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WTO (World Trade Organization)

Introduction:

WTO (World Trade Organization) agreements consists of the rules and regulations and having fair trade practices framework with the developing countries of the world. In order to face multilateral negotiations and to cope up with the failure of Doha Round. The multilateral trade system was a great achievement that advanced a framework for the WTO/GATT international trading. However, the conflicts of member’s interests, RTAs have become the only remedy, where nations can seek to apply their views via direct negotiations. Ultimately the success depends on the success of Doha Round, developing countries fails to achieve their objectives under the RTAs framework and bilateral deals. Finally it has been analyzed that the rules set under the RTAs were proper but the regulation was on weaker side. The RTAs and WTO relationship has been controversial and much disputed as a matter of lack of regulation among the fair trade practices. Taking into consideration the proper valuation of the goods the amount of duties paid should also be counted. Lastly in this essay we look towards most beneficial acquisitions to promote unfair and equitable foreign trade practices.

Describing WTO:

A word WTO is known as the World Trade Organization which is very helpful to the trading business around the world. Nowadays most of the countries are being benefited by the trading agreements which are having their own different types of regions[1]. Earlier the regions and the international bodies were treated very softly with a view to have mutual cooperation to the financial business. But the time when RTA has been increased, it has put a competition with the trade structure. WTO came into practice from 1995 due to which agreements has been treated fairly and smoothly. It was formed so as to have track on all joint venture trade and agreements which were being done among the associates, side by side support was being given to the newest trades. As such many precautions have been taken care of so that any disputes should not come among the different nations. All the previous agreements which were formed by different countries were being continued with the new agreements also. World Trade Organization also plays an important role to keep a check on all regions so that there should not be any unfair trade practices being used with the agreements[2].

The agreements helps the other nations to remove the poverty line by taking different measures which helps the workers to benefit in terms of their health, family and also by providing good training so as to come out from their poverty line.

The WTO agreements consists of the rules and regulations and having fair trade practices framework with the developing countries of the world. Every country has different rules and regulations as such WTO takes care of all nations.

There are approx. 150 countries are the member of WTO and among them around 2/3 members are developing countries. Those developing countries play an important role in the WTO due to their strong economy and consider trade as a one of the key for the economy development. There are several difference as concern to their individual views exist among the developing countries. So followings are the special arrangement for the developing countries:

Existence of the special provision for the developing countries under WTO agreements.
There are special committees as concern to Trade and development, focus on those special provisions and there are other area like technology transfer, trade and debt, which are dealing with some other committee.
Technical assistance related training and development backed by Secretariat of WTO for the developing nations.

The obligation of procedural fairness of WTO has two different aspects. The first explained that the obligation imposed within dispute settlement system, which protects the fairness among the parties in the processing. The other, member of WTO are obliged to ensure the fairness practice in their country’s legal system; it could be referred to GATT Article X: 3(a), which state that all the norms and regulation mentioned under Article X: 1 should be strictly scrutinize in a proper manner. Although, the above mentioned obligations are very important and it could also be subject to WTO dispute settlement proceeding.

In this essay, there are some problems which are been faced when the rules and trade practices are being implemented on different nations. In this we cover all the briefs of WTO; all the problems which are related to the developing nations have been resolved through WTO rules and guidelines[3].

Review of World trade organization

For the development of the economy, international trade barriers are been incorporated to provide promotional support to the developing nations. During the formation of International Monetary Fund, a proposal was been submitted by United Nation[4] and formulation of plan was been done with economics and social council acknowledge so as to regulate the plan in International Trade Organization ,started just after World Bank and IMF in 1945. US and UK has got a very sophisticated picture towards the fair trade in the beginning, just after sometime United Nation have been settled for mixed and different rules and regulations, o the other hand United kingdom Government followed proper rules and regulations so as to run in an proper manner.

WTO and various trade agreements share the same rules and regulations as such they were regulated by strict policies. Mainly there were some clear exemptions of various trade agreements as compared to WTO. RTA and other agreements from the trading organization created a discriminatory issue for other members. The regional trade agreements moved very hastily just after article XXIV came through which other trade organizations has grown significantly.

Fifty four bodies signed the treaty that worked for the debate for various rounds held at Havana. As ITO does not come under the Trading agreements as states of UNO, it never participated while voting for ITO bodies, and ignores by few regulatory bodies[5].

The negotiation which took place in 1948 involved various rounds and at UN Conference in Havana(Cuba), 54 countries signed the negotiation. The main objective of ITO’s was to encourage more international economic growth and the flow of trade internationally, which also consider agreements of commodity, provisions for employment, investment opportunities and eliminating risky business practices. The major factors which ITO constitutes and concentrated was to increase the flow of international trade by performing trading of various goods and services and to boost up the global economic growth. Proper procedures were established to measure the performance of provisions made for employment, limiting trade practices, agreement of commodity and various methods of investment. Because of all this ITO was not in the minds of different bilateral participating nation in the trading[6].

The actual predictions on epigrammatic agreement and trade organization kept a regulatory check on it proved by General agreement on Trade and Tariffs. After the disintegration of the ITO, GATT has been emerged as a multilateral instrument for handling the international trade. Since, GATT transformed as an international body, which has been expected by UN system to function as a specialized agency[7].

Handling the issues over trade , trading was increased as well as the tariffs set were comparatively lower than the other trade practices, thus playing an important and pivotal role in forming a powerful and useful approach all over. Some set of rules and regulations was to be followed by the endorsed countries. A deep refurbishing was required by the system in 1980’s which gave rise to a Uruguay Round and further lead to the introduction of WTO7. InGeneva, The Uruguay round has been taken place with the basic idea of the ministerial meeting of GATT in November 1982.

Agriculture was strongly hindered from the beginning in this meeting, but all the ideas lead to the immense failure of all. The new globalization of the world economy was anxiously followed by the Uruguay Round.

Since the treaty has been signed by many nations, a large expansion in the trade was expected. Trading of agriculture and textiles in different segment also showed a increasing sign. A well planned cross-examination was held in order to give a review to all rules and regulations levied by GATT. Hence, the growth of international trade has been accelerated due lead taken by increased number of nations. In year 1993, some modifications were made in the rules and regulations which had been assigned to the existing signatory bodies. Perhaps same rules were to be followed with the same agreements as it was the high time but some changes lead to the higher side of foreign trade. The important benefit obtained from the act of Uruguay Round lead to the foundation of World Trade Organization. On 1st, January 1995, the term WTO came into existence in continuation with the GATT framework[8]. For all the countries agreement is not necessary, although it is related to the constitutional body of international law and represents the significant picture widely. Around 153 members took part in the foundation of WTO and maximum trade is being measured through this WTO framework. WTO is regarded as the only existing framework which focuses and deals in maintaining the healthy relationship between the co-countries which allow the trade expansion within liberal economy across the world. The co-members of WTO have the full right to arbitrate in the round table as per Article 2, many regulations deal while

posing provisions and restrictions for obligation among the internal environment[9].WTO describes various rules and regulations for promotional trade, but it does not represent the real picture as any appropriate meetings and procedures are not followed or have not been considered regarding the fairness of practices and which remains impartial. Because of all this some new areas has been taken into account and proper measures are drafted to make them as an economical advantage among labour and the environment because of different trading agreements. WTO works on the larger framework whereas the agreements are balanced when it considers the total number of states. Few assumptions are being framed while dealing with the developing countries. WTO’s basic principle is to see the limitation of rules and regulations which are open to the members, although a very limited discussion on trade barriers and proper procedures are followed to resolve the disputes between the trading countries.

WTO Regulatory Framework

The legal framework of WTO is to see the proper execution of fair trade practices and the extent up to which the rules and regulations should be taken into consideration while doing trade with different countries. The problem faced lies with the implementation of various rules and regulations, how to resolve the disputes among different traders and making decisions for the organization[10].

Under the Article 4.1 of the WTO agreement, the Conference among the ministry is the highest authority of WTO. The conference details the voluntary decision making all the members of WTO confined to the legislative body. The meeting of the Ministerial Conference must be done in every two years. These meetings explain the wide range of political interactions of the Conference held for through discussions and decisions.

It is not necessary that the Ministerial conference actually needs to deliver the proper influence over the obligatory feat over the WTO members. In contrary the General council calls for the general meet with all itsMemberState’s ambassadors apparently once in every subsequent month inGeneva, this meeting is done related to the economic condition in order to get investigated and possible amendments could be made on the decisions making. Its main objective is to frame and analyze the policies related to national trade and in order to run other authorities in the WTO such as the secretariat. Every member of the WTO was specified to participate in disputes settlements panels, committees exempting from the Appellate body, councils and Textiles Monitoring Body. The administrative and technical support was provided by the Secretariat among both the WTO and developing countries which were laid on different trade policies, resolutions of trade and advice of the governments.

To keep checks on the rules and regulation, the country’s voting system plays a very crucial role as each country can just vote one time, though it does not matter because they are not taken into account.

Dispute Settlement

The global economy prefers to do trade with the neighboring countries, reason being the low tariffs, and thus helping in creating and maintaining healthy environment and relation as transport costs also lowers down. Proper calculations and approximations are made in order to formulate and regulate proper agreement among the countries. As new trade theory opens the gate for the scale of economies giving rise to larger number of agreements and thus to more trading segments which can become more efficient towards exports and imports. Various agreements of Uruguay Round gave a helping hand in providing a clear picture of WTO framework towards planned rules and regulations. A proper framework to settle disputes was confined by WTO[11].

The dispute settlement is an integral system in the WTO, Which applies to all multilateral agreements with single set of all disputes but some specific rules in some cases.

The following bodies play an important role in the WTO:

Dispute Settlement Body (DSB)
Panel and Appellate Body
Parties: WTO Members
WTO Secretariat

Dispute Settlement in the WTO: Relationship of players

Source: Dispute Settlement in the WTO, www.wto.org/english/tratop_e/…/intro_wto_disput_settle.ppt

As the disputes arising between the trading countries, the regulations of the trade control the fluctuations affects, now a days the WTO dispute settlement as the most dynamic international adjudicative process in the worlds due to the previous experience of the Considered WTO director-general. Hence it was found that “aggressive unilateralism” of economically powerful nations have been replaced by mechanism of multilateral rules and remedies backed by WTO. Because of the separation of many members from the system, the transparency of WTO guideline fails to fulfill the decisions making process. As an example, certain conferences have not been attended by some of the delegates among the Seattleconference[12].

Thereafter, The Doha conference came into existence whose main objective was to focus on the individual people, thus showing a real picture to the framework. The main drawback is due to improper time management and negotiation done with the different rounds of conference. The difficulties arise due to the unclear language used in the various agreements of analyzing the treaties[13]. The increasing number of nation towards MFN treaty is more important aspect of the decision, from which other nation will get benefited and consequently banned discrimination state would be followed by WTO. The rate remains the same for all the other bodies no matter if any member provides some benefit at lower cost or lower custom duty; hence no discrimination is being followed. MFN also concerns about the GATT (article2) and Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (article4) 11. The main thing which is considered while selecting the method is that the method or the article must contain all the important aspects of WTO.

National treatment

The members of the different states could not be fully understood the actual relationship between the foreign products and services. The third article of GATT is being referred for the proper limelight of actual market principles of WTO. Thereafter proper proportion should be maintained between the regional and international products and services as per Article 17 of GATT and the TRIPS provisions. Making differentiation may very easy for the WTO regarding its local and overseas products.

National treatment firmly applies to the foreign goods, services or piece of logical property has already accessed the local market. It fails to achieve its main objective of finding out the proper and exact proportion of conflicts between the developed and developing countries. National treatment policy very easily accepts the changed proper tariffs for the neighboring products but thereafter if the product has been found radically they lose the position of being charged as an correspondent tax notions. For example the situation can be best put up into matter of fact that treatment can be found in Japan-Alcohol which can best explain: in order to get proper protection the national treatment is generally prohibited while using internal taxes and other internal treatment obligations. Article I of GATT and WTO owns a very significant role and have been described as “a keystone of the GATT and one of the main and important pillar of WTO trading system”. Though it is mainly accepted that WTO has been more successful in comparison to GATT for promoting the fairness and equality in the trading system as organization keeps a regular check on the liabilities possessed by its members.

WTO is referred to as a free trade institution which generally accepts tariffs and occasionally forms or follows different forms of protection[14]. Thus it s a open system of desired rules and regulations where there is truthful and fair competition. The rules governed to the Non-inequity-national treatment and MFN is centralized and can be opposed critically by the environment, human right action and medical. The international trade regime contains the factors that are so designed as to prevent the intervention in support of domestic stability. Generally basic concept and objective of the national treatment is to increase the fair competition between the members in terms of goods, intellectual property, agriculture, services and this has given a right to the government of breaching the trade agreements. The fairness and equality between the international trade has been threatened in many occasions in many ways but WTO proved successful in solving the matters and bringing out fairness and equality by using utilizing case laws. Anti-dumping agreements and relevant case laws are explained so that one can think of rules and regulations to be followed in the trade agreement.

WTO and the developing countries

The WTO membership consists of developing countries which formed the main framework and resulted in better trade flow of foreign products and services after the GATT. This was because the involvement of emerging countries increased immensely. The involvement of more developing countries roots WTO’s stem from classified system tailored by the World Bank on the basis of per capita income of the country. Since WTO does not contain any proper definition of developing countries, the term was defined in either economic or other measures[15]. These developing countries in the WTO framework had a disadvantage of lack of human and technical resources. WTO considered these countries to be weaker in keeping up proximity with the rapidity in meetings held in Geneva on the weekly basis. Thus developing countries under the framework rarely entered into the discussions as they were less prepared than the industrialized countries. Due to this, a decision making bloc was selected to make decisions on behalf of all members for US, EU, Canada and Japan. Therefore in spite of single vote structure for the WTO it was helpless to allege the decisions. The WTO is responsible for the promoting fair and equitable trade as an international organization. WTO in Seattle conference was accused to be the supporter of globalization because of favoring interest of developed countries and negative effects on developing countries[16]. There was a disagreement between the developing and developed countries regarding the agricultural subsidies given by the governments of developed countries. One must clarify that , most least developed and developing country’s economy depends on the tariffs on foreign products and services.

Since WTO focuses on reducing the tariffs on foreign goods and services under the principle of MFN the biggest disadvantage which developing countries faces being under WTO will be risk faced in terms of their budget and public payment responsibilities. As the gathering of most powerful countries under the WTO as well increase in the demand of the national treatment by the WTO, developing countries will be affected negatively and its local market and agriculture will be confronted by the tough competition. In year 2003 many developing countries rejected the EU proposal which focused on lowering the commitment of is agricultural subsidies. This gave the developed countries a greater access over the developing countries markets[17].

The WTO lies on the fact that even after the collapse of Doha round, WTO didn’t stopped performing its functions discussed under the past rounds, continued to manage and hold a stable position, even though it lacked some regulations in developing countries. The existing agreement detailed the planned set of rules and regulations for trading among important players includingEU,USA, Japan, China andIndiaas prevailing power. The WTO possessed a challenged against Doha deal as they undertook separate free trade agreements among themselves thus attracting the new acquisitions and working with the new countries like Russia and Vietnam, which worked very hard and did all possible efforts to be the part of the organization. The new policies were implemented taking into the consideration that the disputes are been settled and criticism is being hold n frequent basis. Solving the disparity among the member states provided the real benefit of no risk element.

As some important skills will be expected in next couple of year therefore the role of the Director General of WTO has to be re-evaluated for the future concern. In order to make a regulatory body WTO will be looking forward to leadership acknowledgement while addressing philosophical measures related to the impacts of the trade policy towards the employment which WTO’s most members are with. In this modern world today the developing countries which are the members with the WTO faces more problems in terms of employment. They offer very less jobs in agricultural and manufacturing sector. The relationship between economic growth and employment during the short span of time in dynamic economies like inChinahas been denied by the Asian development Bank and UNDP study. Thus the main problem faced by the members of the WTO is due to the trade affecting the jobs basically entitled to it. Providing employment can be placed as an important aspect with the new rising needs formulating a proper procedure to show some efforts in significant manner. Few adjustments are planned to be made to keep stress of job segment liberalized and flexible. The adjustments are posed to be flexible and wide executions are sequential as the present economy and trading system tends to change dramatically over the last few rounds of trade negotiations constituted in year 1994 summit.

The under developed and poor countries are making various efforts to gear up their spirits in order to overcome lost grounds in past few years in trade. So in nutshell it can be seen and framed out that many countries are gearing up the working on employment and other various possible factors for creating a environment beneficial for trade[18].

Conclusion

All the above mentioned information attempted to explain that how fair trade system is embodied in the WTO/GATT is to be taken care of and understood clearly. Both GATT and WTO got the benefited of international trade by framing and following various rules and regulations of trade. Different trade barriers and negotiation on tariffs were very seriously planned keeping in to the mind the rules and regulations of the trade. Since WTO came into existence first, it afforded the opportunity of gathering members and discussing the trade opportunities available, discussed issues and provided protection to their markets from unfair trade practices and anti-competition. Free of cost trading tends to be beneficial and free trade movement will be a helping hand towards the welfare of the organization. In order to save the free trading and free trade movement the GATT/WTO established some agreements (like anti-dumping agreement) which contained the rules to protect the Member’s economies, introduced some principles like MFN and national treatment. These organizations removed the key developmental tool for developing countries. The developing countries which do not joined the WTO was negatively affected. The only solution which was left with the developing countries was to organize their interest to achieve their objectives. The Doha development round clearly showed the way of fairness of focusing particularly on t he central issues of market access and thus ensuring all the members participation in the decision makes process.

The WTO helps in facing the unnecessary competition present in the members of the states. Delays in holding panels and increased management cost gave rise to more disputes among the members and breaches of WTO obligations. To settle these disputed developed and developing countries experienced proper disputer settling process. It has been initially made for the WTO to overcome the regulations speeded all over the equity between member States to boost world trade. By providing legal assistant to the developing countries, a fair trade can be considered best with the difference between developed and developing countries. The relevant aspect which is supported by the trade agreement is of competitive liberalization with the consent of moving toward free trade on the three levels that is multilateral, bilateral and regional. The reason for the improper regulation of obligations among the members may be due to the lack of decision making power. The conflict between household rules and its necessities was the major criticism faced by WTO. The identical apprehension applies to cut-throat liberalization. The general concept of liberalization is based in the concept of discriminatory view of RTAs. To develop good healthy competition among different levels having full benefit for well-off countries, a good competitive liberalization is must. Competitive liberalization in actual is regarded as political rather than economical.

The increasing operational trade barrier between groups of members has been removed by mutual agreement between the groups of countries. The members of the WTO predicted the need of RTAs after dealing withDoharound to be in harmony with the multilateral process in order to promote trade integration and facilitate the transactions between the nations. Thus ministers decided to launch a negotiation to address this subject of trade integration, in respect of RTAs systematic and legal aspect. The WTO reformed RTAs to be transparent ad fully regulated under its rules. For the regional trade agreement a Draft Decision on a transparency Mechanism was advanced in year 2006 but the conclusions are awaited from the Doha Round. A successful Conclusion by theDoharound will be expected to improve the CRTA and increase the WTO oversight of RTAs. The failure cost in the DDA will be substantial, as the trading system. The main analysis of the papers reveals the proper understanding of the rules and regulations mentioned therein. In respect of culture, there should be proper regulatory bodies to face multilateral negotiations, uncertain and unpredictable future, and the failure of Doha Round. The set up set by the multilateral trade system was a great achievement that advanced a framework for the WTO/GATT international trading. However, the conflicts of member’s interests, RTAs have become the only remedy, where nations can seek to apply their views via direct negotiations. Ultimately the success depends on the success of Doha Round. The developing countries are not able to achieve their objectives in the framework of RTAs and bilateral deals as in few situations local business is put to set aside from the competition under competitive liberalization. Finally it has been analyzed that the rules set under the RTAs were proper but the regulation was on weaker side. The RTAs and WTO relationship has been controversial and much disputed as a matter of lack of regulation among the fair trade practices. Taking into consideration the proper valuation of the goods the amount of duties paid should also be counted.

So in nutshell it can be pointed out that few goods do not have any problem during calculation of export duties or quota management, nor does it creates problem for the valuation of goods for internal taxation or foreign control. Hence WTO looks out for more beneficial acquisitions to promote unfair and equitable foreign trade practices.

References

10 Benefits of WTO Trading System (2008): WTO, ISBN 978-92-870-3436-6 available at www.wto.org

Alan Matthews (2003), “Agriculture After Cancun”, Trinity Economic Paper No. 17, 2003.

Amrita Narlikar (2006), “Fairness in International Trade Negotiations: Developing Countries in the GATT and WTO”, The World Economy, Volume 29, Issue 8, pages 1005–1029, August 2006.

Andrew D. Mitchell (2006), “Fair Crack of the Whip: Examining Procedural Fairness in WTO Disputes Using an Australian Administrative Law Framework”, U of Melbourne Legal Studies Research Paper No. 232, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=987758

Anne McGuir (2002), “The Doha Development Agenda”, Finance & Development (IMF), September 2002, Volume 39, Number 3.

Bhagwati J, Hugh T. Patrick (1990), “Aggressive unilateralism: America’s 301 trade policy and the world trading system”, University of Michigan Press, pp. xii + 268

Bhagwati and Krishna (1999), “Trading Blocs: Alternative Approaches to Analyzing Preferential Trade Agreements”, MIT Press.

Brian Jones J. (2010),“The role of World Trade Organization” available at http://ezinearticles.com/?The-Role-of-World-Trade-Organization-(WTO)&id=3591171.

Folsom R. (2008), “Bilateral Free Trade Agreements: A Critical Assessment and WTO Regulatory Reform” , School of Law , San Diego Research Paper No. 08-070 2008.

Hoekman B & Holmes P (199), “Competition Policy, Developing Countries and the WTO”, FEEM Working Paper No. 66-99. Available at SSRN: http://ssrn.com/abstract=200621 or doi:10.2139/ssrn.200621

Matsushita M at el. (2006),“The World Trade Organization Law, Practice and policy”, Oxford University Press, 2nd Edition.

Mr. Carlos Carnero Gonzalez (European Parliament) (2008), “LOOKING BEYOND DOHA” , ANNUAL 2008 SESSION OF THE PARLIAMENTARY CONFERENCE ON THE WTO, Geneva, 11-12 September 2008.

Overview of the WTO: DTI’s Website for Europe & World Trade; The National Archives.

Peter V. D Bossche, Denise Prevost & Marielle Matthee (2005/06), “WTO Rules on Technical Barriers to Trade” ; available at http://www.worldtradelaw.net/articles/vandenbosschetbt.pdf.

Ross Korves (2005), “Regional Trade Agreements Are Discriminatory, And That’s Good”, available at http://www.truthabouttrade.org/index2.php?option=com_content&do_pdf=1&id=855

Sandra Polaski (2006), “The Future of the WTO, Trade, Equity, and Development Project”, Policy Outlook 2006

Robert E. Hudec (1987), “Developing Countries in the GATT/WTO Legal System” TRADE POLICY RESEARCH CENTRE, ISBN 0-566-05697-6.

Ten Years of WTO Dispute Settlement: Australian Perspectives (2006), Commonwealth of Australia, ISBN: 1 921244 08 9, available at www.dfat.gov.au/trade/negotiations/wto_disputes.html.

Tobi Indyke (2009), “Fair Trade or Free Trade”; available at http://ezinearticles.com/?Fair-Trade-Or-Free-Trade?&id=2886317.

[1]Benefits of WTO Trading System (2008) http://www.wto.org/english/res_e/doload_e/10b_e.pdf

[2] Brian Jones Jr. (2010), The role of World Trade Organization, http://ezinearticles.com/?The-Role-of-World-Trade-Organization-(WTO)&id=3591171

[3]Tobi Indyk,. Fair Trade Or Free Trade; http://EzineArticles.com/?expert=Tobi_Indyke.

[4] Agricultural Issues Centre vol. 17, No. 2 (2003), http://aic.ucdavis.edu/pub/quarter/q17.2.03.pdf

[5] Bhagwati & Krishna (1999), Trading Blocs: Alternative Approaches to Analyzing Preferential Trade Agreements, MIT Press

[6] Matsushita M, Schoenbaum T, &Mavroidis P (2006), The World Trade Organization Law, Practice and policy, Oxford University Press, 2nd Edition.

[7] The Uruguay Round, WTO; http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact5_e.htm

[8] Peter Van den Bossche, Denise Prevost & MarielleMatthee (2005/06), ‘WTO Rules on Technical Barriers to Trade’http://www.worldtradelaw.net/articles/vandenbosschetbt.pdf.

[9] Overview of the WTO: DTI’s Website for Europe & World Trade; The National Archives.

[10] Ten Years of WTO Dispute Settlement: Australian Perspectives (2006), Commonwealth ofAustralia

[11] Bhagwati J, Krishna P (1999), Trading Blocs: Alternative Approaches to Analyzing Preferential Trade Agreements, MIT(Press)

[12] Bhagwati J, Hugh T. Patrick (1990), Aggressive unilateralism: America’s 301 trade policy and the world trading system, University of Michigan Press, pp. xii + 268

[13] Brown, Andrew and Stern, Robert M. (2005), Achieving Fairness in the Doha Development Round,, Global Economy Journal: Vol. 5: Issue. 4.

[14] Folsom R. (2008), Bilateral Free Trade Agreements: A Critical Assessment and WTO Regulatory Reform, School of Law , San Diego Research Paper No. 08-070 2008.

[15] Mr. Carlos Carnero Gonzalez (European Parliament) (2008): LOOKING BEYOND DOHA, ANNUAL 2008 SESSION OF THE PARLIAMENTARY CONFERENCE ON THE WTO, Geneva, 11-12 September 2008

[16]Ross Korves (2005), Regional Trade Agreements Are Discriminatory, And That’s Good, http://www.truthabouttrade.org/index2.php?option=com_content&do_pdf=1&id=855

[17] Alan Matthews (2003), Agriculture After Cancun, Trinity Economic Paper No. 17, 2003

[18] Sandra Polaski, the Future of the WTO, Trade, Equity, and Development Project, Policy outlook 2006.

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Free Essays

Decision making in manufacturing organization related to make or buy scenarios.

INTRODUCTION

Manufacturing Organization in Today’s world is constantly facing the challenges of making strategic decisions that affect the sustainability and profitability of the manufacturing Organization.

This study will be exploring the aspects of decision making within a manufacturing Organisation as it relates to make or buy scenarios.

In other for these decisions to be made an understanding of the decision making process is needed.

Decision Making:

This involves the processes resulting to a selection of a course of action among several alternatives.(1)

To a great extend, the success or failure of companies greatly depends on the quality of their decisions.

Decision making Theory:

This is a general approach to decision making when the outcomes associated with alternatives are often in doubt.

It follows a process of

1. Listing the feasible alternatives.

One alternative that should be always considered as a basis for reference is to do nothing.

2. List the events. (Also called chance events or states of nature) that have an impact on the outcome of the choice but not under the decision maker`s control

3. Calculate the payoff for each alternative in each event

The payoff is the total profit or total cost These payoffs can be entered into a payoff table, which shows the amount for each alternative if each possible event occurs..

4. Estimate the likelihood of each event using past data, executive opinion or other forecasting methods.

This is expressed as a probability, making sure that the probabilities sum to 1.0

5. Selecting a decision rule to evaluate the alternatives, such as choosing the alternative with the lowest expected cost. This depends on the amount of information the decision maker has on the events probabilities and the decision maker`s attititude towards risk

The types of decision people make depend on how much knowledge or information they have about the situation. (2)

Decision making can be examined under three different situations.

1. Decision making under uncertainty. (Events can be listed but their probability cannot be estimated).

2. Decision making under risk. (Events can be listed and their probability estimated).

3. Decision making under certainty. (A situation where the outcomes are known)

Buy or Make decisions are increasingly common as companies, in their efforts to improve efficiency and competitiveness, focus on their core activity which they do best, and contract out peripheral activities.(3)

Make or buy decisions rarely depend solely on cost factors. Other factors need to be considered: e.g.

Continuity of supplies
Retaining skilled labour
Employing specialist plant
The availability of capital to make and the alternative uses for such capital etc.

Each company therefore engaged in manufacture may have to review periodically

the extent to which it will:

a)Make or buy plant, equipment or components

b)Process internally or buy out semi-finished components and materials

Decisions may result from changes in the company or market situation. Some firms pursue a policy of specialisation and concentrate their production effort on a fairly narrow front and thus buy out a wide range of commodities.

Other companies, however, tend to exercise greater control over the manufacture of equipment, components and the processing of semi-finished materials, minimising the number of the various items bought out.

LITERATURE REVIEW

Make or Buy Decisions

a)MACRO – Decisions involve long-term capital expenditure relating usually to products and materials as in questions of vertical integration requiring the determination of policy by senior management e.g. the decision by a print manufacturer to acquire a printing press.

b)MICRO – Decisions, which normally relate to buyers e.g. new parts i.e. should these be made or bought in etc.

Make or Buy Categories

Make or buy decisions may apply in four different situations:

a)Items currently made in – consideration being given to buying out.

b)Items currently bought out – consideration being given to making in.

C) Items currently part made in – consideration being given to placing all the work internally or externally.

d)Items for a new requirement – consideration being given to making in or buying out in total or in part.

Initiation of Make or Buy Studies

Make or buy studies may be initiated by Purchasing or by other departments resulting from:

a)Large price increases being submitted by suppliers

b)Space needed for other more lucrative production commitments

c)Production rationalisation plans

d)Comparative price studies (Value Analysis or ABC analysis).

Long-term/Short-term Considerations

Make or buy decisions may relate to long-term or short-term needs (i.e. can it be planned or

emergency situations?).(5). The extent to which efforts are deployed will depend on value,

importance and time-scale. Take the case of a company requiring a minor spare urgently.

The part is normally made in but because of a machine breakdown Purchasing is asked to

buy out. Obviously, in such a situation an in-depth study will not be mounted involving

Finance, Product Development, Market Research etc.

Financial/Non-Financial Classification

Make or buy studies can be classified as being:

a)financial – i.e. they are done on a strictly cost comparison basis

b)non-financial – i.e. they are done because of other constraints which will, obviously, have an ultimate financial impact (e.g. secrecy, lack of expertise, time factor etc.)

Aspects for Consideration

Aspects for consideration in a make or buy study may include:

Item currently bought out

a)Is there a patent involved which might incur a Royalty payment?

b)Are the prices being paid the lowest which might be achieved externally?

c)Does the supplier have a greater purchasing power than the buyer for the materials he obtains?

d)Is the raw material readily available to the buyer?

e)Will the withdrawal of business from a supplier jeopardise future supplies should the “make in” decision be later reversed?

Items currently made in:

a)Will the quantities interest the outside supplier?

b)Will new tooling be required – and at what cost?

c)Might the part be subject to frequent modification

d)Will a transfer of work create personnel problems?

Reasons / considerations for Making

1)Making is cheaper than buying (Cost considerations)

2)To ensure direct control of quality

3)Delivery times from outside suppliers are too long

4)No suitable suppliers

5)To ensure continuity of supply

6)To utilise spare production capacity (i.e. help to absorb fixed overhead/s)

7)To retain labour during slack trade – declining trade

8)To maintain secrecy / Design secrecy required

9)To utilise scrap / surplus materials

10)Desire to integrate plant operations

11)Desire to maintain a stable workforce (i.e. in periods of declining sales)

12)Need to exert direct control over production and / or quality

Reasons / considerations for Buying

a)Buying is cheaper than making (Cost considerations)

b)Quantities required are too small for economical production

c)To avoid cost of specialist plant or labour

d)To augment capacity

e)To utilise the vendor’s specialist expertise, machinery and/or patents / R&D

f) To reduce investment in inventory

g)Transfer of risk to vendor

h) Own company may not be able to make all it needs of the sort of part (may not have the plant capacity.)

i) Desire to maintain a multi-source policy

j) Desire to maintain a stable workforce (i.e. in periods of rising sales)

k)To “open up” new markets by sourcing overseas

l) Efficient Procurement

Reasons given for reconsidering Make-Buy Decisions

1)Deterioration in supplier’s quality performance

2)Delivery failure or poor service by existing sources

3)Large price increase

4)Volume changes, much larger or smaller quantity requirements for item concerned

5)Pressure to reduce costs

6)Desire to maintain employment of people or utilisation of plant and physical resources in a downturn

7)Need to get earlier or more reliable sources

8)Need for design secrecy

9)Import substitution

10)Supplier’s withdrawal from a particular market

RESEARCH METHODOLOGY

In carrying out research, academics have suggested considering using various types of research approach.

The scope of this report is to explore make or buy decision making in manufacturing organization The general principle is that the research strategy or strategies, and the methods or techniques employed, must be appropriate for the questions you want to answer.

This systematically describes the general overview of the link between research question and research design.

To carry out a good project, one must develop his/her own ideas on how best to carry out the research. There are two different types of research route generally used by authors when carrying out a research, thesis or project, there are fixed and flexible design. (Robson.c, 2002).

It compares the two different approaches in carrying out a research to petroleum engineers and explorers respectively: The petroleum engineer has a specific goal in mind, to find oil buried below the surface.

Before the engineer begins the investigation on how to acquire the oil a careful study of maps showing features of the geographic area, with this information at hand the engineer will then go and find something specific. To follow the fixed design route, one must generally know what they are looking for, however flexible design encourages one to explore generally. Flexible design could be described as gathering information, going first in one direction and then perhaps retracting that route. On discovering a lake in the middle of a large wooded area, the explorer would take frequent compass readings, check that angle of the sun, takes noted on prominent land marks and then use feedback from each observation to modify earlier information. Carrying out a general research, it is advisable for an initial focus to be mapped out by the researcher as it aids to answer the primary question of (What do I intend to achieve when carrying out this research) The initial stages of carrying out a research can be either problematic or straightforward depending on what sort of research is being carried out.

Data collection Techniques

The aim of the project is to carefully explore make or buy decision making in manufacturing organizations.

In order to carry out a study on make or buy decision making for manufacturing organization. Books, journals, magazines and the internet will be used as a good source to acquire materials which aids in understanding the subject matter.

There are different forms and sorts of data which should be considered before selecting the appropriate material. There are two sources of data one being primary and the other being secondary, the fundamental difference are primary data is data gathered at first hand from people in the general population or sample as the case may be.

In contrast secondary data is the use and application of data that already exists usually from policy documents, newspapers, magazines and so on.

Primary data can sometimes be expensive and can also take a while to collect data as a result of that the source of data that has been collected to build up this report will be mainly secondary. secondary source of data is of better quality because it is usually published so therefore unbiased which means it is not skewed in the favour of research objective. (Robson c., 2002).

Qualitative and Quantitative Research approach

Qualitative research can be described as an exploratory kind of research; its main purpose is to uncover prevailing trends of an opinion.

The approach is concerned with words rather than numbers. This approach aims to investigate an in-depth understanding of its subject matter. Qualitative research is centrally concerned with understanding a thing rather than measuring them. (Robson.c, 2002).

Quantitative research In general terms can be described as an approach that is primarily concerned with numbers how it relates to each other rather than words Quantitative research seeks to set up connecting relationships between two or more variables using statically method for testing of the variable’s strength and importance of its relationship.

In this project the Qualitative research method will be used extensively as it allows for exploration of the subject to gain in-depth understanding

Many models have being put forward as frame work for research design, below is a model that consist of the key components to a successful research. Adapted from Robson (2002).

Purpose(s) – What is the research trying to achieveIs the author seeking to change something substantial as a result of this study or trying to explore the effectiveness of something
Theory- Where will the author find the theory that will direct and channel his researchWhat way will the theory be translated
Research questions- To what questions posed by the author are the research geared to provide answers forWhat study is needed to know to correctly answer the research questionsHow feasible are the questions poised given the time and the resources available
Methods-What techniques will be used to effectively collect dataTo what degree will the data be analysedHow will the author communicate to other academics/ readers the authenticity of data collected
Sampling Strategy- How will data be collectedWho will the author seek to interviewWhat will be the best way in balancing the need to be selective with the need to collect important data needed

Project Plan

References.

1. Slack, N., chambers, s. 2007. Operations management.

2. Krajewski, L., Ritzman, L. 2007. Operations management.

3. Parmigiani, A. 2007. Why do firms make or buyInvestigation of concurrent sourcing strategic management Journal 28: 285-311.

4 He, D., Nickerson, JA. 2006. Why do firms make or buyEfficiency, appropriability, and competition in the trucking industry. Strategic Organisation 4: 43-69.

5. Ashall, D. 2010. Lecture notes on procurement and supply chain management.

6. Mitchell, L. 2010. Lecture notes on Manufacturing Strategy.

7. Robson, C. (2002). Real world research. Michigan: Blackwell publishers.

Categories
Free Essays

The purpose of this document is to provide the extensive literature review as for as the risk management of an organization is concerned.

Introduction

REVIEW OF LITERATURE

The banking is the old concept as old as the man existence in the world in the earliest.

From the day one of the baking sector development the credit risk management it is obvious that the credit risk is very much possible an the existence of the credit risk is as old as the banking concept is. The development of the banking sector has taken the new and developed shapes by having the technology from the advent of the science and technology of the present age. The credit risk exist from the first day of the banking sector but the management of the credit risk is came in to existence after the realization of the credit risk in the banking sector.

The credit risk management is one of the key factor for any banking organization for the management of the risks to the banks from the credit losses or and of the bank defaults.

To minimize the credit risk of the banking organization it is obvious that the management of the organization has to make the follow up policies to make the risk to be get less and to achieve this goal the brief study of the following factors is necessary

Analyzing the documentation for the products launching of the banking sectors from the point of view of profit loss of the product
The exact picture of the products are in the real investment and income ratio of the banking statements which should be studied and analyzed for the future planning of the new product launching for the banking organization
The study of the financial documents of the banking organization is very important for minimizing the credit risk of the various products of the bank.
The analyzing of the banking organization’s investments from the profit/loss ratio should be studied

The risk management is done by the evaluation of the previous financial documents like the financial reports, trail balance accounts, balance sheets and other such documents are very important in this regard.

The proper working of the organization is controlled by the management of the organization and the management of the organization is responsible for all the ups and downs of the organization. The management manages the cycle of the workforce inside the organization and its management is usually the main concern with the workforce and the proper functioning of the banking organization. The credit risks are also the part which come under the concern of the management of the banking organization as it can cause the proper functioning of the banks be astray from the actual path of working or th malfunctioning of the organization. The management of the organization has to develop the proper credit risk management cycle or system to manage any credit risk that can cause the damages to the organization in the short term and long term.

It is not the every time that the management of the organization becomes able to identify and wipe out the credit risks that are causing the financial threats to the organization completely.

Here we can discuss some points that are the subject to the project management which are useful for overcoming into the context of the business organization in short and long run having all the possibilities taken under the considerations

If we go along planning something we must look in doing something, searching something and creating steps to sort out our planning by having proper planning which we called the proper management if done for credit risk management the banking organizations must be evaluated properly.

The credit risk management is analyzed by the authentic documents/legal documentation of the banks or any organization as it deals with the sensitive issues of any bank or organization

The legal documentation of the bank includes the term papers for different purpose utilized by the bank

for the instance, the bank provide different products or we can say financial products. These legal documents include

Financial statements
Profit loss statements
Quarterly Reports
Equability share Reports
Investment Reports.
Dividends Reports

The data analysis factors are very much important in understanding the credit risk and credit management of any organization in short/long term planning. The credit risk management is done by the different things.

Is is done by the customer satisfaction which is don by the review of different factors created by the credit risk.

The utility of the credit risk management is usually the settlement of the causes of failures that can be caused by the credit risks. The credit risk management has a very vast area under its cover.

It involve the factors which are created by the customer’s needs and can be overcome by doing the customer satisfaction management.

The credit receiving is often taken to grant which help to put in plain words the needs of diplomacy. The first point of the credit control which should be kept in mind is to recognize the cost of credit and its various effects on the profit loss of the organization. By analyzing the credit risk we can conclude the banking risk that can be faced by the organization at various level of credit control process.

Credit risk management is also very useful analyzing lacks that can occur during the credit control policy of any origination

The data is utilized that is provided by the concern banks in this regard. The time series analysis of the five year financial plan is very effective to figure out the exact picture of the present state of the risks that are faced and that can be faced by the organization or a bank

The structurally identification of the banking risk management is done by the review of the various legal documentation of the banks or any financial organizations in the marketplace. The credit rsik investigation is done by analyzing the different documentation such as the profit and losses ratio of the bank for the individual products launched by the organization or a bank

The individual investigation is very much necessary as the ignorance in this matter will cause the credit losses on one of the products individually which might not be come under the eye of the banks or the financial organization as the organization as a whole going in profit or achieving its goal at steady speed.

The exploration of the internal structure of the organization is done by the management of the organization at various levels of working in the banking and in the management cycle.

The exploration may reduce the banking credit risk as it allows the complete picture of the organization and needs of the organization can be fulfilled according to the necessities opf the financial organization or the bank.

What is the most important is to make the environment of the banking organization so good for the working conditions and for the customers as the believe of the customer on the different products of the organization become firm.

The identification of the sectors from the bank or the financial organization can face the credit risks are very import to spotlight. The different sectors which can cause the credit risks are following

Different products launched by the organization and its development by not taking the proper handling
The loans given by the banks as the return of the loan must be ensured by the legal documentation to avoid the loan losses
The investments done by the bank in different sectors

The overview of these factors and sectors might be the way to avoid the credit risk to the organization.

The management role in this regard is very much important as the management deal with the major decisions of the organization so to avoid the credit risk management the management has to play his role as a good management.

The management of the organization is responsible for taking the necessary steps to initiate the process which might less the risks of credit that can cause damage to the organization or a bank.

The management of the organization is responsible to answer the following What we are planning to do in managing the risk managementWhat is our approach in doing itWhen is the right time to do the start What are the prerequisites of doingWhat time period will it require What will be the cost require to complete it?

The above question will give the brief view of the present credit risks towards the organization and the management of these risks can be done by adopting the proper techniques and methods for it.

The credit risk is taken under the consideration for each and every documentation of the banks/organization.

Financial Reports

There are many ways to understand the banking ability and position. The financial reports are of main concern which are made after analysis of the financial reports by the banks.

Types of Financial Reports.

There are many types of financial reports two of which are of mains converse

1. Yearly Financial Reports.

The yearly financial reports include. The complete profit/loss of the organization financial statements are also included in the report The complete profit/Loss report is created at the end of the fiscal year which covers in the yearly financial report.

2. Quarterly Financial Reports

The quarterly financial reports are done to have a quick view on the performance of the organizations or the bank.

3. Half Quarterly Reports

The half quarterly report is created to have a quick and focused view on some certain products and products appreciation of the bank or any organizations.

The Bank offers loans and launches different products which involves in the credit risk.

The loans are the major concern which are very much involved in the credit risk. The recovery of the loans must be ensured by getting the proper security to avoid any risks caused by the loss due to loan non-recovery.

The credit risk in the market is very much open.

Launching more and more new products the possibility of the more and more credit risk can be faced by the organization or the bank. To avoid such risk the proper risk management should done to avoid the risks in these circumstances.

The review of the whole circumstances gives us the picture of the organization in the short and long term planning of the management.

If we go along planning something we must look in doing something, searching something and creating steps to sort out our planning by having proper planning which we called the proper management if done for credit risk management the banking organizations must be evaluated properly.

By looking at the credit risk we probe into the banking risks, assessments, management and control over the management. The attempt to understand the credit risk unfolds some of the risks in management evaluation and assessment equipments, models and methods.

Credit risk management also analyzes to overcome the lacks in credit lacks during the different credit management implementation techniques.

Conclusion:

In the end we can say that the credit risks exist right from the beginning of the banking concept and the banking concept is as old as the man from the very early age. The different levels of risks are threatening for the banking organization should be taken in to the account by the management of the organization for the betterment of the financial organization. The identification of the risk is very important as the identification of the sectors is done from where the bank can face the credit risks. The credit risks can be made less by following the proper method and techniques followed by the complete study of the financial documents of the organization. The brief history of the organization in terms of credit losses and the profit should be analyzed to get the clear picture of the present situation. And the proper evaluation will enable the management of the organization to avoid the credit risks.

Categories
Free Essays

A critical analysis of the training and its impact on the performance of the organization

CHAPTER 1 Introduction

1.1) Introduction of Chapter 1

A brief history of organization and work involved in organization has been discussed in this introductory chapter. Also the objectives of this project, research methodology and finding and data analysis are given in this chapter. An introductory summary and history of training is also provided in this chapter.

Most of us have, at some time been a ‘trainer’. As the training confirms, people, animals even plants, can be ‘brought to a desired standard of efficiency, condition or behaviour by instruction and practice’. Whether training have helped colleague to master a particular work routine or a puppy to conform to acceptable standards of domestic behaviours. Within most organisations the task of bringing people to the desired standard of efficiency- or helping them to learn to do things the way they need to be done is share. In some, every employee is expected to help by training others or themselves. In others, just team leaders, supervisor or managers may be explicitly involved. Some aspects may be dealt with by a separate training department, particularly in the Social Care Organisation. Social Care Organisations have legal responsibilities to provide s safe and healthy environment for their staff, subcontractors and visiting members of the public. They are required to provide a range of training that ensures that their workforce has the correct level of knowledge and skill to operate safely and that a safe and healthy working environment is maintained. Although there is legislation that requires statutory training to be identified, organisations need to establish their own minimum standards for safe practice tailored to their business demands and requirements. By publishing their mandatory training requirements, they are establishing an organisational standard that offers clarity for the workforce and ensures consistency and quality in their provision of statutory and mandatory training.

To provide proper training and after that its proper evaluation is essential for growth of any organisation. This project concentrates on (A) Comfort Care Services (UK) Limited and Bluebird Care (B). Intention of this dissertation is to improve the ways to provide training to employees, based on the identified needs of the organisation, and to evaluate and measure the impact of training on the organisation. For this purpose, interviews will have to be arranged and questionnaires will be distributed within the organisation. The results of questionnaires and data gathered from interviews will be analysed and recommendations has to be available at the end of this project.

Introduction of the Companies

This dissertation is based on a case study on a company called Comfort Care Services and Bluebird Care.

(A) Comfort Care Services (UK) Limited

Comfort Care Services (CCS) has been providing accommodation and supported housing for the past twenty five (25) years for service users suffering from learning disabilities and mental illness. It also supports service users who are recovering from alcohol and illegal substance misuse. Using a client-centred approach, CCS continuously strive to achieve a positive long-term outcome for our service users through accessing other services, and working closely with other professionals and families, where appropriate.

Comfort Care works in partnership with Social Services, Community Mental Health Teams (CMHT) and Supporting People within leading Local Authorities across London and the South of England offering high quality supported housing for vulnerable adults who are:

Aged between 18-70 with recognised mental health needs and learning disabilities
Individuals recovering from substance/alcohol misuse and other complex needs
Individuals ready to be discharged from psychiatric wards
Vulnerable adults living in the community in crisis
Private referrals from GPs and families

To prepare our service users towards independent living, Comfort Care has a holistic approach which involves social workers, psychiatrists, GPs, care workers, advocates and their extended families.

Comfort Care Services (CCS) offer a tailored solution to Services Users referred to Comfort Care. This allows other professionals and families to help us design the support plans to ensure the best outcomes for the service users in our care.

There is a great variety of supported housing and residential care available and different types of accommodation suit different levels of need. These vary from residential care to respite care and floating support. At present, CCS does not provide nursing care, but is planning to do so in the near future. CCS has twenty three supported housing units in the community which all conform to National Minimum Care Standards and it have been accredited by several boroughs and recently received an “Investors in People” award. These houses are located in London, Slough, Maidenhead, Reading, Woking, Guildford, Bracknell, Aylesbury and Redhill.

(B) Bluebird Care

Bluebird care provides high quality care at home. They have the offices in many parts of the United Kingdom and work with private individuals (and their families), with Social Services, GPs and Primary Care Trusts. Bluebird Care brings a breath of fresh air to the trials and tribulations of care at home. Building on extensive experience within the caring professions, Bluebird Care has revolutionised the way care is delivered by concentrating on high quality customer service, whilst at the same time upholding the very best in professional care provision.

We have proved successful because we offer the service people want. We don’t tell people what they can have. We believe that the people we provide care for are first and foremost customers. In that way everyone understands exactly what they can expect. And that is “Good Old Fashioned Service.

Providing care to the whole community

Bluebird Care provides care not only to Older People but also to people with Learning Disabilities, Physical Disabilities and to Children and their families. Care can range from the straight forward fifteen or thirty minute visit right through to live-in care. With offices across the UK, Bluebird Care is fast becoming the nation’s foremost provider of care-at-home

The fastest growing care franchise in the UK with experience in franchising and care provision you will not find elsewhere. Bluebird Care’s growth has been exceptional by any standards. From a standing start in June 2006, Bluebird now have franchised offices throughout the UK and Republic of Ireland. The market in the UK is currently worth some ?20bn per year, and growing. Bluebird Care is a success story within this huge market and you can be part of it developing your own successful, profitable Bluebird Care business.

1.1) Significance of a study- Training

The Significance of a study refers to its practical application in the discipline and perhaps to society in general. Therefore, the significance of a study of training is a process whereby an individual acquires skills and knowledge. It is important for a business to improve performance of workers. It is a cost to firms to pay for the training and also to suffer the loss of working hours whilst as trainee is being trained. However, the potential gains from employees training are significant. The main benefits of training are improved productivity and motivation of staff and also better quality products being made or services being provided.

It is important that a business provides training that is consistent with the business strategy. The most important steps in developing a training strategy are to Identifying the skills and abilities needed by trainees, drawing up an action plan to show how investment in training and development will help meet business goals and objectives, Implementing the plan, monitoring progress and training effectiveness.

1.2) History of Training

According to CIPD (2007) starting point of commercial training was the Industrial Revolution in Europe. At that time there was great manufacturing competition internationally and there were also large groups used to work in factories. Because of this employers realised that they should train their employees and also governments realised that the quality workforce is an important factor in growing competition for trade. In this course work mostly the history of training in Great Britain has given, but references are made to other countries as well where their practices have made an impact upon the United Kingdom.

CIPD (2007) enlightens that during the 19th century and also in beginning of the 20th century, training was seen as being based around apprenticeships and unstructured on-the-job training also existed. Where successful, workers in semi-skilled jobs were assumed to be training providers to new workers by using demonstration method. Management theories arrived from the USA to the UK after 1920s. Before that UK was under the influence of ideas from across the Atlantic. Taylor and Mayo are pioneers in this field. Taylor given principles of scientific management and Elton Mayo suggested that positive relationship between workers and between management and workers is necessary in maintaining interest in work. In the Second World War, importance had been given to training officers. At that time some businesses also realised the importance of training. During the 1950s and 60s other sociologists and psychologists like Argyris, McGregor and Herzberg started to think like Mayo and they presented their theories. By the late 50s it was accepted that management is more than that what Taylor had suggested. Work became more complex and dynamic, and there was need to pay attention towards training to enhance the abilities of workers to get maximum benefit from workforce.

Managers used to train workforce in the beginning but after some time specialist trainers and training departments came into being. In the late 1960s the first business schools in the UK opened and after that many other management and training schools came into being (CIPD, 2007).

1.3) Aims & Objectives of the project:

Aims are just general statement briefly outlining the content of the training being offered. We written objectives are much more specific and should clarify the aims in more detail. They should state what the trainee should be able to do. Well written aims and objectives will help to provide a sound basis for identifying the content of a training programme. They also will assist you in assessing whether or not the training has been successful.

Critical analysis of nature of Training and its impact on the performance of the Organisation
An impact study of the trainings provided to the employees of Company ‘A’ & ‘B’
To identify the gaps that exists between current situation and what is/ will be required
To study the cultural change of the organisation through training
Suggest ways to improve the training based on the identified needs
To build confidence in employees to work with clients
Improve life style of clients through training of employees

1.4) Research Questions

Coupled with the research questions are supporting references to the critical literature review and initial conceptual framework. Discussion of the various fields appropriate to the research questions are outlines for the reader via a reasoned selection. A synopsis of the critical review and evaluation of the literature is provided, which led to the set of the working definitions of the key concepts used in the research. The research questions are then discussed in light of their suitability for an interpretative report based on ethnographic research principles. The structure of the research is outline in order of the reader to contextualize and conceptualize the entirety of the piece of work. The following research question has been designed and briefly explained in the chapter 2 “Literature Review”.

1.Why should we evaluate training and development?

2.Why it is so hard to evaluate training in the workplace?

3.What aspects of training should be evaluated?

4.Why are Training and development important?

1.5)Literature Review

A search of literature is an essential part of every research project. There are two areas to be searched at the time of beginning a research project.

The literature relevant to the topic;
The literature on research methodology and data collection techniques.

As a researcher this means searching out, obtaining and then reading as much as possible in the time which is available. The literature review will be made up of different kinds of materials, including books, articles, and these. Figure shows the two main kinds of literature to be searched and indicates what benefits each brings to the planning of research project.

Analyzing the literature can have as much intellectual and practical value as collecting first-hand data. A through critical evaluation of existing research often leads to new insights by synthesizing previously unconnected ideals, and can provide methods for collection of data and suggest solutions tried in similar solutions.

Two kinds of Literature (Source: Doing a Literature Search by C. Hart 2001)

In the chapter 3, detail knowledge of how information was organised and contributed immeasurably to the success of this research. In the intervening time period, there is the developed practical and conceptual knowledge about searching for relevant literature and at the same time collection and development of the ideas and practical methods for analysing and synthesizing ideas found in the literature. Also this chapter provide an introduction to one of the most difficult tasks, that of literature reviewing.

1.6) Analysis and Interpretation

In Chapter 4, another step is the analysis and interpretation of the date that were gathered. Again, the procedure used to analyze the data will vary depending on the research design chosen and the data gathered (Churchill, 2005), Analysis of data from qualitative research is very different from the more statistical analysis of quantitative data. It will most likely not be expected to have a complete understanding of all the possible techniques for analysing for this research, but it is expected that logically and competently analyse and interpret the data. The interpretation of the analysis will bring out the meaning of the data and convert the data into useful information. This will give the detail information that can be used to answer the research objectives and overall research problem (and satisfy the requirements for the project). Once the data have been analysed, clear recommendations can be established based on the current research.

1.7) Conclusion and Recommendations

This section includes general statements, inferences, generalizations and implication based on the findings or result of the research. It’s usually derived from the hypothesis or assumptions of the research. The conclusion should be guided against biases and partialities, incorrect generalizations, deductions and misleading impressions. Whereas, recommendations are usually statements that offer solutions to the issues or problems presented and discussed in the research. All recommendations enumerated in the research should be practical, specific, feasible, attainable, logical and valid. Recommendation for further research on similar topic but to be done in other places and involving other respondents. Chapter 5 of this research is based on the conclusion and recommendations.

Churchill, G.A. (2005), Marketing Research: Methodological foundations. 9th edition, Mason, OH, Thomson/south-western

Chapter 2 Literature Review

2.1) Introduction to Chapter 2:

A review of the literature consists of reading, analysing, and summarizing a synthesis of scholarly materials about a specific topic. It’s called scientific literature review. When the review is of scientific literature, the focus is on the hypothesis, scientific methods, results, strengths and weaknesses of the study. The term scientific literature review refers to theoretical and research publication in journals, reference books, textbooks, government reports, policy statement and other material about the theory, practice and results of inquiry. This chapter will provide the background to the research by looking at different types of training and relevant theories have incorporated in this research. These researched theories have, as a result, helped to tackle research questions in this work in context with the contributing theories.

Relevant Theory

Critical analysis of nature of Training and its impact on the performance of the Organisation

2.2) Definitions of Training:

According to Buckley and Caple (2007, p.5) training is:

“A planned and systematic effort to modify or develop knowledge/skill/attitude through learning experience, to achieve effective performance in an activity or range of activities. Its purpose, in the work situation, is to enable an individual to acquire abilities in order that he or she can perform adequately a given task or job.”

Mayo (1999, p.16) noted that:

“Training is concerned with know-how, and should be driven by a clearly defined need that is about improving a component of capability.”

The term training does not mean a traditionally defined programme or event. It has broader meanings because it covers a range of learning methodologies both within the current job and beyond it.

2.3) Benefits from employee Training:

Trainee may get intrinsic or extrinsic job satisfaction. Intrinsic job satisfaction may come from performing a task well and from being able to perform new skills. And extrinsic job satisfaction involved extra earnings because of job performance and more chances of promotion in and outside of organisation. On the other hand Buckley and Caple (2007) describes that organisation also gets many benefits, including improved productivity because of better performance, less absenteeism, low turnover, decrease in wastage, less accidents and great customer satisfaction.

Training gives confidence to employees to cope with the changes within and outside of organisation. An organisation can only be successful by releasing and realising the potential of its workers and it can only be achieved by training. In service led industries, people in an organisation are its most important assets and training gives confidence to these people to perform well. Training always plays a role in the performance of employees and hence performance and success of organisation. For instance, CCS mainly deals with patients suffering from mental health problems. There are more chances of self harm or other injuries. So, if an employee has taken ‘First Aid training’, that employee will be able to work confidently and also will be able to perform well; even he/she does not have to provide first aid every day. This confidence will also contribute in success of organisation. Whereas, in Bluebird Care the Patients are most likely to be disabling due to Stroke attacks, paralyses problem then the employees need to get the training of “Manual Handling”. Also employees should have to be aware of hazards during their home to home visits. In Manual Handling different aspects of training are involved like Hoisting, use of the Banana Boards, Slide sheets, etc. This type of training will improve in the confidence of employees to perform well.

Some of the benefits which an organisation can achieve through training are given below:

Increased job satisfaction and morale
Increased motivation
Increased efficiencies in process, resulting in financial gain
Increased capacity to adopt new technologies and methods
Increased innovation in strategies and products
Reduced employee turnover

Torrington and Hall (1991) conclude this fact that training motivates the trainee because it helps them to fulfil their potential and continue their self development.

2.4) Training and performance management:

Armstrong and Baron (1998) suggest that ‘performance management’ is an imprecise term. According to them it involves, a strategic and integrated approach which gives success to the organisation by improving the performance of those people who work in that organisation and also by developing team and individual capabilities.

2.5) Organisational objectives:

An organisation is successful if its set objectives are being achieved regularly. It does not matter if the organisation is non-profit making or a commercial organisation. Everyone in the organisation has to focus on their tasks to achieve these objectives. Comfort care services and Bluebird Care have its own objectives and training can assist to achieve these objectives in many ways. According to Truelove (2007) training provides competence to individuals to perform their job efficiently. It also play strategic role in long-term by involving leadership and organisational issues in training. It also develops the organisation by examining current methods, values and standards.

2.6) Analysis of Organisational training needs:

To provide best training, it is important to know that what type of training is needed. Martin and Jackson (2002) describes that training needs arise because of various reasons. Including political changes, economic changes, environmental changes, changes in law, technological changes and social changes.

Analysis of organisational training needs (AOTN) is a process to overview organisation’s performance. Main objective is to find out that what areas of organisation can be improved by training. AOTN helps to identify problems in advance and also helps to take an action before it become a serious problem. According to Truelove (1996) AOTN provides the basis of evidence to make a decision about training, and it also tells what areas of training are most beneficial for investment. It also helps to find out that currently employed resource in training are up to what extent beneficial and how to get more benefits from these resources.

Lichtenstein (1992) suggests that the key to any training strategy is to effectively find out deficiencies in employee skills and knowledge before the development and investment in training programs.

New employees of organisation are quite satisfied with Induction program. However, according to those employees who are working with company for more than three years, are not satisfied with the induction they had. This information raises two points here. First point is that company has improved its induction program and secondly those employees who are working with company from long time they need to go through induction program again. Most of senior employees use only shared knowledge to solve problems but they actually do not follow company procedures properly.

2.7) Gathering the information:

According to Martin and Jackson (2002) information can be gathered from following sources: Questionnaires, observation of employees at work, job descriptions, evidence of competence for individuals, appraisal records, succession plans, performance targets, opportunity for improvements and interviews with managers, staff, internal and external customers.

AOTN can be done by collecting and interpreting data and analysis of all information gathered within the organisation. This information can be gathered from the people throughout the organisation.

According to Truelove (1996) it is an easy task to find out training needs on individual level to improve the performance of that particular individual. If that individual is not doing the job properly then training is essential and if that individual’s performance is satisfactory then training can be given to develop the potential of that individual. Usually line manager is the best person who sets the standard of performance required and judge whether these standards has been achieved or not. So, line manager can find out training needs easily. This individual approach has a limitation that individuals will demand different types of training. That’s why it is recommended to consider group needs instead of individual needs. To achieve this goal a broad view need to be taken of the performance of a group.

If there is lack of skills and knowledge and as a result of it performance is not satisfactory then there will be a training gap. AOTN helps an organisation to identify this training gap.

Identifying the training gap (Truelove, 1996)

According to Truelove (2007) poor performance can be due to lack of abilities, lack of motivation and lack of competence. He argues that training can help to improve motivation and competence but lack of innate ability cannot be improved much with the help of training. Comfort Care Services is working hard to motivate staff and improve the level of their competence.

Following three types of training needs has been derived from Hackett’s (2003) work.

Organisational training needs: This type of need applies to the whole organisation. All mandatory trainings come under organisational training needs. For example, fire awareness, health and safety, and first aid training.

Group Training needs: Occupational or group training need applies to a particular category of employee. It deals with a particular group in an organisation. For instance, it is recommended after gathering primary data that in CCS group of those employees who are working with company from more than three years, they need to go through new induction process.

Individual training needs: Individual training needs can be thought of as an occupational need that applies to a specific employee and not to the whole group of employees. For example, training for proper communication for a particular employee. Torrington et al (2002) refers that for effective learning, individuals should have knowledge of their own weaknesses and strengths.

MacLennan (1995) suggests that the most appropriate way to select the style of learning is to discuss with individual which style will help them the most. According to Mumford (1994) senior managers can be best trainers for new managers. Bluebird Care is following this approach by using work shadowing techniques.

2.8) Staff Performance Appraisals and training requirements:

According to Carnall (2007) the purpose of appraisal should be to encourage the worker to do better in the present job, to determine rewards, to determine training needs and also to determine future use of employees.

Mullins (2002) suggests that appraisal scheme can help department manager enabling a regular assessment of individual’s performance, highlight potential, and identify training and development needs.

Appraisals establish the individual training needs and hence enable management to identify organisational training needs. Line managers or human resource manager can find out training requirements through staff performance appraisal. Performance appraisal provides detailed information about current performance of employee and it also tells that what is expected from an individual. The difference between expected performance and actual performance is maybe because of lack of training. Manager can then find out that what type of training that particular individual requires. But in some cases lack of performance may be due to some other factors. For instance, lack of motivation or lack of professionalism. This is very important to understand that however training provides a vital role to achieve performance level and objectives of organisation but if objectives are not being achieved then training is not the only thing to blame.. Boxall and Purcell (2008) are of the opinion that training and development of employees is a great investment in human resource and it plays a big role in development of organisation as a whole. Performance appraisal also motivates individuals to participate in learning activities and increase their skills and knowledge.

An impact study of the trainings provided to the employees of Companies ‘A’ & ‘B’

2.9) Plans for training:

In present service-led economy, there is much more need than ever before for training in what are often called ‘soft’ skills. According to Orme (2008) one of the challenges for Learning and Development professionals is to consider all different types of needs, and to prioritise and schedule accordingly.

In formulating plans for training it is important to examine both internal and external resources available. These resources are explained in detail below.

2.10) Internal training:

In some organisations there are some training facilities available internally, for example, some organisations are fully or partially equipped with computer training, management training and equipment training. There are some organisations with their own training departments. In many organisations senior managers and workers can be appointed as training providers. Martin and Jackson (2002) suggest another way of providing training to employees is through partnership with other non-competitor organisations and sharing expertise with subsidiaries and associated companies.

2.11) External training:

Any training which is not internal is external training. External training can be expensive sometimes in terms of its cost but on the other hand it has many benefits for businesses in long and short term. Cost of external training depends on the size of organisation. Some small organisations do not provide internal training because of lack of facilities. They prefer external training because it cost them less and gives more benefits as compare to internal training. External training involves many costs like course fee, travelling fee, accommodation and most importantly absence from the workplace which leads to temporary loss of production and possible loss of sales or services. Martin and Jackson (2002) recommend to find out any possible solution within company and not to go for external training unless it is vital.

The decision of providing ‘on the job’ or ‘off the job’ training depends upon organisations resources, type of training required, urgency of the need and training policy of the organization (Hackett, 2003).

2.12) Different types of training:

Training takes place not only in schools and colleges but also in many other settings. It can be community based training or at workplace. So, it can be classed base or on the job training.

There are many ways of training described in books. For instance, the committee on Post secondary Education and Training for the Workplace (Hansen, 1994) describes four types of training based on the characteristics of trainees.

1: Qualifying Training, this is basic training

2: Skill improvement Training, this type of training is for employed people who want to upgrade their job mobility and knowledge through training.

3: Retraining, this type of training is for those people who have been or are about to be displaced from their jobs so need to prepare for new line of work.

4: Second chance training, this training is for those people who need some basic education and also job skills in combination with other social services, to reach economic self sufficiency through employment.

Another way of classifying training is by the contents of training, for instance, differentiating the ‘on the job training’ from ‘general training’. In a general training the trainee can use the gained skills in any firm or job. General training includes basic training skills, stress and time management, basic computer skills, etc. But on the other hand on the job training is specific to that job and usually cannot be used in any other firm. For example, training of handling of customers through a specific machine or specific software used in a firm.

2.13) Employer based training:

The bureau of labour statistics survey (2007) on employer based training tells us that there are several categories of formal training. These categories are discussed in detail below by dividing these into two different groups.

First group is based on functional area of learning. It is explained in this chart below.

Other group can be described under different employee groups. This is explained in this chart below.

After explaining above two groups now following categories of formal training are discussed below with respect to their particular group.

Orientation training that provides information on personnel and workplace practices and companies policies. This type of training can be provided to a specific group of employees.
Health and safety training that tells about health and safety hazards, procedures and regulations. This is an example of functional area of learning.
Apprenticeship training that includes both classroom training and on-the-job training. This training can be classified under employee groups.
Basic language skills to improve reading and writing. This falls under the category of Functional areas of learning.
Training to operate and repair machinery. This is functional as well.
A management skill training falls under both categories.
Computer operating skills is a functional area of learning.
Customer relations skills and sales skills training come under both categories.
Food and hygiene training comes under functional training.
Cleaning, protective and personal services training are also functional training.
Job skills training to upgrade employees’ skills to perform job in a better way can be classified under employee groups.

The term employer-based training does not mean that this training has to be necessarily provided at the worksite.

To identify the gaps that exists between current situation and what is/ will be required

2.14) Methods of training:

On the job training:

On the job training is unstructured most of time. On the job training is not restricted to trainees own current job. There are also other helpful ways to provide training, for instance, job rotation, special projects and work shadowing (Hackett, 2003). On the job training can be readily provided on a just-on-time basis without any delay.

Following are the examples of on the job training.

?Job instruction

?Work diaries and log books.

?Coaching

?Mentoring

?Peer relationships

?Self-development groups

?Learning logs

?Work shadowing

Comfort Care Services & Bluebird Care both companies are using work shadowing, learning logs, work diaries and log books very successfully at the moment. It is recommended to provide staff with books and other material at work place. So, they can gain more knowledge about mental health issues and care plan of the Service Users. It is also recommended to use role play techniques for learning. Managers can be trained off-the-job and then they can provide on-the-job training to staff. It will reduce cost of training for the organisation. For instance, cost involved to send a member of staff on a training course and also cost of covering his/her shift.

NVQ in care is one of the best examples of on-the-job training. During this type of qualification an assessor comes to work place of staff and assesses that staff while working. At present many staff members and managers are going through NVQ study at different levels.

Off the job training:

Off the job training helps to get the background knowledge needed for some jobs. Off the training is mostly provided at academic schools, colleges and universities. It helps individuals to develop skills to get a job. Off the job training will help individuals to acquire basic knowledge, theories and legislation governing specific type of job. Off the job training is very helpful to build confidence in individuals.

But Hackett (2003) argues that it might be costly to train someone on the job for a specific job. For instance, an organisation might lose its customers if on the job training is provided to a customer service representative without prior off the job training.

Following are other examples of off the job training.

?Seminars and workshops

?Visits to other organisations

?Computer simulation

?Outdoor development training

Senior managers can share their work with trainee managers and then senior managers will have more time to go for off-the-job training.

Comfort Care Services mostly send its workers only to mandatory training, and most of this mandatory training is provided off-the-job.

Disadvantages of Off-the-job training:

Vickerstaff (1992) reports that a comprehensive research was conducted on the management of training in 200 small firms in the UK. Almost all companies in the study faced similar problems in the organisation and management of their training effort. Following were the main areas of difficulty:

1. Investment in their training effort.

2. Finding the right way of training which suit their needs.

3. Good management of their training effort.

According to Vickerstaff (1992) companies found that the cost of external training was the main cause of not taking available courses, but the companies also had problems in releasing people for training. Companies also reported that much of the existing training courses were unable to fulfil their needs. It is also a time consuming process to find out suitable training course. And also it is very hard for small companies to assess the benefits of courses offered.

Employers are now giving more emphasis on ‘on-the-job’ training as compare to ‘off-the-job’ training because it is more effective and also cheaper, in terms of cost, most of time (Torrington et al, 2002). Same principle is recommended to both organisations Bluebird Care & Comfort Care Services by providing more learning facilities at work place for its staff.

To choose right method of training it is very important to find out what the learning style of the trainees isAnd then that learning style should keep in mind while delivering required training. Different learning styles are discussed in detail below.

Learning style:

Individuals are different from each other. So, their ways of learning also differ. Honey and Mumford (1992) describe four different styles of learning. These styles are as follow.

Activists:

Activists learn best from trying something out without preparing. Activists are those people who are very open-minded towards learning. They are always happy to learn things as soon as possible with immediate experiences. They are always enthusiastic about new things and new technology. They face challenges with courage and always looking for new challenges. They like to centre all activities on them.

Reflectors:

Reflectors are very good at listening and observation. Reflectors always gather and reflect of all available information before making a decision. They are thoughtful people who think from every angle before making a decision. They prefer to stand back, listen and observe people. When they act it is part of wider picture because of their own knowledge and also observation of other people in past and present.

Theorists:

Theorists think about problems in a logical way. They build concepts on the basis of their analysis. They are also good at integrating different pieces of information. They are perfectionists who will carry on working until things are tidy and fit into a rational scheme. They are rational people they don’t believe in anything subjective or ambiguous. Their decisions are always crystal clear. They learn through theories, models and concepts.

Pragmatists:

Pragmatists use practical approaches to solve problems. They like to take first opportunity to experiment their ideas. These people are perfect to send on management courses because they bring lots of ideas from those courses. They are practical and down to earth people who like to solve problem through practical decisions. They always keen to learn and will find a way to apply their knowledge in real situation.

2.15) The Training cycle:

Training is an ongoing process. According to Martin and Jackson (2002) first of all it has to be analysed that what are the training needs usually it is called ‘training needs analysis’ then the next process is to find out that how to plan a training programme to satisfy all those training needs which has been identified. Third step is to implement training programme, it is recommended for a trainer to keep in mind that what learning style is preferred by trainees. Last step is to evaluate the training provided. This training cycle is continuous, as shown in figure below, because of today’s dynamic business world.

Source: Martin and Jackson (2002)

During this study many training needs have been identified. So, this study covers first part of training cycle. It also gives some suggestions that how organisation can provide these trainings. What ways it should adopt for training and also how to implement training within the organisation.

Following are different ways of learning. These are very useful for an organisation to decide that which way should be adopted to fulfil training requirements.

To study the cultural change of the organisation through training

2.16) The most effective ways in which people learn in organisations:

There are many methods of training. Organisations have to find best suitable method of training for its employees. There are many factors which determine the method of training. These factors include cost, culture of organisation, nature of learner group or individual learner, benefits, applicability of method and organisation’s strategic goals. It is noted by Marching Ton & Wilkinson (2008) that traditional ways of learning and development are still most common and effective. At non-managerial level and junior manager level instructor-led training was most effective way of training but for senior level managers external coaches or a mentor was seen to be most effective.

Following are the figures which show the percentage of most effective ways in which people learn in organisations. % of respondents

Source: Chartered Institute of Personnel and Development (2007)

Above chart shows the importance of training on-the-job. Experience of work itself and informal help from colleagues can be gained from on the job. So, it is suggested to provide more training and learning facilities at work place.

2.17) Why should we evaluate training and development?

Training and development activities are not ends in themselves. Unless, there are some positive changes in the performance of organisation, training method need to be improved. It is necessary to evaluate training to improve performance of company. Evaluation is also necessary because organisations invest heavy amounts of money in training. Without evaluation of training it is impossible to improve the process of training.

Following points are expanded from the reasons of training evaluation Martin and Jackson (2002) has described:

?Providing feedback to the trainer.

?To see whether the needs and objectives of the training have been met.

?Identification of further needs and consequently improve training in future.

?Justification of expenses.

?To show the benefits of training to top management.

Vellios and Kirkpatrick (2008) explain that evaluation of training is essential and trainer has to evaluate whether trainee has gained all required skills and knowledge during training and then successfully transferred these skills and behaviours into the workplace.

Top management of CCS understand that it is hard to evaluate training but on the other hand they understand importance of training. All senior managers are working hard to improve company’s performance and they are finding new ways of training and planning to conduct training sessions in near future.

To evaluate and improve training and development activity, assessment should be perception-based and consensus-oriented. (Krishnaveni and Sripirabaa, 2008)

It is very important to set objectives of the training and development. These objectives will give the basis for evaluation of training. Martin and Jackson (2002) suggest that if the set objectives are achieved then training was successful.

2.18) Why it is so hard to evaluate training in the workplace?

Training sometimes lacks planning, resources, time and also sometimes training is done for the wrong reasons or in a wrong way. Evaluation of training is also difficult because most of time it is hard to measure. Sometimes it is measurable but the expectations of outcome may be wrong. For example, operating unit managers are looking for increased performance only after training and not necessarily the increased learning, but trainers usually judge their training by the increased learning of trainee.

According to Berge (2008) it is very important to know the causes for difficulty in evaluating training in the workplace because it will be helpful for planners to plan training evaluation and to develop ways to overcome the difficulties.

It is hard to evaluate training in a company which deals with people suffering from mental health problems because it is difficult to see changes in service users’ life due to staff training and these changes are also not measurable. Some changes might does not have direct link with staff training at all. But still there are many things which can be noticed and judged after training and hence training can be evaluated to some extent. Personal experience tells that training can be evaluated by interviewing employees to check their confidence level after training, change in their behaviour and improved performance can be noticed. It is also recommended to get feedback about their training program but this feedback should not be taken just after their training because of halo effect. It is noticed that post-course questionnaire are mostly used after training programmes. Torrington et al (2002) argues that there is a big drawback of these questionnaires is the powerful halo effect which means that a person may fill the questionnaire on the judgment of a single positive or negative impression (Mullins, 2007). And also this questionnaire will evaluate the course and knowledge of trainer not the learning outcomes.

2.19) What aspects of training should be evaluated?

According to Torrington et al, 2002, it is easy to evaluate training when outputs of training are clear to see. For instance, increasing trainee’s typing speed or reducing errors while dispatching goods in a warehouse. But it is very difficult to evaluate the success of management training program or social skill development

Training can be evaluated at different levels with different techniques for each level (Hamblin, 1974, cited in Fayolle, 2007). Examples of these levels are given below.

Level 1: At this level reaction of trainee observed about training and methods of training. It is also recommended to observe that what the point of view of trainee about training is. It is easy for CCS and Bluebird Care to observe trainee’s reaction; this can be achieved by having an informal chat with trainee.

Level 2: At this level it is checked that whether the trainee learned what was expected. Both Bluebird and Comfort Care Services can develop questionnaires or ask questions to trainees about training and learning outcome.

Level 3: This level comes after providing training. At this level it is checked that if there is any change in job behaviour because of the training provided. At this level observation of trainee is recommended after training. If employee is doing same job in a better way then it means that training objectives has been achieved.

Level 4: It is monitored that after training what are the changes in the performance of that particular department. In case of CCS there are not many departments and company mainly deals in health care. However, Bluebird Care is dealing with different type of Service Users especially who has the physical disability. But it can be divided in different areas or different counties and then performance level can be checked at this level.

Level 5: This is an ultimate level. At this level, the effect of training checked on the organisational level in terms of business objectives. At this ultimate level training can be evaluated by comparing its performance objectives with its actual performance. If set objectives of company have been achieved after training then it means that training was successful.

Eerde et al, (2008) suggest that there is no effect of training quantity on the usefulness of training and effectiveness of organisation. TNA comprehensiveness and training quantity, both are unrelated to size of organisation.

Bramley (1996) explains that performance can be evaluated at three levels. These levels are individual, team and organisational levels. He also suggests that criteria for evaluation should be announced at the beginning of training program rather than tagged on at the end.

It is very hard to measure the impact of training on an organisation and it is rarely achieved in practice. Sedler-Smith et al (2000) found in their studies during 1999 that most of companies evaluate training for operational reasons rather than strategic reasons. They also found that this evaluation is rarely used for return on investment decisions and mostly used just to check the training process and to give feedback to trainee.

2.20) Why are Training and development important?

To survive in this commercial world, all organisations have to continuously provide training to their employees to make sure that they have up-to-date knowledge and up-to-date skills (Martin and Jackson, 2002). These are essential for any organisation to prosper. In a free market economy all organisations has almost similar access to capital, customers and employees. The only thing which distinguishes one organisation from other is effectiveness and efficiency of that organisation. And this effectiveness and efficiency can only be acquired from knowledge and skills of employees through training.

2.21) Compare and Contrast the various studies

Every year new challenges emerge in the field of training and development for example, competency, development, outsourcing, e-learning, and knowledge management. In spite of the variety and complexity of these challenges, there is a common theme: business leaders want to see value for their investment.

In this section, it’s essential to compare and contrast the various studies related to the training for an employee and with the view of employers. The initial reactions to the learning experience indicate that the Training is relevant and immediately applicable to their needs. How effective is the Training and how sustainable will it beWhat the people doing effectively and better as a resultWhat result are these investments in Training development having for the business?

The reason for comparison and contrast is to determine the effectiveness of a Training program. When the comparison is done, it will be hopeful that the results are positive and gratifying, both for those responsible for the programme. Therefore, much though and planning need to be given to the programme itself to make sure it is effective.

Training and qualifications alone cannot ensure a competent workforce. Moreover, through the considerable debate about the types of Training and qualifications that are appropriate, and how to get a better match between national training and qualifications and the specific needs of employers. Finally there are unresolved questions even with certified competences as to the extent to which they certify capability as opposed to performance, a theme that is pursued further. The implications are therefore that the competent workforce cannot be achieved simply through raising the numbers of qualified staff. Therefore training must be integrated within a vigorous framework of continuous performance management which requires

Clear values
Define goals
Definitions of accountabilities, responsibilities, and areas of discretion
Standards of performance
Supervision and appraisal systems
Skills and system to handle individual issues of capability and conduct
Quality assurance process

With the view of contrast, in large organisation the completion of a full training needs analysis is a massive and lengthy tasks, often overtaken and delayed by fresh demands and crises that weaken the eventual outcome of the exercise and make the result hard to implement. The involvement of the service users is assessing the training of the staff is also important. Their comments on the key skills and attitude experiences as helpful are invaluable. There is therefore a need to use a range of measures and information gathered on a continuous basis both directly and indirectly

Suggest ways to improve the training based on the identified needs and to build confidence in employees to work with clients.

2.22) Management’s responsibility for training and development:

The CIPD (2007) reported that in 74% of organisations, line managers had taken on responsibility for learning and development. Most of them are doing this job efficiently. According to Singer (1979) there are different types of managerial responsibilities for training and development of their staff. These responsibilities include taking interest in employees’ careers by providing them opportunities to improve their abilities, knowledge and skills. It is also a major responsibility of manager to motivate employees for continuous learning.

Reid and Barrington (2003) explained that it is responsibility for all managers to involve in training process. They suggest that top management should involve them in creating a positive attitude to human resource development. They should also involve in creating human resource policies and providing resources for these policies. They should present themselves as a role model for their subordinates with their personal involvement in training decisions.

Marchington and Wilkinson (2008) are of the opinion that middle and junior level managers are responsible for implementing the training policies developed by senior management. They should provide all the relevant information to people involved in training. They should also allow leave to those trainees who have to go for external training courses. Managers are responsible for team activities, project teams, problem-solving group work, sharing knowledge, conducting performance reviews, and agreeing development plans.

CCS is currently working on most of the areas discussed above. But most of the managers are using informal approach in areas like team activities, problem-solving group work, sharing knowledge etc. it is suggested to use formal approach and document it.

Hutchinson (2007) suggests that learning and development responsibilities must be included in line manager’s job descriptions and should be provided with regular feedback.

Managers sometime report some hurdles in training process. For instance, many organisations has limited resources, hence they find it difficult to provide funds for training. Training requires time which sometimes becomes hard because managers are extremely busy in other important tasks at work. Lack of understanding about the impact of learning and development is also an obstacle in learning process. According to Reid and Barrington (2003) some managers have adverse feelings about learning. They think that they do not need any training because they are already trained while studying at formal education institutions. These feelings have anti-development influences.

Fortunately most of the managers in CCS are willing to get trained and they welcome more knowledge about their work. Weekly meetings at head office also play a good role in discussing day to day issues and bringing up problems at a level where all managers can share their opinion and find out a solution for these problems. Whereas, in Bluebird after every 2nd week of the month staff meeting is arranging find out the best policies and solution to accommodate their Service Users. Also Bluebird Care is regularly distributing the bulletin among the staff members and get the feedback from their Service Users regarding with employee performance. This is perfect example of knowledge sharing.

Time is main hurdle in managers’ training. They are very busy in their daily tasks. It is recommended to divide their work with those staff which has potential to do the job and it can also help them to become manager in near future.

Some managers themselves are not competent, motivated and good learners; they may find training as an unnecessary expenditure and waste of time (Marchington and Wilkinson, 2008).

According to a report of CIPD in 2007 only 6% of line managers are provided with reward for developing the skills of their staff. So, there is need to share the fact with senior management about the importance of learning and development. Senior management has to realise that training is essential for progress of any organisation. CCS senior management is aware of importance of training but at the moment they have not developed any structured incentive program for those managers who are trying to develop the skills of their staff. If senior management announce some reward for those managers who are continuously striving to achieve the objectives of organisation through skills improvement of their staff, it will accelerate the process of learning and development. It will also motivate other managers to do so.

2.24) Critical Analysis

Ideally, all organisations integrate training into a comprehensive human resource strategy. Each member of staff should have a training profile, as part of their own personal development plan. Social services agencies tend to play this game at the organisation level and fail culpably at the individual level. Their plans, like community care plans and children’s plan, make excellent, even if soporific, few agencies put the same level of effort into planning for individual members of staff, unless they are staff with problems who tend to received a disproportionate amount of attention in order to dot the i’s and cross the t’s before shifting them out of the workforce.

An analysis of who gets training in social work agencies tends to show that while some staff put themselves forward for lots, other get none at all. Sometimes, provider-led courses are put on with no reference to a training needs analysis simply because an in-house trainer has an expertise in a particular area. Often, the staff who needs training most avoid it at all cost as part of their general strategy to evade scrutiny.

The social care organisation of the future will be a learning one. It will rely upon its own staff rather than external consultants. It will seek to rebuild the camaraderie lost during the cold excesses of some public sector business planning regimes.

2.25) Discussion

In this section, a brief discussion to identify buzzwords for social care work for ‘collaboration’, ‘co-ordination’, and ‘multi-disciplinary’ would surely be safe. Indeed, exhortation or different organisations and professions to collaborate in the social care field have been unceasing over the past twenty years. Training is one of the most demanding and complex processes in which they can be involved. Apparently basic forms of foundation training can become fraught with anxieties, conflicts and complications when it is delivered in an inter-professional group. While many of the issues confronted in inter-organisation training are similar to those encountered in single discipline training, their intensity is much greater. Simply putting different professionals together in one room for the training is no guarantee that mutual understanding and respect for each other’s role will be enhanced. Indeed, it may even serve to consolidate pre-existing power differences, occupational stereotypes and prejudices. This area of training may therefore stretch even the most experienced trainer to their intellectual, emotional and facilitative limits.

2.26) New Theory

in the recent time the social care organisations and government are very strict and very

2.27) Conclusion:

This chapter has provided different theories and methods of training. It has also provided the base to do the research in right way and to explore different angels of training in this research in the light of the work done by experts of this field. It takes us to the next chapter to discuss various research methodologies to gain an insight of the various prospects at offer in forms of forming the right research pattern that could gives us reliable results.

Chapter 3 Research Methodology

3.1) Introduction to Chapter 3:

This chapter looks into the various approaches to research, the available research methods, the strategy adopted, the sample selection, approaches to data analysis and the validity of the research approach implemented. All these topics are stitched together in a systematic way to create a bridge of understanding by using gathered information.

According to Sekaran (1992) an organized way to find out solution for a specific problem through investigation is called research. Similarly if the research is done to solve a business problem then it will be called as business research.

3.2) Types of Research:

A research can be done for two purposes. These are discussed below.

Fundamental Research:

This type of research is conducted to gather more information and knowledge about a particular phenomena and to develop theories after the research. This is also called as basic or pure research. This type of research helps to improve the understanding of researcher about a particular issue.

Applied Research:

Applied research is the research done to find a solution to any existing problem. This is called applied research because this is done with the intention of applying the results of this research to get to the bottom of particular problems in an organisation. This research addresses the problems of organisation directly that’s why most organisations conduct this research and also willing to pay huge amounts of money to researchers and consultants.

The research done during this study was also an example of applied research. It can also be further extended by researching particular problems in depth.

3.3) Research Methodology:

Kothari (2008) suggests that research has a direct impact on the development of any business therefore it is very important for the business to be updated with the latest research in the business world.

Goddard and Melville (2007) enlightens that it is very important to choose appropriate research methodology because it has to serve the purpose for which the research is undertaken. It also helps the researcher to get the insight of the research conducted. This coursework will look into different types of research methodologies and will also recommend a research methodology to collect the information for the purpose of the current research.

3.4) Research Map:

The research work has been conducted in a step by step format. It has been shown below in the form of a map.

3.5) Research Approach:

Social sciences provide us with different methodologies. Amongst them are qualitative, quantitative, inductive and deductive. These are discussed below.

3.6) Qualitative and Quantitative:

Saunders et al (2003) describes that there is a clear difference between a qualitative and a quantitative research. They draw attention to three distinct differences between qualitative and quantitative data. Qualitative data is based on meanings expressed through words. The collection results are non-standardized data which requires classification into different categories and the analysis is derived through the use of different concepts. Qualitative research method is used to understand behaviour. According to Saunders et al (2009) this method is mostly used in businesses. On the other hand quantitative data is based on meanings derived from numbers, the collection results consist of standardized data and the analysis is consists of numeric, diagrams and statistical data. Saunders et al (2009) says that quantitative analysis is used mostly in science but it is also helpful to use for businesses because businesses can decide new markets to enter on the basis of statistical data. Both approaches have their advantages and disadvantages and neither one of these approaches can be considered better than the other. Yin (1994) says that the best research method to follow for a study depends on the study’s research problem. So, user of any of above discussed two methods has to think that which method is suitable for research.

In this research qualitative method has been used mostly to collect the data because qualitative method is most suitable to conduct this kind of research. Questionnaires have been used and interviews have been conducted to collect data from employees of the organisation.

3.7) Induction and Deduction:

Holme and Solvang (1997) suggest two ways of conducting research. These are induction and deduction. Induction starts from collection of data and then a theory that can explain the phenomenon is developed by an analysis of that data. Deduction is opposite of induction and the process starts with a theoretical base, and then narrowed down.

Deduction method is informally called top down approach as it can be seen in diagram. In this approach process starts from building a theory in mind and then narrowed it down to a specific hypothesis and then observation started to prove hypothesis right or wrong. This confirms that theory was right or wrong.

However, inductive method works bottom up. This method is more open ended as compare to deductive method. It starts from observations and then on the basis of those observations and patterns a hypothesis comes up and then a theory developed at the end.

This research is an example of induction method because this research started with observation and different patterns of work were also examined. And then a hypothesis developed that with help of training certain objectives of organisation can be achieved. After investigation through questionnaires and interviews of managers and also ordinary employees of company it was confirmed that this hypothesis is correct and a theory has been given that to improve the performance of company training of all employees is essential.

3.8) Data-Collection Methods:

There are many methods of data collection such as interviews, observations, focus groups and questionnaires. Yin (1994) suggests that to get required information combination of these methods is often necessary.

Interviews:

An interview is mostly conducted face-to-face in which interviewer gather information by asking questions from one or more interviewees (Mark, 1996).

Sekaran (1992) states that interview can either be structured or unstructured and it can be conducted on telephone or face-to-face. Face-to-face interviews are very helpful to collect correct data as interviewer can also see the expression of interviewee. However, telephonic interviews are best to overcome geographical restrictions.

Structured, Unstructured and semi-structured Interviews:

In an unstructured interview a list of questions may be prepared but interviewer asks questions informally according to the natural flow of interview. According to Burns (2000) unstructured interviews are more conversational in style. However, in a structured interview all questions are prepared in a specific manner and flow. Interviewer has to follow the order of the questions and has to use exact wording during interview. This is just like a questionnaire conducted in person.

In a semi structured interview, interviewer has listed questions and interviewer also asks additional questions rose in the discussion as a result of interviewee’s comments. Semi-structured interview allows interviewee to speak about what they want to say in response to any question. A semi structured interview offers a compromise of structured and unstructured interviews.

In this research work semi-structured interview method has been used to collect the required information from managers and also ordinary staff. All the questions asked were open-ended and interviews were in conversational style.

3.9) Questionnaires:

According to Mark (1996) questionnaire consists of a set of questions in a written format that explains itself. Saunders et al (2003) state that interviews are mostly highly formalised and structured but the greatest use of questionnaires is very useful to gather information. According to Saunders et al (2003) use of questionnaire is helpful because all techniques of data collection can be used in questionnaires. In questionnaires each person is asked to answer same type of set of questions in a set order. Questionnaires provide an efficient way of gathering information from a large number of people. Major problem with questionnaires is that it is hard to produce a good questionnaire and Saunders et al (2003) state that researcher needs to ensure that it will collect the accurate data required.

In this research a questionnaire has been used to collect information. Questionnaires were the best available way to collect required data from all employees of company. It was physically impossible to conduct interviews of all employees during the allocated time. Observation was another way to get information but it was also difficult to observe all employees. So, questionnaires were the fastest and effective way to collect required information. The questionnaire used to collect information during this study and also complement letter is attached in appendix.

Conclusion:

In this chapter various approaches have presented which are used in the process of research. These approaches have been implemented in accordance with the available literature. The reasons for adopting these approaches during this research have also been discussed.

Categories
Free Essays

Critical Study of the Organization behaviour at Southwest Airlines

Introduction:

According to Peter Senge (1990: 3) learning organizations are organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together. (Peter Senge 1990: 3).Due to the rapid change in the business environment, the learning organisations came into access as it has flexibility, adaptively and productivity which excels an organisation. The people in the organisation have the capacity to learn but the structures in which they operate are often not conducive to engagement and reflection. Moreover, due to lack of tools and guiding ideas in the organisation it leads to unclear image of the situation in which the people works. There is a fundamental requirement in the organisations to shift mind amongst their members for continual expanding of their capacity to create their future. When you ask people about what it is like being part of a great team, what is most striking is the meaningfulness of the experience. People talk about being part of something larger than them, of being connected, of being generative. It becomes quite clear that, for many, their experiences as part of truly great teams stand out as singular periods of life lived to the fullest. Some spend the rest of their lives looking for ways to recapture that spirit. (Senge 1990: 13) .The various aspects that differentiate learning organisations from those traditional organisations lies in Peter Senge’s Five Discipline . They are:

1) Systems thinking

2) Personal mastery

3) Mental models

4) Building shared vision

5) Team learning

Peter Senge (1990:14) says that people are agents to the structure in which they operate and they are a part of the structure. The disciplines are in this way that it ‘concerned with a shift of mind from seeing parts to seeing wholes, from seeing people as helpless reactors to seeing them as active participants in shaping their reality, from reacting to the present to creating the future’ (Senge 1990: 69). It is to the disciplines that we will now turn. (http:// www.infed.org/index.htm)

1) System Thinking- the cornerstone of the learning organization: System thinking is the Fifth Discipline amongst the Five Disciplines of Peter Senge. Systemic thinking is the conceptual cornerstone (‘The Fifth Discipline’) of his approach. It is the discipline that integrates the others, fusing them into a coherent body of theory and practice (ibid: 12). The basic tools of the system theory can build into sophisticated models as they are fairly straightforward. Peter Senge states that one of the major obstacles is that what is written and what is done in the name of the management. It means that a simplified framework is used in a complex business environment. Focusing on the business as a part rather than a whole body leads to the failure of the organization as a dynamic process.( http://www.infed.org/index.htm)

The five disciplines can be approached at one of three levels:

Practices: what you do.

Principles: guiding ideas and insights.

Essences: the state of being those with high levels of mastery in the discipline (Senge 1990: 373).

Each discipline provides a vital dimension. Each is necessary to the others if organizations are to ‘learn’.( http://www.infed.org/index.htm)

2) Personal Mastery- Personal mastery is the discipline of continually clarifying and deepening our personal vision, of focusing our energies, of developing patience, and of seeing reality objectively’ (ibid.: 7). It goes beyond competence and skills, although it involves them. It goes beyond spiritual opening, although it involves spiritual growth (ibid.: 141). Mastery is seen as a special kind of proficiency. It is not about dominance, but rather about calling. Vision is vocation rather than simply just a good idea. People with high level of personal mastery lives in high level of continual learning. Personal mastery is not something which an individual possess but it a process. People possessing personal mastery have high level of self confidence.( http://www.infed.org/index.htm)

3) Mental Models- Starts with turning the mirror inward; learning to unearth our internal pictures of the world, to bring them to the surface and hold them rigorously to scrutiny. It also includes the ability to carry on ‘meaningful’ conversations that balance inquiry and advocacy, where people expose their own thinking effectively and make that thinking open to the influence of others. (Senge 1990: 9). It is necessary for people to learn new skills and develop new orientations in an organization in order to develop the capacity to work with mental models. In other words it means fostering openness (Senge 1990: 273-286).( http://www.infed.org/index.htm)

4) Building Shared Vision – It is one of the ideas about leadership that has inspired organizations for thousands of years. Such visions enables experimentation and innovation. Clear vision makes the people learn on their interest rather than telling them what to do. Translation of this visions into shared vision will lead to the success in achieving the long-term and short-goals of an organization.( http://www.infed.org/index.htm)

5) Team Learning-Personal mastery and shared vision are not enough as it needs the people to work together in team. It will not only lead to good results for an organization but also help in rapid learning amongst the people. It also involves learning how to recognize the patterns of interaction in teams that undermine learning. (Senge 1990: 10). Joining of dialogues with system thinking possibly creates a language which suits more for dealing with complexity, focuses on deep-seated of structural issues and forces rather than being diverted by questions of personality and leadership style. ( http://www.infed.org/index.htm).

There is a myth in the mind of the employers that the educational qualification is enough to make an employee efficient, effective and competence. Education provides the basic cognitive skills to prepare an employee for work. In order to survive in this competitive business world, every organization needs to have their employees to be of highly polished skills and competence powers. This is where HRM steps in. Skills, knowledge and competency can only be developed through HRM. It makes the people to be more competitive as they were used to be. Training is costly as it requires arrangement of resources, staffs and many other perspectives which requires investment. For instance, a training and development programme takes place in XYZ Company. As it requires investment, there can be resistance from the different departments. This happens because the departments other than HRM are of the thought that if the training is given to achieve certain goals of the organization and the employees fail to achieve those goals, it would result in the loss of the business as the output is not equal or more than the output. On the other hand, if the employees achieve these goals it leads to the long-term benefits for the business. Improvement in the employee competency leads to increase in the corporate competitiveness which results in increasing profitability. In the view to increase the skills, efficiency, effectiveness and competence of the people in the organisation, it is necessary that the learning and development must be initiated by the HRM department. These sessions must be carefully planned and made sure that the resources are used at their best. The focus should not only be on the competence but also on the values and attitude. Learning is an initiative of change management which aims at developing employees potentials in order to add more value to the organization and the community they belonging to. (http://www.hrmbusiness.com/2008/08/hrm-basics-hrms-role-on-training-and.html).

On a global perspective for enhancing the culture of learning and development of an organisation, the HRM goes through certain critical challenging issues which play a vital role for the growth of an organisation. One of the challenges that an organisation has to deal with is the employee turnover ratio, which means to retain the resources which for certain reasons wants to leave an organisation. The HRM department finds this part being critical for small medium organisations where they have low budgets to train their current resources or hiring new resources. If an employee leaves an organisation at a certain period of time which can put that project into crucial circumstances for its survival, it’s very important either to document down everything so other resources can pick the right path of that project or to retain them so that the project survives in its best. Hiring new resources and training them again on that project includes cost and time which doesn’t goes in favor of organisation where critical deadlines have to be met. This can also leave a negative impact of job insecurity on employees that the running organisation might be going through financial problems or they don’t find any growth in their career. So another challenge for HRM is to secure their jobs by providing them chances to grow in their career. Once an employee polishes its skill more gives him more confidence to produce better output for that organisation. It’s a contribution towards promoting a learning culture in the organisation too. So HRM ensures that all the necessary ingredients should be provided for an employee to learn more by their own interest. Some organisations have a strategy of providing them a library or an environment where the interest automatically develops. It could be in sense of competition or rewards or benefits whatever motivates them to produce their better output by learning more. So training and development under low budgets can also be a challenging task for HRM as noticed that in small medium organisations usually a resource main ambition is to learn more as much as they can. And those trainings can be conducted internally as well externally. But how much budget that organisation can afford for itAre they willing to invest on their employees in form of trainingsIs that a guarantee by training them, they won’t quitThese perspectives are being thought from an organisations end too. But Southwest airline has proved that putting trust in your employee and give them a free hand to think and logically come up with solutions to problems helped them a lot in building their culture where learning was mainly focused. Other issues like appraisal processes or motivational processes again have a vital role in the growth of an organisation which is directly linked to a psychological satisfaction. Maintaining and sustaining an equitable evaluation of performance system is a key to employee’s satisfaction for their job and its performance. The more they are satisfied towards their jobs, the more they will input their efforts. (http://humanresources.about.com/od/retention/Retention_of_Employees_Tips_and_Tools_for_Employee_Retention.htm,http://www.scribd.com/doc/10041934/HRM-Training-Development)

Considering the brief introduction of Southwest Airlines, the HRM Models that has been implemented are strategic as well as descriptive. As we all are well known about the incident of 9/11, it shook the root of airline industry. This gave a space in the industry to bring about the necessary change required in order to survive in that period. As other airline companies were struggling to survive in the market, Southwest Airlines was the only airline to hold its boot in the industry. From the strategic point of view, it can be seen that the leadership style was tremendous. The mission of Southwest Airlines, low cost, low fare, no frills, and its dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride and company spirit. The airline industry tried to cut down their expenses and marched towards the direction of continuous improvement and innovation. This brought the learning organisation into existence and soon it become very popular amongst the different industries including the airline industry. Learning organisation refers to continuous improvement and maximum utilisation of resources and this was one of the reasons that brought this concept into action. The employees in the organisation were treated in the same manner as the Southwest Airlines used to treat their customers. Creativity and innovation were given more importance than the other factors in the organization. There were lot of talks going around amongst the organisations regarding the team spirit but Southwest Airlines are the one that succeeded in achieving it. This is due to the thought amongst the strategic level that the employees come first than the customers as they are of great importance to the organisation. This shows the form of leadership style used at the strategic level which built trust, love and affection amongst its employees. As the change was took place in the organisation, the Southwest Airlines hold on with their employees rather than cutting jobs and saving cost. Infect the employees were trained in order to deliver the best customer service. The top level shared all the mission and vision of the organisation. Continuous improvement can be bought only if the information is clearly shared with the employees who help them to take punitive steps to achieve the goals of the organisation. A feeling of being a part of a big family made the employees to work for the most benefit of the organisation. The goal of profit maximization was achieved by keeping low cost and high quality of customer service. Competitors have learned from Southwest and its unique management strategies and they are using these tactics as well as unique ones to win over customer. It can also be said that the HRM model used by Southwest Airlines was SOFT HRM as it didn’t treat its employees like a resource but as human as well whereas HARD HRM treats human just like a resource.

As we can clearly see the situation of Southwest Airlines, on the other hand the current situation of the British Airways stands nowhere as compared to Southwest Airlines. In spite of the airline industry being badly hit in that time, the Southwest Airlines anyhow managed to be the best airlines and to make maximum profit. On the other hand, British Airways struggles daily with staff problems, strikes, customer complaints, inadequate in achieving company’s goal. During the ash cloud period, British Airways used to bear a loss of ?20 million pounds on daily basis. Moreover, the ticket charges of British Airways are quite high as compared to Southwest Airlines. Employee’s conflict is one of the major reasons that due to which team spirit is neglected. The flow of organisation’s information and data is restricted as the strategic level feels that the company’s data should be confidential. This leads to a feeling of not being loyal and dishonest amongst the employees. Southwest did not employ the “hub-and-spoke” approach used by other major airlines, such as United, American, and Delta. Instead, its approach was short haul (average flight time was 55 minutes) and point-to-point (e.g., Dallas to Houston, Los Angeles to Phoenix). Southwest had no assigned seats, paid its crews by trip, and used less congested airports (e.g., Baltimore instead of Washington’s Dulles or Reagan; Manchester, N.H., instead of Boston, Mass.). (http://mba.tuck.dartmouth.edu/pdf/2002-2-0012.pdf)

Bibliography:

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Retrieved 18 5, 2011, from (http://mba.tuck.dartmouth.edu/pdf/2002-2-0012.pdf)

Categories
Free Essays

Is Human resource management the most indispensable part of an organization?

Introduction

Human resource management is the indispensable part of an organization as it helps an organization run in a smother path with a level of continuity. Motivation is a part of human resource management. Employees should be motivated as it acts as a driving force which helps them in achieving their goals. Motivation can be either intrinsic or extrinsic. People are intrinsically motivated when they are self- motivated and are drive by any interest or enjoyment in the task. They won’t have to depend upon others or any other external forces.

Extrinsic motivation is the rewards that are given to the people like benefits, money, grades, etc that comes from outside or external forces. Extrinsically motivated people perform better in order to win and beat others. Frederick Herzberg’s has proposed two factor theory of job satisfaction, employees are influenced by two sets of factors namely the motivator factor and the hygiene factor. According to his theory, these factors if present leads to job satisfaction as the employees are motivated.

The term “hygiene factor” is used to make sure that its presence will not make an employee healthier, but its absence might lead to demotivated employees. If the hygiene factor is missed it might cause dissatisfaction in employees, but if increased it do not necessarily motivate the employees.

Example 1: According to the doctoral study conducted at BI Norwegian Business School by Anders Dysvik, “staffs try to perform better only when they are motivated at work.” His research was based on 2,900 employees working at both public and private Norwegian organization. He has pointed out some main things about the motivated employees like:

They perform better and show an increased willingness to help their colleagues.
They are loyal towards the organization.

He has suggested four tips for the best performance of the employees in an organization which are as follows:

Give employees training and development.
Make the employees feel that they are important for the organization.
Before hiring staffs, the organization must search for the employees who has the potential to maintain commitment towards the work and has willingness to learn and develop new things.
Human resource activities should be viewed as a complementary because it helps in increasing the employees’ competency, social relation, autonomy.

Compensation and benefits are the important part of employee motivation and is the main function of human resource management. Without this a company cannot run successfully because if a company doesn’t have a motivated employee then there is a less chances of its prosperity or sustainability. Besides the payment, employees even want some more from their monotonous job, therefore, direct and indirect compensation both makes an employee get motivated. It is a part of human resource and management, which is focused on policy making and is also known as total reward in the UK.

Even though the benefits provided to the employees have a great value, there are a lot of issues regarding its devaluation made by the employees. As the benefits costs a heavy investment, the company should look forward its value made by the employees. It can be done through minimizing the communication gap in between the management and the employees.

Employee should feel that they are being cared and the company values their contribution. Eisenberger, Huntington, Huntington, & Sowa, 1986; Rhoades & Eisenberger, 2

http://humanresources.about.com/od/glossaryh/f/hr_management.htm

http://en.wikipedia.org/wiki/Compensation_%26_Benefits

1. Literature review:

Different writer has different views on what exactly is compensation and benefits. In the words of Mathis and Jackson (2008, pg.361), “Direct compensation is the employer exchanges monetary rewards for work done and performance achieved. Base pay and variable pay are the most common forms of direct compensation.” Whereas Garry Dessler (2007 pg.4), “employee compensation refers to all forms of pay going to employees and arising from their employment.” Here, “all forms of pay” include both the direct and indirect compensation excluding the non- financial benefits. The following part best describes the benefits and compensation:

1.1 Employee Benefits:

The term “benefits” also known as “fringe benefits” or “perquisites”, “perqs”, or “perks”, is the employee benefit which is given as the remuneration to the employee and is not the part of wages. Benefit is a part of motivation and in the time of recession managers are not using non-financial tool to motivate their staffs because they know that this will need a lot of commitment and time.

Its scope deals with the various form of indirect compensation. Employee benefits are tangible and intangible. The tangible benefits can be indirect financial or non-financial payments that the employees get for continuing their employment with the company.

Example 2: Following are the benefits for the employees:

Pay for time not workedInsurance benefitsBenefits after retirementPersonal services family benefitsOther job related benefitsExecutive perquisites
Unemployment insuranceWorker’s compensationSocial securitySubsidized child careEducational subsidiesManagement loans
Vacations and holidaysHospitalisation, insurance for disabilityPlans for pension and retirement plans and lawSick child benefitsSalary guarantees
Sick leaveTrends in employer health care cost controlElder careRelocation benefits
Parental leave and the family and medical leave actTime offOther perks like- time off with pay, outplacement assistance, company cars, chauffeured limousines, dining rooms for the CEO, physical fitness programs, club memberships, tax support, children’s educational subsidies, etc.
Severance paypart-time and contingent workers benefitsFamily friendly benefits and the bottom line
Supplemental unemployment benefits

Some of the benefits listed out by national compensation survey, United States, 2010 are listed below:

Retirement benefits
Health care benefits
Holiday, vacation, sick, and other leave benefits,
Life disability benefits,
Others.

The following data shows the frequently provided employee benefits scheme which taken as a source from Stephen Miller who is a manager of the SHRM online compensation and benefits focus area.

The above listed benefits are all tangible benefits. The intangible benefits provided by the company can be less direct and can be only felt by the employees. For example: appreciation from the boss, good office environment, possibility of promotion, etc.

Historically, unions of the employees tried to negotiate these benefits through collective bargaining. Benefits are the motivating factor which is provided in order to increase the employee productivity so that they can perform well and achieve the common organization goals. With the use of benefits, employees get an economic security, whereas, the employers will be able to attract, retain and recognize their employees.

Employee benefit is an important part of an investment in human resource and it needs to be altered according to the needs of the old employees.

Example 3: Even during the time of recession, Barclays Bank was able to be a pioneer bank among all the other banks in the UK because of its tangible benefits provided both to the employees and its customers. The bank paid 2.25 billion pounds in divided to its share holders in 2007, which include many of the pension funds, mutual funds, and insurance companies. The bank paid 7 billion pounds in employee salaries and incentives in 2007 and contributed, 301 million pounds to the employee pension plans and retirement benefits.

http://www.barclays.com/sustainabilityreport07/economic_impact.html?AddToPrintBasket=true

Example 4: SHRM 2008 Employee Benefits Survey reports that after job security, benefits are the most important job satisfaction factor for employees.

Even though employees don’t appreciate and understand the value of the benefits scheme, their employers are giving the benefits more than ever.

1.2. Compensation for employees:

It is the payment made to the workers and arising in the form of employment. It has two main components namely:

Direct financial payments: These are the wages, salaries, incentives, commissions, and bonuses.
Time- based payment: Clerical workers or the blue color workers get the hourly payment or daily wages, and in contrast, the top level staffs get the salary weekly, monthly or yearly.
Payment for performance: Piece work which is the compensation to the total amount of production, and the sales commission are the good examples of payment for performance.
Indirect financial payments: These are the employer paid insurance and vacations. The following chart shows the parts of direct and indirect financial payments:

2. The main components of compensation and benefits:

There are four main components of employee compensation and benefits namely:

Guaranteed payment: http://en.wikipedia.org/wiki/Compensation_%26_BenefitsIt is the reward given in cash which is used by the employees for the instant consumption like basic salary, which can be paid hourly, weekly, monthly or annually. It can also be known as minimum wages.
Variable payment: It is even a cash reward but is provided only when the performance is achieved for example: bonus schemes, commissions, overtime payment, etc. For example: Avon cosmetics UK pays its sales representative 20% commission out of its every 78 pounds and over sales.
Benefits: Benefits are often not provided in cash which include all the employee benefits like part-time off, pension contribution and company car plans, paid sick leave, insurance benefits, etc.
Equity based compensation: It is the employer compensation plan in which the shares of the employer’s are used as the employee compensation. Stock option is a good example of equity based compensation.

2.1. Advantages of compensation and benefits to the employers:

2.1.1. Decreased turnover:

Employees will stay loyal with their company if the company in return provides them a good reward for their job, therefore, there will be a low turnover in the organization.

2.1.2. Easing of their cash flow:

In this case, the company induces the salary sacrifice system, where the employees give up a portion of their salary in return of their benefits.

2.1.3. Tax advantages:

With the cooperation with the employer, the employee should be able to negotiate the benefits which will provide tax advantage. Example 4:If a company pays the telephone bills then it is known as the non-taxable benefits. It is the sundry benefit that represents a significant tax saver within a year period.

2.1.4. Decreased absenteeism:

A properly designed compensation and benefits will create a less chances of employees getting absent. If they have a good working environment, with a good salary and benefits they’ll be more encouraged to go to work.

2.1.5. Satisfied employees:

The organization will have a satisfied employee if they give them a fair enough compensation or benefits. This will result in the happy workers who will be effective and efficient towards achieving the common organization goals.

2.1.6. Motivated employees:

The employees are automatically motivated and can be directed towards the organizations targets, when the company provides them the benefits and the compensation.

2.2. Advantages of compensation and benefits to the employees:

2.2.1. Secured life:

Employees will be secured and happy when they are motivated. They’ll feel a secured life more than ever before.

2.2.2. Employee efficiency:

Employees will be efficient in their work and perform better than before in order to get those benefits more and more.

2.2.3. Peaceful mind:

Employees will feel the peace of mind that will lead them towards doing their work more efficiently and effectively.

2.2.4. Self confidence:

When the employees are rewarded their self confidence will be automatically increased that will make them excel in their performance.

3. Benefits are undervalued by employees:

In the UK rule of employee benefits, often the benefits are taxed at individual tax rates. Therefore, this can be expensive if there is no availability of the financial advantage to the individual from the benefits; therefore this is a disadvantage to the employees. Following are some examples that discusses on benefits undervalued by the employees.

Example 14: Billions of pounds wasted on Under-valued cost of benefits

Posted by HR Zone in managing people

According to Adrian Humphreys of employee benefits administrator, WPA Protocol, Five Billion pounds per year that could be better expensed to young employees has been wasted on under-valued cost of benefits. His survey was based in the current NOP World survey of 100 HR Director and Managers amongst the top 1500 UK organizations out of which 63% of the employers who provides the benefits think that the benefits doesn’t affect their employees’ career decision. In contrast, according to the survey, 96% of the employees found the benefits scheme to be either fairly or very important.

According to WPA Protocol, there should be a standard reward package particularly for the highly skilled knowledge workers, who will be responsible for the economic boost in the near future. Small and innovative firms are providing an increased salary by making their employees to choose their own portable benefits on their own. If they had a choice to cut off the benefits, 75% said company car, 14% said to reduce the pension plan, and 11% vote out for the health benefit cost.

According to him, reducing the expenditure is the main point to decrease the yearly escalating cost of benefits and the employers are re-evaluating the best way to remunerate their employees. He has even further added up that, if we shift towards the knowledge based economy then we’ll see that the employers have the perfect benefit package to motivate and retain better staffs.

Example 5:http://en.wikipedia.org/wiki/Employee_benefit#United_KingdomAccording to the UK law, UK system of state pension provision is dependent upon the National Insurance Contribution (NIC) payment. If there is no financial advantage then this kind of benefits will be too expensive to the employees.

Example 6: 2008 SHRM Employee Benefits Survey, there’s a disconnection in between the total amount spend on the benefits by the employers and the employees’ perception of the value of their benefit package. Even though the benefits are important element to the employees, they don’t understand its value; therefore, the Human Resource professional should help their employees understand all the options and the value provided to them in the benefit package.

Example 7: According to colonial life survey report, at Columbia, S.C. on February, 28, 2011- research shows that less than 19% of the employers think that their employees have an excellent know how of the provided benefits and about 5% of the employers think their employees have no knowledge about the benefits. Even though the employers spend a lot of money in their employees’ benefits, maximum number of employers thinks that their employees don’t understand their benefits package.

http://www.coloniallife.com/en/BenefitsCommunication/~/media/acrobat/product/Value%20of%20Benefits%20Topic%20Sheet%2070060.ashx IMPORTANT ONE

Example 10: http://www.hrmguide.co.uk/recruitment/job-ads-benefits.htm according to Gary Smith, a senior consultant at Watson Wyatt, “Employers won’t highlight the benefits that their organization offers at the beginning because they know that employees traditionally try to undervalue their benefits mainly the pension benefits”. Therefore most job advertisements don’t focus on employee benefits program. According to Watson Wyatt’s survey, the mostly mentioned benefit was pension for low paid jobs and only when the organisations could offer the final salary program advertisements for the high pay jobs they’ll refer to pensions.

Example 11:

http://www.shrm.org/Research/SurveyFindings/Articles/Pages/2009EmployeeBenefitsSurveyReport.aspx

According to 2007 Benefits Survey Report made by (SHRM) Society for human Resource Management, 40% of United States organization’s payroll shows the cost of benefits to its workers.

Even though employees harmoniously rate benefits as a main factor in job satisfaction, there is a disconnection in-between the expenses the company makes on their employees’ and the perceived value of the benefits made by the employees. Therefore, Human Resource managers should help their workers understand the total benefit scheme, its options and the actual value provided by the benefits. The survey exposes that the huge number of Human Resource managers check their benefits scheme at every year. Therefore, the organizations should also improve the competitiveness of their scheme. They can do this by the use of various survey reports and needs assessment, benchmarking tools, to meet the employee needs by staying inside the state and federal laws and regulations.

Example 12: According to the 2006/07research from Origen, employer expends 20-30% of their employee benefit scheme. Out of them only 13% of the employees gives a high value on their worth.

Even though employees are equipped with various kinds of benefits package, they don’t appreciate and value it.

3.1. Reasons for employees to undervalue the benefits:

In order to make the organization groom in a right direction, it should find out the reason why the employees are not satisfied.

Example 13: According to Brook C. Holtom, Ph.D. there is a chance that the employee benefits are not giving the employers the payback they deserve in increased employee satisfaction and appreciation. The employers, on the average, spend about approximately 29% of the total employee compensation scheme. The most current research indicates that the employers are spending about 43% of the total salary on the various types of employees’ benefits. One of the researches posted in a journal, Personnel psychology, states that the employees can understand and appreciate about the cost of benefits in between 31% to 68%. The employees try to undervalue their benefits due to the following sets of reasons:

Lack of proper communication by the employers towards the employees about their benefits.
Lack of choices or options in the employee benefit schemes.
Lack of proper understanding shown by the employees towards the market value of their provided benefits.

In order to maximize the value of employee benefits expenses, the employers should allow their employees to make the choices on their benefits. They should use lots of information as their tools to attract the employees. They will have to make the employees to think about the value of their benefits through the following ways:

Interactive computer quizzes,
Employee benefit fairs and exhibitions,
Landline hotlines,
Posters at the workplace,
Movies or documentaries related to employee benefits, etc.

Organizations that want to increase the value of their employee benefits expenses should make a research on their employees by asking them which benefits will they value the most and why with the specific reason, so that the employers will know the preferences of the employees towards the benefits provided.

Organizations that provide and offer various schemes of benefits will automatically experience optimistic employee morale and will retain employees better than the organizations which do not.

Conclusion and recommendation:

As benefit gives an employee the social and economic support, therefore it becomes an indispensable instrument to improve the good working quality of an employee. According to the question, I disagree with the view that even if the employees are undervaluing the benefits, company should rather add more direct compensation without cutting the cost. The main assets of an organization are the employees without which the organization can’t run in a smoother path. If the organization finds that its employees are undervaluing the benefits provided then they should use a strategic tool in order to motivate and retain their current staffs. The tools can be an effective communication made by the top level management with the staffs.

Example 9: Colonial life WWW.coloniallife.com is an accidental insurance company which provides the benefits solution in a clean package. It’s leader in the market for providing benefits to its staffs with best communications, enrollments, personal insurance goods and services that helps to make the benefits count for both the employers and the staffs.

Example 8: According to SHRM 2008 Employee benefits survey, Human resource experts should understand how to increase their employees’ level of understanding through communicating the value of their benefit scheme. The experts can use some methods of communications like- the total compensation statements, employee meetings and workshops, etc.

Reference:

http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=32b87bc8-d81c-411b-8ea3-90cce3a0401c%40sessionmgr13&vid=5&hid=17

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Free Essays

Discuss how Leadership, as a process, shapes the goal of a group or organization

WHAT IS LEADERSHIP?

Leadership is one of the most relevant aspects of the organization context. Leadership is described as “the process of social influence in which one person can enlist the aid and support others in the accomplishment of a common task.”Leadership is the creation of an environment in which others can self-actualize in the process of completing the job. Leadership, as a process, shapes the goal of a group or organization, motivates behaviour toward the achievement of those goals and helps define group or organization culture.

According to Professor Kenneth Clark, “An activity or a set of activities, observable to others that occurs in a group, organization or institution involving a leader and followers who willingly subscribe to common purposes and work together to achieve them.”

Characteristics of leadrership–

Leadership is a process of Influence.
Leadership is related to a situation.
Leadership is a function of stimulation.
Working relationship between Leader and Follower.
Employees must be satisfied.
Community of Interests.

Nature of Leadership-

Performance
Communication
Influence
Power base
Interaction
Acceptance
Followers
Situation
Attributes
INTRODUCTION–

Dr.Manmohan Singh is known as “father of Indian Reforms” came out as the Congress party’s leader. He is the cleanest man in Indian political affairs and he was also previous Finance Minister and Author of the post-1991 Economic Developments.

Dr. Manmohan Singh is thirteenth Prime Minister of India. He was elected as Prime Minister in the fourteenth Lok-Sabha Elections held in 2004. He is the only Prime Minister of India since Jawaharlal Nehru to return to power after finishing a full five-year term, seventh Prime Minister belonging to the Indian National Congress party, first Sikh to grip the office. The Prime Minister of India Dr. Manmohan Singh is almost certainly the most experienced politician and manager in the planet. Dr.manmohan Singh is highly praised as a philosopher and also a scholar. He is well considered for his attentiveness and his educational approach to effort as well as his convenience and his down-to-earth behaviour. He is a man of high moral values and standings.

Today, there are many criticisms of our Prime Minister Manmohan Singh. He has been criticized a number of times for hesitancies and lack of leadership virtues. I personally think that it is not correct. But I think that in coalition period lot of people depends upon partnership and several times results will have to be fluctuated to discuss with the other member.

If our minister in government sector is to be eliminated than the association partners will also have to be discussed. I think who so ever take the chair will also have to perform same. This is the responsibility of every person in coalition to look after the image of our government. Nobody can declare that its minister may be scarce but party is acceptable as party is different from government. I think it will help all coalition partners of United Progressive Alliance (UPA) if government ingredient can present a integrated front.

I believe that Manmohan Singh is quite a strong man and he is intelligent to convey on various faces despite of serious odds. The strength or power of a man can also be judged by patience. If you have zero tolerance of others then you are a very weak personality. The power of decision-making and a leadership lies in a talent to bear lot of citizens with you. Manmohan Singh has obtained this ability in his soul.

Most of troubles faced by nation need long term explanations. Efforts like growth with progress, growth with fairness and integrity, exclusion of Naxalism will get long period. Removal of Naxalism will want eradication of poverty, hunger from huge part of India.

Every union has exact to transform or replace its leadership. If UPA make a decision to change his leader to accomplish so what they think. So there is nothing immoral in young leadership, but it does not show that something is erroneous with Manmohan Singh and his management merits.

BACKGROUND–

Dr.Manmohan Singh was born to Gurmukh Singh and Amrit Kaur on September 26, 1932 in Gah, Punjab, now in Chakwal District, Pakistan, British India into a Sikh family. In his childhood, he lost his mother Amrit kaur after then his grandmother to whom he was so close elevated him.

In his childhood, Manmohan Singh was a diligent student studying in candle-light because where he was living there was no electricity in the village. After separation of India, his relatives migrated to India and stayed in Amritsar (Punjab).He secured highest marks in almost all the examinations he attemped.There he got admission in Hindu College. For his advanced studies in the field of Economics he attended Punjab University, Chandigarh. He attained his Bachelor’s degree as well as Master’s degree in 1952 and 1954 correspondingly.

In 1952, he was awarded the University Medal for first in BA (Hons.).He always stood first throughout his academic years.After two years he was again awarded the Uttar Chand Kapur Medal for standing first in MA (Economics). As a member of St. John’s College, he went on to read for Economic Tripos at Cambridge University. Needless to say his intelligence is supreme. He is also recipient of the Honorary Degree of-

Doctor of laws from University of Alberta, Edmonton, Canada.
Doctor of Social Sciences from University of Roorkee, Roorkee.
D.Sc from Chaudhary Charan Singh Haryana Agricultural University, Hissar.
Thapar Institute of Engineering and Technology, Patiala.

detailed view of his Degrees and posts held-

BA (Hons) in Economics 1952, MA First Class in Economics, 1954 Punjab University, Chandigarh, India
Honours degree in Economics, St John’s College, Cambridge (1957)
Senior Lecturer, Economics (1957-1959)
Reader (1959-1963)
Professor (1963-1965)
Professor of International Trade (1969-1971)
DPhil in Economics, Nuffield College, Oxford (1962)
Delhi School of Economics, University of Delhi
Honorary Professor (1996)
Chief, Financing for Trade Section, UNCTAD, United Nations Secretariat, New York
Economic Affairs Officer 1966
Economic Advisor, Ministry of Foreign Trade, India (1971-1972)
Chief Economic Advisor, Ministry of Finance, India, (1972-1976)Honorary Professor, Jawaharlal Nehru University, New Delhi (1976)
Director, Reserve Bank of India (1976-1980)
Director, Industrial Development Bank of India (1976-1980)
Secretary, Ministry of Finance (Department of Economic Affairs), Government of India, (1977-1980)
Governor, Reserve Bank of India (1982-1985)
Deputy Chairman, Planning Commission of India, (1985-1987)
Advisor to Prime Minister of India on Economic Affairs (1990-1991)
Finance Minister of India, (21 June 1991 – 15 May 1996)
Leader of the Opposition in the Rajya Sabha (1998-2004)
Prime Minister of India (22 May 2004 – Present,2011)

He has always been a stunning student with great aptitude that won him various rewards and appreciations. To reveal a few early appreciation include Wright’s Prize for well-known performance in 1955 and 1957.He was one of the few receivers of the Wren bury scholarship. He married Gursharan Kaur in 1958. On the other hand his family has mostly stayed out of the limelight.

Dr.Manmohan Singh had three daughters named as Upinder, Daman and Amrit.They have winning non-political professions. Upinder Singh is a professor of History at Delhi University. She has written six books including Ancient Delhi (1999) and also A History of Ancient and Early Medieval India (2008). Daman Singh is a graduate of St. Stephen’s College, Delhi and Institute of Rural Management, Anand, Gujarat, and author of The Last frontier.People and Forests in Mizoram and a novel Nine by Nine. Amrit Singh is a staff attorney at the ACLU.

In 1962, Dr.Manmohan Singh completed his studies from the University of Oxford where he was a member of Nuffield College. The title of his doctoral thesis was “India’s export performance (1951–1960) export scenario and policy implications”. His thesis supervisor was Dr. I.M.D. Little. This thesis later grew into the book “India’s Export Trends and Prospects for Self-Sustained Growth”.

His career started in 1966 while working for United Nations Conference on Trade and Development (UNCTAD). After spending three years at UNCTAD he then taught at the University of Delhi and worked for the Ministry of Foreign Trade with the former Cabinet Minister for Foreign Trade. Lalit Narayan Mishra was the first person who recognized Singh’s talent. Then Lalit Narayan has chosen Singh as Advisor at the Ministry of State.

In the year 1982, Manmohan Singh was appointed as a Governor of RBI (Reserve Bank of India). He held this position until 1985. From 1985-1987, he served as the Deputy Chairman of the Planning Commission of India.

In 1991, then Prime Minister P.V. Narsimharao selected him as the Finance Minister of India and served for such five long years till 1996. In the duration of these five years (1991 – 96). He carried out various reforms that resulted in the end of License Raj System that helped Indian Economy to greater international trade and investments.

In 1997, he was offered with an Honorary Doctor of Laws by University of Alberta. The University of Oxford rewarded him an honorary Doctor of Civil Law degree in June 2006, In October 2006, the University of Cambridge pursued with the same honour. St. John’s College further honoured him by naming a Ph.D Scholarship after him, the Dr. Manmohan Singh Scholarship.

The Following 2004, general elections Dr.Manmohan Singh was surprisingly declared as the Prime Ministerial candidate of the Indian National Congress-led United Progressive Alliance (UPA). He was confirmed as the Prime Minister on 22 May 2004, along with the First Manmohan Singh Cabinet. After the Indian National Congress won the 2009 general elections on 22 May 2009. Dr.Manmohan Singh was avowed in for his second occupancy as the Prime Minister at the Asoka Hall of Rashtrapati Bhavan.

In 2010, TIME magazine programmed him among the hundred most dominant people in the world. Newsweek magazine also lists him as one of TEN world leaders who have won high opinion and also described as the leader other leaders love.

Reputed writer Khushwant Singh mentioned Dr. Manmohan Singh as the most excellent Prime Minister of India. Even ranking him superior than Jawaharlal Nehru the first Prime Minister of India. He mentioned of an incident in his book Absolute Khushwant, The Low-Down on Life, Death and Most things .In the middle of where after losing the 1999 Lok Sabha election,Dr.Singh instantly returned rupees two lacs, he had lent from the writer for hiring taxis. Terming him as the greatest example of honesty.Mr. Khushwant Singh said that; “When people talk of integrity, I say the greatest example is the man who occupies the country’s highest office.”

Major roles played by Dr.manmohan Singh–

As a Finance Minister
As a Prime Minister
As a Governor of Reserve bank of India

The country’s 14th Prime Minister Dr.Manmohan Singh is a man of honourable status and deeds .He is also the first Sikh to have attained the country’s top parliamentary position. In this comes the support of a legitimate will to put an end to anxiety of the 1980s. ANI tried to visit Dr.Singh’s roots which verbalize of a fundamental straightforwardness and rise from the heaps and modest initial stages. The citizens celebrating Dr. Manmohan Singh as prime Minister consider and are familiar with him that he is one of them.

Fortune had huge stuff in store. Congress President Sonia Gandhi‘s judgment to withdraw from the Prime-Minister ship and suggest her most reliable lieutenant alters various equations, remarkable between them.Dr.Manmohan Singh becoming prime minister sets at rest any allegation of partiality against the community and furthers a mending after the tensions of Operation Bluestar to evict terrorists at the Golden Temple and the assassination of former Prime Minister Indira Gandhi.

Qualities-

Manmohan Singh, no doubt, is a wearer of many hats. He is not only a sharp bureaucrat but also an astute economist who performed an economic ‘bypass’ to a dying Indian economy and dared to do the unthinkable: open gates of India to foreign direct investment (FDI) and ending an era of license raj. In a stirring speech he had predicted the days of a rising India. Manmohan Singh’s historic budget of 1991 changed the course of India’s economic history. Singh’s radical economic shift was not like Harry Potter’s magic wand but it gradually saved India from extending a begging bowl to IMF (International Monetary Fund). PC Chidambaram’s 1997 “dream budget” was nothing but a legacy of Manmohan Singh. NDA capitalised and strengthened the basic policies of Manmohan Singh. It was only in 2006-07 Time and New Statesman portrayed India on their cover pages and recognised the potential of India’s economic march.

Political sincerity and commitment cannot be gauged from speeches but it reflects in the legislature. The two most prominent decision of Manmohan Singh government are passing of RTI (Right to Information Act) and NREGS (National Rural Employment Guarantee Scheme). UPA’s common minimum programme is indeed praise-worthy but Manmohan Singh government has failed to fulfil aspirations of the common man. As activist Aruna Roy has rightly remarked, “In a strange schizophrenia, the Manmohan Singh government remembered to bring the non-shining India to the table, but forgot to serve it.”

Manmohan Singh has spent his early days in a village (now in Pakistan) but his heart only beats for the rich and the corporate India. NREGS was passed after much deliberation and discussion while SEZ (Special economic zone) bill was passed without any debate.

It has been rightly said that Manmohan Singh was in office but never in power. His tenure as a PM has been dominated by his ministers. PC Chidambaram never listened to Mannohan Singh. Just one example of the union budget would suffice. In a letter dated November 24, 2006 just after the submission of Sachar committee report, the Prime Minister’s Office directed to the finance ministry that “wherever possible, 15 per cent of targets and funds be earmarked for the minorities in the schemes included in the Prime Minister’s 15-point programme.” Finance Ministry completely ignored this directive. The post-Sachar Union budget was a major disappointment for minorities. After acknowledging that only a ‘modest’ contribution of Rs 16.47 crore was made to the equity of the National Minorities Development and Finance Corporation (NMDFC), Finance Minister (FM) said, “following the Sachar Committee report, NMDFC would be required to expand its reach and intensify its efforts”. So a paltry sum of Rs 63 crore was added to its share capital. And Rs 108 crore was allotted to the districts with a concentration of minorities. FM did not mention the actual number of those districts to avoid the embarrassment. There are a total of 155 such districts. You need not be a mathematician to figure out that only bureaucratic leftovers will be bestowed to the minorities. Out of the Union government’s total expenditure of Rs 680,521 crore, the total allocation for minorities (it includes Sikhs and Christians too) was less than Rs 320 crore. The total number of minorities in India is 200 million (Muslims 150m, Sikhs and Christians 50m).

The private life of Manmohan Singh-

At long last, people got a teeny-weenie peek into the private life of Manmohan Singh, the turbaned soft spoken man who has been the Prime Minister of one of the largest democracies in the world for the last 5 years. Indian Prime Minister Dr Manmohan Singh, a sophisticated former economist, has played a key role in the country’s emergence as one of the rising powers of the 21st century, engineering the transition from stagnant socialism to a spectacular takeoff in the global economy. But it’s Singh’s unassuming personal style that really inspires awe among his fellow global luminaries, who praise him for being modest, humble, and incorruptible. He has been dubbed as the weakest ever Prime minister of the country by the leader of the opposition L K Advani, others have challenged him to live debates in the electronic media, and people who he trusted him have tried to tarnish his image. But he is a cool customer. His wife and daughters worship the ground he walks on and he stands tall amidst the ruins of criminals and opportunists. He is passionate about his work and never shrugs from shouldering responsibilities. There is no certainty that the UPA would return to power but if it does, he should continue to do the good work that he has set in motion.

REFERENCES
http://www.webindia123.com/personal/politician/manmohan.htm
http://en.wikipedia.org/wiki/Manmohan_Singh
http://www.indianembassy.tj/en/policy/policy.php?id=21
http://mulbagal.com/presentpm.html

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What are the effects on trade regulation for food security under the world trade organization system

Abstract

With the launch of new negotiations on international trade called ‘Doha Development Agenda’ (DDA), agriculture is once again expected to be a central and difficult issue. As a solution to the problems associated with food security in the DDA negotiation on agriculture, this article suggested a creation of a food security box.

The basic idea of the food security box is, (i) to allow, like other existing exemptions (such as Green and Blue Boxes), a series of exemptions to the AoA for members whose agriculture was not meeting basic food security needs (hereinafter the members); (ii) to allow the members to protect and enhance their domestic production capacity under certain conditions; (iii) to provide flexibility to the members so as to increase domestic support for agriculture until they have achieved a certain level of food self-reliance; (iv) to obligate developed countries to give to developing countries technical assistance for improvement in the productivity; (v) to balance the rights and duties between food-exporting countries and food-importing countries.

Free trade alone cannot solve the global food security problems, since free trade may have both positive and negative effects on food security. It should be noted that the policy to achieve food security based only on food aid and trade liberalization is too risky in terms of long term public policy. Given the instability of agricultural production and food aid, it is in the special interests of many food-importing countries such as the Republic of Korea and Japan to increase domestic agricultural production to ensure food security.

I . Introduction

The Doha Ministerial Declaration, issued at the fourth World Trade Organization (WTO) Ministerial Conference on 14 November 2001, launched new negotiations on a range of subjects, and included the negotiations already underway in agriculture and services. With the launch of new negotiations on international trade entitled “Doha Development Agenda (DDA),” agricultural trade is expected to be the most contentious and difficult issue.’) It is agreed that the non-trade concerns (NTCs) such as food security and environmental protection will be taken into account. At the DDA agricultural negotiation, food security

* Professor, College of Law, Kyung Hee University, Seoul, Korea E-mail: <[email protected] >

This work was supported by the Korea Research Foundation (KRF-2001-013-000021). is a key element of NTCs. The NTC Group (comprising the European Communities, Japan, Norway, Switzerland, South Korea and Mauritius), often called as the ‘Friends of Multifunctionality’, raised NTCs as a central part of their negotiating positions.

The United States and the Cairns Group rejected, however, the concept. Some countries argue that there is no food security issue for developed countries because they can afford to purchase if necessary. Food security is, however, fundamentally a matter of national security, justice and human rights where all countries have a great concern.

The focus of the Agreement on Agriculture (AoA) is, unfortunately, not on food security but on trade liberalization. The existing provisions of the AoA can not only not solve the global food security problems but also have detrimental impacts on food security and sustainable development, consumer health and safety and the environment. The AoA does not adequately and equitably address the food security needs of both developing countries and developed countries. As a solution to the problems associated with food security in the WTO negotiation on agriculture, this article suggests a creation of a food security box. This article will not attempt to explain or describe the details of the AoA.

Section II describes the concept of food security under the context of the WTO system and international law. Section HI points out some problems and shortcomings in the current AoA. Section IV describes the concrete contents of a proposed food security box. Section V provides a brief summary and conclusion.

II. The Concept of Food Security

1. Definition of Food Security

The term ‘food security’ has been defined in diverse ways. Both developing countries and developed countries have adopted some kind of food security policy. One starting point in understanding the concept of food security is a widely accepted definition adopted by the United Nations Food and Agriculture Organization (FAO) at the World Food Summit in 1996: “Food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for

an active and healthy life.” 2) There are four elements implicit in this definition: availability, accessibility, reliability (or stability), and sustainability. Adequate food availability means that sufficient food supplies should be available to meet consumption needs. Access to food means that both physical and economic access to food should be guaranteed. 3) A reliable food supply means that an adequate food supply should be continued even during seasonal or cyclical variations of climate and socio-economic conditions. Access to adequate food is essential for good nutrition, but it is not in itself sufficient. Food should also be safe in order that people may survive and be free from disease. Food security, therefore, inevitably requires food safety. In addition, food security requires agricultural sustainability in terms of long-term food security. If agricultural production is managed through exploiting non-renewable natural resources or degrading the environment, it may threaten long-term agricultural sustainability and global food security. 4) Thus, food security requires available, accessible, reliable and sustainable food supply at all the times.

Food security has three dimensions: individual, national and multinational levels. 5) At the individual or household level, poverty or gender inequality may influence the distribution of food affecting individual food security even when food supply is sufficient. At the national level, natural disasters or socio-economic conditions such as armed conflicts may seriously disrupt food production and supply. States may have sufficient food at the national level, but have some food insecure individuals because of unequal distribution of food. At the multilateral level, especially within the context of WTO, food security is considered as a State affair, and discussion tends to focus on liberalization of agricultural trade, trade regulation and adequate supplies of imported food to members.

2. Food Security as a Food Sovereignty

“Food sovereignty is the right of each nation and its people to maintain and develop its own capacity to produce the people’s basic food, while respecting productive and cultural diversity.”6) Food may be used as a tool by nations to impose political and economic pressures on others. The effective realization of food security is essential to national sovereignty since the use of food as a political weapon among nations may limit and jeopardize the sovereignty of individual nations.

Thus, in the Rome Declaration on World Food Security, government delegates agreed that “[alttaining food security is a complex task for which the primary responsibility rests with individual governments.” Because of the responsibility assigned to governments for achieving food security, they emphasized that “Mood should not be used as an instrument for political and economic pressure.” Food sovereignty is, therefore, a pre-condition for a genuine food security.

The term ‘food sovereignty’ was elaborated by NGO. In an Action Agenda adopted at NGO/CSO Forum on Food Sovereignty, food sovereignty was affirmed as “a right of countries and peoples to define their own agricultural, pastoral, fisheries and food policies which are ecologically, socially, economically and culturally appropriate.” 7)

3. Food Security as a National Security

One of the major tasks of a State is to ensure enough food to feed its own people. Adequate food is indispensable for the survival of a sovereign State. When we are, therefore, talking about food security, we are really talking about a national security issue. Thus, some commentators justify the maintenance of a certain minimum level of production of agricultural products in the name of national `safety and security’.

Although the WTO members have not resorted to Article XXI (national security exception clause) of the GATT (General Agreement on Tariffs and Trade) to protect their domestic agricultural industry, the relevance of national security was pointed out at the Special Sessions of the WTO Committee on Agriculture. “Under GATT Article XXI, national security issues may be exempted from Wf0 trade disciplines. Food security is also inextricably connected to national security and political sovereignty. Chronic food insecurity puts national security in jeopardy by placing at risk the health of a large number of people, and also it incites internal turmoil and instability. ”

4. Food Security as a Human Right

Access to adequate food is recognized as a human right. Food security is fundamentally a matter of human right. Many commentators agree that “under international law there is currently found, to a minimal extent, a treaty right conjoined with a customary right to be free from hunger.”il)) International Agreements such as the Universal Declaration of Human Rights”) and the International Covenant on Economic, Social and Cultural Rights 12) support this view.

In the Rome Declaration on World Food Security, government delegates reaffirmed “the right of everyone to have access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger.•..” 13) Food security is a global issue. National disaster or armed conflict in one agriculture exporting country can seriously affect the food security of other countries. International cooperation is, therefore, indispensable in order to ensure universal food security. Thus they also reaffirmed “the importance of international cooperation and solidarity as well as the necessity of refraining from unilateral measures not in accordance with the international law and the Charter of the United Nations and that endanger food security.” 14) “Each nation must – cooperate regionally and internationally in order to organize collective solutions to global issues of food security. In a world of increasingly interlinked institutions, societies and economies, coordinated efforts and shared responsibilities are essential.” 15)

III. Problems and Shortcomings in the Agreement on Agriculture

1. Lack of Food Security Provision

The focus of the AoA is not food security, but trade liberalization. Its main objective is to establish “a fair and market-oriented agricultural trading system” through “substantial progressive reductions in agricultural support and protections”(Preamble). The AoA aims to liberalize agricultural trade in three principal ways: increase of market access, reduction of both domestic support and export subsidy.

The AoA has no provision on food security, and no definition on food security. There are, however, a few provisions mentioning the term ‘food security’ in a very narrow sense. Commitments under the reform programs should be made in an equitable way among all members, having due regard to non-trade concerns, including “food security”(Preamble). Article 12 of the AoA provides that members instituting ‘export prohibition or restriction’ shall give due regard to the effects of such prohibition or restriction on importing members’ “food security”. Annex 2 of the AoA articulates ‘public stockholding’ (para3) for “food security purposes”. 16) Para.4 (“domestic food aid”) of the Annex 2 is also a provision for food security, although the term food security is not used. Thus, the term ‘food security’ in the WTO is used in a very narrow sense and relates primarily to the adequate supply of food to member states through free trade.

2. Inequity between Food–Export and Food–Import Countries

The AoA has a lack of due consideration for non-trade concerns such as food security. The AoA enables food-export countries to continue to subsidize and protect domestic producers while requiring food-import countries to open up their markets to foreign competition. Consequently, it failed to balance the interests of food-exporting and food-importing countries. It should be noted that there are special provisions for developing and least-developed countries, not for food-importing countries. Even the net food-importing countries (NFICs) are merely a subcategory of developing countries. 17)

The AoA, like other WTO Agreements, specifies different types of legal rights and obligations concerning market access, export subsidies, and domestic support, according to different categories of countries. The principal classifications are developed and developing countries, with the latter receiving ‘special and differential (S&D) treatment.’ It should be also noted that commitments under the reform programs for agricultural trade should be made ‘in an equitable way’ among ‘all’ members, having due regard to non-trade concerns, including food security (Preamble).

3. Insufficient Recognition of S & D Treatment for Developing Countries

As pointed out above, the AoA confers more beneficial legal rights and obligations concerning market access, export subsidies, and domestic support on developing countries. Developing countries were given different timetables, different target reduction rates, and different exemptions. The implementation period for making reductions was six years (until 2000) for developed countries and ten years (until 2004) for developing countries. Developing

17) The net food-importing countries (NFICs) are a subcategory of developing countries, which is defined by the WTO Committee on Agriculture based on trade profile data and negotiation among members. As of February 2000, there are 19 NFICs.

countries were allowed to apply lower rates of reduction in the areas of market access, export subsidies, and domestic support (but not less than 2/3 of those to be applied by developing countries). Least-developed countries were exempted from reduction commitments, although they were required to bind their tariffs and domestic support and not exceed those amounts.

Most of the current S&D provisions for developing countries are, however, largely irrelevant and ineffective because they lack the funds and means to use export subsidies, and domestic supports. The AoA enabled developed countries to continue to subsidize and protect domestic producers while requiring developing countries to open up their markets to foreign competitors. The AoA provisions systematically favor agricultural producers in developed countries and multinational agribusiness, and are unfair to developing countries. No WTO Agreement is more iniquitous than the AoA. Thus, the AoA enabled developed countries to maintain trade-distorting subsidies and import restrictions, and failed to achieve its stated objective of establishing a fair and market-oriented agricultural trading system. 18) It should be noted that the Doha Declaration articulated that S&D treatment for developing countries shall be “an integral part of all elements of the negotiations.”(para.13)

4. No Recognition of Uniqueness of Agricultural Products

Agricultural products are unique and most essential commodities in every country. In addition to its primary function of producing food, agriculture also provides non-food services to our societies jointly produced from agricultural activities. Non-food services of agriculture that have characteristics of public goods include the viability of rural areas, food security, environmental protection, rural employment, and preservation of cultural heritage and agricultural landscape. In this context, the multifunctional role of agriculture, in both developed and developing countries, should be recognized. 19)

In addition, agricultural production is biological and site-specific. Demand and production in agriculture is inelastic. Supply is heavily dependent upon the weather, and very sensitive to climate change. Over 90% of global rice production depends on the same monsoon area. 201 All these unique and multifunctional characteristics of agriculture need to be recognized and should be reflected in the revised AoA. “[T]o ensure that international trade plays a positive role in ensuring food security…, it is essential that trade rules respect the characteristics that distinguish agriculture from other sectors.” 21 )

5. Insufficient Recognition of Importance of Domestic Production for Development and Food Security

The AoA is premised on the idea that trade liberalization can enhance national and global food security. There is, however, widespread public concern that the current direction of trade liberalization under the AoA has a detrimental impact on food security and development. To date, the AoA’s objectives of removing trade barriers and protection have failed to promote the goals of sustainable agriculture and food security. The AoA overestimates the importance of free trade, but underestimates that of domestic production, in terms of sustainable development and food security.

In order to reduce the risks that are often associated with an excessive reliance on imports, a certain degree of domestic agricultural food production is essential for food security and development.22) Domestic production may play a role of insurance against risks such as import interruptions and poor harvests in exporting countries. 23) Agriculture is a way of life in many developing agrarian countries, and support of agricultural production is essential for ensuring food security, rural employment, and poverty alleviation. Agriculture continues to be an important source of foreign exchange and revenue for developing countries. In this context, domestic production should be recognized as an essential means to secure food security and development in the revised AoA.

6. Non–Implementation of the Marrakesh Decision

For countries that may be adversely affected by trade liberalization, a separate ‘decision’ was adopted, called ‘the Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries’ (Marrakech Decision). 25) The Marrakech Decision was supposed to protect LDCs and NFIDCs from food insecurity caused by trade liberalization through ensuring a continued flow of financial resources, food aid, and technical assistance.

To date, the Marrakech Decision has not been sufficiently implemented. The Marrakech Decision is ineffective because it does not adequately define the problem (what are the negative effects?), it does not assign responsibilities, and it has no implementation mechanism. The requirement for providing a proof of damage and causality makes it also very difficult to invoke the Decision.

N. Proposals for Food Security Box

Food security is a key element of non-trade concerns and agricultural problems. As pointed out earlier, however, the existing provisions of the AoA can not only not solve the global food security problems but also have a detrimental impact on food security and sustainable development, consumer health and the environment. The AoA does not adequately and equitably address the food security needs of developing countries and developed countries.

The AoA needs, therefore, fundamental reform from the perspective of food security, and food security should have top priority in the DDA agricultural negotiations and a revised AoA. Food security should be mentioned in the preamble of the AoA as a central objective,and specifically reflected in its Articles. As a solution to the problems associated with food security in the DDA negotiations on agriculture, this section will suggest a creation of a `food security box’; the provisions of which will be elaborated in detail, based on the four elements of food security mentioned above.

It should also be noted that the food security box is different from the concept of a `development box’ in that the latter is concemed with S&D treatment for developing countrie s,26) while the former reflects the food security concerns of both developing countries and (net food-importing) developed countries. 27)

The basic idea of the food security box is, (i) to allow, like other existing exemptions (such as Green and Blue Boxes), a series of ‘exemptions’ to the AoA for ‘members whose agriculture was not meeting basic food security needs’ (hereinafter “the members”); (ii) to allow the members to protect and enhance their domestic production capacity under certain conditions; (iii) to provide ‘flexibility’ to the members so as to increase domestic support for agriculture until they have achieved a certain level of food self-reliance; (iv) to obligate developed countries to give to the members technical assistance for improvement in productivity; (v) to balance the rights and duties between food-exporting countries and food-importing countries.

(1) Tariffs

Basic food security crops should be exempt from tariff reduction commitments. Each member may nominate, based on a negative list approach, a list of staple food security crops for exemption from reduction commitments. The ‘basic food security crops’ or ‘staple food security crops’ are crops which are either staple foods in the country concerned, or the main sources of livelihood for low-income farmers 2 8) To be qualified as ‘basic food security crops’, they should be sensitive in terms of food security and sustainable development.

26)Some members proposed a Development Box at the Committee on Agriculture. See The Development Box, Non-papa by Dominican Republic, Kenya, Pakistan and Sri Lanka, Special Session of the Conunittee on Agriculture Informal Meeting, 4-6 February 2002.

(2)TRQs

Tariff rate quotas (TRQs) were introduced in the Uruguay Round to ensure that existing access conditions were not undermined and as a means to create new market access opportunities. The expansion of TRQs may help to ensure greater market opportunities, for exporters especially in developing countries, and to further liberalize and increase trade in agricultural products. Since TRQs have contributed positively to increased market access and the food security of net-food importing countries, much flexibility in connection with the TRQs administration should be given to the basic food security crops of net-food importing countries. Some members proposed at the Committee on Agriculture ‘auctioning’ as an efficient and transparent method of TRQ allocation. 29

(3)SSG

The Special Safeguard (SSG) provisions were introduced to facilitate the reform process and as a means of protecting domestic farmers injured by increase in imports. Given the special nature of agricultural products, the SSG mechanism should be continued, in order to minimize serious injuries caused to the domestic industry by sudden import surges and price fluctuations in ‘food security crops’. Consideration should also be given for extending the SSG to cover crops which have the potential to substitute for local food security crops.

(4)Domestic Support

At the WTO Committee on Agriculture, many delegates emphasized the importance of domestic production in achieving food security. 30) Most delegates contended that the most efficient solution should lie in a combination of domestic production, imports (trade liberalization), food aid and stockpiling, but they varied a lot in the emphasis they gave to various means.

Food aid and free trade can play important roles in achieving food security. The heavy dependency on imported foods and foreign food aid is, however, too risky especially to net food-importing countries in terms of food security policy, since they can provide major food-exporting countries with a powerful political weapon. They can foreclose the potential of domestic production as an engine of rural development and economic growth. It should be noted that the policy to achieve food security based only on food aid and trade liberalization is, therefore, too naive and risky in terms of a long term public policy.

The maintenance of a certain degree of domestic food production is, therefore, an essential element in national food security policies, in each country whether it is a developing or a developed country, and no matter how high its optimum self-sufficiency ratio may be. All domestic support taken to increase domestic production of basic food security crops for `domestic consumption’ should, therefore, be exempted from any form of domestic support reduction commitments. 32)

It should be emphasized that greater diversity in food production systems may contribute to achieve food security by enabling the access to food within a region 33) Developing countries should have the flexibility to take any domestic support measures including price support for food security, rural development and poverty alleviation, regardless of its impacts on trade.34)

(5) Export Subsidies

Export subsidies provided by developed countries may impact negatively on the food production system of importing countries and have detrimental effects on their domestic markets.35) Thus, they may impact negatively on the food security situation of net food-importing countries and developing countries. It may be contended that net food-importing countries and developing countries may also benefit from lower world agricultural prices caused by export subsidies provided by other countries. These benefits are, however, highly unreliable, and export subsidies are the most trade distorting of policy tools used in the agricultural sector. Therefore, at the Doha Ministerial Declaration, it was agreed to reduce, with a view to phasing out, all forms of export subsidies. 36) Developing countries should have the flexibility to use export subsidies in order to promote exports, especially when these exports are critical for achieving their food security needs.

(6) Dumping

Export subsidies may contribute to the problem of dumping which has also detrimental effects on the food production system of importing countries. The US and EC farmgate prices for many crops are less than many countries’ cost of production, because of huge amount of export subsidies. Producers from other countries cannot compete with dumped products from the US or EC based grain multinationals such as Cargill. The existing AoA does not address the problem of dumping of agricultural products. Thus, “[Ole lack of rules in agricultural trade that preceded the AoA contributed directly to food insecurity in the world.”37) Therefore, dumping of agricultural products should be prohibited, and food-importing countries should be allowed to take appropriate border measures against the dumped products, if they impact negatively on the food security policy of importing countries.

(7) Export Credits

Subsidized export credits, along with export guarantees and insurance, could be used to circumvent export subsidy commitments. 381 For this reason, strict rules and disciplines on export credits should be established in the revised AoA. Export credits may be, however, useful for food security in food importing countries suffering from financial crises or food supply problems,39) and should be allowed to be invoked through specific criteria, so long as they are not used as a means of circumventing export subsidy commitments. As of August 2002, export credits covering exports of agricultural and food products are not governed by any specific discipline within the AoA. 401 Rules and disciplines on export credits should ensure that export credits conform to commercial practices and do not confer an export subsidy.41) Developing countries should be, however, allowed to have the flexibility to use export credits.

(8) Export Restrictions and Taxes

Export restrictions and export taxes may be necessary for the food security of food-exporting countries in cases of emergencies like food shortages. For this reason, article XI of GATT 1994 prohibits quantitative export restrictions but makes an explicit exception for “export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting countries.” Export restrictions and export taxes may, however, have detrimental effects on the food security of food-importing countries by promoting price variability and uncertainty.

At the WTO Committee on Agriculture, a number of food-importing countries, like South Korea and Japan, contended that their food supplies could be disrupted and their food security jeopardized if exporting countries restrict exports of agricultural products. 42) Article 12.1 of AoA further obligates the member instituting the export restrictions to give due consideration to the effects of such restrictions on importing countries’ food security.

However, given their significant distortion effects on world agricultural markets, strict rules and disciplines on export restrictions and export taxes should be established in the revised AoA. Above all, the period of export restrictions should not exceed more than three months, and a certain amount should be exempt from exporting restrictions during its implementation, for the food security of importing countries. Differential export taxes which encourage exports of processed products and discourage primary product exports should be prohibited.43) Developing countries should be, however, allowed to have the flexibility to use export restrictions and export taxes.

(9) State Trading Enterprises

Many countries have used state trading enterprises to control domestic markets and to regulate trade. State trading enterprises with exclusive or special rights and privileges may have negative effects on the establishment of a fair and market-oriented agricultural trading system. From the viewpoint of food security of importing countries, import state trading enterprises may, however, play an important role to ensure stable food supply. On the contrary, export state trading enterprises with monopolistic power may have a significant and direct impact on the international market.

More stricter rules and disciplines on export state trading enterprises should be, therefore, established in the revised AoA. New disciplines on state trading enterprises should ensure export and import transactions are non-discriminatory and transparent. Developing countries should be, however, allowed to have the flexibility to use state trading enterprises. 44)

(10) Food Aid and Stockholding

Article 10.4 of the AoA does not prohibit the use of food aid as a means of surplus disposal or market expansion. 45) Food aid may, however, have negative effects on food security, and be used to circumvent export subsidy commitments. 46) At the WTO Committee on Agriculture, MERCOSUR group contended that there was an urgent need to establish more detailed rules on food aid in order to ensure that WTO commitments on reducing export subsidies are not circumvented while at the same time preserving the humanitarian dimension of food aid. Strict rules and disciplines on export restrictions and export taxes should be, therefore, established in the revised AoA. 47)

Above all, food aid should only be in the form of grants rather than credits, should respond genuinely to demand, and should be targeted at the needs of the recipient countries. It should not harm the domestic production systems of the recipient countries, should not distort international trade, should not amount to the disposal of price-depressing surpluses, should not allow countries to circumvent their export subsidy commitments, and should not be used as a means of expanding market share by subsidizing countries. Developing countries should be provided with the technical and financial assistance to improve their domestic food production capacity.48)

Public stockholding of basic food security crops for food security purposes should be given a wider definition under the Green Box provision. According to para.3 of Annex 2 to the AoA, the volume and accumulation of stocks shall correspond to predetermined targets related solely to food security, and there are strict criteria for how such stocks are purchased and sold. The AoA should also provide for regional food security plans, including joint maintenance of emergency food stocks. 49) Some countries at the WTO Committee on Agriculture proposed creating an international food stockholding system in order to effectively address food security concerns of developing countries. 50) Developing countries should be allowed to have the flexibility to use food security stocks.

(11) Food Safety

Recently, food safety has been an emerging NTC issue. Public concerns on food safety increases as the trade of agricultural products increases. Food safety requirements may be used as a means of disguised protectionism. Food safety can’t be, however, given up in the name of trade liberalization, because food supplied to people should be safe, at least from the perspective of food security. Without consumers’ confidence in food safety, trade liberalization of agricultural products can’t be accomplished successfully. Strict rules and disciplines on food safety should be, therefore, established in the revised AoA. Since food safety issue may also be discussed in the SPS and TBT Committees, this article proposes a written ‘Understanding’ to be adopted, which may be annexed to the AoA or SPS Agreement.51 )

The Understanding should, among other things, deal with the precautionary principle, burden of proof on food safety, mandatory labeling for GM (Genetically Modified) crops or foods, cooperation with other organizations such as OECD and Codex. Since most food-importing countries lack technical capacity to show scientific evidence against imported foods, technical and financial assistance should be provided to members, especially to developing countries. 52)

(12)Peace Clause

Article 13 (“due restraint”) of the AoA is due to expire at the end of 2003. This Peace Clause protects members using domestic support measures from being challenged under the GAIT 1994 and the Agreement on Subsidies and Countervailing Measures, so long as they comply with their commitments on export subsidies and domestic support under the AoA. The Peace Clause should be preserved and extended for all measures that are taken to achieve the food security policy of developing countries.

(13)Environment and Sustainable Agriculture

Agricultural activities have both positive and negative effects on the environment. Agriculture contributes to environmental goods such as biological diversity and landscape conservation, which may enhance agricultural sustainability. It should be noted that agriculture in many developing countries is based on small-sized farms, and this type of farming is ecologically sustainable. “[There is an emerging realization that agricultural systems in both developed and developing countries face challenges to achieve long-term sustainability and food security,” 53)especially in light of growing populations and resource degradation. Without local agriculture there would be no positive effects, and without some level of support and protection there would be no agriculture.

A certain degree of domestic production should be, therefore, maintained for sustainable agriculture and long-term food security. Green Box measures alone are not sufficient, 54) and the criteria for Green Box need to be broadened and flexible enough to enhance sustainable agriculture and long term food security. 55) Domestic supports for sustainable agriculture should be also allowed under the Blue Box.

V. Conclusion

At the DDA agricultural negotiation, food security is a key element of the NTCs and the most contentious issue. Trade liberalization may enhance national and global food security by expanding sources of food supply, encouraging more efficient allocation of resources, lowering food prices in importing countries, and increasing economic growth rate.

However, the proposition that free trade can solve the food security problems is wrong for the following reasons. Agricultural products are different from industrial products in some respects and agriculture has the characteristics of a public good. Thus, when we are talking about agriculture, we are really talking about food security, rural development, environment, employment, culture, as well as production of food for sale in a market. Agricultural production heavily depends on climate and land conditions, unlike industrial products. Given the uncertainty of food supply in the world food market, there will always remain a residual threat to food security. The policy to achieve food security based only on free trade is too risky in terms of long term public policy. The maintenance of a certain level of domestic agricultural food production is, therefore, essential for food security of both developed and developing countries.

The current AoA does not, however, adequately and equitably address the food security needs of developing and developed countries. With a view to redressing the imbalance and inequity of rights and obligations under the AoA between food exporting and importing countries, this article proposed a food security box. Among other things, basic food security crops should be exempt from tariff reduction commitments. Much flexibility in connection with TRQs administration should be given to basic food security crops. All domestic support measures taken to increase domestic production of basic food security crops should be also exempted from any form of domestic support reduction commitments.

The agricultural negotiations are scheduled to end by 1 January 2005, along with almost all the other negotiations under the DDA. It should be noted that the DDA negotiations are a single undertaking. No element of them will be agreed until all areas are agreed on. As of 23 November 2003, the 31 March deadline for establishing ‘modalities’ in the agricultural negotiations was not met. WPO members failed to set guidelines on tariff and subsidy cuts to use in subsequent negotiations. The first and revised draft of modalities for the future commitments prepared by the chairperson of the Committee on Agriculture failed to reflect the food security concerns of net-food importing and developing countries.

This agricultural impasse may, therefore, spill over into other areas of negotiations, including services, and threaten the entire DDA round of multilateral trade negotiations. Without a system or compromise to solve the food security problems of both net-food importing countries and developing countries, the DDA round can’t reach a successful and satisfactory settlement.

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Free Essays

World Trade Organization, China’s economy will deeply and broadly get involved in international division of labor.

Introduction

After entering into the World Trade Organization, China’s economy will deeply and broadly get involved in international division of labor. To develop and establish a stable foothold in the competition, Chinese enterprises should learn and grow in the face of competition and challenges. Chinese enterprises have also realized it and explored reasonable international strategy for their development and management. Some outstanding Chinese enterprises have used mergers, acquisitions or strategic alliance with foreign companies to achieve the dream of being multinational corporations. The most representative enterprise is the Lenovo Group. Based on analysis of the international road of the Lenovo Group, the report is aimed at discuss Chinese enterprises’ choice of internationalization. The structure of the report is described as follow: Firstly, it introduces the background of global PC industry and the Lenovo Group. Secondly, SWOT and PEST model are used to analyze internal and external environment of the Lenovo Group. Motives of Lenovo to go international are listed in third part. Fourthly, chooses Japan to expand its international markets and analyzes the Lenovo Group’s entry model. Then the report will give advice of Lenovo’s international competitive strategy. Recommendations and conclusion will be given in the last part.

1. The background of Lenovo Group

Lenovo group was established in 1984, it was originally invested by Chinese Academy of Sciences and it was called ‘Legend’. It is a highly innovative, international technology company formed by Lenovo and the former IBM Personal Computing Division. Lenovo Company mainly produces desktop computers, printers, projectors, laptops, mobile phones, servers, and other goods. In a very first stage, Lenovo have to occupy the most domestic market share in China, changes from single product to wide range products. In the one hand, Lenovo made its business to meet specified customer needs, changes from product model to solution model. In the other hand, Lenovo increased its service range, changes from value added service to a full standard service. Moreover, the three stages of transformation enhanced its business integration and improved their competitiveness. In 1996, Lenovo ranked No.1 in China’s domestic market, along with its rapid development in recent years. Then in December 2004, Lenovo purchased IBM’s personal PC business in a total price of $1.25billion dollars. The IBM personal PC business integration helps Lenovo to gain experience, especially in new product development, talent reserves, management and sales. Moreover, these insist the transformation of Lenovo from a local enterprise to become multinational corporations.

2. The internal and external environment of Lenovo

Business environment consists of the internal and external forces under which the organization operates (.Stephen, 1997). It shapes the abilities of enterprises in order to keep successful relationships with their customers. Successful enterprises pay more attention to constantly watching and adapting to the changes of the business environment (Richard, 2003). Generally speaking, most enterprises can control their internal environment such as customers and suppliers, but external environment is uncontrollable, such as political factors, economic factors etc. In order to gain the unbeatable position in the market, enterprises must strive hard continuously to adapt to the changes in the external environment (Zhao, 2004). SWOT and PEST analysis are effective tools to monitor and evaluate the internal and external environment of companies.

Strengths

Strong market share

Lenovo has a prominent advantage on market share in Asia- Pacific PC market (not including Japan). Figure 1 shows the data about market share in the PC market of Asia in 2007. In the one hand, Lenovo’s market share is dominant compared to other competitors like Dell and HP in Chinese PC market. The Lenovo Group reached a new height of 34.5 percent in the fiscal year 2007, and achieved 24 percent year on year growth in PC shipments (Lenovo Group, 2008). In the other hand, Lenovo is one of the leading brands in China and has maintained this leading place for over 10 years. Lenovo can fully understand the local consumers’ needs as a localized enterprise and adapt to the market changes successfully.

Figure 1

Source: Internet Data Center

Brand advantage

The strong market share enhances the brand image of the Lenovo Group. In the PC market, the leadership of Lenovo has exceeded many other competitors in China, and is in an industry leader position. Since Lenovo has acquired the IBM’s PC operations, the advantage of Lenovo’s Dual-brand strategy appeared increasingly. The company could use the ThinkPad brand on existing Lenovo products. Therefore, a strong brand portfolio of Lenovo laptop was established in the domestic PC market, and it has taken a complete coverage of business and consumer market. The brand influence is improving gradually. In addition, Lenovo plays a leading role in cost control and Channel Architecture as a domestic enterprise in China. The Group is able to adjust its strategies and directions to the market development and pass its products’ consumptive value to consumers quickly in order to have the advantage of time difference.

Weakness

Small market share in global PC market

Although Lenovo has achieved great success in China, the market share of Lenovo in the global PC market is still very little. Market share is a comprehensive reflection of the products competitiveness. The performance of Lenovo in America and Europe is very unstable. Lenovo lags far behind Hewlett-Packard in the global PC market share. And the gap of international operational experience between Lenovo and Dell is much bigger in the US market. It will be difficult for Lenovo to catch up with Dell and HP.

Lack of scale

The Lenovo group is lack of scale to compete with its major competitors effectively. Table 1 shows the revenues and unit PC shipments of the major competitors in the fiscal year2009. It is easy to find that Lenovo falls behind its competitors.

Table 1(million)

HPAcerDellLenovo
Revenues$114,552$17,397.4$52,902$16,604.8
Unit PC shipments59403725

Source: Lenovo Group, Ltd.2010

Laptops and desktops are the main products of Lenovo, but its competitors have a wider range of product portfolio. For example, Acer offers the products including notebook computers, PCs, liquid crystal display (LCD) monitors, and high-definition televisions etc. HP has various kinds of products and service, such as PCs, imaging and printing-related products and services, and technology services (Lenovo Group, 2010). Although it has expanded the product portfolio with Lenovo mobile, Lenovo needs to expand its products and service continually. Because the weak scale of the group will limit and affect its operating performance.

Opportunities

Growing PC demand

The global PC market is expected to grow rapidly in the future. With the rise of the notebook market and the popularity of PC, the consumer market will show annual growth in geometric progression. And small-medium business segments of the PC markets are also expected to drive the growth. Table 2 shows the data about the demand of PC markets from 2007 to 2010. It can be seen that the demand of PC growth rapidly from the year 2007.

Table 2

20072010
Global PC shipments250 million350 million
Consumer segment120 million170million
Small-medium business55 million80 million

Source: Lenovo Group, Ltd.2010

Lenovo plays a leading role in global PC market, and the brands of PC products include IdeaCentre, IdeaPad, Essential, ThinkPad and ThinkCentre. Positive outlook for PC market will contribute to steady revenue flows for the Lenovo group in near term. This is no doubt that providing a good opportunity for the development of Lenovo in consumer market. Lenovo can be in a good position to benefit from the growing PC demand.

Olympic strategy

It is the best opportunity for Lenovo to break into the global market. Lenovo has many sports marketing cases in past few years, including signing a contract with the World Player, and cooperating with NBA. It also sponsors F1 Williams. Lenovo’s Olympic marketing is the most impressive and prospective strategy. Relying on the various advantages of Olympic sponsor, Lenovo can appeal to the public’s attention from the Olympic to the Lenovo’s products. It will help Lenovo enhance the brand image and awareness.

Threats

As China had joined the WTO, the market is gradually opening up. It is easier for foreign companies to access to the Chinese market. More and more famous computer manufacturers have established in China, the competition will become fiercer.And the mid-range market and the low-end market will be the target markets for international brands, so Lenovo will face the threat from gradually reduced price. Lenovo needs to know how to develop the advantages in scale, cost, channels and service when faces intense competition. In the consumer market, Lenovo faces stiff competition from Dell, HP, Acer, Apple and Sony For example, HP became the world’s first position by the success in the consumer PC market. And Dell also broke the years of single direct sales into retail stores. Lenovo will face a big challenge of Hewlett-Packard, Dell and other manufacturers in the world.

PEST analysis

Analysis the external environment is very helpful for a company to achieve long-term improvement and strategic planning. Following part will focus on analyzing the Lenovo’s external environment by using PEST tool including political, economic, social and technological factors.

Political– With the development of IT industry, some problems have emerged, such as environmental pollution and energy consumption. Therefore, the Green IT has been encouraged by Chinese government. Green IT refers to low energy consumption and low noise pollution. As a leader in Chinese PC market, Lenovo has achieved the task of Green IT in noise pollution. The noise index of a Lenovo brand-‘Kai Tian S’ was lower than 30 dB (Lenovo, 2005). In addition, the IT industry’s export tariff has decreased to 9.1 percent in 2005 since China joined the WTO (Global M&A Reachch Center, 2006). So these policies are tends to encourage Lenovo to expand its global market.

Economic– The world economic has a tendency to decline because of the economic crisis in 2008. However, new economic policies were announced by Chinese government at that time. The policies were loose monetary policy and positive financial policy. And Chinese government offered 400 million RMB to motivate economic growth (The Marketing Surveillance Center of China, 2008). It is a great opportunity to develop IT industry. The demand of IT products in China has also increased by the growth of GDP. What’s more, the economies of some developing countries grow rapidly so that provides more opportunities for IT industry, while the IT industry in developed countries has become saturated.

Social factors– It contains education, population, income levels, lifestyles and other cultural factors. Brand awareness of the computer manufacturers will be affected by the income and education level of consumers. Firstly, education level and the demand of IT products are increasing in China with the development of society. Secondly, Chinese people become more international because of the globalization. The lifestyles of Chinese people changed a lot with the influence of developed countries. So it provides a better external environment for Lenovo’s development.

Technology– Lenovo Group was established by the Chinese Academy of Science. There are more than 1,800 computer professionals in this governmental organization which owns the highest level of computer technology in China. After the acquisition of IBM’s PC operations in 2005, Lenovo took full use of the IBM’s advanced technologies to produce high quality products and make the R&D activities (Lenovo, 2005). And remote work of Internet offers a good opportunity for enterprises to share their advanced technologies. Therefore, Lenovo Group can enhance its competitive ability in order to expand the scale of global market based on the analysis of internal and external environment.

3. International Expansion Rational

Kotter (1980) pointed that two important factors decide the reason why enterprises choose to go international. First is the force of circumstances, due to market price in easy or government control, there are fewer opportunities for enterprises in home market. Second is attractive factor, the demands for enterprises’ products are getting greater and greater overseas. Luftman and his colleagues (1992) described the distinction between primary motives and secondary motives. Primary motives include market-oriented investments, cost cutting investments and overseas investments for the purpose of reducing raw material costs or other reasons. Secondary motives include internal investment environment, the ability to respond to the external environment, or factors relate to the country to invest.

By 1999, the company held 21.5 percent share was the best known brand in China and had some brand presence in Asia. Having keeping the domestic PC market leadership for five following years, the company faced new challenges when China entered the World Trade Organization. The company owned 30 percent share in domestic PC market far outdistanced other competitor’s 10 percent share, but it could no longer depend on local player advantages such as tariffs on imports or foreign companies’ distribution channels. For example, Dell used a direct sales model to enter China. Also by 2003, the company faced an increasing domestic competition of rising Chinese PC giants, for example Haier, the appliance maker, introduced their own-brand PCs.

Besides, seeking and capturing broad overseas markets have been the basic motive. When the company has grown to sizable scale, it will face pressure of growing markets. While domestic market cannot offer opportunities, the company has to extend to external markets. The company can expand scale and scope of product operation to enhance its competitive advantage due to external markets. On the whole, as the limitation of internal market capacity and gradually while-hot competition, also Lenovo’s growth rate has been declining, internationalization has became the inevitable choice for Lenovo.

In addition, Lenovo aimed to develop its core competence by going international. In international market, Europe and other developed countries pioneer in the fields of global information technology and network technology. Lenovo has set up the research laboratory in Silicon Valley, and through IBM Deal built strategic business partner relationship with IBM, the company pursued high-tech to ceaselessly strengthen its core competence and occupy a position in the fierce competition of high-tech area.

4. Country Selection

Lenovo’s next move for expansion is Japan and to focus on personal PCs. In 27th January 2010, the announcement was given by Masato Yamamoto (NEC President) and Yang Yuanqin (Lenovo CEO): A new company called B.V. established which registered in Netherland. Lenovo owns 51% shares and paying $175million US dollars for the initial IPOs. And rest of the combination activities will be completed in June 2011.

Country Attractiveness

Japan is a small island located at the Pacific Ocean near China, the Japanese own a tradition of strong electronic industries, and some major world-class brands are came from there such like: Toshiba, NEC, Fujishu, Panasonic and SONY. In the Asia-pacific region of personal PC business, when competing with MNES such as: HP, dell, Acer and Asus, Lenovo is clear that it leads 20 percent of market share, however, in order to keep their position and secure their business in Asia, the opportunities for Lenovo to entry Japanese market beyond its cooperation. As a part of Lenovo’s global strategy, the market share combination will benefit NEC from the Chinese market and Lenovo from the Japanese Market, especially both brands will have a strong partnership facing the competition in a global stage. As the pie chart showed below:

Strategic Consideration

Meanwhile, Japan is a country with complexity, even in the business relates areas: Japan has cumbersome regulations, a deep cultural background and special business practices. The consumer market is very competitive, and consumers prefer domestic goods.

In Japan, the majority of sales channels controlled by large corporations in Japan, this increase distribution cost and impact foreign products to be less competitive in the Japanese market. Japanese consumers have the taste of high-quality products and product design.

Figure 3. Japanese market characteristics: A positive spiral of Japanese market

Source:

In the electronic industries, Yasushi (2006) mentioned the ideal cycle mode for growth as an electronics manufacturer in Japan, for several years, the negative cycle relied on saturated market limits and share competition in Japan market, and the solution for Japanese companies is to go overseas to gain more cost competitiveness. The positive cycle shows more about the relationship between market expansion and capture global market share. For Lenovo, facing these challenges, the product line could be localized in Japan or even in China, and sell computers in the Japanese market.

Figure 4: Target country’s attractiveness and risk involvement

Target country’s attractiveness

Lenovo

Strength (Benefit)

Weakness (Harmful)

Potential Market Growth and high end users

Good quality control and research design can fulfill Japanese customer needs, especially with IBM as one of the core brand

The gap to specifically define the locations of different sales network

‘Home bias’ ecosystem

Partnership with NEC will increase their brand name as PC product line were built in Japan

Lenovo still a new brand that need certain time of acceptation by JP customers

Government policies and the hardware bias over software

Hardware sales might booming according to industry gap

Software might stands alone as Lenovo want to create more added value

The absence of alternative forms of financing: banking loans and venture capital

More direct investment will have more direct control and free hand from banking operations

Foreign business have less banking backup and the bottleneck may harm the business long-term

Japanese companies preferred to develop long-term relationships

with their hardware suppliers and to depend on those suppliers

Chinese business people could more familiar with the high context culture in Japan

Relationship building with different destitution dealers may lower the efficiency on new product promotion

Different concept on fitness or adaptation between computer software and operations

Lenovo’s own research center in Japan used as technical support, and further cooperation with NEC could easily modify software to fit operations

Lenovo cannot adapt their operations in order to take advantage of the software, this might increase its spending on research

5. International Market Entry Mode Selection

There are many critical issues of a multinational company to be successful in internationalisation process. The entry mode selection is one of the most important issues which many scholars have been investigated in factors of the entry mode decision (Osland et al 2001). Transaction and the cost of uncertainty will be increased if the entry mode decision is inappropriate. (Meyer et al, 2009). Therefore both country level factors, (i.e. institution, exchange rate and cultural distance), and industry level factors, (i.e. market size and structure, product maturity, type and sales service) need to be considered (Meyer et al, 2009). In addition, objectives of the market entry will frame level of involvement, level of control, time spending and ownership arrangement, which lead a company to make a proper entry mode decision (Figure.1). Since PC is a manufactured product, the foreign operating mode could be classified into wholly owned subsidiaries, export and joint venture.

Figure 6.1 Level of involvement and time in order to choosing the entry mode

Source: Adapted from Zhu (2010)

The first entry mode, wholly owned subsidiary is a foreign business that fully operates under the parent company’s control. The parent company performs self-handling operation, owns resources and its particular assets with anticipation to take high risk and generate high profits (Zhu, 2010). Level of equity arrangement to host country is 100 percent ownership. Thus, an interest of the parent company is a major. The second entry mode, exporting, is a low level of internationalisation. Products and services made by a company in one country and sent to another country (Rugman and Collinson, 2009). There is none-equity arrangement to the host country. The third entry mode, “joint venture is a special type of strategic alliance inwhich the partners share in the ownershipof an operation on an equity basis” (Griffin, 2008, p.122). Moreover, to select the best entry mode for Lenovo expansion in Japan, advantages and disadvantages of the three kinds of entry modes is considered and displayed in the table below.

Table 6.1 Comparisons of Advantages and Disadvantages of three entry modes

Advantage

Disadvantage

Wholly owned subsidiaries

-high power of management

-not share profit

-chance of high political risk

-high capital investment and resources obligation

-need operational facilities in host country

Exporting

-no need operational facilities in host country,

-gain economy of scale

-limit opportunities to gain knowledge of local market and competitor

-slow response to customer demand

-high transportation cost

-face trade barrier

Joint Venture

-share investment risk, i.e. profit and loss with local partner.

-combine data, information, complementary resources and know-how

-possibility of reducing political or governmental condition risk

-lack of fully control

-possibility to face inappropriate contractual term, also argument and conflict

-loss of competitive advantage through imitation.

-managing the relationship with foreign partner

Source: Adapted from Johnson, G et al (2005) and Zhu (2010)

Japan is a country with both low physical and psychic distance from China, Lenovo’s home country, so, the wholly owned subsidiaries seems not to be very risky, furthermore the country ranks 17th freest economy out of 179 countries, the economy scores above the world average and it is found none of trade barriers (Datamonitor, 2010a). However, Japan has ‘Home bias’ ecosystem, the absence of alternative form of finance, government policies, particular way of develop long-term relationship with suppliers and different concept adaptation between computer software and operation, which the authors have stated in Chapter.5 before, that is, become an obstacle in the nature of competition in Japanese local market. In joint venture, the company will combine the market know-how within partners to understand market needs. Moreover the partners will bring in additional resources to assist each other in operating at the particular marketplace to overcome the new entry dilemma (Yui and Makino, 2002).

With regard to objectives in internationalisation of Lenovo in Chapter.3, the country analysis in Chapter.5 and review of market entry mode conditions, joint venture can be identified to be the most suitable entry mode of Lenovo in Japan. On 27th January 2011, Lenovo, (the fastest growing top-five global PC maker, who is a manufacturing and technology expertise), has announced $175million in joint venture with NEC (new company formation structure is illustrated in Appendix.1). NEC is number 1 Japan PC market share, who has superior brand name in Japan with strong market position.

Evidences: benefits of the joint venture entry mode regard to objectives of international business expansion is illustrated below:

(1)Sales expansion

NEC is the strongest PC brand in Japan. Lenovo could benefit from extensive distribution channels in order to expand customer based (Lenovo, 2011). Lenovo could focus on twenty two thousand local subsidiaries of NEC around the world to expand its overseas sales as it’s showed in figure 6.4 (NEC, 2011). NEC Lenovo Japan Group become number one PC Company in Japan with approximately 25% market share as it’s showed in figure 6.2 (Lenovo, 2011). NEC Lenovo Japan Group in worldwide position at the third quarter of 2009 and 2010 is compared in table 6.3. The company increased 1.9% of its market share, from 9.3% to 11.2% after the integration (Lenovo, 2011).

Figure 6.2: Market share of PC in Japan on 2010

Source: Lenovo (2011)

Table 6.3: Market share of PC in worldwide on 2010

PC Manufacturer

3rd Quarter 2009

3rd Quarter 2010

+/-

HP

19.6%

17..8%

-1.7%

Acer

13.5%

13.1%

-0.3%

DELL

12.6%

12.6%

0.0%

NEC & Lenovo

9.3%

11.2%

+1.9%

Source: IDC Japan, Japan Personal Computing Quarterly Model Analysis Q3 2010 (Cited in NEC, 2011)

Figure 6.4: NEC’s sale network

Source : NEC (2011)

(2)Resource acquisition:

It is known that PC companies have razor-thin margins which could be improved by economies of scale and cost savings. Profit margin of Lenovo is about 1.8 percent in the last reporting quarter, meanwhile their competitor, Acer, generate its profit margin at 2.9 percent. (Soh, 2011) Joint venture with NEC will perform resource acquisition and formulate economies of scale. Refers to figure 6.4, Lenovo not only has determined to improve its supply chain, R&D and sales & marketing by increasing scale, but also plan of decreasing in service, product and information system cost (Lenovo, 2011) NEC also agreed that PC product strength through the joint development. Leveraging the scale of both company will enhance PC price competitiveness (NEC, 2011). Vincent Chen, an analyst with Yuanta Securities in Taipei also claimed that ‘most of NEC’s PC production is out sourced’. This means that NEC have a good relationship with suppliers, cause, Lenovo would gain more bargaining power with the contract manufacturers. (Soh, 2011)

Figure 6.4: Benefits of joint venture in terms of resource acquisition.

Source: Lenovo (2011)

(3) Risk minimization:

At industry level in current period, there is a global expansion of commercial PCs manufacturers (NEC,2011) However, PC sales dropped due to increasing of global popularity of tablet PCs such as Apple’s iPad (Soh, 2011). Also, touchscreen tablets from Research in Motion(Blackberry maker) and Dell, will be launch soon in this year. This will cause a PC market size reduction. (Soh, 2011) Similarly, Acer(Taiwan-Based) and Asustek hit PC market with low-cost netbook PC and plan to produce touchscreen tablet(Soh, 2011). This could reflex that, PCusers’ need are varies and unstable. PC makers need to develop new innovative products continuously to maintain its position in order not to drop out of the market.

At country level, there was a research of Gartner that many multinational companies, such as HP, was struggled to break in to Japan. They could not compete with a local company, such as Toshiba (Soh, 2011). Distribution channel This joint venture could help Lenovo to break in to Japan with lower risk than wholly own subsidiary or exporting entry mode.

There are many successful joint ventures in Japan. Japan’s regulation attracted investor to invest in the country for example reducing trade barrier, such as lowest import tax. In contrast Meschi (2004) claims that failure rate of the joint venture is high. However, the successful of the cooperation depends on following agreement of the partners and the ability of partners to perform their values.

6. Challenges and Strategies

Differentiation Strategy

If there is no financial crisis in 2008, apparently NEC would not face such as loss in 2009 and 2010. Lenovo’s huge opportunity appears from its product diversifications, so after the joint venture NEC could give strong support to Lenovo on its new product innovations, in order to prevent customer impression of low cost Chinese production, and making their products with more added values to attract more customers. Because the natural of personal PC industry relies on new cutting edge design, highly practicable functions and digitalized lifestyle integrations. Compare to other traditional industries, this trend would lead to Lenovo apply the differentiation strategy, but before ensuring the validity of this strategy, it is very necessary to look at what is the actual strength of NEC.

Coordination

According the announcement given by Lenovo and NEC, they are willing to share key research centers in Japan, so, if NEC give more emphasis on personal PC division, both engineers could work together in the new joint venture company, in order to increase the speed of new product development process, especially for Lenovo, except their mainstream product ThinkPad, other product series also could get effective technical support, and boost sales. Furthermore, it is expected that both of Lenovo and NEC’s brand and products could be more competitive in the marketplace, such as good research, development and innovation. As a result, Lenovo is very likely to adapt a differentiation strategy that brings the new product design back to China or other overseas market: by using the manufacturing bases in developing countries, and then integrates them with advanced technology, and Lenovo’s future shows a clear path than ever before.

7. Conclusion and Recommendation

In summary, Lenovo is one of most outstanding Chinese enterprises who have adopted mergers and acquisitions or strategic alliance with foreign companies to achieve the dream of being multinational corporations. Lenovo has a dominant market share in China and prominent advantage on market share in Asia- Pacific, unfortunately not in Japan. An attractive strategy to internationally expand the firm to Japanese PC market is joint venture. Even Japan has ‘home bias system’, lack of financial support for JV. It is obviously a high technology development country. Lenovo could gain sale expansion, resource acquisition, especially complementary knowledge from this market entry. It is enhancing Lenovo’s mission to be the global innovation leadership, refer to their mission statement.

Stepping forward into Japan is a challenging move for Lenovo. However, it is not a finish line of its internationalisation. The company needs to decide the next move strategically and appropriate entry mode. Moreover, how the company operates successfully in different market and different cultures is more important. Adjusting to a new market should be less ethnocentric. Although, joint venture is an appropriate entry mode to Japan, market research is still essential. Sustainable growth is an approach to dominate global PC market.

Appendix 1: PC Business Alliance Scheme

Source : NEC Japan web site (2011)

Reference

Datamonitor (2010) Japan–In-depth PESTLE Insights. Country Analysis Report. [Online] Available from: http://web.ebscohost.com/ehost/pdfviewer/pdfviewersid=b17c0647-420c-40ae-a954-24184c2a33ae%40sessionmgr112&vid=16&hid=107 [Accessed 8th March 2011].

Global M&A Research Center, (2006), China Mergers and Acquisitions Yearbook, 2006 annual report, Beijing, Posts & Telecom Press

Griffin, R.W. (2008), Management 9 ed. Texas, Houghton Mifflin Company

Jian Mei, Liu. (2008), “Lenovo Group’s strategic evaluation: Based on the analysis of the Balanced Scorecard”. [Online]. Available from: http://jingpin.szu.edu.cn/strategy/strategy2009/upfiles/edit/200906/20090622160000.doc [Accessed 28th March 211]

Johnson, G., Scholes, K. and Whittington, R. (2005) Exploring Corporate Strategy. (7th ed). Essex: Prentice Hall.

John Quelch, (2006), ” Lenovo: Building a Global Brand”. Harvard business school. [Online]. Available from: www.ecch.com. [Accessed 28th March 211]

Lenovo Group, Ltd. (2008). SWOT Analysis, p4, 1p. Available at: http://www.lenovo.com/social_responsibility/us/en/sustainability/Lenovo_2006.2007_Sustainability_Report.pdf. (Accessed: 25th March, 2011)

Lenovo Group, Ltd.(2010). SWOT Analysis, p1-9, 9p, 2 Charts

Lenovo, (2005), Introduction of Organization. Available at: http://www.lenovo.com.cn/about/lenovo/company1959.shtml (Accessed: 24th March, 2011)

Meschi, P. -X. (2004) Valuation Effect of International Joint Ventures: Does Experience MatterInternational Business Review, 13 (5), 595-612.

Meyer. K. E., Estrin. S., Bhaumik. S. K, Peng. M. W (2009), Institutions, Resources, and Entry Strategies in Emerging Economics, Strategies Management Journal, 30, 61-80.

NEC. (2011) NEC.co.jp [Online] Available from: http://www.nec.co.jp/press/en/1101/images/2702-01-01.pdf [Accessed 8th March 2011].

Osland, G. E., Taylor, C. R. & Ming, Z. S. (2001) Selecting International Modes of Entry and Expansion. Marketing intelligence and planning, 19 (3), 153 – 161.

Richard ,L. (2003). Daft Management [M]. Machinery Industry Press.p23

Rugman, A.M. and Collinson, S. (2009). International Business. (5th ed). London: Prentice Hall.

Robert Dujarric , Andrei Hagiu (2009) Capitalizing On Innovation: The Case of Japan. (Online) Available from: http://www.hbs.edu/research/pdf/09-114.pdf [Accessed date: 18th March, 2011]

Soh, K., (2011) Reuters. Lenovo, NEC in PC Joint Venture in Japan . [Online] Available from: http://www.channelinsider.com [Accessed 8th March 2011]

Stephen ,P , Robbins. (1997). Management [M] China People’s University Press, p64.

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Yasushi Uchida (2006) Japanese Makers Struggle for Foothold in Emerging Markets Available from: http://techon.nikkeibp.co.jp/article/HONSHI/20061026/122746/ [Accessed date: 18th March, 2011]

Yiu, D. & Makino, S. (2002), The Choice between Joint Venture and Wholly Owned Subsidiary: An Institutional Perspective, Organization Science, 13 (6), 667-683

Yu Qing, (2011) the new pattern of Personal PC industry: NEC and Lenovo’s joint venture. Available from: http://tech.qq.com/a/20110124/000295.htm [Accessed date: 18th March, 2011

Zhao Xibin.(2004) ‘Several basic theoretical issues on enterprise environment’ [J]. Journal of Wuhan University: Philosophy and Social Sciences, 57 (1):12-17.

CnBeta.com, (2011) Lenovo and NEC’s new joint venture market share (Online) Available from: http://www.cnbeta.com/articles/133482.htm [Accessed date: 18th March, 2011]

Zhu, Y. (2010) International Business Management. Lecture Slides: MGT 4139, London, Middlesex University.

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Free Essays

The world Trade Organization (WTO)

Introduction

WTO and Trade Libralization:

“The world Trade Organization (WTO), is the only global international organization monitoring and controlling the rules of trade between nations. It was formed in 1995 with the General Agreement of Trade and Traiffs (GATT) as its basis.” (Paul and Aserkar, 2010:1)

The Doha Development Agenda:

The fourth ministerial conference in Doha, in its November 2001 declaration, highlights the directives of negotiations around 21 subjects and the problems faced in their execution. The declarations support the WTO agreement objectives in order to amend the restrictions and biases in the world agriculture markets. (http://www.wto.org/english/tratop_e/dda_e/dohaexplained_e.htm#subsidies)

The member countries are entitled to focus on the following facts:

Access to Market
Subsidies on Export
Reduction in domestic support.

For developing countries like Africa and Latin America, the Doha Declaration provides a differential treatment during the negotiations with some special provisions to monitor if the countries meet with the basic needs like food security and overall development.

Competitive Environment:

“No prohibitions or restrictions other than duties and taxes whether made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any contracting country on the importation of any product of any other member country.” (GATT 1947)

According to the original GATT, introduction of non-tariff barriers such as subsides and import quotas, creates an unfair environment, highly distorting the agricultural trade especially with the use of export subsidies. (http://www.wto.org/english/tratop_e/dda_e/dohaexplained_e.htm#subsidies)

The Multilateral Agreement in the agriculture sector produced in the Uruguay Round laid the foundation to a fair competition with minimum distortions, through constant restructuring in the negotiations. (http://www.wto.org/english/tratop_e/agric_e/agric_e.htm)

Africa and Latin America have predominantly large population especially in the rural areas, wherein the prime focus of these groups is agriculture. As per the FAO 2000 reports, agriculture occupies 50 percent and 20 percent of the total employment in the African and Latin American countries. (Morrison and Sarris, 2007: 340)

The European Union and The United States trade polices play a major role in promoting the overall progress of the developing nations by providing adequate support in accordance to the WTO agreements. No doubt that, agricultural products occupy a major share in exports of the developing countries. The United States and European Union impose higher controls on the agricultural exports of these developing nations by excising or imposing subsidies.

However it would be quite unfair on their part, just to focus on either Africa or Latin America or only on the agricultural products and no other major industries or sectors. Moreover they are not legally obliged to focus on the concerns of other countries for their own benefits. In this competitive world, the big players should promote equal opportunities for all the countries, especially the developing ones. The core sectors need to be classified and equally promoted for a balanced overall growth.

As in most developing countries, the rules and procedures of the multilateral trading system are regarded as unfair by the developing countries. They view the rules and procedures as favouring the developed countries. For example, although the WTO is supposed to be a member-driven organization, important issues and decisions are taken in “Green Room” meetings and African countries do not have proportionate and adequate representation at these meetings. In addition, because of their relatively low bargaining power, countries in the region have difficulties setting and influencing the agenda and pace of negotiations. The lop-sided power structure of the multilateral trading system is evident in the fact that developed countries managed to get the Singapore Issues on the agenda of the Doha Work Programme at the WTO Ministerial Conference in Doha despite mounting opposition from developing countries, who comprise more than two-thirds of the membership of the WTO. The Singapore Issues contributed to the failure of the 2003 WTO Ministerial Conference in Cancun and three of the four issues were eventually taken out of the Doha Agenda. (Morrison and Sarris, 2007: 344-345)

To stabilize farmers’ incomes and preserve a practical, diverse agricultural system is by combining the supply management and the price supports. In order to be effective, The United States and European Union should impose superior tariff controls along with the price supports on the imported farm goods. However such a policy prescription, of course, runs completely counter to the entire neoliberal thrust of the last twenty-five years, and would effectively remove US farm policy from the regulatory jurisdiction of the WTO, signalling the end of the WTO’s Agreement on Agriculture. (http://www.foodfirst.org/backgrounders/subsidies)

References:

Justin Paul and Rajiv Aserker (2010) 5th edn. Export Import Management. New Delhi: Oxford University Press

WTO (n. d.) WTO | DOHA Declaration [online] available from [1 May 2011]

WTO (n. d.) WTO | Agriculture Gateway [online] available from [1 May 2011]

Morrison and Sarris (2007) WTO rules for agriculture compatible with development. Rome: fao.org

Karl Bietel (2005) ‘U.S. Farm Subsidies and the Farm Economy’. FOOD FIRST 11 (3), 3

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Free Essays

Effects Of Globalization On An Organization

1.0 Introduction

Globalization is the process of international integration resulting from continuous interchange of ideas, cultural aspects, products and other world views. The process of globalization in the modern day has been caused by the advancement in transport, infrastructure and telecommunication sector. The invention of the internet has led to the massive international integration promoting trade and various political interests. The development of global monetary systems such as PayPal and Visa has accelerated economic integration among several countries in the world. The continued growth in mobile telephony has also provided convenience in the globalization process through allowing global routing of voice and data. In the modern day, people are able to network and conduct business across the globe from the comfort of their homes.

The process of globalization has greatly influenced the normal business and organization’s operations with several organizations being forced to adjust to several changes in order to remain relevant and profitable in the current global markets. The research question the report will be seeking to explore is: – what are the effects of globalization to an organization?

Considering the numerous international changes that have taken place because of globalization in political and economic front, it is very paramount to establish the response of various organizations to the same changes. Therefore, this report is very appropriate because it seeks to expand the study and focus on individual firms.

Globalization has brought about a sea of opportunities for organizations to exploit, but has also brought about several challenges too. There have been reported cases of loss of culture, insecurity and unemployment among many other challenges. This research will seek to identify several negative and positive effects of globalization in the context of an organization.

The entire issue of globalization is very broad and is therefore impossible to comprehensively exhaust it. However, the study will seek to streamline on a number of positive and negative effects of globalization on an organization and leave room for further study on the topic.

2.0 Literature review

According to Theodore Levitt (1983), the difference in preference in business and consumer patterns would eventually disappear ushering in an era of global production of goods and services. This prediction has been realized in the 21st century whereby most of the firms develop products with a global perspective. The global integration foreseen by Theodore in the 1980s has provided a myriad of opportunities to organizations in the modern era.

A report by the World Trade Organization (WTO) in 2003 indicated that globalization has resulted in increased productivity due to the increasing international trade. Several trade agreements enabling entry of non-tariff barriers for products from various sources within the globe have been accented opening a new page in the global trade. This move has increased industrial developments within member countries. Rodrik (1997) argues that the introduction of non-tariff barriers has led to accelerated economic growth in the developing countries because of availability of markets for their products. Most established multinational firms have found it cost-effective to relocate to developing countries to establish plants there in order to cut the cost of labour. This has resulted in the creation of employment opportunities to the people in the country these firms are established. Availability of the outsourced labour has increased on their profitability as documented by Rodrick (1997). According to Stiglitz (2003), relocation of multinational companies to developing countries has increased pressure on the labour market resulting to massive restructuring of the firms in the developed countries.

Globalization has enabled most of production to migrate from mass production under Fordism to customized and value added products in the current post Fordism era in order to satisfy the growing customer base. In the current dispensation, product branding and brand development has taken centre stage outshining the actual product development. According to (Klein, 2000), most of the corporations in the modern era have invested a lot of money in branding and brand establishment through advertisements and sponsorships. The aspect of value addition has resulted in an urgent need for adequate market researchers to satisfy the ever changing consumer’s needs fully (Klein, 2000).

Technology has been embraced by most corporations as a result of globalized markets. The stiff competition within the global market has led most corporations to seek alternative methods to reduce on cost of production. As outlined earlier most firms have opted to relocate to places where the cost of labour is considerably cheap according to (Stiglitz, 2003), but still technology has been embraced as a tool to reduce on the cost of production. Most firms have computerized their operations reducing the cost of labour and used the computer networks to seek markets for their products hence reducing on advertisement and promotions costs. To cut the cost of middle-men, firms have opted to embrace technology according to (Thomas, 2000)

According to (Carr & Chen, 2001), most organizations have been able to tap on availability of integrated systems of global standardization to advance to new markets. An integrated intellectual property rights and patent systems allow an organization to retain their intellectual property rights anywhere in the world provided they are registered. This has helped curb piracy and duplication of copyrighted materials. Therefore, the parent organizations are given an opportunity to venture new markets without undue harassments.

Globalization has come with numerous positive effects. However, according to a study by (Oxfam America, 2002), globalization has brought about several negative effects among them increased insecurity. However, the issue of insecurity and global terrorism has been a subject of concern leading to the establishment and empowerment of international police and UN peace forces according to a publication by the UN Security Council, 2006.

3.0 Research methodology

Several research methodologies were used to collect the data for this study. The major method of data collection was reading the already published articles and academic materials on the same topic. Several online journals, books and academic papers were read to provide data for this research. The information from the existing literature was discussed by the group members to reach a consensus on what to include on the final report. To help remain objective and focused on the study, several research questions were developed.

To ensure data collected is relevant, representative and consistent with study under review, a careful sampling technique was developed in the distribution of questionnaires. Video call and social media interviews were also carefully reviewed to ensure that relevant candidates were interviewed. For the video call and social media interviews, people currently working in multinational firms were interviewed. Data collected from online books, academic papers and other forms of written sources were also carefully reviewed to ensure information retrieved is consistent with the subject.

Interviews were another method used to collect data for this study. Social media interview via twitter to an employee of a multinational organization was organized whereby the respondent responded to several questions we posted to him. The aim of the interview was to establish some of the gains and challenges the firm experiences as a result of globalization. The responses were documented and used in the data analysis phase of the research. The questions asked were simple, clear and short to avoid confusing the respondents. Absolute care was taken to avoid open ended questions which could influence the respondent’s responses. Additional questions were posted to the same respondent via an internet call using Skype. Similarly, questions asked through this method were short, concise and structured to avoid influencing the responses. Questions and answers provided by the respondent were recorded and used for data analysis.

Questionnaires were also developed for the above study. The questionnaires were developed and distributed randomly to several respondents within the college. A total number of 75 questionnaires were distributed, and the respondent’s responses used to analyze the data. The questionnaires were structured in such a way that they were concise, clear and short so as to avoid any confusion to the respondents. The interviewer was available upon request to aid clarifying issues where necessary, but very careful not to influence the respondents responses.

A random sampling technique was used in the distribution of the questionnaires. A sampling factor aimed at achieving a 6% of total population representation in the college was developed and questionnaires developed and distributed. Based on the college population, 75 questionnaires were distributed representing a sampling factor of 6%. In order to ensure that all the students had an equal probability of being chosen as a sample, a random picking was employed within the population. This method therefore ensured that every student had an equal probability of being selected. Data collected from the questionnaires was used in data analysis.

3.1 The big questions

The entire research was meant to establish the effects of globalization on an organization and all the questions asked to the respondents whether in the questionnaires or interviews were meant to answer that research question. In order to exhaustively cover the question, several other questions were developed to aid in the data collection. The questions were:

What is globalization
What are the causes of globalization
Have you witnessed any global change in your lifetime
How has globalization positively affected your life
How has globalization negatively affected your life
Which specific areas have improved as a result of globalization
Which specific areas has globalization affected negatively
How has globalization affected organizations in your locality
What are some of the suggested solutions to the challenges associated with globalization
4.0 Analysis and findings

4.1 Data analysis

From the responses, 57% of the respondents were for the opinion that globalization has a net positive influence to local organizations with 28% holding the opinion that globalization has net negative effects to the local firms. Of the total respondents, 15% were not sure whether the net effect of globalization has either negatively or positively affected local firms. The graphical representation of the respondents responses is demonstrated below.

It was clear from the questionnaires that a majority of the respondents identified several areas as the biggest beneficiaries of globalization. The four major areas that have been positively affected by globalization are: –

Foreign trade at 29% according to the respondents
Labour mobility 24% from the data collected.
Products and service standardization at 12% of the total respondents
Infrastructure and transport at 35% of the total interviewed respodents

It is necessary to note that this list is not exhaustive of all the responses the respondents gave but a summary of the major areas identified by the respondents. Areas like healthcare, sports, tourism, wildlife conservation and global peace initiatives were noted as having improved with globalization but had negligible percentages to be tabulated as compared to those represented below.

The respondents had also the opportunity to identify several areas they thought globalization has negatively affected. The major areas identified were;

Environment at 31% of the total responses
Security at 12% of the total interviewed
Employment at 12% of the respondents
Marginalization of local firms at 24% of the responses
Culture and tradition at 21% of the total data collected.

Just like with the positive effects, the one’s represented by the bar graph above are not exhaustive of all the areas given by respondents but a summary of the major points raised. Terrorism, global recession, colonialism and illegal trade were identified as additional negative effects of globalization.

4.2 Findings

4.2.1Benefits of globalization

Expanded markets

From the above data, it was found out that most of the respondents perceived globalization as a positive move and supported it as long as it brings economic growth and expanded markets. It was clear that globalization has expanded the markets for organizations and therefore making them more productive and profitable. However, most organizations have been forced to restructure in order to produce globally acceptable products. The current growth in the infrastructure, internet and telecommunication sectors globally was identified as the primary reason for the expanded markets. Internet has been perceived as the greatest contributor to the reduced advertisement and marketing costs and therefore leading to reduced costs of the products. This has made such products competitive in the global markets.

Free flow of labour

Globalization has enabled free flow of labour and therefore able firms have been able to recruit the best talents in the world without boundaries. This has enabled the firms to be more productive. However, this opportunity has been misused resulting to brain drain in the developing countries. . Cases of workplace discrimination, child labour and slavery have also been reported in the current times and this has been attributed to globalization.

Improved infrastructure

In order to trade efficiently, countries have developed several world class infrastructures. International roads, railways, telephony, internet, ports, air ways have been developed and constantly improved to ensure convenience and safety in movement of goods, services and data across the globe.

4.2.2 Negative effects of globalization

Environmental degradation

From the respondents, globalization has resulted in over utilization of environmental resources resulting to environmental degradation.

Marginalization of local firms

As most of the multinationals relocate to the labour friendly countries especially in the developing countries, the existing local firms have either been acquired or economically crippled. This has negatively affected the economies of these countries.

Unemployment

As the multinational organization firms relocate to the developing countries, many jobs in the firm’s original home are lost as a result of such restructuring. Continuous relocation has been accused of destabilizing trade unions in developed countries therefore weakening their bargaining powers on behalf of their members.

5.0 Conclusion

In conclusion, globalization has greatly affected the normal and strategic administration of organizations in the world today. Most of the organisations have been forced to restructure their normal working processes in order to satisfy the growing customer needs. Globalization has further opened global markets for products leading to increased productivity.

Globalization has to a big extent led to industrialization in developing countries due to relocation of big organisations to such countries in search for cheap labour. This has consequently led to the creation of employment hence accelerating economic growth in these countries. Globalization has led to poverty reduction in the developing countries by helping in reducing the gap between the rich and the poor through creating job opportunities. (Adams, 2003)

Apart from the many positive effects globalization has brought to organizations, there are several negative effects associated with it too. Some of the major effects include: –

Environmental degradation

Due to the expanded markets most of the natural resources have been over exploited resulting to degradation. Globalization has further accelerated industrialization which has led to over-establishment of industries above the nation’s carrying capacity leading to a net carbon production. The excess carbon emitted to the environment forms the component of the green-house gases, which have been ingredients of global warming.

Loss of culture and traditions

Most of the organizations have lost their culture and traditions because of the exposure to the global markets. In order to fit in the global markets, several local firms have been forced to restructure and invest in market research and innovative product development to satisfy the diverse customer needs.

Loss of employment

According to a UNCTAD, 1996 report, several workers in the developed countries have lost their employment in the restructuring processes within the organizations particularly in relation to relocating firms in the developing countries in search of cheap labour.

Victimization of local small and medium enterprises

Most of the relocated multinational firms use their financial power to victimize their competitors in their new countries. Lack of proper monitoring and policy formulation gives multi-nationals a competitive edge over their competitors forcing them into acquisition or insolvency (Boyer&Drache, 1996).

This study has tried to address the issue of globalization in the context of an organization. However, due to the scope of the subject the study has not covered the issue of globalization exhaustively. Numerous effects in relation to political, financial, economic and social implication of globalization have not been covered in this study. This research therefore leaves room for future study on the subject.

6.0 Recommendations

Several recommendations are made in order to mitigate the negative effects of globalization and harness the positive influences. Some of the recommendations suggested from the study includes;

Ensure full compliance to local and international law during establishment of multinational firms in the developing countries. This will ensure that the local labour and other resources are not exploited at the expense of their profits. Environmental issues are also addressed at this stage to avoid the establishment of industries that exceed the nation’s carrying capacity (FAO, 2004)
Organizations should embrace the modern methods of advertisements and marketing through the internet and the social media to fully gain from the extensive global population.
The firms should embrace technology as a tool for reducing cost of production. Mechanization would lead to reduced cost of labour hence producing competitive goods in the global markets.
The global consuming market in the world is dynamic and therefore needs constant market research and surveys to ensure that the organizations products are relevant at all times. It is therefore recommended that the organizations embrace market research in order to remain relevant in the market (Klein, 2000).
The local governments should endeavour to protect local firms from unhealthy competition from the multinationals. This can be implemented through government subsidies or tax rebates to the local small and medium firms in order to withstand competition from the multinationals
Governments should open their markets through such innovative products like non-tariff barriers on products from integration members. This would encourage more trade between countries resulting to increased economic growth to the member countries.
Monitoring of labour laws must be closely followed to guard against child labour and work place discrimination. Most of the multinationals established in the developing countries have been accused of child labour, slavery and work place discrimination. Such laws needs to be clearly monitored, and any firm contravening such should have their operating licenses revoked.(Black &Brainerd, 2002)
As the issue of globalization continues to develop, strong intellectual property rights, copyrights and patents monitoring needs to be done to avoid piracy or duplication of copyrighted materials. Such would ensure that firms would establish new markets in a foreign land without fears of copyright or patent infringement.(Thomas, 2000)

7.0 References

Adams, Richard H. Jr. 2003. International migration, remittances, and the brain drain: A study of 24 labour-exporting countries. Policy Research Working Paper No. 3069 (May). Retrieved August, 16, 2013 from < http://rosalinda.ingentaselect.com/wb/wpaperspdf/3069.pdf>

Black, Sandra E.; Brainerd, Elizabeth. 2002. Importing equalityThe impact of globalization on gender discrimination. NBER Working Paper No. 9110 (Aug.). Cambridge, MA, National Bureau of Economic Research. Retrieved August, 15, 2013 from

w9110.pdf>

Boyer, Robert; Drache, Daniel (eds.). 1996. States against markets: The limits of globalization. London: Routledge.

Carr, M. & Chen, M. A. 2001. Globalization and the informal economy: How global trade and investment impact on the working poor. International Labour Organization. Retrieved August, 15, 2013 from < http://www.ilo.org/wcmsp5/groups/public/—ed_emp/documents/publication/wcms_122053.pdf >

FAO .2004. Trends and Current Status of the Contribution of the Forest Sector to National

Economies, FAO Working Paper FSFM/ACC/07. Forest

Products and Economics Division, Rome: FAO..

Klein, N. 2000. No Logo. London: Harper Perennial.

Oxfam America. 2002. Global finance hurts the poor: Analysis of the impact of North-Southprivate capital flows on growth, inequality and poverty. Boston: MA.

Ritzer, G. 2000. The McDonaldization of Society. California: Pine Forge Press.

Rodrik, Dani. 2001. The global governance of trade as if development really mattered. Background paper for the Trade and Sustainable Human Development Project, UNDP.

New York: UNDP.

Stiglitz, Joseph E. 2003. The roaring nineties: A new history of the world’s most prosperous decade. New York: W.W. Norton & Company.

Thomas, F. 2000. One Market Under God. London: Seeker & Warburg.

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How global outsourcing strategies impact the supply chain of a business organization?

Introduction

Global outsourcing has a number of associated risks and considerations that need to be considered in developing a strategy to mitigate the effects on the supply chain of that business. The effect that increased outsourcing has had is to increase globalization and the additional management challenges that are associated therewith. As a result there has been an increased awareness and study of the impact of these outsourcing strategies on the supply chain of a global business organization (Prassad & Babar, 2000). These challenges transcend national boundaries and impose greater responsibility on managers in these organizations to account for the impact of outsourcing on the supply chain and to design strategies that take account thereof.

The proposed research aims to explore the impact of these global outsourcing strategies on the supply chain of a business organization to the extent that national outsourcing does not present similar challenges. The central hypothesis of the research will not only account for the impact, but also on the development of strategies to mitigate the risks associated with global outsourcing. To a large extent therefore, this research will revolve around supply chain management strategies as well as relying heavily the integration of global outsourcing strategies and supply chain management strategies in a Multi-National Organisation (MNE).

Research Question

The research question associated with the proposed research can therefore be succinctly stated as follows:

To determine the impact of global outsourcing strategies on the supply chain of an organization and the development of supply chain management strategies to mitigate the negative effects thereon so as to exploit maximum benefit from these strategies with minimum risk to the organization.

Literature Review

Global business has been forced into evolution in recent years due to the increased demand for high end products at a significantly lower cost than previously associated with manufacturing and service provision (Gunasekaran et al., 2008). To a large extent the possibility of lower manufacturing costs can be attributed to the increased reliance on global outsourcing that has become a normal part of MNE supply chain processes. Strategic outsourcing as a corporate strategy is concerned with two types of activities, on one hand including the actual activities such as logistics and operations without being a distinct feature of that firm, whilst on the other hand including activities that create competitive advantage for the firm (Quelin & Duhamel, 2003). The increase in outsourcing has necessitated a parallel evolution of supply chain and outsourcing strategies within these organizations to deal with the impacts on the overall business of the organization to the extent that global outsourcing presents challenges related to risk, unpredictability and challenges associated with international supply chain management.

A significant impact on the supply chain of a business organization is the constant and recently novel demand for a supply chain strategy that is flexible in order to deliver their products and services to the global market as fast as possible in order to reduce costs associated with manufacturing and processing. The supply chain design that is required by organizations that rely on outsourcing as a strategy includes the decisions regarding the number and location of production facilities, the amount of capacity at each facility, the assignment of each market region to one or more locations, and supplier selection for sub-assemblies, components and materials (Chopra and Meindl, 2004), as well as selection of facilities at international locations, and the special globalization factors this involves (Meixell & Gargaya, 2005). The design of the supply chain will necessarily reflect the overall objectives of the global outsourcing strategy particular to the organization. Therefore, depending on the needs thereof individual manufacturing or production facilities may have specific supply chain protocols and procedures that are specific to that facility or these may be managed as part of the overall strategy of the business organization with the latter generally being the preferred method. Invariably, this may also depend on the relationship between these outsourced facilities and services, and the controlling organization to the extent that this removes a certain measure of responsibility from the MNE. As such there has been an increased use of a responsive supply chain (RSC) as a model for management of these factors, which encompasses a degree of flexibility in assessing these challenges and responding thereto (Gunasekaran et al., 2008).

There are a number of strategic production-distribution models that have been adopted by the global business organizations and in doing so the effect that these models have on the entire supply chain strategy. Case studies have revealed a number of levels of integration of production-distribution models into the overall supply chain in terms of strategic, tactical and operational integration (Vidal & Goetschalckx, 1997). Essentially, this embodies the decision making processes within an organization with regards to their supply chain with strategic planning reflecting a long-term objectives and decision making processes as one extreme, and operational planning reflecting the short-term, everyday objectives. Tactical planning falls somewhere in between these two extremes, with the overall supply chain strategy of the organization reflecting integration of all three of these planning considerations.

Theoretically, these global outsourcing strategies are formed on the basis of these production-distribution models, however there are associated academic considerations that surround the formulation of these strategies, namely supply chain management, risk management and global logistics management. The successful integration of all of these considerations is essential to the long term success of outsourcing strategies, as the international supply chain presents a certain volatility that is often beyond the immediate control of these organizations particularly with regards to predictability. This is so because there is a dissociation between the corporate headquarters of the organizations and the production facilities, where issues such as labour disputes, disruption of supply chain, political stability and disaster management become key considerations in the development supply chain models (Peck, 2005). As a corporate strategy therefore, strategic outsourcing must consider the impact on the supply chain of that organization in order to optimize performance and as a result there has been complete evolution of the supply chain models, strategy and management in terms of these broader corporate objectives.

Research Design

The current research will be primarily based on qualitative content analysis of current academic literature and reported empirical studies (Neuendorf, 2002). The purpose of this method will be to determine current practice in the global market in order to accurately reflect the role played by global outsourcing strategy in the development of supply chain models and corporate strategies . This will necessarily take account of quantitative research factors, however this speaks more to a certain measure of pragmatism that is required by the researcher in conducting this research rather than a shift towards quantifiable research methods. These research methods are justified in terms of the current research objectives to the extent that these measure the current state of global outsourcing strategies on business organizations representing a shift in global strategy rather than focusing on the impact on a specific organization.

Reliability and validity are central concerns for this research, however through the extraction of repeated themes and practices, concerns thereof will be mitigated (Joppe, 2000). The research however is limited to the extent that it relies on secondary sources that are not base accounts of the current practices, but rather contexts that have been analysed and subsequently reported on by a line of academics. The availability of reliable sources is a secondary concern for this research and may present a significant challenge for this research due to the fact that the validity hereof relies on reporting of the actual activities of corporations globally. This is further limited by the availability of sources as being industry specific. The limitation that this presents is that it makes it difficult to present a cohesive model of supply chain design and management to the extent that the literature available on the subject is often industry specific. This means that when collecting data, one must ensure that this is drawn from a variety of sources representing a cross section of industries, both manufacturing and processing, and service-related.

Data collection will be undertaken in a purposive manner, where the data collected representing the current practices and underlying theoretical considerations will be the foundation of generalisations used by the researcher as the basis for the academic opinion presented therein. Purposive sampling is the sampling method that is used for qualitative content analysis, because the purposively selected texts inform the research questions being examined (Neyman, 1934). By selection of data in this way, it will be possible to answer the research question in a manner that is both relevant and directed, ensuring that concerns about validity and reliability are met. Furthermore, this method of data collection will ensure that only relevant information is included in the study rather than focusing on subsidiary issues that may not reflect the relevance of these strategies in terms of global motivations. Coupled with the methodology of analysis being qualitative, purposive sampling further ensures relevant inclusion and therefore speaks to the validity of the research as representative of global business phenomena and does not limit this application to a region, organisation or sector.

Conclusion

Outsourcing is a corporate decision that lies in the policy and business strategy of an organisation, as it modifies the firm’s boundaries as a legal entity and generally involves corporate decision makers at different levels of the supply chain both locally and internationally. It affects company-wide resource allocation policies and asset management practices, as these outsourcing decisions often involve several divisions in large, diversified companies. The understanding and development of these strategies and the effect that these strategies have on the supply chain of a company, both at the level of design and implementation thereof, but also in the management strategies of the associated risks and operational requirements that global outsourcing presents to these companies, is an integral part of the operations of business organizations for without these considerations the benefits associated with strategic outsourcing will be lost. Careful management of these objectives and the supply chain of these companies is essential to the success of these operations and the overall success of the organization.

References

Chopra, S. & Meindl, P. (2004) Supply Chain Management: Strategy, Planning and Operations (2ed) Prentice Hall: NJ

Gunasekaran, A., Lai, K. & Cheng, T. (2008) “Responsive supply chain: A competitive strategy in a networked economy” The International Journal of Management Science, 36, pp 549 – 564

Joppe, M. (2000) The Research Process [published online] Available on: http://www.ryerson.ca/~mjoppe/rp.htm [Accessed 13 October 2012]

Meixell, M. & Gargeya, V. (2005) “Global supply chain design: A literature review and critique” Transportation Research Part E, 41, pp. 531 – 550

Neyman, J. (1934) “On the two different aspects of the representative method: the method of stratified sampling and the method of purposive selection” Journal of the Royal Statistical Society, 97(4), pp. 558-625

Neuendorf, K. A. (2002) The Content Analysis Guidebook. US: Sage

Helen Peck, (2005) “Drivers of supply chain vulnerability: an integrated framework”, International Journal of Physical Distribution & Logistics Management, 35(4), pp.210 – 232

Prasad, S. & Babbar, S. (2000) “International operations management research” Journal of Operations Management, 18, pp 209–247

Quelin, B. & Duhamel, F. (2003) “Bringing Together Strategic Outsourcing and Corporate Strategy: Outsourcing Motives and Risks” Journal European Management Journal, 21(5), pp 647-661

Vidal, C. & Goetschalckx, M. (1997) “Strategic Production-Distribution Models: A Critical Review with Emphasis on Global Supply Chain Models” European Journal of Operational Research, 98, pp 1- 18

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To what extent do The World Trade Organization (WTO) rules prevent the use of trade sanctions against countries that produce in unsustainable ways? Problems and implications for International Environmental Governance.

Introduction

The World Trade Organization, (WTO), is a renowned international organization with a primary agenda to initiate and promote “free trade” (Montgomery 2008). In order to attain this objective, the trade system tries to eradicate various barriers against the liberalisation of trade or any other existing trade barriers, irrespective of their cause being against unsustainable operations. This has led towards many controversies and intense criticism against the WTO, highlighting policies that overlook or prevent economic sanctions that may prevent the violation of human rights or other environmental concerns. The stress among economic sanctions and the WTO lies in the fact that the WTO was established to liberalise economic activities, while the principle of economic sanction is to confine trade by halting or regulating it.

Firstly, it is important to understand what economic sanctions are, and the significance of their existence. Economic sanctions on a general level refer to the direct policies that restrict trade between sovereign countries. These restrictions can take the form of financial or investment restrictions. These economic sanctions can be an embargo of exports from a country (or group of countries) to the target country, or vice versa, where imports from the target country are prohibited. In short, economic sanctions diminish the value of trade relations between groups of countries. (Montgomery 2008)

The World Trade Organization is an organization that promotes the expansion of trade and flow of goods and services between countries to enhance the standard of living of consumers all around the world (Smeets 2000). Sanctions being trade-restricting in their nature are considered inappropriate as they do not correspond with the WTO rules and regulations, and are discouraged by the organization at the same time. Besides, economic sanctions are imposed by the WTO under special circumstances where the organization feels that its authority is being undermined when its policies are not being enforced by the target country (Smeets 2000). Moreover, in the rarity of the situation, World Trade Organization allows its member countries to resort to the ultimate option of trade sanctions in the adverse circumstance when the sovereign integrity or the security interests of the country are being undermined by a target country (Meadowcroft 2002). Organizations prevailing in the member states of WTO are skeptical in taking on sustainable approaches to produce commodities because they incur greater costs as compared to production methods that violate human rights and the environmental state. (Meadowcroft 2002)

Therefore, the goal of the trade system at WTO is “to promote transparency in the international trading system by decreasing the possibility of each member state using any type of camouflaged, Non-Tariff Barriers in its trade” (Grundmann 1998). Therefore, all economic sanctions against human rights violations are essentially an infringement of the liberalised conditions of the WTO policies, because most of them depend on embargoes. Furthermore, it has also been considered that all human rights violations are not explicitly related to international trade. Examples of such instances are the subversion of democracy in Haiti, or the use of forced labor in Burma (Montgomery, 2008). Another example is the extractions of trade compromise by the United States in retribution of the EU’s banana regime, which was declared to be contradicting the WTO policies (Human Rights Watch, World Report 2005). Following are particular Articles from the trade system at WTO that signify how sanctions are considered inappropriate in terms of affecting free trade (1&2):

Article I: General Most-Favoured-Nation Treatment
Article XI: General Elimination of Quantitative Restrictions

1 – Human Rights Watch, World Report 2005: European Union available at www.org/english/docs/2006/01/18/eu12312.htm
2 – Article I & Article XI of the General Agreement on Tariffs and Trade (GATT 1947) available at www.wto.org/english/docs_e/legal_e/gatt47_e.pdf
3 – Article XI: The General Exception clause is also contained in Article 14 of GATS. The TRIPs also contains a general exception clause related with the granting of patents in Article 27.2.

From the international environmental governance perspective, the introduction of Multilateral Environmental Agreements (MEAs) allowed member countries to pose sanctions against one another. This allowed member states to pose economic sanctions against a target country, in case it was unable to meet the terms and conditions set for the production of goods that was originally agreed upon. MEAs are parallel to the WTO trade system and allow the body to intervene and resolve a matter with the WTO principles that elicits the solution for the matter without considering the environmental consequences (Bradly 2006). For example MEAs on climate change or dangerous chemicals have been considered to influence the significant task in bringing sustainable development. However, due to the existing overlap among the numerous MEAs policies and articles included in WTO trade system, for instance limits on trafficking endangered species, a lack of clarity exists between the link among WTO rules and MEAs. The argument over whether or not a WTO quarrel might be highlighted over trade measures taken under an internationally conferred MEA has been exhausted. Due to this obscure reference to the governing policies plays a vital role in the requirements of MEAs (WWF Briefing Series, 5th ed). Thus, the international environmental governance can be considered at fault due to lack of political governance on the countries as well as the WTO. Upon pressurisation from the government, WTO could revamp its policies to help promote economic sanctions that govern human rights among its member states.

However, international organizations such as the WTO have dealt with issues such as environmental and human rights concern in segregation until recently. The increasing tension among commerce and sustainable production recommend that bodies (i.e. WTO) should revamp its policies and remove restrictions to accommodate sustainable environmental concerns from its member states. Jayadevappar (2000) established numerous instruments for revamping policies in GATT and NAFTA to attain a balance between trade and environmental eminence. He also examined the association linking sustainable production methods and trade by standardizing and governing the development procedure and goods. He also suggested GATT take self initiation to identify changes in its policies and identify revamps to accommodate concerns for the environment and sustainable production methods. Also, Sforza (1999) suggested in his study that government intervention should take place in order to promote environmental governance to create a balance among commerce and free trade.

Works Cited

Montgomery, E. M.-B. (2008). Power or Plenty: How Do International Trade Institutions Affect Economic Sanctions. Journal of Conflict Resolution .

Smeets, M. (2000). Conflicting Goals: Economic Sanctions and the WTO. GLOBAL DIALOGUE .

Staples, S. (1999). The WTO and the Global War System.

UNEP; International Environmental Governance and the Reform of the United Nations, XVI Meeting of the Forum of Environment Ministers of Latin America and the Caribbean; 2008.

Guide to GATT Law and Practice (Analytical Index) (World Trade Organisation: Geneva, 1995), p. 554.

“Time to Reassess Unfair WTO Entry Terms.” Global Times 17 Apr. 2012. Retrieved from: http://www.china-sds.org/kcxfzbg/addinfomanage/lwwk/data/kcx389.pdf

Meadowcroft, James (2002). “Politics and scale: some implications for environmental governance”. 61: 169–179.

Sand, Peter H. “International Environmental Governance.” Environment: Science and Policy for Sustainable Development 32.9 (1990): 16-44. Print.

Condon, Bradly J. 2006. “Environmental Sovereignty and the WTO: Trade Sanctions and International Law”. Ardsley, NY: Transnational.

Grundmann, 1998.”’The Strange Success of the Montreal Protocol: Why Reductionist Accounts Fail”, International Environmental Affairs 10, 197-220.

Sforza, Michelle. “Rading Away the Environment: WTO Rules Thwart Environmental Agreements, Punish Innovation.” 20.10 (1999). Print.

Kubasek, Nancy, and Gary Silverman. Environmental Law. Upper Saddle River, NJ: Pearson Prentice Hall, 2008. Print.

Jayadevappar and S. Chhatre. 2000. “International Trade and Environmental Quality: A Survey”, Ecological Economics 32 (2000) 175–194
Dietz and E. Neumayer. 2007. “Weak and strong sustainability in the SEEA”: Concepts and measurement?, Ecological Economics 61, 617–626.

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The Impact Of Employee Involvement And Participation On Organization Performance

Abstract

The following research paper seeks to explore the correlation between employee involvement in decision-making processes within the organization and organization’s performance. The main focus remains to evaluate the existing academic literature to demonstrate evidence that employee involvement and participation initiatives produce tangible advantages for organizations. Hence, the research considers theoretical approaches towards the impact of employee participation on organization’s performance and examines empirical studies conducted on the subject stated above. The results of the following study are mixed. While chosen empirical cases show that direct forms of employee participation contribute to improved organization’s performance, such evidences have not been observed in reference to representative form of employee involvement.

Introduction

Over the past decades work reforms were implemented in order to guarantee humanistic patterns of work and to improve the quality of working life. As the global business environment started to become more competitive in the 1980s, major focus shifted towards the productivity and economic performance of the organizations. The organizations sought new avenues to gain competitive advantages over rival companies. According to the studies conducted in the 1980s by Gallup Organization, employees engaged in the company’s decision-making were more productive, customer-focused, profitable and more willing to stay and develop within the organization (Dicke, 2006). Hence, human capital started to be perceived as the company’s most important asset (Belanger, 2000). Currently a range of organizations including corporations, government agencies, schools and other non-profit organizations believe that employee involvement and participation are crucial to the good economic performance (Boxal & Purcell 2011). Employee participation contributes to the organization’s efficiency in two ways. First, it increases employee’s productivity. Second, it increases the company’s capacity to react quickly to changing business environment. Therefore, employee involvement as a part of Human Resources Management (HRM) practices became a subject of numerous academic researches over the last decades. The scholars from various fields in industrial relations developed various approaches and models in order to provide new evidences on the linkage between HRM and business performance (Gonzales, 2009).

The following research project examines the impact of employee involvement and participation on organization’s performance. First, the project defines a term ‘employment involvement and participation’ and demonstrates two concepts of measuring employee involvement. Further, the project discusses theoretical developments on the linkage between employee participation and organization’s performance. Finally, the project analyses empirical evidences of such relationships. The empirical study include the cases of direct and representative forms of employee participation.

Employee involvement – definition

Employee involvement, called also worker’s participation can be perceived as “a variety of processes and structures which enable, and at times encourage employees to directly and indirectly contribute to and influence decision-making in the firm and in the wider society” (Gonzales, 2009, p.8). The following definition indicates that there are various activities through which the employees can influence decision-making processes within the company. Generally, employee involvement can have a direct or indirect form. Direct involvement means that employees have an immediate influence on the decision-making processes within the company. Typical forms of direct involvement are employee surveys, team briefings, autonomous working groups or suggestion schemes (rewards for meeting company’s goals). Indirect involvement (representative involvement) means that a specific group which represents all employees is involved in the decision-making processes within the company. Common forms of indirect involvement are board representations, work councils or task forces (Eurofund, 2009). In turn, Gonzales (2009) classified employee involvement into three groups. These are informative, consultative and delegative participation. Informative participation refers to downwards communication within the organization. Employees have been given information top-down about the organization and its competitors, their own department or their individual performance. Information sharing includes open communication processes as well as information disclosure. Consultative participation regards various schemes developed by the management team to gain opinion of its employees and can have a form of individual meetings, team briefings and employees’ surveys. Delegative participation concerns various programmes which give employees capacity to make decisions on a particular set of issues and includes the forms such as problem-solving groups and semi-autonomous groups. Finally, Forth and Millward (2001) demonstrated three types of practices in reference to employee participation. These forms are individual supports (i.e. extensive information disclosure or specific training); task practices (i.e. quality circles or team work) and organizational supports (i.e. job security or employee share ownership).

A number of models measuring employee involvement and participation have been developed over the past decades. One of the most important seems to be a model presented by Marchington (2005). He identified four core aspects of employee participation within the company:

The degree of involvement: – this indicates the extent of involvement to which employees, either directly or through their representatives, may exert some form of influence on management decisions.
Scope: – the scope of management decisions that are open to influence by subordinate employees may differ depending on the subject matter and may range from trivial to strategic decisions.
The level: – the level at which the subordinates may be involved in management decisions varies substantially and can range from departmental level, through to division and headquarter level.
Forms of participation: – participation may be direct or indirect. Direct participation refers to the face-to-face involvement while, indirect participation occurs when workers are represented by trade unions in workers’ council or high-level consultation committees and through collective bargaining.

Another interesting model has been developed by Cox et.al. (2006). This model identified two dimensions of employee involvement, breadth and depth. Breadth regards a number of various employee involvement’s practices and programmes implemented in a work place. Using diversified but complementary schemes of employee participation leads to stronger impact on the company through mutual reinforcement. It also indicates that the management team aims to maximise the profits of employee participation. In turn, depth concerns the quality of employee involvement’s practices within the company. This measure indicates how embedded the employee participation’s practices are within the company. Both breadth and depth are important as they are strongly linked with organizational commitment and job satisfaction (Hayman & Mason 1995). That is, if employees’ views are taken into consideration and acted upon by the management, then they are more likely to demonstrate their commitment to the organization and indicate their satisfaction with their work. A major weakness of this measure is that the embeddedness of employee participation within the organization has often been assessed through management eyes rather than by analysing employee views on employee participation.

Employee participation and company’s performance – theoretical approach

The idea of employee participation as a part of Human Resources Management practices has been researched by a number of scholars who underlined significant benefits of employee involvement schemes on the company’s performance.

Kanter (1982) postulated that participatory character of the decision-making processes within the organization brings more positive outcomes than bureaucratic structure, as it involves knowledge sharing between workers and managers. Workers seem to be better informed than their managers with regard to the products and services, processes and work tasks, as they are directly involved in these activities. Hence, their views and suggestions might be very valuable in developing company’s strategy and achieving enhanced performance.

In turn, Lawler (1990) listed a number of various benefits of employee involvement within the company. He pointed out that employee participation leads to more efficient and innovative methods and procedures in a workplace and improves communication within the organization (between managers and workers as well as across work departments). Greater employee involvement results in higher job satisfaction and lower staff turnovers. Further, as employee participation concerns training and team work, it also leads to greater staff flexibility and higher job motivation. Additionally, high work motivation and better work methods determine increased rate of outputs and hence, contribute to the better quality of the products and services offered by the company. Finally, better communication and improved worker-management relations reduce a number of disputes and conflicts within the organization and help to resolve existing conflicts in the most effective way. All these factors contribute to improved performance of the organization. It is also important to add that Lawler identified various negative consequences associated with employee involvement. One of them are expectations created amongst the employees. These expectations usually concern organizational changes, personal self-development and career advancement opportunities. If the organization fails to meet these expectations, it will lead to dissatisfaction amongst workers. Employee participation causes also additional costs. Developing new skills is associated with additional costly trainings. In turn, accepting new responsibilities by the employee automatically requires an increased in salary of such an employee. Participatory character of decision-making is also slower than traditional style of leadership as it involves a significant number of people that have to accept the decision (Lawler, 1990).

Markowitz (1996) underlines higher morale of the employees and their greater commitment to performed job as a consequence of increased participation in the decision-making processes. As employees have a decision-making power, they fulfill their duties more accurately. Higher productivity of the employees contributes to higher profits of the organization and greater stability within the industry (Jones, 2006).

More recently, the effects of employee involvement were analysed by Appelbaum et.al (2000). Similarly like Lawler, the researchers emphasized the importance of information on the production (service) processes possessed by employees. The organization should aim to gain such knowledge from its employees in order to stay profitable. However, three conditions have to be met by the company to gain such knowledge. Employees need to be involved in substantive decisions. They are required to have specific skills and they need to be given appropriate work incentives. This approach indicated that employees cannot provide valuable information to the organization’s management if these conditions are not met. Additionally, employees are not willing to provide such information if they are not given appropriate incentives. Hence, this approach underlines the important of coherent and accurate HRM practices within the company (Jones, et.al., 2006).

Grimsrud and Kvinge (2010) postulate that employee participation is associated with the features such as responsibility, control rights, rights on revenue and risk taking. The companies are characterized by the areas of joint interests of employers and employees as well as by the areas where the conflicting interests appear. In particular, the author focuses on two conflict areas. These are principle-agent problem and free-rider problem. Principle-agent issue concerns different approach of the organization (owners and management team) and employees towards the inputs of work and distribution of created outputs. While the organization aims to achieve higher labour productivity and higher value added and keep fixed salaries at the same time, employees intend to share higher profits. Free rider issue refers to the situation when the organization cannot monitor individual contribution of its employees to the organization’s development and hence, individual rewards of employees depend on joint efforts. Hence, the organization tends to implement practices that will improve the productivity of employees, while employees seek to take advantage of such situation and gain additional benefits (i.e. higher return rights) in exchange of improved productivity.

Employee participation and company’s performance – empirical evidences

A number of scholars sought empirical evidences of the positive correlation between employee participation and organization’s performance. Some scholars based their analysis on the examples of a single organization (i.e. Jones, 2006) or selected industry (i.e. Sesil, 1999), while others examined the various businesses across the country (i.e. Guerrero and Barraud-Didier). Some researchers decided on a wider cross-country study (i.e. Gonzales, 2009; Grimsrud and Kvinge, 2010). Due to the scope of the following project, only key findings of selected empirical researches will be presented.

At the individual company level, Bartel (2004) conducted research on HRM practices amongst the branches of large bank. He proved that recognition system and performance feedback were of key significance for employees of this bank. Implementing these particular HRM practices contributed to the increasd sales of loans (Gonzales, 2009). In turn, Jones et.al. (2006) examined the influence of innovative HRM practices on performance of a Finnish company in the retail services sector. They proved that employees who have been given opportunities to participate in decision-making process within the company, to receive solid information and to gain rewards were willing to increase their productivity. It is crucial to note that these HRM practices were implemented in settings where employee were characterized by low skills and were assigned relatively simple tasks.

At the industry level, Sesil (1999) analysed the impact of employee participation and group incentives on the company’s performance in high technology industry in the UK. The research included 118 companies, primarily in electronics and engineering and concerned various aspects of employee participation such as quality involvement, presence of union, multi-skilling of employees, communication between employees and management, strategic planning and establishment plan. Additionally, the researcher examined the bonuses for employee as a form of group incentives. The research revealed that bonuses, quality involvement and multi-skilling had large positive effects on company’s outcomes, while other variables showed no impact on performance. Hence, these results indicated that there is strong correlation employee participation and the company’s performance. This effect is even stronger if the employee involvement is combined with group incentives.

At the country level, Guerrero and Barraud-Didier (2004) focused on high-involvement practices and their impact on French firms. The research was based on the questionnaire conducted amongst 180 large companies in France. 57% of these companies originated in the industrial sector, while remaining 43% – in the services sector. The study concerned four major HRM practices, namely empowerment, compensation, communication as well as training and skills development. The following study revealed that empowerment was a key determinant of improved company’s performance, while communication and training had a minor effect on organizational results. In turn, compensation showed no influence on company’s outputs. The following study underlined that the company should ensure enriched and challenging activities in order to manage employee participation. Further, the study postulated that the companies should promote open communication and power sharing amongst management and employees in order to develop participatory style of leadership as this style contributes to better HRM within the company and improved company’s performance.

In the cross-country context, Grimsrud and Kvinge (2010) conducted research on the economic impact of representative participation in eight countries[1]. The research took form of perception studies which means that “the respondents are asked to indicate whether different participation initiatives are believed to have an impact on different output measure” (Grimsrud and Kvinge, 2010, p. 149) and investigated various forms of representative participation such as work councils, trade unions or joint management – union committees. The following study showed very mixed results. Most of the analysis demonstrated that there was no correlation between employee participation and company’s productivity or such correlation was negative, while only several studies reported small positive productivity gains of employee participation. For instance, the study conducted on work councils amongst the German companies revealed that these councils had a positive impact on labour productivity while they influenced negatively company’s profitability. Similarly, the analysis of the Japanese companies showed a positive correlation between trade unions and labour productivity and negative correlation between trade unions and company’s benefits. Finally, the research amongst the British companies demonstrated that trade unions had a negative impact on productivity growth as well as on climate of relations between managers and employees at the workplace.

Conclusions

To sum up employee participation became a subject of theoretical debate and empirical analysis amongst the scholars. A number of researchers underlined positive correlation between employee involvement and organization’s performance. Precisely, employee participation (either direct or indirect) brings a valuable knowledge of products and services delivered by the organization and hence, contribute to the organization’s performance. Additionally, employee participation leads to higher job satisfaction and increased labour productivity as well as to lower staff rotation. These factors also determine organization’s success. On the other hand, some scholars stress various conflict areas within an organization (principle-agent issue; free rider problem) that might have a negative influence on the organization’s outputs.

Three empirical cases presented in the following paper revealed that direct employee involvement in decision-making processes within an organization contributed to its better performance. Employee empowerment and information sharing as well as financial rewards seemed to be mainly responsible for this improved performance. Employees must thus be sought for ideas on how organizational performance and quality of product or service can be improved. There is the need for management to ensure existence of employment participation programmes and initiatives that contribute to employee involvement in decision-making processes. Not only should the emphasis be placed on the existence of such initiatives but also on the embeddedness of such initiatives within the organization.

The evidence on strong correlation between employee participation and organization’s performance has not been found in reference to indirect forms of employee involvement. Although the following paper examined only one case of representative participation, this case included analysis across various countries and industries. This study revealed that employee participation had only minor positive impact on labour productivity while no effects (or negative effects) on overall company’s performance have been observed.

Reference

Belanger, J. (2000). The influence of employee involvement on productivity: a review of research. Hull: Human Resources Development Canada.

Boxall, P. and J. Purcell (2011). Strategy and Human Resource Management. Basingstoke: Macmillan.

Cox, A., S. Zagelmeyer and M. Marchington (2006). “Embedding employee involvement and participation at work”. In: Human Resource Management Journal, 16 (3), pp.250–267.

Dicke, C. (2006). Employee engagement and change management. New York: CAHRS.

Eurofund, (2009). Employee involvement [online] Available from: (Accessed on 14.05.2012).

Forth, J. and Millward, N. (2001). “The impact of unions on pay levels in lower-skilled jobs”. National Institute Economic Review. 176, pp. 76-90.

Gonzales, M. (2009). Worker’s involvement at the workplace and job quality in Europe. Edinburgh: RECWOWE Publications.

Grimsrud, B, and Kvinge, T. (2010). Productivity Puzzles – should employee participation be an issueNordic Journal of Political Economy, 36, pp. 139-167.

Guerro, S. and Barraud-Didier, V. (2004). High-involvement practices and performance f French firms. International Journal of Human Resources Management. 15(8). pp.1408-1423.

Hyman, J & B. Mason (1995). Managing Employee Involvement and Participation. London: Sage.

Jones, D., Kalmi, P. and Kauhanen, A. (2006). How does employee involvement stack upThe effects of Human Resources Management policies on performance in retail firm. New York: Cornell University ILR School.

Kanter, R. (1982). Dilemma of Managing Participation. Organizational Dynamics. (summer). pp. 5-27.

Lawler, E. (1990). High Involvement Management. Participative Strategies for Improving Organizational Performance. San Francisco: Jossey-Bass Publishers.

Marchington, M. (2005). ‘Employee involvement: Patterns and explanations’. In: (ed.) Harley, B., J. Hyman and P. Thompson Participation and democracy at work. Basingstoke: Palgrave Macmillan.

Sesil, J. (1999). The impact of employee involvement and group incentives on performance in UK high technology establishments. New Jersey: School of Management and Labour Relations.

Categories
Free Essays

To what extent do World Trade Organization rules act as a barrier to international environmental governance?

Introduction

The gradual opening of the arteries of world trade through the World Trade Organisation (WTO), while resuscitating international economics and being a symbol of the “hyperliberalisation” of trade, has been strangling environmental protection (Conca: 2000, Lowenfeld: 2008: O’Neill & Burns: 2005). The need for an effective, robust and objective way to resolve international disputes is arguably, in the light of the relentless and “inexorable integration of markets, nation-states and technologies to a degree never witnessed before” (Friedman: 1999), stronger than ever and a retreat to the unilateralist ideologies which gave birth to the First World War is almost unthinkable now given our interdependence on each other. The question is can the environment be protected while the aggressive expansion of trade continuesThe birth, by accident, of the General Agreement on Tariffs and Trade (GATT) in 1945, was part of an indefatigable drive to combat trade protectionism, discriminatory trade policies and most significantly armed conflict as a means of resolving disputes in the wake of the second world war (Irwin, Mavroidis & Sykes: 2008, Lowenfeld: 2008, Wilcox: 1949). One of the pronounced goals of trade liberalization is the removal of trade barriers and with the accession of China to the WTO, which replaced the GATT in 1995, the “hyperliberalisation” of trade is gathering pace with 153 members and 97% of world trade (Conca: 2000, p.484). This unrestricted access, while avowedly positive for economic growth, has been perceived by many commentators as being “inimical to the quest for global ecological sustainability” as Conca, the most skeptical critic, puts it (Ibid). World Trade Organisation rules have, to a large extent, acted as a barrier to international environmental governance both substantively and procedurally. In terms of the national laws and the WTO, the destabilization of international environmental regimes and procedural rules the WTO has hindered rather than helped environmental initiatives both nationally and internationally. There have been some signs of progress, however, with a joint report by the United Nations and the WTO in 2010 acknowledging for the first time that some restrictions on the liberalization of trade will be needed to fight climate change (WTO-UNEP Report: 2010) and other commentators discerning a move towards an “accommodation between the notions of free trade and environmental protection” (O’Neill & Burns: 2005, p.319). It is also vital to note that Conca’s strident objections, while relevant, were written in the year 2000 after just five years of the WTO and therefore omits one important WTO decisions. Nevertheless the author’s biting criticism must be answered and his view is not entirely without justification even in 2012:

“The WTO has proven to be profoundly anti-environmental both procedurally and substantively, handing down environmentally damaging decisions whenever it has had the chance to do so. Fears of a race to a dirty bottom are proving prescient, and optimism that trade rules can be greened from within has waned appreciably” (Conca: 2000, p.484).

Part 1:WTO rules and the environment

WTO/GATT, national laws and decisions

One of the central objections to the WTO rules in the sphere of environmental policy is that they, in Conca’s words, “undercut” national policies (2000, p.486). Erich Vranes adopts more mature terminology for this level of interaction which he labels as “vertical” as between domestic measures and WTO law (Vranes: 2009). Conca’s objections arise when a national environmental regulation is challenged under WTO rules and, without exception between 1995 and 2000, “handed down an anti-environmental decision” (Conca: 2000, p.486). There have been six decisions relating to environmental issues under the old GATT regime and just three under the new WTO rules (WTO website: 2012). The case which sparked the hostility to the GATT/WTO regimes is the Tuna/Dolphin case (case 1) where dolphins were being caught in tuna nets and dying unnecessarily in the hunt for tuna (Lowenfeld: 2008, p.315). The US government sought to ban all tuna imports from Mexico which brought a dispute settlement proceeding under the old GATT rules under article XXIII. America’s defence under article XX (the general exceptions article) was based on the protection of animal life and the “conservation of exhaustible resources” and proved futile as the Panel found in favour of the Mexicans with the ban on tuna contrary to article XI(1) of the GATT and unjustified by Article XX(b) or (g) (Lowenfeld: 2008, p.317). The other cases under the old GATT regime concerned American taxation on gas guzzling cars brought by the EU in October 1994, the so-called “son of Tuna/Dolphin” where the EU successfully challenged the Marine Mammal Protection Act in June 1994, the father of the Tuna/Dolphin dispute successfully brought by Canada against the USA in February 1982 and finally two successful cases brought by the US against firstly Thailand for the restriction and taxation of cigarettes in November 1990 and secondly against Canada regarding the exports of herring and salmon (WTO website: accessed 2012).

Conca’s powerful criticism was written only after two WTO decisions on the environment had been handed down and the rules were interpreted narrowly: firstly United States – Standards for reformulated and conventional gasoline in 1996. In this case, brought by Venezuela and Brazil against the US, measures to ensure imported gasoline complied with air quality restrictions were found to be discriminatory although the WTO panel did emphasize that it was America’s discrimination against imports, which were subject to more stringent measures than exports, which crippled their case; not that they didn’t have a defence or indeed a noble cause. Secondly, in a “strikingly similar” complaint to the tuna/dolphin decision brought in 1998, India, Malaysia, Pakistan and Thailand all challenged US legislation which banned all imports of commercial seafood, pursuant to the Endangered Species Act, to save turtles instead of dolphins: United States Import Prohibition of Certain Shrimp and Shrimp Products. Although the US lost this case, again by virtue of discriminatory behavior, it is clear that the seeds were sown for a fresh start and as Lowenfeld points out, this appellate decision had “sought to dampen the conflict between the trade and environment communities” (2008, p.323). Furthermore, had the US not discriminated, then it is certain that they would have won both on imports of gasoline and shrimp and indeed the second decision in the shrimp case confirms this (O’Neill & Burns: 2005) . This analysis leaves just one WTO decision in the 21st century: European Communities — Measures affecting asbestos and asbestos-containing products. In this trailblazing decision, brought in 2001 by Canada against the EC ban on asbestos products, the WTO panel found, affirmed later on appeal, that France was entitled to ban such harmful products under the very provisions so controversial in the tuna/dolphins case:

“…the Panel found that the French ban could be justified under Article XX(b). In other words, the measure could be regarded as one which was “necessary to protect animal, human, plant life or health.” It also met the conditions of the chapeau of Article XX. It therefore ruled in favour of the European Communities. (WTO website: accessed 2012)

1.2 International environmental regimes

Another powerful criticism leveled at the WTO rules is the perceived parallel at an international level where Conca discerns a “WTO-based threat to a broad array of international environment regimes” (Conca: 2000, p.487). This threat, which Vrane labels as being on a “horizontal” level between WTO law and public international law including treaty agreements (Vrane: 2010), is, according to Conca, brought about because these international environmental regimes often depend on trade related measures for their implementation and observance (2000, p.488). The main problems are firstly that the WTO’s existence is having a chilling effect on “global political imagination” (Ibid). Conca justifiably points out that the 1994 Amendment to the Basel Convention, which sought to ban the trade in hazardous wastes, may well be one of the last to target the trafficking of environmental hazards. The continued political impasse concerning the Kyoto Treaty lends weight to Conca’s observations although perhaps, in light of the global recession, the international environmental arena is anyway sterile (Rajamani: 2008). Secondly Article XI of GATT, which prohibits quantitative import/export restrictions is often cited as being a stumbling block and could well be used as the basis of a WTO challenge against environmental regimes such as the one which exists with respect to logging (Conca: 2000, p.489). This problem is still a hypothetical one but nonetheless is relevant and demonstrates perhaps that the rules have had a “chilling effect” on numerous proposed environmental regimes (O’Neill & Burns: 2005, p.330). Conca cites the example of a new logging regime: which failed to materialize at the Seattle conference (ibid). Finally the Basel Convention on hazardous waste is cited by Conca as a battleground:

“Ineffectiveness and a huge loophole for waste ‘recycling’ kept the waste trade…alive, leading a coalition of developing countries and environmental activists to push through the ‘Basel ban’ at a 1994 conference of the parties. The constant threat of a WTO challenge has inhibited the collection of the national ratifications needed for the amendment to enter into force, and undercuts efforts to use the regime…” (Conca: 2000, p.489)

Part 2: Procedural Rules of the WTO

2.1 Burden of proof, precautionary principle and Amicus Curiae

Finally the rules of the WTO themselves have been justifiably seen as stacking the deck against those who are fighting for the environment (Lowenfeld: 2008, p.327). The burden of proof is, as Conca observes, “squarely on the shoulders of those arguing for environmental precaution” (Conca: 2000, p.485). The presumption of a violation means that “the Member against whom the complaint has been brought”, will “rebut the charge” and the party which is asserting the affirmative of a particular claim will bear the burden of proof: a rule which is universal to all disputes and not just the environmental issues (Sebastian: 2010). Lowenfeld also points to the “precautionary principle” which dictates that:

“…uncertainty regarding the adverse environmental effects of an activity should not be a bar to adoption of measures to prohibit or otherwise regulate the activity, but that such uncertainty provides an affirmative justification for adopting such measures” (2008, p.333).

The Beef Hormones case is often cited in connection with this embryonic principle. The Appellate Body held here that this principle was not yet part of customary law but that it was commonsense to weigh the “severity of the danger against the degree of likelihood that the danger would be enhanced by the challenged activity” (Ibid). Lowenfeld suggests that this line of reasoning could lead to the WTO adopting a “worst- case scenario” argument which would, quite understandably, undermine environmental protection (Ibid). The author concludes by observing:

“…the precautionary principle as formulated by the European Community seems too harsh. On the one hand, it is susceptible to misuse for purposes of competition and protection; on the other, it seems both to overestimate and underestimate science” (Ibid at p.334).

Further to the burden of proof and the precautionary principle are the Amicus Curiae briefs: the closed door proceedings used to make it difficult for the stakeholders usually so closely intimated with environmental action (charities etc) to participate and are still difficult to surmount. This procedural innovation, which is a creature of statute, has enabled certain organisations to provide opinions to supplement decisions which are often made by lawyers and economists who usually have little knowledge of environmental effects (Conca: 2000, p.485). Those submitting the Amicus Curiae briefs can be WTO members or non-state actors and it is important to note that the acceptance of such briefs is an exercise of discretion on the part of the Panel (Stern: 2006). The fact that such briefs have become more commonplace undoes Conca’s arguments a little but, as noted above, it is ultimately a question of discretion as to whether an organization is allowed to submit such a brief. What is clear is that the complex ways in which ecosystems can be corrupted do not always fit easily into the burden of proof system.

2.1 Interpretation of Article XX of GATT

The interpretation of this article is key to much of the criticism of the GATT/WTO. In both Tuna-Dolphin and Shrimp-Turtle cases it has been noticed that these general exceptions to GATT provisions has been interpreted narrowly by both GATT and WTO panels respectively (O’Neill & Burns: 2005, p.325). This narrow interpretation has fuelled a lot of criticism with the panel in Shrimp/Turtle expressly saying that the WTO supports countries who hold such noble goals and that it was because of the US’s discriminatory behavior that they held against the US. As noted above, however, the decision in European Communities — Measures affecting asbestos and asbestos-containing products could be the beginning of a new era of interpreting the exceptions as they relate to environmental protection. Certainly the WTO has been sensitive to the criticism it has received from many quarters about its handling of such cases. Whether Conca’s observation that “Playing by WTO rules, the first definitive ‘proof’ of harm will often be irreversible ecosystem collapse” is debatable in the current climate and, arguably, about a decade out of touch (2000, p.485).

Conclusion

In conclusion the rules of the WTO to a large extent are acting as a barrier to international environmental governance. In terms of the undermining of national and international laws, the procedural flaws in terms of the burden of proof, the precautionary principle and the amicus curiae briefs as well as the narrow interpretation of article XX, the WTO has a lot of damage to undo in the coming years. Much has been written on this volatile subject and it is clear that Conca (2000) is the most scathing critic. His polemic is out of date, however, and although many of his conclusions are valid his overriding point, that there is an anti-green agenda in the WTO is slowly being unraveled. Indeed as far back as the 1998 Shrimp-Turtle case it has been discerned by astute commentators like O’Neill and Burns that the decision is a pro-environmental one, albeit resulting in ultimate defeat for the USA. The recent joint UN-WTO report (2010) is an indicator of the direction which the WTO is going in and the most recent case involving environmental action, the EU-Canada Asbestos case, confirms that a broader interpretation of article XX can provide positive environmental results. Perhaps the greening of the WTO has begun and no doubt the scathing criticism of authors like Conca had something to do with their new-found green credentials. A proper reform of the WTO rules is required but perhaps the tide has already turned as Barkin observes:

“…the incompatibility between the rules of the international trading regime and the need for responsible management of the global environment is substantially overstated, and that official interpretations of these rules are becoming consistently more environmentally-friendly over time” (Barkin: 2005, p.334).

Bibliography

Journals

Conca, Ken (2000) ‘The WTO and the Undermining of Global Environmental Governance’ Review of International Political Economy 7:3 Autumn pp 484 – 494

Rajamani (2008) ‘From Berlin to Bali and Beyond: Killing Kyoto Softly?’ International & Comparative Law Quarterly 57(4) pp909-939

2.0 Books

Barkin, Samuel.J (2005) ‘The Environment, Trade and International Organisations’ in Dauvergne, Peter (ed) Handbook of Global Environmental Politics Edward Elgar Cheltenham

Friedman, Thomas (2000) The Lexus and the Olive Tree Anchor Books: UK

Irwin, Mavroidis & Sykes (2008) The Genesis of the GATT Cambridge University Press: worldwide

Lowenfeld, Andreas F. International Economic Law (2008) (2nd ed) Oxford Uni Press: Oxford, New York.

O’Neill, Kate & Burns, C.G William (2005) ‘Trade Liberalization and Global Environmental Governance: the Potential for Conflict’ in Dauvergne, Peter (ed) Handbook of Global Environmental Politics Edward Elgar Cheltenham

Sebastian, Thomas (2010) ‘The law of permissible WTO retaliation’ in Bown and Pauwelyn (eds) The Law, Economics and Politics of Retaliation in WTO Dispute settlement: Cambridge University Press: worldwide

Stern, Brigitte (2006) ‘The emergence of non-state actors in international commercial disputes through WTO appellate Body case-law’ in Sacerdoti, Yanovich and Bohanes (eds) The WTO at ten: The Contribution of the Dispute Settlement System: Cambridge University Press: worldwide

Van den Bossche, Peter (2008). The Law and Policy of the World Trade Organization, UK: Cambridge University Press

Vranes, Erich (2009) Trade and the Environment: Fundamental Issues in International Law, WTO law and Legal Theory Oxford University Press: Oxford

3.0 Statute

Endangered Species Act

GATT 1947: Articles XXII and XXIII

Marine Mammal Protection Act 1972

Understanding on Rules and Procedures Governing the Settlement of Disputes

4.0 Websites

WTO, ‘WTO and UNEP launch a report explaining for the first time the connections between trade and climate change’, 26 June 2009, Press/559. UNEP issued an identical press release on the same day, available at www.wto.org/english/news.e/pres09_e/pr559_e.htm.

WTO website accessed on 2nd February and available from: http://www.wto.org/english/tratop_e/envir_e/envir_e.htm

5.0 Decisions

GATT

> United States — Taxes on Automobiles, ruling not adopted, circulated on 11 October 1994. Case brought by EU.
> United States — Restrictions on Imports of Tuna, “son of tuna-dolphin”, ruling not adopted, circulated on 16 June 1994. Case brought by EU.
> United States — Restrictions on Imports of Tuna, the “tuna-dolphin” case, ruling not adopted, circulated on 3 September 1991. Case brought by Mexico, etc.
> Thailand — Restrictions on the Importation of and Internal Taxes on Cigarettes, ruling adopted on 7 November 1990. Case brought by US.
> Canada — Measures Affecting Exports of Unprocessed Herring and Salmon, ruling adopted on 22 March 1988. Case brought by US.
> United States — Prohibition of Imports of Tuna and Tuna Products from Canada, ruling adopted on 22 February 1982. Case brought by Canada.

WTO

> European Communities — Measures affecting asbestos and asbestos-containing products. WTO case No. 135. Ruling adopted on 5 April 2001. Case brought by Canada.

> United States — Import Prohibition of Certain Shrimp and Shrimp Products, the “shrimp-turtle” case. WTO case Nos. 58 and 61. Ruling adopted on 6 November 1998. Case brought by India, Malaysia, Pakistan and Thailand.
Recourse to Article 21.5 of the DSU. Ruling adopted on 21 November 2001. Case brought by Malaysia.

> United States — Standards for Reformulated and Conventional Gasoline, WTO case Nos. 2 and 4. Ruling adopted on 20 May 1996. Case brought by Venezuela and Brazil.

Categories
Free Essays

Does Ineffective Leadership Affect the Functioning of an Organization?

Introduction:

Leaders are considered an integral resource in an organization and it is often said that the leader’s personality and caliber affect the manner in which an organization is managed and the organization’s overall performance. The main role of leaders is to guide, supervise, and manage the employees of an organization and make integral and critical decisions related to the organization’s operations. Thus, it is highly important for leaders to possess a variety of essential skills. Some of the skills that leaders must possess include problem-solving techniques, critical thinking, quick and efficient decision making, patience and human resource management techniques, amongst other expertise. Leaders hold major responsibility for the way they manage their decisions and the manner in which they guide the employees of an organization. Mistakes or obliviousness to vital information can lead to disastrous affects for organizations or a major loss in revenues (Northouse, 2012).
Accordingly, it is important for leaders to have a proper plan for managing a firm and leaders usually possess a certain leadership style. There are various leadership styles that leaders adopt when managing an organization and these leadership styles include the autocratic leadership style, charismatic leadership style, and situational leadership style amongst many others. Some leaders prefer to deal with an iron hand and are highly autocratic in their leadership style. Such leaders are highly authoritative and prefer to give commands rather than attain the opinion of their subordinates. However, some leaders are highly informal and involved in their leadership role and adopt a charismatic style of leadership. Such leaders prefer to involve their employees in the decision making process, prefer an informal environment, and reduce barriers to communication (Carmelli et al, 2010). However, the appropriate leadership style may vary from organization to organization and from situation to situation. It is the leader’s duty to understand the type of leadership necessary for a particular situation and implement it effectively (Brown & Mitchell, 2010).
This research paper will seek to explore how ineffective leadership affects the functioning of an organization and whether it has a highly adverse affect upon the organization’s performance. The paper will seek to explore topics such as different management styles, responsibilities of managers/leaders, examples of ineffective leadership, and their consecutive effects on the functioning of the organization. This outline will commence with a brief literature review, formation of research questions, research methodology, and a conclusion.
Literature Review:
Many scholars believe that ineffective leadership leads to disastrous consequences for an organization. In the same manner, effective leadership can also lead to highly beneficial results for an organization and its employees. There are various examples of highly successful leaders who have brought their organization’s numerous benefits such as Steve Jobs, Bill Gates, and many others. These leaders were able to effectively make decisions in times of crisis, keep their workforce motivated and efficient, and form effective marketing strategies for the promotion of their organization (Hind et al, 2009).
Leaders often possess certain leadership styles and it is regarded that ineffective leadership occurs because of the adoption of the inappropriate leadership style. Thus, leaders who adopt the wrong leadership style or who possess a personality which is not able to adapt to certain situations are likely to cause severe disruptions or inefficiency in the functioning of their organization. Leaders who adopt inappropriate leadership styles or who are ineffective leaders may cause problems such as increasing communication barriers, disrupt the proper dissemination of information, be oblivious to vital information concerning the organization, and lead to the de-motivation of employees. Examples are found in organizations where leaders are highly authoritative, consider their opinion to be correct, and remain distant from subordinates and employees and consequently, employees are unable to disseminate vital information to the leader and fail to help the leader make better decisions (King, 2013).
However, there are also examples of organizations where the authoritative nature of leaders is working for the organization’s benefit rather than causing the organization losses. Hence, it is obvious that the leadership style that must be adopted by a leader must vary according to the organization’s situation and the manner in which the leader implements and conveys his/her message (Becker, 2009). This concept and other concepts related to the effects of ineffective leadership on the organization will be analyzed in this research paper.

Research Questions:

Does ineffective leadership affect the functioning of an organization?
What leadership styles are appropriate for various organizational situations?
How can ineffective leadership be defined and what are its consequences?
Research Data:
The research data that will be used will be both primary and secondary in nature. The data and information that will be gathered will be qualitative in nature and will be of exploratory in order to explore the topic in depth.
Data Sources:
Primary data will be gathered from the interview while secondary data will be obtained from journal articles, books, online sources, online databases, websites, newspapers, and other academic sources of information
Data Collection Method:
After obtaining permission from a specific organization (yet to be chosen), the manager or leader of that organization will be interviewed. Other information for the study will be derived from secondary sources for which library access and access to online databases is essential.
Data Analysis Method:
As the data is qualitative in nature, the data gathered through secondary sources and the data gathered from the interview will be analyzed through the method of content analysis. The content of the literature reviewed will be compared to the content of the interview and then will be analyzed for relevancy a the key points are extracted from both sources to conduct the analysis

Conclusion:

Leadership is one of the most important topics in the study of management and through the analysis of the data obtained, this research paper aims to recognize, analyze, and evaluate the effects of ineffective leadership on an organization.

References

Becker, G. (2009) “Moral leadership in Business.” Journal of International Business Ethics. Vol. 2:1 pp. 7-19
Brown, M. & Mitchell, M. (2010) “Ethical and Unethical Leadership: Exploring New Avenues for Future Research. Business Ethics Quarterly. Vol. 20:4 pp. 583-616
Carmeli, A., Gelbard, R. & Gefen, D. (2010) “The importance of innovation leadership in cultivating strategic fit and enhancing firm performance”. The Leadership Quarterly. Vol. 21:3 pp. 339-349
Hind, P., Wilson, A., & Lenssen, G. (2009) “Developing Leaders for Sustainable Business.” Corporate Governance. Vol. 9:1 pp.7-20
King, C. (2013) “The Importance of Leadership and Management in Process Safety”. Process Safety Progress.
Northouse, PG. (2012) Leadership: Theory and Practice. Sage Publications.

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Free Essays

Project Management on World Trade Organization ministerial Conference of 2005

Executive Summary

The aim of this report is to investigate the project management aspects relating to the World Trade Organisation’s (WTO) ministerial conference in 2005. This report details the issues relating to project management and the impact of the project management practices on the outcome of the event. It identifies the key stakeholders in the project and the role they had in determining the success/failure of the project. This report further discusses the role of the leadership and the effective team building and management skills and how much of an impact these had in the successful project delivery.

Introduction

The World Trade Organisation (WTO) Sixth Ministerial Conference which is abbreviated as MC6 and popularly known as the Hong Kong Ministerial Conference was held between the 13th and 18th December, 2005 at the Hong Kong Convention and Exhibition Centre. The total turn around expected for the conference was representatives from around 148 countries across the globe. The Hong Kong People’s Alliance led a protest on the WTO which mainly consisted of farmers from South Korea. The three main designated protest zones included Wan Chai Sports ground and the region around Wan Chai Cargo Handling Basin. The total budget for the ministerial conference was Hong Kong $250 million (WTO, 2005).

Background

The highest decision making body of the World Trade Organisation is the Ministerial Conference that meets a minimum of once every two years. This ministerial conference provides the organisation with the direction and helps in the decision making process (HKPA, 2006). The conference held from 13th – 18th December 2005 is the sixth ministerial conference and was aimed at making a decision about the liberalisation of farm trade and reaching an agreement relating to farm subsidies . It also aimed at successfully concluding the 2006 Doha Round (Target WTO, 2005).

The role of the project manager

The project manager of the WTO conference 2005 is responsible for the success of the project and also ensuring that the stakeholders relationships are well maintained and that all the stakeholders are able to effectively communicate and share their ideas about agricultural issues (Heydon, 2006).

Given that the WTO ministerial conferences play a major role in the decision making process and ensuring that multilateral trade agreements are smoothly implemented, the role of the project manager cannot be underestimated (Alam, 2008). This report discusses the role of the project manager in establishing good stakeholder relationships and his role in the success of the project.

Project Objectives and Scope

The objectives and scope of the 2005 HK WTO conference was to establish:

Market access – reduction in the tariff of goods
Domestic support – direct payments to be made to the farmers and local producers
Export Subsidies
Services – remove restrictions internationally in various service sectors and
Singapore Issues – demand for transparency in laws, fair competition etc. (UN, 2005)

The scope of the project management planning activities included arrangement of venue, security and emergency, organisation of logistics, managing media, budgeting and risk and contingency planning (Alam, 2008).

Stakeholder Analysis

This section of the report discusses the key stakeholders in the HK WWTO 2005 meeting, stakeholder analysis methods to effectively communicate with these stakeholders in order to ensure smooth communication. Stakeholder Analysis is defined as the activity which analyses in depth the attitudes of all the key stakeholders towards a project (Goodpaster, 1991).

Other definitions by researchers (Freeman, 1984) include ‘a group of individuals who can affect or be affected by the achievement of the organization objectives’.

Key Stakeholders

The key stakeholders of the WTO include the member nations, the vendors, tradesmen, farmers and other categories of trade associations, the media, the public, governing bodies, the international trade community. It also includes the general population and public that are affected directly or indirectly as a result of the agreements and arrangements made by the WTO Ministerial conference committee (Alam, 2008).

High Power , High Interest

One of the member nations that holds high power as well as high interest in the World Trade Organisation. There are a total of 153 nations in the WTO and the USA engages with various other nations and takes a leadership role in the WTO ministerial. For instance, USA played a key role in the Doha Conference and was blamed both directly and indirectly for holding up the talks and the progress of the sessions. Given the high power and interest it holds in the WTO, USA aims to boost its exports. It plays a major role in the WTO negotiations to enhance its stance in the WTO as a ‘leader’ and also to use the opportunity to initiate talks with its trading partners like Japan and India. Given its power, most decisions of the trade-rounds are highly influenced by the United States (BBC, 2013).

High Power, Low Interest

Hong Kong as one of the key members of the WTO was the host to the fifth ministerial conference in the year 2005. Though being a key member, Hong Kong has not shown much interest in the activities of the WTO and has not taken any proactive steps in issue resolution of the ongoing issues of the WTO. Be it agriculture or environmental issues,Hong Kong remains to be a silent spectator in most cases which clearly indicates the lack of interest in influencing the member states or steering them to decision making on specific issues (BBC, 2013).

Low Power, High Interest

The farmers and the agriculture community worldwide have high interest in the activities of the WTO as the trade agreements that are negotiated and agreed upon have a serious bearing on their livelihood and concerns. There is a growing concern relating to fairer trade markets, food security and farming subsidies. Though there is a lot of interest shown by the farming community, they do not have the power to speak and hence do not have the influencing capability. The increase in the suicide rates of farmers is also attributed to the failure of WTO to understand their concerns and the lack of transparency and inequality in dealings of the WTO (Long, 2007; Shiva, 2014). Researchers also suggest that there is a lack of understanding from the WTO committee members on the needs of the farmers and the decisions made are not in line with their demands (Anderson and Martin, 2005).

Low Power, Low Interest

The last type of stakeholders have the least power and are also not very much interested in the activities of the WTO. The citizens of Hong Kong for example, belong to this stakeholder group. Given that the multilateral agreements are huge and complex, the authorities do not have the capacity and capability to scrutinise the details of all contracts. Also, the authorities of a country are not held accountable for the negotiations and agreements signed. This makes them lose interest given that they neither have the power nor the capacity to influence the decision making. Also there are restrictions that prohibit them from questioning the authority (Keohane and Nye, 2001; Scharpf, 2000).

Stakeholder Management

Stakeholder management is essential for the smooth communication and functioning of an organisation and also to ensure that the objectives of the organisation are achieved. Stakeholder management should be in line with the strategic management objectives of the organisation and the type of the stakeholder that needs to be satisfied should be taken into account depending on the organisation type in order to ensure that these expectations are met. It is essential to first identify the various stakeholders, their role in the organisation, the decision making authority they have in the organisation and how much their ideas or ideals would affect the success of the organisation. Once these are identified, it is essential to develop a stakeholder management strategy that is aimed at not only satisfying these stakeholders but also helps achieve the overall objective of the organisation (Freeman, 2001).

In a multicultural organisation or where the organisation is huge and spans across different continents and cultures, the stakeholder management strategy becomes inevitable. It defines the communication methods and helps understanding the do’s and don’ts in each geographic location. It also helps achieve transparency in operations and facilitates better participation of the stakeholders in the decision making process. Stronger business decisions that are sustainable, long term and ethical are facilitated by a good stakeholder management approach (Carroll and Buchholtz, 2014).

Communication Management

Researchers believe that not all stakeholders of an organisation have equal importance. For example, in a non-governmental organisation which is aimed at helping people, the pubic might be the key stakeholder as opposed to a business organisation which aims at satisfying the primary needs of the shareholders. Hence, in a diverse world where the needs of the organisations differ, it is essential to understand the primary stakeholders who needs to be satisfied and devise a communication management plan to ensure that the communication to these stakeholders are made in near real-time and in an effective manner (Podnar and Jancic, 2006; Jacobson et al, 2009).

Tuckman’s Communication Model

Bruce Tuckman devised a five step communication model in the year 1975.

These five steps includes:

Forming
Storming
Norming
Performing and
Adjourning

Forming: This is where the leader gives the guidance to the team and the initial stage in the communication process. This is a stage where the roles and responsibilities are unclear

Storming: Brainstorming activities take place, compromises happen, clarity increases and the team members get a basic understanding of what is required of them

Norming: The team members agree by consensus. The leader facilitates the decision making but the team members are now in a position to agree. The roles and responsibilities defined by the leader in the forming stage are now very clear and evident.

Performing: The team members are strategically aware and are able to execute their responsibilities and perform better in order to achieve the goals. They work on their own and there is very little interference from the leader. The leader is called for when there is guidance required both in terms of personal and interpersonal development

Adjourning: Also known as Deforming or Mourning, refers to the breaking up of the group after the successful completion of the task. This stage involves identification of good performers, the well-being of the team and also measuring the performance. (Tuckman, 1977)

Conclusion

This report gave a brief about the role of the project manager in the HK 2005 WTO ministerial conference and the various stakeholders, the level of interest and the power to influence the decision making of the WTO. Furthermore, this report also discussed effective stakeholder management techniques and methods, communication strategy in relation to the WTO.

References

Freeman (1984) Strategic Management, A Stakeholder Approach, Pitman, Boston

Podnar, K., & Jancic, Z. (2006). Towards a categorization of stakeholder groups: An empirical verification of a three?level model. Journal of Marketing Communications, 12(4), 297-308.

Jacobson, S. K., & McDuff, M. D. (2009). Communication as an effective management strategy in a diverse world. Wildlife and Society: The Science of Human Dimensions.

Tuckman, B. W., & Jensen, M. A. C. (1977). Stages of small-group development revisited. Group & Organization Management, 2(4), 419-427.

Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. Cengage Learning.

Freeman, R. E., & McVea, J. (2001). A stakeholder approach to strategic management.

Scharpf, F. W., & Schmidt, V. A. (Eds.). (2000). Welfare and work in the open economy: volume ii: diverse responses to common challenges in twelve countries (Vol. 2). Oxford University Press.

Keohane, R. O., & Nye, J. S. (2001). Power and interdependence (Vol. 3). New York: Longman.

Shiva, Vandana (2014) Of food, farmers and WTO’s doublespeak, Available at: http://www.asianage.com/columnists/food-farmers-and-wto-s-doublespeak-972 accessed on 06/12/14

Long, Jessica (2007):“WTO Kills Farmers”: India Free Market Reforms Trigger Farmers’ Suicides, Global Research

Anderson, K. and Martin, W. (2005), Agricultural Trade Reform and the Doha Development Agenda. World Economy, 28: 1301–1327. doi: 10.1111/j.1467-9701.2005.00735.x

BBC (2013): Profile: World Trade Organization, Available at: http://news.bbc.co.uk/2/hi/europe/country_profiles/2429503.stm accessed on 05/12/14

WTO (2005): Hong Kong WTO Ministerial 2005: Briefing Notes, The “Win-Win” Potential for trade and environment, Available at: http://www.wto.org/english/thewto_e/minist_e/min05_e/brief_e/brief11_e.htm accessed on 05/12/14

HKPA (2006): Hong Kong People’s Alliance on WTO, Wayback Machine, Available at: Accessed on 05/12/14

Target WTO (2005): Target World Trade Organisation, Available at: http://www.targetwto.revolt.org/ Accessed on 05/12/14

Alam S (2008): Sustainable Development and Free Trade, Institutional Approaches, Routledge, UK

Heydon K (2006): After the Hong Kong Ministerial Meeting: What is at stake?, OECD, France

United Nations(2005): Perspectives from the ESCAP Region after the Fifth WTO Ministerial Meeting: Ideas and Actions Following Cancun (Studies in Trade and Investment), United Nations

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Free Essays

How does the organization you work for or an organization you are familiar with ensure that their training is effective? Drawing on the relevant literature, critique their existing approach. Identify and discuss how, according to the literature, practice could be improved. Highlight any possible constraints to improving practice.

Introduction

Historically, the training culture of the Civil Service was weak. It existed mostly for technical tasks that were related to administrative jobs rather than having a focus on leadership and management. One reason for this weakness was the emphasis on involvement in policy making rather than policy implementation as the key to promotion to the more senior grades (Hennessy, 1989). This culture has slowly changed, not least with the development of ‘Executive Agencies’ at the end of the 1980s (James et al., 2011) and the growing involvement of outside contractors in service delivery and specialist areas such as finance and IT. This led to a demand for a more professional approach to project management as well as managing the contractual relationship with non-civil service firms (Cabinet Office, 2002).

However, a number of subsequent reports (HM Government, 2012; National Audit Office, 2014) continue to point to serious weaknesses in actually managing service delivery, project management and contractors. While this could be seen as indicating flaws in the approach to training and development, there are other possible explanations such as the wider culture, policies being developed for political rather than administrative reasons and lack of capacity to manage external firms. This relates to the wider issue that it is often very difficult to evaluate the impact of any HR initiative in terms of output criteria (Camps and Luna-Arocas, 2012; Taylor et al., 2010) due to the multiplicity of potential variables that might have an impact (Devins and Smith, 2013).

This report explores these themes in the context of the approach to training in the UK Civil Service. It starts with a discussion around the recent change in approach within the Civil Service and then reviews the literature on the successful implementation of organisational learning and development approach. This is followed by a critique and review of the new approach. To help place this in context, the focus is on the Department of Work and Pensions implementation of Universal Credit (BBC, 2014).

Approach in the Civil Service

As discussed, the approach to both developing senior leadership and wider organisational learning in the Civil Service has seen significant change. The old model was one of recruiting bright individuals and expecting them to learn from a varied series of postings with a particular emphasis on policy development and working with Government Ministers (Hennessy, 1989). One consequence of this was a lack of focus on implementation and management of projects once and an important reason for the creation of executive agencies (James et al., 2011) in the late 1980s was that the resulting focus on administration and implementation would lead to a change in mindset of staff aiming for the higher grades in the Civil Service.

Over time, there have been a number of attempts at changing the focus of management training in the Civil Service. This has included an emphasis on project management, especially in the context of IT systems, and working with external providers (Cabinet Office, 2002). The latest iteration of this process was set out in the 2012 Civil Service Reform Plan (HM Government, 2012). This is part of a wider set of proposals including a plan that service delivery should be ‘digital by default’, but the bulk of the focus is on improved project and policy management by “improving the skills, abilities and performance of civil servants, by producing a 5-year capabilities plan for the whole civil service” (HM Government, 2012: 18). In terms of capacity building, the focus is on (all quotes are from page 23):

“The old idea of a Civil Service ‘generalist’ is dead”;
“Some skills gaps have already been identified, such as leading and managing change, commercial, financial, programme and project management, digital skills, skills in managing risk and the ability to drive continuous improvement”, and;
“there is a serious need for many more civil servants to have commercial and contracting skills”.

While some of this applies to all staff, there is still a strong emphasis on the identification of individuals early in their career, usually at application, who will be given specific training and development opportunities. However, weaknesses continue especially in contract management and a recent report has found serious shortcomings in terms of staff capacity and expertise (National Audit Office, 2014).

This approach can be characterised as an attempt not just to improve certain skills but to bring about a wider shift in culture (HM Government, 2012). The current culture is described as “cautious and slow-moving, focused on process not outcomes, bureaucratic, hierarchical and resistant to change” (HM Government, 2012:.9). The aim is an organisation that becomes “pacier, more flexible, focussed on outcomes and results rather than process. It must encourage innovation and challenge the status quo” (HM Government, 2012: 27). This is grounded in organisational development and organisational learning rather than specific training approaches (Glaister et al., 2013; Gold et al., 2013).

Literature Review

Management learning and development is a complex field (Boxall and Gilbert, 2007), not least as there is still a legacy of the traditional ‘heroic’ model where leadership is seen as an innate skill possessed by certain people rather than something that can be learned and developed (Daft, 2008). This is relevant as the civil service has taken a historic approach based on what can be called an ‘elite’ model of management development (Boxall and Gilbert, 2007) with identified individuals recruited to specific career paths. From this staff development was a mixture of formal training but also experience in a multiplicity of roles, reflecting the traditional model of civil service managers as highly intelligent generalists (Hennessy, 1989). The fundamental problem with this approach is that recruitment tends to be from a relatively narrow group, “may exclude significant sources of potential ability from the identification and selection process” (Boxall and Gilbert, 2007: 108) and lead to over-reliance on a particular skill set. As such, there is nothing in the new process that suggests a significant departure from this approach.

One key challenge in understanding the impact of any HR initiative, especially in the fields of organisational development and organisational learning, is the relationship between internal changes and the end result (Camps and Luna-Arocas, 2012). Some models of organisational behaviour assume a direct relationship between adoption of a new policy and outcomes but most approaches can be described as ‘contingent’ or ‘configurational’ (both of these take account of various other changes and that existing structures have a bearing). Thus in the field of organisational learning there is a two-fold challenge. One question is what changes will lead to organisational learning and adaption, the second question is whether the product of a new approach to organisational learning might lead to actual performance changes (Camps and Luna-Arocas, 2012).

Camps and Luna-Arocas (2012) argued that existing norms and culture have a major impact on the success or otherwise of new initiatives in the field of organisational learning. In effect, a focus on a particular initiative, or new approach, will tend to be less effective if no real attempt is made to address the wider culture. As will be discussed below, one problem in the adopted approach is that while this may represent an attempt to change the culture of the civil service it does not address the parallel issue of the mindset of Government Ministers. This is important given the importance (Taylor et al., 2010) of the need for failures to be acknowledged in an open manner. If this stage is omitted, or used to apportion blame, then it is unlikely that the organisation will absorb and develop new approaches.

This stresses the difficulty of how to link changes in approach to organisational learning to measurable outcomes. This has been an ongoing debate in the wider HRM literature (Janssens and Steyaert, 2009; Paauwe, 2009) both as to how such an evaluation can managed and the consequences, for the field of HRM, if the focus is on measurable organisational level outputs as opposed to culture and practice within the organisation (Devins and Smith, 2013).

Evaluation and Critique

The Civil Service review matches many of the criteria identified in the literature (Gold et al., 2013). There is a focus on wider organisational learning and development combined with an acknowledgement of the need for specific training in identified skills and competencies. In addition, the new approach is linked to planned changes in terms of pay, reward, promotion and career development. Thus in one sense it can be seen as setting out the base of a well structured training programme. However, one important strand is missing from the review. There is little mention of how the Civil Service interacts with Ministers or the wider political process (Hennessy, 1989). Where this theme is introduced it is as a complaint by ministers that the “culture can make it difficult for the Government to adapt swiftly to the needs of the day” (HM Government, 2012: 9). As such, the plan is framed as being about enabling the civil service to operate in a different way but does not address an important part of the pressures and constraints on the civil service – how ministers set and shape policy.

This can be briefly explored by looking at a single policy development in the Department of Work and Pensions (DWP). Universal Credit is an attempt not just to bring together the full range of benefits paid to adults of working age, it also seeks to link this to fluctuations in earnings. At a purely technical level it requires the integration of a number of existing computing systems run by the DWP but also to create a real time link to the tax and earnings data. This challenge proved problematic for a number of the benefit reforms introduced by the previous Labour Government (Brewer et al., 2005).

To this complicated project management task should be added that the minister in charge had developed his ideas over a number of years and that the purpose was not a technical revision of the UK Benefits System but an ideological framing of the reasons for poverty and the solution. This belief has been challenged by a number of commentators as lacking a real evidence base (Slater, 2011). So Universal Credit has been delayed, seen cost overruns and it has been suggested that “UC incorporates just about every design feature that hasn’t worked in the course of the last 30 years. And it adds others” (Spicker, 2014). However, there appears to be little scope for the type of reflective learning suggested in the organisational learning literature when the policy is the creation of ministers with a very defensive mindset. The end result is the suggestion that “any learning is hampered by ministers” (BBC, 2014). This instance does not invalidate the approach to training proposed in the Civil Service Reform Plan, but it does suggest that the goal of improving project management and policy implementation is unlikely to be achieved when the focus is placed simply on one half (the civil service) of a complex relationship between a permanent administration and political governance.

Conclusion

In conclusion, this paper has reviewed the logic behind the relatively recent Civil Service Reform Plan and its attempt not just to use training and development to address skills gaps in the Civil Service but to change the overall internal culture (Gold et al., 2013). As such, it can be described as a process of organisational learning and development rather than an approach to training. In terms of the wider literature, the approach offers a good fit to the themes commonly identified although it takes little account of the problem of evaluating the impact of HR initiatives (Devins and Smith, 2013). However, as argued in the last section, the core problem is it concentrates on one half of the relationship between administration and political governance. As with the case of Universal Credit, the approach of Ministers can undermine policy implementation. In part, as not all policies are based on clear evidence, in part as the nature of the political process makes it hard for ministers to take responsibility if a key project is failing. Unless this too is addressed, then the goals of the Civil Service Reform Plan are unlikely to be achieved. In effect, the weakness lies in the understanding of the complexity of the organisation.

References

BBC. 2014. MPs: Universal Credit inquiry ‘hampered by ministers’ [Online]. London: BBC. Available: http://www.bbc.co.uk/news/uk-politics-26936477 [Accessed 6 November 2014].

Boxall, P. & Gilbert, J. 2007. The management of managers: A review and conceptual framework. International Journal of Management Reviews, 9:2, 95-116.

Brewer, M., Clark, T. & Wakefield, M. 2005. Social Security Under New Labour: What did the Third Way mean for welfare reform: Institute for Fiscal Studies.

Cabinet Office 2002. Risk: Improving government’s capability to handle risk and uncertainty. London: Cabinet Office, Strategy Unit.

Camps, J. & Luna-Arocas, R. 2012. A Matter of Learning: How Human Resources Affect Organizational Performance. British Journal of Management, 23:1, 1-21.

Daft, R. L. 2008. The Leadership Experience, 4th, Mason, Thomson Higher Education

Devins, D. & Smith, J. 2013. Evaluation of HRD. In: Gold, J., Holden, R., Iles, P., Stewart, J. & Beardwell, J. (eds.) Human Resource Development: Theory and Practice. 2nd ed. London: Palgrave Macmillan.

Glaister, C., Holden, R., Griggs, V., McCauley, P. & Blackburn, M. 2013. The Practice of Training: The Design and Delivery of Training. In: Gold, J., Holden, R., Iles, P., Stewart, J. & Beardwell, J. (eds.) Human Resource Development: Theory and Practice. 2nd ed. London: Palgrave Macmillan.

Gold, J., Holden, R., Iles, P., Stewart, J. & Beardwell, J. (eds.) 2013. Human Resource Development: Theory and Practice, 2nd, London: Palgrave Macmillan.

Hennessy, P. 1989. Whitehall, London, Fontana

HM Government 2012. The Civil Service Reform Plan. London.

James, O., Moseley, A., Petrovsky, N. & Boyne, G. 2011. Agencification in the United Kingdom. In: Verhoest, K., Thiel, S. V., Bouckaert, G. & Laegreid, P. (eds.) Government Agencies in Europe and Beyond: Practices and Lessons from 30 Countries. Basingstoke: Palgrave Macmillan.

Janssens, M. & Steyaert, C. 2009. HRM and Performance: A Plea for Reflexivity in HRM Studies. Journal of Management Studies, 46:1, 143-155.

National Audit Office 2014. Transforming government’s contract management. London: National Audit Office.

Paauwe, J. 2009. HRM and Performance Achievements, Methodological Issues and Prospects. Journal of Management Studies, 46:1, 129-142.

Slater, T. 2011. The Myth of ‘Broken Britain’: Welfare Reform and the Cultural Production of Ignorance. Edinburgh: Edinburgh University Institute of Geography.

Spicker, P. 2014. Universal Credit: Don’t blame the IT. Computer Weekly.

Taylor, S. G., Templeton, G. F. & Baker, L. T. 2010. Factors Influencing the Success of Organizational Learning Implementation: A Policy Facet Perspective. International Journal of Management Reviews, 12:4, 353-364.

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Free Essays

The Role of International Strategy and Organizational Design

The current trend of world economics business model lays on the world system division of labor between the core, the marginal, and the semi-marginal countries/states. The trading is not “isolated” or “internal” but rather it participates externally or in the global market and as such, this type of market is heavily affected by the dictates of the globalization trends.

The system of economics and their flow and relations between these countries are “non-static” and “non-constant” over long and short periods of time due largely to political, environmental and cultural changes vis á vis the evolving idea of ‘consumerism’ in the global community. The traditional concept of consumerism and commoditization of goods is largely challenged, hence, the business sectors/producers should construct an effective strategy and an efficient organizational design to cope up with the world economic trend and at the same, fulfill the organization/companies objectives and visionary goals.

The success, therefore, of an international company, lies on competitive action central to the combination of an effective strategic and traditional management.  We do not displace the idea of traditional management (e.g. budgeting and marketing) because its’ function is recognized as the core of business planning but rather, we aim to rectify/improve the company’s/organization’s business performance by target shooting the errors and analyzing it within the context of the global market system (or the business environment) and the capabilities (e.g. assets, facilities, resources) of the company system.

Critical to strategic management is the anticipation of changes in the economic system, in the demands of the consumers, new business technologies, competition, and (global) economic policy developments. Co-integration of the two—traditional and strategic—would give a sense of direction to the company in the globally competitive market.

What would be an apt strategic management in the non-static global economic system? The strategic management for this is a six level schema: (1) analysis of external factors (2) scrutinizing internal factors (3) stratagem (4) execution and (5) performance assessment/evaluation.

Arguably, the logic in analyzing the external factors lies in the structural level of social formation, but, we dispense this, in favor of the transnational concept—an approach that capitalizes on the importance of transnational practices in three major sectors, political, economic, cultural with focus on transnational corporation influence and consumerism— that of which had been the latest trend in global capitalism. Also, the importance of technological improvements and their incorporation into the market is intangible in the analysis of external factors.

The presence of competitors and economic policies should not be undermined; the parameters set by international laws may be restrictive but nevertheless, they are designed to facilitate a “fair” trading system; competitors for a particular commodity should also be accounted since globalization is heavily mandated by the transnational corps. It is on the basis of such external factors the company will seek to adjust to and construct the stratagem.

The capacity of the organization, its’ parameters, its’ resources, its’ liabilities and its’ needs must be carefully examined. Financial status, the employed technology for the commodity, the operative management and the available facilities must be ‘apt’ and can be competitive with the international companies. Leadership within the system and good working force are important elements. The organization should seek to answer the following in response to its internal structure: is the product globally competitive?

After assessing the internal and external factors, devising the stratagem is the next point of economic action. Goal identification and the feasibility of the plan being constructed is high on the agenda. Crucial to this is the statistics of materialization, the impact on the company/organization, and products development over a timeframe. Critical points should be well identified as well as mitigating errors, alternative plans, and analyzing and defining jobs and responsibilities per level of organization. The stratagem developed should have the following characteristics: (1) goal-oriented; (2) creative, by-product of external and internal analysis; and (3) strength-decisive/non-vulnerable in the market; (4) feasible.

The execution of strategy requires organizational design, resource allocation, and strong motivation. Organizational design involves efficient distribution of work force, recognizing their potential, and creating effective relations between the working people. Performance assessment is the last step and is achieved by assessing the plan on its’ efficiency on its’ how’s and ends. Flow monitoring of the work and assessing statistical significance of produce as well as company growth are important evaluation points. The importance of such strategy is the actual/real test of the stratagem on the economic market.

The strategic management places special attention to the environmental monitoring. Such activity is inherently important during forecasting or anticipation of future economic events and other related global aspects which may otherwise affect the position of organization and its products in the global economic scheme. Present and past trends and their change over time is prevalent in predicting scenarios that may be of value to the company. In strategic planning, ‘predictions’ are important in that the decisions are made to be flexible.

In recognizing the role of international strategy and organizational design in the global market, the organization/company takes an initial step in ‘equipping’ itself against the highly volatile network of economic world systems and becomes, at the most, competitive.

References

Sklair, L. (1999). Competing Conceptions of Globalization. Journal of World-Systems Research, 5, 143-162.

Aguilar, F. (1967). Scanning the business environment. NY: Macmillan, Inc.

 

 

 

 

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Program Evaluation for Non-Profit Organization

An organization needs to put in place an evaluation process to ascertain whether it is accomplishing its goals or not. Such evaluation would then become a very important part of the ensuing planning process. There are two ways in which an organization conducts an evaluation. One is intended to proceed with the evaluation through the goals established by the organization. The other is to conduct the evaluation through the processes in place in the organization.

With goal-based evaluation, the organization seeks to understand whether the avowed goals have been achieved or exceeded. It has an emphasis on outputs instead of processes. Even with limited resources and difficult situations, the goal-based evaluation looks at the outputs based on the inputs and other raw materials put into the process. It is usually useful for organizations that are beating deadlines, or seeking to meet targets given limited resources, time, and manpower. Results are given primacy in this kind of evaluation (Edvardsson & Hansson, 2003).

Process-based evaluation focuses on efficiency and effectiveness. It is geared towards minimizing costs while ensuring that the goals are achieved. With this kind of evaluation, the goals to be achieved are given and are expected to be delivered. In doing so, the organization is freed from looking at the achievement of the goals because such is expected. What the organization is focusing on, however, is the way that the goals are being achieved.

Are they effective and efficient? Are they contributing to the overall objectives of the organization? Is there a way that such processes could be improved and geared to help the organization achieve more? Are the policies of the organization sound and the different departments coordinating smoothly with each other? Through these questions, the organization is taking a look at the way in which it can achieve its goals by improving its processes. The goals are important but processes are more important in certain respects because of their systemic nature. Depending on the circumstances, however, a goal-based organization may be more important than a process-oriented one (Ott, 2001).

In addition to this, process-based evaluation takes a look at the policies, programs, coordination systems, and other processes at work in the organization. It makes use of a systemic view of the organization and seeks to integrate every important aspect of the organization in the evaluation process. It is more comprehensive than goal-based evaluation as it may take more time to be completed (Ott, 2001).

Application of Evaluation Styles

Goal-based evaluation may be more appropriate in situations where the non-profit organization is evaluating together with their clientele. In the case of an organization dedicated to community development, a goal-based evaluation would be suitable for a discussion with the community regarding the achievements of the goals. Usually, if the goals are not accomplished or achieved, the people, together with the non-profit organization can brainstorm on the problems that are being faced by the community.

In addition to this, it would be important to evaluate themselves about the hindrances that they face in accomplishing the goals identified during the planning phase. Goal-based evaluation also looks at the actual outputs of the organization’s project. If the project is about reducing the number of substance addicts in the neighborhood, then a goal-based evaluation would say that the program is successful if there is a significant decline in the number of offenders.

On the other hand, process-based evaluation would take a look at the overall systemic performance of the organization. Even if the results are phenomenal if the processes are not firmly in place, then such an evaluation would be careful in proclaiming success. It would look at the coordination systems, the teamwork of the organization, as well as the ethical side of things. With such an evaluation, it becomes important to look at the overall strategy of the organization instead of simply focusing on achieved goals (Ott, 2001).

Establishing the Framework of a New Nonprofit Organization

As a new Executive Director of a nonprofit organization, there are several things I need to do in order to ensure that the organization is setup and would thrive in the process. Without the necessary legal and financial framework, the nonprofit organization is bound to fail. The following strategies outline what needs to be done for this organization.

The first step, of course, would be to define what the organization is all about—the kinds of services to be offered and the way it will be structured. The vision, mission, and goals of the organization have to be defined. The structure, on the other hand, would enable the organization to achieve its goals.

Registration and Legal Personality

The nonprofit organization should acquire its legal personality by being registered with the Securities and Exchange Commission or its equivalent. Through this, the nonprofit organization will be able to transact legally under the laws of the country and will be able to purchase property and open accounts under its own name. This also prevents unscrupulous persons to setup accounts and secure properties in their own names at the expense of the organization. With a legal personality, however, also comes responsibility. As such, the organization may sue persons and it can also be sued. It therefore needs to comply with legal requirements of organizations.

Securing Advisers

The nonprofit organization also needs legal and financial advisers so that it would not violate any law or ordinance even accidentally. A legal counsel would be needed. Although there are lawyers offering pro-bono services, it would also be a good idea to include the lawyer’s fee in the budget of the organization.

Securing Funding

As part of the strategy of the organization, the Executive director also needs to look for sources of funding from different organizations. Private corporations and even countries do fund initiatives for development. It takes a careful research of these organizations. Without a steady source of funding, the organization will not prosper and will only flounder if there is no steady funding.

As part of the financial framework of the organization, there should also be a means to ensure transparency and accountability. This would be important in ensuring that the donors trust the organization and for the organization to adhere to governmental rules such as Sarbanes-Oxley. Although SOX, as Sarbanes-Oxley is called, was meant for companies for profit, it has provisions for non-profit organizations. Adhering to these accounting regulations can also help in enhancing the overall strategy, integrity, and transparency of the organization.

Reference

Edvardsson, K. & Hansson, S. O. (2003). When is a goal rational?. Social Choice and Welfare, 24 (2), 343-361.

Ott, J. S. (2001). The Nature of the Nonprofit Sector. New York: Westview Press.

 

 

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News article analysis Organizational theory

The article by Dr. Kathy Iversen- a business consultant- provides a lot of insight into practical application of organizational theories in management. The article features Starbucks an American based company coffeehouse company which has over 15,000 chain stores in more than 40 countries. The article focuses on Starbucks rehiring of former CEO after a downward trend due to what he terms as “…myopic focus on operational effectiveness led by new, post-founder management began to negatively impact the customer experience.” (Iversen, 2008, ¶3).

The author compares Starbucks fate with Apple, Swarbs and Dell transformation after the later companies effectively applied tools and systems in the organization that boosted innovation and profitability. The following are three fundamental issues focused in the report in relation to implementation of a good and effective organizational structure that could transform Starbuck’s trend to a profitable path.

The organizational structure should apply systems and models that are dynamic thus are able to change with the corporate world for the business to remain profitable.
A good organizational model should have effective channel of communication, feedback mechanism and facilitate good response and decision making process.
The organizational culture and work environment models should facilitate optimal performance by ensuring that employee capabilities are properly utilized and encourage responsibility and innovation in the workplace.
Dynamism in the corporate world.

The corporate sector in modern times is subject to perpetual change therefore, organizational models adopted should accommodate this change in their organization by putting in place relevant tools to prepare it for this eventuality. External environment analysis focusing on customer, competitors changing trends and adoption of new marketing strategies are vital to ensure that the company remains relevant thus profitable.

The author gives an example of Apple which changed to music enjoyment instead of computing to recapture its market and future profitability (Iversen, 2008). This shows how effective a good which focuses on investing in new fields can help a company reinvent itself into profitability path. Bureaucratic organizational model tend to focus on cost cutting rather than adoption to the innovation, for a company such as Starbucks given its level of maturity, implementing models that focus on new ideas would be the most appropriate in a move to reclaim its lost glory (Daft, 2001 pg. 107)

Effective communication in Organizational Models.

Effective communication is one of the most important elements in establishing an organizational model. There are two main distinction namely formal communications which is utilized in big established diverse companies and informal communication channels which lead to open interactive dialogue both horizontally and vertically in the organization.

The advantages of the later is that it will help facilitate free flow of information thus for analysis of the market, an element which is essential for most businesses. In addition informal means of communication works best in volatile and uncertain environments such as the one which Starbuck’s is facing thus if correctly implemented can lead to quick response and decision making (Daft, 2001, pg.14).

Organizational culture.

According to Daft (2001, pg 30) scholars have pointed out that corporate culture and sound internal processes are key elements in good organizational models to the extent that they promote effective running of the organization. A fluid and flexible structure will encourage constant experimenting and learning thus ensuring better policies, procedures are adopted to ensure dynamism and innovation in the organization. For instance, given the fact that Starbucks is a service oriented company, employee training and empowerment can lead to certain beneficial attributes such as, smoothing the progress of change since they directly interact with the customer thus can be able to get the information needed by management to effect change and enhanced customer relation and satisfaction thus building of clientele and profitability (Iversen, 2008).

Conclusion.

Though, the author did not explore on the organizational approach and design, the best design proposed in this paper would be a decentralized approach with emphasis on organic systems of organization as opposed to mechanistic/ bureaucratic approach. Firstly, given that Starbucks is a multi national company with coffee houses all over the world. A centralized system will fundamentally inhibit flexibility and restrict decision making process and timely response to customer needs. On the other hand a decentralized approach will encourage each store to make decision based on customer needs, create diversity and promote dynamism and innovation factors that are vital for profitability.

However, this approach might lead to loss of control and direction by top management thus leadership skills are essential to ensure that while chains are flexible, the company’s vision, brand name and direction is uniform to ensure sustainability and balanced growth. Secondly, good organic structures ensure that communication is free-flowing, employees are empowered and well motivated and generally the internal processes lead to optimal production hence growth (Daft, 2001, pg 64). There should be both formal and informal channels of communication that are strong and consistent to ensure that management is in control and allow timely information flow in the organization.

REFERENCES:

Daft, R. (2001) Essentials of Organization Theory and Design. South-Western.

Iversen, K. (January, 15th 2008). Brewing a fresh pot at Starbucks. Forbes Magazine. Retrieved March 11th 2008 from http://www.forbes.com/personalfinance/2008/01/15/starbucks-schultz-apple-pf-ii-in_ki_0115soapbox_inl.html

 

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Discuss the Role of the Supervisor in Organizational Planning

Course Title: Supervisory Management Submission Date: 22 October 2012 One Stop Production Company’s Report TABLE OF CONTENTS Summary of the Case3 Statement of the Problem4 Core Problem4 Satellite Problems6 Recommendations 16 Reasonable Assumptions19 Bibliography 20 Summary of the case

One Stop Production is a garment manufacturer specializing in the production of school uniforms. Ms. Susan Holford shared the management of the business with her father Mr. Amos Holford over the past two years and will assume full responsibility for leadership of the company upon his retirement. She has a team of supervisors whose length of tenure with the business exceeds her own involvement with One Stop Production, and in general employees have performed the same functions from the business’ inception. The leadership styles of Susan and her father differ drastically.

Motivated by her intention to manage the business in a different manner than her father, Susan is overwhelmed by the difficulties facing her – particularly the declining production and sales figures, and what she views as the refusal of the employees to improve production levels. This report outlines the challenges facing the business and its new manager Susan. It will first summarize the existing problems, and then establish specifically the core problem and satellite problems that exist; where necessary reasonable assumptions will be drawn and supported by evidence from the business.

The report will then provide recommendations that will empower Susan, as leader, to chart the future course of the organization. This will be followed by a conclusion that unifies the various elements of the report. STATEMENT OF THE Problem Within different organizations one will find varying organizational structures and environments which contribute to the overall organizational culture. Entwined in here are the management and leadership styles, values and beliefs that exist within the organization.

As this case analysis was thoroughly investigated, we discovered that the One Stop Production Company had some major problems (Please refer to Exhibit 1. 0). After careful consideration and collaboration it has been established that the core problem which hinders the success of the company is “Ineffective Leadership and Organization Management”. Whilst the satellite problems include: ? Poor Organizational Structure ?Poor Management * No Clear Goals ?Ineffective Communication CORE PROBLEM Ineffective Leadership In this company, we will examine the leadership skills within the organisation.

A leader’s role is to set the direction for establishing a clear vision by taking risks, sharing and communicating the vision with others so that they will follow willingly. It also includes motivating and inspiring staff by expanding energy through producing change, aligning contingencies by bringing everyone together and balancing the conflicting interests of all members or stakeholders. (www. businessdictionary. com) “The art of getting employees together on a common platform and extracting the best out of them refers to effective organisation management. ” (www. managementstudyguide. com) SATELLITE PROBLEMS

Poor Organisational Structure An organisational structure defines how job tasks are formally divided grouped and coordinated (Robbins & Judge 2010, p. 488). Within the One Stop Production Company the organizational structure was not clearly defined which often resulted in conflicts due to mixed instructions. Mr. Holford, although delegating the majority of functions and running of the operation to his supervisors, still constantly moved around giving random instructions to different employees regardless of department. Ms. Holford wants to restructure the organization having roles and job functions clearly defined.

In addition she intends to appoint specific supervisors to specific departments which would define the levels of authority – Line or functional; allowing both employees ad superiors to know who was responsible for what. Poor Management Management involves coordinating and overseeing the work activities of others so that their activities are completed efficiently and effectively (Robbins & Coulter p. 6). “Ms. Holford never found the time to pursue management because her father had left the management of all three areas of the organization largely up to her” Ms.

Holford exhibits a type of autocratic style of management and does not trust the knowledge of the staff. This lack of trust has resulted in her inability to select specific supervisors to specific department. She has very good ideas and intentions for the organization however a lack of management training proves to be a major deficiency. She does not have the co-operation of the workers and as a result her suggestions are not acted on. Ms. Holford believes the selection of a manager to run things for her is imperative however she does not know how to go about this process.

Ineffective Communication Communication is ‘the transfer and understanding of meaning. It serves four major functions within a group or organization; control, motivation, emotional expression and information. ’ As seen in this case the flow of communication serves one main purpose and that is control. Employees are made aware of Ms. Holford’s suggestions and intentions at meetings however there appears to be no facility for feedback or input from the employees. The lack of trust in the workers’ knowledge results in a ‘one way’ flow of communication. No Clear Goals / Targets The goals of the organization have not been clearly defined and relayed to the workers. The levels of production and sales which are being sought have not been laid out to the workers. RECOMMENDATIONS * Management and Leadership training for Ms. Susan Holford. This is very important so as to develop within her the skills which are necessary for her to manage the organization as well the workers. Leadership & Learning are indispensible to each other. It is known that effective Leaders are not always born but can be trained. Hire a Human Resources Manager – Human resource managers have a key role to play to help a company achieve its objectives and run effectively. HR managers assist employees with matters relating to their employment and also help employees with questions regarding health insurance and other benefits. Hiring and firing employees are both important functions performed by the human resources department because there are certain procedures to be followed. However, a crucial role of human resources is to work closely with upper management as well as the staff to ensure positive company relations at all times. To assist with the hiring of the Human Resources Manager, we have attached the following document. Please see Exhibit 2. 1, 2. 2, 2. 3 and 2. 4) * Implement a five year strategic plan – This should include the Goal setting theory which involves establishing specific, measurable, achievable, realistic and timely  (S. M. A. R. T )  objectives. Work on the theory of goal-setting suggests that it’s an effective tool for making progress by ensuring that participants in a group with a common goal are clearly aware of what is expected from them if an objective is to be achieved. Delegation of work – A General Manager should be chosen with the overall responsible for the day to running and they would report directly to Ms. Holford. In addition specific supervisors for the various departments should be put in place to oversee the running of those departments. Training should also be organized for all supervisors. The supervisors are a direct link between management and the workers. (Please refer to Exhibit 3. 0). * Communication has to become a ‘two way’ process and allow for feedback from the workers. Ms.

Holford must spend time with key supervisors and staff and learn the business, while also truly learn about the staff. She should form a committee of Management from among the key stakeholders in the Company. The Supervisors should be able to communicate any new production and sales targets to their teams directly. * Goals / Targets – Production and Sales targets should be set and the targets should be known to all members of staff. The overall goals of the company should be clearly stated and ensure that the operation of each department coincides with the overall goals of the organization.

Sales records for the past five years should be analyzed so as to pick up on trends and a comparison done with a company in a similar market. For instance sales maybe tied in to the start of the school year where for obvious reasons they will be at their highest. This research would aid in the setting of the targets and goals and also identify reasons for drops in sales at particular times. * Production Levels – The workers have been doing the same jobs since inception.

New technology may be available to increase the efficiency of some processes and the training of workers in the use of new technology or processes to increase productivity and overall job efficiency. * Staff Morale – Despite receiving annual wage increases the employees still appear unhappy and are unwilling to improve production. Ms. Holford should pay attention to what the needs of the workers are. Look at improving the working environment, staff relations. Incentive schemes can be devised to encourage workers to produce more and build up their morale. CONCLUSION

The members of our group believe that after thoroughly analyzing the main issues of the company, and implementation of the recommendations stated would improve the daily operations and production at the One Stop Production. However it should be noted that these recommendations have to be implemented overtime and the changing process should be a gradual one as from the case it appears that the employees are very resistant to sudden change. It should be gradually incorporated into the activities and employees should be clearly shown the importance of it to the company and also the benefits that can be reaped through their assistance.

BIBLOGRAPHY Kotter, John P. John P Kotter on what leaders really do: Harvard Business Press, 1999 Robbins, SP. ; Coulter, M. Management. New Jersey: Pearson Education, Inc. , 2007 Robbins, SP. ;Judge, TA. Organisational Behavior Thirteen ed. Upper Saddle River, NJ: Prentice Hall, 2008 Robbins, Stephen P. and Judge, Timothy A. Organisational Behaviour. New Jersey: Pearson Education, Inc, 2009 Mullins, Laurie J, Management and Organisational Behaviour 8th Ed, p. 382 www. businessdictionary. com Barbados Institute of Management and Productivity – Course Manual 2012

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Lgbt Organizations

LGBT Supportive Organizations The first website I visited was called No Longer Silent: Clergy for Justice. Their main focus was on an alternative Christian perspective on the issue of homosexuality. They basically believed in advocating justice for all, especially Gays, Lesbians, Bisexuals, and Transgendered persons. The support that I see they give is a sense of belonging. They give the support that many seek with is religious acceptance. This organization is very unique because for many years the church has never really given gays a home; No Longer Silent gives us that place to go to for moral support.

Their website gave educational materials like articles on news pertaining to our community. Also materials like scriptures from that give the LGBT community, who are not familiar with the bible; some interpretations and teachings. The next website that I visited was called Gay, Lesbian, and Straight Education Network. Their focus was on assuring that each member of every school community is valued and respected regardless of sexual orientation or gender identity/expression. They give support by giving students internet resources on bullying. They also support our LGBT community by starting their campaign “Think before you speak”.

It helps us inform the world that words do hurt and helps in the prevention of anti-gay language. Their website gives educational materials like Facts about Sexual Orientation. They even give resources like crisis support and advocacy. Then I visited the website for Equality Arizona. Their focus is to secure, protect and defend the rights and welfare of LGBT people in Arizona. The support they give is huge throughout the state of Arizona. They are the ones that fight for our rights. They support us in legal stand points like marriage and adoption.

As for educational materials, they give many blogs on how our issues are coming along. For example: They explain how our local LGBT leaders respond to President Obama’s Declaration of Support for Marriage Equality. Next website visited was PFLAG Phoenix. Their focus is on celebrating diversity and envisions a society that embraces everyone, including those of diverse sexual orientations and gender identities. Their support is very important to our community. Their support is being our family with open arms. It gives parents and families a place where they can show their support for us.

They have a lot of educational material for not only our LGBT community but for our families too. It gives terminology, some theories, and most of all many answers to questions. The last website I visited was 1n10. Their focus is on providing our youth with the tools to improve their self-esteem and help with acceptance of who they are. Their support is how they create a safe space, mentally and physically, for youth ranging for 14-24. Their support also includes helping teens by providing homeless shelters and suicide prevention crisis lines. Educational materials were scarce.

I really didn’t find anything other than a lot of resources for different problems our LGBT youth may encounter. To say the truth, I never knew any of these organizations existed. The one that melted my heart the most would be the PFLAG website. Reason being is all LGBT people look for family acceptance. All the pictures of the protesters made me smile. The 1n10 website also struck me because to me the youth is our future. If they are not educated or helped with open arms, society just might take steps back instead of forward. Our adolescent years are crucial especially being LGBT.

The Equality Arizona website gives me hope that one day they will push far enough to make Marriage and Adoption legal for us. I think that step would push us through the red tape at the finish line. No Longer Silent is another milestone. I learned that they gives us a place of religion that doesn’t outcast us or tell us we should change because if we don’t we’ll go to hell. That’s important to me because during my coming out I lost faith in religion. The GLSEN website shows me that one day LGBT could one day cease forever. All of these websites posed as a great learning experience.

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Organizational Behavior Chapter 5 Summary

Chapter 5 Perception is a process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment. •People’s behavior is based on their perception of what reality is, not on reality itself. •The world as it is perceived is the world that is behaviorally important. Attribution Theory: Judging Others Our perception and judgment of others are significantly influenced by our assumptions of the other people’s internal states.

When individuals observe behavior, they attempt to determine whether it is internally or externally caused. Internal causes are under that person’s control. External causes are not – person forced to act in that way. Causation judged through: Distinctiveness — Shows different behaviors in different situations. Consensus — Response is the same as others to same situation. Consistency — Responds in the same way over time. Errors and Biases in Attributions

Fundamental Attribution Error – Blame on people first, then situation. Self Serving Bias – If won, it’s our success, if failed, their fault. Selective Perception – selectively interpret what they see on basis of their interest, background, exp and attitude. Halo/Devil Effect – draw general impression on one of their trait. XX?? Contrast Effect — evaluation of someone’s characteristics that are affected by comparing with other who rank higher or lower on the same characteristic Another Shortcut: Stereotyping

Profiling – form of stereotyping which member of a group based on a single, usually racial traits Specific Shortcut Applications in Organization Employment Interviews – perceptual biases raters affect the accuracy of interviewers’ judgments, formed in a glance, 1/10 of a second Performance Expectation Self-fulfilling prophecy (Pygmalion effect) — lower or higher expectation of leader leads to productivity of employees, critical impact for employees. Perception and Individual Decision Making Problem is a perceived discrepancy between the current state of affairs and esired state Decisions are made from among alternatives developed from data Therefore, problems must be recognized and data must be selected and evaluated. Decision Making Models in Organizations Rational Decision Making – the “perfect world” model, assumes complete information, all options known and max payoff Bounded Reality – “real world” model, seek satisfactory and sufficient solutions from limited data and alternatives Intuition – a non-conscious process created from distilled exp that results in quick decision. (usually are good decisions) Common Biases and Errors in Decision-Making:

Overconfidence Bias – believing too much in own ability to make good decision, especially outside of own expertise Anchoring Bias — Using early, first received info as basis for making subsequent judgments Confirmation Bias – selecting and using only facts that support our decision Availability Bias — emphasizing info that mostly readily at hand Escalation of Commitment – Increasing commitment to a decision in spite of evidence that it’s wrong Randomness Error – creating meaning out of random event, superstitions Winner’s Curse – higher bidder pay too much due to overestimation Hindsight Bias – believe it could be accurately predicted beforehand after outcome is known Individual Differences in Decision Making Personality: Conscientiousness may affect escalation of commitment. Achievement strivers are likely to increase commitment, while dutiful people are less to have this bias. High self-esteem people are susceptible to self-serving bias. Gender: Women analyze decisions more than men (rumination), and twice likely to develop depression. These differences develop early. Organizational Constraints

Performance Evaluation – managerial evaluation criteria influence actions Reword Systems – managers will make the decision with the greatest personal payoff for them Formal Regulation – limit the alternative choices of decision makers System-imposed Time Constraints—Restrict ability to gather or evaluate info Historical Precedents – past decision influence current decisions Ethics in Decision Making Ethical Decision Criteria Utilitarianism – decisions made based solely on the outcome, seek the greatest good for greatest number, mostly used by business people. Pro: promote efficiency and productivity Con: ignore individual rights, esp. minority Rights – decision consistent with fundamental liberties and privileges, respect and protects rights of individuals Pro: protect individual from harm, preserve rights

Con: create overly legalistic work environment Justice – imposing and enforcing the rules fairly and impartially, equitable distribution of benefit and costs Pro: protect the interests of weaker members Con: sense of entitlement rises Improving Creativity in Decision Making: Creativity – ability to produce novel and useful ideas. People who score high in “Openness to Exp”, intelligent, independent, self-confident, risk-taking, have an internal locus-of-control, tolerant of ambiguity, low need for structure and preserve the frustration face The Three-Component Model of Creativity – proposition that individual creativity results from a mixture of three components Expertise – foundation

Creative – Thinking Skills – personality characteristics associated with creaticity Intrinsic Task Motivation – The desire to do the job because of its characteristics Global Implications Attributions – cultural differences in the ways people attribute cause to observed behavior Decision Making – no research on the topic, assumption of “no difference” and based on awareness of cultural differences in traits that affect decision making, this assumption suspect Ethics – No global ethical standards exist, Asian countries tend not to see ethical issues in “black and white” but as shades of gray. Global Companies need global standards for managers.

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Social Organizations in Turkey

This paper examines that social organizations in Turkey. The efforts of civil initiatives emerged. against to increasing and diversifying problems of World such as war, conflict, natural disasters, famine, drought, environmental problems, infectious diseases, educational issues,When the goverment institutions cannot provide basic sevices , civil society organizations engaged in. In modern Turkey women rights start with revolutions of Mustafa Kemal Ataturk. Mustafa Kemal Ataturk outlawed polygamy and abolished Islamic courts in favour of secular institutions. After that in 2001 Turkish Civil Code changed.

This change provides women equal rights with men in terms of marriage, divorce and property ownership. In addition , Penal Code provides female sexuality for the first time as a matter of individual rights, rather than family honour. Nowadays Tutkey has so many organizations which protects women right and women’s shelter foundations. On the other hand its hard to say that most of them reach their goals. Most of this organizations locate in urban area,however there are a few organizations in rural area. In Turkey women who live in rural area are need more protection orf their rights.

In addtion most of women cannot join these organizations because of their family or husband. In Turkey ,sivil society organizations have great importance because of the goverment cannot its duty. I choose foundation for the Support of Women’s Work (FSWW),its a reformist,revisionist and expressive social organization. In addition FSWW is against to group conflict in Turkey. I heard this organization from a friend of my mother. I went their Office in Beyoglu,and interview with a kind woman who Works there as a volunteer general secretary.

The first aim of FSWW is that recognizes basic women’s knowledge and effort in fighting poverty and contruction of their lifes ,and right to set up and solutions to their own concerns. Secondly,respects local woman values and avoids isolate themselves from their society. Thirdly,women are equal to men and it should be consideres as liet hat all over the society. Finally,they think that women’s equal participation in political and economic can only be achieved at the community or local level , is cooperation between local authorites and other stakeholders in society.

When I ask her ‘why you choose this organization’ she answered – ‘Acording to me this is the right place to defend the women rights and proviede jobs for women to gain them into the society and giving women economical freedom. ’ According to informaton that I learn from she FSWW aims to help to women to determine their individual and collective priories, develop and implement joint solutions,develope their capacity and strenghten communication between them. In addition it supports training ,credit ,cnsulting and marketing in order to increase women’s participation in conomic procesess.

These are some programs of FSWW ; Early Child Care and Education Programs FSWW develop alternative ways in expanding early child care and education services to low-income communities, through the leadership and advocacy role of grassroots women. With an educational approach bringing the children, families, educators and the community together, women cooperatively manage high quality early childcare and education programs. This program is internationally awarded and accredited by Vanderbilt University(USA). [1] Business Development Support

Training and monitoring support to enable women to develop business ideas by analyzing the existing local economic and market opportunities and their own skills, and new products with market potential are developed and women’s skills are improved accordingly. [2] Saving Groups Hundreds of women are organized in saving groups of 10-15 members where they bring their own savings and create their own funds to borrow for their financial needs. [3] NAHIL Shop: FSWW established a shop at the ground floor of its building in Istanbul, where various kinds of products (handmade accessories, decorations etc. produced by women from all around Turkey are sold as well as second hand clothes. The women’s products are also marketed through internet on the shop’s web site and other e-commerce sites. FSWW also created a regular second hand bazaar under the same name, with local branches run by women initiatives, the profit of which goes to local early child care and education initiatives. [4] ? On the other ,In Turkey so many women cannot join these programs because of their husband or family pressure. According to she ,their first aim to help these women who cannot join these programs because of society pressure.

It is very easy to being a member of FSWW. After the registration ,members can be aware of the meeting by the telephone and mail. So many women find out this organization by word out mouth and by the internet site. Group conflict and gender is one of the most important issues of Turkish Society. So many women treated as second-class citizens. Social organizations such as FSWW try to change this idea. In addition goverment is not succesfull in terms of defending women rights. The law system is dominated by men because of that decisions are always protects men firstly.

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Case Study of a Cross-Cultural Organization

Organizational Behavior Final: Clayton J. Ollarvia [email protected] com Organizational Behavior October 4, 2012 Looking into Nestle S. A and its disconnect with Cross-cultural communication and decisions Nestle SA is a Swiss Company engaged in the nutrition, health and wellness sectors. It is the holding company of the Nestle Group, which comprises subsidiaries, associated companies and joint ventures throughout the world. It has such business units as Food and Beverage, Nestle Waters and Nestle Nutrition. It is also active in the pharmaceutical sector.

It divides its products into Powdered and liquid beverages, Water, Milk products and Ice cream, Nutrition, Prepared dishes and cooking aids, Confectionery, PetCare and Pharmaceutical products. The Nestle Group is managed by geographies (Zones Europe, Americas and Asia/Oceania/Africa) for most of the food and beverage business, with the exceptions of Nestle Waters, Nestle Nutrition, Nestle Purina Petcare, Nespresso, Nestle Professional and Nestle Health Science which are managed on a global basis – these we call the Globally Managed Businesses. We also have joint ventures such as Cereal Partners Worldwide and Beverage Partners Worldwide.

In regards to the operations elsewhere, Nestle USA caters to cravings on this side-of-the-Atlantic, from a child’s sweet tooth to a grown-up’s caffeine fix. The company is a major subsidiary of Swiss food giant Nestle S. A. Nestle USA produces hundreds of well-known food brands, including frozen pizza (Tombstone, DiGiorno), chocolate and candies (Baby Ruth, Goobers), beverages (Nestea, Taster’s Choice, Nesquick), juices (Juicy Juice), canned milk (Carnation), ice cream (Edy’s, Haagan-Dazs), baking goods (Nestle Toll House, Libby’s), and prepared meals (Stouffer’s, Lean Cuisine). http://www. hoovers. com/company/Nestl%E9_USA_Inc/cysfyi-1. html Specifically where I see Nestle could benefit from understanding some of the Organizational Behavior practices is in the realm of (cross-cultural) decision making and in Personality Traits. Nestle needs to recognize how to make decisions based upon more than just sales goals. A common definition of decision-making is the process of choosing a course of action for dealing with a problem or an opportunity. Schermerhorn, John R. (11/2011).

Organizational Behavior, 12th Edition [1] (VitalSource Bookshelf), Retrieved from http://online. vitalsource. com/books/9781118426319/id/L9-1-1 One of the biggest problems with Nestle is that it is indeed a global company. A majority of the Presidents and Vice-Presidents and senior staff all reside in Switzerland and travel inconsistently to other countries and regions. This traveling issue makes it hard for management to be able to effectively know how to 1. Communicate with others in other countries and 2. Understand the differences in cultural mores from country to country.

Moreover things that affect the economy in the Eastern countries does not effect the west. However, more than likely they expect things to work in similar if not the same ways from culture to culture and economy to economy. What this problem lends itself to is a lack of cross cultural management and ability to understand the proper ways to address other cultures. Although those of the Swiss culture tend to be very manner-able and well liked, often times we would find them somewhat unrelenting and slightly rude on conference calls and communications.

A large faction of what I saw was miscues from managers not being able to communicate across different ethnic and cultural lines. This was even more evident with regional managers having to disseminate information to retail operations across the border and into other geographies. After going through all of our upcoming TCO’s I would like to investigate how given an understanding of the communication process and given specific incidents of cross-cultural communication problems, I plan to develop a strategy for improving organizational performance through the improvement of cross cultural management process. Nestle should first look at adopting a very extensive guide to cross cultural awareness * All managers should be privy to cross cultural communication programs to ensure compliance with cultural guidelines At the beginning of every cross-cultural management process is an encounter between two or more members of different cultures. In this encounter both participants communicate, watch, and react to each other’s behavior. This behavior and communication is often not interpreted in the correct way, but according to the cultural program of the observer.

Because it is dif? cult to understand the other’s thinking, interpretation is often wrong and does not allow insights into the attitudes and values of the communicators or interactions. Culture can best be described through three main concepts: values, attitudes, and behavior. All three signify culture and allow us to differentiate from other cultures. A survey of current literature consistently indicates that the contemporary business context is globally interdependent and interconnected.

It further demonstrates that corporate leaders should provide opportunities for their managers in international assignments to learn cross-cultural business etiquette in order that they will excel in their interpersonal relationship overseas. (Sizoo, 2007, p. 84) Being that Nestle has so many plants, locations and does business in over 100 countries worldwide, one could argue that it would be essential to have multi cultural norms and ethics guidelines. Throughout my tenure, the main focus of the organization was to produce sales based upon projections from Head Quarters.

This can be problematic seeing as expectations for sales is not weighted based upon the social economy. Cross-cultural misunderstandings often have some seemingly deep roots. Even if we speak with people in English and communicate directly what we intend to say, the message comes across differently than anticipated. Recognizing the need for a Nestle cultural program would be a dif? cult task. Most people are born and bred in a very particular cultural environment, they can only perceive and understand the world, their deeds, and counterparts’ reactions through their very own cultural perspective.

This perspective is a strong ? lter through which most people understand, interpret, and process information in a particular way. And in most cases, these same people do not recognize this ? lter. Our own culture and way of doing business seems sovereignly logical and “normal” that we can hardly think of a better or different way of doing things and managing in ? rms. I would argue that this view is also true for managers who grew up on the other side of the world; they have their own (very logical and often very successful) ideas about how to do business.

A good portion of cross cultural misunderstandings come from how people think and feel about other cultures, which I would argue is made up generally of stereotypes. Stereotypes are generalisations help us to simplify, classify and in general attempt to make sense of the world. They occur when we infer qualities about a person based on evidence of a single characteristic. For example, we may assume that because someone is Hindu that they work in the IT department. This assumption is likely to be based on our previous experience of people with Hindu people or from information we have gathered from the media or other people.

The problem is of course that stereotypes do not always apply. It is certainly not the case that all Hindu people work in information technology. We are most likely to hold stereotypes about groups of people who we do not perceive to be like us and of whom we have limited experience. It is essential for a company the size and with as much reach as Nestle to be able to understand the negative aspects of both behaviors of cross-cultural misunderstandings and avoid stereotypes and learn how to cross-culturally manage both organizationally and or on the institutional level.

I would argue that this means having enough awareness of both their host culture and their home culture to be able to make correct managerial decisions regarding its organization’s work force, its commercial markets, the community in which it operates, and the country, which is its host. A good example of Nestle’s non-understanding of cross cultural awareness is the all but forgotten Nestle Infant Nutrition scandal of the 1970’s. Here Nestle sent several of its work-force into third world countries in order to push their infant nutrition.

Now at the time the formula was doing well in countless other countries and was practically flying off the shelves. However, one of the KEY necessities for the formula was for it to be added to water. Being that at the time no one in Switzerland chose to know enough about these third world locations to see that the water that they had access to was wildly polluted and all but poisonous to small children. If Nestle had taken steps in preparing managers for multinational assignments, they would have been abreast of cultural sensitivity, understanding the importance of maintaining business relationships, and impression management.

They should be informed about the complexities in international cultures and human resources management The way people communicate varies widely between, and even within, cultures. One aspect of communication style is language usage. Across cultures, some words and phrases are used in different ways. For example, even in countries that share the English language, the meaning of “yes” varies from “maybe, I’ll consider it” to “definitely so,” with many shades in between. (http://www. pbs. org/ampu/crosscult. html) This theory alone is what makes having a viable and understandable guidelines for multi-cultural communication.

We will admit that the difficulty in crafting such a document would be not only time consuming but also, extremely tiring as in order to create such guidelines one would have to familiarize themselves with hundreds of different cultures at any given time, however I would argue that a successful guidelines would not just solely be based on the specific interactions of each country but instead be focused on a general understanding of how managers and ALL employees should seek to treat each other across local, national and especially international lines.

The critical process of making decisions, reaching mutual agreements, and building consensus has taken a new dimension because of differences in business etiquette and ethical practices. Cross-cultural awareness skills and interpersonal negotiation competence are a pre-requisite to effective management of a multination workforce. (Okoro, 2012, p. 132) Cross-cultural awareness encourages the recognition of cultural differences while also noting similarities through which communication, understanding and relationships can be forged. The following points reflect the value of gaining a stronger sense of cross-cultural awareness:

Reduces misunderstandings and enhances trust • Understanding and trust can be deepened when each government is more aware of how its and the other government’s cultural background influence their perceptions, values and decisions. Aids in planning, setting goals and problem solving • Each organization can plan and problem solve more effectively as they will be more attentive to what is important to them and the other party Communication, though variously defined, generally describes a process by which information is exchanged among two or more people in a given context.

Ultimately, this process of exchanging information is bound by a purpose: that is, to reduce uncertainty and develop a common understanding among the participants (Kawar, 2012). Cross Cultural communication is another area that I believe Nestle could greatly benefit from on a global scale. Not all too dissimilar to that of awareness communication allows you to take what you know via that of awareness and be able to translate those things into how you speak and interact with you clients worldwide.

Success or failure in managing a diverse or multicultural workforce largely depends on the ability of managers to communicate effectively with people from different backgrounds and nationalities. International business is the outgrowth of globalization, which is driven primarily by economic interdependency and advances in technology, but the success in global business ventures will be affected by the inability of international managers to understand appropriate business etiquette, customs, and values needed to conduct business among nations of the world. (Okoro, 2012, p. 132)

Okoro assesses that management and communication scholars have consistently argued that the success of managers on international assignments depends largely on effective cross-cultural communication. Because of its importance, a number of high-growth organizations competing globally make a conscious effort to hire multi-lingual people from varied cultural backgrounds and nationalities. Here in particular is a place of great opportunity for Nestle to grow fundamentally. Having a manager in play that is already familiar with the customs and languages of the area is vitally important to the success and overall outcome of the business.

Now the issue comes into play is that while Nestle does have staff all around the world in numerous countries that are indigenous to those specific areas, they still have a strong expectation and in some ways an imposing will on those people. How does that affect the communication process? Well If in any given country it is impolite to wags one finger as they speck yet that practice is customary in Switzerland, that in and about itself makes for very difficult deliberations. Cross- cultural communications problems may occur if all individuals within a team do not use the same language, nor norms.

In these situations, for ease of communication, the team often chooses a common language that they can use for group communications. Communication differences between individuals can occur on several different levels but for the sake of consistency I will use the finger example I used in the previous paragraph: Gestures form a significant part of methods of communication. However, there are few if any universal gestures. Non-verbal behaviours or ‘body language’ vary considerably from one culture to another.

For example, a high level of eye contact is considered a sign of attentiveness in some cultures and a sign of rudeness in others. In some cultures individuals are encouraged to express their emotions openly, while in others openly demonstrating feelings is discouraged. These differences in body language can lead to misunderstandings between people of different cultural backgrounds. Norms are culturally defined rules for determining acceptable and appropriate behavior (Okoro) They include those that govern social situations and conversational routines such as greetings, making requests, and expressing various emotions.

In intercultural communication interlocutors may be tempted to transfer their cultural norms to contexts that are not appropriate In conjunction with this Sizoo states that, while some organizations recognize the importance of international business, training and development programs often deal inadequately with the potential conflicts that result from cross-cultural interactions. Too often this training addresses only the cognitive level–focusing on the dos and don’ts. When managers pursue careers in international business they must prepare for a life in a foreign cognitive, affective, and behavior context.

That preparation must include learning cross-cultural considerations intellectually, emotionally, and experientially. I believe that Sizoo’s outline for effective communication training is as outlined. I. Cross Cultural Interview II. Handling a Cross Cultural Event With Cross Cultural interviews the gist of it is each participant interviews one foreigner who is from a culture different from his or her own, and whom he or she has never met before. This exercise provides experience and builds skills at the first two levels of cross-cultural management, self and interpersonal.

This orientation into cultural norms will help management better decipher different cultures and how to break the ice. I have seen the contrary of this especially within Nestle in the early stages of my career. In two distinctly different interactions with management I was told, once that my manager had never worked with an African American man and that he needed to adjust how he communicated since there may be a barrier between us. In a different interaction another manager, while speaking with an Asian coworker said hey I love Chinese food, can you make any by yourself.

Having to initiate and manage an interaction with foreign stranger addresses the emotional challenges of developing cross-cultural expertise. With handling cross-cultural events Sizoo states that, each cultural incident describes a realistic cross-cultural misunderstanding, four plausible explanations for the misunderstanding, and an evaluation of each explanation. In this activity trainees discuss and demonstrate the cross-cultural incidents. The emphasis is on having participants project themselves into the scenario so they “experience” the cultural conflict motionally as well as intellectually. This type of training could be paramount in helping managers overcome communication problems that may arise while dealing with a cross-cultural organization. I use the example of the formula debacle once again here. I would argue that although no one could have readily predicted that such a tragedy would have occurred, if managers were trained on how to defuse problems culturally then I would argue that the explosion of public opinion would not have happened.

Being amply prepared to deal with cultures is one of the key fundamental necessities of any successful business. Now while Nestle was able to eventually recover if people had been trained in this process a bit earlier than, again perhaps things would not have escalated to the points that they did. Through this process managers would learn how to accept the virtual inevitability of making some cross-cultural errors, but not to accept repeating the errors. They would also learn that errors in appropriate behavior are far worse than mere inability to speak the host country language.

The participants further learn to strategically recover in such situations and soon afterwards seek out explanation of their cross-cultural error from a member of the host culture. The key take away with this exercise is that management learns how to develop and over time eventually master communicating cross-culturally in hostile environments. Within the cross-cultural news portion of the exercise, managers would be required to find a newspaper or magazine article that describes an American work organization adapting, or having difficulty in adapting, to the culture of a foreign country.

Participants present an analysis of the cross-cultural differences to the group as a whole and explain why the American organization was successful or unsuccessful in resolving its cross-cultural differences. This allows for managers to get firsthand experience of a similar company to Nestle (ideally) and analyze some of the struggles that they are currently experiencing. This first hand ensures that managers will be able to not only potentially defuse similar situations in the future but even potentially understand the communication process in order to better facilitate a smoother transition to other cultures.

In cross-cultural communication, anxiety and uncertainty are heightened by cultural variability. If the differences between cultures are profound, anxiety and uncertainty would increase when members of the different cultural groups engage in cross-cultural communication. In the same way that theories such as The Theory of Communicative Competence (as described by T. A. McCarthy) suggests that cross-cultural norms practices etc should be taught in schools, is the same was one could argue that cross-cultural communication should be taught by all those organizations, similar to Nestle that have offices all other across the globe.

With both of these initiatives I would think that Nestle would be able to propel itself by leaps and bounds over cross-cultural boundaries. And yes to be honest Nestle has moved to rectify SOME of the issues outlined in this expose, however again I do believe that there does still exist some behavior and speech that is not conducive to the cross-cultural atmosphere. 1. Schermerhorn, John R. (11/2011). Organizational Behavior, 12th Edition [1] (VitalSource Bookshelf), Retrieved from http://online. vitalsource. com/books/9781118426319 2. Sizoo, S. , Serrie, H. & Shapero, M. (2007). Revisiting a Theory-Supported Approach to Teaching Cross-Cultural Management Skills. Journal Of Teaching In International Business,18(2/3), 83-99. doi:10. 1300/J066v18n02_0 3. Okoro, E. (2012). Cross-Cultural Etiquette and Communication in Global Business: Toward a Strategic Framework for Managing Corporate Expansion. International Journal Of Business & Management, 7(16), 130-138. doi:10. 5539/ijbm. v7n16p130 4. Kawar, T. (2012). Cross-cultural Differences in Management. International Journal Of Business & Social Science, 3(6), 105-111.

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Robbins Organization Behavior Leadership Quiz

Chapter 11 Leadership 1) John Kotter’s view argues that management focuses on coping with complexity, whereas leadership focuses on coping with ________. A) conflict B) success C) day-to-day matters D) morale E) change Answer: E Explanation: E) John Kotter of the Harvard Business School argues that management is about coping with complexity. Good management brings about order and consistency by drawing up formal plans, designing rigid organization structures, and monitoring results against the plans.

Leadership, in contrast, is about coping with change. Leaders establish direction by developing a vision of the future; then they align people by communicating this vision and inspiring them to overcome hurdles. Diff: 2Page Ref: 150 Objective: Management and Leadership Quest. Category: Concept/Definitional LO: 1 2) Leadership is best defined as ________.

Similar essay: Absolute Statement

A) the ability to influence a group toward the achievement of a vision or set of goals B) the process of drawing up formal plans and monitoring their implementation C) the process of carrying out the vision and strategy provided by management D) coordinating and staffing the organization and handling day-to-day problems E) the proper use of the influence gained exclusively as a result of one’s organizational position Answer: A Explanation: A) Leadership can be defined as the ability to influence a group toward the achievement of a vision or set of goals.

Leaders can emerge from within a group as well as by formal appointment. Diff: 2Page Ref: 150 Objective: Leadership Quest. Category: Concept/Definitional LO: 3) Which of the following statements regarding leadership is true? A) All leaders are managers. B) Formal rights ensure good leadership. C) All managers are leaders. D) All leaders are hierarchically superior to followers. E) Nonsanctioned leadership is as important as formal influence. Answer: E Explanation: E) The source of a leader’s influence may be formal, such as that provided by managerial rank in an organization.

But not all leaders are managers, nor, for that matter, are all managers leaders. Just because an organization provides its managers with certain formal rights is no assurance they will lead effectively. Nonsanctioned leadership—the ability to influence that arises outside the formal structure of the organization—is often as important or more important than formal influence. Diff: 2Page Ref: 151 Objective: Leadership Quest. Category: Concept/Definitional LO: 1 4) Which theory of leadership differentiates leaders from nonleaders by focusing on personal qualities and characteristics? A) Fiedler’s model

B) attributes theory C) LMX theory D) contingency theory E) trait theory Answer: E Explanation: E) Trait theories of leadership focus on personal qualities and characteristics. The search for personality, social, physical, or intellectual attributes that differentiate leaders from nonleaders goes back to the earliest stages of leadership research. Diff: 1Page Ref: 151 Objective: Trait Theories Quest. Category: Concept/Definitional LO: 2 5) Early research efforts at isolating leadership traits resulted in a number of dead ends. A breakthrough, of sorts, came when researchers began ________.

A) organizing traits around the Big Five personality framework B) using the Keirsey Temperament Sorter C) using Cattell’s 16 personality factors D) focusing on Eysenck’s three factor model E) considering the Revised NEO Personality Inventory Answer: A Explanation: A) Early research efforts at isolating leadership traits resulted in a number of dead ends. By the 1990s, after numerous studies and analyses, about the best we could say was that most leaders “are not like other people,” but the particular traits that characterized them varied a great deal from review to review.

A breakthrough, of sorts, came when researchers began organizing traits around the Big Five personality framework. Most of the dozens of traits in various leadership reviews fit under one of the Big Five, giving strong support to traits as predictors of leadership. Diff: 2Page Ref: 151 Quest. Category: Concept/Definitional LO: 2 6) According to research, which of the Big Five personality traits is the most important in effective leaders? A) conscientiousness B) openness C) extraversion D) agreeableness

E) emotional stability Answer: C Explanation: C) A comprehensive review of leadership literature, when organized around the Big Five, has found extraversion to be the most important trait of effective leaders but more strongly related to leader emergence than to leader effectiveness. Conscientiousness and openness to experience also showed strong relationships to leadership, though not quite as strong as extraversion. Diff: 1Page Ref: 151 Objective: Trait Theories Quest. Category: Concept/Definitional

LO: 7) Emotional intelligence (EI) is critical to effective leadership because one of its core components is ________. A) conscientiousness B) empathy C) optimism D) intraversion E) perfectionism Answer: B Explanation: B) A core component of EI is empathy. Empathetic leaders can sense others’ needs, listen to what followers say (and don’t say), and read the reactions of others. The caring part of empathy, especially for the people with whom you work, is what inspires people to stay with a leader when the going gets rough. Diff: 1Page Ref: 152

Objective: Trait Theories Quest. Category: Concept/Definitional LO: 2 8) Which of the following statements accurately reflects the conclusions about the trait theories of leadership? A) Traits were better predictors of leadership 20 years ago than they are now. B) The Big Five traits are inadequate for predicting leadership. C) Traits are especially useful for distinguishing between effective and ineffective leaders. D) Traits do a good job of predicting the emergence of leaders. E) Overall, traits are poor predictors of leadership. Answer: D

Explanation: D) Two conclusions can be offered about the effectiveness of the trait theory of leadership. First, traits can predict leadership. Twenty years ago, the evidence suggested otherwise. The Big Five seem to have rectified that. Second, traits do a better job predicting the emergence of leaders and the appearance of leadership than actually distinguishing between effective and ineffective leaders. Diff: 2Page Ref: 152 Objective: Trait Theories Quest. Category: Concept/Definitional LO: 2 9) Your company’s HR director is a believer in trait theories of leadership.

He believes that he can differentiate leaders from non-leaders by focusing on personal qualities and characteristics. The HR director plans to promote Lawrence, a highly extroverted manager with a great deal of ambition and energy to the position of VP, Manufacturing. He asks for your expertise in helping him to apply trait theory to leadership selection within your company. The director believes that because of his innate characteristics, Lawrence will be highly effective at helping the company achieve its production goals.

You advise the director against basing his decision purely on traits because ________. A) research has identified emotional stability as the strongest predictor of leadership effectiveness B) studies have found that the Big Five traits are difficult to identify in leaders C) studies have shown that traits are poor predictors of leadership effectiveness D) research has found that conscientiousness is a better predictor of effectiveness than extroversion E) research has shown that effective managers are often unlikely to become effective leaders Answer: C

Explanation: C) Traits do a better job predicting the emergence of leaders and the appearance of leadership than actually distinguishing between effective and ineffective leaders. The fact that an individual exhibits the traits and others consider that person to be a leader does not necessarily mean the leader is successful at getting his or her group to achieve its goals. The context matters, too. Diff: 3Page Ref: 152 AACSB: Analytic Skills Objective: Trait Theories Quest. Category: Application LO: 2 10) Which of the following theories of leadership implies that individuals can be trained to become leaders?

A) trait theories B) LMX theory C) contingency theories D) behavioral theories E) Fiedler model Answer: D Explanation: D) The failures of early trait studies led researchers in the late 1940s through the 1960s to wonder whether there was something unique in the way effective leaders behave. While trait research provides a basis for selecting the right people for leadership, behavioral studies implied we could train people to be leaders. Diff: 2Page Ref: 152 Objective: Behavioral Theories Quest. Category: Concept/Definitional LO: 2 1) The Ohio State Studies narrowed the independent dimensions of leader behavior to two that substantially accounted for most of the leadership behavior described by employees: consideration and ________. A) employee-orientation B) empathy C) constructing vision D) initiating structure E) charisma Answer: D Explanation: D) Seeking to identify independent dimensions of leader behavior, the Ohio State Studies determined that two dimensions accounted for most effective leadership behavior: initiating structure and consideration.

Initiating structure is the extent to which leaders are likely to define and structure their roles and those of their employees in the search for goal attainment. Consideration is the extent to which a leader’s job relationships are characterized by mutual trust, respect for employees’ ideas, and regard for their feelings. Diff: 2Page Ref: 152 Objective: Ohio State Studies Quest. Category: Concept/Definitional LO: 2 12) In the context of behavioral dimensions of leadership identified in the Ohio State Studies, initiating structure refers to the extent to which ________.

A) a person’s job relationships are characterized by mutual trust, respect for employees’ ideas, and regard for their feelings B) a leader engages in participative management C) a leader is accepting of and respects individual differences among various team members D) a leader is likely to define and structure his or her role and those of employees in the search for goal attainment E) a leader initiates efforts to communicate personally with employees Answer: D

Explanation: D) As a behavioral dimension of leaders, initiating structure is the extent to which a leader is likely to define and structure his or her role and those of employees in the search for goal attainment. It includes behavior that attempts to organize work, work relationships, and goals. Diff: 2Page Ref: 152 Objective: Initiating Structure Quest. Category: Concept/Definitional LO: 2 13) Kimberley, a manager at a large company, tends to assign group members to particular tasks, expects workers to maintain definite standards of performance, and emphasizes the meeting of deadlines.

In the light of the Ohio State Studies, this indicates that Kimberley, as a leader, is ________. A) low in task orientation B) high in consideration C) relationship oriented D) employee oriented E) high in initiating structure Answer: E Explanation: E) Initiating structure is the extent to which a leader is likely to define and structure his or her role and those of employees in the search for goal attainment. It includes behavior that attempts to organize work, work relationships, and goals.

A leader high in initiating structure is someone who “assigns group members to particular tasks,” “expects workers to maintain definite standards of performance,” and “emphasizes the meeting of deadlines. ” Diff: 3Page Ref: 152 AACSB: Analytic Skills Quest. Category: Application LO: 2 14) In the context of behavioral dimensions of leadership identified in the Ohio State Studies, ________ is the extent to which a person’s job relationships are characterized by mutual trust, respect for employees’ ideas, and regard for their feelings. A) consideration B) initiating structure C) production orientation

D) task orientation E) position power Answer: A Explanation: A) In the context of behavioral dimensions of leadership identified in the Ohio State Studies, consideration is the extent to which a person’s job relationships are characterized by mutual trust, respect for employees’ ideas, and regard for their feelings. Diff: 2Page Ref: 152 Objective: Consideration Quest. Category: Concept/Definitional LO: 2 15) Jim, a VP at a large company, helps employees with personal problems, is friendly and approachable, treats all employees as equals, and expresses appreciation and support.

In the light of the Ohio State Studies, this indicates that Jim, as a leader, is ________. A) task oriented B) high in consideration C) high in initiating structure D) low in relationship orientation E) production oriented Answer: B Explanation: B) Consideration is the extent to which a person’s job relationships are characterized by mutual trust, respect for employees’ ideas, and regard for their feelings. A leader high in consideration helps employees with personal problems, is friendly and approachable, treats all employees as equals, and expresses appreciation and support. Diff: 3Page Ref: 152 AACSB: Analytic Skills Quest.

Category: Application LO: 2 16) The two dimensions of leadership behavior identified in the University of Michigan studies are ________. A) absolute leadership and contingency leadership B) transformational leaders and authentic leaders C) employee-oriented leaders and production-oriented leaders D) initiating structure and consideration E) initiation and completion Answer: C Explanation: C) Leadership studies at the University of Michigan’s Survey Research Center located behavioral characteristics of leaders that appeared related to performance effectiveness: the employee-oriented leader and the production-oriented leader.

The employee-oriented leader emphasized interpersonal relationships by taking a personal interest in the needs of employees and accepting individual differences among them; the production-oriented leader emphasized the technical or task aspects of the job—concern focused on accomplishing the group’s tasks. Diff: 2Page Ref: 153 Objective: University of Michigan Studies Quest. Category: Concept/Definitional LO: 2 17) The University of Michigan studies define a(n) ________ leader as one who takes a personal interest in the needs of his/her subordinates.

A) contingency B) task-oriented C) employee-oriented D) production-oriented E) structure initiating Answer: C Explanation: C) According to the behavioral dimensions of leaders identified by the University of Michigan’s Survey Research Center, the employee-oriented leader emphasized interpersonal relationships by taking a personal interest in the needs of employees and accepting individual differences among them. Diff: 2Page Ref: 153 Objective: Employee-Oriented Leaders Quest. Category: Concept/Definitional LO: 2 8) If a leader’s main concern is accomplishing his/her group’s tasks, the University of Michigan studies label this leader ________. A) employee-oriented B) high in consideration C) relationship-oriented D) low in initiating structure E) production-oriented Answer: E Explanation: E) According to the behavioral dimensions identified by the University of Michigan’s Survey Research Center, the production-oriented leader emphasized the technical or task aspects of the job, his main concern being accomplishing the group’s tasks. Diff: 2Page Ref: 153 Objective: Production-Oriented Leaders

Quest. Category: Concept/Definitional LO: 2 19) The behavioral dimensions identified by the University of Michigan’s Survey Research Center are closely related to those identified in the Ohio State Study. Employee-oriented leadership is similar to ________, and production-oriented leadership is similar to ________. A) initiating structure; consideration B) task-orientation; relationship-orientation C) transformational leadership; authentic leadership D) authentic leadership; transformational leadership E) consideration; initiating structure Answer: E

Explanation: E) The behavioral dimensions identified by the University of Michigan’s Survey Research Center are closely related to the Ohio State dimensions. Employee-oriented leadership is similar to consideration, and production-oriented leadership is similar to initiating structure. In fact, most leadership researchers use the terms synonymously. Diff: 2Page Ref: 153 Quest. Category: Concept/Definitional LO: 2 20) Contingency theories focus on the ________ that impact leadership success.. A) leader’s personal characteristics and qualities B) leader’s abilities to inspire and transform followers

C) situational variables D) values and ethics E) aspects of the leader’s behavior Answer: C Explanation: C) Numerous studies have shown that predicting leadership success is more complex than isolating a few traits or behaviors, since leadership styles that are effective in very bad times or in very good times do not necessarily translate into long-term success. This idea led researchers to change their focus from trait and behavior theories to situational influences on leadership styles, or contingency theories. Diff: 1Page Ref: 154 Objective: Contingency Models Quest. Category: Concept/Definitional

LO: 3 21) The first comprehensive contingency model for leadership was developed by ________. A) Hersey and Blanchard B) Blake and Mouton C) Fred Fiedler D) John Kotter E) Douglas Surber Answer: C Explanation: C) The first comprehensive contingency model for leadership was developed by Fred Fiedler. Fiedler believes that a key factor in leadership success is the individual’s basic leadership style. According to the Fiedler contingency model, effective group performance depends on the proper match between the leader’s style and the degree to which the situation gives the leader control. Diff: 1Page Ref: 154

Objective: Fiedler Contingency Model Quest. Category: Concept/Definitional LO: 3 22) Which model represents the theory that effective group performance depends on the proper match between a leader’s style and the degree to which the situation gives control to the leader? A) leader-member exchange model B) Fiedler’s contingency model C) Hersey and Blanchard’s situational leadership model D) Vroom and Yetton’s leader-participation model E) House’s path-goal model of leadership Answer: B Explanation: B) According to Fiedler’s Contingency Model, the key factor predicting leadership success is the individual’s basic leadership style.

Since Fiedler assumes an individual’s leadership style is fixed, effective group performance depends on the proper match between the leader’s style and the degree to which the situation gives the leader control. Diff: 2Page Ref: 154 Objective: Fiedler Contingency Model Quest. Category: Concept/Definitional LO: 3 23) In Fiedler’s model, if a respondent describes his or her least preferred co-worker in relatively positive terms, then the respondent is considered to be ________. A) relationship oriented B) production-oriented C) task-oriented D) high in initiating structure E) low in consideration Answer: A

Explanation: A) Fiedler’s least preferred coworker (LPC) questionnaire measures whether a person is task- or relationship-oriented by asking respondents to rate their least favorite coworker. If respondents describe their least favorite coworker in favorable terms (a high LPC score), they are probably relationship-oriented. In contrast, respondents who describe their least-preferred coworker in unfavorable terms (a low LPC score) are viewed as primarily interested in productivity and as being task-oriented. Diff: 3Page Ref: 154 Objective: Least Preferred Coworker Quest. Category: Concept/Definitional LO: 3 4) If a survey respondent sees his or her least preferred co-worker in unfavorable terms, Fiedler would categorize the respondent as ________. A) high in consideration B) task-oriented C) low in initiating structure D) employee-oriented E) relationship oriented Answer: B Explanation: B) Fiedler’s least preferred coworker (LPC) questionnaire measures whether a person is task- or relationship-oriented by asking respondents to rate their least favorite coworker. Respondents who describe their least-preferred coworker in unfavorable terms (a low LPC score) are viewed as primarily interested in productivity and as being task-oriented.

Conversely, respondents who describe their least-favorite coworker in favorable terms (a high LPC score) are considered to be relationship-oriented. Diff: 2Page Ref: 154 Objective: Least Preferred Coworker Quest. Category: Concept/Definitional LO: 3 25) Fran has just completed and scored the LPC questionnaire given to her during an evaluation exercise. She is surprised when she finds out that she described her least preferred co-worker in relatively positive terms because she recalls being particularly annoyed by this difficult co-worker several times in the past.

Based on your understanding of Fiedler’s model, you explain to Fran that her LPC score makes sense within the model because ________. A) Fran tends to become very dominating when given ambiguous tasks B) Fran is usually much more focused on productivity than on developing relationships C) Fran tends in general to focus on building good relationships with the other employees D) Fran has a spotty work history and has tended to switch jobs every couple of years E) Fran is usually chosen for positions of high responsibility within your organization Answer: C

Explanation: C) If you describe the person you are least able to work with in favorable terms (a high LPC score), Fiedler would label you relationship oriented. In contrast, if you see your least preferred co-worker in relatively unfavorable terms (a low LPC score), you are primarily interested in productivity and are task oriented. Diff: 3Page Ref: 154 AACSB: Analytic Skills Objective: Least Preferred Coworker Quest. Category: Application LO: 3 26) Fiedler’s contingency leadership model assumes that ________. A) an individual’s leadership style is essentially fixed

B) an individual can use the LPC to change his/her style to a more productive style C) there is no ideal way to match leadership styles with situations D) all leaders can learn to adapt to different contingencies E) each person’s style will change in accordance with the situation at hand Answer: A Explanation: A) Fiedler assumes an individual’s leadership style is fixed. This means if a situation requires a task-oriented leader and the person in the leadership position is relationship oriented, either the situation has to be modified or the leader has to be replaced to achieve optimal effectiveness.

Diff: 2Page Ref: 154 Objective: Fiedler Contingency Model Quest. Category: Concept/Definitional LO: 3 27) Fiedler labels the degree of confidence, trust, and respect that subordinates have in their leader as ________. A) leader-member relations B) task structure C) positional power D) leader-member exchange E) leader-member orientation Answer: A Explanation: A) Fiedler identified three contingency or situational dimensions to leadership success, including leader-member relations, task structure, and position power. Leader-member relations is the degree of confidence, trust, and respect members have in their leader.

Diff: 1Page Ref: 154 Objective: Leader-Member Relations Quest. Category: Concept/Definitional LO: 3 28) Which of the following situational dimensions identified by Fiedler relates to the degree to which job assignments are procedurized, that is, structured or unstructured? A) leader-member relations B) task orientation C) task structure D) initiating structure E) productivity oriented Answer: C Explanation: C) Fiedler identified three contingency or situational dimensions in which certain types of leaders might excel or fail, including leader-member relations, task structure, and position power.

Task structure is the degree to which job assignments are procedurized (that is, structured or unstructured). Leaders who are task-oriented, Fielder proposes, perform best when the situation is very favorable or very unfavorable. Diff: 1Page Ref: 154 Objective: Task Structures Quest. Category: Concept/Definitional LO: 3 29) In the context of Fiedler’s model, the situational dimension termed ________ relates to the degree of influence a leader has over power variables such as hiring, firing, discipline, promotions, and salary increases. A) task structure B) leader-member exchange C) position power

D) initiating structure E) leader-member relations Answer: C Explanation: C) In the context of Fiedler’s model, the situational dimension termed position power relates to the degree of influence a leader has over power variables such as hiring, firing, discipline, promotions, and salary increases. Diff: 1Page Ref: 154 Quest. Category: Concept/Definitional LO: 3 30) If you were using the Fielder contingency model of leadership to establish a scenario in your company which gives managers maximum control, which of the following combinations of situational dimensions would you seek to achieve?

A) high task structure, good leader-member relations, and strong position power B) limited position power, good leader-member relations, and low task structure C) less structured jobs, strong position power, and moderate leader-member relations D) broad employee responsibilities, low position power, and moderate leader-member relations E) good leader-member relations, low position power, unstructured jobs Answer: A Explanation: A) The Fiedler contingency model proposes that effective group performance depends on the proper match between the leader’s style and the degree to which the situation gives the leader control.

Fiedler states that the better the leader–member relations, the more highly structured the job, and the stronger the position power, the more control the leader has. Diff: 3Page Ref: 154 AACSB: Analytic Skills Quest. Category: Application LO: 3 31) According to the Fiedler contingency model of leadership, task-oriented leaders perform best in situations of ________, while relationship-oriented leaders perform best in ________ situations. A) moderate control; high and low control B) high control; low and moderate control C) high and moderate control; low control

D) high and low control; moderate control E) moderate and low control; high control Answer: D Explanation: D) In the Fiedler contingency model, combining the three contingency dimensions yields eight possible situations in which leaders can find themselves. Fiedler recently condensed these eight situations down to three. According to him, task-oriented leaders perform best in situations of high and low control, while relationship-oriented leaders perform best in moderate control situations. Diff: 2Page Ref: 154 Objective: Matching Leaders and Situations Quest. Category: Concept/Definitional LO: 3 2) Which of the following leadership theories argues that because of time pressures, leaders establish a special relationship with a small group of their subordinates—the in-group, who are trusted, get a disproportionate amount of the leader’s attention, and are more likely to receive special privileges? A) situational leadership theory B) leader-member exchange C) path-goal D) expectancy E) Fiedler’s theory Answer: B Explanation: B) Leader–member exchange (LMX) theory proposes that, because of time pressures, leaders establish a special relationship with a small group of their followers. These individuals make up the in-group.

Members of the in-group are trusted, get a disproportionate amount of the leader’s attention, and are more likely to receive special privileges. Other followers fall into the out-group. Diff: 1Page Ref: 156 Objective: Leader-Member Exchange Theory Quest. Category: Concept/Definitional LO: 3 As you have observed your department manager and her interactions with the department’s employees, you have come to believe in LMX theory. Sarah and Joe get less of the manager’s time. Sally gets fewer of the preferred rewards that the manager controls and John has a relationship with the manager based on formal authority interactions.

Rebecca is trusted. Jennifer gets a disproportionate amount of the manager’s attention and is more likely to receive special privileges. 33) According to LMX theory, the in-group is likely to be composed of ________. A) Rebecca and Jennifer only B) Jennifer only C) Rebecca only D) John, Rebecca, and Jennifer only E) Sarah, Joe, Sally, and John only Answer: A Explanation: A) The LMX theory proposes that early in the history of the interaction between a leader and a given follower, the leader implicitly categorizes the follower as an “in” or an “out,” and that relationship is relatively stable over time.

Leaders induce LMX by rewarding those employees with whom they want a closer linkage and punishing those with whom they do not. Diff: 3Page Ref: 156 AACSB: Analytic Skills Objective: In-Group Quest. Category: Application LO: 3 34) According to LMX theory, which of the following employees is likely to be included in the out-group? A) Rebecca only B) Jennifer only C) Sarah and Jennifer only D) Sarah and Joe only E) Sarah, Joe, Sally, and John only Answer: E

Explanation: E) The LMX theory proposes that early in the history of the interaction between a leader and a given follower, the leader implicitly categorizes the follower as an “in” or an “out,” and that relationship is relatively stable over time. Leaders induce LMX by rewarding those employees with whom they want a closer linkage and punishing those with whom they do not. Diff: 3Page Ref: 156 AACSB: Analytic Skills Objective: Out-Group Quest. Category: Application LO: 3 35) According to the LMX theory, a leader implicitly categorizes followers as “in” or “out” ________. A) after careful performance analysis

B) on a temporary basis C) early in the interaction D) because of political pressure E) only after several months of working together Answer: C Explanation: C) The LMX theory proposes that early in the history of the interaction between a leader and a given follower, the leader implicitly categorizes the follower as an “in” or an “out,” and that relationship is relatively stable over time. Diff: 2Page Ref: 156 Objective: Leader-Member Exchange Theory Quest. Category: Concept/Definitional LO: 3 36) According to research relating to the LMX theory of leadership, which of the following does not appear to characterize in-group members?

A) demographic characteristics similar to those of the leader B) attitudes similar to those of the leader C) personality characteristics similar to those of the leader D) gender opposite to that of the leader E) higher level of competence than out-group members Answer: D Explanation: D) Just how the leader chooses who falls into each category is unclear, but there is evidence in-group members have demographic, attitude, and personality characteristics similar to those of their leader or a higher level of competence than out-group members.

Leaders and followers of the same gender tend to have closer (higher LMX) relationships than those of different genders. Diff: 2Page Ref: 156 Quest. Category: Concept/Definitional LO: 3 37) Which of the following is true according to research testing the LMX theory of leadership? A) There is substantive evidence that leaders differentiate among followers. B) Disparities in how leaders treat different followers are largely random. C) The in-group shows no measurable difference in positive outcomes compared to the out-group. D) In-group members usually show lesser “citizenship” behavior at work.

E) In-group members are no more satisfied with their leader than out-group members. Answer: A Explanation: A) Research to test LMX theory has been generally supportive, with substantive evidence that leaders do differentiate among followers; these disparities are far from random; and followers with in-group status will have higher performance ratings, engage in more helping or “citizenship” behaviors at work, and report greater satisfaction with their superior. Diff: 2Page Ref: 156 Quest. Category: Concept/Definitional LO: 3 8) Believing that in-group members are the most competent, leaders invest their resources in them. This, in turn, leads the in-group members to show higher levels of performance at their jobs. This chain of events reflects the concept of ________. A) assumption fallacy B) reverse engineering C) self-fulfilling prophecy D) Newcomb’s paradox E) predestination paradox Answer: C Explanation: C) Followers with in-group status will have higher performance ratings, engage in more helping or “citizenship” behaviors at work, and report greater satisfaction with their superior.

These positive findings for in-group members reflect the concept of self-fulfilling prophecy; leaders invest their resources with those they expect to perform best—the in-group members—and thus unwittingly fulfill their prophecy. Diff: 2Page Ref: 156-157 Quest. Category: Concept/Definitional LO: 3 39) Who was first researcher to consider charismatic leadership in terms of OB? A) Max Weber B) Robert House C) Fred Fiedler D) John Kotter E) Douglas Surber Answer: B Explanation: B) The first researcher to consider charismatic leadership in terms of OB was Robert House.

According to House’s charismatic leadership theory, followers attribute heroic or extraordinary leadership abilities when they observe certain behaviors. Diff: 1Page Ref: 157 Quest. Category: Concept/Definitional LO: 4 40) Which theory of leadership proposes that followers attribute heroic or extraordinary leadership abilities when they observe certain behaviors? A) transformational leadership theory B) authentic leadership theory C) transactional leadership theory D) attributional leadership theory E) charismatic leadership theory Answer: E

Explanation: E) According to House’s charismatic leadership theory, followers attribute heroic or extraordinary leadership abilities when they observe certain behaviors. A number of studies have attempted to identify the characteristics of charismatic leaders: they have a vision, they are willing to take personal risks to achieve that vision, they are sensitive to follower needs, and they exhibit extraordinary behaviors. Diff: 1Page Ref: 157 Quest. Category: Concept/Definitional LO: 4 41) Which of the following is not a key characteristic of a charismatic leader?

A) sensitivity to follower needs B) unconventional behavior C) vision and articulation D) focus on maintaining status quo E) willingness to take risks Answer: D Explanation: D) Charismatic leadership theory, developed by Robert House, is based on the idea that when followers observe certain behaviors displayed by a leader, they view that leader as having extraordinary or even heroic leadership abilities. Recent studies have sought to identify these specific behaviors. Charismatic leaders appear to possess key characteristics, ncluding sensitivity to follower needs, unconventional behavior, vision and articulation, and willingness to take risks. Diff: 2Page Ref: 157 Quest. Category: Concept/Definitional LO: 4 42) Which of the following is true regarding whether charismatic leaders are born or made? A) Charismatic individuals are not born with traits that make them charismatic. B) Charismatic leaders are usually not achievement oriented. C) Charisma cannot be learned. D) Most experts believe individuals can be trained to exhibit charismatic behaviors. E) Personality has shown no link to charismatic leadership.

Answer: D Explanation: D) Individuals are born with traits that make them charismatic. Personality is also related to charismatic leadership; charismatic leaders are likely to be extraverted, self-confident, and achievement oriented. Although a small minority thinks charisma is inherited and cannot be learned, most experts believe individuals can be trained to exhibit charismatic behaviors. Diff: 2Page Ref: 158 Quest. Category: Concept/Definitional LO: 4 43) According to evidence, what is the first step a charismatic leader takes to influence followers?

A) developing a formal vision statement B) engaging in emotion-inducing and often unconventional behavior C) setting an example for followers through actions and words D) articulating an appealing vision E) communicating high performance expectations Answer: D Explanation: D) Evidence suggests that charismatic leaders follow a four-step process to influence followers. This process begins with articulating an appealing vision, a long-term strategy for attaining a goal by linking the present with a better future for the organization.

Desirable visions fit the times and circumstances and reflect the uniqueness of the organization. Diff: 2Page Ref: 158 Quest. Category: Concept/Definitional LO: 4 44) Which of the following is true about the effectiveness of charismatic leadership? A) Research shows scant correlations between charismatic leadership and high performance. B) Charisma may not always be generalizable. C) Charisma appears most successful when the environment is stress-free. D) Charismatic leaders usually surface when the organization is stable and successful.

E) Charismatic leadership qualities are best utilized in lower-level management jobs. Answer: B Explanation: B) Research shows impressive correlations between charismatic leadership and high performance and satisfaction among followers. However, charisma may not always be generalizable; its effectiveness may depend on the situation. Charisma appears most successful when the follower’s task has an ideological component or the environment includes a high degree of stress and uncertainty. It’s more difficult to utilize a person’s charismatic leadership qualities in lower-level management jobs.

Diff: 2Page Ref: 159 Quest. Category: Concept/Definitional LO: 4 45) Leaders who clarify role and task requirements to accomplish established goals exhibit a(n) _________ style of leadership. A) transformational B) transactional C) charismatic D) authentic E) situational Answer: B Explanation: B) Recent studies, including the Ohio State Studies, Fiedler’s model, and path-goal theory, have focused on the differences between transformational leaders and transactional leaders. In contrast to ransformational leaders who inspire their followers to transcend their self-interests for the good of the organization, transactional leaders encourage their followers to achieve goals by defining specific goals and task requirements. Diff: 1Page Ref: 160 Quest. Category: Concept/Definitional LO: 4 46) ________ leaders inspire followers to transcend their self-interests for the good of the organization and can have an extraordinary effect on their followers. A) Transformational B) Transactional C) Task oriented D) Laissez-faire E) Transcendental Answer: A

Explanation: A) Transformational leaders can have an extraordinary effect on their followers, inspiring them toward selfless goals that benefit the larger organization. These types of leaders inspire their followers by paying attention to their concerns, helping them rethink old problems in new ways, and encouraging them to achieve goals as a group. Diff: 1Page Ref: 160 Quest. Category: Concept/Definitional LO: 4 47) In terms of the full range of leadership model, which leader behavior is the least effective? A) management by exception (active) B) contingent reward C) management by exception (passive) D) individualized consideration

E) laissez-faire Answer: E Explanation: E) According to the full range of leadership model, laissez-faire is the most passive and therefore least effective of leader behaviors. Management by exception—active or passive—is slightly better than laissez-faire. Diff: 1Page Ref: 160 Quest. Category: Concept/Definitional LO: 4 48) According to the full range of leadership model, which of the following leader behaviors will enable leaders to motivate followers to perform above expectations and transcend their self-interest for the sake of the organization? A) management by exception (active) B) contingent reward

C) individualized consideration D) management by exception (passive) E) laissez-faire Answer: C Explanation: C) According to the full range of leadership model, leadership behaviors including laissez-faire, management by exception (active or passive), and contingent reward will not get employees to go above and beyond the call of duty. Only with the four styles of transformational leadership—individualized consideration, intellectual stimulation, inspirational motivation, and idealized influence—are leaders able to motivate followers to perform above expectations and transcend their self-interest for the sake of the organization.

Diff: 1Page Ref: 160 Quest. Category: Concept/Definitional LO: 4 49) Richard is a transactional leader who has just assigned a series of tasks to a project team. Which of the following is most likely to be true about the team’s performance under Richard’s guidance? A) They will set new standards of productivity for the department, exceeding Richard’s expectations. B) They will meet the goals set for them but are unlikely to go beyond those goals. C) They will tend to be unclear about the roles assigned to each team member.

D) They will be highly motivated by what they view as Richard’s heroic or extraordinary qualities. E) They will tend to put the interests of the company above individual self-interest. Answer: B Explanation: B) Transactional leaders set goals for their employees and define roles and expectations. Unlike transformational leaders, however, transactional leaders are unlikely to motivate their employees to exceed expectations or go beyond the call of duty. Diff: 3Page Ref: 160 AACSB: Analytic Skills Quest. Category: Application LO: 4 50) Researchers are conducting a study of a company called Acme Corp. which they believe to be led by a transformational leader. Which of the following, if true, would most support the conclusion that Acme’s leader is a transformational leader? A) Acme’s top managers often disagree over defining the organization’s goals. B) Acme’s goals tend to be very ambitious and to hold personal value for employees. C) Acme has a centralized decision-making structure. D) Acme’s performance has held at average levels for the past three years. E) Acme’s compensation plans are designed to reward short-term results. Answer: B

Explanation: B) In companies with transformational leaders, followers are more likely to pursue ambitious goals, agree on the strategic goals of the organization, and believe the goals they are pursuing are personally important. There is greater decentralization of responsibility, managers have more propensity to take risks, and compensation plans are geared toward long-term results. All these factors result in superior organizational performance. Diff: 3Page Ref: 160 AACSB: Analytic Skills Quest. Category: Application LO: 4 51) Two companies, Roland Media and Go! Corp, are both headed by ransformational leaders. However, Roland Media showed much greater profitability over a 5-year time period than did Go! Corp. Which of the following best explains why Roland Media performed better than Go! Corp under transformational leadership? A) Roland Media’s leader goes through a complex bureaucratic structure, whereas Go! Corp’s leader regularly interacts with the company’s workforce to make decisions. B) Unlike Go! Corp’s employees, Roland Media’s employees don’t readily give up decision-making authority. C) Roland Media is a small, privately held firm, whereas Go!

Corp is a large, complex public company. D) Roland Media is headquartered in a low power distance region, whereas Go! Corp is headquartered in a country that is high in power distance. E) Roland Media’s employees tend to be more highly individualistic than do Go! Corp’s employees. Answer: C Explanation: C) Transformational leadership is most effective in small, privately held companies. It is less effective in complex organizations. Transformational leaders are more effective in improving group potency in teams higher in power distance and collectivism.

They are less effective when leaders must deal with bureaucratic structures, when employees are highly individualistic, and when employees don’t easily give up decision-making authority. Diff: 3Page Ref: 162 AACSB: Analytic Skills Quest. Category: Application LO: 4 52) Which of the following would best serve as evidence to support the conclusion that an individual is an authentic leader? A) The leader is cautious about information sharing and tends to provide updates only to top management. B) In business exchanges, the leader puts the company’s bottom line before his or her ideals.

C) The leader acts in the company’s best interest as long as those interests don’t conflict with his personal ambitions. D) The leader constantly questions his or her values. E) The leader inspires a great deal of trust in his or her followers. Answer: E Explanation: E) Authentic leaders know who they are, know what they believe in and value, and act on those values and beliefs openly and candidly. Their followers consider them ethical people. The primary quality produced by authentic leadership, therefore, is trust. Authentic leaders share information, encourage open communication, and stick to their ideals. Diff: 3Page Ref: 163 Quest.

Category: Concept/Definitional LO: 4 53) The concept of authentic leadership focuses on ________. A) the moral aspects of being a leader B) the unconventional behavior of the leader C) the readiness of followers D) the situational component of leadership E) the transactional aspect of leadership Answer: A Explanation: A) Authentic leaders know who they are, know what they believe in and value, and act on those values and beliefs openly and candidly. Their followers consider them ethical people. This concept is a promising way to think about ethics and trust in leadership because it focuses on the moral aspects of being a leader.

Diff: 2Page Ref: 163 Quest. Category: Concept/Definitional LO: 4 54) The concept of socialized charismatic leadership seeks to integrate charismatic leadership with ________ leadership. A) transformational B) production-oriented C) relational D) ethical E) transactional Answer: D Explanation: D) Scholars have tried to integrate ethical and charismatic leadership by advancing the idea of socialized charismatic leadership—leadership that conveys other centered (not self centered) values by leaders who model ethical conduct.

Socialized charismatic leaders are able to bring employee values in line with their own values through their words and actions. Diff: 1Page Ref: 163 Quest. Category: Concept/Definitional LO: 4 55) ________ is a psychological state that exists when you agree to make yourself vulnerable to another because you have positive expectations about how things are going to turn out. A) Consideration B) Trust C) Empowerment D) Empathy E) Respect Answer: B Explanation: B) Trust is a psychological state that exists when you agree to make yourself vulnerable to another because you have positive expectations about how things are going to turn out.

Even though you aren’t completely in control of the situation, you are willing to take a chance that the other person will come through for you. Diff: 1Page Ref: 164 Quest. Category: Concept/Definitional LO: 4 56) All of the following are consequences of a relationship of trust between supervisors and employees, except that ________. A) trust facilitates information sharing B) trusting groups are more effective C) trust discourages taking risks D) trust enhances productivity E) company bottom-lines are positively influenced by trust Answer: C

Explanation: C) Trust between supervisors and employees is related to a number of positive employment outcomes. Trust encourages taking risks, facilitates information sharing, and enhances productivity. Trusting groups are more effective. Diff: 2Page Ref: 165 Quest. Category: Concept/Definitional LO: 4 57) Which of the following statements accurately describes the attribution theory of leadership? A) Leadership is merely an attribution people make about other individuals. B) Good leaders attribute their successes to their team or group members. C) Leadership qualities are attributions that are independent of performance.

D) The achievement of group goals are rarely attributed to good leadership. E) Leadership is an attribute that individuals are born with. Answer: A Explanation: A) The attribution theory of leadership says leadership is merely an attribution people make about other individuals. Thus we attribute to leaders intelligence, outgoing personality, strong verbal skills, aggressiveness, understanding, and industriousness. At the organizational level, we tend to see leaders, rightly or wrongly, as responsible for extremely negative or extremely positive performance. Diff: 2Page Ref: 165 Quest.

Category: Concept/Definitional LO: 5 58) The President of a small Asian country was hailed as a visionary and a genius when the nation’s economy burgeoned during his first term in office. However, when the currency and the stock-markets crashed during his government’s second term, he was censured as arrogant, elitist, and short-sighted. This scenario reflects the ________ theory of leadership. A) traits B) behavioral C) LMX D) substitutes E) attribution Answer: E Explanation: E) The attribution theory of leadership says leadership is merely an attribution people make about other individuals.

Thus we attribute to leaders intelligence, outgoing personality, strong verbal skills, aggressiveness, understanding, and industriousness. At the organizational level, we tend to see leaders, rightly or wrongly, as responsible for extremely negative or extremely positive performance. Diff: 3Page Ref: 165 AACSB: Analytic Skills Quest. Category: Application LO: 5 59) According to research, which of the following is true about demographic assumptions that are made about leaders? A) Leaders are likely to be assumed to be white. B) White leaders are no more likely to be rated effective than leaders from other racial groups.

C) Teams invariably prefer male leaders. D) Teams prefer female leaders when aggressively competing against other teams. E) Teams prefer male leaders when the competition is within teams and calls for improving positive relationships within the group. Answer: A Explanation: A) Respondents in a study assumed a leader described with no identifying racial information was white at a rate beyond the base rate of white employees in a company. In scenarios where identical leadership situations are described but the leaders’ race is manipulated, white leaders are rated as more effective than leaders of other racial groups.

Diff: 2Page Ref: 166 Quest. Category: Concept/Definitional LO: 5 60) Zenith Technologies has a very flat organizational system with few managers. Instead, it has a rigid system of clear, formalized goals, clear procedures, and cohesive work groups. In this case, the various components of the organizational system are acting as ________ to formal leadership by replacing the support and ability offered by leaders. A) detriments B) traits C) attributes D) substitutes E) supplements Answer: D Explanation: D) One theory of leadership suggests that in many situations leaders’ actions are irrelevant.

Experience and training are among the substitutes that can replace the need for a leader’s support or ability to create structure. Organizational characteristics such as explicit formalized goals, rigid rules and procedures, and cohesive work groups can also replace formal leadership. Diff: 3Page Ref: 166 AACSB: Analytic Skills Quest. Category: Application LO: 5 61) Trust which is based on a mutual understanding of each other’s intentions and appreciation of the other’s wants and desires is referred to as ________. A) substitute trust

B) identification-based trust C) attributional trust D) assumption-based trust E) socialized trust Answer: B Explanation: B) Identification-based trust, based on a mutual understanding of each other’s intentions and appreciation of the other’s wants and desires, is particularly difficult to achieve without face-to-face interaction. It’s not yet clear whether it’s even possible for employees to identify with or trust leaders with whom they communicate only electronically. Diff: 1Page Ref: 167 Quest. Category: Concept/Definitional LO: 5 2) Because he has an internationally based team, Leo and the team do most of their business communications via e-mail. Which of the following represents what is least likely to be true of Leo’s experience working with the team in an online environment? A) Leo relies heavily on his written skills to communicate support and inspiration. B) Team members must be particularly adept at reading emotions in others’ messages C) Team members tend to have high levels of identification-based trust. D) Negotiations between team members sometimes stall due to lack of trust.

E) Leo uses written communication to reinforce what he conveys to team members verbally. Answer: C Explanation: C) Online leaders confront unique challenges, particularly around developing and maintaining trust. Identification-based trust, based on a mutual understanding of each other’s intentions and appreciation of the others wants and desires, is particularly difficult to achieve without face-to-face interaction. Leo’s team would be least likely to experience high levels of identification-based trust. Online negotiations might also be hindered because parties express lower levels of trust.

Diff: 2Page Ref: 167 AACSB: Analytic Skills Quest. Category: Application LO: 5 63) According to the GLOBE project, which of the following is true of the leadership style preferred by Brazilian employees? A) leaders high on consideration B) leaders with a nonparticipative style C) leaders who take self-governing decisions D) leaders who act alone without engaging the group E) task oriented leaders Answer: A Explanation: A) Based on the values of Brazilian employees, leaders in Brazil would need to be team oriented, participative, and humane.

Leaders high on consideration who emphasize participative decision making and have high LPC scores would be best suited to managing employees in this culture. Brazilians do not prefer leaders who take self-governing decisions and act alone without engaging the group. Diff: 2Page Ref: 168 Quest. Category: Concept/Definitional LO: 6 64) According to the GLOBE project, which of the following is true of the leadership style preferred by employees in France? A) people-oriented leaders B) leaders with high LPC scores C) leaders with a participative decision-making style

D) leaders with high initiating structure E) relationship oriented leaders Answer: D Explanation: D) Compared to U. S. employees, the French have a more bureaucratic view of leaders and are less likely to expect them to be humane and considerate. A leader high on initiating structure (relatively task oriented) will do best and can make decisions in a relatively autocratic manner. A manager who scores high on consideration (people oriented) may find that style backfiring in France. Diff: 2Page Ref: 168 Quest. Category: Concept/Definitional LO: 6 5) According to the GLOBE study on the global implications of leadership, employees in this country are more likely to value team-oriented and participative leadership than U. S. employees. However, since it has a relatively high-power-distance culture, status differences between leaders and followers are expected. Therefore, the leader should ask employees for their opinions, try to minimize conflicts, but not be afraid to take charge and make the final decision (after consulting team members). Identify this country. A) China B) Brazil C) Egypt D) France

E) Sweden Answer: C Explanation: C) Employees in Egypt are more likely to value team-oriented and participative leadership than U. S. employees. However, Egypt is also a relatively high-power-distance culture, meaning status differences between leaders and followers are expected. So, a manager must be participative yet demonstrate his or her high level of status by asking employees for their opinions, trying to minimize conflicts, and yet not being afraid to take charge and making the final decision (after consulting team members). Diff: 2Page Ref: 168

Quest. Category: Concept/Definitional LO: 6 66) According to the GLOBE project, which of the following is true of the leadership style preferred by employees in China? A) leaders who are team-oriented and humane B) leaders with high LPC scores C) leaders who take self-governing decisions D) leaders with a moderately participative style E) leaders who act alone without engaging the group Answer: D Explanation: D) According to the GLOBE study, Chinese culture emphasizes being polite, considerate, and unselfish, but it also has a high performance orientation.

These two factors suggest consideration and initiating structure may both be important. Although Chinese culture is relatively participative compared to that of the United States, there are also status differences between leaders and employees. This suggests a moderately participative style may work best. Diff: 2Page Ref: 168 Quest. Category: Concept/Definitional LO: 6 Leo supervises a global team of project members based in multiple countries. Maria is Brazilian; Jean-Paul is French, Amit is Egyptian, and Xiang is Chinese. Leo is American and is based in the United States. 7) In the light on the findings of the GLOBE project, which team members can be expected to respond most favorably when Leo exhibits high levels of initiating structure? A) Jean-Paul and Xiang B) Amit and Xiang C) Maria and Jean-Paul D) Amit and Maria E) Xiang and Amit Answer: A Explanation: A) France and China are countries where individuals tend to value initiating structure. The French have a bureaucratic view of leaders and expect leaders to make decisions relatively autocratically. The Chinese have a high performance orientation that emphasizes status differences between employees.

Leaders with high initiating structures therefore have better results in these countries. Diff: 3Page Ref: 168 AACSB: Analytic Skills Objective: Behavioral Theories Quest. Category: Application LO: 6 68) Which of the following team members would be least likely to respond favorably if Leo made project-related decisions independently, without consulting the team? A) Maria B) Jean-Paul C) Amit D) Xiang E) Maria and Jean-Paul Answer: A Explanation: A) Brazilians value participatory decision-making. Maria would thus be least likely to respond favorably to autocratic decision-making on

Leo’s part. As one Brazilian manager remarked in a research study, “We do not prefer leaders who take self-governing decisions and act alone without engaging the group. That’s part of who we are. ” Diff: 3Page Ref: 168 AACSB: Analytic Skills Quest. Category: Application LO: 6 69) The team agrees that a large component of the project will be carried out at the Chinese headquarters, with Xiang responsible for leading that support team. Based on what the GLOBE project concludes about Chinese culture, which of the following leader behaviors would be most effective?

A) infrequent decision-making B) highly participatory decision-making C) autocratic decision-making D) decision-making without initiating structure E) moderately participatory decision-making Answer: E Explanation: E) Chinese culture emphasizes being polite, considerate, and unselfish, but it also has a high performance orientation. These two factors suggest consideration and initiating structure may both be important. Although Chinese culture is relatively participative compared to that of the United States, there are also status differences between leaders and employees.

This suggests a moderately participative style may work best there. Diff: 3Page Ref: 168 AACSB: Analytic Skills Quest. Category: Application LO: 6 70) In carrying out a transformational approach to overseeing the project, Leo strives to implement the universal elements of transformational leadership. He most likely implements all of the following except ________. A) vision B) providing encouragement C) positiveness D) proactiveness E) silent leadership Answer: E Explanation: E) The silence of a leader is very powerful in Japan, but not necessarily in other countries.

Silent leadership is, therefore, not considered one of the university elements of transformational leadership. The elements are: vision, foresight, providing encouragement, trustworthiness, dynamism, positiveness, and proactiveness. Diff: 1Page Ref: 168 AACSB: Analytic Skills Quest. Category: Application LO: 6 71) The term leadership is synonymous with management. Answer: FALSE Explanation: Although often used interchangeably, the terms leadership and management have two different meanings. John Kotter of the Harvard Business School argues that management is the ability to cope with complexity.

Leadership, by contrast, is defined as the ability to cope with change. Diff: 1Page Ref: 150 Objective: Management and Leadership Quest. Category: Concept/Definitional LO: 1 72) Nonsanctioned leadership is usually less important than formal influence. Answer: FALSE Explanation: Nonsanctioned leadership—the ability to influence that arises outside the formal structure of the organization—is often as important or more important than formal

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Multi-Level Organizational Research

Organization is central to human achievement. The most accomplished individuals tend to have supporting groups and structures, which have major roles in celebrated successes, though they may remain hidden from superficial views. Organizations date back to the dawn of civilization, with religious institutions and military forces being enduring examples.

Organizations are inherently multi-level (Klein, & Kozlowski, 2003). Each level is connected with and dependent on the others. The individual, teams, and the organization as a whole, are the 3 significant parts of a typical structure. Organizations, though they exist in kaleidoscopic varieties of purposes, sizes, and natures, share common issues when they become subjects of systematic inquiry. Performance and effectiveness are the two most important motivations for organizational research, though the interactions between individuals and groups are matters of primary interests in fields of sociology and psychology.

This document reflects on the inevitable implications of multiple levels in organizations, and suggests best practices with respect to studying such structures and the people who function within them. The focus is on how to incorporate multi-level realities in to organizational research,

Stating the Obvious

It is common knowledge that organizations are made of individuals, and that groups of people have to function as teams. However, the implications of the obvious on how organizations should be studied and measured are complex and certainly not as obvious. It may be tempting to resort to over-simplification and ignore multi-level aspects of organizations when designing research projects to study them.

Interplay between individual perceptions and organizations are common to all types of organizations. Multi level variations have been found even in the prison structure (Camp, et al. 1997), where institutional operations and satisfaction with immediate supervision have equal influences on the social climate. The implication is that any research in to the functioning and performance of a large structure with branches at multiple levels has to incorporate distinct phases of research for individuals at the periphery, for teams that operate within the body of structures, and for the entire organization as an entity.

Each of these levels will be in dynamic inter-play with the other two. A phenomenon at a lower level, for example,  may not connect with theory validation at a higher level (Crowston, 2002). There are many examples of technologies being integrated in to organizations at lower levels, without incontrovertible evidence of the benefits at higher levels. That is why conclusions from research at a single level may not yield entirely relevant conclusions.

The best individual technical skills may come to naught if a person cannot deal with others; similarly, the best teams cannot function without adequate resources and support from above (Loo, 2003). No level of organization can be independent, take all the credit, or be assigned all of the blame. Investigative research, which aims to diagnose why an organization functions below par, or which seeks to make recommendations for improvement, has to validate its suggestions for feasibility and appropriateness at each of the multiple levels.

Past organizational research has focused more on the individual level, and not enough on teams and the organization as a unit, or on the interactions between these levels (Schnake, and Dumler, 2003). However, this trend has begun to change and researchers of today can no longer the multiple level structures of organizations they may wish to study. Organization science needs to match the integration which marks literature on the existence of multiple levels (Klein, & Kozlowski, 2003).

Mixed level research needs methods and measurements of their own (Schnake, and Dumler, 2003); the levels of data collection and analysis are often not the same.  Pluralistic ignorance, in which each individual has a special perception of the self versus that of others and of the organization, commonly plagues organizational research. That is why projects should not be based solely on the surveyed and perceived opinions of individual members about their peers, superior, subordinates, and groups.

Bottom up models which draw inferences from lower levels for the higher will yield different conclusions if a top down approach is used (Klein, & Kozlowski, 2003). Research methods must account for how perspectives change with levels. It may be best to adopt an iterative approach, thinking not micro or macro, but both micro and macro (Klein, & Kozlowski, 2003).

Research Objectives as Determinants

Given that multiple levels are ubiquitous in organizations of all types and sizes, all research in this area should take the phenomenon in to account. Organizational research may vary by objectives, and this factor of difference can help in dealing with multiple levels.

The People and Process elements of the Marketing Mix for Services (Payne, 2002) play important roles in determining strategies followed by organizations which do not have concrete or tangible product features in their offers. Research in to the internal workings of such organizations may focus on the lower levels of individual capabilities, and small team functioning, rather than concern itself with organization-level matters. Conversely, stock market analysts who are concerned with specific financial outcomes may prefer to dwell on effectiveness of organizations as a whole (Huber and Glick, 1993), rather than bother with details of issues at micro levels.

Downsizing and new designs are some major concerns of contemporary organizational research. These phenomena create most strains on the individual (Huber, and Glick, 1993) and hence projects which seek to study the effects of integration and different hierarchies should focus on the lowest level of individual members of staff.

The simplistic approach of focusing on just one level of organization will not work in all cases. Communication issues, matters related to diversity in the work force and matters concerning global organizations, all require work to be done at all levels (Huber, and Glick, 1993). Social climate studies also have to take all levels in to account, since institutional initiatives can have variations at its spatially separated sites, and individual variations as well with regard to job satisfaction and organizational commitment (Camp, et al. 1997).

Some of the research problems of multiple levels in organizations arose in the past because of the paucity of prior work in similar areas. However, there has been a cascade of organizational research in recent times, with multiple level enquiries (Huber and Glick, 1993). This new body of work can be used as templates when fresh research projects in organizational behavior are undertaken.

The Effects of Organizational Labeling

Organizations tend to fit in to stereotypes which have been created in public minds over time. Professionally managed corporations, political parties, religious institutions, and bureaucracies, are a few examples of such set patterns of our collective minds. Simultaneously, organizations are more than just people who control or work in them. Suppliers, financiers, regulators, franchisees, and customers are some of the other categories of stake holders.

All organizations do not have to be equally responsive to the environment (Huber and Glick, 1993). Monolithic, powerful, and strongly entrenched organizations may demand research of how to further their aims, but worry less about the proclivities of employees and suppliers of goods and services at the bottoms and fringes of their hierarchies.

A highly evolved organization will be dynamic and open minded: it deserves and needs organizational research at multiple levels, with plenty of iteration, and the objective validation of hypotheses. Others will be directive and in a hurry for results: they may appreciate the values of enquiries at multiple levels less or not at all.

Organizational research driven by purely scholastic intent is a rare privilege. The professional researcher will more often have a restrictive brief set by a paying client with a specific and selfish perspective. Organizational studies may mention all the levels in passing or for the sake of completeness, rather than address each of them in detail and in concert.

The multiple levels within organizations should always be kept in mind when studying structures and group working. Even though studies may be sponsored by the most apical level of organization, valid findings and scientific rigor require that the study extends to teams and to individuals as well.

Towards Best Practices

Multiple levels are inevitable in organizational studies. How can the complexities of this reality be incorporated for better research project design, and to ensure findings on which sponsors can rely? It is best to start with the environment in which the organization operates (Huber, and Glick, 1993).

Such a prior effort will put research fully in context. It is necessary to spend time to collect primary data on how the organization functions; and to focus on processes which link the various levels (Crowston, 2002). It is risky to plunge headlong in to researching an organization: every investment in understanding its needs and to profile it accurately, will pay off in terms of relevant findings on which action can be taken.

Levels in organizations can be conceived in terms of internal customers. This is a standard concept in Services Marketing (Payne, 2002). A higher level in an organization, or a branch of the same level, is a customer of a team which supports it through its function.

Thus, a Sales Manager is a customer of his or her sales people, and the entire sales function is a customer of the production or manufacturing department. Since dealing with all levels can make organizational research very complicated, a workable option is to use the internal customer concept to delineate levels of research.

Another approach is to set up microcosms of the organization in external settings, to act as laboratories for experimentation. Groups of employees may be placed on extended sabbaticals, and asked to play roles equivalent to the levels of their parent organizations. This approach has the advantage of eliciting more objective input data from people inside the organization, but can be expensive and time consuming. Research projects which adopt this ‘laboratory’ approach require patience and sustained support, but yield better and more applicable findings at the same time.

A relatively quick and simple compromise could be to adopt a problem-solving approach (Loo, 2003). The median level is a good optimum in such cases, with a focus on actual teams from the structure, with additional participation by representatives from other levels and branches. This team approach can use direct and indirect benchmarking to support its recommendations.

Wherever a choice is available, the organizational researcher should try to go as micro as possible as uncontrollable factors and complexities keep increasing as the analysis goes to higher levels (Camp, et al. 1997). Aggregate measures tend to mislead, and reduce the chances of useful and valid findings.

Regardless of how organizational research is approached, a common requirement is to specify qualitative organizational performance measures as closely as possible. What for example is motivation or how will supervision be assessed?

This will also address the issue of phenomena at lower levels not being confirmed by theories at higher levels-perhaps the higher level has not specified the benefits it seeks (Crowston, 2002). Such specification will also reduce the pitfalls of data from a lower level from pluralistic ignorance, affecting analysis of a higher level (Schnake, and Dumler, 2003).

Finally, the organizational researcher must always think of multi-level implications of proposed work and suggestive conclusions whether or not all levels are included in the work (Klein, & Kozlowski, 2003). Such an approach should persist throughout the research, including the critical stage of sampling.

Conclusions

While multiple levels in organizations and their influences cannot be denied, including all of them comprehensively in actual projects may present.  It may often be best to make research manageable with clear statements of assumptions and limitations.

Organizations are in flux in any case and will evolve towards the median level. This is the historic trend (Huber, and Glick, 1993). Excellence and thoroughness in studying the team level may be a good compromise.

The perspective of each category of stake holders is distinct, yet valid. The researcher would do well to keep the expectations and profile of his or her customer in mind! Multiple levels, in the end, are integral to all significant organizations, and all research in to such groupings must take these multiple levels in to account.

References

Camp, R. et al. (1997) Aggregating Individual-Level Evaluations of the Organizational Social Climate: A Multilevel Investigation of the Work Environment at the Federal Bureau of Prisons. Justice Quarterly 14: 4: 739-762.

Crowston, K, (2002) Process as theory in information systems research, Proceedings of The IFIP WG 8.2 International Conference: The Social and Organizational Perspective on Research and Practice in Information Technology, 10–12 June 2000, Aalborg, Denmark.

Huber, G, and Glick, W, (1993) Organizational Change and Redesign: Ideas and Insights for Improving Performance, Oxford University Press

Klein, K & Kozlowski, S, (2003) A Multilevel Approach to Theory and Research in Organizations: Contextual, Temporal, and Emergent Processes, Chapter 1 in Multilevel Theory, Research, and Methods in Organizations: Foundations, Extensions, and New Directions, JOSSEY BASS

Loo, Robert (2003) A multi-level causal model for best practices in project management, Benchmarking, Vol10, Issue 1; pg. 29, 8 pgs

Payne, A, (2002), The Essentials of Services Marketing, Prentice-Hall

Schnake, M. and Dumler, M. (2003) Levels of measurement and analysis issues in organizational citizenship behavior research, Journal of Occupational and Organizational Psychology. 76(3):283
 

 

 

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Shawshank Redemption Under the 4 Frames of Organizational Views

I. Problema “Shawshank Redemption” Brief Summary: Andy Dufresne a young and successful banker is sent to Shawshank Prison for the murder of his wife and secret lover. When he first arrives in prison he is very isolated and lonely. With time he realizes there is something deep within every man, that no other can touch, that will help him get through this phase in his life. This element is Hope. Andy becomes friends with prison ‘fixer’ Red and becomes influential within the prison, with both guards and inmates. Andy epitomizes why it is crucial to have dreams.

His spirit and determination, leads him to plan one of the most elaborate prison breaks in Shawshank and filled with courage and desire he completes his daring escape. Political Issues The 2 biggest political issues we see in this movie is the relationship between the guards and the prisoners, and the warden stand on Andy’s meaning to him. The only way to have an easier sentence and have good relationships with the guards is the use of buying them and having them be quiet and silent or noisy and violent when necessary.

This is seeing in the movie when guards walk by and ignore acts of rape or violence, or when they act upon their own instincts to punish or abuse another prisoner, to make a statement. This helps create a reputation among not only the guards; but the prisoners. With some of them, knowing how to use the guards to their benefit and that allows them to create factions for other motives. The relationship Andy established with Red (Morgan Freeman) can also be viewed as a political movement towards neutrality, and avoid being casted in a specific prison group, faction or movement.

The way the Warden treats Andy during the whole movie is a use of extreme political power. Authority based on state powers which is used for individual benefits and be subdued when necessary. Using Andy when needed and punishing him when he gets out of line. Creating the relationship of power and authority. Symbolic Issues It’s hard to pinpoint what the administrative characters symbolize, since most of them play to their roles exactly to what we expect from them. The warden for example plays a rough, violent, political figure which is seeing by the way he runs the prison.

The guards are the typical peons in a chess game, where they don’t ask why things happen, they just obey their orders. Personally I believe that 4 characters make up the individual in the movie. We might see ourselves in any of these characters. Red (Morgan Freeman) The Best Friend. The man who knows the ins and out of the prison. It’s been there for a long time and has created a neutral or conformist position on the issues that arise. Viewed as the person nobody can hate; because of his easy going attitude and willingness to help the ones that seek him. Brooks Hatlen (James Whitmore)

The grandfather of the group. Silent but participate, his opinion holds good power because he has become institutionalized by the prison, by age. When let free from prison, we can’t deal with the outside burdens and feels disconnected from the present world. He kills himself and we see him as retired old man, without family of friends, with no motive to live. A depressed old man. Andy Dufrasne (Tim Robbins) The hero of the movie. Manages to be likeable; but strong enough to convey a stand against abusive authority. Playing your cards in a well thought out game to reach the conclusion you need.

Andy not only escapes from prison; but also shines the light on the corrupt system the prison was having. Tommy Williams (Gil Bellows) The loose gun. That person we see on our lives that we can’t get through to. Could be a son, a brother or a close friend. Even though we know the bad things, we believe there is still hope to save him and have him change. When he is murdered in the movie, we think to our selves, It was too late for him. He already dug up his tomb. There’s always someone in our lives that we wish we could save. ———————————————————————

II. Some Unconscious Aspects of Organizations Help create a Psychological Frame from this Article From reading the lecture, I won’t bother in recreating each aspect of the stories. Instead I will try to create and explain the postulates, that I believe, make up the psychological frame. Also I’ll link personal examples to the postulates. 1. Organizations are always linked to the person who creates them From hiring the first employees and creating the standards of supervision. Companies will always remember the person who created them.

Some companies create Principles or Values, to linger the essence of the first “settler”. a. Personal example: The Company Mars Inc. known mostly for Chocolate and PetCare food, has been always a private, family owned company. As soon as new employees are hired, they are treated as “associates” and taught the 5 family principles, to longer stretch the Mars Philosophy of work. 2. Human Aspect will be translated from founder to organization Any aspect or specific personality the founder has, will be shown on either company view or work style.

Not only Unconscious Aspects talks about this translation happening; but also Perfection or Bust, talks about an Obsessive Compulsive Company. b. Personal Example: An accounting company founded by a man that likes to commit to a lot of contracts, without evaluating the resources on hand. A compulsive man that reacts before analyzing and then becomes harsh upon reviewing results. 3. Change in governing factors are related to change in employees, and might be temporary Even though must companies maintain a certain style of work and certain way to act upon the public eye; these aspects might change or evolve with time.

Most companies are viewed by the people who employ the company at that moment. That’s why opinions may vary from time to time, depending on who holds management. c. Personal Example: P&G has been viewed as a conservative company, by others in the industry. A public company, result oriented in which whoever works there, must be extremely efficient and intelligent to achieve a position. Other General Manager have tried to create a more liberal and laid back style of work; but have been put out by upper management; but during those times, the companies style and opinion was different. . Development of employees is more of an indoctrination The training of the job, will come tied to the ideology of the company. Created by the founder of the company. This way, the work style and culture is propagated by the same employees and on hand-training. d. Personal Example: Both P&G and Mars Inc. , create online assessment, where the company’s history and culture is explained in detail. Helping the employee or associate get acquainted with the company’s culture.

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The Systematic Study of Organizational Behavior

A country’s culture is the conventional behavior of a society that constitutes beliefs, customs, knowledge, and practices. Evidently, it influences human behavior, even though it is rare that it enters into their conscious thought. People depend on culture as it gives them stability, security, understanding, and the ability to respond to a given situation. Culture complements their well-being. This is why people fear change. They fear the system will become unstable, their security will be lost, they will not understand the new process, and they will not know how to respond to the new situations (Knoster, Villa ; Thousand, 2000).

The organization’s base depends on a company’ philosophy, values, vision and goals. A company’s mission and vision are its very core. This, in turn, drives the organizational culture, which is composed of the formal organization, informal organization, and the social environment. A country’s culture determines the type of leadership, communication, and group dynamics within the organization. The workers perceive this as the quality of work life, which directs their degree of motivation. The final outcomes are performance, individual satisfaction, and personal growth and development. All these elements combine to build the archetype or framework that the organization operates from.

A social system is a complex set of human relationships interacting in many ways. Within an organization, the social system includes all the people in it and their relationships to each other and to the outside world. The behaviors that come about within organizations are of utmost concern and importance. Studying these behaviors may help the consumers to comprehend why some sales agents or employees are able to introduce and sell their products and services with efficiency and effectiveness (cited in Johns, 1988). Also, the social system does not have boundaries. It exchanges goods, ideas, culture, etc. with the environment around it (cited in Knoster, Villa ; Thousand, 2000).

A matter like this could become quite a balancing act. Individualism favors individual rights, loosely knit social networks, self-respect, and personal rewards and careers. One aspect begets another aspect, which is why it is integrated in nature.  Socialization or collectivism favors the group, harmony, and asks “What is best for the organization?” Organizations need people to challenge, question, and experiment while still maintaining the culture that binds them into a social system (Knoster, Villa ; Thousand, 2000).

Autocratic – The basis of this model is power with a managerial orientation of authority. The employees in turn are oriented towards obedience and dependence on the boss. The employee need that is met is subsistence. The performance result is minimal.

Custodial – The basis of this model is economic resources with a managerial orientation of money. The employees in turn are oriented towards security and benefits and dependence on the organization. The employee need that is met is security. The performance result is passive cooperation.

Supportive – The basis of this model is leadership with a managerial orientation of support. The employees in turn are oriented towards job performance and participation. The employee need that is met is status and recognition. The performance result is awakened drives.

Collegial – The basis of this model is partnership with a managerial orientation of teamwork. The employees in turn are oriented towards responsible behavior and self-discipline. The employee need that is met is self-actualization. The performance result is moderate enthusiasm.

Individualization is when employees successfully exert influence on the social system by challenging the culture:

Less socialization and too little individualization create isolation.

More socialization and too little individualization create conformity.

Less socialization and too high individualization creates rebellion.

While the match that organizations want to create is high socialization and high individualization for a creative environment. This is what it takes to survive in a very competitive environment having people grow with the organization, but doing the right thing when others want to follow the easy path (Knoster, Villa ; Thousand, 2000).

Compensation as a motivational factor
Many companies mistakenly assume that what works for one organization will work well for all organizations. Companies often attempt to create incentive programs without thinking in detail about how each program feature will best suit their targeted audience. Providing pie and ice-cream when employees desire flexible work hours, paid time off, training, or the ability to work from home is an example of a negative incentive. To facilitate the creation of a profitable program, every feature must be tailored to the participants’ interests.

A successful incentive program requires clearly defined rules, suitable rewards, efficient communication strategies, and measurable success metrics. By adapting each element of the program to fit the target audience, companies are better able to engage program participants and enhance the overall program effectiveness (“Incentive”).

An incentive program represents a substantial investment to most organizations. Receiving a sufficient return on that investment requires the full participation of the program participants. Incentive programs are based upon the concept that effort increases as people perceive themselves progressing towards their goal. In “The Art of Motivation: An Incentive Industry Primer,” the Incentive Marketing Association ties incentive programs to the psychological equation: Ability x Motivation = Performance.

In order to properly motivate, programs must be designed to offer a variation of products and services to program participants based on their unique interests and diverse needs. Successful programs need to carefully develop their reward methods to keep participants eager to approach a new goal once they have achieved a reward (“Incentive”).

In order to create an effective program, organizations must keep the overall objective in mind when considering program design and implementation. Objectives should be formed based on the organizations overall goals and should be straightforward and specific so participants clearly understand the expectations. Program objectives can vary depending on the needs of each individual organization. They must be challenging, yet achievable. If objectives are viewed as unattainable, the program will be destined for failure. Management By Objectives is crucial for a company to achieve progress and success in order to manage the company in an objective manner. With this in mind, Companies have set various standard order procedures for employees.

Managers are always at the forefront of this matter. Objectives may include motivating employees, recognizing performance, persuading customers to make a purchase, or even reinforcing a marketing message. Once the program’s goals have been determined, every aspect of the program must be measured against this goal in order to ensure the programs success in goal achievement. Whenever successful, objectives should provide measurable results allowing the organization to monitor performance and measure the overall success of the program.

References

Borne, P.A. (February 21, 2007). Organizational Behavior. Retrieved December 12, 2007 from http://www.wincustomize.com/articles.aspx?aid=144899&c=1.

Incentive Marketing Association. The Art of Motivation: An Incentive Industry Primer. Retrieved December 12, 2007, from  http://incentivemarketing.org/displaycommon.cfm?an=1&subarticlenbr=51.

Knoster, T., Villa, K.T., & Thousand, J. (2000). Restructuring for Caring and Effective Education: Piecing the Puzzle Together. A Framework For Thinking About Systems Change. Baltimore: Paul H. Brookes Publishing Co.

Johns, G. (2004). Organizational Behavior: Understanding and Managing Life at Work 6th Edition. Upper Saddle River, N.J.: Prentice Hall.