Archive for January, 2015

Use of light in Agriculture

January 29, 2015

Name
Professor
Course
Date
Use of light in Agriculture
Over the years the use of light has expanded beyond lighting to other crucial areas like Agriculture. Use of light in agriculture is by no means new to humans, early scientific experiments concluded that light was an essential factor for germination of plants to takes place In recent years following technological advancements, outdoor lighting projected in LED screens have served great purposes in lighting agricultural fields As the world embraces green energy, solar powered LED screens have been installed in may Green house farms to provide the light necessary for germination and to allow workers in the farms to conduct their activities both day and night
LED lighting not only saves energy but also produces a narrow wavelength and pure light, spectral energy intonation which is suitable and low fever, durable and small size lighting which is very easy to focus on the execution of balanced plant brachtheraphy of the preferred wavelength (Black & Chin, 2000). In a nut shell efficient LED devices are used to attain the best light to augment the production of leafy vegetables which is usually not the case when natural light or high intensity discharge devices are used.
Since light is a crucial environmental factor during growth of plants, adjusting the wavelength and the color of the light can have great effect on the plant growth cycle. For instance, Metal Halide lamps which produce blue light are used in growing plants that are in vegetative state of leafy growth like spinach and lettuce. On the other hand, high sodium pressure lamps which emit red light are extensively used in green house farming to substitute daylight and in indoor growing of beans, lilies and strawberries
Presently many plant factories have adopted LED lighting so as to help reduce the food shortage crisis. LED lighting is now applied in plant production, mushroom production microalgae cultivation, and aquaculture among other forms of agricultural production. In livestock production, LED technology has be widely used in illuminating livestock fields, fishing light, poultry light and in selective insect trapping lamps.
Following drastic environmental changes in recent years, where extreme weather changes have been witnessed, scientists have exploited LED lighting further to contain the situation. For instance, the Northern hemisphere experience winter from 2011 to 2012, intense cloud cover and extreme rainfall which significantly reduced the amount of sunshine time favorable for agricultural development. Most large scale farmers in these areas, adopted LED lighting to substitute for sunshine light and considerable amount of food was able to be harvested.
In a nutshell, lighting is indispensible in livestock keeping and plant production. As technology advances, man has found other ways of sourcing light for these two agricultural purposes to supplement of substitute the natural sun shine light. Man has also manipulated the two main features of light: wavelength and color to ensure greater efficiency and desirability in plant production

Works Cited
Black, Colin, and Chin On. “Utilisation of light and water in tropical agriculture.” Agricultural and Forest Meteorology 104.1 (2000): 25-47.

Management and Education System

January 23, 2015

 

 

 

 

 

 

 

 

 

 

Management and Education System

Name:

Institution Affiliation


 

Assignment 1 – Management

Task 1

Manager

Managers are responsible for groups of people who have an obligation of using other resources within specific systems of operation to achieve objectives of various organizations. In other words, managers are responsible for a group of tasks, and he uses the available human resources and other resources allocated to him or her to achieve them. For instance, an office project can have a project manager (McClain & Romaine, 2008). In this context, the main task of the project manager is to organize the available resources with the aim of completing a specific project. In restaurants, front-of-house managers assist patrons with their duties and supervise various hosts. It is apparent that organizations can have different forms of managers depending on the uniqueness of tasks at hand. Most departments in different companies have line managers. Line managers are responsible for designing policies, setting various organizational targets and making influential decisions for such companies. Such organizations also have staff managers. In most cases, they head revenue consumption departments. Such departments include accounting, human resources, and customer departments. Apparently, the functions of one manager are usually tied to the functions of other managers in an organization.

Management

            Management can be perceived as one of the important factors of production in an organization. In a broader sense, it aims at achieving specific goals of the establishment through proper organization and coordination of the related activities (McClain & Romaine, 2008). For instance, it entails organization and coordination of activities such as marketing and innovation among others. In a more specific term, it involves developing corporate policies, organization, planning, controlling and focusing resources towards achieving the results of the set policies. The size of management varies for different organizations or businesses depending on their sizes. In other words, smaller organizations can have management that is constituted by few people. Larger organizations may have larger management units. In larger organizations, policies are developed by the board of directors and the same is passed down by CEOs or senior managers depending on the organization’s structure. Therefore, the main responsibility of managers is to make decisions that can facilitate the progress of related organizations in one way or the other.

Organization

            The universal perception of the organization is that it is a social unit that entails people who are defined by a common purpose of achieving a common goal. It is a structure of people who are managed with the aim of producing the intended results. The relationships between an organizational activities and its members are determined by the management structure adopted. The management structure of the organization is also responsible for sub-dividing and allocating responsibilities to the available people. In organizations, the implementation of strategies is implemented by people through clearly defined processes. Such processes are facilitated through the authority. The mandates of such authorities are decided of determined by the management structure of the organization. The open-system nature of organizations makes them have a direct relationship with the environment. In other words, they can be affected by the environment where they exist. They can also affect the same environments.

The Importance of Managers in the Success of an Organization

            The overall management process of organizations is carried out through managers. In this context, the function of managers is to identify effective management strategies that will minimize the cost of operation while maximizing output. Effective management strategies can facilitate increased productivity in an organization. An organization is a system that operates systematically to produce specified results. Categories of organizations include corporate organizations, non-governmental organization, non-profit organizations, profit based organizations, governments and international organizations among others. The success of organizations relies on the balance between the inputs and outputs. A successful establishment is that which uses minimal inputs to achieve a relatively high output. All establishments have a primary goal of maximizing their preferred results using minimal input.

There are usually secondary objectives surrounding the primary goal in particular establishments. The secondary objectives contribute to the realization of companies’ goals. The discussion asserts that the importance of a manager in the success of an organization can be accessed on the basis of leadership style he or she uses. Leadership in the context of business refers to the ability of a manager to achieve high results through ensuring efficient operation and utilization of resources. In a general setting, leadership refers to the ability of an individual to guide a group of people towards achieving a particular goal. A purposeful leadership has two potential outcomes. Firstly, a purposeful leadership may lead to greater results for the business. Secondly, it may lead to the progress of the leader. Leadership when applied effectively, thus, is a powerful tool for serving both the business and a leader’s interests at once.

 

Task 2

Organizational Structure

Organizational structure may be perceived as the arrangement of authority lines, communication processes and rights and duties in hierarchical form. Organizational structure determines the arrangement of authority and responsibilities in a given organization. The authorities of the organization are carried out through people in different management levels, such as managers and supervisors. Authority may be perceived as the power that is required by a leader to instigate and uphold actions. It may also be defined as the authority required by the leader of an organization to translate and maintain plans into realizable objectives. An organizational structure determines the allocation, control and coordination of responsibility and authority. An organizational structure also determines how information is passed from one level of management to another. There are different types of organizational structures such as matrix, divisional and functional structures among others. The common aspect among all the types of organizational structures is that they have a chain of command. The chain of command entails different levels of management with specific mandates.

One of the importance of an organizational structure is that it prevents the duplication of roles in an organization. For instance, Wall-Mart retail store has employees that have different responsibilities. There are cashiers, customer attendants, supervisors and store managers. In this context, customer attendants are aware that payments are made at the cashier’s desk once a commodity has been picked or selected from the shelf. Correspondingly, cashiers also know that it is not their responsibility to direct customers where products are located. Organizational structure is important because it can be used to identify the required levels of authority in an organization. Once the duties of workers have been established, executives determine the number of managers that would be needed to facilitate the execution of such duties. An organizational structure is important because it facilitates decision making. Everybody in the organization is aware of the level decision-making capacity bestowed upon them. For instance, a low-level worker cannot make decisions that are reserved for supervisors. It is also crucial for communication. From the moment, new employees join an organization; they know where their reports should go.Importantly, an organizational structure entails plans regarding resource utilization, timetable or the completion of duties. Such factors are important for the achievement of the goals of the organization.

An organizational Chart

            Power is exercised at different management levels of the organization. An organization may consist of a number of managers with varying titles, responsibilities, and authority. They may also exist in different management hierarchies. The hierarchies consist of the top level management, middle level management, and low-level management.  The top level manager controls the operations of the entire organization. They also develop policies and make decisions regarding the objectives of the organization. They also mobilize outside resources to be used to speed up organizational processes. They may consist of chief executive officers and board of directors. They may also consist of company president and vice-president. Middle-level managers oversee the implementation of organizational plans. They also mediate between the top level and low-level managers. They may consist of general managers, branch managers and heads of departments. Low-level managers may consist of supervisors and team leads who control and direct smaller groups of employees with the aim of achieving the goals of the organization. They also assign roles to such groups of employees. They maintain quality in the organizational procedures. They are responsible for channeling the concerns of employees up the hierarchy.

Task 3

The Vision, Mission and Corporate Strategy of Wal-Mart Corporation

The vision statement of Wal-Mart encourages consumers to work together with the company to lower the cost of living. The statement asserts that working with the retail company will give everyone the opportunity to experience a lifestyle where the prices of quality commodities are low. This vision statement borders the mission statement of the company that emphasizes upon saving peoples’ money to enhance their living conditions. The vision and mission statement tends to relate to the plans that were laid in the beginning by the founder, Sam Walton. Wal-Mart started in 1962 by Sam Watson (Fraedrich & Ferrell, 2013). The three policies that guided the rapid growth of the companies through the century include; better service to customers, respect and working to achieve excellence. Wal-Mart is a company that deals in the retail of household and industrial commodities. Currently, the company has more than 10,000 trade divisions in 27 countries. Also, the company is operating 69 banners at the moment (Fraedrich & Ferrell, 2013).

The company tends to work in line with the corporate strategies developed and implemented by Sam Walton. The corporate strategy of the corporation is guided by the overall objective of improving the living standards of customers through reduced prices of commodities. The main business strategy at Wal-Mart involves retailing high-quality products at relatively cheaper prices compared to other retail stores (Fraedrich & Ferrell, 2013). This strategy tends to aim at consumers who exist in the middle and low-class. Arguably, the middle and lower-class individuals form the largest portion of the country’s population. The strategy ensures that products are sold at high rates while collecting small profits for every item. It would attract the majority of people who have limited financial resources to purchase commodities that are highly priced. The success and expansion of the organization can be attributed to this strategy.

SWOT Analysis

The SWOT analysis tool is used to determine the strengths, weaknesses, opportunities and threats of organizations. In other words, it used to determine the position of a company or enterprise in the market. They evaluate their strengths and opportunities and use the same to counter the threats that result from competition. They also use their strengths to cover their weaknesses in the market. In general, SWOT analysis is important because assesses an organization’s competitive ability in the market. For instance, for Wal-Mart to compete effectively against other retail stores such as Amazon and Costco, the executives have to know their weaknesses that can be exploited. The executives should also know how they can use the company’s strength against the weaknesses of the related competitors.

Organization’s Culture

            When talking about an organizational culture, factors such as expectations, values, experience and philosophies come into perspective. The uniqueness of an organization’s social and psychological environment is defined by such factors. They hold an organization together. They are often expressed in the inner workings and self-image of an organization. An organizational culture is an important element in competition because it determines how employees behave towards achieving set objectives. Cultural change can be achieved by leaders of the organization through modeling of the intended behavior and values. It may take time, but cultural change can enhance an organization’s performance. For instance, there are customers that come into retail stores to compare prices and quality of commodities. Such people end up not buying goods. Rather than waiting for customers to reach out to the attendants, they can be taught to be aggressive in a way that would convince potential customers to make purchases. In other circumstances, Employees can be encouraged to be innovative in their approaches.

 

 

 

 

 

 

 

 

 

 

 

References

Fraedrich, J., & Ferrell, L. (2013). Ethical decision making in business: A managerial approach (9th ed., International student ed.). Mason, OH: South-Western.

McClain, G. R., & Romaine, D. S. (2008). The Everything Managing People Book: Quick and   Easy Ways to Build, Motivate, and Nurture a First-Rate Team. Avon: Adams Media.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assignment 2 – Education

A Comparison between the Education System of United Kingdom and USA

            Arguably, most of the world’s top learning institutions exist in the United States and United Kingdom. The excellence in the education system in both countries can be attributed to a long-standing tradition of quality, research-oriented learning as well as academic freedom. However, the education systems in both countries have opposing or different approaches. The first difference lies in the amount of time taken to complete a degree program. Degree programs in the United States take a relatively longperiod, compared to the United Kingdom. Specifically, a degree program in the United States takes a year longer than the United Kingdom. However, the amount of time is also dependent upon the program that students are undertaking. It also depends upon whether students can pursue Ph.D. programs upon the completion of the undergraduate program. In the United Kingdom, it is less likely to bypass the master’s program compared to the United States.  The shorter learning durations in the United Kingdom can be attributed to the focus in such courses. In other words, courses in the UK are more focused than in USA (Ballantine and Spade, 2008).

Students in the United Kingdom are allowed to begin studying their preferred vocations at the beginning of their college education. The college education begins from the age of sixteen years. They are also exempted from taking general education classes such as art and history. Liberal arts education is available for students who prefer to study them. They are also meant for students who have not yet made up their minds regarding the vocational courses they want to pursue. In this context, it is easy to argue that the education system of the United Kingdom tends to focus on vocational studies. This trend is a sharp contrast to the educational system in the United States. For instance, liberal arts education is a compulsory study at the college level. The justification of broadening the education system in the USA is that it enables students to realize who they are and what they want to do in the community.

In comparison, the early specialization in the UK allows students to learn about specific concepts in their courses for a long time. It also allows them to become deeply involved in the system. However, its major setback is that most students may rush into certain disciplines only to realize later that they are not interested in them. The broad nature of the American education system allows students to understand various aspects regarding other disciplines. It also gives them the time to choose the vocations they would like to pursue as they specialize. However, the broader system of education does not allow students to delve deep into particular concepts. Consequently, research accompanying such studies can be shallow and poorly presented.

The education system of the United Kingdom uses a series of exams to assess their students. Such exams include GCEs, SATs, A-level, and university finals. In other words, students are assessed at the end of the term and school calendar year. Most professionals believe that the system is likely to encourage students to be lazy. For instance, students are more likely to study when the exam period approaches. Arguably, there is only a couple of in the assessment of the progress of students.  The education system in the United States uses grade point average to assess their students. The grade point average (GPA) is a continuous assessment of related academic details.  The GPA analysis is a continuous process that entails analyzing reading responses, homework, presentations and overall classroom performances (Ballantine & Spade, 2008)

In both cases, there are four stages of learning processes. However, they differ in terms of structuring and the ages of attendance. For instance, In the UK, the stages include primary school, secondary school, further education and higher education. The period of study in the primary section is between the ages of four and eleven. Most primary schools are mixed in nature while some have strong religion basis. Upon the completion of primary education at the age of eleven years, pupils graduate and join secondary schools. The secondary school system is comprehensive in nature. In other words, they do not operate a selective entrance system. At the 9th year of study, usually between ages 13 and 14, students choose the subjects they want to study over the remaining years. Secondary education ends in the 11th year of study, usually between ages 15 and 16. At this level, students have the option to continue or discontinue their education process. Students may wish to continue their participation in further education. Students in this level only study four subjects. Students who wish to gain specific knowledge enter the higher education level. These are students who wish to gain degrees or diplomas in specific areas.

The primary school education in the United States begins from the age of five and lasts until the age of 10 or 11 years depending on the progress of students. The last grade in the primary school education is the fifth grade. The secondary school level entails seven years and ends at the 12th grade. Students are expected to finish their secondary school education at the age of 17or 18 years depending on their progress. The next step is the undergraduate school that is meant for students who wish to a college or university. Students may take two or four years in the undergraduate school to attain associate or bachelor degrees respectively. Graduate school is meant for students who have attained a bachelor degree and may wish to study for the master’s degree.

 

References

Ballantine, J. H., & Spade, J. Z. (2008). Schools and society: A sociological approach to             education. Los Angeles: Pine Forge Press.

           

 

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January 23, 2015

The Impact Of Corporate Ownership On The Firm Performance In Nigerian Companies

The Impact Of Corporate Ownership On The Firm Performance In Nigerian Companies

Literature Review

Theoretical Framework

The underlining theory for this dissertation will be the agency theory. According to Eisenhardt (1989) Agency Theory describes the relationship between principaland agent/s by using the metaphor of a contract. As per the views of Eisenhardtagency theory is one that suggests a relationship between the shareholders (or principals) and the management of companies (executives). Shareholders are the ones who supply capital to the company whereas management or the executives are the ones who spend the capital in such a way that the company earns the profits expected by the shareholders. In short, both shareholders and the management plays vital role in helping the company in developing in the right direction.

Agency theory is aimed to resolve any problem that can occur between the agent and the principle, primarily because their goals and objectives might be entirely different. In the context of corporate structure agency theory helps understand whether the shareholders that own a significant part of the company are using their power to run the company without the help of the agent. For example, in a study it was said that the CEO also acted as the chairman and there was more than one of the same family member that had a place on the board, as a result of this it had an adverse impact of the firm performance (Ehikioya, 2009). When more than a member of the same family presents in a company board, the interests of that family may get more importance rather than the interests of the company or the shareholders.

Furthermore, when a major shareholder acquires a firm, the concentration of ownership on a particular individual may result. As a result of that the agency cost may decrease (Ehikioya, 2009). Therefore, it is better for a company to have directors from different families. Moreover, it is not for the best interests of the company to have two or more directors with any close relationships. When directors function independently without any prejudices and biases, the company may develop in the right directions.

How does having an Ownership Structure impacts Firm’s Performance

According to Ahunwan (2003)the ownership structure can be divided into four major groups: Group A, Group B, Group C and Group D. Group A represents the sectors that the federal government and the state government take control. The government takes all the revenue collected from the businesses while the business functions under Group A. Group A business can be labelled as public sector business. In other words, all the people or the public have equal shares in such businesses. The government owns and operates such business on behalf of the people and the profits earned from such businesses will be delivered to the public in the form of infrastructure development or through any other social service channels.

Group B has businesses that are co-owned by the federal government and the foreign investors(Ahunwan2003). For example, Nigerian oil sector is working under Group B arrangement. In other words, Nigerian government and foreign companies have claims on such businesses. Foreign companies help Nigerian government in the extraction and purification of oil. These enterprises are listed in the stock markets.

Group C is concentrated with the rich people who have businesses and have enough capital to inject into the business to make it grow to the next levels (Ahunwan, 2003). In other words, Group C business is purely private business. Only rich people can operate such businesses. Even though government may enforce some control over group C business, majority of the policies and strategies of such businesses are determined by the private people.

Group D are small businesses that are either owned by individual of family enterprises characterised with low income and lack of capital for doing business (Ahunwan, 2003). For example, there are many small scale industries in Nigeria which are owned and operated by a group of people, mostly the members of a family. The decision making in such business is done by the members of the group that owns the business.

Under corporate ownership, every member in the board is responsible for all the activities that are taking place in the company. Moreover, every person in the company board should work hard to improve the company performance of the company.At the same time, it is possible for the major shareholders in corporate companies to exclude minority shareholder from corporate management role, even if a representative is available in the board to represent the minority group. A number of factors contribute to a well-arranged corporate ownership among the proprietors.Mahoney & Roberts, (2004) argue that big boards are less accurate and effective compared to a board with smaller number of members. When smaller number of directors is present in a company board, it is easy for the CEO to make a consensus while taking critical decisions. When more members are present in a company board, the CEO would struggle to take a decision because of the contrasting opinions of the board members.

Types of Business ownership

The legal ownership of business can be classified into three broad categories: sole proprietorship,partnership and corporate ownership. In a sole proprietorship, the losses and profits of a business are the sole property of the business owner. No other entities may have any claims on such things.  Moreover, there is no distinction made between personal and business income, when a business functions under sole proprietorship. On the other hand, a partnership is merely joint ownership;therefore, the losses and profits suffered by the business will be shared among the partners. Personal liability of the profits and losses suffered by such business depend on the amount of share hold by the partners.  Both sole proprietorship andpartnershipare simple arrangements that can be dissolved easily, without even a written contract. On the other hand, the operations of corporate ownership are much more complex, than the sole proprietorship andpartnership since it involves the creation of a legal identity that separates its owners. Even if a single person owns all the shares of a corporation, he or she is not personally responsible for it since corporation is a legal entity rather than individual entity. Corporation is immortal in nature whereas individuals are mortal in nature. In other words, a corporation may survive even after the death of its actual owner (Corporate Ownership, 2014).

Relationship between Corporate ownership and corporate governance

There are many definitions for corporate governance. One of them defines corporate governance as a coherent set of institutional arrangements that allow theenterprises to function and to ensure the legitimacy of decision making and control whereas another one defines it asa set of mechanisms having the effect of defining the powers and influencing the decisions of leaders. A third definition describes corporate governance as a set of mechanisms adopted by stakeholders to be represented and effectively assert their interests(Boudabbous, 2014, p.8). According to Magdi and Nadereh (2002) corporate governance is all about making sure that the business is runs well and investors get adequate returns. On the other hand, OECD (1999) has defined corporate governance as the system by which business corporationsare directed and controlled. In any case, it is evident from the above definitions that corporate ownership and corporate governance are connected in one way or another.

Bebczuk, (2005, p.3) conducted a study among 65 non-financial listedcompanies in Argentina in 2003-2004, in order to know the relationship between corporate governance and the ownership structure. He found that ownership appears to be quite concentrated at the level of the largest ultimate shareholder, but separation of control and cash flow rights prevails in less than half of the companies. According to Boudabbous(2014), corporate governance seeks to define the power of leadership and influence their decisions. In his opinion, corporate governance follows different mechanisms in order to minimize the agency costs resulting from conflicts of interest in situations of cooperation.

Relationship between Corporate ownership and the performances of companies

Brockman and Olson (2013, p.393) conducted a study to know more about the relationship between corporate ownership and the performances of companies. Their findings suggest that “the composition of ownership changessignificantly with a decrease in ownership concentration among inside equityholders, i.e. managers and directors who own shares of the firm”. It should be noted that a company may have different types of shareholders. Some of them could be the employees of the company (insiders) while the others could be ordinary people (outsiders). When managers and directors of a company own shares, it is quite possible that they will work hard to make the company profitable. In such cases, managers and directors will get more salaries as well as dividends when the company performs well. When the managers and directors do not have any share in the company, they may not perform well since they get fixed salaries irrespective of the performances of the company.

Concentrated ownership and its impact on the performance of a company

The financial Times (N.d.) defined concentrated ownership as an ownership in which investors holding at least 5% of equity ownership with the firm (Financial Times, N.D). In concentrated ownership the majority shareholders are more powerful than the other shareholders and they seem to get through with their decision. As per the views of Lemmon and Lins (2003) concentrated ownership resulted in side-lining of theminority shareholders by the majority shareholders of the company. Thus, concentrated ownership affects the performance of a company performance both negatively and positively. In other words, concentrated ownership helps majority shareholders to protect their interests at the expense of the minority shareholders. It should be noted that the views, opinions and suggestions of the majority shareholders will get approval in the decision making bodies since it is easy for them to get majority votes in such bodies.

According to Ehikioya (2009) the negative impact of concentrated ownership occurs when the majority shareholders impose their strategies of doing business that is not well researched. It will be difficult for the management of a company to put effective control on all the operations of the company when improper strategies are implemented. The implementation of improper strategies may result in crumbling of the company. Therefore, it is necessary for the majority shareholders to implement only well researched strategies at the first place of the company’s operations. Another drawback of concentrated ownership is pointed out by Heflin and Shaw (2000). In their opinion, as the equity fractionheld by majority investors increases, the information-related component of the spreadincreases and liquidity decreases. Shleifer and Vishny (1986) supported the arguments of Heflin and Shaw. As per their views, majority shareholders help in the enhanced monitoring of management and in increasing firm value. At the same time, they have the ability to reduce the liquidity of the firm’s stock.

At the same time, the positive impact of concentrated ownership is the ability of this ownership in providing better returns to majority investors as well as minority investors. There are few people who have capacity of investing huge amounts.  When the rich invests more, the other shareholders also have the opportunity to gain more even though they less investments in the company (Ehikioya, 2009). According to Ayyagari and Doidge(2010), controlling majority shareholders or blockholders inforeign firms capitalize on the increased liquidity following a cross-listing to reducethe costs of unloading shares.

The Impact of Corporate Ownership on the Performance of Nigerian Companies

Because of poor ownership structure and corporate governance, many of the Nigerian public sector organizations such as NITEL, NNSL, NEPA, and NRC were either dead or simplydrain pipes of public resources, in the 1990’s. Majority of the manufacturing units of these organizations were working below their capacity during this period. Not only manufacturing units, but also service sector undertakings such as banks were also functioning poorly in the 1990s. Many of the investors and shareholders have lost huge amounts of money because of the poor performances of these public sector companies.  It was difficult for the government to stay idle while majority of the public companies in Nigeria were collapsing. Nigerian government took a bold decision at the beginning of 2000, in order to make drastic changes in the corporate governance of Nigerian public sector companies (Kajola, 2008).

The government of Nigeria has introduced various institutionalarrangements to protect the interests of investors in the beginning of 2000. As part of these institutional arrangements, the government has devised a “code of corporategovernance best practices” in November 2003. These institutional arrangements have defined: The roles of the board and the management; Shareholders rights and privileges; and the role of the Audit Committee(Kajola, 2008).

The government has given the right of selecting the CEO to the board of directors. The CEO and the board of directors were given the responsibility of the day to day management of the affairs of the firm. Moreover, it was the responsibility of the board of directors to provide necessary leadership to the company. The CEO and the management on the other hand will be responsible for the operations of the firm in effective and ethical manner. Moreover, it was their responsibility of the CEO and the management to make suitable business strategies based on the developments in the market. Above all, it was the duty of the CEO to make sure that the financial reports are expected to comply with relevant statutory and professionalpronouncements. Shareholders on the other hand were given the right to communicate with the board at any time they like. Moreover, they were able to appoint or remove any board member. It was the duty of the CEO and the board members to clarify the doubts of the shareholders. The major responsibility of the audit committee was to make sure that the company’s published financial reports are correct.  It was the duty of the audit committee to increase public confidence in the credibility of the company (Kajola, 2008). The above measures helped Nigerian public sector companies immensely and these companies started to perform well after the introduction of the above institutional changes.

A study by Tsegbe and Herbert, found that foreign ownership has a positive impact on the performance of Nigerian companies.Prior to the Nigerian Independence in 1960, foreign ownership dominated the corporate structure in Nigeria (Tsegbe and Herbert, 2013). As a result of that, Nigerian companies were well accustomed to foreign ownership. In other words, Nigerian companies learned a lot in how to function effectively under foreign ownership because of the colonial rule prior to 1960.  It should be noted that foreigners have cultivated many positive values and attitudes among the communities in which they rule. In fact, Nigeria got lessons of civilization and modernism from the colonial rule. These learnings helped Nigerian companies very much in increasing productivity and efficiency.

Foreign investors have ruthless management stylethat affects performance and competitiveness of the business in the foreign countries. A company that is built by foreigners bring profit to the individual and the country in which the company is located (Loderer& Peyer, 2002). The foreign companies play a major role in the economy of the country through helping the government in exploration of resources For example; foreign companies have helped Nigeria in immensely in oil business. Itshould not be forgotten that the technological advancements in Nigeria is negligible compared to that in western countries. In fact Nigeria is importing technology from foreign countries. Oil drilling and purification are processes that require complicated technologies. Such technologies are provided to Nigeria by foreign companies. In fact it is impossible for poor people to invest in Nigerian oil sector because of the enormous money required for the investment in this sector. That is the board of directors of the oil companies in Nigeria comprises of only the rich people who have invested most in the industry (Ahunwan, 2002). It is evident that the ownership structure contributes to the prosperity of the company. The only problem of the concentrated ownership is that few people benefit from the oil business, and the poor remain peripheral with regard to enjoying the benefits (Ehikioya, 2009).

Kajola, (2008, p.16) conducted a study among of twenty Nigerian listed firms between 2000 and 2006 in order to examine the relationship between four corporate governancemechanisms (board size, board composition, chief executive status and audit committee) and two firm performance measures (return on equity, ROE, and profit margin, PM), using panel methodology. He has identified a positive significantrelationship between ROE and board size as well as chief executive status. Moreover, he has concluded that the board size should be reduced to a sizeable limit in order to help the company to perform better. In his opinion, chief executive and the board chair should be occupied by different persons in order to avoid the centralization of power on only one person.

Kajola’s findings were well supported by many scholars. Many studies have proved a negative relationship between firm value and board size. In other words, when board size increases, firm value decreases. Lipton and Lorsch (1992) pointed out that large boards are less effective. In their opinion, when a board gets too big, it will be difficult for the CEO to control and coordinate the activities and process of the company in the right direction. Yermack (1996)also supported the arguments of Kajola. They also found a negative relation between board size and profitability.Mak and Yuanto (2003) went one step ahead; they argue that firmvaluation is highest when board has 5 directors. After conducting a study among Nigerian firms Sanda et al (2003) also supported the arguments of Kajola.

Kajola’s findings are extremely significant in Nigerian business sector. Most of the Nigerian firms have only one power centre; ie CEO. It is possible for the CEO to dictate the functioning of the company. When a company has two or more power centres, it would be difficult for the CEO to dictate the management of the company. Collective decisions will takes place on such occasions and the company will be benefitted.

“In recent years, international economic pressures have induced Nigeria to adopt a program of economic liberalization and deregulation. Advocates of the reforms tout their potential not only for generating greater economic growth, but also for contributing to more responsible corporate governance”(Ahunwan, 2002, p.269). The introduction of globalization and liberalization has helped countries all over the world to liberalize their economic principles in order to attract foreign direct investments as much as possible. Even communist China has liberalized many of its economic policies in order to accumulate or attract foreign direct investments. In fact, it is suicidal for countries to stay away from liberalization at the moment. It is impossible for a developing country like Nigeria to keep a blind eye towards foreign direct investments and still able to develop properly. At the same time, responsible corporate governance is necessary for international companies while they invest in a country like Nigeria. It should be noted that the business climate in Nigeria is extremely different from that in other parts of the world. Corporate governance has little importance in Nigerian business sector. However, it will be impossible for foreign companies to invest in such countries where corporate governance is less respected. Therefore, it is inevitable for a country like Nigeria to improve the climate for responsible corporate governance in order to attract more foreign companies.

Application of Agency theory in corporate governance

The agency theory is derived principally from the organizational economics and management literatures. The major argument of this theory is that in structuring andmanaging contract relationships, the separation of ownership and control can be viewed as an efficient mode of economic organization within the nexus of contracts perspective (Tsegba, and Herbert, 2013, p.24).

Agency theory stresses the importance of relationship between shareholders and managers (Reference for Business, 2014). It is the duty of the managers to function in accordance with the interests of the shareholders since the capital used for the business is provided by the shareholders. In any business, investors should get adequate returns. The implementation of institutional changes in Nigerian public companies by the government helped the shareholders of those companies to get more benefits.

At times the agency conflicts may occur in the relationships between the shareholders and the managers (Reference for Business, 2014). In other words, it would be difficult for the managers to consider only the interests of the shareholders while taking decisions. For example, corporate social responsibility and sustainable development are some of the major topics in the corporate world. It would be difficult for the managers to neglect these things and obey the instructions of the shareholders all the time. Ultimately, shareholders like to maximize their returns from their investment. While strictly observing the principles of corporate social responsibility and sustainable development, shareholders may not get the expected returns from the business. “Indeed, agency theory is concerned with so-called agency conflicts, or conflicts of interest between agents and principals. This has implications for, among other things, corporate governance and business ethics” (Reference for Business, 2014)

According to agency theory, corporate governance should lead to higher stockprices and better long-term performance. There are many studies in support to the positive effects of agency theory in the corporate governance. For example, the studies by Weiback(1988) andResenstein and Wyatt (1990) Mehran (1995) proved that firms perform better when the number of board members will be less. Moreover, their studies proved that since managers are better controlled by the CEO and board members, agency costs should be decreased while agency theory is implemented in the corporate governance. The major reason for the poor performances of many Nigerian companies is the poor management. If the CEO travel in one direction and the managers travel in the other direction, the firm will not perform well. Agency theory argues that the performance of better managed firms will be excellent compared to the poorly managed firms. However, Pinteris (2002)argue that there are little evidencesto prove a positive associationbetween corporate governance and firm performance when agency theory is implemented in a firm. The findings of Pinteris stood out since majority of the studies have supported the value of agency theory in corporate governance and firm performances.

 

 

 

 

 

 

 

 

References

Ahunwan, B. (2002). Corporate governance in Nigeria.Journal of Business Ethics 37 (3):269 – 287 (2002)

Ahunwan, B. (2003).Globalization and corporate governance in developing countries : a micro analysis of global corporate interconnection between developing African countries and Developed countries. Ardsley, NY : Transnational Publishers, 2003.

Ayyagari, M. and Doidge, C. (2010), Does cross-listing facilitate changes in corporate ownership and control?,Journal of Banking & Finance, Vol. 34 No. 1, pp. 208-23.

 

Boudabbous, S.(2014). Corporate Governance and Human Resource Management: The Case of Employee Share Ownership. IUP Journal of Corporate Governance. Oct2014, Vol. 13 Issue 4, p7-23.

Bebczuk, R N. (2005).Corporate governance and ownership : measurement and impact on corporate performance and dividend policies in Argentina  Inter-American Development Bank Latin American Research Network . Research Network Working paper #R-516

Brockman, P. and Olson B.C. (2013), Warrants, ownership concentration, and market liquidity,Managerial Finance, Vol. 39 Iss 4 pp. 322 – 341

Corporate Ownership, (2014). Retrieved from http://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Ownership.html

Ehikioya, B.I. (2009),Corporate governance structure and firm performance in developing economies: evidence from Nigeria”,Corporate Governance: The international journal of business in society, Vol. 9 Iss 3 pp. 231 – 243

Eisenhardt, K (1988), ‘Agency-and institutional-theory explanations: The case of retail salescompensation’, Academy of Management Journal, vol. 31, no. 3, pp. 488-511.

Financial Times, (N.D).Definition of ownership concentration.Retrieved from http://lexicon.ft.com/Term?term=ownership-concentration

Heflin, F. and Shaw, K.W. (2000), Blockholder ownership and market liquidity, Journal of Financial and Quantitative Analysis, Vol. 35 No. 4, pp. 621-33.

Kajola, S.O. (2008). Corporate Governance and Firm Performance: The Case ofNigerian Listed Firms. European Journal of Economics, Finance and Administrative SciencesIssue 14 (2008)

Lipton, M and J.W Lorsch (1992): “A modest proposal for improved corporate governance”,Business Lawyer, Vol 48(1), pp 59- 77.

Lemmon, M.L., Lins, K.V.(2003). Ownership structure, corporate governance, and firm value: evidencefrom the East Asian financial crisis. Journal of Finance 58, 1445–1468.

Loderer, C. and Peyer, U. (2002) Board overlap, seat accumulation and share prices,European Financial Management, 8, 165-192.

Mak, Y and Y, Kusnadi (2005): “Size really matters: further evidence on the negativerelationship between board size and firm value”, Pacific- Basin Finance Journal, Vol 13, pp301- 318.

Magdi, R and R, Nadareh (2002): Corporate governance: A framework for implementation,Britain World Group Journal, Vol 20, pp 123- 132.

Mahoney, L. and Roberts, R. W. (2004), ‘CorporateSocial Performance: Empirical Evidence on CanadianFirms’, Research on Professional Responsibility and Ethics in Accounting 9, 73–99.

OECD (1999) Principles of corporate governance. Retrieved fromhttp://www.encycogov.com/

Pinteris, G (2002): “Ownership structure, board characteristics and performance of Argentinebanks”, Mimeo, Department of Economics, University of Ilinois.

Rosenstein, S and J, Wyatt (1990): “Outside directors: board independence and shareholderwealth”, Journal of Financial Economics”, Vol 26, pp 175- 191.

Reference for Business, (2014) .Agency theory. Retrieved from http://www.referenceforbusiness.com/encyclopedia/A-Ar/Agency-Theory.html

Shleifer, A. and Vishny, R.W. (1986), Large shareholders and corporate control, Journal of Political Economy, Vol. 94 No. 3, pp. 461-88.

Sanda, A.U, A.S, Mikailu and T, Garba, (2005): “Corporate governance mechanisms and firmfinancial performance in Nigeria”, AERC Research Paper 149, Nairobi

Tsegba, I. N. and Herbert, W.E. (2013).Corporate Governance, Ownership Structure and Firm Performancein Nigeria.Research Journal of Finance and Accounting.Vol.4, No.5, 2013

Weisbach, M (1988): “Outside directors and CEO turnover”, Journal of Financial Economics,Vol 20, pp 431- 460.

Yermack, D (1996): “Higher market valuation of companies with a small board of

International Energy Policy

January 23, 2015

International Energy Policy

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Introduction

The world is endowed with abundant natural resources in different quantities. However, there is a huge inequality in the distribution of these natural resources such that some regions have more deposit than other regions. This makes it complicated to formulate an energy policy that is acceptable by all stakeholders. Energy and climate policies are somehow interrelated, since energy uses have a direct impact on the greenhouse gas emissions and environmental pollution. Energy policies are being implemented at both local and international level due to heightened awareness of the negative impact of environmental degradation. The energy regulation policies are drawing up the framework for production, regulation, and distribution of safe energy that is sustainable in the long run.

Factors affecting the content of International Energy Agreements

Due to the high stakes involved, International Energy Agreements are not made in a vacuum since a number of factors always come into play. The safety of the people is always given the first priority since it forms the basis of the existence of such agreements (Yi & Richard, 2014). In addition, the safety is also determined by how a particular government addresses the issue of the energy development, which is accompanied by its consumption, distribution and production within their local energy policy. The factors that surround International Energy Agreements are mainly focused on energy, security, economic development, and environmental protection.

There are various factors that accompany a national energy policy, such as the extent of the energy self-sufficiency and the economy of a particular region (Vijjhala, 2006). Another factor is the consequences that will be evident in the future following the foreign policies that are embraced in the country together with the security in the nation. There ought to be specific mechanisms that need to be put in place to implement the total policy like the incentives, manufacturing standards and the taxes charged to help the policy imposed to work out as required (Yi & Richard, 2012). How a national policy drives province and the municipal functions inside it is another factor that is within the energy policy that needs to be considered during policy formulation (Stoutenborough& Mathew, 2008). The safety of the environment is always given priority since no generation want to bequeath a bad environment for the future generation. How future energy will be consumed is another factor that is highly considered within an energy policy since, it aid s in giving the calculations of the population fraction that will be necessary and accepted to endure energy poverty. The place where the future energy will be derived is an energy policy factor that has been put in the front line because it gives the statistics on the usage of the future energy among many sectors of the given country (Shipan& William, 2001).

Framework for energy policies

According to Rabe (2004) and Menz (2005), the framework for energy policies is closely tied with the factors affecting climate change. Therefore, the framework for energy policies are highly determined to make the economy and the energy system more competitive, secure, and sustainable in order to bequeath no harm to the present and coming generation. The European Union is one of the organizations that have been in the forefront in formulating energy policies for its stakeholders (Radolph& Gilbert, 2008). An integrated energy framework developed by the EU is designed to coordinate the energy approach to all its members’ states so that they can be energy efficient by the year 2030. Most of the energy frameworks are highly concerned with the low carbon economy by focusing on the use of renewable sources of energy (Newel et al, 2006). Therefore, these frameworks are designed to build a competitive and secure energy system that creates new opportunities for reliable and increased security for energy products. One of the binding targets of the EU energy policy is to reduce the greenhouse gas emissions by about 40% by 2030 and to about 80% by the year 2050 (Lyon &Hitao, 2010). This regulation is a cost-effective method that will ensure that coal dependency is maximally reduced. Under this arrangement, renewable energy will take the center stage in the transition towards a more secure and sustainable energy system that can be depended on with less environmental risks. The energy efficient directive ensures that proposed new buildings reduce their original energy consumption by 50% than they did in the last three decades (Kemfert, et al, 2014). In this regard, buildings should be designed such that they utilize more of natural light in order to conserve on energy usage. The energy policies also propose a new governance framework that is based on the national plans for competitive, secure, and sustainable energy utilization in order to reduce the negative impact to the environment. Energy policies are also effective in promoting low carbon investment by promoting the use of ecofriendly sources of energy (Kahn, 2000).

Challenges and issues facing oil and gas industry

Political risk is a challenge that is highly evident in the oil industry and this happens because; the oil company is known to be covered by a number of regulations, which limit where and when the oil extraction is done (Hughes, 2010). Countries whose political systems are very stable are at high preference by the oil company despite them sometimes going to countries where oil is available, even though they are not stable in their governance. This may lead to nationalization issue and the shifting of the political ideas, whichmay contribute to the good will of the government changing its policies. Oil Company is also known to well carry out in countries that have a reputable history of granting and enforcing long-term leases in the industry.

Geopolitical risk is another challenge that is very evident in the oil industry, which implicates the difficulty of the oil distraction and the possibility of its access (Fabrizio, 2012). There is fear of smaller deposits in the reserves which is created by the geological risk: hence, geologists work really hard to minimize the risk. They are required to test often so as to ensure that the risk is maximum reduced so as to be able to reserve the level of estimates and be able to express the level of confidence in the findings.

Price risk is another challenge experienced in the oil company whose primary factor is to decide whether a reserve is economically feasible. In the case where the project has just begun, then the price risk is a constant companion because unconventional extraction costs more than a vertical drill down to a deposit (Delmas& Maria, 2011).

A lot of capital has to be invested in an ongoing operation for it to be able to work out well whereby, when the price changes, then there is a lot of difficulties which are experienced at the given time. However, it is economically friendly to ensure that all financial crises are avoided at all cost together with the macro economic factors which negatively affects capital. In a case like this, the company is affected as an individual entity and the usual prices tend to be interfered with.

In any company there are obviously the best and qualified workers whom the company can’t afford to lose them. The retaining of such workers by the industry, lead to the rise in cost as they struggle to add another cost to the overall picture in the outside business world. This also contributes to the industry having few workers all time following the issue of cost which is capital-intensive. If a company has got enormous regulations and a difficult drill, then the project becomes more difficult to handle since, the cost incurred is too high to be sustained. The worldwide production of oil is beyond a company’s control following the costs that have to be incurred in the production process.

SWOT analysis of the Hindustan Company (India)

Strength

One of the greatest strength of this oil and gas exploration company is their strong collaboration with their partners, which enables them integrate their activities and increase their success in terms of oil exploration. In these collaborations, this company and other companies within the same industry are able to share technical know-how and increase their expertise in the management of oil and gas exploration. The Hindustan oil and gas exploration company also has a very strong financial base that enables them to finance and carry out their exploration without any financial let down. Due their strong financial bases and brighter prospects in their duties, this company is in a strong position to get financial credit from various sources that puts them in a good financial position (Carley, 2009). Hindustan Oil and Exploration Company also have a record or heavily investing in the Corporate Social Responsibility (CSR) activities that puts them in good relationship with their surrounding communities. These CSR activities prevent any possible rebellion from their surrounding communities and this makes them able to carry out their financial obligations with a lot of ease. In addition, Hindustan Oil and Exploration Company have a strong brand name and reputation due to its success in the exploration industry over the years. Such a good brand enables them to get bigger contracts that in turn enable them to fetch good revenues from such contracts. Hindustan Oil and Exploration Company is a pioneer in high technology and offshore drilling that further enables them to get very big contracts both at home and at international levels. Strength of Hindustan Oil and Exploration Company is that it is a leading company in the 3D seismic data exploration that puts it a step ahead of its peers in the industry.

Weaknesses

One of the biggest weaknesses of Oil and Gas Exploration Company is the excessive dependence on one single asset, which is oil and gas that is constantly depleted with time. Therefore, the future of this company and other related company seems uncertain these natural resources may be depleted with time (IEA, 2012). Another weakness of this company is that lots of capital is needed to finance the high initial labor and machinery required during the exploration process.

Opportunity

New opportunities keeps merging for oil and gas exploration companies since driller are always finding new basins rich with these natural resources. These new basins provide more jobs for such companies to continue reaping big profits after scooping such contracts. Since most countries are embracing industrialization, the future of oil and gas exploration companies looks brighter since more energy, in terms of oil and gas, will be needed to finance such industrialized states. Currently, there is a big gap with respect to demand and supply of the oil and gas resources and this means that more works still needs to be done by these companies to meet such growing expectations.

Threats

Most of the oil and exploration activities are carried out in countries with greater political instability; the success of such exploration is likely to be tampered with before the end of their contracts. Due to high stakes involves, there is always a high probability of conflicts arising from oil and gas exploration activities and this may threaten the success of such companies. In addition, the price of oil and gas products are highly tied to the economic stability and fluctuations in the global prices and this has a direct impact on the profitability realized from the exploration of these minerals. Recently, there have been heightened environmental concerns both at national levels and international levels. Therefore, this is likely to affect the oil and gas exploration since most initiatives by the government are headed to providing subsidies on renewable energy sources. This is likely to reduce the demand of these commodities, which will ultimately result into reduced profitability by these companies.

Conclusion

Due to increased environmental concerns, there is a considerable increase in energy relatedpolicies at both national and international levels. The SWOT analysis of the Indian exploration company shows that the energy exploration activities are constantly under threat, despite the opportunities represented by the new exploration sites. This is because most environmental policies are geared towards the increased introduction of environmentally friendly sources of energy that I sustainable in the long-term.

Bibliography

International Energy Agency (IEA) (2012) A Policy Strategy for Carbon Capture and Storage (Report)

Carley, S. 2009. “State Renewable Energy Electricity Policies: An Empirical Evaluation of Effectiveness.” Energy Policy 37 (8): 3071–81.

Delmas, M. A., & Maria J. M. 2011. “US State Policies for Renewable Energy: Context and Effectiveness.” Energy Policy 39 (5): 2273–88.

Fabrizio, K. R. 2012. “The Effect of Regulatory Uncertainty on Investment: Evidence from Renewable Energy Generation.” Journal of Law, Economics, and Organization 29 (5): 1–34.

Jaffe, A. B., Richard G. N, Robert N. 2002. “Environmental Policy and Technological Change.”Environmental and Resource Economics 22 (1/2): 41–69.

Hughes, R. 2010.EasternCanadiancrudeoilsupplyanditsimplicationsforregional energy security.Energy Policy, 38,2692–2699

Kahn, R. D. 2000. “Siting Struggles: The Unique Challenge of Permitting Renewable Energy Power Plants.”The Electricity Journal 13 (2): 21–33.

Kemfert, C.,  Hirschhausen, C; Lorenz, C. 2014.  European Energy and Climate Policy Requires Ambitious Targets for 2030. Economic Bulletin. Vol. 4 Issue 8, p17-26

Lyon, T. P., and Haitao, Y. 2010. “Why Do States Adopt Renewable Portfolio Standards? An Empirical Investigation.”Energy Journal 31 (3): 133–57.

Menz, F. C. 2005. “Green Electricity Policies in the United States: Case Study.” Energy Policy 33 (18):2398–410

Newell, R. G., Adam, B. J, and Robert, N. S. 2006.“The Effects of Economic and Policy Incentives on Carbon Mitigation Technologies.”Energy Economics 28 (5–6): 563–78.

Rabe, B. G. 2004. Statehouse and Greenhouse: The Emerging Politics of American Climate Change Policy. Washington, DC: Brookings Institution.

Randolph,& Gilbert M. 2008. Energy for Sustainability: Technology, Planning, Policy. Washington, DC: Island Press.

Shipan, C. R., & William, R. L. 2001.“Environmental Policy and Party Divergence in Congress.”Political Research Quarterly 54 (2): 245–63.

Stoutenborough, J. W., & Matthew, B. 2008. “Encouraging Pollution-Free Energy: The Diffusion of State Net Metering Policies.” Social Science Quarterly 89 (5): 1230–51.

Vajjhala, S. P. 2006. Siting Renewable Energy Facilities: A Spatial Analysis of Promises and Pitfalls. Washington, DC: Resources for the Future.

Yi, H, & Richard C. F. 2012.“Policy Tool Interactions and the Adoption of State Renewable Portfolio Standards.”Review of Policy Research 29 (2): 193–206.

Yi, H & Richard, C.F. 2014. Renewable Energy Politics: Policy Typologies, Policy Tools, and State Deployment of Renewables. The Policy Journal Studies. 42 (3):391-415

History of the United States, 1607 to 1877

January 22, 2015

Ways in which the war impacted development

Unlike most wars, the war of 1812 did not have any political or legislation impacts on the citizens or people who survived the war. It is likely for changes in terms of both boundary and national or regional framework once a war has occurred. However, there are also some wars where major changes in political and legislation aspect do not occur. The war which transpired in 1812 is one of such characteristics (Gillon and Matson, 2008). Nonetheless, there is a mandatory change after a war. This means that after a war there must be an alteration in the previous arrangement before the war some of the changes while others are positive. In cases where the war has led to positive changes the war is described as instrumental for the region (Gillon and Matson, 2008). The War of 18212 was a war between US and the royal empire mostly engineered by Napoleon. The war ended in 1814, but the treaty signed by the two parties was enacted in 1815. The war had different impacts on the United States.

The war is recognized as the turning point for the United States economically (Gillon and Matson, 2008). During the start of the war, America is described as a country which was merely exploiting business and trade. This is due to the absence of significant business agenda and practice in the US at the beginning of the war. During the war trade between the US and Great Britain was ceases as the two were at war. This influenced the urge to establish domestic industries to meet the American people’s need (Gillon and Matson, 2008). A textile industry built by Cabot Lowell is evidence of industrial developments that were forged by the end of the war. In addition, the American people established an identity. The people became proud of their nation and their products and this was the foundation of the current America (world’s super power).

Significance of the battle of Antietam

The American civil war’s main objective was end to slavery. Numerous battles were fought and massive causality was encountered as a result. However, in some battles, courage and forces were strengthened, while in others courage was destabilized (Gillon and Matson, 2008). Some of the famous battles include the battle and fort Wagner under Robert Shaw and the Battle of Antietam. These battles were unique. Battle of Antietam was unique since it was the first battle to be fought on northern front of the country. The battle is renowned for its victory as it was redemption to the streak of losing that was experienced for a long time. This victory provided a platform for Abraham Lincoln Emancipation Proclamation. This required a political backing which he did not have at the start of the battle (Gillon and Matson, 2008). Therefore, besides the massive loss in lives, the Union front was able to stabilize its attacking policy and obtain an opportunity to address their concerns to the country. Emancipation proclamation was the genesis of abolitionists who were the people against confederates. While confederates supported slavery, abolitionists were against the idea and were in war to stop slavery in the country. The battle is important for the civil war because if the union were unable to secure victory from the battle, Lincoln would not have a platform for his proclamation and a united front for fight against slavery would not have been introduced. Furthermore, it also contributed towards advertising the fight against slavery thus obtaining enough support to actualize their dream (Gillon and Matson, 2008).

Antebellum period and slavery

Antebellum, period is described as the time after the 1812 war and the beginning of the civil war. During this period there were a series of events which contributed either directly or indirectly to the present status of the United States of America (Gillon and Matson, 2008). A dominant issue during this period is slavery. Slavery was legal in various states in the US in the antebellum period. A slave was under the authority of their master who had acquired them from the slave market. Whites were the only race whose people were not slaves. On the other hand, blacks were had the highest number of slaves during this period (Gillon and Matson, 2008). Spotting a black person who was not a slave was difficult. This is because the number of blacks who were not slaves was insignificant. Other colored races also comprised as the slave population with varied proportions. Every state has its own set of rules which described authority of the masters over slaves. This meant that slaves were perceived lower human beings. The fact that slaves were perceived as inferior human beings caused controversy in the US. Some people had empathy and sympathy for those condemned to slavery. This people perceived blacks as their equals, therefore condemning them to slavery as a result of their skin color seemed unjust to them (Gillon and Matson, 2008). As a result, movements were established t undermine the authority which masters bestowed on their slaves, initially it began with secret attacks. This involved covert operations where slave masters were attacked and were harmed (Gillon and Matson, 2008). Sometimes the loss was in terms of property alone whilst in some instances it involved physical injury to the slave masters. Later, the movements decided to declare their intentions and state their views in the open. Street rebellions and demonstrations were organized. However, this had different effects as several state governments retaliated to this through lethal force. In some instances lives were lost and huge property damage. Turner rebellion and Nullification crisis include some of the events organized by anti-slavery movements (Gillon and Matson, 2008). These events were countered with response from the government which included policies banning protest from slavery and any anti-slavery movement. Turner rebellion is popular for its causality report. The rebellions lead to the loss of sixty white people. In retaliation, the states executed at least 53 laves and later more than one hundred followed. Anti-slavery movement laws were tightened and slaves’ freedom was utterly jeopardized (Gillon and Matson, 2008).

In spite of the huge blow, that the governments had made on slavery movements in terms of compromises led to a renewed urge to end slavery (Gillon and Matson, 2008). This lead to development of an abolitionist frontier which constituted comprised people who shun slavery. Unfortunately, in the states where slavery was permitted rebellion movements were not able to obtain an opportunity to convey their point. Instead the few rebellion platforms were silenced through lethal force and further restrictions on the legal arena. Therefore, abolitionists were only left with one option which was to fight for what they believed (Gillon and Matson, 2008). This is recognized as t he first plot to offset a civil war based on the divide between the confederates and the abolitionists.

In conclusion, retaliations which the state governments provided for the slave protests availed a platform for the civil war. Retaliations were perceived as harsh and limited ground for diplomatic resolution between the two frontiers. Since dialogue was unable to restore order and address people’s concerns it lead to the civil war.

References

Gillon, S. and Matson, C., (2008) The American Experiment: A History of the United States, 3rd             Edition, Cengage Learning

THE IMPACT OF INTERNET USE WITHIN THE WORKPLACE

January 21, 2015

THE IMPACT OF INTERNET USE WITHIN THE WORKPLACE

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Abstract

The use of internet enabled technological tools such as Smartphones, iPods and other internet-devices including computers within the workplace has had both positive and negative impact on employee productivity. This paper reports on the findings of a secondary research on the impact of internet use within the workplace. The findings reveal that internet use contributes to improved employee morale, increased satisfaction level and enhanced employee engagement. Further, it contributes to enhanced information sharing and development of good personal relationship among work peers as well as between managers and subordinates. On the other hand, internet use within the workplace contributes to diminished productivity especially when organizational internet use policy does not restrict internet use. In such a case, employees tend to take most of their working time propagating personal interests. Similarly, excessively restrictive policies on internet use demoralize employees and reduce their job satisfaction level thus resulting to diminished productivity. Therefore, companies that develop sound internet use policies and monitor their implementation process stands to benefit. This is because the monitoring process enhances compliance thereby driving organizational goals.

Table of Contents

Abstract 2

1.0 Introduction. 4

2.0 Critical review of research findings on internet use within the workplace. 4

2.1 Demerits of internet use within the workplace. 4

2.2 Benefits of internet and Smartphone use within the work place. 10

2.3 Recommendations. 13

3.0 Conclusion. 14

References. 15

1.0 Introduction

As Milligan (2006, p.1) reports, in the recent years, the use of Information and Communication Technologies (ICTs) in the workplace has rapidly grown. The modernization of ICT tools such as wide world web, the internet, Smartphones, iPods and other related devices have helped facilitate commercial transactions within the workplace. Milligan (2006, p.6) argues that ICT proliferation has contributed to the emergence of a knowledge society that is able to effectively and efficiently work in real time. Nevertheless, the use of ICT tools in the work place has not always produced positive results and some employers have criticized it. This paper seeks to provide a critical review of the problems and benefits of internet use within the workplace.

2.0 Critical review of research findings on internet use within the workplace

2.1 Demerits of internet use within the workplace

Internet addiction within the workplace interferes with work life as employees spend most of their time surfing or chatting instead of working. Therefore, productive time is lost leading to negative consequences on the overall productivity of a business organization (Coker, 2011, p.245). Qinyu, Xin, Anil and Long (2009, p.50) define internet misuse as any intentional act by workers to utilize the internet for non-work related activities within the official working hours. Misusing the internet has been associated with ruinous activities such as online piracy, theft of Intellectual property and dissemination of offensive materials.  A good example of internet misuse is the scenario where three council workers in Wales (UK) lost their jobs in 2007 owing to their excessive time spending on the eBay auction site while at the workplace. The Union officials reacted by holding bosses responsible for the actions owing to their act of permitting employee to use internet in the workplace (BBC News, 2007, 21 September).

According to Grodzinsky and Gumbus (2006, p.30), statistics have proved hysterical misuse of internet privileges. Research shows that 70% of web traffic takes place within the working hours (between 9am and 5pm) and is linked to accessing pornographic sites.  Further, 80% of the companies involved in the study acknowledged that its employees had abused the internet by carrying out non-work related activities. Business managers are scared about the deleterious impacts off internet use in the workplace and are in constant surveillance of what employees are doing with the internet (Anandaraja, 2002, p.54). This has resulted to the formulation of internet use policy in many working environments. However, Anandarajan (2002, p.54) argues that internet usage policies are insufficient without frequent monitoring and screening for compliance. A study conducted by Green field and Davis (Cited in Ivarsson and Larsson, 2011, p.64) revealed that 30% of companies utilized in the pilot study had fired some employees for improper internet use in the workplace. Ivarsson and Larsson (2011, p.65) perceive inappropriate use of internet in as workplace deviance. Essentially, workplace deviance is any intentional behaviour that contravenes conventional norms of an organization thereby threatening organizational wellbeing.

According to Ivarsson and Larsson (2011, p.66), activities such as browsing pornographic sites, online gambling, online chatting and online music downloading are referred to as offensive behaviours. Employees who adopt such deviant behaviours find challenges reaching their optimal productivity level with others failing to respond to requests from customers in a timely manner. The use of internet in the workplace results to diminishing productivity and decreasing monetary returns (Ivarsson and Larsson, 2011, p.67). This results from compensating employees for non-worked hours thereby eating into company’s profits. For example, in 2012, it was found out that American employers inappropriately paid deviant workers about $175 million during the NCAA basketball 2-day tournament period.

As Fludd (2014, p.20) affirms, many employees have a tendency of embracing activities that consume company’s productive time. Such activities include checking social network accounts, texting and online office gossip among others. These activities are perceived as productivity enemies since they suppress organizational output due to poor employee performance. As Fludd (2014, p.20) reports, many employers use job-specific tactics to prevent loss of work productivity due to the use of ICT devices and the internet within the workplace. Some of such tactics include censuring information entering the internet, blocking specific internet sites, monitoring internet usage and forbidding the use of Smartphones in the workplace. However, these preventive measures work only if strict monitoring mechanisms are put in place (Fludd, 2014, p.20).

In the light of Ugrin and Pearson (2008, p. 29), Smartphone and internet use have resulted to radical changes in information exchange. As Davis (Cited in Ugrin and Pearson, 2008, p.29) reports, in 2012, the American treasury department realized that 51% of employee work time was being wasted answering private e-mails besides doing online chatting and online shopping. Grodzinsky and Gumbus (2006) reports that internet browsing within the workplace diminishes productivity since employees utilize company time to their advantage. Such time is misused e-mailing friends, planning non-work related vacations, doing online shopping and checking personal e-mails (Grodzinsky and Gumbus, 2006). Scholars such as Lim have recognized internet as a tool that propagates hidden idling commonly known as cyber loafing.  As a result, companies invisibly lose productive time as employees pretend they are working.

According to Ugrin and Pearson (2008), internet misuse culminates to legal issues, privacy issues, security issues and cyber bullying. This gives organizational management rationale for restricting internet use in the workplace (Ugrin and Pearson, 2008, p.29). Many organizations result to blocking some websites so that they are inaccessible to employees. However, monitoring the internet for updates to determine emerging deleterious sites is very cumbersome. Therefore, organizations develop policies that govern internet use in the workplace and the punishment guidelines for employees found misusing the internet. This strategy has proven effective in curbing non-befitting use of the internet and its affiliate communication devices (Ugrin and Pearson, 2008, p.30).  According to Qinyu et al.,2009, p.50), in 2005, a study conducted by the American management association revealed that 55% of the companies reviewed employee e-mail messages, 76% screened website connections and 65% used URL blocking software to forbid employee from accessing specific sites.  In addition, about 25% of the companies terminated employee contracts for being involved in e-mail misuse while 26% of the companies’ unleashed employees for internet misuse (Qinyu et al., 2009, p.50).

In view of Anandarajan (2002, p.53), organizations and individuals are considered as productive factors that yield output. Therefore, non-work related use of the internet culminates to diminished work input and reduced work output. As Anandarajan (2002, p.54) reports, there is a certain buffer zone within which internet use is productive within the workplace. However, above or below the buffer zone, internet use results to reduced work input and consequential reduced work output. This is as illustrated in the following diagram.

Figure 1: Evolutionary productivity function and web misuse.

Source: Anandarajan (2002, p.54)

From the above figure, the area over the buffer zone represents a situation where employees are given excessive freedom to use the internet resulting to internet abuse. On the other hand, the zone below the buffer zone represents a scenario where the management exercises excessive control over internet use resulting to diminished worker morale hence diminished productivity. According to Anandarajan (2002, p.54), the social contract theory can be utilized to explain internet abuse within the work place. When viewed under the social contract lens, internet abuse is a cost that counteracts realized benefits with an organization since each benefit should be accompanied by a cost.

In 2006, Garrett and Danziger (2008) conducted a study to determine the degree of cyber slaking within the workplace.  Utilizing a sample of 1024 respondents, the scholars found out that employees holding high job status had a high probability of abusing the internet more than those holding low status jobs. Therefore, Garrett and Danziger (2008, p.291) recommends internet use policies that are control- oriented in order to avoid loss of employee morale and reduced productivity. In view of Coker (2011, p.238), the belief that excessive internet browsing for personal gain is abusive is intuitively generated. Therefore, moderate internet browsing for personal use within the work place does not attract negative outcomes in terms of productivity. In fact, moderate internet browsing creates employee morale and these results to increased productivity. Scholars such as Seymour, Nadasen, and Lim et al (Cited in Coker, 2011, p.238) reiterates the fact that moderate internet browsing within the workplace is somehow justified. Therefore, total restriction of internet use within the workplace is extremely deleterious to the organizational productivity since employee morale is killed. Scholars According to Anandarajan and Simmers (2003), controlled web browsing is beneficial since it helps employees achieve equilibrium between personal life and work life. This induces gains such as diminished stress, improved time management and informal learning through the internet.

Coker (2011) endeavoured to carry out a survey on 700 randomly selected office workers to determine the impact of internet use within the workplace. About 268 surveys were done 74% of which were conducted on females and the rest on males. The outcome showed that internet browsing within the workplace is positively correlated with work productivity as long as such internet browsing does not consume more than 12% of work time.  Further, employees using internet in the workplace reported 9% increased productivity rate than their counterparts who did not use internet in the work place (Coker, 2011, p.245). However, excessive web browsing was linked to diminished productivity since employees were not able to complete assigned tasks within the scheduled time.  Excessive use of Smartphones within the work place has been associated with decreased work productivity (Pitichat (2013, p.2).

2.2 Benefits of internet and Smartphone use within the work place

According to Ivarsson and Larsson (2011, p.64), advancements in technological innovations especially the linkage of technological devices with the internet has had enormous impact on business operations and employee work life. Employers have endeavoured to trigger business development by allowing employees to access the internet using computers and mobile phones within the workplace. This has resulted to blurring of the margin between private life and work life (Ivarsson and Larsson, 2011, p.64). Grodzinsky and Gumbus (2006, p.2) reports that internet has been harnessed to perform tasks such as product marketing, marketing research and data analysis thereby reducing business cycle times.  In the light of Anandarajan and Simmers (2004, p. 251), though web browsing for personal use might be considered unproductive, it has been linked with increased job satisfaction.  This is because individuals who are contented with information needs are happy with their jobs and are satisfied than those who have been deprived information access.

Simmers, Teo and Anandarajan (2006, p.3) credits internet for positively transforming workplace setting. Internet has contributed to employees having increased flexibility since they are detached from constraints of information, time and place. Internet acts as a learning and communication tool for employees enabling timely conveyance of information over vast geographical distances. According to Simmers et al. (2006, p.3), in 2004, 65.8% of internet users within the workplace acknowledged that going online while at the workplace improved their morale towards work. As Anandarajan (2002a, p.271) reports, internet is a tool that reduces communication cost in the 21st century enabling companies remain competitive. As an external communication tool, internet propagates information sharing in the area of e-commerce, customer support, supply chain management and marketing (Anandarajan, 2002a, p.271.  On the other hand, internet is used as an internal communication tool within organizations thereby promoting knowledge sharing, knowledge management and coordination of operations between different departments (Anandarajan, 2002a, p.271). Internet has transformed organizational competitive environment and helped blur the line between work life and personal life. Anandarajan (2003, p.272) presents a model that befits internet management within the workplace in order to achieve optimal results.

Figure 2: A model of internet management.

Source: Anandarajan (2002a, p.273)

Based on the above model, internet use within the workplace brings maximum benefits when internet management policy is properly managed. However, when internet access is strictly prohibited, the outcome is deleterious since employees are demoralized besides remaining unknowledgeable. On the other hand, when internet use is autonomous (no restrictive controls), employees tend to spend most of their time utilizing the internet for their personal gain. This means that company time is misused thereby contributing to reduced productivity (Anandarajan, 2002 a, p.273).

According to Pitichat (2013, p.3), the use of Smartphones (to browse) within the workplace promotes employee autonomy making them feel satisfied. For example, companies such as Ford Motor have enhanced employee morale by allowing them to bring their Smartphones in the workplace.  Besides, Smartphones play a key role in promoting positive relationship between employees in the workplace. Pitichat (2013, p.5) argues that managers should turn Smartphones as engagement tools to promote a good relationship between them and their subordinates. A case is given where a company listed in the Fortune 500 has utilized Smartphones to build positive relations among employees using Microsoft share point and internal blog.  As a result, employees have developed enhanced motivation and unfathomable relationships among them (Pitichat, 2013, p.5).

As Pitichat (2013, p.5) reports, the use of Smartphones within the workplace promotes sharing of knowledge.  As a virtual interactive platform, Smartphones have offered managers and employees a chance to share information through cloud computing.  A good example of a company that has utilized internet as a knowledge-sharing tool is the General Electric (GE) Company. GE had developed an online platform through which its internal communities can get answers to their queries through its internal experts who are in excess of 100,000. Besides, Ford Motors has also relied on Smartphones to eliminate help desk support costs (Pitichat, 2013, p.6). A model relating Smartphone use and increased work output efficiency is as illustrated below.

Figure 3: The relationship between Smartphone use and work efficiency.

Source: Pitichat (2013, p.6)

Based on the above model, the use of Smartphones within the workplace promotes employee autonomy, good employee relations and knowledge sharing among employees. This culminates to increased work engagement and job satisfaction that in turn contributes to increased work efficiency (Pitichat, 2013, p.6).

2.3 Recommendations

In order to alleviate the negative consequences of internet and Smartphone use within the workplace the following should be done:

  1. Internet use policy within the workplace should be developed, implemented and carefully monitored to promote compliance. This would help eliminate internet abuse within the workplace hence eliminating reduced work productivity.
  2. Organizational management should deploy technology experts to filter information entering the internet sites within the workplace. This would restrict the kind of information that employees would access from the internet sites without demoralizing them.
  3. Organizations implementing ‘no internet access policy’ should nullify such policy and instead develop a restrictive internet use policy. This would promote knowledge sharing and employee engagement hence creating employee satisfaction.
  4. Organizations should allow the use of Smartphones and the internet in the workplace but develop an ethical code to guide their use. This is crucial in avoiding internet misuse in the workplace setting.

3.0 Conclusion

From the foregoing discussion, it emerges that excessive internet use within the workplace culminates to reduced productivity due to unrestricted autonomy. Essentially, employees spend most of the time focusing on personal issues rather than focusing on achieving organizational goals.  This leads to loss of productive time hence productivity decline. On the other hand, excessive restriction of internet use leads to decreased employee morale and loss of satisfaction. This contributes to reduced productivity owing to the fact that employees do not share information and are not able to effectively reconstruct their impaired relations. Therefore, organizations should develop sound internet use policy, carefully implement and monitor employee compliance. This would help achieve optimal results in relation to the gains of internet use within the workplace.

References

Anandarajan, M and Simmers, C., 2004. Personal Web Usage in the

 Workplace: A Guide to Effective Human Resources Management. Idea Group Inc (IGI).

Anandarajan, M. and Simmers, C., 2003. Personal Web Usage in the Workplace: A Guide to Effective Human Resources Management. Hershey, PA: Information Science Publishing.

Anandarajan, M., 2002. Internet Abuse in the Workplace. Communications of the ACM, 45(1), pp. 53-54.

Anandarajan, M., 2002 a. Managing Web Usage in the Workplace: A Social, Ethical, and Legal Perspective. Covent Garden, UK: Idea Group Inc (IGI).

BBC News., 2007, 21 September. Job losses over eBay ‘addiction’. [Online] Available at <http://news.bbc.co.uk/2/hi/uk_news/wales/south_west/7005703.stm>%5BAccessed 6                        November 2014].

Coker, B. L., 2011. Freedom to surf: the positive effects of workplace Internet leisure browsing. New Technology, Work & Employment, 26(3), 238-247.

Fludd, V., 2014. Workplace Productivity Drains. T+D, 68(9), 20.

Grodzinsky, F and Gumbus, A., 2006. Internet and Productivity: Ethical Perspectives on Workplace Behaviour. WCOB Faculty Publications. Paper 129. Available at:<http://biblioteca.clacso.edu.ar/ar/libros/raec/ethicomp5/docs/pdf_papers/24Grodzinsky,%20Frances%20S..pdf>[ Accessed 6 November 2014].

Ivarsson, L., & Larsson, P., 2011. Personal Internet Usage at Work: A Source of Recovery. Journal of Workplace Rights, 16(1), pp.63-81.

Milligan., K., 2006. Using Information and Communication Technology in the Workplace. Australian Research Alliance for Children and Youth. Available at: <http://www.aracy.org.au/publications-resources/command/download_file/id/159/filename/Using_information_and_communication_technology_in_the_workplace.pdf&gt; [Accessed 6 November 2014].

Pitichat, T., 2013. Smartphones in the workplace: Changing organizational behaviour, transforming the future. A Journal of Trans-disciplinary Writing and Research from Claremont Graduate University, 3(1), pp.1-11.

Qinyu, L., Xin, L., Anil, G., & Long, L. (2009). Workplace Management And Employee Misuse: Does Punishment Matter? Journal of Computer Information Systems, 50(2), pp. 49-59.

Simmers, C., Teo, T., & Anandarajan, M., 2006. The Internet and workplace Transformation: M.E. Sharpe.

Ugrin, J. C., & Pearson, J. M. (2008). Exploring Internet Abuse in the Workplace: How Can We Maximize Deterrence Efforts? Review of Business, 28(2), pp.29-40.

International Marketing

January 21, 2015

Name

Course

Lecturer

Institution

City, State

Date of submission

1.0 Introduction

International marketing entails the application of marketing techniques and principles in more than one country across national borders or oversees. It is based on the expansion of a company’s marketing strategy with more attention being diverted to marketing targeting, marketing identification as well as decisions internationally. However, international marketing is a function of internal and external factors that undermine the application of the marketing strategies and techniques that are applicable in organizational expansion. It is also vital to ensure that the international marketing strategy has been reviewed on a quarterly basis as it acts as a benchmark to measure progress (Bowman & Gatignon, 2010, 59).

This paper shall critically analyze the hotel industry In relation to international market development for Moxy and a marketing mix that will be appropriate for the recommended strategy.

 

 

 

 

 

 

 

Table of Contents

1.0 Introduction. 2

2.0 Research and Situation Analysis. 3

2.1 Macro and Micro Environment. 3

2.1.0 PESTEL ANALYSIS. 3

2.1.1 Porter’s five forces. 4

2.2 Market Attractiveness. 5

3.0 Internal environment. 6

3.1 Resource based view.. 6

3.2 Value chain. 6

3.3 Marketing and strategic approach. 6

4.0 Swot key findings. 7

5.0  Identification of specific challenges on the company. 7

6.0 Evaluation of current situation. 8

7.0 Targeting and positioning. 8

8.0 Identification and justification of selected strategy. 9

9.0 Key aspects of Marketing mix applicable to identified strategy. 11

10.0 Recommendation. 11

11.0 Marketing Mix. 12

12.0 Conclusion. 12

13.0 Reference List. 14

14.0 APPENDICES. 15

Appendix A.. 15

2.0 Research and Situation Analysis

2.1 Macro and Micro Environment

2.1.0 PESTEL ANALYSIS

Moxy hotel is a global multinational chain which implies that it will be bound by political factors such as tax rates and the political stability of the country that it is operating in. Since governments are advocating for job creation, Moxy plays its role through the creation of employment opportunities.  Economic factors are also of concern to the operations of Moxy. The factors, leverage costs, prices and demand. Due to the dwindling levels of disposable income, Tesco, the hotel chain has changed its strategy to the advertisement of only the value brands and not the luxurious items. The international hotel industry has been the largest growing industry in the recent past. It ranks as the largest employer in the world today after the government (SEE Appendix A). Social factors play a factor in the sense that consumer needs are subject to factors such as their preferences, attitudes, beliefs and seasons. Moxy puts this into consideration by providing a wide array of products and services that consumers would choose from.

Technological factors such as self-service check-out points and online bookings has been convenient for operations of Moxy hotels as booking from customers globally are processed within a very short time. The multinational chain store has also set aside investments that would cater for intricate internet connections that would cater for its technologically savvy clientele.  It also adheres to social factors by preservation of the environment through reduction of waste produce and meeting the social conscience of its clients. Legislative practices such as the government regulations also undermine the operations of Moxy hotels. Legislations such as the Food Regulating Commission see to it that Moxy regulates the prices it charges to its consumers.

2.1.1 Porter’s five forces

Moxy hotels face competition from other rival companies within the hotel industry. In retaliation, the companies develop product differentiation techniques to target a certain target market. This makes the target market become much smaller thus increasing the competition within the hotel industry.

There are few suppliers that handle the needs of Moxy hotels especially now that Ikea handles most of the furniture supplies and interior décor. Customers have different income levels, necessities and buying capacities (See Appendix B). A vast majority of the customers will prefer affordable prices due to the prevalent economic crisis.

The arrival of new entrants in the hotel industry can be disruptive because it increases the competition. However, with the high costs of entry, such cases are rare. The chain store has also been making attempts to diversify its market share portfolio by offering substitute goods that consumers would choose from. For instance, in the realm of technology and communication, Moxy has both wireless and capable internet that the consumer would choose from depending on their required internet speeds.

2.2 Market Attractiveness

The growth of the industry has been characterized by the wide variety of job opportunities it offers in different sectors within the industry, restaurants and resort and tourism. In addition, the most successful hotel managers in the contemporary hotel industry happen to be very successful business administrators as well. The managers will often work under tight time constraints while at the same time embracing managerial competencies and range of skills that are conventional in the business community at large. Recently, the hotel industry has been largely driven by global tourism. For hotel managers who may wish to apply their marketing strategies for the global marketing expansion, they should be clear on when and where exactly to invest (Pulizzi, 2014, 99).  The managers should also bear in mind that the hotel industry calls for a multicultural and multigenerational workforce.

The industry therefore does not discriminate because of the dealings with people from all walks of life and the preparation of cuisines that target customers from various countries that may be residing in the hotel country. The unexpected uncertainties in the industry make it very risky for other companies to join in while those that are dominating the industry have to always sharpen their competitive edge.

3.0 Internal environment

3.1 Resource based view

Resource based view suggests that organizations ought to derive operational benefits within the organization. The internal factors are within the company’s doors or management and may impact the success of the Moxy Hotel chain. This includes strategic constraints, marketing mix modeling and marketing mix.  The company management and the leadership style are important internal factors in the management impact of an organizational culture. Business relationships and processes within departments are also important in impacting the effectiveness and efficiency of a business.

3.2 Value chain

Moxy hotel is a large multinational hotel chain organization which is an affiliate of the Marriott’s hotels. The work force serves all customers diligently notwithstanding their cultural affiliations. The hotel has well taken full advantage of the European market because its room rates retail at less than a hundred dollars. This is more convenient for the average trendy business man because the same services are offered in other hotels at higher prices. For instance, it has so much focus on lobbies that have high energy zones and public designated places that are appropriate for intimate conversations.

3.3 Marketing and strategic approach

The international strategic approach for Moxy hotel chain will call for a long term view as well as tools such as the customer value lifetime models. The models can be very important in simulating the churn rate, revenue per customer and the effects of strategy on acquisition. For Moxy hotel chain, the marketing strategy should take a very close scanning of the external and internal environments. The internal environment factors entail the marketing mix, strategic constraints, plus performance analysis and marketing mix modeling. The external environment that  Moxy hotel chain should consider entail factors such as political/legal environment, customer analysis, target market analysis, competitor analysis and the evaluation of a technological environment that is most likely to impact success.

4.0 Swot key findings

Strengths

Moxy hotel is among the dominating hotel chains in the hospitality industry and has a wide variety of foods and beverages. The target customers who are the trendy youths have their interests taken care of

Weaknesses

Legal issues that surround the security and safety of the food products and beverages

Opportunities

Improving the brand image

Expansion in most countries in the European market

Threats

External competition and Government laws and regulations

5.0  Identification of specific challenges on the company

The challenges that are inherent in the operations of the Moxy hotel chain is the hotel law. This includes the legal issues that surround the security and safety of the products and the practice of hotel law which is equally vast and varied. It includes management agreements to development deals, the liability of foods and beverages and labor and employment liability. There are also other labor issues that ought to be addressed and this are inclusive of wage hour audits that are performed by the department of Labor. On the business aspect of the industry, there might be a new wave of hotel development that engenders on related issues such as joint ventures, land acquisitions and entitlements.

6.0 Evaluation of current situation

The global expansion of a business will require different strategic options than the plans that are meant for the growth and development of a business over time. However, the identification of a global business strategy is possible and a new business strategy and work backwards to formulate a business implementation from a global perspective. International marketing strategies are the fundamentals that underpin the marketing plans that are intended to attain the marketing objectives. The strategies are developed as multiyear plans that have a tactical plan outlining specific actions that need to be accomplished yearly. This will be of paramount importance as the company will be in a position to measure its progress.

An international strategic plan may be established to identify the challenging goals, business alternatives, an optimum marketing mix and a detailed implementation. Moreover, there should be plan that monitors progress as well as a set of contingencies in the event of problems arising in the course of plan implementation.

7.0 Targeting and positioning

Moxy hotels have seen to it that it has brought the same experience to the generation X and Y in smaller portions and at a very affordable price.  However, an old generation traveler that is looking for a contemporary and trendy vibe at an utterly affordable rate will find the Moxy hotel appropriate.  An independent social traveler looks forward to cohabiting in a seamless world that alternates between a public and a private setting. Young travelers want to experience a low pricing and nerve style and tend to prioritize on a dynamic experience in public places a mere room product service. The lobby will also contain an all-time feature of snacks and drinks.

8.0 Identification and justification of selected strategy

Moxy hotels are a chosen brand name for the joint venture between IKEA and Marriott hotels. The ulterior motive of the joint venture is to open up about one hundred and fifty Moxy hotels across Europe starting in Germany, Italy, Ireland, Austria, United Kingdom, Denmark, Finland, Belgium, Netherlands, Sweden and Norway. According to the supporting case study material, the first Moxy hotel will be opened near Milan’s Malpensa airport in the year 2015. The rooms within the hotel will be priced at around €60 (£52) to €80 a night. Apparently, it is apparent that the hotel has prospective of international expansion. However, there are some strategic options that are vital and should not be downplayed whenever an organization is looking forward to expand internationally in the quest of expansion its customer base. This part of the paper will hence focus on such strategic options and relate them with the case of Moxy hotels.

Moxy hotel, for instance can embrace a strategic option of keeping its prices consistent all through its operation existence. The thing is, the global world has now become transparent and rate parity is becoming a standard best practice (Moore, 2006, 113). Moxy hotels should therefore see to it that rate parity exists in all its booking sites in all countries. What lives bitter taste in the mouth of a client is to play for a hotel facility somewhere then find out that the same facility is being offered at a much lower rate somewhere else. For this reason, the hotel chain has consistently lower prices in all its branches which is a marketing strategy it is using to counteract the competition that is inherent in the hotel and hospitality industry.

Due to the vast products and services that the Moxy hotel offers to its customers, the pricing strategy will have to take into account all these facilities and differentiate those that are most likely to differ from one season to the other. Inventory allocation and the management of sell rates are crucial and should be monitored consistently so as to attain some form of consistency in the pricing procedures.

It is also imperative to acknowledge that when it comes to global or international expansion, there are many ways of breaking into the foreign markets and the approaches will evolve with the growth of company scale. In the international growth strategies, there is no a “one size fits all” since some will undertake an opportunistic basis while others will be executed according to well laid out plans.

Moxy hotel can also partner with different channels by taking into account the beneficial activities of other companies in different industries so long as they will work together in the attainment of a mutual goal that goes beyond making profits and deriving customer utility. The products or the benefits that the Moxy hotels are willing to offer are an approachable service with a contemporary design and at a very affordable price (See appendix B).

All the guest rooms will be well designed and functional. Bathroom amenities will be upscale. Coloring palette will exhibit calming neutral tones that combine natural materials in evoking a comfortable, organic and restorative feel. The Moxy hotel is all about the provision of the “bare maximum.” The smaller room size, the fashionable low cost furnishing, smaller staff and a sole F & B hybrid which drives the rates down.

Moxy hotels should also extend its reach and use this strategic option that would develop its international presence. Expanding globally for any company does not reap benefits unless the company extends its reach by providing services that well suit the areas they have expanded to. This is basically the essence of customer satisfaction. Moxy hotels should therefore see to it that even while globally expanding, they also provide services and amenities such as cuisines as well as some cultural events and festivals that will suit the new market so as to gain market approval in that particular state or nationality.

9.0 Key aspects of Marketing mix applicable to identified strategy

The aspects of marketing mix are also referred to as the 4ps. They entail product, promotion, place and price. The key aspects that will be appropriate for the identified strategy are place and promotion. Moxy hotels need to first establish the promotion method that is best applicable in the communication of benefits and features of the services to the target customer. The hotel will also figure out where exactly it will offer its services and how those services will get to the final consumer. Promotion methods may encompass elements such as advertising, sales promotions and public relations.

10.0 Recommendation

Moxy hotel can partner with different channels by taking into account the beneficial activities of other companies in different industries so long as they will work together in the attainment of a mutual goal that goes beyond making profits and deriving customer utility. In this respect, the hotel industry has partnered with IKEA and Marriott hotels. Marriott hotels dominates the hotel industry while IKEA is a leading Swedish and a top notch furniture manufacturer. The recommendation is appropriate because the combination takes the beneficial activities of other companies.

11.0 Marketing Mix

A marketing mix modeling becomes applicable in the determination of optimal marketing budget and the allocation across the marketing mix in the achievement of strategic goals. The marketing mix models also come in handy in brand management to create and spending across a brand portfolio.

Moxy hotels among other trendy amenities will contain Free Wi-Fi all through, “plug and Meet” meeting spaces, an option of checking in just by using a mobile gadget, floor-ceiling art wall in every bedroom, in-built USB ports in every guest room and Flat Screen televisions.  Moxy hotels are meant to literally revolutionize the industry. The features attract travelers with a younger sensibility and whom contemporary style is imperative. The hotel lacks a lot of competitors because its design well suits the generation X and generation Y because of its design that has been accustomed for these target market (Bergh & Behrer, 2013, 112). Most of the hotel rooms in the European market have been designed for the high end business man and the rooms are a bit costly because they are the target market.

12.0 Conclusion

The Moxy hotel ensures the end customer gets value for his money by having a well customized experience that perfectly suits his pocket. The hotel has seen a white space in the European market because its room rates retail at less than a hundred dollars. It has so much focus on lobbies that have high energy zones and public designated places that are appropriate for intimate conversations.

In the international growth strategies, there is no a “one size fits all” since some will undertake an opportunistic basis while others will be executed according to well laid out plans.  Companies should, therefore, do a market research to arrive at a certain global growth strategy, but not embracing one because of the mere fact that a fellow company has adopted a similar strategy. The international strategic growth for the Moxy hotel chain will call for a long term view as well as tools such as the customer value lifetime models. The models can be very important in simulating the churn rate, revenue per customer and the effects of strategy on the acquisition. For Moxy hotel chain, the marketing strategy should take a very close scanning of the external and internal environments

 

 

 

 

 

 

13.0 Reference List

Bergh, J. ., & Behrer, M. (2013) how cool brands stay hot: Branding to Generation Y. London: Kogan Page.

Bowman, D., & Gatignon, H. (2010) Market response and marketing mix models: Trends and research opportunities. Boston: now.

Moore, G. A. (2006). Crossing the chasm: Marketing and selling disruptive products to mainstream customers New York: Collins Business Essentials.

Pulizzi, J. (2014). Epic content marketing: How to tell a different story, breaks through the clutter, and wins more customers by marketing less.

Richter, T. (2012) International marketing mix management: Theoretical framework, contingency factors and empirical findings from world-markets. Berlin: Logos.

 

 

 

 

 

 

 

 

 

 

14.0 APPENDICES

Appendix A

FIGURE 1: Projected spending on leisure & business travel, 2012-20

 

World 2012 2013 2014 2015 2016 2017 2018 2019 2020 % change 2012-20
Leisure travel spending 3,222.1 3,324.1 3,479.7 3,652.7 3,823.2 3,999.8 4,184.6 4,375.2 4,570.5 +41.8
Business travel spending 1,017.4 1,048.9 1,103.5 1,161.1 1,214.2 1,266.2 1,318.0 1,369.7 1,418.8 +39.4
Total 4,177.8 4,309.9 4,518.0 4,746.3 4,967.8 5,193.9 5,427.8 5,667.4 5,909.1 +41.3

 

Appendix B

Marketing environment

The internal environment for Moxy hotels considers the interests of its suppliers, customers and competitors. The company has partners with IKEA suppliers for its interior décor and Nespresso for its coffee supplies. Nespresso supplies Moxy hotels with high quality coffee and recipes that match customer needs. It adheres to legal factors by carefully researching names and products designs in avoidance of conflicting third party rights. The hotel chain has adopted technologies such as guest free Wi-Fi and smart technology solutions.

Marketing strategy

The Moxy hotels have been committed to being the best lodging and food service company in the hotel industry. It handles its employees in a manner that creates an extraordinary customer service as well as the shareholder value. Its goals and objectives is acting with integrity and upholding ethical and legal standards.

Marketing department

The marketing department aims at reshaping the contemporary hospitality industry by providing new guest experiences, changing brands and conforming to the expectations of its customers.

Marketing systems

The information system for Moxy hotels enhances the services that it provides to its final consumers. It has catered for the provision of “free-to-guest” internet access. It has a well established hotel standard management system which embraces a comprehensive access control function.

Marketing productivity

Profitability of Moxy hotels has had persistent profit growth by taking advantage of cost reduction strategies such as opening many branches internationally thus experiencing economies of scale.

Marketing function

The products of Moxy hotels target the affluent and technology savvy teenagers and everything is offered to them at a lower price.

Richard III and The Merchant of Venice

January 21, 2015

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Richard III and The Merchant of Venice

Richard and Shylock commit to villainy for different reasons. Various selfish reasons fuel their desire to do evil. Richard has the desire to acquire the throne at all costs. Shylock’s desire, on the other hand, is to avenge the evils he believes have been done to him. He avenges evil with more evil. In their respective plays, both Richard and Shylock are manipulative and villainous forces of evil that is a significant similarity characteristic of the two characters in the respective roles they play. Of the two characters, however, we like Shylock’s character more than Richard III. Despite Shylock’s character, we can understand and sympathize with him because even before the play begins, he is an outcast and discriminated against by other Christians.

Unlike Shylock, Richard appears unapologetic about his evil plans and deeds. He openly declares his evil plots. At one point, he states that even as he commits murder he can still afford to smile (Richard). What we do not especially like about his character is that we see no significant reason behind his actions. On the other hand, it is clear that Shylock is pushed by Antonio and the Christians in general. He affirms that Antonio has laughed at his losses, disgraced him, and created a barrier for him not to gain half a million and many other forms of discrimination for the reason that he is a Jew (The Merchant of Venice).

Richard appears to justify his evil actions. However, we do not understand the sober motive behind the evilness that resides in him. The audience cannot sympathize with him. He is power hungry and kills people for no apparent reason. Shylock, on the other hand, is alienated. The Christian characters in his play see him as evil because he is a Jew. His thoughts, however, differ from those of the Christians which gives us a reason to understand his actions and hence sympathize with him. In addition, his actions are open. The fact that the Christian characters misjudge his intentions is what ails him. At one point he declares that the villainy he will execute is a teaching by the Christians (The Merchant of Venice). Unlike us, they fail to understand him.

Another disparity evident in Shylock’s and Richard’s character is in the actions they undertake to realize their particular goals. Although there is a degree of evilness in the actions of both of them, we like shylock’s actions better. We sympathize with the motives behind his actions and therefore understand to a great extent his deeds. As much as he wants to revenge, he does not go out killing everyone on his way like Richard in his quest for power.

Shylock finds a perfect opportunity to avenge the ridicule he is subjected to by Antonio and other Christians when Bassanio approaches him for a loan with Antonio’s shipment as collateral. The loan must be repaid at end of three months failure to which Antonio has to surrender a pound of flesh. They both know very well that this means murder. Shylock was a Jew whose business was to lend money. Antonio and other Christians ridicule him because he is a Jew. They also ridicule him because the interest rates he charges are excessive. When Antonio signs the deal, Shylock is left hoping that the shipment does not arrive in time so that he avenges against Antonio and all Christians in general.

It is clear that Shylock only wants to prove that he is worthy just like Antonio and other Christians. Besides he wonders whether Jews are not hurt with the same weapons, have affection, senses, and organs and suffer the same diseases as Christians (The Merchant of Venice). He understands and respects the Christians laws. On the other hand, the Christians fail to respect Shylock back. As a result, he feels disturbed. However, he does not go killing all Christians in a bid to revenge. He only targets Antonio who is in the front line of those who discriminate against Christians. He is so perturbed that no amount offered will make him change his mind.  He even refuses to accept an offer of three times the debt. At the end of it all, however, he does not kill Antonio or anyone else.

Richard’s actions, on the other hand, take a different root. He is ready to kill anyone who appears as an obstacle to his goal of acquiring the throne. Many dislike Richard especially Ann, who openly calls him a villain. However, Richard is still able to woo her to marriage by telling her that her beauty haunts him in his sleep and he could kill everyone in the world just to have her (Richard III). Richard’s evil-driven desires make him plot for the killing of Clarence and later blame the queen for this murder.

Even after Richard becomes king, his cruelty continues. He has a desire to marry Edward’s daughter.  Therefore, he plans for the killing of his wife first. This greed and struggle with the people that are on his way leads him to his death at the end of the play. Unlike Richard, Shylock does not lose his life. He is converted to become one of the Christians he loathes most. Therefore, although both Richard and Shylock had profound senses of hatred residing in them, their goals and actions led them to different destinations.

Shylock is a better villain than Richard. We understand the motives behind his actions. We even sympathize with him because of the discrimination he was subjected against. We like Shylock more because we understand his intentions and his actions are open.

Works Cited

Richard III. Dir. Richard Loncraine. Perf. Ian McKellen, Annette Bening, Jim Broadbent.         Mayfair Entertainment International, 1995. DVD.

The Merchant of Venice. Dir. Michael Radford. Perf. Al Pacino. Avenues Pictures Productions,           2004. DVD.

The impact of entrepreneurial characteristics on firm performance: uncovering the characteristics of strategic entrepreneurship on the performance of UK SMEs

January 19, 2015

The impact of entrepreneurial characteristics on firm performance: uncovering the characteristics of strategic entrepreneurship on the performance of UK SMEs

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CHAPTER: LITERATURE REVIEW

Introduction

With the advent of the global economic crisis in 2008, the economic status of the United Kingdom has been highly to the extent of experiencing a second recession in the period between 2011 and 2012 (ONS, 2013). Macroeconomic indicators such as unemployment, inflation, and the base rate by the Bank of England continue to highlight the fragile condition of the country’s economy.  Despite these worrying trends in the nation’s economy, SMEs in this county have continued to flourish providing a certain form of relief to the country. According to statistics, the country experienced an increase of 253,000 in businesses between 2011 and 2012 (BIS, 2012). It has been noted that the number of businesses started every year exceed those that exit the market since the year 2000, even during the period of economic downturn. This shows the ability of SMEs in this country to withstand even the harshest of economic conditions to ensure the continued sustainability. In this part we review existing literature to explore the various entrepreneurial characteristics that underlie the performance of a firm and especially SMEs in the UK.

Researchers have concluded that factors leading to the growth of a firm are grouped into two; characteristics of the firm and characteristics of the entrepreneur/owner of the firm. Characteristics of a firm include such aspects as age, legal status, sector, and size of the business, while characteristics of the owner include age, education, level of experience and entrepreneurial capabilities possessed. Entrepreneurial capabilities will also determine business strategies the business adopts including market orientation, methods of financing, management practices and social capital. Literature review has been used to explain the contribution of these entrepreneurial characteristics to the success of a firm. However, to be able to determine how successful a firm is, we need to define the concept of success in the context of SMEs.

The Concept of Success

Scholars have not reached a consensus on the proper definition of the concept of success in the context of SMEs leading to a big room for different interpretations (Foley and Green, 2009). In fact, there has been no study conducted up to date to seek and shed light on the meaning of success to SME entrepreneurs (Ahmad et al., 2011). This poses serious challenges to scholars who are interested in exploring this topic since it is imperative to have a valid methodology of measuring success if to be able to identify pertinent issues regarding SMEs. As a result, understanding what entrepreneurs consider as success formed an object of this study.

Several forms of measuring success have been suggested including earnings (Schiller & Crewson, 1998), size of the firm and level of growth (Cooper et al., 1994) and the number of employees that the firm is able to accommodate (Bruderl et al., 1992). The challenge associated with this is that measures of success may vary depending on different aspects such as nationality of the business or owner. For instance, a recent study (Ahmad & Seet, 2009) revealed that certain elements of success such as financial, social factors, and lifestyle were considered more important measures of success in Australia as compared to Malaysia. Although the majority of research studies tended to lean more on financial factors as indicators of success, other nonfinancial measures may also influence the perception on success.

Such nonfinancial factors as personal involvement, lifestyle, independent quality of life, and responsibility (Jenning & Beaver, 1997) have been highlighted by some scholars as being measures of success. Other factors important indicators of success that have been identified include personal satisfaction, flexibility, independence and reputation (Walker & Brown, 2004)). Customer satisfaction and customer retention were also considered important (O’Reagan & Ghobadian, 2004).

Entrepreneurial Characteristics Leading to Success of a Firm

  1. Characteristics of the Entrepreneur/Owner

The issue of the entrepreneur contributing to the growth of a firm has caught the attention of diverse scholars. Psychologists tend to describe entrepreneurs in terms of their personality traits such as having the high need for success (Johnson, 1990). Economists on the other hand view them as innovators and risk takers. It should be noted that a firm exhibiting high growth rate is likely to have been founded by a group of people as opposed to a single individual. It is also more likely that firms experiencing high growth rates were started by middle-aged entrepreneurs who have more business experience as opposed to younger owners.

This view is supported by the study by Bruderl et al. (1992) where it was found that the level of education and work experience possessed by the entrepreneurs increased significantly to the probability of the success of a business. For instance, level of education may be very critical for the success of the business as they equip the owner with commitment, determination and advanced problem solving skills, while special knowledge in regard to a given discipline or industry may be the key to survival and growth (Cooper et al., 1994). The particular characteristics of the entrepreneur are discussed in detail:

  1. Entrepreneurial Orientation

This refers to the practices, processes, and decision-making activities leading to the new entry of the particular business. Scholars have argued that this is determined by the ability of the entrepreneur to innovate, take risks, and act proactively (Miller, 1983). Being proactive refers to the ability of a given business to take advantage of the existing market opportunities or how a firm is able to adapt to unforeseen adverse market changes. The aggressiveness of an entrepreneur as well as the ability of a firm to identify and respond promptly to market needs have also been linked to success of a business. When a business has a more enhanced entrepreneurial orientation, it has better chances of performing as opposed to a firm that has not developed this capacity (Wang, 2008).

  1. Learning Orientation

The learning orientation of a firm is determined by three factors. The first factor relates to a firms level of commitment to learning and how much learning is emphasized within the firm (Senge, 1990). The second factor relates to open-mindedness and the ability of a business to proactively induce change of organizational culture in terms of long-held beliefs and assumptions that may no longer be helpful to the organization. The third factor is having a common vision for the organization and the ability of a firm to communication organizational goals and objectives across the entire firm while managing to instil a sense of purpose and direction in its members (Baker & Sinkula, 1999).

Scholars have argued that these three organizational values shape two different types of organizational learning which are adaptive learning and generative learning (Wang, 2008; Senge, 1990). Adaptive learning refers to incremental and sequential learning that is acquired when carrying out traditional organizational activities. However, depending on this traditional knowledge may not be beneficial to the firm in the long run and in order to be able to seize new opportunities in the market, the firm may need to change its organizational culture to allow change to take its course. To achieve this, the managers will need to appeal to higher scope of knowledge which is called generative learning. Learning orientation just like entrepreneurial orientation is directly linked to the performance of a firm.

  1. Entrepreneurial Learning

This is a continuous process during which wisdom is acquired from experience (Politis, 2005). Experience here refers not only the good aspects of the business but also the experience acquired through failure and critical moments. Entrepreneurial learning is the ability of a firm to learn not just from within the business but also outside the business including the period prior to its establishment (Cope, 2005). In as much as some incidents experienced along the way may be painful and with disastrous effects, with proper management, they may prove transformational to the business (Beresford & Saunders, 2005). Such events may trigger the need to seek support from the outside world forming the wider network including agents such as bank managers, accountants, or social networks, which may prove very beneficial to the firm in the long run.

As the business grows, the entrepreneur is required to develop mechanisms through which the business will be able to adapt as it moves through the different phases of development. Failure to plan adequately for this adaptation process my lead to developmental crisis both at the personal and organizational level (Cope & Watts, 2000) which is usually the main reason why many SMEs crush before they become successful. To this end, it is paramount that entrepreneurs are able to monitor the various events generating crisis throughout the developmental phase so that they can respond to them in an appropriate and timely manner (Scott & Bruce, 1987). The most important element that should be closely monitored is the complex, interactive relationships existing between individuals themselves and between individuals and the business. Major crisis may not only be important to facilitate learning developing self-awareness but may also be instrumental to the process of change (Cope & Watts, 2000).

However, it should be noted that in order for a firm to generate learning from critical incidents, the entrepreneur should be able to incorporate both ‘single’ as well as ‘double-loop’ learning (Kolb, 1984). According to a study conducted using 27 firms in the UK, it was found that for a firm to grow beyond a critical incident, it must be able to stand back and reflect on the situation as a whole from the viewpoint of a third party (Sullivan, 2000). To be able to maximize learning from business experience, it may be important to engage formal programs such as management courses as well as informal programs such as mentorship processes. Also, to encourage effective learning, instruments such as expert consultancy should not be involved in the process as the business is required to adopt solutions on its own (Sullivan, 2000) to facilitate learning. Engaging a professional distances the entrepreneur from the whole problem-solving process which may not be beneficial since the business does not get to learn how to avoid or even solve such a problem on its own in future.

  1. Characteristics of the Business

Studies placing characteristics of the firm at the heart of business success have focused on aspects such as age of the business, size, sector of market in which it operates in, and legal form. These are further discussed below;

  1. Age of the Business

Age the business has been associated with success or failure rate of firms. Age plays a part in the success of a firm because older businesses have had a longer time period during which to form an accurate view of their attributes as a firm especially in regard to such aspects as cost structure and efficiency levels (Disney et al., 2003). According to research, follower businesses, i.e. those businesses founded within an existing firm, have been associated with higher survival rates as compared to newcomer businesses (Bruderl et al., 1998). This is because these firms are able to take advantage of previously established success factors such as good customer connections or other internal customs that have proved successful for previous businesses. Starting a new business without a having a range of experience to draw from to help deal with industry specific problems largely increases the mortality rate of the business.

Research has also shown that younger firms are characterized by faster growth though growth rate differs with the specific industry (Story, 1994). Slowed growth in regard to older SMEs may be explained by dwindling motivation level, as explained above. This may arise once the owner achieves a certain level of income which he perceives as satisfactory to him, or if the firm has grown past its minimum efficiency levels. It could also be that due to poor management of growth, diseconomies have started to emerge that require employing and managing others, something which the firm has not done or is incapable of doing.  Sometimes, it may just be that the owner has reached his desired level of growth and has no intention of expanding the firm further. This is especially true in regard to small family businesses which are only run for purposes of supplementing the family income.

  1. Sector of the Business

Research has shown a strong correlation between the sector or industry and the growth rate of SME (Bruderl et al., 1992). It has been suggested that sectors characterized high innovative activities exert a certain level of contrasting effect to the performance of a newcomer business (Audretsch, 1995).  In such a sector, only businesses that are entrepreneurial enough to adjust to the high level of innovation and bring new viable products to the market will experience high levels of growth and survive in the harsh market. On the other hand, firms that do not possess the capability to adjust quickly and deliver market expectations are faced with a lower likelihood of success in the highly innovative market. In this light, before considering entering into a highly innovative market, entrepreneurs are encouraged to develop highly competitive strategies if they are to achieve a significant amount of growth within such a sector.

  1. Size of the Firm

According to a study carried out in UK (Schiller and Crewson, 1997), it was found that a positive relationship exists between the size of a firm and its chances of survival while a negative relationship exists in regard to micro-businesses (Holmes et al., 2010). In that study, micro-businesses were defined as those firms with less than 10 employees. This may be explained by the fact that large SMEs are in a better position to achieve high optimization in terms of minimum efficiency levels. However, with time, size of the business becomes less important in determining the survival rate of a business as long as the firm continues to at a fast rate (Disney et al., 2003). In UK, the optimum growth size of a firm has been found to be that having its number of employees as between 2 and 20.

  1. Legal Form

The legal status of a firm also plays a role in its growth rate. For instance, limited companies have been found to exhibit higher growth rates as compared to other forms of businesses such as sole traders or partnerships (Storey, 1994). However, the direct effect of this relationship has not been explored in detail.

  1. Business Strategy
  2. Finance

Although there is a significant number of UK SMEs who depend on funds from family and other informal networks to support their businesses, research has shown that approximately 50 percent of UK firms rely on credit from traditional suppliers through current accounts to finance their operations. The notorious global recession, however, impacted businesses negatively by creating a credit crunch generally triggered by a decrease in turnover and cash flow.

Consequently, businesses slow down in repayment of their debts leading to a reduced credit worthy on the part of the business (Ma and Lin, 2010). When such a situation arises, only businesses holding tangible assets, for instance those within the manufacturing industry, are able to withstand the harsh economic conditions and record high success rates as opposed to those who do not have tangible assets, such as those operating in the service industry. It has therefore been suggested that SMEs maintain a proper record of their cash flows and maintain good working relations with their banks (Ma & Lin, 2010).

Businesses that start with low capital reserves have been associated with high failure rates (Bruderl et al., 1992). On the other hand, high levels of capitalization for a start-up business contribute to the success of a firm by providing elasticity in ‘buying time’, undertaking more ambitious strategies, and in changing the course of undesirable trends (Cooper et al., 1994). Firms recording high rates of growth tend to share equity with external partners, be it individuals or organizations, instead of placing too much emphasis on strategies like short-term debt financing which generally tends to constrain the growth of a business (Storey, 1994). However, this causation may be complicated by the fact that external owners are more likely to support businesses which they feel have high potential for growth. In that case, it may be argued that the business would still have survived even without the external support since the success factors were inherently in the business and not with the external party.

  1. Market Orientation

This has been defined as the ability of an organization to respond to negative customer feedback in regard to their satisfaction levels, timely detection of changes in market needs and consumer preferences, and prompt response to new competition in the market.  A strong relationship has been found to exist between market orientation and the performance of the business (Pelham & Wilson, 1996). Market orientation contributes to the growth of a firm by encouraging forecasting future trends and planning adequately for the same, then focusing on effective implementation of those future plans. However, this works most effectively when integrated into the organizational structure, especially by introducing formal methods of control to ensure that the progress of the program is in line with the set standards. Market orientation should also place innovation and differentiation strategies at the heart of forecasted organizational plans (Pelham & Wilson, 1996). Most high growth firms tend to occupy particular segments of the market rather than generalize the market, though this may be a complex concept especially for SMEs (Storey, 1994). For market orientation to work effectively, intruding new products or services into the market should remain the main objective for the business.

  1.   Management Practices

Management skills possessed by the entrepreneur or obtained from external partners or advisers of the firm may be critical for the success of the business. Good management practices are important in helping the firm adopt business strategies and management models that are more appropriate for the particular business. These practices are generally acquired by investing a substantial amount of time in activities of observing, studying, and collecting information to enable making apt business decisions (Cooper et al., 1994). It demands that the owner be ready to delegate decision-making to non-owning members of the organization for diversity and inclusiveness in the decision making process (Storey, 1994).

The issue of whether these new decision makers should come from within or outside the firm has not been explored in detail. However, it has been a well documented fact that including different members of the organization in decision making is found to motivate individuals who feel a sense of belonging with such a firm, something that is critical in the continued performance of the firm and in accelerating growth rate. However, a study conducted in the UK showed that management know how will only produce a limited effect on the growth or survival of a firm (Cooper at al., 1994). To achieve optimum benefits, other factors discussed in this paper must be present all in relevant quantities.

  1. Networks and Social Capital

Scholars have defined social capital as the goodwill that is available to business persons (Alder & Kwon, 2002) that enable them to either start a business or drive such businesses forward. It operates where an entrepreneur receives opportunities from friends, colleagues, and general contractors in terms of financial or human capital (Burt, 1992) which may not be easily available to other persons. Whereas human capital is concerned with quality of these support individuals, social capital on the other hand is a quality developed between people. Social capital produces two main benefits to entrepreneurs which are; information and influence (De Carolis & Separito, 2006). In regard to information, having a healthy social network exposes one to huge amounts of information that may be very useful for the business either in dealing with current challenges or in forecasting about the future. Influence is important especially when it comes to obtaining credit and other financial support. Individuals can also maximize their influence from social networks by accumulating obligations which they can use in future to gain favours. While most scholars look at social capital as a unitary component, other scholars have tended to look at it as multi-dimensional composed of three dimensions which include; structural dimensions, relational dimension, and cognitive dimension.

  1. Structural Dimension

This refers to the overall pattern of network connections maintained between the various actors constituting the organization. These networks are important in helping a firm gain access to resources as well as reducing the time and resources required to gather data relevant for decision making. These networks ensure that the firm has an efficient mechanism in place for the screening and distribution of information to all members of the organization (Burt, 1992). However, this is highly dependent on how well the information system is configured around the firm. It can be described as the relationships existing between networks that provide the firm with brokerage opportunities allowing optimum utilization of structural holes within the organization (Burt, 1992).

It should be noted that cohesive contacts, i.e. networks between people going through common life situations, are likely to produce information patterns with many similarities thus rendering most of that information redundant. On the other hand, contacts existing between two dissimilar groups may be a rich source of diverse information that may have innumerable benefits to the firm. Therefore, it is the role of the entrepreneurial manager to span the structural holes through mechanisms of information monitoring, problem identification, and appropriate response mechanisms. The entrepreneur should strive to maintain sparse networks consisting of fewer redundant contacts in order to maximize on information benefits as they are likely to be more diverse and providing varied information sources (Burt, 1992). However, the entrepreneur should also keep in mind that information transfer is more effective in situations where interpreting and ascribing meaning to the information is not a challenge to the organization.

Proper positioning within the social network is also crucial if one is to benefit maximally from such a network. This is because it provided the firm with differential access to the various actors within the network which in turn ensures the information obtained is also highly differentiated. For instance, when an individual is positioned in such a way that they are the only point of connection between two groups of people, then the individual is in a position to broker information between the two separate groups (Burt, 1992). This means that they can modify this information to suit their organizational circumstances in a bid to gain optimum benefits from such information (Burt, 1992).

  1. Relational Dimension

Relational dimension defines the quality of relationships existing within a given network. The quality of relationships between the participants of a given network can either be weak or strong depending on the actors themselves and the nature of the network system. A strong relationship is more or less defined by the amount of time spent developing the ties, emotional intensity of such ties, level of intimacy and the extent of reciprocity shared between the participants. A strong relationship is characterised by high levels of trust that is shared by the participants and continuous flow of good quality information (Nahapiet & Ghoshal, 1998). When individuals become highly embedded in a social network, it gives rise to a certain form of trust amongst these individuals referred to as relational trust (Nahapiet & Ghoshal, 1998). This kind of trust is developed over long periods of time and is grounded on the principle of continuous reciprocity. Participants will usually perform favours for each other with the expectation that the favour will be returned at some future date. This kind of accumulated favours may be very beneficial to a firm especially during periods of economic hardships when the firm might really need a helping hand.

  • Cognitive Dimension

Cognitive dimension of social networking has been described as the shared meanings and systems of interpretation and ascribing meanings existing between parties involved in meaningful relations. These special ways of ascribing meanings allow the concerned parties to make sense of the information shared between them. Through this process, parties are able to classify the information into perpetual categories to the extent that these individuals can be a part of each other’s thinking processes (De Carolis & Separito, 2006). In order to reach this level of cognition, the parties must have developed shared language and vocabulary and a common pool of collective narratives though which they can transfer tacit knowledge between themselves (Nahapiet & Ghoshal, 1998). The benefit from this level of social cognition includes the fact that entrepreneurs gain a greater illusion of control. This illusion leads individuals into thinking that they are in a position to predict and control future outcomes especially regarding to the success of the business (Nahapiet & Ghoshal, 1998). This is an important factor for managers of SMEs because it gives them the confidence to get out of their comfort zones and be more willing to take risks. It lures business persons into managing their firms in a proactive manner as opposed to reactive approach.

Conclusion

In this part, we have used the existing literature to review the various characteristics that contribute to the performance of SMEs thus increasing their success rate in a highly ambulatory market. The elements discussed above will form the variables to be used in conducting a research study to determine to what extent these factors contribute to the success of SMEs in the UK. A comparison will be made in regard to SMEs in other economies particularly the US and France. The following sections of the paper will discuss the methodology that will be employed in conducting this study and tools and techniques that will be utilized in analyzing and tabulating the results of the study. A discussion of the results will also be provided and conclusions made in regard to the most effective entrepreneurial strategies in increasing the success rate of SMEs depending on the sector or industry of the firm. This information is aimed at providing future entrepreneurs with a deeper understanding of the various entrepreneurial strategies they can adopt to increase the success rate of their SMEs.

 

 

 

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Entrepreneurial Insight

January 19, 2015

What I gathered is that Richard had entrepreneurship capabilities since the very beginning and perhaps this is why he quit higher formal education but kept on educating himself by getting knowledge by observing the workings of his father’s business. As evident in Point 10. of the coded frame Richard clearly mentions that “my dad was an agent so I think I got a little experience from him, but he didn’t teach me the fundamental if that makes sense. I was sort of left to be free. So it was something that I found was basically taking the opportunity out of everything that I saw”. In point 6, he mentions that he has even learned from his failures, “I think it was like a process of different things that led me to be an entrepreneur. I think; from secondary school I started on– I tried selling gold bar and penguin chocolate bars but I wasn’t successful. I learnt profit loss revenue so those were basic skills I was learning.”
In Point 83, he reflects, “I always say that a business is like a bike. Sometimes you ride, sometimes you fall. Sometimes you’re slow. Sometimes you’re fast. But, I think the aim is to always put yourself in a position where you can make money in other ways.”
Taking all the insightful observations of Richard into consideration; it can be concluded that his personality reflected the traits of an entrepreneurial leader who can successfully handle; the highs and lows of a career which is anything but smooth. Burn (2012) rightly points out that “The real driving force behind this entrepreneurial revolution are those ‘super-heroes’ called entrepreneurs who lead our gazelles. They have become the stuff of legends, increasingly held in high esteem and held up as role models to be emulated. They are often held out as embodying many ephemeral qualities – freedom of spirit, creativity, vision, zeal.” Richard seemed to be in possession of all this and hence can be considered an epitome of Corporate Entrepreneurship.
Capability
Through Point 12, it is evident that capability matters; sometimes more than education in order to be successful in entrepreneurship, “In the first year I did multimedia technology and I dropped out, and then I did international business and then I dropped out because at that point in time I was really running my business so I didn’t see how it made sense.”
He further mentions in Point no. 83 that “I think the aim is to always put yourself in a position where you can make money in other ways. For example, every single person that I work with on my team, has a skill. Someone might have graphic design. Someone might be a really good salesman. I think, if you ever need to boost up or run your business by yourself or you’re thinking of where to get finance, you can get it from yourself, and go out there and use your skills to make money.” All his viewpoints speak a lot about capabilities that an entrepreneur should utilize or try to build upon in order to sustain. The theory of Intrapreneurship can be applied here. As Burn (2012) describs; “Intrapreneurship is concerned with individual employees and how they might be encouraged to act in an entrepreneurial way within a larger organization. It is part of how internal corporate venturing can take place.”
Courage of Risk Taking
In Point 33, Richard states, “I think that when you do have a business you have to, in a sense, fail in order to appreciate life and then in order to learn from it and then succeed the second time.”In Point 97, he observs; “always realize that there are always a possibility even if you do fall, you have to get back up. I think that’s one of the main traits of entrepreneurs. Even if you look at entrepreneurs in the past, you always see that they failed in some way, or they fell in some way. Whether it’s Steve Jobs, he got kicked off Apple, Bill Gates dropped out. There’s always something before that they failed at that they succeeded. James Dyson made 5,000 prototypes before he had one successful prototype. If he had given up, he would have never gotten to—“As stated by Stone, 2014; “Being passionate about what you do is absolutely critical to the success of a venture and one should never shy away from risk taking”.
Support
As mentioned in point 39. “I have one or two mentors that I see, not regularly, but maybe every three or four months and you just meet them, you go out for lunch, and you tell them how you’re doing, and they give you advice. So I think that’s what I have, I should receive some advice from my dad because obviously my dad is also a small business owner, so I’ll go to my dad at times for advice, and I have friends that are very business-minded that can also challenge me to be a better person. “Quoting Harvard Business School Press Pocket Mentor (2012); “through interactive real world scenarios; entrepreneurs practice shaping interactions that maximize learning and lead to better informed decisions.” So we should try to inculcate every interaction as their knowledge bank. In Point 41, Richard further mentions, “I feel like sometimes being an entrepreneur, a lot of the time you’re lonely and a lot of the time you’re alone with your thoughts, like what if this happens? what if I fail? I think that having that support and having that backbone is very important in order to succeed and even like we look at successful people today, there’s always a backbone. It might not be a woman, it could be like a team, or it could be that friend or mum or dad. I always feel like there’s a person or team behind them that enables them to achieve that goal.”

Ethics and Corporate Social Responsibility
In Point 43. Richard mentions; “We care for every single client. For example, now that we’re working with the NHS, when we speak to NHS trusts and private doctors we actually speak with them, have a phone call, have a chat and actually see how their needs correlate with what we can build. So I think that approach and how we aim to grow is much different from other businesses.” I think that this is an extremely valuable approach adopted by Richard’s company. By this they are not just projecting the ethical practice and corporate social responsibility but also in the words of Kuratko and Audretsch, 2009 are setting an example of “the identification and exploitation of opportunities by creating and sustaining competitive advantage” by being different by displaying a caring attitude.
Creativity and Innovation
While giving tips on what leads him to creativity and innovation in Point 45; he mentions “I think one thing I do is that I read a lot and I think a lot. I feel like reading is extremely important because it gives you the knowledge. While I think thinking is also extremely important because it gives you the opportunity to actually think on your own.” In Point 47, he stresses, “–come out with something or visualize and actually strategize and I think that’s the way to breed innovation.”All these observations points towards what has been felt by experts like Ghoshal and Bartlett, (1997) in this context; “ firms need to adapt to an ever-changing environment if they are to survive, and to do so they need to adapt their structures and cultures so as to encourage entrepreneurial activity in individual employees.” Thus by allowing individual employees to adopt their own creativity towards the growth of the company they can actually practice intrapreneurship.
Managing Innovation
“Most ‘ordinary people’ find change threatening. Entrepreneurs welcome it because it creates opportunities that can be exploited and they often create it through innovation” (Burns, 2012). This entrepreneurial characteristics is evident in Richard as well, when he mentions in Point 107, “In the next five years, with the hair thing we want to become a major retailer and wholesaler in the UK and internationally. So selling different types of products, different types of hair extensions is in plans. And with the software, I think that we want to be able to disrupt the NHS and the private medical industry by providing software that allows patients and GPs and doctors to communicate; actually seeing each other face to face.” In this context, Burns (2012) rightly observed, “Corporate entrepreneurship is a loose term used to describe entrepreneurial behavior in established, larger organizations. The objective of this is simple – to gain competitive advantage by encouraging innovation at all levels in the organization – corporate, divisional, business unit, functional or project team levels.”
Customer Orientation
Richard felt a lot about the welfare of his customers as evident in Point 57, “I think a lot of entrepreneurs when they start their businesses, all they think about is money, money, profit, profit. And I think what you have to understand is that if you meet the needs of your market, the money will always come in. So I think the aim as an entrepreneur is to be extremely customer focused. And when you are customer focused, the money will automatically come in because you’re satisfying the customers’ need and they’re paying you for that.”It seems that Richard is going on the right path. In this context, Dyche (2002) rightly mentions, “Building good relations with customers is a business strategy that helps companies tighten their business practices across organizations while forging an ironclad connection with its customers.”
Persistence
In Point 97, Richard rightly observs, “if you look at entrepreneurs in the past, you always see that they failed in some way, or they fell in some way. Whether it’s Steve Jobs, he got kicked off Apple, Bill Gates dropped out. He had stock before that he failed. There’s always something before that they failed at that they succeeded. James Dyson made 5,000 prototypes before he had one successful prototype. If he had given up, he would have never gotten to-“
In point 119, he advises that “I would say be assertive, accept rejection, and never give up. When I was being an entrepreneur a lot of the time I was passive and it meant that I couldn’t take advantage of opportunities, and I think that now I’ve learned to be a lot much more assertive. I think that with rejection, you should learn to handle rejection, because you’ll always get rejection, especially when you’re starting up. You could send 100 emails and get two back. But you have to learn to deal with that. You have to be so strong. And the last one is never give up, because you will experience hardship, will experience failure, but you have to get up, have to continue getting up, because at the end of the day that’s what makes entrepreneurs. If every single person never gave up, everyone would be super successful. But I think that’s what sets you apart, is the ability to keep going on.” “Persistance is responsible for more than 90 percent of success. Persistence keeps you on course and eventually leads you to your goals” (Deitz, 2008).
Planning
Giving an idea about his future plans; in Point 105 he said, “I think the Internet has made that very, very possible to do so. Whereas like maybe 50 years ago to expand, you have to open a new store, now that you are online, you can simply market to another location, market to another demographic. I think the Internet makes that possible and that’s something I’d definitely thinking of going international. We want to continue to grow and we don’t want to give up ever because that’s just becoming complacent.”
In Point 107, he mentions, “In the next five years, with the hair thing we want to become a major retailer and wholesaler in the UK and internationally. So selling different types of products, different types of hair extensions is in plans. And with the software, I think that we want to be able to disrupt the NHS and the private medical industry by providing software that allows patients and GPs and doctors to communicate; actually seeing each other face to face.”
In this context, it has been rightly observed by Jakhotia (2013) that Good Planning “acts as a comprehensive set of performance –based strategies by spelling out the complementary contradictory relationships amongst various functional strategies.”
Goals
Richard was very clear about his goals. In Point 111, he mentions, “we definitely want to grow and we definitely want to expand. In Point 113, he adds “In the next five years, I would probably be a much better entrepreneur and a much skilled person than I am now. I want to learn many more things that will enable me to grow even more. You never know, I could be doing the same thing I’m doing now, or I could be running another business. But I think I definitely want to stay as an entrepreneur and stay solving problems that people and markets have. Talking about future; he says in Point 115 “W e are definitely looking to go international.” Zahra (1991) connected goal setting to corporate entrepreneurship by mentioning that corporate entrepreneurship consists of ‘activities aimed at creating new businesses in established companies’.
Conclusion
I was able to relate to all the theories covered in the course – Ethics and Corporate Social Responsibility, Corporate Entrepreneur, Intrapreneurship, Managing Innovations and Creativity and Innovation while coding the themes and analyzing the interview. Richard seemed to be a dedicated entrepreneur; always finding ways to improve and create competitive advantage. His vision and drive was influencing and it pointed towards the fact that without formal education in entrepreneurship; one can still succeed if his intentions are good for his company, partners, employees and people at large. In the words of Burns (2012), Entrepreneurship “is about institutionalizing a process of continuous strategizing, learning from customers, competitors and the environment. It is about remaining flexible, encouraging change and managing rapid growth.”However; whether it is practical learning or theoretical learning; entrepreneurship is a field which never fails to teach its practitioners important lessons in life and makes a person richer not only monetarily but also in terms of insights as it leads to a sea of technical and behavioral knowledge that a practitioner gets access to in the process of nurturing his business.

References
Burns, P. (2012) Corporate Entrepreneurship: Innovation and Strategy in Large Organizations. London: Palgrave Macmillan

Deitz, J. (2008) The 3 Simple Secrets of Success After the Diploma: Integrity, Persistence and Discipline. Newyork: Universe Inc.

Dyche, J (2002) The CRM Handbook: A Business Guide to Customer Relationship Management. Boston: Adisas Wesley.

Ghoshal, S. and Bartlett, C.A. (1997) The Individualized Corporation: A Fundamentally New Approach to Management. New York: Harper Business.

Harvard Business School Press Pocket Mentor (2012) Persuading People: Expert Solution to Everyday Challenges. New York: Harvard Business Press.

Jakhotia, G.P. (2013) Strategic Planning, Execution and Measurement (SPEM): a Powerful Toll for CEO. Florida: CRC Press

Kuratko, D. and Audretsch, D. (2009) Strategic Entrepreneurship: Exploring Different Perspectives of an Emerging Concept. Entrepreneurship Theory and Practice, 33.

Stone, B. (2014) Things a Little Bird Told Me: Confessions of a Creative Mind. New York: Grand Central Publishing

Zahra, S.A. (1991) Predictors and Financial Outcomes of Corporate Entrepreneurship: An Exploratory Study. Journal of Business Venturing, 6(4).