Luxor Cosmetics Executive Summary Essay

Question 1 2008Variable manufacturing cost as a percentage of selling price Product(Variable manufacturing cost/WSP Production)Mark up Lipstick16.8/2180%(21/16.8)-125% Nail polish10.5/1570%(15/10.5)-143% Creams2.8/5.650%(5.6/2.8)-1100% 2010 Product Lipstick15.3/1885%(18/15.3)-118% Nail polish9.3/11.680%(11.6/9.3)-125% Creams3.3/6.650%(6.6/3.3)+1100% *Note that these calculations are done for goods produced in the year in question Question 2 (cost of goods manufactured in 2008/ sales value for units produced in 2008) * ending inventory 2008 (16.8/21) * 11.5 9.748million Question 3 Luxor uses a FIFO inventory system, so the inventory that is sold first actually may come from prior years. Because of this, goods that are sold in each year need to be separated into goods produced in that year and goods produced in prior years. This is necessary to do because the percentage of the COGS that is variable is slightly different from year to year. 2009 Cost of Goods Sold: 6.3M from inventory on hand at beginning of year (produced in 2008 under FIFO) 2.3M from inventory produced in 2009  2010 Cost of Goods Sold:  8.2M from inventory on hand at beginning of year (produced in 2009 under FIFO) 0.3M from inventory produced in 2010  We now must determine the percentage of COGS that is variable for goods produced in 2008, 2009 and 2010: 2008 10.5M/(10.5M+0.7M) =93.75% 2009 9.8M/(9.8M+0.7M) = 93.333333% 2010 9.3M/(9.3M+0.6M) =93.939393% We now apply these percentages to the COGS for 2009 and 2010 to determine the total variable cost for each year. 2009 Variable COGS = (6.3M * .9375) + (2.3M * .93333333) = $8.0529M 2010 Variable COGS = (8.2M * .93333333) + (0.3M * .9393939393) = $7.9352M Assuming the variable manufacturing cost per unit was the same in 2009 and 2010, a higher variable cost of goods sold means that more units were sold. Since the variable COGS in 2009 is higher in 2009 than it is in 2010, we can conclude that the sales volume of nail polish decreased in 2010. Question 4 Let x = Break Even SalesF = Marketing & Promotion + General Administration + Interest + Fixed Manufacturing Costs Let F = Total Fixed CostsF = 3.4 + 1.3 + 1.8 + 1 Let V = Variable Costs Per Dollar of Sales7.5 V is easily estimated by (COGS-Fixed Costs) /Sales There is a small amount of fixed costs in COGS which means that it is not strictly variable, but for our purposes that makes a very small, immaterial difference and the question only requires an approximation. V = (27.7-1)/33.5 0.7970 x = F + Vx x = 7.5 + 0.7970x 0.2030x = 7.5 x = 36.95 Break even sales are approximately $36.95 Million Question 5 Let x = Break Even SalesF = Marketing & Promotion + General Administration + Interest Let F = Total Fixed CostsF = 3.3 + 1.3 + 1.1 + 1 Let V = COGS Per Dollar of Sales6.7 Again, V is easily estimated by COGS/Sales There is a small amount of fixed costs in COGS which means that it is not strictly variable, but for our purposes that makes a very small, immaterial difference and the question only requires an approximation. V = (27.7-1)/33.5 0.7970 x = 33.00 x = F + Vx x = 6.7 + 0.7970x 0.2030x = 6.7 The new breakeven sales for 2012 would be approximately 33.00, given that 2012 is approximately similar to 2011. The firm is more likely to breakeven than the previous year if they can keep their sales constant and do not produce more than they can sell. Although with current trends of sales over the past few years, it could be estimated that breakeven is not likely. With the current trends sales could be estimated somewhere around 32 million, in which case the firm would not breakeven in 2012. Question 6 Inventory Schedule – 2011 Budget InventoryLipstickNail PolishCreams Inventory (12/31 2010 Actual)15.011.41.2 Planned Production * 19.013.08.0 Goods Available for Sale34.024.49.2 Budgeted Sales19.013.08.0 Ending Inventory (12/31/2011 Budget)15.011.41.2 * Planned production is to produce the same amount as the planned sales, as per sales manager Budgeted Cost of Goods Manufactured and Sold – 2011 Budget Variable Manufacturing Cost (Budget)0.90.90.6 17.911.74.4 Fixed Manufacturing Cost (Budget)0.80.60.6 Cost of Goods Manufactured18.712.35.0 Inventory (12/31/2010 Actual) 13.69.60.7 Goods Available for Sale32.321.95.7 Inventory (12/31/2011 Budget)0.90.90.6 14.110.40.7 Budgeted Cost of Goods Sold 18.211.45.1 MARGINS1.01.11.6 0.00.10.6 Variable Manufacturing Cost – First, find the factor of Variable Manufacturing cost to planned production, less fixed manufacturing cost i.e. – 6.8/(8.0-.0.8) = 0.9 (From Exhibit 2) Inventory – Find the factor of budgeted ending inventory cost to budget inventory value i.e. – 6.6/7.0 = 0.9 (from Exhibit 2) Margins – (Budgeted Sales/Budgeted Cost of Goods Sold) – 1 i.e. – (19.0/18.2) – 1 = 1.0 (rounded) Income Statement – 2011 BudgetCash Flow – 2011 Budget Sales40.0Cash Receipts From Customers40.0 Cost of Goods Sold34.7 Gross Margin5.3Cash disbursements Marketing & Promotion3.6Variable Manufacturing34.1 General Administration1.3Fixed Manufacturing1.0 Interest1.8Marketing and Promotion3.6 Pretax Income-1.4General Administration1.3 Interest1.8 Pro-Forma Year-End Balance Sheet – 2011 BudgetTotal Disbursements41.8 Assets Cash0.0Beginning Cash5.5 Miscellaneous Current Assets3.0+ Receipts40.0 Inventory0.0- Disbursements41.8 Property & Equipment11.2- Loan Repayment10.0 Goodwill9.3Ending Cash (Budgeted)-6.3 Total Assets23.5 Equities Bank Loan16.3 Miscellaneous Current Liabilities4.0 Common Stock12.5 Retained Earnings *9.7 Total Equities42.5 * The Retained Earnings are 9.7 in this budget, which is adjusted from the previous budget to account for an additional $0.7 M loss i.e. – 10.4 – 0.7 = 9.7 Question 7 Through the implementation of the suggested changes in allocation, more of the fixed costs will be allocated to the cream products because this product line has the highest margin (as shown in the budgeted Cost of Goods Manufactured above), even though creams have the lowest total sales value. This will lead to more of the fixed costs being incorporated into the Cost of Goods sold, and not into the ending inventory numbers, therefore decreasing pre-tax income even further. Allocating the fixed costs in this manner would not affect the Cash Flow Statement in any way, as the fixed costs would still lead to a cash disbursement of an equal value regardless of which product line they are allocated to. Question 8 Luxor Cosmetics is a company that is stuck in a dying market because most of their customers that buy the lipstick and nail polish are women aged 45 to 75 who are in the lower income group. As that group gets older and older they have less need for cosmetics so they buy less and less. The sales will continue to drop and we will get less and less profitable. A way to combat this is to reposition ourselves in the market. We need to find a way to get ourselves into a better market that is more eager to buy cosmetics. One way of doing this would be to start targeting a new demographic of women who will buy our products. We could also avoid the non-wholesale market because that way we would get bigger orders and be able to budget better. However if we do this we will have to consider the possibility that we will have to lower our prices and we will have less profits in the end but we will have more sales. We should reinvest in the company that we purchased in the 1990s. We had a product t hat we were going to aim at teenagers but we abandoned the company due to the dotcom crash; we should look at getting that company running. We should reinvest in the company that we abandoned because the market has recovered now. We would get a brand new customer base and we could have increased sales. Plus we already own the company and it does no benefit to us just sitting on the books not generating any profits. It is an environmentally friendly product and environmentally friendly products are becoming more and more popular today. We could make the company seem very socially responsible and that would build us a better reputation and may make our sales in our existing company increase substantially. The goodwill that is on the books today was acquired when we bought the environmentally friendly company in the 1990’s and yet we have not revalued it since then. The asset impairment test should be done on goodwill to see how much of the goodwill exists anymore. It is possible that the asset of goodwill should not exist on the books for Luxor at all anymore. And it is just making our financial statements misleading for investors. If we adjust this properly we will have a more realistic picture of our company as it stands now. This way we will not have misleading financial statements anymore. There are a few ethical issues in the case. The first is that there is pressure for the numbers to be fudged, but as a  professional accountant that cannot be done. We do not want to make the statements misleading so that the bank is coaxed into giving us a loan that we cannot afford. We cannot fudge the statements to meet our needs because someone would figure it out and we would not get away with it and overall it is highly unethical. The other is following the policy that is set in place for how to account for certain things. If our inventory is not usable anymore we should not be keeping it on the books hoping it will make us look better. This is not appropriate and should be written off and adjusted for the fact that it is now obsolete.

Explore Walkers Portrayal of Female Identity †The Color Purple Essay

â€Å"Teach only the boys. â€Å"1 (Page 146) In many cases this term would be considered sexist: However, when reading The Color Purple it becomes evident that the men as well as the boys are the ones who are in need of education. This education is not confined to the academic sense, but Walker rather emphasises their need to acquire the understanding of equal rights. The women may not receive any academic education but they were still equal to men in their ability to work, as Walker shows through several strong female role models throughout The Color Purple. The things that the women have experienced have taught them things about life that no man would ever understand: The gift of tolerance, understanding and a positive mind. Celie has to undergo a lot of traumatic experiences throughout The Color Purple. Walker uses this to mould her into the â€Å"stereotypical† submissive woman. Walker then continues to develop Celie’s stereotypical role of mother and wife by forcing her into another destructive relationship, both emotionally and physically. This relationship affected her attitude towards men but also her self-confidence towards women and children who possess the confidence she does not. Although Walker has portrayed Celie as a weak individual, Mr calls her â€Å"You black, you pore, you ugly, youa woman. † Quotations like this show just what level of racism and sexism Celie and maybe Walker herself had to compete with. Walker may have portrayed Celie in this way to exaggerate the fact that she is also filled with courage. She tries to stand up to Mr ____ , and claims she will † curse him† until â€Å"you[ he] do right by me†. Mr ___, claims Celie is â€Å"nothing at all†. Despite this abuse Celie has the courage to carry on and live her life despite its restrictions. Walker uses each character to reflect all the different elements of female identity. Celie is portrayed as weak, Sophia is portrayed as powerful, Nettie educated and Shug leads the glamorous life every women dreams of. Walker seems to use a variety of different characters to provide comparison and influence in all of the female characters lives. The ongoing influence is the typical 1930s society. Society is responsible for imposing the status quo, which heaven forbid Celie would ever rebel against. â€Å"I don’t fight; I stay where I’m told. But I’m alive. â€Å"(Page 22)She has lost her sister, her freedom and her self respect; she can’t lose her life as well. Sophia however is an excellent example of a powerful woman in society. Not only powerful in body, but also in mind. In the beginning of the book she seems to show no fear and determination no to be moulded by society. Unfortunately this is a short lived dream. Even though Sophia is a powerful woman, she is still victim to discrimination due to her sex and race which results in hr being moulded into the typical stereotypical woman. After being thrown out of Celie’s house by Mr ____, Nettie finds refuge in the home of a missionary couple, who teach her the importance of god and educating others. She abandons the role of housewife and takes on a role more favourable which benefits others and not just her self. Shug Avery abandons all traces of the female stereotype. Her life revolves around the finer things. Her music offers the passion and yearning for the glamorous life, especially for Celie, whose life is made up of orders and abuse, whereas Shug is a woman who doesn’t take orders and on many occasions’ is the one who makes them. Parts of the prejudice society of the 1930’s were the men. In Celie’s mind, men have a kind of meanness that women don’t possess. Women, though they may scream and swear, are not harmful in the way men like Pa are Mr_____ When she was younger the only male she knew was Alphonso, who she then believed to be her father. Although she was treated poorly by her â€Å"father†, she listens to the bible and â€Å"Honor[s] father and mother no matter what. † (page 43-44). This even included forgiving him for the constant sexual abuse. By obeying the Bible she had to obey her father, no matter what the consequence was. The dramatic betrayal of someone she could trust had been destroyed and therefore jeopardised her relationship with any other man, instead of feeling love or respect, she only felt fear. â€Å"That’s the truth. I look at women, tho, cause I’m not scared of them. † Although Mr_____ is her husband,their relationship appears to be one of convenience. When he first approached Alphonso it was to marry Celie’s sister, Nettie. Alphonso however refused. Claiming that Nettie was too pretty and that he should have Celie instead. Compared to Nettie, Celie was hardly the trophy wife that Mr___ desired. â€Å"She ugly. †¦.. But she can work like a man. † (pg. 18. ) Mr ____ only wanted a wife to look after his kid and to satisfy his own selfish needs. Walker portrays Celie as an object only to be used and abused by men. Walker shows a very dysfunctional relationship between Sophia and her husband Harpo; however it is not abusive as all of Celie’s relationships have been. It is a true relationship that was built on a love and not on necessity. Another factor that Walker has used to create the couple is the reversal of personas. So Walker has created her to be the â€Å"man† of the house, as she is stronger than Harpo in more ways than one. This is alien to Celie and she advises Harpo that Sophia needs to be â€Å"taken down a peg† (Page 35) so he can become head of the house again. Nevertheless Sophia refuses to accept this treatment and fights back. Although Sophia managed to defeat one member of society, it was her second and final confrontation that would finally destroy the confidence that Celie so desperately wanted.

A Life With Three Marriages English Literature Essay

A Life With Three Marriages English Literature Essay In the book Their Eyes Were Watching God by Zora Hurston, marriage plays a big role in the story. The main character, Janie, get married three times in her lifetime. Janie is a very attractive woman and practically can get who she wants, but she is looking for a special somebody. Most people get married once, but Janie just couldn’t find the right person to spend the rest of her life with. Janie uses a peach tree as her symbol for a perfect man. Janie lives a life of uncertainty. She wishes to be married to her peach tree, but she cannot seem to run into him. Janie isn’t afraid of waiting for her ideal husband. Janie goes from marriage to marriage trying to find not only the perfect soul mate, but she also wanted to find herself. Janie had a hard time trying to be who she really is when she had her grandmother choosing her husband for her. Janie’s mother and grandmother had such a difficult life. Janie has her grandmother to take care of her, but she cannot do t hat forever. Janie’s grandmother pushed Janie to limits because she wanted Janie to have a life that wasn’t like her own or her mother’s. The theme of this story is love comes with compromise and honesty in a relationship. Marriage promises change, but it will remain loveless without equality and respect. Janie’s first marriage with Logan Killicks fails because Logan and her grandmother neglect to display any respect for what Janie wants out of a marriage. Janie’s grandmother’s selfish act contributed to the marriage because she forces Janie to marry Logan for the sake of her own comforts rather than Janie’s. As stated in the book, â€Å"So you don’t want to marry off decent like, do yuh? You just wants to hug and kiss and feel around with the first one man and then another, huh? You want me to suck the same sorrow yo’ mama did, eh? Mah ole head ain’t gray enough. Mah back ain’t bowed enough to suit yuh!â € (13-4). This quote shows how much her grandmother doesn’t want her to have the marriage she wants. Janie wants the hugs and the kisses, which is what makes her dream marriage seem so incredible. Janie wants to marry because she loves that person, she doesn’t want to marry out of convenience. Janie’s grandmother lived in a time where love didn’t exist and that is what makes her push Janie to marry Logan. During those times it was hard to find a marriage between African American women that contained love. Logan further aggravates the marriage because he expects Janie to show her appreciation for what he has done for her. Logan feels that he does Janie a huge favor by marrying her, but in all actuality, Janie is miserable. Logan has no respect for Janie’s feelings. Although Logan tries to be polite to her there is no sincerity in what he does because he just doesn’t care. Again Logan feels he’s doing Janie a favor. As Boston Globe s taff member, Renee Graham, writes about an interview by Valerie Boyd, she reveals that Hurston writes from experience, â€Å"She often worked as a maid and may have endured an abusive common-law marriage to a man who, Boyd posits, may have provided bitter inspiration for the cruel Logan Killicks in â€Å"Their Eyes Were Watching God.† (Hurston, who married not wisely but often, officially had three husbands. Writes Boyd, â€Å"Zora was afraid that matrimony would only widen her hips and narrow her life.†).

Monetary Economics in Developing Countries Essay

Monetary Economics in Developing Countries - Essay Example The two exchange rate systems have their advantages and disadvantages in their application in a country’s economy. The advantages of the fixed exchange rate system include stimulating international trade as they offer much more stability for both importers and exporters and as such, they do not have to worry about the effects of currency appreciation and depreciation. Fixed exchange rate systems are also said to have a bit of control over the speculative nature of importers and exporters and thus reduce to a certain extent speculative activity in trade practices. This regime disadvantage can be depicted in the inefficiency of a country’s economy. This happens as a result of the government’s artificial support of the exchange rate which means it does not change accordingly with changes in the prevailing economic conditions and thus may loose out from the benefits that would be felt in the economy if the rate was adjusted according to the existing conditions. Furth ermore, the dependence of interest rates on the exchange rate can lead to reduced economic growth of a country in cases where they differ greatly with those being experienced in the market. In cases where one of the countries involved in the fixed exchange rate system agreement has a weaker economy, it may be dominated by the country with a stronger economy and at the same time undermine the prevailing market situation in the country with the weaker economy. Similarly, the flexible exchange rate regime has its advantages and disadvantages. The major advantage of this regime is its flexibility as it allows a country’s economy to adjust quickly to prevailing market conditions. This system also determines the interest rate in a country allowing for effective control of the economy in order to create balance. Despite its advantages, the flexible exchange rate system may lead to volatility in the market as it does not encourage

Comunication Essay Example | Topics and Well Written Essays - 1250 words

Comunication - Essay Example It is apparent that he uses Ethos very well in criticizing the current government and its proponents, showing all its failures and lack of commitment to serve the interest of the common American people. He does not only attribute this to the government as an institution alone, but also draws a closer relationship of these failures to the Democrat party, which he perceives unfit for the people. This, he does in the following observations that he makes, which he believes had an alternative way out that would have seen the circumstances and occurrences become more favorable. The failure of the government was in the tax burden that was bestowed on the people that was a third of the National income; the nation had a debt amounting to one and half more than the debt of all the countries in the world combined and there were many deaths of the American soldiers in the Vietnam War. He accused the members of the current government, the president inclusive of disrespecting the American people and the Nations constitution, through speeches and utterances that were imbibed with sarcasm. He observed that the government had referred to the American people as the â€Å"Masses† and the constitution as this â€Å"Restrictive document,† only to later refer the people as the â€Å"greater society† (Michael, 3).All this was meant to show that the current government did not uphold the interest of the people at its core principle and only considered them important when they wielded the immense voting power. The disrespect of the country’s constitution was something that was tantamount to abuse of the people’s freedom and liberty that had been hard won by their forefathers in the American war of independence. He cited the inability of the government to control the economy, with an example of its involvement in farm economy, in that the cost of this farm economy program had almost doubled. He accused the opponent of Barry Goldwater, who was from the Democrat

Maritime Logistics Essay Example | Topics and Well Written Essays - 2000 words

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Homework Essay Example | Topics and Well Written Essays - 500 words - 31

Homework - Essay Example To start with, I have found incorporation of technology in my studies to be very useful because of the readily available information in the internet. According to Educause, technology provides access to vast amount of information trough use of tools such as internet and online data bases (n.d). This is true because personally I do not encounter unsolvable academic problems considering the fact that I have easy access to internet tools at home and at the school library. For instance, whenever I need clarification on certain topics during my personal revision, I look up in the internet where there is virtually an answer to every kind of question. Secondly, incorporation of technology in training by our lectures has helped to grasp the ideas put forward easily. This is because technological presentations enable the lecturers to point out the key information easily and at ease. According to Nacada, use of good presentations can impact the success of students in their studies (2011). Considering how technological presentations are made, students are attracted to the method of presentation hence making them to pay full attention to the tutors. This is arguably true because presentations made through incorporation of technology, for instance PowerPoint presentation, appeal greatly to learners. Lastly, incorporation of technology in education has helped me to improve my academic performance by enabling my lecturers to have individual based supervision. The use of computers by students facilitates flexible training by lecturers because every student can submit their own work at their convenient time. Further, use of computers enables the lecturers to identify students with weakness on particular topics and attend to them individually as opposed to training the whole class at once. This is the reason for my improved academic performance because I have received

Comparing ethical theories Assignment Example | Topics and Well Written Essays - 750 words

Comparing ethical theories - Assignment Example He stated that an individual experiences the state of happiness by performing actions that they deem as being good. He further added that the good behavior that becomes highly desirable without any reason being associated with it is considered as an ethical act. He further added that the good that is assigned the highest status is the state of happiness (Timmons 215). He stated that an individual can perform various virtues acts that can result in the achievement of happiness. He did not narrowly define what he meant by virtue because virtue for different individuals is defined differently. He even stated that happiness cannot be attained by simply performing a virtuous act for one time; a person needs to carry out those acts throughout their life to attain the state of happiness. Kant was of the idea that an act or opinion can only be considered as an ethical one if the reason for performing that particular act was that the person who is caring out that act was ready to accept the same act being conducted against him in the same situation in which he was making a decision or any other situation (Gensler 294). This means that while performing an act an if an individual makes up his mind for accepting the same act being carried out against him in any situation, then only the act will be recognized as an ethical one. The motive that is drives a particular act was regarded by Kant as maxim which is the reason for carrying out an act (Höffe 263). Kant believed in the principle of universality which means that acts that are considered ethical are considered good throughout the world and there is no difference between how different cultures define the same act while making ethical decisions. The main strengths of Aristotle’s theory are that it emphasizes on the importance of pleasure of an individual. It does not consider

Bilingual Education Essay Example | Topics and Well Written Essays - 2500 words

Bilingual Education - Essay Example In his autobiography Hunger of Memory, Rodriquez unintentionally portrays himself as an exception to his own beliefs. (Rodriquez 12) This book tracks this Mexican American from the time that he was a "schoolchild until he became a literary scholar and nationally acclaimed memoirist. His memoir also describes his gradual alienation from his cultural roots as his assimilation into mainstream culture deprives him of his native tongue and his connection to his past. The book achieves popularity at a time when multiculturalism is becoming a force in American education." (Burt 2004) In order to make sense of the factors that make up Rodriquez's life, he chooses his love for languages to explain how his persona is formed. Rodriquez surmises that it is better to have used English in school rather than to have had a bilingual education. As he struggles to prove this, he represents himself with a paradox of emotions, thoughts, and beliefs. It is his opinion that it was the different uses of languages and his reaction to them that sets him apart. According to Rodriquez, "It is not possible for any child ever to use his family's language in school. " He thinks that "not to understand this, is to misunderstand the public uses of schooling and to trivialize the nature of intimate life and a family's language." (Aria 13) In his writings Rodriquez appears to... In his failure to study these anomalies, Rodriquez does a disservice to himself. When he started school, Rodriquez could only speak "fifty stray English words." (Rodriquez 1) Unlike his brother and sister who attended a Roman Catholic school, Rodriquez went to an all white school with children whose parents were professionals. In his mind, this must have presented a sharp contrast to his own parents who were poor and spoke little English. During this time, he also observed that his brother and sister enjoyed a relationship of togetherness, one that left him feeling alone. His sense of alienation continued to grow as he listened to them " communicating among themselves in Spanish." (Rodriquez 1) Rodriquez has been criticized for cutting himself off from his roots. A better argument would be that the languages barriers that were forced upon him caused this gap. Had he been given a bilingual education this would have been different. Instead of living in language compartments at his home and school, his new English language would have blended into that of his native tongue. As his brother and sister did, Rodriquez would have used both languages interchangeably.If one reads Rodriquez's work closely, they sense his great affection for his family. The feelings of shame that he talks about are more general than personal. Nevertheless, it is easier to attack the character of Rodriquez than to discover the bonds that exists between him and his people in spite of their physical and psychological differences. While addressing the relationship between his brother and sister, it is evident that he has the feeling that he is an only child. Rather than to see how a bilingual education might have made a difference, he chooses to feel

The Conduct of Health Insurance Policy Fraud in the Rainmaker Assignment

The Conduct of Health Insurance Policy Fraud in the Rainmaker - Assignment Example Great Benefit insurance company has wilfully committed fraud when it continued to accept premiums and new policyholders when it knows for a fact that it is in a precarious financial condition to settle obligations due to its huge debt. I would like to give Great Benefit insurance company the benefit of the doubt that when it incorporated the company, it did not intend to wrong its policyholders but meant to fulfill its obligation. In the novel or movie, the insurance company may have been caused to commit fraud to preserve itself as a business entity because it is already hemorrhaging financially due to heavy debts. They may have employed the initial policy of denying all claims regardless of its legitimacy as a coping mechanism of their dire financial status. So the first measure that I will institute is for the insurance company to avoid the circumstance that will cause them to commit fraud in the future. I will fix their financial position by devising a policy that will make the company liquid at all times to settle all the claims of its policyholders in the future. Just like in the banks, I will require the insurance to have a liquidity that is commensurate to a certain number of policyholders that should a significant number of them will file a legitimate claim against their policies, the insurance company will be in a financial position to fulfill its obligation. Equally important is the institution of a policy of limiting the acceptance of new policyholders in accordance with its financial capacity and liquidity. For the time being, I will recommend that Great Benefits insurance company not to accept new policyholder until it has restructured its financial position.

E-learning Evaluation Essay Example for Free

E-learning Evaluation Essay The Problem The adaptation of a new e-training program have brought questions of performance gaps in our orientation program to light and have brought into question the usefulness of an e-learning system and weather we should proceed with a more classical training approach in this area. The importance of the information conveyed in this training, such as fire evacuation points and health coverage options, combined with the need to create a positive first impression for new employees makes this program a high priority item. As it can affect workplace safety as well as company liability regarding the mandated OHS training in these fields, it is critical that we ensure that the program is at maximum effectiveness and are able to distinguish training gaps as a result of program delivery or other variables. As employee training and employee orientation are roles of the HR department, it would seem clear that the responsibility for evaluating the effectiveness of the delivery of this training should fall under the same department. Institution and evaluation of new training systems is something that we should always consider a high priority, but these evaluations are generally carried our as part of the delivery model and not as an afterthought, as in this case. Common Methods for E-learning Evaluation Recent writings in the areas of e-learning support a five faucet evaluation of the e-training program and its effectiveness, but it should be noted that this is still an emerging field. These evaluation areas can be considered common industry practice: (1) (2) Reaction Learning Behavior Results Return on investment These areas of focus are considered in context of several factors such as the learner, technology, instruction, instructor, institution, and community (1) to create a rich matrix of evaluation for the program effectiveness and delivery. ROI can be difficult to calculate and so has been grouped in with results in a number of methods of analysis. E-Learning’s upside seems to outweigh any drawbacks, but more research needs to be done in the areas of concrete costs and benefits as well as the contexts for the transfer of knowledge. â€Å"Proving connections between e-learning and the outcomes – benefits and drawbacks – would assist in the use of evaluation methods† (2)  and the use of evaluation should be considered â€Å"at every stage of the e-learning process† (1). As this field further develops we will undoubtedly see more tools emerge to aid in this evaluation. While the benefits of e-learning are well documented for the right context, the drawbacks highlighted may have some impact for us as well. E-Learning programs may rely heavily on self-discipline, may have a high initial cost, can be difficult to support, and may not be suitable for all types of training or all types of learners. (2) We should keep these limitations in mind when evaluating this program and when looking at implementing further programs of this nature. Application of Current Practices The first and probably most obvious learning to take from these writings is that the evaluation of an e-learning program should take place a various places throughout the delivery cycle. Pre-course, formative, and summative evaluations (1) should have been evaluated prior to this point; this in itself is a lesson we can take away to future implementations. From an evaluative approach we can first look at the learner, their skills, attitudes, and preferences as they relate to this e-learning program. Many of these variables are tied to the reaction level of evaluation but the preset attitude towards a training program will carry much weight in the conscious and subconscious effort put forth by individuals towards it. This form of unintentional or deliberate sabotage, as well as extraordinary effort towards a program will greatly affect results. From this we can see that the attitudes conveyed toward and about the technology, instruction, instructor, institution etc will need to be scanned for any negative presets or experiences with training. An additional factor to be taken from these resources is that the skill sets and resources of the learners may not be capable for this type of training to work. An evaluation of the computer literacy, computer comfort levels, and computer/internet availability that employees may possess is in order. We cannot assume that all individuals will have access to a computer and internet, or the appropriate skills and comfort level for this type of training. Gaps in performance may come about from deficiencies in any of these categories. Evaluation in terms of knowledge transference should be broken into the categories of reaction (as mentioned above), learning – cognitive knowledge transfer, and behavioral  changes. Objective gaps in these areas may be due to factors which are easier to analyze when the barriers are properly identified and grouped. And finally we can learn that the evaluation of this program in an â€Å"almighty dollar† may not be a significant as a blended evaluation which takes into account any increases in program availability this will create, the ability for staff to review the material at any time, and the opportunity to create a dynamic first impression within our staff that may translate into a shift in culture. From these and more we can see that there is much to be gained for our organization in evaluating our training systems, not only in terms of due diligence for current operating procedures, nor simply in terms of ROI – but also in terms of how we can improve, an d aid our staff in their learning. Works Cited 1. A Systemic, Flexible, and Multidimensional Model for Evaluating E-Learning Programs. Mungania, Peni and Hatcher, Tim. 2004, Performance Improvement, pp. 33-39. 2. E-Learning: evaluation from an organizations perspective. Kathawala, Yunus and Wilgen, Andreas. 2004, Training Management Development Methods, pp. 5.01-5.13. 3. E-learning: The Relationship Amoung Learner Satifaction, Self-efficacy, and Usefulness. Womble, Joy. 2008, The Business Review, Cambridge, pp. 182-188.

Process Design and Management Essay Example for Free

Process Design and Management Essay Increased co-production of goods and services (Process Design and Management) The Internet has opened new ways for the customer to interact directly with a firm. Simple direct entry and monitoring of orders is only the first step in the progression of value-added services made possible through information sharing. 1. 0 Introduction The topic of process design and management will generally goes on explaining the word ‘design’, in its broadest sense, is right at the heart of operations management. The design is an activity that can be approached at different levels of detail. Design must reflect the needs of customers, and able applies to products, services and processes. It can be managed as an operations transformation process in its own right. Moreover, the design is starts with something very abstract which represents a concept and ends with something very specific, which means by the final design. Some defines that to ‘design’ is to conceive the looks, arrangement, and workings of something before it is created. First, the position of the process according to its volume and variety characteristics must be defined. Eventually the details of the process must be analyzed to ensure that it fulfills its objectives effectively. Product/service design and process design are interrelated. Small changes in the design of products and services can have profound implications for the way the operation eventually has to produce them. Similarly, the design of a process can constrain the freedom of product and service designers to operate as they would wish. The relationship between designing products and services on one hand and designing the processes that make them is an important point to consider. It is possible to separate product design and process design in manufacturing sector, however it is impossible in practice to separate service design and process design. This is because many services (especially high visibility services) are the same thing. Even in manufacturing industries there has recently been considerable effort put into examining the overlap between product and process design. There is a growing recognition that the design of products has a major effect on the cost of making them. Many of the decisions were taken during the design of products (for example, choosing the material from which the roduct is going to be made, or the way in which the various components are fastened together) will all define much of the cost of making it. , Therefore, to evaluate the various choices which the designer faces in terms of their effect on manufacturing cost as well as on the functionality of the product itself. Also, the way in which product and process design overall has a significant effect on the time between starting the initial concept design for the product and eventually getting it to market. 2. 0Discussion 2. 1Internet Contributed in Online Purchase Process With the advancement of technology, many aspects of the face-to-face interpersonal dynamics in service encounters between sellers and customers have been replaced with technology-based Internet interfaces. Internet can be regarded as sets of connected firms. A retailer can use an Internet presence to reach consumers all around the world. The Internet makes the expanded range of products, services, and information accessible for consumers from geographically distant and/or emerging markets. In recent years, e-commerce has grown dramatically in terms of volume and variety of goods and services traded. This has created significant opportunities to serve customers through internet stores. It is important for internet stores to focus on achieving higher customer satisfaction to increase co-production of goods and services and to retain customers. According to Field and Smith, internet interaction between a retailer and a customer from the point the customer arrives at the retailer’s website to the point the retailer fulfills the customer’s order, has quickly emerged to become an important class of service operations (Field et al. , 2004; Smith et al. , 2007). Co-production of goods and services in internet is growing steadily. For example, in the third quarter of 2009, internet retailing sales in the U. S totaled approximately $34 billion, a 4. 5% increase from the previous quarter. The quality of the internet on the purchase process has been found to affect customers’ purchase decisions, satisfaction, and loyalty in online retailing (Zeithaml et al. , 2002; Wolfinbarger and Gilly, 2009). Hence, to be competitive in the market place, internet is the paramount and as the new ways for the customer to interact directly with a firm. Besides that, the internet is responsive and convenient for customers in the online purchase process. Through internet, the firms being able respond to the unique needs and wants of individual customers by providing the â€Å"right content in the right format to the right person at the right time. † Retailers can facilitate a convenient and responsive online purchase process, serve their customers better, improve customer satisfaction and increase retention. Customer satisfaction is the ultimate result of meeting a consumer’s expectation from the performance of products. Most satisfied customers normally have the intention to re-purchase the products if product performance meets his or her expectation. Like traditional business, online businesses also need to satisfy their customers. Customer satisfaction is one of the central constructs in the study of consumer behavior both in traditional and online business environment (Alam et al. , 2008) found that website design is one of the unique features affecting online shopping environment (Shergill and Chen. , 2005) identified web site design characteristics as the dominant factor which influences consumer perceptions of online purchasing. It can be argued that online shoppers want to receive the right quality and right quantity of items that they have ordered within the stipulated time offer by the e-tailers. In addition, time and cost saving are the main advantages of online shopping. Time efficiency and store efficiency are reflected in time cost and price savings respectively (Devaraj et al. , 2002). These are the determinants of satisfaction. Delivery performance has significant influence on customer satisfaction (Lee and Joshi et al. , 2007; Ahn et al. , 2004; Ho et al. 2004); Grewal et al. , 2004 and Shih et al. , 2004). One of the examples of online firm that successfully increase their co-production of goods and services via internet is Amazon. In an annual study tracking customer satisfaction ratings with the top 10 online retailers, perhaps the biggest takeaway is that Amazon is the world’s biggest e-retailer for a reason that it just plain makes customers happier than their competitors (show by Table 1 below). Amazon continues to set the standard for e-retailers. For instance, upon arrival at the Amazon. om website, a registered customer is greeted by the customer’s name. The customer is then provided with recommendations of products that the customer might be interested in, based on the product searched for or those previously bought by the customer. The website provides the option of receiving reminders of special events like birthdays of loved ones or information about the arrival of the latest books by their preferred author. When the customer is ready to make the purchase, the website retrieves the personal account information such as shipping and payment. In the early stages of Internet development, trust is a critical factor in stimulating purchases over the Internet. Trust is not only a short-term issue but the most significant long-term barrier for realizing the potential of Internet marketing to consumers. An experiential survey of U. S. -based online surfers, new to Internet based shopping, found the shoppers fascinated by international shopping opportunities on the Web, but they were skeptical about actual purchasing from overseas sites. Others report widespread distrust among consumers about Internet-based merchants. To improve customer loyalty, some websites offer discussion groups in their websites and promote common interest to pull targeted customers. When the website contains valuable information about the product then the customer would be motivated to visit the website again. Just like any other medium of business, internet business should also focus on making their customers feel ‘special’. In any business, customer loyalty is a result of exceptional personal services and exceeding customer expectations. 2. 2Internet Strive to Born Global Firms More and more firms’ even very small ones have operations that bridge national borders soon after their founding. Due to the Internet and related information technologies (IT) that enable many of them, this new breed of firms began emerging in the 1990s and is dubbed â€Å"born-global† because their operations often span the globe early in their existence. The definition of born global firm is â€Å"a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries. Born global firms begin with a borderless world view, and immediately develop strategies to expand themselves abroad. This is striking, given the great changes that have taken place in the marketing environment due to introduction of the Internet and other modern technologies that enable bypassing of conventional channels (Frazier et al. , 1999). It therefore seems justifiable to study the Internet-based channel strategies of born globals (Moen et al. , 2002). It is particularly interesting to examine the global expansion of the born globals and their use of the Internet as a sales channel (Servais, Madsen, amp; Rasmussen, 2007). A few studies have investigated the role of information and communications technologies in the international performance of born global firms. Loane (2006) examined the role of the internet in the internationalization of small entrepreneurial firms from various countries (Loane, 2006). Born globals use the internet for communication, for marketing communications, and to lesser degree for managing customer relationships as well as sales transactions and fulfillment activities. Most of the investigated firms also se the internet to support off-line sales, and about one-quarter used the internet to support distribution channels and intermediaries. A significant number of firms used the internet to support relations with partners, suppliers, clients, agents and distributors, Ramp;D partners, and software coding developers, both nationally and internationally. The born globals also used the Internet as a tool for acquiring knowledge, such as market and competitive intelligence, which then become part of the collective wisdom of the firm. The internet makes borders between countries less relevant and facilitates direct interaction between all types of business entities around the world. Born globals use the internet to convey their market presence abroad, support relationships with foreign partners, offer services related to their products, facilitate product development, and maintain relations with foreign customers (Servais, Madsen, and Rasmussen et al. , 2007). Logitech, the computer peripherals company, is perhaps one of the best early examples of a successful born-global firm. According to Benjamin M. Oviatt and Patricia Phillips McDougall, â€Å"Global Start-Ups: Entrepreneurs on a Worldwide Stage. † Focusing first on the PC mouse, the company was founded by two Italians and a Swiss. The company’s operations and research and development were initially split between California and Switzerland, and then it expanded rapidly with production in Ireland and Taiwan. With its stylish and ergonomic products, Logitech captured 30 percent of the global computer mouse business by 1989, garnering the start-up a healthy $140 million in revenues. 2. 3 . Value and Productivity in the Internet Economy Nowadays, many business companies had started practiced in using internet to make interaction with consumer, business people, corporate, and trading partners. The product and service designs and the management play an important role in their profitability and their company sustainability. The company had created the website as haphazard compilations of company brochure ware or static personal web pages as well. These things had come out it with the images that users merely shared with friends and family. It has quickly evolved into a myriad of highly sophisticated online pplications and business processes. On the other hand, the forward thinking company had introduced to attain new heights in productivity and the forward thinking companies could created by leveraging the internet massive public technology infrastructure. To increase the co- production of goods and services, the innovation and awareness of using internet are important to create value through the technologies component. Other than that, the human capitals are also important in operation of the business and managing the design in the company. Therefore, the employers must to be selective in recruiting, and hiring people, whomever that he or she are able to give their efforts into the jobs or task. The value added service could be made by proposing the internet way user whereby the customer can interact directly to the company to improve and enhance their quality service and product through fulfil the customer needs and satisfaction. All of these elements are need depends on the capability of the human resource which in not only posses the technologies equipment. The company have to construct the internet economy’s structure by referred the economics performance in traditional, among other things, technology, the transportation infrastructure, availability of raw materials, and the quality of a skilled labor force. In contrast, the Internet economy comprises the four-layered model shown in Figure 1. The Internet’s infrastructure consists of two layers which are including the global high-speed IP-based networks and applications, and consulting, training, and integration services. Each Internet economy layer has a complementary relationship with every other layer. For example, with advances in layers 1 and 2, ? rms at layers 3 and 4 can provide media-rich content to consumers as well as offering new digital products and services Besides that, complementary relationship implies that the value of doing more of one factor increases by doing more of another. Internet applications and e-commerce are strong complementary relationship between the network infrastructures in the Internet economy. For example, as the Internet bandwidth increases dramatically with the spread of broadband technology, application vendors are rushing to develop powerful multimedia software that can take advantage of the increased bandwidth. These factors lead to increased economic activity on the Internet in the form of media-rich content. The Internet had open the nature stimulates innovation in the network and applications infrastructure, leading to the vastly accelerated development and deployment of new technologies in the Internet marketplace. Figure 2 shows an import/export view of the Internet and physical economies that groups businesses in ? ve categories: 1st : pure digital-products businesses that offer content, knowledge, or services directly over the Internet. 2nd Internet-based companies that deal with physical products, importing goods to be sold from the physical economy. 3rd Traditional businesses that sell some of their products or services directly over the Internet. 4th content developers, Internet service providers, Web and applications hosting services. 5th companies that do not sell directly over the Internet. Unlike the physical economy, which relies heavily on physical resources, the Internet economy thrives on information and knowledge to create value, productivity, and efficiency. Firms that rely on these intangible assets are more likely to succeed in this new world than those that continue to focus on physical processes. The Web’s information and knowledge intensity is a crucial factor in driving performance metrics like online revenue and gross margin, and every partner in a value Web must adopt the Internet in its daily operations to maximize the bene? s of electronic business. T here were few examples for these phenomena that might be able to be the related with it. One of the example is car assembly lines, which had ? rst appeared in the dictionary in 1930 (Hirschhorn, 1984: 9), were argued to be the keystone to prevailing 20th century concepts of human management (Emery, 1976). It is thus hardly surprising that industrial value production was conceptualized in terms of the value chain. The taxation system developed at that time re? cts this. In industrial value creation, customers were seen as destroying the value which producers had created for them. On the other hand, the accounting systems emerging at that time thus wrote down the value of what was acquired to zero over a shorter or longer depreciation period. The end user in this scheme equals the ? nal customer. For producers, industrial value was realized in the transaction, which joined and separated them from customers. Value here equalled the price which the customer paid: in competitive terms, value is the amount buyers are willing to pay for what a ? rm provides them (Porter, 1985: 38); or, value is what customers are willing to pay (Porter, 1985: 3). 2. 4 The Impact Of Design Management And Process Management On Quality: An Empirical Investigation. Design management and process management are two important elements of total quality management TQM implementation. They are drastically different in their targets of improvement, visibility, and techniques. In this paper will review the establishment of framework for identifying the synergistic linkages of design and process management to the operational quality outcomes during the manufacturing process internal quality and upon the field usage of the products external quality. Through a study of quality practices in manufacturing plants from multiple industries, the both design and process management efforts have an equal positive impact on internal quality outcomes such as scrap, rework, defects, performance, and external quality outcomes such as complaints, warranty, litigation, market share. A detailed contingency analysis shows that the proposed model of synergies between design and process management holds true for large and small firms, for firms with different levels of TQM experience, and in different industries with varying levels of competition, logistical complexity of production, or production process characteristics. Finally, the results also suggest that organizational learning enables mature TQM firms to implement both design and process efforts more rigorously and their synergy helps these firms to attain better quality outcomes. These findings indicate that, to attain superior quality outcomes, firms need to balance their design and process management efforts and persevere with long-term implementation of these efforts. The manufacturing strategy literature has viewed product quality as one of the major competitive priorities for attaining a sustainable competitive advantage Hill, 1994. Recently, the speed of new product introduction has also been added to this list of priorities Kim, 1996 . From a quality management perspective, the speed of new product design and development indicates the importance of designing quality into new products. Because design efforts often have a limiting impact on attainable product quality, several researchers have stressed the importance of designing quality into products Juran, 1981; Juran and Gryna, 1993; Hauser and Clausing, 1988; Dean and Susman, 1989; Taguchi and Clausing, 1990; Boothroyd et al. , 1994; Mizuno and Akao,1994 . External and internal quality outcomes the notion that overall market and business performance can be realized through long-term product quality improvement is a cornerstone of the contemporary quality revolution George and Weimerskirch, 1994; NIST, 1998. Customers form their impressions about a firms products based upon their current and past experience with these products Garvin,1987. A satisfactory field performance of the products is accompanied by lower customer dissatisfaction, greater customer loyalty, and improved market share Crosby, 1979; Buzzell and Gale, 1987; Hardie,1998 . We label this aspect of quality outcome as external quality because it is related to the customer’s perspective of the products upon field usage. It captures Juran’s fitness for use dimension of product quality Juran, 1981; Juran and Gryna, 1993 . Specifically, we focus our attention on four long-term indicators of external quality: warranty work, litigation claims, customer complaints, and market share. The quality of products passing internal tests of reliability should affect the experience of customers who use the products in two prominent ways. First, customers perceive product quality in terms of their net value defined as the ratio of performance to cost: Artzt, 1992. Thus, for products with the same performance levels, lower price will drive customer choice and satisfaction. Second, customers willing to spend a certain amount of money will choose the products that offer maximum performance for that money. 2. 5Internet as tool to enhance global strategy It’s can’t be deny that the internet plays a major role in every aspect of our modern life. Moreover, Internet technologies play a major role in business. The internet has contributed to the success and growth of businesses. This journal article is emphasizing on Internet are used to enhance global strategy. Internet is a driver of globalization. Observing the more successful applications, commentators and researchers have suggested a number of industry characteristics which promote Internet use (Andal-Ancion et al. ,2003): digitizability of the end product (e. g. , most information-based products such as directories and encyclopedias), time sensitivity of the end product (e. g. , airline travel), high search costs (e. g. , books), potential for customization (e. g. , clothing retailers), insufficient matching of buyers and sellers (e. g. , business- to-business exchanges and consumer-to-consumer auction sites), and a tradeoff between richness and reach (e. . , retail brokerage, Evans and Wurster, 1999). First at all, the internet makes communication fast and cost efficient. Businesses use internet technologies such as Skype internet and video calls, email and video conferencing to make communication virtually instant. Next, the internet plays a big role in the growth of businesses. It gives businesses an opportunity to reach a wider global audience. Promoting through the internet is also a way to increase sales and reach the desired growth level. Business can also expand by having an online division. The effect of this decentralization of transactions and information transfer raises major questions about the role of bodies which would have traditionally had functions of control, such as governments and regulatory institutions. In terms of transferring, accessing information, companies are now much less dependent on local infrastructures. In the aspect of marketing, Internet was playing important role in advertising. Most businesses are taking advantage of the internet to market their products and services to a global audience. The most notable internet technologies here include search engines such as Google. Social networking websites play a role in business networking by connecting like-minded professionals. Through the internet, people have found business partners and great employees. Moreover, the internet has helped cut costs by outsourcing services to countries where it is cheaper to provide these services. Apart from that, outsourcing enables businesses to concentrate on their core services and become more efficient. One role of internet in business is the birth of ecommerce websites and online payment solutions that allow people to shop online from the comfort of their own homes. Furthermore, the internet has opened up new business opportunities and giving rise to a group of successful online business owners. This is a powerful role as anyone can now start an online business. Cost and speed advantages are also substantial. The Internet is a much less expensive way to send information, and this information can be received in real time anywhere in the world. For global businesses this has massive implications for the possible scale and scope of operations and redefines the traditional trade-off between richness and reach, allowing both to be achieved for relatively little cost. Internet also brings effects on global products and services. Global products and services are seldom totally standardized worldwide, but they are designed with global markets in mind, and they have as large a common core as possible. Some industries and categories, such as personal computers and air travel, allow the potential for a very large common core, while others, such as furniture and legal services, allow for less commonality. Deciding on the extent of global standardization poses a major dilemma for MNCs. Use of the Internet and websites eases this dilemma by making it easier to offer an array of global, regional, or local products, and local customization options for standard core products. While the same can be done through traditional media (brochures or sales calls), but the Web provides more options and the interactivity of the Internet provides for customization by the customer. This can seen from Dell Computer’s ordering system. As the lesson 4 in this article has mentioned the use of the Internet enables both globally standardized and locally customized products and services. Companies can now use the Internet to lessen the globalization tradeoffs they have had to make in regard to products and services. Now, let have a seen on co-production, which means delivering public services in an equal and reciprocal relationship between professionals, people using services, their families and their neighbours. Where activities are co-produced in this way, both services and neighbourhoods become far more effective agents of change (David B amp; Michael H. ) the co-production has a significantly role in the process design and management. As the Internet has designed to interrelated the product and service jointly to the customer. For instance, Dell Computer has promoted Dell Online Self Dispatch to the customer as it is a comprehensive part dispatch program designed to support efficient hardware resolution. Dell also declared the Dell Online Self Dispatch (DOSD) as one global portal for efficient hardware resolution. The customers can access the Website through Internet to had the hardware support from Dell by self-service. 3. 0 Conclusion In summary, product/service design and process design are interrelated. Small changes in the design of products and services can be profound implications for the way the operation eventually has to produce them. The process design and management is right at the heart of operations management. The design is an activity of approaching at different levels of detail and it must be reflecting the needs of customers, and able applies to products, services and processes. The design is starts with something very abstract which represents a concept and ends with something very specific, which means by the final design. The company must follow the processes designs according to its volume and variety characteristics. Eventually the details of the process must be analyzed to ensure that it fulfills its objectives effectively. The proposed model of synergies between design and process management holds true for large and small firms, for firms with different levels of TQM experience, and in different industries with varying levels of competition, logistical complexity of production, or production process characteristics. Finally, the results also suggest that organizational learning enables mature TQM firms to implement both design and process efforts more rigorously and the synergies between design and process management help these firms to attain better quality outcomes. Q5. Raising senior management awareness of operations as a significant competitive weapon (Job Design and Performance Management). 1. 0 Introduction Many senior executives entered the organization through finance, trategy, or marketing and built their reputations on work in these areas, and as a result often take operations for granted. The executives have creatively used operations management for competitive advantage. Raising senior management awareness of operation as a significant competitive weapon refers to the job design of the senior management and the performance of the management. Theoretically, workers  are  motivated  by  jobs  in  which  they  feel  they  can  make a  difference  in their perf ormance and the way the  tasks  give are  combined  to  for complete  jobs. Clear  job  descriptions  will motivate  workforce  and  be successful  in completion  of  tasks. It also important to have both of the employer and employee needed to share understanding of the work to be done with it and comfort with working environment. The employee and employer also need to face the challenges associated with employing a large of people in a wide variety of people in a wide of capacities. Most of the employee is assigned to do a job because they are perceived to be able to fill its requirements. Many  tasks  depending on ability time allotment and other constraints. The role of HR in the present scenario has undergone a sea change and its focus is on evolving such functional strategies which enable successful implementation of the major corporate strategies. In a way, HR and corporate strategies function in alignment. Today, HR works towards facilitating and improving the performance of the employees by building a conducive work environment and providing maximum opportunities to the employees for participating in organizational planning and decision making process. Today, all the major activities of HR are driven towards development of high performance leaders and fostering employee motivation. So, it can be interpreted that the role of HR has evolved from merely an appraiser to a facilitator and an enabler. Performance management is the current buzzword and is the need in the current times of cut throat competition and the organizational battle for leadership. Performance management is a much broader and a complicated function of HR, as it encompasses activities such as joint goal setting, continuous progress review and frequent communication, feedback and coaching for improved performance, implementation of employee development programmes nd rewarding achievements. The process of performance management starts with the joining of a new incumbent in a system and ends when an employee quits the organization. Performance management can be regarded as a systematic process by which the overall performance of an organization can be improved by improving the performance of individuals within a team framework. It is a means for promoting superior performance by communicating expec tations, defining roles within a required competence framework and establishing achievable benchmarks. A  performance management process  sets the platform for rewarding excellence by aligning individual employee accomplishments with the organization’s mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. By establishing clear performance expectations which includes results, actions and behaviours, it helps the employees in understanding what exactly is expected out of their jobs and setting of standards help in eliminating those jobs which are of no use any longer. Through regular feedback and coaching, it provides an advantage of diagnosing the problems at an early stage and taking corrective actions. To conclude, performance management can be regarded as a proactive system of managing employee performance for driving the individuals and the organizations towards desired performance and results. It’s about striking a harmonious alignment between individual and organizational objectives for accomplishment of excellence in performance. 2. 0 Discussion 2. 1 JOURNAL: THE EFFECT OF MANAGEMENT COMMITMENT TO SERVICE ON EMPLOYEE SERVICE BEHAVIORS: THE MEDIATING ROLE OF JOB SATISFACTION Refer on the journal; the proposed model in the Thai hotel work setting indicates that management service initiatives, particularly training, rewards, and empowerment deliver a strong message to employees that the management is devoted to quality service, ultimately creating the positive affect (i. e. , employee satisfaction). Furthermore, the result showed that when employees are satisfied with their job, this positive feeling about their job motivates them to go the extra mile for customers and help co-workers and supervisors in need. Currently, not all hotel operators in Thailand favour the four management service initiatives because those options can be costly. However, it seems to be clear that management should consider allocating more resources to implement such initiatives. Among the four management service initiatives, rewards displayed the largest effect on Thai hotel workers’ job satisfaction, with the largest path coefficient. In general, two kinds of rewards are available: financial and nonfinancial rewards. Rewards also range from a simple thank-you note for an exceptional service to a large reward such as wage increase and promotion. Rewards given to employees, regardless of the type, must be meaningful to the employees and the organization. In other words, rewards should be based on employees’ job performance and reflect the organization’s goal and service standard. Most rewards in the Asian culture, including Thailand, are in monetary form. However, because of the growing influence of the Western style of management, rewards in the form of recognition, such as being selected as employees of the month (or the year) with a certificate, are getting popular in Thailand. This kind of recognition can increase employees’ morale and make workers feel that they are appreciated and valued as a member of the organization, leading to job satisfaction and organizational loyalty. Panmunin (1993) reports that Thai hotel employees suffer from low self-esteem because the Thai caste system disparages servants as low caste individuals. The result of the present study seems to emphasize the importance of appropriate rewards for Thai frontline hotel workers, who may be often neglected and unappreciated in the caste system (high-power-distance culture), to improve their work morale. Next, this study demonstrates that training cannot be overlooked to satisfy hotel workers. Through training, Thai employees master the basic skills necessary to perform the daily duties of the position and develop job competence. In addition to the basic skills, more Thai hotels are offering training such as dealing with guests’ complaints. It is a new type of training that originates from the Western hotel companies. Typically, when Thai employees encounter disgruntled or difficult guests, they have supervisors or mangers handle the situation. This new training program broadens frontline employees’ responsibilities and teaches proper techniques to resolve conflicts and deal with problems immediately to build customer satisfaction. The result of this study seems to suggest that Thai hotel personnel are satisfied with this new, additional training. Third, this study implies that empowered Thai employees are satisfied and exert more positive service behaviours. This result contradicts the proposed hypothesis. Despite the vertical culture, more and more hotel organizations in Thailand are embracing the concept of empowerment by allowing frontline personnel to make more decisions to take care of in-house guests. Although empowerment is a relatively new concept for hotels in Thailand, the result indicates that line employees are quickly adopting such a work practice and are happy about it. In general, frontline employees are much younger than managers in Thai hotels. The young generation has been more exposed to the global influence of U. S. culture. Thus, young Thai hotel employees may regard a Western management practice such as empowerment highly. We also speculate that the positive empowerment outcome is attributed to the new additional training and the Western style of rewards. Research has shown that empowerment often involves training and rewards to be more effective. Another possible explanation regarding the positive effect of empowerment is the growing size of tourism. Thailand is one of the popular travel destinations in the world, and hotels are receiving large numbers of international customers. In Western countries, it is common to see frontline employees empowered to meet the guests’ needs immediately. Travelers, particularly from the United States and Europe may be accustomed to such a level of customer focus and expect Thai hotels to offer a comparable level of service. The management in Thailand is becoming aware of the phenomenon and therefore expending more effort to make use of empowerment to please international hotel guests. Finally, there is no significant effect of organizational support on hotel employees’ job satisfaction. In this study, organizational support focuses on help offered to frontline workers when necessary, appropriate job design, and support for frontline employees’ goals and values. This insignificant result may be partly associated with the high power distance between supervisors and subordinates. In the Thai hotel organization, managers are more likely to be valued and respected than frontline personnel, and Thai managers with authoritative leaderships are least likely to place a high priority on the well-being of frontline employees and assisting in their job. Although the organizational culture is changing slowly, and large Thai hotel companies are adopting Western management styles, it takes a long time for employee perceptions to change. Thai frontline personnel are more likely to recognize strong organizational support (i. e. , they feel they receive enough help at work, their job is designed to be rewarding, and their goals and values are as important as managers’ goals and values) in the future. In the conclusion of organizational behaviour, service quality initiatives such as rewards, empowerment, training, and organizational support have been a revolving theme tied with employee satisfaction and performance. This study presents how these initiatives work in a culturally different setting such as Thailand. The results of this study indicate that the service quality initiatives, which mostly originate from the U. S. or Western (horizontal) culture, are worthy of trial in Asian hotels (with a vertical culture) because such initiatives may help improve frontline employees’ morale and self-esteem and ultimately increase the overall effectiveness of the hotel operation. In summary, hoteliers should continue to increase decentralization of authority, develop attractive compensation, and improve frontline workers’ knowledge and skills through ongoing training. Then, all these efforts are likely to pay off by yielding happier, committed staff members who care about guests and other co-workers. 2. 2 ARTICLE JOURNAL: SHAKING UP INTELS INSIDES Performance-based, standardized job descriptions provide employees with clear and attainable job duties and responsibilities as well as the resources needed to accomplish them (Mahdieh,2013). We work with employees to explain the tools and their importance to achievement of the organization’s mission and goals a critical factor in retaining valuable staff and preventing costly burnout. Employees are an organization’s most valuable resources. Companies spend considerable amounts of money and time developing and supporting their human resources. A critical component of this development and support is employee performance management. An employee’s performance is a measure of the ways in which their work-related behavior contributes to achievement of the organization’s business objectives. In this article, they have problem in new employee, employees are now on stage when theyre meeting with customers and off stage when theyre in a back office handling paperwork. And he implemented an exhaustive playbook that has scripts for everything down to the language with which tellers are supposed to greet customers. Still, at one Boston branch McGee visited, Paul J. Hillson, a consumer marketing manager, concedes that he encountered initial resistance from some FleetBoston tellers: What you hear is, But I already know that customer. McGee agrees that changing employee behavior is still a work in progress. . Managing this performance is the key to producing high achieving and reliable human resources. Performance management is a process by which managers and employees work together to plan, monitor and review an employee’s work objectives and overall contribution to the organization(Memoona,2013). More than just an annual performance review, performance management is the continuous process of setting objectives, assessing progress and providing on-going coaching and feedback to ensure that employees are meeting their objectives and career goals. In this case we can see analysts said, has been the efforts of McGee and his team to overhaul Fleets branches, from products to training to culture. To lure new customers, BofA dangled free checking and free online bill-paying, a service for which many New England banks still charged. And while the old FleetBoston simply gave customers the 800 number for an outside mortgage lender, BofA has outfitted roughly two-thirds of Fleet branches with special software that approves or rejects a customers application for a mortgage or home-equity loans within 30 minutes. As a conclusion, this is in line with results in the emotions and justice literature that negative appraisals are influential drivers of employee behaviours and attitudes (Brown et al. ,2011). Performance appraisals are a basis component of human resource management, the outcomes of appraisals are used as the foundation of many human recourse decisions. While organizations devote considerable resources and time into performance appraisal this collected study has demonstrated that the quality of the employee performance appraisal experience are different. There are employees with low quality performance appraisal experiences while at the other end of the scale, there are some employees who state high quality experiences of the performance appraisal process. Moreover, this research demonstrates that organizations pay a price for letting low quality performance appraisal experiences, when employees have low quality performance appraisal experiences the organization will likely to bring a penalty in forms of lower job satisfaction and higher intentions to quit. 2. 3 ARTICLE: BOFAS HAPPY SURPRISE In this world of competition as organizations effort to remain competitive and sustainable, human resources professionals and strategic planners should collaborate strongly in designing strategies which are more productive and useful (Dazel. 2103). Among these functions, one of the most critical ones that bring global success is performance appraisal . It is more considerable than other processes because its results show the success of the awareness of the other areas in the field of Human Resources and other personnel activities. In the other perspective, assumptions of corporate management show that performance appraisal makes people to be really engaged in the business of the organization. In this situation, the article shows hes making it clear to employees that, under his leadership, Intel truly are entering a new era. Otellini, who officially takes the helm on May 18, will be the first chief executive without an engineering degree at a company where gear heads have reigned supreme. He believes that to keep Intel growing, every idea and technical solution should be focused on meeting customers needs from the outset. So rather than relying on its engineering prowess, Intels reorganization will bring together engineers, software writers, and marketers into five market-focused units: corporate computing, the digital home, mobile computing, health care, and channel products PCs for small manufacturers. The development of an organisational culture indicator followed a review of the organisational culture literature, in which particular attention was given to the instruments that have been most commonly used in its measurement (Michael, 2013). In this article, we can see that the new regime will cause a jolt to the culture. For decades, employees have been compensated for their own work. Now teams will be judged as a whole. Engineers, long the top dogs, may resist working with others. Its like saying to a baseball player, Gee, were deciding to play pro football, says Edward E. Lawler, a professor at USCs Marshall School of Business. All of a sudden, the rules of the game are very different. Otellini has begun to put the pieces in place. Now hell need the teamwork of his people to pull it off. As conclusion, this article established that there was no existing tool which adequately met our requirements for a comprehensive, up-to-date measure, easily completed by all levels of the workforce. Through the review process we were able to identify the cultural dimensions most frequently assessed in organisations and deemed important in this extensively researched field. A parallel search of literature on current manufacturing practice highlighted other areas less traditionally examined in culture research, but which we thought relevant in capturing critical aspects of organisational culture in the manufacturing sector. Performance  management  is a significant tool in business  management  today. Management activity of this type makes it easier to evaluate the productivity of individual employees as well as entire departments. As a result, the company will function more efficiently, may keep overhead low, and has a better chance of succeeding. There are many benefits of  performance management  that have a direct bearing on the day-to-day operation, which in turn makes the overall picture for the company much brighter. Inside the company of The New York Times, there have a lot of job design and performance management that occur and be built by the employer to their employees. Many advantages can we get by doing the implementation of job design and performance management. Through the implementation of performance management, the employer can get the result for what actually their employees doing in managing their work. The use of specific metrics in a performance management program allows employer to make decisions regarding performance breakdowns. Initially, it allows employer to pinpoint problems and take the proper corrective actions to immediately rectify them. For example, as our research in year 2003, according to the journal of The New York Times, Arthur Ochs Sulzberger Jr. , the current proprietor, faced what seemed to be a publishers ultimate test after a loosely supervised young reporter named Jayson Blair was found to have fabricated dozens of stories. The crisis was emerged between the employer and its employees after the employer getting know about their employee’s attitude. The employer can strictly blot for whom employees that making a wrong attitude and breaking the rules of their job ethics. The effects of these crisis has causes the company’s performance lagging. The companies had difficult moments eventual through allegations received due to errors employees. However, it can be improved by making implementation of performance management. Performance management allows employer to make decision and focus their feedback on issues or crisis directly related to the achievement of the individual employee’s goals and objectives. Any other issues or crisis distracting the employee that don’t contribute to the unit or department’s performance can be quickly and effectively handled and eliminated. One of the examples of performance management that can be found in the journal of The New York Times is where Keller has made so many high-level personnel changes whereby two-thirds of all newsroom workers now report to a new boss. Other than that, Keller has also put into practice a string of reforms suggested by several internal committees formed in the wake of the Blair affair. Meaning to say, these include the appointment of a standards editor and a public editor, or ombudsman. After making this system, the company performances was increase and improved and at the same time the whole of operation managements can be run smoothly. According to journal, The Times posted its gains despite boosting the price of a subscription by more than 20% on average. As a conclusion, a good performance management system works towards the improvement of the overall organizational performance by managing the performance of teams and individuals. That is for ensuring the achievement of the overall organizational ambitions and goals. The Times can built more an effective performance management system that can play a very crucial role in managing the performance in an organization such as ensuring the employees understand the importance of their contribution to the organizational goals and objectives. Other than that, by ensuring each employee understands what is expected from them and equally as pertaining whether the employee possess the required skills and support for fulfilling such expectations. Ensuring proper aligning or linking of objectives and facilitating effective communication throughout the organization and facilitating a cordial and a harmonious relationship between an individual employee and also the line employer based on trust and empowerment. 2. 4 The Effects of Job Rotation Practices on Motivation: A Research on Managers in the Automotive Organizations This article is about the use of data envelopment analysis (DEA) to calculate and analyze the level of technical, allocate and cost efficiencies of Australian hospital food service operations. As we know, every provision of food to the patients is the responsibility of each individual hospital. To prepare the food their must cooked and plated and serve it in hot condition, that can we call as a â€Å"cook-serve system†. Therefore this system required substantial labor input and always created tension arising because of the necessity of working tight schedules and need to achieve high quality standards. In 1970, the new system of foodservice was introduced which is the introduction of the hybrid and cook-chill system. These new system require large initial capital investment. There has been an essential expansion in the use of cook-chill systems throughout the different states because of the technology changes. However, the last health service report published that inefficiency is still a problem with most hospital foodservice operation because of the underutilization of production capacity. Actually, this is the on how performance management taking place to overcome this problem. There are a lot of the significant of making implementation of performance management. The primary reason to make sure performance management processes are functioning properly is to tighten the link between strategic organizational objectives and day-to-day actions. Effective goal setting (including timelines), combined with a method to track progress and identify obstacles, contributes to success and bottom line result. Frequently tracking progress against performance goals and objectives also provides the opportunity to recognize and reward employees for performance and exceptional effort, contributing to job satisfaction and productivity. Employees want to feel successful, to do well at their job and feel there are making a valuable contribution. In order to ensure this happens, employees need a clear understanding of individual goals and how they fit into the larger organization. New technology-based solutions offered can provide goal visibility across entire organizations, offer extensive reporting option and can reduce paperwork by as much as 90%. Clear visibility, regular individual analysis and company-wide employee appraisals help identify corporate competencies and skill gaps. With this valuable data, organizational can identify training and development plans. Performance management best practices result in a wide range of the advantages for employees, employer and whole organizational. In a nutshell, the performance management inside every organizational is one of the essential tool to gain a goal and objectives of organizations. Therefore, the organization like hospital can considered more about their performance management to overcome their problem. At the same times gain successful services to their patient. 2. ARTICLE JOURNAL: THE FUTURE OF THE NEW YORK TIMES BUSINESSWEEK Human Resource is the most important resource compared with other resources like machine, material, land, etc. In the organizational context, the effectiveness of human resource depends on designing the job according to human capability and characteristics. Job design is the most important function of Human Resource Management. It indicates that, designing of contents, methods, func tions of a job. The performance of an employee is that, how well an employee performs his or her task duties and responsibilities. Employees’ performance is also crucial. Because the achievement of goals and objectives of the organization is assessed by performance of its resources, employees’ performance should be assessed and maintained periodically. At work, in a human-focussed approach, the human oriented process designs have shown its importance as much as the technical issues, from a productivity aspect. Several human-focussed applications such as increasing motivation at work, improving workers’ physical working conditions, obtaining job security, and increasing job satisfaction, increasing quality nd productivity, decreasing costs to become competitive are increasing it’s importance by the day. Within the natural development process of work, maybe human-centred problems exceed technical problems and even the cost of investment in personal has gone beyond the point of technical investment. Job analysis, training, performance measurement, re-organisation projects, re-engineering studies and especially applications related to job design which support this approach have an important place among human resources applications. Job design related applications began to take shape with a scientific management approach in the 1900s. Models related to job design able to be classified as job rotation, job enlargement, job enrichment, job engineering, quality of work life, social information processing approach and job characteristics approach, have extremely important effects on increasing the productivity of human resources. It is predicted that job satisfaction and productivity will be highest when both job enlargement and job enrichment are jointly applied to redesigning work systems From a conceptual perspective, job design is defined as determining the specific job content, the methods used at work and the relationships between jobs to correspond the firm’s technological and organisational, and the employees’ social and personal expectations. In accordance with this definition, it is stated that a well-designed and defined job increase employees job satisfaction, increases motivation, decreases workplace-related stress, encourage learning efforts and is therefore have a positive effect on employees’ performance. There are many studies published in related literature investigating the relationship between job design and employees’ motivation. The common points of these studies is that the application of job design has a positive effect on the specifics of job performance, like motivation, flexibility, job satisfaction, self-control, and skill development. The relevant studies are shown in Table below.

Organizational Structure at Nokia

Organizational Structure at Nokia Organizational Structure at Nokia As of October 1, 2009 the organizational structure at Nokia was extremely mobile and flexible. Figure 1 Nokias organizational structure is horizontal and it allows for greater flexibility and speedy communication channels between different departments. The devices unit looks after the development and management of mobile devices portfolio which is targeted at all major consumer segments. The solutions department ensures that it continuously develops solutions whereby ensuring that a particular mobile device has integrated contents and personalized services and the output of these three components results into a leading mobile phone for the end user. The solutions unit works with other departments in close proximity to provide such solutions. The services department creates and designs internet services that enhance the consumer experience when Nokia phone users interact with the web. The main areas where this unit focuses on include messaging, maps, music, and Ovi developer tools. This department also ensures that there is a consistent increase in different services as the market evolves. The other significant department is Markets which acts like a supply chain department for Nokia. The unit is also responsible for sales channels, branding and marketing activities for various products and services. The corporate development department looks for future growth opportunities and it also plans for future strategic actions that will give the company a competitive advantage against competitors. This department also provides operational supports to other core departments such as Devices, Services, Solutions and markets. Nokia Siemens Networks is a joint venture with Siemens and it provides network infrastructure which is both fixed and wireless. This division also provides communications and networks service platforms. Finally, the last major division is NAVTEQ; this unit is a provider of detailed navigational maps and digital map data automobile navigation systems, navigation systems for mobile devices, internet mapping applications and mapping solutions to government and other businesses. NAVTEQ is an important part of Nokias operations since it provides downloadable maps and other content that will enhance the experience of consumers who use Nokias smart phones. Corporate Governance The way authority and responsibility is organized at Nokia it shows that the company is exemplary in its approach towards corporate governance. The companys strategic and significant natured decisions are made by the board. These matters might include strategic guidelines, approval of periodic plans and decisions on major divestments or investments. The company charter, article of association and Finnish Companies Act determine the roles and responsibilities of all directors and executive members. According to the auditors and company information strict guidelines are followed in terms of code of conduct and ethical behavior of each employee. Similarly the company complies with all stock market requirements of the Helsinki stock market, New York and Frankfurt stock exchanges. The company provides all necessary data to authorities at NYSE because the under the rules any firm that complies with its national laws must file any differences that exist between its national laws and the laws to be followed under NYSE.    Competitors of Nokia Corporation Nokias direct and major competitors include Motorola Inc, Cisco Systems Inc, Research in Motion, LM Ericsson Telephone Co., and QUALCOMM Inc. The company faces stiff competition in the business oriented mobile phone market from RIMs Blackberry series. Nokias E-series phones are geared to compete with the Blackberry series. Similarly the company faces challenges from Samsung and Motorola in the touch screen phone markets and the latest Android based phones that offer efficient and extremely user friendly interface to consumers. In the navigations and maps market Nokia, like the traditional manufacturers such as Garmin, TomTom, faces tough competition from the Google and Apple partnership that will make the iPhone the ultimate navigation and smart device for this generation. The difference between this navigation process that iPhone will offer is that consumers wouldnt need to download maps for a price or they would not need automotive navigations systems rather they would use their smart phones as navigation devices at very low rates. For the year 2009, Nokias market share remained flat at around 38% in the global handset market after consumers continue to encourage Apples iPhone in favor of the N series that Nokia is offering. Nokia also faces competition from Ericsson mobile phones in the music phones; Sony Ericssons superior voice quality and speaker quality give its phones an edge over Nokias Express music series. Industry Outlook for 2010 The expectations of the company for 2010 are considerably flat in terms of the performance of its various divisions. Overall the mobile device industry is expected to increase by about 10% in 2010 in terms of volume compared to 2009. For the year 2010 Nokia expects its mobile device market share to be flat compared to 2009, a similar sort of expectation also exists for Nokia and Nokia Siemens Networks as the venture sees a minimal increase in euro terms for the mobile and the fixed infrastructure services market. Importance of International Markets to Nokia Corporation In 2009, out of the total sales from the company Europe accounted for 36%, Chinas share was 16%, Middle East Africa 14%, North America 5%, Asia-Pacific 22% and Latin America 7%. As we can see from these numbers that about 59% of sales are coming from the developing world; for a company that began operations from Finland that is an important statistics since most of its revenues are coming from international markets especially from developing countries. The 10 markets from which Nokia generated the highest amounts of sales revenues are listed below in decreasing order; with the highest written first and lowest stated last: China, India, the UK, Germany, the United States, Russia, Indonesia, Spain, Brazil and Italy; when combined these markets provided 52% of the total sales in 2009. It is important to note here that China and India; the fastest growing economies in Asia are leaders for Nokia sales; secondly the list also contains growing markets such as Brazil and Russia. It is important to note here that because Nokias main sales driver is the mobile device market hence there are higher sales potential for Nokia in developing countries. This is because countries such as India and China are experiencing large demand for mobile phones due to the rapid growth and development of infrastructure especially network infrastructure. The rising levels of GDP per capita and income levels of people in the developing world are increasing their ability to purchase mobile phones therefore we could see that in the near future major growth would come from developing economies. Foreign Exchange exposures Faced by Nokia Nokia has businesses all over the world; this global presence means that assets and sales, liabilities and loans taken or completed in different parts of the world may be higher or lower in value when translated into the Euro or any home base currency. Because Nokia owns substantial assets in foreign markets therefore the company has to hedge and protect itself against the potential of currency adjustments in the negative direction. Nokias foreign exchange policy is developed by the treasury department of the company which looks after the interests of the company such that foreign exchange exposure is minimized and shareholder value is maximized. Under the policy; transactions which are considered of material value are hedged against foreign exchange exposures as long as the hedging tool is not uneconomical i.e. the hedging cost is lower or market liquidity is favorable. The company uses derivative financial instruments such as foreign exchange options and forward foreign exchange contracts to manage hedging and reduce the exposure. The group has a policy of not hedging 2-year or beyond forecasted foreign currency cash flows. New Product and Market development (cà ¢u c) Nokia operates in a highly drastic and technologically changing industry; on the consumer side the company also sees the acceptance and increasing demand for more sophisticated products therefore the company has to remain on its toes and come up with new products and services. The recent financial crisis which was coupled with economic downturn as well saw most industries and companies experiencing reduced profits or even losses. 2008 2007 2006 2005 2004 RD Expenditure, EUR(m) 5968 5647 3897 3825 3776 RD as % of net sales 11.8 11.1 9.5 11.2 12.9 If we look at the table above we see that for the period 2004-08 the average RD expenditure as a percentage of sales was around 11%. This explains how important the development of new products and markets are to companies like Nokia. RD expenditure dipped slightly during 2009 by about 1% compared with 2008 figures because of the decline in sales. The reduction in total revenues during the year 2009 was because the brunt of the crisis or the lowest point of the crisis was considered to be the third and fourth quarters of 2009. The major problem faced by Nokia mobile devices sales was the fact that as macroeconomic aggregates plummeted world wide; people were laid off, disposal incomes squeezed and purchasing power declined in some regions because of currency depreciation, all these factors led to the decrease in demand for Nokia phones. Despite these tough circumstances Nokia continued to expand product development and introduced new products in the mobile device markets, new systems and networks from Nokia Siemens Partnership and navigation phones under the NAVTEQ division. Capital Structure and Liabilities Management at Nokia The average basic number of shares during 2009 was 3.705 billion, 2008 was 3.743 billion and 2007 was 3.885 billion. The difference between diluted and basic average number of shares was negligible during all the three years stated above. About 1% of the shares were owned by Nokia Corporation during 2009. There was not much change in the capital structure during the three years apart from a buy-back and cancellation of shares that were owned by the company during 2008 and 2009 respectively. 2008 2007 2006 2005 2004 Net debt to equity % -14 -62 -69 -77 -78 Equity Ratio % 41.2 45.5 52.6 56.4 64.6 Return on Equity % 27.5 53.9 35.5 27.1 21.5 Interest-bearing liabilities, EUR (m)4 452 1 090 249 300 132 If we closely analyze the net debt to equity ratio for the 5 year period we see that initially in the years 04, 05 06 and even 07 the company had surplus assets over total debt. Though this situation drastically declined during 2008 as the credit crunch forced Nokia to borrow money and bridge the gap between its working capital. This factor eroded the asset base advantage the company was holding for the previous 4 years before 2008. Another important factor was that short-term borrowings rose substantially during 2008. Short-term borrowings increased from 714 million Euros in 2007 to 3,578 million Euros in 2008. The equity ratio represents the amount of assets represented or funded by the equity holders. From the table above we can see that the assets funded through equity has been on a declining run throughout the five year period. This also explains that as years have passed by liabilities have been increasing used as a way of financing assets. Many analysts believe that borrowing is a lesser expensive way of raising funds compared to equity as interest paid reduces effective tax rate; secondly creditors do not have a say in the way management runs the business; thirdly no dividends need to be paid out. On the other hand equity has its own advantages such as no finance costs; in case of bankruptcy the claim of common shareholders is last only after other creditors have been paid out. Overall companies are suggested to find an optimum equity and liability combination by working out the WACC at different levels. 2007 was considered one of the best years in Nokias history not only did the stock do well but the companys other major indicators were in green as well. For instance the return on equity was around 53% during 2007; that is a phenomenal return for shareholders from a company that competes in such a tough competitive environment. The return on equity declined significantly during 2008. As we see from the table that the value declined to 27.5% from 53.9% in 2007. This again explains the difficulty the company faced during 2008 in terms of low sales volumes, depressed prices and difficult financial conditions. Nokia Corporations shares are listed on the following stock markets: NASDAQ OMX, (Helsinki), Frankfurter, and New York Stock Exchange. The company delisted its Swedish Depository Receipts (SDRs) from the Stockholm Stock Exchange. The last day of trading of these SDRs was June 1, 2007. Raising capital and loans from foreign capital markets has a number of benefits and a few disadvantages as well. In terms of the benefits; firstly by listing stocks in a market such as NYSE a company like Nokia gave itself exposure to one of the most valuable and important stock markets in the world. New York is the financial capital of the worlds largest economy and having the ability to raise funds in such a market builds great reputation for a company apart from substantial capital. Similarly the SDR move into the Swedish Stock Market was a strong move as that would have strengthened the capital structure before the delisting. SDRs provide a substantial capital inflow in lieu of a stable and known cost of capital that gives the firms financial cost structure sustainability and consistency. In terms of the disadvantages economic activities in a foreign country might impact the shareholder value of the whole group. Though this cost is offset by the point that todays financial markets are so dependent on each other that market risks are almost similar in virtually all countries and their stock markets. The important thing here is that companies like Nokia must be aware of the trade cycles and the economic cycles of the world and individual markets and there relationship between each other because that will determine the impact of raising capital in foreign markets. Impact on Market Value as a Result of Strategies in Foreign Exchange Risk, Raising Capital and Moving into New Markets Technological firms generally have higher risk attached to their stock prices and market values therefore we expect them to do extremely well when the economy is booming and the company is able to come up with consistent and high quality products. The case of Nokia is no different the company has successfully established itself as one of the most reliable and advanced manufacturer of mobile devices. Steadily over the years Nokia has moved into new markets which have diversified the portfolio of the company hence spreading the risk over different but related markets. Nokias move to enter new markets has been a good way of diversifying business interests in the sense that the company has not only developed new products but it has also moved into new physical markets. Developing new products has its own advantages but moving into new geographical markets can benefit companies from the all important concept of economies of new scale. Going into new markets exposes the company to absolutely new customers hence increasing the total potential customer base of the company. Raising capital in foreign markets also impacts the market value of the company in a positive way. The company, by raising additional capital in new markets, not only increases its ability to spend money on acquisitions, development, and supply-chain but also gives credibility and higher standing to the companys share in the capital markets and makes the company a strong candidate for a better rating from agencies. The above graph is the stock price movement of Nokia stock, listed on NYSE, versus the SP 500 over a five year period. What is evident here is that consistently the Nokia stock has out performed the SP 500 for most of the time period under discussion. In percentage terms the stock has performed extremely well during the later half of 2007 up to mid 2008; even during the tough times of the late 2009 the stock did better than the overall SP index. The above graph is again representative of the fact that the companys stock performed better than most top company stocks during the boom period of 2007. Credit has to be given to the financial managers of the company since there prudent steps ensured a better than average EPS for the company and subsequently even better share price performance. Evaluation of the Firms Finance Managers In terms of hedging and controlling the foreign exchange risk I think the financial managers did a good job by employing a prudent policy of hedging all those cash inflows and outflows which were due within 2 years period. This is a prudent approach; secondly if we look at the table below we see that the company has remained profitable despite the financial and economic crisis that plagued the global markets for the past 2 and a half years. 2009 2008 2007 2006 2005 2004 Profit before tax, EUR (m) 962 4970 8268 5723 4971 4705 % of net sales 2.35 9.8 16.2 13.9 14.5 16 Dividends, EUR (m) 1482 1520 2111 1761 1641 1539 Profit attributable to quity holders of the parent 891 3988 7205 4306 3616 3192 EPS (basic) 0.24 1.07 1.85 NA NA NA We also see that the company gave dividends in all the last six years under discussion; this also shows consistency and the right mindset of financial managers who rightly understand the need to rollout dividends in order to ensure continuous investments from investors in the near future. The above graph shows that profitability peaked during the 2007 period and steadily declined thereafter this also shows the difficult financial and economic environment that was weathered by the corporate sectors of different economies. The impact of the crises were so great that profits before taxes almost decreased by 50% in 2008 from 2007 profits before taxes.