Business – Page 7 – Best Essay Writers

Information technology Business Alignment

Introduction

Business process and information technology business alignment is paramount for organizations such as Capgemini as it determines the company’s flexibility as well as agility to transform and satisfy the emerging business needs. Therefore, it is important that Capgemini have reliable enterprise architecture that helps to unify the business and information technology concepts within the company.

This implies that enterprise architecture is vital for enhancing the company’s capabilities for innovation and information management in the present business environment that is highly demanding as well as complex by nature (Dijkman, Vanderfeesten, & Reijers, 2014).

As a result, enterprise architecture can be described as clearly defined application that determines analysis, planning, design and implementation of activities within the company through persistent holistic approach to develop and execute the specified strategy successfully. In light of this, it is necessary to recognize and appreciate the role of information technology business alignment and enterprise architecture and hence the preparation of this article.

Value of Information Technology Business Alignment

In response to the above requirement, it is important to recognize and understand significance of information technology business alignment in the enterprise architecture as Capgemini strives to accomplish the set goals. To start with information technology business alignment model is necessary as it ensures that the company objectives are in line with the requirement of information technology (Chiang & Nunez, 2012).

This is vital at Capgemini whereby the major goal is to help company clients realize the role of technology in enhancing the value of each business venture. Through proper information technology business alignment Capgemini as a company is able to develop technology based solutions that help its clients meet individual business objectives that fit into the technological requirements.

Secondly, another goal of Capgemini is to enhance client’s ability to transform their organizations through improved performance. This can be achieved through proper information technology business alignment because Capgemini is able to empower its clients react swiftly and instinctively to the constantly transforming market dynamics (White, 2015).

The company is focused at helping its clients harness the correct technology suitable for making its clients highly competitive and agile on the market. In other words, information technology business alignment strategy has enabled Capgemini to empower its clients to become change initiators on the market for proper performance.

Most importantly is the fact that proper information technology business alignment architecture facilitates high level of collaboration between the organization and other external parties. This means that Capgemini is able to undertake its operations in a reasonable manner by considering law enforcement authorities and its areas of jurisdiction (White, 2015). Through collaboration the company has been able to meet the expectations of its clients and hence referring to the approach as collaborative business experience.

Strategy for Aligning IT Portfolio

Research has revealed that there are so many enterprise architecture frameworks that any company might subscribe to depending on company concerns and guiding approaches to information technology within an organization. Tambouris, Zotou, Kalampokis, & Tarabanis, (2012) notes that there are three major enterprise architectures namely the Capgemini integrated architecture framework, the zachman framework and the Microsoft enterprise architecture.

This section examines the Capgemini integrated architecture framework (IAF) designed for analysis and development of project and enterprise level architectures. The starting point of implementing this strategy involves breaking down the general problem into various categories so that it is easier to resolve issue in each section independently.

In this case, Capgemini has categorized its system into business which entails people and processes, information that incorporates knowledge, technology infrastructure and information systems (Tambouris, Zotou, Kalampokis, & Tarabanis, 2012). These categories have facilitated easier governance and security structured into four major stages of abstraction namely conceptual, contextual, logical and physical.

The contextual level is designed to offer justification for the organization to undertake the suggested alignment models basing on the related environment. The conceptual stage helps in describing the requirements and the vision of the solution. The role of the logical view is to state how the solution and vision interact as well as their meeting point. The purpose of physical stage is to describe the artifacts of the solution so that other parties are able to recognize the role of the adopted alignment architecture (Steenkamp et al., 2013).

Through these stages it is easier to identify and recognize the reasons for implementing the suggested changes as well as anticipate the potential outcomes basing on the manner in which the vision and the solution coincide. It is evident that the integrated architecture framework developed and adopted by Capgemini helps to bring all business components with information technology requirements customized to suit the needs of specific organizations.

Value of Enterprise Architecture

Enterprise architecture is very important for any organization due to a number of advantages that comes with properly aligned business information technology system. Through enterprise architecture, the company is able to develop high value end to end models with full life cycle for software and system engineering, unified business and information technology systems as well as real time and embedded development.

Effective enterprise architecture is reliable for model design, analysis, test, implementation and maintenance (Seigerroth, 2011). This is supplemented by the fact that effective enterprise architecture increases systems speed, performance and stability. This implies that enterprise architecture is necessary for business simulation whereby suggested models can be transformed into functional units to understand the working of business systems.

This is achievable because enterprise architecture provides a platform for easy traceability, verification, impact analysis and validation of activities across the entire life cycle of models.

Enterprise architecture is vital for managing complexities through integration and interconnection of various structural as well as behavioral information systems. Through this alignment it enhances the company’s ability to produce reliable documents for effective information sharing within the company. Appropriate information sharing facilitates generation and reverse engineering within the company which are necessary for process reengineering such that the organization is able to satisfy market demands (Mezghani & Mezghani, 2014).

With dynamic transformations on the market, it is necessary that the company is able to visualize its applications an aspect that can be easily achieved through enterprise architecture. In case this if achieved it makes it easier for Capgemini to advance its model driven architecture for easier and customized operation within the company. In other words enterprise architecture is necessary for automation, database modeling, system simulation and effective project management.

Benefits of Enterprise Architecture

Business enterprise architecture has been pivotal at Capgemini as it has made it possible to identify and define business strategies, functions and process needs so that adequate application can be developed and linked with each of them. Through this, it is now easier to comprehend the requirements of information systems that can help in supporting each business activity hence facilitating adoption of goal achievement process through coordinated approach (Kurti, Barolli, & Sevrani, 2016).

On the other hand, information enterprise architecture has been essential in describing the manner in which the company has to undertake its operations and processes. Through this it is easier to coordinate the technological requirements with other types of information for proper governance and management.

Broadly, enterprise architecture has been helpful for resource allocation, process integration and wastage reduction in the company. This implies that the company is able to offer diversified services to diversified clients for satisfaction without being hindered by diversification aspects. In general terms, the integrated architecture framework adopted by Capgemini covers wider areas of application not only within the company but as required by its clients (Dijkman, Vanderfeesten, & Reijers, 2014).

The framework has proved to be powerful bearing in mind that it was established in 1990s based on experience acquired by practicing architects as they interacted with company clients. Since it is based on experience by Capgemini’s professionals, the architecture has undergone a series of evolutions to fit the real world experience as it encourages focusing on comprehension of business drivers and requirements.

Areas of Enterprise Architecture Improvement

It is high time that Capgemini reviewed its enterprise architecture system to enhance agility and efficiency. This is a necessity as the company will empower its clients with the ability to stay alert as well competent in the market despite the strong wave of technological transformations. This is necessary so that the company empowers its clients with the ability to counterattack the security attacks that might arise due to rapidly transforming technological aspects (Comuzzi, 2016).

This implies that the company needs to develop an e-governance system so that it is able to readily identify and rectify possible threats that its clients might fall victims. Through such improvements, it follows that the company has to expound in its architecture profession. This implies that the company should reshuffle its architecture such that they are able to consider the talent and individualized capabilities of its employees as well as the clients.

Most importantly is for the company to review its alignment and delivery system so as to cushion against the negative impacts of increasing complexities within company the systems. This must be supplemented by enhanced understanding and comprehension of the architectural structure not only to its employees but to the clients as well (Chiang & Nunez, 2012). In simple terms the architecture should be able to market itself by providing market leading solutions through adaption to specific company needs and expanding from individualized to organizational transformations.

Conclusion

In summary, it is evident that enterprise architecture is important for developing an effective and efficient information technology business alignment system within an organization. This is paramount for the company’s ability to accomplish the set goals especially in the current world whereby technology is taking over every aspect of company operations.

However, it is important that companies adopt specific informational technology strategy portfolios that coincide with the requirement of the system so that it is possible to satisfy company needs as well as the demands on the market. Having realized this, companies like Capgemini and Microsoft have developed customized enterprise architectural frameworks.

Through this custom framework it is easier for Capgemini to help its clients fit into the market by withstanding the current market waves as change initiators rather than becoming followers. The benefits of adopting this approach cannot be denied as they have unbearable benefits as highlighted above. However, it is vital that companies undertake constant assessment of their architecture so that appropriate improvements can be performed from time to time depending on the market situation.

References

Chiang, I. & Nunez, M. (2012). Strategic alignment and value maximization for IT project portfolios. Information Technology and Management, 14(2), 143-157. http://dx.doi.org/10.1007/s10799-012-0126-9.

Comuzzi, M. (2016). Alignment of process compliance and monitoring requirements in dynamic business collaborations. Enterprise Information Systems, 1-25. http://dx.doi.org/10.1080/17517575.2015.1135482.

Dijkman, R., Vanderfeesten, I., & Reijers, H. (2014). Business process architectures: overview, comparison and framework. Enterprise Information Systems, 10(2), 129-158. http://dx.doi.org/10.1080/17517575.2014.928951

Kurti, I., Barolli, E., & Sevrani, K. (2016). CRITICAL SUCCESS FACTORS FOR BUSINESS – ITS ALIGNMENT: A REVIEW OF CURRENT RESEARCH. Romanian Economic and Business Review, 8(3).

Mezghani, K. & Mezghani, L. (2014). Effects of Business Managers’ Skills on Enterprise Resources Planning Strategic Alignment. American Journal of Business and Management, 3(1). http://dx.doi.org/10.11634/216796061403518

Seigerroth, U. (2011). Enterprise Modeling and Enterprise Architecture. International Journal of IT/Business Alignment and Governance, 2(1), 16-34. http://dx.doi.org/10.4018/jitbag.2011010102

Steenkamp, A., Alawdah, A., Almasri, O., Gai, K., Khattab, N., & Swaby, C. (2013). Teaching Case Enterprise Architecture Specification Case Study. Journal of Information Systems Education, 24(2).

Tambouris, E., Zotou, M., Kalampokis, E., & Tarabanis, K. (2012). Fostering enterprise architecture education and training with the enterprise architecture competence framework. International Journal of Training and Development, 16(2), 128-136. http://dx.doi.org/10.1111/j.1468-2419.2012.00400.x

White, M. (2015). Critical success factors for enterprise search. Business Information Review, 32(2), 110-118. http://dx.doi.org/10.1177/0266382115589482

Want help to write your Essay or Assignments? Click here

Opportunity Costs Essay

Opportunity Costs

Opportunity costs stem from trade-offs that exists as a result of scarcity of resources. It is necessitated by decisions to make choices between one or several options that must be given up for one alternative to prevail (Bouman, 2011). Opportunity cost in economics is the costs of the opportunity missed as a result of the alternative given up. It can be expressed in monetary terms or in any other terms of time and it includes both implicit and explicit costs (Mankiw, 2014).

The opportunity costs of watching Good Times are the costs that would be forgone as a result of the choice made to watch Good Times in concert. The alternative costs of watching Good Times are watching the Hot Stuff that basically costs $150 as the entry fee besides the time required to drive to the concert. The implicit and explicit costs of watching Hot Stuff have been valued at $225 while other costs include the hours needed to drive to the location to watch the Hot Stuff concert.

Since the explicit costs have been estimated to be $150 then the implicit costs would be $225 – $150 which equals to $75. The opportunity cost of watching Good Times can be estimated to be $75. But the cost of the hours that would be forfeited in case of travelling to watch the Hot Stuff would also have to be considered. The hours required to prepare for the exam are also valuable and the choice of watching Good Times means that those valuable hours would be saved. The opportunity costs of watching Good Times is watching Hot Stuff.

Opportunity-cost analysis has a lot of practical applications in business operations as long as scarcity of resources exists. The value of the next second best alternative must be considered when deciding the product to be rolled up from the factory. Opportunity costs are never reflected on the Balance Sheet nor in the income statement but the costs are real and must be considered (Mankiw, 2014). The only problem is that quantifying opportunity costs is rather difficult as it relates mostly future events besides most people overlook it (Waggoner, n, d).

To conclude, the opportunity costs of making any decision is literally what is given up as a result of the decision. Opportunity costs are made up of implicit and explicit costs. In economics, profits are calculated based on opportunity costs while in accounting, only explicit costs are used. It is worth noting that opportunity costs is the value of the best alternative, for example the opportunity costs of going to college would be the wages that may have been earned, or the value of the experience that would have been gained or the value of all the activities that one may have missed while studying, or the money paid for tuition or the interest that would have been earned.

The opportunity cost is the value of one alternative not the value of all the aggregate hence the opportunity costs would be one of the most valuable alternative listed. Due to scarcity, resources are limited and only one alternative among many others must be selected. Either the time or the income is always limited due to scarcity hence the opportunity cost in economics is the costs of the opportunity missed as a result of the alternative given up.

References

Bouman, J. (2011). Principles of Microeconomics, Columbia, Maryland.

Mankiw, N. G. (2014) Principles of Economics, Cengage Learning

Waggoner, D. (n, d) Opportunity Costs retrieved July 5, 2016 from http://www.referenceforbusiness.com/management/Ob-Or/Opportunity-Cost.html

Want help to write your Essay or Assignments? Click here

Transnational corporations: Business in International Comparative Perspective

Transnational Corporations

Business in International Comparative Perspective

Topic: To what extent should government policy give greater priority to managing the contribution of transnational corporations to national economic success?

Introduction

Transnational corporations play an imperative role in a country’s development and foreign direct investment is considered among the most widely used approaches for economic growth in developing nations. The extent to which the government policy should give priority to managing transnational corporations’ contributions to national economic success is however a subject of debate. Depending on the national goals, the government may place stringent or relaxed measures in managing transnational corporations.

China is among the countries that have embraced foreign direct investment and whose policies on transnational corporations have been geared towards supporting their contribution to the economy. Accordingly, China’s foreign direct policies have contributed significantly to its current economic state, making it among the rapidly growing countries in the world in terms of economic growth. As the country continues to advance economically, local companies have demonstrated exponential growth; with an observable growth in the number of transnational companies.

Expectedly, these Chinese companies operating internationally are contributing a substantial proportion of the country’s income. It is for this reason that China is highly supportive of companies that invest internationally, ensuring that they can support the national economic success. However, China is yet to put in place vital laws and regulations aimed at protecting or advancing international business expansion.

This paper is a discussion of the extent to which government policy should prioritise the management of transnational corporations’ contribution to economic success. It seeks to recommend whether China should expand its investments and business to Britain and Japan through comparing competitive advantages and disadvantages of the two countries. It also details the lessons learnt with regards to government policy and managing transnational corporations’ contribution to economic growth, besides giving policy recommendations with reference to China’s policy formulation towards host economies.

Government policy and the contribution of transnational corporations in China

A number of studies have established that government policies are highly influential in the activities of transnational corporations. Through policy, the government can easily control the growth rate of transnational companies and thereby influence their contribution to the economy (Tihanyi et al, 2015).Cardoza, et al (2015) sought to study whether government policy has an impact on international expansion of transnational corporations; concluding that government policy can determine the performance of transnational companies and hence influence economic performance.

According to Cardoza et al (2015), governments should actively influence the contribution of transnational economies in order to maximize the gains derived from them. This may be achieved through encouraging international expansion, based on policies that support the growth of transnational corporations. Chow (2016) and OECD (2012) identify state ownership, public financing, assistance programs and regulatory frameworks as some of the policy issues that may influence transnational corporations’ contribution to the economy.

China’s economic growth has to a great extent been associated with foreign direct investment (FDI). In a bid to promote economic growth, China’s policy on FDI was considerably accommodating, thus leading to an influx in foreign companies that sought to take advantage of cheap labour and raw materials (Chow, 2016). However, the increasing number of foreign corporations almost proved unmanageable and China had to put in place more stringent measures to control FDI and to protect the local industries.

In contrast, China has shown great support for local companies investing internationally, with an aim of growing local organizations while ensuring that the country gains more from international trade (Das, 2015). It is evident that the number of transnational companies in China has grown tremendously over the years, a process that is attributed to increased globalization and government support for transnational companies.

The government is encouraging companies to invest internationally through its ‘go global’ strategy. Established in 1999, the policy as aimed at promoting large enterprise internationalisation through offering financial resource accessibility and state-supported research (Chow, 2016). The policy which has been instrumental in Chinese multinational company expansion ensured that companies could access below-market rate capital in the form of soft and subsidised loans from state-owned banks. This policy greatly influenced the growth of transnational corporations in China.

In 2002, the SME Promotion Law was adopted, with an objective of persuading financial institutions to make financing available to small and medium sized companies. As a result, a considerable number of SMEs have expanded globally and account for 70% of exports in China (Chow, 2016).

Government tax incentives issued by China on transnational corporations ensure that companies can reinvest their proceeds in the country and thus contribute to economic development. In China, transnational corporations can get a 40% refund on profits which are re-invested to increase the firm’s capital or develop a new firm (UNCTAD, 2016). The tax refund is only applicable if the company has re-invested the capital for five years. Such an incentive not only encourages business growth but it also ensures that money earned from international business is beneficial to the economy.

Reduced corporate tax for businesses exploring overseas expansion has also been instrumental in influencing the growth of transnational corporations and consequently their increased contribution to the economy (UNCTAD, 2016). Therefore, government control through policies can play an important role in ensuring that transnational economies can contribute to economic performance.

The stringent measures taken by the Chinese government in managing multinational companies in the country has had a direct impact on local companies. As the country seeks to protect domestic industries, there has been exponential growth among small and medium firms, many of which are exploring international possibilities in a bid to expand their businesses.

Britain’s competitive advantages and disadvantages

Advantages

Britain’s competitive advantages are mostly associated with the friendly business environment. Britain is considerably open to foreign investment and the equal opportunities are given in private company formation and operation (UKTI, 2016). There are no special national requirements, except that one of the company’s directors must reside in the UK. Accordingly, the government is keen on defending all businesses despite their ownership nationality.

This makes investing in Britain highly favourable for foreign firms. In addition, Britain is a key economy and is known as an export platform linking with most major economies, and hence a suitable investment destination (Ernst & Young, 2016).

Britain is considered one of the strongest world economies in the globe. By this virtue, Britain is a favourable destination for international business. Other economic advantages include skilled labour availability, advanced infrastructure, low inflation, low taxation and government commitment to economic reform including privatization and deregulation.

Britain enjoys a relatively stable political environment. This is a major prerequisite for successful international business as it ensures productivity and return on investments. Dittmer (2016) notes that political instability could affect business significantly through disrupting operations, hence the need for organizations to assess a target country’s political environment.

Britain’s membership in various trade alliances presents a major advantage as it means that the country has a wide market for its products. Britain belongs to the Commonwealth of Nations, United Nations, OECD, G7, G8, G20, and the World Trade Organisation among others.

Disadvantages

Britain’s heavy taxation and regulations place the country at a disadvantage and has been a constant barrier for investment. 21% in corporate tax is charged on profits that exceed $ 2.1 million (UKTI, 2016). This is because foreign companies have to sacrifice a significant portion of their income towards tax and other legal requirements.

Britain’s economic performance has slowed considerably, a factor associated with global trends, the recent recessions and the country’s housing market slump (Stepek, 2012). Declining economic performance has a considerable impact on business proceeds for companies investing in Britain.

Britain’s EU exit, which has been christened ‘Brexit’ is currently considered a disadvantage because of the uncertainty that engulfs the country’s decision to exit. It has been argued that this may lead to trade imbalances and affect Britain’s international trade prospects. According to BBC News (2016a), the future trading relationship between EU and Britain is uncertain and this may impact the economy through lower levels of investment and reduced consumer spending, from 2.5% expected this year to 0.5% next year. Economic growth is thereby expected to slow down considerably before the country stabilizes.

Japan’s competitive advantages and disadvantages

Advantages

Japan is among the best performing economies globally, with the country being ranked the third largest based on nominal GDP (Agr, 2014). Japan’s per capita GDP was $37,519 in 2014. The country is known to achieve trade and international investment surplus.

Japan is considered among the countries with the highest innovation and this has propelled the economy to a great extent. The country is the home of manufacturing companies and innovations including vehicles, machinery and technology. Japan’s automobile industry is the 3^rd largest in the globe while the electronics products industry is the largest.

Foreign companies investing in Japan can benefit from the accommodating foreign investment rules. Japan is generally considered as a friendly international business destination based on the ease of business. According to the 2013 ease of doing business index, Japan was ranked 27^th out of 185 countries (Agr, 2014).

Entry of foreign of companies in Japan is considerably easy and the country is considered as having among the lowest tax rates globally for consumption and personal income taxes. Japan also has among the leading stock exchanges in the globe, following the merger of Tokyo and Osaka Stock Exchanges (BBC News, 2016b).

Disadvantages

Japan’s currency exchange is highly volatile and this makes it prone to economic fluctuations. Due to the volatility, the country’s GDP in terms of dollars oscillates significantly. The currency fluctuations can be a major short-coming for foreign companies because they are likely to experience major losses in the process of transferring funds back to their countries and during the process of exporting and importing raw materials and finished goods (Yildirim & Ivrendi, 2016).

While the government is easy on personal and consumption tax, corporate tax is relatively high at 36.8% and considered second highest globally (Temple-West & Dixon, 2012). A high tax bracket can limit business performance exceedingly by impacting on profitability. Organizations that seek to invest in Japan must evaluate their strategy to determine whether it would be profitable to invest in the country.

Japan is currently experiencing a shrinking workforce and this is likely to influence companies’ ability to access skilled workforce. This can be explained by the decline in birth rate and the country’s immigration barriers (Takao, 2014).

Lessons to be learnt with regards to government policy and the contribution of transnational corporations

Transnational corporations experience constant challenges in the quest to successfully profit from their international business endeavours. Accordingly, they require adequate support from the government through policies that favour their international competitiveness.

The first lesson derived from this discussion is that while transnational corporations play an imperative role in driving a country’s economy, ensuring international success requires considerable support from the government (Marinov & Marinova, 2012). Through this paper, it can be established that having targeted policies that recognize the contribution of transnational corporations in economic success is highly necessary.

Despite the efforts by the Chinese government to encourage foreign investment, the country must put in place dedicated efforts to develop effective policies to protect transnational companies. According to Chen (2014), a majority of private enterprises in China are still in the development stages as far as international expansion is concerned. They are not only small-scale but also lack basic support in terms of laws protecting their transnational operations.

Chen (2014) notes that the government needs to develop an overseas investment and insurance legislation, institute financial lending mechanisms and support innovation and technology development. It is notable that Chinese companies face considerable resistance in the international market due to business culture differences that impact on profitability margins. An example is that Chinese firms focus on the production of cheap products, which are often labour intensive, such that their profitability overseas is greatly dwarfed by competitors.

Creating trade alliances with various countries can contribute significantly to promoting the contribution of transnational corporations to a country’s economy. Backer (2015) note that by creating trade relations with foreign countries, an economy can benefit from tax benefits and more favourable environment for their businesses abroad.

This makes it easier for transnational corporations to survive in the foreign market and thereby contribute more to national economic performance. China must strive to forge new trade treaties and put in place policies that support such alliances, with countries in which it targets for investment. This way, businesses can gain an easy mode of entry and also benefit from higher profitability levels.

Circumstances and evidence for China in formulating policy towards host countries Britain and Japan

As the economy of China continues to grow, it is evident that the level of global competition has grown significantly. In order to position itself for further economic growth, China must formulate policy that will ensure that its economic growth prospects are assured (Mesquita, 2013). Through formulating policy towards host countries, China can influence its operations in those countries and consequently its economic performance.

Surviving in a foreign economy can be daunting for transnational organisations due to high competition. Accordingly, the formulation of policy must be done with the objective of protecting local companies in the host countries and ensuring that they are profitable enough to sustain their activities overseas. This insinuates that the government can develop policy that reduces transnational corporates’ expenditure if they invest in Britain or Japan. This way, the country can encourage companies to invest in those countries.

Formulating policy towards host countries ensures cooperation between a country and the host, given that there are clear guidelines on their relationship (Mesquita, 2013). This includes the kind of environment that the country’s businesses operate in. It therefore becomes clear for companies that seek to invest in the host countries, about the business environment they are expected to operate in.

Glass & Saggi (2014) explore the question of tax policies and determine that such policies are likely to affect foreign direct investment. Cognisant of this, developing policies that seek to influence host countries into offering favourable tax policies may be effective in promoting transnational corporation expansion into the host countries. In Britain for example, the high tax rates may discourage Chinese companies from investing in the country and by formulating policy towards Britain, China may influence the tax rates and hence encourage investment in this economy.

Conclusions and recommendations

Effective economic contribution by transnational corporations is dependent on various factors, among them the level of support offered by the government in their quest to venture overseas. This includes the policies adopted to support international business and promote performance of transnational corporations. In essence, the government should to a great extent influence transnational corporations’ economic contribution through its policies.

In order to maximize the performance of its transnational corporations, China must strategically make policies aimed at improving their international market survival. This will ensure that they can compete effectively and that they have adequate returns to bring back home. Through developing various regulations including taxation policies that favour international expansion, making funding easily available for budding transnational corporations and easing international trade barriers, China could effectively utilize policy to influence transnational corporations’ contribution to the economy.

Japan and Britain both offer great prospects for China in terms of foreign investment. Being among the world’s largest economies, Japan and Britain present favourable investment destinations for transnational corporations in China. Britain offers great investment opportunities in a country with a stable economic and political environment, which are major prerequisites for business growth.

As a country that is highly developed, transnational companies from China stand to gain considerable international experience through investing in Britain. Besides, Britain promises a wide market for products due to its numerous memberships in international trade alliances. In Japan, it is evident that economic growth is at its peak, as the country continues to rank among the top economic performers in the world. This promises great opportunities for Chinese companies that invest in Japan.

It is notable that despite the attractiveness of host countries, there are always shortcomings or comparative disadvantages that a company must explore before making a decision to invest. Based on this discussion, it is evident that Britain and Japan are characterised by various disadvantages, with the main one for Britain being the uncertainty associated with Brexit and for Japan the currency exchange volatility. Accordingly, China must weigh its options before investing.

A comparison between the advantages and disadvantages of investing in Japan and Britain indicates that Britain have great prospects for international trade. While disadvantages exist, these are outweighed by the advantages. In conclusion, China should seek to promote trade relations with Japan and Britain, with the objective of expanding business and investing in these countries.

References

Agriculture and Agri-Food Canada (Agr) 2014, Business environment: Japan, Retrieved from www5.agr.gc.ca/resources/prod/Internet-Internet/MISB-DGSIM/ATS-SEA/PDF/6506-eng.pdf

Backer, LC 2015, ‘Regulating Multinational Corporations: Trends, Challenges, and Opportunities’, Brown Journal Of World Affairs, 22, 1, pp. 153-173, Business Source Complete, EBSCOhost, viewed 26 November 2016. Retrieved from web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=d9b162f5-2cf2-4339-bdf7-cc59457814b1%40sessionmgr120&vid=0&hid=124

BBC News 2016a, UK economy ‘faces weaker growth’, Item Club report says, Retrieved from www.bbc.com/news/business-37674169

BBC News 2016b, Japan approves merger of Tokyo and Osaka exchanges, Retrieved from www.bbc.com/news/business-18718093

Cardoza, G, Fornes, G, Li, P, Xu, N, & Xu, S 2015, ‘China goes global: public policies’

influence on small- and medium-sized enterprises’ international expansion’, Asia Pacific Business Review, 21, 2, pp. 188-210, Business Source Complete, EBSCOhost, viewed 26 November 2016. Retrieved from web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=ec848aff-7ad9-4fdc-a874-a7a6cf1a62b9%40sessionmgr105&vid=0&hid=124

Chen, M 2014, ‘Study on the Strategy and Countermeasures of Chinese Private Enterprises

Transnational Operation Development’ International Business and Management, 8(2), 65-69. Retrieved from www.cscanada.net/index.php/ibm/article/viewFile/4769/pdf_44

Chow, DK 2016, ‘How China Promotes Its State-Owned Enterprises at the Expense of Multinational Companies in China and Other Countries’, North Carolina Journal Of International Law & Commercial Regulation, 41, 3, pp. 455-490, Business Source Complete, EBSCOhost, viewed 26 November 2016. Retrieved from web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=4e86befc-a977-4bbe-93aa-2a8cf8e92bac%40sessionmgr106&vid=0&hid=124

Das, DK 2015, ‘Multinational Corporations and the Transforming Operational Environment

in China’, Thunderbird International Business Review, 57, 4, pp. 271-280, Business Source Complete, EBSCOhost, viewed 26 November 2016. Retrieved from web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=7&sid=6e0ee173-8fd3-4d42-bec0-9e05529dab55%40sessionmgr106&hid=124

Dittmer, L 2016, ‘Xi Jinping’s Political Economic Transformation and Its International Implications: A Preliminary Assessment’, Romanian Journal Of Political Science, 16, 1, pp. 4-30, Academic Search Premier, EBSCOhost, viewed 26 November 2016. Retrieved from web.a.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=4&sid=354e6f5b-8d57-4389-bb08-6dbf5480e1ed%40sessionmgr4008&hid=4001

Ernst & Young 2016, UK attractiveness survey 2016, www.ey.com/Publication/vwLUAssets/2016-UK-Attractiveness-Survey/$FILE/EY-UK-Attractiveness-Survey-2016.pdf

Glass, A, & Saggi, K 2014, ‘Coordination of tax policies toward inward foreign direct investment’, International Journal Of Economic Theory, 10, 1, pp. 91-106, Business Source Complete, EBSCOhost, viewed 26 November 2016. Retrieved from web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=6&sid=7041d077-1dd6-4a04-b726-13074d080f0e%40sessionmgr106&hid=124

KPMG. (2012).The Future for MNCs in China.

Marinov, M & Marinova, S 2012, Emerging Economies and Firms in the Global Crisis, New York, Palgrave Macmillan.

Mesquita, B 2013, Principles of International Politics Principles of International Politics, London, SAGE.

OECD 2012, Policy Priorities for International Trade and Jobs, France, OECD Publisher

Stepek, J 2012. Britain’s biggest economic disadvantage – our property market. Retrieved from moneyweek.com/property-market-britains-biggest-economic-disadvantage-61200/

Takao, K 2014, The Labor Shortage in Japan’s Economy, Retrieved from www.japanpolicyforum.jp/archives/editor/pt20140907235528.html

Temple-West, P & Dixon, K 2012, U.S. Corporate Tax Rate To Be Highest In The Developed World, Retrieved from www.huffingtonpost.com/2012/03/30/us-corporate-tax-rate_n_1392310.html

Tihanyi et al 2015, Emerging Economies and Multinational Enterprises Advances in International Management Contributors, Bingley, UK, Emerald Group Publishing.

UKTI 2016, United Kingdom – Openness to and Restriction on Foreign Investment, Retrieved from https://www.export.gov/article?id=United-Kingdom-Openness-to-and-Restriction-on-Foreign-Investment

United Nations Conference on Trade and Development (UNCTAD). (2016). Tax Incentives and Foreign Direct Investment: A Global Survey. Retrieved from http://unctad.org/en/Docs/iteipcmisc3_en.pdf

Yildirim, Z, & Ivrendi, M 2016, ‘Exchange rate fluctuations and macroeconomic performance’, Journal Of Economic Studies, 43, 5, pp. 678-698, Business Source Complete, EBSCOhost, viewed 26 November 2016. Retrieved from web.a.ebscohost.com/ehost/detail/detail?vid=2&sid=9e4a3e73-75ca-4150-b770-6f7cf40ca97f%40sessionmgr4010&hid=4001&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#AN=118069643&db=bth

Want help to write your Essay or Assignments? Click here

ASIA-PACIFIC MULTINATIONALS COMPARISON

Asia-Pacific Multinationals Comparison

Introduction

Organizational success is to a great extent determined by the approach taken in corporate organization, its strategy and corporate capabilities. A company’s strategy determines a company’s direction in achieving its objectives while its core capabilities denote the unique factors that differentiate it from competitors. These two aspects are directly related to the organization’s performance as they determine how well an organization can compete. This paper is a comparison of five Asia-Pacific companies to determine how they differ strategy, capabilities, role of government and organizational structure. These include Mitsubishi Corporation, Hitachi Technologies, Huawei, SECOM and Samsung.

Discussion

Mitsubishi Corporation

Mitsubishi’s strategy involves creating corporate value for stakeholders in order to promote societal value and growth potential.

In terms of capabilities, Mitsubishi outperforms its competitors through its diverse businesses. The company operates in different industries including metals, energy, infrastructure, chemicals, and logistics among others. Diversity is known to promote organizational stability based on distribution of risk (Brady, Doyle Noonan, 2013). Triland Metals contributes greatly to the company’s financial performance.

Mitsubishi is considered as being among the world’s biggest multinational. The company therefore has capabilities related to its popular brand name, which makes its products attractive to customers. Mitsubishi invests heavily on research and development and this has contributed to the development of high quality products. Its financial strength also gives Mitsubishi a competitive edge.

Like most multinationals in Asia-Pacific, Mitsubishi has received considerable government backing during its rise. Based on the stable relationship between the owner and the government in its days of formation, Mitsubishi benefited from tax subsides, financial support and government contracts (Reference for Business, 2016). Connections with government officials ensured that Mitsubishi enjoyed favors that led to its rapid growth.

Mitsubishi’s corporate structure is significantly bureaucratic, given that it is a large organization with many businesses. The section heads and group CEOs of the various businesses all report to the chief executive. Each group CEO then has different division heads under his leadership. Mitsubishi’s corporate structure is presented below.

Hitachi Technology

Hitachi has grown considerably over the years, becoming one of the most influential multinationals in Asia-Pacific. This is expected to improve, based on its new strategic approach which involves collaborative creation with customers. The strategy consists of a social innovation business in which the company encourages customers to get involved in the company’s innovation process.

Through the creation of regional ‘fronts’ which promote contact with customers, the company ensures that the needs of customers are met as effectively as possible. To enhance performance of the social innovation model, the company aims at spreading it to all its acquired businesses.

Hitachi’s technological innovation efficiency remains one of its major capabilities. Accordingly, Hitachi can compete well in the market and provide the best quality products for its customers. High level financial performance is a great capability for Hitachi because this means that the company is capable of investing in quality business processes, research and development and the provision of quality products. Financial reports for the company indicate that the company made sales worth 2,000 billion Yen and net income worth 172.1 billion in 2015. The company’s net income is projected to grow to over 400 billion Yen by 2018.

Hitachi’s corporate culture aims at reducing hierarchies and promoting a decentralized system. This is a unique structure compared to other Asia-Pacific organizations which tend to be highly centralized. According to JETRO, increased globalization has led to a move towards decentralization in Asia-Pacific businesses, with the objective of promoting management efficiency and enhancing business outcomes. The corporate structure is illustrated as follows:

Huawei

Huawei is recognized for its rapid growth, having created a strong impact within a short period of time. In doing so, Huawei’s strategy involves research and development, which the company invests heavily on to ensure that it offers innovative solutions for its customers in terms of technology and internet solutions. Targeted innovation dominates its strategy, in a bid to satisfy its customers. To achieve this, Huawei maintains a strong research team to ensure that it maintains technological leadership in a globally competitive environment.

Huawei’s greatest capabilities lie in its innovative products, technology manufactured competence, brand strength and a global customer base. Huawei’s products are popular across the globe, based on their high quality and performance. This has also contributed to the company’s strong brand, thus enhancing its global performance to a great extent. Huawei’s manufacturing efficiency ensures that the company can produce high quality products to meet customer needs. High profitability potential helps the company effectively meet its obligations while its investment in research and development capabilities have ensured that the company produces innovative products that appeal to customers.

Huawei’s success in the United States has been hampered by its association with the Chinese government, thus raising security issues. It is alleged that the company’s policies on cyber security have been influenced by government involvement. As a result, Huawei has undergone security audits to determine its business suitability in the United States. Its future still remains unclear, given the lack of trust by the US government.

In terms of corporate structure, the company has been divided into group functions including enterprise business group, carrier, consumer, and service business groups. Each of the group leads answer directly to the CEO or rotating CEO. The rotating CEO structure is a structure in which the company has a different CEO every six months. There are three CEO: one is the founder while the other two are rotating CEOs. Depending on the CEO in office, he or she is considered the highest officer within the company. This structure is shown as below.

SECOM PLC

SECOM’S strategy involves the use of diversity and innovation in providing the most reliable security solutions. The company is known for its high quality security systems and tools that they provide for all sectors, ranging from simple security cameras to high level security infrastructure. High product quality and customer satisfaction drive the company’s strategy.

In terms of capabilities, SECOM PLC prides itself as a strong force in security technology. This signifies strong expertise in developing security solutions, installations and maintenance. Accordingly, SECOM has a large market share and this has a significant role in promoting performance.

SECOM has a team of highly qualified engineers, with the ability to develop, install and maintain security devices and systems. The company’s innovative model of national accounts plays an imperative role in enhancing customer service. Customers are provided with service accounts and provided with support from the company based on where they are located.

SECOM’s organizational structure takes on a centralized strategy in management, where the management regional office functions report directly to the head office. The section heads respond to the managing director and have several levels under them, making the system highly bureaucratic. The corporate structure is provided by SECOM as below.

Samsung

Samsung follows the vertical integration strategy, which involves owning the production line, from the supply of raw material to final production. Samsung has developed strong capabilities in terms of its supply chain. The company manufactures its own parts including chips, processors and screens using specialized manufacturing innovations that it has mastered over the years.

Samsung owns extensive factories in which it produces mass quantities of phone and TV parts, some of which are sold to competitors in the market. Vertical integration ensures that a company can benefit from low production costs and also enhances efficiency. This strategy gives Samsung a competitive advantage in that by controlling the manufacture of the chips, Samsung is confident that the quality of the parts will be high and consequently the quality of their products.

Samsung has numerous capabilities and core competencies. The first capability is its financial capacity, which has been built over the years to make Samsung a highly profitable company. This ensures that the company has adequate financial resources to manage operations, invest in research and development and to promote business continuity. The second capability is its strong brand which is known across the world. Samsung’s phones and TVs are highly popular, with over one third of Europe owning a Samsung TV (Samsung Profile, 2016).

The third capability is its innovation capacity, fueled by a persistent culture of research and development. Samsung invests heavily in R&D in order to ensure that the quality of its products is maintained at the best possible standards. Another capability is its ability to undertake mass production through its massive plants. Samsung is also well endowed in human resource capabilities, employing approximately 14,000 employees in Europe (Samsung Profile, 2016).

The influence of the government on Samsung’s growth is evident. South Korea invested highly in Samsung during its initial days of international expansion through providing the company with financial support, waiver of tax rebates and promoting a friendly business environment. As a result, Samsung grew to become one of South Korea’s largest corporations, contributing over 20% of the country’s gross domestic product. Therefore, the influence of Samsung on the government is immense and Samsung is known to receive protection from the government (Harlan, 2012). This may promote its future performance business continuity.

The corporate structure at Samsung is considerably horizontal and subdivided in terms of divisions within the company. Each division head answers direct to the CEO as seen below.

Comparison

The companies discussed above portray strong dedication to customer satisfaction, mostly achieved through the development of innovative products resulting from research and development investment. Each company maintains a dedicated R&D department aimed at developing quality products and new innovations to promote success. However, the companies differ in terms of how they approach sustainability and thus ensure business survival in the face of increasing competition.

Mitsubishi’s approach involves investing in diversity, which according to Johnson et al (2014), ensures that a company can manage its risks more effectively. When a company uses diversity as a strategy, successful business segments can effectively complement others when they are not performing well due to various factors in the business environment (Grant, 2016).

Hitachi’s approach towards sustainability is exemplified in the company’s quest to identify future needs of customers in order to ensure that they are effectively met. The social innovation model presents a unique strategy towards promoting customer satisfaction and consequently increased profitability (Weber, Weggeman & Van Aken, 2012). SECOM, Samsung and Huawei’s approaches are closely related because they focus on customer satisfaction through innovation.

Notably, customers are drawn to companies that provide them with unique products and constant research and development is needed to ensure that this is achieved (Woojung & Taylor, 2016). These companies invest considerable amounts in research and development in order to develop innovative products for their customers. As far as Samsung is concerned, vertical integration stands out in its strategy, being the only company that has a considerable influence on its supply chain.

By owning and controlling manufacturing bases in which phone and TV components are manufactured, Samsung can quickly develop innovative ideas into new products ahead of its competitors (Kambara, 2013). Furthermore the company saves on costs for buying the components and gains revenue from supplying other companies in the sector. While each company takes its own approach to strategy, the ultimate goal is to enhance customer satisfaction and hence improve on profitability and market growth (Fitzgerald & Jiangfeng, 2015).

The core capabilities of the organizations differ widely across a myriad of factors as established in the various company profiles. It is notable that all the companies have managed to create a strong brand name internationally, which is critical in promoting their survival in the industry. Secondly, their financial performance is a major strength for all the companies, with each aiming at providing the best quality products to promote profitability.

Manufacturing capabilities are demonstrated in each of the companies and so is the human resource capacity as a core capability in promoting innovation. Unique models applied by each company also stand out in the analysis of capabilities as follows: Diversity for Mitsubishi, innovation efficiency for Hitachi and Huawei, expertise in security solutions for SECOM and a strong brand name and manufacturing efficiency for Samsung. Based on their unique capabilities, these companies have managed to be successful in the market and make considerable profits based on their activities.

The nature of the organization’s corporate structure determines its performance to a great extent as it influences power distribution and organizational efficiency (Hitt, Ireland & Hoskisson, 2012). The rise in decentralization as evidenced in the companies discussed is an illustration of what is put forth by Sheldon & Malcom (2011), that Japanese companies are increasingly discovering the impact of decentralization on performance efficiency on international firms.

SECOM PLC however maintains a centralized system unlike other organizations which have separate functions for each regional office. At SECOM, various departments report to the corresponding department at the head office. The sales department for example reports directly to the marketing department at the head office, as opposed to reporting to the regional head. A centralized structure insinuates that the management of the organization is done centrally (Wong, Ormiston & Tetlock, 2011).

This may impact the organization through slow decision making and bureaucracy, thus reducing performance potential (Musibau, 2016). On the same note, the use of a vertical corporate structure which consists of lengthy reporting lines as evidenced by SECOM, Mitsubishi and Samsung is evident. This raises the question on whether decisions are harder to make in these organizations, compared to horizontal corporate structures where fewer reporting lines exist as in the case of Hitachi and Huawei.

The role of the government in Japanese and Chinese governments in supporting multinational companies to expand internationally is inevitable. Pearce (notes establishes that in the initial years, organizations received support from the government in expanding their operations, in a bid to encourage international expansion. In the case of Hitachi, Samsung and Mitsubishi, the government was particularly influential in their international expansion.

Samsung’s consequent control of the government is an indication that government influence can contribute significantly to organizational performance. The corporation is considered untouchable because its contribution to the country’s income is high enough to render the country disoriented if withdrawn, hence the notable protection. The Korean government has in many instances been accused of favourism towards Samsung, letting the company get away with regulation issues (Marlow, 2015)

Conclusion

The companies compared in this paper effectively illustrate why an effective strategy is instrumental in an organization’s performance. Based on their innovative and dedicated strategies, each of the five organizations has managed to surpass expectations, by being among Asia-Pacific organizations that are leading in global performance.

Secondly, core capabilities play the role of driving business based on a company’s major competencies. This is evidenced in the discussion, where all the companies compared have a unique set of characteristics that have contributed to their growth internationally.

Thirdly, the corporate structure of an organization to a great extent influences performance and a decentralized structure is considered more desirable in managing modern day organizations compared to centralized structures (Malaurent, Yan & Avison, 2016). It is also notable that government control has been influential in the expansion of a majority of the firms discussed. Accordingly, the government continues to influence these organizations, thus impacting their performance.

The discussion brings out unique observations for each company discussed. These can be summarized as follows.

Mitsubishi emerges as an example of global leadership based on diversity. Literature on diversity suggests that diverse companies tend to survive better in the competitive world and are more resilient to harsh economic conditions.

Hitachi establishes that customer centrism is the modern approach to enhancing competitiveness. Through adopting the social innovation model to increasingly focus on involving customers in the innovation process, Hitachi demonstrates that customers are key contributors to strategy.

Huawei demonstrates that targeted innovation could be useful in high technology organizations where new trends keep emerging. Through investing heavily in research and development, Huawei has successfully identified opportunities for growth by providing solutions for contemporary technology users. This has contributed greatly to its rapid growth.

SECOM’s value in expertise emerges as a strong factor in driving success. SECOM is not only innovative but it also strives to promote sustainability through ensuring that the solutions they provide to clients serve them effectively, through setting up a customer support system.

Samsung’s success in the global arena and consequent classification as an ‘untouchable’ is a clear demonstration that government influence can have a significant impact on an organization’s success. Samsung has a form of ‘insurance’ in government backing and its survival is largely assured based on government support. Samsung also provides a valuable lesson on vertical integration and could be an ideal example of how companies could save on costs by managing their supply chains.

Reference list

Brady, G, Doyle, E, & Noonan, L 2013, ‘Trade Sophistication Indicators: Balancing Diversity and Specialization’, International Advances In Economic Research, 19, 4, pp. 425-438, Business Source Complete, EBSCOhost, viewed 5 December 2016., Retrieved from web.a.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=5&sid=5e213d24-a4ae-4751-a805-50b99d0d3d2c%40sessionmgr4008&hid=4209

Ellman, M, & Pezanis-Christou, P 2010, ‘Organizational Structure, Communication, and Group Ethics’, American Economic Review, 100, 5, pp. 2478-2491

Fitzgerald, R & Jiangfeng L 2015, Strategic capabilities and the emergence of the global factory: Omron in China, Asia Pacific Business Review, 21 (3), 333-363

Fitzgerald, R & Rowley, C 2015, Multinational Companies from Japan : Capabilities, Competitiveness, and Challenges, London, Routledge.

Fitzgerald, R, & Rui, H 2016, ‘Whose fall and whose rise? Lessons of Japanese MNCs for Chinese and emerging economy MNCs’, Asia Pacific Business Review, 22, 4, pp. 534-566, Business Source Complete, EBSCOhost.

Grant, R. M 2016, Contemporary Strategy Analysis: text and cases, 9th edn. Chichester, Wiley & Sons.

Harlam, C 2012, In S. Korea, the Republic of Samsung. Retrieved from https://www.washingtonpost.com/world/in-s-korea-the-republic-of-samsung/2012/12/09/71215420-3de1-11e2-bca3-aadc9b7e29c5_story.html

Hitachi 2016, Hitachi in Europe, Hitachi Ltd

Hitt, Ireland & Hoskisson, 2012, Strategic management process and case, Retrieved from https://kafebisnis2010.files.wordpress.com/2011/11/strategic-manag-concept-n-case-hitt-et-al.pdf

Ichimura, S 2015, Japan and Asia: Economic Development And Nation Building, Singapore, World Scientific

Johnson et al 2014, Exploring Strategy: text and cases, 10th edn, London, Pearson.

Kambara, H 2013, Production Outsourcing and Firm Performance: An Empirical Analysis of Japanese Manufacturers, Journal of Business Studies Quarterly 1, pp. jbsq.org/wp-content/uploads/2013/09/September_2013_1.pdf

Malaurent, J, Yan, L & Avison, D 2012, Reopening the Centralization-Decentralization Debate: A Comparative Case Study Of ERP Implementation In Two Chinese Petroleum Companies, Retrieved from www.pacis-net.org/file/2012/PACIS2012-106.pdf

Marlow, I 2015, South Korea’s chaebol problem, Retrieved from

Musibau, A, et al 2016, ‘How Organizational Structure Aids Business Performance’, Clear international Journal Of Research In Commerce & Management, 7, 8, pp. 64-68, Retrieved from web.a.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=9&sid=5e213d24-a4ae-4751-a805-50b99d0d3d2c%40sessionmgr4008&hid=4209

Pearce, R 2012, China and the Multinationals: International Business and the Entry of China Into the Global Economy, New Horizons in International Business Series, Northampton, MA: Edward Elgar Publishing.

Reference for Business, Mitsubishi Corporation – Company Profile, Information, Business Description, History, Background Information on Mitsubishi Corporation, http://www.referenceforbusiness.com/history2/23/Mitsubishi-Corporation.html#ixzz4RyUgENHH, Retrieved from www.referenceforbusiness.com/history2/23/Mitsubishi-Corporation.html

Samsung Profile 2016, Welcome to Samsung Electronics Europe. Class notes.

SECOM 2016, Prospect Brochure, Retrieved from http://www.secom.plc.uk/wp-content/uploads/2014/10/ink10257_oft_sec_prospect_brochure-online.pdf

Sheldon, SK & Malcom, YL 2011, China’s Changing Workplace: Dynamism, Diversity and Disparity China’s Changing Workplace: Dynamism, Diversity and Disparity, London, Warner Publisher Routledge.

Takahito, K & Kazuyuki, M 2016, Centralization or Decentralization of Decision Rights? Impact on IT Performance of Firms, RIETI Discussion Paper Series 06-E-032, Retrieved from www.rieti.go.jp/jp/publications/dp/06e032.pdf

Weber, M, Weggeman, M, & Van Aken, J 2012, ‘Developing What Customers Really Need: Involving Customers In Innovations’, International Journal Of Innovation & Technology Management, 9, 3, p. -1. Retrieved from web.a.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=7&sid=28072e93-bc79-45d1-be0e-3d486059aa5e%40sessionmgr4008&hid=4212

Wong, E, Ormiston, M, & Tetlock, P 2011, ‘The Effects Of Top Management Team Integrative Complexity And Decentralized Decision Making On Corporate Social Performance’, Academy Of Management Journal, 54, 6, pp. 1207-1228. Retrieved from web.a.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=10&sid=28072e93-bc79-45d1-be0e-3d486059aa5e%40sessionmgr4008&hid=4212

Woojung, C, & Taylor, S 2016, ‘The Effectiveness of Customer Participation in New Product Development: A Meta-Analysis’, Journal Of Marketing, 80, 1, pp. 47-64, Business Source Complete, EBSCOhost, viewed 8 December 2016.

www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/south-koreas-chaebol-problem/article24116084/

Want help to write your Essay or Assignments? Click here

Healthcare Facility Startup Case Study

Healthcare Facility startup

Case Study

The St. Francis Care Clinic healthcare facility is developed to assist in meeting current health care demands and to improve access of care for residents in this community. The healthcare facility aims at providing safe, effective, timely, equitable and patient centered care to patients from diverse backgrounds. The primary care services will be provided by nurse practitioners (NPs) who will offer different experience to provide holistic care, open communication, therapeutic listening, and skills in counseling (Pinson, 2008).

The facilities vision is to deliver affordable and high quality of care to patients in order to promote the health as well as the well being of the citizens. The healthcare facility will seat on 1500 Square feet commercial office (leased). The facility has only one direct primary care clinics and 12 physicians. The indirect competitors are two emergency departments found in the one local medical center.

The competitor’s strengths are that the local medical centers have established physician providers with established referrals process. The critical key to success of this clinic is public education on services health services delivered and in managing reimbursement procedures (Buppert, 2014).

Monthly cost estimation

Expenses	Cost ($)
Clinical sites expenses	53,000
Supplies	25,000
Employee structure and expenses	72,450
Malpractice insurance	60,050
Utilities and overhead expenses	14,695
Accounting fee	20,000
Continuing education expenses	13,435
Total	258, 630

The clinic start up expenses will be obtained from a business loan of $100,725 with interest of 9% that will be paid out over 7 years. Although the clinic is expected to be profitable, the cash revenue is expected to remain negative until year 3. The loan repayment in the first year interest is estimated to be $10, 824.

The cost of operations in year 1 is estimated to be 120,121 and sales of $154,000, indicating a small profit in year 1. With addition of more healthcare services in year 2, the operating income is expected to reach $60,662, and the trend is expected to increase in the subsequent years.

The business is expected to grow and expect more income as the loan diminishes. The fixed costs are expected to remain the same with little or no depreciation. On the other hand, the variable cost will increase with increase income. I will contribute $50,000, bringing the total start up expenses to $150, 725.

The healthcare services that will be delivered in this clinic include primary care such as physical examinations, diagnosing, screenings, treatment as well as management of chronic and acute healthcare disorders. Other services that will be provided include preventive care, immunization, diabetes management, HIV/AIDs and smoking.

The facility will accept all public medical covers such as State Children’s Health Insurance Program (SCHIP), Medicaid and private medical covers. The Medicaid reimbursement will be calculated based on rate per unit, whereas the commercial insurances will be based on the company’s own policy. Managed care organizations will be reimbursed based on the negotiated contracts (Sally and Reel, 2013).

Summary

In summation, the estimated costs and assumptions indicates that the clinic is a viable nurse managed healthcare setting. The start up of this healthcare facility will require funding from loan and adequate time to return the amount of money borrowed. However, the projected revenue and expenditures indicates that small profit will be made. To reduce the negative cash flow, I may consider looking for partners or applying for grants so as to reduce the start up expenses.

Want help to write your Essay or Assignments? Click here

Stocks Valuation

1) Rights and advantages belonging to shareholders

Shareholders of a company enjoy following rights and advantages

Ownership right: Shareholders being owners of the company enjoy the right to share residual profits left after paying preference dividend. Their rate of dividend is not fixed. It depends upon the amount of profits. Sometimes they get high dividend in case of high profits.
- Control over management: Shareholders can exercise their control over management through the election of their representatives in the board of directors.
  - The voting right: Shareholders have the right to attend annual general meetings of the company and cast their vote in person or through proxy on various resolutions passed in such meetings. This enables them to participate in corporate and managerial affairs without having to regularly manage affairs directly.
  - Pre-emptive right: At the time of further issue of shares, an offer is made to shareholders first. If shares are left, they are offered to outsiders. It enables them to maintain their proportionate shareholding intact in the company ( H.Sherman, 2011).
  - Transfer of the ownership: Shareholders enjoy the right to transfer the ownership of their securities to others by trading their stock on the stock exchange.

2) (a)Differences between the S&P 500 Index and the Dow Jones Industrial Average

Both Dow Jones Industrial Average (DJIA) and the S&P 500 are the best known index of American stocks but differentiate from each other in the following manner.

Criterion	Dow Jones Industrial Average	S&P 500
Introduction	It is an oldest stock market index which was introduced in 1896 by Charles Dow (Johnson, 2015).	S&P 500 was introduced by S&P Global in 1923 and in its current form, it was published in 1957 ( S&P Dow Jones Indices LLC, 2016).
Index Constituents	DJIA is composed of thirty publicly traded American companies listed in NYSE and NASDAQ. These stocks are picked by an editor of The Wall Street Journal. It covers a large range of industries in the US except transport and utilities ( S&P Dow Jones Indices LLC, 2016).	It is based on market capitalization of 500 large companies listed in NYSE and NASDAQ. It covers a wide range of industries.
Weighting Method	It is a price-weighted index which is calculated by taking the aggregate of prices of stocks in an index and divided by a common divisor (Johnson, 2015). The stocks having high prices have more weightage in this index.	It is a free float capitalization weighted index where in components are weighted on the basis of their market capitalization ( S&P Dow Jones Indices LLC, 2016). The stocks with higher market capitalization have more weightage in this index.

(b)Better measure of stock market performance

The S&P 500 is considered to be the better measure of stock market performance than DJIA because it covers approximately 80% of the stock market capitalization and is considered as a true representative of happenings in the US stock market ( S&P Dow Jones Indices LLC, 2016). DJIA covers 30 securities only and its popularity is because of being an oldest index.

3) Differences between common stock and preferred stock

The main two types of stock issued by companies are common stock and preferred stock which have some similarities as well as dissimilarities. The main dissimilarities between both are given as below:

Criterion	Preferred Stock	Common Stock
Meaning	Preferred stock is a hybrid security which combines features of common stocks as well as debt securities (H.Sherman, 2011). The preference dividend is paid at a fixed rate just like payment of interest at fixed rate, but it is paid out of post-tax profits. It is not termed as ownership security.	Common stock is termed as ownership security. Its rate of dividend is not fixed. It depends upon the amount of profits. The amount of dividend may be high in case of high profits and it may be low or even nil in case of low or no profits.
Preferences	Preferred stock carries two preferences over common stock which are (i) Preferred stockholders are paid dividend first before the dividend is declared for common stockholders. (ii) At the time of liquidation of company, preferred stock is redeemed first before any amount is paid to common stockholders (Weaver & Weston, 2001).	Common stock holders are paid their periodic dividend as well as redemption value after satisfying claims of preferred stockholders
Rights	Preferred stocks do not carry any voting right. But holders get entitled to vote when (i) The dividend has remained unpaid for a specified number of years (H.Sherman, 2011). (ii) The resolution to be passed at the meeting has any impact on their interest.	Common stock provides many rights to stock holders which includes voting rights on corporate and managerial issues and preemptive right. Pre-emptive right is the right given to stockholders to maintain their proportionate ownership in the company at the time of further issue of share (Broadridge Advisor Solutions, 2017).

References

Broadridge Advisor Solutions. (2017). Financial Services of America. Retrieved from http://www.fsa1.com: http://www.fsa1.com/Common-Stock-vs–Preferred-Stock.c1019.htm

H.Sherman, E. (2011). The Equity in the Business. In E. H.Sherman, Finance and accounting for nonfinancial managers (pp. 204-205). New York: NY: American Management Association.

Johnson, M. (2015). What’s the difference between DJAI and S&P 500. Retrieved from http://www.nasdaq.com: http://www.nasdaq.com/article/whats-the-difference-between-the-dow-jones-and-the-sp-5001-cm548598

S&P Dow Jones Indices LLC. (2016). S&P Dow Jones Indices. Retrieved from us.spindices.com: http://us.spindices.com/indices/equity/sp-500

Weaver, S., & Weston, J. F. (2001). Financial Statements and Cash flows. In S. Weaver, & J. F. Weston, Finance and Accounting for Non-financial Managers (pp. 26-28). New York: NY: Mc Graw Hill.

Want help to write your Essay or Assignments? Click here

ORGANIZATIONAL CHANGE AND DEVELOPMENT

Organizational change and development

Executive summary

The need to embrace workable and sustainable strategies as touching organizational development and change has been pressing for modern day organizations. Whereas organizational development encompasses the efforts made by firms over duration of time to come up with better problem solving abilities organizational change connotes the process that enables organizations to optimize their performance whilst working towards an ideal and projected state.

Dyson, a multinational company has had to consider embracing strategies for effective development and change due to the changing strategic situation engraved in the current global economic turbulence that has challenged the firms operations, sales, and profitability. The existing strategy for the company being based on cost leadership and differentiation has thus necessitated the adoption of a future strategy entrenched in e-commerce. The internal and external environment of the firm is captured by economic aspects, technology, and low prices.

Introduction

Organizational development and organizational change are directly related. However, the two differ in terms of their definitions. Scholars have repeatedly concurred that organizational development connotes a planned process to stir up change within the culture of a firm by utilizing research, theory, and behavioral science expertise. Additionally, other scholars have defined organizational development as corporate efforts made over a long duration with the intention of enhancing the ability of a firm to solve problems as well as its capacity to deal with alterations in the external environment.

Further, others have argued that the term connotes a systemic process performed via collection of data, analysis, action planning, intercession, and assessment in order to improve congruence in structure, procedure, stratagem, human resource, and culture culminating in the development of more effective problem solving as carried out through organizational team work with the assistance of change agents.

On the other hand, organizational change is a process that enables organizations to optimize their performance whilst working towards an ideal and projected state (Meyers 2013, p. 43). Moreover, studies indicate that organizational change is usually triggered by the business environment that is ever-changing causing organizations to respond in order to avert a crisis. In most cases, organizational development precedes organizational change except in cases where firms are forced to change and adopt new strategies in order to deal with a foreseen problem.

In both cases of development and change, the processes involved always encounter resistance to change as firms seek to make adjustments in operational strategies and culture. This paper takes the form of a report and focuses on Dyson, a multinational company in order to explore its changing strategic situation engraved in the current global economic turbulence that has challenged the firms operations, sales, and profitability.

Review of Literature

Review of literature indicates that in the light of the current turbulent times, companies, and especially multinationals need to come up with new strategies for development and change. Studies also indicate that organizations are fastly adopting to such strategies in order to acquire the ability to stay afloat amidst the unpredictable economic changes. Conversely, Sullivan (2001, p. 7) argues that only few of modern multinationals have fully embraced the need to see change as an organizational project rather than viewing it from the traditional perspective of it being a core organizational process.

Further review of literature also suggests that unless organizations develop the ability to merge development and change into a single process they may not be able to stand the test of time during the turbulent economic times (Weissenberger& Kotch 2007, p. 7). Additionally, firms need to realize the importance of developing the competencies of their core personnel in a way that helps them enhance their objectivity, imagination, consistency, and flexibility (Balzac, 2011, p. 14). However, Sridhar (2011, p. 2) argues that this alone will not help enhance development and change strategies without multinationals embracing the requirements entrenched in efficient collection of data, assessment, forecasting, diagnostics, , design, and implementation procedures.

The company

Dyson is a company based in Britain and has grown over the years since its inception in the year 1974 into one of the largest multinational. The organization basically operates many stores currently having infiltrated markets in over 70 countries with over 7,000 employees. By the year 2014, the company had already been crowned as the number one corporation in terms of annual revenues. However, the current global economic turbulence has recently caught up with the company causing it to experience declines in sales, efficiency in operations, and profitability in virtually all the 70 countries within which it operates.

Actually, records indicate that in the year 2015, the company for the first time since its inception recorded a decline in both sales and revenues. Despite spending over 11 million dollars to advertise in the 70 countries, the company has not been able to produce the level of sales and revenues it anticipates. This as studies indicate is because the target clients in these countries no longer have the financial capability to make purchases as they did before because of the global economic crisis.

Existing strategy

According to Sridhar (2011, p. 3), companies should always ensure that proper strategies are in place. Strategies define the output of a company (Meyers 2013, p. 45). The existing strategy for Dyson is based on cost leadership and differentiation. This simply means that the company endeavors to provide their clients with an assortment of products and services offering similar or improved quality with their competitors at prices that are much more relatively cheaper.

The company took up this strategy since the day it went public having realized that it could source raw materials and acquire products at prices that could pose a threat to its competitors. However, critics have argued that despite the strategy having worked well for the organization in the past decades it may not be sufficient to help it maintain its competitive supremacy given the current agitating global economic problems (Balzac, 2011, p. 18).

This is because despite its low prices the purchasing ability of its target clients is gradually dwindling making them unable to make the same volumes of purchases. Nevertheless, the organization has kept up with this strategy by always looking out for newer ways to provide products and services at lower prices. Additionally, Dyson is relentlessly rethinking new ways via which it can complete its primary and support activities so that it can further lower the costs while simultaneously preserving competitive echelons in terms of differentiation.

Actually, studies indicate that this is the reason why its competitors have not been able to gain the upper hand over the last three decades because they have not appreciated the need to lower their prices due to the emphasis they have been giving to the maintenance of escalating revenues. The role of the firms supply chain in terms of fostering efficiency in this strategy is evidenced by the efficient internal logistics made possible by the usage of just in time inventory .

Consequently, the company has been able to reduce the costs emanating from outbound logistics. This explains the creation of better levels of fuel efficacy in the firm’s trucks and the bulk purchases that have also served to enable the organization cut down its costs. It is also imperative to consider the role played by technology in advancing and implementing the strategy under discussion.

Technology has given the organization the capacity to forecast demand in an accurate manner and has also sharpened its ability to come up with routes of transport that are more efficient than those used by its competitors. Additionally, technology has also enhanced the ability of Dyson to manage its clients. Conclusively, the cost leadership and differentiation strategy has given the organization the upper hand due by placing high barriers of entry to its competitors (Meyers 2013, p. 49).

Future strategy

The future strategy of Dyson is entrenched in E-commerce. The company came up with this strategy having realized that its sales and revenues had declined greatly over the last few years. By using this strategy, the company intends to rely on technology by setting up a framework that will use the internet as a platform to serve its customers across all conduits. The agenda behind the strategy is to come up with a unique shopping experience (Weissenberger& Kotch 2007, p. 7).

However, one would wonder whether the same strategy will enable the organization to lower its costs below the current ones being offered. However, there is a possibility that this could enable the company to do so bearing in mind that it will lead to a reduction in operational costs. Thus, the strategy could well enable Dyson to lower its prices by approximately 10-15% compared to those offered by its competitors (Sullivan 2001, p. 8). Whereas critics argue that this may not be possible, some scholars believe that it could work with clients that make bulk purchases.

The use of this strategy is also aimed at positioning the firm to become the future of retail as well as catering for the declining purchasing abilities of its globally positioned clients by enabling them to save money. Nevertheless, before agreeing to this possibility one would have to consider the existence of competitors in e-commerce such as Amazon.

Evidently, Dyson will have to do more than just enter into e-commerce because Amazon is currently the giant in this line of business making around 60 billion dollars per year. Whereas Dyson has built its reputation based on logistics, it is almost impossible to achieve the echelons of delivery that Amazon has when it comes to e-commerce. Nonetheless, Dyson intends to start relying on computer sales and the growth of e-commerce by lessening the investments made in starting new stores to focus more on directing capital towards e-commerce.

Transition process

The transition process for Dyson to move from emphasizing on cost leadership and differentiation strategy to directing its resources towards e-commerce must first take into consideration redirecting the company’s resources towards expansion of its e-commerce infrastructure (Riley 2013, p. 23). This means that the organization has to forego its previous efforts geared towards opening new physical stores and focus more on enhancing its online business.

Actually, Dyson has already embarked on the acquisition of jet.com as it seeks to pursue its digital aspirations (Zogjani & Raçi, 2015, p. 3). However, pumping financial resources towards e-commerce alone is not enough to ensure an effective transition. As studies indicate, transition processes only prove effective when organizations realize the need to focus on the needs of target clients by ensuring that the needs of the customers become the platform for business growth.

Bearing in mind the fact that the need for strategy change has been triggered by the adversity of global economic conditions that have decreased the sales and profitability of the company, the transition process must involve a careful consideration of how shifting to e-commerce will enable Dyson to lower its prices to levels that global clients can afford bulk purchases. In addition, the transition process must involve the training of personnel so that the people deployed to work in the digital line will have full comprehension of their duty related obligations (Sharma & Vredenburg 2009, p. 11).

As such, functional training will be necessary so that the e-commerce personnel will have the skills needed as well as the new process information for the transition to be fruitful. Nevertheless, studies indicate that functional training works best when an organization has particular people in mind. This means that prior to the training exercise Dyson will have to identify and recruit specific individuals and sharpen their performance standards based on the e-commerce strategy (Denyer, 2013, p. 135).

Further, the transition process must encapsulate a communication strategy. This means that the current employees must be involved and updated concerning the new changes in order to give each of them the ability to leverage their knowledge, decipher probable pitfalls, and make a commitment towards working with the new strategy.

More importantly, the process of transition should not be considered as an opportunity for the organization to lay down its former strategy entirely but should rather be viewed as an opportunity to merge the useful attributes of the old with the new strategy. Studies indicate that organizations that have viewed the process of strategy transition as an opportunity to completely do away with old strategies have seldom reaped the projected benefits of their new strategy (Denyer, 2013, p. 137).

Consequently, for the e-commerce strategy to help the organization deal with the challenge posed by the turbulent economic crisis Dyson must be able to adopt the new strategy while simultaneously seeking to implement useful and workable aspects of the cost leadership and differentiation strategy it has been using (Suriyamathi, Velavan & Radhiga 2013, p. 31).

Analysis of internal and external environment

The most significant factor in the organizations external environment with regard to the turbulent economic times is the economic aspect. Consequently, Dyson is undergoing a lot of pressure as it seeks to adapt its new e-commerce strategy to the prices of its products and services (Windapo & Goulding, 2013, p. 10). This single factor has led to the reduction of revenues since the countries within which the organization operates are having problems with economic stability.

However, the economic factor still presents an opportunity for the company because of the levels of economic growth being experienced by developing countries in which Dyson has not yet started to operate. Technology is another external factor since the organization must now focus on addressing the current technological trends and especially with regards to e-commerce. Additionally, there is an opportunity because the company can automate its operations and increase its revenue levels.

The aspect of technology also presents an opportunity for Dyson because of the escalating levels of mobile device usage. The threat however is that companies like Amazon have already made their successful entry into e-commerce and it may take a lot of time and effort before Dyson catches up. The most significant internal factor for the company is its low prices. This is a great advantage for the organization because customers have become accustomed to the fact that its products and services are lower than those of its competitors.

Critical analysis of the changing situation

The changing situation as engraved in the turbulent economic times and the future strategy of e-commerce is more of a planned than emergent change. It is a planned change because the company is currently making intentional changes to make its products available over the internet. However, Ali (2008, p. 56) argues that he change is more of emergent than planned because the company has been forced to make amendments in order to respond to the changing customer preferences for online shopping as well as the turbulent economic times.

Although the company has decided to use e-commerce as the future strategy for combating the effects of the turbulent economic times, this may not remedy the situation because of the presence of already existing online companies like Amazon.

While some deem the move to adopt the new strategy the best option for the company to respond, Ali (2008 p. 7) says that it may not be possible for the company to reap the anticipated results unless it persists and focuses on delivery. The ability of Dyson to deal effectively with the challenges emanating from the turbulent economic times will depend on how well it is able to make fitting structural changes that are aligned with the new strategy.

The most significant structural change that will be experienced by Dyson as it seeks to adopt the e-commerce strategy will affect teams and team work in the organization. This is because Dyson will have to come up with technology efficient teams that will work together for the success of the strategy. Additionally, this structural change will influence the culture of the organization.

According to Strazewski (2009, p. 137), e-commerce teams have to be so cohesive that any changes in the customer demands and prices are passed to each member of the team to help businesses stay afloat. This means that the organization will have to focus more on the culture of timeliness and transparency. However, the company is likely to experience problems in entrenching this culture because its current employees have not been accustomed to online business.

The cultural web of Dyson has played a major role in the past in helping achieve organizational competence (Prasad & Nori 2008, p. 50). For instance, the control systems of the firm have enabled the company to effectively monitor and sustain its supply chain (Zendg 2009, p.44). However, the current control system may not be compatible with the strategy that the company aims to deploy.

According to Cloutier and others (2015, p. 21), it is impossible for companies that have engaged in e-business before to expect success by deploying the same control system. Further, the current rituals in the organization have been focusing on the supply chain as well. This means that the firm will have to adopt a new set of rituals that emphasize more on the performance of e-business.

The role of technology at Dyson as the company seeks to introduce the e-commerce strategy is irreplaceable. Firstly, this is because the organization will most likely have to make some changes in terms of human resource in order for the strategy to work. This means that the company may have to replace some of its employees with others that are technology efficient (Loo 2009, p. 9).

Further, there will be need for constant training so that the strategy works as anticipated. Although Dyson expects the new strategy to lead to higher profit margins, this may not be the case in the short-run. According to Huang (2010, p. 140), e-commerce forces organizations to lower their prices more than expected because customers can easily find the same products at similar or lower prices over the internet. Nevertheless, the catch is that technology will help Dyson to do business in every country of the world. This is because of the ability of technology to break geographical barriers (Jones & Parry 2011, p. 16).

This means that the organization will have the capacity to increase the volume of sales and consequently the profit margins due to the global expansion of its market (Theodore, 2014, p. 71). There is however a possible problem in that the use of technology has a way of altering consumer loyalty and purchasing behaviors. This is because of the increasing presence of online retailers causing clients to begin evaluating their options and may opt to go for retailers that have already made their impact in online business like Amazon (Ling. 2015, p. 75).

Recommendations

It is highly recommendable for Dyson that the company instead of completely doing away with the cost leadership and differentiation strategy to try and merge the existing strategy with the future strategy based on e-commerce. This is because the existing strategy has helped the company achieve the current levels of competitiveness and completely setting it aside will deprive the company of the benefits attached. Due to the presence of competitors like Amazon the company should also consider taking time to research on better online platforms although this will take time.

Conclusion

Business strategies should be set up in line with structures of businesses. Well selected strategies always thrust businesses into good performances. Change management should be handled properly till completion. This should be guided by organization culture and company leadership as seen in the case of Dyson company.

References

Ali, M 2008, Developing environmental impact statement (EIS) guidelines for the management of organizational quality at major projects in Kuwait, Retrieved from http://search.proquest.com/business/docview/204618562/13EB17FBF311442APQ/2?accountid=45049, Last accessed 9th February 2017.

Cloutier, O, Felusiak, L, Hill, C, Pemberton, Jones & Enda J 2015, The Importance of Developing Strategies for Employee Retention. Retrieved from http://search.proquest.com/docview/1726791378/5524C7862854D96PQ/5?accountid=45049, Last accessed 9th February 2017.

Denyer, M., 2013. Organizational Policy Changes. Guidelines for Managing Process Safety Risks During Organizational Change, pp.135–147. Retrieved from http://search.proquest.com/business/docview/204618562/13EB17FBF311442APQ/2?accountid=45049, Last accessed 9th February 2017.

Huang, T 2010, Dynamic Quality Management in Complex Construction Projects, Retrieved from http://search.proquest.com/business/docview/733014523/13EB17FBF311442APQ/1?accountid=45049, Last accessed 9th February 2017

Jones, R & Parry, S 2011, Business support for new technology-based firms: a study of entrepreneurs in north Wales. Retrieved from http://search.proquest.com/docview/893890243/4A01D25259254328PQ/16?accountid=45049

Ling, F et al. 2015, Effect of adoption of relational contracting practices on relationship quality in public projects in Singapore, Retrieved from http://search.proquest.com/business/docview/1660895554/13EB17FBF311442APQ/15?accountid=45049, Last accessed 9th February 2017.

Loo, R 2009, A multi-level causal model for best practices in project management, Retrieved from http://search.proquest.com/business/docview/217359658/2F4FAD9DE7DB443DPQ/8?accountid=45049, Last accessed 9th February 2017.

Meyers, GR 2013, Investigating New Tools, Technologies for the Permian Basin. Retrieved from http://search.proquest.com/business/docview/1540778404/53066480327B4D1DPQ/3?accountid=45049, Last accessed 9th February 2017.

Pardo, IS et al. 2009, Looking into the black-box: analysis of the effectiveness of human resources strategy*, Retrieved from http://search.proquest.com/business/docview/225146340/1B854395A7974BD1PQ/16?accountid=45049, Last accessed 9th February 2017.

Prasad VC & Nori, KV 2008, Systems Approach for Adoption of Innovations in Organizations, Retrieved from http://search.proquest.com/docview/211465538/5AD72EE4297469CPQ/20?accountid=45049, Last accessed 9th February 2017.

Riley, JM 2013, Understanding the antecedent competencies of organizational risk management capabilities, Retrieved from, http://search.proquest.com/business/docview/1437003886/B69B4A30BC934996PQ/19?accountid=45049, Last accessed 9th February 2017.

Sharma, S, Pablo, A & Vredenburg, H 2009, Corporate environmental responsiveness strategies: The importance of issue interpretation and organizational context. Retrieved from http://search.proquest.com/docview/236358217/5524C7862854D96PQ/14?accountid=45049, Last accessed 9th February 2017.

Sridhar, V 2011, The practice of risk management in outsourcing and its impacts: An empirical investigation, Retrieved from http://search.proquest.com/business/docview/916760095/B69B4A30BC934996PQ/7?accountid=45049, Last accessed 9th February 2017.

Strazewski, L 2009, Benefits/Financial Products Fit Risk Management Strategy, Retrieved from http://search.proquest.com/docview/200367306/88A8C3FB34ED4BF3PQ/2?accountid=45049, Last accessed 9th February 2017

Sullivan, L 2001, Enterprise wide: Building a Risk Management program from the ground up, Retrieved from http://search.proquest.com/docview/227018296/A25516E0136242C6PQ/2?accountid=45049, Last accessed 9th February 2017.

Suriyamathi, S, Velavan, M & Radhiga, TD 2013, Importance of Leadership in Innovations of HR Practices. Retrieved from http://search.proquest.com/docview/1470793027/5AD72EE4297469CPQ/6?accountid=45049, Last accessed 9th February 2017.

Theodore, J 2014, the Importance of Imbedding the Concept of Continuous Development in The Formulation Of Global Strategies. Retrieved from http://search.proquest.com/docview/1516952897/5524C7862854D96PQ/8?accountid=45049, Last accessed 9th February 2017.

Weissenberger, M, & Kotch, DJ 2007, Importance of industrial services and service innovations, Retrieved from http://search.proquest.com/docview/233255106/5AD72EE4297469CPQ/4?accountid=45049, Last accessed 9th February 2017.

Welborn, J.A., 2001. Changing organizations: a meta-analysis of change implementation strategies’ effects on organizational outcomes, Cengage learning. Retrieved from http://search.proquest.com/docview/1516952897/5524C7862854D96PQ/8?accountid=45049, Last accessed 9th February 2017.

Windapo, AO & Goulding, J 2013, Value-based perspectives of stakeholders’ building requirements in low cost and government subsidised housing projects in South Africa, Retrieved from http://search.proquest.com/business/docview/1432234099/1B854395A7974BD1PQ/12?accountid=45049, Last accessed 9th February 2017.

Zogjani, J. & Raçi, S., 2015. Organizational Change in Business Environment and the Main Barriers during Organizational Changes.Academic Journal of Interdisciplinary Studies, pp.1–19. Retrieved from http://search.proquest.com/business/docview/208736728/13EB17FBF311442APQ/18?accountid=45049, Last accessed 9th February 2017.

Want help to write your Essay or Assignments? Click here

Risk and Return

1. Risk and its measurement

Risk is the probability of variation in actual return from the expected return on investment. It is related to future uncertainty of gaining or losing of investment value. The basic principle of investment is higher the risk, higher is the profit (Fidelity International, 2017). Broadly the risk can be classified in two categories: systematic risk and unsystematic risk. Systematic risk is also known as market risk and it is uncontrollable. Unsystematic risk is a specific risk which is controllable through diversification.

Management of risk is very crucial in any investment decision and it starts with the measurement of risk. There are various methods to measure the risk level. The most commonly used method is computation of standard deviation and variance of distribution of return on investment. The standard deviation measures the volatility of returns or the degree of fluctuation of actual risks from the expected returns.

The higher value of standard deviation denotes higher volatility and thus depicts high level of risk whereas the low value of standard deviation denotes lower volatility and thus depicts low level of risk.

2. Source of firm specific risk and market risk

Firm specific risk is a risk which is specific to a particular firm or group of firms. It arises due to factors which are specific to a firm or group of firms. It is an unsystematic risk which can be controlled by making investment in portfolios instead of making investment in single security.

The main source of specific risk is business risk and financial risk. Business risk is the possibility of lower profits in a business than the expected one. It may be due to competition, low demand of product, high cost of production, bad management decision and input cost etc.

Financial risk is associated with liquidity position as well solvency position of company. In other words it is related to the capacity of the company to repay its short term liabilities as well as long term liabilities in time. For example, UK based banking organization Banco Espirito Santo (BES) failed in 2014 due to its financial irregularities. It is firm specific risk.

Market risk is the systematic risk which arises due to macro events which have impact on all firms (Weaver & Weston, 2001). The degree of impact may vary from industry to industry. It cannot be controlled with diversification that is why it is also known as undiversifiable risk. Sources of market risk can be any natural disaster, change in government regulation, political change, market recession, changes in foreign exchange rates and interest rates. For example, demonetization of currency in India in 2016 had same impact on all industries. It is market related risk.

3. Coefficient of variation

Coefficient of variation is a statistical measure which expresses the ratio of standard deviation to average return of the data distribution (Damodaran, 2014). It is calculated as follows:

Coefficient of variation = Standard deviation of data distribution

Mean of data distribution

It measures the dispersion of data points in a data distribution around its average. It is also known as relative standard deviation as it can be used to measure and compare the degree of variation of two different data series with different number of samples. The higher value of coefficient of variation depicts higher degree of variation and thus higher risk and vice versa. For example stock A has return of 8% and its standard deviation is 25%. Stock B has return of 9% and its standard deviation is 30%.

The coefficient of variation will be as follows:

Stock A = 25% = 3.13%

Stock B = 30% = 3.33%

The coefficient of variation of stock A is low as compared to stock B, so the level of risk is low in stock A as compared to stock B.

References

Damodaran, A. (2014). The Investment Principle – risk and Return Model. Retrieved from http://people.stern.nyu.edu: http://people.stern.nyu.edu/adamodar/pdfiles/acf3E/presentations/risk&ret.pdf

Fidelity International. (2017). About risk and return. Retrieved from https://www.fidelity.co.uk: https://www.fidelity.co.uk/investor/getting-started/the-basics/understanding-investing/property/risk-return.page

Weaver, S., & Weston, J. F. (2001). Finance and accounting for non financial managers (3rd ed.). New York: NY: Mc Graw Hill.

Want help to write your Essay or Assignments? Click here

Ethics in Business Essay

Ethics in Business

Introduction

This paper intends to discuss ethics in business. In order to develop a detailed discussion, the essay will develop a program for Company X’s ethics.

Acceptable and Unacceptable behavior

Notably, operations at Company X will be guided by applicable standards along with procedures whose elements are as indicated below.

Walking the walk:

It is expected that managers and high-rank officers of Company X, should influence the tone of the organization, through demonstrating in actions what they are requiring of junior officers at Company X. Thus, managers and high-rank officers should be an example to junior officers (Giddy, 2015).

Trusting one’s own feelings:

When something does not feel right, then there is a high likelihood of that thing not being right (Michalos, 2013). Thus, if any employee of Company X is not sure of how to act in a given situation, it is recommended that the employee speaks openly, in order to gain guidance regarding all questions he/she might have or advice for any subject relating to Company X.

Retaliation is not allowed:

At Company X retaliation against an employee reporting an ongoing policy violation case or a possible policy violation case should not be tolerated. However, disciplinary action should be subjected to employees of Company X who intentionally fail to give information regarding an ongoing policy violation case at Company X or gives false information regarding the matter. Hence, all employees are mandated with upholding the values of Company X.

Avoidable conduct:

Both the high-rank officers and junior officers at Company X should avoid performing actions and uttering words that may be assumed to be intimidating to others, unpleasant or improper. At Company X all actions by an employee that offend another employee or unreasonably cause disruption to another employee in his/her working capacity are considered as harassment. Thus, all employees are mandated with reporting harassment cases (Poruthiyil, 2013).

Dress Code:

All employees of Company X should dress in a way that acts as Company X’s mirror to the society. Additionally, employees should dress in a way that does not unreasonably cause disruption to another employee in his/her working capacity.

Training Program

Company X will also be providing different training programs for its employees, as a way of providing employees with the chance of exploring and discussing the policies of Company X, along with different procedures required by Company X. Furthermore, training programs will also help in ensuring that the rules of Company X are always being followed. Consequently, components of the training programs are discussed below.

Training frequency:

Company X will be providing training programs for its employees two times annually. Generally, the first training program will be done at the beginning of every year, while the second training program will be done six months after the previous training program. Moreover, each training program will run for a period not less than two weeks. The people responsible for conducting the training programs include Company X’s management officials and visiting speakers who are temporarily invited to join Company X’s management team.

Gift Acceptance:

Among the programs to be regularly provided training on is gift acceptance. Company X highly discourages taking of gifts from clients in form of bribe in order to give the client favored treatment. Hence, the programs will train employees what government policies are in place regarding gift acceptance, and how the government policies align with policies of Company X. Moreover, the programs will also illustrate existing penalties by both the government and Company X regarding gift acceptance. Notably, acceptance of gifts plays a role in clients’ decision making (Vazquez, 2016).

Sexual harassment:

Most of the cases reported regarding harassment in many organizations are based on sexual harassment (Wolcott, 2014). Thus, Company X will be providing training programs on sexual harassment to its employees. The program will involve making employees aware of their constitutional rights and the protections provided to them by Company X’s policies. Furthermore, the programs will educate employees on where they should report any case of sexual harassment. Notably, the aim of providing training programs on sexual harassment to employees is to advocate for employees equal treatment.

Confidential Information:

Training programs at Company X will also illustrate the need for maintaining the company’s confidential information. Different laws relating to confidentiality of companies information are provided for in the constitution. Moreover, the policies of Company X also provide guidelines relating to confidentiality of the company’s information.

Thus, it is important to educate employees regularly on the penalties accorded to confidentiality of the company’s information by the constitution and Company X’s policies. The aim of educating employees regarding confidentiality of the company’s information is to ensure that they do not have a conflict between their personal interests and the interests of the company (Wolcott, 2014).

Monitoring of misconduct

Monitoring of misconduct at Company X will be done through a policy of Company X allowing employees to confidentially talk to the company’s manager of human resource. Furthermore, employees will be allowed to secretly report misconduct cases. Notably, Company X will mostly address misconduct in form of discrimination of employees, and sexual harassment of employees.

Furthermore, Company X will also address causes of hostile working conditions, abuse of the internet, employees stealing the company’s property, violation of Company X’s policies regarding breaks, and employee misconduct when attending to clients. Outstandingly, monitoring will be conducted by the officer responsible for managing human resource at Company X.

Reporting misconduct

Reporting of misconduct at Company X will involve a thorough process. The officer responsible for managing human resource at Company X will be mandated with documenting of all comments made by complaining employees and the evidence that the employees provide regarding the complaint. Moreover, the officer responsible for managing human resource at Company X will be required to identify if the employee who complains are raised against has a disciplinary record with Company X.

Thus, before engaging the employee who complains are raised against the officer responsible for managing human resource at Company X is expected to interview co-workers who also include other managers. Notably, employees will be allowed to report their co-workers who engage in acts of violation of Company X’s policies. The employees will do the reporting through a confidential talk with the officer responsible for managing human resource at Company X.

Ethics program audit

The ethics program at Company X will be audited in order to determine its effectiveness. Therefore, different tools will be used in performing the audit. The first foundation is detailed foundation benefits, where the actual behavior of Company X’s employees will be compared to the policies of Company X. The second tool is the development of metrics where ethics goals will be developed for Company X and reviews made annually regarding the ethics goals performance, with compensation being made on ethical behavior.

The third tool is creating a team which is cross-functional that includes the officer responsible for managing human resource at Company X. Notably, since training programs for employees of Company X will be provided two times in every year, then audits regarding ethics programs will be done once per year. Mostly, audits will be done towards the end of the year. Hence, reviews will be made by a team which is cross-functional that includes the officer responsible for managing human resource at Company X.

After the audit, improvements will be applied through developing a code which prioritizes ethical performance. Furthermore, the management team of Company X will be mandated with demonstrating leadership in upholding ethical values of Company X.

Company X’s employees will also be trained on how to act more ethically with different routes of supporting the employees being created, after which the effectiveness of the program for ethics at Company X is measured again. Consequently, communication of changes at Company X regarding ethical behavior will involve training of employees and role modeling acts by Company X’s management.

Conclusion

Ethics determine in a great way how a business performs. Consequently, the essay above develops a discussion on ethics in business by building up a detailed discussion on a program for Company X’s ethics. Furthermore, the essay provides applicable standards for Company X aimed at guiding the conduct of employees at Company X’s workplace.

The essay also illustrates what a training program by Company X should encompass. Moreover, the essay has also provided the need for conduct monitoring and illustrated how misconduct reporting should be done at Company X. Markedly, since upholding of ethics at Company X is expected to be done through a program for ethics the essay provides an appropriate way of performing the ethics program audit.

References

Giddy, P. (2015). Proportionality reasoning in business ethics. African Journal Of Business Ethics, 8(2). http://dx.doi.org/10.15249/8-2-88

Michalos, A. (2013). The Business Case for Asserting the Business Case for Business Ethics. Journal Of Business Ethics, 114(4), 599-606. http://dx.doi.org/10.1007/s10551-013-1706-2

Poruthiyil, P. (2013). Weaning Business Ethics from Strategic Economism: The Development Ethics Perspective. Journal Of Business Ethics, 116(4), 735-749. http://dx.doi.org/10.1007/s10551-013-1818-8

Vazquez, P. (2016). Family Business Ethics: At the Crossroads of Business Ethics and Family Business. Journal Of Business Ethics. http://dx.doi.org/10.1007/s10551-016-3171-1

Wolcott, G. (2014). Business Ethics and Ideals. Business Ethics Journal Review, 36-41. http://dx.doi.org/10.12747/bejr2014.02.06

Wolcott, G. (2014). The New (Old) Case for the Ethics of Business. Journal Of Business Ethics, 132(1), 127-146. http://dx.doi.org/10.1007/s10551-014-2314-5

Want help to write your Essay or Assignments? Click here