Mattel Toy Recalls

Mattel, Inc. is the largest toy company in the world. This largest toy company in the world was founded by Harold Matson and Elliot Handler in 1945, as they started to produce picture frames. However it was Elliott Handler who had a visionary of a side business in dollhouse furniture out of the converted garage (Mattel). As a top company, the primary activities of Mattel are to design, manufacture, and market the toys. As the company’s sales growing slowly, Mattel started to produce varieties of high quality products and became one of the of the best toy companies around the nation at the time.The major move by Mattel was when it sponsored Walt Disney’s Mickey Mouse Club television show that put the company in spotlight and company’s sales increased significantly. That sponsorship of Mickey Mouse Club helped the company to attract a very high proportion of young potential customers. In 1959, the wife of Elliot Handler, Ruth Handler came up with an outstanding ide a that changed Mattel forever. As Ruth Handler watched her daughter playing with paper dolls, she suggested the idea of making three dimensional dolls to her husband.Elliott loved the idea of making such dolls and introduced the doll with a full wardrobe and accessories to the market. The doll initially named after the nick name of daughter of Elliott and Ruth. The introduction of the new doll was a huge success for Mattel and immediately the doll became the major product line of Mattel (Finding). With the success of Barbie doll, Mattel was named a public company and ranked soon as one of the largest industrial companies in the United States. In 1968, Mattel have introduced another consumer-loved product called Hot Wheels. This was second biggest hit since the company introduced Barbie.Hot Wheels immediately labeled Mattel as the largest toy company in the world. As the toy industry was changing and new competitors were coming in, Mattel saw a stiff competition rising in the mid 198 0s. Like other companies in the toy industry, Mattel faced a stiff from the electronic entertainment. The electronic entertainment introduced many electronical videos games in which children switched to at an increasing young age from the traditional entertainment. To cope up with the competition and attract the new generation, Mattel decided to expand into technology by producing lectronic gaming products. Mattel failed to attract a high proportion of consumers, and were unable to fit in with the new strategy as there were new competitors producing electronic games with lower prices. Later, Mattel decided to focus on producing the core products of the company. This strategy to refocus on the core products and makeover some of the core products was a great success for Mattel. For example, after doing makeover, in 1988 to 1993, the sales of Barbie doll increased to $ 1 Billion dollars from $430 Million dollars (Sansweet).As Mattel is known for making most of its own products in their owned manufacturing facilities, the company owned and operated 10 manufacturing plants worldwide. Half of the manufacturing plants are located in China (Jiangyong). Since Mattel started its business, the company produced its products mostly in developing countries to take the advantage of cheap manufacturing costs. Unlike many toy companies, Mattel produced 70% to 80% of its products in their own manufacturing facilities. The company believed that making products in-house will be more stable and high efficient products.According to Mattel, in-house facilities have high standard safety measures and high quality control that produce high-quality products. Besides making most of its products in Mattel’s own manufacturing facilities, some of its production was outsourced to China and other developing countries in order to focus on domestic strategic efforts such as Research and Development and Marketing. However these outsourcing products were not efficient as products were made in in-house facilities. These outsourcing products were less stable and not as efficient.Many times these products needs to be recalled as they do not meet the safety standards and tend to hurt the image of a well-known organization like Mattel. Therefore, Mattel’s strategy was to focus on making most of its core products at their own manufacturing facilities, and outsource the products that are less popular and non-core. Due to outsourcing to other developing countries, the toy industry faced many hardships. The products that are made in developing countries that had substandard quality control were recalled many times due to the safety reasons.Mattel too faced a stiff pressure from the government and consumers for the products that were not safe and stable which are made in manufacturing facilities in China. Recently, Mattel recalled several of its products because they were not safe for consumers. Recalling millions of products, not only reduced the total revenues of the company, as well as it hurt the company’s image at the same time. Mattel had been always trusted by its consumers for making providing its consumers high-quality products and stable products.The recalls that are connected with lead paint made by Mattel’s lont-time manufacturers. These manufacturers are responsible for not having strong safety regulations and not complying with the quality control within the organization. The manufacturer, Early Light Industrial, was responsible for the second major recall of about 1 million toys. The manufacturer had more than 200 employees to inspect if the contractors were complying with safety regulations, but none of them were stationed on-site to inspect the products. Failure to inspect the products left the company with rooms or errors.In order to understand a company’s situation, financial statements are very important. Financial statements allow you to see the company’s performance, financial condition, and financ ial trend. By examining financial statements of Mattel, we can clearly foresee where the company is heading financially. Looking at ROA and PM, both ROA and PM increasing year to year from 2005 to 2007 which is very good news for Mattel. Despite the recalls, Mattel’s total revenue is still increasing year to year. These analyses clearly show that Mattel is performing very well in making profits.Some of the key financial highlights of Mattel recorded below: Selected Financial Highlights of Mattel, Inc. : YEAR 2007 2006 2005 Net Sales 5,970. 09 5,650. 16 5179. 02 Cost of Sales 3,192. 79 3,038. 36 2,806. 15 Net Income 599. 9 492. 93 417. 02 Total Assets 4805. 46 4955. 88 4372. 31 ROA (%) 12. 4 9. 5 9. 53 PM (%) 10. 4 8. 72 8. 05 Firm Strategy One of the Mattel’s primary strength is that the company is the leading brand named leading toy company in the toy industry. Ever since Mattel started its business, the company always produced high-quality and consumer-loved products . Mattel has plenty of name brands products that are very popular among the customers. Mattel’s brand name recognition stared in 1959 when the company first introduced the famous doll, Barbie.Other products, Hot Wheels, Fisher Price, and NASCAR also are very popular products and behind the huge success of Mattel. In order to continue making the high-quality products Mattel’s main focus is to keep doing what the company is doing and find out what the customers’ want and desire by research and development. Mattel’s main goal is to maximize production efficiency while minimizing the risks, controlling expenses, and maintaining flexibility. In order to focus on that strategy, Mattel has decided to use the third party manufacturers to produce its non-core products.Slowly, Mattel has been moving its manufacturing to countries like China, Japan, Indonesia, Thailand, and many other developing countries. As Mattel has contracts with thousand of vendors in those co untries, the company does not need to rely on a single manufacturer. However, this strategy may not convey quality assurance of the products and also raise concerns over safety regulations. Due to substandard safety measures revolving toy designing and manufacturing in China, Mattel has been facing some tough challenges.During 2007, Mattel has made five recalls of over 21 million toys are made in China due to the excessive lead paints on toys and having loose magnets that normally impose danger to the children while playing with them. These loose magnets and lead paint can easily be consumed by the children. These recent recalls started to hurt the image of the company and as well as the reputations of the company. Sales in some areas started declining, however, the total revenues of the company is increasing than the previous year.Possible Options As we have detected causes of the problems, we need to come up with alternative solutions to solve the problems. There are some alternat ive strategies Mattel can apply in order to stay on the of the toy industry. Possible alternatives include rebuilding strategy, and manufacturing in United States. Option 1: Rebuilding Strategy: Mattel should focus on rebuilding strategy. The company needs to rebuild the consumer trust in toys, rebuild the trust of the industry, and as well as the trust of China.Accountability and responsibility required strongly to repair the image. Denial and accusations will just hurt the image of the company more as it could bring counter attack by the accused. Option 2: Manufacturing in United States: Mattel may decide to move its manufacturing back to United States as they are facing many problems in foreign countries. However, this strategy will be really costly to Mattel financially. Also, it will harm the relationship with foreign countries. Therefore, rebuilding strategy is strongly recommended. Recommendations and ImplementationsDuring the crisis management, accountability and responsibil ity is very important to maintain the reputations and sales of the company. Admit the wrongdoing, instead of throwing blame on China. Blaming China will just hurt the relationship with the Government China. Mattel, Inc. is also required to change its strategy to address the concerns in design, manufacturing, quality control, and safety assurance of the products. In order to implement the rebuilding strategy, Mattel needs to take some of the important steps. The company needs to be open and truthful.Confess to wrongdoing is a great tool to start re-establishing the trust. The company also needs to focus on communicating with the consumers to address their needs. For better standard safety measures, Mattel should hire a third party for sudden inspections of the products in manufacturing facilities. The company should maintain its current strategy and continue outsourcing in China where it could focus on expanding product lines. The company may also incorporate with established manufac turing facilities where they have standard quality control and strong safety measures.Most importantly, the company needs to focus on more modifying the safety operations in facilities by inspecting standards of production and examining the materials that are supplied by third-parties. October 26, 2010 Robert D. Katz Ishaque Mohammed Ibrahim Mattel’s Case Memo Executive Summary: California-based Mattel, Inc. is well-known to the world for making the high-quality and brand-name recognized products. Recently, the Mattel Company recalled millions of products that are mostly made in China for the safety concerns that raised many questions about the sustainability of the company’s products.Due to these recent recalls, now Mattel is totally aware of the perils of manufacturing in developing countries, where the safety measures and working environment were totally unacceptable. The purpose of this case analysis is to understand the problems that occurred and how Mattel will c ome to solutions to solve them. This case analysis will review the problems Mattel is facing, analyze firm strategy by using SWOT, and recommend alternative strategies to solve the problems and best way for Mattel to proceed successfully in the future.

Stress Management and Its Causes

Stress is a term used by many, is somewhat misunderstood, and often used to describe a negative condition or emotional state. People experience various forms of stress at home, work, in social settings, and when engaged in activities to simply have fun. Police officer†s experience stresses the same as others, but also in ways much different than the average citizen. The dangers, violence, and tragedy seen by officers result in added levels of stress not experienced by the general population. What is stress? Stress is not a new phenomenon, it has been experienced throughout history. Stress is a biological response to some stimulus. Fear, panic, anger, tragedy and especially pressure can cause it. Stress can result in the competitiveness needed to succeed in business, relationships, sports, and education. Is stress bad or good? It is both. Good stress is manageable stress an can actually heighten your performance in certain situations. Bad stress is unmanageable stress and lessens your performance because it†s too much to bare. Police work, by its nature, calls for an incredible amount of continual stress. The demands on police officers to show greater restraint has been increasing over the years and has increased the effects of stress on police work. Today†s police officer is now more than ever in the public eye. He now must think about consequences before his actions in every situation. If we take a quick overview of police work and look at the research we can see what are some of the biggest stresses. Having your partner killed in the line of duty, lack of support by the department and bosses, shift work and disruption of family time/ family rituals and the daily grind of dealing with the scum of society. All of these factors add up and lead to high rates of cancer, heart disease, and suicide for police officers. We are becoming all too familiar with police suicide especially with the attention it gets from the media. In New York City twice as many police officers die by their own hand than in the line of duty. Stress is put to blame for this. Every study done indicates that police officer face a much higher level of stress. For suicide there are four main factors: 1. Divorce 2. Alcohol 3. Depression 4. A failure to get help. All four factors are symptoms that can stem from an officer†s stress levels. An officer who got into trouble on the job, suspension or termination is seven times more likely to commit suicide. Police suicide is more directly linked to relationship problems which in turn is linked to job stresses. Of the last fourteen suicides of police officers in New York City eighty-six percent had just had a divorce or relationship break-up. Police officers going through a divorce are five times more likely to commit suicide than officers who have a stable relationship. Relationship problems are highly related to job stress. In fact, studies have called police work to be a â€Å"high risk† lifestyle not because of physical danger, but high risk in developing attitude problems, behavioural problems, drug problems, and intimacy and relationship problems. These studies also show that police suffer from a substantially higher divorce rate ranging from sixty to seventy percent higher than normal couples. The medical community has attributed stress to such biological responses as heart malfunctions, blood pressure variations, gastrointestinal disorders, cancer, depression, muscular discomfort, strokes, and a host of nervous system related problems. For the police officer, biological consequences can represent more long term concerns, but the short term results are the most profound. Stress of the magnitude that affect an officer†s reaction time (increased or decreased) can seriously inhibit their ability to perform a vital action. An unrealistic increase could result in overreacting in confrontational situations, while a decrease could result in a serious injury or even death. Forty-three percent of all adults suffer from adverse health affects due to stress, seventy-five to ninety percent of all physician office visits are for stress related ailments and complaints. Stress is linked to the six leading causes of death, heart disease, cancer, lung problems, accidents, cirrhosis of the liver, and suicide. Stress is a combination of physical, mental, and emotional feelings that result from pressure, worry, and anxiety. These pressures are called stressors. Some examples of common stressors are, divorce, death in the family, job change, pregnancy, marriage, and retirement. In medicine stress is a physical, chemical, or emotional development that causes strains that lead to physical illness. The early warning signs of stress include apathy, anxiety, irritability, mental fatigue, and over compensation or denial. Some signs of apathy are feelings of sadness or recreation that isn†t fun anymore. Feelings of restlessness, agitation, insecurity and a sense of worthlessness are examples of anxiety. Signs of irritability are feeling hypersensitive, defensive, and arrogant. Feeling argumentative, rebellious, or angry are also signs of irritability. Examples of mental fatigue are denying that there are problems, ignoring symptoms, and feeling suspicious. Some behavioural signs of stress are avoiding things, doing things to extremes, administrative problems, and legal problems. Avoiding things includes keeping to one†s self, avoiding work, having trouble accepting responsibility, and neglecting responsibility. Examples of doing things to extremes are alcoholism, gambling, spending sprees, and sexual promiscuity. Some administrative problems are being late to work, poor appearance, poor personal hygiene, and being accident prone. Possible legal problems are shoplifting, traffic tickets, and an inability to control violent impulses. Some physical signs of stress include excessive worrying about illness, frequent illness, and physical exhaustion. Reliance on medication including remedies like aspirin is a physical sign of stress. Ailments such as insomnia, appetite changes, and changes in weight are also physical signs of stress. Indigestion, nausea, and nervous diarrhoea, are also physical signs. Stress can be confusing. There are some myths surrounding stress. One myth suggests that stress is the same for everybody, this is not true. What is stressful for one person may or may not be stressful for another. Some people seem to think that stress is everywhere, so there is nothing a person can do about it, this is also not true. A person can plan their life so that stress doesn†t overwhelm them. Another myth is that stress is always bad for a person. This is not rue because managed stress makes people productive and happy. Some people think that only the major symptoms of stress require attention. The minor symptoms are the early warnings that a better job of managing stress is needed. There are four types of stress. There is acute stress, episodic acute stress, chronic stress, and traumatic stress. Each type of stress has its own characteristics, symptoms, duration, and treatments. Acute stress is the most common type of stress. Acute stress comes from demands and pressures of the recent past and anticipated demands and pressures of the near future. Acute stress can lead to psychological distress, tension headaches, upset stomach, and other symptoms. Some examples of stressors that can cause acute stress are, an auto accident that crumpled the car fender, the loss of an important contract, a child†s occasional problems at school and so on. Acute stress doesn†t have enough have enough time to do the extensive damage associated with long term stress. Some of the most common symptoms of stress are emotional distress, muscular problems, stomach problems, and transient over arousal. Emotional distress includes anger, irritability, and anxiety. Muscular problems such as tension headaches, upper and lower back pain, and jaw pain are also symptoms of stress. Other symptoms are stomach, gut and bowel problems. Heartburn, acidic stomach, ulcers, flatulence, diarrhoea, constipation, and irritable bowel syndrome are examples of these problems. Transient over arousal is another symptom of stress which leads to elevation in blood pressure, rapid heartbeat, and sweaty palms. Heart palpitations, dizziness, and migraine headaches can also result from transient over arousal. Symptoms like cold hands or feet, shortness of breath, and chest pain are also common. Episodic acute stress is common in people who suffer from acute stress. These people†s lives are so unorganised that they are constantly in a state of chaos and crisis. They are always in a hurry, but they are always late. If something can go wrong in their life it usually does. Often these people describe themselves as having a lot of â€Å"nervous energy.† Another form of episodic acute stress comes from non stop worry, they are always worried about something going wrong. The symptoms of episodic acute stress are persistent tension headaches, migraines, hypertension, chest pain and heart disease. The treatment of episodic acute stress requires intervention on a number of levels, generally requires professional help, and may take many months. Sufferers are usually resistant to any kind of change. Chronic stress is the grinding stress that wears people away day after day after day. It destroys minds, bodies, and lives. Chronic stress comes from when a person doesn†t see a way out of a miserable situation. The worst part of chronic stress is that people get used to it and forget that it†s there. Chronic stress kills by means of suicide, violence, heart attack, stroke and cancer. The symptoms of chronic stress are hard to treat and could require a lot of medical and behavioural treatment, therapy, and stress management. Traumatic stress is a special kind of chronic stress, known as post-traumatic stress disorder. It is caused by trauma that is not handled correctly. Some examples of traumatic experiences are, accidents, rape, abuse of any kind, natural disaster, and the death of a loved one. The symptoms of PTSD are flashbacks, over arousal, emotional numbness, and emotional outbursts. People with PTSD suffer from problems with concentration, controlling impulses, and decision making. The long term consequences of PTSD are depression, anxiety, behavioural disorders, multiple personality disorders, and suicide. There are three basic strategies for dealing with stress at the source. The first strategy is altering situations to make them less stressful. Avoiding stressful situations is the next strategy. Accepting stressful situations is the other basic strategy in dealing with stress at the source. Each strategy has it†s disadvantages and it†s advantages. It†s up to every person to decide which one to use with which situation. The tougher a person†s resistance to stress is, the more stress they can take. There is a lot people can do to maximise their resistance to stress. People have resources to help them handle stress, these resources include familial and financial resources, social and spiritual resources, as well as personal resources. They can also develop good health habits and get rid of bad health habits to help build up a resistance. Following these guidelines in a person†s life is a good way to increase their resistance to stress. Eat at least one hot balanced meal per day. Improving a person†s nutritional habits makes them less susceptible to stress. Limiting a person to less than three caffinated drinks per day helps to improve their health and their susceptibility to stress. Give and receive affection regularly. Research shows that people who give and receive affection regularly, live longer and are healthier. Have at least one relative within fifty miles. Family is one of the best ways of reducing stress. Regularly attend social activities. Friends a person meets can provide a support network for good and bad times. Have a network of friends and acquaintances. A strong social network helps fight off feelings of loneliness, isolation, and despair. Have one or more friends to confide in about personal matters. Close friends boost a persons mental health just by being there. Exercise the point of perspiration at least three times a week. Exercise leads to fitness and people who are fit handle stress better. Being the appropriate weight is important not only for health reasons but for self esteem as well. Be in good health is important because a person†s health is their first line of defence against stress. Get seven to eight hours sleep as often as possible. Lack of sleep leads to exhaustion that harms a person†s health and productivity. Do something fun at least once a week. Doing something just for the fun of it improves a person†s resistance to stress because it takes your mind off your problems. Speak openly about your feelings when you are angry or worried. As one can see, stress is a combination of feelings that have different effects on peoples† health, and also there are many different ways to build resistance to it so it will not ruin your life.

God’s rule over human happenings Essay

God controls events of human history to accomplish of his purposes. God’s rule over human happenings is demonstrated many times in the Bible. One of the clearest examples is recorded in the first four chapters of the book of Daniel. Daniel and three of his friends were taken captive by Nebuchadnezzar, king of Babylon. In Babylon they are trained to be special servants of the king. When Nebuchadnezzar had a dream and apparently forgot it, he demanded that his wise men tell him what he dreamed and give its interpretation, on penalty of death if they didn’t. When Daniel heard about this situation, he and his friends prayed to God to learn about the dream and its interpretation. When God revealed the dream and its meaning to Daniel, Daniel thanked God by saying, â€Å"Blessed be the name of God forever and ever, for wisdom and might are His. . . . He removes kings and raises up kings; He gives wisdom to the wise and knowledge to those who have understanding. . . . I thank You and praise You, O God of my fathers; You have given me wisdom and might, and have now made known . . . the king’s demand† (Daniel 2:20-23, NKJV). The dream was about a man with a head of gold, his chest and arms of silver, his thighs of bronze, his legs of iron, and his feet partly of iron and partly of clay. Daniel told the king that God had revealed to him the dream and its interpretation. He declared that different parts of the man represented various kingdoms. The head of gold represented Nebuchadnezzar. His was the greatest kingdom. After him would come lesser kingdoms, represented by the inferior medals, until the coming of the greatest – an everlasting kingdom – represented by a stone, uncut by human hands. The stone would strike the image and broke it in pieces. It would then became a great mountain and fill the whole earth. Nebuchadnezzar was grateful to Daniel for telling him his dream and its interpretation. He declared, â€Å"Truly your God is the God of gods, the Lord of kings, and a revealer of secrets, since you could reveal this secret† (Daniel 2:47). The king then promoted Daniel to be ruler over the whole province of Babylon, and chief administrator over all the wise men of Babylon. Moreover, Daniel’s three friends were placed in positions of power in the province of Babylon. Nebuchadnezzar was a most powerful king. He was also very conceited. He built an image of gold, ninety feet tall. Why he built it is not declared in scripture. However, it may be because the dream, wherein he was represented as possessing a kingdom portrayed with a head of gold, motivated him to exalt himself in that way. He called for everyone to fall down before the image and worship it. But Daniel’s three friends refused. Nebuchadnezzar threatened them, saying that they would be put into a furnace of fire if they didn’t prostrate themselves before it. They still refused, saying that God would deliver them, but even if he didn’t, they would not worship the image. Nebuchadnezzar, full of fury, had them put into the fiery furnace. Afterward, however, when he looked into the furnace, he was greatly surprised. There was a fourth person, one like a son of the gods, walking among them and none of them were burned. When Nebuchadnezzar called for them to come out of the furnace, he discovered that they were not singed, nor did they have even the smell of fire on them. Therefore he said, â€Å"Blessed be the God of Shadrach, Meshach, and Abed-Nego, who sent His Angel and delivered His servants who trusted in Him . . . that they should not serve nor worship any god except their own God! Therefore I make a decree that any people, nation, or language which speaks anything amiss against the God of Shadrach, Meshach, and Abed-Nego shall be cut in pieces, and their houses shall be made an ash heap; because there is no other God who can deliver like this.† (Daniel 3:28-29) He then promoted them in the province of Babylon. Nebuchadnezzar thus came not only to recognize, but also to appreciate the Most High God. Nevertheless, Nebuchadnezzar was still filled with great pride. In his own words, Nebuchadnezzar told how he came to be humbled by God. He had another dream which none but Daniel could interpret. The dream was about a great, strong, and high tree with lovely leaves and abundant fruit. In it the birds lodged, under it animals found shade, and from it all flesh was fed. But a voice from heaven commanded the tree to be cut down. Even so, the stump and roots were to be left, bound with iron and bronze in the grass of the field. Before being told the meaning of the dream, Nebuchadnezzar recognized that â€Å"This decision is . . . in order that the living may know  that the Most High rules in the kingdom of men, gives it to whomever He will, and sets over it the lowest of men† (Daniel 4:17). When told the dream, Daniel was disturbed because he knew it was against the King. The tree represented the king. Although the king was great, he would be cut down but not destroyed. His heart would become like that of an animal and he would eat grass for seven â€Å"times† (probably seven years). However, Nebuchadnezzar was assured that the kingdom would be his after he came to realize that Heaven rules. Daniel then advised the king, â€Å"break off your sins by being righteous, and your iniquities by showing mercy to the poor. Perhaps there may be a lengthening of your prosperity† (Daniel 4:20). The dream began to be fulfilled a year later while Nebuchadnezzar was walking in his palace. He said, â€Å"Is not this great Babylon, that I have built for a royal dwelling by my mighty power and for the honor of my majesty?† (Daniel 4:30). It was then that a voice from heaven said, â€Å"King Nebuchadnezzar, to you it is spoken: the kingdom has departed from you! And they shall drive you from men, and your dwelling shall be with the beasts of the field. They shall make you eat grass like oxen; and seven times shall pass over you, until you know that the Most High rules in the kingdom of men, and gives it to whomever He chooses† (Daniel 4:31-32). And so it was. Nebuchadnezzar ate grass like an ox, his body was wet with the dew of heaven, his hair grew like eagles’ feathers, and his nails like bird’s claws. At the end of the time, Nebuchadnezzar’s understanding returned to him, as did his kingdom, honor, splendor, counselors and nobles. He then blessed the Most High, saying, â€Å"His dominion is an everlasting dominion, . . . He does according to His will in the army of heaven and among the inhabitants of the earth. No one can restrain His hand or say to Him, ‘What have You done?’† (Daniel 4:34-35). He then praised and honored the King of Heaven, saying that his works are true and his ways just. Moreover, he said, â€Å"those who walk in pride, He is able to put down† (Daniel 4:37). God rules. He sent dreams to Nebuchadnezzar. Through Daniel, God made their interpretations known. In this way God caused Daniel to become ruler over  all Babylon and his friends to be elevated to rulership positions. God changed Nebuchadnezzar’s heart and made him to be a believer in the Most High God. He also humbled and then restored Nebuchadnezzar to his kingdom. He thereby caused His name to be heralded by the King throughout all Babylon (Daniel 4:1-3). Nebuchadnezzar came to know that God ruled. Yet he probably did not understood the extent or purposes of God’s rule. He may not have realized that in all these things God was preserving the Israelites in their captivity. When we see disturbing conditions in our world (just as the Israelites saw and were disturbed by the fall of Jerusalem and the overthrow of their nation by the Babylonians) we should realize that God â€Å"reigns over the nations, God sits on his holy throne† (Psalm 47:8; See also Jeremiah 18:7-10). He still rules in the kingdom of men. And while we may not know the extent of God’s rule, we should realize that God is working out his own purposes through contemporary human events.

Discussion Question Assignment Example | Topics and Well Written Essays - 250 words

Discussion Question - Assignment Example This situation was an indication of how interest rates and the real estate market play a central role in determining the performance of the economy and its welfare over time (Wiedemer, 2006). The 2008 global financial crisis paced the world economy between a rock and a hard place. Its effects spread across the world quite fast, making many countries worse off in the entire world. The crisis resulted from various reasons, but the casing point is that the world’s major economies greatly contributed to this crisis. The export-import business worsened as major world currencies became unstable and of low value, worsening international trade at the time. Interest rates and foreign exchange markets were hardly hit (Gossman, 2008). Poverty around the world persisted as unemployment conditions worsened the dependency ratio around the world. Current development and trends in economics are depicting a scenario of dynamism day in day out. Major economic issues that are likely to be discussed in this course 19 years from now pertain to employment, unemployment and globalization. Employment and unemployment are taking a new direction each day. Chances and opportunities of employment are shrinking every year, resulting in high unemployment levels and high dependency ratio. The situation of the two in the year 2030 will portray attributes that will capture the world’s interest. On the other hand, globalization is likely to convert the world into a global village in a more extent manner than it is the case

Why do women earn less than men examine the gender pay gap in an Essay

Why do women earn less than men examine the gender pay gap in an industry your choice and evaluate what can be done to close the pay gap - Essay Example Gender pay disparity has been associated to a number of factors, which have been discussed in various research publications. In this paper, the gender pay disparity within the healthcare industry will be evaluated based on the different professions within the industry and the disparity that exist in their pay. The paper will also discuss various approaches that can be used to seal the gender pay gap and create uniformity and motivation across the two genders. Within the healthcare industry, women have traditionally been considered to fit well into the nursing profession, an area that is considered auxiliary to the mainstream medical profession. As a result, nurses and other medical professionals such as clinical officers, laboratory technologists and other technical staff within the facility have a high population of women. However, access to equal educational opportunities has seen an increase in women medical doctors, men nurses and equal representation of the two genders in the different healthcare professions. Despite this gender progress, women have continued to receive minimal pay as compared to their male colleagues in the same job groups (Hook, Hagan, & Pettit, 2009). One of the core oiling factors in the gender inequality issue in or societies that have led to the determination of the responsibilities for the two genders is stereotypes. This has remained as the major determinant in the social inequality issue as it has continued to build on the perception that men are superior to women and should therefore be responsible for superior roles in the society. Our language that gives the male gender more dominance as compared to the male gender has supported this stereotype and this has led to a new definition for their roles (Caliendo, Lee & Mahlstedt, 2014). Women surgeons and doctors in the United States, for example, earn 71% of the total amount

Role of Leader Managing Conflict Essay Example | Topics and Well Written Essays - 2000 words

Role of Leader Managing Conflict - Essay Example Thus, leadership is defined as the ability to influence a group of people towards the achievement of organizational goals (Robins, Odendaal and Roodt, 2001). This study therefore seeks to critically discuss the role of leader in managing conflict using real examples and case studies from a clinical area. An example is drawn from Riyadh Military Hospital which had encountered certain conflicts when it embarked on a drive to implement some changes in its operations to improve efficiency. The hospital has been experiencing inefficiency of qualified nurses related to high rate of turnover between expertise, because of increased work load, increased duties and responsibilities of bedside nurses and lack of support and motivation. There was also a need to improve the performance of new nurses. The leader nursing staff including sister in charge, head nurse and admin tasked to take the lead in finding lasting solutions to this problem which meant that some changes were to be put in place. C hange was normally met with resistance because of different factors like lack of budget and military role. This essay seeks to critically analyze the different types of conflicts as well as the approaches that can be implemented in order to resolve conflicts in a clinical set up. Analysis of scenario: In the scenario under consideration, there is great likelihood of conflict among the sister in charge, head nurse and the admin that have jointly resolved to take such measures that would improve the competence of new nurses in their work and reduce the employee turn over rate. The fundamental point of consideration in this paper is the different types of conflicts that can occur between the three staff members that have taken the charge. The sister in charge, head nurse and the administrator have their individualistic consents and opinions that find their origin in their respective roles in the organization structure. The head nurse has the most direct interaction with the nurses that are practically facing the problem of lack of training and education. In order to reduce the employee turnover, the head nurse has to pay due consideration to the collective opinion of the nurses that practically work in the hospital. Therefore, the head nurse has little choice but to favor the mutual consent of all working nurses in order to retain the workforce and develop team work. The sister in charge, on the other hand, is sandwiched between the head nurse and administrator. Therefore, the sister in charge has to pay due respect to the concerns of both head nurse and the administrator and is also supposed to introduce and get acknowledged her individualistic opinion. The administrator is loaded with the responsibility of managing the resources of the hospital and allocating the funds to right activities that would benefit the staff as a whole. The administrator can not blindly approve the request raised by the head nurse or the sister in charge. He assumes the responsibility to explain to the owners any action that he takes and justify the allocation of funds to individual activities. Owing to the difference of roles and responsibilities of the three staff members that have taken the charge to resolve the matter of increased employee turnover and lack of competence in the nurses, they have their indivi

Opertaing a small rural-based business Essay Example | Topics and Well Written Essays - 2000 words

Opertaing a small rural-based business - Essay Example (Landstorm, pp. 13-14, 2005) In particular, SMEs play a significant role in the contribution to rural economy. Since few years, sector of rural-based tourism has developed and grown progressively in the country. Certain limits related to the annual turnover or the number of employees have been defined and described in every country, in order to identify the definition the small and medium enterprises. However, every country has its economy, and thus, definition of the abovementioned term has been provided by various trade organizations according to their terms and conditions. In this regard, these enterprises have been abbreviated by SME by some of the major trade organizations, as well as, unions, such as, the World Trade Organization, the World Bank, and the European Union. For instance, a limit of five hundred employees was put on the German companies according to their traditional definition. On the other hand, a limit of only hundred employees was the standard for becoming SME in the Belgium. (Hall, pp. 49-50, 1997) In this paper, we will try to discuss different steps that can be taken to establish and operate small rural-based business in particularly, tourism sector of the United Kingdom. Every business confronts different threats and weaknesses during various business processes; however, establishment of a business brings new opportunities and strengths that will be discussed in this paper as well. The importance of the small business sector in tourism sector of the country will be highlighted during this paper, and few implications will be provided during the study. In the United Kingdom, magnitude of the annual balance sheet, annual turnover, and number of employees are considered during the evaluation of a small business firm statistically. In detail, small business firms have been categorized according to their volume. For instance,

Freud Essay Example | Topics and Well Written Essays - 1000 words

Freud - Essay Example He believed irrespective of whether the behavior is normal or abnormal, it has its influence from the psychological motives, which are often unconscious. This belief of Freud is called as psychic determinism. These theoretical words help in the explanation of what is called as "Freudian slip". The later work of Freud emphasized that the psyche was divided into three parts and they are the Id, Ego and the Superego. The unconscious Id represents itself as the primary process of thinking of a person's most basic necessities satisfaction type of thoughts. The word Id thus represents the most common and essential needs to be addressed by a person. In the case of Superego there rests socially induced conscience that has been counteracted by the Id on the grounds of moral and ethical conduct. Thus, Freud presented that the Superego of the person many a times counteracts the basic necessities that are required to be addressed. Freud addressed the superego as the unconscious and the ego as a largely conscious state of mind. He had advocated that the ego stands in between the id and the superego in order to balance the two i.e. superego and the id. Thus, a balance of the most primitive needs and the moral/ethical beliefs is being achieved by the in-between penetrative presence of e go. Freud believes that a healthy ego shall help provide the ability by virtue of which one can successfully adapt with the outside environment in a manner that holds the identity of both the id and the superego. Freud especially held the focus of his attention to the study and research on the dynamic relationship that exists between the id, ego and superego. He held special attention to the manner in which the three entered into a conflict. We would now like to throw some essential light on the work of Plato and Socrates. Plato was a Greek Philosopher and was a student of Socrates. He was the founder of the Academy in Athens, where Aristotle was a student. Under the guidance of Socrates, Plato wrote philosophical views. He had contributed to the world of knowledge a very precious collection of manuscripts. The Plato's writings present themselves with debates as related to the best possible form of government. Plato had also held the focus of his writings on several other subjects. The central theme of Plato's work has been a conflict that exists between the nature and convention. This is related to the role of heredity and the environment on the intelligence and personality of humans. The more the pleasures of the body fade away, the greater to me is the pleasure and charm of conversation. -Plato, Greek philosopher, The Republic, 4th century BC What progress we are making. In the Middle Ages they would have burned me. Now they are content with burning my books. -Sigmund Freud Thus, the debate as presented rested on the platform of nature versus nurture. We can notice here that Plato and Socrates have placed ethics upon reason. They have marked the essential practice of following the good as ethical and thus essential. However, the ethics have been excluded from the Freud's conception of the superego, ego and Id description. Thus, the point that some people will not confirm to some actions can be due to their realization of them being ethically wrong. This ethical ground on which the performance of an action is not

Consumer Behavior Analysis Essay Example | Topics and Well Written Essays - 1500 words

Consumer Behavior Analysis - Essay Example Economists have analyzed that all types of goods and services need not be advertized for the purpose of sales. Producer’s decisions to incur advertisement expenses largely depend on the market or industry concerned. Competitive market producers never go for advertisement expenses, like the sellers and producers of potatoes (Yeshin, 2006). When business firms face high monopolistic or imperfect competitive markets then they resort to high advertisement expenses. Personal care products are consumer goods products and its trading involves cut thought competition. Large number of business firms enter in such trading and the major differences between their products is qualitative in nature. Thus while targeting the young generations between 18 to 35 years in U.S.; the company must select an appropriate advertising strategy. A good slogan or message for advertisement is the one that is simple, clear and short. The slogan should be easy so that most of the buyers in the market of dif ferent classes can relate to it. â€Å"Every Man is Unique† can be an appropriate message for the personal care products for young men. This is because personal care products like shaving accessories; face wash etc. helps to keep the looks fresh and good (Pure Health, 2011). The viewer ship ratings of a product largely depend on the popularity of the advertisement slogan. ... Demand for personal care products depends on the tastes and preferences of the consumers. For some buyers requirement of personal care products may be an act of necessary consumption. While for others it may be a type of comfort good. While marketing a range of consumer care products for men in U.S., a seller might have several difficulties to attract the consumers. This is because U.S. exhibits different types of cultures in its society. The culture in U.S. is primarily western in nature but still influenced by African, Asian and Latin American cultures. Thus the company must consider different types of culture in U.S. and carry its business activities. There are also many other cultures in U.S. like Polynesian and Native American cultures. The essay tries to analyze different cultures appeal for personal care products, the three cultures considered are African, Asian and Latin American. Africans in America resemble the Black Culture in the society. They are traditional in their tho ught and firmly follow the heritage and culture of Africa (FROST, 2012). It is empirically found that despite of the global crisis, the industry for toilet soap has remained successful in Africa (FROST, 2012). The Africans create high demand for personal care products. Thus appeal for male personal care products would be high from the Africans in U.S. The demand for male grooming products in Asian countries is rising significantly. Many natives in U.S. are from Asian families. So it can be analyzed that the demand for male grooming products will be good from the Asians living in U.S. Latin American men consider themselves to be good looking. The consumers of Latin American cultures are demand for large quantities of cosmetics in

Prisoners rights Research Paper Example | Topics and Well Written Essays - 250 words

Prisoners rights - Research Paper Example This is because of the harsh living conditions that prisoners are subjected to. However being a correctional facility, the system is meant to mould inmates to follow simple rules to fit in society again once they are released (Hudson, 2007). It is important to note that prisoners are entitled to limited rights in a jail setting since some of the civil rights are stripped at the time they are incarcerated. However as per the Eighth amendment of the Federal constitution, prisoners are protected from cruel and unusual punishment on the basis of race, sex or creed. They are entitled to affordable minimum standards of living and food to sustain an average person adequately. In this regard, the sandwich given for lunch by the government is a way of according prisoners affordable living standards (Pertersilia et al, 2012). The wearing of pink pants therefore does not in any way curtail the constitution rights of prisoners. It is prudent to appreciate the correctional facilities and the role they play in our society. It is important to note that other rights are strictly regulated by individual prison systems and therefore are not guaranteed. For example, visitations are not a personal right but nevertheless are allowed. Different state correctional facilities can adopt different measures for prisoners to be law abiding citizens again. This is acceptable as long as they are not overboard and infringe on prisoner

Women would succeed in combat if given the chance Essay

Women would succeed in combat if given the chance - Essay Example pression of poor women, heterosexist bureaucracy, environmental ruin, and militarization all raise weighty issues for feminist movements today.1 Although feminist movements all over the world have been diversely triumphant, we become heir to several issues women of the earlier periods confronted. However, there are new issues as well as we try to understand a world permanently blemished by the unsuccessful attempt of communist and postcolonial capitalist societies to meet the economic, social, religious, and psychological demands of most of the world’s people. Globalization has increasingly become representative of the motives and goals of the free market and companies rather than autonomy and liberty from economic, cultural, and political subjugation for all the inhabitants of the world.2 There are several of the issues tackled in ‘women and war’. It adopts as its basic arguments the importance of the involvement of feminist movements in both local and global political, economic, and cultural mechanisms, and the importance of a global discourse in creating an ethical tradition able to endure and revolutionize the oppressive and commodified processes of the global economy and community.3 The discussion raises the value of feminist research and analysis and aims to build connections between mobilizing, deliberation, and analysis. The discussion of ‘women and war’ offer methodical and workable interventions into the Western-dominated discipline, while at the same time emphasizing the effort that can and has to be carried out to visualize and promote cross-cultural feminist unity. The topic ‘women and war’ is a key representation of the ties between mobilizing, deliberation, and analysis and the actualization of feminist unity promoted by such topic. Drawing on diverse readings and documents, the discussion has introduced a general, compelling, critical analysis of global gendered militarism, emphasizing women’s opposition to it. Furthermore, this

Starbucks Coffee Essay Example for Free

Starbucks Coffee Essay I. Strategic Problem: How can Starbucks Coffee Corporation continue to provide exceptional employee benefits package while pursuing a globalization strategy? II. Analysis of the Problem: A. Company Background and History: 1. Founders. a. Starbucks began in 1971 when three scholars-English teacher Jerry Baldwin-history teacher Zev Siegel, and writer Gordon Bowker- opened a store called Starbucks Coffee, Tea and Spice in the touristy Pikes Place Market in Seattle. b. The inspiration and mentor for the Starbucks venture in Seattle was a Dutch immigrant named Alfred Peet, who had opened Peets Coffee and Tea, in Berkeley, California, in 1966. c. Starbucks Coffee at this time stood for making top-quality, fresh-roasted, whole-bean coffee which was its differentiating feature. d. The company was created to build clientele in Seattle that would appreciate the best coffees and teas. e. Baldwin and Bowker key mission for their business was to maximize the quality of the coffee. The company purchased the finest Arabica coffees and put them through a meticulous dark-roasting process to bring out their full flavors. f. In 2000, Howard Schultz transitions from chairman and CEO chief global strategist; Orrin Smith is promoted to president and CEO. 2. Starbucks and Howard Schultz. a. In September 1992, Howard Schultz was hired at Starbucks. b. Schultzs 1983 trip showed him that there was much more to the coffee business than just providing quality beans. On his trip to Milan, Italy he had a revelation which made him see going to Starbucks should be an experience, a special treat, a place to meet friends and visit. c. Howard Schultz presented his great idea to expand Starbucks to a retail business. They feared that providing drinks would hurt them because it could hurt the integrity of Starbucks mission as a purveyor of fine coffees. d. In April 1984 , Starbucks opened its sixth store which was the first of the companys stores designed to sell beverages, and it was the first one located in downtown Seattle. The sixth store did well with the espresso bars but Baldwin felt that they were coffee roasters and their debt was too high to divest into the restaurant business. e. Schultz left Starbucks left in 1985 to start his own company. f. In March 1987, Howard Schultz, president and CEO, took Il Giornale Coffee Company to form Starbucks Corporation. B. Overview of Retail Industry 1. Financial Situation and Performance. a. Starbucks goal is to become the leading retailer and brand of coffee in each of its target markets by selling the finest coffee and related products, and by providing superior customer service. b. Company-operated retail stores accounted for approximately 85% of net revenues during fiscal 2003. c. Specialty Operations accounted for approximately 15% of net revenues in fiscal 2003. d. Starbucks went public on June 26, 1992 at $17 per share, or a split adjusted price of $1. 0625 for the companys four subsequent 2-for-1 stock splits (wwww. starbuckscoffee. com). e. Comparing Starbucks financial ratios to that of the Industry can give us a general perspective of Starbucks financial strength. This could also give some indication of stock price performance. Most of Starbucks ratios are in line with the industry average, but there are a few that could explain the poor stock performance recently experienced. Starbucks price to earnings ratio is well above the industry average, but this could be due to its relative high growth it has experienced. Return on equity is well below the average for the industry, and this could be an area of concern. This suggests that the investment made by shareholders in the firm has not produced a decent return when compared to the industry average. Starbucks gross margin is also below the average for the industry, suggesting that it is not able to cover its operating expenses as well as other firms in the industry. C. Management Practices and Philosophies 1. Howard Schultz and Benefit Program a. Schultz wanted to build a company that really valued their employees and would gain from their contribution towards the company b. In late 1988 part-timers working 20 or more hours were offered the same health coverage as full-time workers. c. Starbucks paid 75 percent of an employees health care premium; the employee paid 25 percent. Starbucks extended its health coverage to include preventive care, crisis counseling, dental care, eye care, mental health, and chemical dependency. d. In 1995, Starbucks implemented an employee stock purchase plan. e. Schultz believed that if you treat your employees well, that is how they will treat your customers. 2. Workplace Environment a. Store employees were paid around $9-$12 an hour. b. The turnover rates for Starbucks baristas ran about 65 percent. c. Starbucks turnover for store managers was about 25 percent. d. Schultzs approach to offering employees good compensation and a comprehensive benefits package was driven by his belief that sharing the companys success with the people who made it happen helped everyone think and act like an owner, build positive long-term relationships with customers, and do things in an efficient way. D. Products and Services 1. Customer Service a. Employees were trained to go out of their way, and to take heroic measures if necessary, to go out of their way, and to take heroic measures if necessary to make sure customer were full satisfied. b. The theme was Just say yes to customer requests. Baristas made sure that customers got what they wanted. Shultzs rationale was that if you treat your employees well, that is how they will treat customers. 2. International Expansion a. Starbucks created a new subsidiary, Starbucks Coffee International, to orchestrate overseas expansion and begin to build the Starbucks brand name globally via licensees. b. Starbucks Coffee International division was only marginally profitable, with 2003 pretax earnings of only $5. 5 million on sales of $603 million. c. International journey began in 1966 when the first Coffeehouse in Tokyo opened. d. Starbucks Coffee has existing partnerships with 38 countries abroad. There are more than 1500 coffeehouses in 31 markets outside North America. 3. Local Stores. a. The company sites location track record was so good that as of 1997 it had closed only 2 of the 1,500 sites it had opened; its track record in finding successful store locations was still intact as of 2003. 4. Product line at Starbucks a. Starbucks CDs, initially created from the Capitol Records library, initially created from the Capitol Records library, provided a significant seller and addition to the product line. b. In the fall of 2003 Starbucks, in partnership with Bank One, introduced the Duetto Visa card, which added Visa card functionality to the reloadable Starbucks card E. Competition 1. Competition. i)Their competitors are not a threat because their market share is doing extremely well. III. Situational Analysis: A. Strengths, Weakenesses, Opportunites, and Threats: a. Starbucks, like many other companies had some strengths and weaknesses. One of the best strengths that a company can have is a CEO who is not afraid to take a chance and try knew things. Before Shultz came over to Starbucks the company did not have any plans of major growth or product expansion. Companies should always have knowledge of what they are selling and that is what Starbucks did. They knew everything that there was to know about coffee and if they didnt they would find out. Starbucks always prepared all of their managers and employees by sending them to training seminars and classes to learn how to roast the perfect bean, brew the perfect cup and how to serve each customer correctly. Starbucks believed in quality of its products and the character and location of its stores. b. Companies all have strengths, but they also have weaknesses to. Weaknesses were very easy to see when the company was first put together. Baldwin and Bowker were very narrow-minded and had no desire to expand the company very far. The two were also afraid to try knew things such as starting an Espresso bar and a sit in area where people can sit around, talk and make new friends. Though after Shultz took over the company, it seemed as though the weaknesses started to dissolve and the opportunities began to grow. c. Shultz took advantage of the opportunity to expand the company into new areas and markets. Entering new markets brought forward the idea of creating new product lines. d. They started by selling bakery good at the espresso bars and along with selling their beans, they began to sell their Starbucks Barista home espresso machine. Opening the Espresso bar also enabled them to see the CDs that the company played while customers sat and drank. Partnering with Dreyers and Pepsi enabled Starbucks to put their name on ice cream products and the cold beverage market by creating the bottled Frappuccino. This enables the company to earn an additional profit. e. Expanding too fast is one of the most important threats that Starbucks may encounter. Opening all these new stores at such a drastic rate can cause the company to endure major debt. Debt can cause a series of chain reactions leading to lower wages, cutting benefits, closing stores and laying off workers. These are not major threats now, but at an uncontrollable rate, this is one of the main threats that can really affect the future of Starbucks Coffee. IV. Strategic Alternatives: a. Class or program that breaks down the Starbucks Coffee lingo b. Diversity Training programs c. Discontinue joint ventures. d. More Opportunity for Community Involvement Initiatives e. Reconsidering Store Placement V. Evaluation of Alternatives: A. A lot of the customers do not understand the names of the Italian drinks, names of cups, and origin of coffee beans so this class would be give the baristas drink makers an opportunity to learn how to explain the language of the company better. The directors of the board will probably not be content with this idea because it would add an extra expense to implement the program but it would benefit the employee and the customer in the long run. B. Starbucks is all about embracing diversity so this program would encourage exposure to other cultures and an opportunity to learn from others in order to broaden horizons. Starbucks tries to hire all different races so that it will create an eclectic atmosphere in each of its stores. C. Joint ventures can hurt the company imagine because less regulation of your product/service will possibly ruin your image with your shareholders and customers. D. Although, community involvement is encouraged at Starbucks it is not required. They should implement a program that lets all the partners get together once a month and go out and possibly clean up a park in the local community, for example. As a partner, I feel that this program will give each partner an opportunity to get closer to their fellow co-workers as well as making a difference in the community. Not all partners will be excited about spending time with others because they might have other plans or just like to go to work and not spending quality time outside the store. E. They need to reanalyze the density of each store in order to make sure that the closeness of the stores is not taking away from the profit of the other stores. Having more stores means more overhead cost being used because you need to supply each store with all the products. Spread out the stores so that they are not competing with each other, so that will adhere more profit. More store location could possibly mean more revenue coming into the company and the cost of invested into the store will be obtained in a small time frame so it would not be a loss. VI. Recommendations: ?In order for Starbucks Coffee Company to continue its success it must find more innovative ways to provide superior customer service. Starbucks Coffee is known for its exceptional service provided by its baristas. The baristas are content when they are continued to be given a benefit package. Although the benefit package is quite nice, Starbucks needs to find different ways to continue to motivate its employees and the incentives will vary depending on location. Although monetary incentives are a big plus they only motivate employees for so long. Employees enjoy awards that recognize their exceptional contribution, gift certificates, and feeling part of a team that becomes their family away from home. VII. Operational Problems and Recommendations: 1)A lot of the customers complain in the price of the products and drinks. Most of the pricing of the products depends on how the economy is doing. Recently, last year there was a . 10 cent increase due to increase in milk and price of coffee beans. The company had to raise their price in drinks in order to compensate the increase in price of their products. 2)The company should change advertising channels. Most of the companys advertisement is by word of mouth because customers are very content with the product or service. VIII. Conclusion: Currently Starbucks Coffee Corporation is a public company that has been highly profitable while maintaining international market share. As growth both domestically and globally are undertaken the companys image will continue to flourish. The company needs to be aware that as it grows domestically and internationally it takes on more responsibilities. The benefit package it offers to its employees is quite remarkable but at the same time be aware that each county has different political and cultural barriers. As the company keeps expanding, it will need to take several precautions that will prepare them for any financial scares.

Key Points Of Adam Smith David Ricardo Economics Essay

Key Points Of Adam Smith David Ricardo Economics Essay The classical writers of the eighteen and nineteen century when offering definitions of their science expressed themselves about the nature of the economic in two distinct ways. They could define the subject known as political economy. Or having defined the political economy as the science of wealth, they could proceed to set forth the nature of that wealth with which it was maintained that economics is concerned. (Israel M. Kirzner, The Economic Point of View, p 13). The earliest classical economist adopted the description of the economic side of affairs in terms of wealth, but developments narrowed down the concept of wealth to the idea of material wealth of mankind. The attitude toward the utility of economic inquiries in elevation of wealth became an object of scientific study. Investigations that aims finding the means of enriching people and the sovereign; discovering laws of governing and to make the nation wealthy. From the beginning alternative suggestions were made by the e conomists themselves about what should and what should not be included under the heading of wealth. Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations, 1776, explains that the free market, while appearing chaotic and unrestrained, is actually guided to produce the right amount and variety of goods by a so-called invisible hand. He argued that self-interested competition in the free market would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. An often-quoted passage from The Wealth of Nations is: It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.(Adam Smith, p.  18). Smith believed that economic development was best fostered in an environment of free competition. Smith saw no role for government in economic life but believed that the government should enforce contracts and grant patents and copyrights to encourage inventions and new ideas. He also thought that the government should provide public works, such as roads and bridges that, he assumed, would not be worthwhile for individuals to provide. Interestingly, though, he wanted the users of such public works to pay in proportion to their use. Value theory was important in classical theory. Smith wrote that the real price of one thing is the labor and difficulty of acquiring it as influenced by its scarcity. Smith also believed that the main cause of prosperity was increasing division of labor. It would affect a great increase in productivity, one example he used was the making of pins. One worker could probably make only twenty pins per day. However, if ten people divided up the eighteen steps required making a pin, they could make a combined amount of 48,000 pins in one day (Adam Smith, ch. 1). Smith claimed that an individual would invest a resource-for example, land or labor-so as to earn the highest possible return on it. Consequently, all uses of the resource must yield an equal rate of return (adjusted for the relative riskiness of each enterprise), otherwise reallocation would result. Smith used this insight on equality of returns to explain why wage rates differed. Wage rates would be higher, he argued, for trades that were more difficult to learn, because people would not be willing to learn them if they were not compensated by a higher wage. Similarly, wage rates would also be higher for those who engaged in dirty or unsafe occupations, such as coal mining and butchering. In short, differences in work were compensated by differences in pay. David Ricardo another classical economist wrote his famous work Principles of Political Economy and Taxation, (1817). Ricardo continued to work on value theory (ch. 1). He explains the labor theory of value that the relative price of two goods is determined by the ratio of the quantities of labor required in their production. He demonstrates that prices do not correspond to this value; he retained the theory, however as an approximation. His labor theory of value, however, required several assumptions: 1- both sectors have the same wage rate and the same profit rate; 2- the capital employed in production is made up of wages only; 3- the period of production has the same length for both goods. Ricardo himself realized that the second and third assumptions were quite unrealistic and hence admitted two exceptions to his labor theory of value: 1- production periods may differ; 2- the two production processes may employ instruments and equipment as capital and not just wages, and in very different proportions. In his book, Ricardos concept of rent is laid out. Due to variation in scarcity of land, some land pays a higher monopoly value due to its scarcity than other land. Ricardo labels Rent as the portion of individual benefit, that accrues to scarce, resources such as land or gold or houses that is over and above any socially beneficial exchange (ch. 2). If all land were equally situated, however scarce, one could determine that all market exchange of the produce thereof was free and equal and that the exact value of the trade was conveyed simultaneously to both parties and to society. Ricardo extrapolates the problem of monopolistic rent to other situations/resources that are fundamentally scarce: land or gold. Like Adam Smith, Ricardo was also an opponent in the field of a nations trade protectionism policy. In this book Ricardo introduces the theory of comparative advantage (ch. 28). According to this theory, even if a country could produce everything more efficiently than another country, it would reap gains from specializing in what it was best at producing and trading with other nations. The benefits of comparative advantage are both distributional and related to improved real income. Ricardo believed that wages should be left to free completion. . Another idea developed by Ricardo is Ricardian EquivalenceArtComComputers2010-09-04T09:20:00 http://en.wikipedia.org/wiki/Ricardian_equivalence#Introduction, is an economic theory that suggests consumers internalise the governments budget constraints and thus the timing of any tax change does not affect their change in spending. Consequently, Ricardian equivalence suggests that it does not matter whether a government finances its spending with debt or a tax increase, the effect on total level of demand in an economy being the same. Ricardo believed that in the long run, prices reflect the cost of production. The price of an object is determined by the sum of the costs of the resources that went into making it, and referred to this long run price as a Natural price. The natural price of labor was the cost of its production that cost of maintaining the laborer. If wages correspond to the natural price of labor, then wages would be at subsistence level. In his Theory of Profit, Ricardo stated that as real wages  increase, real profits decrease because the revenue from the sale of manufactured goods is split between profits and wages. He assumed in his Essay on ProfitsArtComComputers2010-09-03T16:28:00 http://socserv.mcmaster.ca/~econ/ugcm/3ll3/ricardo/profits.txt, 1815 that profits depend on high or low wages, wages on the price of necessaries, and the price of necessaries chiefly on the price of food. We will treat the economic definitions of another classical writer John Stuart Mill in his writing Essays on Some Unsettled Questions on Political Economy, 1844 as below. -If a country produces both commodities with greater facilities or both with greater difficulty in exactly the same degree, then there will be no motive for exchange. On the other side if they have advantage in producing some commodities, then through commerce the nations can benefit both if each one will specialize in producing those commodities. So a country, by devoting all inputs in the production of goods which their advantage is greatest and give for exchange to the foreign country, would obtain a greater return from labor and capital. But in what proportion the two countries would share the advantage of trade? The problem is concerning about of proportion of goods in exchange, thus exchangeable value or price, regulated by the demand and supply to respective importing and exporting countries. The costs of carriage, tariffs, and taxes are deductive to gain advantage. So two countries would have equal shares of benefit of trade if cost of transportation and other barriers would not exist, otherwise the gross gain is divided in unequal ratio. So a country through the legislative policy can affect the benefits from foreign commerce. As conclusion we may say that a country gains most from the foreign commerce as much as are the foreign needs for its products (Essay I: On the Laws of Interchange Commercial Between Nations and Gain of Commerce Among of Commercial World). A great and rapid consumption leading to an extensive demand, fast circulation and big spending of money was conceived to be the great conditions of prosperity. But consumption is of two kinds: reproductive and unproductive and the first augments to the national wealth while the second weaken it. What is consumed for unproductive is gone for present enjoyment, but what is consumed for reproductive consumption leaves commodities of equal value, commonly with addition of a profit (Essay II: Of the Influence of Consumption on Production). -The phrases productive labor and productive consumption has been used by writers of political economy considering all the labor which serves for useful purposes and consumption which is not waste- in a limited sense productive of wealth. When it is uncertain to which of the two classes (productive and unproductive) an object belongs then should be distinguished characteristics and usage of it. All workmen that work in producing or giving value to things and functionaries positions who have invested to their skills are included in productive labor. The settled classification definitions were used for determining their consequences in economy. A country is enriched in proportion to the amount of the productive labor and consumption and impoverished in proportion of unproductive labor and capital (Essay III: On the Words Productive and Unproductive). -Profit is the surplus which remains to the capitalists after replacing his capital in a gain purpose process. The rate of profit depends on the ratio between the price and proportion of labor, materials, tools and the produce of them; upon the proportionate share of the produce of industry. David RicardoArtComComputers2010-08-11T16:32:00 On the Principles of Political Economy and Taxation, 1817 said that profits depend upon wages: it increases when wages fall and decreases when wages rise. When he says rise of wages it is meant an increase in the cost of production of wages or an increase in the number of hours. So as we can see it is strictly true, that the rate of profits varies inversely with the cost of wages. Rate of profit can increase if: there is an increase of population beyond the capital; improvements in labor efficiency and new entrance successive technologies. The producer, who borrows capital to employ in his business, will pay for the use of it (the interest). There are variations in the market-rate of interest from day to day establishing the actual rate from the movement of demand and supply. The rate of interest has the increase tendency if there is a big demand, low supply, low security individual loan or industry and specific situations. The difference between the profit which can be made by the u se of capital and the interest which will be paid for it is characterized as wages of superintendence (for the risk and labor for carrying business). Interest and wages of superintendence are in the same inverse relation as wages and profits are (Essay IV: On the Words Profit and Interest). -Adam SmithArtComComputers2010-08-11T17:39:00 Inquiry into the Nature and Causes of the Wealth of Nations. gives a definition that Political Economy is a science which teaches or gives the means and laws of making a nation rich. It has included individual decisions connected with the ideas and feelings in man- forming part of a union or aggregations. John S. MillArtComComputers2010-08-11T17:53:00 Essays on Some Unsettled questions of Political Economy. gives another more complete definition of Political Economy: -The science which treats of the production and distribution of wealth so far as they depend upon the laws of human nature, or -The science relating to the moral or psychological laws of the production and distribution of wealth. Under the influence of this desire it shows operations of: accumulating wealth, employing that wealth, producing other wealth under the influence of competition, governed by laws, sanctioning by mutual agreements, establishing laws etc. The science proceeds to investigate the laws which govern several operations on acquisition of wealth (Essay V: On the Definition of the Political Economy and on the Method of Investigation Proper to it).

Social Networking Relationships

Social Networking Relationships Social Networking Relation 1.0 Introduction â€Å"Social networking is really recommendation between people about the things that they are interested in and they like†¦ this has stimulated people’s attention in terms of the importance of public relation. The people who are going on these sites didn’t want to be monetised, they didn’t want to be advertised to, so again editorial communication is so powerful, they would rather be communities that can exchange views that are untarnished.† Sir Martin Sorrell Social media is a global phenomenon in which old demographics no longer apply. Conversations happen at the click of a button. New communities are born every day and brands need to be involved; in the first instance to listen, and then to participate. Social media is booming. Every day new statistics, white papers and articles appear discussing its continued growth. Independent market analyst Datamonitor (2008) has revealed how quickly the number of people participating in online social networking is growing: the United Kingdom currently leads Europe, in terms of membership, and is expected to reach 27 million users a threefold increase on todays figures by 2012 (www.datamonitor.com). â€Å"Social networking sites are the reality television of the Internet,† said Jon Gibs (Senior Director of Media, Nielsen//NetRatings). â€Å"The content is relatively inexpensive for publishers to produce, and social networking is not a fad that will disappear. If anything, it will become more ingrained in mainstream sites, just as reality TV programming has become ubiquitous in network programming,† Gibs continued (www.acnielsen.com). â€Å"However, again like reality programming, the concept of ‘reality’ alone, or in this case ‘social networking,’ is not enough. In this competitive marketplace, sites also have to provide consumers with distinct content they can identify with.† A new survey reveals that almost 50 percent of attorneys are members of online social networks and over 40 percent of attorneys believe professional networking has the potential to change the business and practice of law over the next five years. â€Å"Online professional networking is a growing area of importance in the legal industry,† said Ralph Calistri, Chief Executive Officer of Martindale Hubbell and senior vice president of Global Client Development at LexisNexis. â€Å"As we develop a global network for the legal community through Martindale-Hubbell, objective research such as this survey by Leader Networks serves as an important way for us to listen to clients and guide our efforts.† Table: United States: Top 10 Social Networking Sites (March 2008) Source: AC Nielsen The Internet has broadened the area of word of mouth influences from interpersonal communication among acquaintances to online communication to general public (e.g. posting reviews). Harrison-Walker (2001) defined word of mouth as â€Å"informal person-to-person communication between a perceived non-commercial communicator and a receiver regarding a brand, a product, an organization, or a service.† Marketing practitioners try to encourage such â€Å"informal† communication in a positive manner, and several approaches such as â€Å"viral marketing† (Wilson 2000) and â€Å"buzz marketing† (Rosen 2000) have been developed. Facebook was created in February 2004 by Mark Zuckerberg, a student at Harvard University. According to Zuckerberg, â€Å"The idea for the website was motivated by a social need at Harvard to be able to identify people in other residential houses† (Moyle, 2004). Today Facebook has more than 7.5 million registered members at over 2,000 U.S. colleges and is the seventh-most-popular site on the entire Web with respect to total page views (Cassidy, 2006). Social networking sites are online spaces that allow individuals to present themselves, articulate their social networks, and establish or maintain connections with others. These sites can be oriented towards work-related contexts (e.g. LinkedIn.com), romantic relationship initiation, or connecting those with shared interests such as music or politics (e.g. MySpace.com). Users may use the sites’ communication tools to interact with those they know from offline contexts, such as school, or they may use the sites to meet new people. The way in which these sites allow for new connections to be made between individuals has resulted in proposed legislation which would bar libraries and schools to block minors’ access to social networking sites such as MySpace and Facebook (McCullagh, 2006). MySpace in particular has generated public concern due to its large member base 78 million registered accounts according to one source (Wright, 2006) many of whom are teenagers. There is little academic work examining online social networks. A 2005 survey of academic community members found that 90% of the undergraduates participated in a social network community, primarily Facebook, MySpace, and Friendster, and that many of them disclosed personal information such as email address (Stutzman, 2006). In her ethnographic work examining self-presentation and social connections among Friendster users, boyd (2004) notes that users have a variety of motivations for using the site, including connecting with old friends, meeting new acquaintances, dating, and furthering professional networks. In one of the few pieces to examine this new breed of online fora, Donath and boyd (2004) point out that one of the chief hallmarks of these sites is that links between individuals are mutual, public, unnuanced and decontextualized. In the sites that Donath and boyd examine, public displays of connections serve to warrant, or signal the reliability of, one’s identity claims. Social networking sites are distinguished from the first wave of virtual community sites in that they allow for both maintenance of existing social ties and formation of new connections. A hallmark of the early research on computer-mediated communication and virtual communities in particular is the assumption that individuals using these systems would be connecting with those outside their pre-existing social group or location, liberating individuals to form communities around shared interests, as opposed to shared geography (Wellman et al., 1996). However, some online community researchers have explored how online communities present opportunities for people in a common offline community to extend their interaction. Such a theme is articulated by Wellman et al. (1996), who note that â€Å"Although CSSNs [computer supported social networks] do transcend time and space, not all ties are either totally on-line or off-line. Much on-line contact is between people who see each other in person and live locally† (p.222). 1.1 Research Question This research studies the importance of social networking sites and aims to identify how motivations for using social networking sites influence the degree of interaction and the generation of word-of-mouth. Next, in order to study use patterns of social networking sites between users in United Kingdom and to explore the relationship between the degree of interaction and the generation of word-of-mouth, the following questions are generated. Why / how often do people use social networking sites? Are social networking sites users generating word-of-mouth? If so, what makes users generate word-of-mouth? Do the motivations of using social networking sites influence on the degree of interaction or on the generation of word-of-mouth? H1 Exploring the relationship between the purpose of using social networking sites and the degree of users’ interaction H2 Exploring the relationship between the purpose of using social networking sites and the generation of word-of-mouth H3 Exploring the relationship between the degree of users’ interaction and the generation of word-of-mouth in social networking sites Main Research Question: How effective are motivations for using social networking sites influencing degree of interaction and word of mouth in United Kingdom? At the same time, the growing importance of word-of-mouth on social networking sites is understood and discussed by both marketing practitioners and academics, and online word-of-mouth communication is considered as a new marketing tool (Kozinets, 1999; Croteau, 2006; Peattie, 2007; McKinsey Quarterly, 2007). Due to the similar characteristics between social networking sites and word-of-mouth communication, namely, relationship and interaction among people, a number of researchers tried to find out the connection between online communities and word-of-mouth, then, came up with various ways to measure word-of-mouth in the virtual world (Kozinets, 2002; Godes et al, 2005; Dwyer, 2007). In addition, after their introduction, social networking sites brought in a new organisational framework for online communities. According to Boyd and Ellison (2008), early online communities were constructed as ‘communities of interest’, but social networking sites these days are constructed as personal. In other words, social networking sites are centred around people rather than topics or ‘topical hierarchies’. 2.0 Literature Review 2.1 General Overview The study of personal influence and the idea that there are certain people who are especially influential over others has fascinated researchers, practitioners, and the general public for more than 60 years. Variously named in academic and popular circles, these people have been called opinion leaders (Katz Lazarsfeld, 1955), early adopters (Rogers, 1962/2003), influential (Weimann, 1994), and Influential Americans ® (Keller Berry, 2003), while the process of personal influence has been linked to, or synonymous with, various phenomena such as compliance gaining (strategic attempts to seek compliance from others in interpersonal settings; Wilson, 2002), the diffusion of innovations (how ideas spread in a culture; Rogers, 1962/2003), buzz (contagious word-of-mouth commentary about products, services, brands, and ideas; Walker, 2004), and tipping points (the point at which an idea, behavior, or product â€Å"tips,† crossing a threshold from being a minor phenomenon to a wild epidemic; Gladwell, 2000). Numerous organizations, for-profit and not-for-profit, in an assortment of industries (consumer products, fashion, health care, law, higher education, etc.) have sought to capitalize on a renewed awareness and interest in the influential role that informal conversation and relational networks play internally to an organization (e.g., in terms of sharing knowledge within and across organizational units; Cross Parker, 2004; May Zorn, 2002) and especially to external audiences (e.g., in the case of viral and buzz marketing). Thus, although the power of stimulating word-of-mouth and relational networks has been known for some time (Arndt, 1967; Whyte, 1954), a more recent phenomenon is when certain firms seek to consciously engineer buzz in relational networks (Balter Butman, 2005; Dye, 2000; Godin, 2001; Ozcan, 2004; Rosen, 2000;Walker, 2004). For example, some firms (such as Big Fat Inc.) pay people to go out and talk up a brand, either in face-toface or online settings, where the fact that they are employed by a marketing agency is not disclosed (a form of â€Å"undercover† marketing). Other firms (such as BzzAgent, Inc.) actively recruit volunteers who willingly participate in a campaign by going out and buzzing the product or service (oftentimes in exchange for points that can be redeemed for prizes or the knowledge that they are the first among their peers to have access to a new product) and then report back to the buzz marketing company their own and others’ feedback about the product (the company then compiles and analyzes these various reports from the field and presents them to the client). Still others (e.g., Proctor Gamble’s Tremor program) form an extensive network of carefully selected teenagers to create buzz among peers for their clients’ brands and products (Wells, 2004). These distinct kinds of organizational marketing practices have raised a number of ethical concerns, some more than others. In addition to whether or not the institutional identity of the agent is disclosed, whether or not the person buzzing the brand is doing so for some form of compensation, and whether or not agents involve minors younger than age 13 (Wells, 2004), a significant concern is that through buzz marketing marketers are better able to infiltrate everyday conversations and relationships (Walker, 2004), which might be regarded as further instantiation of corporate colonization of the lifeworld (Deetz, 1992). With traditional forms of marketing and advertising efforts, consumer audiences can â€Å"tune out† or â€Å"turn off† the advertising. However, what happens when the marketing is your friend or family member, in online and offline conversations? Is society increasingly falling prey to the â€Å"commercialization of chit-chat?†(Walker, 2004). Although these concerns are not new— for example, marketing to known others has been well-documented and critiqued in terms of Tupperware parties (Frenzen Davis, 1990; Taylor, 1978) and multilevel marketing companies (Biggart, 1989; Carl, 2004; Fitzpatrick Reynolds, 1997)—the fact that increasing numbers of well-known, mainstream organizations seek to amplify buzz in social networks has elevated the concern (Vranica, 2005). 2.2 Word of mouth Word-of-mouth has grown in popularity over the past several years as a marketing and research medium (BzzAgent, 2005). Marketers seeking to find new methods for reaching customers and communicating with them have wondered if word-of-mouth could provide a potential solution to the dwindling return of traditional marketing platforms. Since the beginning of organized marketing programs, marketers viewed word-of-mouth as an incredibly valuable, yet uncontrollable, result of effective marketing practices. Many marketers have implemented plans to fool word of mouth into occurring, seeding the marketplace with shills (paid actors talking up products and services). They found the results effective but extremely risky, since consumers didn’t like being deceived. In recent years, a number of companies have formed, seeking to harness the power of authentic word of mouth (BzzAgent, 2005). By organizing real consumers, they train them to share their honest opinions more effectively. Defining word of mouth can be tricky, especially in light of the Internet and recent emergence of buzz marketing firms. According to Buttle’s (1998) review of marketing research, Arndt (1967) discussed word of mouth as face-to-face communication about a brand, product, or service between people who are perceived as not having connections to a commercial entity. Bone’s (1992) definition is similar though she noted that word of mouth could be a group phenomenon: â€Å"An exchange of comments, thoughts, and ideas among two or more individuals in which none of the individuals represent a marketing source† (p. 579). Stern (1994) distinguished word of mouth from advertising in that word of mouth is face-to-face, interactive, ephemeral, spontaneous, and does not include such features as clever turns of phrases or jingles. Buttle (1998), however, found these definitions unsatisfactory because (a) Word of mouth can include talk about an organization (in addition to a brand, product, or service), (b) it can be electronically mediated (such as cell phone, chat rooms, e-mail, Web sites, â€Å"tell-a-friend† hyperlinks, etc.), and (c) more and more companies may offer incentives or rewards for consumers to spread word of mouth or make referrals (e.g., to refer friends and family members for a company’s services). Buttle concluded that currently the only distinguishing feature of word of mouth may be that â€Å"word of mouth is uttered by sources that are assumed by receivers to be independent of corporate influence† (p. 243). In contrast to traditional word of mouth marketing research, research on buzz marketing is still in its infancy. Verlegh, Verkerk, Tuk, and Smidts (2004) mentioned, but did not study, buzz marketers in their experimental research on whether or not financial incentives used when stimulating customer referrals alter the meaning of the situation such that consumers would perceive the word of mouth episode to be â€Å"persuasive† rather than just friendly, peer advice. Thomas (2004) represented an early conceptual piece on buzz marketing where it was defined as the â€Å"amplification of initial marketing efforts by third parties through their passive or active influence† (p. 64). An early empirical study that applied insights from existing word of mouth and social network research from a firm’s perspective was conducted by Godes and Mayzlin (2004). Abundant research demonstrates that word of mouth (WOM) is one of the most influential channels of communication in the marketplace. The reasons for WOMs power are evident: word of mouth is seen as more credible than marketer initiated communications because it is perceived as having passed through the unbiased filter of people like me. At a time of declining trust in institutions, research shows that its influence is growing stronger. In a recent national survey (Harris Interactive, 2006a), U.S. consumers were asked which information sources they find useful when deciding which products to buy in four common product categories. WOM and recommendations from friends/family/people at work/school were by far the most influential sources for fast food, cold medicine, and breakfast cereal. For personal computers, a highly technical category, we saw a strong reliance on expert advice in the form of product reviews and websites, followed by WOM as the next most useful. The consumer marketplace in which any enterprise operates is a complex, dynamic system. A study found that disinterested, ill-prepared and unwelcoming salespeople lead to more lost business and bad word-of-mouth than any other management challenge in retailing. There are a variety of different triggers for having a bad shopping experience, including things like parking or how well the store is organized. Some of those things retailers can do something about and some of them they cant. But frankly, a very important part of the retail experience is the interaction with the sales associate, says Wharton marketing professor Stephen J. Hoch, director of the Baker Initiative. In a telephone survey of 1,000 shoppers who were asked about their most recent retail experience, 33% reported they had been unable to find a salesperson to help them. Many of these shoppers were so annoyed by this one problem that they said they would not return to the store. According to the Wharton analysis, sales associates who are missing in action cost American retailers six percent of their customers. Add to that the 25% of consumers reporting they were ignored outright by sales associates no greeting, no smile, not even eye contact (Arndt, 1967; Aaker et al, 1996; Reingen and Kernan, 1986). This lack of engagement turned off three percent of customers to the point where they said they would permanently stay way from the store in which they encountered this behaviour. Hoch remains puzzled by sales associates who retreat from potential customers. You would think that if these sales associates are spending the whole day interacting with people, they would be a lot happier in their own life if they were friendly. Instead, they pull into their shell (Brown and Reingen, 1987). Whats wrong with saying, Hi, how are you doing?' According to Paula Courtney, president of the Verde Group, survey respondents were not frustrated by sales associates who seemed overworked or outmanned by shoppers. Its the conscious ignoring that irritates them, she says. Customers would walk into a store and the store representative would see them and continue to put items on the shelf or watch the cash register or do administrative work absolutely ignoring the fact that an actual person was in the store (Cox, 1963, cited in Brown at el, 2007). In the above example, the degree of interaction was bad with consumers at a particular retail outlet. This provided bad word of mouth and hampered long term sustainability for the retailer. In other words, this forms the central part of the dissertation that degree of interaction and word of mouth are slightly interrelated. 2.3 Motives of Social networking British anthropologist Robin Dunbar estimates that humans can only maintain stable relationships with around 150 people. That number refers to significant relationships like those in a family or tribe and other purposeful groups. Yet in todays over-informed digital business world, where bloated data moves at the speed of thought, its not who you know that really counts, but who knows you (Kozinets, 1999; Boyd and Ellison, 2008). Professional online social networking tools are invaluable in creating personal brand equity and raising awareness about who you are, especially beyond your 150 closest friends (BBC News, 2005). Online social networking software enables you to find quality people who may not be familiar with you, or with your organization, and creates an opportunity to connect with them and sell them on your opportunities (Boyd and Ellison, 2008). They may be unfamiliar with your company or business, or may not have even been looking for something. Because you already know someone who knows them, you can feel more comfortable that they are a quality prospect or at least can do some checking around (Boyd and Ellison, 2008). Also, because of that mutual connection, you can more easily overcome cumbersome barriers and begin a relationship with a little more trust and warmth than with a total stranger. Like Six degrees of Kevin Bacon, social networking sheds light on the contacts you never knew you had. For example, you can contact people in your network to: Rekindle old connections Maximize value in your weak connections Build business relationships with clients or hiring managers Find and meet prospective job-seekers Grow a referral network Heighten your corporate and personal brand Make new connections and grow your sphere of influence Open doors to future career opportunities, increased pay, or promotions Increase visibility, which improves influence and effectiveness internally with your organization as well as externally Social networking also helps you find new leads for networking into companies to: Educate yourself and ask questions about other organizations Conduct competitive intelligence on companies, industries, or individuals Make fewer cold calls and better prepare for them Leverage contacts you already have With the help of existing literature, Ridings and Gefen (2004) categorised four reasons to join online communities: ‘information exchange’, ‘social support exchange’, ‘friendship, and ‘recreation’. Firstly, people choose to use online communities to access and exchange information. By using online communities, people can access a huge amount of information generated by other users since online community providers offer effective systems or technologies in order to make their users easily exchange, create, request and search information (Hagel and Armstrong, 1997). The second reason why users participate in online communities is to obtain the social support. Wellman et al (1996) suggested that online communities give emotional support and sociability to their users by giving ‘a sense of belonging’. For instance, Mickelson (1997) gave examples of online communities which focus on recovering social problems such as alcohol and drug addicts in order to explain why the social support can be the motivation of using online communities. Thirdly, people join online communities to manage relationships. To seek friendship or to generate social capital, which can be defined as the resources gathered through the relationships among people (Coleman, 1988), online community users interact with other users with the aim of establishing and continuing relationships. For example, offline social capital can be generated by means of online tools, especially using social networking sites when people want to expand or keep up their offline relationships. Lastly, recreation is another reason why people experience online communities. In conclusion, how word-of-mouth affects consumer behaviour can be described by those three factors; tie strength, homophily, and source credibility. As mentioned above, Brown et al (2007) and other researchers (Silverman, 1997; Money et al, 1998; Bansal and Voyer, 2000) explored the nature of word-of-mouth in online communities. Finally, the summary of the research above is compared by Brown et al (2007) as the following Table 1. Table 1: A Comparison between offline and online social network constructs Offline Online Tie Strength Definition The intensity of a social relation between pairs of individuals The intensity of an interactive and personalised relationship between an individual and a website Homophily Definition The degree to which pairs of individuals are similar in terms of certain attributes The congruence between a user’s psychological attributes and website content Source Credibility Definition Perceived competence of the individual source providing information Perceived competence of the website and its membership Source: Brown et al, 2007, pp. 10 Table 1 Bottom line: It could be seen that different internet users have diverse motives to enter social networking sites. Fulfilment of motives can enhance positive word of mouth and higher degree of interaction of a particular website. As per previous academic literature there have been negligible cases that internet users have entered social networking with out motivations. This forms the foundation of dissertation. 3.0 Research Model 3.1 Research approach The research strategy we intend to adopt is a combination of multi-methods, of deductive, inductive and exploratory. Quantitative data will be collected throughout the life cycle of the project, from secondary sources: journals, databases, past dissertations, newspapers and magazine articles etc. We propose to use the following secondary databases to conduct quantitative data research: Emerald Full text Emerald Reviews Emerald Abstracts Swet Wise Reuters Business Insight Regional Business News Questia Media Primary research will be conducted, using a closed questionnaire designed to predict average behaviour of children in general (Saunders et al. 2003). The inductive approach takes to account interpretivism or social considerations, which enables to establish the intentions of the respondents more clearly. Saunders et al (2003) says that data collected using open-ended questions allows individuals more flexibility in answering, which may confirm a hypothesis or other wise. The limitation or disadvantage of this approach is that it is subjective and can only be applied to a limited sample of participants (Saunders et el. 2003). Exploratory research will be conducted on a pilot group consisting of young internet users (mainly with Orkut profiles) within the age group 15-20 who will participate in a discussion on the following; the influence of motivations for using social networking sites on degree of interaction and word of mouth in United Kingdom. 3.2 Research Design A research design is a program that guides the investigator in the process of collecting, analyzing and interpreting observations. According to Nachmias Nachmias (1987) it is logical model of proof that allows the researcher to draw inferences concerning causal relationships among the variables under investigation. Consequently, the appropriate research design will depend on the problem to be investigated (Churchill, 1991), the purpose of the research, the research questions, and the state of the knowledge existing prior to the research plan (Eisenhardt, 1989). Research methods and data collection, form an elementary part of the research design. Typically, the research methods and the data collection techniques are functions of the purpose of the research design. The purpose of the research may be organized into three groups based on what the researcher is trying to accomplish: explore a new topic, describe social phenomena or explain why something occurs. The three basic types of research designs are: Exploratory (Case Studies), Descriptive and Casual. 3.2.1 Case Study The case study approach is the most widely used in management fraternity. A Case study is the collection and presentation of detailed information about a particular participant or small group, frequently including the accounts of subjects themselves. It’s a form of qualitative descriptive research and it deals intensely at an individual or small participant pool, drawing conclusions only about that participant or group and only in that specific context. This research design is not used to focus on topics such as discovery of a universal, general