Development and Globalisation

Development and Globalisation Development A process of social and economic advancement in terms of the quality of human life. Development can involve can involve economic, demographic, social political and cultural changes. Development is a term that can be used in many different contexts whether it is social, economical, political etc. However generally development refers to an improvement in certain areas: †¢ Economic o An increase in the country’s economy with a shift from secondary to tertiary industry which becomes less dependent on FDI. †¢ Demographic An increase in population and a more ageing population as standard of living increases. Birth rates and death rates drop as life expectancy increases. †¢ Social o An increase in the range of services, increased land prices and a more multicultural society. Greater access to education, health care and communication †¢ Political o More democratic and more influence on the ‘global stage’. Stabl e government, no dictatorship. †¢ Cultural development o Greater equality for women and better race relations in multicultural societies. Measuring Development Associated essay: Political Parties Are The Pillars of DemocracyGDP- Gross Domestic Product – the value of all the goods and services produced in a country in a year, in $US, usually expressed as â€Å"per capita† (per person). PPP (purchasing power parity)* figures are more useful. *Adjusted for loss of living GNP- The total value of goods and services produced by one country in a year, plus all net income earned from overseas sources, in $US. HDI- Human Development Index: It is a summary composite index that measures a country’s average achievements in three basic aspects of human development: health, knowledge, and a decent standard of living. Life Expectancy †¢ Literacy Rate †¢ Standard of Living (measured in GDP per capita) It gives a more complete picture of development of a country than GDP alone as it considers social factors and not just economic factors. Development Continuum Originally there were three groupings that made up the development c ontinuum, they were: †¢ First World (those developed countries that had a democratic government and a strong economy) †¢ Second World (communist countries) †¢ Third World (UN developed countries)However as time has gone on newer economies have started to develop caused by different development patterns and speeds. The Development gap †¢ The gap between rich and poor countries †¢ Most commonly, the gap is thought of in terms of income/economics †¢ It also social, environmental and even political aspects There was a suggested North/South divide originating from the Brandt report in 1980, where the north accounted for 80% of GDP but only 20% of the population; however this too requires some artistic licence and is a very general way of dividing countries.There are more accurate ways of grouping countries as listed below and as countries move through the development continuum countries pass from one category to another: †¢ Developed (MDC’s †“ the most well developed countries eg. UK) †¢ Developing (Countries which are undergoing development – arguably they all are. Eg. Malaysia) †¢ LDC’s (Least Developed Countries – eg. Ethiopia) †¢ NIC’s (Newly Industrialised Countries – Have just finished development (10 years or so) Eg. China) †¢ RIC’s (Recently Industrialised Countries – Further behind than the NIC’s eg. Dubai) Centrally Planned Economies (The few remaining communist countries eg. North Korea) †¢ Oil Rich Countries (Countries rich in oil eg. Saudi Arabia) Causes for the Development Gap †¢ Colonialisation – colonial powers took resources from poorer countries †¢ Price of commodities is often controlled by TNCs ensuring high profits for MEDC firms and low prices paid to LEDC producers – Fair trade set up in reaction to this. †¢ LEDCs are now primary producers – producing low cost commodities, e. g. b ananas †¢ Primary commodities have fallen in price, or stayed steady, while commodities they need has increased, e. . oil What is preventing the Development gap from closing? †¢ Many LEDCs main industry is as primary producers – generally low profit †¢ Internatnioal trade dominated by TNCs †¢ Rapid The Asian Tigers Who or what are the Asian Tigers? Asian economies that have progressed economically at such substantial rates that have come to rival the earning capacity and quality of living of those being first-world countries – Taiwan, Hong Kong, Singapore and South Korea. Globalisation Globalisation: The increased inter-connection in the world’s economic, cultural and political systems. Positives |Negatives | |Allowed the movement of people more easily |Uncontrolled migration | |Increased foreign trade |Inequality in wealth | |More access to food, services, healthcare etc. ll over the world |Heavy environmental cost | | |Loss of countries individual cultures, global cutters | †¢ Globalisation began in the 19th century as there was the beginning of movement of people and goods; †¢ Increase in independence †¢ Increase in trade as well as the spread of industry †¢ Beginning of Trans National Corporations. Globalisation continued in the 20th century and was shaped by a number of factors including: 1.Emergence of free markets (capitalist economy) 2. Deregulation of world financial markets 3. The establishment of the General Agreements of Tariffs and Trade (GATT) –the WTO which sought to lower trade barriers. 4. The emergence of trade blocs 5. The establishment of the IMF and the World Bank 6. Development of global marketing and the continuing rise of TNCs. Flows †¢ Capital o ICT allows cheap, reliable and almost instantaneous communication o Allows sharing information o Allows transfer of capital o Allows Marketing around the world †¢ Labour o Improved transport for people Size of air craft o Low cost airlines o High speed rail links o Specialised workers- doctors, ICT etc. o Unskilled workers †¢ Products and services o Integrated networks o Goods handling o Computing logistics o Container revolution o Improved transport for goods o Global marketing, the world as one market and create products that fit various regional market places e. g. coca-cola and McDonalds Patterns of production, distribution and consumption Manufacturing has gone from developed countries to lower wage economies. This is known as the GLOBAL SHIFT, which is brought about by FDI by TNCs.Many LEDC’S have benefited from the transfer of technology which has meant these countries can raise their productivity without raising their wages to the level of the developed countries. This has lead to the de-industrialisation of richer countries and the focus on tertiary and quaternary industry. There has also been outsourcing of service operations, such as call centres, Mumbai, this extends t he influence on a global scale also the employment costs are a lot lower even though there is a highly educated workforce. Positive and negatives of the global shift Positives for MEDCs |Negatives for MEDCs | |Movement of polluting industries away from their country |Could lead to wide spread unemployment | |Growth in LEDC’s may lead to demand for exports from MEDCs |Loss of skills | |Cheaper imports can keep the cost of living down benefiting the retail |Negative multiplier effect | |sector |Large gap between skilled and unskilled workers who may experience | |Labour market flexibility and efficiency |extreme redeployment differences | |Development of new technologies leading to investment |deindustrialisation of some areas, such as the North | |Help to reduce inflation | | |Positives for LEDC's and NIC's |Negatives for LEDC's | |Development of new industries Rapid urbanisation and rural-urban migration | |Increased employment |Westernised approach to economy | |Helps to reduce development gap |Increased environmental damage die to polluting industries | |Increased FDI and investment which can lead to improved services such as |Exploitation of labour | |infrastructure, health care and education |Disruptive social impacts | |Increased exports helps BoPs, and increases income and GDP |Over-dependant on one industry | |New technologies |Destabilises food supplies, less agriculture | | |Health and safety issues because of tax legislation | Patterns of production and processes In manufacturing there has been a global shift of marketing from MDC’s to LDC’s.This leads to Foreign Direct Investment (FDI) by the TNC’s. This has led to the de-industrialization of MDC’s but means that they can also be more productive due to the transfer of technology. Newly Industrialised Countries (NIC’s) First Phase †¢ Asian Tigers (Taiwan, South Korea, Hong Kong and Singapore) started to appear in the 1960’s, as developed cou ntries looked at their less developed neighbours †¢ Rapid industrialisation due to the increased spread of TNC’s. †¢ They share similar characteristics which allowed for such industrialisation: – Large populations – Well educated populations – Culture – work ethic – Less rigid laws on health and safety – Government support through loans and grants Rely less on foreign support and set up their own businesses such as the Chaebols in South Korea, comprising of companies such as Samsung, LG and Hyundai †¢ This has now become a multinational and located in several different countries. Second Phase †¢ As wage prices increased in the primary TNC’s (The Asian Tigers) †¢ Countries that could offer lower wage prices such as Malaysia, Indonesia, The Philippines and Thailand, Mexico and Brazil Third Phase †¢ China and India, Turkey, South Africa and the Philippines †¢ China has seen the fastest rate of ec onomic growth of any country †¢ India’s industry is heavily based around services – which accounted for 50% of its total GDP. †¢ New TNCs are now being set up in Indian such as Infosys, Bangalore. Positives of India |Constraints of India | |Large English speaking population |Other countries are beginning to compete | |Costs 37% lower than China |Negative reaction in MEDCs | |Costs 17% lower than Malaysia |Rising wage rates | |Professional salaries ? of UK and USA |High cost of training | |Low telecommunication costs |Negative impacts on quality | |24 hour working to fit with time differences |Corruption and bankruptcy | |Huge labor force for labor intensive jobs e. g. all centers |Command economy, governemtn speding on subsidies rather than investment | |IT college graduates, 2 million/year |Infrastructure beyond major cities is poor | | |Literacy only 61% | Growth in the 21st Century Emerging Economies account for 70% of the global population, countries including the BRICs (Brazil, Russia India and China) as well as countries such as the UAE and South Africa. The increase has been due to: †¢ Raise living standards †¢ Increase opportunities for the population †¢ Increase FDI †¢ Become more of a world player with market to an international standard Countries at very low levels of economic development LDCs †¢ The countries were outlined by the United Nations and of the top 50 33 are in Sub-Saharan Africa. They are defined by the following: – Low incomes ($800 GDP per capita over 3 years) Human resource weakness, nutrition, health, education and literacy – Economic vulnerability shown by signs of dependency on one industry †¢ Many of them suffer from widespread conflict, disease, geographical disadvantages, urbanisation and fast urban growth (demographically speaking). Quality of Life †¢ Most of the population cannot afford basic immunities †¢ Resources of such countries are not ev enly distributed. †¢ Attempts to reduce poverty †¢ High population growth rate means that numbers living in extreme poverty are increasing. †¢ Many of these countries depend on FDI Debt †¢ From the 1970’s onwards some countries found themselves in a debt crisis because the borrowed large amounts from the developed world. For many countries at low levels of economic development that breaking free of poverty can only ever be a vision. †¢ There are certain policies being put in place by the IMF and the World Bank to help free the HIPCs †¢ They have provided debt relief and interest free loans. †¢ SAPs Structural adjustment programmes o Government spending cutbacks to fund debt repayments o Mexico was the first country o 3 main aims:- ? Promote exports- integration and liberalisation ? Reduce government spending- privatisation and cutting costs ? Encourage foreign investment o Both intermediate and poor countries have had SAPs applied o Some suc cess but SAPs could make matters worse especially for the poorest people because:- Loss of credit and subsidies from the government ? Food production falling ? Devaluation of currency leads to dramatic rises in prices ? Less spending on health and education by government †¢ Another scheme, the Multilateral Debt Relief Initiative (MDRI) †¢ Aimed to cancel the debt of the HIPCs †¢ per capita income US$380 a year or less would be eligible for MDRI debt relief from the IMF's resources Social Problems †¢ Lack of income, healthcare, education, sanitation etc. †¢ The Millennium Development Goals were set up specifically to help countries out of the cycle of poverty however they don’t look well to be completed in 2015 (the original target).Global, Social and Economic Groupings Trade Bloc is a group of nations who have joined to stimulate trade and benefit from economic cooperation. The countries involved agree to free trade between them but impose tariffs on goods from countries outside the bloc. Made for a variety of reasons: †¢ To further socio-economic development †¢ To increase alliances and trade †¢ To allow free movement †¢ To prevent war Types of groupings include:- †¢ Free trade areas- tariffs and quotas are reduced on goods between members and restrictions are put in place for goods coming in to the area e. g. NAFTA †¢ Customs unions- tariff on imports from outside the group e. g.Mercosur †¢ Common Markets- like customs unions but with greater freedom of movement of labour and capital, e. g. previously EU, current example East African Common Market †¢ Economic Unions-all of the above as well as member states are also required to adopt common polices in areas such as agriculture (CAP) fisheries, transport, pollution (Kyoto agreement), industry, energy and regional development e. g. EU Positives and negatives of trade blocs |Positives |Negatives | |Greater chance of peace between member n ations. Having to share economic resources | |Faster and smoother economic development |Many countries will have to pay a large sum of money regularly to be in a | |Trade barriers removed |trade bloc | |Higher standard of living. |Elites can hold a disproportionate amount of power. | |Certain areas of a national economy can be supported – eg. Agriculture |If one courty falls in to ecomic crisis the rest of the member states are | |through the CAP. |effected | |People seeking work can move between member states– EU. Non-member states badly affected, lack of trade | |Possibility of a common currency- Euro |Loss of sovereignty | |Greater political influence |Loss of some finacail controls e. g. European central bank | |If countries become indebted member states can help bail out, Greece, | | |Ireland. | | Aspects of globalisation TNCsTransnational Corporations are companies that operate in over two countries – usually having their research and headquarters in the country of origin and locating the manufacturing plants overseas. As an organisation becomes more global, regional R&D and headquarters will develop. TNCs can be split in to three different groups according to what industry they are:- †¢ Resource extraction o Mining, gas extraction and oil producing o ExxonMobil, Royal Dutch Shell and BP †¢ Manufacturing o High-tech ? Computers, microelectronics, pharmaceuticals ? Hewlett Packard, GlaxoSmithKline and AstraZeneca o Consumer goods ? Motor vehicles, televisions and other electrical goods Many of these are assembly industries ? Ford, General Motors, BMW, Sony o Mass produced consumer goods ? Cigarettes, drinks, breakfast cereals, cosmetics and toiletries ? Coca-Cola, Kelloggs, Unilever, Heinz †¢ Service operations o Banking/insurance, advertising, freight transport, hotel chains, fast food outlets, retailers o Barclays, AXA, McDonalds and Tesco Growth of TNCs Why do TNCs expand to different countries? †¢ Larger p opulations with cheaper Labour Costs †¢ Better government policies such as grants, lower taxes and subsidies †¢ Less stringent rules on employment and pollution †¢ Fewer restrictions due to trade barriers †¢ Greater supply of raw materials To take advantage of trade within trade blocs †¢ Allowing them to grow thereby achieving economies of scale, reducing costs, finance new investment and compete in global markets †¢ Allow them to set up in markets that they want to sell in †¢ To acquire geographical flexibility so that they can shift resources and production between locations to maximise profits To serve a global market, TNCs may globalise production by:- †¢ Produce for the market in which the plant is situated †¢ Use one plant to produce for a number of countries †¢ Use integrated production †¢ Source parts in places where they assemble their products close to the market, GLOCALISATION Impacts of TNCs on a host country Positiv e Impacts |Negative Impacts | |Employment |Competition | |Injection of capital into the economy |Adverse effects on local companies which might not be as efficient | |More disposable income will create a demand for more |Environmental concerns | |housing, transport and local services |Less stringent pollution laws so more pollution allowed | |Multiplier Effect |Labour exploitation | |Investment by a TNC can trigger more employment by |Exploit cheap, flexiable, non-unionised labour forces in developing countries | |cumulative causation bringing greater wealth to the |Minimum age | |area |Urbanisation | |New working methods |Factories built in major urban centres leads to younger workers migration to the area | |Transfer of technology will create a more skilled |Negative effects on the rural areas | |workforce. |Removal of capital | |JIT developed |Profit back to country of origin | |Escape Tariffs/trade barriers e. g.Nissan in |Outside decision making | |Sunderland |Plans effec ting the development of plants are made in host country to boost profitability | |To take advantage of government incentives, subsides,|Little consiereation for local people | |EPZs (export processing zones) etc. |Dependancy on TNC | |Lower costs – especially labor |More westerniese approach to life | |To reach foreign markets more effectively | | |To exploit mineral and other resources | | Development Issues within the world Trade vs AidTrade is deemed as the more sustainable path out of the two to economic development as it helps to promote the growth in the volume and value of goods, leading to jobs and greater incomes, some of this income will help to generate domestic demand leading to investment and the multiplier effect. This will also lead to rising living standards and gaining of skills by local people However it relies on three factors: †¢ Adoption of capitalism †¢ Economic growth to ‘trickle don’ so everyone benefits †¢ Promotion of fre e trade This is a similar path that was taken by the MDC's and more recently the NIC's. However many of these NIC's had largely stable governments, a well educated workforce and they employed protectionist policies to stimulate growth e. g. tariffs and import quotas. However there are still problems with trade for a variety of reasons: They cannot be competitive in world markets as they need to invest in equipment, technology and training to make business productive and then infrastructure etc. †¢ Schemes like the CAP undercut mainly agriculturally based LDCs †¢ Wealth does not always trickle down to those who need it, like aid. †¢ Debts mean they would have to make millions before they made profit and due to the cuts imposed by the World Bank and IMF it often means there are public spending cuts especially on health care and education Aid can be either: 1. Bilateral – from government to government. 2. Multilateral – Where collective governments donate t o an organisation (such as the World bank) who the distributes it to suffering countries. 3. Voluntary – Where small NGOs send workers to help. NGOs such as OxfamAid is not always in the form of money sometimes it is in the form of goods or technical assistance. There are also several ways aid can be delivered †¢ Tied aid o Will limit the power of nations and may eventually cause resentment †¢ Short-term aid o Usually following an emergency such as earthquakes or tsunamis o This can be help with rescue operations o Medical supplies, shelter, food and water †¢ Long-term development projects o Improving food availability and farming methods o Helping to provide improved shelter o Health care and education o Developing better livelihoods and improving income o CAFOD, Catholic Agency For Overseas Development †¢ Top down aid Throwing’ money at a country and allowing them to get on with it. o It usually focuses on large scale, expensive projects which are unsuitable for the local community. , such as HEP projects e. g. Nepal o It often doesn’t go to the people who need it most o Usually tied †¢ Bottom up o More helpful to the local community however still bring their problems. o Small scale o Treat the individuals as individuals with creativity and intelligence o They work with people to create what the community most needs and supply the materials o They can undercut local business. However aid is not perfect and may critics say:- †¢ Aid does not reach those who need it the most, it is kept at the top by the government Aid is often used ineffectively on large scale, expensive projects which are often left uncompleted †¢ Sometimes countries don’t even have the correct infrastructure to use the aid effectively †¢ Dependency can be created which is often not sustainable is aid is a large proportion of national income †¢ Tied aid comes with strings attached, in some cases with every dollar given i n aid $7 is given in return Economic vs. Environmental Sustainability ‘Development that meets the needs of today without compromising the needs of tomorrow’ This would be achieved by †¢ Human potential being improved †¢ The environment is used and managed to supply people on a long-term basis †¢ Implies social justice as well as long term environmental sustainability The capacity of the environment to provide resources and absorb increasing levels of pollution is the critical threshold controlling how far population can increase and economies expand sustainably The Rio Earth summit set out the following points for each aspect of sustainability. Environmental Principles: †¢ People should be at the centre of concerns †¢ States have the right to exploit their own environment but should not damage that of others †¢ Protecting the environment is integral to development †¢ People should be informed of projections for the future as well as th e current environmental situation †¢ There should be environmental legislation and standards within states †¢ Laws should be enacted regarding liability for pollution †¢ The movement of substances that are harmful to others should be restricted States should warn neighbours of any environmental unease †¢ EIAs (Environmental Impact Assessments) should be carried out on all major plans Economic Principles: †¢ The right to development must be fulfilled so as to meet development and environmental needs of present and future generations †¢ States should work together to eradicate poverty in order to decrease disparities in living standards †¢ The needs of the poorest countries should be put first †¢ Unsustainable production and consumption patterns should be eliminated †¢ States should cooperate to restore the earth’s ecosystem †¢ Scientific information and innovative technologies should be transferred to improve understanding Stat es should support an open economic system, with few trade barriers and tariffs †¢ National authorities should endeavour to promote the internationalism of environmental costs, taking into account that the polluter should pay For anything to be effective it must strike the right balance between the three core principles – economic, social and environmental. Sustainable tourism myth or reality? As tourism is an increasingly expanding, billion dollar industry, it has increasingly been looked at to become more sustainable. Up until now it has followed this pattern: †¢ The environment attracts tourists for its attractions †¢ The money spent should help to maintain these featuresHowever as tourist flows increase it starts to do more harm than good, particularly to small areas which can’t deal with the massive influx, this can lead to the destruction of farm land to golf courses, and destroying natural habitats such as coral reefs, destroyed by water sports ,e. g. Philippines . Sustainable tourism ‘seeks not to destroy what it sets out to explore’ It attempts to make sure that: †¢ It preserves natural resources for future generations. †¢ The local communities and their culture are recognised as the most important in the tourist sector †¢ Economic benefits of tourism must partly go to those who are local to the area †¢ Everything is guided by the wishes of local people and communities At the Rio Earth Summit an environmental checklist was drawn up to show how the tourism industry could become more sustainable, these included: †¢ Waste minimisation, land use, re-use and recycling Energy efficiency, conservation and management †¢ Transport †¢ Water (freshwater and waste) †¢ Land use planning and management †¢ Involvement of all stakeholders in the planning †¢ Involvement of staff, customers and communities in environmental issues Sustainable tourism is an industry committed to ma king a low impact on the natural environment and local culture, while helping to generate income and employment for local people. Tourist can help by: †¢ Being informed of the local culture, politics and economy †¢ Respecting local cultures †¢ Contributing to local cultures and tolerance †¢ Supporting local businesses and traditional values †¢ Use the least amount of local resources Ecotourism Is one of the fastest growing sectors within tourism †¢ An economic process by which rare and beautiful ecosystems and cultural attractions are marketed internationally to attract tourists †¢ Planning and management is an important factor o Capacity is managed o Encourages conservation, by educating local people and tourists o Focuses on the environment †¢ Criticised for being ‘egotourism’ in some cases. Sustainable ecotourism must : o Have a limit to the number of visitors to sustain the environment o Set up and run in cooperation with loca l people Case Studies Measuring Development- HDI HDI = 1/3 (life expectancy index) + 1/3 (education index)+ 1/3 (GDP index) Advantages |Disadvantages | |Political competitiveness |Does not take into account poverty | |More factors and reliable ones |PPP values change very quickly, inaccurate or misleading. | |Easy and cheap to collect data |Little sense of income distribution | |Sign of welfare in the future, improving health and education, |Quality of life does not seem to be that closely linked | |supply-side policies which can indicate the long-term patterns of AS |Doesn’t take account like war or political oppression. | |curve |Based on normative economics. |The success of government policy |Other measures such as access to internet might be more important. | |Easily comparable to other countries |Changes over time – ceteris paribus | Comparing 2 countries, Nepal and the UK |Measure |UK |Nepal | |HDI |28/187 |157/187 | |Life expectancy |80. |68. 8 | |Expected yea rs of schooling |16. 1 |8. 8 | |GNI per capita, PPP adjusted |33,296 |1,160 | |Pop. Living on $1. 25 per day % |0 |78. 1 | |Population with at least secondary education , female : |1. 015 |0. 48 | |male | | | |Sustainability, Change in forest area (%) |9. 8 |-24. 5 | |% of population living in urban areas |79. 8 |19. 2 | Sub Saharan Africa – A country at low levels of economic development †¢ Sub Saharan Africa contains many countries with the lowest HDI ranking in the world. †¢ Many hold backs from development including war, disease, famine, debt, lack of infrastructure etc. They need large amounts of FDI that will not leave them in a worse situation than when they started. †¢ HDI, lowest ranked are Mali, Sierra Leone and Niger (all with an average of 0. 33) †¢ The top, ranked 119th and 120th in the world were Gabon and South Africa. TNC-Barbie in Taiwan -global shift of manufacturing †¢ Barbie, an American company Mattel , was produced a Japan in 1959 †¢ Has seen a global shift in manufacturing since it started. †¢ They moved to Taiwan in the 1960’s to take advantage of cheap labour costs and increased scale of production. †¢ At its peak Taiwan alone made more than 50% of all Barbie dolls in the world. †¢ Within 20 years Taiwan’s incomes began to rise which then led to Barbie moving somewhere else Mattel opened its first factory in China in 1987, wage prices were much lower and gradually production was mover there. †¢ Today Mattel produces Barbie’s in China, Indonesia and Malaysia – taking advantage of the second stage of NICs, the Tiger Cubs. Taiwan has further benefited from globalisation, as it is now home to companies that manufacture most computers and MP3 players such as BenQ TNC-Coca Cola – Global Marketing †¢ A company with a single product in which minor elements are tweaked for a different market. †¢ The company uses the same formulas, one with s ugar and one with Corn Syrup for different markets. †¢ The bottle design is the same and is regulated depending on different countries standards. The only countries in the world that do not sell Coca Cola are Iceland, North Korea, and Antarctica. †¢ It is not sold in Iceland because all bottles must be the same shape as there is a large recycling project and coca cola refuse to change the shape of their bottle as it is part of their brand †¢ Labour costs may be lower in some countries, especially LEDC countries. Low labour costs = higher profits †¢ Legislation on working conditions, workers’ rights, health and safety, and the environment may be less strict in some countries. Relaxed legislation = lower overheads = more profit. †¢ Some countries may try to encourage multinationals to invest in their countries by offering lower tax rates and financial incentives.More favourable taxation = lower overheads = more profits. Unilever †¢ Unilever is a ve ry widespread (branches in 90 countries) – include most countries in N & S America, Europe, Australasia, Russia, China, India, a number of African countries = MEDCs, NICs and some LEDCs †¢ Sales also very widespread: A lot of African countries (many LEDCs and LLEDCs), Greenland, some countries which were part of the old Soviet Union (Kazakhstan, Uzbekistan, Turkmenistan, Tajikstan) †¢ Very few countries where Unilever has no presence Asian Tiger- South Korea †¢ 13th largest economy †¢ Strong government †¢ Highly skilled and motivated workforce †¢ Large amounts of trade with a positive BoPProblems †¢ Move to democracy takes time †¢ Large aging population †¢ Unequal pay for women and poor working conditions for 52 hours a week †¢ Pollution with poor construction in infrastructure, roads and sewage BRIC economies It is said that these countries will be dominant by 2050, these brick economies, don’t just rely on export indu stries like the 1st generation NIC’s. Brazil emerging economy †¢ President Lula, who began in 2003 took the economy out of dept and is now a stable country †¢ Generates $1. 5 trillion GDP/year †¢ Reliable power, with sustainable sources, such as hydro electric power, sugar cane, bio fuels, sustainable in own Tupi oil fields FDI is the 4th largest in the world, $45 billion each year †¢ Very easy to communicate with †¢ Emerging middle class †¢ Good highly skilled work force However there are some areas where Brazil will need to improve if its development is to continue being sustainable:- †¢ Will become a increasingly aging population †¢ Destruction of the rainforest †¢ Increasing cost of manufacturing †¢ Poor infrastructure †¢ Unequal society †¢ Slow national growth †¢ Increased crime and corruption †¢ 25% of the population live in poverty, favelas, Sao Paulo China – Third Stage of NIC Development â⠂¬ ¢ In 1978 China began to follow the path of development of the Asian Tigers through an export driven road to development. Communist control was relaxed to allow this to do so. †¢ Foreign investment and joint ventures was encouraged. †¢ The internationalisation of the Chinese economy is also called the GUANXI NETWORK referring to the connections that exist between Chinese people and companies scattered all around the world †¢ In order to attract foreign industry in SE China, 14 ‘open’ coastal cities and 5 Special Economic Zones were set up. †¢ They allow tax grants which would give more profit and were in favourable locations, geographically, to work. †¢ Labour was 80% cheaper in these areas †¢ There was a large amount of FDI for the bulk of the 21st Century †¢ Receiving up to $50 million per year. In 2006 they received $63 billion, their highest recorded figure. †¢ Sustained growth of up to 10% – one of the highest in th e world. †¢ China became part of the WTO meaning that trade went from just over $250 billion to just under $1 trillion, almost quadrupling as they got greater access to global markets. Problems: †¢ Dramatic gap between rich and poor †¢ Huge rural/urban migration has left thousands in the countryside isolated as well as a decrease in agriculture meaning that poverty and famine has spread. †¢ Deterioration of environment and use of natural resources †¢ Dependent on the economy of the buyer †¢ Putting other populations before their own †¢ Development of two Chinas, east and westChongqing –largest urban industrial city in the south-western part of china, 32 million people – A major focus on migration and of the western development policy – South of the Gorges Dam – Population grows by 500,000 people a year – Chicago of china – Heavy industry dominates – Large pollution problems, air sewage – 2000 tonnes of waste a day India – NIC driven by services Many people think that the Indian service sector is driven by call centres; however its involvement in the service sector it accounts for 50% of GDP as there is a high population of skilled workers. Software and IT companies have been attracted to India because:- †¢ Second-largest English speaking human resource in the world Investment friendly and supportive government politics †¢ Good infrastructure for power, transport and data communication †¢ World’s third largest brain bank †¢ Stable democratic with over 50 year of independence †¢ Large market size †¢ Investment and tax incentives for exports in certain sectors such as electronics, telecom, software and R The UK and USA has fuelled the service sector in India as Indians migrated to gain skills which they would take back to their home country. Such skills were used to set up companies like Infosys which is now a TNC based in Bangalo re. Bangalore has become the centre of ICT because:- †¢ First state to set up engineering collages First t set up a technology university †¢ Grants and tax incentives for the IT industry †¢ 1991 software technology park was built †¢ Now over 6 technology parks Infosys one of the largest software companies in India †¢ Founded in 1981 and had first foreign clients by 1987 †¢ Overseas offices in Boston and in MK †¢ 455 of workforce based in Bangalore Growth in the 21st century Dubai – An RIC †¢ Dubai is located in the United Arab Emirates †¢ Globally central as it is half way between London and Sigapore †¢ Fastest growing economy †¢ Its economy boomed upon the discovery of oil in the 1960’s. †¢ There was a growth of 300% between 1968 and 1975. †¢ There was rapid immigration. To make itself less dependent on oil, Dubai invested in new infrastructure which attracted FDI and now Dubai’s economy is heavil y based around tourism as well as banking †¢ Oil and Gas currently occupy less than 5%. †¢ Borrowed money to fund many projects †¢ One of the country’s most effected by 2008 market crash, massive inflation problems †¢ Chinese and Indian banks brought a lot of Dubai’s debts Social problems †¢ Vast numbers of immigrants †¢ Poor working conditions, 20 hour day in some cases, because people took out loans to get to Dubai, and now due to little work they have to work all hours to get as much money as they can †¢ Live in poor conditions in tent cities out of the actual city †¢ Passports are taken by employers on arrival Environmental problems †¢ High electricity cost and rising carbon emissions Sewage because there is not enough water, as the city is in a desert, water is more expensive than oil †¢ Nuclear waste †¢ Adu Dhabi, must look to help out by providing solar energy Countries facing low levels of economic developm ent Nepal– †¢ One of the poorest countries in the world – 157/177 in HDI †¢ Its GDP per capita is also one of the lowest at $1,049 †¢ Shortage of energy, supplies †¢ Little money to spend on development †¢ Due to relief little transport infrastructure, remote communities †¢ Mainly subsistence farming and tourism †¢ 78. 1% of the population live on less than $1. 25 a day †¢ Little education and health care provisions HIPC- Tanzania †¢ 40% of the population live below the poverty line †¢ HDI is ranked 152 Life expectancy is 58. 2 †¢ Annual GDP per capita is $800 †¢ 75% of employment is based on agriculture †¢ Literacy rate is 64% Reasons for poverty †¢ Topography and climatic conditions – limit cultivated crops to only 4% of the land area †¢ Industry- mainly limited to agricultural products and light consumer goods †¢ Dependant on agriculture which accounts for half of GDP †¢ Prod ucts include coffee, cotton, tea, tobacco, cashews and sisal which are highly competitive and have falling prices †¢ Tourism is booming especially in the National Parks Attempts to help †¢ Government: a national poverty eradicated strategy- to reduce abject poverty 50% by 2010 The World Bank, IMF and bilateral donors have provided funds to rehabilitate Tanzania’s deteriorated economic infrastructure †¢ Structural Adjustment Policies, SAP’s, poverty reduction strategy papers †¢ â€Å"Vision 2025† programme set the goals of a high quality of livelihood by year 2025; peace, stability and unity; a well educated society and a competitive economy based on sustainable growth and equity †¢ UN MDGs The results of attempts to help Tanzania †¢ Not improved quality of life †¢ Income and welfare indicators fell †¢ Even more dependent on foreign aid †¢ Increased environmental damage †¢ Pick up in industrial practice including gold and natural gas †¢ Increase private sector growth Recent debt relief in Tanzania One of the poorest countries in Africa even though it had some of its international debt written off †¢ $3 billion will be discounted over the next 20 years †¢ Tanzania’s total international borrowings of more than $7 billion Socio-Economic Groupings NAFTA †¢ USA, Canada, Mexico †¢ Set up in 1994 †¢ Aims – To eliminate trade tariffs between the three countries, pushed by the establishment of other socio-economic groupings like the EU. Mexico saw it as the best option as it had built up debt in previous years. |Pros |Cons | |Trade between member countries tripled in the first 13 years. Canada has been affected by the US increase | |Increased employment in the USA as manufacturing grew |Some US jobs have been lost as the plants have moved to Mexico | |Mexico got increased FDI as other countries wanted to locate inside |Dumping in Mexico | |NAFTA. |Mexico i s being exploited because o less rigid pollution laws which | | |affects surrounding countries | EU 27 member states, set up in 1957 as the European Economic Community Aims – †¢ Promote social and economic progress amongst member states †¢ Have more government influence †¢ Introduce EU citizenship †¢ Prevent war †¢ Create better laws Positive impacts |Negative impacts | |Group activity on waste, pollution control and climate change |Loss of sovereignty over some decisions | |Common currency |Greece and Spain situation | |Large labour market due to ease of movement |Sharing fishing grounds | |CAP support |Power of elite | |Peace in EU |Small areas fell isolated | Unilever– TNC †¢ Set up in 1890 by William Hesker Lever, who owned a soap company which revolutionised Victorian hygiene †¢ Unilever was formed by the merger of the Dutch margarine producer ‘Margarine Unie’ as they had the common raw material palm oil †¢ In 1937 Lipton tea was acquired and in 1957 birds eye joined Colworth House facility near Sharnbrook continued research efforts in food preservation, animal nutrition and health problems associated with toothpaste, shampoo and other personal products. It is one of several R & D centres †¢ In 2008, the companies had over 300 manufacturing sites in more than 100 countries across every continent †¢ Unilever employs over 170,000 people and has annual company revenue of over $50 billion in 2007. †¢ Unilever has had problems with animal testing, child labour and deforestation due to the use of palm oil CAFOD- long term and short term aid Aims are to promote long-term development; respond to emergencies; raise public awareness of the causes of poverty; speak out on behalf of poor communities; and promote social justiceLong-term aid †¢ Improving food availability and farming methods †¢ Helping to provide improved shelter †¢ Health care and education †¢ Devel oping better livelihoods and improving income Short-term aid †¢ Provide aid to disaster stricken countries †¢ Set up temporary shelters for those left homeless Democratic Republic of Congo (Kinshasa & Goma), Ethiopia, Kenya Swaziland – top Down Aid †¢ Top down development is usually difficult as often hundreds of thousands of people’s needs need to be ‘catered for’ and it is difficult to satisfy everyone. †¢ The ideal goal is a communist state with a ‘one size fits all’ approach. †¢ Swaziland is in Southern Africa. It is ranked very low in the world for human development. †¢ Many individual concerns to deal with which weakened the country, AID’s, famine and drought. †¢ The number of orphans was increasing as the death rate did correspondingly. †¢ Several branches of the United Nations which were trying to help them such as the UN food programme, and a many NGO’s. †¢ They were distribut ing imported food to hundreds of thousands of people which was ultimately a good thing. †¢ However, the farmers of the local area were not able to sell the produce that they grew †¢ Therefore not able to take advantage of the wet season that blessed them. †¢ There was also a state of dependency Difficult to draw the line between those who should receive aid and those who did not. Other top down aid include large scale projects such as building dams and HEP stations like those proposed in Nepal, this can lead to the loss of valuable farm land and can limit the water downstream, leading to widespread droughts. Nepal, FoST – Bottom Up Aid †¢ Foundation of sustainable technologies †¢ Treats people as individuals with ideas and creativity. †¢ Due to the lack of energy in Nepal and the reliance on wood, leading to deforestation and help problems in the home due to the amounts of smoke †¢ Subsides the purchase of products including solar cookers an d no-smoke indoor cookers Educates people on how to make briquettes, which produce no smoke from waste, to prevent deforestation †¢ However there are limited resources to make the solar cookers and there for they are limited and rely on donations †¢ Not every community has the money to buy the equipment or has access to finding out about products †¢ Not sustainable in the long run if the donations stop Overall top down and bottom up development are both ways of narrowing the development gap, the gap between rich and poor countries. Both, like anything in life have pros and cons however the possible way forward is through micro-credit loans which give people the credit and respect that they deserve.This creates a successful and sustainable way of life and helps to lift individuals out of poverty. Economic vs. Environmental Sustainability Holes bay |Economic |Environmental | |High unemployment especially in Hamworthy gate |Ramsar and SSSI sites rare birds and invertebra tes | |30 Ha of unused land, power station site |2nd largest natural harbor in the world | |Poor access to Poole town centre | | The construction of the twin sails bridge Environment:- direct flow around the support pillars of the bridge causing deposition behind the pillars, †¢ May affect the tidal flats within holes bay, and Poole harbour †¢ Sediment becoming trapped within Holes bay building up the marshes †¢ Tidal salt marshes, to the build up of humus causing the build up of peat rising the level of the and creating fresh water marshes within Holes bay †¢ Poole harbours marshes could decrease in size †¢ Destroying many habitats for bird’s invertebrates and plants alike. Economic:- †¢ Greatly over budget with its total cost coming in at over ? 37m †¢ Engineers spotted a large crack in the surface of the bridge making it unsuitable for use The development of the power station site will also cause an increase drain on local recourses suc h as schools and the area might not be able to cope, †¢ Increase the flow of traffic over the bridges. †¢ Not enough jobs generated in the area †¢ Increased population density and increased unemployment. †¢ Increased crime Brazil- Curitiba †¢ 2 million people in the population †¢ city wide service to recycle products †¢ Recycling and garbage system prevent waste issues, organic and nonorganic, with two different trucks for different types of rubbish †¢ The rubbish is sorted and distributed and reused this means that 2/3 of rubbish is recycled †¢ It also creates more jobs to help reduce unemployment Jaime Lerner, was an architect and later became mayor and designed the current layout of Curitiba †¢ The city has changed from being an agricultural area to a more industrial city †¢ Flood problems have also been solved by building the parks on the flood plains and making artificial river banks around them this also prevents squatting and slums appearing in the parks †¢ Is home to many multinational industries, such as Nissan, Renault, Volkswagen, Audi, Volvo, HSBC, Siemens, ExxonMobil, Electrolux and Kraft Foods †¢ The per capita income for the city is $ 17,977 Sustainable tourism Nepal – concentrated in certain areas such as Khumbu, Chitwan National Park, Annapurna National Park and the Sagarmartha National Park, The number of tourists increasing from 526,705 in 2007 to 710,547 in 2011, – Actions must be taken in order to preserve Nepal. – Problems with air pollution from the transport of tourists and fires getting trapped in the valleys due to the high mountains – Increased demand for water and food supplies, taking away goods from the locals – The same tracks are used by all of the tourists, erosion and destabilises the soil – Increased the risk of landslides. – Some tourists are also not respectful of people’s culture and the wildlife  œ Poor sewage disposal – Khumbu region problem with the amount of waste generated by trekking teams – 500kg per team all waste must be taken down the mountain rubbish there have been clean up operations carried out during training and acclimatisation time of people who wish to climb Mt. Everest †¢ for people to pay the Sherpa’s to carry down peoples rubbish †¢ Nepalese Government has begun charging deposits on tourists and are only returned if groups bring down their own rubbish †¢ Nepalese Government that they should limit the number of tourists †¢ Dismissed as it has been concluded that this will bring more harm than good, by limiting one of the country’s biggest industries they could face increased widespread poverty. Kenya, Kigio Tourism is the 2nd largest contributor of GNP after agriculture. One example of where agriculture has been replaced by tourism is Kigio. Kigio Wildlife Conservancy is a 3,500-acre protected Conservancy â⠂¬ ¢ 2 hours drive from Nairobi. †¢ Originally a cattle ranch, sold by the family to the local community who after a few years decided to forgo cattle ranching in favour of wildlife conservation. †¢ The community now receives a regular income †¢ Conservancy fee each guest pays helps towards the maintenance of the conservancy. †¢ Wide ranging habitats †¢ Many wild animals, honey badger, and over 200 bird species †¢ Protecting nearly 100 species of indigenous plant species which are being destroyed outside the conservancy. †¢ The Conservancy is at the forefront of ecotourism in the Rift Valley lakes area.Guests are encouraged to participate in low impact activities – o guided nature/bird walks, o cycling, fishing o Day or night game drives are conducted in open-sided 4Ãâ€"4 vehicles †¢ Lodges work closely with the local community and support several enterprises, schools and an orphanage. †¢ Guests can visit a group of widows that cr aft sisal baskets, a group that makes jewellery from recycled paper and a rug weaving factory. †¢ The lodges only sell what is made by the community and pay a fair price. †¢ A large percentage of the price is donated to the community fund. †¢ Every year, children from the local community and schools are invited to participate in ecotourism workshops †¢ To protect and improve their environment.

Tennessee Valley Authority

The Tennessee Valley Authority (TVA) was the first large regional planning agency created by the United States Government in May of 1933. The TVA was one of the most innovative and significant ideas of President Franklin Delano Roosevelt to help tackle the economic, social, and political problems in the Tennessee Valley, a region with no economic growth and was heavily impacted before and after the Great Depression. The TVA is a federally owned corporation that provided a series of environmental regulations and resource management to help stabilize and generate economic growth in the Tennessee Valley. The regulation includes: flood control, fertilizer manufacturing, electrical generation, and economic development. The TVA was a significant economic development agency and a regulator during the time. This paper will provide the history and the foundation of the TVA and the essential significance of it to help construct and developed economic and political achievement from regionally to nationally. Tennessee Valley The Tennessee Valley was one of the most impoverished and poor areas of the United States. This region was one of the hardest hit regions after the Great Depression. Much of the land had been farmed too hard for too long, which erodes and depleted the soil (Ezzell). Crop productions had fallen along with farm incomes. Sadly, this region showed no economic growth before and after the Great Depression. Due to this reason the government had established the Tennessee Valley Authority. Tennessee Valley Authority in the 1930s When President Franklin Delano Roosevelt won the election of 1932, he pledged himself to the American people for a â€Å"New Deal†. This order of central economic agenda and economic stimulus plan includes the Tennessee Valley Authority (TVA). On March 1933, Congress and President Roosevelt passed the Tennessee Valley Authority Act to aim for reforestation and the proper use of the marginal lands in the Tennessee Valley (Ezzell). The TVA regulated proper forest, controlled forest fires, and to boost environmental habitats for wildlife. It also promised to improve navigability on the Tennessee River, as well as providing flood controls (U-S-History. com). The most significant transformation during the 1930s was electricity generated by the Tennessee Valley Authority dams. Due to electricity, farmers were more productive and sufficient. Modern devices also made farming much more sufficient and prolific. Electricity also inspired and drew in industries into the Tennessee Valley region. This provided the jobs necessary for those in needs and created even more jobs. Many privately owned power companies in the Tennessee Valley were either bought by the federal government or went out of business because they could not compete with the TVA during the time. There were also Government regulations that were put into effect to prevent competition with the TVA. Controversies There were many economic libertarians who believed the government should not be involved in the electricity generation business. Libertarians fear that government intervention and possession would result to the misuse of hydroelectric sites. The TVA was one of the first federal hydropower organizations. The TVA encountered many setbacks and failures and was involved in many controversies. In the case of Ashwander vs. Tennessee Valley Authority, the court distinguished that regulating commerce among the states includes regulation of streams and that controlling floods is required for keeping streams navigable, and is therefore, considered constitutional (Badger). Directions of the TVA The TVA was presided over by three-member board who held differing ideas about the direction of the TVA (U-S-History. com). A man by the name of Arthur Morgan believed in social planning. His view on the TVA was that it was an opportunity to establish a relationship between government and privately owned businesses. Another man by the name of Harcourt Morgan believed and supported the elimination of poverty and the unemployment of the Tennessee Valley and that it should be the representation for national and regional development. David Lilienthal was a promoter of public power who wanted the TVA to compete directly with the private power interests. There were major conflicts between the three men until March 1938 when President Roosevelt dismissed Morgan for his public criticism of the TVA (U-S-History. com). Dams The first major construction ever built by the Tennessee Valley Authority was the Norris Dam. Named after Senator George W Norris for his creativity and inventiveness. The dam is a hydroelectric and flood control structure located on the Clinch River in Tennessee. The dam was constructed in the 1930s to initiate and establish economic growth to the region and to control the unrestrained flooding that had long afflicted the Tennessee Valley. TVA constructed a total of sixteen dams and steam plant between 1933 and 1944 (Ezzell). Due to the massive constructions the employment reached approximately 28,000 workers. This impacted significantly in the Tennessee Valley region and provided immediate economic growth. Economic Development of the TVA and the Significant Changes By the 1960s, the Tennessee Valley region experienced a significant economic growth. The overall environment of the region was in better shape. This means that farms and forests were extremely in good conditions. The TVA had delivered efficient generating units into service. The electric rates were among the nation’s lowest (Ezzell). Due to the unprecedented growth, the TVA had aimed for a different direction. The TVA began building nuclear plants as a new source of economic power (Ezzell). However, due to the increase of cost in electricity and fuel and the decrease in demand and construction cost rising in the early 1970s, the TVA shut down several nuclear plants. The TVA started to become more productive and efficient while cutting costs. By the late 1980s, TVA had replaced its variable power rates with a fixed rate that lasted for a long period of time. TVA in the 1990s to present day Like many other power industries that are moving towards restructuring, the TVA prepared for competition. The TVA set an agenda to meet the energy needs of the Tennessee Valley. The company cut back on operation costs by nearly a billion dollars every year, it reduced its workforce, stopped building nuclear plants, and generated full capacity of its plants (Edsforth). There were many significant changes for power industries that the TVA had to prove itself to the public. The TVA had to prove its responsibility, efficiency, and reliability. (Edsforth) Conclusion Before and after the Great Depression, the Tennessee Valley was proven to be an impoverished region with high unemployment rates and low standards of living. During the election of 1932, Franklin Delano Roosevelt won by a landslide, defeating Herbert Hoover. He had pledged himself to the American people for a â€Å"New Deal†. Within the structure of the New Deal was the Tennessee Valley Authority (TVA). This was one of FDR’s most innovative and successful programs up to this day. The TVA established environmental regulations and resource management. TVA had impacted many aspects of American politics and economics. The TVA definitely established economic growth and nurtured it through providing jobs. The TVA held its strategy to its solution even as the issues changes over the years. It also had changed the lives of farmers because farming became much more productive and efficient due to its modernized devices. The electricity-generated dams attracted many industries into the region of the Tennessee Valley, providing the jobs for those needed. Up to today, the TVA had proved to be a very stable and successful government operated organization. The power system continues to operate with an astonishing level of reliability and dependability. TVA continues to strengthen its position as a leader in energy and environmental issues.

An Analysis of the Foreshadowing of Cleopatras Betrayal in Antony and Cleopatra, a Play by William Shakespeare

An Analysis of the Foreshadowing of Cleopatra's Betrayal in Antony and Cleopatra, a Play by William Shakespeare Foreshadowing Betrayal Cleopatra’s betrayal is not unexpected at all if one closely reads the text in Antony and Cleopatra. There is ample foreshadowing of Cleopatra’s corrupted morals and sense of self. Antony’s infatuation with Cleopatra leads him to overlook her behavior and forgive her almost instantly. His love is ultimately blinding and had Antony been more aware and focused with his brain rather than his heart, he would have understood what Cleopatra is truly like. What struck me as interesting were all of the little instances that warn of Cleopatra’s future betrayal that could easily be brushed over not only by Antony, but also by readers. Cleopatra’s behavior is brought to light when Enobarbus and Antony are speaking to each other in Act I, Scene II. The way Enobarbus speaks of Cleopatra implies that he had been close to her once before. As narrated, â€Å"Alack, sir, no, her passions are made of // nothing but the finest part of pure love // We cannot call her wins and waters sighs and tears; they are // greater storms and tempests than almanacs can // report. This cannot be cunning in her; if it be, she // makes a shower of rain as well as Jove.† (Act I, Scene II). Enobarbus paints Cleopatra to be this dramatic picture of a woman that he recognizes and wants Antony to acknowledge. Regardless of her â€Å"tempestuous† personality, she is also suggested to be gentler when she is associated with â€Å"showers of rain†. In effect, Enobarbus recognizes both Cleopatra’s harshness along with her ability to seduce and show affection. If one reads closely, one can also notice that Enobarb us speaks of Antony’s woman as though she was once his as well. Antony doesn’t seem to catch on to this or think of Enobarbus possibly having sexual encounters with Cleopatra. However, if the two did have prior relationships together, this foreshadows her disloyalty. Antony’s heart lies directly with Cleopatra and we see this as he refuses to listen to Enobarbus. As one can see, the foreshadowing of Cleopatra’s betrayal links the simple words of Shakespeare’s texts to the bigger consequences that Antony faces. Whether it is through Cleopatra’s behavior or her actions, with the help of inference and close reading, one can see the direction the play was headed towards from its opening pages. With the speech that Enobarbus provides, we gain insight on what other characters besides Antony think of Cleopatra and their own unique ways of describing her, eventually becoming embodied in her actions.

Analysis of Investment and Risk Assignment Example | Topics and Well Written Essays - 1000 words

Analysis of Investment and Risk - Assignment Example In applying the methods of mitigating risk, making a portfolio is one of them which is, in fact, the most suitable and widely used methods in the entire investment industry (Cinnamon & Larsen, 2006). 1) Making of Efficient Portfolios comprising of 10 stocks in total. The companies which have been chosen for this purpose are BG Group, BHP Billion, BP, Barclays, British American Tobacco, HSBC, Glaxo Smith, Glencore, Unilever, Tesco. a) Short selling is one of the noteworthy activities of investment, which means to sell the assets without having its physical possession. The first part of assignment requires making a portfolio with including short selling allowed. For this purpose, following tabular data has been covered: From the tabular formation given above, it can be seen that lots of fluctuation are there among the mean return and standard deviation. The portfolio made with this particular stance would yield a return of 0.72% and a risk level of 3.53%. In this table, it can be found that short selling is not allowed; hence, an investor cannot take any position for a stock which has negative return. The portfolio return is 0.958% with standard deviation with the same 3.53% level. c) In this part, the return would be the same as in the section â€Å"b† because short selling is not allowed and 25% can be allotted to a single share. From this particular analysis, it can be said that the portfolio, which has been made without short selling, would yield the higher proportion of return in lesser risk adoption as compared to the portfolio in which short selling is allowed. In this scenario, in which portfolio has been diversified between 8 stocks and 2 stocks Coca-Cola and Google have been given 0 proportions. The average return of this portfolio is 0.822% with the same level of risk as illustrated above. From the analysis, it can be easily found that there are four stocks, which are above the level of CML; while other 6 stocks are located below the CML; hence there are only four stocks that can fill the gap of capital of an investor, while all other asset or shares would come below the level of average return.

The role of mean variance analysis in the area of portfolio management Essay

The role of mean variance analysis in the area of portfolio management - Essay Example It is therefore computed as the Variance of the returns: Var(R) = [R-E(R)]2 However, the importance of means and variances of assets are far more apparent in the construction and management of an investment portfolio. Essentially an investment portfolio is best understood simply as a combination of individual assets/investments that are held together by the investor at any point in time. But, the importance of risks and returns of individual assets is limited to the significance it has for the risk and return of the entire portfolio (Linter, 1965). It is how the portfolio performs that is the primary concern for the investor. Presumably, due to the additive property of means, the returns from the portfolio equal a simple weighted average of the returns on the individual securities that constitute the portfolio. We can calculate expected returns from a portfolio of investments as functions of probable returns from the portfolio given the probability distributional properties of the re turns or alternatively as weighted averages of expected returns of the individual returns. The weights on the expected returns for are simply the shares of wealth invested in each asset as a proportion of the total wealth invested on the portfolio (Markowitz, 1952). The variance of the portfolio however is less than the weighed average of the variances of the individual investments provided the returns to these investments are not independent, i.e., their correlation is not zero. Since the objective of creating a portfolio is to minimize risks through combining assets with correlated returns, the variance of the portfolio typically is smaller than the weighted average of the individual investment variances. The implication of this outcome is that risk can be lowered for any given return by diversifying the portfolio since the variance of the total portfolio includes additional covariance terms and more negatively related assets imply a smaller value for this term (Sharpe, 1964). For a portfolio with more than 2 assets, the portfolio risk is captured by the variance-covariance matrix of the returns of the portfolio. The investor’s problem is to maximize the expected returns from a portfolio for a given level of risk or alternatively minimizing the risk subject to a given expected portfolio return. This can be reformulated as a problem of choosing the weights on the individual assets to minimize the variance of the portfolio for a given expected return. The set of weights that ensure this comprises the efficient set. Theories of optimal portfolio selection are concerned with constructing the most optimal set of weights for individual assets that ensure maximal returns or minimize risk. Thus, the formulation is that of a constrained optimization problem where either the mean returns of the portfolio are the objective function and the variance serves as the constraint or vice-versa. Here in lies the importance of Mean-Variance analysis for portfolio managem ent. However, Mean-Variance analysis of portfolio management has the following drawbacks: Prudent investors may be concerned with more than just the mean and the variance of the distribution of returns. The mean and the variance are the first two moments of any distribution and if the returns of the portfolio follow a normal distribution, then it is fully characterized by just the first two mom

Russia's Economy Essay Example | Topics and Well Written Essays - 500 words

Russia's Economy - Essay Example Firstly, with regards to the strength that exist within the Russian Federation, it can categorically be said that the natural resource markets for oil, natural gas, and mineral extraction have provided the Russian Federation with a runaway level of economic growth during a period in which much of the remainder of the world has been mired in recession. As a direct result of the fact that the Russian Federation has untold billions of barrels of oil in on reservoirs, the potential for growth within the near future is profound. Moreover, surveys into overall levels of natural gas resources within the Russian Federation indicate that this country has the largest known reserves of natural gas anywhere in the rest of the world.1 Copious supplies of coal, iron, gold, silver, diamonds, and other desired natural resources are also found in abundance in Russia’s the vast eastern wilderness. Finally, another core strength/bright spot of the Russian economy is concentric upon the fact that the Russian Federation exhibit a very high level of educational aptitude and higher learning; doubtless the result of decades of Soviet education that adequately equipped individuals with profound levels of scientific and engineering knowledge. However, apart from the bright spots and potentials for development that had previously been elaborated upon, perhaps the greatest drawback that exists currently within the Russian Federation is contingent upon the overall level of corruption within the country. At nearly almost every level, corruption is a stifling influence which creates unknown prices and incalculable expense for companies that choose to operate within its borders. Such a constraint to foreign direct investment has significantly reduces the overall number of firms that are actively interested in developing their companies further within the

African emerging markets as a potential destination of efficiency Essay

African emerging markets as a potential destination of efficiency seeking investment - Essay Example However, the Asian continent serves as Africa’s greatest threat in terms of foreign investment as the continent has intense aspects by European countries and other grown economies. For this reason, the Asian continent experiences rapid growth in terms of infrastructure and the economy unlike in Africa. On the other hand, investments in African countries by foreigners attributes to maintained peace while the countries that do not have peace experience minimal international investment. Therefore, this essay will indulge on why Africa has steadily been an emerging market as a potential investment destination by foreign investors. In the global population index, Africa boasts of having at least one billion inhabitants spread across the continent. Essentially, this figure comprises of all fractions of the population that include age, gender, among many other factors. However, the literacy levels are average with the percentage standing at sixty two. This means that the elite population is slightly above the half percentage meaning that it is not enough to sustain employment and investment. By 2008, the collective gross development profit for the continent combined was at least two million trillion dollars making it high, but with minimal income. In addition, the overall expenditure levels for the continent were eight hundred and sixty billion US dollars as at 2008. Despite these visible trends, analysts predict that Africa would increase profits and gross spending income by 2020. However, the achievement of these desired results squarely laid with the investments levels if made at a steady rate. For instance, the population of Africa will be at one point four billion people by 2020. Further, analysts predict that the gross development profit will also increase to at least two point six trillion US dollars by the same time. In excess, the levels for consumer spending will also go up to almost one point four trillion dollars.

Paradise Now Movie Review Example | Topics and Well Written Essays - 750 words

Paradise Now - Movie Review Example The movie is basically about terrorists who choose to blow themselves up for a cause or in other words who execute the suicide bombings. The director has tried his level best to explain situations which turn people into terrorists, when a person has no other option but to give up his life to prove a point such a situation is the most desperate one and only in such a situation a person becomes a terrorist. It would be very unfair to say that the director is sympathetic to murderers and is approving suicide missions through this movie, he has tried his best to bring out the root cause of why people turn to terrorism, and if we are to stop terrorism we have to understand it's root cause and we have to understand the feelings of the people who have no other option but to blow themselves up to send a message to people who do a lot of injustice to them. The movie has very interesting characters, like Khaled, Said, Suha and Jamal. Khaled and Jamal are childhood friends and share a good chem istry. They live in a town called Nablus. The most interesting character of the movie is without a doubt Said; he remains very serious and focused in the whole movie. Both Said and Khaled had no concrete work to do, so they engaged themselves in a garage and took care of the cars. This film turned many a head by being the first Palestinian film to be nominated for the Academy award in the category of the best foreign film. The film shows why people turn to terrorism, what are the various factors involved in transforming the people and making them do the unimaginable. Jamal meets Said to prepare him and his childhood friend Khaled to carry out suicide attacks in Tel Aviv, Israel. He said "We decided to answer the assassination of Abu Hazem and Um Jaber's son who died in the bombings." (Paradise now 2005). He motivates Said by saying "If you fear death, you are already dead." (Paradise now 2005). Said had a good enough motive to carry out the suicide attacks, his father was a collaborator and worked for the Israelis, he was executed by them. He quotes "I was born in a refugee camp, life here is like imprisonment. The crimes of the occupation are countless; the worst crime of all is to exploit people's weaknesses and to turn them into collaborators" (Paradise now 2005). He firmly believed that his father was a very good man but he was made weak by being a collaborator by the Israelis. He wanted to send a loud and a clear message to the Israelis by giving up his life. Both he and Khaled prepared themselves for executing the task. Suha another import ant character in the movie gets to know about all this, she convinces Khaled to back out of this mission and he convinces his friend Said to do the same. Said plays a trick on Khaled, khaled returns to his handlers but Said goes on with the plan. With an explosive belt hanging on his body, he decides to get into a bus and blow the whole bus up but he restricts himself on seeing a kid in the bus. "If there is no security for us, there will be none for them either. There power does not help them" (Paradise now 2005). Said said these lines and these lines are a good enough indication of what exactly was going on in his mind. He had a motive of revenge, which is very dangerous and a very

PDCA project Assignment Example | Topics and Well Written Essays - 1250 words

PDCA project - Assignment Example Therefore, I intend to improve my non-verbal communication skills, thus become a better leader in my profession, as well as my social life. My main aim of choosing to improve this skill relates to its ability to help me build better relationships with my peers, subordinates, the patients I serve, and other stakeholders. I followed the Plan-Do-Check-Act (PDCA) cycle to aid me in achieving my personal quality improvement goal. This involved formulating a plan of action to guide me on what I should do. I then implemented the plan, and collected data on the progress of the plan. Collecting the data enabled me to evaluate the success of my plan, hence determined the effectiveness of the plan, or need for modification (Neuhauser, Myhre, & Alemi, 2004). I intended to improve my non-verbal skills through improvement in my listening skills. This involved active listening, which meant giving my seniors, juniors, and other subordinates enough time for self-expression. This involved working on maintaining eye contact with whom I engaged. In addition, I had to work at complementing or contradicting their messages through such acts as nodding, and rolling eyes respectively (Videbeck, 2011). I was also to display acceptance through my posture whenever possible. This meant sitting beside, or across the people I interacted with, instead of behind them, which creates a physical barrier. I also planned to employ appropriate vocal cues, and avoid high pitches, which hinder effective communication. I hoped to treat at least 80% of the people I interacted with in this manner. This measure helped me to gauge my ability to communicate non-verbally, thus measure the effectiveness of my communication skills. The plan was undertaken for four consecutive weeks. During this time, the number of times that I failed to adhere to my plan were recorded on a daily basis in a daily recording sheet. The plan commenced on the 4th

Evaluation of Health Promotion 3 Essay Example | Topics and Well Written Essays - 2500 words

Evaluation of Health Promotion 3 - Essay Example Obesity has become a matter of concern and it is considered to be one of the major health problems. When compared to the other health hazards, obesity has become a common issue among the people of all the age groups. (Health Committee 2004). Health promotion programs have been conducted by many organizations to create awareness among the public. This evaluation proposal aims at providing a complete outlook on the health promotion program for obesity. Health promotion programs are conducted in such a way that people get to know about a particular health problem. It provides information about the existing legislations and policies and the environmental changes. Health promotion programs aim at improving the health of the people by inculcating the basic importance of maintaining their health in a proper way. A health promotion program can be implemented only if the methods and procedures are well defined. Government organizations do not depend on any other private organization to implement health promotion programs. But the situation is entirely different when a private or voluntary organization conducts a health promotion program. The private organizations depend on government or other financial institutions to help them in conducting a health promotion program. The financial institutions provide financial assistance to the private organizations that conduct such health programs. (Aldana 2001). Since our institution is a non-government body, the help of government and other financial institution is necessary. A promotion program has to be implemented within a specific time period and this proposal indicates the timeline of the health promotion program. Research proposals include a complete implementation schedule that imposes a step by step process to accomplish a particular task. This will enable the organization to implement and process the

Functional Areas Of Business Essay Example for Free

Functional Areas Of Business Essay There has been an ongoing debate between enlisted members and commissioned officers of the United States Military about effective leadership and the scope of control. Enlisted Service Personnel are usually the worker bees, are not managerial in nature, with combat and field experience. Commissioned Officers are the leaders of the enlisted members. Commissioned Officers usually are the ones that can be personified as managers, with little to no field or combat experience. This debate stems from Commissioned Officers executing their managerial roles, how it affects the enlisted member, and how it effects the overall mission. Leadership, strategic planning, law, human resources management, will be utilized to analyze the role of a manager within the functional areas of business. Leadership Most employees will follow an effective leader if the manager exudes confidence, is not a hypocrite, and believes in the organization’s mission statement wholeheartedly. The adage, If a manager has to claim to be a leader, it almost seems as though he or she is trying to convince themselves that they are a leader, instead of showing that the manager is capable of leading. Motivation, inspiration, and being levelheaded are great attributes in being a great leader. Managers do not have to be an efficient leader in order to get things done, however, they should know how to manage those effective and efficient leaders in order to see the project or mission through. Most effective leaders are effective by being prepared and knowledgeable with some strategic planning. Strategic Planning As the adhesive that was so meticulously put there to hold up that model ship which is encased in a glass bottle, there is a plethora of minutia detail that goes into planning. With regards to the military, it takes an almost insurmountable amount of planning just to execute even the smallest of missions. This component is imperative to have in the manager’s toolbox, in order to maintain the survivability of the organization. A person that fails to plan, he or she plans to fail. Managers have to stay on top of planning, even if it means that sometimes coming into the organization on weekends, or coming in earlier than their standard start time. The organization also depends deeply on the legal department to ensure that the organization will not fall privy to legal troubles. Read more:  Functional Areas Of Business Law There are legal boundaries that dictate what can or cannot take place in the business world. Businesses hire witty, educated, and self-starting legal individuals to interpret the laws. There is a ton of small laws that can get an organization in or out of legal calamity. It could be a zoning law issue, or a morality issue, or what is common with big organizations is an environment issue. Managers have to be cognizant and stay on top of these issues in order to be a successful manager. In order a successful manager, there have to be some exceptional employees. Those employees hire through Human Resources. Human Resources Management Filtering out among the mass applicant pool to hire the best employees that are most suited for the position, rectifying current employees pay if needed, ensuring equal opportunity to the employees are all components of what it means to be in the human resources department. Managers have a few components to deal with when it comes to human resources. According to an a Forbes article, administrative director at a law-firm wrote that she needed some advice. The administrators employee was pregnant and she wanted to find a way to fire her before the employee tells anyone. She further stated that the pregnant woman would cost the organization a temporary hire, adding that after the baby is born the pregnant woman is sure to miss work due to baby illness. (Ryan, 2014) Managers have to be aware that it is illegal to fire someone for pregnancy, and need to have the wherewithal to be firm, but understand that employees have a choice of motherhood as well as having a  career. Managers in hu man resources can sometimes be the epitome for the managers throughout the entire organization that set the tone for the organization. When a manager from human resources has to fire an individual, if they are not careful the methods that are used can be detrimental to the entire organization. If the manager calls, emails, or texts the individual that in two weeks time that the person will be fired or laid off, that individual now has time to sabotage, slack-off, give trade secrets to competitive organizations or do something physically harmful to himself or the people at the organization. If the manager tells the individual that is to be fired to come into the office and let’s discuss some of the options that a person may have face-to-face, makes that terminated employee somewhat at ease. The terminated employee will not have to tackle this daunting situation alone. Supply Management In order to stay relevant in business, managers understand that they must have quality products at a reasonable rate from their suppliers. However, when the rates are unreasonable, managers should seek out other suppliers that will accommodate the organization’s budget. â€Å"Mooney agrees that managers will usually be keen on a purchasing department that is good at finding savings. But, he warns, even this can be a double-edged sword, because they can be expected to be much less enthusiastic when it is their area of spend that is being touched upon.† (Wheatley, 2005) Managers have to be diligent and understand that the purchasing department, if not fully understood, can break the financial infrastructure of an organization. Conclusion Being a great leader will comprise of attributes such as not being temperamental, inspirational and having the ability to motivate. Being able to strategically plan has to be in the managers repertoire, in order to efficiently run the organization. Laws are meant to be interpreted by the legal team to ensure the organization does not end up in legal trouble. Human resource managers have to be careful with the way they handle terminating employees. Finding the best supplier with a quality product, for a reasonable price is what managers should reach for in order to have a thriving organization. References University of Phoenix. MBA Overview Module. Retrieved from University of Phoenix, MGT/521 Website Wheatley, M. (2005, May). Supply Management. 10-11. Ryan, L. (2014, April). You Think Your Manager is Slimy? Check Out These Guys. Forbes, (), . Retrieved from http://www.forbes.com/sites/lizryan/2014/04/08/you-think-your-manager-is-slimy-check-out-these-guys/

High School Graduation Essay Example for Free

High School Graduation Essay Throughout life people go through so many hardships. Whether it be good or bad there is always something that comes out of the situation. One of the most exciting but yet scariest events would be graduation. So it was the day before graduation and we were having our graduation practice. Standing outside in the line alphabetical order me and classmates talked and waited for practice to start. The sun was beating down, the smell of fresh cut grass filled out our nose. We were all just ready to get it over with. Sitting talking with my classmates discussing our future plans. Debating whether or not we will miss high school, but knowing we will definitely miss each other. So finally it came to practice walking across the stage, so the assistant principle called my name and shook my hand and handed me my mini diploma. Then it finally hit me like a speeding express train, I was about to graduate. May 18th 2012, finally it was here the day of my commencement. I can almost remember that day like it was yesterday, I awoke like on any other school day. That day was crazy, I was running errands and preparing for my graduation and after party. So the time had come for me to put on my blue and gold cap and gown with my gold cords which I had worked so hard for. I had so much sense of pride at the moment all I needed was my diploma in my hand. So the final moment had come and it was time to walk the field. The music stared and we proceeded to walk down the field to our seats. Glancing out at the packed stands I could see my family and friends. While waiting for my name to be called, I reminisced on all the good times I’ve had in high school and all the friendships I’ve made. Finally my row was directed to get up and proceed to the stage and my heart was racing. Thinking it was finally over, no more high school. I hear my name called and I hear all of my family and friends screaming and clapping for me and it made everything I had done to achieve the diploma my principle handed me after shaking my hand. As I was walking back to my seat with my diploma I was envisioning that I had just closed one chapter to my life and I was excited to embark or my next journey. Graduation is an exciting time in a person’s life, especially a high school graduation. When I think of family and friends gathering together to celebrate a joyous occasion, I feel I accomplished my strongest goal. It never occurred to me that graduation would be the end of my youth and the start of adulthood. Graduating from high school was an influential event that gave me a new outlook on life.

Supply Chain Strategic Management For Nike Marketing Essay

Supply Chain Strategic Management For Nike Marketing Essay Nike, Inc was founded in 1964 in the state of Oregon, US. Nike is the largest seller of athletic footwear and apparel in the world. Its main business is in the design, development and marketing of high quality footwear, apparel, and equipment and accessory products. Products are sold to retail accounts via NIKE owned stores and online sales, independent distributors and licensees in 170 countries across globe. Footwear and apparel products are manufactured outside Unites States while equipments are manufactured both in US and outside US. Nikes products are produced in factories owned/operated by independent contractors Nikes footwear products dominates its market share and footwears are designed for aquatic activities, baseball, cheerleading, football, golf, lacrosse, outdoor activities, skateboarding, tennis, volleyball, walking, wrestling, and other athletic and recreational uses. (Nike 2010) Nikes accessories and apparels are designed to match its footwear and performance equipment like bags, socks, sport balls, eyewear, timepieces, electronic devices, bats, gloves, protective equipment, golf clubs are also manufactured. Plastic products are produced in Nikes self owned subsidiary, NIKE IHM, Inc. Other wholly owned subsidiaries of Nike are Cole Haan, Converse, Hurley and Umbro. Supply Chain Process Overview: Business related operations like marketing and contracts with the factories for product development activities is executed in Nikes headquarters in Beaverton, Oregon. Nikes global operations are largely categorized into four geographic segments United States; Europe, Middle East and Africa (EMEA); Asia Pacific and Americas (includes Canada, Mexico and other Latin American countries of Chile, Brazil and Argentina). Nike has outsourced its manufacturing activities across globe since mid-1970s. And the products are developed at factories owned and managed by business partners. (SCM are ERP Implementation at Nike: From Failure to Success 2005) United States Market: Fig 1.1: Nike US Retail Stores Source: Nike Annual Report Fig 1.2: Nike Non-US Retail Stores Source: Nike Annual Report plastic and metal hardware, and specialized performance fabrics designed to repel rain, retain heat, or efficiently transport body moisture. NIKEs contractors and suppliers buy raw materials in bulk. Most raw materials are available in the countries where manufacturing takes place. Supply Chain Framework: The three components of SCM framework are Supply chain network structure, supply chain business processes and the supply chain management components. The three vital components of supply chain network structure are members of the supply chain, structural dimension of the network and various types of process links across the supply chain(Lambert and Cooper 2000). Key members involved in supply chain should be identified. Primary members of a supply chain to be all those autonomous companies or strategic business units who carry out value-adding activities (operational and/or managerial) in the business processes designed to produce a specific output for a particular customer or market .In contrast, supporting members are companies that simply provide resources, knowledge, utilities, or assets for the primary members of the supply chain (Lambert and Cooper 2000). Structural dimension of the network assist in evaluating and managing the supply chain. Horizontal structure means the numbe r of tiers across supply chain and vertical structure means number of suppliers/customers within each tier. Any changes in structure impacts supply chain and proper analysis should be done before making modifications. Successful SCM needs a shift from handling individual processes/functions to integrating activities across supply chain. GSCF identified eight supply chain processes Customer service management, Customer relationship management, Demand management, Order fulfilment, Manufacturing flow management, Procurement, Product development and commercialization and Returns. There exist 4 types of links in business functionalities. They are Managed business process links, monitored business process links, not-managed business process links, and not-member business process links. Managed process links are links that the firm views them as vital to integrate and deal with. These are the links that exists between firm and tier1 customers/suppliers. Monitored process links are albeit not crucial, but vital to the firm and they are the links existing with other member companies. Not-Managed process links are not crucial and the firm is not directly involved in managing them but assign the job of managing the links to member factories. Non member process links are linkages between the firm and other non-members of the supply chain. The nine management components for successful SCM of Nike would be planning and control; work structure; organization structure; product flow facility structure; information flow facility structure; management methods; power and leadership structure; risk and reward structure; and culture and attitude. Supply Chain Process and Objectives of Nike: Precision : The objective is to satisfy customers through product delivery and information accuracy. Nike follows few methods to measure precision DIFOT (Delivery in Full- on Time) and Time to provide resolution to customer queries. The products are produced in factories based on the orders and the developed finished goods are consolidated and then distributed by air/water/road ways to NIKE Customer service centres Fig 1.3: Nike Delivery process Fig 1.4: Nike Apparel and Footwear Product Flow Fig 1.5: Nike Previous Supply Chain Model and desired Simplified Model Fig 1.6: Pictorial representation of Inventory management Fig 1.7: Life Cycle Cost Analysis Fig 1.8: Supply Chain Objectives of Nike Nikes i2 implementation failure : Supply and demand issues need to be paid utmost attention particularly in retail industry as it has to deal with wide choices for each product category like size, color etc. The huge SKU which signifies varied inventory pictures a hurdle to supply chain management. The manufacturing cycle before the implementation of software solutions is generally 9 months. Hence the need for demand planning system arose and Manugistics software was implemented. Due to various limitations in the software, in march 1999, Nike decided to implement software from i2 Technologies for managing its supply and demand. The desired functionality of the software was to match its supply with demand by mapping out the production of varied products at manufacturing units. The module should have been implemented and linked to ERP and other backend functionalities but however Nike implemented software from i2 using the legacy systems rather than implementing as part of its SAP ERP Project (SCM and ERP Implementation at Nike: From Failure to Success 2005 ) In 2000, after the implementation of i2 software, NIKE stated that it resulted in stock pile up for slower-selling shoes and shortages for high demand shoes. Nike blamed i2 software for poor planning forecast which was actually developed to reduce production days. Investors believed Nikes blame game and the shares of i2 dropped severely. But i2 managers claimed that Nikes issues were not linked to software but the way the software was implemented. They did not use the standard template offered by i2 for its footwear division. But i2 accepted the blame of not being forceful in compelling Nike to stick onto their implementation methodology and the bitter truth was i2 desired to solve Nikes complex issue of tracking every shoe model it manufactures. Nike experienced some major issue and hence i2 thought resolving those legitimate issues would really serve as value addition to i2 Technologies. Joshua Greenbaum, a consultant stated that i2 software is not known for technical failures but it is well known for its complexity and the issue here is that Nike went go-alive with the new software even before they were ready to go live which resulted in major chaos. Lessons learnt by Nike : Implementation issues in supply chain can have disastrous effect in Supply chain process of an organization and hence great care should be taken while implementing software solutions for managing supply chain. If a standard template is customized as per the clients requirement then the service provider should monitor that the client adheres to implementation procedures as instructed. If a solution is being offered to address complex issues, then the system should not go-live before appropriate testing to check if all the needs of clients are better served. Premature switching has devastating effect on the organization which Nike has learned at its cost. Fig:1.9: Nikes latest SAP IT Solution to manage supply chain functionalities Nike owns a system Futures wherein the retailers place orders 3-6 months in advance which does assist in demand and forecast planning. But the scenario is different for it Football Team Sports (FTS) category which constitutes 10% of its overall market. Its FTS line comprises about 100 varied styles and it uses a unique fabric Dri-Fit that absorbs sweat. Usually sports team places the order, expects delivery in a weeks time, demands more customized options and hence prestocked items doesnt hold good for all customers. The challenge for FTS apparel lies in its supply chain. Nike has to seek ways to reduce current lead time like modifying demand planning/ forecast system, shifting production base from Asia to Europe and preordering undyed fabric called greige and contracts with strategic suppliers/manufacturers can result in faster delivery even amidst last minute orders. (Nike:Just Do it But How? 2009) Evans and Danks model : Fig 1.10: Evans-Danks Model Source: Evans and Danks (1998) Strategic supply chain management Creating shareholder value by aligning supply chain strategy with business strategy. In: Gattorna, (ed.): Strategic supply chain alignment, Hampshire: Gower, pp. 18-38 Sourcing Strategy : Global Commodity Chain (GCC) perspective provides greater insights on design, distribution and marketing activities. Nike has captured a greater place in US athletic footwear market albeit its manufacturing activities are held overseas, formulating Nike to be archetype of global sourcing strategy. Its successful execution of sourcing strategy can be best known in Nikes effort to retain its power and authority over its highly profitable nodes of the footwear commodity chain which offers them the strategic and geographical mobility. Nikes distribution network was broadened by forming strategic alliance with retail outlets. It shifted its manufacturing base from high cost production countries to low cost countries like Taiwan, South Korea, Asia etc. The merits of producing goods in developing nations have to be weighed against the demerits of other costs like sourcing, production flexibility, transportation and storage. Nike took advantage of global sourcing as a way to reduce cost and in 1980s relocated its plants to Taiwan, South Korea and in 1990s to China, Indonesia and Vietnam. In 2006,over a half a million workers were engaged in 700 factories in 51 countries, although the firm had around 23000 employees in its payroll.(Lechner and Boli 2004). The efficient management of sourcing strategy obtained Nike to manufacture goods as low cost and thereby its market share and profitability increased. Nikes Futures system is order and planning system which serves to resolve inventory and financial bottlenecks. Nike had more flexibility options like modifying design specifications by dealers which offered competitive advantage over its competitors like Adidas. Donaghu and Barff categorised and identified 3 sets of Nikes factories developed partners, volume producers and developing sources. Developed partners are Nikes first/upper tire suppliers who are accountable for innovative and stylish/premier models. Volume Producers produce products in large quantities but selected products. Developing sources are recent factories that have enticed Nike due to low labor cost. Various steps are involved in making a atheletic shoe designing, model and pattern making, molding of soles, material cutting, stitching, lasting, finishing, final inspection and packaging which requires little skill. Hence unskilled workforce and lower wage rate are quintessential in manufacturing shoes competitively. Nike did not own a factory in Asia but had contracts with partners who manufacture apparels and footwear. Nike took the ownership of the products only after they are finished and delivered from factories. Fig 1.11: Members within Nikes Supply Chain Process Fig 1.12: Nike Brand Factories across globe Source: Nike website Demand Flow Strategy: Nike uses Futures Order system to manage its supply with demand. Nike sells its product through various channels Nike owned stores, online, independent distributors and licensees. Nike doesnt own a factory but outsources its manufacturing activities to subcontrators across globe. Nikes manufacturers deploys Just-in-Time principles to manage inventories. Supply Chain Integration Strategy: Information integration, Decision integration, Financial integration, Operational integration and Physical or Virtual links are the key factors of Supply chain integration. Nike uses SAP software solutions to manage its supply chain processes. Nike never manufactures but establishes contracts with subcontractors across globe. Since 1972, Sojitz Corporation of America (Sojitz America), a large Japanese trading company has been offering financial assistance in exports-imports of Nikes products. It offered purchasing and financing services for Nikes goods in Argentina, Uruguay, Canada, Chile, Brazil, India, Indonesia, the Philippines, Malaysia, South Africa, China, Korea, and Thailand, excluding products produced and sold in the same country. (Nike 10K Report, 2010) . Any disruption/failure from it would affect Nikes power to buy goods from suppliers and to sell goods to customers. FishBone Diagram: Fig 1.13: FishBone Diagram for Nike Time Compression: Time is a critical factor in todays supply chain. Time compression can be defined as reducing the amount of time taken for a process in a business operation ie inputs is being transformed to expected/desired outputs in a process but in a compressed period of time. To achieve time compression for the holistic supply chain, activities that does not add value to the process should be identified which is achieved by removing waste and refocusing on the process steps. The horizontal and vertical structure which forms the basis of supply chain must be properly integrated. The structural and infrastructural linkages in a supply chain depicts how efficiently resources, inventory are utilized. (Beesley 1996) Few generic principles to identify and understand supply chain process: The end users in a supply chain are customers who demand speed and adhere to delivery. Nike customers demand variety in products ranges and hence Nike strives to manufactures wide range of products but maintains a minimal stock so as to accommodate many varieties. Customers are not willing to pay extra cash for speedy delivery because similar services are offered by its competitors also. Many firms are just order qualifiers and not order winners. The call for JIT inventory can be satisfied by maintaining correct proportion of stocks in stores. Positioning of resources and inventory also plays a vital role in maintaining a optimal supply chain. Burbidge and Forrester states that the effect of demand variation in a supply chain oscillates out of control and impacts the lower level of supply chain. Fig 1.14: Internet Driven Supply Chain Model Wireless Technology and RFID are used by Nike at a minimum level. Efforts are taken to widely utilize it across its factories. The usage of RFID however raised some privacy concerns and hence Nike is striving hard to resolve such issues and trying to make use of the technology in the best possible way. Globalisation does impact Nike and offers many challenges. Global sourcing and reduced tariffs in developing countries have created complicated webs in supply chain. Infrastructures in developing economies are not well developed and hence it requires partnerships with 3PL providers who possesses better knowledge on market and in few cases Nike has to build its distribution centres. Periodically detailed research has to be done to understand infrastructure issues. Consumer expectation varies in different countries. One size fits all rule doesnt apply anymore. Customization plays a vital role in acquiring customer satisfaction. Product proliferation challenges can be tackled by being more responsive and quick in addressing the needs of the end users. Nike needs to adapt lean and agile manufacturing programs based on their volume-variety formulae. Retailing customers demand for shorter lead times and faster inventory turns and they make attempts to push the products upstream. As a reciprocative action, Nike offers out-of-stock and replenishment programs but should strive to improvise/speed-up time to market and reduce lead times. Conflict exists between cost and flexibility. Manufacturing lead time is longer due to technical complexity associated with fabrics and products require complex innovation which ultimately results in cost of time and delays. Supply Chain Integration Issues and Recommendations for Nike The key thing to focus is to understand the nature of the demand for the products in supply chain. Functional products are those products that fulfil minimum needs, dont alter to a large extent over time, possesses stable and expected demand and lengthy life cycles. Innovative products are expected to have short life cycle and unpredictable demand. Innovative products supply chain differs from functional products supply chain. Two types of supply chain are Physically efficient supply chain and Market Responsive supply chain. The below table shows the attributes of two supply chain. To develop an ideal supply chain strategy, the nature of demand for products is plotted against their respective supply chain. The 2*2 matrix thus depicts if the existing supply chain matches the right demand for the products. The supply chain strategies are perfect if the functional products possess efficient supply chain and innovative products possesses responsive supply chain. Physically Efficient Process Market Responsive Process Primary Purpose Supply predictable, demand efficiently at the lowest possible cost. Respond quickly to unpredictable demand inorder to minimize stockouts, markdowns and obsolete inventory Manufacturing focus Maintain high average utilization rate Deploy excess buffer capacity Inventory strategy Generate high turns and minimize inventory throughout the supply chain Deploy significant buffer stocks of parts or finished goods. Lead Time focus Shorten lead time as long as it doesnt increase cost Invest aggressively to reduce lead time Approach to choosing suppliers Select primarily for cost and quality Select primarily for speed, flexibility and quality Product design strategy Maximize performance and minimize cost Use modular design inorder to postpone product differentiation as long as possible. Table 1.1: Attributes of Physically efficient and Responsive Supply Chain Source: Fisher,M.L., What is the Right Supply Chain for your Product? A simple framework can help you figure out the answer Functional Products Innovative Products Efficient Supply Chain Match Nikes atheletic shoes and casual shoes, sports equipment, apparels and accessories. Mismatch Nikes shoes for diabetic patients, Zoom Air shoes for athletes, high technology sports equipment. Responsive Supply Chain Mismatch Match Table1.2: Nikes product and supply chain positioning matrix Nike should take efforts to shift from upper right hand cell to lower right hand cell. This can be achieved by making few of the products functional and developing a responsive supply chain for the rest of the innovative products. Nike can handle unceratinty by three ways reducing leadtime and becoming agile such that products are produced only when there is market demand; searching for new information that act as indicators and sharing a common platform and components for varied products and demand becoming predictable; hedging against outstanding ambiguity with buffers of inventory (Fisher ) Arcs of Integration: Ragatz et al (1997) claims that the effective integration of suppliers into product value/supply chains will be a key factor for some manufacturers in achieving the improvements necessary to remain competitive.The two types of integration are : delivery integration or forward integration which involves the flow of material between suppliers, manufacturers and customers (Saunders 1997, Trent and Monczka 1998) and Information integration or backward integration that include the effective functioning of IT and flow of data between customers and suppliers (Martin 1992, Trent and Monczka 1998). Tan et al (1998) state that when firms integrate and act as single unit, overall performance is improved across the supply chain. Manufacturers should decide in which direction (customers or towards suppliers) and to which extent (degree of integration), they should undertake upstream and downstream integration. Fig1.15: Integration in the Supply Chain Source: Frohlich, M.T., Westbrook, R., 2001., Arcs of Integration: an international study of supply chain strategies. Journal of Operations Management, 185-200 Fig1.16: Nike striving to move towards outward facing Arc of Integration Source: Frohlich, M.T., Westbrook, R., 2001., Arcs of Integration: an international study of supply chain strategies. Journal of Operations Management, 185-200 C2C Cycle: Fig 1.16: Nikes 5 year trend of Operation Cycle Source: Thomson One Banker Agility is defined as a capability to meet demands of end users and to warrant that supply matches the demand. The key factor is flexibility and time to market in response to demand is crucial. Transforming the supply chain from make-to-sell to make-to-order is the desire of any organization that wants to gain competitive advantage via supply chain management. Nikes objective is centralization and it is achieved by information sharing through the effective implementation of IT. Nikes claims its lead time is 6 months due to technical complexity associated with producing fabrics and products. In this competitive world, 6 months is a wide gap for any rival to gain access competitive advantage. Nike should adopt following ways to reduce lead time gap. Postponement Strategy: Postponement or delayed configuration is a way of manufacturing products in common platforms, components or modules but the final assembly or customization does not happen until the final market destination and or customer requirement is known (Christopher 2000). Inventory levels can be maintained at a generic level which results in lower stock keeping variants and flexibility it offers in greater. Forecasting is easier at basic level than for a final product. Customizing a product locally means more variety at less cost which paves way for mass customization. Through Localization, postponement strategy is fully achieved which implies that the final product is finished in the local region. The hurdle for efficient SCM is to build lean strategies till the decoupling point and agile strategies further than that point (Christopher 2000). Decoupling point is the point at which demand diffuse through the supply chain. The flow of product upto the decoupling point should be forecast driven and the flow of product after the decoupling point should be demand driven (Christopher 2000). The two decoupling points are material decoupling point where inventory is stocked as its basic form and it should continue as far downstream as likely ; information decoupling point which should be available as far upstream as likely to which data about demand diffuses. Nike should seek ways to handle the two decoupling points thereby becoming more agile than competitors and reducing Bullwhip or Forrester effect. In most of the processes it is the lead time of the suppliers that restricts the firm to be more agile to customers demand. Order to Delivery Cycle: Order cycle time is defined as the time consumed from placement of order by customers to delivery of the product to them. The components of order to delvery cycle are order communication, order entry and processing, order picking or production, transportation, customer receiving. Each of these steps consumes time and any bottlenecks associated with any of the processes would result in increased cycle time. Optimum Production Technology categorizes any activity as bottleneck and non-bottleneck. Nike should focus on bottlenecks to which capacity can be reduced and set-up times can be reduced. The firm should also focus on non-bottlenecks in a similar fashion. SCOR and DCOR model: Supply Chain Operations Research Model is used to analyse the current position of the organizations business processes and functions. It possesses a set of metrics to be evaluated and can be compared with the benchmark data. Design channel Operations Research Model links business processes and functions, metrics, good practices and technology attributes into a single unified model to support communication within design chain partners and to improve the effectiveness of extended supply chain. Sustainability: Nike has taken steps towards sustainable business and the need of the hour is to take proactive steps by focusing on sustainable manufacturing, sustainable product development and developing a sustainable marketplace. Nike should take efforts to identify closed loop models and processes which would enhance sustainability across supply chain. Nike must follow an integrated approach in tackling supply chain by fusing lean, energy, water, waste and compliance teams into one model: sustainable manufacturing and sourcing. Sustainability is the path to forthcoming profitability. (Nike Corporate Responsibility Report 2009 ) Nike deals with many contractors and hence Nike should seek long term sourcing consolidation strategy and rationalize its supply chain functionalities. Nike has to take steps to build a sustainable base , align with strategic manufacturers who are able to deliver high end products and are highly innovative, building relationships with contractors willing to adhere to Nikes corporate responsibility. Fig 1.17: Nikes Supply Chain towards Sustainability Source: Nike Corporate Responsibility Report Environmental Impacts: Waste is produced at every step of supply chain. In FY2006, Nike conducted waste mapping study and discovered that 75% of waste is generated from supply chain activities outside factories and when measured by weight, about 40% of the purchased materials end up as waste. One-third of waste footprint is generated from retail packaging and from shipping packaging. Nike operates 5 waste management centres in 4 countries and about 50 products are transported to material vendors so as to recycle them to materials from which Nike repurchases. Nike should focus to utilize more waste effectively to sustainable uses. The firm should seek ways to reduce waste in design stage rather than seeking ways to reduce waste in downstream supply which would decrease costs and waste materials being generated. Fig 1.18: Percentage of Waste generated across Nikes supply Chain Process Source: Nike Corporate Responsibility Report Fig 1.19: Nikes Reuse-a-Shoe Program Source: Nike Corporate Responsibility Report Fig 1.20: Greenhouse gas emissions across various supply chain process of Nike Source: Nike Corporate Responsibility Report Supply Chain Mapping Tools: Various supply chain mapping functionalities are available which can be utilized by Nike to determine its current position and future growth prospects. Demand Density Mapping: Sales Territory Mapping: Gross Margin Map: Customer/DC Allocation Map: Isochrone Mapping: Centre of gravity mapping: Table 1.3: Supply Chain Mapping Tools Source: Types of Supply Chain Map, 2007. Nike should manage the business process links based on its objective such as product variety, improvising quality, lowering cost across supply chain. Number of links should be monitored and managed with great care any decision to change links should be well analysed before incorporating amendments. Owing to high variability in customers expectations, Nike should focus more on demand management to gain a sustainable competitive position in the volatile market. Nike can utilize Point-Of-Sale (POS) systems and key customer data to effectively manage demand and supply thereby lowering uncertainty and offering smooth flow across supply chain. Order fulfilment activities should be given high priority and customer needs should be satisfied greatly which requires proper integration with Nikes manufacturers, distributors and logistics providers. Nike should seek to partner with fourth party logistic providers depending on the marketplace and other benefits. Innovation is the lifeblood of Nike to stay competitive and hence new product development process needs high attention. Nikes should identify end users articulated and unarticulated needs; identify strategic suppliers and forms efficient links for a smooth supply chain. Nike should leap forward towards Joint planning and control approach so as to effectively operationalize its functions globally. Nike has failed to monitor its contractors factories who have employed underage kids and havent adhered to minimum wage rates. Owing to this, Nikes brand names have been associated with child labour and Nike has to face loads of labour rights issues which defamed its brand. Nike has been really doing well in managing its supply chain integration. However if it maps and analyzes every bit of linkages across the chain and takes corrective actions, it can gain a well established position in the market and thereby reducing the cost by a large amount. Conclusion: The mapping of SCM process results in understanding the existing issues and paves way for defining solutions. Identifying the critical members of the supply chain, kind of functionalities to be connected and what nature/degree of integration is necessary for each link are key factors that require deep insight. The goal of SCM is to create the highest possible value not only for the specific firm but across the supply chain including end-consumers. Aligning the product supply with their appropriate supply chain is also vital for increasing sales. Amplification caused by uncertainty can be reduced