August 16, 2017

Executive Summary

Shopping limited store generated a loss of £8,000 which would change to a profit of £25,000 after closing the restaurant. Closing the restaurant would boost Shopping Limited’s profitability but would affect its image. The factors that would affect MIS implementation and design include technological, environmental, and organizational factors. Controlling and planning budget within Shopping limited would include establishing production, inventory and establishing financial goals

Question One

marginal costing statements of all departments remaining in operation

Furnishing Kitchenware Restaurant Menswear Toys Store
£000 £000 £000 £000 £000 £001
Sales 560 980 410 430 680 3060
Variable cost
Purchases for sale 400 680 325 229 560 2194
Opening stock 255 63 25.5 27 197 567.5
Departmental expenses 21 10 16.5 5 20 72.5
Sales promotion costs 14 2 0 1 20 37
Closing stock 263 53 25 25.5 229.5 596
Total variable cost 427 702 342 236.5 567.5 2275
Contribution 133 278 68 193.5 112.5 785
Fixed overheads
Non-management wages 75 45 101 65 95 381
Other costs 412
Profit 58 233 -33 128.5 17.5 -8

Marginal costing statements of the closure of the Restaurant Department

Furnishing Kitchenware Menswear Toys Store
£000 £000 £000 £000 £000
Sales 560 980 430 680 2650
Variable cost
Purchases for sale 400 680 229 560 1869
Opening stock 255 63 27 197 542
Departmental expenses 21 10 5 20 56
Sales promotion costs 14 2 1 20 37
Closing stock 263 53 25.5 229.5 571
Total variable cost 427 702 236.5 567.5 1933
Contribution 133 278 193.5 112.5 717
Fixed overheads
Non-management wages 75 45 65 95 280
Other costs 412
Profit 58 233 128.5 17.5 25

Question Two

Financial implication of closing the Restaurant

The restaurant business is contributing £68,000 to the store, but its overall profitability is -£33, without considering other fixed costs. When the restaurant is in operation, store generated an overall loss of -£8,000, but after its closure, the store would overcome its losses and generate £25,000 in income. This means that closing the restaurant would improve the financial performance of the store. The store would be able to generate more income because of increased control over the departmental expenses related to both management and non-management staff. Other financial implications that the store face includes possible cost of retrenching the staff and additional income that would be generated from the sales of assets attached to the restaurant. As such, even though closing the restaurant would be a cost saving strategy and will improve the profitability of the Shopping Limited store.

Non-financial implication of closing the Restaurant

The hotel recipe is well known in the town. This helps to attract publicity for the Shopping Limited in the city. The closure of the restaurant would reduce this publicity. Instead, the regular guests at the hotel would consider Shopping limited as having sustainability issues, which would affect their purchasing of other goods sold by store departments (Bebbington, Unerman, and O’Dwyer, 2014).

Claude, who is the current restaurant manager has earned huge reputation from around the world following his win in potatoes sculpt competition. The closure of the restaurant would render his position obsolete, and thus he would have to be retrenched or moved to another department. This would affect the reputation that Shopping Limited has gained and reduced the sales that have result from this reputation.

Closing the restaurant would lead to retrenchment of workers attached to the restaurant department. This would demotivate the employees from other departments who would develop job insecurity. Job security is important in providing motivation to the employees. The closure of the restaurant would thus demotivate and discourage the remaining employees, which would affect the overall performance of the Shopping limited store. The community does not like businesses that retrench their employees because it is an indication that they are not making sufficient profit.

Shopping would have to deal with the restaurant to change the remaining workers and management. If the workers from the restaurant will be moved to another deportment, they would show resistance to change, because they are not used to working in other departments. Potential customers would not like to be associated with this business where employees are not fully dedicated to serving them.

Question Three

Problems That Samantha Would Need to Address

Samantha is currently in her final year pursuing a degree in management control. She does not have adequate experience in the management accounting. This creates a challenge given that she will be required to prepare and analyze the financial information for the Shopping Limited. Prior experience is important in executing the role duties of preparing the financial reports that are aimed at making divisions in the store (Otley and Emmanuel, 2013).

Shopping Limited does not keep well-structured financial information. The store does not have previous management accounting information. Samantha would be the first person to collect this type of information of the store. This will be tedious for her. She will be required to ensure she has gathered sufficient financial information that would help the executive management of the store make an informed decision.

There is a need for coordination among the store managers to ensure seamless strategies and decisions adoption. Samantha will be acting as a liaising person with other managers by providing support on all aspects of finances. The cases study shows that Samantha often argues with other colleagues such as Albert, who they do not agree on many things. This would create a challenge for Samantha in trying to coordinate the financial information and decisions within the Shopping department.

The top management of the Shopping Limited comprises of old directors. Their age limits their understanding of complex financial information and analysis and makes a sound division. Samantha would be faced with a challenge of ensuring that she has provided sufficient information to the top management, yet the information is simplified enough for them to understand.

The management accounting role includes making projections about the financial performance of the Shopping Limited. This would require her to analyze the historical financial information of the store and provide advice on how to prevent challenges facing the business now. For example, she would have to advise the directors to close the restaurant because it is operating at a loss or provide more capital to expand its operations as suggested by Claude.

Samantha would be required to ensure Shopping limited has adapted to the changes in the business environment. This store prides itself in maintaining the customers’ relationships, and standard of service relates to a bygone era. This limits the ability of, the restaurant to attract young and middle-class customers who are key to the growth of any business. It is within her responsibility as a management accountant to ensure that the hotel adopts suitable financial strategies that will help to tap into this market.

Other challenges that Samantha would face include establishing the cost of providing service, making solid decisions concerning profit planning, establishing the cost behavior and the way in which profit will change with changes in sales volume, and there might be a challenge in effectively dealing with revenue prospects and ascertaining the cost benefit approach. She would also have challenges in ensuring timely delivery of the products by reporting and recording by the store and establishing the; product customer profitability.

Major factors that would influence design and implementation of Management Information System

  1. Organizational Factors

The management support, organizational resources, and organizational size would affect the design of the MIS. Management support is important in MIS implementation and design, where their viewers would be required. The management support helps to motivate other employees and provide require information, commitment, and motivation in the design and implementation of the MIS. The organizational resources including human capital, intellectual capital, financial resources, and other resources will facilitate communication of the structure and purpose of the MIS (Bebbington, Unerman, and O’Dwyer, 2014).

  1. Technological Factors

The technological factors include cost effectiveness, perceived benefits, usefulness, and richness. The effective implementation and design of the MIS will depend on its perceived benefits and usefulness that it will provide to the Shopping Limited. The usefulness is determined by the cost saving that it will bring and efficiency that to will bring.

  1. Environmental Factors

The environmental factors would include competitive intensity and external pressure. The pressure from other organizations and required information by agencies and authorities would affect the MIS design.

Question Four

Setting Up of Budgetary Control and Planning

Budgetary planning refers to the process of preparing the budget within the firm. As management account at the Shopping Limited budgetary planning is vital for the store. This process will involve establishing goals, identifying the alternatives, and gathering the information about them before selecting the best alternative that would suit the store. The final step would involve implementing the chosen decision. In budget planning, one needs to ensure planning is quantified and financed properly and can control the allocation of the resources and performance. As management accountant in the Shopping Limited setting up the budgetary planning and control, the system would include long range and strategic plan and sales budget. Sales budget would include making realistic forecast using such methods as sales force opinions, statistical methods, market research, and mathematical models. On addition, setting up the budget control would include developing production budget and inventory budget. The production budget is expressed in quantitative terms with the duties of the production manager including work-in-progress budget and analysis of the plant utilization.

Store and Behavioral Problems

Some of the behavioral challenges one may face as management accountant include unwillingness on the side of employees and management to support the implementation of the plan. Given that Shopping Limited is a family business, where family members head departments, they may create resistance in supporting and coordinating especially when it comes to financing. This may lead to mistrust that may lead cause underutilization of the objective (Otley and Emmanuel, 2013). For budgetary control to be effective, there would be a need for clear duties and responsibility structure. There should be routines for data reporting, analysis, and collection. There should be time variances and when they are adverse action should be taken to get back to favorable.


Management accounting is important in the efficient running of the organization. Samantha would play a key role in helping Shopping limited reverse the current loss and would help in making strategic decisions based on the implementation of effective data collection and analysis system.



References List

Bebbington, J., Unerman, J., and O’Dwyer, B. (Eds.). 2014. Sustainability accounting and accountability. Routledge.

Otley, D., and Emmanuel, K. M. C. 2013. Readings in accounting for management control. Springer.



August 16, 2017

Table of Contents

Executive Summary. 3

1.0 Introduction 4

2.0 Literature Review on the Concept of Capital Asset Pricing Model(CAPM) 5

2.1 Theoretical Literature. 5

2.2 Empirical Literature. 6

2.3 Summary and Conclusion on the Literature Review.. 6

3.0 Empirical Analysis of the Capital Asset Pricing Model (CAPM) 7

3.1 CAPM Model Design. 7

3.2 Regression Analysis 8

3.3 Summary of the Ordinary Least Squares (OLS) Regression Analysis Outcome. 9

3.4 Comparison of the Estimated Beta and Published Stock Beta for General Electric. 10

3.5 Evaluation on Reliability of the Ordinary Least Squares CAPM Regression Model 10

4.0 Summary and Conclusion. 10

References 12










Executive Summary

The main objective of this report is to evaluate and test the reliability of the capital asset pricing model (CAM) in estimating the relevant stocks’ expected return and its beta coefficient. The study uses ordinary least squares (OLS) regression analysis to build and estimate a model for the General Electric (GE) stocks’ required rate of return based on the capital asset pricing model (CAPM). The regression analysis outcome finds that the model’s intercept (average risk free rate of return) is -1.96% while the stocks’ beta coefficient is 1.0117. In addition, the model’s coefficient of determination (adjusted R2) is equal to 99.02%. On the basis of the regression analysis results, this report finds that the capital asset pricing model (CAPM) can be reliably used in estimating the stocks’ required rate of return due to the model’s high adjusted R2. Finally, the report concludes and acknowledges that since the published beta coefficient for General Electric (GE) is equal to 1.01, the implication is that the estimated capital asset pricing model (CAPM) also seems to provide reliable estimates for the stocks’ beta coefficient.











1.0 Introduction

The capital asset pricing model (CAPM) is an investment finance model, which describes the relationship between the expected return of an asset and the relevant systematic risk profile of any asset stock security (Brealey 2013). According to Clark (2014), capital asset pricing model (CAPM) is generally used to determine the value of any asset stock security by taking into consideration the risk free rate of return (return on the 3-month U.S. Treasury Bill) and the market risk premium. The implication is that through the use of capital asset pricing model, investment and financial analysts can determine the extent to which investors will be compensated for the time value of money as well as in assuming the greater inherent risk associated with investment in risky asset securities.

The main objective of this paper is test the reliability of the capital asset pricing model by estimating the risk free rate of return, the asset stock beta for General Electric (GE) stocks and the market risk premium for investors who wish to invest in the stated General Electric (GE) stocks. Therefore, this report will seek to evaluate whether the capital asset pricing model (CAPM) provides accurate and reliable estimates of the asset stocks’ required rate of return, risk free rate of return, and the relevant stocks’ beta coefficient. This research question is important in assessing and evaluating on whether the capital asset pricing model (CAPM) can be reliably used to estimate any asset stock security’s required rate of return.

This test on reliability of the capital asset pricing model (CAPM) in estimating the required rate of return for any asset stock security will be undertaken using the monthly adjusted historical prices for General Electric (GE) stocks, S&P 500 stock security and the U.S. 3-months Treasury bill for the five (5) year period 1st January 2012 to 31st December 2016.


2.0 Literature Review on the Concept of Capital Asset Pricing Model (CAPM)

2.1 Theoretical Literature

According to Brealey (2013), capital asset pricing model (CAPM) is an investment finance model, which provides a description of the relationship between the systematic risk and the expected return of an asset stock security. The implication is that given the risk free rate of return on the U.S. Treasury bill (Rf) and the market risk premium (Rm – Rf), investment analysts can estimate the required rate of return on any asset stock security given the stock beta coefficient for the stated asset stock security.

Cadman (2014) contends that the capital asset pricing model (CAPM) can be estimated based on the following model formulation.

Re = Rf + β [Rm – Rf] where;

Re = required rate of return on asset stock security

Rm = return on the market security portfolio (S&P 500)

Rf = Return on the risk free asset (U.S. 3-month Treasury bill)

β = Asset stock security beta.

On the basis of the above model formulation, the expected required rate of return on any asset stock security is basically a component of the risk free rate of return and the market risk premium (Schroeder 2014). The implication is that the capital asset pricing model (CAPM) provides an insight on the extent to which investors will need to be compensated for the time value of money effect as a result of investing their funds over a long-term period of time. Clark (2014) contends that the rate of return on the risk free asset generally provides an estimate of the return to investors that compensates them for the effect on time value of money from their investment funds.

On the other hand, the second component of the capital asset pricing model (CAPM) generally measures the risk premium, which compensates investors with higher expected return for assuming greater risk on the asset stock security. The implication is that the decision by investors to invest their funds in the risky but high return asset stock security instead of investing their funds in the U.S. Treasury bill can only be justified by the high market risk premium return. According to Brealey (2013), the market risk premium return is generally over and above the return on the risk free rate.

2.2 Empirical Literature

In his empirical study on the application of capital asset pricing model (CAPM) on the Chinese stock market, Zheng (2013) finds using multivariate test approach that the capital asset pricing model (CAPM) can be reliably used in estimating the expected required rate of return for any asset stock security listed in the stated stock exchange.  In this case, Zheng (2013) finds that the null hypothesis, which stated that the market stock proxy is on the mean-variance frontier, is rejected.

In addition, Petros (2010) finds that there is a strong linear relationship between the required rate of return for the asset stock securities listed on the Zimbabwe Stock Exchange and the relevant stock beta. The study by Petros (2013) sought to estimate the capital asset pricing model (CAPM) based on the asset stock securities listed at the Zimbabwe Stock Exchange for the period 1st January 2003 to 31st December 2008 using time series and cross-sectional data analysis approach.

2.3 Summary and Conclusion on the Literature Review

On the basis of theoretical and empirical literature review related to the capital asset pricing model (CAPM), this paper concludes that the stated model provides a reliable estimate of the required rate of return on any asset stock security. In addition, according to various theoretical literature, the capital asset pricing model (CAPM) generally provides a useful insight on the extent to which investors should be compensated for the time value of money effect as well as for assuming greater inherent risk associated with investing their funds in a risky asset security as opposed to investing their funds in the risk free U.S. Treasury bill. Therefore, based on the literature review, the capital asset pricing model (CAPM) generally estimates the asset stock security’s required rate of return by incorporating the risk free rate of return and the market risk premium return.

3.0 Empirical Analysis of the Capital Asset Pricing Model (CAPM)

3.1 CAPM Model Design

This section of the report will undertake a test of the capital asset pricing model (CAPM) using ordinary least squares (OLS) regression technique. The regression analysis on the capital asset pricing model (CAPM) will be undertaken using the adjusted monthly historical prices for the General Electric (GE) stocks, S&P 500 market portfolio and the U.S. Treasury bill security. Specifically, the following model formulation will be used to estimate the capital asset pricing model (CAPM) for the General Electric (GE) asset stock security.

[Re – Rf] = Rf + β [Rm – Rf] where;

Re = required rate of return on asset stock security

Rm = return on the market security portfolio (S&P 500)

Rf = Return on the risk free asset (U.S. 3-month Treasury bill)

β = Asset stock security beta.

The implication in this case is that the monthly stock return on the General Electric (GE) asset stock will be adjusted for the risk free rate of return unlike in the previous empirical case studies where the expected return on the risky asset security was not adjusted for changes in the risk free rate of return.

The expected return on the General Electric (GE) asset stock security, S&P 500 market portfolio and the U.S. 3-months Treasury bill will be computed based on the following log return model formulation;

Re = Ln (Pt-1/Pt) where;

Re = monthly return on the General Electric (GE) asset stock.

Pt = monthly adjusted stock prices for General Electric (GE), S&P 500 and U.S. 3-months TB in current period t.

Pt-1 = monthly adjusted stock prices for General Electric (GE), S&P 500 and U.S. 3-months TB in previous period t-1.

3.2 Regression Analysis

The ordinary least squares (OLS) regression will be undertaken based on the stated model formulation [Re – Rf] = Rf + β [Rm – Rf] where the component {Re – Rf} will represent the dependent variable for the model while the component {Rm – Rf} will represent the independent explanatory variable for the model. The intercept for the ordinary least squares (OLS) regression model will represent the risk free rate of return while the slope for the stated regression model will represent the General Electric(GE) stocks’ beta coefficient. Reliability of the capital asset pricing model (CAPM) in estimating the stock’s required rate of return will be measured by the model’s coefficient of determination (Adjusted R2) such that a coefficient of determination that is greater than 0.5 will indicate a statistically strong relationship between the stock’s required rate of return and the market risk premium.


3.3 Summary of the Ordinary Least Squares (OLS) Regression Analysis Outcome

The following table provides a summary of the ordinary least squares (OLS) regression analysis outcome to estimate the capital asset pricing model (CAPM) for the General Electric (GE) stocks.

Table 1: Summary of the Ordinary Least Squares (OLS) Regression Outcome

Intercept (α) -0.0196
Slope (β) 1.0117
Adjusted R2 0.9902
ρ-value (Intercept) 0.0174
ρ-value (Slope) 3.2889E-60
F-value 5,978.49


On the basis of the above regression analysis results, the following capital asset pricing model (CAPM) can be derived;

[Re – Rf] = -0.0196 + 1.0117 [Rm – Rf]

Therefore, based on the above capital asset pricing model (CAPM) formulation, the average risk free rate of return (return on the 3-month U.S. Treasury bill) is determined as -1.96%. In addition, based on the capital asset pricing model, the General Electric (GE) stock’s beta coefficient is estimated and determined as (β = 1.0117).




3.4 Comparison of the Estimated Beta and the Published Stock Beta for General Electric

Table 2: Estimated Beta and Published Stock Beta for General Electric (GE)

Source of Beta Value of Beta (β)
Ordinary Least Squares (OLS) beta estimate 1.0117
Published beta (Yahoo Finance 2017) 1.01


The above table depicts that the estimated beta for General Electric (GE) seems to be fairly similar to the published stock beta for General Electric (GE) based on the stock profile information derived from Yahoo Finance (2017). This information provides evidence that the capital asset pricing model (CAPM) is likely to provide reliable estimates of the stocks’ required rate of return and the relevant stocks’ beta coefficient.

3.5 Evaluation on Reliability of the Ordinary Least Squares CAPM Regression Model

The fact that the ordinary least squares (OLS) regression model’s coefficient of determination (adjusted R2) is 0.9902 implies that 99.02% of fluctuations in the expected return for General Electric (GE) stocks can be explained by movements in the market risk premium. Therefore, this report concludes and acknowledges that the stated capital asset pricing model (CAPM) is expected to provide reliable estimates of the stock’s required rate of return and its beta coefficient.

4.0 Summary and Conclusion

On the basis of the regression analysis results, this paper finds that the estimated average risk free rate of return on the U.S. 3-months Treasury bill is -1.96% while the estimated beta coefficient for the General Electric (GE) stock security is 1.0117. The implication is that the estimated beta coefficient for General Electric (GE) asset stock security is relatively volatile compared to the beta coefficient for the market stock portfolio, S&P 500. In addition, this report finds that the coefficient of determination (adjusted R2) for the derived capital asset pricing model is 99.02%. This implies that the stated capital asset pricing model can be reliably used in estimating the required rate of return and the stock’s beta coefficient for any stock asset security.

Therefore, with respect to the research question for the study, this report concludes and acknowledges that the capital asset pricing model (CAPM) provides a reliable approach and technique for estimating the stocks’ required rate of return and the stocks’ beta coefficient. Finally, the results and conclusions in this study seem to compare favorably with other academic theoretical literature especially with respect to the reliability of the capital asset pricing model (CAPM) in valuing company’s stocks and in estimating the relevant stocks’ required rate of return.














Brealey, R 2013, Principles of corporate finance, McGraw Hill, London.

Cadman, T 2014, ‘Climate finance in age of uncertainty, Journal of Finance’, vol. 4, no. 3, pp. 351-356.

Clark, GL 2014, ‘Information, knowledge and investments in offshore markets’, Journal of Sustainable Finance and Investments, vol. 4, no. 4, pp. 299-320.

Petros, J 2013, ‘An empirical investigation of the capital asset pricing model: studying stocks on the Zimbabwe Stock Exchange’, Journal of Finance and Accountancy, vol. 3, no. 1, pp. 1-17.

Schroeder, M 2014, ‘Financial effects of corporate social responsibility’, Journal of Sustainable Finance and Investments, vol. 4, no. 4, pp. 337-350.

Yahoo Finance 2017, General Electric (GE). [online] Available from: <>%5BAccessedon 15th March 2017].

Zheng, R 2013, ‘An empirical study of CAPM in Chinese Stock Market’, Journal of Financial Economics, vol. 2, no. 1, pp. 1-24.






The hazard and potential risks associated with the physical hazard of Slaughterhouse Workers

August 16, 2017


Many workers are at a high danger of being affected by the different types of hazards resulting from the exposure of microorganism in the slaughterhouse. Some of the hazards include noise, chemical reaction and exposure to dangerous gasses among others. The hazard and potential risks will not only harm the workers, but it will make the industry to compensate them for their health treatment. This review focuses on dealing with the physical hazard which faces the employees of the slaughterhouse. There are specific emerging hazards, and potential risks which have been pointed out at the slaughterhouse hence necessary measures should be taken to control the risks. The hazard and potential risks associated with the physical hazard of slaughterhouse workers needs to be addressed in a sophisticated manner to come up with the necessary steps to control the hazards and manage the potential risks. Apart from the hazard and possible risks the slaughterhouse workers faces stress, which is associated with the working environmental of the slaughterhouse. This situation has made it possible for the slaughterhouse to be categorized as the most dangerous working place in many industries. The primary objective of this review is to showcase the hazard and potential risks associated with the physical hazard of slaughterhouse workers and what necessary control measures can be taken, to ensure that the risks are well managed, and the worker’s health have been improved.

Keywords: Hazard, potential risks, slaughterhouse, workers, health treatment, control measures.






A slaughterhouse is a dangerous place where workers are congested, and it can result to hazard and potential risks, which can be harmful to the workers. For the past few years, many slaughterhouses have been employing more workers so as to increase their goals which result in affecting the health of the workers. Laws and regulations, which are supposed to govern the workers, have failed to ensure their safety, by protecting the workers against the hazard and risk their facing in the slaughterhouses. The workers’ rights end up being neglected which can cause them to suffer about the risks evolving in the slaughterhouse. Many slaughterhouse workers are foreigners and people living in low-income societies where the rate of survival is high. Many workers hired to work in the slaughterhouses are not fully qualified, and they do not have certificates to prove that they are fit to work in the industries (Bustillo-Lecompte & Mehrvar, 2015). This is due to the high demand of more workers so as to improve the rate of the industry. Most workers end up being afraid to report any cases concerning their health safety and injuries since they fear to be fired or deported. Therefore, this issue causes more slaughterhouse workers to suffer due to the hazard and potential risks imposed to them in the industries. The slaughterhouses are stuffed with many machines which are operated by manual labor in different levels for the final production. Workers are trained to handle the different types of machines used for different processes. In some situation, different workers slaughter the animals while another sort out the different cuts of meat. These workers are aware of the dangers imposed on them by the nature of the slaughterhouse work since the tools used are dangerous and can cause injuries and accidents to the workers.

Many injuries and accidents experienced in slaughterhouses cannot be prevented. Some of the problems encountered by the workers include the speed at which the workers slaughter the animals. Animals killed and the process can end up causing injuries to workers in the slaughterhouse. In industries where the workload is high, more animals are killed which end up increasing the risk of injuries to the workers. Workers state that, if the speed of slaughtering animals is high, there is no time to sharpen their tools such as knives which end up being blunt and causing injuries and harm. Long working hours end up increasing the risk of injuries in the slaughterhouse. Workers suffer chronic pains on their backs, hands and arms which end up causing stress. More hazard injuries caused by the slaughterhouse hazards end up not being reported to the authorities since workers are afraid to report this type of cases which might cause them to lose their jobs (Reis et al., 2016). In recent years, authorities fail to report on injuries resulting from hazard and potential risks in the slaughterhouses since the workers do not report such cases. Most workers end up enduring working for long hours and continuous pain to be able to live above their poverty level and provide a decent life for their families.

Evaluation and control of hazards

For any slaughterhouse to reduce the risks and hazards affecting their workers, necessary measures should be taken in the industries. These measures need to be evaluated so as to come up with a good control system. The system safety discipline consists of guidelines which are used by managers to control the hazards and potential risks identified in the slaughterhouses. The main aim of the System Safety is to provide the necessary prevention of any hazards and risks in the industries. Accidents and injuries can be avoided by implementing the System safety in the slaughterhouses. The System Safety can also be used to control any dangerous hazards so as to achieve a free-hazard working environment in the industries. A hazard is a situation that can cause any harm to human health. A Risk is any situation which can pose a danger, loss or harm to people.

This system is used to provide a continuous procedure which will provide effective decisions in evaluating the different types of hazards affecting the slaughterhouse workers. Workers have a right to be protected from injuries and accidents caused by hazard features in any slaughterhouse. The system can also provide a good approach to achieving an effective system safety which can be used in controlling the hazards and risk encountered in slaughterhouses (Bahr, 2014). Management of hazards and potential risks in the industries can help a manager identify and know which type of risks can cause real harm, injuries and accidents to workers. Right measures taken in a slaughterhouse can control and minimize risks from taking place. A good example is ensuring that all floors are well cleaned so as to avoid workers from slipping and falling. Hazards and risks can be controlled by simple guidelines from the people in charge of any slaughterhouse so as to avoid accidents and injuries.

Practices that can control hazards

The best practices that can assist and ensure that hazards and risks are controlled include three main stages. These stages focus on dealing with any risks and hazards identified in the industries so as to ensure the rights and safety of the workers are protected. The three main stages which ensure that there is effective risk management include, identification, assessment, and control of risks (Buncic, 2014). These three stages end up creating the necessary measures which are to be used in controlling and preventing the hazards and risks from occurring in the slaughterhouses. The stages also showcase the description of the problems related to hazards and risks and how they are analyzed so as to find the necessary measures or precautions so as to prevent them (Buncic, 2014).

Risk Identification

Before offering any evaluation on controlling of the risks and hazards involved in the slaughterhouse, necessary hazard and risk identification process should be carried out. The Hazard identification involves the process of examining the slaughterhouse for any hazards which could affect the workers. Some of the hazards found in the slaughterhouses include harmful gasses such as carbon dioxide which is released from the decomposing animal manure, ammonia and frayed electric wires. The identification of hazards tends to lead to potential identification risks which must be examined. Factors that contribute to risks should be identified so as to eradicate or prevent them as soon as possible. The hazards and risks identified can be identified through their level of consequence. In this stage, the risks and hazards are categorized depending on which type they are and what damages can they cause to the slaughterhouse, and what factors contributed to the risks and hazards. What necessary measures and control can be taken to ensure that the hazards and risks are controlled? This stage of identification deals with all these features.

Risk Assessment

Before conducting the risk assessment, the slaughterhouse should first conduct an analysis of the risks present in the workplace. The risks analysis focuses on whether the hazards will occur and what will happen when it does occur. Risk assessments involve evaluation of any injury or accident occurring in the slaughterhouse. The risk assessment displays the relentlessness of any injury or accident that has occurred in the slaughterhouse resulting from the hazards. The risk assessments also deal with combining the information from the risk analysis and acquiring the most effective strategies in decision making. An assessment of the risks recommends if a hazard event has ever occurred in any slaughterhouse (Nguyen-Viet, 2016). The slaughterhouse is then examined so as to make sure that the past hazard event won’t occur again in the near future. Workers can also be questioned so as to know the dangers of the hazards and how to control them. The slaughterhouses should be inspected and assessed to ensure that they are free from hazards and safe for the workers. In case a Hazard has been identified, necessary actions should be taken to eradicate the issue. The tools and equipment used in the slaughterhouse should also be assessed and examined to ensure that they are safe and cannot cause any hazards.

Risk control

This stage deals with the control of any hazards or risks encountered by workers in the slaughterhouse or work place. Necessary actions are taken so as to control or eradicate the hazards or risks in the workplace. Some of the actions required may include eradication of the hazards so as to stop causing any more damages in the plant. Under this stage, effective decision making should be applied so as to come up with the best strategies that will deal with the hazards. The risk control should include an incorporation of devices which are safe and development of procedures or training that may result in a sufficient decision, which solves the hazards and risks in the work plantation. The control measures should include the right information or data of the slaughterhouse and how often do the hazards occur. Next would be a developed plan which assesses the current risks and hazards of the plant which in the end will be taken necessary measures to control the issue. A good plan comprises of actions to be taken in dealing with the hazards and risks. Improvements should be done in the working plant, and an effective solution should be administered to the workers (Ninios et al., 2014).

Safety disciplines that handle human factors

Humans are mainly responsible for any necessary safety measures applied in any slaughterhouse or working plant. Individuals who are managers in the slaughterhouses are knowledgeable and well trained in administering the workers. However, the changing technology has enabled a well effective science foundation which can assess the human performance through training and development. Improvement of human performance can help improve the goals of any slaughterhouse; hence necessary safety regulations should be adhered to so as to ensure that the workers’ rights are well catered for. The slaughterhouses should ensure that they provide safety systems to their workers so as to reduce cases involving hazards and risks in the working plant.

Human factors and Human errors

The nature of the system at hand determines the type of factors that would impact the safety of the environment. For this reason, it is essential to note the factors that are dependent of the system at hand for the purpose of easy management of the risks (Stanton, 2013). Human errors have highly contributed to the accidents and injuries involved in the slaughterhouses. Reduction of human errors can improve human safety measures and productivity in any working place. Top managers of any working plants such as the slaughterhouses need advice on how to implement guides and rules and what can be done to prevent errors from occurring, which can cause accidents (Dekker, 2014). New approaches are identified which will help managers apply the Human Reliability Assessment in dealing with human errors. Human Reliability Assessment is in charge of providing and analyzing human roles which can lead to any error in any working plant. This assessment will help eradicate human errors in the working plants in the near future.


In conclusion, the hazard and potential risks associated with the physical hazard of slaughterhouse can end up affecting and causing injury or accidents to the workers. The workers need to be protected against any harmful hazards and any potential risks which are bound to happen in a slaughterhouse. The system safety principles are guidelines to managers so as to provide an effective working plant which is free from hazards and risks to their employees. There are specific stages which are risk development, risk assessment and risk control which helps managers to deal with hazards and any form of injuries in a slaughterhouse.





Bahr, N. J. (2014). System safety engineering and risk assessment: a practical approach. CRC Press.

Buncic, S. (2014). Public Health Hazards: B. Control of Biological Meat‐Borne Hazards. Meat Inspection and Control in the Slaughterhouse, 334-353.

Bustillo-Lecompte, C. F., & Mehrvar, M. (2015). Slaughterhouse wastewater characteristics, treatment, and management in the meat processing industry: A review on trends and advances. Journal of environmental management161, 287-302.

Dekker, S. (2014). The field guide to understanding’human error’. Ashgate Publishing, Ltd..

Nguyen-Viet, H. (2016). Risk assessment for food safety management in developing countries.

Ninios, T., Korkeala, H., & Fredriksson-Ahomaa, M. (Eds.). (2014). Meat inspection and control in the slaughterhouse. John Wiley & Sons.

Reis, D., Moro, A., Ramos, E., & Reis, P. (2016). Upper Limbs Exposure to Biomechanical Overload: Occupational Risk Assessment in a Poultry Slaughterhouse. In Advances in Physical Ergonomics and Human Factors (pp. 275-282). Springer International Publishing.

Stanton, N., Salmon, P. M., & Rafferty, L. A. (2013). Human factors methods: a practical guide for engineering and design. Ashgate Publishing,

Rise of Political and Economic Liberalism

August 16, 2017

The coining of the word ‘liberal’ can be traced back to the first decades of the 19th Century. The political meaning was particularly derived from the establishment of the liberal Swedish and Spanish parliamentary caucuses. Later on, the same was realized in Europe. With the setting up of these embryonic political affiliations and parties, there was a dream throughout Britain and United States of setting up democratic systems of national administration. This view emerged amidst opposing views from conservative opponents (Einar & Lie 2). Despite these critics, the word became more prominent among the fewer nations that could apply its principles. This essay evaluates the political and economic views regarding the rise of liberalism. A critical comparison and contrast of thoughts forms the basis of this content.

It is indeed an uphill task to provide a clear-cut chronology into the rise of liberal thought both from the political and economic perspectives. With much more certainty, however, it is right to support the claim that the idea was initially born in England in the middle of the 17th Century. Critics may also raise counter-claims that the idea was present in Britain even before this, which further complicates the situation. What, however, entailed the whole idea behind liberal thoughts? To better understand the reasons behind the rise of liberalism, there are important events that led to the formation and implementation of the idea both from the political and economic perspectives (Arblaster 90).

The collapse of feudalism can be seen as a major landmark in the formation and application of economic and political liberalism. Feudalism was a political and economic system in which the feudal lords had full control over all economies and politics. They had the last say in all critical decisions. The system was predominantly present in Europe and China (Sturgis). With support from the Church, feudalist societies thrived under the opinion of the few in power. The fall of this system paved way for the emergence of the middle class that had aspirations towards being in political positions. Their reasons were more positive and people-oriented. As opposed to the feudalists, the middle class and the capitalists did not express interest in the dominant roles of the Church. In this era, capitalists were in charge of financing the administration system while the middle class provided executives and administrators. With the rise of these classes, liberalism slowly began to take shape.

A major event leading to formation of liberal thoughts was publication of Eccleshall’s article “Liberalism” in which enlightenment was seen as a necessity in any society. Most thinkers and philosophers of this period were rather skeptical about the function of laws, administration and customs. They instead opted for a rational reconstruction of the societal systems in order to drive individuals to enough freedom. This led to opposition of autocratic and dictatorial economic and political systems of the 17th and 18th Centuries (Hardin 3). The publication of the article enlightened most readers and thinkers and this was seen as major step towards the formation of liberalism. Unlike in the previous cases where autocrats and dictators had the rights to make final decisions on all matters related to governance and economies, people began to see the need to take part in such decisions and be free to make personal decisions.

The second half of the 18th Century saw a series of events leading to the creation of liberal societies among a few world states. Two of these events played a central function in the creation of liberal thoughts. To begin with was the declaration of America’s independence in the year 1776. America’s war to achieve independence was not only for its own benefit. It was seen as a symbol of victory against all forms of colonialism in the world. Other countries saw the need to follow in the same direction. Most nations, for instance France, greatly strived to emulate the path that had been taken by America in its fight for independence. The second important event of the 18th Century was the Declaration of the Rights of Man in 1789. This was soon after the French Revolution. This led to fall of the French autocratic system of governance. Both of these events happened on the watch of major continents such as Europe and Asia. The seeds of liberalism were produced in the 18th Century when most political and economic systems saw the need to have rational systems in place and foster freedom to everyone.

Some philosophers’ writings were also seen as major conspicuous channels leading to emergence of liberal economic and political thoughts. Thomas Hobbes (1588-1679), for instance, may be considered as a writer whose ideas provided liberal thoughts among his readers. His quest for equal liberty among all men played a role in providing a clear thinking in line with the liberal systems and methods of economic management. Other authors that had similar ideologies included Benedict de Spinoza (1632-1677) among others (Arblaster 44). Most of their writings were centered on natural rights, freedom, peace and security, and curtailment of political power.

In the quest for liberal systems, there emerged similarities and difference between economic and political thoughts. These, however, did not quite emerge directly at the time liberalism was born. It is actually John Locke (1632-1704) who clearly expressed his principles of liberalism in the British tradition. Two of his Government treatises constituted the most direct ever since political philosophy of liberalism (Riley 2-3). His ideas in these publications greatly influenced the rise of the political systems under the liberal school of thought. At the center of his publications were ideas that remain as under girding principles in the present liberal political systems. He directly wrote that every person existed independently and had the freedom to make personal decisions as far as they do not harm the society and other people. In his view, the principles of justice were strongly founded on the right to possession and disposal of property. It is from this that debates on what constitutes such principles still dominate major economies of the world.

Owing to common ethnic, cultural and political systems, the American liberalism greatly borrowed from the British and French systems of administration. In spite of the fact that early states of the American Revolution borrowed ideas from the British political thoughts, the following developments had major similarities to the French Systems. Thomas Jefferson received inspiration from both countries hence his declaration of America’s independence in 1776 (Arblaster 65). His writings on this declaration quoted statements from Locke’s writings.  These political views mainly concentrated on the freedom and rights of all persons irrespective of administrative roles in the society. It is notable that Locke and Jefferson’s ideas showed common political viewpoints on what a liberal system should entail.

Theoretically, strong differences exist between political and economic viewpoints on liberalism. According to the Western intellectual tradition, it is believed that principles of liberalism traced back to the 17th Century should only focus on the natural rights and freedom of all persons. The economic aspect does not seem to be very critical in the examination of what liberalism should include. Liberal thoughts should centrally focus on the personal coexistence within the community. Every person deserves to be bestowed upon equal rights in the political and societal systems of administration. The Modern Western Theory also concentrates majorly on the political viewpoints of liberalism (Cristiano 6). In their liberal thoughts, the proponents of this theory stipulate that no person should be accorded special rights than the next man. With no mention of the economic aspect of liberalism, it is notable that these theorists majorly believed that liberalism is a political concept.

Utility-based liberalism which also gave birth to the theory of utilitarianism does not provide a clear view into where the natural rights originate. In addition, the theory has no principled account of conflicts that involve rights. In addition, it does not provide a conclusive resolution to both cases. The principle of utility has economic, political and social explanations to liberalism. The liberal utilitarian, Jeremy Benthan and J. Stuart Mill, adopted different secondary principles reflecting on individual fundamental interests (Weinstein 67). For instance, they believed that one is the main decision-maker regarding their own interests. In making an economic decision such as purchase decision, a person chooses to do that action that brings the most good out of possible alternatives. The second secondary principle dwelled on security, equality, abundance and subsistence. In this perspective, protection of a person could not exist per se without inclusion of their property. As such, a political system must be founded on the principles of utilitarianism to become mutually acceptable by the society.

Other than the theories, personal ideologies on political and economic liberal thoughts have been given significant attention by different scholars and authors. Adam Smith, for example, believed that the economy works at best when left alone by the government (Stegmann 23). Unlike most political liberalists, Smith’s view of liberalism from the economic perspective believed that the freedom of the economy could best be achieved without political interceptions. In this regards, he developed liberal economic principles that faced multiple critics from other scholars. For example, he proposed the idea of economic liberty in which every person could be allowed to make a rational decision within a marketplace. His definition of person, however, did not take into account major economies and companies as legal persons. Critics to his ideas such as T. Green argued that negative freedom was an economic freedom leading to exploitation. In his point of view, Green believed that this freedom could lead to some form of poverty and widening the gap between the rich and the poor. Given equal opportunities, the rich could make irrational decisions that could make the poor poorer. He instead proposed the idea of positive freedom which recognized the fact that freedom could be undermined by social inequality.

As opposed to the political thought on liberalism, economic liberalists had different views on what the state should do and what it should not do. On some issues, the two sides agreed on similar ideas. For instance, both the political and economic thinkers believed that the government had a role in enforcing the natural right aspect of liberalism. No government had a right to violate the rights of a person on any circumstance. It was also agreed that the government has to be in a position to tolerate economic inequality on legal grounds. It was the duty of the government to determine what counts as ‘property’ and offer protection to the owner of such an item.

Economic liberalists were mainly concerned with the freedom at the economic centers of the society. The government has the duty to ensure that each person has access to equal rights and opportunities. In the event that a person’s rights are infringed into illegally, there are actions to be taken by the available organs. The major difference comes in the sense that economic liberalists believe the government should not interfere with the economy. Independence of the economy, in the view of Adam Smith, could lead to significant improvements and development of individual rights as far as property ownership and purchase and investment decisions are concerned.

In conclusion the origin of political and economic perspectives of liberalism can be dated back to the 17th Century. In the course of such developments, ideological and theoretical differences and similarities have emerged. These have had effects on the liberal societies to the present age. Economic liberalists such as Adam Smith and political liberalisms like Jefferson could easily agree and disagree on certain sensitive issues. It is notable that the political liberalists majorly focused on natural rights of an individual whereas economic liberalists stressed on the issue of economic freedom. In spite of these differences and similarities in ideologies, liberalism has been seen as a major success factor in most societies. Abolishment of dictatorial, autocratic and colonial systems has given rise to strong economies of the world that today foster freedom and equal rights to all people globally.



Works Cited

Arblaster, Anthony. The Rise and Decline of Western Liberalism. Oxford: B. Blackwell, 1984. Print.Bottom of Form

Einar, Dag. & Lie, Amund. What is neoliberalism? Oslo: University of Oslo. Web. Feb 28, 2017.

Hardin, Russell. Liberalism, Constitutionalism, and Democracy. Oxford [u.a.: Oxford Univ. Press, 2003. Print.

Riley, Jim. Moderate Ideologies: Liberalism and Conservatism. Denver: Regis. 1990. Web. Feb. 28, 2017

Stegmann, Franz. Economic liberalism, Marxism and Critical Judgement. St. Augustine Papers, vol. 5(1): 1-50. 2004. Web. Feb. 28, 2017

Sturgis, Amy. The rise, decline and reemergence of classical liberalism. Belmon: Belmont University. 1994. Web. Feb. 28, 2017

Top of Form

Weinstein, D. Utilitarianism and the New Liberalism. Cambridge: Cambridge University Press, 2007. Print.


HRM – Recruitment & Selection Process

August 16, 2017


One of the most important factors that influence the success of an organisation is the quality of its human resources. Therefore, the recruitment and selection of employees in an organisation is a vital function of the human resources department. Companies across the world experience diverse problems in the recruitment and selection process, which must be addressed if effectiveness is to be achieved. The work presents the recruitment and selection challenge faced by ABC Company, a Gas and Oil Company based in Qatar. The identification of the problem goes hand in hand with a discussion on how it limits effectiveness at ABC. Relevant theory on recruitment and selection process has also been reviewed. This is followed by strategic recommendations for ABC to consider in an effort to handle the identified problem. The last section contains the main conclusions of the work.

Recruitment and selection process at ABC and its problem

ABC enjoys high profitability as one of its major strengths. However, the threat in this company is that most of its jobs are associated with a high level of risk for the workers. At the same time, salaries given to employees are often affected negatively whenever the oil prices collapse since this leads to a decrease in demand for oil products. The recruitment process at ABC begins with receipt of the description of every job and a list of vacancies from various departments. The vacancies are then published in the company’s website and social media sites, such as Twitter, Facebook and LinkedIn. Candidates submit their resumes in relation to the job they are interested in followed by the scanning of these resumes by the recruiting officer, who produces a shortlist of the preferred candidates. This is followed by the selection process, which is based on interviews aimed at validating the provided information and applicant behaviour. A second interview is conducted by the department manager and feedback given to the recruitment and selection officer in form of general comments. The administration section completes the process through the required formalities.

The problem at ABC Company is that its recruitment process is not well designed to achieve organisational effectiveness. Although the company is mature and systematic, its recruitment and selection system should be revisited to achieve the orgnisational effectiveness. The poor design of this process makes it time consuming as it entails screening of applicants, validation, communication and other relevant aspects. This is a source of ineffectiveness in the organisation because delays in filling some vacant positions may mean a decline in the product output. Furthermore, the selection process is entirely based on the use of interviews, which are associated with a number of limitations. For example, the effectiveness of interviews in the recruitment process depends on the skills of the interviewer to ask questions as required.

The system has the problem of being too rigid since the interview process is focused on determining whether the candidate is knowledgeable and technically competent. For this reason, the organisation fails to determine the candidate’s soft skills, such as a positive attitude, self-confidence, work ethics, and good communication skills. There is a need to make sure that the interview sessions use more than a pre-developed list of interview questions. The recruiters in this organisation have not appreciated that candidates can practice and perform well in an interview entirely based on a list of questions without other unpredictable forms of assessment, such as individual and group role plays. Furthermore, different departments require different approaches when interviewing their candidates. Therefore, the system is ineffective as it does not allow departments to streamline their sessions to satisfy the demands.

According to Robertson & Smith (2001), interviews give room for bias from the interviewing officer. The officer may form stereotypes relating to the attributes required by the candidate to be successful in the job. This means that ABC recruits people with undesirable characteristics due to these stereotypes. Such people do not have the skills and knowledge to enable ABC to achieve its pre-determined goals. Interviewers are most likely to make decisions in the initial stages of the interview, with the remaining part of the interview being used to justify or validate the initial decision. This is an indication that resources are effectively utilised only in the first few minutes of the interview. Waste of resources in the recruitment and selection process at ABC creates ineffectiveness since other aspects of the company receive reduced amounts of resources. In addition to using interviewing, the company lacks a structured framework to be followed by different departments when assessing their need for new employees. Therefore, ABC Company must address this problem as soon as possible by considering a number of recommendations.

Relevant theory

The many advantages associated with recruitment of new employees in an organisation encourage organisations to consider a good recruitment and selection process as vital to the success of the organisation (Boxall & Purcell 2008). Armstrong (2006) argued that the recruitment and selection provides the organisation with new talent and ideas, especially if the recruitment is done externally. External recruitment is involves bringing in new employees from outside the organisation. This is different from internal recruitment, which involves hiring or promoting employees within the organisation. Generally, the recruitment and selection process has an advantage of allowing an organisation to find qualified and experienced candidates. Bacon & Hoque (2005) added that this process can open up opportunities for the organisation to develop a diverse workforce. Furthermore, an organisation that hires skilled and experienced individuals reduces the cost required to train a professional. This is acts as a competitive advantage for the organisation since the overall cost of production is reduced (DeVaro 2008).

Internal recruitment has been linked with a number of advantages, which may encourage some companies to consider it in their recruitment and selection process. For example, organisations may prefer this type of recruitment as it gives room for considerable savings (Newell 2005). Internal employees have knowledge of how the organisation operates, hence are in need of minimal training. They understand the goals and needs of the organisation and the industry in general (Lievens & Chapman 2010). Companies have also used internal recruitment as a way to motivate their employees to work harder to qualify for promotions (Costen 2012; Ahmad & Schroeder 2002).

Despite these above advantages, internal recruitment has some disadvantages which can be overcome using external recruitment. To begin with, external recruitment can be used to overcome the problem of limited choice of qualified candidates associated with internal recruitment. The former has the advantage of allowing the arrival of fresh skills (Barney 2001). Furthermore, external recruitment is used by companies to maintain a high level of competition by bringing in fresh talents. This prevents cases where workers are promoted without additional knowledge.  External recruitment allows the company to avoid leaving some positions vacant when specific employees are promoted since it depends on external sources for new employees (Murphy & Bartram 2002). Therefore, the company is able to save on the cost required to recruit a new employee to fill the vacant position. External recruitment can act as a remedy to the possibility of producing organisational inbreeding, which has a low level of the much needed diversity (Carless 2007; Wiener 2012).

As companies invest in recruiting the right employees, they are faced by a number of challenges. Shortage of skills has coupled with the high competition for talents as major challenges for recruiters (McEvoy 2014). In this regard, the skills gap has been widening since the number of qualified candidates across various sectors is higher than the number produced by relevant institutions. A good number of recruiters argue that complying with the recruitment-related legislation is a challenge in the recruitment process. Others explain that it is expensive to shift to mobile platforms, which is the trend in the recruitment process.

Despite these challenges, organisations can recruit the right employees by embracing appropriate techniques. For example, Interview sessions should be held with department manager, peers, recruitment officers, and supervisors. This should be done with an aim of making sure that every person expected to be involved in the job review and career development of the candidate is made part of the selection process. In addition to making sure that the candidates are technically competent, it is important to focus on other important issues, such as emotional intelligence and motivation. Asking the right questions in the interview sessions and letting the candidates interview the panel can improve the selection process. For technical jobs, it is important to use individual and group role plays to understand more about the candidate (s). This is because role plays allow the employer to assess the candidate’s management skills, such as verbal communication, decision making and analytical reasoning skills (Mullins 2009).

According to Compton et al. (2009), advancements in technology have transformed the way recruitment and selection is done in most companies. Employers are now using online platforms to find qualified candidates to fill vacant positions in what is called e-recruiting (Whitaker 2003). The motivating factor is that e-recruiting is cost-effective when compared to advertisements made in different media forms, such as in newspapers (Roberts 2013). Others prefer e-recruiting because it saves time (Shen & Edwards 2004; Henry & Temtime 2009). Applicants can send their resumes online and employers can administer interviews through the same platform with the need to use an intermediary. However, the lack of access of the internet by some members of the public may cause real talent to remain untapped, requiring companies to avoid relying on online recruitment as the only channel of acquiring new employees (Huselid 2012).

Firms are also finding it difficult to retain their top talent, creating another challenge in the form of a high a rate of employee turnover. This issue has severe effects if the form of employee turnover is dysfunctional. Dysfunctional turnover hurts the company as it involves the exit of employees with unique skills. Profitability of companies affected by this form of turnover is directly affected since it is expensive and difficult to replace unique skills. Employees can leave a company due to ‘push’ or ‘pull’ factors. Pull factors of employee turnover are the ones that attract the employee to another place of work (Munyon et al. 2011). A major pull factor associated with employee turnover is the opportunity to learn, grow and develop in a new organisation. Additionally, employees are likely to leave the current employer after they acquire better paying jobs. On the other hand, push factors are the company aspects that encourage employees to leave. Dissatisfaction in the current job can be described as the major company aspect that facilitates employee exit. Some employees may decide to leave the company due to poor relationships with their line managers. Therefore, it is clear that push factors influence employee turnover more than pull factors (Ofori & Aryeetey 2011). This is because employees may find it hard to leave the company if they are happy even when they are offered a better pay elsewhere.

According to Biles & Holmberg (2010), organisations should allocate enough time and resources to the process of recruiting and selecting of the right people to fill vacant positions because such employees allow the organisation to enjoy many benefits. As explained by Barber et al. (2014), qualified employees are associated with high retention rates hence the organisation is not required to incur expenses in periodic recruitment of new employees. The focus of any effective recruitment and selection process should be the creation of a pool of high performing employees (Ichniowski, Shaw & Prennushi 2009). Through these employees, the organisation can provide quality services to increase the level of customer satisfaction. The process must also be designed in such a way that the selected employees are confident to be quickly adapt to new roles and handle multiple tasks. Another advantage of hiring such employees is that they can work effectively in a team and requires minimal attention from their supervisors (Katou & Budhwar 2006).

Companies are pursuing a myriad of options to understand and address the issue of employee turnover as the major challenge in the recruitment and selection process. To begin with, organisations have recognised the need to generate more detailed data on employee turnover (Richard et al. 2009). For example, this data is now organised in such a way that it reveals the rate of employee turnover per department. Also, organisations are organising the data to reveal the rate of employee turnover per month. The limitation is that generation and organisation of such data requires the company to incur additional costs on its human resources management (Robbins 2005). Nevertheless, this option has allowed companies to understand the factors behind the high rate of employee turnover, thereby being able to target its intervention strategies with ease.

The use of qualitative data in determining the reasons why employees are leaving the company has proven important. In this regard, there is a move from the use of self-completed questionnaires to the use of interviews. Interviews give the data collector an opportunity to probe the answers provided in order to understand the underlying issues in a better way. Companies are also improving the level of communication between the company shareholders and employees to reduce the rate of employee turnover (Tendon 2006). When structuring the new way of communication, most companies are focusing on informing, emphasising and reaffirming to employees that their contributions affect its operations. Others have developed clear and measurable objectives for their employees. This move is effective since it satisfies the desire in employees to feel they are doing well in their duties and that their capabilities and talents are making a difference in the company (Terpstra & Rozell 2009).

Recruitment and selection of qualified employees is a long process with several steps. Each of its steps must be taken seriously by any firm that wishes to achieve organisational effectiveness. Planning is an important step in this process and requires the organisation in question to think about the relevant steps in recruitment and selection as early as possible (Rynes, Bretz & Gerhart 2011). Also, it is at this stage that the company is required to schedule the activities and allocate time and resources to support the entire process. A company that gets involved in proper planning of the recruitment and selection process is able to follow the best process. Therefore, time constraints are managed and the process is streamlined for both the applicant and the organisation. It is through planning that the organisation is able to analyse and design the position the hired person is expected to fill in line with the organisation’s needs.

Another critical step in the recruitment and selection process is the job analysis step. Here, the organisation must determine the knowledge, skills, and attributes needed by the employee to perform a certain role (Ferris, Berkson & Harris 2002). Identification of attributes is particularly important because the recruiter gets an opportunity to ascertain whether a candidate fits in the organisational culture. In addition to helping in identification of the key selection criteria, job analysis informs the position description. The two are important elements in attracting appropriate candidates.  Therefore, it can be said that a poorly designed job analysis is likely to have negative effects on the quality of outcomes regardless of the effectiveness of other steps in the recruitment and selection process (Unwin 2005). For example, a poor job analysis may create room for interviewers to develop wrong beliefs about the vacant position and its requirements and hire an individual unsuitable for the role.

An effective recruitment and selection process should not ignore the importance of short-listing step. This is where the employer determines the applicants that meet the key selection criteria to fill the vacant position. The organisation uses this step to reduce the pool of applicants to a manageable size. The application form used in this step should be standardised in all relevant areas (Wright et al. 2005). By standardising the format used to collect information and the items for which information is to be collected, the possibility of subjectivity in the evaluation process is reduced.

The short-listing step is followed by the selection step. Most organisations use interviewing as the selection technique. Since interviewing can be time consuming and expensive, most companies are unable to maximise its value (Ahmad & Schroeder 2002). Some organisations enhance the quality of their recruitment and selection process by incorporating additional assessment techniques in the process (Nelson 2007). In such cases, more value is added to behaviourally-oriented interviews since the recruiter can predict on-the-job performance more accurately. It is prudent to conduct reference checking step in the recruitment and selection process. Reference checks allow the parties involved to obtain information about employment dates, estimate of job performance and the willingness of the employer to re-hire the candidate (Zottoli & Wanous 2010). Making selection decision and evaluation are other important aspects of this process.


In an effort to handle the recruitment and selection problem identified above, ABC can consider a number of recommendations. To begin with, there is a need for the company to define a strategy for use in the recruitment process in addition to creating a structure methodology for use by all the recruitment officers and department managers. The idea is to develop a behaviour assessment framework because it is expected that a candidate who was able to excel in his or her previous job roles is likely to excel in the job being offered by ABC. The questions to be included in these interviews should assess whether the candidate is a team player, a leader, and a problem solver. Other questions may test whether the candidate has strong work ethics and whether one can handle conflicts.

It is also prudent for ABC to develop a consistent interviewing team based on the job profile. The team should consist of relevant individuals, such as the recruitment officer, department manager, a stakeholder, peers, and a supervisor. The consistency make sure that all candidates are provided with uniform interviewing environment and questions to avoid variations in results due to aspects not related to the candidates’ skills and knowledge. Furthermore, developing such a team ensures that all major players in the company are represented in the decision made in the interview.

The interview framework at ABC should be developed in such a way that it identifies the minimum requirements for a specific job. However, it is important to appreciate that one job may require different attributes from another job. Nevertheless, common aspects should include the skills, knowledge, and experience. The company needs at a particular time should be considered when developing the minimum requirements. For example, the company may be a need to increase the number of female employees to achieve gender balance in its workforce. In such a case, the company may streamline its recruitment and selection process to hire more new female employees than male employees.

ABC should also update the website vacancy system to include more options for easy screening. The system should allow the company to identify candidates for more than one job. The aspects to be included in the system should include years of experience, discipline under which the job falls and the candidate choices. Furthermore, the candidates should be able to submit their resumes through the same platform.

In addition to using interviewing in the recruitment process, the company should use other assessment tools. The selection of the appropriate tool should be based on job profile and complexity. Possible tools are tests, presentations, and role play. This should be done in an effort to overcome or reduce the limitations associated with interviewing. Pre-employment tests should be used when the company has limited funds to conduct the interviews or before an interview to reduce the number of candidates. In addition to consuming less time than interviews, these tests eliminate bias as they can be standardised across all the candidates. Interpersonal characteristics needed for a specific job can be determined through these tests. Presentations should be used when the employer or a department is interested in understanding the candidate’s level of confidence. Unlike in interviews where the candidate is expected to specifically answer the asked questions, presentations give the candidate a chance to communicate an idea to the employer. This gives the employer a chance to understand the communication skills possessed by the candidate and the candidate’s time management skills in case of a timed presentation. On the other hand, role plays should be used to determine the soft skills of the candidates. They have the advantage of allowing the candidates to interact with their peers or supervisors. This makes the selection process more interesting and can yield better results than interviews based on a list of questions. Through role plays, the employer can understand the candidates’ ability to take control of various situations and whether they are always genuine and alert.


From the above discussion, it is clear that the ABC experiences a major problem in its selection and selection process despite being a large and profitable company. The main problem is that the recruitment and selection process is entirely based on the use of interviews. This creates room for bias from the interviewing officer and increases the cost of the process by making it time consuming. From the critical theory part, it can be concluded that the recruitment and selection of qualified employees is a long process with several steps which must be well-designed to achieve organisational effectiveness. To address the identified problem, ABC should define a strategy for use in the recruitment process and develop a consistent interviewing team based on the job profile. ABC should also update its website vacancy system and use other assessment tools other than interviews.


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Ahmad, S, & Schroeder, R 2002, ‘The importance of recruitment and selection process for sustainability of total quality management,’ International Journal of Quality & Reliability Management, Vol.19, pp.5, pp.540-550.


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The odds of getting Ronaldo in a pack

August 16, 2017

FIFA soccer or FIFA football, best known as FIFA is a chain of connected football games which are released every year by Electronic Arts under the label of EA Sports. Due to the worldwide fan base that the game of soccer has, this series became a massive hit as soon as its first edition got released in the year 1993, with the official permission of FIFA, the governing body of the international football game. By 2013, FIFA introduced the FUT (FIFA ULTIMATE TEAM) game and since then, the total number of players playing this game increased from 11.2 million players to 15 million players. Also, various features and modifications to the original core game have been introduced to much astounding success. The main series along with the additional inclusions like UEFA football championship, FIFA world cup, UEFA Premier League, La Liga, Premiera Liga, some of the premier clubs, real titles comprise the FIFA game pack now. As of 2017, the football player Marco Reus is the new star of the FIFA game, but, the craze for getting some of the star icons of football, like Cristiano Ronaldo, Lionel Messi, etc., hasn’t been depreciated. FIFA 2012 has been named as one of the fastest and highest sold games of 2012 and it raked in a profit of $186 million. Thus, it can be said that FIFA football is one of the highly sold games of this era. This is mainly attributed to the fact that for many adults in this world, FIFA football is like the exact replica of the real world FIFA game. Earning coins through various measures, earning players by completing quests, and buying gold coins using real money to get a chance of getting the ‘hard to pin down’ top players becomes a thrilling journey for them, which in due course morphs into an inevitable addiction which lures them again and again to invest real money in these games. But, the real fact is that the chances of getting at least one of these top players in a team is highly bleak and thus, is a sheer waste of money. This is extremely pointless to waste real currencies in a game which is not going to give a definitive outcome.

The working of this game is really simple. As FUT game is firmly digitized, the randomizations of the players play an important role. This situation is different from a real life rare cards playing game. Here, the manufacturer of these types of cards will ensure that the rare cards are produced to a bare minimum and are mixed with the normal cards so that these cards are randomly distributed amongst the players. But, in the digitized version the situation is entirely different. Only the EA Sports know the trading secrets. Thus, EA can very well control the digital economy by ensuring that the occurrence of the top-rated players in a pack is extremely low. Hence, to overcome this situation and to get at least one of the top rated players, a gamer is forced to shell out the real currencies. For this purpose, this paper is going to consider the example of the star player, Cristiano Ronaldo, who belongs to the Real Madrid team. We are going to use the concepts of the probability theory in order to prove our hypothesis.

an illustration

Suppose, let us consider that the image of Ronaldo is present on a single face of a six faced dice. Two other faces of the dice are filled with the image of Messi and the remaining three faces of the dice are filled with the images of Reus. Now, when the dice is rolled, the probability of getting a Ronaldo is 17% (i.e.)  = 0.1666…= 0.17 (approx). Now, let us keep on adding more faces and hence, more images to the existing dice. So, obviously we need to get a bigger dice and thus, the probability of getting a Ronaldo in all the cases becomes extremely lower.

Now, let us consider the phenomenon of the FUT games. According to the FUT bin, there are 811 rare gold cards in the game and Ronaldo is one among them. So, let us assume that we open a 50k pack which has 12 rare gold card players in it. Now, each of the players in the card has a card weight associated to them. The lower is the card weight; the higher is the chance of not getting the player. Card Weight is a unit introduced by the EA sports, to denote how frequent the player is traded (Ward 2016). Ronaldo has a card weight of 2, the lowest in the game, which means he is the least probable player to get turned up. Now, there are two situations.

  • Let us presume that every player of the gold pack has the same card weight, which is nearly impossible. Then, the probability of turning up with Ronaldo = 1- [the probability of not turning up with Ronaldo] = 1 – [^12] = 1 – [0.9987^12] = 0.015 (that is, we are repeating the randomization process of searching a Ronaldo card in all the 12 associated cards and each card has a probability of 810/811. Thus, the total probability becomes.
  • Conversely, let us assume that for each of the 12 players present, the card weights are different. In this case, each of the players has a different probability and thus, the probability entirely depends on the card weight of the selected player (as the repeated occurrence of a player depends on card weight only). So, there are chances of ending up with the same player twice, or different players (different from Ronaldo) in each of the 12 times. Thus, it is not possible to come up with a definite probability value.

Thus, it is seen that we need to open at least 60 of the 50k packs to ensure that we end up with a Ronaldo. This is the phenomenon behind the FUT game. With around 5000 players along with item cards getting involved in a FUT FIFA game, the chances of getting a big player are so dim even if we trade with other gamers and buy packs.

Now, let us look at the probability of turning up with a Ronaldo in our ultimate team formation by considering the teams of FIFA 2016 and FIFA 2017 and let us show, in each of the cases the possibility of turning up with a Ronaldo is much lower.

fifa  2017

In the ultimate FIFA’ 17 team, there are 1808 gold cards in total. Ronaldo has a team rating of 92, which means he is a rare gold card player. In the total number of cards, there are 681 rare gold cards (37.7% of the total) and 1127 non rare gold cards (62.3% of the total). Thus, the ratio of pulling a common card over a rare card is 2:1. Of these total cards, only 8 of the players have a total rare rating of 90+ and Ronaldo is one among them. Thus, the total probability of getting a Ronaldo from these 1808 cards is 0.004. Now, while creating a FUT team we go by the standard selection method. That is, we select each of the players as belonging to League, Nation, and a Hybrid mix. With 40+ leagues entering into FUT 2017, and 19 Nations getting participated in this online game, the odds of pulling out a respectable top tier player becomes lower and lower (Lopes 2017). Thus, we end up pulling normal filler cards that will only provide us an opportunity to pull up more cards, but, we don’t end up with cards having elusive players. Let us consider the case of premium gold coin packs here.

The Premium gold pack is sold for 150 FIFA points or for 7500 gold coins. This pack yields us total of 12 items, out of which 10 are gold and 3 are rare. We have to consider the aspect that there is no assurance for the number of players present in the pack. So, we can also end up with club paraphernalia and other consumable items. Now, the ultimate team option has 15000 different players who are spread over different packs. The below-mentioned table is a representation of the rare players in a Gold pack albeit without their card weight.

(“FUT 17 – “Pack Luck””)

Now, there is also the possibility of another person getting a Ronaldo and hesitates to trade the card in the transfer block where a real player can choose the packs. As Ronaldo is one of the highly rated cards, a real player who gets a Ronaldo will only decide to utilize the card rather than putting it on trade. Let us now assume that we had used strictly the premium gold pack for this purpose. So, this would cost roughly $200 in real currency. (One FIFA point = 0.0084 USD. Therefore, 150 FIFA points = 150*0.0084 USD = 200 USD) (“FUT 17 – “Pack Luck””).

By referring to the above table, we can say that the probability of getting an 80+ rated player is 1 in 4 (25%).  Here, these probability measures are going to be done with the assumption that out of the 30 items that are mentioned in the pack, we get all the 10 common cards and 3 rare cards and the rest are the goodies. For instance, we can also get 7 cards (3+4) and the rest as paraphernalia in which the probability measures change.


Now, the total probability of getting a rare player =  = 0.3766

The probability of getting a rare player from the 90+ cadre = 8/1808 = 0.00424

Thus, the probability of getting a Ronaldo specifically = 1/1808 = 0.00055

1 Premium Gold pack has 10 +3 cards, out of which the 10 cards belong to the overall community and the 3 cards belong to the rare community. Let us open the pack by drawing a single card at once. Let A denote the collective event in which all the common cards occur. Let B denote the collective event in which all the rare cards occur. Hence,

P (A) = the overall probability for the 10 common cards =  = 0.00887

P (B) = the overall probability for the 3 rare cards =  = 0.00440

As the occurrence of a common card or a rare card is a mutually exclusive event, we have,

P (A or B) = P (A) + P (B) = 0.00887+0.00440 = 0.01327 [The occurrence of either a common player card or a rare player card can only happen at a time. Both the events cannot simultaneously occur. Hence, both these events are regarded as mutually exclusive events].

Now, if A denotes the event in which a rare card occurs out of 3 given cards and if B denotes the event in which a common card occurs out of the 10 common cards, then

P (A) =  = 0.10; P (B) =  = 0.33

Thus, P (A or B) = P (A) + P (B) = 0.10 + 0.33 = 0.43

Suppose that we do not get Ronaldo in this considered pack. So, we have to buy another premium pack to check whether we have got our desired output.  Now, the probability of getting a 85+ rated player = 0.28. Here, the card weight comes into foreplay. If we sell this particular player, then the chances of trying to get a Ronaldo will slightly be increased, as we will be on the lookout for another player to fill up the team slot. But, if we intend to retain the player, then we must have to try once again, by taking into account all the external factors, which are explained in the above paragraphs.

Continuing in this manner, it is noted that these probability measures give us a 1/300000th chance to end up with a Ronaldo in any pack (irrespective of its values in FIFA coins) and 1/75000th chance in all the gold packs available (there are 11 kinds of gold packs available in FUT 2017, with various interpretations of drawing up the rare cards). Thus, in order to end up with a Ronaldo, a real player must invest anywhere from $210 to $1015. $210 is the amount needed to buy a rare gold pack which guarantees the presence of all the rare gold card players whereas $1015 is the amount needed for buying all the 11 packs. One might or might not end up with a Ronaldo in the rare gold pack though it is ensured that the most unique and top rated players will be available with this pack.

fifa 2016

Here, in the ultimate FIFA 16 team, we had 60 leagues with more than 650 teams playing the game. There are around 1400 gold cards introduced in FUT 16 game of FIFA. We can buy cards for FUT 16 through the following means.

  • When we form a new club from the starter pack
  • When we buy them from the FIFA store
  • When we play and win packs from the FUT draft
  • When we win season games
  • When we receive gifts from the EA Sports

Out of these aspects, a real chance of getting a player for our Ultimate Team arises from the first three aspects. The first two aspects are pretty much direct. But, the third apect, namely, FUT draft needs at least 300 FIFA coins or 15000 coins to make an entry into the drafting competition. That is, we need at least $1260 to make our entries for the FUT draft. Though irrespective of our winning or losing the game, the EA sports is going to reward us with two gold packs for buying the FUT draft entry, chances are still low that we will end up with our favourite player, in our case, Ronaldo. Even if we gain an entry into the drafting competition, we have to challenge any assigned online player and try to win. The chances of winning the game also have a lower probability because one cannot get to know the skills and talents of the opponent player. So, the amount we are going to shell out in the entry level is far higher than the amount we had already spent for the other editions of FUT games (“FIFA 16 – FUT Draft Thoughts”). In the 2016 edition of FUT, Ronaldo is assigned with a card weight of 2. This means, he is the least traded player in the entire edition of the game. He also has a rating of 99, which means he is the rarest player who can be found in a pack. In the top ten players of FIFA 16, no player has a card rating which is more than 40. This means, there is a lower probability of finding any one of the top rated player in the entire FUT game (“FIFA 16 FUT: The Probability To Pull A Cristiano Ronaldo From Packs”). As said above, the total opportunity of getting a Ronaldo is,

The total probability of getting a Ronaldo =  = 0.000714

Thus, if we consider the case of premium gold packs, which is valued at 7500 gold coins with 10 gold cards and 3 rare cards. This premium pack is rated at $210 (the same as FUT 17 rate). Hence, by utilizing the same probability measures that we had done above, we can say that in order to end up with a Ronaldo, a real player must invest anywhere from $210 to $1015. $210 is the amount needed to buy a rare gold pack which guarantees the presence of all the rare gold card players whereas $1015 is the amount needed for buying all the 11 packs, which is the same situation we had noticed in FUT 17. But, in FUT 16, the entry of a FUT draft competition ensures that a real player have to spend an additional $1260 apart from the pack amount to tighten his/her chances of winning a Ronaldo card. Considering the fact that that there are total of 1 in 75000 chance of getting a Ronaldo card in any of the single gold packs, we have to get 10 packs worth of 7500 coins to exhaust all the 75000 possible chances. Thus, our sample size is too huge to exhaust. The following table is a representation of exhausting the 75000 chances.

Chances Getting a Ronaldo card Amount Spent
1 to 100 Yes/ No (if not proceed to the next pack) $210 (for a premium gold pack)
101 to 200 Yes/ No (if not proceed to the next pack) $210 (for a premium gold pack)
201 to 300 Yes/ No (if not proceed to the next pack) $210 (for a premium gold pack)
301 to 400 Yes/ No (if not proceed to the next pack) $210 (for a premium gold pack)
401 to 500 Yes/ No (if not proceed to the next pack) $210 (for a premium gold pack)
501 to 600 Yes/ No (if not proceed to the next pack) $210 (for a premium gold pack)
601 to 700 Yes/ No (if not proceed to the next pack) $210 (for a premium gold pack)
701 to 800 Yes/ No (if not proceed to the next pack) $210 (for a premium gold pack)
801 to 900 Yes/ No (if not proceed to the next pack) $210 (for a premium gold pack)
901 to 1000 Yes/ No $210 (for a premium gold pack)

Thus, it is a sheer waste of time and waste of money to search for a Ronaldo card in a FUT game, irrespective of the editions. To summarize, getting a Ronaldo card is like winning a bumper UK lottery.



Works cited

“FIFA 16 – FUT Draft Thoughts”. 23’s Thoughts. N.p., 2016. Web. 15 Jan. 2017.

“FIFA 16 FUT: The Probability To Pull A Cristiano Ronaldo From Packs”. N.p., 2016. Web. 15 Jan. 2017.

“FUT 17 – “Pack Luck””. 23’s Thoughts. N.p., 2017. Web. 15 Jan. 2017.

Lopes, Rodrigo. “Buying Packs Guide For FIFA 16 Ultimate Team”. N.p., 2015. Web. 15 Jan. 2017.

Ward, Simon. “What Are The Odds Of Pulling Ronaldo In A FIFA Gold Pack? (And How To Improve Them…) – Gamepointsnow Blog”. GamePointsNow Blog. N.p., 2013. Web. 15 Jan. 2017.



Promotional-Driven Marketing Strategy

August 16, 2017


Any business that needs to beat its competitors requires an efficient marketing strategy and therefore, has to realize the significance of promotion. Business advertising is an active process that requires effective scrutinizing for good results (Davis, 2013). Marketing and promotional strategies are elements that go hand in hand. For marketing, it is the process of combining all the elements of manufacturing, promoting and selling the goods and services to the consumers while promotion puts across the benefits of goods and services to the customers. Well-planned promotional strategies and marketing guarantee long-term success by bringing in more customers. The promotional mix is a marketing strategy that consists of sales promotion, public relation, advertising, and personal selling. This paper is going to develop a promotional mix for trendy shave, a new shaving style that is directed towards men using the five-step decision-making matrix.

The 5-step critical-thinking matrix

The five step matrix will be significant in the promotion of an innovative product, the trendy shave to the target market(men). It’s a new kind of shaving style that is coming into fashion targeting students who cannot afford expensive barbershop services. The many styles of shave will allow men to experience classy shave since they will be shaved side blowbacks. The style comes after realizing a gap in the market whereby the existing shaves have failed to meet the needs of the target market (Djordjevic & Djordjevic, 2012). As much as, it will be affordable to students, they will not have to frequent the shop for hair maintenance since it will keep the customer cool and presentable in all official and nonofficial occasions.

Identification of the problem

Identification of a gap or a problem in the market is the first stage of the marketing plan of promotion. Currently, there is a gap whereby student frequent barber shops for services and this appears like a waste of time as the target market is not aware of a new shaving service in the market. The existing barber shops have not done enough in promoting their services so that the public gets to know about them. Therefore, trendy shave will employ the key elements of the promotional mix that involve advertising, public relations, sales promotion, and direct or indirect marketing to bring awareness to potential customers. Direct marketing will involve the venture itself contacting clients while indirect marketing will involve intermediaries such as agents to promote the services of trendy shave.

Trendy shave will utilize a viable advertising as a tool for reaching the customers in the market. The shop will employ a good advertising campaign that would allow it to reach a large number of people. Therefore, the best way to advertise will be the use of social media avenues like WhatsApp, Facebook and Twitter, and posters around the campus. The venture will choose this kind of advertising because a majority of the students are fond of the listed social media avenues. Posters will also be useful because they will be put around hostels and major hanging joints around the campus.

Public relation is another promotional tool that trendy shave will employ as it will build the positive image of the product by evaluating the public attitudes and communicate the overall goal of the product. It will have multiple days in a month where it will offer free services to customers and donate a percentage of profit to local charities. There will also be a public relations teams that will be responsible for communicating with the media or students in the event of negative issues. Lastly, sales promotion is another way in which it will market the venture. Trendy shave will offer free shaves and hats on particular days of the month so as to lure more customers. All this way will be aimed at increasing the number of customers that will be visiting the shop.

Obtaining information

It is the second stage of the marketing matrix since the firm has already identified the gap in the market and therefore, information is needed to develop a promotional strategy that fills the gap. The phase involves gathering actual data from potential consumers about the possible product and how they will feel (Milligan, 2012). The venture’s marketing team will design approaches of data collection from potential clients so that trendy shave can have a promotional advantage over other shaving services providers. Some of the methodologies that marketing strategists can use to seek data actively include carrying out interviews, online data collection, and questionnaires.

The questions that the promotional team asks should be relevant and focus on the current challenges that consumers experience in the market. They should also aim the target market (men) since the innovative products intents to fill the gap of providing services that the current shaving styles have failed to offer. The process of information collection is expensive and time-consuming, and one should take into account the available resources like money and time.

Making future plans

The success of a new product on the market depends on the ability of the provider to focus on the future since customers’ needs are future oriented. The business should have a long-term strategy of how it will fulfill the current and future promotional needs of trendy shave that serves the all-time needs as such that it will reflect on both short and long time impacts of the new shaving fashion.

It is the stage where the marketing team appraises the benefits and challenges that the methods of promoting the services will meet in the market. In this scenario, the promotional methods will face challenges such as lack some of the potential clients are using any of the social media platforms used in advertising (Davis, 2013). Another challenge is that since the business is still new, some of the methods of promotion like public relations team will be expensive.  Addressing such issues provides insight into the possible consequences that are likely to happen. Making of plans is vital since the product may not fill the gap in the market.

Decisions Making by Choosing from the Alternatives

After analyzing the gathered data about the available methods of promoting trendy shave, the marketing team decides what to implement so that the new product hits the market with success. The stage is significant when the current issue is multidimensional, and because it is a promotional strategy, the marketing team will try to fill the gap in the market with the information that it has gathered from the potential customers about the trendy shave and the best way to promote it. It will decide whether to implement it or not. The whole process will depend on advertising objective, budget, and the marketing communication process.

Implementing the decision

The phase summarizes the five stages of the decision-making matrix, and here, the marketing strategists of the company apply the best promotional strategy after analyzing all the variables. The implementation process promotes the product by attracting the potential customers who feel that there has been a gap of coming up with the best method that will lure more customers. The implementation process will be a continuous process whereby the marketing strategy process will involve analyzing the most felt type of message about the product from the target market. In this manner, it will enable the marketing team to make continuous changes and improvements based on the feedback from the consumers since it is an ongoing process.


The five-stage decision-making matrix above evaluates with the promotional mix of trendy shave, a new shaving fashion that caters for all the shaving needs. The process commences with the recognition of the problem, gathering information, making future predictions, making future decisions and implementation and the follow-up process. Therefore, after unveiling the shaving style in the market after the five stages, customers will have an informed perspective on it because the business has communicated to them. The marketing strategy is communication focused since it a promotional mix that involves sales promotion, personal selling, direct marketing and advertising
































Davis, A. (2013). Promotional Cultures (1st ed.). Hoboken: Wiley.

Djordjevic, M. & Djordjevic, A. (2012). The indirect strategies of internationalization of companies. Marketing, 43(1), 33-40.

Milligan, S. (2012). Marketing strategies (1st ed.). Delhi: Research World.


The integrated management project

August 16, 2017

Table of Contents

Introduction to the company and sector. 3

Problem statement 3

Framework for analysis of the problem statement 5

Alternative solutions 7

Divestiture. 7

Diversification. 8

Recommended strategy and justification. 8

Implementation. 10

Stakeholder analysis 10

Change process tool 13

Conclusion. 14

References 16



Introduction to the company and sector

Rio Tinto is an Anglo-Australian mining multinational corporation. Rio Tinto’s divisions are aluminium, copper and diamonds, energy and minerals, iron ore, growth and innovation (Rio Tinto, 2016). The company is organised using the matrix structure as illustrated that it has functional and divisional executives (Rio Tinto, 2016). This affords the Rio Tinto extra focus on each of its functions and divisions. Noteworthy, the company’s main product is iron ore, which constitutes the majority of the company’s output (Rio Tinto, 2016). Consequently, the ensuing report will be focusing on analysing the issues in the iron ore industry and the appropriate strategic remedies. Rio Tinto is one of the market leaders in the iron ore industry, along with competitors like BHP Bilton, Fortescue and Vale. However, the industry has been declining at an annual rate of 24% for the past 5 years, according to IBISWorld, a global market research company (IBISWorld, 2016). The problem behind the industrial decline is the consistent volatility in the prices of iron ore. Likewise, the volatility in the prices of iron ore is one of the main problems which Rio Tinto is facing.

Problem statement

Rio Tinto is facing the problem of price volatility in iron ore, as illustrated in figure 1, which accounts for 70% of the company’s output, as illustrated in figure 2. The price volatility in the industry is a problem because it impedes long term planning at Rio Tinto, and also inflicts on the company’s revenue. When the prices decline, Rio Tinto is exposed to the risk of losses, and yet when they shoot through the roof, then demand for iron is likely to decline. Unfortunately, these prices are consistently volatile, even in the short run, as shown in figure 1. Moreover, the issue is exacerbated by external environmental factors such as political policies which support over production (Dasari, 2016) and fiscal policies which elevate sort-term demand hikes (Rio Tinto, 2016b). However, to deal with the issue, the company first has to understand its entire ecosystem. To achieve this, the company should apply different tools and techniques in order to generate a fuller understanding of the problem.

Figure 1: Iron ore prices


Source: Vale (2017)





Source: Rio Tinto (2016)

Framework for analysis of the problem statement

Some of the tools which will be useful in assessing the problem statement are the PESTLE framework and Porter’s 5 forces analysis. Considering that the problem can be quantified, the hard systems approach is the best approach for solving it. For example, the price changes in the iron ore industry can directly be attributed to the ratio of demand to supply.

Porter’s 5 forces analysis can be used to decipher the nature of the industry in a bid to understand how it contributes to the consistent price volatility. Porter’s 5 forces analysis looks at the intensity of rivalry in the industry, the threat of new entrants, the threat of substitutes, the bargaining power of the buyers and the bargaining power of the suppliers. The intensity of rivalry in the iron ore industry is very high, because of the high exit costs and the intense saturation of the industry (IBISWorld, 2016; Rio Tinto, 2016). One of the main problems which have been cited in the industry was the over-supply of iron ore from some of the largest markets. However, the threat of new entrants was very low because the industry has very high capital requirements and significant regulatory barriers (Gilroyl, 2014). The bargaining power of the buyers was extremely high though, because the industry is highly saturated. Moreover, the bargaining power of the suppliers is also high. In fact, Rio Tinto mentions that one of the challenges which it is facing, is the fact that governments are beginning to increase the rent of exploiting their natural resources. The mining companies cannot find substitutes for their ores, so they are at the mercy of the governments, which are the suppliers in this case. The threat of substitutes is very low, because no metal has the unique properties of iron ore. Since three out of the five factors are high, the iron ore industry is conceivably unattractive, and therefore subject to price volatility.

The PESTEL framework can also be used to decipher the problem which Rio Tinto is facing. The political environment has contributed to the volatility of the iron prices through mechanisms like subsidies to local miners, which increase the surplus of iron ore on the global market (Dasari, 2016). However, the economic stimulus in China is now driving the prices up again (Rio Tinto, 2016b). The economic environment on the other hand has influenced volatility through consumer demand patterns and the macroeconomic factors. For example, if the world is facing a recession, then there is likely to be a decline in the demand for real estate. This would lead to a decline in the demand for construction materials such as steel, and therefore, a decline in the demand for the components of steel production, such as iron ore. The social environment on the other hand, does not affect the prices of iron ore. The rate of technological change is growing at unprecedented rates, and this is providing new cost-efficient mechanisms for the iron ore mining industry (Kalpakjian & Schmid, 2014; Bellamy, 2011). For example, rather than using people to mine for the iron ore, companies can now use unmanned trucks to do the same, at a fraction of the costs and time which it would have required people to do it. It is therefore evident that the technological environment also contributes to the issue of volatile iron ore prices. The ecological environment does not affect the price of iron ore in any direct way. However, consumers are increasingly supporting companies which they perceive as sustainable or socially responsible (Sheth, Sethia & Srivanas, 2011). Resultantly, companies have to ensure that instil sustainability into their value chains in a way which can appease the customers, for example by reclaiming the depleted mines for productive use. However, iron ore is a business to business product, so this does not affect its prices directly. The legal and regulatory environment has contributed to the volatile prices of iron ore, by failing to regulate the amount of mining that is acceptable for the health of the mining industry. There is no general association for iron ore miners similar to OPEC in the petroleum industry, and this contributes to the volatility.

Alternative solutions


Considering that the iron ore industry is displaying signs of a decline, Rio Tinto could choose to divest the iron ore unit by selling it, and focus on the growing business units such as diamond. One of the advantages of this approach is that the company will be able to focus on the business units which are in their growth stages and are therefore stars, while giving more resources to the businesses which are in their infant stages and may therefore still be question marks according to the BCG matrix (Wheelen & Hunger, 2011; Johnson, Scholes Whittington, 2008). Noteworthy, the primary goal of the shareholders is to make the highest returns on their investment in the company’s equity. Consequently, a star or cash cow are preferable. However, when considering divestiture, the company should also consider the chain of effects which it could spark. For example, the divesture of the iron ore unit means that some of the employees will have to be dismissed or that they will begin working in the purchasing organisation. Likewise, the company’s asset base would decline and Rio Tinto would have to incur the opportunity cost of the unit’s future cash flows.


The basis of diversification is that Rio Tinto has to venture into a new product in a new market, according to Ansoff’s stipulations (Ansoff, 2007; Freeman, 2010). Resultantly, the company can just diversify into another industry which has a more favourable and stable environment than the iron ore industry. If Rio Tinto chooses to diversify, it can venture into an industry where the power of the suppliers is lower. Moreover, the company can also choose an industry where the products or services are more differentiated among the competitors, so that they do not have so much influence on each other. This would mean that the actions of the competitors have a less profound effect on the actions of the company. Noteworthy, even if diversification into a stable industry can offset the negative volatility in the iron ore industry, it presents a great amount of risk. First, the company would be venturing into a new market and would therefore have no established market share. Rio Tinto will then have to compete with the market veterans to gain market adoption. Likewise, diversification requires intense initial outlay from the company, unlike divesture.

Recommended strategy and justification

Diversification would be better for Rio Tinto, because it would present the least amount of disruption to the company. Moreover, diversification also allows the company to keep its iron ore unit so it can steward it through the difficult times. According to Tavassoli (2015), sometimes when industries can be revamped from the decline stage by changes in the market environment. In detail, diversification would also be better to address the problem of volatile iron ore prices. In addition to providing an alternative source of income to offset the revenue troughs during periods of price and demand decline, it benefits all of the functions of the company to a greater extent than divestiture does. Specifically, it is recommendable for Rio Tinto to diversify into energy generation. Presently, the company has an energy business unit, but it only acts as a supplier of energy raw materials like coal and uranium (Rio Tinto, 2016). Since Rio Tinto already has the raw materials, it could diversify by just integrating forward vertically.

Financially, diversification can increase the cash flows of the company on a more permanent basis than divestiture. With divestiture, the company will receive one large cash flow after selling off the unit, and then surrender any future cash flows from the unit, to the buyer. However, with diversification, Rio Tinto will be making cash from the new business unit and the iron ore unit during the times when it is not making losses from the declining prices. When it is making losses, the company will still have another source of revenue in addition to the assets of the iron ore unit.

In human resources, diversification will enable the employees of the company to remain under the same management. Several scholars highlight the demoralising effect of strategies in which some employees are dismissed or separated for example in acquisitions. This effect is named survivors’ guilt, and it causes relative under-performance in the employees who are left behind (Noer, 2009; Weber, Rachman-Moore, & Tarba, 2012).

In operations management, diversification will improve the economies of scope which Rio Tinto obtains from operating in several segments. Noteworthy, economies of scope are the cost-savings which companies can get from operating in multiple businesses (Chandler, Hikino, Chandler, 2009; Miller, 2006). Rio Tinto gains operational economies of scope from such things storage, administration, experience and marketing.

In marketing, the diversification would enable the new business unit to benefit from the brand equity of the Rio Tinto brand. Consequently, diversification can help the new business unit to obtain market adoption relatively quickly. Presently, Rio Tinto has a good will figure which is valued at $951 million (Rio Tinto, 2016). Moreover, good will is a reflection of the customer perceptions of the organization (Hair & Lukas, 2014; Jobber & Ellis-Chadwick, 2012), so logically, the higher the good will, the stronger the brand equity of the company.


The hard methodologies shall be used to assess the implementation of the recommended change. To that end, the stakeholder power matrix has been applied.

Stakeholder analysis

The narrow definition of stakeholders is that they are any individuals or groups which are affected by the operations of the company (Carroll & Buchholtz, 2014; Freeman, 2010). However, the extensive definition is that the stakeholders are any entities which have an interest in the company (Carroll & Buchholtz, 2014). The stakeholders in Rio Tinto’s diversification strategy include the customers, the suppliers, the shareholders, employees, creditors, regulators, and governments, to mention a few.

The customers are the primary stakeholders because they influence the survival of the company. If Rio Tinto pursues diversification, then it will reduce the amount of iron ore it produces, so that it can spread its resources over the new business unit. Depending on the extent of the reduction in the company’s iron ore output, the customers may be charged higher prices. Rio Tinto has major clout in the iron ore industry according to IBIWorld (2016). Consequently, a decline in the company’s production of iron ore can affect the availability of the same on the global marketplace. Resultantly, the ensuing decline might lead to an increase in the general prices of iron ore in the global market, a cross which the customer has to bear. Since the customers are powerful stakeholders, who are also very interested in the workings of the company, they shall be managed closely, as the stakeholder matrix in figure 3 suggests.

The employees are also very important stakeholders in the operations of the business. If these employees fail to deliver quality performance, then the company’s operations suffer (Macey et al., 2011; Wright & McMahan, 2011). If Rio Tinto diversifies, it will have to hire new employees to operate in the new business unit. These employees’ main interest in the company is likely to be job security, in addition to the milder requirements like empowerment. Since the employees do not have much decision making power in the company, they shall be kept informed.

The suppliers do have a high bargaining power in the company, as illustrated in Porter’s 5 forces model. This power culminates from the fact that iron ore deposits are an unrenewable natural resource. This means that companies have to rely on the benevolence of the countries which have them, or else risk having no raw materials. To that effect, Rio Tinto confers that Indonesia is one of the countries which is using its power as a supplier, to increase the rents collected from the buyers such as itself (Rio Tinto, 2016b). Moreover, the high bargaining power of the suppliers means that they are not very interested in the strategies of the company, because they can always replace it with another customer if it chooses to leave. This places the suppliers in the category of the stakeholders who should be kept satisfied.

Rio Tinto is a profit-seeking company, so one of its greatest goals is to maximize the returns of its shareholders. Consequently, the shareholders are very interested in knowing if the company’s proposed diversification strategy will generate the required rate of return. Moreover, the shareholders also have the power to sabotage the strategy, so they should also be managed closely.

Rio Tinto’s debt to equity ratio is 0.95 (Rio Tinto, 2016), which signifies that the company has nearly as much debt as it has equity. This implies that the creditors of Rio Tinto have a lot of power over the company as the providers of the majority of its funding. Moreover, the creditors are also very interested in the operations of the company because it is from these operations that their loan principal and their interest will be paid back. Unlike the other three strategies on Ansoff’s growth matrix, diversification requires the company to venture into new markets and new products (Rothaermel, 2015; Eden & Ackerman, 2013). Conceivably, the risk becomes greater because of that, so the interest of the creditors may be elevated. Consequently, the creditors will be managed closely.

The regulators have the power to either permit or prevent Rio Tinto’s diversification, depending on how it is done. Noteworthy, the company may try to diversify in the form of a wholly owned business, a joint venture, or a merger with an existing company. If Rio Tinto is collaborating with any other company to venture into the new market, then it might present a risk of generating monopoly-like powers. If that is the case, then the company may be barred from pursuing the diversifying collaboration. However, the interest of the regulators is only moderate because the regulators can get the information of the mechanism of diversification, from the legal documents. Consequently, they do not have to keep monitoring the company. To that end, the regulators will be kept satisfied.

Figure 3: Stakeholder matrix

Change process tool

The Kurt-Lewin model suggests that the change process should be implemented in three main steps namely, unfreeze, change, and refreeze (Burke, 2013; Benn, Dunphy, & Griffiths, 2014). When unfreezing the current status quo, the change managers notify the stakeholders of the pending change and why it is necessary, while generating an environment for change to thrive in. During this phase, Rio Tinto will have to justify the necessity of the changes (diversification) in order to generate stakeholder buy-in. If the stakeholders are involved in the process, there is less chance for resistance from them (Hayes, 2014; Waddell et al., 2013). The second phase will be the implementation of the change (diversification) itself. During this phase, Rio Tinto will have to establish clear goals and roles, in addition to providing the resources to facilitate the change. According to Kerzner (2013), establishing clear goals which are specific, measurable, attainable, realistic and time-based, yields better results because the implementers know exactly what it is expected of them in a limited time frame. It is also during this phase that monitoring and evaluation must take place, to ensure that the change is proceeding as planned. If there are any discrepancies between the actual and the planned outcome, remedial action is taken. When the change is performing as required, the final step is to integrate it into the organisational culture and make it the new status-quo.


In synopsis therefore, Rio Tinto’s problem which is being discussed in this case, is the volatility in the price of iron ore, which is the company’s main output. The problem has been assessed using tools like Porter’s 5 forces analysis and PESTEL analysis. Moreover, two solutions to the problem have been proposed, namely the divestiture of the iron ore business unit and diversification into a more stable industry. Diversification was chosen as the better option because of its integration into the broad systems of the business, as described prior. The recommended industry for Rio Tinto to diversify into, is the energy industry. This industry has been selected because of its proximity to Rio Tinto’s operations and the nature of the industry. In other words, the energy manufacturing industry is strategically fit for diversification because Rio Tinto already supplies the raw materials which are used in the industry, such as uranium and coal. During the implementation, the company needs the participation of various stakeholders, so the hard systems approach has been used to analyse the power and interest of some of the main stakeholders in the change process. However, the actual process of implementation should be managed according to the Kurt-Lewin model of change.










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Bellamy, D., & Pravica, L. (2011) Assessing the impact of driverless haul trucks in Australian surface mining. Resources Policy, 36(2), pp. 149-158.

Benn, S., Dunphy, D., & Griffiths, A. (2014) Organizational change for corporate sustainability. New York, NY: Routledge.

Burke, W. W. (2013) Organization change: Theory and practice. Sage Publications.

Carroll, A., & Buchholtz, A. (2014) Business and society: Ethics, sustainability, and stakeholder management. Montreal: Nelson Education.

Chandler, A. D., Hikino, T., & Chandler, A. D. (2009) Scale and scope: The dynamics of industrial capitalism. Boston, MA: Harvard University Press.

Dasari, S. R. (2016) ‘India’s iron ore imports ease, exports rise on policy support.’ The Dollar Business: December 17. Available at: (Accessed March 7 2017).

Eden, C., & Ackermann, F. (2013) Making strategy: The journey of strategic management. Thousand Oaks, CA: Sage.

Freeman, R. E. (2010) Strategic management: A stakeholder approach. Cambridge University Press.

Gilroyl, A. (2014) ‘Overview: The structure of the iron ore industry.’ Market realist. July 16. (Accessed March 7 2017).

Hair Jr, J. F., & Lukas, B. (2014) Marketing research. New York, NY: McGraw-Hill.

Hayes, J. (2014) The theory and practice of change management. Basingstoke: Palgrave Macmillan.

IBISWorld. (2016) ‘Global Iron Ore Mining Market Research Report.’ Available at:

Jobber, D., & Ellis-Chadwick, F. (2012) Principles and practice of marketing. New York, NY: McGraw-Hill.

Johnson, G., Scholes, K., & Whittington, R. (2008) Exploring corporate strategy: text & cases. Upper Saddle River, NJ: Pearson Education.

Kalpakjian, S., & Schmid, S. R. (2014). Manufacturing engineering and technology. Upper Saddle River, NJ: Pearson.

Kerzner, H. (2013) Project management: a systems approach to planning, scheduling, and controlling. Hoboken, NJ: John Wiley & Sons.

Macey, W. H., Schneider, B., Barbera, K. M., & Young, S. A. (2011) Employee engagement: Tools for analysis, practice, and competitive advantage. Hoboken, NJ: John Wiley & Sons.

Miller, D. J. (2006) Technological diversity, related diversification, and firm performance. Strategic Management Journal, 27(7), pp. 601-619.

Noer, D. M. (2009) Healing the wounds: Overcoming the trauma of layoffs and revitalizing downsized organizations. Hoboken, NJ: John Wiley & Sons.

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Rothaermel, F. T. (2015) Strategic management. New York, NY: McGraw-Hill.

Sheth, J. N., Sethia, N. K., & Srinivas, S. (2011) Mindful consumption: a customer-centric approach to sustainability. Journal of the Academy of Marketing Science, 39(1), pp. 21-39.

Tavassoli, S. (2015) Innovation determinants over industry life cycle. Technological Forecasting and Social Change, 91, pp. 18-32.

Vale. (2017) ‘Iron ore indices.’ Available at: (Accessed March 7 2017).

Waddell, D., Creed, A., Cummings, T. G., & Worley, C. (2013) Organisational change: Development and transformation. Mason, OH: Cengage Learning.

Weber, Y., Rachman-Moore, D., & Tarba, S. Y. (2012) HR practices during post-merger conflict and merger performance. International Journal of Cross Cultural Management, 12(1), pp. 73-99.

Wheelen, T. L., & Hunger, J. D. (2011) Concepts in strategic management and business policy. Upper Saddle River, NJ: Pearson Education.

Wright, P. M., & McMahan, G. C. (2011) Exploring human capital: putting ‘human’back into strategic human resource management. Human resource management journal, 21(2), pp. 93-104.


August 15, 2017


Documents provide a researcher with ideas on additional issues to observe as well as the questions that require further research. Documents are important when identifying potential respondents. They give background information that can be used to develop interview questions, especially if the research is limited to a technical field. Such historical insight is valuable in developing a contextual approach to the study. Prior knowledge of the research subject’s historical background, can be used to define the conditions that currently affect the subject being studied (Guest, Namey & Mitchell 2012). For instance, documents provide useful data that can help the researcher contextualize interview question. Documents are also a source of additional business data, which is a valuable addition to the researcher’s knowledge base (Bryman & Bell 2015). Business data provided by respondents during interviews may not be comprehensive or detailed enough because of the many figures involved especially in business accounting. Documents can be used to broaden the scope of information collected during an interview.

Document analysis

According to John Scott’s criteria used in analysing research documents, a researcher must evaluate their authenticity, representativeness, credibility and meaning (Scott 2014). It is important to identify the validity of documents in serving a particular purpose in the research. Consequently, documents should not serve as alternatives or surrogates of information required from different sources. Relying on documents alone compromises the scope of a study by limiting the researcher’s contextual approach to one source of information (Guest, Namey & Mitchell 2012). Business research, especially in the daily operations of a firm, cannot rely on documents alone. Inferences made without consulting different sources of information, also have a higher chance of being wrong or entirely false. The integrity of a study can also be compromised unknowingly by using falsified documents. It is, therefore, imperative that all documents, including official ones, be treated with scepticism and subsequently verified. However, we cannot relegate the importance of documentary data because of its potential to uncover further aspects of the subject of research (Eriksson & Kovalainen 2015). Recognizing the existence of official documents gives a researcher the resolve to explore the quality of information received from respondents. Documents, therefore, inform the validity of information as the study progresses from one source of business information to the next (Scott 2014). Finally, the documents are a vital source of information when conducting research where specific events are no longer observable. They are also important in cases where respondents do not have a clear recollection of facts.

There are different types of documents. The choice to use organizational, public or personal documents is informed by the nature of the study and complemented by document analysis. Document analysis is an important method of data collection when conducting business research. It is more efficient than other data collection methods because it consumes less time, especially if all the documents are readily available (Bowen 2009). Document analysis concentrates on data selection than its collection. Documents are also efficient research tools because of their availability (De-Massis & Kotlar 2014). There are many documents on business data in the public domain. In cases where information is not readily available, a formal request to business institutions can yield a huge cache of business data that can improve the research exponentially (Collis & Hussey 2013). The internet has eased the process of qualitative business research by providing a lot of free documents.

Documents are important in ensuring that the research is cost-effective. Apart from being less costly, recorded information is of particular importance where new data is available (Eriksson & Kovalainen 2015). The researcher only needs to evaluate the content of the documents to determine their content, since the information required for the research already exists. Researchers can track changes and developments by evaluating documents related to the study. Researchers can compare different documents on a similar subject, such as cash flow statements from various financial quarters, to identify changes that explain answers given by respondents. Periodic reports help a researcher to build ideas on the performance of a business unit or strategic principles that the respondents in an interview apply (De-Massis & Kotlar 2014). A collection of periodic historical documents can be used to show how subtle changes can lead to significant issues in the future. Drawing on the complementary nature of the documents, researchers can make informed predictions on the business (Bowen 2009).

Researchers can verify their findings by using documents. For a researcher to make inferences on the results of the study, he or she has to make sure that all the information collected is factual. Documents can collaborate information sources from the field, for example, during interviews (Collis & Hussey 2013). Documents can, therefore, guide a researcher as he or she progresses through different stages of the study. Where discrepancies or contradictions occur between information collected in the field and documents the researcher can make further investigation to identify the truth. On the other hand, research done with documents that include converging information build the confidence of those who read the research (Collis & Hussey 2013). Readers are more likely to trust a study done by comparing information provided by different sources. Where those sources complement each other, the research findings and final recommendations made by the researcher appear more plausible and believable (Guest, Namey & Mitchell 2012).

The non-obtrusive nature of documents protects their integrity over time. Facts gathered from documents can be influenced by any form of bias during the research process. Documents are also non-reactive, which maintains objectivity throughout the research process. The rigid nature of the information contained in historical business documents complements the integrity of qualitative research, unlike other sources of research information (De-Massis & Kotlar 2014). The meaning attached to different views provided by respondents based on their interpretation of events cannot influence the course of research where a researcher uses valid documents. They are, therefore, a better record of regular events that witness reports. Concerning documents being non-reactive, they are also useful in offering stability to the research. The researcher can maintain a strict course of research without being sidetracked by irreverent information that is not related to the subject of study. Other research methods such as interviews, expose a researcher to possible distractions and bias that compromises the eventual inferences made from the research (Bryman & Bell 2015).


Business researchers stand to solidify the validity of their research by exploiting the exactness of documents used in research. Documents contain exact information such as names and details of past events (Scott 2014). They can also increase the scope of study in cases where documents from a broad timespan or varied settings within an organization are available. However, documents can present researchers with some disadvantages. Business documents developed for other purposes are an insufficient account of the research subject. The narrowness of the study questions answered through data collection and analysis means that researchers have to be careful when using documents to develop context (Eriksson & Kovalainen 2015). Researchers may also be biased in selecting relevant documents. Finally, a researcher may find that some confidential or sensitive documents may be deliberately blocked or irretrievable.






Bowen, GA 2009, ‘Document Analysis as a Qualitative Research Method’, Qualitative Research Journal, Vol. 9, no. 2, pp. 27–40.

Bryman, A & Bell, E 2015, Business Research Methods, Oxford University Press, Oxford.

Collis, J & Hussey, R 2013, Business Research: A Practical Guide for Undergraduate and Postgraduate Students, Palgrave Macmillan, New York.

De Massis, A & Kotlar, J 2014, ‘The case study method in family business research: Guidelines for qualitative scholarship’, Journal of Family Business Strategy, vol. 5, no. 1, pp.15-29.

Eriksson, P & Kovalainen, A 2015, Qualitative Methods in Business Research: A Practical Guide to Social Research, SAGE, New York.

Guest, G Namey, EE & Mitchell, ML 2012, Collecting Qualitative Data: A Field Manual for Applied Research, SAGE, New York.

Scott, J 2014, A Dictionary of Sociology, Oxford University Press, Oxford.


Economic Performance of the United Kingdom

August 15, 2017

Economic Overview

The United Kingdom (UK) economy was significantly affected by the financial crisis. To stimulate the economy, policymakers had to raise taxes and reduce public expenditure to improve performance.  The economy is highly dependent on the service sector which contributes to almost 79% of the total Gross Domestic Product (GDP) (InterNations , 2016, p. 1).  The highest contributing services are financial services such as insurance and banking.  Performance after the Brexit vote was better than expected especially considering consumer services and spending.  In 2016, growth was 2% which was slower than recent years.  Growth is expected to hit 1.2% due to the economic and political uncertainty surrounding the Brexit vote. While the recession was anticipated, solid growth in 2016 has reduced the probability of a downturn.

The manufacturing sector still plays a significant role in the economy, contributing 21% of total GDP. Currently, the UK is the eleventh largest manufacturing country in the world hosting companies such as GlaxoSmithKline, Rolls-Royce and BAE Systems. Construction and automotive industries are also pertinent as they employ almost five million citizens.  The oil, gas and coal industry are of great significance, but the nation has had to depend on imports due to reducing quantities.  Although the agriculture sector contributes to only 1% of the GDP, the sector can meet 60% of the local demand for food.

It was expected that consumer confidence would be affected after Brexit. A significant impact was also expected, but that has not been felt yet.  The economy grew by 0.6% in the third quarter, higher than most predictions.  Also, the drop in the Euro helped increase the value of exports but has also increased costs for importers in the country. Furthermore, British tourists have to spend more on holidays.  The poor performing currency also caused a spat between Unilever and Tesco.  Unilever was willing to increase product prices due to the lower value brought by the currency. This forced Tesco to temporarily stop selling some of Unilever products to the public.

Still, a beneficiary of the falling Sterling has been the tourism sector.  This has made the country a cheaper destination for tourists and higher earnings are expected from this sector. Stock markets have also been optimistic after Brexit with the FTSE hitting a record high in 2016. To spur the economy, the government reduced rates to 0.25% (BBC NEWS, 2017, p. 1).  The Bank of England also announced a £100 billion program to encourage banks to provide lower interest rates to the public. Also, an extra £70 billion was added to the quantitative easing scheme the bank has been using

Production output and performance analysis

Real GDP indicates the health of an economy and higher figures shows better performance.  It also points to increased employment opportunities since companies are looking for more employees (Brezina, 2011, p. 4). From figure one below, it can be shown that GDP drastically reduced in 2008 and 2009.  Due to the significance of the finance sector to the economy, the financial crisis in 2008 massively affected the country.   The economy has not returned to its pre-crisis levels despite various economic policies. This is because recovering from a financial crisis is painful and tends to be slow.





Figure 1

Source: Generated for the study

Figure 2 below also shows that the real GDP growth rate hit negative levels during the financial crisis.  The growth rate is an important signal of economic growth.  If the rate is positive, this points towards the economy expanding.  In such a situation, businesses grow, and personal jobs increase. When the rate is decreasing, companies stop recruitment practices waiting to see if the economy will improve and it signals less consumer consumption.  A negative rate implies that the economy is undergoing a recession.  Figure 2 below shows that the effects of the financial crisis were severe.  The healing process has been slow, but the country has managed to get back on track since 2010.




Figure 2

Source: Generated for the study

GPD Per Capita is gotten from dividing the GDP of the nation by the entire population (Arnold, 2008, p. 137).  The indicator can be used to determine economic output considering the size of the population.  It becomes a useful indicator when it is compared with other countries and shows an increase in productivity.  Since it shows the average income of each resident, it also indicates if economic growth is sustainable. From figure 3 below, it can be shown that GDP per capita has improved from 2009. The sharp decline in 2009 is expected due to the financial crisis. Still, economic measures have fostered viable economic development from 2009 till the current state.




Figure 3

Source: Generated for the study

Price Level Analysis

Inflation is experienced when there is a rise in commodity prices which leads to lower standards of living.  It can be caused by surplus aggregate demand or cost push factors (Basu, 2011, p. 5).  As expected, the UK inflation rate increased from 2009-2011.  Low inflation in the UK could be caused by several factors.  Falling prices of commodities such as electricity, gas, food, metals and oil could be a reason why prices are still low. Also, large supermarkets such as Sainsbury and Tesco have been engaging in price wars, reducing prices for the consumer. Also, Europe is experiencing deflation which has kept inflation low.  Figure 5 below shows the annual inflation rate for the UK economy. It can be shown that inflation dropped from a high of 4% in 2011 and reached 0% in 2015.

The indicator is also measured on a monthly basis with 1.6%, reported in December 2016, being the highest rate since July 2016 (Allen, 2017, p. 1). The sudden rise was brought by a drop in the value of the pound caused by the Brexit vote.  It is expected that inflation will continue increasing leading to tighter living standards. Also, the pound has performed poorly other currencies even hitting $1.2 at a particular point.  Since the economy is highly dependent on consumers to propel growth, the government has intervened to improve household incomes.  This involves freezing fuel duty and increasing the national living wage.

In December 2015, the prices factories pay for energy and materials went up by 15.8%.  Coupled with higher oil prices and currency-related issues, inflation could significantly increase in 2017.  Thus, the Bank of England could make life tougher for consumers. This will result in tighter family budgets and less consumer spending to prevent too much inflation.

Figure 5

Source: Generated for the study



Labor Market Analysis

This analysis will involve looking at the unemployment sector. Unemployment refers to a situation where people are looking for work, but they cannot seem to find a job.  While most of the policies are expected to create “maximum employment,” it is normal and harmless for every economy to experience some form of unemployment.  While various types of unemployment may exist, this report will most cover cyclical unemployment. This unemployment is brought by economic contraction (Diamond, 2013, p. 2). Thus, when the economy is expanding, the unemployment rate is low. Also, when an economy is going through a recession, the unemployment rate is high.

Cyclical unemployment is prevalent in the UK. From figure 4 below, it can be shown that the unemployment rate rose in 2008 as a result of the recession. However, with less severe slumps, unemployment has been worse.  Despite the fall in GDP in the recession of 2008-2013, employment reached its highest level of 8.5% and had reduced since 2011.  The modest fall in unemployment is more of a surprise since the economy is still weak. This decreasing unemployment could be explained by various reasons.  From figure 2 above, it can be shown that economic growth has been stable since 2010. This means that the economy is recovering and more jobs are being created.

The decreasing unemployment rate could also be as a result of flexibility in the labor market, zero hour contracts could encourage employers to keep more workers.  A decrease in labor activity could also force employers to hold on to their employers.  Disguised unemployment could also explain the unemployment mystery being experienced in the UK.


Figure 4

Source: Generated for the study

Policy Recommendations

The UK faces growth challenges in the future given the uncertainty of Brexit. Besides its social and economic strengths, the country has to be more competitive and productive.  Also, recovering fully from a recession can take several years.  Implementation of the policy is critical as failure could lead to political frustration and financial waste.  To increase consumer spending, one common method is to introduce tax cuts (OECD, 2010, p. 24).  Reducing taxes should fuel consumer spending which is crucial to economic growth.  However, the evidence is required to show the relevant industries that need a tax cut.

Increasing expenditure on infrastructure could create more jobs and enable easy flow of money into the economy.  Since the rates are low, it is a good time to invest.  Improving rail and roads would provide future benefits.  The UK also has to boost productivity as it compares poorly to other developed economies.  The country has a shortage of expertise in areas such as construction and IT, improving such weak sectors could help increase productivity.  Making improvements to the educational sector could also add trillions in the future.  If teenagers could improve their skill in reading, math, and sciences, this could add almost 3 trillion in 2095 (Espinoza, 2015).


Economic growth has been solid after the recession of 2008-2013.  Rapid growth has been accompanied by a vigorous labor market and low inflation (European Commission , 2016, p. 1).  The sturdy performance was as a result of growing consumer confidence, a resilient banking sector, and friendly monetary policy.  The GDP growth rate is on a steady trajectory and domestic demand is expected to drive this growth. Currently, the country is experiencing no macroeconomic disproportions, and the future does not look too dull. While Brexit was expected to have a significant impact on the economy, most of the indicators are favorable which has been puzzling to most economists.  To keep positive growth, the government has to adopt favorable monetary policies, improve infrastructure and boost productivity.









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