Providing a Financial Aid to the Developing Countries

1. Nowadays, it became quite clear to just about anyone that the idea that, by providing a financial aid to the so-called ‘developing’ countries, Western nations would be able to help these countries to get out of poverty, has been deprived of the remains of its former legitimacy.[1]Advertising We will write a custom research paper sample on Providing a Financial Aid to the Developing Countries specifically for you for only $16.05 $11/page Learn More This could not be otherwise, because ever since the ‘aid’ paradigm has attained the status of the UN official policy, in regards to the Third World countries, there has been not even a single instance reported of the policy’s implementation having produced a positive outcome. Quite on the contrary – the more this ‘aid’ has been pumped into the concerned countries’ economy, the faster they grew detached from the notions of progress and development, i n the first place. In its turn, this leaves very little doubt that the assumption that aid can serve as the tool of development, is conceptually fallacious. In this paper, I will explore the validity of the above-stated thesis at length. 2. One of the reasons why, during the course of the late 20th century, it became a commonplace practice among ‘progressive’ politicians in the West to advocate the idea of aid, is that during this time it used to be fashionable to assess the essence of the ongoing developments on the international arena within the conceptual framework of political Constructivism. According to the paradigm’s foremost provision, as time goes on, the very purpose of the independent states’ continual existence undergoes a qualitative transformation. [2] In its turn, this was supposed to justify the idea that rich countries should preoccupy themselves with trying to improve living standards in the Third World. Nevertheless, as time goes on, it becomes increasingly clear to more and more people that, discursively speaking, political Constructivism is nothing by the instrument that allows Western countries to conceal their actual (Realist) agenda, concerned with: a) political/economic expansion, b) maintenance of a political stability within, c) destabilization of competing states. What it means is that Western countries cannot be genuinely interested in having aid, which they provide to the ‘developing’ countries, to prove effective, by definition. After all, the fact that people in the West enjoy the world’s highest standards of living is the direct consequence of the Western countries’ existential mode remaining largely ‘parasitic’. The validity of this statement can be well illustrated, in regards to the FRS’s practice of emitting billions and billions of dollars, without bothering to ensure that the money in question does reflect the value of any material assets. As a resu lt, the US currency had ceased to represent any objective value, whatsoever, while being turned into essentially the tons of a valueless green paper (nowadays, it is rather the bunch of digital zeroes in the FRS’s main computer).Advertising Looking for research paper on international relations? Let's see if we can help you! Get your first paper with 15% OFF Learn More Yet, it is specifically this currency (the US dollar), with which the Western world pays ‘developing’ countries, in exchange for their natural and human resources. In the similar manner, Spanish and later British colonists used to buy land from the American Natives, in exchange for glass-beads. Therefore, the Western practice of providing the Third World countries with aid, while these countries are being robbed clean by the very same ‘aid-providers’, is a hypocrisy of the worst kind. Being strongly hypocritical, this practice cannot possibly result in the improvement of l iving standards among the world’s most impoverished people. Quite on the contrary – it prompts aid-recipients to adopt the mentality of beggars, which are doomed to rely on others, while trying to meet the ends.[3] In its turn, this causes the ‘poor and needy’ to become resentful of their moralistically minded ‘beneficiaries’. In this respect, it would prove quite impossible to disagree with Bindra, who suggested that: â€Å"Far from being productive or necessary, the donor-dependant relationship most often ends in mutual hatred. And amid the final acrimony, one crucial fact is forgotten: the longer the relationship has carried on, the less capable the dependant of reducing his dependence†.[4] This explains the phenomenon of legal and illegal immigrants from the Third world continuing to arrive to the Western shores in big numbers, despite remaining deeply resentful of the so-called ‘Western values’. These people are perfec tly aware that in their own countries, they do not have even a slight chance of a social advancement, by definition, which in turn is the direct consequence of the West’s ‘well-meaning’ geopolitical arrogance, reflected by the euro-centric belief that aid can indeed serve as the tool of development. This, of course, once again exposes the sheer fallaciousness of the assumption that by throwing ‘crumbs’ from their richly served tables to those people that have to struggle with hunger on a daily basis, philanthropically-minded Westerners would be able to make a difference. There is another reason why there can be no rationale, whatsoever, in thinking that there may be any objective benefits to the policy of providing aid to the ‘developing’ countries – especially if the latter happened to be situated in Africa. This reason has to do with the fact that, in the evolutionary sense of this word, these countries’ citizens cannot b e considered equal with their Western or South-Asian counterparts. After all, it does not represent much of a secret that the average rate of IQ among citizens of the world’s most impoverished countries, such as Nigeria, Equatorial Guinea and Ethiopia, amounts to as low as 50-60.[5] What it means is that the very assumption that aid can trigger the process of the evolutionary underdeveloped individuals being set on the path of progress, does not stand much of a discursive ground.Advertising We will write a custom research paper sample on Providing a Financial Aid to the Developing Countries specifically for you for only $16.05 $11/page Learn More The reason for this is apparent – it is only those individuals that are capable of operating with highly abstract subject matters, which in turn is being reflected by the rate of their IQ, who have what it takes to be able to enforce the virtues of a rationale-based (and consequentially prosperous ) living. After all, it is specifically one’s ability to understand the meaning of abstractly sounding terms/definitions, which creates objective preconditions for the individual in question to be capable of exercising a rational control over its animalistic urges. One of these urges is concerned with the intellectually underdeveloped people’s tendency to remain tribally minded, throughout the course of their lives. In its turn, this can be discussed in terms of a metaphysical ground, out of which these people’s taste for corruption actually stems. This helps us to understand why, as practice indicates, at least 60% of a financial/material aid that is being provided to the ‘developing’ countries annually, on the part of the West, ends up being stolen by the local officials, in charge of distributing this aid among the most socially disadvantaged citizens. [6] Yet, it is not only that this does not cause aid-providing Western countries to reconsider the legitimacy of the policy in question, but it in fact appears to provide aid-donors with an additional incentive to keep on throwing money into the bottomless pit of the Third World. Such a seeming illogicality, however, can be well explained once we realize that, in the geopolitical sense of this word, the term ‘aid’ is nothing but the well-sounding euphemism to the term ‘extortion’. The rationale behind this suggestion is as follows: By providing aid to the Third World countries, Westerners contribute to the maintenance of the situation when the representatives of the corrupted ruling elites in these countries, are able to remain in the position of power, while continuing to lead a parasitic existence. The price of this is that the rest of ordinary citizens are being kept in the state of an extreme poverty. After all, the more impoverished citizens are, the easier it is to provide them with the incentives to participate in elections/publicly held mass- rallies, which in turn legitimize the earlier mentioned state of affairs. This is because the cost of the impoverished citizens’ active participation in the earlier mentioned activities is comparatively cheap.Advertising Looking for research paper on international relations? Let's see if we can help you! Get your first paper with 15% OFF Learn More For example, it represents a common practice, on the part of politicians in many ‘developing’ countries, to hire people to participate in the mass-rallies (staged to prove that these politicians indeed enjoy much of a public support), by paying every individual ‘supporter’ as little, as $1 per day.[7] This partially explains the reason why, while pumping finances into the economies of the Third World countries, the UN bureaucrats never cease stressing out that the provided financial assistance is also meant to promote the values of democracy. While knowing perfectly well that, within the Third World settings, democracy necessarily breeds corruption, the earlier mentioned bureaucrats simply strive to maintain the present status quo in the ‘developing’ countries, concerned with the situation when the small minority of these countries’ richest citizens continues to subject their less fortunate countrymen to the most extreme forms of an econ omic exploitation. Therefore, the democracy-rhetoric, on the part of those Western politicians who popularize the idea that aid can indeed be considered the tool of development, indicates that, despite having condemned the legacy of colonialism formally, Western countries nevertheless continue to remain essentially colonial – although this time, their colonial aspirations are concealed with the politically correct wrapper of ‘aid’.[8] Finally, the idea that aid may serve as the instrument of development cannot be considered thoroughly valid, because it is nothing but the byproduct of White people’s endowment with the sense of a perceptual euro-centrism. That is, the concerned idea appears to be consistent with solely the Western outlook on what the notion of development stands for, because it reflects While people’s tendency to associate this particular notion with the notion of quality. What it means that there are no good reasons to consider this idea applicable, within the context of how people in non-Western countries go about addressing their evolutionary agenda of securing and expanding the affiliated environmental niche on the planet. The reason for this is apparent – even though that, regardless of what happened to be the particulars of their ethno-cultural affiliation, all people are similar, in respect of being ‘programmed’ to seek domination, the strategies that they deploy during the course of the process, reflect the measure of the concerned individuals’ existential complexity. Whereas, some people strive to maintain their evolutionary fitness by the mean of contributing to the pace of the technological/cultural progress (quality), the others pursue the same agenda by the mean of making babies on an industrial scale. In the eyes of evolution, neither of the mentioned strategies can be deemed ‘superior’ – all that matters, is that the chosen strategy ensures the eventu al survival/dominance, on the part of its affiliates.[9] [10] In its turn, this implies that, despite the fact that many citizens in the Third World countries do suffer from undernourishment; ‘aid’ (in the Western sense of this word) is the last thing they need. For example, within the matter of forty years, the population of Ethiopia has tripled – despite the fact that, throughout this time, Ethiopians continued to suffer from the never-ending civil war and famine.[11] Perceptually ‘feminized’ Westerners, on the other hand, grow ever more incapable of addressing even the most basic life-challenges – despite enjoying the world’s highest standards of living. As opposed to the Western societies of whining degenerates, which have effectively ceased evolving, the Ethiopian society is blessed with the Darwinian vitality, which in turn allows its members to successfully deal even with the most unimaginable hardships – without needing t o be ‘aided’ by those who cause these hardships, in the first place. 3. I believe that the earlier deployed line of argumentation, in defense of the suggestion that the notions of ‘aid’ and ‘development’ are mutually inconsistent, fully correlates with the paper’s initial thesis. Apparently, aid cannot lead to development, by definition. Bibliography Bebler, Anton. â€Å"Self-Assertion in the Third World.† International Political Science  Review 1, no. 3 (1980): 369-380. Bindra, Sunny. â€Å"Men Behaving Badly.† In Missionaries, Mercenaries and Misfits: An  Anthology, edited by Rasna Warah, 147-155. London: AuthorHouse, 2008. Ghosh, Arun. â€Å"Self-Reliance, Recent Economic Policies and Neo-Colonialism.†Ã‚  Economic and Political Weekly 27, no. 17 (1992): 865-868. Hodgson, Geoffrey. â€Å"Darwinism and Institutional Economics.† Journal of Economic  Issues 37, no. 1 (2003): 85-97. Jones, Jack. â€Å"Soc ial Darwinism Reconsidered.† Political Psychology 3, no.  ½ (1981): 239-266. Lynn, Richard, and Tatu Vanhanen. IQ and the Wealth of Nations. Westport: Greenwood Publishing Group, 2002. O’Higgins, Eleanor. â€Å"Corruption, Underdevelopment, and Extractive Resource Industries: Addressing the Vicious Cycle.† Business Ethics Quarterly 16, no. 2 (2006): 235-254. Olssen, Mark. â€Å"Radical Constructivism and its Failings: Anti-Realism and Individualism.† British Journal of Educational Studies 44, no. 3 (1996): 275-295. Szeftel, Morris. â€Å"Misunderstanding African Politics: Corruption the Governance Agenda.† Review of African Political Economy 25, no. 76 (1998): 221-240. Tomlinson, Bill. â€Å"What Was the Third World?’, Journal of Contemporary History 38, no. 2 (2003): 307-321. White, Phillip and Lionel Cliffe. â€Å"War Famine in Ethiopia Eritrea.† Review of  African Political Economy 27, no. 84 (2000): 329-333. Footnotes Bill Tomlinson â€Å"What Was the Third World?’, Journal of Contemporary History 38, no. 2 (2003): 311. Mark Olssen â€Å"Radical Constructivism and its Failings: Anti-Realism and Individualism.† British Journal of Educational Studies 44, no. 3 (1996): 280. Anton Bebler â€Å"Self-Assertion in the Third World†, International Political Science  Review 1, no. 3 (1980): 375. Sunny Bindra, â€Å"Men Behaving Badly.† In Missionaries, Mercenaries and Misfits: An Anthology, ed. by Rasna Warah (London: AuthorHouse, 2008), 149. Richard Lynn and Tatu Vanhanen, IQ and the Wealth of Nations (Westport: Greenwood Publishing Group, 2002), 120. Eleanor O’Higgins â€Å"Corruption, Underdevelopment, and Extractive Resource Industries: Addressing the Vicious Cycle.† Business Ethics Quarterly 16, no. 2 (2006): 237. Morris Szeftel â€Å"Misunderstanding African Politics: Corruption the Governance Agenda.† Review of African Political Economy 25, no. 76 (19 98): 219. Arun Ghosh â€Å"Self-Reliance, Recent Economic Policies and Neo-Colonialism.† Economic and Political Weekly 27, no. 17 (1992): 866. Geoffrey Hodgson â€Å"Darwinism and Institutional Economics.† Journal of Economic Issues 37, no. 1 (2003): 90. Jack Jones â€Å"Social Darwinism Reconsidered.† Political Psychology 3, no.  ½ (1981): 245. Phillip White and Lionel Cliffe â€Å"War Famine in Ethiopia Eritrea.† Review of  African Political Economy 27, no. 84 (2000): 332. This research paper on Providing a Financial Aid to the Developing Countries was written and submitted by user Lyla U. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

COURSE PROJECT Essay

COURSE PROJECT Essay COURSE PROJECT Essay Devin Martin MIS 535 Managerial Applications Of Information Technology Professor: Mr. Sibrizzi Course Project How to Improve a Broken Accounting Information System Table of Contents 1. Introduction 2. Step to implementing an integrated accounting information system 3. Benefits and advantages of a computerized accounting information system 4. Emerging technologies 5. Conclusion 6. References Can you imagine in 2012 working for an entity whose Information systems hasn’t been improved since the 90s? Well I did. I was in my sophomore year of college, when I received a call from the City of St. Louis Human Services Department secretary. Ms. Lajoyce offered me an opportunity I was so patiently waiting on, the accounting clerk position. I was extremely excited and believed this was the beginning of my journey to being an Accountant. It was now time for me to put all my education to use. Once I was there, I quickly learned the accounting department didn’t operate with an integrated information system or collaboratively as a team. Each accountant had there own database or spreadsheet systems, which decreased productivity and efficiency. Information systems are essential for conducting day-today business. First, I will focus on describing each accountant’s database or spreadsheet system and identity the problems. Then, I’ll educate the manag er on how to effectively implement an accounting information system. Lastly, I will provide the advantages and benefits for the accounting department if a well structured accounting information system is implemented. I found the best way to prepare myself for my first real job was to learn the organization, its culture, and environment. In the accounting division there was the manager, accounting coordinator, internal auditor, three accountants, and four accounting clerks. The division still operated as command and control environment, which means no matter how many good ideas I had the upper-level management would not listen to them. The first accountant maintained the books for the Homeless division, the second accountant maintained the books for the St. Louis Agency on Aging, and the third accountant maintained the books for the Youth and Family Division. All of the accounting division employees were given the necessary hardware to complete their duties, but lacked the necessary software needed to successfully complete their duties in a timely manner. The accounting manager has been unsuccessful in convincing the Department Director, to approve funds to update the accounting information system. The Youth and Family accountant, over the years, decided he would purchase the software he needed to create his own database. He quickly taught himself how to build a database using access. The database the youth and family accountant created consisted of several transaction processing systems. Once a transaction was input into the system, it updated the system’s master file that permanently maintained sites and vendors information for the youth and family division. The data in the system was combined in different ways to create reports of interest to management and government agencies and to send payment to the sites. The TPS supplied data to the accountant’s general ledger system, which is responsible for maintaining records of the firm’s income and expenses and for producing reports such as income statements and balance sheets. His system decreased data redundancy and cut cost. Unfortunately the accounting coordinator and other accountants weren’t educated on using an access database, so they couldn’t comprehend his system. The division must be aware of and open to the influences of information systems to benefit from new technologies. The Homeless division accountant and the SLAAA accountant had several excel spreadsheet systems they created to

Research Paper Essay Example | Topics and Well Written Essays - 1250 words - 4

Research Paper - Essay Example Traditionally, these problems were not apparent because tourists were very responsible in helping preserving the pristine nature of places they visit. But today the environment are becoming an eye sore because of exploitation through ecotourism. Wildlife is also threatened. Reasons for this could be poor management so that the environment and wildlife are not conserved. Ecoutourism became a form of business rather than appreciation of nature. Thus, most often it hastens the decline of natural resources and causes the imbalance of environmental ecology as a result of some extinction of fauna brought about by extensive tourism. Modern ecotourism should be transformed from its current state to the position where it contributes to ecological preservation, nature protection, and social responsibility. (Make sure you describe the problem fully in introduction. I think the problem was fully described. Besides I will be going beyond 5 pages if I will revise the introduction. I even went beyo nd the number of word count required in your paper)(he said to me need more describe so you can change some words by another words which is more value of describe) Ecotourism is believed to contribute to ecological preservation. This had been observed in the case of turtle based ecotourism at Mon Repos Beach just near Bundaberg, Australia (Tisdell, Clem & Wilson, Clevo, 1). The development of turtle based ecotourism contributed positively in its preservation. It was even adopted by other countries like Sri Lanka as their â€Å"come on† tourist attraction. Observation also reveals that when people are interested in certain place, the more that the host communities are going to exert effort to preserve its natural beauty. An example of this is the Great Wall of China. Ever since it attracted tourist from all over the world, the Chinese government started to pay particular attention in the maintenance of the wall as well as planting

Shakespeare's Othello theme and characterization Essay

Shakespeare's Othello theme and characterization - Essay Example 34). Lago characterization is basically presentation of black sheep in the societies that how they play with individual’s life and destroys them. Their mind games are of pure evilness and immorality; utmost desire to get power, wealth & ranks can lead them to do any spiteful task. Lago in the quest of such desires makes a big spectrum in which he plays with many individual’s life and creates conflicts in between them so that he would lead to the ultimate path of success. His agenda is self fulfilment of worldly desire for which he would take any step (Rees, 186). The theme of the author is to concentrate readers on such kind of devil-men who are present in the human race. Othello is depicted as hero in the novel; however his did some immoral acts due to ignorance about the occurrence of certain events. Lago is the main person behind this whole game plan. The writer wanted to depict that sometimes even good people can commit crime due to ignorance, resentment, jealousy, envy and unawareness but their agenda is not to prevail destruction among the society. Their acts are in the light of presented facts and figures and thus they feel resentful inside thus take bitter actions. Othello killed her wife due to genuine misunderstanding; though taking a human life due to jealousy, betrayal and revenge is not justifiable in any book of law (Toole 73). Todd & Kenneth (371) illustrate that Othello after knowing the real picture of the handkerchief incident commits suicide as he feels extremely sorry for his act of killing her wife, disrespecting her and disregard Cassio services. The writer wanted the readers to understand that the good one’s cannot resist after hearing the truth as they feel ashamed of their wrong deeds prevailed. Also man with a noble and gentle heart knows that what’s right and wrong in life so killing an innocent due to a great

Balance Score Card As A Performance

Balance Score Card As A Performance Leading organizations has been successfully using performance measurement to gain insight into the organization and the effectiveness and efficiency of its programs, processes, and people. However, they do not stop at collecting and analysis of data rather, these organizations use performance measurement to force improvements and successfully transform strategy into action. Therefore, they use performance measurement for managing their organizations. The balanced scorecard (BSC) is the most widely applied performance management system today. The BSC was originally developed as a performance measurement system in 1992 by Dr.Robert Kaplan and Dr. David Norton at the Harvard Business School. Unlike earlier performance measurement systems, the BSC measures performance across a number of different perspectives-a financial, a customer, an internal business process, and an innovation and learning perspective. BSC was introduced at a time when businesses were evaluating performance only through a financial scope and the different perspectives added a new dimension to the performance management concept. However over the years a number of alternatives have been introduced to replace BSC such as Applied Information Economics (AIE), Performance Prism, Results based management Model etc. This is mainly due to the changes in the environment which is beyond the four quadrants of BSC and basic implementation issues experienced in BSC. The Balanced Score Card has to go through a transformation in order to survive and revive itself as powerful performance management tool. Balance Score Card Introduction The field of performance management in todays day and age is vital to any organization. This importance can be defined through John E Jones quote What gets measured gets done, what gets measured and fed back gets done well, what gets rewarded gets repeated. John E. Jones. Performance Management can be of two main aspects. In one view, the performance of the company as a whole and further the effectiveness of the management of their capabilities of running the business successfully are looked at while in another view performance management system of evaluating employees to help them reach their respective goals and thereby ensure that the company meets the companys overall objectives. When the word â€Å"measurement† comes to our mind, it has always been through a financial scope. There by performance of an entity was always measured through measures such as Return on Investment (ROI), Earnings Per Share (EPS),Gearing Ratio, Net Profit After Tax (NPAT), and Sales Turnover etc. However when the environment became gradually more competitive and complex there were more stakeholders involved in a business. The customers were one of the main stakeholders interested in the activities in the organization. Their demand evolved and along with that how they perceive performance also too dramatic change. They were no more content with only financial evaluation of the organization; measures such as market share, customer satisfaction, productivity, and innovation etc were more appealing. It was during this transition, the balance score card was introduced by Dr. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give a more balanced view of organizational performance. The balanced scorecard is a strategic management tool used for translating an organizations strategic objectives into a set of performance indicators distributed among four quadrants. Some of these indicators are maintained to measure an organizations advancement towards its vision and other indicators are maintained to measure the long term drivers of success. Through the balanced scorecard, an organization monitors both its current performance and its efforts to improve processes, motivate and educate employees. Balance Score Card History The balance score card has been known to be created by Kaplan and Norton however there is a historical twist to this as for my findings on www.wikipedia.com. The first balance scorecard was created by an independent consultant called Art Schneiderman in 1987.He participated in a research study in 1990 led by by Dr. Robert S. Kaplan and was able to describe his work on balanced score card. Subsequently, Kaplan and David P. Norton included anonymous details of this use of balanced scorecard in their 1992 article on Balanced Scorecard. Kaplan and Nortons article wasnt the only paper on the topic published in early 1992 but the 1992 Kaplan and Norton paper was a popular success, and was quickly followed by a second in 1993.The balances score card was widely spoken of only through their articles and journals. Kaplan and Norton researched on BSC through a project involving 12 companies. Thereby BSC became Kaplan Norton Balance Score Card and they were identified as the creators. Balanced Scorecard has been awarded a prize by the American Accounting Association as the â€Å"best theoretical contribution in 1997†. Balance Sore Card Perspectives As explained earlier BSC is a tool which monitors organizational strategies by using a combination of financial and non financial measures. It is designed to interpret strategy in to objectives and measure it across four balanced perspectives, namely Financial, Customer, Internal Business Process and Learning and Growth. The BSC directs to develop metrics, collect data and analyze as for these for quadrants in order to have an overall perspective. The pictorial view of the perspectives is as follows: The Financial Perspective This perspective reviews if the strategies of the company contribute towards the bottom line of the company. The virtue of Balance Score Card (BSC) is that it represents both leading and lagging performance measures. Traditional lagging indicators include financial measures, such as revenue growth and profitability. As it implies financial data is mostly historical data and organizations are measured based on its past performance. This perspective clearly describes how the organization looks to the shareholders. Few of the measures that can be used are : Return on Capital Employed (ROCE) Return on Investment (ROI) Market Share Revenue Growth Profitability Economic Value Added ( EVA) The Customer Perspective This aspect reviews how customers perceive the organization. And today, the buzz word in the corporate world is customer service. The importance given to this concept is immense due to the competitiveness and the buyer bargaining power. Therefore customer focus, customer satisfaction, on time delivery etc are leading indicators. Poor Performance from this perspective is a leading indicator of downfall in future business even if the financial indicators are healthy. In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups. Metrics for the customer perspective could include: No.of Complaints On Time Deliveries Repeat Purchases Customer Acquisition Customer Retention The Internal Business Process Perspective This assesses the quality of people and processes. This perspective refers to internal business processes which the company should improve in order to achieve its objectives and give customers both satisfaction and productivity. Traditional methods only looked at improving existing systems however the balanced scorecard has the ability to identify entirely new processes that the business should succeed, in order to achieve customer satisfaction. The measures for this have to be developed very carefully as understanding the business process is crucial. The measures should focus on internal processes that will have the greatest impact on customer satisfaction and achieving business objectives. Potential measures for the internal perspective include: Amount of reworking Increase in productivity % of defects Increase in capacity utilization The Learning Growth Perspective This perspective concentrates on the areas an organization must improve, on continuous improvement, and creating value in the future. The focus is on the intangible assets of the organization. The future of any organization today lies on how innovative and evolving it is, thereby this perspective encourages this aspect. Further the perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement. The following metrics could be used to measure success in relation to the innovation and learning perspective: No of New Products introduced No of Trainings done per period Research Development as a % of Sales Employee suggestion which were implemented Critical Evaluation of the Balance Score Card An organization without a performance management system is like a ship in the deep blue sea without a compass, not knowing if the direction it sails is correct nor knowing how to improve its direction. Therefore the purpose of measuring performance is not only to know how the entity is performing but also to enable it to perform better. The Balanced Scorecard concept measures whether the companies are aligned with its larger-scale objectives in terms of vision and strategy. It focuses not only on financial outcomes but also on the human aspect as explained earlier under the introduction and the perspectives area. Thereby the BSC provides an overall view of the organization and the business. This is contrasting to the traditional method of being only financial oriented only. The measurements used in the separate perspectives are explained in the earlier section. The balanced scorecard is not only a measurement system but is a management system as well. It enables organizations to clarify their vision and strategy to its employees and translate them in to operational goals or action plans. The evolution of BSC from its simple performance measurement framework to a strategic planning and management system is gradual. Further the BSC is also useful to communicate the expectations expected from the employees. This can be done through clearly defining the measures or KPIs to be achieved by individual or department. To elaborate this in order to achieve overall objectives of the organization of Sales growth by 10%, Employee A,B C of Production Department can contribute by keeping the lead time of goods 98% as expected or better than customer expectation. Employee D E of Sales team can target to ensure customer complaints are attended to within 24hours which is an industry norm. As explained in this, the Sales growth of 10% is expected to come through attending to customer order on time (lead time) and customer service (handling complaints). Cascading the organizational objectives to the lowest level employee will pave the way for success. As explained the balance scorecard has evolved over the years to be identified as a â€Å"strategic linkage model† or a strategy map. The strategy map enables organizations to clarify their strategy and assist organizations with creating their BSC framework and measures. A generic corporate strategy map is provided below to illustrate the â€Å"Strategy Map† concept. The balance score card has the ability to identify the key areas which can make a huge impact in an organization. The critical success factors of each perspective can be identified through the well defined measurement criteria. As for the results of the KPIs the management has the ability to identify the superior and weaker link of the organization and take action to correct the situation. A business might be performing well with increased sales, however the production team might have a ratio of increased defect rates. This might not reflect in the top line as the production team ensures the sales are not slowed down by covering up with increased production. If the internal process is not reviewed properly the production defect rates will not highlighted. This is where the BSC becomes a critical tool to identify critical success factors. The balanced scorecard approach can be used and applied at both the individual and the organizational level. It provides a balanced approach to evaluate the employees performance in a comprehensive manner. Traditionally, measuring the employee performance refers to only the comparing of their action plans and behaviors with the standards set. However the BSC actually measures the results of their actions like profits, increasing market share. It considers the progress towards achieving the goals and objectives of the organization and the effectiveness of the process. Thereby, the balanced scorecard gives the full view of the employees and the organizational performance and it helps to align the employee performance plans with the organizational goals. The Balanced Scorecard provides a stage for feedback and in turn a process for learning as well. Feedback about products, new learnings discoveries can be included in to the scorecard. Based on the measures employees can be given feedback and also training in order to improve the processes. This helps to refine the processes on a continuous basis with the use of the feedback. Thereby once a balanced scorecard system is in place, it allows for ongoing monitoring of goals and objectives. BSC benefits to maximize co-operation between teams. Employee helps one another to achieve their respective overall KPIs. This helps to build the team culture in the organization. The BSC drives a performance drive in to the business with its set objectives and continuos feedback. And if the objectives are linked to rewards, employees are very well motivated to achieve the set targets. The BSCs ability to give a wide view of the business operations makes it a formidable tool in the business world. The four perspectives of the scorecard permit a balance between short term and long term objectives, between desired outcomes and the performance drivers of the outcome, between soft measures and hard measures. However having gone through the positives of the Balanced Score Card, this tool has its negatives as well. The Balanced score card in was introduced in the early 90s and now the business environment has seen many changes. Has the Balanced Score Card got all requirements to still qualify as good performance management tool in current context? , will be discussed in detail in the following section. The organization through different elements in BSC analyzes the organizations performance and these measures are vital in creating a good balanced scorecard. Once the balance score card is implemented, you can not presume the business environment to be the same. In current context the volatility of the business environment is so rapid therefore the nature of your business can change in time, which means the BSC too has to be modified accordingly. It is a time consuming affair to maintain a scorecard but if it is not done properly the organizations ability to evaluate its employees will become an issue. The business should be able to give a considerable time to upkeep or maintain the scorecard, if not; it might not be a good solution for the business. The balance scorecard attempts to involve employees from all levels in the organization by cascading the vision and strategies. Despite inherent attempts to empower employees, the balanced scorecard is still seen to be based around a centralized, prescriptive model. Even though BSC focuses on dynamism and constant feedback it would still react slow to bottom level suggestions based on the organizational culture and background. In their book in 2007, Kaplan Norton (2007) mentioned that implementing a BSC would take a minimum time line of 26 months. Another weakness in BSC or a question which remains unanswered is how well the BSC will function in a dynamic environment. Organizations today are going through a paradigm shift. Internet and Information Technology as a whole has made the world a global market. Thereby the businesses also have to adapt to different environments, new changes in order to survive. Is BSC a model which is fast enough for this adaptation? , is a query in most peoples mind. Currently any measurement tools have to be modified taking in to account the dynamic changes in the environment in order to make it a pervasive tool. As discussed in the previous areas the BSC is designed to measure performance through four major perspectives. However questions are raised now whether these perspectives are sufficient to measure a business performance. As indicated in the BSC History this model was introduced in the early 90s, however the organizations and the environments they perform in have moved much further and there are many other concepts which are significant for an organizations long term sustainability. As an example the Green concept was only a thought in the early 90s but today its a way of life for organizations. Even customers are concerned in how respectful their brands are to the environment. Corporate Social Responsibility is another indicator that organizations have stepped out of the traditional financial performance criteria, and they are actually weighed for the contribution they make to the society. It is used as a way of marketing too. These areas have a special place in the annual report an d it is the pride of any organization to report their contribution to the society and the environment. Further ethical practices play a main role in reporting and in anything an organization does. After the Enron issue ethics have been discussed in the corporate tables and it does matter in blue chip companies to be ethical towards its stakeholders and shareholders. However these elements have not been touched upon on the balance score card. Another observation on BSC is on the weight given on the four perspectives, the standard weight given may not be applicable to all organizations. It might vary from industry to industry and even internal divisions might have varied measures, thereby based on the importance of the perspective has to be reviewed before weighs are assigned. Based on the research by Kaplan Norton (2003) it has been found that using about 20 -25 measures is the usual recommended practice. Figure 3 drawn from an article written by Dr David Norton illustrates the weights assigned for each perspective, with greater emphasis on internal business process, as it is the primary source through which the strategy of the organization is implemented. The balance score card weights should not be a pre defined and should be a management decision based on industry norms etc. At IFS which is an organization keen on research and development and learning, the emphasis on the internal process and learning and growth perspectives will be high. However if we take a bank, Financial stability, Customer service and the Internal Processes are all vital and require high weight. Thereby it is crucial on understanding the concept properly on assigning weights as it is a crucial part of BSC. The stakeholders form the main category of any organization, because they are the group of people who will be affected from the decisions made by the organization. The customers perspectives have been included in to the Balanced score card however the other main categories which I felt lacking in BSC are the suppliers and the competitors. The suppliers are key to a companys source of raw materials and supplier management can bring monetary benefits to the organization. Organization should always keep a tab of its competitors and scores should be kept to follow up on direct competitors. As adding more perspectives will complicate the BSC, I have suggested a recommended way of handling this under recommendation section. Though the balanced score card could be reward the employees it is criticized when performance evaluation and incentives are related to it. It has been found that when rewards are linked to the scorecard directly, productivity drops considerably. This is mainly due to the fear by the employee that he/she maybe made responsible for factors which is beyond their control. Thereby they may tend to keep a margin or levy when agreeing upon targets in order to achieve the targets and get the incentives in a relaxed way. However this is not critic on the BSC concept, it is an issue with the implementation. Another criticism is that the Balanced Scorecard does not provide a bottom line score. The scores are not assigned based on any proven economic or financial theory. The bottom line score does not give a unified view with clear recommendations. It acts only as a simple list of metrics and how they are interpreted will vary from organization and industry. Therefore the implementation and the management commitment and intelligence in interpreting the measures play a main role in the success of BSC. Further to elaborate on this for BSC it is not usually sufficient to use generic measures used by other organizations. Each business should strive to identify the firm specific measures that are appropriate to implement their strategies and achieve the vision of the company. This relies upon the competency of the management. Further many companies use only lagging measures which shows results of a past event. For the balance score card to be successful the business should include leading measures as well, which will indicate the future of the business. Many managers get carried away with BSC by only including non financial measures however to reap the full benefit of BSC managers have to include future indicators (leading measures) as well. A research conducted by Claude Levy, a professor at the Free University of Amsterdam reported that the failure rate of BSC implementation is 70% and this is mainly due to the many number of metrics and employees not having an understanding of the metrics. Due to its long duration in implementation many organizations use a balanced scorecard system. However this cost a lot of money in training time and additional money for any consultants that are needed during the process. Therefore the initial cost in implementing the balanced scorecard is huge. Balance Score Card Recommended Improvements Based on the evaluation above I suggest the following to improve the current balanced score card. The main stakeholders such as competitors and suppliers should also be entered in to the BSC. As including another area will complicate the score card, I suggest these stakeholders are identified under internal business process however even 2-3 measures/KPI each has to be assigned for each stakeholder under this area. Many alternative tools have been designed based on the BSC framework and the â€Å"Performance Prism† is one such customized BSC framework which takes in to account five perspectives, which includes stakeholders as well. The BSC design should be broader in order to accommodate the environmental aspect, Society and Ethics. However complicating the BSC with many perspectives will not serve the purpose either. Therefore the balanced score card should have an industry specific format with assigned measures. This standard could be used for the firm and customized if required. The measures used should be between 25-30 maximum with the newly included areas as well. Too many measures mean most of the time nothing gets measured at all. The weights assigned to the perspectives should be decided based on the firm and the importance of the processes relevant to the business. I feel that it is hard to pre-define the weights in todays context and it should be a management decision, however in order to ensure order prevail they could get audit support on assigning weightage. On implementation of the BSC it is of utmost importance that the objective of the concept is clearly communicated. Further if the measures/KPIs are discusses with line managers and staff before entering it to the scorecard the employees will feel ownership towards the KPIs. And thus can avoid any issues later arising when rewards are linked to KPIs. Linking incentives to the achievement of these KPIs is a motivator, and I feel should be an integral part of BSC. The BSC will not be successful if it does not include leading measures as well as the lagging measures. At the end of the day it is all about improving your future. Thereby there should be a specification on BSC that out of the total measures even 40% should be leading measures and that there should be even one for each quadrant. The balanced scorecard or any other performance management tool is driven by a well defined strategy of the organization. It is the understanding of the linkages between the objectives and metrics that is the foundation of the BSC. Thereby if the business is not equipped with a good strategy and competent management team, I feel the BSC is not the performance management tool for them. The balance score card with its metrics should be an automated system. In present scenario, unnecessary issues can be resolved if a balanced scorecard software is installed. The organization should also give adequate time for training the staff. Conclusion The Balanced Score Card is the pioneer tool in focusing on a range of perspectives which included financial and non-financial factors. The tool is built to focus on past and future of the business with its lagging and leading measures. However in an ever evolving business environment, the BSC has failed to evolve with time. And the balance scorecard depends heavily upon how it is used or interpreted. Therefore the management commitment towards BSC is vital for its success. The biggest critic for BSC is that its disability to be maintained in a dynamic environment. The industry specific BSC designs will be more applicable and more flexible. And these formats can include the perspectives relevant to that industry. For example for the power generation industry the environmental perspective should be mandatory. Further if the Balance Score card software is used the time factor for implementation can be reduced. The weights assigned to each perspective should also be firm specific and the KPIs should be reviewed on a constant basis in order to ensure that they are real time KPIs. The balance score card is still a popular tool among many mainly due to its simple to understand concept. All organizations are trying to gain an advantage over the other at all times, therefore if one organization takes the first step towards another performance management tool, the Balance scorecard will see a slow death.

Customer Relationship Management and Systems Essay

1. What concepts in this chapter are illustrated in this case? Symantec Corporation started out with good intentions. Shortly after acquiring Veritas it began an ERP rollout that was designed to standardize and unify the Symantec and Veritas information systems. The goal was to create a single ERP system, within which all of the company’s extensive network of resellers, integrators, distributors, and customers could place orders for over 250,000 different products Symantec offered in the same way. That follows the basic concept of enterprise systems which are based on a suite of integrated software modules and a common central database. When new information is entered by one process, the information is made immediately available to other business processes. Although companies can rewrite some of the software in ERP systems, the software is unusually complex and extensive customization may degrade system performance, compromising the information and process integration. If companies want to reap the maximum benefits from enterprise software, they must change the way they work to conform to the business processes in the software. Although Symantec and Veritas had each used Oracle E-Business Suite 11d prior to the merger, both used highly customized versions of the systems that made integration a daunting task. An overhaul of the combined company’s enterprise systems was needed to join together Symantec and Veritas’s data from key business processes. Enterprise systems help large companies enforce standard practices and data so that everyone does business the same way worldwide. Enterprise systems help firms respond rapidly to customer requests for information or products. Unfortunately, the two companies bungled the implementation of the enterprise system almost from the beginning. 2. What management, organization, and technology factors were responsible for Symantec’s difficulties in overhauling its ERP systems? Management: Most of the issues were due to the company’s shortsightedness in implementing Project Oasis. The initial reaction to the launch of the new system was decidedly negative. Once customers reached a Symantec employee, they could spend up to 20 more minutes troubleshooting problems, and were often told that there was nothing that could be done. There was simply too much change occurring all at once for typical customers to handle. Partners were unhappy with Symantec’s slow response to many of the problems. Organization: The company was unprepared to meet the increased demand for customer support after the rollout. Symantec neglected to coordinate the development of its new ERP system with the launch of other products from different divisions within the company. The changes to the licensing system were not coordinated with the rest of the project. Customers were unhappy with changes to the stock-keeping unit product system (SKU system). Symantec had overlooked the needs of many customers while designing a technically sound but user-unfriendly ERP system. Technology: Both companies used highly customized versions of Oracle’s E-Business Suite 11d prior to the merger. Users struggled to process the large amount of information provided to them and were overwhelmed by the increased number of steps, all of them new, required to place orders. Some smaller distributors and partners didn’t update their systems to handle the new SKUs and were unable to submit purchase orders electronically. After the rollout, licensing became much more difficult for Symantec’s customers and partners, forcing them to wait multiple weeks before receiving their licenses. 3. Was Symantec’s response to the problem adequate? Explain your reasoning. The company initiated a follow-up project named Project Nero. The goal of the project was to recapture the loyalty of customers who were disenchanted by the changes brought about by Oasis. The project reached out to customers and fixed the problems with the information systems to improve response times and streamline operations. The company began by adding over 150 new customer representatives to handle the increased volume of calls, reducing wait times and increasing customer satisfaction. Executives traveled the country to improve relations with angered customers and partners. The company introduced a master list of product releases readily available and standardized its communication methods between departments regarding new projects and change management. Symantec used Net Promoter methodology to measure and increase customer loyalty. The results identified specific criticisms and customer problems and dramatically aided Symantec in correcting those problems. Project Nero helped the company weather the worst of the crisis. However, the company does not release the results of its Net Promoter surveys to the public so the extent to which it has repaired its reputation is unclear. 4. What would you have done differently to prevent the implementation problems that arose at Symantec? Student answers will vary but some of the principles that should be included in their answers are: Even the most careful planning and well-designed systems can quickly go awry if customers are unable to make use of the new system. Enterprise applications involve complex pieces of software that are very expensive to purchase and implement. The total implementation cost of a large system, including software, database tools, consulting fees, personnel costs, training, and perhaps hardware costs, might amount to four to five times the initial purchase price for the software. Enterprise applications require not only deep-seated technological changes but also fundamental changes in the way a business operates. Business processes must be changed to work with the software. Employees must accept new job functions and responsibilities. Most implementation projects fail or experience enormous problems because executives, managers, and employees did not understand how much organizational change was required. Specific Symantec problems that perhaps could have been avoided: †¢ Communicate with employees better to counteract the negative attitude towards the project. †¢ Communicate with customers and distributors better about the upcoming changes. †¢ Make sure all of the systems that were changing were coordinated throughout the organization. †¢ Not change as many systems all at the same time. Even though stretching the implementation out over a longer period may have cost more money, perhaps it would have prevented some of the massive problems overall. 5. If you were a partner or customer of Symantec, would you have switched vendors in response to the ERP overhaul issues? Why or why not? Student answers will vary. Some principles to keep in mind are: Enterprise applications introduce switching costs that make it very costly to switch vendors. Companies become dependent on the vendor to upgrade its product and maintain the installation. Many of Symantec’s partners and smaller distributors were reliant on Symantec and perhaps could not afford to switch vendors. That would mean they would have to switch all of their internal systems at great cost. Customers are often reluctant to switch vendors based on historical relationships. If the problems seem temporary, the customers will hang on. If the problems seem insurmountable, some customers will desert the sinking ship.

Fiscal and Monetary Policy

Introduction As an assistant manager for Skanska I have been asked by my manager to explain how fiscal and monetary policy decisions affect the business in which I work. To undertake this task I will provide explanation of the fiscal and monetary policies. I will also explain what interest rate is and what could be possible changes on it. Additionally, I will explain how both policies could make changes in employment level. Fiscal policy Economic climate is essential to be controlled within every single county because this helps control important activities within the particular country.All countries where economy is developed created and follow polices which ensure that money spent by government are used in an appropriate way. Those policies are known as fiscal and monetary policies. Fiscal Policy Fiscal policy could be defined as a legislation which was introduced by government to control the economy. The fiscal policy control and affects public taxation, public expenditure and bor rowing money. Fiscal policy includes direct and indirect taxation, public finances, public sector borrowing, pre-budget report and redistribution of income.The purpose of fiscal policy is to monitor, control and support economy as a whole. (Ref. http://www. investopedia. com/terms/f/fiscalpolicy. asp#ixzz1nhAdVG74) Taxation Taxation could be defines as a collection of money by government from their citizens and corporation businesses to found operational expenditure of the country. Changes in taxation would have a large influence on economy because amount of obtained money could be spent for different purposes or needs of the country. Taxation could be divided into two main types which are direct and indirect taxation. Ref. Book: Business level 3, Book Publisher: Edexcel Page: 300 Author John Bevan) Direct Taxation This particular type of taxes is paid by population and businesses on their income and profit. If the amount of income is higher than the higher will be direct tax which will have to be paid. Direct taxes could be collected by government in form of income tax, corporation tax, council tax, working tax, road tax, capital gains tax, inheritance tax, stamp duty, national insurance (NI). (Ref. Class notes- Direct and Indirect taxation Lecturer- Brenda Horan Date- 06/02/2012) Income TaxIncome Tax rates 2011-12 by tax band and type of income Income tax is a main financial source for government to found activities of the country and public services. This is pay by anyone within the country who has an income. It is protected by legislation that organisations and individuals have to proof how much income was generated for each year. Income tax could be calculated in three ways which is 20, 40 and 50 percent. Additionally, there is a possibility of personal allowance which means that some people income is not taxable as they do not earned enough to pay income tax.This tax year the basic personal allowance or tax-free amount is ? 7,475. Furthermore, some peopl e may be entitled to a higher Personal Allowance if they have reached the age of 65 or over. (Ref. http://www. hmrc. gov. uk/incometax/basics. htm) †¢ National Insurance Contributions This is another form of tax which is based on income. National Insurance contribution also known as NI is paid by employees and employers to the government. NI is dependable on the amount of money which is earned by each party and whether people are employed or self-employed.Through National Insurance contributions employees are building up to entitlement for different social benefits if they have to. Additionally, NI building up a form of state pensions when employees would be retired. There is one restriction where people do not have to pay NI and this is when they reach retirement age. (Ref. http://www. hmrc. gov. uk/incometax/basics. htm) †¢ Corporation Tax Corporation tax is a form of tax which is based on taxable profits of all businesses. This is why organisations do their best to redu ce amount of corporation tax.The most common way to deduct the amount of corporation tax is to reinvest the profit into the further development of the business. (Ref. http://lexicon. ft. com/Term? term=corporation-tax) Indirect Taxation Indirect taxes are charged by government on producers or suppliers. The main aim of these taxes is to reduce pollution and improve the environment. The examples of indirect taxes are value added tax (VAT), excise duty, air passenger duty, insurance taxes such as car, home or pet insurance, TV licence or driving licence. (Ref. http://tutor2u. net/economics/revision-notes/as-marketfailure-indirect-taxation. tml) †¢ Value Added Tax (VAT) This type of tax is charged almost on all products or services provided by organisations. For instance businesses pay VAT for all products which are needed to manufacture the products and then VAT is paid by customers if they want to buy manufactured products. VAT could be charged into three different rates which a re standard rate 20%, reduced rate 5% and zero rated 0%. Standard rate is most common form of VAT and this is paid on almost all products or services unless they have been specified to reduce or zero rate.Reduced rate is depend on products it’s self and the circumstances of the sale. The most common example of reduced rate VAT are domestic fuel and power, installation of energy saving materials, sanitary hygiene goods or children’s car seats. Zero rated VAT is similar to the reduced rated VAT as is depend on products it’s self and the circumstances of the sale. The example of this type of VAT could be products or services such as food apart from the meals purchased in restaurants or hot takeaways, books and newspapers, children's clothes and shoes, public transport. (Ref. http://www. hmrc. gov. k/vat/start/introduction. htm) †¢ Excise Duty This is another form of indirect tax which is only paid for certain products on the market. Excise duty tax is added to the goods or services which might be luxuries, danger for environment and harmful for the health of population. The examples of products which include excise duty are tobacco, spirits and beers, oil or gambling. The government has introduced excise duty to increase amount of overall collected taxes but also to decrease the demand for particular products. (Ref. http://customs. hmrc. gov. uk/channelsPortalWebApp/channelsPortalWebApp. ortal? _nfpb=true;_pageLabel=pageExcise_InfoGuides) †¢ Air Passenger Duty Air passenger duty is paid by airlines to the government for carriage passengers from UK airports. International booked passengers who are coming into the country are exempted to pay this duty. Since 2009 air passenger duty is paid by the amount of flies whereas use to it was charged by every single passenger. The changes amended in this type of taxation increased prices of airline tickets as organisations are forced to pay more taxes. The main purpose of collection of air pas senger duty is to raise extra funds to upport economy but also for environmental reasons. (Ref. Book: Business level 3, Book Publisher: Edexcel Page: 301 Author John Bevan) Public Finances Public finances could be referred as the amount of money which government pays for its expenditures through collection of taxes and borrowing. To support community within the country the government provides valuable activities such as security, education, transport and health support. Running the following activities might cost government millions so this is why appropriate amount of collected taxes is essential.Government have to balance overheads for different departments in appropriate way and ensure that money spent in certain area would benefit population and generate future return in the economy. (Ref. http://glossary. econguru. com/economic-term/public+finance http://www. etvotenow. org/financial-tips/public-finance-definition-know-your-environment-in-the-business-world-233. html) Public Se ctor Borrowing Public sector borrowing also known as a Public Sector Cash Requirement could be defined as an amount of money which government has to borrow from Bank of England to operate essential activities provided to the public.Public sector cash requirement occurs when the country does not collect enough finances to cover overheads of essential activities. If that would happen, then country will start going into the debt what would disadvantage economy and community as less money might be invested in public interest. (Ref. http://www. qfinance. com/dictionary/public-sector-borrowing-requirement) Impact of Fiscal policies on Skanska? Changes made within Fiscal policy would have a large impact on business operations. Skanska could be affected by any decisions made within these policies as any decisions could change the activities and revenues of the business.For instance, if government cut down the spending costs to build hospitals or motorways then Skanska will lose contracts, w hich simply means there would not be projects undertaken by my organisation. This situation would be reflected in the release of employees as the organisation might not be able to afford to maintain workforce. Additionally, this would affect the manufacturing organisations as they would not be able to supply Skanska with their products and therefore less money will be generated and flowed into the economy.How does Fiscal policy affect Skanska? Skanska operates in construction industry so any changes in fiscal policy would affect overall operation of this business. Skanska as a one of leading construction organisations in the United Kingdom would be affected by positive or negative outcome. For instance, if government would change income tax band from taxation element for higher then this would benefit this organisation as there would be a possibility to pay lower amount of taxes by Skanska.The example could be that if government increase the income tax band of 50% from 150,000 to 20 0,000 then my chosen organisation would generate higher revenue as even if they would achieve revenue of 180,000 the business will under the 40% of income tax band. The effect of changes in this fiscal policy could create more profit for Skanska so owners, stakeholders and employees might benefit from this fact as higher amount of money obtained by the business could be shared into these parties. Additionally, the result of fewer taxes paid by my organisation would nathnelo investors and owners to reinvest extra income in the business.Reinvestment of generated profit would be equalised to the expansion of Skanska what might create new jobs for employees due to further investments. Changes in public sector borrowing would also affect Skanska because if government would not collect enough taxes than it automatically decrease amount of possible spending’s into the economy. In the past the government applied Golden Rule of public borrowing which state that it should never be borr owed more than 40% of overall income from economy. Due to recession in United Kingdom the government has to break this rule to reduce possibility of bank collapse.In 2010 the government decided to introduce Fiscal Responsibility Act which is about limiting the amount of government borrowing. This act is mended to stop the country to follow into the debt. Due to breaking Golden Rule decision my chosen organisation had better opportunities to undertake any projects as more money were flowing into the economy. (Ref. Book: Business level 3, Book Publisher: Edexcel Page: 301 Author John Bevan) Monetary Policy Monetary policy is interlinked to fiscal policy and it was created by the government to support and control an economy activities.Monetary policy influence aggregate demand, employment level, money supply, the interest rate that is offered by central bank and the level exchange rate within the country. In the United Kingdom the central bank is the Bank of England which is in charge of interest and exchange rates or money supply. Additionally, the Bank of England is responsible for the amount of money that banks need to keep in the vault which is also known as bank reserves. The purpose of monetary policy is to control and stabilize overall economy within the country. (Ref. http://www. nvestopedia. com/terms/m/monetarypolicy. asp#ixzz1oQuE0cW4) Aggregate Demand Aggregate Demand could be defined as the total demand for provided goods and services produced within the economy over a certain period of time. Aggregate demand is considered as the sum of consumption, investment, government spending, and net exports. Aggregate demand has a large influence on the economy as a whole because its increase or decrease would generate positive or negative outcomes in the economy. (Ref. http://finance-dictionary. com/definition/a/aggregate-demand/) Interest RateInterest rate could be defined as the amount of percentage charged by lender usually banks to the borrower. The perce ntage of interest rate is based on the annual basis also known as Annual Percentage Rate (APR) and this is dependable on the value of borrowed money or assets. The example of borrowed assets could be cash, beneficial goods of consumers and large assets such as vehicles or premises. If the interest rate is low then there is frequent possibility of larger investments as the businesses do not have to pay back much more than it was borrowed from the bank. Ref. http://www. investopedia. com/terms/i/interestrate. asp#axzz1oRT2mwKL) Employment Level Employment level could be defined as the population who is currently working and this is presented in form of percentage. The level of employment is very important factor to be considered by government because through this aspect the taxes are collected which could be reinvested into the economy. Employment level is affected by monetary policy because if inflation level would increase then more likely the wages of employees would be higher.The overall result from this situation could be that the employer might reduce workforce to cut down cost which possibly would decrease aggregate demand due to less people would have confidence in spending money. (Ref. http://www. economicshelp. org/blog/453/unemployment/definition-of-full-employment/) Impact of Monetary policies on Skanska The changes in monetary policy would have a large influence on my chosen business because changes amended in these policies could have knock-on effect in my organization.For instance, changes of the interest rate for lower could lead to the situation where Skanska might invest in latest machinery as interest rate on this purchase will be lower so the business would save money if the make a purchase in this period. Additionally, low interest rate might create situation where population would be less likely to make a savings due to low interest which they could receive. If population would not be interested in saving then they would prefer to spend the money which they earn so the economy would benefit as the aggregate demand would increase.How does Monetary policy affect Skanska? Implementation of monetary policy could affect industry within my chosen business operates. Through increase or decrease of interest rates Skanska would be affected by the changes in demand of provided services by population. For instance, if government would decrease the level of interest rate than this might stimulate higher aggregate demand because people would have more money to spent. If population have a confidence to spend money than my chosen business is more likely to convince potential customers to make the purchase.Additionally, lower interest rate would attract Skanska for new investments due to low interests which need to be paid back. This is also easier for construction industry to find new invertors all over the world as in this period investors are able to generate large return of invested finances. If government and central bank would decide to raise interest rate than this would disadvantage my chosen organisation as opposite effect which most likely would reduce aggregate demand and inflation. Employment level would be affected by changes in monetary policy which could create different situations within operation of Skanska.Government do their best to keep inflation at 2% which means that economy would be stable and wages would be increase by similar level. Low raise of inflation would means that employees have a job security due to steady costs of business. For instance, if inflation would drastically rise then wages would increase too so as a result business might not be able to afford workforce due to too high overheads. (Ref. http://tutor2u. net/economics/content/topics/ad_as/ad-as_notes. htm) How fiscal and monetary policy would help Skanska to achieve its objectives.Skanska committed their selves to outperform business in the management of the environment, health ; safety and the engagement with the commu nities they work in as well as the project performance and profitability. The achievement of main aims is depended on the legislations of government. Through changes in fiscal policy my chosen organisation would be able to generate outcome which would benefit the business and the productivity of economy. For instance, if inflation increased due to raise of aggregate demand than increased spending would most probably decrease national debt at least in short term.Also decrease of income tax would increase the amount of available organisational income which might increase the aggregate demand. Appropriate changes in fiscal policy could create significantly impact the national income and therefore have immediate effect on the economy. Another benefit which Skanska could obtain from changes in fiscal policy is higher profitability and motivation of workforce if taxes on wages would be decreased. Additionally, if higher amount of people and organizations would earn more than automatically the government would collect more taxes such as VAT or income tax.Growth of economy would also means that government would spend less money for different types of benefits which support unemployment community. (Ref. http://12chunso. wordpress. com/2011/05/11/advantages-and-disadvantages-of-fiscal-policy/ http://library. thinkquest. org/19110/english/advantag/index. html http://www. economicshelp. org/macroeconomics/fiscal-policy/fiscal_policy. html) On the other hand, Fiscal policy have great influence on businesses operation so government have to ensure that amended changes do not affect the organisations in the way that they would not be able to operate.For instance if government would increase the income tax as too high level than organisation would not be interested in feather operations as too much amount of taxes which will have to be paid to government would be seen as not reasonable and the organisations might be closed down. This would create negative outcome for economy b ecause if businesses will be closed down then unemployment would increase and more money government will have to spend to support those people and no taxes at all would be collected as organisations would abandon from operations.Additionally, changes in direct taxation or government spending may take considerable time because of both political and moral reasons. For instance, taxing rich people more than the others might be seen as unfair treatment for parties who are charged higher. (Ref. http://12chunso. wordpress. com/2011/05/11/advantages-and-disadvantages-of-fiscal-policy/ How monetary policy would help Skanska to achieve its objectives. http://www. ehow. com/facts_5796267_benefits-policy-over-fiscal-policy_. html) ConclusionOverall, I have described what fiscal and monetary policies are and what is involved in those aspects. Also I have explained how does policies affect my chosen organisations and what out6come could be generated through changes in both policies. The fiscal a nd monetary policies are closely interlinked to each other. Fiscal and monetary policies are very important to be managed in an appropriate manner by government because wrong changes would not only affect businesses within the country but also the economy as a whole will be affected.Bibliography AuthorPageDate John Bevan Book- Business level 3 Page: 300-305 Publisher: Edexcel Class notes- Direct and Indirect taxation Lecturer- Brenda Horan Date- 06/02/2012 http://www. investopedia. com/terms/f/fiscalpolicy. asp#ixzz1nhAdVG74 http://www. hmrc. gov. uk/incometax/basics. htm http://lexicon. ft. com/Term? term=corporation-tax http://tutor2u. net/economics/revision-notes/as-marketfailure-indirect-taxation. html http://www. hmrc. gov. uk/vat/start/introduction. htm http://customs. hmrc. gov. k/channelsPortalWebApp/channelsPortalWebApp. portal? _nfpb=true;_pageLabel=pageExcise_InfoGuides http://glossary. econguru. com/economic-term/public+finance http://www. etvotenow. org/financial-tips/p ublic-finance-definition-know-your-environment-in-the-business-world-233. html http://www. qfinance. com/dictionary/public-sector-borrowing-requirement http://www. investopedia. com/terms/m/monetarypolicy. asp#ixzz1oQuE0cW4 http://finance-dictionary. com/definition/a/aggregate-demand/ http://www. investopedia. com/terms/i/interestrate. asp#axzz1oRT2mwKL Fiscal and Monetary Policy TOMAS L. OLFATO ANSWERS TO GROUP 4 EXAM ECON 204 (NOTE: ANSWERS ARE HIGHLIGHTED IN YELLOW) PART I. (5 points each) A. An increase in government spending will shift the IS curve to left increasing output with higher interest rate. [pic] Expansionary monetary policy or Contractionary monetary policy. a) To maintain the same level of output, what monetary policy should BSP implement? ANSWER: EXPANSIONARY MONETARY POLICY (Increasing money supply lowers interest rate) b) To maintain the same level of interest rate, what monetary policy should BSP implement?ANSWER: CONTRACTIONARY MONETARY POLICY (Reducing money supply results to an increase in interest rate) B. An inflationary gap occurs when aggregate demand exceeds aggregate supply at full employment level of output. When there is increased spending and availability of money are high, prices start to rise resulting to an inflationary gap. What fiscal policy (Expansionary or Restrictive) should the government implement to dampen growth an d lower inflationary pressures(5 points). ANSWER: RESTRICTIVE FISCAL POLICY (Racing taxes or cutting government spending to dampen GDP(Aggregate Demand) growth and lower inflationary ressures) [pic] C. A Deflationary gap occurs when aggregate supply exceeds aggregate demands at full employment level of output. The opposite of Inflation, deflation has the side effect of increased unemployment which can lead to economic depression. What fiscal policy (Expansionary or Restrictive) can government implement to stop severe deflation(5 points). ANSWER: EXPANSIONARY FISCAL POLICY ( Increasing government purchases, decrease in taxes and/or increase in transfer payments closes a recessionary gap, stimulate the economy and decreases the unemployment rate) pic] PART II. (2 points each) True or False: FALSE 1. The Keynesian school of thought is based on the premise that free markets can regulate themselves alone, free of any human intervention. There is an invisible hand that moves market toward s a natural equilibrium, without the requirement of an intervention. TRUE2. Keynesian economic models stress the fact that government intervention is absolutely necessary to ensure growth and economic stability. The government has the very important job of smoothing out the business cycle bumps.TRUE3. In the Goods market, an increase in interest rate will result to a decrease in Money Demand while a decrease interest rate will result to an increase in Money Demand. TRUE4. In the financial market, an increase in interest rate will increase Money Supply while a decrease in interest rate will decrease Money Supply TRUE5. In liquidity trap, people are indifferent as to how much money or how many bonds they hold, so they are willing to hold fewer bonds and more money (more liquid) at the same nominal interest rate.The money supply will increase but the effect on the nominal interest rate remains zero. All the additional money is held as idle balances and equilibrium is unchanged. FALSE6. Disposable Income excludes both the negative impact of taxes and positive impact of transfer payments. FALSE7. Transfer payments decreases disposable income TRUE8. Fiscal neutrality creates a condition where demand is neither stimulated nor diminished by taxation and government spending. TRUE9. Crowding out effect happens when expansionary fiscal policy causes interest rates to rise, thereby reducing the investment or spending.If an increase in government spending and/or a decrease in tax leads to a budget deficit and this deficit is financed by increased borrowing, this creates demand for money and loanable funds. This will increase interest rates leading to a reduction in private consumption or investment. FALSE10. Expansionary fiscal policy increases national saving thereby reducing the supply of loanable funds and raising the equilibrium of the interest rate. PART III. (5 points each) 1. A monetary policy wherein the government steps on the break. RESTRICTIVE MONETARY POLICY 2. A policy that focuses on controlling price and interest rates.MONETARY POLICY 3. The most popular policy instrument. OPEN MARKET OPERATIONS 4. A monetary policy instrument in which BSP have no total control. DISCOUNT RATE 5. When the government wants to reduce the money supply in open market, it has to. SELL BONDS TO THE PUBLIC PART IV. (10 points) If the government wants to solve the issue on economic growth by increasing the money supply, what should be the effect on interest rate, investment, and consumption? ^MONEY SUPPLY, v INTEREST RATE, ^INVESTMENT, ^ CONSUMPTION Please email your answers to [email  protected] com with copy to [email  protected] com and [email  protected] com THANKS