Goodness of the Service Level and Current Structure Assignment - 22

Goodness of the Service Level and Current Structure - Assignment Example However, equation 2 and 4 only hold if y= 0, for non-negative values of x andy. Consequently, x= 4300 is the optimal number of vaccine doses that the facility can purchase for optimality. From the confidence interval formula for normal distribution, Z=(mean-Â µ)/(standard error) And mean-Â µ = zero and this means that Z is not defined. As Z approaches infinity, however, the probability of failure approaches zero. Therefore, at 4300 doses, the facility has a zero percent probability of failure. The optimal number of vaccines and chance of running out of vaccines Optimal profitability occurs when total cost equals total expenditure for generating the cost. Assuming that an organization purchases z doses of the vaccine and sells x doses and returns y doses to the Centers for Disease Control and Prevention, the following are computations for the optimal number of vaccine doses and the chance of scarcity. Cost of vaccine= 4z= 4(x+y) Revenue= 15x+ y, based on $ 15 sales price and $ 1 buy back price. Reduction to lower levels such as $ 7 per dose would motivate people into and increase a total number of used vaccines. A reasonable profit level would, therefore, be possible, and even higher levels attained due to a higher number of unit sales. Such a reduction in price would also promote quality of health by preventing flue (Thompson 1). A hold on the buy-back policy is likely to reduce facilities’ stock level and therefore limit the availability of vaccines. In addition, unused vaccines would lead to greater losses and prompt facilities to charge higher prices on sales. Consequently, holding the buy-back is likely to reduce demand for vaccines and increase the burden of the flue.

The Strategic Finance Of Nestle Management Essay

The Strategic Finance Of Nestle Management Essay Nestlà ©s case study provides various examples which demonstrate a link between concepts drawn from pre-requisite modules. In my opinion, the link between First Mover Advantage model clarified in Strategic Management and the concept of Merger Acquisition covered in Strategic Finance are the most interesting. Figure 1.1 provides evidence found through the combination of these two concepts. Figure 1.1: Link between FMA and MA Evidences In the 20th Century, Nestle expanded through a series of acquisitions Nestle enters markets early-before competitors Acquires local firms when good opportunities arise Local brand for local market (Customization) 2/3 of Nestlà ©s growth generated from acquisitions FMA to Polish market Nestlà ©s Acquisition of Goplana Strategic Finance (NarayananNanda, 2004) First Mover Advantage Strategic Management (Johnson et.al, 2008) Merger Acquisition First Mover advantage is defined as the benefits generated for a firm that breaks in new markets first (Johnson et.al, 2008). The aim is to build a strong and sustainable position within the market as a way to defend potential competitive newcomers. Regarding Nestlà ©, the company enters emerging markets early before prospective competitors in order to build a significant position within them (Case Study, 2011). Thus the company is able to respond to any potential economic and population growth within emerging markets as well as to any possible upcoming competition. Mergers Acquisitions are strategic components dealing with buying or combining different companies that can assist the company to a speedy growth and improve its financial performance especially in the long term (NarayananNanda, 2004). During the 20th century, Nestlà © has undertaken a number of mergers and acquisitions, most notably the acquisition of Maggi in 1947, and thus has achieved to extend its geographic presence and product line (Case Study, 2011). Nestlà ©s acquisition of Goplana, is an interesting example of how its activities link with the companys long-term strategy of achieving first mover advantage within the Polish market (Case Study, 2011). The company was aiming to rush its development inside the market and maintain its authority. As such, Nestlà © retained the local staff and management of the acquired company and carefully adjusted the Goplana product line to better fit local opportunities (Case Study, 2011). Overall, acquisitions have been an important function for Nestlà ©s growth (Cook et.al, 2003). Alongside the MA group, the firm uses people from the finance sector as to assist the financial analysis of MA process (Cullinan et.al, 2003). This shows a clear link between Nestlà ©s FMA strategy and its MA activities. The firm maintains local companies with regional staff in local markets as to better customize its performance by creating share value and local expertise. Significantly, the success of Nestlà © in growing local companies also depends on the management development programmes that Nestlà © uses in order to come closer and train its local managers (Case Study, 2011). The process of entry for a company influences its ability to create value. According to Rahman Bhattacharyya (2003), Nestlà © has benefited by acting as a first mover in emerging markets. In terms of business development, the company sometimes involves mergers and acquisition activities as a way to grow and create value. Moreover, the reasons behind the MA activities can vary according to expectations. These may be the economies of scale, speed of entry, shareholder expectations and so on (Johnson et.al, 2008). Mergers and acquisitions are considered as one of the most dynamic ways in which a firm can recombine assets to create value (AhernWeston, 2007). By being the first mover into a market it may hides some drawbacks. Hill Jones (2009) noted that first movers have to tolerate large costs of pioneering that later movers may not. Also first movers may fall into substantial mistakes and risks as they lack experience, where second movers can enjoy knowledge and improvements through first movers gaffes. Similarly, MA is a particularly stressful practice for people involved within the new corporate culture and structure that can create ambiguity, anxiety and antipathy amongst companys staff (Appelbaum et al 2000). Such a fact can destroy the organisations value. 2nd Question: Does it make sense for Nestlà © to focus its growth efforts on emerging markets? Why? According to the Case Study (2011), by the early 1990s Nestlà © realised that it faced important challenges in maintaining its rate of growth within the markets of Western Europe and North America. Therefore, the company has turned its attention to emerging markets for further growth. Rapoport (1994) stated that developed markets are in the saturated phase of their life cycle where the competition is becoming higher, creating the war of price and substitution. Due to the economic downturn in such markets, people incomes have been characterised as incomplete and thus consumers are becoming more price conscious. Additionally, population indexes show that the population growth rate has been stagnated in contrast with the emerging world which is expected to expand by the year 2015 (Delegge, 2009). Delegge (2009) stated that emerging market economies are growing at a faster pace than those in developed countries. Furthermore, the researcher indicates that due to the combination of the global recession and the downturn of real estate prices, residents of emerging markets are expected to outperform both American and European consumers in terms of spending dynamics. Thereby Nestlà © translated emerging markets as an opportunity of higher growth returns with the promise of significant market share in the long term. In order to maintain its growth rate, it does make absolute sense for Nestlà © to focus its growth efforts on emerging markets. Goldman Sachs introduced the BRIC acronym (Brazil, Russia, India and China) that refers to the countries which are estimated for the next decades to be at a better stage than the current developed markets (ONeilStupnytska, 2009). Furthermore, they announced the concept of the Next Eleven (N-11) countries such as Nigeria, Mexico and Turkey which have the potential of becoming along with BRICs, the worlds dynamic markets by 2032 (ONeilStupnytska, 2009). Nestlà © has already been active in developing economies but it is therefore slight in contrast with their rival company Unilever. Moreover, the US food drink report (2010) notes that even with the greatest exposure in such markets; Unilever has experienced negative average revenue. This was due to its poor business management and incorrect decisions made over the last five years. Nestlà ©s core competencies and capabilities can enable the company to continue performing in emerging markets. Nestlà © has the ability to create brands quickly and in a sustainable fashion with products such as Nescafe, which also give strong focus on RD which enables the company to generate greater profits (Datamonitor, 2010). The company has the unique strength to customize global products with the same quality standards based on customer needs in the local market. Also, the firm has unmatched geographic existence in the emerging markets and so the company has the flexibility to deal with circumstances that sometimes cannot be easily predicted (SinghChild-Villiers, 2010). Applying those distinctive competencies, Nestlà © can earn greater returns and gain a sustainable advantage over its competitors. Rahman Bhattacharyya (2003) supported that unique performance within emerging markets can offer differential advantages for a first mover company. Following a first mover strategy, Nestlà © has benefited in many emerging markets as it was the first company which offered differentiated affordable products in local markets (RahmanBhattacharyya, 2003). Nestlà © aims to build a substantial position by achieving successful customer perceptions. Moreover, as the market grows and income levels rise, Nestlà © can potentially benefit by being responsive in such possible situations. Nestlà © can also take advantage of location economies, which are created from performing a value creation activity in the best location possible (HillJones, 2009). For instance, Nestlà © has opened a new factory in Nigeria which was dedicated in Popularity Positioned Products (Nestle, 2011a). This enabled the company to achieve lower costs and therefore facilitated the company to customizing its products in terms of price and accessibility. Thus, by enduring in such location economies, Nestlà © can gain a competitive place in each single location. 3rd Question: What is the companys strategy with regard to business development in emerging markets? Does this strategy make sense? From an organisational perspective, what is required for this strategy to work effectively? Regarding the business development in emerging markets, Nestlà ©s strategy was to enter markets before competitors in order to get the first mover advantage. The company aims to build a significant position within the developing world and thus be able to understand and satisfy the requirements of local population. Nestlà © acquires local firms when valuable opportunities arise during the entry process of the company into new emerging markets. A good example is that of 1995 where Nestlà © acquired Rossia, one of the leaders of chocolate manufacturer in Russia (Nestle, 2009). Nestlà © realised the chances that have been offered from the opening of Russian market and the increase of income levels, by making this new investment. In addition, there are times when Nestlà © enters emerging markets by building its own infrastructure from scratch, such as in China. Considering such a method, the company enters markets where no actual competitors exist and thus creates its own paths as a way to establish a market presence. Nestlà ©s product portfolio includes a strong presence of numerous key brands which focus on developing local marques for their respective markets thereby escaping its global brands for these customers (Urde, 1999). Overall, the company owns 8500 brands under its organisational umbrella and less than 10% are registered in more than one country. As an alternative way of trying to force a product in a market, the company customizes its product based on the needs of the local consumer and focuses at the extent of achieving economies of scale. At the moment, Nestlà © follows the strategy of adaptation to local conditions by using its in house PPP (Popularity Position Products) method which offers affordable products of high quality to meet the needs of emerging consumers (Nestle, 2010b). In the long-term, Nestlà © is aiming to supply the whole region with various products in order to realize economies of scale. For instance, as part of its long term business development strategy in Middle East, Nestle has established a network of factories in five countries. According to Porters generic strategies figure 1, Nestlà © adopts focus/niche strategy which reduce company risks and focus its marketing efforts on a limited number of market segments (Eldring, 2009). By adopting such a strategy, the company aims to build a substantial position in these particular markets so as to gain a competitive advantage using product innovation and marketing activities. Due to the fact that these economies are growing at a fast pace, Nestlà © is able to escape such segments and can offer a wider variety of upscale products such as mineral water and prepared foodstuffs (Case Study, 2011). (Source: Adopted from: www.mindtools.com/media/Diagrams/GenericStrategies) The successful presence of Nestlà © within developing markets verifies that the implication of Nestlà ©s strategy has been correctly applied. The corporate structure that Nestlà © comprises is closely related with the idea that all markets are equally important. Lavelle (2004) mentioned that Nestlà ©s strategies originated from a particular point and are independently applied from its local units. In order for the strategy to work effectively, it is necessary for the company to consider the following issues. Firstly, the firm must have available resources to invest in RD as well as the fast and effective production of innovative products (Hitt et.al, 2009). Nestlà © has established 6 RD centres in emerging markets that provide the ability to launch new products quickly and efficiently (BulckeSingh, 2011; Bauer, 2011). In order for the company to maintain its advantages over the competition it is imperative to continue focusing and investing on its RD activities. Secondly, the company must ensure that products can be customized at the requirements of any local market. Using the PPP model, Nestlà © is able to offer its products based on the requirements of the emerging consumers. Finally, Nestlà © must continue focusing on long-term investments in order to sustain a competitive advantage within the emerging markets. 4th Question: Through your own research on NESTLE, identify appropriate performance indicators. Once you have gathered relevant data on these, undertake a performance analysis of the company over the last five years. What does the analysis tells you about the success or otherwise of the strategy adopted by the company? Key Performance Indicators can be described as the main companys parts that assist to define and evaluate the success of a strategy in which the business is involved (Eckerson, 2009).Obviously, companys performance indicators can differ according to the reasons that have been composed for. Performance Indicators can be defined using numerous models, one of which is the Balanced Scorecard. The concept involves both qualitative and quantitative measures which evaluate the performance regarding the strategy chosen (Johnson et.al, 2008). Figure 4.1 applies the concept of Balanced Scorecard for Nestlà ©; an analysis has been carried out and can be seen below. Figure 4.1: Nestlà ©s Balanced Scorecard Financial Sales EBIT Net Profit NESTLE To be recognised as the world leader in Nutrition, Health and Wellness, trusted by all its stakeholders To be the reference for financial performance in its industry Internal Business Employees Factories Customer PPP Customer Acquisition Learning Innovation GLOBE-NCE RD (Source: Adapted from Johnson et.al, 2008 www.nestle.com) Firstly, the financial perspective can help the company understand its shareholders perception. Nestlà ©s EBIT grew steadily in the past 5 year period from CHF 13302 million to CHF 16194m in the year 2010, a growth of 21.7% (Nestle, 2011c). Significantly, 2009s EBIT was reported at CHF 15699m, an increase of just 0.15%. Moreover, the relative sales figures grew from CHF 98458m in 2006 to CHF 109722m in 20010, dropping at CHF107618m in 2009 after a successful year in 2008 where sales were at CHF109908m (Nestle, 2011c). In addition, the net profit margins showed a dramatic growth over the last five years from CHF9197m in 2006 to CHF34233m in 2010. Such a significant increase of net profit was due to the disposal of 52% of Alcons outstanding capital, which increased the profit (as a percentage of sales) from 9.7% in 2008 to 31.2% in 2010 year (Nestle, 2011c). Secondly, an internal analysis makes it possible to identify the level of operational procedures of Nestlà ©. During the year 2006, Nestlà ©s workforce involved 265 000 people, a number that increased in the year 2008 to 283000. Throughout 2009, the company cut about 5000 jobs resulting in a 281000 person workforce for 2010 (Nestle, 2011b). In addition, the company in 2009 was operating 449 factories 30 less from the year 2006 (Nestle, 2007b; 2010a). With respect to the third perspective of Learning Innovation, Nestlà © seems to have a strong focus throughout the years. Taking into consideration Nestlà ©s product innovation, it can be seen that the company is aiming for a deeper scope within this area. In 2006, Nestlà © spent about CHF 1.7 billion for its RD with a further increase in the following years (Nestle, 2007b). According to Nestlà © (2010a) spends about 1.9% of its annual revenues on its RD program which is considered as one of the key drivers of growth. In addition, the company combines two programs, GLOBE and NCE, which enable the reduction of production waste. Through these models, Nestlà © has achieved CHF 1 billion in 2008 which has further increased its efficiencies to a CHF 1.5 billion saving in 2009 (Nestle, 2010a). Finally, the consumer perspective is related to how customers perceive Nestlà ©. This can be measured through Nestlà ©s PPP model which aims to focus on low-income consumers around the world (Nestle, 2010b). Within 2007, the PPP performance involved 37 countries while in 2008 this number almost doubled to 70, generating an organic growth of 27% (Nestle, 2008). In 2009, PPP achieved sales of CHF 8.8bn with an organic growth of 12.7% (Nestle, 2010b). As a final point, 2010s concept encompassed 90 countries with sales figures of CHF 11bn and a double digit growth (Bulcke, 2011) Overall, the analysis of such indicators shows that Nestlà © has been able to improve its performance over the last five years. Despite the crisis triggered in 2008, Nestlà © is actually steady on a financial and non-financial scale. It seems that the long term strategy generates positive results for the short term as well. Giving focus on customization of local markets through the PPP concept, the company builds strong roots for the future, particularly in emerging markets as there are high growth potentials. 5th Question: How would you describe Nestlà ©s strategic posture at the corporate level; is it a pursuing, a global strategy, a multi-domestic strategy, an international strategy or a transnational strategy? Multinational companies use four main primary strategic postures when competing in the international environment. These are illustrated in figure 5.1. Such strategies depend on factors that are related to two types of pressures, Cost Reductions and Local Responsiveness (Hill, 2009). Figure 5.1: International Operations Strategies TRANSNATIONAL STRATEGY Move material, HR, ideas across national boundaries Economies of scale Location Economies Ex. Nestle, Kraft GLOBAL STRATEGY Standardized products Economies of scale Ex. Motorola, Intel High MULTIDOMESTIC STRATEGY Customization Different National Markets Ex. MTV, McDonalds INTERNATIONAL STRATEGY Import/export Minimal local customization Ex. Microsoft, PG Low High Low (Source: Adapted from Hill, 2009; AhlstromBruton, 2009) Figure 5.1, demonstrates the conditions under which each of the International Strategies are most appropriate. In addition, it shows some key characteristics of each strategy and gives examples of companies that follow different strategies. Regarding Nestlà ©s strategic posture, the company traditionally operated on a decentralized structure as a way to customize its product offerings to local needs, a key characteristic of a multi-domestic company. With the multi-domestic strategy, an organisation focuses on national differences and customizes its products by responding to the needs of the local preferences. This is in contrast to the global strategy where the company is able to improve its profits and development through lower costs that are derived from location economies and economies of scale (Hill, 2009). Due to the high competitive conditions that Nestlà © faced along with the need to obtain cost reductions, the company moved one step ahead by adopting a transnational strategy (Busco et.al, 2006). Such a strategy involves elements of global and multi-domestic strategies through which the company seeks to achieve both cost efficiencies and local customization (Hitt et.al, 2009). Child-Villiers, Head of Investor Relations, noted that Nestlà © is now integrated in a proactive and efficient way within the markets. He also supported that the company goes one step ahead as it links the globe with Nestlà ©s Continuous Excellence programme (BulckeSingh, 2011). Similarly, its competing company, Kraft Foods shifted to a transnational international strategy to better compete and grow (FoodProcessing.com, 2007). Within Nestlà ©, its national units are characterised as semiautonomous as they are able to involve decisions such as pricing and marketing in order to customize the products to local needs. Localization rather than globalization is the key characteristic of the companys idea which is also supported by the belief that there is not a single product for everyone (Nestle, 2007a). Although the authority of local subsidiaries are still decentralised, the firm has an integrated structure of seven strategic business units (SBUs) that manage advanced strategic decisions for key products ranks and achieve cost economies by centralizing operations such as acquisitions, production and RD (Hill, 2009). The company is divided into five divisions made up of Africa, America, Europe, Asia and Oceania. However, each zone assists in the development of the overall strategy but do not interrupt the local strategic decisions. It can be noted that Nestlà ©s activities and resources are neither centralised in the company, nor decentralised so that each subsidiary unit is able to operate separately in local market. Peter Brabeck-Letmathe, the CEO of Nestlà © noted that while the company comes closer with the consumer the more decentralized it is, he nevertheless supported that the more it is dealing with high level judgments, the more centralized decision making becomes (Wetlaufer, 2001, p.116) Moreover, following a transnational strategy it may sometimes require the company to adapt a more flexible tactical expansion and therefore involves a partnering with other organisations or exclusively owned acquisitions (DooleLowe, 2008). For instance, in 2003, Nestlà © formed a partnership with Colgate-Palmolive in order to develop a gum and candy product line. This was done in an attempt to capture a share of a market dominated by other competitors (Fox, 2005). 6th Question: Does this overall strategic posture make sense given the markets and countries that Nestlà © participates in? Why? Generally, Nestlà © operates almost in every country all around the world. Within the developed markets Nestlà © has a strong basis while in developing world the company involves a huge presence as they are potential markets for growth. According to Hill (2009), transnational strategy makes most sense in markets where the pressures for cost reductions and local responsiveness are high. Due to the high competitive levels and the financial complications that exist in developed markets, companies have to rethink about their strategies in order to survive (Hill, 2009). Then again, emerging markets involve low spending consumers with different preferences and tastes as well. It is therefore important for firms to respond at the cost pressures and the local requirements of the markets (Hill, 2009). Following this transnational structure, Nestlà © is able to customize global products in accordance with consumer requirements in the local market. This can be achieved through its autonomous local units which are responsible to understand the local needs and decisions related to marketing and distribution. Using an extensive market research, the company offers its products under the organisation umbrella and specializes on building brand names that are associated with local conditions (XieBoggs, 2006). Consequently, the company achieves the advantage of building customer loyalty and brand equity in local markets (Pass et.al, 1994). Allowing the subsidiaries to modify their packaging and distributions channels to meet local needs is a further benefit for Nestlà ©. In instance, Nestlà © and Mars in UK have combined their confectionery deliveries to Tesco, as a way to reduce as much possible trucks from Britains roads (IGD, 2010). This had a result to reduce both environmental and distribution costs. Since the early 1990s Nestlà © UK has been recycling its packaging as a way to reduce the amount of packaging used (IGD, 2008). The company decreased not only the costs of packaging but also its transportation costs since less Lorries are required. Regarding Nestlà ©s strategic posture, the companys subsidiaries within emerging markets have achieved to reap previous learning and ideas that have been used in developed markets (BulckeSingh, 2011). It seems that the company has succeeded to successfully transfer capabilities, skills and core competences in these markets. Hill (2009) supported that a transnational enterprise must give strong attention on flexibility by exploiting an information flow among the organisation and its local units. Thus, the key characteristic of transnational strategy offered the ability for Nestlà © to achieve almost 40 billion of sales in emerging markets and a growth of 11.5% in 2010 year (BulckeSingh, 2011). This worldwide combination strategy allows Nestlà © to enjoy benefits of low cost through location economies and economies of scale (Ireland et.al, 2008). For instance, as part of its strategy in the Middle East region, Nestlà © has set up a network of factories in five countries with a prospect to supply the whole region, achieving at the same time economies of scale (Case Study, 2011). Through the integration of regional economic groupings the company is able to produce larger units which can supply entire areas, building at the same time competitive advantage (Nestle, 1999). Sometimes, the transnational strategy involves a complex structure which includes a potential danger of losing control. Under this circumstance the organisation involves problems of creating a practical and valuable organizational structure and it is therefore impossible to manage the strategy (Hill, 2009). According to Bartlett et.al (2010) in order avoid any risks the transnational strategy requires a balanced binary of decision making and not a choice of one or the other but of where, how, when. 7th Question: Is Nestlà ©s management structure and philosophy aligned with its overall strategic posture? The management structure and philosophy is well affiliated with Nestlà ©s overall strategic posture. Nestlà © provides cooperation between local autonomy and centralized decision making. Even that the authority to local subsidiaries is decentralised, the firm is organised into seven SBUs that involve in the overall strategy development. Thus the multinational firm focus on local responsiveness and global integration (BartlettGhosal, 2000). The companys structure is well matched with the concept of transnational strategy. The SBUs that Nestlà © performs around the world are responsible for top strategic decisions which have specific focus on particular product lines such as coffee and beverages (Parsons, 1996). In addition, these SBUs participate within the overall companys strategy where Cook et.al. (2003) noted that the acquisitions made from the SBUs are essential drivers of firms success. Beside that structure of SBUs, Nestlà © includes regional divisions in five key geographical zones (Case Study, 2011). In combination with SBUs, these regional organisations are also supporting the overall strategy and business development. It is also important to state the RD that Nestlà © operates which focus on the creativity and production of products that meet local requirements. The RD function involves 29 research groups within various countries around the world (Bauer, 2011). Beyond such structure, Nestlà © decentralized as the responsibility for market decisions is carried down to local units which are basically operate autonomously for various local judgments. Nestlà © supports the philosophy that there is no single product for everyone, which achieves to understand local preferences through its subsidiaries and thus develops tailored products that meet those tastes and habits. Figure 7.1: Nestlà ©s organisation chart (Source: Adopted from: www.Nestle.com) Following the above figure 7.1, it can be seen that Nestlà © operates within a global matrix structure. As it has been already stated above, Nestlà ©s structure centralizes in some operating decisions and at the same time decentralizes in cases of national operations. The company integrates its functional competencies and capabilities into local teams such as to successfully respond within the global marketplace (BulckeSignh, 2011). Thus using a global matrix structure the company is able to fulfil customer requirements from different geographical places (Ireland et.al, 2008). According to Hill (2009), a global matrix structure is highly recommended for an organisation which adopts transnational strategy in order to be effective implement. Since 2000, Nestlà © has developed its Global Business Excellence (GLOBE) approach with a prospect of simplifying its organisational process structure through an integrated knowledge system. The programme provides Nestlà ©s companies with similar plans, structures and best performance to integrate actions thru the entire organization and to support organizational strategy for business objectives (Johnson, 2005). Recently, the company reorganised its structure through the development of an additional programme known as NCE (Nestlà © Continuous Excellence). Through that method Nestlà © is able to reduce production waste by saving million tonnes of product material through know-how production such as recycling (Nestle, 2010c). Bulcke Signh (2011) noted that the combination of those two programmes, GLOBE and NCE, enable the company to drive cost-effective growth and outperform the market. Concluding, the idea behind those programmes was to reorganise the organisations structure as t o be linked with the overall strategy.

Financial Instability Essay -- Financial Market Finances Accounting Es

Financial Instability The soaring volume of international finance and increased interdependence in recent decades has increased concerns about volatility and threats of a financial crisis. This has led many to investigate and analyze the origins, transmission, effects and policies aimed to impede financial instability. This paper argues that financial liberalization and speculation are the most reflective explanations for instability in financial markets and that financial instability is likely to be transmitted globally with far reaching implications on real sector performance. I conclude the paper with the argument that a global transaction tax would be the most effective policy to curb financial instability and that other proposed policies, such as target zones and the creation of a supranational institution, are either unfeasible or unattainable. INSTABILITY IN FINANCIAL MARKETS In this section I examine four interpretations of how financial instability arises. The first interpretation deals with speculation and the subsequent â€Å"bandwagoning† in financial markets. The second is a political interpretation dealing with the declining status of a hegemonic anchor of the financial system. The question of whether regulation causes or mitigates financial instability is raised by the third interpretation; while the fourth view deals with the â€Å"trigger point† phenomena. To fully comprehend these interpretations we must first understand and differentiate between a â€Å"currency† and â€Å"contagion† crisis. A currency crisis refers to a situation is which a loss of confidence in a country's currency provokes capital flight. Conversely, a contagion crisis refers to a loss of confidence in the assets denominated in a particular currency and the subsequent global transmission of this shock. One of the more paramount readings of financial instability pertains to speculation. Speculation is exhibited in a situation where a government monetary or fiscal policy (or action) leads investors to believe that the currency of that particular nation will either appreciate or depreciate in terms relative to those of other countries. Closely associated with these speculative attacks is what is coined the â€Å"bandwagon† effect. Say for example, that a country's central bank decides to undertake an expansionary monetary policy. A ne... ...onal Financial Markets,† in Gerald Epstein, Julie Graham, Jessica Nembard (eds.), Creating a New World Economy: Forces of Change and Plans of Action (Temple University Press, 1993). Charles Hakkio, â€Å"Should we Throw Sand in the Gears of Financial Markets?† Federal Reserve Bank of Kansas City Economic Review, 1994. Richard Herring and Robert Litan, Financial Regulation in the Global Economy (Brookings Institution, 1995). Ethan Kapstein, â€Å"Shockproof: The End of Financial Crisis† Foreign Affairs, January/February 1996. Charles P. Kindleberger, The World in Depression (London: Penguin 1973). Paul Krugman, â€Å"International Aspects of Financial Crises† in Martin Feldstein, ed., The Risk of Economic Crisis (Chicago: University of Chicago Press, 1991). John McCallum, â€Å"Managers and Unstable Financial Markets† Business Quarterly January 1, 1995. James Tobin, â€Å"A proposal for international monetary reform† Eastern Economic Journal 1978, volume 4. John Williamson, The Failure of World Monetary Reform 1971-1974) (NY:NYU Press, 1977) L.B. Yeager, International Monetary Relations: Theory, History, and Policy 1976. .

The United States: An Empire in Denial

With the arrival and eventual establishment of a permanent settlement on American soil in the early seventeenth century, the English settlers came upon an expansive territory of land teeming with resources and endless possibilities. Soon, these settlers longed for liberty and thus desired to break free from the imperial clutches of British rule. Standing resolutely against a great and powerful empire, liberty was won in America by the blood of its founding fathers, indelibly written in the Declaration of Independence.Perhaps in these humble beginnings are the reasons why America today could never officially admit on how she has evolved into the empire she had once detested and fought. The facts, however, speak for themselves. America today is a colossal empire and as such, she has in her power the capacity to shape the future by creating a world environment conducive to profitable economic relations (especially to third-world countries) and international peace, both of which are in s hort supply, these days.What the world needs, according to Niall Ferguson in page 301 of his book ‘Colossus’, is an effective liberal empire and the United States is the best candidate for the job. What restrains America from accepting and performing its role as an imperial power? This paper delves on this question and discusses the following relevant issues: (1) definition of an empire, (2) what America has become, (3) the American might: strongholds around the globe, (4) the American empire: adherence and denial, and (5) America as the engine of global growth.America is now the only superpower in the world and she is in a position to greatly influence the course of human history. Main Body Definition of an Empire Probing into the topic at hand, it is necessary to elucidate on the true meaning of ‘empire’ as rationalized by Mr. Ferguson: An empire is ‘first and foremost, a very great power that has left its mark on the international relations of an e ra . . . a polity that rules over wide territories and many peoples, since the management of space and multi-ethnicity is one of the great perennial dilemmas of an empire .. . An empire is by definition . . . not a polity ruled with the explicit consent of its peoples, [But] by a process of assimilation of peoples of democratization of institutions empires can transform themselves into multinational federations or even nation states. (10) Thus defined, an empire does not require the general consensus of the people involved. However, an empire can adapt to whatever is the prevalent social, economic or political environment at hand. What America Has BecomeIn the course of human history for the past four centuries since the arrival of the English settlers in America, has the United States revealed itself, in whatever degree, as a nation with imperial intents? As Ferguson states: This book argues not merely that the United States is an empire but that it has always been an empire. Unlik e most of the previous authors who have remarked on this, I have no objection in principle to an American empire. Indeed, a part of my argument is that many parts of the world would benefit from a period of American rule (Ferguson 2).The United States is perceived to be the greatest empire to have ever existed in the history the mankind, propelling itself to the top, not only with its involvement and successes at previous wars, but most especially, with its exploitation of constant advances in science and technology for its defensive posture. In this field, America has no equal. As we have seen, by most conventional measures of power–economic, military and cultural–there has never been an empire mightier than the United States today (Ferguson289). The American Might: Strongholds around the GlobeFrom a military standpoint, America has the greatest influence over many other nations today. Controlling offensive and defensive strategic sites around the globe, its military arm is well-emplaced and is in the best position to act or react should the need arise. . . . the U. S. military has around 752 military installations in more than 130 countries . . . In the first year of President Bush’s presidency, around 70,000 U. S. troops were stationed in Germany, and 40,000 in Japan . . . Almost as many (36,500) were in South Korea . . .Moreover, new wars have meant new bases, like Camp Bondsteel in Kosovo, acquired during the 1999 war against Yugoslavia, or the Bishkek air base in Kyrgyzstan . . . At the time of writing, about 10,000 American troops are still based in Afghanistan, and it seems certain that a substantial force of 100,000 will have to remain in Iraq for at least the next few years. (Ferguson 16) What other nation in the face of the earth – be it in the past or in the present – could ever boast of such a claim? What other nation is more prepared to control vast areas of land, air and water with its military dominance?On lan d the United States has 9,000 M1 Abrams tanks. The rest of the world has nothing that can compete. At sea the United States possesses nine ‘supercarrier’ battle groups. The rest of the world has none. And in the air the United States has three different kinds of undetectable stealth aircraft. The rest of the world has none. The United States is also far ahead in the production of ‘smart’ missiles and pilotless high-altitude ‘drones’ (Ferguson 16). The American Empire: Adherence and Denial The United States today is an empire – but a peculiar kind of empire.It is vastly wealthy. It is militarily peerless. It has astonishing cultural reach. Yet by comparison with other empires it often struggles to impose its will beyond its shores . . . Only when the United States could cast itself in an anti-imperialist role . . . were the Americans able to perform their own cryptoimperial role with self-confidence (Ferguson 287). This is where the Ameri can nation faces its greatest hurdle in reaching its full potential and becoming a great empire for the greater benefit of the world, for it could not bear the concept of an Imperial America.It took a succession of humanitarian disasters abroad in the 1990s and terrorist attacks at home in 2001 to rekindle public enthusiasm for a more assertive American foreign policy, though even this had to be cloaked in euphemism, its imperial character repeatedly denied (Ferguson 287). But this denial is not a sentiment shared by all Americans. As events unfold and the need for change arises, more and more adherents to an imperial America surface, publicly giving voice to an advocacy silently embraced by a few.Richard Haas, who went on to serve in the Bush administration as director of policy planning in the State Department, argued that Americans needed to ‘re-conceive their global role from one of traditional nation-state to an imperial power’, calling openly for an ‘informa l’ American empire . . . As Thomas Donnelly, deputy executive director of the Project for the New American Century, told the Washington Post in August 2001, â€Å"There’s not all that many people who will talk about it [empire] openly. It’s discomforting to a lot of Americans.So they use code phrases like ‘America is the sole superpower’ â€Å"(Ferguson 4). There is little doubt that the declaration of an imperial America would profoundly provoke global agitation. However, one must bear in mind that this is not a new concept and that for decades, this abstraction has always been in the backdrop, even more so in every anti-American cause one would care to listen to. Few people outside the United States today doubt the existence of an American empire; that America is imperialistic is a truism in the eyes of most educated Europeans.But the theologian Reinhold Niebuhr noted as long ago as 1960, Americans persist in ‘frantically avoiding recognit ion of the imperialism [they] in fact exercise (Ferguson 294). All evidence suggests that America is an empire. The denial of the American populace and most especially that of the United States government to this fact is not an altogether innocuous act or claim, as in the present case of Iraq and Afghanistan. Does imperial denial matter? The answer is that it does . . .The trouble with an empire in denial is that it tends to make two mistakes when it chooses to intervene in the affairs of lesser states. The first may be to allocate insufficient resources to the nonmilitary aspects of the project. The second, and the more serious, is to attempt economic and political transformation in an unrealistically short time frame. (Ferguson 294) America as the Engine of Global Growth To this day, America remains to be the behemoth that it is with the American dollar taking its rightful place as the international currency in the global market.Twentieth-century history handed the United States a privileged position in the world economy; its currency became and has remained the world’s favorite. Since 1945 it has been used more than any other for denominating international transactions, and that has made it the preferred currency for central bank reserves (Ferguson 283). America, it appears, has everything that is needed to perform its imperial role. It is even likely that, in these times of widespread poverty, many countries would rally behind this cause for simple economic motives.The reason that so much overseas capital flows into the United States, so it is said, is that the American economy is the engine of global growth and foreign investors simply want a ‘piece of the action’ (Ferguson 281). At the end of the day, the alleviation of poverty through the creation of a dynamic and vigorous economy is the backbone of a peaceful nation. Here is where one sees the role that America should play. The Role that America Should Play What the world needs toda y is not just any kind of empire.What is required is a liberal empire- that is to say, one that not only underwrites the free international exchange of commodities, labor and capital but also creates and upholds the conditions without which markets cannot function- peace and order, the rule of law, non-corrupt administration, stable fiscal and monetary policies- as well as provide public goods, such as transport infrastructure, hospitals and schools, which would not otherwise exist. (Ferguson 2) The question that must now be answered is: ‘Can the United States achieve the role of being an effective liberal empire?’ There is no doubt that the America of today has a foothold on almost all of the essential attributes required to perform this role. Although the United States seems in many ways ideally endowed –economically, militarily and politically – to run such an ‘empire of liberty’ (in Thomas Jefferson’s phrase), in practice it has bee n a surprisingly inept empire builder (Ferguson 2). Because of the democracy with which America was founded upon, we have seen time and again how the American populace, in general, refuses to accept the concept of an empire.As such, it could not move on to greater heights of historical attainment. Others would claim that many millions of people around the world have benefited in some way or another from the existence of America’s empire – not least the West Europeans, Japanese, and South Koreans who were able to prosper during the cold war under the protection of the American nuclear ‘umbrella’ – and that the economic losers of the post-cold war era, particularly in sub-Saharan Africa, are victims not of American power but of its absence (Ferguson 13).In the words of retired General Anthony Zinni: ‘What is our obligation to the world? ’ We preach about values, democracy, human rights, but we haven’t convinced the American people to pony up . . . There’s no leadership that steps up and says, ‘This is the right thing to do’ . . . That’s the basic problem . . . There has to be the political will and support for these things. We should believe that a stable world is a better place for us . . . the U. S.would make a much greater difference to the world. (Ferguson 293) Conclusion Through the acceptance and support for an American empire by the American people themselves – which in itself is a huge undertaking – the United States could significantly alter the course of human history for the better. This conclusion could better be proven by questioning any of the multitudinous impoverished citizens from a third-world country if such a nation would be better off under the auspices of the American dollar.The United States has always been an empire in denial. A truly unfortunate fact for humankind would have a much better place to live in if only the world, most especially the American populace, would accept, recognize and support this undeniable reality of an imperial America. Works Cited Fletcher, Richard. Colossus. U. K. : Penguin, 2004.

Chemical bond Essay

Answer the following questions in your own words, using complete sentences. Based on your observations in the lab, categorize each unidentified compound as ionic or covalent. Explain in one or two sentences why you categorized the compounds the way that you did. (5 points) Based on my observations in the lab I categorized Substance A and Substance C as an ionic bonds because the solids don‘t conduct electricity but when in liquid state and aqueous solutions, electricity was conducted. I categorized  substances B and D as covalent bonds because the solids conduct electricity but the liquid state and aqueous solution do not. Explain, in your own words, the differences between ionic and covalent bonding that account for the differences in their melting points. (4 points) Ionic bonds typically have much higher melting points than covalent bonds because of their crystal-like structures. The bondage is much more complex and requires higher heat to break than a covalent whose bonds are broken relatively easy. In order to conduct an electrical current, a substance must have charged particles (ions or electrons) that are free-moving (able to move about throughout the sample). Why do you think ionic compounds are not able to conduct electricity as solids, even though they can as liquids and in solution? (2 points) I think ionic compounds can’t conduct electricity as solids because the particle are all packed together and have no room to move freely as opposed to the particle when in liquid state or solutions. Based on your research and observations, why do you think pure (distilled) water does not conduct electricity but tap water usually does? (2 points) I think this is because tap water contains more ions than distilled water allowing it to conduct electricity. I also think the minerals that dissolve in the water have a lot to do with the conductivity.

Mid summer essays

Mid summer essays In Shakespeare's "A Midsummer Night's Dream" the mortal teenage characters fall in love foolishly, and the character Bottom states, "O what fools these mortals be". They are foolish because they act like children. Although Lysander, Hermia, Demetrius, and Helena appear grown-up, when they are in love they act foolishly. The four teenage Demetrius is a fool because he is unaware that his love changes through out the play. At the start of the play Demetrius does not love Helena. (II ii,line 188) Demetrius says, "I love thee not, therefore pursue me not." (II ii,line 194) "Hence, get thee gone, and follow me no more." In III ii, Demetrius after being juiced begins to love Helena. (III ii,line 169-173) Demetrius says, "Lysander, keep thy Hermia; I will none. If e'er I loved her, all that love is gone. My heart to her but as guest- wise sojourned, And now to Helen is it home returned, There to remain." This proves he is a fool, because he is not aware of his changing love for Helena. Helena is a fool because Demetrius does not love her but she still persists in chasing him. Demetrius shows no love for Helena. (II i,line 227-228) Demetrius says, "I'll run from thee, and hide me in the brakes, And leave thee to the mercy of wild beasts." (II i,line 199-201) "Do I entice you? Do I speak you fair? Or rather do I not in plainest truth Tell you I do not, nor I cannot love you?" Demetrius clearly illustrates to Helena that he has no interest, but Helena persists. (II i,line 202-204) Helena says, "And even for that do I love you the more. I am your spaniel; and, Demetrius, The more you beat me, I will fawn on you." (II i,line 220-222) "Your virtue is my privilege. For that It is not night when I do see your face, Therefore I think I am not in the night;" This proves that Helena is a ...

Data Mining essays

Data Mining essays In today's information age, many businesses rely on customer information for survival. Data mining is a relatively new and very important tool in aquiring knowledge on thier customers, spending habbits, geograpphical trends, and more. "Data mining is an information extraction activity which has as its goal the discovery of hidden facts contained within databases." What this means is its automated procedures used to find unknown patterns in order to make likely predictions such as consumer spending habbits. Eric Brethenoux, a research director for advanced technologies at the Gartner Group, is one of many who believes that datamining is a technology in which a company cannot afford to ignored. With present day data mining capabalities, it is now possible to spot trends in data in information companies stored from the past, creating a competative advantage for the company with the most information. The power of datamining lies in the way it does not rely on narrow human queries t o produce results, but instead uses technology developed in the fields associated with Artificial Intelligence. Using artificial intelligence, datamining can produce useful inferences concerning data that human analysts would never see. Data Mining can be used by many companies to find new customers and repeat business to previous customers. As stated before, many businesses rely on this use of data mining for survival. This is very helpful when deciding strategic target marketing. Without it, many businesses may not have enough customers to run a profitable and successful operation. Identifying inefficient operations within the buiness is another use for data mining. The findings pertinant to efficiency can save a wastefull business enourmess amounts of capital. Finding and understanding what is inefficient can be considered the first step towards finding an efficient system or met ...