service. These kinds of limited service does not comprise of the on-site restaurant and amenities services. Along with this, the limited services are less costly and sustainable than the full services.

There are different types of hotels, which are differentiated on the basis of the standardized services offered by them. Some of the types of hotels are resort hotels, conference hotels, casino hotels, garden hotels, all-suite hotels, extended-stay hotels and holiday inns. These different kinds of hotels provide different types of services to the customers and meet their requirements effectively for earning optimal benefits out of the services offered. Through this, the hotels have developed competence in terms of the stipulation of theme based facilities, which is becoming successful these days.

In the present competitive environment, the hotel industry is widely dominated by the large group of hotel chains. It facilitates the development of the well-known chain of hotels, which is recognized by the customers and tourists for their reliable and quality based services at the expected rates. The management of large hotels is aware about the significance of brand dependability for the customers, so they have diversified their business operations from full service to limited service under different name including the chain of hotels (Seaton & Bennett 1996).

The establishment of franchise agreements and management based contacts has facilitated the chain of hotels for managing the independent operations. It provides the independent chain of hotels to become a part of the strategy of the large enterprise, so that the services of the hotels can be internationalized in a similar manner. In order to personalize the service and provide distinctive experience to the potential customers, the concept of boutique hotels is becoming popular in the urban regions with effective supporting services and decorations (Westergard-Nielsen 2008).

Currently, the accommodating industry is widely transforming towards the adoption of limited services in the regions of suburbs, commercial, residential localities accompanied by the hotels within the vicinity of the popular restaurants. The hotels in the urban business sector are focusing on the provision of wide range of services to the customers by inter-mixing their services and the lodging alternatives. It facilitates the hotels in establishing long term business operations and arrangements by considering the food service, restaurant service and other lodging services (Medlik & Ingram 2000).

The marketing strategy of the hotels is highly oriented towards the management of promotional activities and availability of lodging facilities through the websites. The employment opportunities in the industry are high involving the operational based job positions, which can be related to finance, services, operations, administration, management, etc. Therefore, the hotel industry appears to be full of employment opportunities for the people in diversified segments. The work force of the hotels mainly focuses on the maintenance of effective interface solutions for the customers and supplying adjustable package arrangements with defined characteristics, which is highly significant in concern to the growth and development of the industry (Dibb & Simkin 1994).

There exist intense growth opportunities in this industry due to the consistent expansion of hotels in the suburban regions. The customers require leisure, lavishness based facilities and heritage lodging options, which is prominently considered by the management. Along with this, the expansion in the travel industry has stimulated growth opportunities for the hotels to furnish standardized lodging facility at the identified and key destinations of the travelers. Currently, package based traveling plans are increasing, which are configured by the hotels and the travel industry. Due to this, it is essential for the hotels to change the facilities in accordance with the market trends and comply with the innovative means of supplying facilities in a more effective way (Rutherford & O’Fallon 2006).

Influence of Economic Recession on Hotel Industry

Economic recession impose severe challenges for all kinds of industries. The challenges are related to the financial and economical aspects of the market. Hotel industry has faced adverse conditions due to the reduction in the occupancy rate and tourism industry, which has resulted into the reduction in the revenues of the hotels. In the hotel industry, demand is derived from the business, as well as, tourist based travelers, whose spending is highly influenced by the economic strength. Therefore, the profitability of the hotels is highly dependent on the efficient business operations. It is due to the reason that the expenses of the hotels are fixed on specific facilities (Heyer 2008).

The hotel industry is equipped with large amount of fixed costs, which includes wages of the work force, bills of different utilities, sustenance of different facilities, etc. Large hotel operators take competitive advantage from the economies of scale involved in their operations and can effectively put forward desired capital for the nourishment of their name in the market (Hatch 2004). Small hotel operators also become competitive in the market by offering specialized services and facilities, so that the distinctiveness in the service portfolio can be established. For that reason, in the recession period, the hotels have to implement intense management practices (Lee & Barth).

The confidence of the potential customers gets influenced by accommodation charges due to the cautious behavior of customers, as well as, tourists on spending money for the accommodation. When the occupancy rate will be adversely affected, the revenue statement of the hotels also gets influenced by this. It has a major influence on the other sections of the hotel industry also. The decline in the occupancy rate is followed by the decline in the revenues for the other facilities of the hotels. Therefore, it is essential for the management of hotels to focus on the employment of innovative practices for their survival and making steady progress (Mandelbaum 2009).

Since, the consumer behavior gets focused towards seeking affordable accommodation for the stay, so the hotels require considering the preferences of the customers effectively during the recession period. Some hotels included cost cutting within their strategy through the provision of no frills bedclothes, but it is the basic requirement of the customers to attain clean and comfortable bedding sheets for taking rest. Some hotels implemented aggressive promotional programs based on attracting the customers for obtaining comfortable and affordable services in the situation of economic crisis (Verret 2009).

With the assistance of aggressive promotional strategy, the hotels could only face the challenges when they will provide quality services and facilities to the customers as per their requirements. The hotels have enhanced the internet marketing and basic facilities involved in their portfolio for the survival in the market. The market penetration and positioning strategy of the hotels got transformed and the business decisions were changed by the management for the sustenance of the current profitability and efficiency (Shin 2003).

Due to the decline in the economy of the global business environment and the exchange rate fluctuations, the visitors to the hotels got reduced. It also reduced the revenues of the hotels, which squeezed down the profits and the revenues attained by the hotel industry from the tourism industry. The amount of bank credit available for the hotels for the management of their services in the recession period also declined, which insisted the hotel managers to focus on the cutting their expenses (Hatch 2004).

Accompanying to this, the decline in the occupancy rate also reduced the spending of the hotels to lower price levels. Due to this, the accommodation charges and luxurious suite charges also got reduced. Social networking was considered by the hotels for increasing the sales process and servings within their segments. The business prospects of hotels regarding the expansion and development of new ventures were restrained for the time being, so as to manage the critical situations of economic crisis effectively. The thought of representing the hotels to be emerging was avoided by the management, so that the current business practices can be handled properly and the market image can be sustained (Curan 2009).

The competition in the hotel industry becomes intense and leads to the increase in the layoffs of the employees with an aim to cut the cost. The cost cutting policy also includes the reduction in the facilities and the room charges (Moberg 2001). The activities of the hotels are mainly based on the market segments, which are business travelers, domestic travelers and tourists from the domestic and international markets. These market segments reduced their expenses on the tourism industry, which directly has affected the operations of the hotel industry. Regarding this, the demand for the luxurious facilities in the hotel industry got reduced, but the low cost facilities grow significantly, which counterbalanced the situation (Profits and Occupancy Down as Recession Takes its Toll 2009).

For instance, the influence of recession on the hotel industry of United Kingdom can be analyzed. The hotel industry of UK is also severely influenced by the economic recession, which reduced international events to be organized by the country and the currency value of sterling also reduced. The occupancy rate of the country came down by 2.5% to 73.9% from the year 2007 to 2008 and the average availability of room’s rates were enlarged by 2.3% to £104.33. This implies that the occupancy rate decreased to a significant extent and influenced the operations of the hotels in the country (UK hotel industry feels effects of global economic downturn 2009).

Due to recession, the products and services purchasing from the hotels also got reduced, which is of great concern for the industry operators. The lag in the business performance occurred due to the late response of the corporate clients from the tourism policies. The performance of the hotels got changed with the widening of the economic variations. Due to this, the profitability of the hotels lowered significantly and the supply-demand pattern for the hotels got drastically altered. Many of the hotels faced the problem of lack of capital and it affected the credit availability for the hotels in the market. The availability of funds in the market was affected due to the collapse of banks and financial institutions (Zhou, Brown, Dev & Agarwal 2007).

The hoteliers were unable in estimating the rebound effect in the financial markets, so that the performance of the hotels can be anticipated to get improved and adequate amount of funds can be acquired from the market. It stimulated the hotels towards managing the marketing and procurement strategies for maintaining the efficiency and effectiveness in the competitive market place. The revenues of the hotels from the tourist market sources reduced, which deviated the hotel management towards sustaining the current market share and creating demand for their services in the market through proposing differentiated services from that of the competitors (Tobin 2009).

But, the hotel industry has managed to survive in economic downturn successfully. The industry managed to face the challenges posed by the recession with the assistance of the effective business strategies and management practices. Large business houses in the hotel industry survived due to the availability of requisite amount of capital and competitive human resource. But, the small business houses faced problems and they cut down their expenses and increased lay offs to survive in the industry (Collins 2009). The revenues from the luxury services got reduced significantly and the demand for the low cost facilities increased during recession, which was optimally managed by the hotels (Moberg 2001).

Therefore, the hotels also focused on prioritizing the opportunities available in the market and re-energizing their operations for sustaining their future survival in the market. The small ventures in the hotel industry restructured their business operations and considered the urban development as an opportunity for retaining their market share. It has enabled the overall hotel industry in regaining their momentum and managing their operations appropriately, which has played an important role in the sustenance of the hotels after facing critical challenges of economic recession (Rutherford & O’Fallon 2006).

Management Practices of Hotels

Management practices are the basic policies and procedures of the business industries, which develops the business framework for the operators. The management practices form the base for the management of the business operations and making remedial alterations according to the business needs. Therefore, in the current business scenario, the organizations consider the different approaches for managing the business operations effectively in the crisis situations. These approaches are based on risk management, total quality management, crisis management and management by objectives. It is helpful in increasing the productivity and efficiency of the business organizations significantly (Joyce & Woods 2001).

The management practices of the hotels provide the complete overview of the business operations. It is helpful in the analysis of the different managerial aspects of the hotels and the strategic planning approach adopted by the management. In the hotel industry, the management practices are diversified among different segments in order to fulfill the business requirements of the industry. The corporate performance of the hotels is optimally manageable with the assistance of the well defined and planned management practices. Moreover, it is significant in the strategic management of the hotels (Thompson & Martin 2005).

The management practices of the hotel industry are based on the effective coordination and implementation of the business strategy comprising of the marketing activities, human resource activities, financial management and customer relationship management. It is due to the reason that these factors contribute towards the attainment of the competitive advantage in the market. With the assistance of effective management practices, the hotel industry is able to gain span of control and chain of command over the operations followed by the optimum resource application (Kusluvan 2003).

These factors are significant in the enhancement of the productivity and efficiency of the hotel industry. The dominance and sustenance of the business operations in the competitive market place with compliance to the legal regulations can be obtained by the hotels through the effective management practices. Along with this, the management practices represent the hotels persistent driving forces, which are important for the administration and execution of the operations in order to judge the economic performance. This implies that the hotels having well defined management practices are able in organizing and sustaining their businesses in the adverse market environment (Rutherford & O’Fallon 2006).

Marketing Strategy

Marketing strategy play a vital role in the organization of the business operations of the hotel industry. It is helpful in assessing the performance and business viability of the hotels. It should be based on the stimulation of positive customer satisfaction for increasing the overall revenue and accomplishing a competitive advantage. It yields better results in favor of the hotels successful accomplishment of the business goals and objectives. Marketing strategic framework is also helpful in the recognition of the advantages from the potential customer sales and its contribution in the development of long term competence of the hotels (Dibb & Simkin 1994).

Therefore, the marketing strategy of the hotels should be based on the objective of establishing an effective communication network, so that the distinctive and quality oriented services can be recognized by the customers. The customer can realize the quality and value of the charges for the accommodation and recreation. It is helpful in communicating the brand value to the potential customers. In addition to this, it also facilitates the hotels to form effective relationships with the customers and potential service suppliers. The hotels should establish differentiated strategy focused on growth perspective (Seaton & Bennett 1996).

The hotels can attain significant growth in the market by targeting the business operations in the urban and suburban regions within the domestic and foreign communities. The value proposition of the hotels should be based on distinguishing the services and facilities in a personalized manner for the travelers and tourists. The involvement of customer requirements in the service portfolio caters positive image and brand name of the hotel in the market. Regarding this, the marketing strategy of the hotels is required to be contingent on the different aspects, such as branding, promotion, target marketing, marketing mix, market segmentation, advertising, marketing media, etc (Brotherton 2003).


The branding strategy of the hotels should develop a positive brand image in the market. The hotel branding should be done on the basis of the convenience provided by the hotel in accordance with the standardized criteria. The service properties and the availability of luxury differentiate the hotel brand from that of the competitors. The locations of the hotels in the regions of the key destinations also add value to its branding. The availability of the personal service and luxurious backgrounds with an aim of stimulating the comprehensive range of quality oriented services for the customers (Dibb & Simkin 1994).

The target market based messaging is required to be different from the perspective of the different market segments, which forms the basis for the branding options for the hotels. The brand name can be effectively recognized by the customer in the market through the distinctive facilities and experience from the hotels, so the outlook of the hotels should comprise of the elaboration of the key attributes and facilities. It enables the customers in gaining effective experience and benefits from the high quality services, which transforms their future preference for the hotel. Therefore, the branding strategy of the hotels should rely on the quality and growth oriented aspects of the services offered at the hotel, which adds value to the competence of the hotel and maintains the productivity (Hockessin 2008).

Target Marketing

The target marketing strategy defines the target market of the hotels. The major target market for the hotels is the domestic and international travelers, which are divided as business travelers, tourists and banqueting. On the basis of the requirements of the different target markets, the customer requirements are analyzed and adequate services are provided by the hotels. It is beneficial in attracting the diversified customer base from the market and enhancing the desirable service portfolio for the customers. The well defined target marketing plan will be helpful for the hotels in differentiating the business approach of the hotel from that of the potential rivals (Abrams & Kleiner 2003).

The target marketing strategy of the hotels in the present business scenario should focus on the professional visitors of the domestic and international regions belonging to the industries, which are travel, automotive, IT, etc. by forming corporate contracts on the annual basis. With respect to the arrivals at the hotels and the utility of the lodging facility for the visitors, the alternatives of the room services should be provided to them. It is helpful in the expansion of the market and identification of the innovative services within the facilities of the hotels. In order to employ the target market strategy, the management practices of the hotels are required to be flexible and adjustable, so that the adequate competent level in the market can be established and respective performance can be sustained in the adverse market circumstances (El-Ansary 2006).

Market Segmentation

The market for the hotels is segmented on the grounds of the diverse lodging facilities offered to the potential customers. The lodging facilities are differentiated with respect to the luxury, leisure, number of rooms and recreational services included at the place. The room charges are also segmented on the basis of the facilities included in the rooms. The additional facilities that play a significant role in the market segmentation include the food and bar services, entertainment, meeting, banquet halls, etc (Thompson & Martin 2005).

In order to manage the different market segments, hotels follow the standardized rules for different levels of services. On the basis of the international rating system, the hotels are classified to be five stars, three stars, one star by considering the respective niche, domestic and international market segments, as well as, the requirements of the prospective customers. It distinguishes the levels of the hotel facilities within the overall corporate business sector by not creating intense competition for the different segmented levels.

Marketing Mix for the Hotels

The marketing mix plays an important role in the success or failure of the marketing mix. It comprises of the four major P’s, which are product, price, place and promotion. It covers the main segment of the marketing strategy, which is based on the tactical practices of hotels. The integrated marketing mix contingent on the four factors is helpful for the marketing professionals of the hotels in concentrating in the potential customers present in the target market, so that the positive response and value for the hotel services can be stimulated significantly. These factors are effectively controllable by the market professionals for enhancing the satisfaction level of the customers (Joyce & Woods 2001).

The hotels can develop positive brand image in the target market segment through the effective inter-mixing of the four factors of market mix. It is essential for the marketing professionals of the hotels to focus on the optimal marketing mix that will aid in generating better outcomes for the real business. The requisites of the marketing strategy can be effectively fulfilled by the well defined marketing mix. The different components of the marketing mix are described below, which should be considered by the hotels in an optimal manner (The Marketing Mix Revisited: Towards the 21st Century Marketing 2006).

Product: The product marketing strategy for the hotels is required to be based on the furnishing of high quality services. The lodging facilities and services of the hotels should be accompanied by the commendable personal services, so that the significance of the hotel within the market can be enhanced. The product quality is of great significance for the hotels in order to become competitive in the market. It is also helpful for the hotels in the establishment of a unique and differentiated status in the market (Forrester 2008).

The product marketing approach of the hotels should also comply with the features of the branding strategy. It has proved to be beneficial for the hotels in differentiating its product and services from that of the competitors on the grounds of quality. It will facilitate the repeated levels of business for the hotel industry. In compliance with the standards of hotel industry, the product marketing approach should be well coordinated with the branding strategy, so that the adequate amount of revenues can be generated and quality services can be furnished to the potential customers (Hockessin 2008).

Price: The pricing strategy of the hotels is required to be consistent with an aim of differentiating the services and lodging facility significantly. It should comply with the standardized pricing policies for establishing differentiation within the services. Along with this, the creation of value by providing the lodging facility at the reasonable and affordable prices will be helpful in creating value for the products and services. Competent pricing policy accompanied by the quality and beneficiary facilities is helpful for the hotels in the attainment of the competitive position in the market and gaining advantage from it in the adverse market conditions (Payne 2009).

The pricing policy should distinguish the rates of the rooms as per the taxes and service requirements, on the basis of stay and preference for the additional services. The discounting and flexibility in pricing policy should be well defined for acquiring more customers in the unfavorable market circumstances. The room rates should also be defined in accordance with the seasonal variations in the number of customers, so that the overall profitability can be sustained optimally. With the assistance of this, the pricing strategy adds value to the provision of the appropriate products and services for meeting the requirements of the customers effectively, which enhances their experience (Thompson & Martin 2005).

Place: The component place of the marketing mix denotes the distribution strategy adopted by the hotels. In concern to this, the hotels adopt the strategy of promoting and availing the products and services through the personal selling, internet selling, advertising and direct marketing approach. These approaches are distributed in the market through different channels, which facilitates the development of an effective network. It is helpful in allocating and making available the provisions of the lodging facilities at the key destinations as per the requirements of the target group of customers (Goi 2009).

The major channels of distribution and delivery used by the hotels include the information technology based reservation systems, travel agents and direct booking systems. These distribution facilities are easily accessible to the customers and promote the provisions of the hotels effectively in the market. Regarding this, it is essential for the hotels to develop a well established channel of the distributors, so that the lodging facilities can be entertained by maximum number of customers. With the assistance of this, the hotels become able in accomplishing the necessary competence level, which raises the productivity and efficiency of the hotels (Peters & Pikkemaat 2006).

Promotion: The promotional strategy of the hotels comprise of the well planned promotional tools and techniques, which are highly significant for the hotel industry and play a significant role in the accomplishment of competitive advantage. The main focus of the promotional tools is oriented towards the implementation of mass communication approach, which involves the promotion of the hotels through the print ads over the internet networks and different trade publications (Belch 2003).

The promotional campaigning strategy of the hotels is focused towards attracting the regular customer base and the expected customers from different regions, which proves to be a cost effective mode of establishing campaigns in the target markets successfully. The promotional campaigns are also based on the different approaches, which are described below. With the assistance of these approaches, the overall promotional plan of the hotels can be allocated and defined in a proper manner. These approaches facilitate the brand image and creates well known name in the market, which is essential for the successful operations of the hotels (Seaton & Bennett 1996).

  • Personal selling: Personal selling approach is effective for the promotion of the hotels in the domestic target market. It is a significant approach with respect to the development of long term relation in the domestic market place. It is also helpful in the establishment of increased level of corporate activities within the domestic locations, which facilitates the hotels with an increased attention of the local travelers towards the lodging facilities of the hotel. This approach is helpful for the hotels in the development of local brand image in the market (Payne 2009).
  • Public relations: The public relations approach involves the promotion of the hotels services through the demonstration of the hotel as an effective and collaborative member within the local community. The involvement of the hotel management in the events and functions held at the domestic regions is helpful in the formation of significant public relations. It also facilitates the spreading of positive word of mouth regarding the services and lodging facilities at the hotels (Pizam & Ellis 1999).
  • Direct marketing: The direct marketing approach is adopted by the hotels through the channel of PR agencies and travel agencies. The PR agencies and travel agencies directly establishes contacts with the big corporate houses and provides the brochures of the hotel in order to form lodging contracts with their business persons and organizing their meetings. The matters related to direct marketing are handled by the PR and travel agencies. Along with this, the package tours organized by the travel agencies are also a part of this approach, which significantly promotes the corporate relations and customer relations of the hotels (Ingold, Yeoman & McMahon-Beattie 2000).
  • Advertising: The advertising approach of the promotional strategy involves the print media based advertisements and internet advertisements. The major attributes and features of the lodging facilities and accompanying services are integrated properly, so as to create good image of hotel in the minds of the potential customers. It is highly significant in representing the attributes of the hotel in a more specified and unique manner in order to attract more customers and gain benefits from it (Altstiel & Grow 2006).
  • Website based marketing: The website based marketing approach of the hotels is a prominent approach in establishing an interactive relation with the prospective customers. The website of the hotel should provide complete information about the quality based services and luxury based accommodation facility. In addition to this, it should also provide the facility of online reservation and check-out facility accompanied by the printable brochure facility (Forrester 2008). The main aim of this approach is to deliver the message of the hotel services in a proper way. The website of the hotel should be listed on the major websites of travel agencies, so that the customers can properly allocate the hotel. It facilitates the customers in finding out the options of hotels at the key destinations as per their requirements (El-Ansary 2006).

It can be inferred from the different strategies and approaches included in the marketing mix for the hotels that the integrated framework of all the components is essential to be followed by hotel management in order to establish a good image and brand name in the market. Flexible and adjustable marketing mix as per the requirements of the market conditions provides assistance to the hotels in managing and sustaining the business operations significantly. In accordance with the present market overview, the consideration website based marketing approach is effective and prominent due to easy accessibility to the prospective customers from the domestic and international market.

Human Resource Strategy

The human resource strategy is of great importance for the development and progress of the hotels in the competitive market place. It integrates the key employees for performing their best performance in favor of the organization. Properly defined HR strategy is helpful for the hotels in confirming and supporting the personal, as well as, professional orientation of the employees and retaining the key employees over a long period of time. In order to sustain better performance in terms of financial and market image, the hotels offer competitive salary structure to the employees, which is helpful in increasing the satisfaction level of the employees with the job (Hoque 1999).

The HR strategy of the hotels should be based on the goal of promoting the equal rights at the work place, furnish career growth opportunities to the employees accompanied by adequate income, creating effective work environment and developing social networking with the employees, so that the employees can be retained and secure job positions can be acquired by them. It should infer towards the development of participative work environment and properly defined HR framework, which should be equally communicated to the employees for developing mutual trust and relation among the management and the key employees (D’Annunzio-Green, Maxwell & Watson 2004).

It is essential for the hotels to include the different HR policies appropriately within the HR strategy. It is due to the reason that this industry provides employment to the vast majority of people in the form of job positions in different divisions, such as food and restaurant, bar, lodging facilities, administration, marketing, operations, IT system, etc. Therefore, the HR strategy of the hotels should comprise of effective recruitment and selection policy, training and orientation programs, performance appraisal system, compensation policy, etc. With the assistance of these policies, the hotels can attain competitive work force for the management of the operations in a proper manner (Kusluvan 2003).

Recruitment and Selection Policy

The recruitment and selection policy of the hotels should be conducted through different ways including the directly conducting the recruitment in the expert hotel management and catering institutions, personal suggestions from the existing employees, recruitment agencies and conducting recruitment drives by giving advertisements in the newspaper, job websites and magazines. The adoption of any of the methods provides substantial employees to the hotels, who are skilled, and talented (Mabey, Skinner & Clark 1998).

In order to become successful in the recruitment drives, the hotels elaborate the job requirements and other subsequent amenities before hiring the potential candidates for the different job positions and also elaborate the overall HR policy for future concern. The selection process is widely based on the interview methods, so that the communication skills and interpersonal skills can be judged appropriately. On the basis of the establishment of the contracts, the selected candidates are hired by the hotel management, so that the employees can be at least retained for the contract period. Recruitment and selection policy forms the basis of the HR strategy in concern to the hiring of skilled work force and meeting the job requirements of the hotels for managing the human resource (Kearns 2003).

Training and Orientation Programs

The training and orientation policy involves the general orientation of the employees with the HR policies of the hotels. It is initiated in accordance with the well defined operational and processing based training and development programs. Its main aim is to strategically develop the service quality among the employees for generating better performance of the hotels. Generally, internal managers conduct the training sessions of the new recruitments. In case of developing new skills among the employees, which are prevailing in the market, the hotels take the services of external consultants, so that the competent work force can be developed (D’Annunzio-Green, Maxwell & Watson 2004).

On the job training is mainly organized for the new recruitments, so that the adequate skills can be acquired by them in an effective way. The training sessions are conducted by implementing discussions, simulations, coaching through role playing, instructions, etc. With the assistance of these methods, the problem solving skills can be developed among the employees and their understanding about the management of service quality can be developed in a pragmatic manner. Along with the new employees, regular training sessions for the existing employees should also be conducted at regular interval of times for the development of competitive skills and reforming the latent talent of the work force. Training for managing the emergency situations is also provided to the employees on a weekly basis, so that they can handle the drastic conditions effectively (Mabey, Skinner & Clark 1998).

Therefore, the overall workforce should be divided in different groups, so that the internal, as well as, external training of the employees at different levels can be conducted and requisite skills can be developed to become competitive. The external training programs are selected with great care, so that the training can be managed within the allocated budget. It enhances the employee branding approach of the hotels in order to develop internal communication and create service quality oriented work force. The employees can effectively coordinate themselves with the hotels through proper orientation, which makes them competitive and beneficial for the hotels.

Performance Appraisal System

The performance appraisal system of the hotels mainly concentrates on the professional and personal advancement of the key employees. The process is based on the assessment of the performance of the employees on a regular basis and furnishing feedback by describing the areas for improvement and rewards for the respective performance. For establishing an effective performance appraisal system, the hotels should integrate it with the organizational culture (Woods, Sciarini & Breiter 1998). The performance appraisal process is based on the following steps:

  • Selection stage: At this stage, the managers and employees define the required competencies in the form of objectives, which have to be achieved by them. The major objectives should be related to the identification of the areas that require improvement, assessment of the present job performance, provision of adequate performance supportive rewards.
  • Appraisal and assessment stage: At this stage, the managers give rating to the employees with respect to the defined objectives and competencies. In addition to this, the employees and managers of the hotels should perform the performance evaluation work by implementing methods of performance appraisal, which are self-assessment, behaviorally anchored rating scales (BARS), 360-degree appraisal and assessment centers. With the assistance of these methods, the overall performance of the employees, managers, peers and sub-ordinates can be successfully evaluated (Woods, Sciarini & Breiter 1998).
  • Development scheduling stage: At this stage, the performance ratings of the employees and managers are compared. On the basis of the comparison of performance, the requirement of future training and rewards are defined for the work force. It is effective in evaluating the potential capabilities of the employees and communicating feedback, so that the employees can be tended towards the accomplishment of organizational goals and objectives in an optimal way.

Through the implementation of this process, hotels can effectively satisfy the employees and retain them within the organization. The self-assessment and 360-degree appraisal method are effective in the overall appraisal of the employee performance. These methods facilitate the performance appraisal of the key work force in a more specified form and identification of the key skills, so that the employees can be positioned at the different job positions and required performance level can be attained optimally (Hoque 1999).

Compensation Policy

The compensation policy of the hotels is the main segment of HR framework, which is considered as the management’s concern for the employees. It should be based on the fairness and equality determinants, so that the employees can be motivated and retained for the hotels. The compensation policy of the hotels is followed through the job evaluation process, which is helpful in defining the appropriate wage structure and incentives for the different job positions. The significance of wage structure is defined over the organizational hierarchy, which is helpful for the hotel managements in the retention of the key work force (D’Annunzio-Green, Maxwell & Watson 2004).

The salaries of the employees is divided into three components, which are basic salary (fixed), performance based incentives and rewards (variable). The performance based incentives of the hotel employees are supplied on the basis of the assessment of the performance. Incentives are provided to the employees in compliance with the short and long term incentive plans of the hotels. Additional rewards are based on the job position of the employees and the turnover of the hotels. Properly defined compensation system is helpful in the retention of the employees and developing highly motivated work force.

The rewards and incentives are also furnished to the employees through non-monetary modes, such as free gifts, additional responsibility, career advancement, appraising the employee performance, stock provisions, etc. The hotels also provide free lunches, medical facility, insurance benefits, transportation facility, paid holidays, club membership, recreational facilities, etc. to the employees, which is helpful in increasing their job satisfaction level and creating a social work environment for them (Kearns 2003).

Motivation and Organization Culture

The employees are motivated through the effective work environment, justified performance appraisal system, well defined salary structure, effective reward system and fair employee-employer relationship in the hotel industry. Highly motivated work force contributes towards the success of the hotel and in establishing the brand name in the competitive market place. Properly defined job responsibilities and participative work environment integrate the employees with the organizational goals in an effective manner. The employees get highly committed towards the hotels and incorporate quality services to the customers, which encourages their performance, as well as, the profitability of the hotel (Mabey, Skinner & Clark 1998).

The organizational culture of the hotels is mainly oriented towards the customers and secondly on the key work force. It is due to the reason that the customers are the worth-making and profitability generating facility for their business and the employees act as the base that generates positive image of the hotel through effective customer service. Without the key human resource, the hotel industry cannot survive and manage the business operations in the competitive market place. Therefore, an integrated organizational culture that promotes the participative work environment is beneficial for the hotels, which also provides assistance in the creation of motivated and quality service oriented work force (D’Annunzio-Green, Maxwell & Watson 2004).

This implies that the HR strategy of the hotels is helpful in managing the adverse market conditions. Properly defined and structured HR framework establishes coordination among the employees and the hotel management, which stimulates the desired performance. With the assistance of the HR policies described above, the hotels can effectively develop competitive work force, which is helpful in the accomplishment of the competitive edge in the market (Hoque 1999).

Financial Strategy

Effective financial strategy is helpful for the hotels in the management of the financial requirements in an optimal way. It provides the overview of the financial performance and the different aspects related to the management and allocation of funds to the different business segments. Hotels require focusing on the adoption of adequate financial strategy in order to fulfill the requirement of funds in the different market conditions. It is helpful in the allocation of the funds to the different divisions of the hotels, which includes wages, utility billings, marketing, resource procurement, HR policies, etc (Fabozzi 2002).

Mainly, the financial strategy of the hotels includes the budgeting and cash flow management related aspects. Accordingly, the financial arrangements of the hotels can be defined for meeting the requirements of the varying market environment. It also focuses on the transparent financial system, which is clearly defined for the establishment of transparent relation with the key stakeholders (Peters & Pikkemaat 2006). The consideration of key stakeholders is essential for the hotels due to the influence of the business operations of the hotels on them. Along with this, the financial strategy of the hotels should also consider the financial, as well as, the non-financial aspects of the capital management, so that the profitability and the revenues for the customer service operations can be assessed effectively (Ingold, Yeoman & McMahon-Beattie 2000).

The financial strategy of the hotels should consider the different business aspects in an appropriate way, so that the financial information can be generated properly and it can be allocated accordingly. The financial strategy integrates the transactions structuring, capital restructuring, equity financing, tax obligations and government regulations. The major aspects that are considered by the hotel management for the integration of the financial prospects in order become successful in managing the financial requirements for gaining competitive edge are budgeting, cash flow management, working capital management, etc (Medlik & Ingram 2000). These aspects are described below:

Budgeting in Hotel Industry

Budgeting plays an important role in improving the financial effectiveness of an organization. In the current environment, several hotels in hotel industry are loosing a huge part of their revenue due to unorganized virtual sales procedures in the current economic down turn. To reduce the impact of current economic downturn, the hotel industry should analyze and organize its sales procedure and by giving proper training to its sales staff. In order to meet the aspiration of its owners and employees, the hotel industry should use sustained profitability. The sales, profit and cost of the hotel should be estimated in advance (Ingold, Yeoman & McMahon-Beattie 2000).

For the effective budgeting system in the hotel industry all the objectives, plans and strategies should be translated in the budgeting and budgetary control process as it would help to keep the hotel industry in course. The operating budget, which includes all the income and expenditures, in the hotel industry, should be prepared on the basis of individual departments and activities and should be consolidated in the projected profit and loss account. The capital budget of the hotel industry should be incorporated in the budgeted balance sheet as it would be beneficial to formulate effective budgeting system in the hotel industry, which would help to face the impact of current economic downturn (Fabozzi 2002).

In order to increase the budgeting effectives, the actual result and the budgeted result should be compared on the regular basis as it would be beneficial to make the appropriate strategies for the effective and accurate budgeting system. The comparison would also help to take the corrective actions for the revision. The performance of the hotel should also be confined with the performance of individual as it will improve the accuracy in the budgeting system of hotel industry. It will also help to achieve the financial targets and objective of the companies in the industry.

Working Capital Management

The working capital management is an important component to maintain a proper cash flow within the organization. The current economic downturn also affects the working capital management of the hotel industry. In order to improve the working capital management, the financial management of the hotels should review the adequacy of its financing and banking agreements, the appropriateness of the financial agreements should also be reviewed. The performance of the hotel should be evaluated in context of financial perspectives, as it would be profitable to improve the working capital management (Ingold, Yeoman & McMahon-Beattie 2000).

The proper review of the discretionary and non-discretionary expenses would also help to enhance the cash level, which would also improve the working capital availability in the business. The improvement in the financial transparency, aggressive policies for the working capital management is some other strategies, which should be adopted by the hotel industry in order to improve the working capital management.

Cash flow Management

The management of cash flow is most important task for the hotel industry in the current economic downturn. In order to manage the cash flow system, the emphasis of the hotels should be on the improvement of operational performance. It should also focus on the elimination of unnecessary cost to derive larger amount of profits. The hotel industry should also eliminate or reduced the activities, which are not adding value for its customers. It will be beneficial to reduce the unnecessary costs and would improve the organizational profits. It should also provide some special facilities to its customers at lower cost to achieve competitive advantages. The change in the end business process would also help to improve the cash flow management. The improvement in the cost control environment and facilitation of cost culture would also help to improve the cash flow management. The main focus of the management should be on the reducing the cost and to improve the profits from its business operation (Medlik & Ingram 2000).

Customer Service Strategy

The approach of customer service strategy is necessary to be considered appropriately by the hotels for being successful in the global business environment. It is the main component of the overall business operations, which develops positive image and credibility of the hotels in the market. It is considered as a parameter that describes the customer satisfaction and different aspects related to the customer service provided by the hotels. Hotel industry requires well defined customer service strategy focused towards the provision of quality services, so that the customers can recognize the brand and the goodwill of the hotel in the market can be established (Nash 2002).

Mainly, customer service strategy involves the values for the customers and creating the work force accordingly. The service level provided by the hotels should conform to the standards of customer service for fulfilling the requirements of the customers effectively. For the successful implementation of the customer service strategy, it is necessary for the hotels to align it with the vision and goals of the organization. Moreover, the strategy should be defined by the management in cooperation with the employees, so that it is easily conveyed to the overall work force. It should be redefined on a regular basis, so that the requirements of the customers can be successfully executed (Rigsby & Greco 2002).

The customer service strategy for the hotels is required to be based on a well defined slogan that provide assistance in motivating the employees regarding generating better service outcomes. The values that should be included in this strategy and are required to be followed by the employees are communication, loyalty, respect, responsiveness, commitment, participation, cooperation, sense of humor, etc. It is due to the reason that the internal values of the hotels are directly related to the levels of external customer service (Lake & Hickey 2002).

The customer service should initiate with a warm welcome, anticipation of their needs and a fond word of farewell at the departure from the hotel. The customer service strategy of the hotels that should be structured in an optimal manner for the attainment of competitive edge over the competitors is described below:

Discernment of customer value obligation

The hotels require integrating the information obtained from the customers in order to develop electronic data base. It is also helpful in gaining information about the consumer behavior and enabling the hotel work force about the requirements of the customers, so that best and personalized services can be supplied to the clientele. More specific and precise information about the consumer behavior and preferences can be obtained by the hotel staff working at the different divisions, such as lodging managers, food and beverages section, recreational facilities, etc (Zhang 2008).

Along with this, the customers’ complaints should also handled by the personnel at the reception of the hotels. The process of conducting customer surveys while their stay at the hotel provides the information about the customer satisfaction level, follow-up facility & customer handling and feedback aspects. This information is helpful in discerning value to the potential customers and crediting the status of the hotel in the market, so that effective customer relations can be sustained and brand image can be developed (Favilla 2004).

Furnishing value-imparted service to customers

The customers from different target market have different requirements and they take on their experience with the hotels to the next visit. They carry further the value and satisfaction attained from the hotels. Therefore, it is essential for the hotels to offer value-imparted services to the customers, which are far beyond their outlook. It transforms the customer satisfaction level to the customer loyalty and commitment. Along with the compliance to the international standards and regulations, the hotels should give consideration to the stimulation of personalized and superior quality, as well as, value-imparted services for the customers (Nash 2002).

With the assistance of this approach, the hotels can effectively meet the requirements of the customers and the customer service can be made more superior than the customers’ expectations. It is also helpful for the hotel management and the employees in analyzing the customer preferences and developing skills for becoming proactive in handling their requirements. This strategy is also helpful in promoting the level of customer service and establishing an effective bonding with them. Due to this, the service consciousness of the key work force of the hotels gets elaborated and provides competitive performance in the crisis situations (Lake & Hickey 2002).

Constitute service brand

The strategy of constituting the service brand is helpful for the hotels in developing brand recognition value among the customers. Effective brand recognition assures for the service quality, which is an essential component for the development of the customer’s reliance and confidence in the products and services of the hotels. The popularity of the hotels in the market can be enhanced through this customer service strategy (Pizam & Ellis 1999). This strategy reduces the aspects intending risks related to the customer’s social network and security, which is highly significant from the perspective of strengthening the customer value for the hotels. Through this, the hotels can establish themselves as the well- recognized brand in the market (Rigsby & Greco 2002).

In addition to this, the hotels should also focus on the development of service brand name, so that the personalized brand name can be marketed through the marketing channels. It also facilitates the hotels in establishing effective customer relations and gaining profitability from the customers’ investments. The commitment of the hotels towards the service brand is also essential due to the requirement of standardized and excellent customer value in the diverse market conditions. Regarding this, the key work force of the hotels is also required to become more competitive by adding value to the customer service and quality based provision of the lodging facility to the customers (Zhang 2008).

Flexible management structure oriented towards customers

In concern to this strategy, the hotels should develop flexible and easily adjustable management structure oriented towards the customers for the accomplishment of the operational goals. This strategy is helpful in meeting the customer requirements in an appropriate manner and promoting quality performance oriented work environment. In order to be successful in fulfilling the needs of the customers’ with quality services, an integrative and coordinated approach of the different divisions of the hotels is required, which plays a significant role in the reformation of the management structure for delivering service quality with ease and flexibility (Favilla 2004).

This strategy promotes the customer-centered approach among the management and the employees at the hotels, which makes vital contribution towards the betterment of the efficiency and productivity of the services furnished at the hotels. Due to the existence of flexible management structure, the hotels can develop the adaptation capability for surviving in the competitive market place and altering the service quality as per the expectations of the customers. The main mission of the hotels is to develop competence in terms of the assurance among the customers for their products and services. This strategy facilitates the coordination among the customer service and the personnel management operations (Lake & Hickey 2002).

With the assistance of these strategies, the hotel management can effectively provide responses to the customers and increase the overall customer satisfaction level. Customer loyalty can be stimulated by the hotels and uniform relations with the customers can be sustained, which is the result of quality based customer service. Regarding this, the strategy of taking customer survey is beneficial for the hotels in assessing the service quality with respect to the different customer groups. The feedback of the customers is helpful in making requisite alterations in the customer service strategy and sustaining flexible management structure (Zhang 2008).

Hotel Strategy in the Present Scenario

In the present market overview, the hotels require integrating their procurement strategies, business strategies and practices in order to overcome the influence of economic recession. The uncertainties imposed by the economic environment, which were faced by the industry, affected the overall performance and operability of the industry. Therefore, the industry needs considering a well- defined budget and specific criteria based customer service portfolio, so that the position of the industry can be raised and new business challenges can be effectively handled by the industry players (Medlik & Ingram 2000).

The major business approach of the hotels should focus on the sustenance of the business performance to progress in the industry and overcoming the business related threats for generating the desired outcomes. The outlook of the hotel industry can be altered effectively by implementing the innovative procurement strategies and reformed business services. In concern with this, it is vital for the hotels to promote the business properly with the assistance of the alignment of the core business capabilities in accordance with the alterations in the requirements of the prospective customers (Peters & Pikkemaat 2006).

It will assist the hotels in capitalizing on their potentialities and securing well supported customer relations. The strategy of the hotels should be based on developing continuing and enduring relationship with the prospective customers and the new clientele to be added. The communication plan of the hotels should be elaborated and re-defined, so that the strength of hotels in the domestic and international markets can become more intensified. It will assist the hotels in attaining a strong position in the market and sustaining the market share accompanied by the quality service oriented portfolio (Seaton & Bennett 1996).

The hotels should adopt the differentiation strategy, so that the products and service offered to the key customers can be differentiated from that of the competitors, which will aid in retaining a brand name in the market. The customers will recognize the brand name of the hotels through the quality services more than their anticipation, which induces their future preference for the hotel. It will also stimulate the customer’s attention towards the differentiated hotels and it also resolves the issues related to the profit generation for the hotel management (Hotels: Managing in a Downturn 2008).

This strategy can be effectively implemented by the hotels with the assistance of a well- defined marketing and communication plan. It will stimulate the market attractiveness towards the services of the hotels. In addition to this, consistently implemented employee training and development programs also stimulate the orientation of the employees towards enhancing their skills and customer service capabilities. It is helpful in assuring high standards of customer service and enhanced productivity, as well as, efficiency of the hotel in the market, so that the hotels services can be differentiated (Dibb & Simkin 1994).

Moreover, the hotels should also focus on the identification of the new markets for the specific target groups. It will assist the hotel management in reducing the varying nature of services to be included in their service portfolio due to the consideration of the needs of the target groups. Since, the need for limited service properties in the market is increasing and customers’ preferences are also changing, so the hotels should consider this as an opportunity and establish limited service provisions for the customers. The hotels can generate optimal revenues in the current market environment through this.

Therefore, the hotels also focused on the urban redevelopment strategy for rationalizing their products and services in accordance with the domestic and international market customers. The hotels should mainly focus on prioritizing their needs for maximizing the productivity through the available opportunities. The major steps that should be taken by the hotels are described below:

  • Firstly, the hotels should analyze the influence on their operations and understand the loopholes in their contingency planning, which can further be improved significantly for rationalizing the future implications of the business strategy and planning.
  • The hotel management must consider the importance of taking strong decisions in the uncertain and risky situations. Along with this, it is essential to analyze the key value drivers related to the business and assessing the business risks for taking adequate position and advantage in the form of upturn in the profitability.
  • The hotels should analyze the availability of the adequate funds and working capital for procuring their credit functioning and avoiding the situations related to liquidity. Appropriate cash management is essential with respect to the management of the treasury, funding and financing in terms of the integration of the financials (Hotels: Managing in a Downturn 2008).
  • It is necessary for the hotel management to concentrate on the important segments, which are generating profits for them. In this regards, the management should assess the requirement of the products and services to be included in the hotel for creating value to the customers and elaborating the business channels. It is also helpful in examining the major investments of the hotel in the different segments.
  • The operational performance should be consistently assessed by the hotel management for managing the targets related to the cost cutting and reducing complexity, which is not required. It will facilitate in assessing the requirement of alterations in the business model and strategies accompanied by the value creation for the hotels.
  • The information about the management within the hotels is required to be communicated effectively and it is also essential for the management to analyze the integrated framework of hotel. Regarding this, the hotels should define the key performance indicators with a lucid vision. The decision making process of the hotel management should focus on the reliable facts and accordingly, the decision should be modified and implemented (Rus & Toader 2008).
  • The strategic planning approach of the hotels should be based on different business settings, so that the policies and plans can be made flexible with market alertness. The influence of adverse situations on the operational, financial and human resource related aspects should also be considered while making strategic plans for the hotels. It will facilitate the hotel management with the ability to responsively adapt the other strategic alternative.
  • Employee engagement practices should be clearly defined by the hotels in order to increase their value and recognition. Effective communication network with the employees is required to be established within the hotels, so that the employees can be engaged within the management practices. Along with this, the hotels must consider the importance of the key work force and concentrate on the identification of the key talent and providing justified, as well as, appropriate incentives to the employees, so that the work force can be retained and get motivated. This strategy is helpful for the hotels in managing the requirement of talented work force in future.
  • The consideration of the key stakeholders is also necessary for the hotels. So, the management should recognize the suppliers and purchasers for strengthening and maintaining the relations after facing drastic conditions of recession. Regular communication with the stakeholders is essential for the hotels.
  • The hotels should also seek relevant advantage from the market opportunities and maximize their revenues accordingly. Thus, the consideration of innovative servicing approaches will be beneficial in intending the hotel towards the accomplishment and progress of the future growth perspectives. In order to be progressive, the hotels should mainly concentrate on the brand valuation accompanied by the future growth objective (Hotels: Managing in a Downturn 2008).

Since the economy is recovering from the recession, so the consumer behavior will also change. Thus, it is necessary for the hotels to consider the variations in the consumer behavior and develop their flexible service portfolio accordingly. The hotel industry will be recovered modestly and the customers will rebound with the improvement in the financial prospects of the market. With the assistance of the above described steps, the hotels can develop flexible business structure and manage the changes in the consumer trends. This implies that it will optimize the business approach of the hotels and will improve their efficiency and productivity, which will directly increase the revenues and brand name in the market.


Since the business environment has two aspects, one is full of opportunities and another imposes threats, so minute ignorance can become a major loss for the hotels, so this aspect should be considered while developing the business strategy. In order to retain the operational excellence and the market share, the hotels should follow appropriate business framework and short, as well as, long term variations in the business environment. The major recommendations for the hotel industry that should be considered by the hotels adequately for sustaining the business operations effectively are described below.

  • Forecasting: The hotel management should implement appropriate forecasting policies in order to analyze the market trends and assessing the consumer behavior in a proper manner. For this, hotels can also take services of the external market forecasting companies for the development of contingency plans (Rutherford & O’Fallon 2006).
  • Contingency planning: It is the most important segment of the business strategy, which should be considered by the hotels effectively. With the assistance of appropriate contingency plans, the hotel management can adapt requisite modification in their service policies corresponding to the market environment. It will provide assistance to the hotels in the implementation of the new plan for making adjustments in the business policies and sustaining the competitive advantage.
  • Market analysis: Proper strategy for the market analysis should be developed by the hotel management, so that the management structure and the service portfolio can be made adjustable within the available resources. It is helpful for the hotel management in analyzing the influence of the market trends and the market environment on their operational excellence. The consideration of market trends is helpful in mitigating the risk posed by market fluctuations and adverse conditions similar to negative waves of economic collapse.
  • Integrated business strategy: The hotels should also consider the importance of integrated business strategy accompanied by well structured business approach for different segments of operations. It will provide assistance to the hotels in the integration of the market structure and the collaboration of the key work force with the business goals and customer oriented business framework (Thompson & Martin 2005).

With the assistance of the consideration of these recommendations, the hotel industry can propagate the required business level in the competitive business environment. The implementation of appropriate strategic plans provides assistance to the hotel management in making adequate transformations in their business policies for gaining excellence over their market performance.


It can be interpreted from the above discussion that economic recession has significantly affected the business operations of different industries. Due to recession, the productivity and profitability of the businesses has been reduced and some big business organizations have got liquidated. With respect to the analysis of the hotel industry, it has been analyzed that the industry is widely influenced by recession. It is due to the reason that the hotel industry has a direct relation with the tourism industry and decrease in the tourist arrivals directly influences the hotel revenues.

The occupancy rates of the hotels and the average room rates got reduced, which affected the output from the business operations. The hotel industry involves large amount of fixed cost in the form of wages of the employees and billing of the desired utilities, so many organizations focused on the cost cutting and lay offs. The consumer behavior regarding the lodging facilities was changed and it affected the operability of different divisions of the hotels. Financial market variations reduced the credit availability to the hotels due to this; small business operators in this industry got adversely affected. The level of competition in the hotel industry was intensified and the hotels focused on differentiating their services for sustaining their brand name as well as service quality.

In order to become successful in the adverse economic conditions, the hotels require integrating their business strategy and the different divisions, so that the market opportunities can be maximized and tapped effectively for gaining control over the business operations in the adverse economic climate. It is necessary to create demand for the lodging services, which are available at affordable prices with adequate service quality, so that the influence of recession can be counterbalanced. The inclusion of flexible management structure oriented towards the customers will be helpful for hotels in the establishment of adaptive services and operational efficiency.

Regarding the organization and execution of the business operations effectively, the hotels require implementing well structured and formulated management practices, so as to manage the different business aspects in an optimal manner. For overcoming the challenges posed by the recession climate, the implementation of effective marketing, human resource, financial and customer service strategy is essential. The marketing strategy provides assistance to the hotels in optimizing the market overview of the products and services favorable for the customers. It also promotes the services of the hotels for the creation of the brand image in the market and differentiating the service portfolio.

Since human resource is the key towards the success of the hotels, it is essential for the hotels to provide adequate incentives and motivation for retaining the key talent. It is also helpful in the coordination of the different service divisions of the hotels. The financial strategy of the hotels requires focusing on the cash management and financial resources for fulfilling the requirement of funds in the management of the diversified operations and maintaining the relations with the suppliers for the sustenance of the service quality. It also facilitates the hotel management in effectively allocating their financial resources and managing the requirements of the key stakeholders.

The customer service strategy oriented towards the fulfillment of the customer’s requirements in an optimal way and developing a brand name of the hotel in the market. Besides this, it also facilitates the hotels in gaining competitive advantage and differentiating themselves from the major players in the market. These strategies facilitate the hotels in the customization of their services and making their business policies in accordance with the market fluctuations. In addition to this, these strategies are also helpful in the promotion of the hotel services in the market and accomplishing the requisite customer focus, which aids in gaining competitive edge to the hotels.

For the accomplishment of competitive advantage and managing the business operations in the recession influenced market environment, the hotels should alter their business strategy and focus on the integration of the different management practices optimally for generating better outcomes. It is essential for the hotels to focus on the restructuring of their management practices and including contingency plans for the sustenance of the efficiency and profitability in the adverse market conditions. Moreover, the process of maximization of the market opportunities for the execution of the business operations, the hotels requires developing service quality oriented approach, which enhances their operational excellence significantly.


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Task A

Task A
The main tasks involved in the project can be broken down into five phases,
Inception Phase
Requirements Phase
Functional Definition Phase
Development Phase
Testing Phase
Key Milestones
Expected Date
Survey results analysed to determine website requirements
Nov 27, 2009
Goals, scope and use cases determined
Dec 4, 2009
Comprehensive technical requirements ascertained
Dec 25, 2009
User interface design finalized
Jan 22, 2010
Website design commencement approved
Feb 5, 2010
Coding and database complete
Feb 26, 2010
Content integrated using content management system
Mar 12, 2010
Stability and performance testing complete
Apr 9, 2010
Website launched online
May 14, 2010

Following is the list of members in the team responsible for developing the website,
Dean of Technology
Public Relations Co-ordinator
Chief System Administrator
Student Body Representative
Web designer
The Work breakdown structure (WBS) for the project is as follows,
Fig 1.1 Work Breakdown Structure
The weekly cost for the project comprises of payment to the programmer and web designer. The programmer charges $19 per hour, while web designer’s hourly rate is $17. As they both are freelancers, their compensation will depend upon the number of hours their expertise is needed in a week. As other members of the team including dean of technology, public relations co-ordinator, and chief system administrator are already on the university’s payroll, their compensation would remain the same irrespective of time spent on this project. The student body representative’s involvement in the project will be minimal due to personal academic commitments. Although the student will not be compensated monetarily, working on a real project would serve as invaluable experience.
One-off costs for the project are one-time investments that do not occur on a regular basis. This includes money spent on security assessment by an expert organization, purchasing a domain name for the website, software licensing and price of server hardware. A domain for the website would cost about $10 (Eitel 4). The server hardware cost would total to around $1500 for a system based on Pentium Xeon processor. The licensing cost of Operating System and other software of designing the website would add another $2000 to the expenses.

Task B
Some tasks in a project cannot begin before another task begins or ends. This dependent relationship between tasks in the project is graphically denoted in the Gantt chart using arrow marks (Microsoft 2). For instance, the last task in the project which is referred to as “launch website online” cannot be completed until the previous task “Debugging and incorporate improvements” is completed. This dependency is denoted as FF (finish-to-finish) in the ‘predecessor’ column. Following are two different views of the MS project file. The first one displays weekly costs and one-off costs, while the second one displays the product schedule.

Fig 2.1 MS Project file detailing weekly and one-off costs

Fig 2.2 MS Project file detailing schedule

The following figure 2.3 represents an MS Excel file displaying product schedule, resource allocation, weekly and one-off costs. The next figure 2.4 is bar chart modified to display a Gantt chart in MS Excel.

Fig 2.3 MS Excel spreadsheet detailing schedule and resource allocation

Fig 2.4 MS Excel spreadsheet displaying a Gantt Chart
Task C
Project Overview
Title: University Website Development
Estimated budget: $30,000
Estimated duration: 6 months (11/9/2009 – 5/14/2010)
Objectives: Improve communication between students and faculty
Conduct Online examinations
Provide resources pertaining to course as well as general announcements
Inform potential students about the university
Abstract: A team consisting of six members would be deployed to design a website for the university, based on requirements identified from a survey. The website would not only improve information dissemination and academic standards, but also help improve the reputation of the university, thereby proving to be a worthy investment.

Inception Phase
The development of the website first involves a discussion with all the key members of the project. Since the website is for a university, students would be the primary users. Hence, the student body representative would be part of the team to give inputs on student needs and preferences. The dean of technology, a professor with a technical background, would be the key technical advisor representing the university. The dean would serve the role of a project manager and be given the authority to make crucial decisions.
The public relations co-ordinator would be responsible for contributing ideas relevant to creating a positive image for the university, while developing the website. The PR co-ordinator would also take care of complaints and handle dispute resolution. The chief system administrator would offer advice in the practical system requirements and common issues that need to be addressed by the website. The admin would also be responsible for maintaining the website, once it is launched live.
The two freelances hired to provide technical expertise are a programmer and web designer. The former would be responsible for coding the system software side of the website, while latter would take care of the external design part. The initial discussion would be a brainstorming session where ideas are exchanged freely. The success of this stage lies in university staff effectively conveying their vision for the website to the programmer and web designer. A survey would be specially designed to methodically determine the requirements for the website.  Many higher officials and students would participate in this survey to express their ideas. The survey would consist of questions such as,
Level of internet knowledge
Common problems while visiting websites
Handy features in websites
Favourite website
The data from the survey is analyzed to come to a common consensus with respect to website requirements. The results of the analysis are discussed among the group to organize ideas in a more structured way.

Website Requirements Phase
The goals of designing a website of the university are presented. The website would be required to host online exams, serve as a notice board and a forum for freely exchanging ideas. All the students and faculty in the university would access the website.  The bandwidth requirements of the website will have to be calculated. This can be accomplished based on the number of students and faculty members likely to simultaneously access the website. Other assumptions such as power failure and downtime will also have to be taken into account.
The website will also have to be optimized for search engines as potential students may wish to access the university. Therefore, the website will also have to be submitted to search engines and keyword list will have to be generated to effectively accomplish this. Information such as course details, fee structure, campus culture, and photo gallery would have to be uploaded to attract potential students. A professor may use the website to announce a test to the students, while a student may use it to take a test or access resources pertaining to the test. Therefore, use cases will have to be developed to ascertain what every user would require from the website and the nature of their interaction.

Functional Definition Phase
By this time, the team would have developed a rough idea of what the website is going to be. A suitable domain name ending with ‘.edu’ is purchased. A site map would be employed to visually represent these ideas. It would serve as the basic building blocks for the website (Bronte Design 23). Hence, care should be taken to incorporate all the necessary elements are included here. A page list comprising of links to various kinds of information serve as directory of the website; it also helps web crawlers identify the website.
The next step would be to develop a basic wireframe for the website that would serve as the blueprint of the website’s interface (Stanford 3). The navigational elements that would help one access different parts of the website would also be decided at this stage. As there are different kinds of users likely to access the website, each of them would have to be given varying levels of permission to access the website. For instance, a student would be given lesser access compared to a professor, as a student should not be able to change the questions at will or gain unauthorized access to academic information. However, the system administrator would be given maximum privileges, as the admin would be responsible for maintenance and making changes to the website when necessary.
The user-interface is now decided based on the inputs received thus far. The interface should be simple yet intuitive, even for novice computer users. The website should also feature a special interface for visually and audibly challenged students. This would ensure that the university is an equal-opportunity learning environment.  Once the team zeros in on a design interface, choices pertaining to software and hardware will have to be made. The progress made thus far is taken up for discussion pertaining. If all the members of the team approve of the decisions, then project moves on to the next phase. If not, necessary changes are made.

Website Development Phase
A basic template for the webpages is created by the web designer. The images that are to be displayed on the webpages are also loaded and integrated to the webpages (Lynch and Horton 2). This would be the skeleton of the website, on which further additions and developments would be made. The programme would develop a database storing student information and log-ins for everyone. Following this, the programme would code the website so as to integrate the database, web pages and software applications need to run the website.
The next stage would be to devise a content management system that would allow authorized users to append information in the website. The PR co-ordinator along with the student body representative would develop suitable content to display on the webpages. Now, the website’s code is optimized to enable web crawlers to easily recognize it (Kobayashi and Takeda 2000). Another meeting consisting of key project members would be convened to get feedback and suggestions. If everything goes through smoothly, the project would go to the final phase.

Website Testing Phase
The phase involves vigorously testing the functionality of the website; broken links and non-function buttons are all eliminated during this test. The website is also put under maximum load to assess it stability. The website is also tested by simulating different cases on different operating systems and browsers to assess cross-platform performance. The system admin would also be trained on performing system maintenance and other aspects.
Care has to be taken to ensure that the website is secure from online threats. Hiring a firm such as McAfee to provide security expertise would a worthwhile investment. During the testing phase, the online security firm would assess the website for vulnerabilities and fix them if necessary. After this, it would award a ‘Hacker Safe’ or equivalent certificate, which serve as safety seal of approval. This gives more confidence to users to enter their personal information (McAfee 2). User feedback is collected mainly to assess the usability and accessibility of the website. A final round of debugging is done and changes suggested in the feedback are made if necessary. After all team members are content with the website, it is launched online and hosted from a powerful server on campus. Backup power requirements for the server are also put in place to avoid unexpected downtime.

Electronic Resources
Following is a list of typical choices likely to be deployed for a project of this nature,
Web design  Adobe Creative Suite 4
Website coding HTML
Database development  SQLite
Operating System Windows Server 2008
Server  Intel Xeon processor based IBM server
Project Management  MS Project and Excel
Project Documentation  MS Word

MS Project vs. Excel
Both Microsoft Project and Microsoft Excel have been deployed to chalk out the project plan for the university website development project. These tools would help ensure that the project is proceeding as per schedule and within the budget. A simple Gantt chart can be generated in Excel by manipulating a bar chart (Peltier 3). Following are the screenshots of Gantt charts generated using MS Project and MS Excel,
Fig 3.1 Gantt Chart using MS Project

Following are the two resource graphs generated using MS Project to represent the weekly costs incurred on compensating the programmer and web designer (Tactical Project Management 5).

Fig 3.2 Weekly costs to Web Programmer using MS Project
Fig 3.3 Weekly costs to Web Designer using MS Project
Fig 3.4 Gantt Chart generated using MS Excel
Fig 3.5 Resource allocation, Weekly costs and One-off costs generated using MS Excel

The old adage ‘a picture is worth a thousand words’ stands true in this situation. It is apparent that MS project clearly superior and versatile compared to MS Excel. Although Excel is simpler use, it lacks many of the features of MS project. Task dependencies cannot be expressed in Excel. Although weekly as well as one-off costs can be calculated using Excel, it is easier and more practical to calculate those expenses using MS project. Task dependencies can also be graphically denoted on the Gantt chart quite easily (Microsoft 1).

Risk Factors
1) The project could exceed the estimated budget of $30,000 due to unexpected one-off costs.
2) The project could exceed the estimated deadline due unavailability of staff or performance lags, which would also increase weekly costs.
3) If the end product does not meet the initial requirements, it could involve hiring new resources to cleanup. The aforementioned risks can be reduced by keeping a close track of the project plan and ensuring that changes are made immediately to minimize the impact of the risks.

Task D
Microsoft Project is specially designed to schedule projects and keep track of them, making them superior to Microsoft Excel, especially for huge projects.  It is easier to generate Gantt charts and resource graphs in MS Project, as it gets automatically generated when the schedule is entered. Project dependencies can be graphically represented using Microsoft Project. The templates can help cut down time needed to develop a project plan from scratch. It is also simpler to measure expenses and allocate resources. MS Project facilitates resource levelling by identifying unbalanced deployment of resources. It also serves as an ideal solution to test out different scenarios, as it easier to modify the project plan. Project timelines can be easily estimated using MS Project. It also enables better risk management by moving around the schedule to compensate for unexpected delays. The application also improves communication between the team members, as everyone’s role is clearly laid out well before the commencement of the project (Talbot 2).

Works Cited Page

Automated network security audits combined with an extensive vulnerability management portal. (n.d). McAfeee. Accessed Nov 6, 2009,

Create a Gantt chart in Excel. (n.d). Microsoft. Accessed Nov 6, 2009,

Create task dependencies (links) within your project. (n.d). Microsoft. Accessed Nov 6, 2009,

Glossary of Terms. (n.d). Bronte Design. Accessed Nov 6, 2009,

Eitel, Joe. (n.d). eHow.com. Accessed Nov 6, 2009,

Export the Microsoft Project Calendar to Microsoft Word. (2009). Tactical Project Management. Accessed Nov 6, 2009,

Kobayashi, Mei, and Takeda, Koichi. (2000). Information retrieval on the web. ACM Computing Surveys.

Site design. (2004). Lynch and Horton. Accessed Nov 6, 2009,

Stanford, Julie. (2003). HTML Wireframes and Prototypes. Accessed Nov 6, 2009,

Talbot, Rich. (2008). The Advantages Of Microsoft Project. Wild West Web Works. Accessed Nov 6, 2009,

Peltier, Jon. (2007). Gantt Charts in Microsoft Excel. Tech Trax. Accessed Nov 6, 2009,




EXECUTIVE SUMMARY…………………………………………………………..iv

INTRODUCTION……………………………………………………… ………….1

REPORT PROCEDURE…………………………………………………………..…1

THE 4 P’S……………………………………………………………………………2

PRODUCT……………………………………………… …….……2




SWOT ANALYSIS………………………………………………………………….3













This report examines the international marketing strategies used by General Electric Company in its quest to tap the international market. The purpose of the report is to provide the company with the information necessary to amend and improve on their marketing strategy. Over the years GER has highly diversified its operations and is now operating 11 major lines of businesses which include transportation, consumer finance, commercial finance, insurance and energy. It is also involved in healthcare, consumer and industrial products, advanced materials and NBC-Universal. The objective of this report is to;

  • Assess the 4 P’s of the company
  • Perform a SWOT analysis for the company
  • To assess international marketing strategies used by the company
  • To evaluate the importance of international marketing for GE Company
  • To evaluate the weakness of the strategies adopted
  • To recommend necessary action to be taken

The information necessary for this report was obtained by scrutinizing company information from their website which is amply updated. Based on the conclusion made in the report, recommendations for an effective international marketing strategy are to fully utilize the internal and external market environment through employee appreciation, relationship marketing and utilization of local professionals in foreign regions.

This report is an examination of the international marketing strategies used by General Electric Company, London to access international foreign markets handled by Boston Consulting group officers during the year 2009. The purpose of this report is to provide the company with the information necessary for them to improve their presence in the international market. The strategies used by the company previously were analyzed and a SWOT analysis was done on the company. The report examines the importance of international marketing to GE and several recommendations to tap into more foreign market. The recommendations proposed in this report are 1) to fully utilize the internal market environment 2) to adopt strategic measures to enhance the external market 3) To utilize local professionals in the different regions.

During the preparation of the report, different team members adopted different responsibilities as follows;

Derrick Aston – To identify the 4 P’s for GE Company

James Stephen – To identify international strategies employed by GE in the past

Symon Ahmed – To explore possibilities of improving international marketing strategies for the company


This is the report on the international marketing strategies adopted by General Electric Company, London. The company is one of the largest and extensively diversified corporations in the world. It’s organized along 11 business lines which include transportation, consumer finance, commercial finance, insurance and energy. It is also involved in healthcare, consumer and industrial products, advanced materials and NBC-Universal. Its symbol in the London’s stock exchange is GE and it employs over 315,000 employees in over 160 countries, with headquarters in Fairfield, Connecticut. The company has for a long time aimed at promoting both the internal and external marketing environments. Its primary marketing strategy has been a concentration on promoting customer consciousness on all employees in all its branches. This has been based on the growing awareness in today’s market that a strategy can only be marketed successfully in the market place once it’s marketed internally.

Report Procedure

Effective September 30, 2009, the Director of International marketing at Boston Consulting group requested consultants in the company to evaluate the international marketing strategy for General Electric Company, a highly diversified company with operations in over 160 countries. The report was to evaluate the 4p’s of the company and perform a SWOT analysis of the company. The report was also to evaluate the existing international marketing strategies adopted by the company as well as assess the importance of international marketing to the company. It was also intended to evaluate the weakness of the adopted strategies as well as making recommendations for more effective strategies. The report duration was given as two weeks.

The 4 P’s for the company

  • Product

The company has maintained a culture of producing high quality products aimed at providing the best value to the customer. It also engages in continual improvement of the existing products through thorough and high-tech research (Gary and Veronica, 2008, p 13).

  • Price

In recognition of existing competition in the global market, the company is involved in regular evaluation of its price to ensure that customers attain optimum value for their products using least resources. The company is hence involved in provision of discounts and promotional items from time to time.

  • Place

The company has adopted an ambitious global plan over the years to distribute its products to its consumers in a considerably convenient manner. In pursuit of this goal, the company has opened branches in over 160 countries which exclusively merchandise GE’s products (Kotabe and Helsen, 2006, p 36).

  • Promotion

The company has a vigorous promotion culture aimed at maximizing communication to the consumers. The company has a state of the art website which is updated continuously to reflect the products, their benefits and how they can be accessed. Communication is amply up to date with a professional and articulate customer services online (Dennis 1964, p 26). The company also pays great attention to all it’s stakeholders including employees and customers who are treated as critical in the company’s internal business environment.

SWOT Analysis for GE

  1. Strengths
    • Global recognition and strength-The company is positioned 5th in Fortune 500 list, with a massive operation base in over 160 countries. The products of the company are well distributed in all major markets making the company a household name for its products.
    • Diverse product range-The Company has invested heavily in 11 major business fields giving it a wide range of products. These products are categorized into both long and short term products (Kotler and Gary, 2008, p 11). Among the long term products are long term aircraft engines while short term products include lighting products, plastics and NBC.
    • A decentralized organizational structure where management is done at the regional levels thereby reducing the burden of cross border transactions and communication (Kotabe and Helsen, 2006, p 36).
    • The company has well established marketing relationships with both customers and employees.
  2. Weaknesses
    • Poor performance in the energy sector- The company sector, which forms a wide financial base for the company, has been underperforming with no signs for improvement in the near future. This has been attributed to the ongoing financial crisis that has massively affected major businesses and economies.
    • Inability to acquire expansion sites for the company- Due to its size, the company faces monumental challenges acquiring new sites for expansion due to existing domestic and foreign policy framework. For instance, the company’s planned purchase of Honeywell International was denied by the European Union. The targeted company is a manufacturing and technology company, with great specialization in the aerospace industry.
    • Poor flexibility-Due to the sheer size of the company, it is increasingly hard to effect essential changes to the business. This means that the company can lose ready market due to its inability to make quick decisions necessary to capture the change.
    • Time to time charges of corruption cases
    • poor history of large scale water and air pollution
  3. Opportunities
    • Increased Geographic growth- The Company has potential to tap into geographically strategic paces such as China and select countries in Africa such as Egypt and South Africa. Improved presence in the global market implies a significant potential for more business opportunities (Gary and Veronica, 2008, p 13).
    • Research and Development- The company massive investment in training and adoption of relevant technology positions it in a strategic position for competing with other major world players.
    • Improved Customer service provision
    • The company has adopted a customer focused strategy where customers are given access to all information needed within the short time possible. Enhancing professional raining for customer service training on its staff is also an immense potential for the company (Kotler and Gary, 2008, p. 51).
    • Mergers- The recent merger between Vivendi and NBC presents more opportunities for the company in the media business.
    • Diversification and innovation of new products such as provision of financial services.
  4. Threats
    • The Global Financial Crisis- Economy slowdown in major economies such as the US and UK is a potential disaster for the company since 40% of its gross revenue is generated overseas.
    • Cut-throat Competition- The constant change in technology raises up great competition as competitors adopts diverse strategies to remain in business. The continuous existence of the business requires smart strategies, which are not always timely. Major competitors to the company includes Philips Electronics, Citi group and AG
    • Intense scrutiny- Huge business attracts a lot of scrutiny from governments, private entities and individuals. Any perceived non performance leads to investor apathy especially in the stock market.
    • The unpredictability of environmental patterns in some potential foreign markets (Kotabe and Helsen, 2006, p 36).

International marketing strategies adopted by the company

The company basically employs two strategies in its international marketing efforts. The first one involves investing and tapping the internal market within the reach of the company (Gary and Veronica, 2008, p 18). This is done in order to utilize the business principle which implies that a business must be employee oriented if it desires to be customer oriented. The internal marketing strategy is a business philosophy that utilizes employee’s potential in helping tap external market for the business (Adcock et al, 2009, p 15). Among major competitors, it has become a widely accepted fact that a strategy cannot work in the market efficiently if it is not well marketed internally (Kotler and Gary, 2008, p. 91). For GE to achieve its objective of reaching the wider world, the internal environment is treated as a prerequisite. The goal in this strategy is to convert employees to adapt and cultivate a culture of relationship marketing (Medha 2009, p 10). For GE to effectively penetrate the international marketing, the requirements of the internal market are first met and are then converted to the external market. In business it is recognized that inability of an organization to meet the needs of the employees leads to employee’s defection which breaks up the relationship that they had built with the customers. In promoting the internal market strategy, GE recognizes its employees as customers of the organization. The idea is that if products supplied by the company are valued by the employees, it is likely that the employees will bring in more customers. To promote this strategy, GE invests in their employees by providing good working environment and providing necessary tools required to perform various tasks in the organization. By being highly valued and appropriately compensated, the employees at GE are usually the first customers to purchase and promote any product rolled in the market. Another important consideration in this strategy is the involvement of employees in developing a quality approach the work they do in the company. Every employee has the responsibility of promoting production of quality products within the business.

The next strategy adopted by GE regards the external environment of the organization (Kotler 2008, p. 28). In the external market, several aspects are considered to be crucial by GE. This market involves the review of the general economy and the likely market for the company’s products. In seeking the external market, the company considers several factors such as fiscal, economic, technological developments, legal requirements and the business environment (Medha 2009, p. 61). Attention is also paid to existing and potential competitors in the business within the external environment (Dennis 1964, p. 42).

The micro and macro environment for the company’s business are also put into consideration. The microenvironment is the combination consisting of customers, suppliers and other stakeholders in the company (Paliwoda and Ryans, 2008 p. 61). GE is a huge company that treats suppliers as insiders and crucial partners in the running of the business. The customers of GE are not seen just as potential people willing to spend their money in the business but the company has put efforts of integrating the company’s view and the view of the customers. Customer service is very core in GE and all multinationals dealing under GE is supposed to adopt this view. Three components are cited as crucial with regard to quality afforded to customers. These include the employees, the process and the customers themselves (Kotabe and Helsen, 2006, p 36).

GE recognizes the needs of customers and invests in meeting their needs. Customers needs identified in GE includes competitive prices, service and correct transaction processing, on time delivery and performance. By analyzing the needs of the customers GE is able to invent new modalities which produces the required satisfaction among the customers.

Another strategy implemented by GE is relationship marketing among its major consumers. This strategy basically aims at retaining existing customers (John 2007, p. 51). This strategy concentrates on building long term relationship with the customers which is regarded as very vital in the running of business. This strategy is based on the business recognition that customers build relationship with people rather than products (Chekitan 2005, p. 35). To build this relationship, frequent contact with the customers is enhanced and the customers are encouraged to keep on making enquiries within the business. In its efforts to build strong relationship with the customers, GE has established a modern state of the art answer centre, which is regarded as one of the best in the world where customer’s gets free personalized attention around the clock. The center has been able to create opportunity for GE to be in contact with customers for longer time and hence creating the opportunity for tapping even customers who may get dissatisfied in the course of doing business. This contact helps the customers of GE to understand the company’s commitment to them and the value they attach to their customers. This has the effect of improving and cementing the very crucial relationship that GE attempts to build. The knowledge obtained from customer’s interactions provides relevant information with regarding to sales and marketing and possibilities of new products development (Adcock et al., 2001, p. 91).

As part of its internal environment, GE makes efforts to ensure that its suppliers adopt practices that comply with its environmental and safety standards. The company has a program for helping their suppliers in new markets to enhance their environment, health and safety standards. This is achieved through conscious efforts to increase awareness of important issues among its suppliers. By doing this, GE is able to protect its international image and integrity as well as safeguarding the quality of products (Kotler and Gary, 2008, p. 90).

Another crucial strategy adopted by GE is diversification. Recently, the company diversified to offering financial services. This diversification is adopted in the company’s efforts to ensure that it can offer all services that its customers deem necessary. This attempt was initially started as a credit financing stream where customers would obtain financing for the products they wanted if they didn’t have enough money.

Importance of International marketing to the Company

International marketing is very important for this company in its quest for generating substantial profits. For today’s businesses, survival depends on their presence on the global world market (Kotler 2008, p. 29). For such a company to effectively participate in global competition, a lot of efforts are needed in improving the effectiveness of the company’s top management in making crucial decisions at the right time. International market for GE means new markets in places and regions that are new and that are not supplied with the products the company offers. Expansion of the company in the international market is important in connecting the company with new sources of raw materials that are needed in their production lines (Selden 1997, p. 42). Since GE is a highly diversified company, there is also a great need for creating a highly diversified market that can absorb the diverse products offered by the company. Marketing is primary to all activities carried out by GE. In the international market, marketing is important to GE since it helps extend the domain for competitive enterprise (Dennis 1964, p. 24).

This implies that this level of marketing helps to break economic and nationalistic barriers and helps build economic unity among different regions economies (Schultz 2006, p. 90). Marketing that is regarded as crucial by GE is that which concerns developing countries such as Africa and Asian giants such as China and Japan. In the upcoming international markets, marketing helps in the innovation of new products that are in line with the upcoming market trends. It also helps in expanding existing market, accumulate more capital, helps in balancing international payments, exchange primary products, increase profits and extend production facilities (Chekitan 2005, p. 35). To achieve working solutions for the international market, the company borrows from other highly diversified companies which have faired well in the international foray. It can however be argued that GE has not completely utilized its potential in tapping the larger world market. Part of the probable reasons why this company has not completely utilized the global market is associated with the high cost required for such ventures and the complexity of diversity due to its highly diversified aspects. There are however several ways through which this company can improve its access to the world market and remain effective despite its diversification.

Ways in which the company can improve its international marketing strategy

The international market is considerably different as compared to local and regional markets. This is because it entails the possibility of meeting different markets dominated by different cultures. To achieve success in effective international penetration, several ways can be adopted and utilized. The first strategy would be comprehensive market survey that would effectively establish the needs that potential customers of that market are (Kotler, 2008, p 28). The survey should be carried out by professionals who should include as part of their team local professionals well oriented with local market. The survey would help the company establish the kind of products that it can offer to such markets. The other consideration would be to use other companies existing in the local markets as frontiers of the company in such markets either as dealers or franchises (Adcock, et al, 2009, p 1). The other strategy would be recruitment and training of employees sourced from the local markets. Such employees would give the company the advantage of being conversant with local languages and the general trends of business within their local environments. Use of print and electronic media would also be very crucial in establishing international markets and this would call for establishment of liaison between major media sources and the company (Nelson 2009, p. 17). Advertisement in the media should be professional and should portray the integrity and presence of the company.


The International market is very important in today’s business. The growth of technology has established the world as a global village and has given businesses a perfect opportunity for reaching to the previously unreachable markets. GE has a well established capital base that ensures that it can reach to more regions than it has done. The strategy that needs to be adopted by this company in these efforts must be based on exploiting the immediate internal market which would effectively open room for wider penetration in the external market. The international market presents great potential for the company since it would assist in expanding production facilities for the company which would effectively help in maximizing the company profitability. One of the challenges facing this company is the adoption of flexible strategies that can be adopted fast and effectively. The company should hence work towards developing working solutions that would help develop strategies that would address this weakness.


GE is a global company. The achievements made by the company over the last couple of decades show the firms commitment to achieving global presence in all corners of the world. Since the company has a wide capital base, it has potentials to reach a wider market than it has currently achieved It is recommended here that;

  • The company should invest in high level business surveys in upcoming markets to expand its market base (Theodore 1983, p. 95).
  • The company should engage local professionals in their targeted regions who would help actualize the real customer needs in such markets.
  • The company should adopt up to date technology to help fast track its services and product logistics in its wide markets. This calls for adequate training for employees on ways and modalities with which new technology should be used. Such technology could be in the area of communication, international money transfer, shipping and logistics and effective diplomacy necessary to maintain budding foreign relations (Adcock et al., 2009, p. 76).


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Is globalisation a threat or an opportunity to developing countries?


Globalization has often been regarded as the ‘cradle’ of global economic development. This so called ‘world liberator’ however has not escaped criticism as opponents claim that it has been the cause of social evils and rising levels of poverty in developing countries. Due to the nature of globalization and in its bid to open up social, economic and political boundaries currently in place, various functions in different countries have been affected (Whiteford and Wright-St Clair, 2004, p. 353; Bhagwati, 2004, p. 4). The effect of globalization in developing countries has been a subject of debate with different views being put forth about the possible outcome of globalization in developing countries. IMF (2001, p. 1) puts forth that most debates generally focus on whether globalisation is a threat or an opportunity for developing countries.

Globalisation as an opportunity

Economic development

According to Baghwati (2004, p. 28) globalisation can be said to be economically benign; playing the significant role of enhancing economic prosperity and offering a new beacon of hope to developing countries. Globalization is often characterised by a reduction in trade barriers such that there is a free flow of goods, services and labour from one country to another (Gangod Gangopadhyay and Chatterji, 2005, p. 281). Richardson (2000, p. 42) contends with these views and adds that that the effect of this is increased trade which in turn translates into increased income for developing countries. Globalisation therefore serves as an opportunity for developing countries to stabilise their economies by taking advantage of trade. These statements can be considered true because globalisation has greatly reduced barriers between countries through elimination of tariffs and import duties. This is noted by Richardson (2000, p. 2) and Dierks (2001, p. 63).

The rise in globalisation has led to increased capital flow into developing countries’ economies. Foreign Direct Investment (FDI) injects a considerable amount of capital into developing countries thus easing their efforts towards economic stability. The developing countries have also benefited in terms of increased financing through loans and grants from developed countries (Aurifeille, 2006, p. 254). It is true that increase in capital inflow serves the purpose of enhancing economic development in a country. What proponents fail to incorporate in their studies however is that net capital inflow could lead to negative effects on trade. Chan and Scarritt (2001, p. 154) note that large capital inflows often result in appreciation of exchange rates and inflationary pressures that impact on the country’s current account. This means that globalisation in an attempt to improve the economy could actually thwart the progress of the economy.

The reduction in trade barriers has led to the promotion of specialisation. This is an economic concept which denotes that countries can concentrate on the production of commodities that they can produce at the least cost (Aurifeille, 2006, p. 252). This commodity can then be traded to earn maximum income for the country while other goods may be imported from other countries. In this regard developing countries should take advantage of globalisation to enhance their income through trading in goods which they can produce most effectively. Such a development not only gives developing countries an opportunity to prosper economically but also to obtain goods that prove expensive to produce in their own countries. Most studies on globalisation contend that globalisation enhances competition as the flow of goods and services between countries becomes easier. According to Corsi (2009, p. 9), competition is an effective way of enhancing innovation and the production of better quality goods.

Technological advancement and knowledge transfer

The transfer of technological know-how has taken an integral part in globalisation. Corsi (2000, p. 9) points out that this has led to increased innovation and better methods of production to developing countries. The direct result of this is increased income and thus appreciation of the countries’ economic development. At the same time, globalisation has led to increased transfer of knowledge and skills to developing countries (OECD, 2000, p. 61). Foreign nationals coming to work in multinational companies add to the knowledge banks of developing countries thus increasing the level of efficiency. Increased knowledge about production methods, economic policies and management techniques present invaluable inputs in developing countries. At this juncture, it would be worthwhile to note that developing countries should use this as an advantage to tap these knowledge and skills because foreign investors are not destined to stay there forever. Training of professionals and development of technology within the country are vital yet they are not effectively addressed in the globalisation literature presented by these authors.

Employment and social welfare

Developing countries have an opportunity to increase their per-capita income following the increase in globalisation. The increase in Foreign Direct Investment following the reduction in foreign investment laws has played a great role in reducing unemployment in developing countries (Welfens, 1999, p. 158). Increased employment levels raise the social welfare of the citizens of developing countries as a result of increased disposable income so that they can comfortably take care of their needs. In consideration to this proposition, increased personal income would be worthwhile for developing countries’ citizens. It is however notable that education in developing countries is not well established. As a result, many multinational companies have to bring in foreign expatriates to take up management positions while local citizens mostly take up positions requiring lower skills. This is barely addressed by Welfens. If developing countries have to benefit from globalisation through increased employment, increased training and education must be provided to the country’s citizens.

Globalization as a threat

Increased inequality

Critics of globalisation propose that globalisation does not negate the needs of developing countries. According to Zedillo (2007, p. 11), globalisation only serves the interests of countries in the developed world such as United States, Europe, Australia and Canada among others. Developing countries are normally left out of major decisions on globalisation even in cases where they are directly involved. According to IMF (2000, p. 6), globalisation serves to amplify the level of inequality between nations. As far as opponents are concerned, developed countries have a larger stake in influencing the world economy to an extent that they influence the economic and social policies in developing countries. Multi-national Corporations have not made the situation any better in developing countries. According to Robert and Lajtha (2002, p. 186), multinational companies take advantage of the cheap labour that can be obtained from developing countries’ citizens. These companies normally provide poor working conditions and do little to upgrade the knowledge of their workers. Consequently, the workers are not in a position to improve their social welfare. It is true that inequality has been on the rise due to globalisation. Studies conducted by the World Economic Outlook indicate that while the average per capita income rose considerably in the 20th century, the income gap between the developed and developed countries had become wider (IMF, 2000, p. 6). Income distribution was more unequal at the end of the century than at the beginning.

Increased control by developed countries

With increase in globalisation, the level of control over developing countries over developing countries has increased. This not only threatens political systems but the social aspects as well. Political leaders in developing countries are under the control of developed countries and the policies taken in developing countries mostly result from pressure by developed countries (Richardson, 2002 p. 2). Zedillo (2007, p. 11) notes that these policies are mostly meant to address particular developing countries’ interests. Developing countries often have to submit because failure to do so could lead to deleterious effects including the withdrawal of financial assistance, FDI and possible trade restrictions through trade embargos. It is notable that even when developing countries receive financial aid from developing countries and international financial organisations, they are not at liberty to spend the finances in the projects that they desire to develop. The projects to be undertaken using the funds are often dictated by the donor countries; most often to promote their own self interests. While the concept of dominance is true, it is a perfect example of the struggle for dominance that characterises societies. According to Joseph (2003, p. 131-133), societies strive to outdo one another politically, socially and politically through development of methodologies to dominate others even if it means using acts that may be considered unethical. To a certain extent therefore, the actions of developing countries cannot entirely be blamed on globalisation.

Threat to the workforce

The ease with which individuals can move from one country to another has been a threat to the level of professional skill and expertise for developing countries. Highly qualified professionals are now moving to developed countries where they are assured of better pay incentives (IMF, 2000, p. 4). The direct result of this is that the developing countries are now experiencing shortage of qualified staff to run local institutions. This is a great threat to the developing countries’ workforce which is bound to decrease as more learned and experienced workers migrate to developed countries. IMF fails to mention the decision to go for higher incentives in foreign countries is a question of rational choice. It is only normal for employees to seek greener pastures and attractive packages in international firms provide them with these.

Increased dependence on developed countries

Reduced trade barriers have led to increased supply of cheap products from developed countries to developing ones. Developed countries are in a position to produce cheaper products due to the availability of advanced technology, capital and economies of scale (Robert and Lajtha, 2002, p. 183). Cheaper goods often lead to unfair competition to companies producing similar goods in developing countries thus putting them out of business. The result of this is that countries now have to depend on imports to furnish their demand for such goods. This increases dependency on developed countries. As far as unfair competition is concerned, this should in fact be a wake up call to developing countries and not a reason to allow the closure of industries. As noted by Whiteford and Wright-St Clair (2004, p. 353), companies should rationalise production so as to ensure that they are as efficient as possible to compete with others in the market. This shows that increased competition could indeed play to the advantage of countries if proper measures are taken to address the country’s shortcomings.

Effect on the socials structure

As far as conservatives are concerned, globalization has been the cause of culture erosion, increase in the level of crime, immorality among other evils. According to Whiteford and Wright-St Clair, 2004, p. 350), the concept of culture erosion has led to wide criticism of globalisation. There is a considerable erosion of cultural identities and boundaries between nations. This is what has been referred to as a borderless world such that leads to the loss of identity as people start behaving in similar ways across the globe. The critics of globalisation under this claim have not taken time to look at the positive side of cultural interaction. Not only does it promote communication across nations thus enhancing interdependency but also eliminates undesirable behaviour such as racial and ethnic segregation hence increasing international cohesiveness. When people interact socially, political and economically, their differences are less visible such that they can effectively work together.

What next for globalisation and developing countries?

From the above review, it is possible to identify that globalisation has both its upsides and downsides. Globalisation is desirable because it draws the world together in a mutually interdependent manner through enhancing trade and breaking political and cultural barriers. Globalisation on the other hand proves to be a threat to developing countries in certain aspects. It is notable however that globalisation is advancing at a fast rate and attempts to stop it would only result in remote results. The question of what next for globalisation then arises. There is a general contention that despite the benefits associated with globalisation; there are downsides of the same which often make globalisation undesirable. Globalisation even then is a phenomenon that is here to stay (Chan and Scarritt, 2002, p. 51). In a way, creation of policies and institutions to reduce the probability of globalisation downsides is what should be adopted in order to make globalisation useful to every country (Bhagwati, 2004, p. 32).

Handling globalisation downsides

The IMF and other international bodies have offered recommendations as to how the developing countries can catch up and to help reduce the negative effects of globalisation. IMF (200, p. 6) cites the presence of factors that hinder the accumulation of human and physical capital and technology advancement as the reasons for slow advancement in poor countries. If these are eliminated through modification of policies, technical and financial assistance, the level of inequality between poor and rich countries could be reduced. In order for developing countries to integrate into the global economy, the following should be addressed: improvement of trade, encouraging foreign direct investment, increase in debt relief for developing countries, macroeconomic stability, increased education and research, structural reforms and outward oriented policies. These developments will not only aid developing countries in benefiting from globalisation but also in enhancing overall development of their economies, political and social systems.

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Reference List

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Publishers, New York.

Bhagwati, J 2004, In Defense of Globalization, Oxford University Press, New York

Chan, SC & Scarritt, JR 2002, Coping with globalization: cross-national patterns in domestic

governance and policy performance. Taylor & Francis, New York.

Corsi, C 2000, Innovation and market globalization: the position of SME’s, IOS Press,


Dierks, RG 2001, Introduction to globalization: political and economic perspectives for the new

century, Rowman & Littlefield, Lanham, MD

Gangopadhyay, P & Chatterji, M 2005, Economics of globalization. Ashgate Publishing,


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International Monetary Fund.

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Kiggundu, MN 2002, Managing globalization in developing countries and transition economies,

Richardson, M 2002, Globalisation and trade liberalisation, SAGE, London.

Robert, B & Lajtha C 2002, A new approach to trade liberalization: The use of export-led

growth in developing countries. Journal of International Trade vol 10, no. 4, pp. 181-191.

Welfens, PJ 1999, Globalization, economic growth and innovation dynamics. Springer, New

York.Westport, CT, Praeger.

Whiteford, G & Wright-St Clair, V 2004, Occupation & practice in context. Elsevier, Australia.

OECD 2000, Globalisation, migration, and development. OECD

Publishing, Paris.

The Importance of Heavy Metal Tolerance in the Evolution of Asteraceae


Studies pertaining to plant evolution have been progressive branch of science. Not only in the field of plant taxonomy and classification, recent developments have also been attributed to plant genetics, speciation, morphology and evolution. Moreover, the interest pertaining to the development in the higher flowering plants or Angiosperms have become more focused on the evolutionary characteristics that became apparent through long periods of time considering the variations in the physical and chemical environment of their habitats. One of the important family belonging to Angiosperms is the Family Asteraceae. It is the family where Dahlias, Sunflowers, Daisies and Asters belong. Their evolutionary development has been significant in identifying the characteristics that made the higher flowering plants became successful in terms of their reproduction and other means of sustaining their evolutionary lineage (Panero and Funk, 2002).

One of the successful adaptations developed by the Family Asteraceae was their proliferation in serpentine soils. Serpentine soils and substrates are classified to have a higher contents of nickel, chromium and cobalt that are rendered toxic and poisonous to plants. It also hinders plant growth due to its minimal potassium and phosphorous content as well as low ratio of calcium to magnesium. Most species that render themselves capable on growing to serpentine soils have a very distinct morphology, is highly specialized and have a slow growth rate (Kruckeberg, 2002).

In this paper, we will discuss the importance of heavy metal tolerance in the evolution of Family Asteraceae by discussing its functional morphology and having a comparative analysis with its non-serpentine tolerant members. Aside from identifying the natural selection and comparison with drift and metal tolerance, we will also aim in answering the questions:

      1. What are the key traits relating to functional morphology and ecophysiology that differ between the Asteraceae serpentine species and their closest relatives found on non-serpentine soil?

      2. Do the findings support the hypothesis of convergent evolution (i.e., traits giving adaptation to serpentine have evolved independently in different lineages) or exaptation (i.e., traits were already present in the ancestors and ecological sorting processes have allowed the formation of serpentine chaparral) or both?

Literature Review

Soil is one of the major contributors in plant speciation (Rajakaruna, 2004). In Rajakaruna’s study, the role of the contrasting properties and characteristics of soil in diversifying and differentiating species of plants is very vital and important. Using the serpentine soil as one of the test conditions in which plants are surviving, Rajakaruna found that these edaphic feature plants have developed are highly attributed to their genetic modifications and alterations making them adaptive to these conditions (Rajakaruna, 2004).

In a study conducted by Brady, Kruckeberg and Bradshaw (2005), attempts in identifying the genetic component that makes serpentine adaptations in plants possible. They reviewed the properties and characteristics of the serpentine soil as well as the reliable hypotheses by previous researches conducted that enables plants to have serpentine soil tolerance. Low calcium to magnesium ratio, avoidance of Mg toxicity or a high Mg requirement were among those studied (Brady et al, 2005). They also reviewed recent works pertaining to serpentine ecology and found out that there was a variation regarding the uptake of particular ions and heavy metals among serpentine tolerant and intolerant species (Brady et al, 2005). It manifested large phenotypic effects and the correlation between drought and metal tolerance were considered as well as the multiple independent development of the species’ capacity to adapt in a serpentine environment.

Another study measuring and identifying the potential for evolution of heavy metal tolerance in plants by Gartside and McNeilly (1974) was able to state several adaptive qualities acquired by plants for them to live in soils with high heavy metal content. The study was done by increasing the copper content in pot composts and the germination of plants were observed and monitored using one heavy metal tolerant plant as control. It was observed that the total plant dry weight and height decreased as the copper concentration was increased and that some other individuals were able to grow and survive under this condition. Moreover, the heavy metal tolerance observed in the surviving plants was heritable and was measured in its breeding value (Gartside and McNeilly, 1974).


Using Rajakaruna and Bohm’s (1999) study focusing on the edaphic factor and patterns of variation in Lasthenia californica (Asteraceae) to identify the functional morphology of serpentine tolerant species of Asteraceae and compare it with its non-serpentine tolerant relatives . It was found out that using transectional studies of L. californica, considering its flavonoid chemistry, achene morphology, allozymes and flowering time differences, there exist significant comparisons on the physical and chemical edaphic features. Two races were formed and were classified as race A and C. Under several morphological and evolutionary characteristics observed, races A and C were compared on their ability to tolerate further the effects of a serpentine soil. Higher pH, cation exchange capacity, relative water concentration, combined ionic strength, clay percentage and sodium to magnesium ratio were the conditions set for race A. Race C, however, was at the other ends of the transects. Soils where race C was planted have higher metal content such as calcium, potassium and nickel and a higher calcium to magnesium ratio. It was found out that race A exhibited achenes germination, had become mature and seeds were set equally on two sites while race C showed poor growth and no flowers produced compared to race A. It is through the genetic adaptation and modification made by one of L. californica variation that had developed an internal and external mechanism in tolerating high metal concentration. With shorter length and larger root system compared to its same species planted in non-serpentine soil which has a taller stem length and smaller yet highly diffused root system (Rajakaruna and Bohm, 1999).

Ducousso et al (1990) attempted to know the genetic variation between and within populations of a perennial grass, Arrhenatherum elatius. It was a very important aspect and factor in determining the capabilities of plants to adapt to extreme conditions existent to the soil serving as its substrate and reproductive environment. It was then found out that A. elatius growing on toxic soils were able to thrive due to the large number of tolerant offspring or genotypes that emerged from normal pasture-growing species. It was further maintained due to the spatial heterogeneity existent in toxic soils and a more open reproductive system. They have also attempted to interbreed it with non-serpentine species due to its limited gene flow in dense populations.


Rajakaruna and Baker (2004) have identified the characteristics of serpentine plants in terms of its morphology and physiology. Serpentine plants are xeromorphic and smaller with chlorotic, narrow and glaucescent leaves. They strongly develop schlerenchyma and have larger root systems. They attributed it to the plants capacity in dealing with water and nutrient stress existent in these soil environments. These plants are able to tolerate and hyper accumulate higher levels of heavy metals, particularly nickel and have developed both an external and internal mechanism to allow heavy metal penetration in their environment.


The development seen in Asterceae species planted in serpentine soils where high heavy metal contents are observed, have been attributed in its ability to alter and modify its genetic structure and manifesting it in its overall morphological and physiological conditions. It is can be strongly considered as a product of convergent evolution since some members of Asteraceae are predominantly adaptive to dry and open environments (Judd et al, 1994). This serpentine adaptation developed by Asteraceae species is a result of genetic modification and alteration making it capable in allowing high heavy metal penetration and even has the capacity to store it inside and utilize it with a highly specialized internal mechanism. Such development can be further assessed when genetics, ecology and physiology and evolution are merged together as a unified approach in determining and assessing the effects of serpentine soil to other families of higher plants.


Brady, K. U., Kruckeberg, A. R., and Bradshaw Jr., H. D. (2005). Evolutionary ecology of plant adaptation to serpentine soils. Annu. Rev. Ecol. Evol. Syst. 26: 243-66.

Ducousso, A., Petit, D., Valero, M. and Vernet, P. (1990). Genetic variation between and within populations of a perennial grass: Arrhenatherum elatius. Heredity, 65: 179- 188.

Judd, W. S., Sanders, R. W. and Donoghue M. J. (1994). Angiosperm family pairs – preliminary phylogenetic analyses. Harvard Papers Bot. 5: 1-51.

Kruckeberg, A. R. (2002) Geology and Plant Life: the Effects of Landforms and Rock Types on Plants. Seattle: University of Washington Press.

Panero, J. L. and Funk, V. A. 2002. Toward a phylogenetic subfamilial classification for the Compositae (Asteraceae). Proc. Biol. Soc. Wash. 115: 909-922.

Rajakaruna, N. (2004). The edaphic factor in the origin of plant species. Int. Geol. Rev. 46; 471-478.

Rajakaruna, N. and Baker, A. J. M. (2004). Serpentine: a model habitat for botanical research in Sri Lanka. Cey. J. Sci. 32: 1-19.

Rajakaruna, N., and Bohm, B. A. (1999). The edaphic factor and patterns of variation in Lasthenia californica (asteraceae). Am. J. of Bot. 86 (11): 1576-1596.

Credit Crisis

The financial system of each economy is responsible for regulation of the financial scenario in an economy. Through maintaining sufficient information to the investors to enable them make accurate decision regarding the investment opportunities, the enable investors channel their funds to productive investment opportunities. The US has an intricate financial system which relies on both onshore and offshore investors to source and supply funds.

The crisis

Most investors, being rational, speculate and place their funds to the most viable options. Having taken its roots in the advent of the 21st century, the crisis became perceptible in 2007, exposing major cracks in the regulation of the financial industry. In order to enable sub-prime borrowers to acquire houses as contained in policy documents by the Bush administration, most lending institution availed mortgages with attractive repayment characteristics. With the sustained decrease in housing prices, the adjustable mortgage rates started adjusting-only upwards (Koch 2009).

As early as 2006, the sub-prime mortgage market was experiencing deterioration. S&P were the fist to take the first step by placing a large portion of the centralized debt obligations (CDOs) into the ‘credit watch’ list. With similar instances in the mortgage backed securities, investors awoke to a situation where their investments safety was compromised. Having relied on the credit ratings when making decision relating to make investments, most investors were exposed to credit risks of monstrous proportions as suggested by Koch (2009).

Low rates of interest and a huge inflow of foreign financing established a large base of credit availability before the advent of the crisis. Investment in real estate backed by debt finance led to a 5% increase in home ownership in the US due to increase in the prices of houses. The attractive prices were viewed as investment options since mortgage finance to homeowners is a sure source of funds to most operations.

The increasing incentives to borrowing through concession of interest rates and down payment amplified the lending volumes. Lending institution introduced packages which adjustable rate mortgages where borrowers received a grace period. In a bid to increase the lending volume most lenders used the automated underwriting facility compromising the quality of the loans.

Low interest rates experienced at the turn of the century stimulated an increase in the mortgage financing and substantial improvement in the housing prices. Financial institutions jumped into the opportunity thus directed all their investments into mortgage availing institutions. As suggested by Crouchy (2008),

“Borrowers paid low teaser rates over the first few years… There are two types of borrowers…; those who lived in the house and got a good deal and those who speculated and did not live in the house. If refinancing proved impossible, the speculator could default on the mortgage and walk away. The losses arising from delinquent loans were not borne by the originators who sold the loans to the arrangers”

The creditworthiness of sub-prime borrowers is low due to their high debt to income proportions. With most home owners relying on the rising house prices a source of cushion for their increasing debt. The sustained decline in housing prices made it harder for them to refinance. In the middle of the declining housing prices, the credit rating of mortgage originators dipped, leading to demand for higher yielding collateral by investors. Most sub-prime borrowers who had tracked the gains from investment in homes went ahead to take the mortgages, oblivious to the underlying costs. Increasing foreclosures pushed the number of housing inventory to record levels further compromising the overall price of housing.

The compromise arising from the traders of the sub-prime mortgages fueled the monstrous crisis. The high volume of sub prime mortgages led to lowered demand for the investment. The large pool of credit without any asset backing led to invention of financial products such as mortgage backed securities (MBS) and centralized debt obligations (CDOs) which received favorable ratings by credit rating agencies.

Through securitization, it was no longer necessary for mortgage issuers to hold them to maturity, but could trade in them, and generating more revenue through the transaction fees. By engaging in large scale lending sub-prime borrowers, whose credit ratings are not attractive, the mortgage institutions exposed themselves to default risk of significant extents. The Bush administration policy relating to availing homes to all households did much to fan the laxity in lending institutions to consider the repayment ability in addition to their willingness to repay the loans.

The huge chunk of the mortgages offered to the sub-prime borrowers were not backed by Fannie and Freddie, leading to wide spread loss when the interest rates increased and the borrowers were unable to repay their loans. Since the banks had relaxed their lending criteria, most individuals did not have the capacity to repay their loans. The assets backing the mortgages lost their value, thus compromising the net worth of the lending institutions (Crouchy et al. p. 7).

Demand and supply factors contributed to the decline in housing prices. With the increased demand for housing, the increase in house inventory led to decrease in prices. The inability to refinance the mortgages led to increase in interest rates for new lending, which were duplicated in the existing mortgage holders. The sudden increase in repayment rates with the looming unavailability of credit led to increased foreclosures with mortgage providers aiming at salvaging their investments.

The mortgage crisis was further complicated by the presence of investment banks and hedge funds whose risk profile regulation is not identical to other financial institution. The debt burden assumed by most of these institutions was not identical to those of other financial institutions. Their capacity to absorb and contain widespread defaults owing to the increase in interest rates was greatly compromised. The massive losses facing financial institutions shot through the roof with redemptions of investments having failed or were halted. With the crisis spreading fast among lenders to sub-prime creditors, most companies were unable to fulfill their revenue-returns obligations to their investors leading to massive drops in share prices.

The complexity of the investment packages based on the creditworthiness from the credit rating agencies led to exposure to assets classified as sub-prime. With considerable limited information regarding their investment, most investors had no clue to the quality of the underlying assets.

Blatant conflict of interest arose due to compensation of credit rating agencies as well as the advisory roles of the credit rates to the issuers of debt instruments. As posited by Crouchy et al.

“Originators make loans and supposedly verify the information provided by the borrowers. The issuers and arrangers of mortgage backed securities bundle the mortgage and should perform due diligence. The rating agencies receive data from the issuers and arrangers and assume that appropriate due diligence has been performed. Rating agencies clearly state that they do not crosscheck the quality of borrowers information provided by the originators” p 10.

In the pre-crisis period, the probability of default accruing from the faulty rating increased compromising the recovery rates of mortgages. When the lending criteria were tightened, the resultant unavailability of funds to the institutions further compounded the problem. The credit crisis which started in the sub-prime lending market has spread to other financial markets leading to loss of investor confidence in the most reliable debt instruments. The resulting scenario was borrowers having mortgages for which they did not qualify while others could not access funds for which they qualified. The borrowers jumped into the situation and amplified the fraud.

The diminutive motivation available to originating brokers to perform thorough due diligence and scrutinize the credit status of the rising number of borrowers. With an incentive reparation for the brokers who were rated on volume of lending without consequences for default resulting from their successful lending. When the federal institution increased the interest rates, it became harder for the sub-prime borrowers to afford the repayment as posited by Koch p.19.

Mono-line insurers are concerned with insurance for assets of different assets. Their capital carrying capacity is sufficient to earn a triple a rating. The top mono-line insurers having specialized in insurance of municipal bonds with much of their growth emanating from structured products. Through insuring CDOs, whose major constituents were lending to sub-prime borrowers, the mono-lines found themselves unable to maintain their triple-A rating, their major facet in the industry.

The downgrading of a mono-line necessitates downgrading of the insured instruments it has insured. With the investors in some money market funds preferring only AAA rated instruments, the municipals were unable to access funds at low costs to fund bond markets, thus lack of funds to finance public projects.

Most institutions have lines of credit which help to augment their liquidity. Such credit lines can be revoked at the discretion of the issuer. Since investors have no access to the investors, this type of arrangement is questionable nature especially with looming market disruption. Money markets draw their attractiveness to investors from their retention of AAA ratings, failure to which they have to dispose off their assets, leading to massive loses.

Crouchy, et al suggested that the end of the crisis has led to major changes in the players of the financial markets of the global economics. Rating agencies have to classify their ratings by specifying whether they relate to liquidity, pay-back characteristics, the period of validity, the models used as well as portraying the ratings in numerical values to give them better meaning (p.61).

More transparency from banks regarding the extent of their commitments arising from credit sensitive instruments is required. Similarly, effects of inclusion of off-balance sheet components of its financing activities should be indicated. Migration from volume-tied compensation of loan originators was also to be revised to reflect quality of the loans.

The economic crisis necessitated an economic package in order for the ailing institutions to find a financial footing. Most banks received liquidity injection by the government so as to enable them to sustain their operational capacity (Crouchy et al. 116). The federal baked package was aimed at stimulating growth in all sectors of the economy. Large scale borrowing enabled the government to free up the liquidity strain facing the institutions as well as financing the take over of others.


Regulation of h financial system of any country is necessary for financial stability of the country. The actions of each financial institution have to be coordinated to avoid credit exposure. Since the financial system is the backbone of the economy, any adverse effects spill over to the other sectors, thus generating a crisis of monstrous effects.

Works Cited

Crouchy, Michel, et al. “The Sub-prime Credit Crisis of 2007”. 31 October, 2009


Koch, Timothy. 22 Apr 2009. “The Financial Crisis of 2007-2009: Causes Consequences and Cures”. 31 October, 2009 <http://www.gsbcolorado.org>.