Regretting the Ink: The Process of Tattoo Removal

There are many ways on how people express their personalities and interests, and getting tattoos is one of them. However most often than not, when people decide to get a tattoo when they are younger, they seldom think of the consequences associated in getting an unwanted tattoo removed. There are many ways on how tattoos can be removed nowadays such as, dermabrasion, salabrasion, laser, and surgical removal; and more and more people are getting a tattoo nowadays, which suggests that tattoo removal can also get bigger as an industry in time. As a matter of fact, experts note that one in every four people in America has tattoos (Simpson, 2009). However, despite having many options on tattoo removal, the process remains a costly, painful, and time-consuming process, which makes a lot of people remain doubtful about the process despite their need to have the tattoo removed. The following discussions shall provide an overview of the tattoo culture in America as well as the growing industry of tattoo removal. This discussion shall also follow the premise that while tattooed individuals get many options on how to get their tattoos removed today, some still remain doubtful and hesitant as most methods remain costly, painful and branded with a stigma of tattoos being a mistake.

Literature Review

Tattoo and its Stigma in the Current Society

The society has undeniably grown more liberated over the years, accepting some of the prohibitions of the past and being more open about people’s freedom of self-expression. For a time, tattoos were considered taboo. Tatooed individuals were either seen to have violent tendencies or deviant. However, today, more and more people are getting tattoos and the society has apparently grown more accepting of this as a culture. As a matter of fact, approximately 15 to 20% of Americans have tattoos today (Simpson, 2009). The society’s acceptance of this culture has also been apparent in the rise of TV shows like Miami Ink, LA Ink, and Ink – among many others – that apparently makes the tattoo culture more mainstream. Overtime, more and more tattoo shops and parlors open as a clear manifestation of the society’s growing acceptance of body art.

However, despite popular acceptance, there are still environments where tattoos are frowned upon. In traditional suit-and-tie offices today for example, that deviant stigma about tattooed individuals still exists unless a person is a known part of a creative industry like music, arts, or entertainment in general. Aside from conflicts out of misjudgment and stereotyping, this stigma also erodes the confidence of people despite their abilities, as tattoos and piercings tend to trigger negative first impressions. Individuals with tattoos greatly suffer from such stigma as some of them find it hard to get their dream jobs just because they have ink on their skin. Lucky Lauren, a nurse from a tattoo removal clinic has had clients with such problem. These people usually come in the clinic complaining how they have been misjudged in applications because of their tattoos. As a result, despite liking their tattoos so much, these people are forced to have them removed just so they could land the job they want. Lauren notes, “If someone is intelligent, they’re loquacious and are able to conduct themselves in a professional manner within the workplace then I don’t think that tattoos should really be an issue” (Lauren, qtd. in Jinks, 2013).

So where does the stigma of tattoo and body piercings really come from? There are perhaps numerous factors; however, one of the most apparent reason for this impression is the sense of permanence. Having tattoos and piercings means having body modifications that cannot be reversed or taken back. Tattoos for example, are considered to stay in place for the a person’s lifetime. The electrically-powered tattoo machine injects a needle into the skin, penetrating the epidermis – outer skin layer – then depositing ink into the second layer of the skin called, dermis. Due to the permanence of tattoos and body piercings, most of the people who get them are usually misconstrued of having hasty decisions and less regard for their body.

Thinking Twice Before Getting Inked

More people are getting enticed to get a tattoo nowadays; but while getting a tattoo sounds like a good idea for some, it generally requires a great deal of thought beforehand. A tattoo’s permanence is a huge factor that people needs to consider. Getting a tattoo means scarring one’s body of permanent mark and symbol. Hence, getting a tattoo entails a particular level of affiliation or passion over something. People simply cannot irrationally get a tattoo without regretting it afterwards. In Caitlin Jinks’ article, Injecting Ink into the Workplace with Tattoo Discrimination, a nurse from a tattoo removal clinic notes how important it is to think twice before getting a tattoo. She suggests, “If they want a tattoo, they should get a picture of the tattoo and sit it by their bedside for twelve months, have look at it and say ‘I still love it,’ then get a tattoo because it’s something that’s stuck with you” (Lacey, qtd. in Jinks, 2013).

Aside from having a permanent mark on their skin, people need to think through getting a tattoo due to its associated risks. In the article, Think Before You Ink: Are Tattoos Safe? the Food and Drug Administration cites different risks associated to getting a tattoo:

  • Infection – individuals face the risk of acquiring hepatitis and HIV by getting tattoos from unsanitary tattoo parlors. Dirty needles can pass these infections easily from one client to another
  • Allergies – much like any cosmetic or skin product, the ink pigments that are injected on a person’s skin when getting a tattoo could cause different types of allergic reactions and has been reported to cause more serious problems
  • Scarring – unwanted scarring on the skin may also happen when undergoing a tattoo removal procedure
  • Granulomas – tattoo pigments can be perceived by the body’s immune system as foreign; this may cause small bumps and knots to form around it as a result of an accumulation of antibodies
  • MRI complications – patients may also experience swelling and burning sensation when going through a magnetic resonance imaging (MRI), though this has been reported to happen rarely (FDA, 2009)

These risks does not always happen to everyone who decides to get inked; however, the effects of these risks can be very serious to one’s health. FDA notes that while most ink pigments today are safe, some pigments have not yet gone through the tests FDA initiated. With the aid of the Arkansas-based National center for Toxicological Research, FDA is trying to find out a few things about ink pigments that could possibly be harmful to human health, such as the ink’s chemical composition, short-term and long-term safety of pigments, as well as the usual body reaction to when light interacts with ink (FDA, 2009). Linda Katz, Director of FDA’s Office of Cosmetics and Colors in the Center for Food Safety and Applied Nutrition further notes, “Our hope is to get a better understanding of the body’s response to tattoos and their impact on human health, and to identify products at greatest risk” (Katz, qtd. in FDA, 2009). Moreover, FDA says they have yet to approve any tattoo pigments for injection into the skin. This applies to all tattoo pigments, including those used for ultraviolet (UV) and glow-in-the-dark tattoos.

What does the Bible Say about Tattoos?

When speaking of taboos and prohibitions, the Bible is often a reference point for many. Hence, in light of this discussion about tattoos and body piercings, is there something mentioned in the Holy Scriptures prohibiting people of being inked? Perhaps the most related passage to tattoos from the Bible is this: “You shall not make any cuts in your body for the dead nor make any tattoo marks on yourselves: I am the Lord” (Leviticus 19:29 – New American Standard). At a glance, this passage can be easily interpreted as a prohibition for having tattoos as creative expression; however, in order to understand the passage’s real intent and purpose, one must first read through the context of the chapter that it is in. In analyzing the context of this verse from its chapter, it actually speaks about cutting or marking the body for dead relatives. This was said to be the practice of people who worshipped pagan gods, therefore veering them away from God’s guidance and protection (Gerwig, 2007). Today, people get a tattoo as means of self-expression; either the symbol has a deeper meaning to the owner, or it represents a particular truth about the wearer. Tattooed Christians do not actually mark themselves to rebel or pay tribute to false idols or anti-Christian gods. A lot of these people even mark themselves permanently with symbols that represent their devotion to Christ; but in reality, tattoos are not for everybody. Many will still question it relevance and meaning, hence Christians – and people from other belief systems with very strict rules about self-expression through the body – who are planning to get inked must think it through deeply and weigh all the pros and repercussions.

Argument

Obsolete Tattoo Removal Procedures: Dermabrasion

Once a person regrets a tattoo, s/he will naturally go for the easiest method there is to remove it. Luckily for these people, there are actually ointments being sold online that are said remove tattoos without the assistance of a professional dermatologist. Unluckily for them though, these products are yet to be approved by the FDA. There are also several other methods of tattoo removal that have been prohibited in the United States due to the risks involved in them. For one, physicians note dermabrasion with metal or diamond-coated fraises or abrasive sakts (salabration). This process uses a diamond fraise wheel or wire brush to destroy the surface of the skin, which had been frozen with a typical cryogen (Bernstein, 2007). In an article entitled, Lasers in Plastic Surgery: Laser Tattoo Removal by Eric Bernstein, the author says that “there is virtually always some scarring [in dermabrasion], loss of normal skin pigment, and residual tattoo when using this method of tattoo removal” (Bernstein, 2007). The author also notes that using salt or other rough surfaces such as sand paper can also remove the surface of the skin in the attempt to remove a tattoo; however, it is the inflammation that actually removes some of the tattoo pigment the reason why this method has already considered obsolete.

Tattoo Removal by Laser

Tattoo removal through laser is perhaps the most trusted method there is. However, despite being a reliable method for tattoo removal, this process remains to be a tedious and very expensive procedure.

Kosoglu explains laser removal being a highly sensitive procedure involving high-intensity laser energy absorption by the skin. The expert notes that what happens is pulses of high-intensity laser energy passes through the epidermis and are selectively absorbed by the tattoo pigment. The laser then breaks the pigment into smaller particles, which then is excreted by the body the way the body gets rid of bacteria (Kosoglu, qtd. in FDA, 2014). Kosoglu also notes that because every color of ink absorbs different wavelengths of light, multi-colored tattoos will require the use of multiple lasers. The expert further notes that, “lighter colors such as green, red, and yellow are the hardest to remove, while blue and black are the easiest to remove” (FDA, 2014). Hence, tattoo laser removal cannot be effective in a single treatment. Depending on the tattoo’s size and colors, it could require multiple visits to the dermatologist’s clinic and a few weeks of healing time between procedures. Moreover, this procedure may also entail some side effects like, pinpoint bleeding, redness, or soreness (FDA, 2014). On the average, tattoo laser removals could take over six to ten treatments, and this procedure is usually spread over six to eight weeks; and a patient would have to wait over a year for the tattoo to be completely removed from the skin. On the average, doctors also charge around fifty dollars per square inch for laser removals – a price that obviously not everybody can afford, considering the extent of tattoo coverage people have nowadays. As a result, the easiest tattoo removal procedure remains a tedious and a very expensive treatment. While it has been available for tattooed people for a long time, many still hesitate availing the service because of its cost and complexity.

Surgical Excision

Tattoos vary in size, shapes and inspiration. In some cultures, the larger the tattoo, the greater the honor and impression are on the person. Generally, tattoos signify strength and confidence to have a lifetime body modification; and apparently, larger tattoos give people greater pride. However, the problem with larger tattoos is, obviously, it will be harder to remove one the wearer regrets it. Fortunately though, there is a surgical procedure recommended for removing larger tattoos. Surgical excision is a series of multiple surgeries performed in a staged manner for removing a tattoo completely. It is recommended for larger tattoos as these marks would often take a very long time to remove by laser or dermabrasion. The problem with surgical excision though is, there is a significant risk of producing scars that can actually be debilitating because of the often varied locations of tattoos (Bernstein, 2007). Bernstein observes, “Tattoos that are placed on acral locations may have insufficient loose skin for easy removal. In addition, tattoos in these locations may result in scars that restrict movement due to contraction” (Bernstein, 2007). This is one factor that makes people hesitant about undergoing the procedure as they are torn between retaining the tattoo and acquiring scars that are most likely to last their lifetimes too. Surgical excision has been mostly recommended for people who are having allergic reactions to their tattoos. Laser removal is generally not allowed on people with allergic reactions to pigments as this may cause more severe reactions. Surgical excision also appear to be as expensive (even more in some cases) as laser removal. Furthermore, patients will be required to spend on post-operative medication and antibiotics, which is another relevant factor on why people are second-guessing undergoing the procedure.

Medical technology is coping up with the growing tattoo industry, which is a good thing. However for some reason, tattoo removal procedures remain risky and costly. Sure getting a tattoo is a big decision that everybody needs to think through very carefully – some people say that having a tattoo removed is more painful than getting a tattoo itself; but considering factors such as allergic reactions and the inevitable workplace discrimination, these people also deserve convenient options on how to remove marks that nonetheless make their lives more difficult.

Conclusion

While a significant number of people in America has a tattoo and wants to get one, among this population, a significant number of wearer also regret having one (FDA). Getting a tattoo is part of an individual’s right to self-expression. However, as apparent by the current proliferation of the tattoo removal industry, more people are seeking the chance to get a reverse a bad decision they once made. But while there are several options available to the public today, these procedures remain risky and very expensive. Because of this, a lot of people remain hesitant to undergo such procedure despite the desire to get a mark taken off their skin. It is true; the public deserves convenient and safe options on how to get their tattoos removes. But perhaps the unavailability of these convenient and safe procedure is the society’s way of telling that getting a tattoo is a huge life decision everybody needs to think through carefully. It cannot be denied that there remains a stigma about tattooed people; and while this cannot be eliminated that easily, people who want to get a tattoo needs to consider this too as the emotional effects of negative impressions on tattooed people could hurt more than any removal procedure.

Works Cited

Bernstein, Eric. “Laser Tattoo Removal.” Seminars in Plastic Surgery, Thieme Medical Publishers. Aug 2007. 1 Apr 2014. <http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2884836/&gt;. Web

Food and Drug Administration. “Think Before You Ink: Are Tattoos Safe?” FDA Consumer Health Information, 21 Mar 2014. 11 Apr 2014. <http://www.fda.gov/downloads/forconsumers/consumerupdates/ucm143401.pdf >. Web

Gerwig, Chuck. “Tattoo and The Bible | Sacred Ink” Sacred Digital, Brough Communications. 7 Apr 2007. 30 Mar 2014. <http://www.sacredink.net/tattoo_and_the_bible/ >. Web

Jinks, Caitlin. “Injecting Ink into the Workplace with Tattoo Discrimination”. ABC Illawarra NSW. 22 Apr 2013. 30 Mar 2014. <http://www.abc.net.au/local/stories/2013/04/22/3742014.htm&gt;. Web

Simpson, Summer. “Tattoos in the Workplace [Inquiring Minds]”. The Creative Coast, Savannah Economic Development Authority. 18 May 2009. 30 Mar 2014. <http://www.thecreativecoast.org/tattoos-in-the-workplace-inquiring-minds/#.U3YcGIGSxvk&gt;. Web

Urdang, Michael, Mallek, Jennifer, and Mallon, William. “Tattoos and Piercings: A Review for the Emergency Physician.” National Center for Biotechnology Information, US National Library of Medicine. 02 May 2006. 1 Apr 2014. <http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3236178/&gt;. Web

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Assessment of a case study

Abstract

Ruth’s Chris Steak house is a company that has just concluded a very successful IPO. They had made promises in their 2005 report to expand and increase their revenue. This assessment will help them make a decision on how to fulfill the above mentioned promise.

Ruth’s Chris steak house has just concluded a successful IPO. The IPO was able to raise an equity capital of more than one hundred and fifty four dollars. Although the existing stores are experiencing an increase in revenue growth the company is finding it necessary to expand by entering the international market. These will enable them fulfill the commitment they made in the 2005 annual report. They promised to grow the company by setting up both company owned steak houses and also by selling franchises. While this is still possible they must be careful not to disappoint the shareholders because after such a successful IPO they expect an increase in share prices. This can only be achieved by maximizing the amount of profit.

Though Ruth’s Chris steak house intends to increase its profits through expansion to the international market, there are several issues that are making it difficult. One of the issues is that though the senior management is committed to the idea of expanding the business not all of them think that international expansion is the way to go. Secondly, there are some market barriers they may have to deal with for example some countries do not accept the use of beef from the United States. They also do not have enough data about market trends. Finally, their franchising conditions are not very favorable and may discourage many potential partners. These are;

  1. A liquid net worth of One million USD,
  2. verifiable experience within the hospitality industry,
  3. desire and ability to develop multiple locations,
  4. 100 USD per restaurant franchise fee
  5. 5% gross sales royalty fee
  6. and finally 2% gross sales fee.

These might be considered as too many conditions.

It is also important to note the countries that have successfully set up franchises they include; Canada, Mexico, Hong Kong and Taiwan. In these countries instead of setting up company owned restaurants they should consider continuing with franchising. This is because people are generally skeptical about foreign owned restaurants.

Another way of dealing with the above mentioned issues would be to reconsider the franchising conditions. This will enable more people to be interested in the business without feeling like they are selling their should to the business. They should use this as a marketing strategy. They can do these by looking at what conditions are required by fellow competitors.

To deal with the issue of people not accepting the use of US beef. They may consider allowing the franchises to use beef from the local community. As long as the meat is properly inspected and meets their standards. By doing so, they will become popular in the particular country since they will be supporting the local businesses.

As for the lack of market data they will have to collect all relevant information before entering any new country. This will enable then to know how to market their products. They will also be able to find out which countries have the greatest risk and which ones will be a walk through the park. Once they have established this they will know which countries to go to first.

The selecting decision criteria should be based on which decision will enable them to fulfill the promises they made in the 2005 annual report. There are several alternatives to these they may consider continuing to sell franchises to the countries that they have already done so. They may also consider relaxing the franchising conditions. Another alternative would be to set up company owned restaurants.

By expanding in the already successful countries, that is Canada, Hong Kong, Mexico and Taiwan, they have a better chance of achieving the above mentioned goal. This is because they already have avenues into these markets and the research has already been done. The Cons of doing these are that it could limit the growth potential of going to other countries.

In conclusion, Ruth’s Chris steak house should do the following. They should first expand franchises in Canada, Hong Kong, Mexico and Taiwan. This is because they already have inlets into these markets. They also have an understanding on how to deal with partners from these countries. They can also attempt to encourage partners with existing franchises to open new restaurants. This can be done by giving discounts and offers.

They also need to look at their franchising agreement and relax some of the conditions so as to stop discouraging potential partners. Finally before they go into any country they need to do proper and complete market research, to avoid loss making investments by investing in the wrong country.

References

Gofton, L., & Ness, M. (1997). Business market research. Montreal: Renouf.

Welch, L. S., Benito, G. R. G., & Petersen, B. (2007). Foreign operation methods: Theory, analysis, strategy. Cheltenham, UK: Edward Elgar.

Sherman, A. J. (2004). Franchising & licensing: Two powerful ways to grow your business in any economy. New York, NY: AMACOM.

An Investigation of Corporate Social Responsibility among Companies in the Oil Industry

An Investigation of Corporate Social Responsibility among Companies in the Oil Industry

Name:

Course:

Professor’s name:

University name:

City, State

Date of Submission

Abstract

The research looks at measures of corporate social responsibility that have been done in the oil industry to determine how genuine they are, whether they are worse in developing countries and whether regulation offers a better assurance to stakeholders. The literature review highlight to the conflict of interest that exists in shareholders when it comes to corporate social responsibility. Companies in the oil industry only seem to react to extrinsic pressure from stakeholders. The research methodology settles on the use of a secondary qualitative study. A multiple case study analysis is adopted to answer the research questions. The results of the data analysis indicate that oil companies are more reactive rather than proactive in corporate social responsibility except for the case of BP. This occurs after pressure from stakeholders or the international community. In the case of Nigeria, the economic loss led to the change in policy. The research also determined that developing countries are the worst hit. Finally, regulation seems to provide a better assurance to stakeholders as opposed to self-regulated corporate social responsibility policies.

Table of Contents

Abstract 2

1.0 Introduction. 5

1.1 Background of the study. 5

1.2 Statement of the problem.. 7

1.3 Aims and objectives of the study. 8

1.4 Significance of the study. 9

1.5 Scope of the study. 10

1.6 Overview of the study. 10

2.0 Literature reviews. 11

2.1 Introduction. 11

2.2 Theoretical Framework. 11

2.3 Corporate social responsibility in the oil industry. 13

2.4 Corporate social responsibility as a social license. 14

2.5 The Oil industry and the environment 15

2.6 Differences in developed and developing nations. 17

3.0 Research methodology. 19

3.1 Introduction. 19

3.2 Research approach. 19

3.3 Research design. 21

3.4 Research method. 22

3.5 Data collection and analysis. 22

3.6 Ethical considerations. 22

4.0 Data Analysis. 23

4.1 Introduction. 23

4.2 Case studies. 23

4.2.1 Exxon Valdez Oil Spill 23

4.2.2 The Piper Alpha disaster 26

4.2.3 The violation of human rights in Nigeria. 28

4.2.4 BP’s Global Warming acknowledgment 32

4.3 Discussion. 33

5.0 Conclusion and Recommendations. 35

5.1 Conclusions. 35

5.2 Recommendations. 37

5.3 Recommendations for future studies. 37

References. 38

1.0 Introduction

1.1 Background of the study

Corporate social responsibility is a term that refers to the responsibility that organizations have towards other elements while they continue their operations. Nowadays, this issue is imperative to how companies conduct business. While corporate social responsibility seems to be a new topic, many different scholars have debated it since the concept of business was developed. In truth, the interaction of business with the environment cannot be classified as something new in practice or theory. However, there has been greater pressure on businesses to adhere to corporate social responsibility in an attempt to increase the ethical consideration that businesses have when they exploit resources. This means that the mutual interaction of businesses with the environment cannot be one-sided in nature. The environment needs to be maintained or exploited within reasonable measures (Jamali & Mirshak, 2007, p. 82). When considering the environment, this does not refer to only the physical environment, this refers to the entire combination of social, environmental and business aspects that are affected by the business. An example is when a business deals with mining, the environment is affected by the drilling and the relocation of physical material. Socially, the company needs to compensate workers adequately based on the type of work and the risk involved in their work. Finally, some of the profits need to be used in ensuring that the company improves the lives of the people in the geographical region that they live. This clearly shows that corporate social responsibility needs to be done from a holistic approach where there is harmony with all the different aspect of a business. This harmony has made corporate social responsibility a common topic in many academic studies.

The following graph shows the increase in corporate social responsibility

The main conundrum with corporate social responsibility is that it organizations are based on the need to increase wealth and profitability. This means that a company needs to reduce any extra expenses in order to increase the overall profit margin that the organization is having. Milton Friedman highlighted that there are two fundamental questions that limit the effectiveness of corporate social responsibility. The first question is: What are the organization’s goals? Most companies are not created with the aim of adding value to a community or protecting an environment. In most cases, companies are started to add wealth to the shareholders. This means that most companies seek to exploit existing resources in order to increase profit. The exception is non-profit organizations that seek to improve the welfare of people or protect the environment. However, there are very few such companies in existence. This means that corporate social responsibility is essentially going against the goals of most organizations. In truth, the question is whether these organizations engage in corporate social responsibility for public approval, or they do it genuinely. Based on the evidence provided by Friedman, many of these companies only do this is order to avoid negative publicity for lack of corporate social responsibility. The second question is: Whether there are any authorities that determine the vital activities of companies? This is a subject of regulation. Regulation in most industries is done based on the overall nature of the industry. However, each company is in a different location with different effects on the environment (Prno & Slocombe, 2012). This means that regulations cannot be specific enough to determine what is vital in corporate social responsibility. Therefore, many companies self-regulate when dealing with social corporate responsibility. The organizations will then seek to do this while minimizing the cost to increase profit margins.

Corporate social responsibility needs to be viewed from two perspectives. The first is from the shareholders who seek to gain a direct return on the capital that they have contributed. The second are stakeholders who are directly and indirectly affected by the activities of the organization. Shareholders seek to gain a return on their investment and then increase the profit that they gain from the organization. Corporate social responsibility can be viewed as a liability to shareholders. On the other hand, stakeholders are interested in ensuring that the exploitation of resources by the organization is done sustainably while ensuring the integrity of the environment and community that interacts with the business. However, it is important to note that decision making in any organization is made by the shareholders. Shareholders determine the members who are included on the board of the company. This means that shareholders have a direct influence on the company. Since the shareholders view corporate social responsibility as a liability, it is done in a minimalistic way or simply as a public relations gimmick that seeks to improve brand image. On the other hand, stakeholders in any organization are not involved in policy making. This means that the only way that corporate social responsibility is improved is through intrinsic motivation by the shareholders or extrinsic pressure from stakeholders (Brown & Forster, 2013). This makes corporate social responsibility difficult to completely achieve when the stakeholders are handicapped by an inability to create concrete policies in the country.

1.2 Statement of the problem

The problem with corporate social responsibility arises from the fact that it goes against what is viewed as economic rationality. This means that economically, social corporate responsibility is a liability that businesses. The problem then arises of whether then corporate social responsibility measures in a company are genuine or only there to give the impression that they are willing to be responsible to reduce the extrinsic pressure from stakeholders.

This problem is compounded in the oil industry that is prone to numerous cases of negative externalities, negligence, and fraud. The problem arises from several main conditions. The first condition is the nature of the companies and the profit margins that are expected. Most oil companies are Fortune 500 companies that are known for their large profit margins. Due to this, the companies seek to minimize the liabilities as much as possible. Due to the most of the corporate social responsibility is only a fraction of the total profitability. In proportion to other industries, the percentage of earnings as compared to the portion that is set aside for corporate social responsibility is very low. This means that in terms of proportions of earnings, the contribution of oil companies is low despite being more in quantity than from other companies.

The second issue that can be highlighted is the nature of the commodity. Oil is a scarce resource. Due to this, most companies are willing to increase the risk that is expected to get the commodity. This increase in risk means that there are greater hazards not only to the environment, but to communities where oil is being drilled from or transported. The complexity is that the problem is based on duality. The first is the short term risk that arises from oil spills, natural gas leaks and disposal of by-products. The long-term issue is the issue of global warming or the increase of carbon emissions due to oil. On a social level, there is a question of the communities that are around areas with oil reserves. The threats of displacement and compensation that the workers are given as compared to the salaries of the greatest executives.

While corporate social responsibility is being practiced in the oil industry, it is important to note that several academic articles have highlighted that the oil industry uses corporate social responsibility for three reasons. The first is to seek a social license to operate in a specific area. The second is to provide the perception of corporate social responsibility and lastly is to provide problem-solving systems that are based on value creation. This begs the question of how genuine the corporate social responsibility is from oil companies.

1.3 Aims and objectives of the study

The aim of the study is to review corporate social responsibility in the oil industry in an attempt to determine whether these companies are adhering to corporate social responsibility policies or whether they use it as a public relations campaign to reduce the extrinsic pressure from stakeholders.

The specific objectives of the study are:

  • To determine whether oil companies are motivated by disaster and extrinsic stakeholder pressure to adopt corporate social responsibility or whether they are motivated by intrinsic desire
  • To determine whether corporate social responsibility in oil companies is worse in developing countries
  • To determine whether government regulation would bring better results as opposed to social corporate responsibility in the oil industry

The specific objectives highlighted above needs to be reviewed based on the following research question.

  • Are oil companies being motivated by disaster and extrinsic stakeholder pressure to adopt corporate social responsibility or whether they are motivated by intrinsic desire?
  • Is corporate social responsibility among companies in the oil industry worse in developing countries due to lack of extrinsic pressure?
  • Will regulation bring better results as opposed to corporate social responsibility in the oil industry?

1.4 Significance of the study

The research seeks to view corporate social responsibility in the oil industry from a perspective of whether organizations in the oil industry. There are numerous academic papers that attest to the existence of social corporate responsibility in the oil industry. However, there are few papers that look at how genuine the corporate social responsibility appears. In addition to this, stakeholders apply pressure to companies extrinsically to push the agenda of corporate social responsibility. However, in developing countries, there is a lack of this push and oil companies may be inclined to forgo corporate social responsibility altogether. This study is important because it will highlight such instances. Finally, a study on corporate social responsibility is important because it provides a snapshot of the industry to allow future comparison with measures that will be made by the industry.

1.5 Scope of the study

The scope of the study refers to the implications and the reach of the study. The research that will be done will look at companies in the oil industry. This will be a global review where company corporate social responsibility policies will be reviewed both in developing and developed countries. This will determine whether pressure from stakeholders in developed countries provides the extrinsic pressure. This will determine whether companies can self-regulate. In case of the latter, the study will conclude that regulation needs to be set to ensure that companies adhere to certain rules.

1.6 Overview of the study

The dissertation is subdivided into three main parts. The first segment involves an introduction of the paper. A background of the concept of corporate social responsibility is provided where main aspects of the topic are discussed. A problem statement reviewing the main issues in the oil industry as the objectives and research questions are set in the study. The second segment involves a review of literature that concerns corporate social responsibility in the oil industry. Major researchers such as Friedman are quoted. The third section of the study involves a review of the research methodology that is used in the study. A secondary approach is used with qualitative analysis preferred due to the nature of the objectives. The fourth segment involves a review of the data selected and determination of the underlying themes. An explanation is provided based on the research question. Finally, the segment on conclusions reviews the study based on the objectives. Recommendations are made based on the results of the study.

2.0 Literature reviews

2.1 Introduction

This segment of the study reviews the academic literature on the subject. This involves looking at the difference between stakeholder and shareholder pressure in an organization based on the importance of making profits. The study proceeds to look at academic issues in corporate social responsibility in the oil industry.

2.2 Theoretical Framework

According to the shareholder view of the firm, the only role that the management should play is to increase the wealth of the company’s equity owners and other groups that have made monetary investments. The view, advanced by Milton Friedman, argues that private investors deserve to be in the controlling seat of the company’s decision-making process. At the same time, shareholders should have a first claim to the company’s returns based on the fact that they incur the opportunity cost of investing in the company instead of pursuing other projects. In this regard, the shareholder theory argues that pursuing alternative goals, such as corporate social responsibility acts, would have a diminishing effect on shareholder value.

In support of the shareholder view, Jensen and Meckling urged companies and their shareholders to peg managers’ performance on how much return was generated from managerial decisions. Therefore, there was an increase in the number of companies that peg their manager’s pay on such indicators as the company’s stock price and the amount of profits made over one year. An additional idea advanced by Jensen and Meckling was that a group of few private equity firms has the potential of extracting the best results from a listed company as opposed to where the listed company is owned by a diversified number of shareholders. Martin (2010) noted that Jensen and Meckling were of the opinion that managers and shareholders were not on similar terms as far as whose goals should be satisfied first. Having been handed over the running, and the capital, of the company, managers were free to pursue their interests. This was at the cost of maximising the wealth of shareholders. The arguments advanced by Jensen and Meckling, and Friedman make little mention of the important role played by other groups of people within the company.

The idea that shareholders are an important factor towards the success of a company is not one to be refuted. This is based on the fact that they contribute the capital that is necessary for the establishment of the company. However, the idea that they are the only group of people who matter once the company is operational has been put to the test. In fact, it has been argued that the management has done a poor job of satisfying this obligation towards shareholders. For example, Jensen (1968) found that private mutual funds did a worse job at increasing shareholder wealth as compared to individual investors. In a more recent finding, it is estimated that shareholder returns for the period between 1933 and 1976 was just 7.6% (Martin, 2010). However, the returns were worse in the period between 1977 and 2008 where the average shareholder made a return of 5.9% every year (Martin, 2010). Therefore, there is enough evidence to dispute the argument that shareholders are the only group of people who should be considered when managing the company because a sole focus on their needs has left them worse off than when the company managerial theory was also intent on satisfying the needs of other groups.

According to Freeman (1984), the role of stakeholders is not one to be ignored. In his landmark book, Freeman (1984) defined a stakeholder to be that group of people who affect or are affected by the operations of the company, in this regard, a stakeholder group could be inclusive of employees who play a vital role as innovators and even managers of shareholder’s money. It would also include suppliers who play the role of providing quality inputs to the company. Other major stakeholders in the company have been identified to be the government, customers, and the society at large. One of the advancements of stakeholder theory is through a company’s corporate social responsibility activities (Brown & Forster, 2013).

According to Wagner et al (2011), one of the issues that confronts a manager is seeking to fulfil the needs of stakeholders is the basic fact that there is a long list of groups whose needs are paramount to the company. The result is that the manager is often at a loss on how to prioritize on the divergent and often conflicting needs of each stakeholder group. For instance, satisfying the needs of employees might require the spending of vast amounts of money on training and motivation. Such a step comes at the expense of reducing the company’s profitability and shareholder returns. In the recent past, these needs have been forged into three; economic, social, and environmental (Stenzel, 2010, p. 1). These needs have been confided in a reporting framework known as the Global Reporting Initiative (Global Reporting Initiative, 2014; Alazzani & Wan-Hussin, 2013).

2.3 Corporate social responsibility in the oil industry

According to Alazzani and Wan-Hussin (2013), an increasing number of oil and gas companies are adopting the GRI as the standard against which they assess their CSR activities. According the GRI, there are three perspectives that could be used in classifying stakeholders and their respective needs. These are economic, environmental, and social aspects (Global Reporting Initiative, 2014). The economic aspect seeks to assess how well the company did in terms of making credible profit returns to shareholders. In addition, the economic perspective assesses how well the company performed in terms of establishing a market presence and other indirect economic impacts.

According to Alzalabani (2013), one of the main reasons for the economic recession of between 2007 and 2009 was the fact that companies took out excessive risks. This was especially with regards to their capital structures that were loaded with high levels of debt. In this regard, GRI’s economic perspective seeks to address other economic indicators as being the amount of risk that the company is exposed to as a result of its operations.

According to Marimon (2012) and as contained in the reporting standards, the second perspective is that the company should conduct its operations in a manner that can be considered to be environmentally sustainable. Under this perspective, the company is expected to employ sound production and operational systems that cause minimum impact on the environmental well-being. According to Lozano (2012), companies should seek to ensure that their current product needs do not interfere or diminish the needs of future generations. In this regard, it is important that the company is aware of its impact on the environment by performing tests on the amount of effluents and wastes released to the environment, carbon emissions, biodiversity, and the environmental cost of transport.

2.4 Corporate social responsibility as a social license

According to Owen and Kemp (2012), mining companies must be keenly aware that they operate with the authority from the local community. In the past, mining companies were distrusted by local communities owing to the latter’s capabilities to destroy the livelihood and fabric of an entire society. With developments in global legal structures, it became possible for these local communities to outvote mining company interests through court suits (Prno & Slocombe, 2012, p. 349). Such results have been termed as the mining company failing to gather gain the social license to operate. In gaining the social licence, a mining company is expected to address the issues of labour practices, human rights, product responsibility, and general social needs such as corruption and public policy (Global Reporting Initiative, 2014; Prno & Slocombe, 2012).

According to Cheon et al. (2014), oil and gas companies are the wealthiest of all companies across the world. In the 2014 Fortune 500 listing of companies by virtue of gross revenues, there were four companies among the top ten whose core business is directly related to the mining, refining, and marketing of oil and gas (Time Inc., 2015). Moreover, the top ten companies included two companies dealing in the production of automobiles, which are the highest consumers of oil and gas products (Time Inc., 2015). Collectively, oil and gas companies play a critical role in the world of business through the revenues and profits generated. For instance, it is estimated that the entire oil and gas industry is worth about £35 billion in annual revenues for the UK and $134 billion to the US economy (U.S. Environmental Protection Agency, 2015; British Broadcasting Corporation, 2014). It is not possible to deny that the petroleum industry is a major player in the global economy and that of countries that are directly involved in the mining and refining processes.

According to Frynas (2009), the four major petroleum companies (Royal Dutch Shell, Exxon, BO, and Chevron) spent an estimated $500 between them on developing the communities where they had operations. During the year 2013, Royal Dutch Shell spent an estimated $160 million in voluntary social activities (Royal Shell Plc., 2013). The inference is that these companies play a large role in developing the communities in which they operate. According to Spence (2011), the reason for increased spending in the community is due to the increased gap in expectations between the society and the company’s business interests. Moreover, the cost of suffering reputational damage has far exceeded the cost of make such investments (Spence, 2011, p. 78).

2.5 The Oil industry and the environment

Recent studies have shown that oil and gas companies are some of the largest contributors towards the phenomenon that is global warming (McKibben, 2012). Globally, it is estimated that oil and gas producing nations hold over 2,795 gigatons of fuel reserves, this is compared to the 565 gigatons that is estimated to be safe so as to avoid the danger of escalating global warming to higher levels than is already the case. While these could be considered to be merely reserves that are yet to be released into the atmosphere, it is plausible to consider other factors. One, these are reserves that are owned by a country and an oil and gas company. Therefore, the nation and the company have already factored these reserves into their balance sheets as development costs and intangible assets, as per the accounting rules (Damodaran, 2009; Deloitte Global Services Limited, 2015). The implication is that the reserves have to be used up at one time in the future so as to fulfil the needs of debtors who loan money based on the estimated amount of oil held by a company or the entire nation.

CSR is classically defined to be a voluntary undertaking on the part of the company towards its list of prominent stakeholders (Frynas, 2005, p. 586). However, there are other motives for undertaking CSR activities. According to Spence (2011), a mining company might engage in CSR activities as part of the act to appear sensitive to the needs of the market. These needs include taking care of the environment and the community in which it operates. Moreover, mining companies might investment in CSR in the hope of motivating their employees, gaining a competitive advantage, maintaining stable operating conditions, among other external needs (Frynas, 2005, p. 583).

However, these are needs that are beside the primary perception of CSR, which is the provision of a solution where general business laws fall short (Frynas, 2012, p. 7). Therefore, countries are increasingly making it mandatory for companies to set aside a certain sum of funds for the sole purpose of developing the communities in which they operate. Moreover, it has become mandatory for petroleum companies to adhere to certain environmental rules across the world, especially in developed nations. With carbon emission targets being set by national governments, oil and gas companies are hard pressed to become responsible towards the environment and the society in general.

One of the core areas where government regulation has played a key role in the petroleum industry is with regards to oil spills (Frynas, 2012, p. 1). Oil spills are defined to be the accidental leaks into the environment that occur during the operation of oil mining, transportation, or marketing operation (Frynas, 2012). Oil spills can have a catastrophic impact on the environment, and the community affected. For instance, the Deepwater Horizon oil spill of the year 2010. The oil well was offshore of the American coast, about forty-one kilometre away from the nearest American port. During its collapse and subsequent explosion, the accident led to the direct deaths of eleven employees and the injuries to tens more. Besides the loss of life, the catastrophic impact on the environment was enormous and one that had not been witnessed before. It took three months to control the oil leak and seal the well, at the end of which some 780,000 million cubic meters of oil had already leaked into the open ocean. BP recognizes that the oil spill continues to cost the company money in terms of environmental clean-up and legal proceedings (BP Plc., 2013).

According to Frynas (2012), such tragic events continue to attract the attention of countries that host oil companies owing to their potential impact on the country’s environmental heritage. The result has been the drafting of laws that affect oil and gas mining and the penalties that are to be paid should oil spills occur. At the same time, companies realize that oil spills are a costly affair. Not only does a company such as BP, pay substantial amounts in cleaning up the oil spill, but it also suffers reputational risk. In addition, the petroleum company stands to lose the much-prized license to operate within a country owing to a history of oil spills. Consequently, companies have become more abrasive in controlling oil spills.

2.6 Differences in developed and developing nations

The second aspect that has been addressed through voluntary and government action is that of the exercise of human rights (Crane, et al., 2013). In previous years, mining companies have been accused of providing their employees with poor working conditions such as subjecting them to extreme weather conditions and dangers from company operations. For example, an offshore mining platform exposes the employee to the weather elements of storms and the possibility of an on-site explosion hundreds of kilometers away from the nearest land port. Nations have been concerned over the vulgarities that some of their citizens might be exposed to, with the result being the enactment of laws meant to offer better-working conditions (Crane, et al., 2013). Petroleum companies are also aware of the reputational risk that might be suffered due to negative public limelight regarding the working conditions of their employees. Such a limelight might affect their attractiveness within the job market, which is a highly undesired situation.

According to Jamali (2007), a developed country is one that is characterized by strong institutions that regulate corporate and individual behavior. In this regard, a developed nation is one where the flow of resources is expected to be transparent and well-understood. In these nations, the role of the company towards its employees, the environment, and the society is understood by all. When there are shortcomings between performance and expectations, the avenues for correction are equally clear with the judicial system offering much of the remedy. This is beside immediate government action (Jamali & Mirshak, 2007). This is not to mention that developed nations are endowed with easily accessible resources such as communication and transport networks. Therefore, petroleum companies in developed nations offer CSR as part of a charity effort.

According to Spencer (2011), the situation in developing nations is different from that of the developed world. One of the main factors that characterize a developing world is a clear discord in the presence of infrastructure. While the developmental equivalent has a well-connected population, the developing nation has the infrastructure, but it is concentrated in one area or just a selected number of urban towns. Secondly, the developing nation lacks the clear institutions that are present in a developed world. Due to a gulf between the literate and the illiterate, it becomes easy for the politically connected to seek favors and do away with the rule of law, even when there are clear procedures to be followed (Spence, 2011). The result is that there is a gap between what is expected of a petroleum company and what is delivered. Unlike the developed case scenario, few challenge the status quo.

It is under the developing nation circumstances that the mantle of a company’s CSR is tested. Due to the presence of the chance to by-pass legal provisions, many petroleum companies can opt out of their obligations to the community and the government (Spence, 2011). In a case of Royal Dutch Shell in Nigeria, the company’s recognition that it is being associated with a corrupt and inefficient regime made it change its mode of operations. As from the 1980s, Royal Dutch Shell has made significant efforts to reduce environmental pollution and engage in community development efforts such as providing education and health facilities (Spence, 2011). The effectiveness of government against self-regulation in developed nations remains to be seen and is the subject of subsequent sections of this study.

3.0 Research methodology

3.1 Introduction

This segment of the paper reviews the research methodology used in the study. This involves looking at the research approach that will be used and the research design that will be used in the study. Overall, the main aim is to allow the collection and interpretation of information that will answer the research questions adequately.

3.2 Research approach

The research approach of any dissertation determines the underlying characteristics of the study that will be undertaken. The research approach first needs to determine whether it shall be inductive or deductive. An inductive study is a study that seeks to create a theory or a model that is different from previous models that have been generated by scholars. This is one of the most complicated research approaches available because validation of the model needs to be done. Alternatively, a deductive approach involves the review of the research questions or hypotheses of a topic based on collected information. The main aim of such a paper is answering the objectives of the paper. The theoretical framework in such a paper is based on information from previous scholars. This study uses information from the work of Milton Friedman in the research methodology and uses it as information to explain corporate social responsibility (Govaert, 2009, p. 23). There is no creation of a theory or model. This indicates that the study adopted is deductive in nature rather than an inductive study.

The second consideration that needs to be made is determining whether to use a primary of a secondary approach to the study. A primary study involves the collection of novel data that has yet to be used in a previous study. On the other hand, secondary data is data that has already been collected and used by other scholars in their work. Each of the different types of data has different advantages. Primary data is advantageous because it collects information that is specifically, used in the study. This means that the research questions determine the data collected. This improves the accuracy of the study since the data is specifically suited to answer the research questions. Despite this advantage, primary data is difficult to collect because it requires a lot of money and time. This reduces the reach of most primary studies due to funding and the access to information. Due to this, it is not the best when undertaking global studies from a university dissertation (Sarantakos, 2007, p. 31). Another problem is the risk of making mistakes during the data collection process. Data collection is difficult in a primary setting and errors can reduce the reliability if the primary data that has been collected. Secondary information also has specific strengths and detriments that are different. The first strength is the ease of collection of information. Secondary data is already available from other studies and the investigator only needs to select the information accurately. Secondly, any secondary study requires less time and money to collect as opposed to a primary study. This makes it especially useful in a dissertation setting where finances are limited to the student. The main detriment is the likelihood of propagating errors that were collected from previous studies. Any errors in primary data collection will be propagated in secondary research. However, this can be circumvented by the review of the primary data collection methods that were used in the study. Since the study seeks to determine the authenticity of the corporate social responsibility in the oil industry, a primary study is difficult because revenue and time to collect information from all or even one oil company is not available. For this reason, a secondary research approach is preferred as the research approach in the study.

3.3 Research design

After determining a research approach to be used, it is important to determine the design that will be used in the study. A secondary study is different from a primary study in terms of the research design that will be used in the study. In the case of a primary study, the research design would have been determined by either a focus group, survey or an experiment. In a secondary study, the different designs are either academic literature review of case study analysis. Case study analysis involves looking at specific companies, countries or situations to provide an explanation of the subject being investigated. The alternative is using academic literature based on topic (Bocarnea, et al., 2013, p. 23). This is less refined because it provides a general explanation of the subject rather than a specific analysis. For this reason, a case study analysis is used.

Case studies can be of two main types. The first type involves a review of one case study. This is called a single case study approach. This is effective when trying to explain success measures that can be undertaken based on an instance of success from one company. The main detriment of this type of case study is that it is not representative of an industry only a specific company. The alternative is a multiple case study. This involves looking at different companies and using the similarities as the baseline for the entire industry (Sapsford & Jupp, 2006, p. 21). This approach is favored in the study because the different methods of corporate social responsibility of different situations and companies will determine the social corporate responsibility of the entire industry. This extrapolation is required in the study.

3.4 Research method

There are different methods of research that can be used in case study analysis. Any case study can opt to use the qualitative or the quantitative method of secondary collection of information. A quantitative method of secondary research involves the collection of quantitative data. Quantitative data is empirical data that can be analyzed using mathematical software. The main benefit of this research method is the ease of data analysis. However, this information as many restrictions like the determination of parametric data. There is also a high risk of error propagation if the information collected was wrong. The alternative is a qualitative case study research. This involves the collection of qualitative information from case studies and then analyzing the underlying themes that already exist. This is more complicated than quantitative research (Vogt, 2010, p. 21). However, it is best suited for understanding abstract issues such as corporate social responsibility. This is the reason it is used in the research.

3.5 Data collection and analysis

Data collection involves looking at instances where corporate social responsibility was used by oil companies to deal with a disaster. This is reviewed to determine whether the measures taken were done to respond to extrinsic pressure or the measures were done based on genuine intrinsic needs to improve the social and physical environment of the oil company. An assessment will be done to determine whether government regulation would have been better than the self-regulating corporate social responsibility policies that the oil companies have adopted. This will determine the authenticity of the corporate social responsibility policies (Bergman, 2008, p. 23). Finally, an assessment will be done on the differences that occur in developed and developing countries. This will allow all the research questions to be adequately answered in the study.

3.6 Ethical considerations

Ethical considerations are important in all sections of a study. Ethical considerations are especially important when conducting primary studies involving human participants. However, the study uses secondary analysis, and the instances of human responses come from other academic papers. The only requirement is to ensure that the studies included had proper ethical considerations and permission to quote any human responses. Proper citing will ensure that the information is attributed to the right source.

4.0 Data Analysis

4.1 Introduction

The case study analysis that will be conducted will review the incidents that occurred in the past and the corporate social responsibility measures that have been put in place afterward. This will allow a look at the authenticity of the corporate social responsibility policies by companies in the oil industry.

4.2 Case studies

4.2.1 Exxon Valdez Oil Spill

The first case study is the Exxon Valdez Oil spill. This is the largest oil disaster that happened in the United States. Approximately 11 million gallons of crude oil were spilled into the ocean along the Alaskan coastline. The incident occurred in March as an oil tanker was traveling along the Prince William Sound reef in Alaska. The oil tanker ran aground and released millions of gallons of crude oil into the sea. The situation was further compounded by the fact that the disaster occurred a fair distance away from the coast (Guterman, 2009, p. 1558). The entire process cost the United States as well as the oil company billions of dollars in losses.

There are several issues that can be highlighted by the disaster. The first is the reasons that led to the disaster. Reports indicate that the oil disaster occurred when the captain allowed someone else to steer the ship because he was drunk at the time. The inquiry showed that most of the crew had been drinking prior to the report, and the third mate was the one at the wheel of the oil tanker (Guterman, 2009, p. 1558). The captain also had several cases of alcohol abuse, and this meant that he was a risk to the entire ship. In terms of due diligence, the captain should not have been allowed to control such a ship while still dealing with alcohol addiction problems.

The ramification of the disaster was the spilling of over 1.2 million barrels of oil into the ocean. This affected the area in three main ways. The first was the environmental destruction that is caused by the oil spill. Oil restricts oxygen from entering the water. 1.2 million barrels covers a significant distance from the ocean to restrict a large portion of the aquatic life from adequate oxygen. This leads to loss of life and a disruption of the food chain. In addition to this, oil is sticky and thus makes the skin of animals and birds different. The mobility of these animals if affected and millions of these animals die of drowning. In addition to this, fishing is the livelihood of any of the people living along the Alaskan coast. Disruption of the fishing for extended periods of time led to the loss of livelihood of hundreds of families that rely directly or indirectly on fishing (Guterman, 2009, p. 1558). Thus negatively impacts the amount of information that is already in existence.

The reaction of the oil companies was to use the Alyeska organization to ensure that there was fast and effective clean-up of the oil that had been spilled. The organization quickly assumed responsibility and set measures where the oil would be either siphoned or burned as fast as possible. However, the measures that were being taken were not adequate. The United States government took control of the operation and conducted the bulk of the clean-up process. Immediately, investigations were started to determine the exact cause of the oil spill and the possible ways of resolving the situation. The agencies involved in the clean-up process sought to either use chemicals, mechanically collect the oil or burning the oil to preserve the population. The different areas were subdivided, and the oil cleaned based on the nature of the area as the priority (Ott, 2009, p. 248). However, the loss of animal life was the greatest because the reduced oxygen absorption greatly affected breathing. Many of the microscopic plants and animals that provide the backbone of the area were also affected. The following table gives the perceived risk that is associated with the Exxon Valdez oil spill in studies of respondents perceptions.

The Exxon Valdez disaster is one of the most important parts of the history of corporate social responsibility in the oil industry. This is seen by the massive fine that any organization in America has ever been fined. This allowed compensation of the manpower and the loss of revenue among the people in Alaska. This is the first time that the oil industry found itself losing money due to corporate irresponsibility. This meant that corporate social responsibility now had to be taken seriously in order to avoid any financial losses (Ott, 2009, p. 248). This provides one of the fundamental pressures that are required. Stakeholders found themselves in a position of power where they could dictate policy. The effect on stakeholders psychological stress due to lack of earnings is shown in the table below.

Additionally, the government took a more involved role in the regulation of the oil industry. In 1990, following the disaster, Congress set the Oil Pollution Act. This act required the United States coast guard to toughen the regulations on oil tanker owners and oil tankers, as well as the operators. In addition to this, an oil fund was put to deal with similar disasters in future. The result was the toughening of oil tanker hulls as well as more involves monitoring of the oil tanker operators. This seems to be a good step towards corporate social responsibility in the oil industry. The question is whether this is extrinsic or intrinsic in nature. In the first place, it was evidence that the captain has a long standing problem with alcohol abuse that the oil company knew. However, this was left unchecked despite the risk that it posed. In addition to this, oil is known to be an environmentally harmful substance. Oil tankers need to be well protected to ensure that the material does not reach the environment. This would have been done without the pressure that came from stakeholders after the disaster. However, the oil companies were simply afraid to increase the cost of business. This was done at the expense of not only the environment, but also the people who live off the ocean (Ott, 2009, p. 248). This indicates that there was no intrinsic motivation by company shareholders before pressure from external stakeholders was introduced. It is important to realize that the disaster did highlight the ability of government regulation to increase corporate social responsibility where self–regulation was not able to be done. The United States is also a developed country, and the government can apply greater pressure on the oil companies.

4.2.2 The Piper Alpha disaster

Another great disaster that has occurred in recent years is the Piper Alpha oil disaster. The disaster occurred when one of the hydrogen oil production platforms exploded killing hundreds of workers. The nature of the disaster is complicated. The exact cause of the explosions is not known. However, the investigations indicated that there was a change in the maintenance pump after the initial one had been removed. The alternative pump may have failed to operate correctly and thus led to the ultimate explosion that started the chain reaction (Hull, 2002, p. 435). It is assumed that the initial pump explosion occurred at 10:00pm. Soon there were other explosions that occurred from the crude oil and natural gas that was in the organization.

The initial explosion disabled the control room. This meant that the main channels of communication were closed off. The water deluge system on the platform was also ineffective, and this meant that it could not be operated to deal with the explosion. The normal recommendation in case of an explosion is a congregation of the workers in the gallery area. Many of the workers moved to that section of the platform. However, there were flames and smoke in that section of the platform. This eliminated the expected method of evacuation through life boats or helicopters. The smoke was increasing, and many of the survivors had to crawl out of the gallery and jump into the water. Most of those who died were still on the gallery platform waiting for evacuation. In total, 167 employees perished in the platform disaster. In terms of corporate responsibility, there are many issues that were not done according to plan. The first issue was the slow response of the organization in mobilizing evacuation. Occidental Company, the oil company that operated the platform, denied any responsibility by saying that the set measures of safety that were above board (Ott, 2009, p. 248). However, these security measures were responsible for most of the deaths. There was only one evacuation site on the platform. This backfired because the fire, was concentrated around that section. Over 70 percent of those who perished were in the gallery area.

The second problem arises from the nature of the platforms. The company’s platforms were interconnected, and this meant that the Piper Alpha was being fed with oil from the other platforms. Common sense dictates that in case of a fire, the other platforms are supposed to be closed to reduce the flow of oil and natural gas to the other platforms. However, the company kept pumping oil and natural gas. This fed the flames and worsened the situation. Outright, Occidental denied any responsibility for the disaster despite the gaps in the security system that existed. First the water deluge system was out of commission for several months, despite the ever-present risk of disaster. There was no corporate social responsibility by the Occidental Company (Hull, 2002, p. 434). This indicated that despite public pressure, there was still no intrinsic need for the company to take responsibility. The judiciary did not press any charges on the company mainly because the energy minister at the time had close ties with the oil industry.

It is important to review whether incidences of disaster had caused any change in the security procedures. A further investigation shows that Occidental company has suffered two prior disasters that had almost led to similar disasters. In 1984, the company had to evacuate an entire platform due to a similar leak. In 1987, there was another factor incident that did not yield any resolution. Several elements of the two prior disasters such as the failure of the water deluge systems were still present in the 1988 disaster. This clearly indicates that despite the repeated risk that existed, there was no major change in the company safety policies. This shows that there was no intrinsic pressure to adhere to corporate social responsibility by the company (Hull, 2002, p. 434). The company was also shielded from external pressure by the decision to forgo charging of the company officials.

Clearly the failures that existed should have at least led to charges of corporate manslaughter due to the negligence of certain key aspects. It is also important to note the power that oil companies have due to their financial capabilities. While Scotland cannot be considered to be developing, it is less developed than Britain and other areas of Europe. This means that there is still an inadequate representation of stakeholders in policy making and regulation reinforcement. This is a clear indication that the development of an area influenced the extrinsic pressure that can be applied to companies in the oil industries. When compared to the Exxon disaster, it is worrying that there were more human fatalities but the difference in the external pressure is less than adequate to deal with the disaster (Hull, 2002, p. 434). The irony is that even to date, Occidental claims to be a company that always uses social responsibility yet it failed to provide any compensation for the victims of the fire beyond the mandated corporate amounts. In addition to this, the government gave the company huge tax reliefs to allow the rebuilding of the platform. In a way, the United Kingdom taxpayers indirectly funded the rebuilding and any losses that the company had. This is clearly not adhering to social or corporate responsibility. Currently, Occidental does not mention the disaster in its database.

4.2.3 The violation of human rights in Nigeria

One of the best examples of corporate social responsibility for the lack of this responsibility is the 1990’s involvement of Shell in Nigeria. Nigeria is one of the largest producers of oil around the world. There are over 3 million barrels of oil produced each day from the country. Nigeria relies on a lot on oil with over 65 percent of the GDP coming from oil. In terms of population, Nigeria is one of the most densely populated countries around the world. The country has over 130 million and a rural demographic of over 55 percent (Hemming, 1996, p. 393). One of these rural communities is the Ogoni community with approximately 500,000 people. The community is predominantly agricultural with the majority of their activities being centered on fishing or agriculture. The area where the Ogoni resides is in the oil-rich Niger Delta that has the largest oil deposits in the country. Shell is the main company that operates near community, and it has acquired the land using the Land Use Act of 1978 that allows multinational corporations to acquire land that will be used for operations.

The main issue arises from the method used in the disposal of unwanted gas and oil. There are numerous methods but the most effective methods are expensive and costly. The cheapest method is flaring where the unwanted oil is burned. This is the method that Shell Company adopted in the Niger Delta. However, this is done at a larger scale than in other areas of the country. In the United States, only 0.6 percent of the gas is flared. There is 1.5 percent in Russia, 5 percent in Mexico and 20 percent in Saudi Arabia. However, the rate of flaring in Nigeria is 76 percent. This indicates a significantly higher percentage than most of the other countries. The main problem with flaring is that it releases large amounts of carbon and methane into the atmosphere. This leads to acid rain as well as increased global warming. In the Niger Delta, Shell burns these oil flares for 24 hours. This creates a constant problem for those who live near these flares due to extreme heat and the damage that the heat causes to the crops (Hemming, 1996, p. 393). The acid rain then causes greater issues when it rains making many farm areas barren due to the excess chemicals that are spewed. Sociology scholars have clearly highlighted the plight of the Ogoni due to the problems that arise from the use of flaring in the Niger Delta. The following images give a description of the condition that the Ogoni people go through due to the flaring.

Most communities in Africa use rainwater as a source of drinking water. However, in the Niger Delta, this is not possible because the rain contains harmful chemicals that are detrimental to the health of the Ogoni people. Apart from flaring, there are numerous oil spills that occur due to lack of proper maintenance of the oil pipes. In 1992, a pipeline destroyed a river that was the source of drinking water for several villages. Life has been destroyed in the river due to the policies that are in place in the organization. Over 40 percent of the oil spills that occur in Shell occur in the Niger Delta. This indicates that the rates are significantly higher than in other areas.

4.2.3.1 Human rights violations

There are several human rights violations that have occurred in the Niger Delta. Due to the worsening condition of the quality of life of the people in the Ogoni community, there were peaceful protests by the people in an attempt to seek the intervention of the government. However, the response of the government to pressure from Shell was to create a unit known as the mobile police to tackle this peaceful protests. The protests led to the death of over 100 people with reports by the Human Rights Watch indicating that Shell provided the police with weapons that were used in the massacre. The Ogoni community responded by creating MOSOP (Movement for the Survival of the Ogoni People). The MOSOP formed an Ogoni Bill of Rights that were tabled to the Nigerian government and the United Nations. The bill also contained a statement that accused Shell of failing to share economic resources, causing environmental degradation and reducing the quality of life of the Ogoni community. This led to international condemnation by the United Nations Human Rights Commission. When the Nigerian government realized that the United Nations had also been provided with the bill a military force was created by that would specifically deal with any of the prosecutors (Hemming, 1996, p. 393). The heavy military presence led to the death of over 2,000 civilians and the destructions of over 35 villages in the Niger Delta. The problem became so bad that Shell had to discontinue operations for an extended period.

The leader of the MOSOP was considered a threat and charges were fabricated against him and the other leaders of the MOSOP. They were charged with conspiracy to commit murder. The charge carried a life imprisonment sentence. Despite appeals from major world leaders, including Nelson Mandela, the eight were hanged in 1995 (Hemming, 1996, p. 393). There was a worldwide outcry of the events along with public condemnation of Shell Company for its human rights violations and the involvement in the problem.

4.2.3.2 Shell’s solution to the condemnation

Despite the protracted issues between Shell and the Ogoni people, the first change started when the company started losing market share because of the international outcry due to the issue. Public opinion polls in developed countries showed that Shell was negatively viewed mainly due to the belief that it had negative human rights and environmental policies. This started to take a toll on share prices and business with other companies. More businesses opted for competitors rather than Shell. This caused a massive loss to the company. The company responded by taking measures to resolve any environmental damages that were caused in the past. This involved drastic reduction in flaring as well as clean-up of oil spills that occurred in the Ogoni area of the Niger Delta. This marks an intrinsic push to adhere to corporate social responsibility due to the loss of economic value of the company (Hemming, 1996, p. 393). One of the major changes was to allow SustainAbility to control the corporate social responsibility aspect of the organization. This assured stakeholders that measures were being put to deal with the issues that Shell had been accused of. SustainAbility pushed for the creation of a transparent approach that listened to what stakeholders had to say. This means that the grievances that had been ignored from the Ogoni community were now being taken under consideration. This involved reviewed of the health and safety regulations of the organization as well as a review of the self-imposed targets that Shell had set to reduce negative environmental impact.

Another measure taken by SustainAbility is to include stakeholders in the process of environmental conservation. Advertising campaigns were created targeting the Ogoni community and other stakeholders of the efforts that Shell was making to improve the standards of living of the society.

It can be clearly seen that the main driver of the change in Shell’s actions in the Niger Delta is the loss of revenue. This is in line with the assertion that shareholders will only make changes when it economically benefits them. Shell was using a lot of money to protect the oil wells as well supply the military with weapons. This money would have easily been converted to helping the Ogoni Community. In addition to this, many of the measures used in developed countries such as regulated flaring were upheld in Nigeria because the government was easier to bribe and convince of the importance. Ultimately, this is a clear indication of what can happen without any regulation.

4.2.4 BP’s Global Warming acknowledgment

One of the recent and most intrinsic shows of corporate social responsibility is shown by BP and their acceptance of their role in the global warming crisis. The company was the first major oil company to this and make deliberate changes to resolve the growing problem. This was widely unexpected in the oil industry since most companies were adamant that they were not the cause of the problem, but rather it was a result of human consumption. The major change that occurred was that BP had forced all the other oil companies to admit their role in environmental and check their environmental policies. One of the most important pledges was to reduce the company’s carbon dioxide emission to 10 percent in twenty years. However, BP was able to do this in less than four years. With the world taking global warming more seriously, there were many who applauded the efforts that BP had done but many critics in the oil industry had asserted that the move would have negative economic impacts on the company (Budzianowski, 2011, p. 293). While this was true, the public acclaim had increased the popularity of BP to counter this issue. The country also introduced the carbon trading that has now been adopted by many developed countries. This is a clear indication that the oil industry has the capability of being involved in the fight for environmental conservation.

4.3 Discussion

There are several clear issues that can be seen from the case studies that have been analyzed. The first is the distinct difference between shareholder perception and stakeholder perception. Shareholders view the business as an income generating vehicle. On the other hand, stakeholders view the business as a resource exploiting entity. This means that the stakeholders seek to ensure that the resources used are not over-exploited or endangered by the oil company. It is difficult for any business to self-regulate. This is especially more difficult in the oil industry where the profits are large. The lack of self-regulation is clear in the platform fire where Occidental had two more incidents prior to the fire but failed to make any safety measures that would reduce the problem. In addition to this, the company continued to pipe oil and gas during the period, and this resulted in the acceleration of the fire beyond the limits that were expected before. In the Exxon Valdez oil spill, the company sought to siphon the fuel mechanically out of the ocean in an attempt to save on fuel (British Broadcasting Corporation, 2014). However, this was deemed ineffective, and the coast guard had to use other methods. In the Niger Delta, Shell Company did not listen to the grievances of the Ogoni community and opted for the more dangerous but cost effective method of flaring. This is a clear indication where the economic interests are pursued in the interest of the environment or community around the company. This means that the shareholders who are policy makers in the organization do not consider intrinsic corporate social responsibility from the onset.

This is compounded by the fact that all cases of corporate social responsibility changes to the policy occur after a major disaster. The change in hull strength of oil tankers and the strictness of the employee selection was done only after the Exxon Valdez oil spill. The Shell change occurred after many years of ignoring the plight of the Ogoni community. Only when the company started to reflect losses economically was the policy changed in favor of more strict methods. This indicates that most of the corporate social responsibility changes were as a result of pressure from stakeholders or the international community. This is a clear indication that the policies that are being set in place are more reactive than proactive in nature. This indicates an aspect of public relations in those campaigns. However, there are a few cases such as the BP global warming acknowledgment that indicate that some companies are proactive. However, this is only one of few proactive cases (Bergman, 2008). A conclusion can be drawn that most of the corporate governance procedures adopted by oil companies are reactive rather than proactive.

Finally, violations of social or environmental issues seem to be worse in less developed countries. The Exxon Valdez issues were resolved in a short time while the situation in Nigeria took several years before Shell even admitted its flaws. In addition to this, the change occurred after the developed world took notice and made public condemnation to Shell. This indicates that corporate social responsibility policies in developed countries are different from those in less developed countries. In addition to this, there was blatant bribery by the company along with active help by supply weapons that led to the innocent death of over 2,000 members of the Ogoni community. Developing countries have leaders who are more easily corrupted, and the voice of less prominent members of the community are ignored. This is the reason the Nigerian government came to the aid of Shell rather than resolve the issue amicably with its people (Brown & Forster, 2013). This is an indication that oil corporation have different standards for developing and developed countries. Developing countries are still yet to reach the level where stakeholder opinions are taken seriously.

Finally, the case studies have shown the power that regulation has in the oil industry. Before the Exxon Valdez period, there was little regulation on oil tankers. However, the onset of regulation has streamlined the policies and improved corporate social responsibility in the oil industry. In addition to this, it is clear that areas with low regulation like Scotland and Nigeria were prone to more socially and environmental practices (Hemming, 1996). This is a clear indication that despite the calls for self-regulation, there is a need for regulation that ensures that the rights and freedoms of individuals are maintained while ensuring that the environment is protected regardless of the area of the location. It is clear that corporate social responsibility reports are increasing as shown in the figure below, but the reason is may be for public relations.

5.0 Conclusion and Recommendations

5.1 Conclusions

The results of the study indicate that corporate social responsibility in the oil industry is different from what is expected in theory. The objective was to determine whether oil companies are motivated by disaster and extrinsic stakeholder pressure to adopt corporate social responsibility or whether they are motivated by intrinsic desire. It is clear that companies in the oil industry are motivated by extrinsic pressure rather than intrinsic desire to be more socially responsible in their practices. As highlighted in the case studies, most of the major changes that have occurred in corporate social responsibility in the oil industry was due to pressure from stakeholders. In the Exxon Valdez issue, the pressure from people in Alaska as well as environmental groups led oil companies adopting better oil transportation safety measures. Similarly, the pressure in Nigeria from the international community led Shell Company to shifting its approach to more stakeholder and environmentally friendly methods despite years of pressure from the Ogoni community. The theoretical framework highlighted that shareholders who are the main decision makers cannot intrinsically increase their liabilities through corporate social responsibility. However, when stakeholder pressure leads to economic loss either through fines or through loss or market, the shareholders are willing to engage in corporate social responsibility measures. In truth, this simply shows that the oil industry, mainly uses corporate social responsibility as a public relations gimmick to restore public image rather than as an intrinsically motivated subject (McKibben, 2012). However, there are exceptions such as BP’s unpressured move to reduce carbon emission. While this was unpopular with other oil companies, the company proceeded to reduce its carbon emission. This is one of the few exceptions.

The second objective of the study was to determine whether corporate social responsibility in oil companies is worse in developing countries. This is answered by comparing the response that oil companies have had after disasters show that in the United States the companies quickly took responsibility and tried to resolve the situation. In Scotland, which is slightly less developed than America, Occidental refuses to claim liability. This indicates the change in corporate social responsibility based on the level of development. The situation is worse in developing countries. The Ogoni community in Nigeria opposed the environmental degradation and loss of quality of life due to Shell’s 24 hour flaring policy. However, Shell responded by using connections in the government to fight against the Ogoni. Despite the loss of over 2,000 Ogoni community members, Shell only agreed to change policies when the company faced international condemnation and loss of market share (Spence, 2011). This clearly shows that oil companies take advantage of the lack of voice of stakeholders in developing countries.

The final objective is to determine whether to determine whether government regulation would bring better results as opposed to social corporate responsibility in the oil industry. In developed countries, pressure from stakeholders has led to the development of laws and regulations that clearly control the rate of environmental degradation. However, developing countries are not able to provide such strict measures to ensure that environmental degradation is reduced. The lack of regulation makes them more prone to issues of exploitation. This means that self-regulating social corporate responsibility in the oil industry does not guarantee environmental conservation or adherence to human rights. This means that measures of regulation should be set to provide a basis for corporate social responsibility.

5.2 Recommendations

There are a few recommendations that can offer to allow better corporate social responsibility in the oil industry. The first measure is the creation of a body that ensures that oil companies infringe a specified minimum environmental degradation measure and no human freedoms and rights. This will ensure that the oil companies compensate the communities around the region adequately in a fair manner. There should also be set penalties for any environmental damage or human rights violation that occurs. This should be global to ensure that even people in developing countries are protected. Finally, the minimum limits should not be included in corporate social responsibility. This will mean that social responsibility is done intrinsically, beyond the economic loss expected.

5.3 Recommendations for future studies

The results have indicated that most of the corporate social responsibility policies set by companies in the oil industry are reactive, and only seek to improve company image. A study should be undertaken to determine the exact minimum mandatory social responsibility measures that can be placed in the oil industry.

References

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Data Communications

 

Data Communications

Name

Professor

Institution

March 27, 2015

 

Physical Layer

Thephysical layer sends and receives bits. These bits come in values of 1 or 0. This layer communicates with the physical medium. Different media use the bit values differently. These media utilize different protocols to describe the bit patterns and the mechanism of encoding signals to the various connectors. The Physical layer describes the mechanical and electrical, and functional methods to activate and deactivate as well as maintain the physical network between two nodes. This layer is also, where the interface is identified between the data terminal equipment and the data communication equipment (Todd, 2013).

Physical layer creates circuits for moving bits between devices. It Specifies voltage, wire speed, and pinout of cables used for communication.At this layer synchronization, impedance and connector shapes are an important factor. Generally, its functions are responsible for placing communication signals into the communication media and reception of incoming signals from the same media (Todd, 2013).

The different the media types are

  1. Fiber optic cables
  2. Coaxial Cable
  3. Twisted Pair

Devices in this layerinclude LAN hubs and LAN repeater

 

 

 

Data-Link Layer

At this layer, Combination of packets into bytes and bytes into framesoccurs. Its main functions are:

  1. Providing access to the media using MAC addresses
  2. Performing error detection

Encapsulationat this layer and addressing are done to identify the MAC physical addresses.This layer places rules that define when a device can transmit data over the media. Data link layer protocols dictate the format of the header and trailer that will be used for successful sending and receiving data over the media (Todd, 2013).

The Data Link layer provides for the physical transmission of data and handles error notification, network topology, and flow control. Delivery of a message to the intended node is assured using unique MAC addresses.Themessageis converted into frames, and an additionalheader with the physical destination and source addresses (Todd, 2013).

Media Access Control is the data link sub layer thatdescribes how packets are put on the media. Contention based media access is first come first served basis access where everyone shares the same bandwidth. MAC addressing is defined here. Line discipline, error notification without correction, the ordered delivery of frames, and optional flow control can also be used at this sub layer (Todd, 2013).

Logical Link Control identifies the internet protocols and then encapsulating them. An LLC header dictates how the packet will be treated when a frame is received. When a host receives a frame and looks in the LLC header it finds out where the packet is destined. It also performs sequencing and flow control (Todd, 2013).

Devices operating in these layers are LAN switches, wireless access points, and cable or DSL modems

Examples of protocols include HDLC and Ethernet.

 

 

Internet   layers

The internet layer provides several featuresincluding addressing and routing.It provides logical addressing, which routers use for path determination. IP defines that every host computer should have its own unique IP address. In addition, IP defines the process of routing so that routers can forward packets of data so that they are delivered to the intended destinations. The internet layer describeshow the network infrastructure isimplemented suchdata is sent to every node in a network (Todd, 2013).

The internet layer receives a TCP segment from the transport layer. In a process called encapsulation, the internet layer adds IP header information, such as the IP address of the source and destination hosts (Todd, 2013).

The IP header is checked at the destination host. When the IP address in the destination field of the headermatches that of the checking host, the host removes the IP header from the packet. This process is calledde-encapsulation. After the packet is de-encapsulated, the resulting segment is passed up to the transport layer (Todd, 2013).

Two versions of IP exist:

  1. IP Version 4 (IPv4)
  2. IP Version 6 (IPv6)

2 NETWORK DESIGN

  1. Network device details

COMPUTER A

MAC: 62-BA-2A-11-11-11   OUI assigned 3 bytes and vendor assigned 3 bytes

IP ADDRESS: 150.0.0.2    class B address

SOURCE PORT: 4922

DESTINATION PORT: 80

ROUTER 1

MAC: 6C-32-34-11-11-11   OUI assigned 3 bytes (Trek) and vendor assigned 3 bytes

IP ADDRESS: 150.0.0.1    class B address for port connected to network 1

IP ADDRESS: 128.0.0.2    class B address for port connected to ROUTER 3

ROUTER 3

MAC: 6C-32-34-11-11-12   OUI assigned 3 bytes (Trek) and vendor assigned 3 bytes

IP ADDRESS: 128.0.0.1    class B address for port connected to ROUTER 1

IP ADDRESS: 10.0.0.2    class A address for port connected to ROUTER4

ROUTER 4

MAC: 6F-9C-32-11-11-12   OUI assigned 3 bytes (Kirk) and vendor assigned 3 bytes

IP ADDRESS: 10.0.0.1    class A address for port connected to ROUTER 3

IP ADDRESS: 11.0.0.1    class A address for port connected to ROUTER 5

ROUTER 5

MAC: 6F-9C-32-11-11-13   OUI assigned 3 bytes (Kirk) and vendor assigned 3 bytes

IP ADDRESS: 11.0.0.2    class A address for port connected to ROUTER 4

IP ADDRESS: 129.0.0.1    class B address for port connected to ROUTER 2

ROUTER 2

MAC: 6F-9C-32-11-11-14   OUI assigned 3 bytes (Kirk) and vendor assigned 3 bytes

IP ADDRESS: 129.0.0.2    class B address for port connected to ROUTER 5

IP ADDRESS: 192.168.0.1    class C address for port connected to NETWORK 2

COMPUTER B

MAC: A2-D4-C4-11-11-11   OUI assigned 3 bytes and vendor assigned 3 bytes

IP ADDRESS: 192.168.0.2    class C address

SOURCE PORT: 80

DESTINATION PORT: 4922

 

  1. Delivery of the   message   from   Computer A to Computer B, for each step
From-to Source MAC Destination MAC Source IP Destination IP Source PORT Destination

PORT

PDU Encapsulation order
R1-A 62-BA-2A-11-11-11 6C-32-34-11-11-11 150.0.0.2 192.168.0.2 4922 80 Ethernet frame Ethernet frame> IP packet> TCP segment>Data
R3 -R1 6C-32-34-11-11-11 6C-32-34-11-11-12 150.0.0.2 192.168.0.2 4922 80 WAN frame Ethernet frame
R4- R3 6C-32-34-11-11-12 6F-9C-32-11-11-12 150.0.0.2 192.168.0.2 4922 80 WAN frame Ethernet frame
R5- R4 6F-9C-32-11-11-12 6F-9C-32-11-11-13 150.0.0.2 192.168.0.2 4922 80 WAN frame Ethernet frame
R2- R5- 6F-9C-32-11-11-13 6F-9C-32-11-11-14 150.0.0.2 192.168.0.2 4922 80 WAN frame Ethernet frame
B- R2 6F-9C-32-11-11-14 A2-D4-C4-11-11-11 150.0.0.2 192.168.0.2 4922 80 Ethernet frame Data>TCP segment>IP packet>Ethernet frame

Assumption: all ports on one router use the same MAC address.

At the source, the data from computer A is encapsulated into a TCP segment with the source and destination port numbers, the segment is then encapsulated into an IP packet with the respective source and destination IP addresses. The packet is further encapsulated into an Ethernet frame identifying the source and Destination MAC. The frame is encoded into  bits for transmission over the media to the router 1.Along the links between the routers, the frame is encapsulated into different data link frames depending on the underlying technology like PPP, to transport the frame along the WAN link(router to router). At the destination, Computer B, the frame is de-encapsulated into the IP packet to reveal the IP address of destination (and source) host, then de-encapsulated into the TCP segment to reveal the destination (and source) port number or service. Final de-encapsulation is done to produce the data. This process is reversed during the reply.

  1. For the reply from computer B to computer A
From-to Source MAC Destination MAC Source IP Destination IP Source PORT Destination PORT PDU Encapsulation order
B- R2 A2-D4-C4-11-11-11 6F-9C-32-11-11-14 192.168.0.2 150.0.0.2 80 4922 Ethernet frame Data>TCP segment>IP packet>Ethernet frame
R2- R5- 6F-9C-32-11-11-14 6F-9C-32-11-11-13 192.168.0.2 150.0.0.2 80 4922 WAN Ethernet frame Ethernet frame
R5- R4 6F-9C-32-11-11-13 6F-9C-32-11-11-12 192.168.0.2 150.0.0.2 80 4922 WAN Ethernet  frame Ethernet frame
R4- R3 6F-9C-32-11-11-12 6C-32-34-11-11-12 192.168.0.2 150.0.0.2 80 4922 WAN Ethernet frame Ethernet frame
R3 -R1 6C-32-34-11-11-12 6C-32-34-11-11-11 192.168.0.2 150.0.0.2 80 4922 WAN Ethernet frame Ethernet frame
R1-A 6C-32-34-11-11-11 62-BA-2A-11-11-11 192.168.0.2 150.0.0.2 80 4922 Ethernet frame Ethernet frame> IP packet> TCP segment>Data
  1. Some possible security vulnerabilities and threats include:

Man-in-the-middle attacks where someone places themselves between sender and receiver. It involves Packet sniffing where a network interface card is set to promiscuous mode allowing access all network traffic. This might expose some sensitive data including passwords (Todd, 2013).

IP spoofing attack where a host masquerades as a trusted host by presenting an IP address that appears to be from the local network or using another approved external IP address (Todd, 2013).

Port redirection attacks where a hacker breaks into a machine and uses it to produce wonky traffic.

Denial of service (DoS) attack where the network resources are made unavailable to the legitimate network users. Examples include TCP SYN flood and ping of death(Todd, 2013).

MeasuresI would put in place to remove or minimize the vulnerabilities

  1. Placingan intrusion detection system (IDS) intrusion prevention system (IPS) to help prevent attacks with a known signature
  2. Applying Access Control Lists on the network devices to filter the network traffic as desired like filtering and denying ICMP messages repeated pings
  3. Controlling access by only using encrypted protocols like IPsec, SSH
  4. Installing Authentication servers at both network 1 and 2 to authenticate users whenever they want to access network resources.
  5. Installing firewalls especially at the boundary of network 1 and network 2 to filter traffic entering these networks.
  6. Configuring peer authentication between the routers to avoid a rogue routers (Todd, 2013).
  7. Applying network address translation to conceal internal addresses for network 1 and network 2

 

 

Question 3 (5 marks) – IP Addressing

  1. a) What are the subnet masks for the following slash address blocks? (1 mark)
  2. /16 255.255.0.0
  3. /17 255.255.128.0

iii. /28              255.255.255.240

  1. b) Are the following address masks legal? If so, what are their slash forms? If not, why are they not legal? (1 mark)
  2. 255.255.252.0 legal /23
  3. 255.240.252.0 illegal an address mask must fill an octet (ie. 255. All network bits must be set) before moving to the next octet. To be valid it should read 255.255.252

iii. 255.255.255.224               legal /27

  1. 255.255.132.0 illegal. A subnet mask can only be in specific blocks of(128, 192, 224, 240, 248, 252, 254, and 255). 132 is not among these.
  2. c) How many computers are in networks with the following address blocks? (1 mark)

Raising 2 to the number of host bits then subtract 2(one broadcast address and one network address.

  1. /25 2^7-2=126
  2. /26 2^6-2=62

iii. /27              2^5-2=30

  1. d) Your enterprise is assigned a /18 address block starting at 130.45.64.0. Divide this into four Detail each   subnets   network   address   with   the   CIDR   slash   notation,   the subnet masks and the broadcast address. How many usable addresses are in each subnet?

(2 marks)

Creating subnets by borrowing 2 bits from the network portion to have a /18+2 =/20

2^2bits=4 subnets

Subnet address CIDR slash notation Subnet mask Broadcast address
130.45.64.0 /20 255.255.240 130.45.79.255
130.45.80.0 /20 255.255.240 130.45.95.255
130.45.96.0 /20 255.255.240 130.45.111.255
130.45.112.0 /20 255.255.240 130.45.127.255

Usable host addresses are given by:

2^12 host bits -2broadcast and network addresses=4096-2=4094 usable host addresses

Reference

Todd, L. (2013). Routing and Switching. Indianapolis,Indiana:John Wiley & Sons, Inc.

Research in Motion Case Study

entrepreneurship has become vital as firms strive to sustain their operations and competitiveness in the current business environment. Corporate entrepreneurship is concerned with recreating or instigating the renewal of an enterprise so as to perceive and exploit business opportunities that can promote growth and profitability in the enterprise in question. Factors like intense competition, constant changes and high number of sophisticated competitors in the current business environment have necessitated the need for corporate entrepreneurship. It is therefore important for Research in Motion Company to put in place effective structures and strategies that will enable it to be innovative if it is to remain relevant in the technological market.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

 

The current business environment is characterized by intense competition and constant changes. As such, firms have to adopt entrepreneurial strategies in order to remain competitive and relevant. The desire to meet customers’ needs, explosive growth in some sectors and recession like conditions in others have led many organizations to restructure and even change their key business ideas in order to adapt to the changing business environment and innovatively exploit opportunities (Hill, 2012).

This paper examines various aspects of corporate entrepreneurship in an Information Technology (I.T.) company known as Research In Motion (RIM) Company. RIM is the company that developed and marketed the once popular smart device called Blackberry. First, this paper provides a summary of the case study. Second, the paper outlines how RIM Company manages the triggers for corporate entrepreneurship. Third, the paper discusses the elements of building an adaptive organization that are relevant to RIM. Finally, the paper outlines the strategy that RIM can use as it strives to sustain its innovative leadership using fundamental paradoxes confronting corporate entrepreneurship.

Case brief

The case study is about an Information Technology company called Research In Motion Company. The company engages in the design, development and marketing of various information technology devices and software. One of the company’s popular products is a smart phone called Blackberry. In a period of 10 years, RIM sold more than 50 million   smart phones worldwide   and expanded its operations and profitability significantly. However, because of the volatile nature of the technological market, the company currently losing ground to Apple’s iPhone and a number of smart devices running Android mobile operating system. For the company to sustain its operations and profitability, it must come up with new innovative products and services that can compete with iPhone and other smartphones running Android operating system.

Managing the triggering events as it applies to Research in Motion

 

There are several triggering events for corporate entrepreneurship. Some of the triggering events are specific customer request, competitor threat, changes in people’s lifestyle, new sales target, declining market share, improved quality control, senior management initiative, ongoing innovation program in a given company and availability of new resources.   In the case of Research in Motion Company, the main triggering events for corporate entrepreneurship are competitor threat or actions, changes in people’s lifestyle, declining market share and the ongoing innovation programs in the company.

Research in Motion Company has struggled in recent years to manage the triggering events for corporate entrepreneurship effectively in recent years. As a result, the company has lost its leadership position in the global smartphone market to competitors like Apple, Samsung and Google. RIM Company can manage the triggering events effectively by first of all studying the triggering process. This can be done by analysing the business environment where the company is operating using business analysis techniques such as PESTLE analysis, SWOT analysis and MOST analysis.

PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Environmental factors that affect RIM’s external business environment. Using this business analysis technique, RIM will be able to understand the macro-environment factors that can affects its current strategic posture in order to adapt effective corporate entrepreneurial strategies to respond. The company can use SWOT analysis to focus activities in areas of strength where it has greater advantage compared to its competitors. SWOT acronym for strengths, weaknesses, opportunities and threats. RIM will use this business analysis technique to examine its current position by focusing on its internal strengths and weaknesses and its ability to compete with companies like Apple, Google and Samsung. Furthermore, RIM will use MOST analysis to examine its internal environmental by reviewing its mission, objectives, strategies and tactics. This will ensure that the company’s mission, objectives, strategies and tactics are relevant and accurate given the prevailing conditions in the information technology sector.

By studying the triggering process in RIM, managers in the company will gain insights regarding the triggers before deciding the triggers to focus on given the prevailing conditions in the company’s internal and external business environment. The manager at RIM will then decide on how resources and incentives will be allocated to facilitate certain triggers. In addition, the managers in the company will come up with an organizational structure that can take advantage of particular types of triggers. For example, the company can use its technical capability, resources and skills to transform itself in a manner that can enable it take advantage of a given trigger. The company can also develop new effective structures that support small and large scale redeployment of resources to creative activities so as to create an enterprise that is focused on identifying and exploiting opportunities. Furthermore, the company institutionalize practices that creates an environment that promote innovation as a way of solving business problems. Finally, the managers in the company will come up effective strategic plans and management approaches that can enable them to effectively respond to the triggers for sustainable entrepreneurship.

Building an adaptive organization

 

Research In Motion Company is currently being confronted with dynamic, threatening and complex changes in its external environment. The company has lost a significant share of its market share to competitors like Apple and Samsung. As such, RIM has no option but to adapt to the changes in its business environment in order to remain relevant and competitive in the market. Adaptation in this case entail various forms of innovation.

There are several elements from building an adaptive organization that would be relevant to RIM. The first element that would be relevant to the company is the style of champions that work and do not work. RIM’s ability to adapt and be innovative is dependent on the company’s ability to learn (Morris, Kuratko & Covin, 2010). The approach taken by leaders in the company in developing a learning organization is therefore a vital element in building an adaptive organizations. Leaders in the company should therefore develop new ways of thinking that motivated employees in the company to unleash their potential so as to create new avenues for growth and alternative ways of doing things to promote learning. The leaders should also do away with standard procedures and structures that are primarily intended to guard against mistakes and frauds. This is because they hamper innovations leading the company to use its limited resources on non-viable long term projects.

The second element from building an adaptive organization that would be relevant to RIM is approaches to goal setting and monitoring that keep projects on track. This element would be relevant to RIM Company because the company was the first to come up with a smart phone yet allowed its competitors like Apple and Samsung to come up with cheaper and more effective smart devices that significantly reduced its market share. Moreover, despite the fact that it is obvious that in the computer and consumer electronics industry where the company is operating features and functionality have significant influence on consumers’ purchasing decisions, the is yet to come up with an effective mobile operating system that can compete with iOS or Android. These show that RIM’s approaches to goal setting and monitoring is not effective and that is why the company cannot keep its projects on track.

The third element from building an adaptive organization that is relevant to RIM is methods of opportunity identification that are especially productive given the nature of the company, industry and market. RIM was the first company to come up with a smartphone that enabled the company’s profits to grow by 84 percent in the year 2009 becoming the fastest growing company in the world. However, because of the company’s inadequate methods of identifying opportunities in its business environment, it allowed Apple to take a significant share of its market (Morris, Kuratko & Covin, 2010).This is because Apple’s strategy was focused on developing a digital lifestyle product line that exceeds customers’ expectations in terms of quality of design and functionalities supported which was the trend that was taking shape at the time while RIM’s strategy was focused on meeting the needs of corporations. Apple was therefore able to develop core capability in product design as it strives to differentiate its products and services from its competitors. As a result, Apple developed digital lifestyle products that were beautiful, unique, and easy to use making RIM’s Blackberry less competitive (Hill, 2012).

The fourth element from building an adaptive organization that would be relevant to RIM is the models of successful projects in terms of key steps or stages and the identification of the models that best fit different types of projects. RIM is the company the company that popularized smartphones as a must have tool for the twenty-first-century worker. The company however failed to use the model of the Blackberry’s successful project in terms of its key steps or stages to identify the models that best fit subsequent projects in the company. As a result, RIM is quickly losing ground to Apple’s iPhone and a slew of smart devices based on Android. This is because Apple has been able to come up with exceptional designs. Apple also vertically integrates its proprietary software and hardware (Kim, 2014). This ensures that the company control all the technologies that are important for its success. Competitors like Samsung on the other hand have been able to use Android operating system to produce affordable smart devices that appeal to a wide range of consumers.

The fifth element from building an adaptive organization that would be relevant to RIM is the technique for optimally managing the timing and allocation of resources across the stages of a project. Unless RIM find new ways to innovate, the company could struggle to survive. This is because a recent market research shows that around 40 percent of BlackBerry users would switch to Apple’s iPhone as their next smart phone purchase and 33 percent of them would switch to an Android phone option. The company therefore does not have a loyal customer base that can sustain its operations and profitability in future. It is also important to point out that Apple’s iPhone will soon be offered by Verizon which is the number one wireless carrier in the United States. In addition, Apple currently controls the majority of mobile applications developers’ mindshare with nearly 89 percent of the registered projects. RIM therefore has a long way to go for it to regain its market leadership position and should change its focus from enterprise customers to consumers who are the key driving force in the smartphone market.

Strategy for RIM as it tries to sustain its innovative leadership

It is important to point out that not all corporate entrepreneurs produce dramatic breakthroughs. Ironically, the corporate entrepreneurs that try to overthrow the established corporate entrepreneurs most of the times realize that the returns they achieve is less than those received by less ambitious entrepreneurs (Morris, Kuratko & Covin. 2010). Corporate entrepreneurs are therefore confronted by a number of paradoxes. Managers at RIM should thus be adept at managing the paradoxes by focusing on speed, portfolio business models, “go to market” flexibility, competitive innovation and intra-enterprise cannibalism.

The paper recommends that RIM should focus on a strategy that will enhance its speed to market and go to market flexibility. According to RIM’s Co-CEO, the company has plenty of new innovative devices that are yet to be unveiled. However, given the volatile nature of the information technology market speed to market is critical. The CEO should not allow RIM to be left behind by its competitors who are going beyond smartphones to other innovative products like cars and TV. Speed to market is important because RIM is operating in a fast-cycle industry. Therefore, for the company its innovative leadership, it has to produce products and services that can transform the market faster compared to its competitors.

Go to market flexibility is important because of the nature of RIM’s main competitors. RIM’s main competitors are Apple, Samsung, Microsoft and Xiaomi. Xiaomi market is mainly in China. The company offers high quality and affordable smart devices based on Android. Samsung on the other hand is the largest technology company globally and offers smart devices based on Android (Kim, 2014). The company controls its entire manufacturing processes for smart devices and therefore able to bring products to market faster compared to its competitors. Samsung’s smart devices are also affordable. Microsoft recently acquired Nokia and is offering high quality smart devices based on its proprietary operating system at affordable prices (Kim, 2014). Given that RIM’s competitors are using diverse strategies to compete, it is important for the company to be flexible in order to find the right balance that can enable it maintain its innovative leadership. The company should therefore be leaner and focused on a few key businesses such as software and services. This will enable the company to enhance its speed to market and go to market flexibility.

Conclusion

 

RIM Company is at a crossroad and there is need for a new approach. The company has lost a significant market share to its main compettors in recent years. Because the company is operating in a fast-cycle industry, it is important to be leaner and focused on a few key businesses so as to enhance its speed to market and go to market flexibility.

References

Hill, C. 2012. International Business, Competing in the Global Marketplace. New York, Mc Graw-Hill.

Kim, M. 2014. In smartphone mass-market, Samsung, Apple have margins on their minds. [online] Available http://www.reuters.com/article/2014/04/09/us-samsung-elec-smartphones-analysis-idUSBREA3806J20140409%5BAccessed 12 May 2015].

Morris, M., Kuratko, D. & Covin. J. 2010. Corporate Entrepreneurship & Innovation. Nwy York, Cengage Learning.

Logistics and Operations Management

Name:

Logistics and Operations Management

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Institution:

Date:

Table of Contents

Introduction…………………………………………………………………. p 3

Customer Service………………. ………………………………………….P 4

Packaging…………………………………………………………………… p 5

Product Planning…………….…. ………………………………………….P 6

Facility Location…………………. …………………………………………..p 7

Storage and Materials Handling… ………………………………………….p 8

Conclusion…………………….…………………………………………….. P 9

The Case of Sony

Being that different organisations make use of different operational strategies or trade in different products, logistical operations used in each case may be varied (Inwent: 2015). However, some component activities are more recurrent than others. However, an evaluation of a case example will provide a better understanding of the components of logistic. It will also provide an understanding of the means by which each one of them can be optimised in order to improve the organisation’s overall performance. This report will make evaluate the case of Sony UK. The various component activities that are used by the company will be evaluated. From this evaluation, the performance objectives for each activity will be derived, and the efficiency of these objectives determined. Logistics are aimed at achieving the optimum potential for all the components of a business (Couriel: 2010: p. 4). This will in turn benefit the interests of the shareholders, suppliers and customers (Ballou 2010, 13).

As initially noted, the component activities applied by various organisations are varied. The case of Sony UK provides a unique approach that conforms to the varied types of products the company deals in. The component activities observed in the case of Sony UK include: (Naidu 2011, 6)

  • Customer service
  • Packaging
  • Product planning
  • Facility location
  • Demand forecasting
  • Storage and materials handling

Each of these activities represents a key aspect in relation to the company’s supply chain.  Each one of these activities operates independently. However, the implications are intertwined to form an efficient system.

Customer service

This refers to a portal by which the company and its customers can interact. Essentially, customer service is aimed at providing the customers with a chance to seek aid or issue complaints in relation to the company’s products and services (Tshohl 2011, 3). Notably, Sony Inc offers a lot of emphasis in relation to this activity. Being that the company deals with electronic devices, it should be able to provide a means by which the customers can gain help on usage of products or to report unsuitable aspects or malfunctions of the acquired product. Customer service involves the recognition of what the customers need and providing a means of helping the customers achieve this intended quality (University of Huston: 2011).

As a company, Sony Inc puts in a lot of effort in maintaining its customer services. Labour force set aside to help in achieving efficiency in this activity plays an important role in helping the organization arrive at an appropriate operational objective in terms of customer service. This efficiency is observable from the flexibility of the company’s customer service. Notably, the system developed to serve this purpose is able to offer customers with an aid in a wide range of issues. This flexibility is supplemented by the quality of the customer services offered. This quality is achieved through the employment of highly skilled support teams. These services are also very accessible as the various communication channels put in place ensure that the support teams are available around the clock. In essence, the operations surrounding the achievement of the goals set in relation to customer services are based on several important objectives. The first is in relation to the maintenance of quality in the form of professionalism and the use of skilled personnel. The second is in relation to the maintenance of proper customer relations. This is achieved by ensuring that the employees accorded this task maintain an acceptable code of conduct and level of respect towards the customers. The third is in relation to the delivery of timely assistance in order to preserve the patient’s time. This reduces the customer’s waiting period while ensuring that the timely services are of the required quality. In addition to these objectives, the company also ensures that the customers are able to access assistance on a variety of issues (Gilmore 2014, 12).

Essentially, this component activity captures value, variety, visibility and volume in relation to this component activity. Volume is captured by the substantial number of customer service employees, which increase the rate at which service can be offered. Visibility, on the other hand, is captured by the fact that the customer services can be reached easily.

Packaging

Packaging is mainly important in relation to the protection it offers the product in question. However, the aspect of cost has to be considered. A careful balance has to be reached in terms of efficiency, cost and environmental effects of the packaging offered (Goodwin & Young 2011, 22). Sony has been noted to be one of the leading companies in terms of the maintenance of good packaging strategies (Turner 2007, 91). An instance of such success in packaging is observable in the packaging of Sony’s waterproof Walkman. This device is designed to be resistant to water, and is sold in the market in a water bottle. The customer can then reuse the water bottle as opposed to discarding it. In this case, a non-bio degradable packaging can be disposed of in an environment-friendly fashion. Apart from this instance, the company also focuses on ensuring that packaging for its products are biodegradable and at the same time protective for the equipment being sold.

Product planning

The third Activity captures the need to ensure that a product is produced with the utmost efficiency. In addition to this, product planning also captures the need to budget for the production. Essentially, the cost of production reflects the cost of the final product. Product planning as a component activity allows the company to be able to effectively budget for the given product’s production (Kahn 2014, 21). This is in addition to the establishment of the outlook of the final product. Currently, the electronics industry is according a lot of emphasis on aesthetics as opposed to focusing on quality alone. Planning allows Sony Inc to develop products that are both good looking and are of the right quality. In addition to this, the company is able to plan for and develop products in the most appropriate value.

Planning for the product makes it possible to estimate the cost of production. This ensures that the production process is not subject to cost, but rather, cost only remains a variable in the production process. However, it is important that the production process be developed carefully. Hasty plans may be very inaccurate and may present problems for the company. However, product planning does increase the speed of production. Similarly, in such a case, the speed of production is predetermined and, therefore, speed becomes absolute in determining the quality of the final product (Buzacott et al 2013, 105). This increases the dependability of the production process and that of the final product.

This component activity makes use of quality, time management, resource management and planned production as its main objectives. Time management involves considering time as a factor of production. Essentially, planning ensures that the production process can be completed in accordance with specified deadlines. Quality management objectives, on the other hand, are based on the initial specification of expected production standards. Product planning can be used to specify the quality of the final product. Essentially, the production process is carried out in accordance with product specifications and within the most suitable parameters as established in the product planning process. The third objective, resource management, ensures that the production process is conducted within the specifications of the budget. Notably, product planning considers the available resources and the required resources. Production is then conducted in line with these establishments. Essentially, this can help to save the company a lot of resources by reducing the cost of production. At times, these reduced costs can be transferred to the customers.  Planning also makes use of demand forecasting techniques. This means that the company can estimate the level of production with respect to the expected demand.

Facility location

Sony is a multinational company. Sony UK is just a branch of the company that serves the UK market. As a company with a global market, Sony requires a very large facility in which it can be able to manufacture its wide range of products for its vast market. Therefore, the company needs to secure a location that has all the resources, including land, to help it sustain its production. It is for this reason that the company owns a number of factories across the globe (Sony 2011). While most companies in the technology industries have their factories based in China, Sony has its factories located in several countries. Only recently, the company has proposed to set up a factory in India. This variety of locations for its factories help to provide a variety of options for the company. This helps it reduce the risks involved in having only one key factory. This strategy also helps to increase the rate of production. In addition to this, in some cases, it helps to reduce the distance between the point of production and the customers. This is helpful in reducing the cost of supply. Facility location helps to cater for time utility. This is especially observable from the fact that the strategic location of warehouses, factory and transport facilities play an important role in the delivery of products to the market (Crandal Crandall & Chen 2014, 58). In as much as this may not improve the quality of the products, strategic location does improve accessibility. However, transport does play an important role in ensuring that the company is able to unify all its premises and to supply its customers (Sreevinas & Sriivinas 2013, 7).  This is an important aspect in relation to logistics operations.

Storage and Materials handling

In as much as packaging helps to protect products from damage, any efforts to provide the best packaging will be pointless if the equipment used in handling them is not carefully selected. Electronic devices can prove to be fragile. Therefore, storage facilities used should be suited for the storage of delicate items. Similarly, the machinery used to handle these products should be specially developed to handle such levels of delicateness. Sony makes use of very effective equipment. This ensures that the integrity of the equipment being handled or stored is maintained.

In addition to this, the use of specialised equipment can prove to be important in time management. Specialized equipment is able to perform tasks involving the handling of goods faster and easily. This is good in helping the organization save on time, which can then be directed to other projects that will add benefit to the company. Proper storage facilities, on the other hand, can help to preserve the quality of products. Similarly, better storage facilities and equipment can increase the number of products being handled, therefore, providing room for other materials. This helps to boost the speed and efficiency of the entire production and supply process (Rios 2011, 61). Therefore, volume and value are sustained through such facilities. It is also notable that proper handling of products helps to reduce costs involved with the handling and storing goods or damage to goods (Coyle Langley & Gibson 2008, 31).

When selecting such equipment and storage facilities, it is mandatory to consider their dependability. This is in relation to their dependability in relation to their ability to perform the task for which they were acquired. Similarly, the aspect of cost comes into play. High cost of storage and handling of equipment will increase the company’s expenditure. However, if the gains from this equipment is more, then such expenditure would be considered worth the trouble. A more preferable approach would be the acquisition of multipurpose equipment. This makes it possible to acquire the maximum value the equipment secured.

Conclusion

Sony has been able to remain in the market for a long time. This has been attributed to the fact that the company makes use of small but effective decisions. For instance, the activities noted in logistic operations may appear to be minor. However, the implications of such small techniques may lead to a chain of events that will see a company prosper. Sony provides a perfect emulation of a company that makes use of logistic strategies to improve its performance. Such strategies improve the organization’s performance at the production and supply level (Farahani Rezapou & Kedar: 2011, 25). The noted component activities; customer service, packaging, product planning, facility location, demand forecasting, and Storage and materials handling represent some of the component activities Sony makes use of in order to achieve maximum value from its production and supply process. Notably, each of these activities is related such that the success of the logistics operations is on the proper coordination each activity, while ripping the benefits simultaneously (Government of Canada, 2015).  Essentially, logistics help to bring together the dimensions of time, space and place in accordance with specified plans, coordination techniques and organization (Gleissner and Femerling, 2013, 3).

References:

Ballou, R. 2010, Logistics, Supply Chain and Transport Management. Cambridge University College.

Buzacott J., et al. 2013. Production Planning and Control: Basic Concepts. Muchen: Verlag.

Couriel. 2010. Logistics: Basic Concepts and Characteristics.

Coyle, J., Langley, C. & Gibson B. 2008. Supply Chain Management: A Logistic Perspective. Boston: Cenegage Learning.

Crandal E., Crandall C. & Chen C. 2014. Principles of Supply chain Management. 2nd Ed. New York: CRC Press.

Farahani R. Z., Rezapour S. & Kedar L. 2011. Logistic Operations and Managements: Concepts and Models. London: Elsevier

Gilmore A. 2014. Consumer Service Management. New York: Barb Gates.

Gleissner H. and Femerling J. C., 2013, Logistics. Springer Texts in Business and Economics, DOI 10.1007/978-3-319-01769-3_2,#Springer International Publishing Switzerland

Goodwin D. & Young D. 2011. Protective Packaging for Distribution: Design and Development. Pennsylvania: DEStech.

Government of Canada. 2015. Logistics and Global Models. Global Business Strategy and Innovation: A Canadian Logistics Perspective. [Available at] http://www.ic.gc.ca/eic/site/dsib-logi.nsf/eng/pj00530.html   [Accessed on] 26th March 2015

In went. 2015. Transport Management. [Available at] https://gc21.giz.de/ibt/en/opt/site/ilt/ibt/regionalportale/sadc/inhalt/logistics/module_01/16_components.html  [Accessed on] 26th March 2015.

Kahn K. 2013. Product Planning Essentials. New York: Routledge.

Naidu P. 2011. Quality Management and Supply Chain Management in Sony.

Rios, R. et al. 2011. Just in Time systems. New York: Springer.

Rushton, A., Croucker P., Baker P., The handbook of logistics & distribution management, 3th Edition

Sony. 2011. Corporate Info.  [Available at] http://www.sonyenergy-devices.co.jp/en/outline/index.html  [Accessed on] 26th March 2015.

Sreevinas M. & Sriivinas T. 2013. The Role of Transportation in Logistics. New York: Library of Congress.

Tschohl, T. 2011. Achieving Excellence through Customer Service. New York: AudioInk.

Turner T. 2007. Vault Guide to Top Consumer Employers. New York: Library of Congress.

University of Huston. 2011. Introduction to Logistics. [Available at] http://www.uh.edu/~lcr3600/simulation/logistics.html  [Accessed on] 26th March 2015

Environmental Management for Sustainable Development

University’s Name

Submitted by Names:

Tutor:

Date:

Introduction

Environmental issues have become one of the emotive topics in the whole world. There is increased environmental degradation across the globe and a lot of international conferences are being held to discuss the issue, but what is shocking is that no significant change is being realized. This is partly because the world fears taking the responsibility for their actions and there have been increased blame game, especially among the developed countries, which are the most polluters, due to selfish interest. One such country that has experienced increased environmental degradation is the United Kingdom, especially London city. According to London Climate Change Partnership (LCCP) (2002), the main cause of environmental pollution in London is its transport system, which is the main source of greenhouse emission in the city and its environs.

The report focuses on the environmental friendly and sustainable transport systems in London. Issues to be covered in this work include the impact of current transport systems on the environment of London and its people, how to reduce the impact of environmental pollution, and how to implement renewable energy systems in the new transport systems. In addition, the work will cover new transport systems which are environmentally friendly.  This report, therefore, aims at providing enough information, which will help in in replacing the current transport systems with the new environmentally friendly transport systems in London.

Impact of Current Transport Systems on Environment

The world’s number one polluter is a transport system since it is the major consumer of the petroleum products in the world.  One of the way the system pollutes the environment is through greenhouse emissions of gases, which leads to global warming. Some of the gases emitted by the locomotives are nitrogen oxides and carbon monoxide gases, which reacts with air, causing excess carbon dioxide in the air which leads to global warming. Nitrogen oxide gas also reacts with moisture in the air leading to acid rains which are very corrosive (Bows et al, 2006). The current transport system in London has led to  a lot of negative impacts on the environment like increased temperatures, acid rains, rise in sea levels, floods and storms, which affects the lives of people living in London  and the whole economy of the United kingdom.

One of the adverse impact of the current transport system in London is global warming (“LCC”, 2002). Global warming is caused by excess carbon dioxide in the atmosphere in the environment.  Research has shown that road transport is the main contributor of global warming due to the emission of excess of carbon  dioxide gas in the atmosphere. Some of the results of global warming include a rise in sea level and increased storm, which the country is experiencing now (“LBC”, 2003).

Another impact of transport system in the environment is noise pollution. This majorly come from big trucks, airplanes and trains. Most of these trains and aircraft stations are located near London city which negatively affect the lives of local people. Even though people may not be aware, noise pollution comes with health problems. People living and working in areas prone to noise have been noticed to be developing similar diseases (Akerman and Hojer, 2006). Research shows that noise pollution  cause diseases like sleep disturbance, psychological problems and cardiovascular diseases. The high number of  large vehicles, trains and airplanes in London affects the health of the people. This will end up affecting the economy as a whole. Therefore, the current transport systems in London affect the health of people living within and around the city.

London is also experiencing increased  air pollution. Research from environmentalists show that the contributor to air pollution is road transport. Road transport locomotives harmful gases in the air like carbon monoxide, nitrogen oxides, fine dust and soot, benzene and hydrocarbon gases which come with a lot of effects on the lives of many living in London  and UK’s economy as a whole. It is estimated that about 12000-24000 people due of air pollution in the UK.  One of the disease that has claimed the lives of many people in London due to air pollution is asthma. This disease is caused by nitrogen oxides and ozone gas, which come from locomotives. This also has a bearing on the economic performance since, according to the National Asthma Campaign, the government of the UK spends about £1 billion every year on asthma patients.  Very many people are also being admitted in hospitals and government of UK estimates that between 14000-24000 people are being admitted in hospitals due to air pollution. The current transport systems  cost the government and people of  the UK their lives and money due to air pollution associated with it.

Another issue that is related to the transportation system is land take. It has been observed that transport systems tale a large chunk of land in in London. Road transport alone takes about of the total land available i9n the UK, which is about 2004km2, according to the Department of Transport. Heavy vehicles take about 150km2 of the total land. This show that the land available for other human activities has reduced.  City occupants are therefore forced to concentrate on a small piece of land within the city, which compromises the space available for housing and other human activities leading to environmental degradation.

Prevention of the Impacts of Transport system Environmental Degradation

Governments all across the globe are doing all that they can  reduce the impacts transport systems in environmental degradation. Determination to reduce the impacts should not only be aimed at reducing the impact, but they should be sustainable as well. Some of the steps that the London government should take to reduce the impacts  include  improving infrastructure, use of alternative fuels,  use of public transport, use of electric vehicles, use of bicycles, and purchase of carbon offsets.

One of the areas that the government should concentrate on is the improvement of the existing infrastructure. Appropriate infrastructural development will be able to improve the capacity of other transport networks leading to efficiency and conservation of the environment. In order to ensure that the development is sustainable, the developers should do a proper impact assessment to ascertain that the infrastructural development is sustainable in  the long run. The investment should focus on better railways, water transport, and public transport.

The main transport system polluter is road transport and therefore the government of London should concentrate on the construction of efficient and modern railway lines to replace road transport. Railway transport is more environmentally friendly compared to road transport and at the same time it will be able to connect other parts of the city adequately. In order to ensure that railway transport is sustainable,  electric train should be used since they do not pollute the environment and at the same time they are faster.

Petroleum products contribute to a larger percentage of polluters. Therefore, finding alternative fuels will help in reducing the level of pollution caused by transport systems. Currently, there are a variety of fuels in the market that are environmentally friendly and the government should come up policies to ensure that the public uses those fuels in transport. Such environmentally friendly fuels include E-85, liquefied petroleum gas (LPG), and compressed natural gas. These fuels contain low content of carbon and, therefore, do not pollute the environment like the normal fuels.

One way of reducing congestion in the city is the reduction of the vehicles accessing the city. The majority of people in London prefer using their private vehicles when moving from one place to another. In the London city alone, there are about 26 million trips made a day by people when they are doing their business in the city. This figure shows that the city is congested with both human and traffic jams. However, government and city planners should come up with the strategy of making public transport attractive to the people.  This can be achieved by making public transport attractive to the public. First, public transport should be accessible and a proper and efficient service made for the public. For instance, the mode of payment and inquiry should be through mobile phone in order to reduce congestion in the public transport parks. This strategy will reduce the impact of transport systems on the environment.

Government and local authorities should promote initiatives that enhance the use of a vehicle as a means of transport. This will reduce the impact of transport systems on the environment since vehicles do not use any fuel and therefore there will be reduction carbon dioxide emission in the environment. However, to achieve this, the government should develop and expand infrastructures which enable cyclist to easily move from one place to another. A separate paths and tunnels should be developed for cyclists to motivate them to use their vehicles when moving from one place to another.

Finally, the public should be made to transact their business online. With the current technology, there is no need for one to move to the city to do the shopping or transact a business that can easily be done online. This will reduce the number of people moving to the city, which will reduce the number of private vehicles accessing the city. A good infrastructure should be put in place to allow this online transaction to reduce the negative impacts of the transport system on the environment. This will result to another effect on health since bicycles a form of exercise and therefore cyclists will maintain physical fitness. This will reduce health problems leading to productive labor force.

Implementation of Renewable Energy Systems in the New Transport system

A new transport system is important to reduce  environmental degradation that the country is witnessing today. However, this is only possible if a new set of renewable energy is put in place to reduce the use petroleum products in the current transportation system. Some of the renewable energy that should be considered are solar energy, wind energy, electric energy and biofuel energy (Banister and Hickman, 2006).  Will ensure that London is free from the transport system environmental pollution,   which will ensure that residents of the city are healthy and London economy is thriving.

The use of electricity in transport system has gained momentum and is viewed as one of the ways to keep the environment clean and also to save on fuel consumption since the volume of fuel is also reducing (Willowa and Connel, 2003). Therefore, the best way to save the economy and to save the environment is through the use of electricity in transport system. Some of the advantages associated with the electricity powered locomotives are that it leads to less pollution since there is no exhaust leading to less environmental pollution. Another advantage that it comes with is that the world  London will not be depended on the oil prices to improve its economy. In addition, electricity provides a perfect way to harvest both solar and wind energy, which can further be used in other means of transport.

Currently, there are fully developed electric train and electric vehicles which can be used in the new transportation system. What need to be done by the concerned authorities is to put systems in place which makes it possible for people to use electric trains and vehicles. Since electric vehicle uses battery, many charging centers should be developed, which are easily accessible. This can also be enhanced through the use of the modern technology by developing a swap station where the batteries are charged using the modern technology. This will encourage more people to use the electric transport system in order to save the environment. Apart from reduction in environmental degradation, it will also lead to economic stability in London since it will not rely so much on oil, which always determine the market forces (“International Energy Agency”, 2006). The same should apply to other means of transport like a train.

Another new means of transport that is highly sustainable is the use of bicycle since it only requires the use of human energy which is renewable. However, this means of transport have been shunned by the majority since it is associated with lower class people (Cairns et al., 2004). But all is not lost since more people are now embracing the bicycle as their means of transport. What the government need to do is to put systems and structures in place to motivate and facilitate this healthy and clean means of transport.

First, exclusive lanes should be set aside for  bicycles only to enable smooth movement of cyclists. At the same time, bicycle locking facilities should be set aside in a safe place where cyclists can leave their bicycles when engaging in other activities within the city. Finally, since one is more likely to sweat when biking, showers should be placed in the designated places in the city at workplaces to enable cyclists to freshen up. The use of the bicycle will be sustainable if all these facilities and infrastructure are put in place.

Recommendations   

The current transport system contributes to environmental degradation that London and its people are experiencing today. The main source of energy used in the current transportation system oil, which is expensive and at the same time pollutes the environment. Despite heavy reliance on oil in the transportation system, there are cheaper and environmentally friendly alternatives, which are sustainable and will significantly reduce the level of environmental degradation. These alternatives are recommended below:

  • Creation of an online platform. The new technology allows people to transact a lot of businesses online. Therefore, an online platform should be created to prevent people from driving to the city to access services, which do not need one to travel since they are available online.
  • Make bicycle the most viable alternative to the current transportation system. It does not need to use any fuel and it makes the society physically fit. What needs to be done is only to put facilities and infrastructures in place to motivate and facilitate the use of bicycles.

Conclusion

It is clear that the current transportation system leads to environmental degradation. This has led to increased global warming, which comes with other environmental disasters like rise in sea level and increased storm in the city. Environmental degradation affects all the sectors of the economy, especially health sector. However, there are solution to environmental degradation that is caused by the current transport systems in London. What needs to be done to save the situation is the use of safe and healthy renewable energies like bio fuel and electricity. Therefore, in order to solve these environmental degradation associated with the current transportation system, ne transport systems must be put in place.

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