Madeleine

Madeleine

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Institution

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There exists a small cake from France that is known to be light, supple and is the size of a tennis ball, yet for generations past, when eaten it has been said to bring to mind powerful memories of history past. I am talking about the modest madeleine, which according to many people is the creation of a French. This article seeks to talk about this madeleine cake, its features and origin.

For those lucky enough to have eaten a Madeleine cake, it sure was a surprise to all of them that a cake so simple and plain could set off such a gushing inundation of recollections. For others, the madeleine cake will everlastingly have an exceptional place in the midst of the pantheon of cakes and snacks and biscuits that make our tea times a little bit sweeter. So, what is a Madeleine cake? It is one of the many pastries that the French people came up with and instantly spread throughout  France like wild fire. It size is unique and for the duration of its existence, there has been no notable to changes in its recipe, size or shape. Another plus for this cake is the fact that its mould is unique unlike the rest of the cakes and it look like the cake has been baked from the  inside of a sea shell. Its recipe starts just like any other cakes with the usual components of flour, sweeteners and eggs; they then go through the process of mixing these ingredients. In order to complete the mouth watering madeleine cake, the mixture is soaked with lemon juice and then using a spoon, it is poured into the mould and taken to the baking oven (Madeleine, & Achilleos, 2012).  Of course the outcome is a delicate, brittle, wet madeleine cake which has a humped shape. It is touted as a stylish rather than elaborate pastry; it just sits there patiently waiting and asking to be dipped in a steaming cup of tea.

Although versions of the story will vary, the cake is believed to be a time-honored delicacy from a town called Commercy and its neighbor Liverdun, two towns found in the Lorraine area of northern France. It has now made its way across the globe never losing its French allure and some now claim that it tastes better when dipped in honey. The effect is a sweet and sour taste that has been called the taste of northern France. It has been baked in their kitchens at home since the 18th century and has now become commercialized being sold from the local shops and street vendors to five star hotels. It is the recommended pastry in most tea parties and not even in France alone but as far as Europe. It has been called a comfort food as people like the conflicting bitter sweet taste in their mouth that makes them stop worrying about other things. The madeleine is given as gifts between friends, neighbors and even used as rewards for well behaved children.

In conclusion, eating a madeleine is like eating 18th century France, the madeleine is not bound by gender, religion or generation meaning that its appeal of such an experience should make anyone want to get a feel of this wonderful creation that is the madeleine no matter where one is from.

References

Madeleine, & Achilleos, A. (2012). We love madeleines. San Francisco, Chronicle Books. http://overdrive.torontopubliclibrary.ca/ContentDetails.htm?ID=398204BB-3386-4D6C-AABA-0DED6545DBC8.

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Addressing Family Conflict and Family Dynamics in the stories Sonny’s Blues and Two Kinds

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Professor

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Date

  1. Analyze how the families, their relationships and problems are represented in Sonny’s blues written by James Baldwin.

Answer

This is a true story told by a narrator of his young brother Sonny. He narrates how his brother struggled with issues to do with family, education, and his personal ambitions and eventually gave up, indulging into drug abuse. He is informed from a newspaper that sonny was arrested. Out of bitterness, he decides not to visit or even write to him while in prison. After teaching, on his way home, he meets up one of Sonny’s friends whom he despised and felt pity for at the same time. They start talking about sonny and the fact that his current lifestyle is a source of anguish to many.

However, when his daughter Grace dies of polio, he writes to Sonny while in prison. Sonny responded with an explanation of the reasons why he was in the current situation. They keep in touch until he is released from prison. The narrator takes him to his house. There is an element of flashback where the narrator recalls how his brother and father used to fight, how his mother constantly reminded him never to abandon his younger brother and warned him of the guilt he will have if he does so.

It was after their mother died, that Sonny spoke to the narrator about his passion of being a jazz musician, something he ignored and insisted that he should clear school first. He clashed with his sister in law on several occasions because of playing the piano and skipping school to stay with other musicians. A fight ensued and he was compelled to move out and join the navy.      The two brothers lost touch until after the war. Upon reconciliation, they fought again over Sonny’s decisions in life and it was very ugly. It even reached a point that Sonny told him to his face that he does not recognize him as a brother. After a while, the narrator becomes suspicious of his small brother and decides to search his room. He is distracted by beautiful music from outside. At that moment, sonny comes in to invite him to watch him play the music. As they went to the club and the narrator sees the passion in Sonny’s eyes as he played the piano to a crowd that adored him, he was awed and discovered who Sonny really was.

This story is a good basis that teaches us to respect individual decisions and offer moral support to each other. Brothers need to be there for each other in good and bad times regardless of the decisions one makes. When it comes to family, one has to forgive them for they do not know what they do, to accept them because they have no other choice. They will always put you to the test, but you should always try to do your best and just pray for God to do the rest. One can choose their lovers, pick friends but cannot pick the family they are in. It is important to know that they will be with you to the end because they are family.

  1. Analyze the family issues in Two Kinds written by Amy Tan

Answer

The Two Kinds is a story told by a Chinese American woman named June. She was the protagonist unlike the story on Sonny’s Blues where Baldwin was the antagonist. She tells of the struggle she faced inside herself, wanting to live up to the expectations of her mother, an Asian immigrant. When the mother left China, she left behind two twins and came to reside in America. June’s mother wanted her to become a prodigy.

She bought her books and magazines that trained her how to be sharp and carry herself intellectually as a prodigy. June had the will to be what her mother wanted. She allowed her mother to train her on how to become a Chinese Shirley Temple. Through that, every time the mother saw that June was not getting perfect, she would be angry and this made June resentful.

With the view that she wanted to pursue her dreams, she stopped wanting to be perfect just to please her mother. Sometime later, while watching a small Chinese girl performing, June’s mother decided that her daughter was to be a pianist. She enrolled her for piano lessons with a deaf teacher. At the end, when she was expected to present in a talent show, she disappointed everyone by singing a very bad tune. She thought that her mother’s pursuit would end but she pushes her further and eventually June bursts and speaks harshly to her mother, she even tells her she wishes she was dead like the twins the mother had left in china.

June sees this as a conflict which went unresolved and has followed her to adulthood. She felt like she had disappointed her mother who later accepted the defeat. Before she died, she gave June a piano on her thirty first birthday as a peace offering, a symbol of the reconciliation she really needed in her heart.

This story is important in reminding the parents to allow their children pursue their dreams. They should not instill things that are not necessary in a baby’s life because they will grow up unhappy. It teaches on the fact that unconditional love should be exercised in the family setting and forgiveness and reconciliation are important keys to freedom.

In conclusion, both stories have the same teachings on the importance of sticking together as a family till the end. Even in death the family should be close knit. This is achieved through ensuring that each individual needs are taken care of and their views heard (Greenberg & Watts 127. Everyone is important and they have different talents, it is necessary that all parties should understand who they are and what they want in life. This will aid in strengthening the weaker branches. Abandoning each other cannot solve anything, instead, challenges should be faced together knowing that no matter what tide comes, you always have each other’s back as a family.

The families should find better ways of solving their conflicts because in a family set up, some are preachers, some are gay, some are addicts, drunkards or strange but not even one is turned away because they are family (Greenberg &Watts 129). As a family, it is important to accept each one and let your heart be an open door. The members are the mirror of the worst and best in you and therefore, it is paramount to give out your best as a member.

Work Cited

Greenberg, Brian & Watts, Linda. Family: a place where life begins. New York: MacMillan Publishers. 2009. Print.

CAPITAL ASSET PRICING MODEL (CAPM) AND THE FAMA FRENCH THREE FACTOR MODEL

Question One

Assumptions of Capital Asset Pricing Model (CAPM)

Sharp (1964) and Lintner (1965), made a number of assumptions with regard to the formulation of the Capital Asset Pricing Model. These assumptions and their implications in the real world are outlined as follows;

In the first place, each individual investor can invest any portion of his capital resources in specific risk free assets such as treasury bonds that pay a given exogenously determined interest rates.

Implication

The implication of the assumption is that the risk averse investors would have a range of portfolio of assets to choose from that will ensure that the overall portfolio risk is minimized. In addition it is possible for investors to evaluate the market risk premium of their portfolio of assets. Secondly, the investor can invest any portion of his capital resources in a number of risky securities that are traded in the market.

Implications

The implication of the assumption is that investors who are risk takers would be able to choose a portfolio of risky assets that would ensure that they maximize their portfolio returns with a given level of risk due to the fact that market securities are more risky compared to the risk free securities.

In addition, investors participate in a purely competitive market in which there are no transaction costs as well as personal and corporate taxes. This means that investors trade their securities in a perfectly competitive market.

Implications

The implication for this assumption is that securities markets are perfectly efficient and all investors have all the available stock information which implies that there are no insider dealings. In addition, the assumption implies that investors do not incur transaction brokerage costs.

Additionally, the paper by Sharpe (1964) and Lintner (1965) makes an assumption that investors may borrow any amount of money so as to invest in any risky assets that earn a higher return compared to the risk free assets.

Implications

The implication of the assumption is that investors may borrow money from the capital market or reduce their proportions of funds allocated for risk free assets so as to invest in risky assets and increase their overall portfolio returns. Moreover, investors can make purchases and sales transactions of their securities at a certain discrete transaction points.

Implications

The implication of this assumption is that the investors use a standardized single period transaction horizon which implies that the returns of the market securities can only be compared to the returns on the risk free securities after a certain period e.g. six months or after one year. The papers also make an assumption that investors’ capital consist of the cash and other resources that are specifically set aside for profitable investments in market securities.

Implications

The implication is that there is no competition for investors’ funds with respect to the need for liquidity transaction requirements as well as investments requirements. In addition, the papers make an assumption that each investor trading in market securities and risk free securities will have a given unique utility indifference curve that specifies their risk return preference for a given portfolio.

Implication

The implication of the assumption is that investors can choose to select portfolios with a higher market returns for the same risk or portfolios with a lower risk for the same market return. Finally, the papers by Sharpe and Lintner, assume that investors will always be rational and would always seek to maximize their wealth or portfolio value

Implication

The implication of this assumption is that if any two compositions of assets have the same expected returns investors would prefer the one with a smaller variance while if any two mixture of assets have the same variance, then investors would prefer the one with a greater market returns.

Question Two

Validity of the Capital Asset Pricing Model (CAPM) Assumptions

Investments in Risk-Free Assets

The assumption that each investor can invest a portion of his capital in certain risk free assets is valid in the real world. This is because there are numerous risk free assets that are available today such as treasury stocks and bonds. However, the breach of this assumption would imply that investors will only be able to select portfolios that consist of risky assets only and moreover, there would be no risk premium returns as well as the capital market line for investors.

Investments in Risky Assets

The assumption that investors can invest a portion of their capital in a number of risky assets is valid both in the ideal and the real world. This is because various capital markets have a number of securities that earn a higher market return although they are much risky compared to the risk free assets.

The implication for the CAPM if this assumption is breached is that portfolio return would be equal to the risk free return only and that investors would not be able to earn the risk premium on any given portfolio of assets.

Perfectly Competitive Securities Markets

The assumption that investors trade securities in perfectly competitive markets is not valid in the real world. This is because there is no capital market that is perfectly efficient since in most securities market, there are is much transaction costs in the form of brokerage costs and other personal and corporate taxes.

However, the implication if this assumption is breached is that the capital market line would not be linear. This is because, investors would be making their portfolio choices while considering the effect of the transaction costs and taxes rather than based on only the risk- return tradeoff.

Investors Borrow to Invest in Risky Assets

This assumption that investors are free to borrow any amount of money so as to invest in risky assets is valid in the real world. This is because; the capital market allows investors to borrow so as to invest in more risky assets. Alternatively, investors may reduce their proportions of funds that are invested in the risk free assets so as to increase their portfolio of risky assets that earn higher income. However, if this assumption is breached, the implication is that investors may not be able to move along their indifference curve so as to obtain an optimal portfolio of assets.

Single Transaction Period Horizon

This assumption is valid in the real world due to the fact that comparisons of the assets returns and risk is usually done after a specific period of time such as annually. The implication if this assumption is breached is that investors and analysts might find it difficult to compare and analyze the returns and risks of both the risky assets as well as the risk free assets.

Investors’ Funds for Capital Investment is Distinct

This assumption is much valid in the real world due to the fact that almost all investors have cash that is dedicated for liquid transactions as well as cash for investment purposes.

The implication if this assumption is breached is that investors may decide to use the funds available for the purchase of securities for their own personal transactions and thus reduce the proportion of securities in their portfolio.

Investors make Rational Investment Decisions

This assumption is valid in the real world due to the fact that each investor would always want to maximize his portfolio returns subject to a given risk preference. If this assumption is breached is that the investors’ indifference curves, the implication would however not be concave. This implies that there would be instances when investors would choose assets that have a higher variance for any given mix of assets that have the same return.

Question Three

CAPM Regression Model for “Fama French” 30 Year Data Series: Telecommunications Industry Security

Using the excess return model; R_pt – R_ft = α + b*(R_mt – R_ft) + ε_t an empirical test of the CAPM using the data file “Fama French”, the following CAPM regression model was derived from the results shown in table 1 (Appendix 1). R_pt – R_ft = 0.19 + 0.43 (R_mt – R_ft) + ε_t

(0.16)  (0.02)

With an adjusted R square of 57%, the model seems to be statistically significant due to the fact that 57% of the variations in the excess returns of the market portfolio are explained by the movement in the Telecommunication security market premium.

Hypothesis Testing

Given that H_ (0): α = 0

H_ (1): α = 0

In addition, the t-statistic from the regression results indicate that α has a t-statistic of 1.21. Therefore, since t = 1.21 < than t 0.95 = 1.96 then the CAPM regression model agrees with the null hypothesis which implies that both the model and its intercept α are statistically significant.

CAPM Regression Model for “Fama French” 30 Year Data Series: Health Industry Security

The following CAPM regression model was derived from the results shown in table 2 (Appendix 1) using the excess return model.

R_pt – R_ft = 0.08 + 0.42 (R_mt – R_ft) + ε_t

(0.17)  (0.02)

With an adjusted R square of 50%, the model seems to be relatively statistically significant due to the fact that 50% of the variations in the excess returns of the market portfolio are explained by the movements in the Health security market premium.

Hypothesis testing

Given that H_ (0): α = 0

H_ (1): α = 0

The t-statistic from the regression results indicate that α has a t-statistic of 0.47. Therefore, since t = 0.47 < t 0.95 = 1.96 then the null hypothesis is accepted and that both the model as well as its intercept α are statistically significant at 95% confidence level.

 

 

CAPM Regression Model for “Fama French” First 10 Year Data Series: Telecommunications Industry Security

The following CAPM Regression model was derived from the results shown in table 3 (Appendix 1) using the excess return model.

R_pt – R_ft = -0.07 + 0.67 (R_mt – R_ft) + ε_t

(0.25)  (0.04)

Given that the adjusted R square for this model is 69%, then the model seems to be statistically significant due to the fact that 69% of the variations in the excess market portfolio returns are explained by the variations in the Telecommunications industry security market return premium.

Hypothesis Testing

Given that H_ (0): α = 0

H_ (1): α = 0

The t-statistic from the regression results indicate that α has a t-statistic of -0.26. Therefore, since t = (-0.26) < t 0.95 = 1.96, then the null hypothesis is accepted and that both the model as well as it’s α will be significant at 95% confidence level.

CAPM Regression Model for “Fama French” First 10 Year Data Series: Health Industry Security

The model below was derived from the results depicted in table 4 (Appendix 1) using the excess market portfolio return model.

R_pt – R_ft = 0.28 + 0.59 (R_mt – R_ft) + ε_t

(0.24)  (0.04)

The adjusted R square for the model is 70% which implies that almost 60% of the variations in the excess market portfolio returns are explained by the movement in the Health industry security market return premium.

Hypothesis Testing

Given that H_ (0): α = 0

H_ (1): α = 0

The t-statistic from the regression results indicate that α has a t-statistic of 1.17. Therefore given that the value of t = 1.17 < t 0.95 = 1.96, then both the model as well as its intercept α are statistically significant.

CAPM Regression Model for “Fama French” Second 10 Year Data Series: Telecommunications Industry Security

The model below was derived from the results depicted in table 5 (Appendix 1) using the excess return market portfolio model.

R_pt – R_ft = 0.33 + 0.30 (R_mt – R_ft) + ε_t

(0.26)  (0.05)

The adjusted R square for the model is 53% which implies that almost 53% of the variations in the excess market portfolio returns are explained by the movement in the Telecommunications industry security market return premium.

Hypothesis Testing

Given that H_ (0): α = 0

H_ (1): α = 0

The t-statistic from the regression results indicate that α has a t-statistic of 1.17. Therefore given that the value of t = 1.29 < t 0.95 = 1.96, then both the model as well as its intercept α are statistically significant.

CAPM Regression Model for “Fama French” Second 10 Year Data Series: Health Industry Security

The model below was derived from the results depicted in table 6 (Appendix 1) using the excess return market portfolio model.

R_pt – R_ft = 0.60 + 0.36 (R_mt – R_ft) + ε_t

(0.29)  (0.04)

The adjusted R square for the model is 40% which implies that almost 40% of the variations in the excess market portfolio returns are explained by the movement in the Health industry security market return premium.

Hypothesis Testing

Given that H_ (0): α = 0

H_ (1): α = 0

The t-statistic from the regression results indicate that α has a t-statistic of 2.09. Therefore given that the value of t = 2.09 < t 0.95 = 1.96, then both the model as well as its intercept α are not statistically significant which implies that the null hypothesis is rejected.

CAPM Regression Model for “Fama French” Final 10 Year Data Series: Telecommunications Industry Security

The model below was derived from the results depicted in table 7 (Appendix 1) using the excess return market portfolio model.

R_pt – R_ft = 0.016 + 0.35 (R_mt – R_ft) + ε_t

(0.27)  (0.03)

The adjusted R square for the model is 60% which implies that almost 60% of the variations in the excess market portfolio returns are explained by the movement in the Telecommunications industry security market return premium.

Hypothesis Testing

Given that H_ (0): α = 0

H_ (1): α = 0

The t-statistic from the regression results indicate that α has a t-statistic of 0.06. Therefore given that the value of t = 0.06 < t 0.95 = 1.96, then both the model as well as its intercept α are statistically significant at 95% confidence level.

CAPM Regression Model for “Fama French” Second 10 Year Data Series: Health Industry Security

The following model was derived from the results depicted in table 8 (Appendix 1) using the excess return market portfolio model.

R_pt – R_ft = -0.61 + 0.36 (R_mt – R_ft) + ε_t

(0.32)  (0.04)

The adjusted R square for the model is 46% which implies that almost 46% of the variations in the excess market portfolio returns are explained by the movement in the Health industry security market return premium.

Hypothesis Testing

Given that H_ (0): α = 0

H_ (1): α = 0

The t-statistic from the regression results indicate that α has a t-statistic of -1.88. Therefore given that the value of (t = -1.88) < t 0.95 = 1.96, then both the model as well as its intercept α are statistically significant.

Validity of the Empirical Model to the CAPM Theory

This model agrees with the Capital Asset Pricing Model theory in various aspects. In the first place, the standard error of the model using the 30 year data series indicate that the value of 3.00 and 3.23 for the telecommunication and health industry respectively is a bit higher compared to the standard deviation of a portfolio that consist of both industries which is computed at 2.89. This therefore, agrees with the CAPM theory that if the correlation coefficient between the securities of the two industries is less than 1, then the portfolio that comprises both securities would have a much smaller variance compared to the variance of each individual security. This is the effect of diversification. In addition, the model is statistically significant, which implies that its validity to the CAPM theory is much higher. This is evidenced by the positive beta coefficient.

Question Four

Background and Features of the Fama French Three Factor Model

The Fama French three-factor model is an asset valuation model that specifically expands on the Capital Asset Pricing Model by including in the model the size and value factor of a certain security in addition to the risk factor that is normally considered under CAPM. This model was formulated by Fama and French who sought to find a formula that would better measure market returns than is provided under CAPM.

The features of the Fama French three-factor model include the fact that the model incorporates the size of the security as well as the value of the security in addition to the risk factor that is normally considered under CAPM. In addition, the model assumes that the small cap stocks with a higher value tend to outperform most securities in the capital market. In essence, the three factor model states that higher value stocks tend to outperform growth stocks while small cap stocks tend to outperform large cap stocks. Finally, the model seems to provide a better evaluation tool compared to the CAPM Model.

Question Five

Fama French Three Factor Model: Telecommunications Industry Security

Using the excess return portfolio model, an empirical test was conducted to test the validity of the Fama French Model. The following regression model was obtained:

R_pt – R_ft = 0.26 + 0.47 (R _mt – R_ft) -0.34(SMB) _t -0.15(HML) _t + ε_t

(0.15)  (0.02)                         (0.06)                (0.05)

With an adjusted R square of 61%, the model seems to be statistically significant due to the fact that 61% of the variations in the excess return portfolio model are explained by the telecommunications security market return premium as well as the size and value of the securities in the portfolio.

Hypothesis Testing

Given that H_0: α = 0, b = 0, s = 0, h = 0

H_1: α = 0, b = 0, s = 0, h = 0

The t-statistic from the regression results indicate that t α = 1.67, t b = 20.9, t s = -6.2, t h = -2.76. When the statistical t is compared to the t 0.95 = 1.96, then the null hypothesis for the model intercept α will be the only one accepted. Therefore, the rest of the coefficients would not pass the test and will be considered not statistically significant.

Fama French Three Factor Model: Health Industry

Using the excess return portfolio model, an empirical test was conducted to test the validity of the Fama French three factor model based on the health industry security. The following model was obtained.

R_pt – R_ft = 0.04 + 0.57 (R _mt – R_ft) -0.64(SMB) _t -0.11(HML) _t + ε_t

(0.15)  (0.03)                         (0.06)                (0.05)

The model also has an adjusted R square of 61% which implies that 61 % of the variations in the excess return portfolio model are explained by the movements in the health industry market risk premium as well as the size and value of the securities in the portfolio.

Hypothesis Testing

Given that H_0: α = 0, b = 0, s = 0, h = 0

H_1: α = 0, b = 0, s = 0, h = 0

The t-statistic from the regression results indicate that t α = 0.25, t b = 20.9, t s = -10, t h = -2.10. When the values of the statistical t are compared to the t 0.95 = 1.96, only the model’s intercept passes the test due to the fact that tα = 0.25 < t 0.95 . The other coefficients failed to pass the hypothesis test and would thus be considered not statistically significant at 95% confidence level.

Implication of the Empirical Results to the Fama French Theory

The results of the empirical results tend to prove the validity of the Fama French theory. This is because, in the first place, the stock size coefficient in the model is negative and less than one. This implies that a small cap stock that is indicated by a small stock size coefficient, will lead to an increase in the excess portfolio return in the model. Moreover, the stock value coefficient in the model similarly implies that it would cause an increase in the value of the excess portfolio return.

Moreover, the Fama French three-factor model tends to explain a higher proportion of the variations in the stock’s beta compared to the CAPM. This is due to the fact that the coefficient of determination in the CAPM model which is 57% and 50% for the telecommunication and health industry respectively is much a lower compared to the coefficient of multiple determinations of 61% each for both the telecommunications and health industry respectively.

Comparison of the Fama French Three Factor Model and CAPM Results

The main difference between the results from the Fama French three factor model and the CAPM model is that the Fama French three factor model has a greater explanatory power with an adjusted R square of 61% compared to the adjusted R square of 50% and 57% for the telecommunications and the health industry respectively. There the Fama French model is a better evaluation tool for managers.

References

Craig, MA 2006, ‘Multifactor models do not explain deviations from the CAPM’, Journal of Financial Economics, vol. 38, no. 1. pp. 3-28.

Harvey 2013, ‘The risk exposure of emerging equity markets’, World Economic Review, vol. 9, no. 1, pp. 19-50.

John, P 2014, The Fama French three factor model [online] Available from: <https://www.portfoliosolutions.com&gt; [Accessed on 11th December 2014]

Lintner, J 2013, ‘The valuation of risk assets and the selection of risky investments in stock portfolios and capital budget’, The Review of Economics and Statistics, vol. 47, no. 1, pp. 13-37

Lintner, J 2014, ‘The valuation of risk assets and the selection of risky investments in stock portfolios and capital budget’, The Review of Economic and Statistics, vol. 47, no. 1. pp. 13-37.

Perold, FA 2004, ‘The Capital Asset Pricing Model’, Journal of Economic Perspective, vol. 18, no. pp. 3–24.

Reinganum, MR 2012, ‘The anomalous stock market behaviour of small firms in January’, Journal of Financial Economics, vol. 38, pp. 89-104.

Sharpe, FW 2014, ‘A theory of market equilibrium under conditions of risk’, American Finance Association, vol. 19, no. 3, pp. 425-442.

Wilcox, JW 2001, ‘Taming frontier markets’, Journal of Portfolio Management, vol. 19, no. 1, pp. 51-55.

Wilcox, JW 2002, ‘Taming frontier markets’, Journal of Portfolio management, vol. 20, no. 1, pp. 50-57.

 

Appendix 1: Summary Output for the CAPM Regression

Table 1: Summary Output for “Fama French” CAPM Regression using the 30 Year Data Series: Movement of the Excess Return Market Portfolio with the Telecommunications Industry Security

Regression Statistics
Multiple R 0.75767723
R Square 0.57407479
Adjusted R Square 0.57288506
Standard Error 3.00194143
Observations 360
ANOVA
  df SS MS F
Regression 1 4348.330949 4348.331 482.5232
Residual 358 3226.171551 9.011652
Total 359 7574.5025
  Coefficients Standard Error t Stat P-value
Intercept 0.19310535 0.159011321 1.214413 0.225391
X Variable 1 0.42538976 0.019365466 21.96641 2.48E-68

Table 2: Summary Output for “Fama French” CAPM Regression using the 30 Year Data Series: Movement of the Excess Return Market Portfolio with the Health Industry Security

Regression Statistics
Multiple R 0.71137184
R Square 0.5060499
Adjusted R Square 0.50467015
Standard Error 3.23278693
Observations 360
ANOVA
  df SS MS F
Regression 1 3833.076232 3833.07623 366.7696
Residual 358 3741.426268 10.4509114
Total 359 7574.5025
  Coefficients Standard Error t Stat P-value
Intercept 0.08026852 0.172079981 0.46646053 0.64117
X Variable 1 0.41993212 0.021927163 19.1512289 8.72E-57

Table 3: Summary Output for “Fama French” CAPM Regression using the First 10 Year Data Series: Movement of the Excess Return Market Portfolio with the Telecommunication Industry Security.

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.832764479
R Square 0.693496678
Adjusted R Square 0.690899192
Standard Error 2.712641994
Observations 120
ANOVA
  df SS MS F
Regression 1 1964.609175 1964.609 266.9877
Residual 118 868.2943372 7.358427
Total 119 2832.903513
  Coefficients Standard Error t Stat P-value
Intercept -0.06746535 0.252144638 -0.26757 0.7895
X Variable 1 0.665755428 0.040744511 16.33976 4.39E-32

Table 4: Summary Output for “Fama French” CAPM Regression using the First 10 Year Data Series: Movement of the Excess Return Market Portfolio with the Health Industry Security.

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.839878081
R Square 0.705395191
Adjusted R Square 0.70289854
Standard Error 2.659468214
Observations 120
ANOVA
  df SS MS F
Regression 1 1998.316513 1998.317 282.5366
Residual 118 834.5869996 7.072771
Total 119 2832.903513
  Coefficients Standard Error t Stat P-value
Intercept 0.284483163 0.244083703 1.165515 0.246161
X Variable 1 0.592069084 0.035223706 16.80882 4.21E-33

Table 5: Summary Output for “Fama French” CAPM Regression using the Second 10 Year Data Series: Movement of the Excess Return Market Portfolio with the Telecommunications Industry Security.

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.7358754
R Square 0.5415126
Adjusted R Square 0.5336752
Standard Error 2.7256613
Observations 120
ANOVA
  df SS MS F
Regression 2 1026.622521 513.3113 69.09347
Residual 117 869.2198661 7.42923
Total 119 1895.842387
  Coefficients Standard Error t Stat P-value
Intercept 0.3320095 0.257039962 1.291665 0.199019
X Variable 1 0.304937 0.052032705 5.860487 4.35E-08

Table 6: Summary Output for “Fama French” CAPM Regression using the Second 10 Year Data Series: Movement of the Excess Return Market Portfolio with the Health Industry Security.

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.637905779
R Square 0.406923783
Adjusted R Square 0.401897714
Standard Error 3.086848854
Observations 120
ANOVA
  df SS MS F
Regression 1 771.4633568 771.4634 80.96262
Residual 118 1124.37903 9.528636
Total 119 1895.842387
  Coefficients Standard Error t Stat P-value
Intercept 0.599681714 0.286468722 2.093358 0.038459
X Variable 1 0.35531713 0.039488793 8.997923 4.66E-15

Table 7: Summary Output for “Fama French” CAPM Regression using the Final 10 Year Data Series: Movement of the Excess Return Market Portfolio with the Telecommunications Industry Security.

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.779549619
R Square 0.607697609
Adjusted R Square 0.604373013
Standard Error 3.0252627
Observations 120
ANOVA
  df SS MS F
Regression 1 1672.91843 1672.918 182.7884
Residual 118 1079.9613 9.152214
Total 119 2752.87973
  Coefficients Standard Error t Stat P-value
Intercept 0.016023084 0.276428938 0.057965 0.953875
X Variable 1 0.348886763 0.025805377 13.51993 9.88E-26

Table 8: Summary Output for “Fama French” CAPM Regression using the Final 10 Year Data Series: Movement of the Excess Return Market Portfolio with the Health Industry Security.

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.687874887
R Square 0.47317186
Adjusted R Square 0.468707215
Standard Error 3.505799683
Observations 120
ANOVA
  df SS MS F
Regression 1 1302.585223 1302.585 105.982
Residual 118 1450.294507 12.29063
Total 119 2752.87973
  Coefficients Standard Error t Stat P-value
Intercept -0.609372121 0.323177203 -1.88557 0.061812
X Variable 1 0.362752446 0.035236631 10.29475 4E-18

Appendix 2: Fama French Three Factor Model

Table 1: Summary Results for Fama French Three Factor Model: Telecommunications Industry Security

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.786856078
R Square 0.619142488
Adjusted R Square 0.615933015
Standard Error 2.846645067
Observations 360
ANOVA
  df SS MS F
Regression 3 4689.696323 1563.232 192.9109
Residual 356 2884.806177 8.103388
Total 359 7574.5025
  Coefficients Standard Error t Stat P-value
Intercept 0.2557664 0.15303518 1.671292 0.095543
X Variable 1 0.46890494 0.022427955 20.90716 6.78E-64
X Variable 2 -0.34431206 0.05528231 -6.22825 1.33E-09
X Variable 3 -0.14558302 0.052716972 -2.7616 0.00605

Table 2: Summary Results for Fama French Three Factor Model: Health Industry Security

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.787283913
R Square 0.61981596
Adjusted R Square 0.616612161
Standard Error 2.844127087
Observations 360
ANOVA
  df SS MS F
Regression 3 4694.797535 1564.933 193.4629
Residual 356 2879.704965 8.089059
Total 359 7574.5025
  Coefficients Standard Error t Stat P-value
Intercept 0.039098143 0.154680088 0.252768 0.800594
X Variable 1 0.570019499 0.027220603 20.94074 4.94E-64
X Variable 2 -0.636800296 0.062449528 -10.197 1.37E-21
X Variable 3 -0.109502327 0.053236389 -2.05691 0.040423

 

 

The challenges and rewards leaders experience when encouraging the externalisation of tacit knowledge from their employees

Introduction

Knowledge is an extremely important thing in the modern organizational world. In fact knowledge management is accepted as one of the major organizational activity in the present business world. It is impossible for an organization to develop properly if it fails to manage the knowledge of its employees in the right manner. Knowledge is usually classified as explicit and tacit. The concept of explicit and tacit knowledge was formally introduced by Michael Polanyi during the latter half of twentieth century (Ryle, 1950). Explicit knowledge can be defined as the knowledge that is learned consciously. Such knowledge can be accessed by the holder any time he wants. On the other hand, tacit knowledge is the knowledge that is learned unconsciously and it stores in the subconscious mind of the holder. It cannot be accessed easily (Tagger, 2005). In other words, tacit knowledge is stored in areas that were inaccessible to a conscious process (Reber, 1995). The nature of knowledge is difficult to evaluate. It can be tacit at times and explicit other times. (Augier and Thanning, 1999; Leonard and Sensiper, 1998)

The major aim of extracting tacit knowledge is to counter the negative consequences faced by an organization because of the removal, moving on or retiring of experienced personnel (Yu and Abidi, 2000). Departure of experienced employees may cause several problems to an organization since such employees may have immense amount of tacit knowledge that were used for the benefit of the organization in the past. While an organization loses experienced employees, it loses tacit knowledge also. Since tacit knowledge of employees play a vital role in the success of an organization, it is important for leaders and managers to externalize such knowledge before an employee ends his career with the organization. The conversion of tacit knowledge into explicit knowledge is often referred as externalization (Nonaka, 1994). However, externalization is a difficult task even though it helps leaders in many ways. This paper explains the challenges and rewards leaders experience when encouraging the externalisation of tacit knowledge from their employees.

Challenges and rewards leaders experience when encouraging the externalisation of tacit knowledge from their employees

According to Nonaka & Takeuchi (1997), tacit knowledge plays an important role in knowledge creation and sharing. However sharing of tacit knowledge is not an easy task. Conversion of tacit knowledge into explicit knowledge is the major challenge facing by leaders while they try to externalize the tacit knowledge of employees. According to Tagger (2005), the extraction of tacit knowledge from employees is a complex process for leaders and managers because such knowledge is located actually inside the expert’s head. In other words, tacit knowledge is located at some inaccessible areas or the subconscious levels of the employee brain. Normal processes may not help leaders to bring out this knowledge. Moreover, the holder of the tacit knowledge may not know whether some information stored in his subconscious mind may come under the knowledge category or not. It is easy for him to externalize explicit knowledge since such knowledge is accepted as knowledge by the holder. On the other hand, the holder of tacit knowledge may not accept even useful information as knowledge. As a result of that, he may not be aware of the tacit knowledge stored in his memory. In short, one of the major challenges facing by leaders while they try to externalize the tacit knowledge is the difficulties in translating tacit knowledge into explicit knowledge (Stacey, 2002).

Another problem facing by the leaders in the externalization of tacit knowledge is with respect to cognitive dimension. Tacit knowledge has two dimensions: technical and cognitive Technical dimension refers to the know-how whereas cognitive dimension refers to beliefs, ideals, values, mental models, schemata etc (Nonaka and Konno, 1998). The cognitive dimension of the tacit knowledge are mental models (Senge, 1996) that are controlling people’s actions and are, vice versa, shaped by them. For example, it is easy to judge a person’s actions if his thinking process is known. However, it is extremely difficult to realize the thinking process of a person and hence it is difficult to judge or anticipate his actions.

Identification of people who possess the worthwhile knowledge is another problem facing by the leaders while they try to externalize the knowledge (Tagger, 2005). It is not necessary that all the experienced employees have worthwhile knowledge. At the same time, it is possible that even an employee working in the clerical or lower levels of the organization might have worthwhile knowledge. It is the duty of the leaders to identify employees who possess worthwhile knowledge, irrespective of which category they work for the time being.

It is not necessary that the extracted knowledge is always valuable for the organization. It is quite possible that the extracted knowledge might already been captured elsewhere (Tagger, 2005). The efforts of the leaders to externalize tacit knowledge could be meaningless on such occasions. Therefore, it is necessary for the leaders to make sure that the employee possesses valuable knowledge that were uncaptured so far, before trying to externalize those knowledge.

The extraction of tacit knowledge is profitable for an organization. It should be noted that experience is the best available teacher in this world. No other teachers can teach a person as effectively as experience does. An employee might have enhanced his knowledge and skill as he spends more time in an organization. A fresh employee may struggle to adapt with an organization even if he is well talented, highly skilled or educated. Externalization of tacit knowledge from experienced employees would help fresh employees to manage their jobs and responsibilities with ease. Moreover, “the results of the externalization process enables people with different backgrounds to share the former tacit knowledge” Hemmecke and Stary, N.d., p.3).

Conclusions

Leaders often face many challenges while externalizing the tacit knowledge of the employees. Tacit knowledge is embedded in the subconscious mind of the employees. It has technical as well as cognitive dimensions. The cognitive dimension of the tacit knowledge is raising many challenges while leaders try to externalize tacit knowledge. Externalization of tacit knowledge is helpful for an organization for its development. The valuable knowledge and skills learned by the experienced employees can be transferred to new employees with the help of processes such as externalization of tacit knowledge.

 

 

 

 

 

 

 

 

 

References

Augier M., Thanning V. M., (1999): Networks, Cognition and Management of Tacit Knowledge, Journal of Knowledge Management, 3, 4, 252-261

Hemmecke, J. and Stary, C. (N.d.). A framework for the externalization of tacit knowledge Embedding repertory grids [Online] available at: http://www2.warwick.ac.uk/fac/soc/wbs/conf/olkc/archive/oklc5/papers/a-4_hemmecke.pdf [Accessed 17 March 2015]

Leonard D., Sensiper S. (1998): The Role of Tacit Knowledge in Group Innovation, California Management Review, 40, 3, 112-132

Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science, 5 (1), 14-37.

Nonaka, I.; Konno, N. (1998). The concept of ‚Ba’: Builing a foundation for knowledge creation. California Management Review, 40 (3), 40-54.

Nonaka, I.; Takeuchi, H. (1997). Die Organisation des Wissens: Wie japanische Unternehmeneine brachliegende Ressource nutzbar machen. Frankfurt/M.; New York: Campus Verlag.

Polanyi, M. (1974). Personal Knowledge: Towards a Post-Critical Philosophy. Chicago, University of Chicago Press.

Reber, A. (1995). Implicit Learning and Tacit Knowledge: An Essay on the Cognitive Unconscious. New York, Oxford University Press.

Ryle G. (1950): The Concept of Mind, Hutchinson’s University Library, London

Stacey, R. (2002) The Impossibility of Managing Knowledge. Hertfordshire University Business School, 2002.

Senge, P. M. (1996). Die fünfte Disziplin. Kunst und Praxis der lernenden Organisation. Stuttgart: Klett-Cotta.

Tagger, B. (2005). An Enquiry into the Extraction of Tacit Knowledge. [Online] Available at: http://www0.cs.ucl.ac.uk/staff/B.Tagger/FinalIMR.pdf [Accessed 17 March 2015]

Yu N, C. Abidi, S.S.R.(2000) A Scenarios Mediated Approach for Tacit Knowledge Acquisition and Crystallisation: Towards Higher Return-On-Knowledge and Experience. Third International Conference on Practical Aspects of Knowledge Management, Basel, Switzerland.

Conflicts in the TNK-BP Merge

Conflicts in the TNK-BP Merge

University’s Name

Submitted by Names:
Tutor:
Date:

The problems started in 2008 when tension arose between a managing body of the merge AAR and BP due to pressure from the Russian authority which led to disputes among the shareholder. The disputes were so intense such that the shareholders confronted each other in the public view. The reason that led to pressure from the Russian authority was the issue of tax evasion of approximately $900 million from various units sold in TNK-BP. The shareholder raised mixed concerns about the issue of tax evasion and the probe conducted by the Russian authority led to shareholder’s disputes Ekin (2009).
The issue of the government, accusing TNK-BP joint venture, was meant to destabilize the it and to make it look as if it was ineffective because it failed to meet its obligations. These were meant to make the leadership of the venture look stupid and irrelevant. After realizing that the CEO was a performer, the authorities came with a plan to topple his management with some faulty accusations. This created some more loopholes of his management skills, hence was the major source of solving disputes Goldman (2008).
The government was aiming to discourage shareholders and bring more confusion in the venture as to why the liabilities were more and unpaid yet the TNK-BP had the potential and capacity of settling its liabilities. The government also knew that by imposing such accusations it would result into a heated repulsion of the shareholder and the management, since the shareholder would realize that the CEO and his top management were misappropriating the company’s assets Dixon (2007).
The merge was also struck by other legal obligations when the Federal Security Service arrested the employee of BP-TNK merge together with his brother where they were found guilty of industrial surveillance. AAR and BP engaged in public war concerning the unnecessary overpayment of western employees at the TNK-BP. The governing body was expatriating about the overpayment yet the western employees were defended by BP. AAR was then accused of being behind the denial of western employees work permits after they expired. This increased their enmity as the corporate body AAR was annoyed by the claim. In 2008 a local brokerage through court action stopped TNK-BP from employing and using foreign staff. This further widened the relationship between BP and its governing body as they thought that all the setbacks were brought by ARR Guriev (2005).
In 2008 June BP was threatened by the Russian shareholder when he wanted to take a legal action to remove the nominated directors of BP from power in the TNK-BP alliance when the corporate differences increased. BP was annoyed by the intention throwing blame to AAR that they were the ones who influenced the shareholder to make his decision. They disagreed with AAR who thought that BP’s aim was to tarnish their name by making all kinds of negative claims on them. The legal action that the Russian shareholder wanted to take was against the nominated BP employees was generated and motivated by the idea that BP was supporting foreign employees to earn more from the joint venture. The Russian government also denied the then TNK-BP chief executive officer permission to work under the temporary work permit the idea that was to stop all the foreign employees from working in Russia. Stopping the foreign employees targeted to remove Dudley from management though in an indirect way Guriev (2005).
After the departure of the foreigners, in September, the government withdrew its claim of tax evasion from TNK-BP joint venture and also suspended the case against the arrested employee of TNK-BP claims that there was to the case to be heard against the two and also that TNK-BP had settled their tax. It was therefore seen that the Russian authority wanted to remove the foreign employees from working in the country. The blame game that AAR was behind the government denying the foreign workers the working permit was then found to be political and not driven by AAR as it was earlier thought of. Dudley then moved from Russia blaming a plotted campaign that aimed to remove him because of the fight for power to control the joint venture between the partners and BP. The former TNK-BP senior manager described Dudley as a very resilient CEO and hence his evacuation should be put into doubt Ekin (2009).
The departure of Dudley brought some relief as BP and AAR reached a peace deal on how the venture was to be controlled. It can be noted that the problems the venture was facing were engineered politically so as to destabilize the leadership of Dudley who was a foreigner. The government wanted to control the joint venture and therefore after realizing that it was unable to do it, it started the game plan to remove Dudley from a management position. They did this by creating confusions among the Russian people so as to have control of the business. The legal worries were able to disappear after the departure of Dudley and there the company strategy was to form a new management system to preside over the business after the resignation of Dudley Poussenkova (2013).
The explosion of the deep water horizon in Gulf of Mexico led to a massive spill that led to the loss of billion dollars in TNK-BP venture. The spill led to the CEO of BP losing a job that was replaced by Dudley the former CEO of TNK-BP joint venture. With the re-introduction of Dudley as the CEO in BP management it meant that wrangles that existed and ended in the past were to be reintroduced again. The rivalry between BP and AAR intensified as it was steamed by the external forces that were political. The Russian government wanted all the management positions to be managed by native speakers. BP stood firm to protect their CEO and therefore this intensified the rivalry as they saw as if they were being betrayed by BP Dixon (2007).
Partnership problems were as a result of claims that were generated by AAR that BP was responsible for blocking the goals and achievements TNK-BP which included the expansion of the company in Russia. The problem, therefore was that neither BP nor AAR was responsible for the wrangle that existed. The main reasons for their differences was that they being pushed by the political forces. The government wanted the companies in Russia to be under the control of the natives as they believed they were paying the foreigners a lot instead of paying the natives.
Western expatriates are not only affected by the cultural differences while working in TNK-BP but they are also affected with the Russian government authorities. Not everything has changed even after Russia having changed from the Soviet era since until now non- Russian executive in TNK-BP is not allowed by the Russian law to access the official state data concerning the National natural and petroleum reserves Ekin (2009).

In January 2011, Dudley now the new CEO of BP developed a scheme that would bring up the company’s finances and hence give it access to a big oil and gas reserves which had not yet been tapped. The plan was based on a share swap between BP and OAO Rosneft in which they would acquire 5% stake in BP in exchange of 9.5% stake from the Russian oil firm. Additionally, the two companies came into an agreement to explore and develop three licensing blocks in Kara Sea, which was a Russian part of the Arctic Ocean (Chazan 2011).
The dispute arose when AAR were unhappy because BP had failed to include them in the deal. They felt BP was breaching the TNK –BP contractual agreements that had been made earlier. This agreement stated that that TNK-BP would be the prime driver for all petrol and gas operations in Russia in which BP went against. They in turn sued BP in a London and Stockholm International Arbitration court which it was agreed that BP had violated the agreement of the shareholder hence they blocked the BP-Rosneft alliance (Ekin & King 2009).
This was a big blow to BP and they found it difficult to admit. Market analysts found it rather interesting as to why BP should go ahead conducting a deal without actively involving AAR yet they were business partners. This signing was rather miscalculated since BP placed a lot of faith in the chairman of Rosneft Igor Sechin who was by then the deputy prime minister and often referred to as Putin’s right hand man. It turned out that Sechin’s influence could not make an impact on the AAR shareholders force of overturning the decision (Ekin & King 2009).
An analysis shows that politics played a big role in most of the business deals in Russia and this is observed when PB blindly takes a decision based on the other party’s political standing within the country being sure that they would maneuver the normal systems to get what they wanted. This is proved contrary to the expectations when AAR takes them to the courts and wins the case. AAR is described as a company with a high international profile, good government connection and has enough assets to shield them against political pressure if need be, hence BP could not use that as a weapon against them Carbonell (2009).

In the year 2012, political pressure mounts for BP when the minister for Natural resources and Environment ordered legal cases to be brought against the oil company for massive pollution over the Western Siberia region, between the Ob and Yensei rivers. This comes amid criticisms that the company has had a poor record of environmental conservation and urged to modernize their pipeline within a month to reduce the massive oil leaks. According to Blank (2011), environmental concerns could not have been part of his mind when he was attacking the third largest oil producer in the world, but it was driven at his ambition to seek candidacy in the gubernatorial race in the region.
Towards October in 2012, BP planned an exit strategy in which it decided to sell its stake in the TNK-BP purposefully to escape the frustrating relationship with AAR. They mutually agree to sell the $55 billion worth of stake to Rosneft in which TNK-BP sells to Rosneft sells its $28billion stake in cash while BP settles on converting its stake of $26.7billion to shares and acquisition of 5.66% of Rosneft from the Russian government, hence becoming a significant minority shareholder in the company (Poussenkova, 2013). The deal was sealed in March 2013 when BP received cash totaling to $12.5 billion and stake worth 18.5% from Rosneft.
Industrial analysis showed that though BP is running away from what it terms as a difficult relationship, the current one would be more difficult. This is because the Russian government owns 75% in Rosneft while BP owns a 19.75% stake making it a government controlled entity. Most companies in Russia, which are owned by the state, are run in their own unique way in that they are run not at the best interest of minority shareholders. Towards the end Russia assures BP of good business by offering them two seats in the board which gives them the confidence of absence of corporate governance tussles within the company Dixon (2007).
May 2014 followed a series of signings to enhance good working relationships among the partners. During the St. Petersburg International Economic Forum, the two partners signed agreements concerning exploration and development of Domanik formations in the Volga Urals region, which created an avenue for joint pilot projects and in case of success lead to development of unconventional resources (British Petroleum in Russia 2014).
June 2014 followed by new signings of long term deliveries of oil products and crude oil on a prepaid basis. This type of agreement involved a possible exchange of oil products with crude oil of up to 12 million tons within a span of 5yrs on a prepaid basis and the total amount shall not be less than $1.5 billion. Such deals are meant to cement the relationship between the two partners and to increase profitability in the long run Carbonell (2009).

General Analysis
Western expatriates are not only affected by the cultural differences while working in TNK-BP but they are also affected with the Russian government authorities. Not everything has changed even after Russia having changed from the Soviet era since until now non- Russian executive in TNK-BP is not allowed by the Russian law to access the official state data concerning the National natural and petroleum reserves.

Reference List
Blank, S. 2011. From Russia with Greed. World Affairs, 174 (3), 79-85.
British Petroleum,. 2014. BP in Russia | About BP | BP Global. Retrieved 28 November 2014, from http://www.bp.com/en/global/corporate/about-bp/bp-worldwide/bp-in-russia.html
Carbonell, B. M. 2009. Cornering the Kremlin: Defending Yukos and TNK-BP from Strategic Expropriation by the Russian State. U. Pa. J. Bus. L., 12, 257.
Chazan, G. 2011. BP and Rosneft to swap stakes. The Wall Street Journal, 15.
Dixon, S. 2008. Organisational transformation in the Russian oil industry. Cheltenham, UK Northampton, MA: Edward Elgar.
Dixon, S. E., Meyer, K. E., & Day, M. 2007. Exploitation and exploration learning and the development of organizational capabilities: A cross-case analysis of the Russian oil industry. Human Relations, 60(10), 1493-1523.
Ekin, A. C., & King, T. R. 2009. A struggling international partnership: TNK-BP joint venture. International Journal of Strategic Business Alliances, 1 (1), 89-106.
Ekin, A. C., & King, T. R. 2009. A struggling international partnership: TNK-BP joint venture. International Journal of Strategic Business Alliances, 1(1), 89-106.
Ekin, A. C., & King, T. R. 2009. Fight Over TNK-BP Revives Worries About Kremlin. International Herald Tribune, 17.
Goldman, M. 2008. Petrostate Putin, power, and the new Russia. Oxford, New York: Oxford University Press.
Poussenkova, N. 2013. The global expansion of Russia’s energy giants. Journal of international affairs, 63 (2), 103-124.
The role of oligarchs in Russian capitalism. The Journal of Economic Perspectives, 19 (1), 131- 150.

Biology

Biology
Name
Institution

Evolved defense
My sister considered the morning sickness as a side effect of pregnancy. The nausea, however, happens to coincides with the rapid tissue differentiation of the fetus. Such a time when development is vulnerable to interference by toxins. Therefore, she did restrict the intake of strong-tasting, potentially harmful substances thus protecting her kid
Evolved defense entails the body’s ailments that have changed over time, and they have been brought about by natural selection. They are primarily physiological mechanisms that are often associated with unpleasant experiences. Though, they assist the body in its self-defense. For instance, pain is unpleasant to the human bod, thus people who feel it will tend to avoid it by all means. Fundamentally, it is intended to steer people away from activities that cause pain because they are harmful to the body. Other activities of evolved defense include cough, vomiting, and diarrhea (Nesse & William, 1998).
An ailment that can be considered an evolved defense mechanism is coughing and sneezing. It is essentially a mechanism to clear up foreign particles from the lungs. People who lack such a mechanism are prone to pneumonia and consequently die (Nesse & William, 1998). Cough might be interpreted as a disease, however, is part of the healing process. Such a defensive mechanism is kept in reserve and unleashed when needed. It has been changed over time by natural selection thus considered an evolved defense.
Virulence is the capability of an infection to produce a disease. It refers to the quantitative aspect of the disease-causing ability. Virulence is a function of some factors that include the genetic make-up of the individual and the infection. Also, variations in the immune system (Nesse & William, 1998).
The level of virulence profoundly affects the behavior the host species. For instance the case of AIDS among human beings. It requires direct contact, therefore, will drive a pathogen to a state of low virulence. However, the host remains mobile hence interacting with others. But, the interactions that are responsible for spreading the agents have the ability towards more virulence. In addition, behavioral choices such as safer sex will consequently lead to alteration of the pathogen genetic makeup (Nesse & William, 1998).
HIV is characterized by variations in the viral virulence factors which are heritable among infections. Such a phenomena indicate that viral virulence is naturally selected at the population level. The relationship between the transmissibility and duration of disease do favor viruses of intermediate virulence.
Conflict with other organism
Peter is a ten year old boy who has been experiencing pain in his ear for some time. After being diagnosed by a doctor, he was found to have some bacterial infection. The Doctor did prescribe some antibiotic drugs that have been successively used to eliminate the bacteria. However, despite the administering of the drugs, the pain in his ear still persisted.
The concept of antibiotic drug resistance entails the fact that over time, the bacteria, viruses, and parasites have adapted to medications that were initially meant to kill them. The evolvement resistance is a natural phenomenon that results from the action of microorganism’s replication in an erroneous way (Antibiotics Drug Resistance PPNT, 2014). Thus, developing resistance. Such a scenario has a profound effect of making the antibiotic drug products less useful.
The concept of drug resistance is further clarified by the Antibiotic Drug Resistance of the ear. The ear infection is primarily caused by bacterial infection. Although it is a single species of bacteria responsible for the disease, it is in four mutated forms. In the events of treating an ear infection with antibiotic Amoxicillin, it eliminates only one form of the bacteria while the rest persist and even multiply because they are composed of a slight genetic variation (Antibiotics Drug Resistance PPNT, 2014). Thus, they profoundly thrive despite the application of Amoxicillin whose initial purpose is to treat them.
Such a phenomena emanates from the fact that the bacteria undergoes some generic variation. The DNA mutations ultimately give rise to genetic variation. The primary cause of variation is mutation, which in turn changes the sequence of a gene. Altered genes or alleles are then passed to the offspring. The Genetic Variation gives way for differential survival and reproduction. If there is no variation in the population, then it is possible that the entire population of bacteria can be eliminated by treatment with the right antibiotic (Antibiotics Drug Resistance PPNT, 2014).
The antibiotic only wipes out susceptible bacterial strains which is primarily a form of selection pressure. On the other hand, those whose genetic variations thrives leaves the most number of offspring- fitness. The best resistance traits are passed down the offspring thus perpetuating their lives and thriving through the application of drugs. It profoundly complies with the concepts of evolution and natural selection. The fact that the drug only wipes out susceptible bacteria and the rest remains, explains the persistence in peter’s pain. Such a fast evolution in bacteria has constantly placed human beings in conflict with other organisms because they evolve faster than human beings.
With such a resistance, it translates to persistence of the bacterial infections despite their treatment. The result is an overuse of antibacterial drugs that can have a detrimental effect. For instance, in the year 2012, there were an estimation of 450 000 new cases of MDR-TB around the globe. Globally, 6 percent of the new TB cases and about 20 percent of previously treated TB cases are estimated to have MDR-TB, exhibiting a substantial difference in the frequency of MDR-TB among the countries. Extensively drug-resistant TB has been identified in 92 countries, in all regions of the world. Such a phenomena are raising global concern because the new forms of resistance mechanism are emerging and spreading throughout the world (). It jeopardizes the world’s ability to contain and treat the common infectious diseases. Failure to address such diseases translates to death and disability of individuals.
The consequences of antibiotic overuse are detrimental, and they are:
Increasing diarrhea among the children.
Upsetting the gut flora- the delicately balanced bacterial strains in the gut can be disrupted by overuse of antibiotics.
They assist some useful bacteria in the gut to evolve through horizontal gene transfer.
Untreatable cases of Gonorrhea.
Increasing drug and hospital costs as treating an infection requires long and expensive therapy (Gullagher & MacDougall, 2013).

Coping with Novelty
I have been looking around and I have probably noticed that at least one every three people I encounter is overweight. I consider myself lucky that am not overweight, perhaps soon I will be obese if I don’t check my feeding habits. Its time I consider embracing feeding habits that really traces my evolutionary origin- hunter-gatherer ancestry. It is essential I checking such lifestyle diseases associated with the modern and western life such as cancer, obesity and heart attacks.
Novel environment entails the human-built ecosystems. The conditions exist in places that have been altered by human engineering. It presents a modified environment from the previous simple and elemental lifestyle of the hunter-gatherer, and human beings have evolved over time. In order to get the precise context of the comparison of novel environment and hunter-gatherer, their respective lifestyles are compared and the disease of obesity and breast cancer.
The global rise in obesity pandemic is primarily attributed to the modern Western lifestyle that is the basis of the novel environment. The western lifestyle exhibits activities and diets that considerably deviate from human’s metabolic physiology evolution- hunter-gatherer. The concept of modern conveniences and machines have profoundly minimized physical activities thus lowering energy consumption. In addition, the foods modern foods are energy dense with lots of adipose and appetite translating to obesity of the consumers. On the other hand, hunter-gatherer communities consumed natural and wild foods accompanying their high physical activities. The parallels in the feeding habits and energy consumption explain the high level of obesity cases in today’s people of the novel environment.
In addition to the obesity pandemic, the cancer disease is increasingly taking toll in the novel environment. The question of cancer downs to the nature of food that the modern human society consumes which differs from the evolutionally origin- hunter-gatherers. The hunter-gatherer used to consume natural food. On the centrally, today’s food is mainly processed with numerous additives that are cancer genic. With the accumulation of such elements, it translates to cancer thus jeopardizing the survival of the human race who are ever deviating from the ancestral foods to the modern lifestyle foods. Thus perfectly explaining the reason behind obesity being pandemic.

Trade-off and Constrains
In the African Continent, research has indicated that some people are more susceptible to malaria than the others. Can this be explained through genetic makeup of the people, geographical location or another case of microorganism evolution?
Sickle cell anemia is a hereditary disease whereby the body produces sickle-shaped blood cells. On the other hand, the normal blood cells are rounded with a slight depression in their center. The sickle red blood cells do not carry enough oxygen thus the person does not get efficient supply of oxygen to the organs. In addition, the clumps of sickle cells often blocks the flow in the blood vessels that lead to limbs and vital organs. Such a blockage profoundly causes pains, infections and organ damage (Sickle Cell Disease and Malaria PowerPoint, 2014).
The relationship of sickle cell anemia and malaria is complex. The complex varies depending on the three genotypes of the sickle cell anemia. The three genotypes about sickle cell anemia are normal hemoglobin genotype (HbAA); sickle cell trait (HbAS); and homozygous sickle cell disease (HbSS). Firstly, the heterozygotes for the sickle gene AS are substantially protected against the danger of dying of malaria. Because the AS heterozygotes which are infected with Plasmodium falciparum are eventually removed from the system by macrophages. As for the patients exhibiting homozygous for sickle gene, suffering from SCA. They are more susceptible to effects of malaria (Sickle Cell Disease and Malaria PowerPoint, 2014). The advantage of having S allele is that such an individual is protected against lethal malaria.
A trade-off of genes whose aim is to offer reproductive advantage exists in the case of sickle cell anemia. However, it does cause vulnerability to diseases. Thus explaining the vulnerability to malaria among the people with two copies of sickle cell gene.

Difference in Darwinian medicine and Mainstream medicine view an individual’s ailment.
Often I do have a cold which results in severe cough and sneezing. At times it can be very painful and irritating. That is why I constantly take medicine in order to reduce it. However, what puzzles me most is the fact that all the scientists are unable to come up with a medicine that can end such a cough associated with cold. Why lack medicine in the whole world that can eliminate a simple cough?
In the context of Darwinian medicine, a cough is considered as part of the solution rather than a problem. Despite the fact that it causes pain and discomfort, it clears up foreign particles in the throat thus keeping us safe from any harm posed by such particles. On the other hand, taking medicine is form of mainstream medicine that aims to eliminate the cough. The Darwinian medicine and mainstream medicine are constantly opposing one another.
The Darwinian medicine primarily establishes itself in the context of evolution and human biology. Therefore, it is slow and takes generation to develop in line with the concepts of natural selection. It has profoundly contributed to the understanding of antibiotic resistance and autoimmune disease. On the other hand, mainstream medicine employs a fast methodology approach to eliminating the diseases from the host. It lacks efficiency as it is prone to microorganism’s mutation and genetic variations.

References
Gullagher, J.C and MacDougall, C. (2013). Antibiotics Simplified. Burlington: Jones & Bartlett
Learning.
https://youtube.be/AYvX8tnCM9s
Ewald, P. (2008). Can we domesticate germs? Retrieved on December 23, 2014 from https://www.ted.com/talks/paul_ewald_asks_can_we_domesticate_germs?language=en
Nesse, R. M. and William, G.C. (1998). Evolution and the Origins of Disease. Retrieved on December 24, 2014 from https://bbhosted.cuny.edu/bbcswebdav/pid-17700712-dt-content-rid-95760929_1/courses/BCCO1_BIO_24_DO1W_1149_1/BCC01_BIO_24_SO1W_1132_1_ImportedContent_20130128084334/Assignments/Essay%20Essay%20-%20Stage%201/Evolution%20and%20Origins%20of%20of%20Disease.pdf
Antibiotics Drug Resistance-4 PowerPoint. (2014).
Sickle Cell Disease and Malaria PowerPoint. (2014).

Appreciative Inquiry Asset Based Community Development Paper

Appreciative Inquiry Asset Based Community Development Paper
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Introduction
It has been noted that United States as a nation has been shaped by immigration since the arrival of the newcomers four hundred years ago. Immigration has contributed in making America and its citizens what they are today. It has also contributed towards the many economic, political and social processes that are basic to America as a nation. Throughout the history of United States, immigration has been occurring. Large-scale immigration occurred in four peak periods namely: the inhabiting of the novel colonies, westward growth during the intermediate of the nineteenth century and the rise of cities during the turn of the twentieth century. This last peak began in 1970’s and continues to date (Zingher, 2014).
These peak periods of immigration have coincided with basic revolutions of the State’s economy. The first peak aided the start of European suburbs in the Americans. The second gave room for this young country, Unites States to supersede its colonial economy and move to an agricultural one. It is during the third peak that industrial revolution led to the growth of a manufacturing economy (Schurtman, &Lillard, 2014). Immigration to the United was primarily by Europeans during the presiding decades of 1880. This was driven by the industrialization in the Western parts of Europe and the famine of Irish potato. The industrial revolution of the United States and the expanding frontlines of the AmericanWest was drawing the immigrants to the United States shores. It is worth noting that Chinese immigrates were earlier observed to be in great numbers back in 1850s and this was after the discovery of Gold precisely in California.
The United States has become a nation of immigration and immigrants and hence adjusts its immigration policies very rarely. As such, the politics surrounding the immigrations may be termed as greatly divisive (Gomez, 2014). The result of this case has been an increase in the disengagement from the economic and societal forces that hurl immigration. Once converts have been done, they take years to legislate them.
To date, United States is on the need for a major reform in addressing the enduringhitches of illegal immigration. Those of the immigration system also needed to be reformed since they have not been revised since 1990 (Zingher, 2014). The push for an inclusive immigration reform has gone back to the congressional stage where cross-party groups in the House and Senate likewise are engaged in a noteworthy negotiation to come up with legislations that would increase the implementation at the nation’s boundary and interiors, legalization of the unauthorized immigrants who are estimated at eleven million. In 2007, the CIR legislation failed in the Senate and determinations to change the nation’s immigration laws were sidelined. Revisiting of the immigration agenda was adopted by both parties after the outcome and voting trends of the 2012 presidential elections.
Working of the Immigration System.
It is in the 1965 immigration and nationality act that guiding principles and the different ways of immigrating to the Unites States were largely established. They take place in three primary immigration streams which include family (re)amalgamation for U.S. citizens and legalized permanent occupants with close family members; convening legitimate labor market wants; and harbor for those in want of humanitarian protection. The most common ways of immigration are through family-based or occupation based channels. The family based immigration falls under the principle of family unit. The principle provides that close family members of State’s citizens can unite with their U.S. families without arithmetical limitations. For their adult wedded and unwedded children with their children can be reunited but this takes a longer time. For the family based immigrants sponsorship by a competent relative under the defined six categories is a must. There are also employment based visas provided for permanent immigrants with the aim of meeting the nation’s fiscal and labor market wants. It has a limitation of one hundred and forty thousand visas per year. Statistics indicate that these immigrants accounted for between twelve percent (2003) and twenty two percent (2005) of the legal immigrants in the past decade(Schurtman&Lillard, 2014). The employment based green cards come in five categories of workers and the majority of them must be supported by their employer.
Unauthorized Immigrants
The unauthorized immigrants go into the United States through the crossing of land borders secretly between recognized ports of entry, by means of documents deceitfully for admission at ports of entry or even extending a legal temporary visa. In the early 1970s is when this illegal immigration began building up reaching relative high levels. The population of these illegal immigrants grew between 1990 and 2006 by an average of 300,000 to 500,000 persons per year (Schurtman, &Lillard, 2014). This was resulting from the rapid job creations in collaboration to other factors like powerful push factors within Mexico. Illegal immigration has been found to be a determinant of the economic conditions through the markedly growth within a robust economy with great demands for low-skilled labor and the narrowing in line with the economic contractions. The entrance of illegal immigrants in massive numbers refreshed certain communities and contributed to local economic growth. The rapid and unrestrained social change coupled up with the pressure on civic services brought about by persons who are illegal immigrants has inspired anger and resentment hence immigration has become a hotly debated issue of state concern.
A New Era
The figure of unauthorized immigrants residing in the United States is enormous though a number of indicators imply that migration undercurrents have set in with the effect of reduction of unlawful immigration in the future. This is even as the economy of the United States recoils. The decline in illegal immigrants has been witnessed since the year 2007 with a decline in number of arrests made in line with migrants trying to traverse the border illegally. These new trends are influenced by a number of factors (Gomez, 2014). The first factor being the diminishing of lower-skilled labor demand in the sectors that employed unauthorized immigrants. Secondly, the costs, dangers and difficulty of making an illegal immigration due to the accumulation of immigration enforcement at the boundaries. Looking at the factor in combination, we can predict a lasting new development that is expected to remain in place in the near future.
Immigration Benefits and Costs
An acknowledgement of the real benefits brought about by illegal immigrants on the supply side of the American economy is in existence. This is the major reason as to why the business community is compete against a simple crackdown. Economic costs on illegal immigrants are also in place. These are resulting from America’s generous social insurance institutions. Thinking of it logically the cost of securing the borders would still be in place no matter the number of illegal immigrants. The illusion that immigrants harm the economy of the United States should be thrown out of hand. At the moment, there is a higher percentage of foreign-born Americans and yet the economy is still strong with a higher total gross domestic product. In collaboration to this, there are more Americans working than ever with higher productivity per worker. This economic boom might not have been as a result of immigration but also it is not in order to falsely lay blames on the immigrants for hurting the economy at a time when it is at an all-time high(Zingher, 2014). Increased immigration flow corresponded with a steady and considerable reduction in unemployment in the past two decades. A comprehensive accounting of the benefits and costs of immigration has found that the benefits outdo the costs.
Economic Principles for Effective Immigrant Program
An effective immigrant working program for the future of immigrants will be guided by a number of economic principles and as such, recommendations. These principles should be borne in mind. They include:
 Biometric identification of all guest workers in America. A sister program to the one in existence (US-VISIT) will be in order in the essential enforcement efforts and in authentication of guest workers by American companies. Currently an effective system for internal enforcement does not exist.
 An effort to have the existing migrant workers register with the guest worker program is also desired. This could be effectively achieved through positive incentives for the compliance and negative incentives (punishments) for non-compliance. To have the program working the United States companies also need incentives (Gomez, 2014). The success of the program is dependent entirely on the companies support through passage and enforcement. The guest worker status should not be used as a path to citizenship and also should not include the rights of United States social benefits. Compliance to the program is dependent on legal entry for guest workers.
 This legal entry shall be made efficient through the contingent upon a brief waiting period. The program will desire that the government agencies shy away from micromanaging migrant labor. It is important to note that the use of the program as an excuse to create another large federal bureaucracy will lead to its failure.
 After the entry into the program, bonds could be used to monitor compliance. A condition of finding a sponsoring employer within duration of one month with day laborers finding long-term sponsoring employers would make the program more effective.
 Punishment should be two way for both the migrants and employers who do not comply with the new laws. The migrants also are required to respect all American laws and traditions since it is the host country.

References
Gomez, J. H. (2014). Immigration And The Next America. Vital Speeches of The
Day, 80(4), 120-122.
Schurtman, M., &Lillard, M. C. (2014). Remedial And Preventive Responses To The Unauthorized Practice Of Immigration Law. Texas Hispanic Journal of Law & Policy, 2047-119.
Zingher, J. N. (2014). The Ideological and Electoral Determinants of Laws Targeting
Undocumented Migrants in the U.S. States. State Politics & Policy Quarterly, 14(1), 90-
117. doi:10.1177/1532440014524212