Is it fair to suggest that the German state is a 'frozen landscape Essay

Is it fair to suggest that the German state is a 'frozen landscape - Essay Example Criticising the trend of confining welfare state to the element of social spending, he contends that the social expenditures are â€Å"epiphenomenal to the theoretical substance† of welfare states (p.19). Thus, he denotes the inflexibility of continental welfare state system and refers to it as a â€Å"frozen continental landscape† deriving from the â€Å"frozen Fordism† existing in countries Germany, Italy and France and concludes that the situation favours a â€Å"status quo† in these countries (Palier and Martin, 2007, p.538). However, Scharpf and Schmidt (2000), as quoted in Palier and Martin (2007), challenges this notion and contends that social insurance based welfare systems â€Å"face the biggest difficulties† among welfare states (p.538). Therefore, to accommodate the changes in economy, the welfare state system of Germany has evolved to align with the transition and it may not be fair anymore to call it â€Å"a frozen landscape.† P alier and Martin (2007) contend that the Bismarckian welfare system has initially been unable to cope with the problems due to the rigidness of â€Å"their own tradition† while the other welfare regimes have done so by adapting to the changes through the implementation of various structural reforms (p.358). However, they concede to the fact that with some reforms introduced after the year 2000, the Bismarckian system has been able to incorporate drastic changes within their system, which may account for the emergence out of the frozen landscape. In the modern day of complex economy, states cannot focus too much on social welfare, ignoring other aspects that deserve better attention. Quoting Therborn (1983), Esping-Anderson (1990) argues that if one considers the historical changes in the activities of the states, it appears that only when countries invest the majority of its resources for â€Å"servicing the welfare needs of households† they can be called welfare state s (p.20). But, it has transpires from historical evidence that countries usually spend a greater part of their funds on â€Å"defence† and â€Å"administration† than on social welfare and, therefore, no state can be called a welfare state (p.20). Therefore, it appears that Germany’s continued existence as a Bismarckian welfare state has become impractical, forcing them to adapt to the changing environment. The country, over a period of time, has hence been evolving various strategies and changing their rigid stance on welfare orientation, incorporating various changes in their systems. Gosta Esping-Anderson again finds a possible failure of the welfare states to stand up to the â€Å"edifice of social protection† which remained â€Å"frozen† due to socio-economic pressures of the past and the system became incompatible to the emerging economic conditions and needs (Esping-Anderson, 1996, p.2). Developing nations such as the US and UK have prospered in the twentieth century by their focus on developing technology rather than investing on social welfare schemes. However, it becomes evident from the examples of these countries that when aspects such as technology is accorded adequate priority, the resultant growth in industry as well as other employment avenues will offer the citizens better jobs and living conditions and thereby improve the overall standard of living. This situation also seems to have

English Speech - After The First Death Essay Example for Free

English Speech After The First Death Essay English speech Good morning, teachers and year 11’s, Identity is one of the main themes in the novel After the First Death by Robert Cormier. Identity defined is the individual characteristics by which a thing or person is recognized or known by. Throughout the book, Kate, the main character is constantly changing her emotions and the way she acts showing her different sides. When the main character, Kate appears, She is said to be silent. This tells the reader, that she does not want to confront the terrorists, which also brings us to the point that Kate is not a very brave person. When the reader first meets Kate it had said that, She regarded then in shocked silence, mouth agape, eyes wide open with disbelief. This tells the reader that she is terrified and scared. The central theme of self identity is presented multiple times through main characters such as Kate. She struggles with finding her true identity and becoming brave. My visual representation represents how Kate and the children on the bus are pure and superior to Miro and artkin. The black and white are conflicting colours and white rocks show that the children and Kate are pure and the black shows Miro and Atkin. The black represents the colours of the balaclavas and the colour of Miro’s skin. The black also is a less superior colour than white, representing that the children and Kate are more important. The ratio of white to black rocks demonstrations that there more innocent characters than immoral characters in the novel. The jar is the thing that all the characters have in common; they are trapped in this and cannot get out. This represents the situation they are all in. Wanting to get out but cant. Thankyou†¦

Fact Sheet on Imperial Russia in 1914 :: Russian History

Landforms †¢ the European side is mostly flat plains †¢ the Ural Mountain and several large rivers (Volga, Ob, Yenisey, Lena) run in a south-north direction †¢ much of the Asian side (west of the Ural) is in the tundra zone †¢ high mountain ranges along the Mongolian border and in the far east of the country Climate †¢ the largest country in the world. †¢ extreme temperate conditions: temperatures below freezing for several months, although it can get very hot in the summer †¢ most of the ports freeze in wintertime, living the country with only limited year-round access to important sea routes Resources †¢ rich soil and grazing land in most places in the European side †¢ coal and iron accessible in the European part †¢ huge mineral wealth in the Asian part (gold, diamond, oil, iron and heavy metals, etc.) – hard to access People †¢ population is about 174 million, the second largest in the world after China, with a 50% population rise between 1860 and 1914 †¢ about four fifth of the population lived in the European part, †¢ about 80% of them peasants, had been owning small pieces of land since 1861 †¢ the Tsar, Nicholas the II, was an autocratic ruler †¢ most of the population lived in poverty. †¢ most of the land was owned by the church and a few noble families, the nobility accounting for 1% of the population owned 25% of the land †¢ poor education system, only a selected few could read and write †¢ disease and starvation was common †¢ only 40% of the people are Russian-speaking Comment Russia, the world’s largest country, covered one sixth of the planet’s total landmass (Warnes, 1999), excluding Antarctica. The country had a huge wealth of resources, most located in hardly accessible or completely inaccessible parts of Siberia. The European coal and iron mines supported and increasingly powerful iron industry. The Trans-Siberian Railway completed in 1904 did not make mining of these resources much easier. The roads in Siberia were muddy and impassable for most of the summer season. The flooding rivers made east-west travels and transportation very difficult. Most routes were open only in the winter, when the harsh conditions made movement of people and goods tough. As a result, the country could not enjoy the benefits of the available mineral resources. Although home to the world’s second largest population, the 174 million people were not united. Only 40% belonged to the â€Å"motherland†, the rest was made up almost 20 different other nationalities and several other smaller groups. Most people lived below the standards of other European nations.

History and Methods of science Essay

Isotope, one or two or more species of atom having the same atomic number, hence constituting the same element, but differing on mass number. As atomic number is equivalent to the number of protons in the nucleus, and mass number is the sum total of the protons plus the neutrons in the nucleus, isotopes of the same element differ from one another only in the number of neutrons in their nuclei. Source: â€Å"Isotope,† Microsoft Encarta 2006 (DVD), Redmond, WA: Microsoft Corporation 2005. Atom, tiny basic building block of matter. All the material on earth is composed of various combinations of atoms. Atoms are the smallest particles of a chemical element that still exhibit all the chemical properties unique to that element. A row of 100 million atoms would be only about a centimeter long. Understanding atoms is key to understanding the physical world. More than 100 different elements exist in nature. Each with its own unique atomic makeup. The atoms of these elements react with one another and combine in different ways to form a virtually unlimited number of chemical compounds. When two or more atoms combine, they form a molecule. For example, two atoms of the element hydrogen (H) combine with one atom of the element oxygen (O) to form a molecule of water. Source: â€Å"Atom,† Microsoft Encarta 2006 (DVD), Redmond, WA: Microsoft Corporation 2005.

Caribbean Folklore: Le Loupgarou and Ol Higue

Le Loupgarou† and â€Å"Ol Higue† Folklore exists in many cultures throughout the world. Folklore in the form of tales, myths and legends is passed from generation to generation through the oral tradition. Folklore in the Caribbean has been drawn from the rich and diverse backgrounds of our ancestors who came from various parts of the world. Our ancestors brought with them their language, culture, religious beliefs and practices, and their tradition of storytelling.The tales of demons, ghosts, zombies and spirits have been fascinating for the young and old alike, and variations of these stories have been told again and again. â€Å"Le Loupgarou† and â€Å"Ol' Higue† share similar characteristics as they are both based on Caribbean folklore. â€Å"Le Loupgarou† means werewolf or lagahoo. Fittingly, Derek Walcott's poem tells a tale of a man named Le Brun. He sold his soul to the devil and so he changes into a werewolf at night. He is ostracized by the village and lives all alone in a small old house.Similarly, â€Å"Ol' Higue by Mark Mcwatt is a poem about what Caribbean people would call a soucouyant which is in essence, a female vampire that takes off her old skin at night and turns into a fire ball, lurking through the nights to feed on her poor victims. Interestingly enough, the soucouyant is the female counterpart for the lagahoo. The old woman is â€Å"Ol' Higue†, like Le Brun, lives alone in an old house. She almost never comes outside during the day as her feeding is done at night.She doesn't like children and isn't amiable by nature which are also characteristic of Le Brun. Walcott’s poem opens with the line â€Å"A curious tale† suggesting that we, already from the beginning, should be questioning the verity of the story since tale usually is associated with fiction. â€Å"Ol' Higue† doesn't indicate that it is a fictitious story but as Caribbean people, it is easy to come to the conclusion just from the first stanza that she is a soucouyant. â€Å"Le loupgarou† is written in a†¦ [continues] Read full essay

Roman Government of the Early Empire

Roman Government of the Early Empire Octavian defeated Marcus Antonius and Cleopatra VII at Actium and became the undisputed leader of Rome. Through his military power he was able to maintain control of the Rome and gradually establish a monarchy. The Romans hated the term monarchy and Octavian wanted to be considered democratic. Thus he did not create any positions but simply held the powers of the regular magistracies, many at ones and continuously. The Romans, weary from civil war, knew what he was doing but accepted the situation.After the civil war Octavian through his general Marcus Agrippa demobilized the Roman army from 75 legions reduced to 28. Octavian controlled all the stronger provinces where legions were stationed; out of the 28 remaining legions Octavian alone controlled 26. Dio Cassius wrote " ...he alone had arms and maintained soldiers..." Octavian was secure financially through his acquisition of Egypt administrated by him directly through his Praefectus Aegypti.English: The Roman Empire under Augustu s Caesar (3...According to Dio CassiusOctavian controlled the state treasury and could spend it as he chooses. Because Octavian had both military and financial control of Rome he had absolute power in all matters.Princeps was the official title of the early emperors. The Princep or 'first citizen' held supreme 'auctoritas' and were the top patrons. This form of government is referred to as the principate. Octavian was later given the title Augustus and became the first Princep. He established a model of government based on the assumption of positions and powers already existing in the Republic. This model of the principate was followed and extended by later principes.According to Dio Cassius Augustus held all the offices and titles except dictatorship, although original constitutional magistracies still exist everything is carried out according to Augustus' wishes. Augustus frequently became a consul and always held the title of proconsul outside Rome; more...

Harrison Bergeron Summary and Response Essay Example

Harrison Bergeron Summary and Response Essay Example Harrison Bergeron Summary and Response Paper Harrison Bergeron Summary and Response Paper This meant that no person was more intelligent, better-looking, or more athletic than the other. In order to make sure the Amendments were being upheld, the Handicapper General and his team of agents were in full force. In April of 2081, Harrison Burgeon is taken away from his parents (George and Hazel) by the Handicapper General. Because of the equality laws, his parents did not have the Intelligence to recall the tragedy. Those with above average Intelligence wore a radio In which the government could broadcast a noise to interrupt the thoughts of those who had been thinking for extended periods of time. One night, George and Hazel are watching ballerinas dance on television. Hazel is crying but cant exactly remember why. That was a real pretty dance, that dance they Just did, said Hazel. Huh? said George. That dance, it was nice, said Hazel (Opponent, 1). Suddenly, Harridans picture is shown on the television, claiming that he has escaped from prison. The government felt as If they were In danger because of Harrison. He was very Intelligent, an athlete. And is under- handicapped (Opponent, 3). Instead off little ear radio for a mental handicap, he ore a tremendous pair of earphones, and spectacles with thick, wavy lenses besides. : The spectacles were intended not only to make him half-blind, but to give him whining headaches besides. Scrap metal was hung all over him (Opponent, 3). George suddenly recognizes that Harrison Is the one being shown across the television, but a sound of automobile wreck forces him to lose his train of thought. When the noise Is over, he cant remember who he Just saw. The government felt threatened by Harrison because of his above average qualities. However, Harrison claimed to be an Emperor and would select an Empress hat night. l am the Emperor! cried Harrison. Do you hear? I am the Emperor! Everybody must do what I say at once! (Opponent, 5). As Harrison was dancing with his Empress, Diana Moon Slammers, the Handicapper General, entered the room and shot both Harrison and his Empress. Both were dead before they hit the floor. She had shot them because they had disobeyed the laws of the land and equality. Diana threatened to shoot the musicians as well if they didnt put their handicaps back on. After this incident, George and Hazels television went out. George had left to grab a ere from the kitchen and came back to the living room. Muff been crying? He said to Hazel, watching her wipe her tears. Muff, she said. What about? he said. I forgot, she said. Something real sad on television. (Opponent, 7). In response to ten story, I completely Allegros Witt ten Handicapper Generals Ana the rest of the government officials. I do not believe that those with higher power can force an individual, let alone an entire nation, to become completely equal in inhum ane ways. The most interesting detail of the reading was by far the extremity f how far the government went to ensure that all citizens were no better than others. If someone were to be more athletic, they were to wear a bag of birdbaths around your neck. If someone were to be above average looking, they were to wear a mask. If someone were to be more intelligent, they had to wear a radio which blared a terrible noise if a thought was carried for more than twenty seconds. Hanging bags of birdbaths around the more athletic kind was particularly interesting. I was confused as to how a government could be so strict to ensure that no person is better than the other. Was Harrison the only one they were afraid of, or were they afraid of everyone who was a potential threat to the government?

Ingls bsico - Present Simple o Present Continuous

Ingls bsico - 'Present Simple' o 'Present Continuous' Present Simple Use el present simple para hablar sobre actividades o rutinas que toman lugar de forma regular. Ejemplos: I often go jogging on Saturdays.He usually has coffee for breakfast. Present Continuous Use el present continuous para hablar sobre lo que est sucediendo en un momento presente del tiempo, en torno a un momento presente o para un programado evento futuro. Ejemplos: Were working on the Smith account this month.Shes watching TV at the moment. Los verbos de estado Los verbos de estado son verbos que expresan un estado. Los verbos de accià ³n son verbos que expresa algo que una persona hace. Ejemplos: I hope to see you soon. (stative verb) He is cooking dinner at the moment. (action verb) Los verbos de estado no pueden ser usados en las formas continuas. A continuacià ³n hay una lista de comunes verbos de estado: believeunderstandthink (opinion)wanthopesmelltastefeelsoundlookseemappear Pruebe su conocimiento con esta breve prueba.  Learn more Espanol here.

International Relations for Mao Zedong and Deng Xiaoping Essay

International Relations for Mao Zedong and Deng Xiaoping - Essay Example Actually, Mao Zedong through his Communist Party of China collaborated even with the capitalist states like the United States of America, Japan and many European countries. Mao Zedong had a great quest for dominance over the perceived neighbors and trade partners like Russia and Germany. As demonstrated by Wang (27), this made him appear resistant to the external forces advising him how to manage the government to find a throughway towards better economic development. In fact, Mao Zedong did ignore otherwise good advice from Stalin who wanted China to become a fully communist state. Mao also appeared to cheer over the death of Stalin hoping that he would become the next powerful leader to control the allied group. This however did not materialize when Khrushchev ascended to power to continue the initial state of power held by Stalin. Mao’s continued opposition against the ideologies of his fellow leaders in the Communist world including Khrushchev soured to the extent of causing withdrawal of China dismissal from the Communist Movement. Mao continually resisted moves and policies adopted by Khrushchev towards defending their members. One such op position occurred when Khrushchev backed down to Cuban missile milieu. Deng appears as one of the Chinese leaders who took the revolution vehicle to the right direction. After the death of Mao Zedong in 1976, and his rise to power, Deng repaired their tutored relationship with the international community by denouncing communism and adopting socialism form of rule. Deng went ahead to reconcile with Soviet Union and all countries that surrounded China having he pains of the peasant citizens at hand (Deng 23). In fact, Deng is one lead who contributed to the economic classification of countries as first class, second and third. In the classification, Deng admitted that Soviet Union and United States were in the first class. Deng also

Family Business Research Paper Example | Topics and Well Written Essays - 1000 words - 2

Family Business - Research Paper Example The other family members in family-run businesses do not often accord the same level of respect to the decisions made by their siblings or relatives who may be in charge of the family business. Many times, siblings will overrule the decision of a sibling who was chosen by the parents to hold a position of authority. This shows a lack of structure that is vital in ensuring that organizations realize their goals. This lack of structure is also to blame for the procrastination of important tasks within an organization. Procrastination can result in delayed succession planning which is detrimental to a company. According to the family business survey, which was meant to assess different how the different functions in family-run businesses are conducted, only 12% of the reviewed family businesses had documented plans dealing with succession planning (The Family Business Survey, 5). This is somewhat better than the survey of Australian KPMG and Family Businesses, conducted to further under stand the success of family businesses, which established that 80.7% of respondent family businesses did not have any succession planning program in effect (KPMG and Family Business Australia Survey of Family Businesses, 3). ... Another common concern is favoritism. According to a family survey conducted in the UK, it was discovered that 18% of the respondents felt that their lives were in some way hampered by their responsibilities towards the family business. 17% of the respondents also affirmed that it is easy for business disagreements to bet in the way of building strong family relationships (The Family Business Survey, 4). There were similar findings from the According to CBIA/UCONN Family Business Program Survey, which established that only 31% of the participants felt that the responsibilities were fairly allocated (Rathgeber and Nino, 12). The accusation of favoritism is common in most family organizations and can sometimes interfere with realizing organizational objectives. The employment of qualified workers is another issue that often causes misunderstandings within family run businesses. For the most part, the children or relatives of people who launch successful businesses expect that they will hold positions of authority in the said businesses even if they may not be qualified for them (Miller and Le Breton-Miller, 39). However, for any business to succeed, it requires the input of skilled workers who are trained in professional institutions. Sometimes, parents have to hire workers from outside the family in order to keep their companies afloat while placating their children with junior positions. According to the Family Business Survey, 61% of the respondents had 2 or 3 relations who worked in the family-run companies (Family Business Survey, 7). The Australia KPMG and Family Business Survey’s results indicated that 40% of the surveyed

Bacholer of education (birth-5) organisations commuities and Essay

Bacholer of education (birth-5) organisations commuities and communication-literature review - Essay Example a as a whole, closely looking at its road networks and reasons for road congestion before delving into ways to avoid cause of accidents by children including the use of restraints. The capital of the Greater Western Sydney, Parramatta is considered as the region’s business services centre and is undoubtedly quite busy. According to the most recent census conducted by the Australian Bureau of Statistics (2006) the city had a population of 18,448 people. It is therefore inevitable that, just like every other busy city in the world, Parramatta is cumbered with the problem of traffic congestion. People in Parramatta use various forms of transport including; road, rail and water. Road remains the busiest as people cycle while others walk with others travelling by bus. As a result of this exceeding congestion, Parramatta has the slowest commuter times as well as the highest levels of city pollution, eventually affecting family life and the economy as a whole. The particular areas of weakness that greatly accelerate congestion include a shortage of entry points into the city, nine major choke points at the converging points of west-east roads, few full length west east arterial roads (Organisation for Economic Co-operation and Development 2002). Round abouts are also fairly common in the city hence is another cause of congestion. In general, Sydney’s inner west suburbs are well known for having the worst traffic congestion and Parramatta is one of them. Although accidents are less common, the city is also home to many families hence it is dangerous for children. Currently, Parramatta is going through a development program that will focus mainly on transport within the area to encourage economic growth. Traffic management on all roads in New South Wales, of which Parramatta is part of, is managed by the Roads & Traffic Authority (RTA) but the body delegates its duties to City Council of Parramatta to regulate transport locally. The city council resurfaces roads,

Network Essay Example | Topics and Well Written Essays - 1000 words - 1

Network - Essay Example So, we use repeaters and hubs (as shown in Figure 1). Repeaters buffer the input signal and send the amplified version of the same signal to only the output port. Hubs are basically broadcasters (multiport repeaters). The signal is repeated to all ports other than the input port. Ethernet is a shared medium, so, all nodes use the same medium for transmission of data. When two nodes send data at the same instant, the data collides and its validity and integrity is compromised. Data has to be sent again. Although Ethernet uses CSMA/CD (Tanenbaum 2003) for collision yet there are still delays. So, networks are designed to avoid collisions while ensuring efficient utilization of bandwidth, providing good network throughput. In Figure 1, in case two nodes broadcast at the same time, collision occurs. Hubs/repeaters also limit the number of nodes that can be supported (see Table 1 (Technick n.d.)). So networks cannot expand beyond a limit. As at a time, the entire bandwidth can be utilized by only one node, so the overall throughput is limited. For avoiding collisions, the network traffic needs to be isolated. So the big networks are divided into smaller segments. These segments are connected together through bridges and switches. Bridges and switches (bridges with enhancements) are transparent intelligent devices that facilitate growth of LANs with the same underlying functionality. They can connect a node or a full Ethernet segment (with its own set of switches, hubs and repeaters) of even different LAN technologies on each of their ports (see Figure 2). They map the MAC addresses of nodes to each port. For each incoming frame the bridge/switch checks the destination MAC address. If the destination MAC lies on another port, only then it forwards, else it filters the frame thus keeping it within the segment it came from. The collision domain is separated. If there is a collision in one segment, the effect

Organizational Behaviour Essay Example | Topics and Well Written Essays - 1000 words

Organizational Behaviour - Essay Example However, soon afterwards Ali was assigned larger and difficult projects that he was supposed to complete on his own. From the above figure it is apparent that there is a strong interrelation between tensions arising out of a desire to achieve personal advancement (as has been observed in Ali), and a corresponding resolution of the same in the form of credit given against individual performance (that Tony failed to deliver). Furthermore, the motivational capability of Tony was suspect because he was never too serious about catering to Ali’s queries and it was evident that the latter was gradually being demotivated. â€Å"Maslow suggested that there are five needs systems that account for most of our behaviour† and as is evident from the figure appended above, he theorised that â€Å"there is a natural trend in which individuals become aware of and therefore are motivated by each of these needs in ascending order† (Montana & Charnov, 2008, pp.238). As the case revealed that Ali was looking forward to gain a learning experience during his tenure at WD Inc., and in this context it may be mentioned that his extrinsic needs required motivation in the form of a prospect to earn a good grade, and his intrinsic needs called for motivation in the form of challenges as well as accomplishment in association with learning. On the other hand, Tony himself was not sufficiently motivated in order to be able to motivate his subordinates and he exhibited a major deficiency in the area of multi-tasking as well. Consequently, he could not offer any significant supervision and guidance to Ali, there by resulting in the frustration of the latter. As has been opined by Bennis & Goldsmith (1997) â€Å"in addition to being important to organisations, communication is critical to the leader, manager, or supervisor† (Harris, 2002, pp.14). The importance of this organisational function can be comprehended from the fact

Network Essay Example | Topics and Well Written Essays - 1000 words - 1

Network - Essay Example So, we use repeaters and hubs (as shown in Figure 1). Repeaters buffer the input signal and send the amplified version of the same signal to only the output port. Hubs are basically broadcasters (multiport repeaters). The signal is repeated to all ports other than the input port. Ethernet is a shared medium, so, all nodes use the same medium for transmission of data. When two nodes send data at the same instant, the data collides and its validity and integrity is compromised. Data has to be sent again. Although Ethernet uses CSMA/CD (Tanenbaum 2003) for collision yet there are still delays. So, networks are designed to avoid collisions while ensuring efficient utilization of bandwidth, providing good network throughput. In Figure 1, in case two nodes broadcast at the same time, collision occurs. Hubs/repeaters also limit the number of nodes that can be supported (see Table 1 (Technick n.d.)). So networks cannot expand beyond a limit. As at a time, the entire bandwidth can be utilized by only one node, so the overall throughput is limited. For avoiding collisions, the network traffic needs to be isolated. So the big networks are divided into smaller segments. These segments are connected together through bridges and switches. Bridges and switches (bridges with enhancements) are transparent intelligent devices that facilitate growth of LANs with the same underlying functionality. They can connect a node or a full Ethernet segment (with its own set of switches, hubs and repeaters) of even different LAN technologies on each of their ports (see Figure 2). They map the MAC addresses of nodes to each port. For each incoming frame the bridge/switch checks the destination MAC address. If the destination MAC lies on another port, only then it forwards, else it filters the frame thus keeping it within the segment it came from. The collision domain is separated. If there is a collision in one segment, the effect

BUSINESS ETHICS Essay Example | Topics and Well Written Essays - 2500 words

BUSINESS ETHICS - Essay Example First, it is necessary to define the issues and explain why they are ethically controversial. Second, one is to identify the stakeholders and explain whose interests are at stake and what kind of interests those are. Third, one is to clarify the ethical values and see what relevant values are in the organization’s Code of Ethics and what moral standards and principles are relevant. To resolve the issue we should understand how organizational values and moral standards can be applied and what impact the resolution may have on the stakeholders. However, it is not enough simply to offer resolutions; they must be made a reality. Implementation of resolutions requires a certain plan of actions, monitoring of the outcomes and assessment of success. Tesco is Britain’s largest retailer occupying 30 percent of the market share. It is followed by Sainsbury’s and Asda Wal-Mart. All the three corporations have similar ethical problems associated with their monopolistic position in the market and low-cost marketing strategy. Tesco is also well-known for its diversification strategy. Their corporate strategy is â€Å"an inclusive offer†, which refers to the company’s ambition to appeal to customers with upper, medium and low income in the same stores. As David McCarthy, Citigroup retail analyst put it, â€Å"Theyve pulled off a trick that Im not aware of any other retailer achieving. That is to appeal to all segments of the market† (Liptrot 2005). This diversity is expressed even in Tesco’s own brand products, verifying from the up-market â€Å"Finest† to a low-price â€Å"Value†. The diversification is used in the firm’s six UK store formats, differentiated by size and ra nge products on sale. Initially specializing in food, the company entered such areas of businesses as clothes and consumer electronics, selling and renting DVDs, CDs and music downloads, as well as Internet service Business Ethics Essay Example | Topics and Well Written Essays - 1000 words - 17 Business Ethics - Essay Example The fact that the decisions of Nardelli have secured the firm’s success is not enough for justifying potential violations of ethics by Nardelli, if such case is proved to exist. Nardelli was appointed as the leader of Home Depot in 2007 (Kavilanz 2007). Nardelli introduced an important change in Home Depot: he supported discipline in regard to all aspects of the business (Kavilanz 2007). Many employees were opposed to this practice as they preferred the leadership style of the firm’s previous leader: Bernie Marcus (Kavilanz 2007). Marcus was quite friendly with employees, a fact that allowed him to establish strong links with staff in all business department; however, as the company was expanded the above practice of Marcus would have to be changed (Kavilanz 2007). The appointment of Nardelli as the firm’s leader was related to a new era for the firm: discipline was set as a priority in regard to all parts of the business (Kavilanz 2007). Nardelli kept a distance from staff at least when having to deal with employees at group level (Kavilanz 2007). Gradually, employees who preferred the leadership style of Marcus left the company, a fact that had not affected the growth of the business (Kavilanz 2007). Still, the leadership style of Nardelli, being characterized by ‘no flexibility and autonomous management’ (Kavilanz 2007) had to be changed in order for the firm’s performance to be kept at high levels, especially since the housing market had started to show signs of slowdown from 2007 onwards (Kavilanz 2007). Under such terms, the autocratic leadership style of Nardelli, being based mostly on ‘command and control’ (Nussbaum 2007) would have to be replaced by a more flexible, democratic leadership style; such leadership style would allow employees to express their creativity and enthusiasm, a fact that would lead to the improvement of employees-customers relationship (Nussbaum 2007). In order to evaluate the leadership style of Nardelli it

What Makes Someone a Hero Essay Example for Free

What Makes Someone a Hero Essay Father is the first person who I remind of hero. My father gives me a live, as human in order to see the social world. He protects me and take cares of me with his love and his sincere. He instructs me to be a good person. So, my father is my hero. When I was young, my father took care of me as well as my mother. I was showered, dressed me up by him. After school my father always asked about my homework. And when I had a problem with my homework; science , mathematics , Thai even English. My father can be my consult. He could explain and help me for my homework. He gave many suggestions and examples to make me understand. My father gives me the suggestion to live in the society. He told me many aspects in the society, harmful things even the harmful person. He told me how to aware of those thing. He said: â€Å"Nowadays, the society is more dangerous than the past. † You should aware of strangers and you must avoid to go to the place which is endanger. You must look around and aware of everything which is suspicious. † He protects me from danger. When I was eight years old. I drowned in the hotel swimming pool. In that moment, I thought, I will not survive. With my father’s subconscious, he jumped into the swimming pool and pool me up from the deep. He might die from that situation because he is not good at swimming at all. That time I realized that he was my hero. He doesn’t like the Hollywood hero or the cartoon hero; he is my hero, only my. He is a good model. Since I was born, I feel of his loves. He never hates me when I annoyed him. In his whole life, he works hard. He is a great leader of the family. I should imitate him. I considered him as my inspiration to be a good person. Especially, about honesty, he said, â€Å"Honesty is a good habit that the good person must have. † My father is my hero that really have in the real world. This is not the imagine. He does not walk out from the superhero cartoons or the Hollywood movies. He is not handsome like a star. He is not rich as a billionaire but he can pay any things for his kids even his life. That makes him to be my super hero.

What is meant by internal and external drivers for change

What is meant by internal and external drivers for change With globalisation it is an important to have clear concept about business management. Business environment is the totality of all such factors which influence the working and decision making of a business organisation. Business is a commercial enterprises ventured into secure maximum possible profit and to give best services to the public. These are things, events or situations that occur the way a business operations, either in a positive or negative way. This can be called driving forces or environmental factors. They are; Internal driving forces, which are the things, situations or events that are occurred inside the business and these generally under control of the company. The main internal driving forces are given below; Technological Capacity The new discoveries make the old one obsolete. The business community has to keep itself abreast with the technological changes. And it is also an important aspect as it shapes the business operations in the long run. Today the scientists are working on such technologies which will change the entire production process. The company is not running without most modern technology, they cannot competent to others Organisational Culture Organisational behaviour can be defined as the systematic study of the behaviour and attitude of both individual and group within the organisation. Organisations that have a powerful success spirit, and always embrace change and listen to staff and customers are said to be forward looking. Forward looking organisations, they are risk takers and also they done there business very well. So organisation is the essential part of a company. There is no well organisation culture in a company, which may negatively affect the production of a company, to fight in the competitive business world, business turnover, co-ordination of employees, staff etc Financial Management Finance is the main factor of a business. Without money, no business. There is direct relationship between money and the business. According this view financial management has a powerful stand in the business organisation. In a company the finance management take decision about fund distribution like purchase of raw materials, introduce new assets, proper fund distribution etc In these reasons financial management has a powerful stand in the internal driving force. Employee Morale The level of confidence and strength of a person or group is very important of a company. The employee has no morale or they are not committed their job, the company going in down words. The employees are satisfied with their both company and job, which will make a positive energy For increasing employee morale the Corus Company introduce more programs and also they provide mental confidence to the employees. Poor Delivery Poor customer service or delivery is a universal problem that impacts on the bottom line and profit margins in all types of industries, business and services throughout the world. The time plays an important role in the business. Customers need goods and services at their own time; otherwise they select another comfortable company or services. For example; The Corus Strip products UK (CSP) The Corus Company, there were delays to delivering steel to customers on time. So that leads to loss of business. Competition Globalisation has sharpened the competition. Introduce new ideas, technologies, innovations, techniques etc are the main parts of business competition. To face the competition every organisation suffer more things like expense, organisation problems, external problems etc.. For example Corus steel company cannot competitive to other companies because production of steel in UK could be more expensive than from than other countries. In these reason the Corus Company faced many problems in the business world. High wastage The wastage makes a big trouble to the companies, and also they dont know how to overcome this problem. Every organisation looking for less wastage and more product. For example, the Corus Company falling to make products right first time meant that they had to be reworked or scrapped. II External Driving Forces External driving forces are those kinds of things, situations or events that occurred from outside of the company or organisation. And now we can discuss about, what are the external driving forces of a company. Economy There is an intimate relationship between the business firm and the economic environment. The performance of business depends up on the economic environment. At any type of financial fluctuations like inflation or deflation badly affect the business. Political Influence The political forces are directly bearing on the functioning of the business. Political influences like ideology of parties, Govt. policies, Govt decisions, political stability, tax policy, etc are positively or negatively affected the business environment. New Competitors Competition makes challenge the business world. New competitors make more trebles for other companies, because they introduce new technology, ideas, innovations and customer satisfied goods and services with reasonable price. But old companies cannot competitive with them as well because there machines, technologies and all other things are old, and they cant replace it. For example, low cost producers in Eastern Europe were taking business and its could lead to reduce demand with higher costs. Technology It is also an important aspect as it shapes the business operations in the long run business. Technology includes inventions, discoveries and new and better techniques of converting the resources in to final product. Technology helps in performing the operations in much better and cheaper way. The customer expects higher specifications, so it can maintain only new technologies. Customer Satisfaction Customer satisfaction is a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Balanced Scorecard. In business, customers are the king. For customer satisfaction every company introduce new products, attractive packing, adopting new technology, attractive schemes, offers etc Day to day every customers looking for a new technology and high quality products, so the company update there thinking, technology, otherwise they cannot competent with others. In these reasons customer satisfaction has a powerful external driving force of a company. Both internal and external factors are driving the running business. But it under controlled by business organisation. A well organised management can be easily controlled these internal and external driving forces. In the case of Corus Company, in 2005 they introduce new cultural programme called the journey The main courses of this programme is to overcome the poor driving behaviour. For overcoming the both external and internal poor behaviour they introduce so many programmes like push up employees skills, self awareness, promotion and development programmes etc After the programme the company get a new face in the business field. There are external and internal driving forces to promote sustainable development of Corus Company. The different driving forces have different strength levels. The external driving forces provide external condition to CPS UK development. The internal driving forces are permanent fountainhead to promote Corus sustainable development. All the driving forces are indispensable to promote Corus Companies sustainable development. 2. What barriers to change existed at Corus? Resistance  to change is the action taken by individuals and groups when they perceive that a change that is occurring as a threat to them. Key words here are perceive and threat. The threat need not be real or large for resistance to occur. In its usual description it refers to change within organizations, although it also is found elsewhere in other forms. Resistance is the equivalent of objections  in sales and disagreement in general discussions. Resistance may take many forms, including active or passive, overt or covert, individual or organized, aggressive or timid. Resistance is an inevitable response to any major change. Individuals naturally rush to defend the status quo if they feel their security or statuses are threatened. Folger Skarlicki (1999) claim that organizational change can generate scepticism and resistance in employees, making it sometimes difficult or impossible to implement organizational improvements. In order to understand the concept of employee resistance, it is critical to define what is meant by the term  resistance. Change is a common occurrence within organisations, and resistance to change is just as common. There are several types of resistance to change. Understanding these different types of resistance, the company can reduce resistance and encourage compliance with change. There are basically two groups associated with a resistance to change of an organisation. (I)Individual level of sources (II)Organisational level of sources (I)Individual level of sources Individual sources of resistance to change reside in basic human characteristics such as perceptions, personalities, and needs. In the case of Corus Company they faced many problems in resistance to change, especially in internal sources. The following summarizes reasons why individuals may resist change in Corus Company. I.1 fear to unknown Some changes require that employees possess a new set of skill and hence without training. So employees will not welcome the changes of a company. In the case of Corus Company, they make some more changes for their improvement of a company, but employee resistance the changes. Because they fear about their job, current position, other benefits etc In the Corus Company, the fear of unknown badly affects the new changes of the company I.2 Lack of skills This is another problem of resistance to change of a company. If company introduce new changes that may directly affect the employees of a company At that time they update them self without any training. The employees of Corus company they had fear about their skills, current teams, and position etc I.3 Habit Resistance due to habit occurs when the employees are comfortable in their daily habits and do not want to alter them due to change, because they are already skilled and experienced person in their own works. Sudden changes or alternatives cannot accept to the employees. So it may another course of resistance to change. Employees of Corus Company, they did not change their habits and attitude, so they resist the changes of the company I.4 Ageing work force Corus Company has a powerful work force. Lot of skilled and experienced employees are the power of a company. When the company introduced new innovations, technologies, ideas that may affect the workforce of employees. Older employees has very big personal skill and experience, that cannot be transferable. So it may another reason for resistance to change of Corus Company. I.5 Economic factors Employee may fear that the change will lead to technological unemployment, because new technology is associated with education of labour intake so they resist the change. When workers resist changing, which will leads to high standards which in turn may reduce the opportunities for bonus or incentive pays. The new changes make disturbance in their work. These all things show the economic factors in resistance to change. II Organisational Sources Organisational changes are activities of transformation or modification of something. The main purpose of these types of activities is improvement of business result. Organisational changes are not simply the journey from one point to another point. Many barriers will need to be passed in this process. One of the biggest barriers is resistance that is sub component on every organisational change. Managers should have known that there are always people that will resist of a change process. Efficiency and effectiveness of a change process are in direct relation with resistance and successfully dealing with that resistance. So these are the main organisational sources for resistance to change; II.1 Threat to job status or security Job reductions had been a major problem in the steel industry since the 1970s. At the same time the Corus companys some previous changes had lead to cut jobs. So this is the course for resistance to change of a company. Other people didnt see a threat to their job because the business had previously survived difficult times. This is difficult to Corus. II.2 Unexplained changes to the time line If the time line o the change process that is spelt out of the beginning of the change process is continually shifted without explanation, employees will lose confidence in the change process and they will not share management vision. II.3 Lack of trust In an environment where there is a lack to believe, that there will be sinister motive for the change. Furthermore managers who do not trust their employees will not allow employees participation in the change process even when it is necessary. So lack of trust is another important factor of resistance to change. So these are the main resistance to change in the Corus Company. From the above reasons employees of the Corus Company did not accept the changes. Directly or indirectly barriers make many problems in the company and also it affects whole companys activity. The company also had a long term service experience with experienced employees, but they had lower productivity. For increasing productivity the company add changes and gaining more rewards rather than newer employee. Corus felt that this was an area that needed major changes, so company were suitably rewarded to the employee for higher output. 3. Analyse the approaches Corus used to overcome these barriers. Changes are an inevitable factor in any organisation. The effective and challenged leaders and management can manage changes, adopting new technology, new innovations etc Yet as inevitable as change may be, it is just as inevitable that there will also be individuals within this organisations who reject any major changes or innovations to their workplace. The barrier shows the efficiency of a company or organisation. Barriers make many problems in the company, but if a company manages theses problems, they can run a business very successfully. Some strategies which can be used to overcome this resistance to change. For example, CSP U.K. The Corus Company faced many problems like cultural issue, social issue, economical factors, habit of employees, fear of unknown, limited forces changes etc But the Corus Company overcome the barriers very well, and we can see how Corus Company overcomes the barriers. There are five tactics have been suggested for use by change agents in dealing with resistance to change in the Corus company U.K Communication There are two branches of communication, which are communication internally, within the organisation between employees and management and externally between the organisation and suppliers and customers. Organisations that fail to communicate with their customers and suppliers, changes that are in effect can face disastrous consequences. For increasing communication skills the Corus Company introduce new programme The Journey. According to this programme the employees increase their direct and indirect communication, for example they provide weekly newsletters and workshops etc Participation Where the initiators do not have all the information they need to design the change and where others have considerable power to resist. When employees are involved in the change effort they are more likely to busy into change rather than resist it. This approach is likely to lower resistance and those who merely acquiesce to change. For example, from the start it was important to the Corus Company to share with employees what might happen to the business if it is did not change. Corus give more important to their employees, also getting everyone to take ownership of the new values by physically signing up to the programme. After that the employee more involved in decision making, works etc and also their experience are recognised. So with the good participation the company can overcome the barriers. Building emotional commitment Today talent management is the key imperative, making employee commitment more important than other. The commitment makes a positive energy inside and outside the business organisation. Research on middle managers has shown that when managers or employees have emotional commitment to change, they favour the status quo and resist it. For building emotional commitment the Corus Company U.K provide many more programs. Corus provide ownership to their employee. It may more involve in decision making and their contributions. With the help of emotional commitment programme the Corus Company overcome the barriers of change. Implementing changes fairly The management seen that the change as positively. But the employees take those changes as negatively. So if a company introduce new changes of their company at the same time they think how to overcome the barriers. For example, in 2005 the Corus Company make a programme for overcome the barriers of change, and also increase employee morale. Around 150 workshops were held to spread the messages. Fortnightly newspaper clarified these values and repeated the key messages through articles on various activities, such as employees taking part in the redesigning of a control room to improve layout and safety. Billboards, intranet, video programmes and most of all, direct one-to-one conversations all reinforced the messages. And also 1500 senior managers were invited to the millennium Stadium in Cardiff. This programme is impressive venue raised expectations. However, they were served cold tea and give a presentation on a ripped projector screen. So these activities show the implementing ch anges of Corus Company. Selecting people Research suggests that to ability to easily accept and adapt is change is related to personality. Some people simply have more positive attitude towards them self, are willing to take risk and are flexible in their behaviour. Another study found that selecting people based on a resistance to change scale worked welling winnowing out those who tended to react emotionally to change or to be rigid. For example, the Corus group arrange many programmes for increasing working mentality of the employees. The journey also raised important questions about how the company managed key issue, such as alcohol or drug misuse. For keep this thing the company makes, all working sites are alcohol free. Understandably, before the change programme, any one offending in this way was likely to face disciplinary action and this is still the case in most working environment. As a result in over fifty employees that previously would have lost their jobs being retained in work. These points said that, how the Corus company overcome the barriers to change. In generally, the first key technique to overcome the resistance the barriers is that to work closely with employees. Employees are the main part of a business, so the management make creative and helpful ideas for their employees otherwise company lost their co-ordination power, employee morale, unity between employees and management. For increasing the self confidence of the employee, the company provide verity programs. In these types of programs Corus company overcome the barriers to change. 4. Evaluate the effectiveness of the change programme so far. The changes can make challenges in the world. In the same way without challenges there is no change. Significant organizational change occurs, for example, when an organization changes its overall strategy for success, adds or removes a major section or practice, and/or wants to change the very nature by which it operates. It also occurs when an organization evolves through various life cycles, just like people must successfully evolve through life cycles. For organizations to develop, they often must undergo significant change at various points in their development. Leaders and managers continually make efforts to accomplish successful and significant change its inherent in their jobs. Some are very good at this effort, while others continually struggle and fail. Thats often the difference between people who thrive in their roles and those that get shuttled around from job to job, ultimately settling into a role where theyre frustrated and ineffective. There are many schools with educational programs about organizations, business, leadership and management. Unfortunately, there still are not enough schools with programs about how to analyze organizations, identify critically important priorities to address and then undertake successful and significant change to address those priorities. Now we are going to evaluate the effectiveness of the change in the Corus Company. Corus Company was formed in 1999 when the former British steel plc merged with the Dutch company. Now the Corus Company is subsidiary of Indian owned Tata Group. In 1999 Corus has three operating divisions and 40,000employees in world wide. Corus aims to be a leader in the steel industry by providing better products, higher quality customer service and better value for money than its rivals. In 2005 CSP UK introduced a cultural plan for change called The Journey. The journey change programme at Corus Strip Products contributes to sustainability for the business. By facing up to its internal weakness, CSP has improved efficiency, increased output, lowered costs and reduced waste in an increasingly competitive steel market. This has enabled the business not just to survive but also to grow even during the economic recession of 2008 and 2009. Thanks to the Journey programme, CSP UK expects to reduce costs for the 2009/10 financial year by around  £250 million. To make sure that actions delivered results, Corus established clear targets and standards. After the journey Corus Company achieve their target. The key performance indicators are given below; -: Increased their production capacity from 4.5% to 5 million tonnes -: They reduce 20% of cost of production -: 5000 employees have signed up to the values and beliefs of the business -: Another outcome is reduction in absenteeism -: The measurable improvements in levels of quality and services for customers -: New outcome changes have increased new safety terms -: Emissions of carbon dioxide has reduced by 10%, so CSP UK exceeds Govt. Standards -: As the results of measurable improvements company make challenges in the local community For achieving company values and targets, all individuals, departments are engaged very well. This journey helps to enable further improvement of Corus Company. Individuals, teams and departments all support the improvement culture and are more engaged and committed to achieving company values and targets. This culture shift is of critical value as it will enable further improvement. Corus has implemented top-level security with controlled access for the 5000+ vehicles which enter the Corus site each day. This provides a new enhanced entry experience for employees, contractors and suppliers and demonstrates that Corus Strip Products is now seen as an organisation that is proud of itself. As a men, institution, organisation or a company as if everybody looking for a change. Because we need changes. If they fail to do so they may be left behind by the competition. change management at CPS (Corus Strip Products) UK involved bringing the issues out into the open, confronting barriers to change, winning the commitment, provide moral support to the employees, provide better and effective plan for change an also keep the internal and external relationship to the customers. The journey has helped CSP UK to get a new face in the business field. After the programme employees get more morale power from the top level management, as the result they more attached with their work. The result of the change management programme shows that, the Corus is a sustainable company and it can continue to make profits in spite of the recession. In these things said that the effectiveness of the change programme in the Corus company UK. When the Corus Company introduced new changes in their company, at that time the employee did not accept the changes in their own individual, group and social reasons. But the company overcome the resistance of change very well. This is show that the change may challenge peoples. It may even be seen as a threat. Which company make it as a challenge; they must be adopting the changes in their organisation. Word count- 3888

Thomas Jefferson Essay examples -- Biographies American Presidents Pap

Thomas Jefferson The third president of the United States, a diplomat, statesman, architect, scientist, and philosopher, Thomas Jefferson is one of the most eminent figures in American history. No leader in the period of the American Enlightenment was as articulate, wise, or conscious of the implications and consequences of a free society as Thomas Jefferson. Thomas Jefferson was born on April 13, 1743, at Shadwell, a tobacco plantation in Virginia. His father, Peter Jefferson, was a self-made success, and although uneducated he was a very intelligent man. His mother, Jane Randolph was a member of one of the most distinguished families in Virginia . Peter Jefferson died when Thomas was 14 and left him valuable lands and property. Denied a formal education himself, he directed that his son be given complete classical training. He studied with Reverend Mr. Maury, a classical scholar, for two years and in 1760 he attended William and Mary College. After graduating from William and Mary in 1762, Jefferson studied law for five years under George Wythe. In January of 1772, he married Martha Wayles Skelton and established a residence at Monticello. When they moved to Monticello, only a small one room building was completed. Jefferson was thirty when he began his political career. He was elected to the Virginia House of Burgess in 1769, where his first action was an unsuccessful bill allowing owners to free their slaves. The impending crisis in British-Colonial relations overshadowed routine affairs of legislature. In 1774, the first of the Intolerable Acts closed the port of Boston until Massachusetts paid for the Boston Tea Party of the preceding year. Jefferson and other younger members of the Virgini... ...ound it very interesting that of all the accomplishments that Jefferson listed on his headstone he apparently did not think it important enough to mention that he had been twice elected and served as president of the United States. Bibliography Daugherty, Sonia. Thomas Jefferson: Fighter for Freedom and Human Rights. New York: Frederick Ungar Publishing Company, 1961. Koch, Adrienne, and William Peden. The Life and Selected Writings Of Thomas Jefferson. New York: Random House Publishers, 1993. McLaughlin, Jack. Jefferson and Monticello The Biography Of A Builder. 1st ed. New York: Henry Holt and Company Publishers, 1988. Randall, Willard Sterne. Thomas Jefferson A Life. 1st ed. New York: Henry Holt and Company Publishers, 1993. Smith, Page. Jefferson A Revealing Biography. New York: American Heritage Publishing Company, 1976.

Outsiders in Brave New World Essay

Outsiders are a very common theme in the novel Brave New World by Aldous Huxley. Many characters show traits of an outsider. John is one character who fits the bill. He is the ultimate outsider. Other outsiders in the book are Bernard and Linda. All of these characters have traits that make it difficult for them to â€Å"fit in† to the society of the New World. They don’t fit in a conforming society. These three characters are perfect examples of outsiders in Brave New World. Bernard is an outsider who doesn’t want to be an outsider. He wants more than anything to fit in, and when he does, he takes advantage of it. He is physically smaller than the other Alphas. Other Alphas think that a â€Å"gamma put alcohol in his blood surrogate† when he was a baby, which is why Bernard never fully developed physically (Huxley, 46). He also â€Å"spends most of his time by himself – alone† (Huxley, 45). The other Alphas don’t really want to be around him. Bernard has one friend, Helmholtz Watson, who is also an outsider. Everyone in the beginning of the book views Bernard as an outsider. When Lenina tells her friend Fanny about being interested in Bernard, she â€Å"look[s] startled† and strongly disapproves of the idea because of Bernard’s â€Å"reputation† (Huxley, 44). People don’t accept his differences because they are brainwashed to think that everyone who is different doesn’t belong in their â€Å"perfect† society. Bernard later starts to fit in to society because of his newfound popularity after bringing John back from the Reservation. He begins to conform because deep down all he wants to do is fit in. He throws a party and is all of the sudden the most popular kid around. He really enjoys his newfound popularity. His sudden change in attitude shows how shallow he is. He disapproves of the society in the New World because they didn’t accept him in the beginning. When they accept him, he likes the society which shows how hypocritical he is. John’s mother, Linda, is another classic example of an outcast in Brave New World. First of all, she had a child, which is unheard of in their society. People in the New World are shocked when they learn of the child. The word â€Å"mother† alone â€Å"made Lenina look uncomfortable† (Huxley, 118). The idea of a family disgusts the citizens of the New World and she is definitely viewed as an outsider for having one. Another reason Linda isn’t accepted is the fact that she aged. When Lenina first sees Linda, she is disgusted at â€Å"all the lines on her face† and she cringes at the sight of â€Å"the wrinkles† and her â€Å"sagging cheeks, with those purple blotches† (Huxley, 119). The citizens are not used to old people. Lenina does not know that this was the natural aging process. Linda is also viewed as an outsider on the Indian Reservation. She is used to the New World, and when she first arrives in the Indian Reservation, she is viewed as different. She is used to sleeping with many men, so when she â€Å"had people in the ordinary way, the others [thought she was] wicked† (Huxley, 121). The women who lived on the reservation hate her deeply. She becomes an outsider on the Reservation. Linda is a fitting example of an outsider in the book because she aged, she has a kid, and she lived on the Indian Reservation with the same morals as the people from the New World. Lastly, the ultimate example of an outsider is John. He is an outsider in both the Indian Reservation and the New World. He is a â€Å"stranger in the reservation,† because he was born of a woman from the New World and his skin was much more pale than the others (Huxley, 118). He is an outsider in the New World as well because he is a â€Å"Savage† from the Indian Reservation. He does not live by the same moral code as the other citizens of the New World. He wants to leave the New World. He goes to the controller at one point and asks if he â€Å"mightn’t go to the islands with† Helmholtz and Bernard (Huxley, 242). He does not fit into the New World and he does not agree with the morals they lived by. He is searching for truth, which is a foreign idea to the citizens of the New World. He ends up spending his time alone, because he does not like the people of the New World. His wish to be alone is the reason why he wants to go to the islands. He wants to be anywhere else, â€Å"So long as [he] can be alone† (Huxley, 243). He does not conform to the society because he had grown up naturally, without being brainwashed by the government. In conclusion, John is the textbook example of an outsider in the book because no matter where he is, he never fits in. These three characters are great examples of outsiders in Brave New World. Outsiders are a very common theme in the book, and John, Linda, and Bernard are all characters who display traits of people who are different. Because they do not conform to the societies they live in, they become outcasts. Without these traits, this novel would not have much of a story.

An Analysis of George Orwell’s Essay Why I Write Essay

George Orwell and Joan Didion, in their essay, â€Å"Why I Write,† imply that writing has affected each author to abdicate adversity and to accept failure. Orwell and Didion support their implications by explaining how each author attempted to embrace the abstract ideas in writing, but learned to view themselves as mediocre writers, neither good nor bad, whose self-reflection in writing produced a solemn atmosphere. Their purpose is to educate the reader on relevant motives and authenticity associated with writing to help them conceive a profound piece of work through self-reflection. Both authors establish a formal but moderately depressing tone, appealing to young Americans who hope to become writers. George Orwell, in the essay, â€Å"Why I Write† utilizes the rhetorical strategy of explanation in order to effectively deliver his message to the attending audience. Orwell, at first, introduces a statement about his childhood and his ambitious goals to become an inspiring writer. Suffering from depression and solitude during his adolescent years, Orwell often constructed solemn pieces of literature in order to reflect upon his current lifestyle. This idea of self-reflection assisted Orwell in becoming an exalt writer. Through exemplification, Orwell introduced the â€Å"four great motives for writing.† Orwell reflects upon the subject of sheer egotism, arguing that writers often write to be remembered. The author further elaborates on this idea, stating that serious writers care more about personal self-reflection than making money. In the motive of aesthetic enthusiasm, Orwell views himself as a moderate writer, illustrating how writers make their writing sound and look good by appreciating the aesthetics. The author eventually provides an  example for these motives, by appealing to the pathos in his Spanish-civil war poem, often concentrating on emotion and expressing remorse. Through explanation, George Orwell was able to effectively deliver his message to the attending audience. Joan didion, in the essay â€Å"Why I write,† utilizes the rhetorical strategy of explanation to appeal to her audience. Joan introduces her essay with the topic of self-reflection, by illustrating the act of saying I. In addition, Joan elaborates on this idea of self-reflection, explaining how writing allowed her to create a mind of abstract ideas. Similar to Orwell, Joan experienced several obstacles that impeded her writing. The author focuses on a particular issue, in which Didion became distracted while writing. The author reflects upon this idea, by providing an example of how her attention diverted simply to a â€Å"flowering pear outside her window† or the â€Å"lights on in the Bevatron† while writing at Berkley. Didion additionally conveys her attitude towards these distractions, often wondering why such events occur. As a result, Joan often ponders upon the abstract ideas in order to enhance her writing. Through the use of explanation, Joan didion was able to effectively deliver her message to the attending audience. George Orwell and Joan didion, in their why I write, employ the rhetorical strategy of explanation in order effectively attend to their audience. Though each author provided examples in order to support their implication, their appeals to pathos and emphasis on pondering the abstract ideas in writing further attracted their audience.

Corporate Financial Management Lecturer’s Guide

CFML_A01v3. QXD 8/6/08 3:51 PM Page 1 Lecturer’s Guide Corporate Financial Management Fourth edition Glen Arnold For further lecturer material please visit: www. pearsoned. co. uk/arnold ISBN 978-0-273-71064-6  © Pearson Education Limited 2008 Lecturers adopting the main text are permitted to download and copy this guide as required. CFML_A01v3. QXD 8/6/08 3:51 PM Page 2 Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies around the world Visit us on the World Wide Web at: www. pearsoned. co. uk ––––––––––––––––––––––––––––––––––– First published under the Financial TimesPitman Publishing imprint in 1998 Second edition published 2002 Third edition published 2005 Fourth edition published 2008  © Financial Times Professional Limited 1998  © Pearson Education Limited 2002, 2005, 2008 The right of Glen Arnold to be identified as author of this Work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. ISBN-978-0-273-71064-6 All rights reserved. Permission is hereby given for the material in this publication to be reproduced for OHP transparencies and student handouts, without express permission of the Publishers, for educational purposes only.In all other cases, no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without either the prior written permission of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd. , Saffron House, 6-10 Kirby Street, London EC1N 8TS. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the Publishers.CFML_A01v3. QXD 8/5/08 4:16 PM Page 3 CONTENTS Preface Location of answers to questions and problems SUPPLEMENTARY MATERIAL FOR CHAPTERS Chapter 1 The financial world Chapter 2 Project appraisal: Net present value and internal rate of return Chapter 3 Project appraisal: Cash flow and applications Chapter 4 The decision-making process for investment appraisal Chapter 5 Project appraisal: Capital rationing, taxation and inflation Chapter 6 Risk and project appraisal Chapter 7 Portfolio theory Chapter 8 The capital asset pricing model and multi-factor models Chapter 9 Stock markets Chapter 10 Raising equity capitalChapter 11 Long-term debt finance Chapter 12 Short-term and medium-term finance Chapter 13 Treasury and working capital management Chapter 14 Stock market efficiency Chapter 15 Value management Chapter 16 Strategy and value Chapter 17 Value-creat ion metrics Chapter 18 Entire firm value measurement Chapter 19 The cost of capital Chapter 20 Valuing shares Chapter 21 Capital structure Chapter 22 Dividend policy Chapter 23 Mergers Chapter 24 Derivatives Chapter 25 Managing exchange-rate risk  © Pearson Education Limited 2008 5 6 7 10 14 20 24 29 33 38 40 43 47 51 54 58 59 64 66 72 74 77 81 84 86 91 96 3 CFML_A01v3.QXD 8/5/08 4:16 PM Page 4 Supporting resources Visit www. pearsoned. co. uk/arnold to find valuable online resources Companion Website for students ? Learning objectives for each chapter ? Multiple-choice questions with instant feedback to help test your learning ? Weblinks to relevant, specific Internet resources to facilitate in-depth independent research ? A wide selection of FT articles, additional to those found in the book, to provide real-world examples of financial decision making in practice ? Interactive online flashcards that allow the reader to check definitions against the key terms during revision Sear chable online glossary For instructors ? Complete, downloadable Instructor’s Manual including answers for all question material in the book ? A brand new set of over 800 PowerPoint slides that can be downloaded and used as OHTs Also: The regularly maintained Companion Website provides the following features: ? Search tool to help locate specific items of content ? E-mail results and profile tools to send results of quizzes to instructors ? Online help and support to assist with website usage and troubleshooting For more information please contact your local Pearson Education sales representative or visit www. earsoned. co. uk/arnold CFML_A01v3. QXD 8/5/08 4:16 PM Page 5 PREFACE This Guide is designed to assist lecturers and tutors using Corporate Financial Management fourth edition. Supplementary material for chapters For each chapter: †¢ The learning outcomes are outlined. †¢ Key points and concepts are listed. †¢ Solutions to selected numerical problems (thos e marked with an asterisk in the main book) are provided. Note that there is often more than one possible correct solution to a problem. Different answers, which nevertheless follow the logic of the argument presented in the text, may be acceptable.Overhead projector transparency masters Also available on the website in PowerPoint ® for downloading are over 800 selected figures, tables and key points reproduced in a form suitable for creating overhead projector transparency masters. These are arranged in the order in which they appear in Corporate Financial Management. The learning objectives and summary points from the chapters are also included. Glen Arnold  © Pearson Education Limited 2008 5 CFML_A01v3. QXD 8/5/08 4:16 PM Page 6 LOCATION OF ANSWERS TO QUESTIONS AND PROBLEMS (No answers given to those in final column)Chapter No Answered in Appendix VII Answered in Lecturer’s Guide 1 Essay answer required (see text) All (see note in Appendix VII) 2 1, 2, 4, 5, 6 3, 7 3 1 , 2, 3, 6, 9, 11, 13, 15 4, 5, 7, 8, 10, 12, 14 4 1, 2, 4, 5 3 5 1, 2, 3, 5, 6, 9, 10 4, 7, 8 6 1, 4, 5, 6, 7, 8, 9, 10, 11 2, 3, 12 7 1, 2, 3, 7, 8, 9, 10, 11, 12, 13, 15 4, 5, 6, 14a, b, c 8 1, 3, 4, 5, 7, 8, 9, 10 6, 7, 8, 9 14d 2, 6, 11 9 1–11 10 12 8 1–7, 9–11, 13–19 11 1, 2, 3, 4, 5, 6, 10, 11, 13, 16 7 8, 9, 12, 14, 15, 17–20 12 1, 2, 4, 9, 10, 11 5, 12 3, 6, 7, 8, 13, 14, 15 13 1, 4, 5, 7, 9, 10 3a, 6, 8, 23, 25a , 3b, 11, 12, 13–22, 24, 25b, 25c 14 2 15 8, 9 1, 3–17 7, 10 16 1–6 1–4 17 1, 5, 6, 7 18 1, 2 19 2, 3 1 20 3, 4, 5, 6, 7, 9 8, 10 1, 2 21 2, 3, 6a, 9 1 4, 5, 6b, 7, 8 22 4, 5, 8 23 6 1, 3, 4, 5 2, 7, 8, 9 24 1, 2, 3, 4, 5, 7, 10 6, 8, 9 11, 12, 13 25 1, 2, 7, 8a, 10, 11 4, 9 3, 4b, 5, 6, 8b 6 2, 3, 4, 4a 8 1, 2, 3, 4, 7  © Pearson Education Limited 2008 CFML_CH01v3. QXD 29/7/08 17:25 Page 7 SUPPLEMENTARY MATERIAL FOR CHAPTERS Chapter 1 THE FINANCIAL WORLD L EARNING OUTCOMES It is no good learning mathe matical techniques and theory if you lack an overview of what finance is about.At the end of this chapter the reader will have a balanced perspective on the purpose and value of the finance function, at both the corporate and national level. More specifically, the reader should be able to:  ¦ describe alternative views on the purpose of the business and show the importance to any organisation of clarity on this point;  ¦ describe the impact of the divorce of corporate ownership from day-to-day managerial control;  ¦ explain the role of the financial manager;  ¦ detail the value of financial intermediaries;  ¦ show an appreciation of the function of the major financial institutions and markets. K EY POINTS AND CONCEPTS Firms should clearly define the objective of the enterprise to provide a focus for decision making.  ¦ Sound financial management is necessary for the achievement of all stakeholder goals.  ¦ Some stakeholders will have their returns satisfied – gi ven just enough to make their contribution. One (or more) group(s) will have their returns maximised – given any surplus after all others have been satisfied.  ¦ The assumed objective of the firm for finance is to maximise shareholder wealth. Reasons: – practical, a single objective leads to clearer decisions; – the contractual theory; – survival in a competitive world; it is better for society; – counters the tendency of managers to pursue goals for their own benefit; – they own the firm.  ¦ Maximising shareholder wealth is maximising purchasing power or maximising the flow of discounted cash flow to shareholders over a long time horizon.  ¦ Profit maximisation is not the same as shareholder wealth maximisation. Some factors a profit comparison does not allow for are: – future prospects; – risk; – accounting problems;  © Pearson Education Limited 2008 7 CFML_CH01v3. QXD 29/7/08 17:25 Page 8 Glen Arnold, Corporat e Financial Management Lecturer’s Guide, 4th edition – communication; – additional capital. Corporate governance. Large corporations usually have a separation of ownership and control. This may lead to managerialism where the agent (the managers) take decisions primarily with their interests in mind rather than those of the principals (the shareholders). This is a principal-agent problem. Some solutions: – link managerial rewards to shareholder wealth improvement; – sackings; – selling shares and the takeover threat; – corporate governance regulation; – improve information flow.  ¦ The efficiency of production and the well-being of consumers can be improved with the introduction of money to a barter economy. Financial institutions and markets encourage growth and progress by mobilising savings and encouraging investment.  ¦ Financial managers contribute to firms’ success primarily through investment and finance decis ions. Their knowledge of financial markets, investment appraisal methods, treasury and risk management techniques are vital for company growth and stability.  ¦ Financial institutions encourage the flow of saving into investment by acting as brokers and asset transformers, thus alleviating the conflict of preferences between the primary investors (households) and the ultimate borrowers (firms). Asset transformation is the creation of an intermediate security with characteristics appealing to the primary investor to attract funds, which are then made available to the ultimate borrower in a form appropriate to them. Types of asset transformation: – risk transformation; – maturity transformation; – volume transformation.  ¦ Intermediaries are able to transform assets and encourage the flow of funds because of their economies of scale vis-a-vis the individual investor: – efficiencies in gathering information; – risk spreading; – transaction costs.  ¦The secondary markets in financial securities encourage investment by enabling investor liquidity (being able to sell quickly and cheaply to another investor) while providing the firm with long-term funds.  ¦ The financial services sector has grown to be of great economic significance in the UK. Reasons: – high income elasticity; – international comparative advantage.  ¦ The financial sector has shown remarkable dynamism, innovation and adaptability over the last three decades. Deregulation, new technology, globalisation and the rapid development of new financial products have characterised this sector. Banking sector: – Retail banks – high-volume and low-value business. – Wholesale banks – low-volume and high-value business. Mostly fee based. – International banks – mostly Eurocurrency transactions. – Building societies – still primarily small deposits aggregated for mortgage lending. – Fina nce houses – hire purchase, leasing, factoring. 8  © Pearson Education Limited 2008 CFML_CH01v3. QXD 29/7/08 17:25 Page 9 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition  ¦ Long-term savings institutions: – Pension funds – major investors in financial assets. Insurance funds – life assurance and endowment policies provide large investment funds.  ¦ The risk spreaders: – Unit trusts – genuine trusts which are open-ended investment vehicles. – Investment trusts – companies which invest in other companies’ financial securities, particularly shares. – Open-ended investment companies (OEICs) – a hybrid between unit and investment trusts.  ¦ The risk takers: – Private equity funds – invest in companies not quoted on a stock exchange. – Hedge funds – wide variety of investment or speculative strategies outside regulators’ control.  ¦ The markets: The money markets are short-term wholesale lending and/or borrowing markets. – The bond markets deal in long-term bond debt issued by corporations, governments, local authorities and so on, and usually have a secondary market. – The foreign exchange market – one currency is exchanged for another. – The share market – primary and secondary trading in companies’ shares takes place on the Official List of the London Stock Exchange, techMARK and the Alternative Investment Market. – The derivatives market – LIFFE (Euronext. liffe) dominates the ‘exchange-traded’ derivatives market in options and futures.However there is a flourishing over-the-counter market. There are no numerical questions in this chapter; answers may be found from reading the text.  © Pearson Education Limited 2008 9 CFML_CH02v3. QXD 29/7/08 17:26 Page 10 Chapter 2 PROJECT APPRAISAL: NET PRESENT VALUE AND INTERNAL RATE OF RETURN L EARNING OUTCOMES By the end of the chapter the student should be able to demonstrate an understanding of the fundamental theoretical justifications for using discounted cash flow techniques in analysing major investment decisions, based on the concepts of the time value of money and the opportunity cost of capital.More specifically the student should be able to:  ¦ calculate net present value and internal rate of return;  ¦ show an appreciation of the relationship between net present value and internal rate of return;  ¦ describe and explain at least two potential problems that can arise with internal rate of return in specific circumstances;  ¦ demonstrate awareness of the propensity for management to favour a percentage measure of investment performance and be able to use the modified internal rate of return. KEY POINTS AND CONCEPTS  ¦ Time value of money has three component parts each requiring compensation for a delay in the receipt of cash: the pure time value, or impatience to consume, – inflation, – risk.  ¦ Opportunity cost of capital is the yield forgone on the best available investment alternative – the risk level of the alternative being the same as for the project under consideration.  ¦ Taking account of the time value of money and opportunity cost of capital in project appraisal leads to discounted cash flow analysis (DCF).  ¦ Net present value (NPV) is the present value of the future cash flows after netting out the initial cash flow. Present values are achieved by discounting at the opportunity cost of capital.NPV = CF0 +  ¦ (1 + k)2 + †¦ CFn (1 + k)n 0 accept 0 reject CF1 1+r + CF2 (1 + r)2 + †¦ CFn (1 + r)n =0 The internal rate of return decision rule is: IRR IRR 10 CF2 Internal rate of return (IRR) is the discount rate which, when applied to the cash flows of a project, results in a zero net present value. It is an ‘r’ which results in the following formula being true: CF0 +  ¦ 1+k + Th e net present value decision rules are: NPV NPV  ¦ CF1 opportunity cost of capital – accept opportunity cost of capital – reject  © Pearson Education Limited 2008 CFML_CH02v3. QXD 29/7/08 17:26 Page 11Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition  ¦ IRR is poor at handling situations of unconventional cash flows. Multiple solutions can be the result.  ¦ There are circumstances when IRR ranks one project higher than another, whereas NPV ranks the projects in the opposite order. This ranking problem becomes an important issue in situations of mutual exclusivity.  ¦ The IRR decision rule is reversed for financing-type decisions.  ¦ NPV measures in absolute amounts of money. IRR is a percentage measure.  ¦ IRR assumes that intra-project cash flows can be invested at a rate of return equal to the IRR.This biases the IRR calculation.  ¦ If a percentage measure is required, perhaps for communication within an organisation, th en the modified internal rate of return (MIRR) is to be preferred to the IRR. ANSWERS TO SELECTED QUESTIONS 3 Confused plc a Project C IRRs at 12. 1% and 286%. See Fig. 2. 1. NPV + 12. 1 – 286 Discount rate Fig. 2. 1 Project D No solution using IRR. See Fig. 2. 2. + NPV Discount rate – Fig. 2. 2 b This problem illustrates two disadvantages of the IRR method. In the case of project C multiple solutions are possible, given the non-conventional cash flow.In the case of project D there is no solution, no IRR where NPV = 0. c NPV Project C: +? 646 Project D: –? 200 Using NPV the accept/reject decision is straightforward. Project C is accepted and Project D is rejected.  © Pearson Education Limited 2008 11 CFML_CH02v3. QXD 29/7/08 17:26 Page 12 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition 7 Seddet International a Project A At 20%: –5,266 + 2,500 ? 2. 1065 = 0, ? IRR = 20% Project B At 7%: –8,000 + 10,000 ? 0. 8163 = +163 At 8%: –8,000 + 10,000 ? 0. 7938 = –62 IRR = 7 + 163 163 + 62 (8 – 7) = 7. 7% Project CAt 22%: –2,100 + 200 ? 0. 8197 + 2,900 ? 0. 6719 = +12. 45 At 23%: –2,100 + 200 ? 0. 8130 + 2,900 ? 0. 6610 = –20. 5 IRR = 22 + 12. 45 12. 45 + 20. 5 (23 – 22) = 22. 4% Project D At 16%: –1,975 + 1,600 ? 0. 8621 + 800 ? 0. 7432 = –1 ? IRR is slightly under 16%. The IRR exceeds the hurdle rate of 16% in the case of A and C. Therefore if all projects can be accepted these two should be undertaken. b Ranking under IRR: Project Project Project Project C A D B IRR 22. 4% 20% 16% 7. 7% best project c Project A –5,266 + 2,500 ? 2. 2459 = 349 Project B –8,000 + 10,000 ? 0. 6407 = –1,593 Project C 2,100 + 200 + 0. 8621 + 2,900 ? 0. 7432 = 228 Project D –1,975 + 1,600 ? 0. 8621 + 800 ? 0. 7432 = –1 12  © Pearson Education Limited 2008 CFML_CH02v3. QXD 29/7/08 17:26 Page 13 Glen Arnold, Corporate Financia l Management Lecturer’s Guide, 4th edition Ranking Project A Project C Project D Project B NPV 349 best project 228 –1 –1,593 Project A ranks higher than project C using NPV because it generates a larger surplus (value) over the required rate of return. NPV measures in absolute amounts of money and because project A is twice the size of project C it creates a greater NPV despite a lower IRR. This report should comment on the meaning of a positive or negative NPV expressed in everyday language. It should mention the time value of money and opportunity cost of capital and explain their meanings. Also the drawbacks of IRR should be discussed:  ¦ multiple solutions;  ¦ ranking problem – link with the contrast of a percentage-based measure and an absolute moneybased measure;  ¦ additivity not possible;  ¦ the reinvestment assumption is flawed.  © Pearson Education Limited 2008 13 CFML_CH03v3. QXD 29/7/08 17:26 Page 14 Chapter 3 PROJECT APPRAISAL: CAS H FLOW AND APPLICATIONS LEARNING OUTCOMESBy the end of this chapter the reader will be able to identify and apply relevant and incremental cash flows in net present value calculations. The reader will also be able to recognise and deal with sunk costs, incidental costs and allocated overheads and be able to employ this knowledge to the following:  ¦ the replacement decision/the replacement cycle;  ¦ the calculation of annual equivalent annuities;  ¦ the make or buy decision;  ¦ optimal timing of investment;  ¦ fluctuating output situations. KEY POINTS AND CONCEPTS  ¦ Raw data have to be checked for accuracy, reliability, timeliness, expense of collection, etc.  ¦Depreciation is not a cash flow and should be excluded.  ¦ Profit is a poor substitute for cash flow. For example, working capital adjustments may be needed to modify the profit figures for NPV analysis.  ¦ Analyse on the basis of incremental cash flows. That is, the difference between the cash flows arisin g if the project is implemented and the cash flows if the project is not implemented: – opportunity costs associated with, say, using an asset which has an alternative employment are relevant; – incidental effects, that is, cash flow effects throughout the organisation, should be considered along with the obvious direct effects; sunk costs – costs which will not change regardless of the decision to proceed are clearly irrelevant; – allocated overhead is a non-incremental cost and is irrelevant; – interest should not be double counted by both including interest as a cash flow and including it as an element in the discount rate.  ¦ The replacement decision is an example of the application of incremental cash flow analysis.  ¦ Annual equivalent annuities (AEA) can be employed to estimate the optimal replacement cycle for an asset under certain restrictive assumptions. The lowest common multiple (LCM) method is sometimes employed for short-lived as sets. Whether to repair the old machine or sell it and buy a new machine is a very common business dilemma. Incremental cash flow analysis helps us to solve these types of problems. Other applications include the timing of projects, the issue of fluctuating output and the make or buy decision. 14  © Pearson Education Limited 2008 CFML_CH03v3. QXD 29/7/08 17:26 Page 15 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition A NSWERS TO SELECTED QUESTIONS 4 Mercia plc a Proposal 1 Consultant’s fee – sunk cost Central overhead – irrelevant Depreciation – irrelevant Time (years) ?000s 0Earthmoving Construction Ticket sales Operational costs Council Senior management Opportunity cost Cash flows –1,650 3>? 2 –100 –1,650 Discounted Cash flows 1 –150 –1,400 –200 +600 –100 –100 –50 +600 –100 –50 +150 0 +450 150 (1. 1)2 450/0. 1 (1. 1)2 + NPV = + ? 2. 193m Propos al 2 Central overhead (? 70,000) – irrelevant Consultants fees (? 50,000) – sunk cost Time (years) ?000s 0 1 2 3 –100 5,000 –4,000 –400 –100 5,000 –4,000 –400 –100 Design & build Revenue Operating costs Equipment Executive Opportunity cost Sale of club –9,000 Cash flow –9,100 –100 Discounted cash flow –9,100 –100 1. 1 –100 +11,000 500 + 500 (1. 1)2 +11,500 + 11,500 (1. 1)3 NPV = –? 137,566 Recommendation: accept proposal 1 IRR Proposal 1: 20. 2% Proposal 2: 9. 4%  © Pearson Education Limited 2008 15 CFML_CH03v3. QXD 29/7/08 17:26 Page 16 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition 5 Mines International plc a Survey – sunk cost Time (years) ?m Profit (loss) Add depreciation Capital equipment Survey 0 1 2 3 4 5 0 0 –4. 75 –2. 1 0 –4. 75 0. 30 3. 9 2. 0 4. 7 2. 0 4. 7 2. 0 2. 9 2. 0 1. 5 0 0 0 2. 0 –2. 0 2. 0 2. 25 –0. 25 2. 25 2. 25 0 2. 25 1. 75 +0. 50 1. 75 0 +1. 75 0. 125 0. 125 0. 125 0. 10 0 –0. 25 0. 10 0 –0. 10 Debtor adjustment: Opening debtors Closing debtors Creditor adjustment Opening creditors Closing creditors 0 0. 15 +0. 15 Overheads Hire cost Cash reserves Government refund Cash flow Discounted cash flow 0. 2 0. 15 0. 10 0. 10 0. 125 –0. 05 +0. 025 0. 2 0. 2 –0. 1 0. 2 –1. 0 5. 125 0. 2 +1. 0 +0. 2 –5. 75 –5. 75 –6. 20 4. 05 6. 575 6. 9 8. 075 1. 85 –6. 20 + 4. 05 + 6. 575 + 6. 9 + 8. 075 + 1. 85 1. 12 (1. 12)2 (1. 12)3 (1. 12)4 (1. 12)5 (1. 12)5. 125 = –5. 75 – 5. 536 + 3. 229 + 4. 680 + 4. 385 + 4. 582 + 1. 035 = ? 6. 625m The maximum which MI should bid in the auction is ? . 625m. This additional cash outflow at time zero would result in a return of 12% being obtained. (Some students may time the final debtor and creditor payments at time 5. 25 as time 6. ) b IRR = 29. 4%. c Poin ts to be covered:  ¦ Time value of money.  ¦ Opportunity cost of money for a given risk class.  ¦ Sunk cost.  ¦ Treatment of depreciation.  ¦ Allocated overhead treatment.  ¦ Cash injections.  ¦ Hire cost – opportunity cost. Comparison of NPV with other project appraisal methods: Advantages over IRR: – measures in absolute amounts of money; – ranking problem; – multiple solution problem. 16 Pearson Education Limited 2008 CFML_CH03v3. QXD 29/7/08 17:26 Page 17 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition  ¦ Advantages over payback: – time value of money allowed for; – all cash flows considered; – cash flows within pay back period considered properly.  ¦ Advantages over ARR: – firm theoretical base, time value of money; – defined decision criteria. 7 Reds plc One-year cycle: Time (years) 0 1 –10,000 –12,000 8,000 – 4,000 NPV = –10,000  œ 4,000 ? 0. 9009 = –13,604 AEA = –13,604 0. 9009 = –? 15,100 Two-year cycle: Time (years) 0 1 2 –10,000 –12,000 –13,000 ,500 –6,500 NPV = –10,000 – 12,000 ? 0. 9009 – 6,500 ? 0. 8116 = –26,086 AEA = –26,086 1. 7125 = –? 15,233 Three-year cycle: Time (years) 0 1 2 3 –10,000 –12,000 –13,000 –14,000 3,500 –10,500 NPV = –10,000 – 12,000 ? 0. 9009 – 13,000 ? 0. 8116 – 10,500 ? 0. 7312 = –39,039 AEA = –39,039 2. 4437 = –? 15,975 Reds should replace the machinery on a one-year cycle.  © Pearson Education Limited 2008 17 CFML_CH03v3. QXD 29/7/08 17:26 Page 18 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition 8 Immediate replacement: Time (years) 0 1>? +4,000 –15,100 +4,000 –15,100 0. 11 = –? 133,273Replacement after one year: Time 0 + 2>? –2,000 –2,00 0 1 3,000 –15,100 0. 9009 – 15,100/0. 11 1. 11 3,000 ? = –? 122,966 Replacement after two years: Time 0 1 2 3>? –2,000 –1,000 +1,500 –15,100 –2,000 –1,000 ? 0. 9009 + 1,500 ? 0. 8116 –15,100/0. 11 (1. 11)2 = –? 113,097 Recommendation: Commence replacement cycle after two years. 10 Curt plc Incremental cash flows Time (years) 0 –70,000 –28,000 28,000 37,000 47,100 68,410 ? ? ? ? ? 0. 8621 0. 7432 0. 6407 0. 5523 0. 4761 2 3 4 5 0 –70,000 100,000 –80,000 –48,000 110,000 –82,000 121,000 –84,000 133,100 –86,000 146,410 –88,000 10,000 –70,000 Current cash flowsNew plan 1 –28,000 28,000 37,000 47,100 68,410 = = = = = = –70,000 –24,139 20,810 23,706 26,013 32,570 8,960 The positive incremental NPV indicates that acceptance of the proposal to manufacture in-house would add to shareholder wealth. 18  © Pearson Education Limited 200 8 CFML_CH03v3. QXD 29/7/08 17:26 Page 19 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition Other factors: some possibilities The relative bargaining strength of Curt and its supplier. Perhaps a search for another supplier would be wise. Perhaps it would be possible to negotiate a multi-year price agreement.Are there some other incidental effects Curt has not considered, e. g. factory space usage? 12 Netq plc Output per year: 1,000 ? 0. 3333 ? 2 1,000 ? 0. 3333 ? 0. 75 ? 2 1,000 ? 0. 3333 ? 0. 5 ? 2 = 667 500 333 1,500 Cost of annual output 1,500 ? ?4 = ? 6,000 PV = 6,000/0. 13 = ? 46,154 Both machines replaced: Annual costs 1,500 ? ?1. 80 = ? 2,700 PV = 14,000 + 2,700 0. 13 = ? 34,769 One machine is replaced: Old Output: first third of year second third of year last third of year New 333. 3 166. 7 0 500 333. 3 333. 3 333. 3 1,000 Annual costs 500 ? 4 + 1,000 ? 1. 8 = ? 3,800 PV = 7,000 + 3,800 = ? 6,231 0. 13 The lowest cost option is to replace both m achines. 14 Opti plc Costs One-year replacement: PV = 20,000 – 6,000/1. 1 = 14,545 AEA = 14,545/0. 9091 = 16,000 Two-year replacement: PV = 20,000 + 6,000/1. 1 – 1,000/(1. 1)2 = 24,629 AEA = 24,629/1. 7355 = 14,191 Three-year replacement: PV = 20,000 + 6,000/1. 1 + 8,000/(1. 1)2 + 4,000/(1. 1)3 = 35,072 AEA = 35,072/2. 4869 = 14,103 Four-year replacement: PV = 20,000 + 6,000/1. 1 + 8,000/(1. 1)2 + 10,000/(1. 1)3 + 10,000/(1. 1)4 = 46,410 AEA = 46,410/3. 1699 = 14,641 The optimal replacement cycle is 3 years.  © Pearson Education Limited 2008 9 CFML_CH04v3. QXD 29/7/08 17:27 Page 20 Chapter 4 THE DECISION-MAKING PROCESS FOR INVESTMENT APPRAISAL LEARNING OUTCOMES The main outcome expected from this chapter is that the reader is aware of both traditional and discounted cash flow investment appraisal techniques and the extent of their use. The reader should also be aware that these techniques are a small part of the overall capital-allocation planning process. The studen t is expected to gain knowledge of:  ¦ the empirical evidence on techniques used;  ¦ the calculation of payback, discounted payback and accounting rate of return (ARR);