Alternatives for the decision regarding the high lead found in the whistles Essay

The situation of determining how to handle the recently discovered high lead content in the large whistles order is a difficult one that will in some way affect the company. Three alternatives have been made to allow options for this decision. Alternative 1: Say nothing; allow the whistles shipment to go without notifying the customer. Alternative 2: Replace the customer’s order by providing whistles that meet the appropriate company standards. Alternative 3: Contact the customer and explain the situation, offer them a discount for on the whistles that are lower than the company standard. Decision Process The process for choosing the three alternatives began by identifying the decision to be made. The decision at hand is what to do with the information discovered about the order of whistles going to a school in South America. This is a big decision that will affect the company in each alternative. The next step of the process is listing options possible for the situation, and then studying those options by listing advantages and disadvantages of each. Then the decision was made by choosing the best overall solution for the decision. And lastly the decision was evaluated to determine if the results were what was expected. The three options for this decision are listed above; say nothing to the customer, replace the order, or try to make a deal for the customer. Each option is motivated by a result that will benefit the company financially, ethically, or a mixture of both. The idea behind the alternative 1 decision was to save money upfront and not bother with order changes and other inconveniences for the company. In studying this option the advantage of this would be to save money and time for the company. The disadvantage would be a possibly unhappy customer, an unethical move which could make employees see the company as being unfair; giving a poor product that could be hazardous to children. The legal ramifications of this alternative would be risky if the a child became ill from the use of the whistles and the company was blamed, sued, etc. The idea behind the alternative 2 decision was to replace the customers order with whistles that are not potentially hazardous and meets the company standards. The advantage of this option is not putting the company in an unethical situation of trying to pass products that are under par for high quality. This will help set a standard of ethics in the company that could motivate employees to do good work. The disadvantage of this option is that it will cost the company $100,000. The financial loss could take a long time to recover from, the positive influence on employees won’t immediately compensate for the loss. There would not be a legal issue with this option. The idea behind the alternative 3 decision was to try and contact the customer and explain the situation and let them decide if they would like the whistles replaced or to take the hazardous whistles at a discount. The advantage of this alternative is that the customer could decide to keep the original whistles which would still save the company a considerable amount of money cutting the losses to a much smaller amount. Also it would show that the company had the customer’s best interest in mind. The disadvantage of this option is that it could reflect negatively on the company still because we can’t really determine how the customer will feel about the whistles that are potentially hazardous. They customer might think that the company is trying to cut corners and save themselves money. This would be bad for future business. Legally the customer would probably not try and sue the company, but there is still the potential issue of the company being reported as manufactur ing products with too high of a lead content. This would kill the company’s reputation and the customer relationships of other clients. Recommendation Alternative 2 is the recommended decision; replacing the customer’s order by providing whistles that meet the appropriate company standards. This decision was made by both ethical and financial decisions. Ethically this alternative is the most appropriate. The customer contacted the company to provide a product to be used in the South American schools. It would be unethical to provide the customer with a product that is below the company and country standards even though they are not violating the South American standard. The customer chose this company over a foreign company to give a quality and safe product. This recommendation will positively affect the company because they will possibly become more favorable in the eyes of the customer, with the possibility of more business in the future from them and their business relations. This option was chosen not only for company recognition, but also to save children from a potentially hazardous experience. This option will be a great cost to the company, but the positive experience from both the customer and employees. By creating a culture of â€Å"wanting to do what is right† will help future sales and the company will gradually earn the loss in funds back over time. Customer relationships Considering the outcome on the customer relationship is an important part of the decision making process. We have to ask ourselves how will the customer feel about our decision, how will it influence them and how will it influence the company? By choosing alternative 2, to replace the whistles, the company will look favorably to the customer, being the school buying the whistles. Though the company will merely be providing the product that was originally agreed upon for the initial sale, the customer will realize that the company is sacrificing to replace the whistles and they will go away with a positive relationship with the company. This experience is sure to foster future business from the customer because of the positive experience they experienced. They will also be more likely to recommend the company to their peers and the company could gain substantial business from the experience. The children who would be ultimately affected by the quality of the whistles will feel good about receiving a quality, non-hazardous product, and the parents of the children will be grateful knowing that the company behaved ethically. This could also create future business for the company by providing the children and parents with a positive experience from the company. The company employees will see the standard of ethics portrayed by the company and it will reflect in their work. By giving an example of a high ethical standard it is likely that employees will take greater pride in their work which will affect the company in a positive way. The company’s decision will affect multiple stages of people, their feelings, thoughts, and behaviors will help the company in the long run to regain the loss taken from replacing the whistles. The financial gains will be gradual yet immeasurable in the long run of creating a company with a superior ethical standard. Social Responsibility In a corporation, social responsibility is behaving ethically as individual workers and together as a company to be sensitive toward social, cultural, economic and environmental issues. This means that the company doesn’t always do what’s best for its self but rather do what is best for their environment, customers, employees, culture, etc. Social responsibility is a big part of the decision making process because decisions made by the company not only affect the company alone, it affects employees, the economy, the customers, and the environment. These decisions and methods are important when considering long-term business operations. The decision making process for the situation had many factors involved. The most noticeable factor was the cost of replacing the lower quality whistles with a product that is up to the company’s standard and isn’t potentially hazardous. There was multiple ways of looking the problem; ignoring it, saving the company money and hoping there was not issues with the product, or there was the option to replace the product with something the company could be proud of, a product that had no hazards for use by children, and doing what was appropriate ethically for the situation. Social responsibility played a major part in the decision to use alternative 2 and replace the order with whistles that didn’t have high amounts of lead. The choice to do what is best for the customer, environment, and the kids of the schools outweighed the option to save the company time and money.

Saudi Arabia

Saudi Arabia is a deeply conservative country in the Middle East rooted in Islamic laws and traditions that degrade women in the society. The laws have roots in both the traditions and Islam. And to a large extent, the country has suffered slow growth as only half of its economy is productive.It is evident that when women are empowered there will be a tremendous growth in the economy, and as such, gender parity should be perceived as a moral obligation which will stimulate economic stability and give women a chance out of social bondage.WHY THE LAWS SHOULD BE CHANGEDThere is a great need for the country to adjust its laws to accommodate all the citizens, both male and female. The kind of discrimination and social degradation women face is the worst ever. Women are forced to obtain permission from men, including from their sons to be able to travel, get jobs and enroll for higher education. Even after the progress which had been made during the colonial period, the country has found i tself back to its original position,at work places, the education sectors and leadership. For the women, discrimination has become the norm. During job applications and recruitments, they don't get the same opportunities as men (Vogelstein, 2018). With the men's narrow conservative perception, women are even denied promotions, others dismissed. Thus, this has led to constant disputes with their male colleagues. The result being slow progress in their personal development stemming adverse realities for them. This perspective doesn't regard women as having the necessary skills and abilities for pursuing leadership roles although there are economic reformations, there are still numerous challenges.The academic leadership roles of women has been crippled by organizational and administrative challenges they face in their work environment (Alsubh, 2018). Women are barred from taking superior positions due to lack of their training and education. This coupled with inadequate financial allocation and patriarchal mindset has affected women leadership, which directly impacts on the institutional achievement. Other challenges hindering their capabilities are caused by uncooperative behavior of their subordinates, excess workload with very long working hours due to absence of positional power.Most women trying to break away from the societal norms and expectations find themselves in very tight schedules(Alsubh, 2018). They are expected to take charge of their families. This translates to less time attending to work, in severe cases a promotion may lead to separation from her family.Some opt to drop their jobs altogether. With constrains in time, they are barely able to get enough experience. Most cannot withstand the pressure and end up with low self-confidence, thereby unable to adapt to the dynamics of work environment. This significantly bars implementation of the strategic leadership technique. More than often, over the years, the workplace has always been considered to be a masculine domain(Alsubh, 2018). Men are perceived to be more productive than women, which has created conflicts among women and fellow workers or even their bosses. Women are made to appear unfit and even within the right qualifications they still find it hard convincing their seniors. Sadly, most loose the opportunities. Women empowerment is therefore suppressed.CONCLUSIONSaudi Arabia having developed its laws from Islamic laws and traditions, is a highly patriarchal society where women are utterly discouraged from formal jobs in the public sphere. For the better part of history, this has been the story over and over again. The government has finally come to terms with the fact that it cannot develop without the input from women, thus it's in the process of creating a friendlier environment for the women, although amidst challenges. Women are also citizens who need equal opportunities just like men, Saudi Arabia The Kingdom of Saudi Arabia is the heart of the Middle East which is well known among many foreign countries for its oil production. Saudi Arabia is known as the land covered by immense deserts and insignificant amount of rainfall. The country is rich with oil and natural gas resources. At the time of its independence, Saudi Arabia was relatively poor country because at that time its oil resources were not discovered. In 1950’s, Saudi Arabia’s economy improved because of its proper utilization of oil. Saudi Arabia is the largest country occupying the Arabian Peninsula, with the Red Sea and the Gulf of Aqaba to the west and the Persian Gulf to the east. Saudi Arabia is surrounded by Jordan, Iraq, Kuwait, Qatar, Bahrain, United Arab Emirates, Sultanate of Oman and Yemen. The Kingdom is often termed as â€Å"The Land of the Two Holy Mosques† in reference to the two holy cities, Mecca and Medina. The foundation of The Kingdom was established by Abdul Aziz bin Saud in 1902, when he was successful in taking control of his ancestral home, the city of Riyadh. In 1932, The Kingdom was declared and recognized as Kingdom of Saudi Arabia. The present form of government in Saudi Arabia is Monarchy with Council of Ministers and Consultative Council (Adams, 2003). The estimated population of Saudi Arabia is 27. 6 million. Its size is about 2,150,000 square km. The religion followed in Saudi Arabia is Islam, which is also its birth place. The official language of Saudi Arabia is Arabic, which is used by most of the population. English is the second language which is used in government, trade sector, the media, and among non Arab emigrants. The social atmosphere in Saudi Arabia is extremely conservative. The country holds firm establishment of the meaning and significance of Islamic religious law. Cultural arrangement must correspond to assiduously clear principles and values of ethics. Men and women are not allowed to be present at community organized functions together and are separated in working organizations and firms. The majority Saudis are native Arab. Some are of assorted ethnic origin and are descendants of Turks, Iranians, Indonesians, Indians, Africans, and others. Indians, Pakistanis, Bangladeshis, Indonesians emigrants are also residing in Saudi Arabia. Natural Resources of Saudi Arabia The natural resources of Saudi Arabia mainly comprise of petroleum, natural gas, iron ore, gold, copper, zinc. Other mineral resources include Phosphate High-grade silica sand, feldspar and nepheline syenite, kaolin, basalt and scoria, gypsum and anhydrite, quartz, limestone and dolomite, marble, decorative limestone, granite, gabbro and others (Arjomand, 2003). Saudi Arabia’s Relation with United States of America Saudi Arabia’s exceptional and distinctive position in the Arab and Islamic world, its assets of the world’s biggest oil resources and its location make its alliance significant to the United States. In 1933, ambassadorial relations were instituted between the two countries and also Standard Oil of California was signed. The U. S. embassy was initiated in Jeddah in 1944. In 1984, the embassy repositioned to Riyadh. The former embassy in Jeddah was converted into U. S. consulate. The United States and Saudi Arabia share mutual interests on issues of regional defense and safety, oil trade and sustainable expansion and progress. Close discussions and conference between U. S. and Saudi Arabia have been increased on global, economic and advancement concerns such as Middle East issues and communal welfare and benefits in the Middle East. The constant accessibility to resources of oil from Saudi Arabia continues to be imperative to the affluence of the United States. Saudi Arabia is the primary leader in field of oil trade for the United States, supplying more than one million barrels of oil per day. The U. S. is Saudi Arabia’s chief dealing collaborator and Saudi Arabia is the main U. S. export promoter in the Middle East. Saudi Arabia and U. S. also maintain longstanding security associations. However, the first difference of opinion between the two countries occurred when U. S. ecognized Israel as a separate sovereign independent state in 1948. The Saudi government refused to recognize the country of Israel. In 1953, a U. S. military training mission was founded in Dhahran. The aim of this group was to offer training and encouragement in the usage of weapons and other safety measure assistance to the Saudi military. Many military aircrafts, air defense weapons, armored vehicles, etc have been sold to Saudi A rabia’s military by the United States. The Saudi’s authority showed concern in Israel-US relations that became cordial in 1970s and 1980s when U. S. sold military arms and weapons to Israel but didn’t sell arms to Saudi Arabia. The reason why U. S. stopped its supply of arms to Saudi Arabia on basis that Saudi Arabia will use them against Israel. These divergent interests had an unfavorable affect on US-Saudi relations, indicating that United States had no concern to protect Saudi Arabia. However in 1990, the Iraq conflict made Saudi Arabia guaranteed them of their significance and worth to the United States of America. Saddam Hussein had attacked Kuwait. Saddam Hussein also had the intentions to attack Saudi Arabia. Because of this, United States of America was promised proliferation of oil control (Ayoob, 1999). United States of America sent out more than 400,000 troops to the area to prevent aggression and hostility by Hussein and drove him back to Iraq. The United States mission was an instant success, due to support of Saudi Arabia. Saudi Arabia was used as an initiation pad for both land and air troops to be sent into Iraq. The military arms and weapons were sold to Saudi Arabia were used during the operation. Distinctively, the four high tech advanced AWACS aircrafts loaned by Jimmy Carter to Saudi Arabia. After the end of the operation, the Saudi government intended to buy 20 million dollar worth U. S. military equipment but the request was denied. This denial of request resulted in resentment about being treated unequal ally. According to Thomas L. Friedman editorial column of August 12, 1990, the U. S intentions of providing protection to Saudi Arabia was not because of their cordial relations but because of economic benefits. The United States did not send the troops to the Saudi to defend and maintain autonomous egalitarian principles. The form of government in Saudi Arabia is monarchy which is a feudal regime. The American policy is not to make a better and safe place for feudalism. The main ambition of U. S is to secure its economy which is harbored by the Saudi’s oil reserve. Saudi Arabia and United States relations tensed after September 11, 2001 terrorist attacks in which total of 15 suicide bombers had Saudi nationality. Saudi Arabia condemned the 11th September attack by calling it an action against humanity. However, when U. S. waged war against Iraq the United States had to vacate its army stationed in Saudi Arabia in August 2003 (Bloomfield, 2004). . The Current State of Saudi Arabia The current form of government in Saudi Arabia is monarchy with Council of Ministers and Consultative Council. Sharia, the holy law of Islam, is the basis of all the legislative and officially authorized system, which is inferred according to the firm Hanbali rite by the educated and scholarly religious elders. Saudi Arabia is defined as an independent Arab, Islamic state whose foundation is the Quran and Sunna of the Holy Prophet. The standard of the administration are affirmed to be righteousness, fair, dealing, parity fairness, equal opportunity and consultation in accordance with the Sharia. The responsibility and obligation of the government is to shield Islam, human rights and offer public services and protection to all citizens in accordance to the Sharia. The leader is in command of the government and religious administrator of Saudi Arabia is the King. Saudi Arabia has no independent legislature and no political groups. The Consultative Council has no legislative rights but it has the authority to assemble and call ministers for inquiry and to submit proposal and advice to the king (Bosworth, 2004). Saudi’s Support for Palestine The Kingdom of Saudi Arabia has been a staunch supporter of Palestine since the era of King Abdul Aziz Saud. This permanent long term support was first acknowledged in 1935, at the conference on the Palestinian issue. The Saudi government has assisted the Palestine in all its different stages because the Kingdom firmly considers that these supporting efforts are part of Islamic duty and obligation. The Saudi government has played a principal and idiosyncratic role in supporting the Palestine issue and strengthening the Palestinians to achieve their objective and ambition to found an independent sovereign Islamic state. The Kingdom of Saudi Arabia accepted all declarations of global organizations with regard to the issue of Palestine. It involved in various conferences on this issue since Madrid conference. It exerts maximum in getting in touch with the West, welcoming nations and the U. S. government to force and compel Israel for considering international declarations that call for complete Israeli removal from all the occupied Arab regions. The Saudi government has assisted Palestinian issues at financially levels as well. The Kingdom presented financial assistance to the Palestinians in the Al Khartoum Arab summit in 1967. At various summits, the Saudi government has offered financial assistance to Palestinians. Additionally, the Kingdom organized Saudi Development Fund for a Palestinian Development Program that looks after the health, education and housing divisions in the Palestinian territories. The Saudi financial assistance to the Palestinians is the major share between all other Arab contributors. The Kingdom of Saudi Arabia condemned the cultural and ethnic segregation wall that Israel is building on Palestinian regions. The Kingdom protested to the International Court of Justice in Hague. The Court in Hague called upon Israel to discard this illegal wall. The UN General Assembly also passed a declaration in this regard calling upon Israel to remove the illegal war. Saudi Israel Relations Saudi Arabia’s relations with Israel are not cordial. When Israel emerged as a separate independent state in 1948, the Saudi government refused to acknowledge it. A licensed affiliate of the Arab League, Saudi Arabia fully supports the idea that Israel must vacate from Arab regions which were occupied forcefully in June 1967. Saudi Arabia with authorization supports the peaceful resolution of the Arab Israeli clash but does not accept the Camp David Accord, stating that it will violate Palestinians rights. Saudi Arabia does not maintain diplomatic relations with Israel and is active in economic embargo of Israel (Brent, 2006). Saudi’s Role in Terrorism Saudi Arabia is plays significant role in the movement of against terrorism, proving assistance in armed forces, ambassadorial and economical grounds. Saudi Arabia also discontinued acknowledging Taliban in mid November 2001. The Bush government eulogize Saudi encouragement and backing for the campaign on terrorism. The Saudis have cracked down hard on local Islamic extremist groups which were responsible for a series of terrorist bombings in 2005 and 2006. The government also announced amnesty for terrorists who surrendered their arms. Many of these former terrorists were sent to Islamic schools in which their Islamic extremist ideology was moderated. Many Islamic scholars of Saudi religious seminaries have openly condemned the use of terrorism as being against the principles of Islam. However despite extensive efforts to crack down on domestic terrorist groups, Saudi Arabia has been known to provide arms, training and support to Palestinian and other radical Islamic groups. The country has cracked down hard on local Islamic fundamentalists who have endangered the royal family but Saudi Arabia also has been accused of funding groups in Palestine, Kashmir, Chechnya, Afghanistan and Iraq. Saudi Arabia was a key supporter of the Taliban before the US invasion of Afghanistan (Brown, 1999). It has provided financial assistance to Hamas, a violent Islamic radical group responsible for numerous acts of terrorism inside Israel. Saudi Arabia Tour of the World Paper: Saudi Arabia This profile on Saudi Arabia is intended to provide important information on a number of relative subjects that will help you consider establishing a business or considering investing in the Kingdom of Saudi Arabia. The Kingdom of Saudi Arabia is the largest country in the Arabian Peninsula and occupies about 2, 149,690 square kilometers. It is the 13th largest country compared to the world and is slightly more than one-fifth the size of the United States.It is bounded to the west by the Red Sea, to the north by Iraq, Jordon, and Kuwait, to the east by the Arabian Gulf, the United Arab Emirates, Qatar, and Bahrain, and to the south by Omen and Yemen. Most of the country is desert, so its climate is harsh, dry and with great temperature extremes. Its capital is Riyadh and has 13th other provinces, which are presided over by governors. Based on the World Fact book, the Kingdom has a population of 26,534,504 people and that includes 5,576,076 expatr iates. Saudi Arabia is a stable Monarchy.The head of state is King Abdullah bin Abdul Aziz Al-Saud, whose official title is the Custodian of the Two Holy Mosques. He was preceded to the throne after the death of King Fahad in 2005. The King, who is the Prime Minister and a council of Ministers form the executive and legislative branches of the government. They are responsible for the policies and guiding the development of Saudi. The council of Ministers is supported by the â€Å"Shura,† which is 150 distinguished men as the members that are appointed by the King.The Kingdom’s legal system and laws are based on â€Å"sharia† Islamic principles. The laws and regulations applicable to all businesses are propagated by the Royal Decrees (online. â€Å"Middle East: Saudi Arabia. â€Å"). Saudi Arabia has grown to be amongst the wealthiest nations of the world since the discovery of oil. The kingdom has the largest oil reserves in the world outside the United States and the Soviet Union. It possesses about one-fifth of the worlds petroleum reserves, is the largest exporter of petroleum and the petroleum sector accounts for about 80% of the Kingdoms udget revenues, 45% of the GDP and 90% of the export profits. Saudi Arabia joined the World Trade Organization in 2005, and is optimistic about the private sector growing to help it expand its economy (online. â€Å"2012 Index of Economic Freedom. â€Å"). Saudi Arabia purchasing power parity GDP is about $676. 7 billion in 2011 and it is 24th in the world. The official exchange rate GDP is $560. 3 billion. The real growth rate GDP is 6. 5% and GDP per capita is $24,000. The GDP compositions by sector are 2. 1% for agriculture, 67. 6% for industry and 30. 4% in services in 2011(online. Middle East: Saudi Arabia. â€Å"). Even though Saudi Arabia’s economy is trying to diversity, it is almost dependent on the products produced from oil. Saudi Arabia is one of the founding member’s of the Organization of Petroleum Exporting Countries (online. â€Å"2012 Index of Economic Freedom. â€Å"). The Kingdom’s exports make up 30% of the organization yearly total exports. The diversification efforts are focusing on telecommunications and petrochemical sectors. In the oil and service sectors 6 million foreign workers play important roles in the economy of the Kingdom.But Saudi’s own people are unemployed. The officials are working hard to reduce unemployment by increasing spending on education and job training. The government is also establishing six â€Å" economic cities† in different regions of the country to promote foreign investment and plans to spend $373 billion between 2010-2014 on infrastructure projects and social development to move forward Saudi Arabia’s economic expansion (online. â€Å"Middle East: Saudi Arabia. â€Å"). With the agriculture sector contributing 2. 1% to the country’s GDP, there are not a lot of product s.Saudi’s products consists of wheat, barley, tomatoes, melons, dates, citrus, chickens, eggs and milk. The 67% GDP of the industries are from crude oil production, petroleum refining, basic petrochemicals, ammonia, industrials gases, cement and construction. The industrial production rate in 7. 7% in 2011 (online. â€Å"Middle East: Saudi Arabia. â€Å"). Saudi Arabia’s exports contribute to 350. 7 billion to the economy during 2011. 90% of the commodities are petroleum and petroleum products. The Kingdom’s main export countries are Japan at 14. 3%, China at 13. %, United States at 13%, South Korea at 8. 8%, India at 8. 3% and Singapore at 4. 5% since the 2010 census. Saudi’s import system spends $106. 5 billion since 2011. The main import commodities are machinery and equipment, foodstuff, chemicals, motor vehicles, and textiles. Their import partners are United States at 12. 4%, China at 11. 1%, Germany at 7. 1%, Japan at 6. 9%, France at 6. 1%, Indi a at 4. 7% and South Korea at 42% since 2010 census (online. â€Å"Middle East: Saudi Arabia. â€Å"). The United States is the Kingdom’s largest trading partner and is the number 1 source of FDI.Saudi Arabia is among the top 20 recipients of the FDI in the world and is the 15th largest trading partners with the United States Saudi Arabia has a stable and profitable banking system and it is regulated by the Saudi Arabia Monetary Fund (SAMA). The banks follow Islamic law, by keeping out interest payments. No bank has ever failed in the Kingdom. The banking industry is the safest in the Middle East. Saudi Arabia received a Banking Industry Country Risk Assessment rating of 2 in 2011. The banking sector is composed of 13 Saudi owned banks and 8 foreign banks.The National Commercial Banks is the country’s largest bank, which is controlled by the government and follows Islamic laws. As well as commercial banks, there are 5 government credit establishments to help the priv ate and corporate financing requirements. The currency is Riyals, so 1 U. S. dollar equals 3. 75 Riyals. The Saudi stock exchange is the largest in the Arab world (online. â€Å"Country Profile: Saudi Arabia. â€Å"). In Saudi Arabia, Arabic is the official language but English is spoken in business settings and schools. The religion is 100% Muslim.Islam is practiced by all Saudis and controls their political, legal, economic, and person lives. The Quan and the action of the Prophet are used as basic principles for Muslims. Muslims pray at least 5 times a day, at dawn, noon, afternoon, sunset and evening. The holy day for Muslims is Friday and everything is closed and most business have Thursday off also making the weekend Thursday and Friday. During Muslim holy month Ramaden, all Muslims fast from dawn to dusk and are only allowed to work 6 hours a day. Expatriates are not required to fast but they must eat, drink, chew gum or smoke in public.Family and or tribe are the most impo rtant and the basis of their social life. Saudis take their responsibilities and pride in their family seriously. Families tend to be large and extended family is close. Businessmen tend to hire family and friends because trust is the greatest importance. The Kingdom’s etiquette is quite unique. Men shake hands when greeting one another but they will shake and kiss a close friend when meeting. Men and women do not greet each other public. When Saudis meet they take their time and talk about general things. Gift giving is not the norm just like in other countries.If you are invited to a Saudis house bring something small to say thank you, flowers are only given from a women her hostess. Never bring alcohol unless you are positive they partake and gifts are never opened when received. Take off your shoes, arrive on time and accept Arabian coffee even if you don’t drink coffee. If the meal is on the floor, sit cross-legged or on one knee, eat only with your right hand sin ce the left is considered unclean, try a little bit of everything served and meals are served family style. Saudis socialize in restaurants and hotels when meeting foreigners they do not know well.Generally entertainment is separate for men and women if both sexes are included. Always greet the elder first to show respect, dress conservatively and arrive on time (online. â€Å"Saudi Arabia†). Saudi Arabia’s economic freedom score is 62. 5, making it 74th freest in the 2012 index. Forming a business has become less time consuming, and the licensing necessities have become simpler. With no minimum capital required, starting a business takes only three procedures and five days. There is no government minimum wage, but wage increases have improved the production (online. â€Å"2012 Index of Economic Freedom. ). The 1st step in starting a business in Saudi Arabia is to find a Saudi sponsor to enter the country. The sponsor acts as the middleman and arranges appointments wi th the right individuals in the business world. Saudis prefer to work with people they know and trust and will spend a lot of time getting to know you. Most Saudis will judge you on your appearance so dress and present yourself well. Most Saudis wear long white thobes. You will be expected to wear a suite. Businesswomen should make certain that their collarbones and knees are covered and that their clothes are not form fitting.Make sure appointments are several weeks to one month in advance, try to schedule in the morning, arrive on time, although it is accepted to keep a foreigner waiting, and it is not uncommon to have the meeting cancelled once you have arrived. Meetings are never private until a relationship of trust is acquired. That means you will expect interruptions and make sure you do not bring the topic back to the original discussion until the new person has left. Business meetings never start with talking about business first, there will be inquires about health and fam ily.Never ask about a Saudis wife. Decisions are made slowly and do not rush the process. Saudis are great negotiators and the highest-ranking person makes the decisions (online. â€Å"Saudi Arabia†). Women rights and sponsorship are two main issues in Saudi Arabia that are seen as disadvantages with doing business in Saudi. Women are treated differently in the Kingdom compared with the United States and Europe. Saudi women and foreign women are not allowed to drive a car, sit in the front seat of the car and have to be covered from head to toe basically.They have to travel with a male at all times. The male is usually the husband, father or brother or whomever makes the important decisions on behave of the woman. There are no current women in office for the government. The most influential women today in Saudi Arabia believe that the Kingdom will never progress with the real and full participation of women. Sponsorship of foreign labor has reportedly had a few problems with the way they have been treated. The system is no longer conventional to the life in the 21st century and fails to provide foreign workers with basic human rights.Today foreign worker want a new system that integrates a comprehensive and flexible legal framework for employer and employee (online. Alnowaiser, Dr. Khalid. ). In the end doing business in Saudi Arabia has positive and negative situations. The good out shines the bad. The best businesses to get into right now would be involved with power generation, telecommunication, natural gas exploration and petrochemical sectors. As long as you see patients as a virtue and are willing to make deals, doing business in Saudi Arabia is the right place to start or branch out your company.

Western civilization after 1800. The Cold War Research Paper

Western civilization after 1800. The Cold War - Research Paper Example The Cold War refers to a period of history between 1945 to the early 1990s (Gaddis, 1997) that is exemplified by a continuing state of political conflict and military tension, as well as a few proxy wars between the Communist and the Western world The ‘cold’ part of the name is a reference to the fact that there was no actual war between the two primary forces, the Soviet Union and the United States, although in some ways it is a misnomer because, as previously mentioned, there were proxy wars involved. There were several key events in the Cold War that can be used to illustrate the nature of the tension involved and how the military powers used their power and animosity to form this state of military tension. Firstly, it is necessary to discuss the reasoning behind the Cold War. The world at the time was attempting to recover from the events of the Second World War (Russet, 1994) as well as trying to establish new regimes or experiment with the old ones (Gaddis, 1997). The principal difference between the two major powers was the way of life – the Soviet Union was primarily communist and supported communist regimes like that of Cuba, and the United States was primarily a capitalist state. This ideological difference was compounded by a geographical disagreement – the Soviet Union had many states which were ceded to them by the fall of Nazi Germany (Mearsheimer, 1990) and the United States and the Allied Forces disagreed about how these borders should be drawn. The United States funded a lot of the European recovery, and the Soviet Union refused to let any of the member states participate in the program, leading to some areas of poverty within the USSR and an animosity towards communism in the US. The first main event of the Cold War can be said to be the Berlin Blockade. Notably, Germany would become a particularly important company in the events of the Cold War, perhaps because of its direct involvement in World War Two and the fact that the country was now split in two (Gaddis, 1997). Berlin was occupied by both Soviet and Allied forces after the end of World War Two, and the USSR began a blockade of the railroads and any other access to the Allied parts of the city under the assumption that this would cause the Allied Forces to cede defeat and allow Soviet access and control of the city. The response to this by the Allied Forces was to use the British Royal Air Force to send supplies into the city (this became known as the Berlin Airlift) and ultimately, the plans of the USSR to control Berlin were foiled (Walker, 1995). The next event in Cold War history can be considered the Korean War (Walker, 1995). Korea at this time was not split into two countries – North and South – as it is today. These two nations began a war in the year 1950 which carried on until 1954. North Korea was supported by the People’s Republic of China, a communist state, and was thus ultimately supported by the USSR who provided some military aid for the conflict. South Korea was supported by the United Nations and the United States. This was the first example of a proxy war occurring in Cold War history (Gaddis, 1997). The ultimate conclusion of the war is still evident in the splitting of the Korean peninsula that we can see to this day, and although there is no direct warfare, we can still see that the sides taken are still relatively easily split into communist and capitalist nations (Russet, 1994). The Vietnam War is a subject very close to the hearts of many Americans, and was another proxy war within the Cold War era. Contrary to what the name suggests, the Vietnam War took place in Cambodia and Laos as well as Vietnam (Walker, 1995). Again, this was a war of North and South, with the North being communist again and sponsored by the USSR, and the South being anti-communist and involving the heavy use of a lot of United States military troops. The US government wanted to have a large inv olvement in this war to

Sales Management Essay Example | Topics and Well Written Essays - 1500 words - 4

Sales Management - Essay Example Direct mail incorporating an 800 number can be used similarly to the Yellow Pages, as can advertising in many other media.  «Outbound telemarketing takes many forms, but it most resembles traditional, unsolicited door-to-door sales. Contacts are made through cold calls (random), warm calls (referrals) or hot calls (customer-initiated requests for information)†2. For example, manufacturers who were primarily communicating with customers through nonintegrated channels are now finding it is possible to reach them also through telemarketing efforts at a substantially lower cost than other integrated channel alternatives. In this case, manufacturers increase their channel control by adding an additional in-house channel (telemarketing) while keeping cost efficiency high through the application of information technology. At the same time, firms must move with caution as the increase in integration is likely to result in less flexibility. However, the net result is that new technolo gies allow firms to enter customer segments much more easily than before. In other words, market entry barriers are no longer so high, as new technologies enable firms to enhance market coverage while containing costs3. Both direct selling and direct marketing make wide use of telemarketing techniques. Studies noted earlier show that the public perceives some disadvantages in buying from a telemarketing firm. Evidence also exists that image questions still haunt the perceived legitimacy (e.g., pyramids) and ethical propriety of direct selling, as well of selling in general4. Major negative factors attributed to telemarketing by a cross section of consumers are high-pressure selling, unreliable salespeople, and loss of contact after the sale. While some instances of these behaviors undoubtedly exist, they are far from endemic to the industry. These image problems should be addressed and alleviated job satisfaction, commitment, and productivity and

Entrepreneurs Essay Example | Topics and Well Written Essays - 2000 words

Entrepreneurs - Essay Example Also, the theoretical evaluations and research the entrepreneur has done before setting up the enterprise are bound to differ. Thus, many enterprise fail and this has made entrepreneurship often a difficult and tricky. Many theories abound Entrepreneurship, Entrepreneur and Enterprise and a lot of events in the industry complement these theories. Specifically, the Enterprise in Events is one of the fastest growing in the serviced sector and much of the growth is accelerated by the growth of small and medium sized enterprises. There are several kinds of event planning. The list includes celebrations such as fairs, parades, weddings, reunions, birthdays and education related events such as conferences, meetings, graduations and also product launches, political rallies, fashion shows, memorials and civic events. Sometimes events might be purely business related or social or sometimes a mix of both. To manage these events, it is imperative to identify new areas of development and induce creativity into the workings. Therefore, to sustain growth and to maintain profits in the service industry, and entrepreneurial mindset is essential. Moreover, to tackle problems in targeting the right audience, analyz ing the business growth and raising funds for the enterprise a disciplined set of principles are definitely required. One of the principles of Classic Economic Theory projects the ways in which an Entrepreneur should make investments. It supports stating that if an entrepreneur should make investments then even a one percent rise is sufficient. Certainly, in theory a one percent increase is profitable. For instance, if an entrepreneur has $100 and if $1 is the profit per month, then Classic theory states that this is a viable investment. Nevertheless, as theory does not take into consideration, the practical constraints into consideration, this might not be a competent idea to run the

PEST Analysis Essay Example | Topics and Well Written Essays - 3500 words

PEST Analysis - Essay Example Insecticides and pesticides are being sprayed extensively on crops without any notice and thus result in a number of medical problems. People suffer from digestion related issues, a number of carcinomas also take their origin from such chemically treated food products. As cited by Dich,  Zahm,  Hanberg and  Adami (1997), arsenic being used in these chemicals has been labeled as the potential carcinogen for humans by International Agency of Research on Cancer. Not only have the crops taken the toll, but the animal husbandry and dairy farming has also been suffering from the consequences over the past few decades. In short there is a dire need for a drastic change that will rid the mankind of this curse of chemicals and artificial products and this is where companies like Eden Food step in. As the changing trends introduced to the modern customer the organic food products, a ray of hope was seen. Organic food according to FDA as cited by Food Marketing Institute (2012) can be def ined by taking into consideration that the word organic does not simply refer to the food but also gives an indication as to how it has been produced. It must be noted that such food is different from natural food and also it must not be subject to any amount of irradiation whatsoever. Companies like Eden Food are a way out for the people seeking healthy, environment friendly food which is palatable too. As the awareness of the health conscious clientele is increasing, more questions arise and it becomes imperative for the industries and businesses to be more vigilant in their approach. Luckily enough Eden Foods has been able to cope up with the challenge it is made to face with and there have been introduced a wide variety of organic food products for the customers to choose from. With every passing day, the market for organic food and especially Eden Foods is growing by leaps and bounds. According to the Federal Marketing Institute as cited by Cook (2004), a study conducted in 200 0 showed that the global market for organic food was at an estimated 20 million dollars with USA accounting for 39% of it. In short, with the ever increasing demand of a healthy living, the responsibility on the food industry increases manifold and there is a dire need placed in front of Eden Foods to match the demands of the customers if successful business is to be managed in the long run. Procedure working of the product chosen As has been the trend observed over the past several decades, the third world countries are introduced to a new product when some time has been elapsed after the introduction of the same product in the markets of the first world countries. On the same basic principle it has been observed that the trend of organic foods in the first world traces back to the 80s and 90s, whereas the poorer states of the world are now being introduced to this concept and it is comparatively novel for them. On the other hand, when the needs of the two groups of countries are c ompared, it is seen that the people residing in the third world countries are more in need of pure and healthy food free from contaminants and artificial chemicals. These people are faced with the problems of unhealthy and unsanitary drinking water and the living conditions in general are not as refined as in the first world states (Gadgil, 1998). For that matter, the whole chiaroscuro of unhealthy lifestyle is evident in the form of malnutrition, more gastro

Strategic Management Essay Example | Topics and Well Written Essays - 1000 words - 3

Strategic Management - Essay Example These initiatives normally revolve around resource allocation, utilization, and performance in the external environment of the business. Additionally, strategic management provides the opportunity for an organization to specify its mental picture, policies, objectives, mission and plans. It allocates the required resources for the execution of its programs, projects and plans (Sachs & Ru?hli 2011 p. 1). Furthermore, strategic management ensures the organization develops a balanced scorecard for the evaluation of its general performance. The scorecard also enables it to determine if it is progressing towards its set objectives and make the necessary changes or adjustments. However, for an organization to perform its strategic management process successfully, it must have the right paradigm. Importance of an organization’s "paradigm" for strategic management Several contemporary organizations today are operating in complex environments where there are frequent and sudden changes of structures. They need to decamp from their traditional management structures to adapt new approaches to management. Incidentally, the operating environment for most organizations faces stiff competition and massive explosion in the field of information technology. This requires that the company update its management paradigm to fit in the new era adequately (Kachru 2009, p. 48). The enhanced utilization of information technology has led to the emergence of knowledge or information based economy. This is partially responsible for the increase in complexities of organizations. Consequently, many organizations have resorted to changing their paradigms to adopt new organizational structures. This includes the changes in leadership and management practices. Additionally, technologies such as the internet, e-mail, voice mail and telecommuting have also contributed in the rebranding of the structures of organizations to encompass virtual offices, companies and teams (Kachru 2009, p. 92 ). The shift to the new organizational paradigms has several uses to the organization. The adoption of new technologies in the field of information science is making both intra-organizational, as well as inter-organizational communications simpler (Kachru, 2009, p. 93). Consequently, this eliminates the previous communication boundaries leading to a global market place that is borderless. The elimination of the market place boundaries can significantly reduce the command chains within organizational structures and paradigm. As a result, the organization will have free control spans by replacing its departments with stronger teams that have been empowered. This paradigm assumes an organizational structure whereby a flatten hierarchy replaces vertical boundaries as cross-functional teams replace functional departments. This is important to the organization because it consolidates the activities of the organization around centralized processes (Kachru 2009, p. 84). The creation of the organizational paradigms without boundaries eliminates geographical barriers to the organization. This places an organization in a suitable position to interact freely with its clients and other business partners in the entire globe. For good strategic management, an organization needs to shift its paradigm to benefit from the following processes a. Reduced dependence on the leadership of command and control b. Hierarchy breakdown that leads to a lean change in the systems of management c. Enhanced commitment to the application and utilization of virtual technologies d. Increased teamwork reliance e. Attain flexibility f. Interactive system of knowledge transfer through electronic and mutual interest instead of authority systems New forms of management

Maslows Hierarchy of Needs Essay Example | Topics and Well Written Essays - 250 words

Maslows Hierarchy of Needs - Essay Example These two levels, according to Maslow are closely related to each other. While love/belonging generally refers to emotionally-based relationship such as family and friends and safety needs concerns security and order in home and in the workplace. From Maslows perspective on human needs for recognition reward in the workplace, people will not need any sort of material reward if they themselves feel satisfied about the job they have done. In some organizations, an extrinsic reward system may not work because one of its main tenets is providing material rewards (i.e. bonus, gift checks, movie passes) just to persuade an individual to perform better in his work. â€Å"Its not sustainable; if you withdrew the reward, the motivation disappears† (DAusilio, â€Å"What Motivates†). DAusilio also writes in that it is hurts the intrinsic and â€Å"removes their innate desire to do it in his own† (â€Å"What

Arab and israeli conflict Essay Example | Topics and Well Written Essays - 750 words

Arab and israeli conflict - Essay Example Evidently, this changed leading to a series of conflicts that are still being experienced today. Podeh (27) reveals that after the collapse of the Ottoman Empire, both the Arab and the Israeli aimed at occupying the empire; as a result, there was a political and nationalist conflict between Arab and Israeli over territorial competition. The conflict then spread to the local Israeli and the Palestinians. The conflict between Arab and Israeli was based on different aspects. There was religious aspect where by Muslim, Jewish and the Christian argued about the idea of the chosen people. Both sides claim to have full right to take the land of Canaan. The Israeli people claim that the land was for the children of Israel as promised by God according to the bible. The Arabs, on the other hand, claim the same land in accordance to their Quran. The Arabs argue that the land of Canaan was promised to all of Abrahams’ descendants including Ishmael. Arabs claim descent from Ishmael hence they had to fight for the land of Canaan. Despite a number of peace agreements between Arabs and Israeli, the conflict has moved from bad to worse. The two conflicting parties have involved into wars of which the Israeli defense force has won most of them. Throughout the conflict period, the Israeli government is positive at the conflict negotiations with their rivals Arabs. The conflict is one of a kind having lasted for almost six decades. Podeh (34) asserts that America has been in the front line to help in resolving the conflict between Arab and Israeli. The United States provides defense to the Israel against the common threats of the radical Islam and the terroristic activities. America has significantly promoted peace to the Arabs and Israelis by allowing the Israelis to take greater risks for peace. United State has also helped the government of Israeli to retain back many of its immigrants America being a superpower nation, it has

Plato vs. Aristotle Essay Example for Free

Plato vs. Aristotle Essay Plato and Aristotle, two philosophers in the 4th century, hold polar views on politics and philosophy in general. This fact is very cleverly illustrated by Raphaels School of Athens (1510-11; Stanza della Segnatura, Vatican), where Plato is portrayed looking up to the higher forms; and Aristotle is pointing down because he supports the natural sciences. In a discussion of politics, the stand point of each philosopher becomes an essential factor. It is not coincidental that Plato states in The Republic that Philosopher Rulers who possess knowledge of the good should be the governors in a city state. His strong interest in metaphysics is demonstrated in The Republic various times: for example, the similes of the cave, the sun, and the line, and his theory of the forms. Because he is so involved in metaphysics, his views on politics are more theoretical as opposed to actual. Aristotle, contrarily, holds the view that politics is the art of ruling and being ruled in turn. In The Politics, he attempts to outline a way of governing that would be ideal for an actual state. Balance is a main word in discussing Aristotle because he believes it is the necessary element to creating a stable government. His less metaphysical approach to politics makes Aristotle more in tune with the modern world, yet he is far from modern. Platos concept of what politics and government should be is a direct result of his belief in the theory of forms. The theory of forms basically states that there is a higher form for everything that exists in the world. Each material thing is simply a representation of the real thing which is the form. According to Plato, most people cannot see the forms, they only see their representation or their shadows, as in the simile of the cave. Only those who love knowledge and contemplate on the reality of things will achieve understanding of the forms. Philosophers, who by definition are knowledge lovers, are the only beings who can reach true knowledge. This concept has to be taken a step further because in The Republic, Plato states that philosophers should be the rulers since they are the only ones who hold the form of the good. Plato seems to be saying that it is not enough to know the forms of tables or trees, one must know the greatest formform of the goodin order to rule. The reasoning is: if you know the good, then you will do the good. Therefore, philosopher rulers are by far the most apt to rule. In The Republic, Plato builds around the idea of Philosopher Rulers. Even though it is not his primary point, it certainly is at the core of his discussion of the ideal state. The question that arises is, Why do you need ideal states which will have philosophers as rulers? There are many layers to the answer of this question. The first thing is that a state cannot be ideal without having philosophers as rulers. This answer leads to the question, Then why do you need ideal states to begin with? The Republic starts with a discussion of Justice which leads to the creation of the ideal state. The reason why an ideal state is needed is to guarantee the existence of Justice. This does not mean, though, that there cannot be states without Justice. Actually, Plato provides at least two reasons why the formation of a state cannot be avoided. These are: 1. human beings are not self-sufficient so they need to live in a social environment, and 2.each person has a natural aptitude for a specified task and should concentrate on developing it (The Republic, pp 56-62). Although a person is not self-sufficient, a composition of peoplea statesatisfies the needs of all its members. Furthermore, members can specialize on their natural fortitudes and become more productive members of society. States are going to form, whether purposefully or coincidentally. For this reason, certain rules have to be enacted for the well-being of the state. The main way to institutionalize rules is through government and in the form of laws. Platos The Republic is not an explication of laws of the people. It is a separation of power amongst three classesRulers, Auxiliaries, Commonersthat makes the most of each persons natural abilities and strives for the good of the community. The point is to create a harmonious unity amongst the three classes which will lead to the greater good of the community and, consequently, each individual. The three classes are a product of different aptitude levels for certain tasks amid various individuals. Plato assigns different political roles to different members of each class. It appears that the only classes that are allowed to participate in government are the Auxiliaries and, of course, the Philosopher Rulers. The lower class does not partake in politics because they are not mentally able. In other words, they do not understand the concept of the forms. Thus, it is better to allow the Philosophers, who do have this knowledge, to lead them. Providing food and abode for the Guardians is the only governmental responsibility the lower class has. The Auxiliaries are in charge of the military, police, and executive duties. Ruling and making laws is reserved for the Philosopher Rulers whose actions are all intended for the good of the state. To ensure that public good continues to be foremost on each Rulers agenda, the Rulers live in community housing, hold wives/children in common, and do not own private property. The separation of classes is understood by everybody Self-interest, which could be a negative factor in the scheme of things, is eliminated through a very moral oriented education system. All these provisions are generated to maintain unity of the state. The most extravagant precaution that Plato takes is the Foundation Myth of the metals. By making the people believe, through a myth, that the distinction of each class is biological as well as moral, Plato reassures that there wont be any disruption in the harmony of the state. Whereas Platos The Republic is a text whose goal is to define Justice and in doing so uses the polis, Aristotles The Politicss sole function is to define itselfdefine politics. Aristotle begins his text by answering the question: Why does the state exist? His answer is that the state is the culmination of natural associations that start with the joining of man and woman (pair), which have a family and form a household; households unite and form villages; villages unite and form the state. This natural order of events is what is best because it provides for the needs of all the individuals. Aristotle, like Plato, believes that a person is not self-reliant. This lack of sufficiency is the catalyst in the escalating order of unions among people. In The Politics, it appears that Aristotle is not very set on breaking down society. His argument says that there are different classes in society, but they are naturally defined. For example, he devotes a lot of time to an explanation of the naturalness of slaves and their role in society. Aristotle is also very sexist and explicitly states so. His view is that women are inferior to men in all senses. Perhaps the most pertaining to our discussion is the citizen, whose role is purely political. Both Plato and Aristotle seem to agree that some people are not capable of practicing an active role in political life. Platos reason is that the lower class is not mentally adept for the intricacies of higher knowledge on the good. Aristotle seems to base his opinion on a more political issue. He believes that only those that fully participate in their government should be considered citizens of the state. For this reason, he excludes workers as citizens because they would not have the required time to openly participate in politicking. The Aristotelian polis, as opposed to Platos, is a city with a large middle class which promotes stability and balances the conflicting claims of the poor and the rich. Aristotle combines elements of democracy with elements of aristocracy, again to balance opposing claims. Because he is aware that human interest is an inextricable entity, the distribution of scarce and valuable goods is in proportion to contribution to the good of the polis. This system provides for the self interested who believe that those who work harder should receive more. Another point is that the citizens rule and are ruled in turn, insofar as the mixed social system allows. This is permissible because of the strong involvement of the citizens in government; it is what one would call a true democracy. Overall, a spirit of moderation prevails. The philosophies of Aristotle and Plato have been around for over sixteen centuries, yet today it is difficult to find specific instances where either philosophy is applied. This may be a result of the fact that todays political philosophy differs from both philosophers. While Aristotle and Plato uphold the good of the community or state above individual good, todays constitution includes a bill of rights that guarantees the rights of each individual in the nation. Having these individual rights is a necessity for todays citizens. Going back in history to 1787 will show that one of the reasons there was controversy in the ratification of the constitution was that it did not include a Bill of Rights. When the drafters promised that as soon as the constitution was ratified, a Bill of Rights would be added, the doubting states proceeded to ratify it. According to Plato and Aristotle, a Bill of Rights is not necessary because it does not improve the good of the community. Another point of discrepancy between the philosophers and todays society involves the topic of slavery. Aristotle argues for the naturalness of slavery in The Politics, yet slavery has been considered grotesque for quite some time. In correlation to slavery, there is the undermining of the female population by Aristotle. Although Plato is a lot less discriminatory, he also believes women are the sub-species. While women have had to fight endless battles to achieve the recognition they deserve, today it is a well accepted fact (generally) that women are as capable as men in performing tasks. Naturally, since Aristotle and Plato have been around for such a long time, our society certainly contains some of their influences in a general sense. For example, today it is believed that certain people are born with certain capacities. Intelligence has been attributed to genetics. Because of the different intelligence levels among people, we have different classesfor example: advanced, intermediate, and beginners. In their appropriate level, each person develops his or her abilities to the highest potential. This concept is sometimes at odds with the ideal of equality, ie. we are all human beings. Yet, in essence, it does not take away from the ideal because we are all humans, but we differ in certain capacity levels to complete tasks. Platos and Aristotles philosophy have helped shape present thought, though, by no means, mandate our practices. The philosophers are very community oriented while we value the individual. Besides differing with todays standards, each philosopher is in his own way distinct. Plato is very attracted to metaphysical philosophy, while Aristotle is much more methodical. Both perspective views are and will continue to puzzle students for years to come.

Accounting Ratios for Account Manipulation

Accounting Ratios for Account Manipulation How companies manipulate their accounts using accounting ratios? Abstract The emergence of accounting scandals in the US has shaken the world over. Professionals, stakeholders, shareholders and regulatory authorities blame a multitude of factors for the proliferation of cases like Enron, Tyco, WorldCom and Xerox etc. The researcher is of the view that the rising number of bankruptcies and fraud cases in the corporate sector has been the result of weakness within the financial system and regulatory standards. In the US especially the flexibility of the financial standards has given firms the opportunities to manipulate accounts with the help of financial and accounting professionals for the benefit of top management. These individuals have knowledge of GAAP (generally accepted accounting principle) and its loopholes. They capitalize on these loopholes to the extent of crippling the economy and professional standards. The following research investigates the rationale for firms that resort to accounts manipulation through financial ratios and how it could be curbed. It identifies the measures for counteracting unethical professional behaviour by outlining the core weaknesses within the accounting standards and systems. It also compares the US standards with those of the UK to conclude that the UK is less liable to fraudulent behaviour because its authority has taken measures to strictly regulate accounting professionals, auditors and top executives to avoid engage in accounting manipulation and fraud. Table of Contents Chapter 1 Introduction Background Rationale Objectives Scope Work Map Chapter 2 Literature review Introduction Enron WorldCom Ratios Differing Accounting Standards in the UK and US Chapter 3 Research Methodology Inductive and Deductive Reasoning Qualitative and Quantitative Research Secondary and Primary Resources Research Rationale Chapter 4 Data collection and analysis Chapter 5 Conclusion and Recommendations Bibliography Appendices Background The growing number of accounting scandals with the likes of Enron, Tyco, WorldCom and Xerox etc. has raised cause for concern for stakeholders, shareholders, professional bodies and trade authorities alike. They are of the view that corporate finance has undergone transformation for the worse in the last ten years. Williams’ research (2002) indicates that accuracy of revenues and earnings help in operational decision support and formulation of corporate strategy for almost 60 percent of the firms. Others, approximately 58 percent, feel financial reporting transparency and compliance (93 percent) with external reporting requirements imperative for effective corporate and industry performance. However, the growing number of scandals related to fraudulent earnings, inflated asset values and understated liabilities have undermined this system of corporate governance (Lev 2003). Investor confidence has been shaken as each scandal reveals the weak foundation of financial information system of public companies and regulatory authority that oversees them. When Enron filed for Chapter 11 bankruptcy on December 2, 2001 and WorldCom did the same later, investors blamed their business failures on accounting manipulations. This practice is not new. In fact according to Mishra and Drtina (2004) some 200 companies in the past five years have restated their earnings as a result of accounting manipulations. CFO Magazine survey indicates chief financial officers (CFOs) are forced to misrepresent earnings or are pressured to violate generally accepted accounting principles (GAAP) to satisfy shareholders and top executive management. Accounting manipulation not only offers the chance for companies like Enron and WorldCom to increase the asset valuation but also to understate liabilities that would appreciate stock prices, hide losses and increase company valuation. The practice is not limited to the US only. In the UK accounting manipulation is also known as creative accounting. According to Amat, Blake and Dowds (1999) creative accounting refers to a process whereby accountants use their knowledge of accounting rules to manipulate the figures reported in the accounts of a business. Since the accounting process itself is flawed in the sense that it provides flexibility, and opportunities for manipulation and misstatement, financial professionals find it easy to engage in creative accounting. The practice helps in presenting increased profits, genuine economic growth and management efficiency whereas the opposite may also be true. According to Kamal Nasser (1993 qt. Amat, Blake and Dowds 1999) Creative accounting is the transformation of financial accounting figures from what they actually are to what preparers desire by taking advantage of the existing rules and/or ignoring some or all of them. The views of these authors indicate that accounting rules in Western countries are weak and offer plenty of room for manipulation. The damage resulting from accounting manipulation affects the accounting principles that the stakeholders, public and investors depend on and use to estimate, judge and predict corporate performance. The usefulness of accounting principles has regulated industries, balanced investment flow and capitalization in the past. However, Enron and the likes have proved that accounting principles (that the masses have depended on in the past) are unreliable. The scandals prove that accounting tools like financial ratio analysis or fundamental analysis for accounts estimation and prediction do not tr uly reflect the value of the investment. Artificial transactions can be used to manipulate balance sheet amount; profits can be moved from period to period; and assets can be re-arranged to depict a positive financial standing. Amat, Blake and Dowds (1999) are also of the view that companies employ creative accounting to smooth income and report a steady growth. This is achieved by manipulating accounts to depict improved profits even in weak economic conditions to harmonize the ongoing income. Investors, following accounting principles often utilize accounting ratios to judge and estimate the performance of firms, consider steady income growth as stability and judge a non-volatile stock as a good investment. Similarly Fox (1997) is of the view that accounts manipulation is for the purpose of normalizing income so that the company’s management can boost share price by reducing the levels of borrowing, lower risks and generate capital through new shares. Using the accounting rules companies often arrange financial accounts so that they would not reflect in the balance sheet, income statement or cash flow statement. The problem arises when the flexibility within the financial principles allows accountants of companies to manipulate accounts to avert investors, banks and financial institutions scrutiny. This kind of flexibility is limited in some countries while it is more pronounced in others. In the US for example the FASB (Financial Accounting Standard Board) rules that income from extended warranties may be recognized at the time of sale. Banks may not recognize this when they calculate the debt to equity ratios to allow the company to borrow through inventory. In the UK on the other hand there is less provision for using bad debts and inventory as a means to decrease liabilities and inadvertently inflate profitability. Thus, accounting manipulation undermines the moral and ethical standards that are expected of public limited companies. Decreasing apparent volatility in income, inflating debts to avoid taxes, smoothing income to create artificial opportunities for investments and manipulating accounting principles to control market mechanisms depict the weakness within the economy. It also reflects on the ethical standards and moral of the profession of accounting and auditing. Despite the knowledge and acknowledgement of this fact, professionals in the UK from a survey (Nasser 1993) indicate creative accounting is a problem that can never be resolved (91 percent). In the US creative accounting is more regular because it capitalizes on the mandate for detailed accounting rather than broad principles, which makes it even harder to detect fraud. The trend in fraud indicates that the foundation of accounting measures and ratios that firms, institutions and public use to estimate financial statements are not reliable. According to Mishra and Drtina (2004) financial statement ratios tend to focus on profitability not quality of the performance of the company. Ratios such as return on assets and return on equity are not adequate to gauge the firms ability to meet debt obligations or to measure the financial distress it is in. Similarly, ratios that accounting models use to tract shifting revenues and expenses through cash flow statement information merely asses the firms cash level based on operations, financing or investing activities. It is limited in calculating the value of the firm based on free cash flows or net income that affect cash flows. As a result, often firms tend to resort to bankruptcy declarations because of the lack of cash inflows. Furthermore, company’s stock performance is based on the performance of the stock prices but these values are risk dependent and the prices are set with the assumption that market value of the firm is efficient and the stock prices reflect information in the financial statements. However, when analysts base their decisions on ratios such as price to earnings, dividend yield and price to book ratios they are wholly dependent on information in the financial statements, which may be fraudulent (Mishra and Drtina 2004). Rationale When firms are constrained by fraud risks such as: opportunities, pressure and rationalization of unethical management, company information itself forms the basis for high risk (Hillison, Pacini and Sinason 1999). According to Cressey (1973) non-sharable financial need is responsible for the unethical practice that result in fraud such as accounts manipulation. The urgency, which forces management to pressure accountants and auditors to commit fraud, is due to the need to appropriate assets and resources to curb financial losses. In the process they undermine their professional integrity (See Appendix 1) (Hillison, Pacini and Sinason 1999). Riahi-Belkaoui and Picur (2000) in their attempt to understand fraud in the accounting environment write 59 percent of a KPMG 1998 Fraud Survey respondents believe fraud will become more prominent in the future. The reasons they cite include economic pressures, inadequate punishment for conviction, weakening social values, insufficient emphasis on prevention and detection, and criminal sophistication. Accounts manipulation is the result of favourable situations in which criminals recognize flexibility within the financial reporting system and audit failure to detect manipulation. Furthermore, when institutions gain power, privileges and position to create an environment conducive to white collar crime, members are likely to acquire earnings management knowledge that are within the framework of the accounting policies and alternatives. Abdelghany (2005) notes that earnings management help financial managers select certain target and tailor the financial results of the firm to match it. The basic premise is that management can manipulate soft numbers resulting from accrual accounting. As mentioned earlier firms engage in accounts manipulation due to several reasons some are unethical while others are due to the environment in which they operate. The approach to manipulate accounting principles to benefit from persistent high quality earnings and influence process decisions motivate firms to smooth income, inflate revenues, restate earnings and deflate liabilities. They try to meet the analysts expectations and company performance predictions (Abdelghany 2005). Other reasons include debt covenant avoidance, costs of investment, sustainable long-term performance and meeting up with bonus plan requirements etc. among others. The pressures of management performance, leadership, market failure, and future losses tend to motivate top management to conceal internal misappropriations and misstatements. The influence of these pressures on the reported statements is great as analysts depend on the information to make investment decisions, debt covenant, and professional pre diction. Abuse in the form of manipulating accounts affects not only the firm but also the industry and the economy at large. Given the above rationale the researcher is of the view that there is a great need to study accounts manipulation and its affect on industries, the public, accounting and auditing professionals, and the investment environment as a whole. Objectives The objectives of this study are as follows: To investigate how firms like Enron and WorldCom engage in accounts manipulation using financial ratios. To investigate the ethical and professional implications of financial ratios manipulation through accounting misstatements, earnings management and restatements. To study the role of the regulatory authority in contributing or deterring accounts manipulation by comparing the accounting standards in the US and UK. Scope The researcher aims to evaluate pertinent industry practice by evaluating case studies of Enron and WorldCom. The researcher shall also delve into issues of accounting principles weaknesses and the role of the authority in contributing to the current trend of accounting fraud and manipulation. Consequently, the study shall benefit professionals who are in the field, trying to find solutions for the current trend and how to curb it. Academicians might find the use of theoretical frameworks to study a current accounting dilemma interesting and contributory to future works. Moreover, the researcher expects the results of the study enumerating to both students and academicians alike who are interested in the study of accounting fraud and manipulation. However, readers might find the scope of this study limited in the sense that it will be focused on accounts manipulation particularly in the use of financial ratios. There are other methods of accounting manipulations, which will be covered briefly in the research. Overall, readers will find the findings useful and informative. Work Map The study shall be divided into the following sections: Chapter 1 introduces the topic through a brief overview of the current norms and practices in accounts manipulation. It also points out reasons why there is a need for the study with objectives for directing the topic for discussion in the following chapters. Chapter 2 is a Literature Review, which shall trace the Enron and WorldCom scandals in the light of accounts manipulation. It also reviews literature on financial ratios fraud and its effects. Lastly, it shall study the accounting standards adopted by the UK and US to compare which one is more prone to accounts manipulation. Chapter 3 shall outline the various methods considered and chosen for the development of the current study. Chapter 4 is an analysis of the data collected and evaluated from the researchers point of view based on the expertise of the scholars discussed in the Literature Review. Chapter 5 shall conclude the findings, and offers some recommendations to resolve the issues outlined in the objectives. Overview An efficient capital market is one that allows prices to shift rapidly in response to the latest information because public information is conveyed efficiently, interpreted and analyzed to make effective decisions. Disclosure therefore is an obligation imposed by law to facilitate market performance. Companies are obligated to provide information so that investors and the public can interpret information to participate in the market decisions. Professional ethics is relegated through understanding among accountants, auditors, management and executives on the premise that the market is entitled to receive full accounts and reports of companies’ performance as per regulatory authority. The form and content of the individual or consolidated accounts is regulated by the company law and by accounting standards issued to the accounting professionals and auditors. However, sometimes publicly traded company financial position becomes tradeoffs due to limited liability, losses and perf ormance pressure. Any compromise in their performance results in negative market reaction, as they are bound by standards and targets set by the public. This kind of market behaviour force companies to resort to unethical practices (Ferran 1999). Alternatively, when regulations change in response to the demand of the market, companies have to reshuffle their internal systems to comply with them. The preparation of accounts in accordance to applicable accounting standards often conflict with the companys standards and values. New accounting information requirements and standards are often viewed with apprehension as they put pressure on the statutory requirements. For example the Listing Rules of the London Stock Exchange require annual reports and accounts of companies to contain â€Å"additional information†. The changing environment therefore creates a problem for companies to align current with past performances (Ferran 1999). To gauge a companys financial standing, analysts use ratios to estimate and evaluate its performance by comparing it with the current status or against the industrys standards. Financial managers of companies are aware of the use of this tool to evaluate companys performance. Within the framework of legal accounting standards they employ planning and capital structure decisions to measure the performance of firms. Ratios such as price to earning, for example, are of particular interest to investors interested in gauging the performance of the company they want to invest in (Pike and Neale 1996). When pressured, accountants can manipulate accounts information, such as interests, liabilities, and pre-tax profits etc, to substantially inflate or deflate certain accounts according to the needs of the firms objectives for the short or long term. For example some companies might inflate earnings per share to depict higher dividend to increase the companys investment attractiveness. Others might deflate liabilities to depict low debt to equity ratio, to create opportunities for borrowing. Whichever the cause, the fact is that firms engage in accounts manipulation within the accounting principles framework. They are within their legal rights to employ such methods, which allow them to create a positive picture to investors, creditors and institutions. How far can firms employ such methods and to what extent constitutes unethical or illegal practice will be investigated in the following sections. Enron Among the recent cases of accounts manipulation is Enron. Enron products and services relate to gas and energy wholesale, as well as retail to a host of customers. The company is considered one of the most innovative with an efficient management team and a leader who is the envy of the industry. According to Mishra and Drtina (2004) Enron filed bankruptcy in 2001 when it had just revealed its strategic plans in the light of asset and non-asset expansions. The companys plan had been to expand into energy trading expertise with a host of new products and services. At the time its share had been traded at $90. From 1999 to 2001 the company underwent great changes in terms of its earnings per share from $1.27 in 1999 to $0.999 in 2000. To deflect speculation, Enron used off-balance sheet partnerships to finance and sustain its investment growth and rating (Mishra and Drtina 2004). This method is not a new practice but is employed by 27 percent of companies. Enron however used it to hide its massive debts by inflating revenue with gain from sale of assets to off-balance sheet partnerships by guaranteeing the partnerships debt with stocks. As a result Enron had to restate its earnings from time to time to reflect the reduction in shareholders’ equity due to the partnership. The stock price started to decline to less than $1 in November 2001 despite the fact that the company had been considered one of the fastest growing companies in the industry. While the book value of the assets tripled from $23.5 billion in 1997 to $65.5 billion in 2000, in actuality Enron had been deteriorating in its market capitalization (Kedia and Philippon 2005). Enron is a typical example of accounts manipulation where misreporting to show increased investment value and simulated income have created artificial resources whereas the company had been running into high level of debt s. The real cost of manipulation eventually reflects in the earnings. Earnings management has been used to boost stock prices so that managers can profit from the share trading but in effect undermine the organizations value. In theory the use of earnings management helps firms to manipulate price earning ratios to, firstly show firms potential activities, and secondly to restate the value of the firm. However, as a consequence, the earnings created theoretical growth in investment and employment depicting strong growth (Kedia and Philippon 2005; Healy and Wahlen 1999). According to the authors, Kedia and Philippon (2005), Enron used an earnings manipulation model, which has resulted real time inefficiencies, as it does not account for the fundamental value of the firms equity or account for the allocation of resources. Wamy’s (2004) investigation reveals that Enron inflated profits by nearly one billion dollars and top employees raked in millions of dollars (they should not have received) through complex and special partnerships to hide debt, inflate profits and to engage in allied unethical and heinous business practices. The companys unique business model depicts human capital as the leveraging point for its investments, instead of fixed assets. Since its people are considered physical assets, it could allocate earnings to these individuals to create higher value for the firm that owns them. Theorists blame the companys manipulated accounts as the basis for its bankruptcy in 2001. Others (Barlev and Haddad 2004; Wamy 2004) blame it on the transition within the accounting framework. Barlev and Haddad (2004) attribute the shift of accounting practices due to the inclusion of the new paradigm of fair value accounting has increased the pace of reporting in firms. The authors in their research prove that the new paradigm improved full disclosure, transparency and management efficiency mandates. However, the weak control system that governs accounts information contributed to abuse and manipulations. It has allowed Enron to sell its stakes to special purpose entities thereby minimizing reported activities. Since Enron took the position that as a result of the decrease in its ownership interest, it no longer controlled [SPEs] and was not required to consolidate [SPEs] in its balance sheet. SPEs had been acquired through bank loans and debt issuance, which resulted in high debt to equity ratio, but hidden from the investors. As business transactions at Enron grew, the company is also confronted with its inability to pay for these transactions (Dodd 2002). Further, the company has also abused the fair value framework by using hedging instruments such as changing fair value of assets and liabilities, variable cash flows and foreign currency exposure to emphasize on its valuation (Barlev and Haddad 2004) by recording inaccurate revenue and earnings growth. Enron reported prices and recognized fictitious unrealized gains to account for pretax income worth $1.41 billion for the year 2000, which is attested by its auditors as being true (Makkawi and Schick 2003). WorldCom WorldCom (now MCI) is one of the largest distance phone companies in the US to declare bankruptcy in 2004. The reason had been accounting irregularities that equal to $11 billion. According to Scharff (2005) the companys declaration had been one of the largest accounting frauds in the US history. The author writes of the perpetrator as being the organizational structure, group processes and culture, which mitigate fraud that had become an integral part of WorldComs operations. WorldComs rationale for following a corrupt course of action stems from groupthink behaviour and competitive industry environment that pressurize members of the organization to make decisions to pursue fraudulent activities (Whyte 1989). Scharff (2005) traces the development of WorldComs bankruptcy and notes that during the 1990s the company had been under strong pressure to maintain cash flows and earnings before interest. As the telecommunication industry is subjected to strict regulations, WorldCom executives resorted to fraud to allocate costs of capital as prepaid. Similarly, it also engaged in improper release of accruals so as to reduce current year expenses to increase earnings. Not only this, the company also ensured that minor revenue entries are made to increase operating earnings (Scharff 2005). The finance and accounts department had been encouraged by top management to engage in fraudulent behaviours (See Appendix 2) to cover for the invulnerable position the organization had been in. However, the most important issue had been when the company found out about loopholes in the GAAP that would support the entries the executives wanted to include. Through them, the company also managed to inflate cash flows for five quarters with the assumption that the company received cash flows from operations whereas most of its activities had been based on accruals. According to Tergesen (2002) the accounts manipulation engaged at WorldCom had been aimed at inflating consolidated cash flows to present a positive operation picture so that investors are attracted in buying its stocks to increase capitalization. Realizing that investors are risk averse, and avoid company stocks that raise cash through financings, such as debts or investment related activities such as assets, WorldCom managed to pose a positive and attractive picture through accounts manipulation. It managed to secure operations cash flows through securitizing, which is the selling of account receivables. Selling of receivables is recognized as cash collections, even though they are collected in the future. Although this practice is regular, the timing and the manner of entry makes it culpably the basis for accounts manipulation. Not only this, Tergesen also notes that WorldCom engaged in capitalizing expenses. This practice involves the capitalization of costs of assets in the bala nce sheet and writing it off as annual instalments. To compensate for the lack of cash, WorldCom also manipulated the GAAP rules of allowing cash raised through securities sales recorded in the â€Å"cash from operations† section, even though the activity is not related to cash flow. (Tergesen 2002). The motivation according to Zekany, Braun and Warder (2004) stemmed from the pressure to meet analysts and investors’ expectations. WorldCom had been closely connected with the stock market and a favourite of investors. To meet analysts’ forecast expectations, WorldCom used its public relation as guidance for meeting such expectations. These expectations are derived from earnings estimates, securities performance and market position of its stocks. WorldCom, pressured from the intensity of investment demand and analysts’ expectations, devised financial measures to meet the financial requirements. To increase the stock market value, the top executive had to engage in expansionary acquisitions, to increase revenue growth. At the same time the companys performance deteriorated along with the industry yet it had to prove that it performs above the others (Zekany, Braun and Warder 2004). The accounting department at WorldCom had become an important functional component under the directives of its executives engaged in accounts manipulation activities to boost E/R ratio. The authors explain that WorldCom adopted the line cost accruals system to compensate for the accrual revenue and the liability reported in the balance sheet. However, since the accrual system is highly risky, it is difficult to make provision for its accurate reportage. The pressure to meet up with the line cost accruals motivated executives to find creative accounting ideas to reduce and save costs. This approach would have been successful, however since the industry had been strived by deterioration, earnings could not be inflated to achieve the expected levels to portray a positive E/R ratio. E/R is basically a ratio to measure the return on business resources available to the management. It is similar to a measure of shareholder equity and management effectiveness. (Alexander 2001). Ratios Fraudulent financial reporting has given new dimensions to corporate fraud. Both external and internal auditors are striving with the legal liability to detect fraudulent financial statements, so as to save damage to their professional reputation and to prevent public dissatisfaction (Kaminski and Wetzel 2004). Previously professionals relied on the efficiency of ratios to detect expectation errors to make decision pertaining to stock prices, risks and value of stocks for future growth. Subsequent decisions are based on the credible reportage. Investors, borrowing institutions and the public, use accounting ratios to predict returns or performance. Ratios rely on earnings and book value to measure a firms value. Performance is predicted by a cross-sectional aggregate and indicators from figures in the financial statements. Investors use strategies such as fundamental ratio analysis, accruals analysis and fundamental value analysis, to account for their decisions and treatment of inve stment portfolios. However, Daniela, Hirshleifer and Teohb (2001) are of the view that these strategies are not effective predictors of future stock returns. They write: Earnings reported on firms financial statements differ from cash flows by accounting adjustments known as accruals. These are designed in principle to reflect better economic circumstanceshigh accruals predict negative long-run future returns. (Daniela, Hirshleifer and Teohb 2001) This strategy is affected by the discretionary working capital accrual and new equity. This is so because investors are fixated by earnings numbers. Consequently they tend to underestimate other accrual factors. Similarly, the authors also note that the fundamental value analysis strategy to predict future stock returns, relies on stock prices from an imputed value based on a fundamental value model (Daniela, Hirshleifer and Teohb 2001). Even in this model the discounted value of expected future residual earnings are defined in the context of normal return employed in future years. In re

Difficulty Writing an essay at Tertiary Level -- English Writing

Writing an essay at Tertiary level is an extremely difficult process. â€Æ' Introduction The ability to write a quality piece of writing at the tertiary level is a procedure that does not come easily. As mentioned in Marshall and Rowland (2006, p.195).the complexity of developing a style of writing that is personal and academic while processing and developing thoughts and concepts into a presentable piece of academic writing can be a daunting process ( myself included ). This essay will discuss some of the barriers a student may experience during their writing experience. The development of research and reading skills in their approach to learning and difficulties a student may experience due to procrastination and consequently questioning the usefulness of the essay as a learning tool. Motivation and Reasoning â€Å"For many students essay-writing is the bane of their lives. They question the usefulness of essays, make heavy weather of writing them, and generally try to put them off for as long as they can get away with it†(Rowntree,D. 1974, p.65). In this quote from Rowntree the discussion is over the initial process, the assimilation of ideas and knowledge. Most students would agree that the most difficult part of the process is to organise ideas and concepts into words on paper, especially words that they feel to convey their thoughts as Barnett, cited in Marshall and Rowland (2006, p.145).mentions. The question does need to be asked ‘Who (or what) am I writing this essay for?’Marshall and Rowland (2006, p92).argue that we write only for our tutor or lecturer as a means to assess our scholarly efforts. I disagree with this and would side with the view from Rowntree (1974, p65).that the written essay make... ...r Conclusion Essays are not an easy task, but they can be a task over which the student has the most control. Importantly, the written essay teaches a student to think by giving them skills to analyse a topic systematically and communicate their thoughts about the topic in a logical way. Essays are about learning and showing proof of the research effort, your knowledge and your depth of understanding of a topic. References Marshall, L. and Rowland,F. (2006). A Guide to Learning Independently. Malaysia: Pearson Education Australia. Orr, F. (1992). Writing essays. In Study skills for successful students. North Sydney: Allen and Unwin. Pauk, W. (1969). The research paper,Time and technique. Journal of Reading 13. Reprinted as Scholarly writing: A case study. , p.25-32. Rowntree, D. (1974). How to Write Essays. London: MacDonald.