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Fraud Risk

Running Head: Fraud Risk

Name

Institution

Date

Introduction

Generally, the term fraud is used to denote any deliberate act or omission intended to deceive others. Such an act or omission enables the perpetrator to achieve a particular gain, while the victim suffers a loss (Singleton & Singleton, 2011). The concept of fraud is, therefore, an expansive legal concept where the auditors cannot determine the occurrence of such fraud but instead, their interest is to determine the acts or omissions that lead to a substantial misstatement of an organization’s financial statement (Bell & Carcello, 2000).

Discussion

Misstatements emanating from asset misappropriation involve theft of assets in an organization. This leads to an omission of material facts in the financial statement. Misstatements emanating from fraudulent financial reporting according to Vona, (2012) are omissions that are deliberate and meant to mislead. Consequently, the requirements outlined in the GAAP are not adhered to in the financial statement (Gillett & Uddin, 2005).

The concept of fraud risk factors is a situation that involves three conditions. These conditions include: incentives/pressures; attitudes/rationalizations; and opportunities (Beaulieu, 2001). It should however, be noted that fraud risk factors do not necessarily indicate the existence of fraud. Nonetheless, these factors are usually warning signs of an impending fraud (Singleton & Singleton, 2011).

Fraud risk assessment of DynCorp International.

DynCorp International is a United State based organization that provides global government services in support of the United States foreign policy objectives, national security, international development, diplomacy, and providing support solutions for defense in the U.S. Being a big organization, as it is, DynCorp International has a number of fraud risk factors associated with misstatement emanating from fraudulent financial reporting, while others may be related to misstatements emanating from assets misappropriation.

To begin with, since the operations undertaken by DynCorp International are massive and cuts across different states with the United States and other nations, the operations may present an opportunity to engage in financial reporting that is misleading. Such opportunities may arise in scenarios where DynCorp International has significant operations situated or carried out across international boundaries. In such scenarios, there is a high possibility that different jurisdictions have different cultures and business environment.

Owing to the nature of its operation, DynCorp International has a number of branches or subsidiary and bank accounts in jurisdictions that offers tax- haven with unclear business justification. In such a scenario, the operations may present an opportunity to engage in financial reporting that is fraudulent. In addition, the ability of DynCorp International to dominate the security support sector in the United States and its strong financial presence may present an opportunity to engage in financial reporting that is fraudulent. Such dominance allows the organization to monopolize its terms and conditions to their customers and suppliers leading to transactions that are inappropriate.

Another risk factor in DynCorp International may be associated with significant estimates used to evaluate the organization’s liabilities, assets, expenses, or revenue. Such estimates are very difficult to corroborate as they involve subjective evaluation, which may present an opportunity to engage in financial reporting that is incorrect. There is also a risk posed by the management practice within the organization, which involves committing to the company’s creditors, third parties, as well as analysts. As if that is not enough, the management of DynCorp International is usually hesitant to rectify notorious material weaknesses or significant deficiencies.

Fraud risk assessment of Alliance Data Systems

Alliance Data Systems Corporation is an organization based in North America that offers loyalty as well as marketing solutions. Some of the activities carried out by the organization include designing and installing customized solutions across North America. The services offered by this company range from loyalty consulting, email marketing solutions, marketing consumer database, to inventive agency services. Alliance Data Systems Corporation provides its services to a number of industries forming the basis of it’s’ clientele. These industries include: financial services, grocery, health care, pharmaceutical, hospitality, among others.

The risk factors related to misstatements emanating from asset misappropriation in Alliance Data Systems Corporation may be categorized into three conditions that are common in instances where fraud subsists. These conditions include: incentives/pressures; opportunities; and attitudes/rationalizations.

The financial obligation of an individual in Alliance Data Systems Corporation may in one way or another, generate pressure on employees or even management executives who have access to assets, or cash prone to theft to embezzle such assets or cash. Employees may also be motivated to misappropriate assets or case susceptible to theft because of the adverse relationship that exists between Alliance Data Systems Corporation and some of the employees. Some of the scenarios that may cause strenuous relationship between the organization and employees include: compensation, or promotions that defy the expectations of employees, and anticipated employee layoffs in the future.

There are also some circumstances in Alliance Data Systems Corporation that may increase the possibility of misappropriating susceptible assets in the company. These circumstances include the availability of inventory items in the Corporation that are small in size and are highly priced. The company also has assets that are marketable, small in size, and cannot be easily identified.

In an effort to maintain profitability and financial stability Alliance Data Systems Corporation may be exposed to fraud risk due to the increased failures of business and the significant decline in the demand for their services by customers. The company also becomes highly susceptible to brisk changes, for instance changes in interest rates, or technology. Additionally, chances of fraud may increase due to the pressure on the company to fulfill the demands of third parties. The management executives may be tempted to misappropriate company funds or assets to mitigate the pressure.

Fraud risk assessment of AMR Corporation

AMR Corporation is an American air company and a parent company of American Eagle Airlines, Inc, as well as American Airlines, Inc. The corporation oversees all the airline activities worldwide. With respect to the nature of AMR Corporation operation, the corporation has a number of branches or subsidiary and bank accounts in jurisdictions that offer tax- haven with unclear business justification. In such a scenario, the operations may present an opportunity to engage in financial reporting that is misleading.

AMR Corporation operations are massive and cuts across different states with the United States and other nations, the operations may present an opportunity to engage in financial reporting that is fraudulent. Such opportunities may arise in scenarios where AMR Corporation has significant operations situated or carried out across international boundaries. In such scenarios, there is a high possibility that different jurisdictions have different cultures and business environment.

The financial obligation of an individual in AMR Corporation may in one way or another generate pressure on employees or even management executives who have access to assets or cash prone to theft to embezzle them. In addition, the ability of AMR Corporation to dominate the air transport sector in the United States and its strong financial presence may present an opportunity to engage in financial reporting that is fraudulent. Such dominance allows the organization to monopolize its terms and conditions to their customers and suppliers leading to transactions that are inappropriate.

Fraud risk assessment of Baker Hughes

Baker Hughes is a company that deals with oil and natural gas production in over eighty countries. The major functions of the company are to assist countries with oil and gas exploration, development, generation, and also help them in the management of such oil and gas reservoirs. Baker Hughes operations cut across over 80 nations, the operations of this organization may present an opportunity to engage in financial reporting that is fraudulent. Such opportunities may arise in scenarios where Baker Hughes has significant operations carried out across international boundaries. In such scenarios, there is a high possibility that different jurisdictions have different cultures and business environment. Thus, providing an opportunity for fraud.

The economic obligation of employees in Baker Hughes may in one way or another, generate pressure on employees or even management executives who have access to assets or cash prone to theft to embezzle such assets or cash. Employees may also be motivated to misappropriate assets or case susceptible to theft because of the adverse relationship that exists between Baker Hughes and some of the employees. Another risk factor in Baker Hughes may be associated with significant estimates used to evaluate the organization’s liabilities, assets, expenses, or revenue. Such estimates are very difficult to corroborate as they involve subjective evaluation, which may present an opportunity to engage in financial reporting that is falsified.

Fraud risk assessment of IBM Company

IBM is a multinational company based in New York dealing with IT consultations, technology, as well as computer production. The company provides services related to information technology and produces both software and hardware.

As a computer producing company, there are some circumstances that may increase the possibility of misappropriating susceptible assets of the company. These circumstances include the availability of inventory items in IBM that are small in size and are highly demanded such as laptops, hardware and software.

Another risk factor in IBM is the possibility of misappropriation of intellectual property that is in the domain of the company’s employees. The existence of assets that are marketable, small in size, and products that cannot be easily identified also increases the risk of such assets being misappropriated easily. As a multinational company, IMB has numerous subsidiary companies as well as bank accounts in different countries. The state of affair may present a chance of misappropriating cash or assets of the company in jurisdictions where there are different business environment and cultures.

Conclusion

There are a number of ways through which fraud can be manifest in a company and the company dealings. Undoubtedly, fraud can have a negative impact on a company’s investment and business activities in general. For this reason, the management of a company has a responsibility to design and enforce policies for purposes of mitigating such fraud incidences. One of the most effective ways of preventing fraud in a company is through developing and adopting a set of core values in the company that provides primary principles that steers every action of all employees.

References

Beaulieu, R. (2001). Earnings Manipulation Risk, Corporate Governance Risk, and Auditors’ Planning and Pricing Decisions. The Accounting Review, 79 (2), 277- 304.

Bell, B., & Carcello, J. (2000). A decision aid in accessing the likelihood of fraudulent financial reporting. Auditing: A Journal of Practice & Theory, 19 (1), 169-184.

Gillett, P., & Uddin, N. (2005). CFO intentions of fraudulent financial reporting. Auditing: A Journal of Practice & Theory, 24 (1), 55-75.

Singleton, T., & Singleton, A. (2011). Fraud Risk Assessment. London: John Wiley and Sons.

Vona, L. (2012). Fraud Risk Assessment: Building a Fraud Audit Program. London: John Wiley & Sons,

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Economic Development of Singapore

Running Head: Economic Development of Singapore

Name

Institution

Date

Outline

Introduction
Discussion
Conclusion

Introduction

Singapore is one of the few countries in the world with the most competitive and strong economies in the world. The economic situation was however, very different forty years ago when the country was under the British colonial rule. Singapore was faced with severe unemployment problems and shortage of housing facilities to the citizens. During the colonial period, Singapore was made a commercial port that served the Southeast Asia region in terms of maritime economies. About forty years ago, when Singapore became independent, the country was ranked among the third world countries with less than 320 US dollars in the GNP per capita. Soon after independence, the population of the country was growing at a terrific rate, the infrastructure was in a devastating condition, and the unemployment rates were rising.

According to Yuen (2005), a substantial number of the country’s population was living in squatter settlements and slums on the fringe of the city. It is worth noting that the economy of colonial Singapore was based on entrepôt trade. Nevertheless, this kind of primary production in the country and its economic activities did not create enough employment opportunities to the rapidly growing population in the country. After the British troops were withdrawn from Singapore, unemployment situation became worse as the country had to create more employment opportunities as well as improve the housing conditions.

The only viable means of alleviating the unemployment conditions as well fostering economic development in Singapore was through industrialization as recommended by the United Nations Industrial Survey Mission (UNISM). It therefore followed that the prime target for Singapore was primarily establishing industries that required intensive labor. Industrialization in Singapore was however a new phenomenon since the country had not engaged in industrial activities before. Most people in the county were experienced in other activities such as service, trade, and processing activities but not industrial activities. It therefore follows that there were very few individuals in the country with expertise in the field of industrial institutions. According to Goh, (1963) without government intervention, industrial establishment in Singapore could not be achieved. This was because the domestic market in post- colonial Singapore was too small to be able to accommodate numerous industrial establishments. It became apparent that the success of industrialization efforts in Singapore could not be realized without a deliberate government intervention and support.

Consequently, in 1961 the new government of Singapore established The Economic Development Board (EDB) to substitute the Singapore Industrial Promotion Board (SIPB). The EDB was established with the primary objective of promoting rapid development in the economy, creating new employment opportunities, as well as spearheading rapid industrialization program in the country. Unlike the Singapore Industrial Promotion Board (SIPB) which had it staff consisting of a manager as well as S$1 million revolving fund, the new Economic Development Board (EDB) was furnished with S$100 million for purposes of boosting rapid economic growth in Singapore. In their work Seetoh & Ong, (2008) state that the Economic Development Board (EDB) was given the authority to fund activities such as manpower development, industrial establishment, provision of incentives, promotion, as well as development of industrial estates. It should however be noted that the functions and responsibilities of the EDB became more complex with the development of industrial establishment in the country, and as such there was an urgent need to redesign the functions of this board for purposes of effective implementation of its mandate.

Discussion

In light of the need to streamline the functions of the EDB, the government of Singapore established the Development Bank of Singapore in 1968, which was a public limited company to take over from the EDB the function of industrial financing. Further, in the same year the government established the Jurong Town Corporation (JTC), another statutory board charged with the responsibility of developing industrial estate. These two functions were initially performed by the Economic Development Board (EDB), and as such the board could now concentrate on the function of investment promotion.

In a bid to attain its objectives, the Economic Development Board (EDB) embarked on a mission to establish offices for purposes of investment promotions across the globe. The EDB further, embarked on acquiring technology, information, manpower, and finance from all over the world, while at the same time promoting foreign investments. During the initial years of its formation, the Economic Development Board (EDB) gave many industries tariff protection, tax holidays, pioneer status, as well as attracted numerous foreign investments. In an effort to promote rapid industrial establishment in Singapore, the Jurong Town Corporation (JTC) designed viable industrial estates with the require infrastructure for such purpose. In the year 1971 for example, the Jurong Town Corporation (JTC) established a program of training workforce from Singapore in other countries which were industrialized. Such training programs included Philips in Holland and Rollei in Germany to mention but a few. In addition, the JTC established training institutions in the field of design and technology within Singapore (Haque, 2004). These training institutions were established in conjunction with other countries such as France, Germany, and Japan.

The Economic Development Board (EDB) on the other hand gave the necessary development fund for purposes of boosting the process of manpower training in Singapore. It therefore, follows that Singapore made a deliberate effort to heavily invest in the education of its workforce for economic development of the country. Consequently, these developments in Singapore brought about full employment as well as drastic economic growth.

As the leading sector, manufacturing had contributed greatly in the economic growth of Singapore by the end of 1960s. As a matter of fact, study shows that the manufacturing sector contributed up to 18% of Singapore GDP by the close of that decade. In addition, the structural outlook of the Singapore changed tremendously in the sense that the economy was no longer based on the long-established entrepôt trade but there was an additional sector in the economy which was the industrial sector. According to Yuen (1991), Singapore had attained the level of full employment in the country by the begging to the 1970s. The rates of GDP were very high in Singapore during the period 1965-1986 which went as high as 8% to 10% per annum.

In the 1980s, the economy of Singapore was based on five main sectors. These sectors included: production of goods and services for use by the local consumers, manufacturing products for purposes of exporting, provision of specialized services projected at the global market, banking, as well as services related to telecommunications. The tremendous growth in the manufacturing sector of the economy particularly in the 1970s and 1980, was a major boost to the economic development in Singapore and the society at large.

International trade and sale of services were the major contributors to the economy of Singapore. There were several economic activities that were involved in the entrepôt trade which included among others activities such as currency exchange, wholesaling, and warehousing. In the 1980s further advancement were made, Singapore began to produce precision optical instruments as well as assembling different components of electronics. The country further took as an economic activity the process of grading and sorting rubber and pepper (Kim, 2006). All these economic activities contributed a great deal to the economic development of Singapore, not to mention the wide pool of employment opportunities that were created as a result.

Following the country’s heavy reliance on external suppliers and market, the country had no choice but to embrace free market, economic openness, and free trade. Initially, Singapore had a number of protective tariffs aimed at protecting domestic manufactures and boosting the local economy. In addition,the country also had a few revenue tariffs. These tariffs were however, awaiting abolition in the following decade as it so happened. Further, during the 1980s, Singapore never had any form of system that would control prices in the domestic arena and the country also never had a foreign exchange control bureau. There were a number of economic activities that the government did not have direct control. These aspects included: repatriation of capital, the aspect of profit remittance, and private investment. In addition, the government solicited for huge foreign investment and a substantial number of corporations were entertained in the county.

Consequently, during the 1980s foreign investments in the manufacturing sector had risen to about 70% of the total manufacturing sector in the country (Seetoh & Ong, 2008). The government also played an important role particularly in creating the necessary environment for both the local and foreign investment. The government did this through providing an administration that was effective and free from any form of graft, a genuine concern for the challenges encountered in the business world, and a high-quality infrastructure.

Since the country dependent highly on the foreign market, it became vulnerable to the unpredictable market conditions of the world. In an effort to take full advantage of the situation, the government of Singapore adopted an economic system with a dominant role of the government in terms of the management of macroeconomic. The government also went ahead to take control of the essential factors of production for instance capital, labor, and land. Another factor that greatly contributed to the rapid economic development of Singapore is the high rates of savings within the domestic economy. These domestic savings in turn provided the much needed reserves to the country’s economy during trade rescissions and also provided a much needed boost to the capital levels of the country instead of depending on foreign corporations for that purpose.

It should however be noted that the high rates of domestic savings in Singapore was as a result of a deliberate government program which was designed in a way that all citizens in the country were obliged to make a compulsory contribution to the pension fund. This pension fund was controlled by the central government. (Kim, 2006). The contribution was about 25% of every employee’s salaries in Singapore. The government during this period was the largest provider of employment opportunities; it also had the control over a large percent of land of about 75%, it housed a large percentage of the population in apartment that were self owned. The government also controlled the wages level in the country (Yuen, 1991).

The government of Singapore emphasized on the need for its citizens to acquire high level of skills. In an effort to achieve social goals, the government of Singapore used taxation and budgeting. Up to 1984, the government of Singapore controlled the size of families through setting the number of children every family could have. Each family was restricted to have two children; any family which had more than two children the government imposed higher educational as well as medical costs on them. Surprisingly, the government in 1986 introduced tax rebates which were meant to persuade women who had attained collage education to get up to four offspring.

During the early 1990s, the Economic Development Board (EDB) established the Economic Development Board Investment Pte Ltd (EDBI). The was an investment arm of the Economic Development Board charged with the responsibility of initiating investments into various companies that were key in the growth of industrialization in the country and also to enhance innovations and technologies that were emerging. This arm of the Economic Development Board was therefore aimed at promoting novel growth in different areas of the economy in Singapore. In private equity for example, the EDBI established an Investment Fund for Technopreneurship known as Technopreneurship Investment Fund (TIF) for purposes of financing Singapore industrial venture.

According to a research conducted on the economic condition of Singapore, the manufacturing sector of the economy in 2006 contributed up to 28% of the country GDP (Yuen, 1991). The goal of the Economic Development Board (EDB) is to ensure that the total output in manufacturing doubles to about S$80 billion by the year 2018. It is projected that the manufacturing sector over the next decade will be the major contributor to the countries GDP. The new target areas of the EDB is to promote lifestyle, educational, biomedical sciences, IT and software sectors, medical, and emerging growth businesses such as clean energy and water. For purposes of improving export performance in the Singapore, diversification of products would be very vital factor. For this reason, services and manufacturing have been acknowledged as the two crucial engines in the economic growth of Singapore and the process of industrial reconstruction of the country.

Conclusion

Since the early 1960s Singapore as a country have had a remarkable economic development. It has even been suggested that today, Singapore is one of the countries with the most competitive and strong economy in the world. The role of the Economic Development Board (EDB) cannot be overemphasized in the economic development of Singapore. The economy of Singapore was based on five main sectors. These sectors included: production of goods and services for use by the local consumers, manufacturing products for purposes of exporting, provision of specialized services projected at the global market, banking, as well as services related to telecommunications. The EDB was therefore, established with the primary objective of promoting rapid development in the economy, creating new employment opportunities, as well as spearheading rapid industrialization program in the country (Yuen, 1991). The EDB further, embarked on acquiring technology, information, manpower, and finance from all over the world, while at the same time promoting foreign investments. During the initial years when the EDB was formed, the board gave many industries tariff protection, tax holidays, pioneer status, as well as attracted numerous foreign investments.

The functions and responsibilities of the EDB became more complex with the development of industrial establishment in the country, and as such there was an urgent need to redesign the functions of this board for purposes of effective implementation of its mandate. The Economic Development Board (EDB) was given the authority to fund activities such as manpower development, industrial establishment, and provision of incentives, promotion, as well as development of industrial estates (Seetoh & Ong, 2008). To address this, the government of Singapore established the Development Bank of Singapore in 1968, which was a public limited company to take over from the EDB the function of industrial financing. Further, in the same year the government established the Jurong Town Corporation (JTC), another statutory board charged with the responsibility of developing industrial estate. The government of Singapore further took control of the essential factors of production for instance capital, labor, and land. Another factor that greatly contributed to the rapid economic development of Singapore is the high rates of savings within the domestic economy. These domestic savings in turn provided the much needed reserves to the country’s economy during trade rescissions and also acted as a booster to the capital levels of the country other than depending on foreign corporations for that purpose. The government also created the necessary environment for both local and foreign investment. This was achieved through providing an administration that was effective and free from any form of graft, high-quality infrastructure, and a genuine concern for the challenges encountered in the business world.

References

Haque, M. (2004). Governance and bureaucracy in Singapore: Contemporary

Reforms and Implications. International Political Science Review, 25 (2), 227– 240

Kim, P. (2006). Father Leadership: The Singapore Case Study. Emerald,

44(1), 24-45.

Seetoh, K., & Ong, A. (2008). Achieving sustainable industrial development through a

System of strategic planning and implementation: The Singapore model in T C Wong, B Yuen and C Goldblum (Ed). Spatial Planning for a Sustainable Singapore, Singapore: Springer.

Yuen, B. (1991). Planning and development of industrial estates in Singapore. Third World Planning Review, 13 (1) 47-68.

Yuen, B. (2005). Singapore high technology cluster: origin and present situation. Journal of Property Research, 9 (1)247-260.

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Kodak case study

Running Head: Kodak case study

Name

Institution

Date

Outline

Introduction
PESTEL analysis
SWOT analysis
Conclusion

Introduction

Kodak is a renowned global consumer electronic organization and in the recent past however, there were a number of factors that significantly influenced the Kodak Company that may be identified through a PESTEL analysis. PESTEL is an environmental scanning tool which stands for political, economic, sociological and technological, environmental and legal factors (Macher & Richman 2004: 39). Technological changes over time have enormously influenced the Kodak Company in terms of changing as well as altering the company’s organizational customs and structure. The biggest challenge faced by Kodak Company was the fact that in several markets, digital technologies had greatly advanced while Kodak looked on and did nothing. By the time the company attempted to catch up with these technologies, it suffered a major setback since it was too much at the rear to be able to catch up with the rapidly changing technology. In addition, the strategy used by the company in an effort to fit in the changing technological times was nevertheless, unsuccessful. This could be attributed to the fact that pursuing a joint venture with another organization caused conflicting situations, and Kodak could not match up easily with the already established performer. Consequently, the only viable option for Kodak was to split up the joint venture and work independent of each other.

Discussion

PESTEL Analysis

As earlier stated, there were a number of factors that significantly influenced the Kodak Company’s organizational change, and these factors can be identified through a PESTEL Analysis. Beginning with the political factors, Kodak was greatly influenced by the political climate which caused considerable organizational change in the company. Globalization as part of political development had a vital role in influencing the performance of Kodak. It is worth noting that besides politics, there were other factors that contributed significantly to the performance of the company. (Cooke 2002: 23).

Changes in the economic environment also played a significant role in the company. With the advent of globalization, there were more opportunities opening up in the global market, and this meant that more competitor companies infiltrated in the industry to compete for consumers. According to an analysis undertaken by Tan & Tiong (2005:27), the number of consumers Kodak served, changed significantly as a result of the company’s social economic consideration. The increase in the amount of disposable income among the global population, as well as the rapid changes witnessed in terms of technological advancement allowed people to access new technologies that Kodak could not develop. For these reasons, Kodak lost a significant market segment that it had controlled in the past. At attempt by Kodak to introduce changes to be at par with the rapidly changing technology made it much easier for the competitor companies to outshine the company.

In addition, social changes played a vital role in influencing organizational changes and performance of Kodak. There was a tremendous change in the consumer preferences and needs, and this called for changes to meet these needs as well as achieve the desired targets of consumers. The consumers demanded high tech products for purposes of imaging and also to meet the needs of their status in the society. The circumstances as they were, practically forced Kodak to effect organizational changes in an effort to accommodate the changing needs of the consumers. Pettinger (2004:44) argues that due to globalization, the need to act swiftly and fast in respond to the consumer needs became the order of the day. Thus, there was a tremendous increase in the number of competing organizations each making an effort to outdo the other and win a bigger share of the market segment.

According to Henderson (1996: 36), the technological advancement in the imaging industry unlike any other, had witness rapid and sophisticated technological changes. This rapid technological advancement had forced the already established players in the industry as well as the new entrants to device quick and viable means for purposes of responding to the consumers need and keep up with the technological trends. Even though for a number of decades Kodak enjoyed international leadership in the field of imaging, the company was a little hesitant to engage itself in embracing and developing the new digital technologies for fear of the impacts that could emanate from such engagement. Kodak further, failed to foresee the possibility of its products being outmoded by the emergence of the digital technology. Furthermore, the company failed to design a viable strategy to deal with the emerging competitors in other regions. It should, therefore, be noted that by the time Kodak ventured into the development of the emerging technologies in the imaging sector, other competitors were far ahead of the company.

Further more, environmental factors also played a significant role in influencing organizational changes in the Kodak Company. Throughout the history of the company production process, there has been a big challenge particularly in terms of disposing off products from the company. Tan & Tiong (2005:44), note that the chemicals used by the company to produce its product are very unfriendly to the environment. In addition, most of the products produced by the company do not decompose after disposal, thus, posing an environmental threat. Developing and adapting a technology that would not compromise the status of environment posed a big challenge to Kodak, and in a way contributed to the sluggish performance of the company.

In the legal context, Kodak had to deal with different legal requirements of different countries in which it had established its subsidiaries, a factor that significantly affected the operation of the company. In an effort to mitigate this challenge, Kodak decided to enter into joint venture with other organizations which were technologically advanced in different countries. As such, it could be able to meet the needs of consumers, as well as keep a significant market share. Nonetheless, there emerged organizational conflicts within the joint ventures that obstructed the vibrancy of the company (Johnson & Scholes 2002:13).

SWOT Analysis

SWOT Analysis involves identification of the pertinent factor and assessing the significance of each one of these factors. The factors are both internal (strengths and weaknesses) as well as external (opportunities and threat) as presented in the table below:

Analytical factor	Relevance
Strength (Internal)	Kodak has a reputation of producing product of high quality for its clients, thus, the company is able to entice a significant number of customers to purchase its products. The company also has a wide range of consumers for it products such as the professional in the photography, film, as well as ordinary people who are fascinated by the company’s rewards and advertisement drives (Geary 1995:32). The products produced by the company are also very user friendly as they are simple and easy to operate.
Weakness (Internal)	It is a known fact that Kodak has been very slow in responding to the rapidly changing needs of the customers in terms of developing technologically sophisticated products, and this affected the profit margins of the company. It should also be noted that Kodak failed to foresee the possibility of its products being outmoded by the emergence of the digital technologies. Kodak also failed to design a viable strategy to deal with the emerging competitors in other regions, thus, losing a substantial market segment to its competitors in other regions (Booch 1996:16).
Opportunity (External)	Even though there are numerous competitors in the film industry, all is not gone for Kodak since the company has a long standing reputation that can be used to capture a significant segment of the market. Moreover, the consumers as well as the suppliers in the film industry may not be able to entirely direct the market forces. As such, producers such as Kodak do have the opportunity to determine the prices for their products, thus, keeping up with the speed of other competitors. In addition, Kodak has a well established relationship within Non Governmental Organization as well as various governments across the globe. By using such links, the company can be able to keep up with the market trends (Graetz et al 2002:65).
Threat (External)	The massively growing demand for technologically advanced products in the imaging industry poses a major threat to Kodak in the sense that there several other players in the industry that are well established, such as, Sony and other which have successfully developed high tech digital products that have out modeled products from Kodak. Additionally, with the rapid growth of the internet technology, as well as the emergence of cellular phones which come with cameras on them, create a situation that may phase out players such as Kodak in the film industry (Taylor & Cooper 1988: 57).

Conclusion

The operation of Kodak in an industry that has experienced massive evolution particularly in the context of digital technologies presented the company with challenges that saw the decline of the company in the recent past. Through PESTEL Analysis, one can be able to identify a number of factors that influenced the performance of Kodak. PESTEL Analysis engages an assessment of issues such as political, economic, sociological and technological, environmental and legal factors, and their impacts on the company. SWOT analysis, on the other hand, involves identifying the factors that are relevant to the company, and examining their significance. These factors in the SWOT analysis include the internal strength and weaknesses of the company and the external opportunities and threat of the company as discussed above.

References

Booch, G (1996), Object Solutions: Managing the Object Oriented Project, Addison- Wesley, London UK.

Cooke, FL (2002), Maintenance Work, Maintenance Skills, Blackwell, Oxford UK.

Graetz, F. et al (2002), Managing Organisational Change, John Wiley, London.

Geary, J (1995), Work Practices: the Structure of Work, in Edwards, P. (ed) Industrial Relations: Theory and Practice in Britain, Blackwell, Oxford UK.

Henderson, RM (1996), Technological Change and the Management of Architectural Knowledge, Sage Publications, Thousand Oaks, USA.

Johnson, G., & Scholes, K (2002), Exploring Corporate Strategy, FT Prentice Hall, London.

Macher, JT., & Richman, BD (2004), Organisational Response to Discontinuous Innovation: a Case Study Approach, International Journal of Innovation Management, Vol. 8 no. 1, pp. 37-52.

Pettinger, R (2004), Contemporary Strategic Management, Palgrave Macmillan, Basingstoke.

Tan, V., & Tiong, NT (2005), Change Management in Times of Economic Uncertainty, journal of UK Management Review, Vol. 27, no.1, pp 23-40.

Taylor, H., & Cooper, CL (1998), Organizational Change: Threat or Challenge? The

Role of Individual Differences in the Managing of Stress, Journal of Organizational Change Management, Vol.1, no. 1, pp 56-72.

Appendices

Analytical factor	Relevance
Strength (Internal)	Kodak has a wide range of consumers for it products, such as professional in the photography, film industry, as well as ordinary people who are fascinated by the company’s rewards and advertisement drives.
Weakness (Internal)	Kodak has been very sluggish in developing digital technologies which other companies have embraced and developed.
Opportunity (External)	The company has had a long standing reputation for its quality products.
Threat (External)	Kodak products were out modeled by other organizations that had developed and advanced digital technologies.

PESTEL- Political, Economic, Sociological and Technological, Environmental and Legal Factors

SWOT- Strength, Weaknesses, Opportunities, and Threat.

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Multiple Orgasms

Multiple Orgasms

Name

Institution

Date

An orgasm is an abrupt discharge of sexual tension that is accumulated in an individual, leading to muscular contractions that are rhythmic around the pelvic area which in turn produces intense arousal and pleasurable sensations (Hite, 2004). This is experienced by both women and men. Sometimes, orgasm is referred to as coming or climaxing. Study shows that orgasms vary from one individual to another in the sense that sometimes an orgasm may be less intense, mild, and subtler, while in others it may be explosive and intense. Such differences in the intensity of orgasm may result from several psychological factors such as activity expectation, mood, or even the general perspective about the encounter. Physical factors such as length of time between orgasms and fatigue may also determine the intensity of orgasm.

Multiple orgasms is therefore, a situation where an individual experiences more than one peak or climax in a single event of lovemaking without necessarily losing his or her sexual arousal in between the orgasms. Multiple orgasms are very common among women. Nonetheless, men can also experience multiple orgasms as is in women through proper training. Multiple orgasms in women indicate the ability to carry on sexual stimulation within a short period after the first orgasm. This happens within a few minutes or immediately so that another climax may be reached. Where a woman experiences a number of peaks in a single sexual encounter then she may be referred to as multiple orgasmic individual.

The sexual response cycles of both female and male are remarkably alike. The only difference however, is the ejaculation experienced by males. Women who are multiple orgasmic can experience orgasms that are consecutive if there is continuous stimulation after the first climax. This is because unlike men, women do not ejaculate (even though some reports indicate that indeed ejaculation is experienced by some women).

In males, ejaculation leads to a period of refractory during which it is impossible to achieve further sexual stimulation or an erection. This is caused by the intense sensitivity of the pines as well as the loss of sexual tension. This may be a big hindrance to multiple orgasms in men. Women are nonetheless, able to achieve it much easier than men since they are not programmed biologically to ejaculate and therefore hard to lose sexual tension (Pokras, 2007).

In an effort to appreciate how multiple orgasms can be achieved in men, one must distinguish between ejaculation and orgasm (Hite, 2004). Due to the fact that orgasm and ejaculation in men occurs in a rapid session, one might be tempted to think that they are one and the same thing. Yet, ejaculation comes slightly after orgasm. To be able to navigate through the path of multiple orgasms therefore, a person must be able to disconnect orgasm and ejaculation during a sexual encounter. A person can be able to separate orgasm and ejaculation though the use of pelvic floor muscle, commonly referred to as PC muscle (Pala, 2004). This muscle is known for its ability to discontinue the urine flow during urination. In instances where it is difficult to stop the flow of urine it is an indication that the PC muscle is weak. This means that a person needs to work on strengthening this muscle for purposes of experiencing multiple orgasms.

Adequate preparation is also important in achieving multiple orgasms in both male and female. After understanding and differentiating orgasm and ejaculation as well as taking the step of appreciating the PC muscle, a person should take another step and learn how to control the muscle effectively. Through regular exercise of the muscle, a person can be able to gain control of when to ejaculate particularly in men and this may help an individual achieve multiple orgasms.

According to Pala, (2004) practicing can also enable an individual to achieve multiple orgasms. Practice may be done through masturbation. A person should relax and then start masturbating and just before the person reach the point where they would ejaculate commonly referred to as point of no return, he should stop masturbating and contract the PC muscles while counting from one to ten. One should then relax for a while before resuming masturbating again. This time however one should masturbate until he is much closer to the point of no return and repeat the squeezing or contracting exercise of the muscle. This should continue until a person is able to learn his own sexual response.

Beck, (2003) suggest that there are other possible ways through which an individual can achieve multiple orgasms such as partnering. A romantic partner can be of great help in an effort to achieve multiple orgasms. This method can be of great help as it can be easy to get assistance from your partner in areas where you feel the need to improve on for purposes of becoming a multi- orgasmic. Once the partners successfully achieve their goal of being multi- orgasmic they can get a wonderful opportunity to enjoy all the pleasure that love lovemaking could bring.

The ability stimulates oneself slowly and gently may go a long way in enabling a person to understand his or her individual level of sexual arousal hence, achieving multiple orgasms. In a study conducted by Pokras, (2007) taking sexual stimulation slower enables an individual to appreciate his limits of sexual arousal and can be able to easily separate orgasm, arousal, plateau, and ejaculation. Having made all these discoveries, an individual will have a much greater opportunity to be able to control the PC muscles, know when to stop or resume stimulation for purposes of achieving multiple- orgasms.

Focusing on pleasing your partner rather than personal satisfaction is another way in which an individual can achieve multiple orgasms. The problem of personal gratification over that of the other partner is more in men than in women. Most men do not put into consideration the satisfaction of their partners and therefore they attain their peak way before them. to address such a predicament the aim of a partner should be to satisfy the other partner by controlling his or her sexual arousal until such a time when both have achieved a number of peaks and can hold it any more. In such instances a person is able to achieve multiple orgasms with less difficulty and intense pleasure.

Indeed, there a number of ways through which both male and female can obtain or achieve some of this method require constant practice while others just require an individual will to accomplish. When an individual achieve multiple orgasms it means that such an individual experiences more than one peak or climax in a single event of lovemaking without necessarily losing his or her sexual arousal in between the orgasms. This state increases the excitement and pleasure of and individual sexual life. Some of the ways through which a person may achieve multiple orgasms include; distinguishing between orgasm and ejaculation during a sexual encounter, partnering with your romantic partner for purposes of helping each other to achieve multiple orgasms, practicing how to control the PC muscle for purposes of prolonging sexual arousal, a person can also achieve multiple orgasms by focusing on satisfying his or her romantic partner before attaining his or her sexual gratification.

References

Beck, J. (2003). How to Have Multiple Orgasms. Washington: HarperCollins.

Hite, S. (2004). The Hite Report: A Nationwide Study of Female Sexuality. London: Seven Stories Press.

Pala, A. (2004). Voluntary Ejaculation and Male Multiple Orgasms. Michigan: Universal- Publishers.

Pokras, S. (2007). Male Multiple Orgasms: Techniques That Guarantee You and Your Lover Intense Sexual Pleasure Again and Again and Again. Berlin: Ulysses Press.

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Management

Management

Name

Institution

Date

An individual with the responsibility of a manager has a great opportunity to motivate, lead, and supervise others. The ability of such an individual to the aforementioned effectively brings about a great change in the overall success of the company (Jim and Upchurch, 2007). It goes without saying that failure of a manager to effectively exercise his/her leadership and supervisory responsibility might result to a complete failure of his company. The encounter of Mary Jones is a successful and effective management tactic. This is because the previous head of accounting used to yell scream, pull ranks, and threaten mangers of other departments for failure to submit their budget in time. Unlike the previous head of accounting Mary Jones is using his managerial skill effectively by befriending managers from other departments and sending them reminder notes way before the due date. In fact, she goes an extra mile to send them a note thanking them for submitting their budget in time. Indeed, Mary Jones has exhibited effective management skill which has brought out positive result thus, successful.

Causal valuable are usually independent variables. Often times, they consist only those variable controlled by the management and the organization. For instance in Cutie Holmes Company the decision by management to squeeze more profits out of the large amount of cash flow is a casual variable. In addition, the management decision to completely revamp all jobs procedures for 20% to 30% is a causal variable. Intervening variables on the other hand, are those variables that reveal the performance capabilities, health, and internal state of a particular organization. This may be indicated by attitudes, performance goal, or motivation. In Cutie Holmes Company the terrible moral of employees, employees shrinking at coworkers, and absenteeism represents intervening variables. Finally, end result valuables consist of dependent variables that reveal what an organization has achieved, such as costs, growth among others. A turnover routine of about 50% and the resignation of technical people represent the end result valuables in Cutie Holmes Company.

MBO simply means management by objective. This program may be helpful to Cutie Holmes Company in that the program emphasizes a management model geared towards performance improvement in a company. This program clearly defines the objectives as well as goals that are agreed to by both the employees and management. In an arrangement such as this, the employees of Cutie Holmes Company will fully participate in the activities of the company without getting bored, hence increase their productivity.

Reference

Jim, M., and Upchurch, B. (2007). The Practices of Successful Managers. Retrieved from http://www.businessknowhow.com/manage/successful-manager.htm.

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Legal Issues in Psychology

Legal Issues in Psychology

Name

Institution

Date

One of the cases that have had an impact on psychological testing is the case of Griggs v Duke Power. This case was brought before the court for determination of discrimination allegations in 1971. This case emanated from a state that was very notorious in slavery and the effected of which had continued to affect that state often manifested by discrimination of Africans Americans (Hogan, 2007).

The case of Griggs v Duke Power as observed by Hogan, (2007) outlined a legal principle that has up to date been used as a tool for psychological testing. In the ruling of the case court noted that all persons in America including the minority groups, persons from different races or gender, must be fairly treated during the process of hiring workers. In addition, job performance should at all times be the key to the requirements set for such a job. In light of the above, the court set legal standards upon which psychological testing would be weighed against. According to Tobler, (2005) the legal standard outlined in the case of Griggs v Duke Power is to the effect that during the hiring process of any company, government, or private entity there should be a relationship between the job requirements and job performance.

Even though discrimination is very much alive in the United States, it is a vice that should be avoided at all costs. This vice is illegal under the constitution of the United States which entitles all citizens of America all the fundamental and inalienable privileges and rights regardless of their race, religion, gender, economic, or political status. To this end the case of Griggs v Duke Power is the locus case in regard to psychological testing.

References

Hogan, T. P. (2007). Psychological testing: a practical introduction. Hoboken, NJ:
John Wiley & Sons.
Tobler, C. (2005). Indirect discrimination: a case study into the development of the legal concept of indirect discrimination under EC law. Antwerpen: Intersentia.

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Economic Development of Singapore

Running Head: Economic Development of Singapore

Name

Institution

Date

Outline

Introduction

Discussion

Conclusion

Introduction

Singapore is one of the few countries in the world with the most competitive and strongest economies in the world. The economic situation was however, very different forty years ago when the country was under British colonial rule. Singapore was faced with severe unemployment problems and shortage of housing facilities to the citizens. During the colonial period, Singapore was made a commercial port that served the Southeast Asia region in terms of maritime economies. About forty years ago, when Singapore became independent, the country was ranked among the third world countries with less than 320 US dollars in the GNP per capita. Soon after independence, the population of the country was growing at a terrific rate, the infrastructure was in a devastating condition, and the unemployment rates were rising.

According to Yuen, 2005 a substantial number of the country’s population was living in squatter settlements and slums on the fringe of the city. It is worth noting that the economy of colonial Singapore was based on entrepôt trade. Nevertheless, this kind of primary production in the country and its economic activities did not create enough employment opportunities to the rapidly growing population in the country. After the British troops were withdrawn from Singapore, the unemployment situation became worse as the country had to create more employment opportunities as well as improve the housing conditions.

The only viable means of alleviating the unemployment conditions as well fostering economic development in Singapore was through industrialization as recommended by the United Nations Industrial Survey Mission (UNISM). It therefore followed that the prime target for Singapore was primarily establishing industries that required intensive labor. Industrialization in Singapore was however a new phenomenon since the country had not engaged in industrial activities before. Most of the country’s population was experienced in other activities such as service, trade, and processing activities rather than industrial activities. It therefore follows that there were very few individuals in the country with expertise in the field of industrial institutions. According to Goh, 1963 without government intervention, industrial establishment in Singapore was not easily adaptable. This was because the domestic market in post- colonial Singapore was too small to be able to accommodate numerous industrial establishments. It became apparent that the success of industrialization efforts in Singapore could not be realized without a deliberate government intervention and support.

Consequently, in 1961 the new government of Singapore established The Economic Development Board (EDB) to substitute the Singapore Industrial Promotion Board (SIPB). The EDB was established with the primary objective of promoting rapid development in the economy, creating new employment opportunities, as well as spearheading rapid industrialization program in the country. Unlike the Singapore Industrial Promotion Board (SIPB), which had it staff consisting of the a confidential secretary and a manager only as well as S$1 million revolving fund, the new Economic Development Board (EDB) was furnished with S$100 million for purposes of boosting rapid economic growth in Singapore. In their work Seetoh and Ong, (2008) state that the Economic Development Board (EDB) was given the authority to fund activities such as manpower development, industrial establishment, provision of incentives, promotion, as well as development of industrial estates. It should however be noted that the functions and responsibilities of the EDB became more complex with the development of industrial establishment in the country, and as such there was an urgent need to redesign the functions of this board for purposes of effective implementation of its mandate.

Discussion

In a bid to attain its objectives, the Economic Development Board (EDB) embarked on a mission to establish offices for purposes of investment promotions across the globe. The EDB further, embarked on acquiring technology, information, manpower, and finance from all over the world, while at the same time promoting foreign investments. During the initial years when the EDB was formed, the board gave many industries tariff protection, tax holidays, pioneer status, as well as attracted numerous foreign investments. In an effort to promote rapid industrial establishment in Singapore, the Jurong Town Corporation (JTC) designed viable industrial estates with the require infrastructure for such purpose. In the year 1971 for example, the Jurong Town Corporation (JTC) established a program of training workforce from Singapore in other countries which were industrialized. Such training programs included Philips in Holland and Rollei in Germany to mention but a few. In addition, the JTC established training institutions in the field of design and technology within Singapore (Haque, 2004). These training institutions were established in conjunction with other countries such as France, Germany, and Japan.

The Economic Development Board (EDB) on the other hand gave the necessary development fund for purposes of boosting the process of manpower training in Singapore. It therefore, follows that Singapore made a deliberate effort to heavily invest in the education of its workforce for economic development in Singapore. Consequently, these developments in Singapore brought about full employment as well as drastic economic growth.

As the leading sector, manufacturing had contributed greatly in the economic growth of Singapore by the end of 1960s. As a matter of fact, study shows that the manufacturing sector contributed up to 18% of Singapore GDP by the close of that decade. In addition, the structural outlook of the Singapore changed tremendously in the sense that the economy was no longer based on the long-established entrepôt trade but there was an additional sector in the economy which was the industrial sector. According to Yuen, (1991) Singapore had attained the level of full employment in the country by the begging to the 1970s. The rates of GDP were very high in Singapore during the period 1965-1986 which went as high as 8% to 10% per annum.

In the 1980s, the economy of Singapore was based on five main sectors. These sectors included: export-oriented manufacturing, the regional entrepôt trade, production of goods and services for use by the local consumers, refining of petroleum and shipping, and finally the international market with specialized services for instance tourism services, telecommunications services, as well as banking and finance services. The tremendous growth in the manufacturing sector of the economy particularly in the 1970s and 1980, was a major boost to the economic development in Singapore and the society at large.

The economy of Singapore largely depended on the sale of services as well as international trade. The entrepôt trade involved economic activities such as sorting and processing, wholesaling, currency exchange, warehousing, credit, ship repair and provisioning, risk management, adjudication of disputes arising from commercial dealings in the country, and business information. In the 1980s further advancement were made, Singapore began to produce precision optical instruments as well as assembling different components of electronics. The country further took as an economic activity the process of grading and sorting rubber and pepper (Kim, 2006). All these economic activities contributed a great deal on the economic development of Singapore not to mention the wide pool of employment opportunities that were created as a result.

Following the Singapore heavy reliance on external suppliers and market, the country had no choice but other than to embrace free market, economic openness, and free trade. It is worth stressing that Singapore was a free port in the 1980s with a few tariffs that were basically protective and countable revenue tariffs. These tariffs were however, awaiting abolition in the following decade as it so happened. Further, during the 1980s, Singapore never had any form of system that would control prices in the domestic arena and the country also never had a foreign exchange control bureau. The country had no control on private investment and enterprise; there was also no control on capital repatriation or a limitation on the remittance of profit. In addition, the government solicited for huge foreign investment and a substantial number of corporations were entertained in the county.

Consequently, during the 1980s foreign investments in the manufacturing sector had risen to about 70% of the total manufacturing sector in the country (Seetoh and Ong, 2008). The government also played an important role particularly in creating the necessary environment for both the local and foreign investment. The government did this through providing an administration that was effective and free from any form of graft, a genuine concern for the challenges encountered in the business world, and a high-quality infrastructure.

Since the country dependent highly on the foreign market, it became vulnerable to the unpredictable market conditions of the world. In an effort to take full advantage of the situation, the government of Singapore adopted an economic system with a dominant role of the government in terms of the management of macroeconomic. The government also went ahead to take control of the essential factors of production for instance capital, labor, and land. Another factor that greatly contributed to the rapid economic development of Singapore is the high rates of savings within the domestic economy. These domestic savings in turn provided the much needed reserves to the country’s economy during trade rescissions and also boost the capital levels of the country instead of depending on foreign corporations for that purpose.

It should however be noted that the high rates of domestic savings in Singapore was as a result of a deliberate government program which was designed in a way that obliged all the citizens in the country had to make a compulsory contribution to the pension fund (Kim, 2006). This contribution was about 25% of the salaries of Singapore citizens. The government during this period was the largest provider of employment opportunities; it also had the control over a large percent of land of about 75%, it housed a large percentage of the population in apartment that were self owned. The government also controlled the wages level in the country (Yuen, 1991).

According to a research conducted on the economic condition of Singapore, the manufacturing sector of the economy in 2006 contributed up to 28% of the country GDP. The goal of the Economic Development Board (EDB) is to ensure that the total output in manufacturing doubles to about S$80 billion by the year 2018. It is projected that that manufacturing sector over the next decade. The new target areas of the EDB is to promote lifestyle, educational, biomedical sciences, IT and software sectors, medical, and emerging growth businesses such as clean energy and water. For purposes of improving export performance in the Singapore, diversification of products would be very vital factor. For this reason, services and manufacturing have been acknowledged as the tow crucial engines in the economic growth of Singapore and the process of industrial reconstruction of the country.

Conclusion

Since the early 1960s Singapore as a country have had a remarkable economic development. It has even been suggested that today, Singapore is one of the countries with the most competitive and strongest economies in the world. The role of the Economic Development Board (EDB) cannot be overemphasized in the economic development of Singapore. The economy of Singapore was based on five main sectors. These sectors included: export-oriented manufacturing, the regional entrepôt trade, production of goods and services for use by the local consumers, refining of petroleum and shipping, and finally the international market with specialized services for instance tourism services, telecommunications services, as well as banking and finance services. The EDB was therefore, established with the primary objective of promoting rapid development in the economy, creating new employment opportunities, as well as spearheading rapid industrialization program in the country (Yuen, 1991). The EDB further, embarked on acquiring technology, information, manpower, and finance from all over the world, while at the same time promoting foreign investments. During the initial years when the EDB was formed, the board gave many industries tariff protection, tax holidays, pioneer status, as well as attracted numerous foreign investments.

The functions and responsibilities of the EDB became more complex with the development of industrial establishment in the country, and as such there was an urgent need to redesign the functions of this board for purposes of effective implementation of its mandate. The Economic Development Board (EDB) was given the authority to fund activities such as manpower development, industrial establishment, and provision of incentives, promotion, as well as development of industrial estates (Seetoh and Ong, 2008). To address this, the government of Singapore established the Development Bank of Singapore in 1968, which was a public limited company to take over from the EDB the function of industrial financing. Further, in the same year the government established the Jurong Town Corporation (JTC), another statutory board charged with the responsibility of developing industrial estate. The government of Singapore further took control of the essential factors of production for instance capital, labor, and land. Another factor that greatly contributed to the rapid economic development of Singapore is the high rates of savings within the domestic economy. These domestic savings in turn provided the much needed reserves to the country’s economy during trade rescissions and also boost the capital levels of the country instead of depending on foreign corporations for that purpose.

References

Haque, M. (2004). Governance and bureaucracy in Singapore: Contemporary

Reforms and Implications, International Political Science Review, 25 (2), 227– 240

Kim, P. (2006). Father Leadership: The Singapore Case Study, Emerald,

44(1), 24-45.

Seetoh, K., and Ong, A. (2008). Achieving sustainable industrial development through a

System of strategic planning and implementation: The Singapore model in T C Wong, B Yuen and C Goldblum (Ed) Spatial Planning for a Sustainable Singapore, Springer

Yuen, B. (1991). Planning and development of industrial estates in Singapore, Third World Planning Review,13 (1) 47-68.

Yuen, B. (2005). Singapore high technology cluster: origin and present situation, Journal of Property Research, 9 (1)247-260.

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Detailed Report for Industrial and Commercial Bank of China

Name

Instructor

Course Name

Date

Outline

Overview
History of ICBC
Industrial and Commercial Bank of China (ICBC) Operation and Business
Conclusion
Works Cited
Appendix

Overview

The banking industry in china has over the years undergone reforms and development. The PBOC bank was the sole bank that operated the Chinese financial system from the year 1949 to the year 1979. This bank single-handedly dealt with all the functions payments and lending systems as well as deposit taking. In an effort by the Chinese government to introduce reforms and modern systems of banking, PBCO bank was stripped off some of its businesses such as foreign exchange and international trade financing. These businesses were instead handed over to the Bank of China (BOC) in 1979. Other functions such as the fixed investment & construction as well as agriculture functions were given to the Agricultural Bank of China (ABC). The top tier structure of the Chinese banking was formed in the early 1990s. This top tier embodied a number of cooperatives, financial companies, and nine joint stock commercial banks. The non banking institutions in the Chinese financial system may be categorized into the following institutions: finance companies, TICs (trust and investment companies), financial leasing companies, urban credit cooperatives, and rural credit cooperatives. The banking system in china has for a long time been under the tight control of national government in terms of lending decisions, setting interest rates, as well as lending targets.

After 1990 however, the government of china introduced the three policy banks which reduced the level of government control over the banking system in china. These three policy banks included: the Agricultural Development Bank of China (ABC), the State Development Bank of China, and the Export-Import Bank of China. Consequently, these specialized banks became part of the big banks owned by the state. According to an argument advanced by Demirgüç and Levine (20), the establishment and the ultimate dominance of the largest state owned banks in china reduced the level of competition in the Chinese banking industry. With the entry of numerous banks that are not owned by the state, however, in the late 1990s there has been a drastic decline in the concentration ratio in the Chinese banks. Even though the largest four banks owned by the Chinese government continue to control a substantial amount of the assets in the banking sector, china has over thirty thousand financial institutions that are not banks as well as banks that are carrying on their businesses as legal entities.

It has been severally stated that in recent times, the amount of NPLs within the four big banks owed by the government of china poses a significant dilemma for the banking sector in china. The only viable means through which the problem NPLs could be solved was through reducing the amounts particularly in the big five banks to normal levels. In this spirit, the central government of china since the late 1990s undertook the responsibility of improving the capital base, the quality of assets, and risk management in the banking sector. These aspects were improved by the Chinese government for purposes of transforming the state owned banks to meet international standards. In so doing, these state owned banks could be listed in the international capital market. It therefore, follows that in an effort to improve the capital adequacy of these banks, it was necessary for the Chinese government to reduce the level of NPLs.

According to a study conducted by Bekaert et al (37), the system of private and government ownership of Chinese banks provided a very huge advantage to the Chinese banks particularly during the global financial crisis. This fact could be eluded from the fact that during the global financial crisis, three of the Chinese banks held the largest market capitalization across the globe. Unlike other banks in the world, the Chinese banks were never affected by the predicament of financial instability thus, enabling the economy of china to cross through the financial crisis unaffected.

History of ICBC

The Industrial and Commercial Bank of China (ICBC) was one of the four largest state owned banks that operate in china. This bank was formed in 1984 and it basically specialized in commercial transactions as well as financing. The establishment of this bank was part of the reforms undertaken by the Chinese government which started around 1978 in the banking industry. After its establishment, the ICBC took over from the central bank of china, PBOC, the functions of commercial banking. The Industrial and Commercial Bank of China (ICBC) went on with its specialized functions of commercial banking until 1993. The bank stretched its network of distribution and operation, enhanced their focus on risk management and profitability, and strengthened their management systems and financial accounting. The establishment of three policy banks in 1994 stripped of all functions carried out by ICBC and other banks that were owed by the state particularly those functions relating to policy lending. Consequently, the Industrial and Commercial Bank of China (ICBC) and other banks owned by the government such as the Agriculture Bank of China, Bank of China, and China Construction Bank, formed the four largest commercial banks within china and they operated on a more commercial basis.

The Industrial and Commercial Bank of China (ICBC) designed its first website in 1997, and also introduced a country wide telephone banking later in the year that followed. In a joint venture, the ICBC and the Hong Kong Bank of East Asia obtained seventy five percent stake of the ICBC-BEA Finance Company. After the ICBC acquired the Union Bank, the ICBC- Asia Company was formed in 2000. In the same year, ICBC introduced mobile banking, online commercial and private banking services, telephone banking services, and online business-to-business services. The presence of the Industrial and Commercial Bank of China (ICBC) in china was further boosted by the acquisition of about 25 % stake of shareholding in the China Insurance Holdings as well as in the China Insurance International Holdings.

During the end of the year 2002 the Industrial and Commercial Bank of China (ICBC) introduced Banking @ home which was a novel personal internet product. The Industrial and Commercial Bank of China (ICBC) acquired Fortis Bank Asia through ICBC – Asia and later changed the name of this bank to Belgian Bank from the original name, Fortis Bank Asia. In 2005, the ministry of finance in china injected capital into the four big banks owned by the state including the Industrial and Commercial Bank of China (ICBC). Lerner & Wan are of the view that the addition of more foreign currency reserves in these banks was aimed at strengthening the quality of assets as well as capita base (116). The central government of china further established four companies for purposes of asset management. These asset management companies included: China Great Wall Asset Management Corporation, China Huarong Asset Management Corporation, China Orient Asset Management Corporation, and China Cinda Asset Management Corporation. In the ICBC bad assets were transfer through Huarong Asset Management Corporation, one of the four companies formed by the central government of china for purposes of asset management. In 2005 however, was changed to a joint stock limited company from a bank owned by the state.

The Industrial and Commercial Bank of China (ICBC) faces some challenges in its commercial banking operations. One of these challenges includes competition from other foreign banks. Before joining the World Trade Organization (WTO), the central government of china protected Chinese banking sector from foreign competition. In light of the above the Chinese government did not allow foreign banks to operate their businesses using the Chinese currency particularly while dealing with their customers from china. The government had also put in place strict geographical limitations on foreign banks establishment within the territorial integrity of china. Nonetheless, after china became a member of the World Trade Organization (WTO) in the year 2006, the entry restrictions on foreign banks were lifted. In addition, the local currency business limitations on the foreign banks customers were also scrapped. Further the Chinese government lifted any form measures that involved non-prudential restriction of foreign banks in terms of operation as well as ownership. This process opened up the Chinese banking sector to foreign banking corporations thus increasing competition within the Chinese banking sector. For this reason, the Chinese banks hand to drastically enhance their business strategies as well as their service delivery for purposes of competing favorably with the foreign banks for a space in the global and local market (Barton & Wilson 44).

Lack of transparency in the Chinese banking sector was another big challenge within sector. Over the years, Chinese banking industry applied risk-based capital rules; nevertheless, the consistency in the application of such rules equitably among all the industry players left a lot to be desired in the banking sector. The accounting standards that were adopted by all the listed Chinese banks after 2007 has gone a long way in strengthening the standards of accounting within the banking industry in china thus, restoring the confidence of international investors and indeed the public at large.

Industrial and Commercial Bank of China (ICBC) Operation and Business

It is worth noting from the onset that the ICBC is basically a commercial bank which provides a number of services including among others: e-banking, wholesale banking, corporate banking, international business banking, and personal banking services. The bank also provides support towards the development of medium-sized enterprise, primary industries, key enterprises, pilot projects, and a number of infrastructure constructions. The Industrial and Commercial Bank of China (ICBC) has a number of segments which includes: personal banking, bank card, corporate banking, as well as e-banking (Lerner & Wan 98). During the year 2005, ICBC Bank had RMB 3, 289.6 billion in total loans, in total assets; the bank had RMB 6,456.1 billion, RMB 5,736.9 billion in total deposits, and RMB 171.6 billion in their total operating income. Studies show that by 2005, the Industrial and Commercial Bank of China (ICBC) was one of the Chinese largest corporation banks in terms of corporate deposits and discounted bills, as well as outstanding corporate loans. In addition, the bank had personal customers not less than 150 million and corporate banking customers exceeding the mark of 2.5 million. By the year 2006, ICBC has established more than ninety eight representative offices, overseas branches, outlets, and subsidiaries. The fee-based banking operations of the Industrial and Commercial Bank of China (ICBC) included: custody service businesses, bank cards, investment banking, agency services, wealth management, clearing and settlements, and electronic banking.

For purpose of achieving international standards of banking, the Industrial and Commercial Bank of China (ICBC) designed several steps to achieve this goal. These steps included adopting a financial reorganization that attempt to reduce the problem of non-performing loan and improve the adequacy of capital, designing efficient operation systems that are at par with the global standard of banking, developing a risk management system that is modern, and setting up viable mechanisms for corporate governance. Further, the Industrial and Commercial Bank of China (ICBC) embarked on novel reforms in its operational system, these reforms generally focused on risk management, operational efficiency, and improving customer services. In the words of Barton & Wilson, the bank specifically worked to improve on the operation of the treasury, personal banking, reorganizing the structure of operational through management layers as well as through reducing the number of branches, designing a comprehensive system of review and a viable platform of reporting to support a centralized financial and capital management, enhancing the incentive structures of employee for instance through developing a viable program of profit sharing, and finally through enhancing risk management and internal control systems (54).

The Industrial and Commercial Bank of China (ICBC) further forged collaboration with Goldman Sachs for purposes of strengthening the bank’s internal controls and risk management, corporate governance practices, asset management; enhance their treasury operations and their capabilities on non-performing loan disposal, as well as strengthening their investment banking operations and corporate banking (Barton & Wilson 56). The bank did not cease to enhance their customer service, risk management, and the bank’s support on its card business.

Quinn and Toyoda, (24) are of the view that in the banking industry, the aspect of risk management is very vital. In this respect, the Industrial and Commercial Bank of China (ICBC) has over the years implement a viable risk management framework for purposes of covering risks associated with bank operation, credit, market, and liquidity. The risk management framework was supported by advanced information technology and as such enhancing the quality of the Industrial and Commercial Bank of China (ICBC) assets to the enhanced risk management strategies. Prior to the introduction of the law governing commercial banking, the capabilities to manage risk by ICBC and other specialized banks owned by the state were quite restricted. Nevertheless, the passage of the law enabled these banks and the Industrial and Commercial Bank of China (ICBC) in particular to be able to take control in their risk management strategies as well as carry out their business in a more commercial point of view.

According to a study conducted by Kaplan and Scholar, the sustainable and stable growth in the revenue of the ICBC bank over the years is a clear reflection of the strong momentum within the bank operations. In 2010 for instance, the bank in the first three months registered a net profit of about RMB 41.725 billion. This profit exceeded the one registered in the previous year (2009) by about 19%. In addition, the earnings per share during the year 2010 were RMB 0.12. The earnings per share increased by about 9 percent compared to the previous year (54).

Conclusion

Over the past few decades, the banking system in china has been under the tight control of national government in terms of lending decisions, setting interest rates, as well as lending targets (Diamond 760). The government of china however, introduced the three policy banks in the late 1990s which reduced the level of its control over the banking system in china. These three policy banks included: the Agricultural Development Bank of China (ABC), the State Development Bank of China, and the Export-Import Bank of China. The system of private and government ownership of Chinese banks provided a very huge advantage to the Chinese banks particularly during the global financial crisis (Kennedy, & Matthew 33). The Industrial and Commercial Bank of China (ICBC) was formed in 1984, it was one of the four largest state owned banks that operate in china. This bank was basically established to deal exclusively with commercial transactions as well as financing. One of the challenges faced by the banking sector in china was competition from other foreign banks.

According to Kennedy & Matthew, before china joined the World Trade Organization (WTO), the central government of china protected Chinese banking sector from foreign competition (55). The government did this through enforcing geographical limitations on foreign banks establishment within the territorial integrity of china. In addition, foreign banks were not allowed to operate their businesses using the Chinese currency particularly while dealing with their customers from china. After china became a member of the World Trade Organization (WTO) in the year 2006, the entry restrictions on foreign banks were removed (Gompers & Joshua).

After its establishment, the ICBC took over from the central bank of china, PBOC, the functions of commercial banking. After its establishment, the ICBC took over from the central bank of china, PBOC, the functions of commercial banking. The Industrial and Commercial Bank of China (ICBC) has a number of segments which includes: personal banking, bank card, corporate banking, as well as e-banking. ICBC has established more than ninety eight representative offices, overseas branches, outlets, and subsidiaries. The fee-based banking operations of the Industrial and Commercial Bank of China (ICBC) included: custody service businesses, bank cards, investment banking, agency services, wealth management, clearing and settlements, and electronic banking.

In an effort to achieving international standards of banking, the Industrial and Commercial Bank of China (ICBC) took several steps which among others include: adopting a financial reorganization that attempt to reduce the problem of non-performing loan and improve the adequacy of capital, designing efficient operation systems that are at par with the global standard of banking, developing a risk management system that is modern, and setting up viable mechanisms for corporate governance. The bank adopted a risk management framework that was supported by advanced information technology and as such enhancing the quality of the Industrial and Commercial Bank of China (ICBC) assets to the enhanced risk management strategies. The bank was able to control its risk management system after the passage of the law governing commercial banking on their capabilities to manage risk.

Works Cited

Barton, Newell, & Wilson, George. Dangerous markets: managing in financial crisis, John Wiley & Sons, Inc, 2003. Print.

Bekaert, Harvey, et al. “Growth Opportunities and Market Integration,” Review of Financial Studies 62. 2 (2007): 1081-1138. Print.

Diamond, Peter. The role of a stock market in a general equilibrium model with

technological uncertainty, American Economic Review 57. 4 (2009): 759 – 776. Print.

Gompers, Paul, and Joshua Lerner. An analysis of compensation in the I.S. venture capital partnership, Journal of Financial Economics 51. 1 (1999): 3-44. Print.

Kaplan, Steven, & Schoar, Antoinette. Private equity performance: return, persistence, and cash flow, Journal of Finance 60. 4 (2005): 1791 – 1823. Print.

Kennedy, Simon, & Matthew, Benjamin. Central banks face rising pressures from

Politicians, Bloomberg publishers, 2007. Print.

Lerner, Joshua, & Wan, Wong. Smart institutions, foolish choices? The limited partner performance puzzle, Journal of Finance 52. 2(2007): 97– 126. Print.

Mukherjee, Andy. Asian central banks should follow South Korea’s lead, International Herald Tribune, 2004. Print.

Quinn, David, & Toyoda, Anthony. “Does Capital Account Liberalization Lead to Economic Growth?” Review of Financial Studies 2.1 (2008): 1403-1449. Print.

Appendix

Balance Sheet

Period ending Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Assets

Cash And Cash Equivalents 276,592,000 566,322,000 292,234,000 265,069,000 Short Term Investments 429,747,000 174,701,000 101,975,000 78,715,000 Net Receivables1, 199,896,000 1,167,434,000 1,215,647,000 1,114,253,000 Inventory1, 954,000 2,206,000 3,400,000 4,563,000 Other Current Assets1, 621,142,000 1,334,595,000 1,064,294,000 623,616,000

Total Current Assets 3,554,065,000 3,293,161,000 2,731,855,000 2,116,143,000 Long Term Investments 2,484,096,000 1,881,780,000 1,864,197,000 1,735,374,000 Property Plant and Equipment – – – – Goodwill 5,350,000 4,891,000 1,420,000 – Intangible Assets – – – – Accumulated Amortization – – – – Other Assets – – – – Deferred Long Term Asset Charges 18,696,000 10,746,000 5,833,000

Total Assets 11,785,053,000 9,757,146,000 8,683,712,000 7,508,751,000

Liabilities

Current Liabilities

Accounts Payable 10,705,009,000 8,819,165,000 7,639,311,000 6,725,375,000 Short/Current Long Term Debt 189,457,000 109,536,000 328,928,000 145,251,000 Other Current Liabilities 26,473,000 46,545,000 38,393,000 32,154,000

Total Current Liabilities 10,944,689,000 9,035,235,000 8,028,067,000 6,902,121,000 Long Term Debt 78,842,000 45,632,000 54,560,000 63,817,000 Other Liabilities – – – – Deferred Long Term Liability Charges – – – – Minority Interest – – – – Negative Goodwill –

Total Liabilities 11,111,160,000 9,154,471,000 8,145,341,000 7,042,287,000

Stockholders’ Equity

Misc Stocks Options Warrants – – – – Redeemable Preferred Stock – – – – Preferred Stock – – – – Common Stock 334,019,000 334,019,000 334,019,000 334,019,000 Retained Earnings 240,466,000 166,934,000 100,518,000 24,342,000 Treasury Stock 99,408,000 101,722,000 103,834,000 108,103,000 Capital Surplus – – – – Other Stockholder Equity – – – –

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Gender

Name

Instructor

Course

Date

Gender

Introduction

For centuries now, the issues of gender have been explored both in high cultures as well as popular cultures (also referred to as pop culture). From the time a person is born, gender of such a person is prevalent since it is a social construct. This social construct can emanate from media influence, toys used by children to play, clothing, as well as parental influence. Such influences usually have a great impact on the learning path of a child regarding his or her gender. Important to note, is the fact that some of the toys for instance brought in to the market by various companies are a clear indication of reinstating gender norms in the society. As a matter of fact, some of these toys are gender specific and their main objective is to bring about conventional roles of each gender. Most companies manufacturing toys have adopted traits that reflect masculinity or femininity in accordance with the western societal gender notions. Even though toys are meant to be articles of entertainment to children, parents should be alive to the issue of choosing toys for their children because the overall gender norms learned by a child can be determined by various toys.

Discussion

In a study conducted by Lorrber, (345) the aspect of gender in human beings does not necessary flow directly from an individual’s reproductive organs or genitalia, it is largely an aspect of social construction. It therefore goes without saying that social status of an individual are carefully developed through a process of approved learning, emulating, and finally implementing what that person has learnt. Social construction of an individual is also developed the same way as the social status of an individual is developed. In the western society, there are a number of characteristics that are associated with modern femininity. Such traits include among others, gentleness, compassion, and motherhood. On the other hand, masculinity in the western society is associated with characteristics such as braveness, ambition, strength, and toughness to mention but a few. In light of the above, most companies manufacturing toys have adopted traits that reflect masculinity or femininity while designing toys (Riordan 32).

Most of the toys that are meant specifically for young girls are manufactured with aspects that depict conventional traits of domesticity as well as femininity. Some of these toys also depict household duties. In a research conducted by Brumberg (44)most toys produced for purposes of entertaining young girls or targeting them reflect the concept of femininity. An example of a doll marketed by one of the toy company and that reflected aspects of domesticity is the Barbie. The Barbies Mattle Company introduced one of the toy line that depicted gender and the role of every gender in the society. The toy line has a doll that depicts a pregnant woman and she is at home waiting the return of her husband from work while taking care of her children. There are also some toys and diapers for the awaited unborn girl.

Young girls therefore learn the concept of motherhood and domesticity through the iconic Barbie doll. The children right from their tender age learn how to be good housewives as well as how to take care of a child. The intention of marketing this doll is to enable young girls gain knowledge of how to maintain a house as well as how to plan for an unborn child. Children also learn from the doll how to take care of a kid once that kid is born. The doll creates an image that depicts a universe that is influenced and dominated by the male gender. G.I. Joe, on the other hand, is the toy figure that reflects masculinity. The toy is primarily produced to entertain boys as it depicts extreme action, strength, braveness, and toughness all of which are traits attributed to the male gender. This toy is a clear depiction of a male figure in the western culture. Handling machines as well as dealing with weapons that are mechanized, are some of the attributes associated with the male gender within the western culture.

It is worth noting that the image reflected by the toys meant for young boys promote the notion of masculinity with traits such as aggressiveness. What’s more these toys meant for young boys are designed in a way that they resemble male figures with well built muscles (Cassell 34). This is a clear indication that male gender in the western culture is associated with aggressiveness and at times use steroids for purposes of building muscles. As a matter of fact, some of these toys for young boys are branded as real heroes in the United States. This is a clear indication that individuals who are aggressive and violent are the only ones who can be heroes. In addition, it also depicts the view that some of the traits that real heroes and men should possess include: masculinity, violent, and aggressive to mention but a few. There is also a clear indication that such a person must not have feminine traits.

It is worth noting that dolls are used to describe toys that are feminine mostly meant for young girls, while the word action figure is used by the society to denote the masculine toys meant for young boys. The societal use of these words is a clear indication of gender awareness (Riordan 32). Gender messages are therefore, shown in certain wordings, and boys may only play with action figures and not dolls. This is because boys are associated with action and aggressiveness while the young girls are expected to be gentle, compassionate, and motherly,

Toys in the western pop culture portray all the aspects of gender messages. The toys that are meant for girls are usually pink in color while those meant for boys are usually blue in color. Consequently, most of the toys that are brought into the market targeting boys represent or depict ambition and violence while those meant for girls symbolizes gentleness, compassion, and domesticity. It is therefore, clear that the toys produced by most companies in the western society are intended to instill particular gender qualities in children which are in accordance with the norms of western society gender notion. The gender identity and sexuality of children should not be dictated by parents through choosing toys for their children. There would be more gender disparity in a society where gender of an individual is not influenced or dictated by norms of societal gender. Nonetheless, the societal notions play a big role in influencing the gender of individuals particularly in the western culture, hence the inequality among different genders (Doty 45).

Conclusion

The aspect of gender in human beings does not necessary flow directly from an individual’s reproductive organs or genitalia; it is largely an aspect of social construction, Social status of an individual are carefully developed through a process of approved learning, emulating, and finally implementing what that person has learnt. In the western society, there are a number of characteristics that are associated with modern femininity. Such traits include among others, gentleness, compassion, and motherhood. On the other hand, masculinity in the western society is associated with characteristics such as braveness, ambition, strength, and toughness to mention but a few. Some of these traits are depicted in the toys that are produced by toy companies targeting particular gender of a child. Most of the toys that are intended specifically for young girls are manufactured with aspects that depict conventional traits of domesticity as well as femininity. Some of these toys also depict household duties. The toys meant for young boys promote the notion of masculinity with traits such as aggressiveness. What’s more these dolls meant for young boys are designed in a way that they resemble male figures with well built muscles. Handling machines as well as dealing with weapons that are mechanized, are some of the attributes associated with the male gender within the western culture. Most companies manufacturing toys have adopted traits that reflect masculinity or femininity in accordance with the western gender notions. Gender messages are therefore shown in certain wordings, and boys may only play with action figures and not dolls. This is because boys are associated with action and aggressiveness while the young girls are expected to be gentle, compassionate, and motherly.

Works Cited

Brumberg, Joan. The Body Project: An Intimate History of American Girls. New York: Random House, 2007. Print.

Cassell, Kevin. “Toys, Boys, and Masculine Ideology.” Rapid Pulse. 23 Apr. 2008. Web. 30 Nov.2012. <http://www.kevincassell.com/blog/>.

Doty, Susan. Where the Girls Are: Growing Up Female with the Mass Media. New York: Times Books, 2004. Print.

Lorber, Judith. “’Night to His Day: the Social Construction of Gender”. Composing Gender. New York: Bedford St. Martin’s, 2009. Pgs. 335-347. Print.

Riordan, Enoch. “Commodified Agents and Empowered Girls: Consuming and Producing Feminism,” Journal of Communication Inquiry 25. 3 (2001): 279-297.

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. In the light of present adoption of economic liberalism in many developing countries, what are the possible shortcomings of relying in the free market and on the forces of competition from the standpoint of income distribution?

Q1. In the light of present adoption of economic liberalism in many developing countries, what are the possible shortcomings of relying in the free market and on the forces of competition from the standpoint of income distribution?

Introduction

Market economy o free market economy functions primarily depending upon the forces of the market, namely demand and supply. The institution of the market allocates and distributes commodities based on the principle of price determined by the interaction of the forces of the market. Price of a commodity generally shoots up when its demand exceeds supply and when the reverse occurs, it is generally associated with price cuts of the good in question. Therefore, in the free market system, a successful business makes a consistent profit in a field of competitors. The concept of competition is an important component of a free market system. Competition in the marketplace provides the best possible product to the customer at the best price. When a new product is invented, it usually starts out at a high price, once it is in the market for a period of time, and other companies begin to copy it, the price goes down as new, similar products emerge. In a competitive market, the poor versions of the product or the overpriced will be pushed out of the market because consumers will reject them. The free market system determines the winners and losers in each industry based on the demands of the customer, whether industrial, business customers, or consumers, people who buy for personal use.

Discussion

One of the main downsides of a market economy is the fact that it can become so competitive that smaller companies cannot compete with the bigger brands and so on. In this case, a company can thrive on creating new products but due to the high amounts of revenue they are making, they become the market leader and other companies do not have the chance to compete. This can be very detrimental towards companies who are struggling to get by in the industry.

A free market system tends to give rise to the development of ·monopolies. A monopoly refers to a market situation where there is only one supplier. Monopolies tend to arise because modem technology has made it possible for large-scale producers to obtain many economies of scale. Private monopolies can potentially exploit the consumer through high prices and low quality.

In a free market economy externalities are not taken into account. Externalities refer to social costs and benefits which are not fully accounted for in the market system. In a free market system the focus is on private costs and benefits. This gives rise to social costs such as pollution and noise which lead to reductions in welfare of people experiencing these costs by, say, living near a factory.

A free market economy may not produce public goods. Public goods are those commodities characterized by non-excludability and non-rivalry in consumption. Non-excludability implies that it is not possible to exclude individuals who have not paid from consuming the commodities. Non-rivalry in consumption implies that one person’s consumption does not reduce the consumption of another individual. Examples of public goods are street lighting and defense. The problem of the provision of public goods by the private sector arises because of the free rider problem. The free rider problem leads to potential customers understating their preferences or willingness to pay and still gaining since they receive the good without necessarily paying for it. Such individuals gamble on the good being provided to others who will express some willingness to pay.

A free market economy systematically under provides for merit goods like health and education. Merit goods are those commodities which are socially desirable in a system where the price mechanism allocates resources merit goods will be provided in inadequate quantities and would be too expensive for the vast majority of the population.It is argued that in a free market economy certain socially undesirable goods and services known as demerit goods such as drugs and alcohol may be produced. This is because the demand for such commodities exists and they may be profitable to provide.

A free market economy is likely to generate considerable inequalities in income and wealth. This is because where the price mechanism operates in factor markets the wages and salaries earned will depend on the forces of demand and supply. Those whose skills are in demand will therefore command much higher remuneration than those whose services are in low demand. It is argued that a free market system subjects an economy to cyclical employment when production and consumption decisions get out of line. Labor market imperfections may also result in a form of unemployment known as structural unemployment.

Conclusion

In reality there are no perfect free market economies. Even in developed countries like USA considered to be champions of free market, there are many areas of government control. For example there are laws intended to check unfair trade practices. Also there are considerable restriction on what can be imported and how much quantities through the mechanism of import quotas and tariffs. Then there are provisions like anti dumping laws. This proves that free economy has its advantages. Major problem is that to be most effective it needs some ideal environmental conditions like full, free and instantaneous availability of all relevant information to all buyers and sellers. It also requires complete freedom to manufacturers from one industry to another. Perfect conditions like these are possible only in theory. Lack of these ideal condition makes free market mechanism ineffective in many ways. Thus monopolies and oligopolies develop, that may act against the interest of the consumer.

Additional materials about competition

Competition for work drives down the income for most jobs. When there is an oversupply of potential employees for a particular type of work, and the alternative is unemployment, competition will drive wages down to subsistence levels, and working hours will expand. Those who might miss out on work will be willing to accept less to obtain a job. In a perfectly competitive market, the level of wages for a particular type of labour will tend to equate to the cost of reproducing the labour. For workers without special skills, this means wages that are just enough to feed and clothe them so that they can continue working. This was the outcome during the industrial revolution before governments legislated minimum wages and the maximum hours that could be worked for those wages^[5]. Even the salary levels of jobs that require extensive university qualifications will be driven down by competition if there is free access to obtaining the qualifications. When there is an undersupply, higher salaries will attract more people to get the qualifications. But once this satisfies demand, competition will tend to force salaries down to the minimum level needed to reproduce the employees and their qualifications.

Competition also tends to produce work that is meaningless and unfulfilling for workers. Competition amongst businesses will force employers to organise work and design jobs to maximize efficiency. They will not be able to structure work in ways that produce satisfying and meaningful work for employees where to do so would conflict with maximum efficiency. Competition between potential employees will mean that they have to accept what is offered. The result is that large numbers of employees in market economies spend their working life doing tasks in which they find no meaning, that are achingly boring, and that prevent them from developing their potential as human beings. Many workers in modern market economies have less freedom in their life to pursue their own interests and personal development than slaves in earlier times. Large parts of their life are taken up doing things that they would never freely choose to do^[6]. This is an inevitable outcome of ungoverned (unmanaged) markets.

Competition amongst the producers of goods and services drives down their profit margins. No one makes much money out of businesses that are subject to strong competition. In areas of business where anyone can get the knowledge and capital to operate, competition in a free market system will force down profits to subsistence levels. This is commonly the case where there is no regulation of taxi services, corner shops, street vendors and other small businesses. It is only in circumstances where vigorous and open competition does not exist to drive down profitability that great wealth can be accumulated and that the massively unequal distribution of wealth found in modern market economies emerges. It is only when there are business opportunities that most people are unable to exploit that very high incomes are produced.

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