Conversation Topics for business occasions Essay

Discussion Topics for business events - Essay Example Attention to these objectives furnishes the subordinates with a bearing so they can outfit themselves with the abilities required to be qualified for the open doors lying ahead. The subordinate ought to especially attempt to ask the supervisor how he/she would be associated with the undertaking. The subordinate should attempt to assent with the supervisor over the fundamental methodology and principles. The subordinate should impart to the supervisor what he/she thinks the perfect methodology is and afterward he/she may approach the manager for input. â€Å"Be sure you comprehend forthright what the core values are for the work †not simply the strategic components. These standards are what you ought to talk about with your boss† (Chatman refered to in Gallo, 2011). Notwithstanding that, the odds of subordinates’ thought for those open doors by the manager are upgraded on the grounds that the supervisor has just talked about the plans with them. An awesome and enlig htening subject of conversation is innovation. Examining most recent mechanical examination and items with a manager not just sets a decent impression upon the chief, yet additionally shapes an intriguing subject of conversation. Nowadays, with the pace of innovative improvement being so quick, there is a ton to talk about. Subordinates can talk about the creative highlights of the most recent contraptions, draw correlation between the freshest and the old models of devices, examine whether a specific device merits putting cash in or not, and above all, regardless of whether a specific device can be utilized to improve the business they are worried about somehow or another. Conferences are entirely reasonable events to talk about imaginative thoughts in. Subordinates can propose to a manager how the utilization of another contraption can help them in the business tasks, and how it tends to be coordinated into the authoritative culture. This puts forth for the manager that the subord inates are entirely educated, dedicated, and can add to the advancement of the association. Legislative issues may be a decent subject of conversation with a supervisor in a conference furnished that the subordinates can assent with the boss’s feeling and show regard for his/her perspectives. In any case, it is an unsafe theme to talk about with a manager in light of the fact that numerous individuals host enthusiastic associations with their political gatherings and when they examine governmental issues, they enjoy into a warmed contention with the pundits. In the event that this occurs between a chief and a subordinate, it isn't useful for the relationship. While talking about governmental issues, it is recommendable for the subordinates to initially tune in to the boss’s position, on the off chance that they can concur with that, they ought to examine it; on the off chance that they can't, they ought to either stay quiet or attempt to change the subject articulately . Each subject that is talked about in a conference between a chief and the subordinates doesn't really need to identify with business. Sports is another exceptionally fascinating and connecting with theme to talk about with a manager on a conference. Gatherings are superb events for talking about games in light of the fact that the chief and the subordinates are having a balanced conversation, and have adequate chance to examine such things. This is not the same as the day by day collaboration that occurs in the workplace which is obliged by constrained time and weight of work. â€Å"During the excited work week, they experience the supervisor as the wellspring of control, assignments, periodic censures and, ordinarily, almost no close to home chit

The Merchant of Venice Act 1 Summary

'The Merchant of Venice' Act 1 Summary Shakespeares The Merchant of Venice is an incredible play and flaunts one of Shakespeares most essential reprobates, the Jewish moneylender, Shylock. This Merchant of Venice Act 1 outline guides you through the plays opening scenes in current English. Here, Shakespeare sets aside the effort to present his principle characters - most prominently Portia, perhaps the most grounded lady parts in all Shakespeares plays. Act 1 Scene 1 Antonio is addressing his companions Salerio and Solanio. He clarifies that a trouble has come over him. His companions propose that his misery could be because of him stressing over his business adventures. He has ships adrift with stock in them and they could be defenseless. Antonio says he isn't stressed over his boats since his products are spread among them and in the event that one went down he would in any case have the others. His companions propose that he should then be infatuated, Antonio denies this. Bassanio, Lorenzo, and Graziano show up as Salerio and Solanio leave. Lorenzo says that now Bassanio and Antonio have been brought together they will make their leave yet mastermind to get together later for supper. Graziano attempts to brighten Antonio up yet without any result, he discloses to Antonio that men who attempt to be despairing so as to be seen as astute are tricked. Graziano and Lorenzo leave. Bassanio grumbles that Graziano has nothing to state except for simply won't quit talking. â€Å"Graziano talks a vast arrangement of nothing† (Act 1 Scene 1) Antonio gets some information about the lady he has succumbed to and expects to seek after. Bassanio recognizes that he has acquired a great deal of cash from Antonio throughout the years and vows to clear his obligations to him: To you Antonio, I owe the most in cash and in affection, And from your adoration I have a guarantee to unburden every one of my plots and purposes how to get away from all the obligations I owe.(Act 1 Scene 1). Bassanio clarifies that he has gone gaga for Portia the beneficiary of Belmont however that she has other more extravagant admirers, he simply needs to attempt to rival them so as to win her hand. He needs cash to arrive. Antonio discloses to him that all his cash is tied up in his business yet that he will go about as an underwriter for any credit that he can get. Act 1 Scene 2 Enter Portia with Nerissa her holding up lady. Portia whines that she is fatigued of the world. Her dead dad specified, in his will, that she herself can't pick a spouse. Portia’s admirers will be given a decision of three chests; one gold, one silver, and one lead. The triumphant chest contains a picture of Portia and in picking the right chest he will win her submit marriage. He should concur that on the off chance that he picks an inappropriate chest he won't be allowed to wed anybody. Nerissa records admirers who have come to figure including the Neopolitan Prince, County Palatine, A French Lord and an English aristocrat. Portia derides each of the courteous fellows for their weaknesses. Specifically, a German aristocrat who was a consumer, Nerissa inquires as to whether Portia recalls that him she says: Vilely in the first part of the day when he is calm, and most viley toward the evening when he is flushed. At the point when he is best he is minimal more regrettable than a man, and when he is more awful he is minimal superior to a monster. A the most noticeably terrible fall that at any point fell, I trust I will make move to abandon him.(Act 1 Scene 2). The men recorded all left before speculating for dread that they would fail to understand the situation and face the results. Portia is resolved to follow her father’s will and be won in the manner by which he wished yet she is glad that none of the men who have come have succeeded. Nerissa helps Portia to remember a youthful man of honor, a Venetian researcher, and fighter who visited her when her dad was alive. Portia recollects Bassanio affectionately and trusts him to be deserving of acclaim. It is declared that the Prince of Morocco is coming to charm her however she isn't especially upbeat about it.

Whats happening with Senior House

What’s happening with Senior House The thing that happened My phone was buzzing all day Friday with emails regarding the same Thing, the same event, the same new information. As Sabrina described vividly, even the initial subject line seemed ominous “Important news for the Senior House community” which then was followed with immediate mention of “troubling data” and “important decisions we have made.” Emphasis mine, because “we” was in no part the “Senior House community,” and I felt that discrepancy did well to set the tone for the body of the announcement. Here’s a screencap of the message: There is a good chance you’ve heard about this already, since a lot of people are talking about it. There is an article in The Tech regarding its announcement in general, and then another in which Dr. Cynthia Barnhart discusses the plan more depth. As I mentioned, there is an enormous amount of talk about this in public channels by residents, alumni, friends of the Haus, and others who are concerned. Even my mom texted me about it saying they e-mailed her too, as they did to every parent of a Senior House resident. I have definitely read more open-letters-per-time-unit since the release of this announcement than in any other equivalent length of time in life on this earth, which I think serves to illustrate that this has provoked some sort of controversy. The Concerns “Whether your hair is mousy brown or electric blue, whether you listen to classical concertos or cutting edge undiscovered bands, whether you like sushi or greasy diner food, trashy novels or great lit in dead languages, you’ll find those who share your tastes at Senior House. And if you can’t peg yourself on this either/or list, we’ll love you all the more. Senior House residents are happy to sometimes march off the beat of any drummer. And long after you’ve left MIT, you’ll always want to come home again.” The number cited in the e-mail looks drastic. Sixty percent 4-year graduation? This is pretty low, and it suggests there has to be something that is different about Senior House to explain this alarming statistic. If our aim is really to use proper statistical methods to diagnose a problem, we will first want to control for things not held equal. We might first look at demographic factors, as it is well-documented that students of certain demographic backgrounds are significantly more likely to take longer than four years to graduate. For instance, Senior House is one of the most inexpensive dorms to live in and has a disproportionately high share of low-income students, and in fact, the most expensive dorms McCormick, Maseeh, and Baker have the three highest graduation rates, whereas the cheapest dorms (East Campus, Random Hall, Senior House) have the lowest. On top of this, the House houses a disproportionately high share of underrepresented minority students, and according to the Chancellor’s office, 40% of its residents are LGBT. To the extent that the difficulties associated with these factors can explain the graduation rates, action targeted at the dorm itself is worthless, especiall y the problems faced by poor and minority students could be addressed directly with respect to their experiences. In addition to this, a number of people have pointed out that the openness of Senior House culture is likely to select for those who suffer from mental health difficulties, yet were it not for the tight-knit community they had had here, it would have been much worse for them. To ban freshmen is here not only bad science, but a disservice. Points like these are not my own, and they are just a fraction of those being voiced in response to this decision. Holly ’18 eloquently summarizes these and a number of other objections that the community has expressed in an open letter to the Chancellor, which I suggest you read for a more comprehensive account of why people are generally upset. We are alarmed at the complete lack of collaboration with residents in the process of this decision. We are disturbed that a predictably controversial decision was announced after most students had left campus for the summer, which comes across as a strategic effort to minimize protest. In general, it should be expected that policy very drastically affecting the situation of a large number of people should be drafted with their input, or at the very least with their knowledge.  I’ve never much liked surprises. And then, it was also a surprise that they survey data apparently being used to corroborate the “drug use” allegation was not as anonymous as it purported to be. (Still, the aggregate data has not been publicly released, so it is impossible for us to know what it actually says.) Others worry that this measure constitutes an existential threat to the community as we know it, with ominous references to Bexley, a dorm culturally similar to Senior House which was recently closed and torn down. I will also point out the fact that the cultures of dorms are built from different people with different values, which should easily affect graduation rates. The atmosphere at Senior House is anything but conventional, and many stray off the four-year path as a result of their personal uniqueness. I can name a number of fellow students who have taken time for startups, students who take semesters off to travel around the world, and students who punt the Protestant ethic and instead enjoy their lives here, at the cost of taking more time. The most creative people I know have felt trapped by the rinsing and repeating of the deadlines and the grind because their minds are somewhere else besides the five point oh and the six figures and the severe importance of demonstrating their worth to the rest of the world quantitatively. And personally, I love being at MIT! but I’m not about to drink Kool-aid from the firehose that tells me a failure to follow a cookie-cutter ideal is indicative of a personal shortcoming. I think this aspect of the culture was what drew me in, though it’s possible my time here has further “corrupted” me with a more confident sense of irreverence. The administration aims to protect the freshmen from this corruption; I don’t think that this is right. But you know, we could instead ignore all of this and come to the conclusion that those 20% of Senior House residents are junkies who drop out of school cause of Drugs (I hope I phrased this in a way that is obviously sarcastic, since I feel like this not far from what they actually would have you think). In seriousness, I don’t think that there’s anything wrong with making sure students are healthy, and looking to design policies to help them. We welcome the mental health trained faculty, and are passing around ideas and initiating dialogue about things we think we could improve upon as a community both socially and academically. But I do think that this interpretation of data on graduation to justify depriving freshmen of Senior House (and depriving Senior House of freshmen) is absolutely not acceptable, and I think this is the general consensus. Going Forward People now are looking to negotiate. Theyre trying to bring back the freshmen, and to modify the remainder of the plan in a way that is tailored to what students feel will best help them succeed, academically and/or personally. A group of residents already met with and spoke to Chancellor Barnhart on Friday. Robby ’18 was one of these people. What he said to me, after meeting with her in person, was something like: “I honestly think she wants to do good.” The immediate dilemma I then found myself in was whether to dismiss him in cynicism or in sarcasm; but see, Robby has an intuition that I really really trust, and he’s up in the front line in Cambridge, and I’m not. A lot of people are very upset and passionate and distrustful of the administration as was my own instinct but in the back of my mind I do keep considering the possibility that this solution will be successfully re-negotiated, because someone who genuinely wants to do good should listen to a resounding chorus saying “the ban on freshmen will actually do much more harm than good” and then accept an invitation that goes “let’s work together to figure out what will help.” It’s a belief in the mutual exclusivity of a genuine desire to craft policies that end up for the best, and the implementation of the policy as it currently stands. I suspect only one of these can end up being true, and if Robby is right, then I have hope. The Chancellor also admitted that not working with students and staff from Senior House to develop this plan was, in her words, a “mistake.” This recognition on her part is also very significant. Any rational person will agree that an enormous and fateful decision should not be implemented if the decision was made in a way that they believe was flawed. It’s like, imagine you declare the next president of a nation and the people collectively say, “what the hell?” Because apparently you had intended to run an election, but forgot, and you say, “whoops, that was totally a mistake.” …“But it seems like the winner was already announced on TV, so it’s too late to run the election now, yeah, sorry” ? or would it be, …“So let’s take a step back and fix this.” Like I said, my current hopes about the future of these negotiations involve a healthy dose of faith in the parties involved, and an underlying sense of amazement at the dedication of the community through all of it so far. There is something profound in the fact that people care so much, that they’re taking time out of their busy schedules to devote their attention to preserving something they value and ensuring that future generations can come to share in it too. It says there’s something worth keeping alive here. And it says there’s a lot at stake. In the mean time, here’s a nice  petition, and an email address for Dr. Barnhart. I will try to keep you updated.

Ethics in Advertisement of United Colors of Benetton

Ethics in advertisement of United Colors of Benetton Are Benetton ´s advertisements ethical or not? Contents Introduction: 3 The United Colors of Benetton strategy 3 Three separate cycles of building Benetton’s value 4 Utilitarianism approach 6 Deontological approach 7 Conclusion 9 References 9 Introduction: As the students of MME (Economics and Management studies), we have chosen the topic, which involves our study program, which is the Marketing and Consumer behavior. Our topic is focused on the advertisement and the practices of United Colors of Benetton Company. Their way of marketing seems to be directed â€Å"another way† and it has been discussed several times whether their strategy is ethical or not in the past. First we†¦show more content†¦The â€Å"united† name became a metaphor pretty soon thus the name of Benetton’s company was changed to the United Colors of Benetton. One of their first add showing no racial differences saying â€Å"All the colors of the world† was the start of the new era of their many times controversial marketing strategy discussed all over the world. Three separate cycles of building Benetton’s value As it was mentioned above, the strategy of Benetton’s advertising campaign leads to many discussions and criticism and many of ads were prohibited in several countries. Their strategy is divided into 3 main cycles. The cycle of Difference The first and oldest cycle started in the 80’s and was concerning to the racial, religious and sexual conflicts and differences. All the conflicts are based on tabus and on a difference that separates rather than unites. The Benetton’s plan was to integrate opposites and to unite differences under a single flag – the Benetton’s logo. The ads were not so controversial. As in the following cycle – the cycle of the reality. The cycle of reality This cycle starts in the early 90’s as the answer to the Gulf WarShow MoreRelated Marketing and Ethics (United Colors of Benetton) Essay1888 Words   |  8 Pagesindustry, United Colors of Benetton continues to face the challenge of effectively marketing clothes across racial, cultural, and religious borders. Renowned for using social issued-themed pictures to promote its brand, Benetton has strayed from traditional marketing techniques to provide customers with an idea of the many issues that plaque societies from continent to continent. This unique approach has been met with extreme emotions, and people have both praised and damned the Benetton advertisementsRead More Controversial Advertising Essay examples3078 Words   |  13 Pagesexample-cases of controversial advertising can be investigated. The integration of ad-alien contents within the Benetton-campaign then will be analysed as a form of aesthetic subversion to subsequently question exactly the image’s ad-al ien and supposed subversive form and content. Thus, it will be shown that Benetton’s subversive potentials are overshadowed by their functions as advertisements. This works second part will look at two campaigns developed for French Connection. By investigating twoRead MoreInfluence of Religion on Consumer Behavior and the Effects on Marketing4277 Words   |  18 Pagescommunity and teachings to encourage morality while spirituality involves an individualized search for meaning and developing interconnectedness with humanity and the transcendent, however both internalize a sense of morality, perception, values, ethics, identity and desires (1). 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Article Type:    Research paper Keyword(s):    Ethnic minorities; Racial discrimination; Disabilities; Discrimination; Equal opportunities; Gender; â€Å"Lookism†; â€Å"Lookphobia†; United States of America. Journal:    Equality, Diversity and Inclusion: An International Journal Volume:    32 Number:    1 Year:    2013 pp:    83-119 Copyright  ©    Emerald Group Publishing Limited ISSN:    2040-7149 Read MoreMarketing Management130471 Words   |  522 Pages Evolution of marketing management 3.2. The Role of Marketing 3.3. Marketing concepts 3.4. The Marketing Mix (The 4 P s Of Marketing) 3.5. Corporate Social Responsibility (CSR) and Ethics in Marketing 4. Have you understood type questions 5. Summary 6. Exercises 7. References 1. INTRODUCTION: The apex body in United States of America for the Marketing functions, American Marketing Association (AMA) defines marketing as â€Å"Marketing consists of those activities involved in the flow of goods and servicesRead MoreExploring Corporate Strategy - Case164366 Words   |  658 Pagescompetitive forces in the travel industry. HiFi – how can small players survive changing markets? Amazon (B) – latest developments in a successful dot.com. Formula One – developing the capabilities for competitive success in a hi-tech industry. Manchester United – clash of expectations in the football world. Salv ation Army – strategic challenges for a global not-for-profit organisation with a mission. Bayer MS – corporate social responsibility in the international development of a German company. Eurotunnel

The Life and Ideas of Socrates - Free Essay Example

Sample details Pages: 5 Words: 1522 Downloads: 2 Date added: 2019/08/08 Category People Essay Level High school Tags: Socrates Essay Did you like this example? The unexamined life is not worth living for the human being. These words, spoken by one of the most influential men to ever live, have resounded throughout millennia as the basis for all philosophical thought. Socrates life played a major role in human history as it has influenced everyone from Plato, to Aristotle, and even Alexander the Great, showing its importance for us as humans living in an ever-changing world. The life of Socrates fluctuated and evolved constantly, as his early years consisted mainly of education and early philosophical thought, but as he grew in wisdom and stature he found himself fighting in multiple battles during the Peloponnesian wars and saving the lives of powerful men. Sadly, his philosophical ideas were not widely accepted and his steadfastness to his own ideas eventually led to his execution. Socrates was born in Athens during the year 469 B.C. to Sophroniscus and Phaenarate, his father and mother respectively. The tribe his family associated with was Antiochis, while their Deme, or their district, was Alopece. Five days after his birth, Socrates father followed the sacred tradition of carrying him around the hearth and accepting him into the family, naming him on the tenth day. Following his naming, Socrates was presented to his phratry and socialized into Athenian institutions necessary for the common male (Nails 09). As Socrates grew, he became more and more e ager for schooling and was eventually incorporated into the sophisticated schooling system of Athens. Don’t waste time! Our writers will create an original "The Life and Ideas of Socrates" essay for you Create order During Socrates childhood, literacy became more widespread and education was becoming a necessity for a growing percentage of the Athenian population. Because of this, Sophroniscus ensured his son would receive an education on par with what was expected at the time, showing that Socrates upbringing was not deprived nor was it especially luscious. At a young age, Socrates was already purchasing the scrolls of Anaxagoras and educating himself in the ways of philosophical thought, planting the seeds of wisdom that would grow and influence generations to come. In his 18th year, Socrates father put him through the ceremony of dokimasia, where he would be examined and entered onto the citizens role. This made Socrates eligible for tasks of the Athenian government, meaning he needed to spend two years in compulsory military training. Unfortunately, soon after Socrates came of age, his father died, leaving Phaenarete (his mother) as his only legal guardian. Between this time and his 30th yea r, Socrates discussed philosophy with influential teachers of the time and trained himself in a trade in preparation for his coming eligibility for public office (Nails 09). Socrates early years played a large part in the molding of the rest of his life, as his fathers death played a profound effect on his moral development and his introduction to philosophy at such a young age allowed him to be deeply rooted and knowledgeable in it at just 19. After Socrates completed his mandatory military training, he was sent to Potidaea in 432 with Alcibiades to put down a revolt as a foot soldier. Alcibiades, a commander during the Peloponnesian wars, was wounded and dying on the battlefield before being rescued by Socrates, who saved his life, armor, and honor. In the year 429, during a short stint in Athens between two battles, Socrates was accused by a comic playwright of aiding Euripides in writing his tragedies, a false accusation that harmed Socrates reputation and would be repeated twice more. After travelling around the Balkan Peninsula once more to fight against revolts, the Greeks luck began to dry up and they were defeated in 424 during the Battle of Delium. Although there were many casualties, Socrates was still honored for his heroism in battle and was praised once again by his commander Alcibiades. Unfortunately, the Athenians were defeated again at the Battle of Amphipolis in 422 and Socrates was of a small group that r eturned. This would be the last time Socrates would fight in any war (Nails 10). After concluding his military career, Socrates began to teach the youths of Athens in the ways of philosophical thought and was held in high regards among them, yet he remained essentially anonymous from those who would be his peers. Unfortunately, any trace of this anonymity that was left in 423 was eliminated by the popularity he gained from being portrayed in Aristophanes Clouds. Being placed in the spotlight was not something Socrates was used to, so this event ultimately resulted in the unrest that led to his execution. After the war time that followed 423, Socrates continued his talks on erotic love with the youths of Athens (these inspired Platos Symposium) and eventually married Xanthippe, who soon after bore their first son Lamprocles. In the following years, they had another child named after Socrates father, Sophroniscus. Following his familys development, a newly erected wrestling school became the setting for Socrates examinations of the nature of friendship with a group of adolescents who associated with Plato and his older brothers. This association would soon be damaged as Aristophanes took another stab at Socrates reputation, stating, Its no longer fashionable to associate with Socrates, and His hairsplitting twaddle ignores the craft of the tragedians! (Nails 12). This unrest eventually led to accusations of irreverence and Socrates was eventually found guilty and executed. In his final hours, Socrates remained happy and energetic, drinking the Athenians poison and dying with his honor. Although Socrates himself never wrote down a word of his ideas and philosophies, his students (most notable of whom was Plato) ensured that the vast majority of his works were immortalized to ensure the world would see his genius. Because of this, we can today observe Socrates ideas of the Socratic Method and the Socratic Paradox, two key aspects of the world of metaphysical thought. The Socratic Paradox, or the idea that the only thing man can know is that they know nothing, was uncovered by Socrates in a way one would only suspect from the iconic thinker. According to The Story of Philosophy by Bryan Magee, When the oracle at Delphi declared him to be the wisest of men, he thought this could mean only that he alone knew that he did not know anything, (Magee 20). Socrates uses this simple declaration from a fraudulent fortune teller to discover one of the most profound paradoxes of philosophy while in the process stemming from it the Socratic Method. The Socratic Method is the most popular of Socrates main philosophies as it plays a part in almost any philosophers ideological journey, and involves asking a series of questions to reach, what most would hope, an end (although this was rarely attained, as Socratic questioning commonly becomes circular). Around ancient Athens, Socrates would question the legitimacy of fundamental concepts of livelihood and, according to the course text, challenge a person who thought they knew the answer, and then subject that answer to examination by asking the person a series of searching questions about it, (Magee 21). This questioning could delegitimize ideas thought to be the most concrete, as evidenced by the hatred produced from Socrates questioning of Greek gods and eventual charges of irreverence. This invalidation of ideas would force both observers and those questioned to, according to Magee, retract [their] answer, or at least qualify it although that interlocuter â€Å"â€Å" had thought they knew what, let us say, courage was, actually they did not, (Magee 21). By exposing the great ignorance of the Athenians in this way, Socrates effectively opened the eyes of thousands of youths who would eventually carry on this way of thought, whether they be his students or simply avid listeners. These ideas formulated by Socrates have resounded throughout millennia and have an undoubtedly profound effect on todays society. Socrates influence has stretched from his lifetime to today, and his ideas are still applied in modern thought and philosophy. By asking the deep-seated questions of life, Socrates was able to make humans really contemplate the meaning of their existence like never before and encourage a new way of thinking on a subject scrutinized since the beginning of human existence. The implication these ideas hold for us today is that we must accept the reality that there is no answer to the question, What is the meaning of life? but there are rationalizations for our existence. By asking, What makes things good? What is virtue? What is love? we can discover, through the Socratic method, why were here. Interestingly enough, the answer for these questions changes from person to person, each with their own respective question that carries them on to the next, eventually resulting in the eventual realization that all truths are subjective except one, that it is impossible for us to know anything d efinitely. Socrates inspiration throughout thousands of years has played a profound effect on human history and has molded cultures around the world for the better. In the constantly evolving world in which we live, having a grasp on the meaning of our existence grows in importance every day as daily trials become greater and more difficult to deal with. Although Socrates life ended before the modern calendar even began, his influence has remained and his ideologies have been immortalized by those who stood alongside him.

Problem Solving Critical Thinking †Hdlt Free Essays

Critical thinking and Problem Solving HDLT mini paper It is possible to store the mind with a million facts and still be entirely uneducated. Alec Bourne. According to American educational Psychologist – Robert M Gagne – â€Å"The central point of any education is to teach people to think, to use their rational powers, to become better problem solvers. We will write a custom essay sample on Problem Solving Critical Thinking – Hdlt or any similar topic only for you Order Now â€Å" Looking at the current model of our own learning, in HDLT 2 class itself – as students of the second semester in the university; we have been exposed to theories of this subject before. It is now time for adapting, assimilating, applying the past knowledge in real life contexts. This adaptation is tested through fresh, innovative learning environments and higher expectations. Let us first determine critical thinking and problem solving and see how are these phenomenon interrelated with each other and the role both these skills play in our lives. Critical thinking (CT) is defined as â€Å" intellectually disciplined process of actively and skillfully conceptualizing, applying, analyzing, synthesizing and /or evaluating information gathered from or generated by observations, experiences, reflections, reasoning or communication as a guide to belief and action. Scriven Paul, 2007, P 1). Thus simply put, CT is metacognition or thinking about thinking. Problem-solving (PS) is a mental process that involves ascertaining, investigating and solving problems. The eventual objective of problem-solving is to overcome hindrances and find a solution that best resolves the issue. These problems could range from simply crossing the road and reaching safely on the other si de without getting hurt by the oncoming vehicles or solving a Sudoku puzzle or figure out a estimated expenses of a trip or in case of a child, solving a multiplication sum given in the class. The term problem solving ( P S) in educational settings would involve solving well-structured text book problems which are poles apart from ill structured problems which are encountered in everyday life. Thus we can see that in order to effectively solve a problem, one may require to engage with it and critically think about it to find the best solution. Let us now look at certain important broad themes and specific problem solving processes used by children – Broad themes – 1. Task analysis – details of steps taken to actually solve problems. For example a child adds 2 multi digit numbers, the actual process – starting with adding the numbers in the right most column, writing ones digit as a part of the answer, carrying over the tens digit ( if it is so ) †¦ so on and so forth. Task analysis helps in identifying the exact places where child might be encountering difficulty in solving the problem, the nature of the difficulty. Thus it gives an insight into the manner in which the child solves problems; and thus provides scope for rectification. 2. Means – End analysis – Using this methodology, one solves a problem by considering the obstacles that stand between the initial problem state and the goal state. The path to reaching the goal can be achieved by accomplishing smaller sub goals. When all of the sub goals have been achieved – when all of the obstacles are out of the way – then the main goal of interest has been achieved. Thus, means-ends analysis can be seen as a search strategy in which the long-range goal is always kept in mind to guide problem solving. 3. Encoding – this literally means identifying critical information in order to build internal representations. Thus it is very important to train the child to filter out the relevant data from the all the available information. Many children fail because they are not thought how to encode critical information and utilize it. Important processes of Problem Solving- 1. Planning – this is future directed PS, most often used in difficult and new situations. But most often the novelty of the situation also ensures that children often forget to plan. 2. Route Planning – this is done in order to select a most efficient route in order to reach a destination. Children as early as one year of age start showing the development of this ability. Example – an adult figuring out his way in order to reach a new destination; after looking at various maps. The route is figured out post route planning. 3. Causal Inference – many a times problem solving is an attempt to understand the cause of a phenomenon. Humans are curious by nature. A two year old will constantly be in the endeavor to know â€Å"why things happen†Ã¢â‚¬ ¦ why do birds fly, whereas animals don’t? so on and so forth. 4. Analogical Reasoning – In problem solving this is predominantly concerned with systemic correspondences, where a solution to a known problem may be applied to solving a structurally similar problem. Analogical reasoning improves with maturation and increase in content knowledge. According to Piaget’s stages of development analogical reasoning only starts developing in the pre operational stage ( ages 2 -7) and gets occasional limited success in concrete operational stage(7-11) and becomes fully developed by formal operational stage (age 11 through adulthood) Stage I (Preoperational) – egocentric responses using idiosyncratic relations. IA – children were unable to form lower-order relations IB – some children able to form lower-order relations, but unable to form analogies Stage II (concrete operational) – occasional, limited success IIA trial-and-error success on analogies, inability to resist false counter-suggestions IIB consistent success on analogies, but inconsistent ability to resist false counter-suggestions Stage III (formal operational) – Success on all aspects of the tasks. Criticism of Piaget – Goswami Brown reasoned that children might fail Piaget’s tasks because they lack knowledge of the relations entailed. On this view, children ought to be able to solve classical analogy problems provided the analogies are based on familiar relations. Practice in analogical reasoning improved young children’s spontaneous formation of analogies. 5. Scientific reasoning: Children question everything as a basic premise,they want to know the why , how of everything; but they are also hugely influenced by the beliefs that they see are carried around them. Whenever they actually do something on their own, they do develop an understanding and rationality regarding the same phenomenon. For example a child understands that sugar takes less time to dissolve in hot milk rather than cold milk. Thus, when they indulge in activities, experiment they develop scientific and logical reasoning. 6. Logical reasoning – It is when a child can apply logical rules in order to solve problems. Logical reasoning requires the child to link each alternative to the main problem by strong reasoning. They may also require using logical structure â€Å"If†¦ , Then †¦. † for example if a child has to climb up two floors, he could either use the lift or the stairs. If the escalator lift for some reason is not working, then either the child could wait till the lifet starts working or take the stairs. The choices have to be logically reasoned out. Both analogical and logical reasoning develop gradually over early and middle childhood whereas scientific reasoning does take more time to develop and take shape as it is much enhanced by experience. Along with certain important processes used in PS some of the others are – Symbolic representation as tools Rule based problem solving etc. Above we have also looked at Piagetian perspective on PS. Let us also look at the Vyogotsky’s perspective on the same. Lev Vygotsky gave some novel ideas regarding childrens learning and their problem solving abilities. 1. Zone of Proximal development (ZPD) – This is the zone where learning takes place. This zone represents the difference the between what the child can achieve on its own and what it can achieve with the help of others. In order, for learning to occur, the elder or peer must provide a challenge that is beyond the child’s own capabilities and yet be assisted. Thus assisted learning or peer learning is an important aspect of children developing the PS abilities. If children have done a task with an adult or under the guidance of an adult (ZPD) they tend to show improvement whilst performing as opposed to those who were attempting it for the first time ( Piaget’s discovery learning ). Vyogotsky also pointed towards the importance of private speech in children, whenever confronted with a novel problem. This speech could be their method of engaging with the problem. As children grow up and get better at symbolic interpretation, this private speech diminishes. Now let us look at how a constructivist classroom helps children in enhancing their PS abilities. Constructivist approaches to learning attempt to generate environments where learners are actively engaged in their surroundings and environments that help them to construct and develop their own understanding, reasoning and knowledge, rather than the teacher interpreting their world for them. The learners interaction with the environment and with the subject matter at hand results them in having their own view about the subject. Thus we can see that collaborative learning is the hallmark of a constructivist classroom. For example – group of students in a chemistry class are learning about properties of organic salts. Instead of directly stating the properties, the teacher will devise questions which will engage the students in challenging their previous knowledge, link it to the other phenomenon that they have already been studying and generate a new level of understanding regarding the topic. During the discussions and promptings, when one student comes with the relevant concept, the teacher would cash on it and hint to the group to further explore this concept. Late, she would sum up ay concluding what the class has learnt, what helped and what did not help them in constructing new knowledge. Question – The biggest question for me is the teaching methodology. In most of the schools, that me and my colleagues have visited during our practicum, we inevitably noticed that instead of focusing on teaching the students how to think, rationalize, develop an understanding. The focus is on what they should think? Conclusion – By providing them everything like â€Å"ready to eat meals†, we seal them from developing their own understanding. In a class room setting children, still encounter structured problems, in real life settings children will be coming across many ill structured problems. The aim of education must be to prepare them for encountering the challenges that they would face everyday. They have to be trained to adequately use their problem solving abilities within the classroom as well as outside it. References – Taylor, L, (2005). Introducing cognitive development. Taylor and Francis: Psychology Press. (Chapter: Thinking and reasoning). Siegler Alibali (2005). Chapter 10: Problem-Solving (pp 341-380). Synder L. Synder J. – Teaching critical thinking and Problem solving skills, The Delta Pi Epsilon Journal, Volume L, No. 2, Spring/Summer, 2008 How to cite Problem Solving Critical Thinking – Hdlt, Essay examples

Andrew Jackson Essay free essay sample

Was Andrew Jackson really a bad president? He definitely was. Andrew Jackson was the 7th president of the United States. He was a politician and an army general. He was seen as a man of the common people. Some regard him as a good president and some say he was evil. Jackson was definitely evil. He caused the destruction of the National Bank, abused the spoils system, and engineered the Indian removal act of 1830. The first reason Andrew Jackson was a horrible president is that he caused the destruction of the national bank. On September 10, 1833. President Jackson announced the government will no longer use the Second Bank of the United States, the countrys national bank. He then used his executive power to remove all federal funds from the bank. Jackson removed all federal funds from the Second Bank of the U.S., redistributing them to various state banks. They became known as pet banks. We will write a custom essay sample on Andrew Jackson Essay or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page He stopped all deposits to the bank. Jackson had succeeded in destroying the bank. Its charter officially expired in 1836. This showed his abuse of presidential power during the Bank War. The second reason Andrew Jackson was a evil president was because of his abuse of the spoils system. The spoils system was giving loyal members of the party federal office positions. Under Andrew Jackson 919 officials were removed from government positions, which was 10 percent of all government postings. He made a clean sweep of federal job holders. The third reason Andrew Jackson was a terrible president was because of the Indian Removal Act. The Indian Removal Act was signed into law by Andrew Jackson on May 28, 1830, authorizing the president to grant unsettled lands west of the Mississippi in exchange for Indian lands within existing state borders. A few tribes went peacefully, but most resisted the relocation policy. During the fall and winter of 1838 and 1839, the Cherokees were forcibly moved west by the government. Approximately 4,000 Cherokees died on this forced march, which became known as the Trail of Tears. You really think a guy that destroyed the national bank, abused the spoils system, and caused the Indian Removal Act was a good a president? How could  a guy that hated and killed Indians be praised. Such a guy should be regarded as one of the worst presidents of the United States. People called him the man of the people but he was no man of the colored people. He contributed many things to American history and all of the good will be outweighed by his evil.

A Brief History of the Microscope

A Brief History of the Microscope During that historic period known as the Renaissance, after the dark Middle Ages, there occurred the inventions of printing, gunpowder and the mariners compass, followed by the discovery of America. Equally remarkable was the invention of the light microscope: an instrument that enables the human eye, by means of a lens or combinations of lenses, to observe enlarged images of tiny objects. It made visible the fascinating details of worlds within worlds. Invention of Glass Lenses Long before, in the hazy unrecorded past, someone picked up a piece of transparent crystal thicker in the middle than at the edges, looked through it, and discovered that it made things look larger. Someone also found that such a crystal would focus the suns rays and set fire to a piece of parchment or cloth. Magnifiers and burning glasses or magnifying glasses are mentioned in the writings of Seneca and Pliny the Elder, Roman philosophers during the first century A. D., but apparently they were not used much until the invention of spectacles, toward the end of the 13th century. They were named lenses because they are shaped like the seeds of a lentil. The earliest simple microscope was merely a tube with a plate for the object at one end and, at the other, a lens which gave a magnification less than ten diameters ten times the actual size. These excited general wonder when used to view fleas or tiny creeping things and so were dubbed flea glasses. Birth of the Light Microscope About 1590, two Dutch spectacle makers, Zaccharias Janssen and his son Hans, while experimenting with several lenses in a tube, discovered that nearby objects appeared greatly enlarged. That was the forerunner of the compound microscope and of the telescope. In 1609, Galileo, father of modern physics and astronomy, heard of these early experiments, worked out the principles of lenses, and made a much better instrument with a focusing device. Anton van Leeuwenhoek (1632-1723) The father of microscopy, Anton van Leeuwenhoek of Holland, started as an apprentice in a dry goods store where magnifying glasses were used to count the threads in cloth. He taught himself new methods for grinding and polishing tiny lenses of great curvature which gave magnifications up to 270 diameters, the finest known at that time. These led to the building of his microscopes and the biological discoveries for which he is famous. He was the first to see and describe bacteria, yeast plants, the teeming life in a drop of water, and the circulation of blood corpuscles in capillaries. During a long life, he used his lenses to make pioneer studies on an extraordinary variety of things, both living and non-living and reported his findings in over a hundred letters to the Royal Society of England and the French Academy. Robert Hooke Robert Hooke, the English father of microscopy, re-confirmed Anton van Leeuwenhoeks discoveries of the existence of tiny living organisms in a drop of water. Hooke made a copy of Leeuwenhoeks light microscope and then improved upon his design. Charles A. Spencer Later, few major improvements were made until the middle of the 19th century. Then several European countries began to manufacture fine optical equipment but none finer than the marvelous instruments built by the American, Charles A. Spencer, and the industry he founded. Present day instruments, changed but little, give magnifications up to 1250 diameters with ordinary light and up to 5000 with blue light. Beyond the Light Microscope A light microscope, even one with perfect lenses and perfect illumination, simply cannot be used to distinguish objects that are smaller than half the wavelength of light. White light has an average wavelength of 0.55 micrometers, half of which is 0.275 micrometers. (One micrometer is a thousandth of a millimeter, and there are about 25,000 micrometers to an inch. Micrometers are also called microns.) Any two lines that are closer together than 0.275 micrometers will be seen as a single line, and any object with a diameter smaller than 0.275 micrometers will be invisible or, at best, show up as a blur. To see tiny particles under a microscope, scientists must bypass light altogether and use a different sort of illumination, one with a shorter wavelength. The Electron Microscope The introduction of the electron microscope in the 1930s filled the bill. Co-invented by Germans, Max Knoll, and Ernst Ruska in 1931, Ernst Ruska was awarded half of the Nobel Prize for Physics in 1986 for his invention. (The other half of the Nobel Prize was divided between Heinrich Rohrer and Gerd Binnig for the STM.) In this kind of microscope, electrons are speeded up in a vacuum until their wavelength is extremely short, only one hundred-thousandth that of white light. Beams of these fast-moving electrons are focused on a cell sample and are absorbed or scattered by the cells parts so as to form an image on an electron-sensitive photographic plate. Power of the Electron Microscope If pushed to the limit, electron microscopes can make it possible to view objects as small as the diameter of an atom. Most electron microscopes used to study biological material can see down to about 10 angstromsan incredible feat, for although this does not make atoms visible, it does allow researchers to distinguish individual molecules of biological importance. In effect, it can magnify objects up to 1 million times. Nevertheless, all electron microscopes suffer from a serious drawback. Since no living specimen can survive under their high vacuum, they cannot show the ever-changing movements that characterize a living cell. Light Microscope Vs Electron Microscope Using an instrument the size of his palm, Anton van Leeuwenhoek was able to study the movements of one-celled organisms. Modern descendants of van Leeuwenhoeks light microscope can be over 6 feet tall, but they continue to be indispensable to cell biologists because, unlike electron microscopes, light microscopes enable the user to see living cells in action. The primary challenge for light microscopists since van Leeuwenhoeks time has been to enhance the contrast between pale cells and their paler surroundings so that cell structures and movement can be seen more easily. To do this they have devised ingenious strategies involving video cameras, polarized light, digitizing computers, and other techniques that are yielding vast improvements, in contrast, fueling a renaissance in light microscopy.

history and Origin of Dracula essays

history and Origin of Dracula essays What is a vampire? Webster's Dictionary defines on as "in folklore, a corpse that becomes reanimated and leaves its grave at night to suck the blood of sleeping persons." The Encyclopedia Britannica says that "the persons who turn vampires are generally wizards, suicides, and those who come to a violent end or have been cursed by their parents or by the Church. But anyone can become a vampire if an animal (especially a cat) leaps over the corpse or a bird flies over it." Among the specialists the most intriguing definition is written by Scoffern who said " The best definition I can give of a vampire is a living mischievous and murderous dead body." This is a strange and contradicting , but so are vampires. Religion plays a large part in the human society not only as a source of hope and belief, but as an explanation of events that happen and for what purposes they happen. During the reign of pagan beliefs many areas of the world formed their own superstitions and beliefs in the supernatural. As the people were conquered by other lands or moved, many beliefs became intertwined and developed into most of the superstitions that we know today. In Ancient Greece, tragic stories are full of the most horrifying blood-letting, but the closest one gets to a vampire is the Emusa, or Lamia, a demon that had a tangible body but not one made of human flesh and blood. The Lamia is said to be a real woman. A queen, who was paid visit by Zeus, king of the gods, became pregnant with child. Zeus's wife Hera did not like this and took the child in anger. In her grief the princess left her castle and roamed the woods. Soon she was known for attacking mothers and their children while traveling. Other Ancient Greek demons and vampires include the Maniae (horribly deformed people), the Larvae (spirits that persecute children), the Mormo (a hideous female spirit), the Gilo (night wandering phantoms), and the Stirges (in one form the appeare...

AHRQ Research Paper Example | Topics and Well Written Essays - 1000 words

AHRQ - Research Paper Example These are In-patient quality determination There is need for a system integration that will enable the IQIs. Inpatient quality indicator are stipulated measures that gives a dimension the way hospital administration data than involve the degree of care in the hospital. The sensor shows the quality of attention within the hospitals. It covers the sequence of inpatients for some steps and the condition of their illness. The determination whether the rate of mortality is directly proportional to the availability, integrity and accessibility of the information that are facts and can be attested to is a question of concern and the best way to solve this is by ensuring that the system that is in place is void of inaccuracy. The technology that is used to share the information involving this department must make use of the latest EISA fundamentals. The hardware that should be used should must maximum information security especially the networking devices (Andriessen & Vartiainen, 2006). As far as the management of information that involves the release of patients is concern, there is still a lot to be done because there are disparities in knowing whether the patient was discharged or died. For AHRQ to eradicate this problem the software that is used to check the state of a patient in a regular basis must be put in place. The second aspect concerns pediatric quality indicators (PDIs). This is used to keep the information about the discharge of patient. This is to determine the quality of healthcare in the pediatric department. The issues that involve the patients in the pediatric department that is not captured in the healthcare system are given consideration. To ensure that this is achieved the program that should be used should be able to update it anytime a patient is discharged (Andriessen & Vartiainen, 2006). Basically, the discharge process that is undertaken in the hospital involves the doctor, the nurses and the supportinate that such as the security. An effect ive system is one that is able to share the information amongst the three parties and at the same time enables information filtering so that the sensitive health information remains with the doctor. Too ensure this, an interactive system that guides the different parties on how to ensure the authenticity of the data needs to be implemented. The information security system that is applied must ensure that the validity and reliability of the administrative data. Any risk that is involved must be checked. In addition, interconnection between the information concerning adult healthcare as a contributing factor to the children health is a problem. The different servers that maintain this information should be linked so that the availability of data is made flexible. This will make sure that the needs for different social classes ranging from low income to the rich are maintained (Andriessen & Vartiainen, 2006). The indicator that is used for adult patient should also be able to adapt to infants. This is made possible by using physical metric of an individual such as weight to adjust the functionality of the system. The embedded software used must transmit the record immediately so that the analysis and interpretation can be done to facilitate information dissemination to all the agencies. Prevention quality indicators These are the measures that are used for emergency care services. The rate of transferring data

World Civilization I Essay Example | Topics and Well Written Essays - 250 words - 2

World Civilization I - Essay Example There was also intimate association between the priests and the chieftains in Vedic India. In the society of Vedic India, there were also four major castes, that is, the Brahmins (priestly caste), the Ksatriyas (worrior caste), the Vaishyas (the farmer and tradesman caste), and the Shudras (servants and menial workers) (Indian History 205). Just like in the Vedic India, the societies in the Southeast Asia had also some structural features that acted as centers for political and military authority. Additionally, it is evident that the societies in the Southeast Asia also expanded like the territories in Vedic India. This is evidenced by the extension of the cities in the Southeast Asia to the surrounding areas. The demand for provision of defense in the Southeast Asia also led to the emergence of kingdoms like in the Vedic India which enhanced taxation. Just like castes in Vedic India, Southeast Asia had also empires such as Akkadians and Babylonians. Social distinction was also evident in Southeast Asia like in Vedic India. This is evidenced by the variation in the rate of punishment as a result of class distinction. Unlike Southeast Asia, the social structure of ancient China looks like that of Vedic India. This is evidenced by the social structure of China first having the kings and nobles in the highest level, then the lords and warriors, and finally the peasants in the lowest class. The roles of leaders in ancient China were also well stipulated. The kings led to government, the lords paid taxes to the kings as well as provided warriors to protect the land, and the peasants worked for the

The Electricity Company Of Ghana Action Plan Finance Essay

The Electricity Company Of Ghana Action Plan Finance Essay Electricity generation, transmission and distribution in Ghana mainly involve three institutions that work in an interrelated manner. Volta River Authority (VRA) generates the electric power through hydro and thermal plants and, until recently, also had responsibility for the high voltage transmission system. The Ghana Grid Company (GRIDCO), created as part of reforms in the power sector, now has responsibility for the high voltage transmission so as to have that separated from generation entities. It is the least known of the institutions. The Electricity Company of Ghana (ECG) distributes the energy produced to most consumers through low voltage transmission lines. It is the institution that is in direct contact with most of the public. Figure 1 below shows the main processes of the power distribution in Ghana. The ECG is a limited liability company owned solely by the Government of Ghana and has the responsibility of supplying and distributing electrical power in the southern part of Ghana. It was established in November 1997 as Joint Stock Company based on the companies code in accordance with the 1993 Corporate Act (Act 461) of Ghana. The company has its headquarters in Accra, a total workforce of 5,281 with a customer base of 1.7 million (ECG annual report 2008). Vision The ECGs vision is to be among the leading electricity distribution companies in Africa in terms of quality, safety and reliability. Mission Statement The mission statement of the company is to provide quality electricity services to support economic growth and development in Ghana. The primary objective of the company is to supply electrical energy to people in its areas of operation. In discharging its various duties, the company has executed a number of national electrification programmes on behalf of the government. The ECG is a monopoly in the electricity distribution sub sector of Ghana. The tariffs that clients pay for the supply of electricity services are regulated by the state owned company called Public Utility Regulatory Commission. The ECG charges commercial rates to its clients which are subsidized by government. Organizational structure The company is run by the Board of Directors, Principal Officers and Advisors. The companys Board of Directors are appointed by the Government of Ghana. The Principal Officers and Advisors control and run the eight directorates of the Company. These directorates are Engineering, Operations, Customer Services, Materials Transport, Finance, Audit, Legal Services and Human Resources. Figure 2 below depicts the organizational structure of the ECG. Fig.2: The Organizational Chart of ECG Board of Directors ManagingDirector rector Divisional Managers (3) Divisional Managers (6) Director Legal Services Director Customer services Divisional Managers (3) Employees Employees Director Human Resource Director Customer services Director Material and Transport Director Material and Transport Director Audit Director Finance Director Engineering Director Operations Divisional Managers (6) Divisional Managers (3) Divisional Managers (2) Divisional Managers (2) Divisional Managers (3) Divisional Managers (3) Divisional Managers (5) Divisional Managers (3) Lower managemt Employees LOwer Managemt Employees Lower Managemt employees Employees Lower Managemt Employees Lower managemt Employees Lower managemt Employees Lower Managemt Employees Lower Managmt Employees Board of Directors The Board of Directors as at 29th June, 2009 was composed of the following persons: Ing.Sqn. Ldr. Clend Sowu (Rtd.): The chairman of the Board. He is a Consultant Engineer and a Retired Military Officer. Mr. Cephas Gakpo: The Managing Director of the company Mr. Bernard Allotey Jacobs: A Media Practitioner Barimah Kwame Nkyii XII: Omanhene Assin Aimanim Traditional Area, Tax Ecpert. Dr. Kwaku Osafo: Economist/Engineer Mr. Samuel M. Codjoe: Lawyer Mr. Anthony Gyampo: Educationist Mr. Kwabena Adjei: Businessman, Communication Professional Hon. Dr. Nii Oakley Quaye-Kumah: Member of Parliament for Krowor Constituency, Veterinary Surgeon Mr. Jake Kofi Anre: A Lawyer and Secretary to the Board Directorates of ECG The Engineering Directorate is responsible for the planning and designing of the distribution network. The directorate is also responsible for the procurement and implementation of investment projects. The Operations Directorate is responsible for delivering quality reliable and safe supply of electricity to customers, maintain the network regularly in order to reduce the number of interruptions and outages, respond quickly to faults and use modern technology to operate the distribution system; Materials Transport Directorate has responsibilities of managing all activities regarding materials received for projects and other ECG operations. In addition, the department has to manage all operations regarding Transport (Vehicles). Customer Services Directorate has responsibilities of gathering all information about Power Purchases, Power Sales, Average End-User-Tariff (EUT), System Losses, Revenue Collection, debtors position at the end of each year and customer population. Audit Directorate is responsible of operational, commercial and financial activities of ECG. With Technical Audits, physical inspections and reconciliation of materials usage are carried out. The directorate is also responsible of Audit investigations on fraud and corruption. Lastly, it support Management about operational activities and give directives to address them. Legal Services provides legal services to the ECG. The Director is the Secretary to the Board of Directors and maintains a Board Secretariat to provide secretarial services to the Board of Directors. He is involved in the prosecution of people involved in the illegal activities against the ECG to reduce system losses. Finance Directorate has responsibilities of analyzing and reviewing financial data, reporting financial performance, preparing budgets and monitoring expenditures and costs for the ECG as a whole. Human Resources Management Directorate has responsibilities in the following areas: Staffing (Employment and Recruitment, Personnel records, Compensation); Training and Development and Industrial Relations (Health and Safety). The ECG is a Strategic Enterprise in the sense that it is the only electricity distribution company that supplies electricity to the whole of Ghana. Secondly it offers employment to over 5,000 Ghanaians, making it the largest employer in Ghana. SITUATIONAL ANALYSIS The analysis of the performance of ECG as described below is based on available information up to year 2008. The Impact of Global and National Forces on ECGs Operations The worldwide economic recession (Credit Crunch) affected both the economy of Ghana and ECGs operations. The year saw rapid hikes in crude oil and metal prices which resulted in the high cost of power generation from thermal sources and sharp increases in the cost of materials and equipment required for capital investment projects. The Ghana Cedi also depreciated against the major world trading currencies especially the US Dollar, the Euro, and the British Pound. Since most of the inputs for ECGs capital investment projects were imported, prices consequently increased relative to energy sales which were generally denominated in the Ghana Cedi. The cost of investment projects therefore increased from 12% to about 20%. The U.S dollar for instance appreciated in value against the Ghana Cedi from a rate of $1: GHÂ ¢0.92 in July 2007 to $1: GHÂ ¢1.49 in June 2009Â  [1]Â   The inflation rate in Ghana also contributed to the high cost of operations and subsequently affected the companys profitability. The inflation rate has increased over the period from an average of 10.73% in 2007, 16.46% in 2008 to 19.86% in 2009. This resulted in increases in labor cost and other local raw material inputs. Details of the inflation rate is attached as appendix 1 Financial, Operations and Human Resources Performance Profit and Loss The ECG has made an operating profit of GHÂ ¢25,089,202 in 2008. Prior to this year, the company had been making losses. In 2006 and 2007 for example, the net operating losses were (GHÂ ¢3,429,300) and (GHÂ ¢8,657,716) respectively. Current Assets The stocks level at year 2008 was GHÂ ¢135,851,792. This was an increase of 99.8% over year 2007 figure. The Accounts Receivables also increased by 50.5% to GHÂ ¢258,033,418 in 2008. The table below depicts the status of the Current Assets of the company over the three year period from 2006 to 2008. Current Assets 2008 GHÂ ¢ %age change 2007 GHÂ ¢ %age change 2006 GHÂ ¢ Stocks 135,851,792 99.8 67,999,841 39.3 48,800,300 Debtors 258,033,418 50.5 171,411,587 16.2 147,503,100 Prepayment 8,323,294 184.6 2,924,574 48.4 5,665,800 Short Term Investment 16,358,519 108.5 7,845,126 12.0 7,002,600 Cash and Cash Balances 49,473,765 42.6 34,690,929 16.4 29,796,100 468,040,788 64.3 284,872,057 19.3 238,767,900 The increases in the stocks and debtors depict a weak inventory management and credit policy of the company. Debtor/Sales Ratio The Debtor/Sales ratio which is an expression of customer debt in days of billing was 130 days in 2008. It deteriorated from 138 days in 2006 to 162 days in 2007 representing a decrease of 17.4%. Although there was an improvement from 162 days in 2007 to 130 in 2008, the figure is still too high. Loans and Suppliers Credit The ECG through the Government of Ghana has secured the following loans and credit from the World Bank and other suppliers for investments in its distribution network. This has increased the companys debt situation tremendously. DSUP $15m financed by IDA, ECG (2003-2007) GEDAPÂ   $94.5m financed by IDA and partners, AfDB, ECG, (2008-2012) GEDAP Extension $70m for Ashanti Region, financed by IDA (2010-2014) French credit Euro 65m for Tema and Kumas. Financing from the french govt. (2008-2012) Norwegian credit Euro 60m for Greater Accra and Eastern regions. Financing from the Norwegian govt. (2008-2012) El Sewedy credit 16.5m from El Sewedy TD (2010-2011) As at December 2008, an amount of GHÂ ¢171.92 million was outstanding in suppliers credit. Systems Losses System loss is a power loss in its course from the source to end users. In 2007 the systems loss was 24.03%. This increased to 25.58% in 2008 as result of poor transmitting system and also theft through illegal connections. The ECGs performance in this area is declining and this is adding onto the cost of operations of the company. The table below shows the trend of the systems losses over a three year period from 2006 to 2008. System losses units (GWh) Year 2005 2006 2007 2008 Total Purchases 5045.4 5252.8 5145.6 5799.4 Total sales 3762.0 3978.4 3909.1 4315.8 System losses in % 24.26 24.03 25.58 Human Resources Capacity ECGs staff strength at the end of the year 2008 was 5,281. This was an increase of 6.07% over year 2007 figure of 4,929. Staff turnover over the year period is showed in the table below. Employee turnover Year 2006 2007 2008 Employee turnover 3.02% 3.27% 3.53% The percentage of employee turnover increased from 3.27% in 2007 to 3.53% in 2008. The reasons assigned for this increase upon our investigation are lack of motivation and incentives to the employees. Evaluation of ECG This section of the Plan tries to come out with a range of expected fair market values for ECG incase the government find it necessary to privatize it. The main purpose of this evaluation is to give all stakeholders especially government and management of the company a fair market range of values within which the ECG can be sold. ECG, as already mentioned above is a public monopolist and as such not listed on the Ghana Stock Exchange (GSE). As a result of this, the market Comparison Method of evaluation can not be used. The only feasible formulas to use would be the Asset Appraisal Method and the Discounted Cash Flow Method. Asset Appraisal Method This method involves revising all the asset and liabilities of the company including Goodwill. Using the 2008 audited financial report of the company, we can easily get the values of the asset and liabilities of the company at Net Book Values (NBV) and not the Revised Values. Since we are not in a position to revalue the companys assets and liabilities we are solely relying on the NBV of these assets and liabilities. The NBV of assets and liabilities for the 2008 financial year were given as follow: 2008 GHÂ ¢ Current Assets 468,040,788 Fixed Assets Plant, Property and Equipment 1,171,197,452 Goodwill 2,021,653,890 Total Asset 5,008,661,390 Less Current Liabilities (259,567,145) Value ECG 3,401,324,985 Calculating the value of Good Goodwill is calculated based on the Supper Profit Method. This involves determining a value for the expected future profit of the company. Here, some past profit of the collected based on the 2008 report and an average is taken. We then make adjustments to reflect future profits. Thus, expected future expenses and income are adjusted. Years Net profit/Loss GHÂ ¢ 1999 17365,259 2000 (7,583,807) 2001 152,973,046 2002 (451,974) 2003 (483,609) 2004 (269,686) 2005 (305,425) 2006 (475,200) 2007 (48,836,581) 2008 11,598,017 Total 123,530,040 Average profit for the 10 years = Expected Future Operating Expenses Looking at the operating expenses of the company over the years, the average expenses over the years is around GHÂ ¢6,574,530. Since expenses are expected to increase over the coming years, a 10% adjustment is made to reflect future changes. This 10% was chosen based on the increasing trend of operating expenses from 1999 to 2008. This brings the total future expected operating expenses to (GHÂ ¢6574530 +GHÂ ¢657453) GHÂ ¢7,231,983. Expected Future Income Again, looking at the operating income over the years, the average income for the 10 years is GHÂ ¢54,145,602. Since the expected income are expected to increase as a result of the stabilization of the Ghanaian Cedi against major foreign currencies, stable world price of crude oil, materials, and of course the discovery of crude oil in Ghana. Taking all these factors into consideration, a 15% adjustment is made to reflect these changes. Therefore the future operating income is (GHÂ ¢54,145,602 + 8,121,840) GHÂ ¢62,267,442 GHÂ ¢ The number of years of purchase which depends on the bargaining powers of both the government who is the owner of ECG and the would-be private investor on the reputation of the company. ECG, as earlier discussed, serves both the Ghanaian Economy and other two countries in West Africa (Togo Benin). It also has the potential to expend to other countries as a result of the discovery of crude oil in Ghana. With all the above reputations and potentials, we have decided to fix the number of years of purchase at 30 years. The Goodwill for the company would be Limitation of this method The value of the fixed assets used in the valuation might have some composition of non-productive assets and therefore would affect the fair market value of the company. Discounted Cash Flow Method This method takes into consideration the time value of money. Thus, discounted cash streams of future cash flow. Here, the first thing we do is to forecast the future cash flow by making adjustments to 2008 cash flow of the company. From the cash flow statement (2008), the net cash flow was GHÂ ¢15,819,658. Since cash inflows are expected to increase over the next few years due to expansion and reduction in operating expenses, an upward adjustment of 15% is made to the net cash flow for the next five (5) years. Thus, from 2008 up to 2013. Expected net cash flow from 2013 upwards can not be forecasted due to uncertainty. Discount Rate The company is at the moment using a discount rate of 10%. Due to the possibility of inflation and exchange rate fluctuations, have decided to fix the discount rate between 12% 15%. According to the discounted cash flow method: FMV = Present value of cash flow up to the terminal year + Present value of terminal value. Year Expected Net Cash Flow GHÂ ¢ 2009 18192607 2010 20921498 2011 24059722 2012 27668681 2013 31818983 Using the NPV formula which is given as: NPV =, we can now calculate NPV at both rates of discount (12% and 15%). NPV @ 12% = But Terminal = NPV = NPV (12%) = GHÂ ¢2,200,234,081 NPV @ 15% = But terminal value = NPV = GHÂ ¢1,708,064,531 Interpretations Since the Asset Appraisal Method gave us the highest value of GHÂ ¢3,401,324,985 it would be considered. We are therefore concentrating on the Discounted Cash Flow Method range of values to determine the value of the company. This therefore means that the value of ECG, must be in the range of GHÂ ¢1,708,064,531 and GHÂ ¢2,200,234,081. SWOT ANALYSIS The investigations conducted on the ECG revealed the strengths, weaknesses, opportunities and threats as summarized in the table below. STRENGTH Competent Work Force High level of technical expertise Government Support A monopolist (large customer base) Facilities (i.e. warehouse) Availability of donor funds Installation of prepayment meters Customer Call Center Vast Distribution network system Low cost of production as compared to countries in the sub region Availability of electrical fault detection technology WEAKNESSES High turnover of professional and technical staff Uncompetitive conditions of services Lack of rule enforcement Poor Communication Lack of team work Not clear defined job descriptions Talents in the company not used to the best advantage No effective Research and Development (RD) Weak Inventory Management High network distribution losses Mismanagement of resources OPPORTUNITIES Potential to expand (nationwide and other countries) Potential of quality power delivery Political and Economic stability Staff training and development West Africa Gas Pipeline Oil discovery on the coast of Ghana THREATS Government Interferences Government determination of Tariffs Fluctuations in the exchange rates Effects of inflation Natural Disasters (i.e. rain storms) Increasing World prices of metals, materials and equipment WEAKNESSES OF THE THREE MAIN DEPARTMENTS THAT NEEDS TO BE RESTRUCTURING BASED ON OUR ANALYSIS MATERIALS AND TRANSPORT DEPARTMENT Weak Inventory Management Unstructured Procurement Unit Increases in the world prices of metals, materials and equipment Mismanagement of Company resources Effects of inflation on local procurement Fluctuation in the exchange rate OPERATIONS DEPARTMENT No effective research and development High network distribution losses Unreliable and low quality of power supply Inadequate training and development of operations staff Inadequate staff HUMAN RESOURCES MANAGEMENT DEPARTMENT High turnover of staff Talents in the Company not being used to the best advantage Poor Communication Lack of team work Uncompetitive conditions of service Lack of rule enforcement No well defined job description Excess labor force STRATEGIC ALTERNATIVES AND RECOMMENDED STRATEGIES Based on the SWOT analysis, the following strategic alternatives are recommended to bring about turnaround for the Material and Transport Directorates; Human Resource Directorate and the Operations Directorate. MATERIAL AND TRANSPORT DIRECTORATE Assets Reduction Strategies: Divesting Specific Assets Assets that are in surplus with respect to the future requirements of the company should be sold off. Unproductive and obsolete assets such as transformers, power cables, electric conductors and meters should be sold. Reducing Inventory Material costs should be reduced through improved buying practices, better utilization of materials and efficient inventory management. Inventory of the company such as transformers, meters, cables, conductors and wooden poles should be managed based on Vital Few Trivial Many Principle. This will help the company to avoid holding too much inventory, which is cost to the company and also prevent the company from holding too little inventory which can make the company loose customers. Not only that but also, the reorder level should be fixed between the maximum order level and the minimum order level to prevent the inventory from reaching the danger level. Reducing Debtors (Accounts Receivables) There should be a credit policy to help in the effective administration of the debtors. Customers credit worthiness should be well determined. Debts should be collected within 30 days. There should also be a debt recovery plan. Reducing Cost The Company should adopt Total Cost Management (TCM) control strategy as a way of reducing cost. There should be intelligent optimization and not just cost cutting in the areas of direct costs; overheads; procurement costs; production costs; selling and distribution costs; inventory costs; personnel costs. There should be speedy execution of contract bids and procurement processes to avoid additional costs being incurred as a result of lapse of deadlines. The introduction of e-Procurement should also be used to facilitate the procurement process. The company should also enter into forward contracts to reduce costs. Debt Restructuring Arrangements should be made for third party (government) to service the debt on behalf of the enterprise. There should be selective sale of assets and the revenue that would be realized from the sale of these assets should be used to offset the debt owed to suppliers. Legal Restructuring Specific legal steps should be taken to privatize the company. HUMAN RESORCE MANAGEMENT DIRECTORATE Organisational Restructuring There should be a merger of the engineering and operations directorates to ensure harmonization of action plans towards the achievement of corporate objectives. Information technology should also be used to make the hierarchical organizational structure flat. A strategic planning unit should be created and headed by a corporate strategist to lead the process of strategically positioning the company towards the achievement of the companys goal. There should be appropriate job descriptions, specifications and schedules matching with the qualifications, experiences and skills of employees so to get the best performance out of them. Furthermore, training and development should be a routine exercise for the company. Rules and regulations should be explicit, easily accessible and discipline enforced to ensure compliance with set standards. Labour Redundancy Management should develop a Redundancy Implementation Plan considering the economic climate and political mood of the country, since the implementation of the redundancy plan could be a complex and time consuming process. Staff Performance Appraisals methods such as the Balanced Scorecards should be used to identify and declare non performing staff redundant. Compensation packages should be prepared for such redundant staff, and contingency plans made for unforeseen circumstances in the event of strikes. OPERATIONS DIRECTORATE Physical Restructuring It is recommended that this Directorate should be merged with the Engineering Directorate to bring about efficiency and effectiveness. The size of budget for Research and Development should be increased. Investments in distribution networks should be increased to improve quality and reduce losses of electric power. There is also the need to improve upon the monitoring of customers consumptions to be able to detect theft of electric power. The technical staff strength should also be augmented and given the appropriate technical know-how so to be able to cope with the growing demands of the proposed merger of the Operations and Engineering Directorates. Safety equipment should be made available for the staff to use in protecting themselves in order to reduce the rate of accidents. Proposed Timeline for implementation of Turnaround strategiess TURNAROUND STRATEGIES 2010 2011 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Discussions with Management Assets Reduction Reducing Cost Debt Restructuring Legal Restructuring Organisational Restructuring Labour Redundancy Physical Restructuring Conclusion ECG plays a vital role in the socio- economic development of Ghana and there is no doubt that any Turnaround would yield enormous benefits to the Ghanaian economy. Hence, for the above recommended strategies to bring about any meaningful Turnaround, it calls for commitment and support of management of ECG and the government of Ghana. Not only that but also, for efficient and effective implementation of the strategies, there is the need for expert knowledge and advice. It is therefore hoped that the necessary support will be given for the desired results to be realized in ECG. Privatization Option The public sector in Ghana has suffered setbacks which are largely attributed to ineffective and in efficient management. When we consider the case of Ghana Electricity Company, noticing the trend of losses of the company over time and the failure to meet the objectives or purpose of its formation, in view ,it is suggested that it would be better for the ECG to involve expatriates into their operations, this can be done by private sale of there shares to the foreign multinationals who have got the technical and financial knowhow and experience in the distribution of energy to buy into the private share of the organization ,Government should endeavor to have multinational partnership in the operation of the privatization by giving them of shares in the enterprises. There is need for good follow up on privatized enterprises. This would make the organization to be more effective and efficient in their operation. The federal Government should encourage this multinational to participation in the distribution of power in Ghana. This would be done by establishing a power sector reforms which will allow the involvement of foreign multinationals expatriates in the distribution of power. These reforms would include the provision the necessary Infrastructures which would enable the reduction in establishment costs, rationalization of power tariff, mobilization of private capital for power generation and transmission and lower capital-power generation ratio. In order to achieve these goals, distribution companies. A State Electricity Regulatory Commission would also be also set up to monitor the operation of the company. The desire to involve the private sector in the management and provision of infrastructure and services which will prompt multinational company to buy private share of the organization. . Private placement occurs when a company makes an offering of securities not to the public, but directly to an individual or a small group of investors. Such offerings do not need to be registered with the Securities and Exchange Commission (SEC) and are exempt from the usual reporting requirements. Private placements are generally considered a cost-effective way for small businesses to raise capital without going public through an initial public offering (IPO) The ECG should sale 49 of its shares to a multinational partner would be able to participate in the core business of energy distribution in Ghana. Also the Government should provide

Role of Finance Companies

Role of Finance Companies Traditional role of Finance Companies The finance companies are much smaller in scale compared with commercial banks, and they are also saddled with more restrictions which will be discussed later in the report. Traditionally, they relied on their personalized and flexible services to attract clients. This is because there are always consumers who are rejected by the commercial banks because adding these consumers to their portfolios would be uneconomical for these commercial banks as their economies of scale cannot offset the transactional costs these clients would bring because of the small margins these smaller consumers bring. These mainly include people or companies who do not have the capital to meet the relatively higher capital requirements of the commercial banks compared to finance companies. One example would be the current business account for companies. The major banks such as DBS and OCBC also offer low startup requirements, but charge a monthly management fee if their balances fall below $10,000 , not a big amount for businesses but possibly a stretch on new and small scale businesses. Hence, finance companies plug that gap with much lower balance requirements that would be more attractive to these business owners. Another example would be home loans by which finance companies offer a wider range of interest rates for a different range of financing needs compared to commercial banks who offer more generic rates on a whole. Emerging opportunities for Finance Companies Financial companies are however, now exploring new opportunities that they have not been able to capitalize on before. For example, Hong Leong has recently been awarding underwriting rights by the MAS, a traditional stronghold of commercial banks. This has redefined the boundaries that a traditional finance company in Singapore held due to regulations under the finance companies’ act. Wealth management, a relatively fast growing new segment in Singapore, has seen Hong Leong also wrestling in with a slice of the pie that many expected the commercial and investment banks monopolize. Industry Performance Finance companies form a small and unique portion of the financial services sector here in Singapore. A large part of their income comes in the form of interest income from loans and also commission fees for services that they offer. By focusing on domestic opportunities, they have managed to avoid exposure to the credit crisis that many others in the sector have been affected by. This has thus helped all 3 firms in the sector to post stellar results over the past year. As shown below, Singapore’s GDP growth YoY was 7. 7%, a slight moderation from the 8. % in 2006. This represents opportunities as the need for financial services increase as people in Singapore gain affluence. Growth of profit for Finance Companies Growth on EBIT ranged from a low of 38. 7% to a high of 65. 2% riding on increased receivables for all 3 finance companies. This is exceptional considering the cloud that has shrouded the financial sector in recent times. In dollar terms, their p rofits grew by SGD$43million to a total of over SGD$150million. Also, operational efficiency was a strong driver of the profit growth. Revenues remained rather stable and it was the decreased operating costs that led to higher profits according to the financial reports released. This could be due to reasons such as improved technical systems or improved employee proficiencies. Growth of property & construction revenue segment There is a strong focus on the â€Å"heartland† consumers and increased demand for housing, particularly in HDB flats, has led to opportunities that finance companies have leveraged on to cement their stake in this niche market. Although commercial banks also offer housing loans, finance companies are able to adapt each individual loan to consumer’s requirements because they enjoy greater flexibility especially for smaller loans that larger financial institutions do not want to accommodate to enjoy the relatively small returns. Looking at the breakdown of loans and advances of Finance Companies, we can see a large part is driven by the building and construction sector in Singapore, which was booming last yea. The building sector was driven by the construction of the 2 integrated resorts and a booming property market last year. A key driver of the industry, construction growth, which represents a large portion of finance companies’ interest income, grew at a rate of 20. 3% in 2007, compared to 3. 6% in 2006. The bull run in the property market, as mentioned, has also contributed to the sector’s good performance. Property agents have described in particular, the HDB resale market as the kingpin of the real estate sector. Projected unit sales are estimated to be at 30,000 by industry players. Average prices rose 17% for 2007. This, coinciding with a new government initiative to encourage singles to live with their parents by providing a grant of up to $9000, has led to a boom for the property market domestically in recent times. The government’s policy to target an eventually population size of 6million citizens would lead to an increased demand for housing as more and more immigrants look to plant their roots here. Thus, we can expect housing loans to continue to be a strong driver of performance for finance companies into the foreseeable future. Increase in SME initiatives The government’s initiative to increase SME competitiveness and promote entrepreneurship has also facilitated the expansion of this revenue segment for financial companies. The founding of organizations such as SPRING help to spur and stimulate the growth of target sectors for these financial companies. Initiatives such as the Micro Loan Programme under SPRING create direct market share for these finance companies for those who are rejected by the commercial banks for loans. A look through the Hong Leong Finance website shows at least 11 initiatives directed at SMEs alone. This shows the importance of this particular revenue segment to finance companies. Therefore, the future of this key driver of finance companies’ success looks to be rosy given the support that SMEs receive domestically from the government. It is also important to note that finance companies give incentives by positioning themselves as service providers for smaller enterprises who require greater flexibility in terms of financing requirements. As mentioned earlier in the report, this is due to the fact that it is uneconomical for commercial banks to process some enquiries and loans because they are uneconomical given the scale of operations. Summing up, the performances of finance companies have been exceptional with impressive growth figures. However, as the recession worries and full effects of the sub-prime issues slowly uncover, finance companies may yet be exposed to underlying issues that may influence performances in the near future. Next, we shall examine some of the trends in the finance company sector and try to identify key issues that may offer insights into what we can expect from these finance companies in the future given what we have already discussed. We would also examine a key player to try and gain insights into how these finance companies operate. TRENDS AND ISSUES IN THE FINANCE COMPANIES SECTOR: SINGAPORE 1. Consolidation within industry One of the most pervasive trends identified in the last decade in the finance companies sector is the consolidation of the industry. This is evident from the number of finance companies that have ceased operations. Some of these companies were forced out of the industry due to regulatory changes, while others, like OCBC Finance, simply merged with their principal companies. Since 1996, 19 finance companies have surrendered their finance companies’ license, with only 3 main finance companies remaining by the end of 2007. Accordingly, the assets and liabilities of finance companies as a whole have declined dramatically over the past decade, before stabilizing and increasing steadily over the past 3 years to around 10 billion dollars. Finance companies’ assets decreasing before stabilizing and recovering, and consolidation. 1. 1 Regulatory changes One of the catalysts for this consolidation is no doubt the regulatory changes that MAS has put into effect. Since December 1994, the Finance Companies Act was revised to raise the minimum capital requirement for finance companies from $0. to $50 million, and existing finance companies were given until 2003 to gather the required amount. This effectively meant that finance companies which did not have the required capital had to either merge with other players in the industry including banks, or raise the required capital. Hong Leong Singapore Finance, the finance company in Singapore today, is the result of such a merger between Hong Leong and Singapo re Finance. Examples of mergers with their parent banks include Maybank Finance, and Overseas Union Trust, which of course was subsequently absorbed into UOB. It could be argued that even without regulatory changes, mergers and acquisitions are inevitable for the smaller companies to survive. Regardless, the changes put into place by MAS has forced the industry to evolve into one with lesser, but stronger players. 1. 2 Increasing competition In 1998, then DPM Lee Hsien Loong remarked in a parliamentary session that the rationale behind these regulatory changes was to â€Å"enable finance companies to have the resources to compete more effectively and increase public confidence in them. Hence, another major reason for the consolidation in the industry can be attributed to the increasingly intense competition from commercial banks and other financial institutions which provide similar services. Loans and other services catered to SMEs, which the full banks typically deemed unprofitable, were traditionally the strong suit of finance companies. From data gathered on the 3 existing finance companies, loans and services to SMEs forms over 40% o f their portfolios. However, in the past decade, many commercial banks have started divisions to tap into the SME market made popular by finance companies. Finance companies thus now have to contend not only with each other, but commercial banks as well. This means that badly run finance companies simply could not contend with the competition and were targets for other finance companies’ acquisitions to boost their own ability to compete. 1. 3Niche markets Finance companies are usually able to compete with commercial banks because they offer services to niche markets (usually SMEs) which then form a large part of their portfolio. In today’s financial markets, Hong Leong Singapore Finance is known to target clients within the SME, consumer housing and the silver industry. Sing Investments and Finance has loans in the construction and property development sectors amounting to 68% of their loans portfolio. However, the population of such niche markets are usually much smaller than mainstream financial markets, and companies need to be able to capture a larger market share within the niches to be able to offer products with a competitive edge over commercial banks. Under the basic tenets of economics, this means that a only a small number of firms are needed to satisfy demand in such niche markets. Hence, there is necessarily a trend towards consolidation of similar firms within the separate niche markets in a ‘survival of the fittest’-style competition, which is the situation being faced with today. 1. 4 Global mergers and acquisition trends Mergers and acquisitions have been widespread and plentiful in recent times, and although this directly impacts the trend of mergers within the finance companies sector, there are also indirect effects to be discussed. One must consider that the increasing prevalence of large, merger companies necessarily means that the pool of smaller companies, of which finance companies cater to, is steadily decreasing. Such large merger companies usually go to commercial banks for the more sophisticated and diverse range of credit options which finance companies are simply unable to provide, either because of regulatory restrictions from the Finance Companies Act, or because they do not have the resources to do so. Again, this results in a net effect of finance companies having to merge themselves to operate effectively and efficiently to capture this diminishing pool of available business. TRENDS AND ISSUES IN THE FINANCE COMPANIES SECTOR: INTERNATIONAL International finance companies Unlike in Singapore, a legal definition of ‘finance company’ exists, there is no clear definition on what constitutes a finance company in the overseas financial markets. However, there is a general consensus that finance companies provide mainly lending services to consumers and small businesses. As with finance companies in Singapore, international finance companies typically target these clients that the major banks overlook, or have specializations in specific industries that make them more attractive to customers seeking credit services within these industries. Unlike Singapore, where only 3 such companies now operate, there are literally thousands of such companies overseas catering to different industries and customer bases, and it will be definitely be out of the scope of this report to discuss each one in detail. Also, the nature of the finance companies sector is such that they are more influenced by regulations and performances of industries within the countries in which they operate, and less affected by global financial trends. A simple example of this is in Singapore, where finance companies have been fairly shielded from the turmoil in overseas financial markets led by the subprime crisis in the US. Instead, they have been doing well, largely owing to the boom in the local property, auto and SME markets. It is thus more appropriate to examine the issues and trends of nternational finance companies in the context of the local markets which they serve, rather than to identify and global trends that affect all financial markets. Hence, we have decided to focus our attention on finance companies operating within 3 countries where financial markets are relatively mature and established, and whose activities are more transparent and in the limelight. These are Australia, Japan and USA. 2. Fin ance companies in Australia The finance companies scene in Australia is thriving, and has witness continued growth in the last 3 years. Another good year was recorded in 2006/2007 with both business and personal lending continuing to grow. Finance companies in Australia have long been a significant sector in the Australian financial services market, offering a wide range of products including business leasing, fleet leasing and personal lending. Such companies provide an alternative source of borrowing to the banks, building societies and credit unions. The two largest finance companies operating in Australia are Esanda and Capital Finance, which collectively represents almost 40% of the sector’s operating profits after tax. Some of the key issues which have impacted profits in the last 2 years include: ? asset growth of 7. 1% leading to an increase in interest income ? increased competition leading to reduced margins and fee income ? increased bad debts expenses ?reduced profits on motor vehicle lending 2. 1 Australia – Reliance on Auto Industry and Industry Trends The auto industry is a major driver of performance of the finance companies sector in Australia, no doubt because the majority of the finance companies are exposed to the sector. This may be in the form of lending to consumers and businesses to purchase their motor vehicles, financing auto dealers’ purchase inventories, or providing fleet management businesses. The growth of finance companies coincides with the auto industry’s boom in the past 5 years, with 4 consecutive years of record sales up to 2005. Provision of loans to purchase large cars dropped 18 percent largely due to the change in consumer purchasing habits from the price hikes in oil. Instead, smaller car sales were up 21 percent, contributing to increased revenues for finance companies. However, the increased affordability of new cars in the last 5 years has created difficulties for finance companies which provide fleet management services, such as BMW Finance and ORIX, since such companies suffer reduced profits on the sale of cars at the end of their lease. In recent times, the focus of many of the larger finance companies have shifted to diversification of services. This is similar to Hong Leong Singapore Finance’s strategy in Singapore, which is to take on the major banks at their own game, such as providing property and construction facilities. GE Money’s expansion into credit cards, mortgages and on-line savings provide another example of Australian finance companies’ diversification. Just as the finance companies are expanding their services to include services provided by major finance players such as banks, so are the majors entering into sectors traditionally dominated by finance companies. This includes areas such as lending secured on receivables, consumer and low-doc lending. This has increased competition among Australian finance companies, which is further crowded by new entrants such as Aussie Home Loans’ plans to target car and personal lending markets. . 2 Australia – Growth in Assets, Personal and Business lending Total assets of the finance companies surveyed increased 7. 1 percent to $37. 5 billion, slightly down from 8. 1 percent growth in the previous year, but this still represents a strong rate of growth. This trend has been observed for the past 4 years, and can largely be at tributed to lending growth in the business and personal sectors. Even though finance companies in Australia only accounts for 5 percent of total Australian loans and advances, their market share is considerably higher in traditionally key markets of business lending and personal lending. This is estimated to be around 10 and 15 percent approximately. Since finance companies in Australia are typically not exposed to the housing mortgage market, they are not affected much by the decline in the housing market that is being experienced in global markets. However, the quality of the assets seem to be an issue for finance companies. Total bad and doubtful debt expense increased 32 percent from 2006. Even when viewed in context in the growth of receivables, the ratio of bad debts to average receivables increased. Hence, unlike in Singapore, it does seem that Australian finance companies suffers somewhat from increase in credit losses. However, this is to be expected since finance companies typically engage in less secure lending to less credit worthy customers in exchange for a higher margin. It must also be said that the amount of credit losses increases pales in comparison with the subprime losses that major international banks have faced even with supposed tighter credit checks. 3. Finance companies in Japan In early 2007, the consumer finance industry of Japan was valued at a total of ? 0 trillion with annual growth of 4%. The key factor influencing this previous growth in the industry might be traced to the equity and real estate bubble burst in the early 1990’s which lowered the collateral of several consumers. This provided a large market segment seeking uncollaterized loans, which were only provided by the consumer finance companies. At the same time, consumer finance companies had an advantage over the banks as they had a wider network of loan offices and had a reputation for quicker loan approval. 3. Japan – Regulatory elimination of ‘grey zone’ lending Significant change is expected in the consumer finance sector of Japan, as new regulations affecting consumer finance companies were passed in December 2006, and are to be withheld by the year 2009. The main crux of the new regulation would be that it lowers that maximum allowed interest rate chargeable on uncollaterized consumers. While the interest rate cap on consumer loans were capped at 20% by the Interest Rate Restriction law, the Capital Subscription law stated that a rate of 29. 9% could be charged, in the event that a written consent to the charges was provided by the consumer. Due to this law, several consumer finance companies in Japan have been providing loans to poor credit clients, at interest rates charged within the ‘grey zone’ (20%-29. 9%). What this new legislation entails would be that these consumer finance companies will need to adapt and reinvent themselves, as they can no longer depend on the ‘grey zone for survival’. What can be expected would be shakeout of the smaller consumer finance companies, consolidation as well as diversification of products. 3. 2 Japan – Regulatory Changes The Japanese Diet revised legislation regarding the Money Lending Business (MLB) law. A previous ceiling of 29. % for consumer loan interest rates set by the Capital Subscription law was repealed and reduced to 20%. This coincides with the ceiling set by the Interest Rates Restriction law, which has an interest rate cap of 20% per annum for such loans. Even then, this cap is only applicable for loans of up to ? 100,000 and below. Fo r loans with principal amounts ranging between ? 100,000 and ? 1,000,000, the cap is only 18% per annum. Loans with principal amounts over ? 1,000,000 are charged a maximum interest rate of 15% per annum. At the same time, the Bank of Japan has in recent years opted to abandon their zero-interest rate policy. At the moment, their interest rates have been set at 0. 5%. It is yet to be seen if there will be any increase in this rate, as it will probably depend on the performance of the Japanese economy as it adapts to this change, as well as the USA downturn. But essentially, with the bottom line raised and the top lines lowered, consumer finance companies are seeing their margins diminishing. The amendment also includes tighter entry restrictions for consumer finance companies, return of excess interest payments made to consumers, as well as restricts the maximum debt a consumer may hold to only one-third of his annual income. At the same time, the lid has been left open for more restrictions to be implemented between now and 2009, during which enforcement for the new regulation is going to be implemented. 3. 3 Japan – Effects on Performance In response to the new legislation, the industry has been suffering since. An estimated loss for the combined consumer loan sector for the fiscal year of 2006 has been made at ? 3 trillion. This can be directly attributed to the diminished market segment as well as several requests for refunds of excess loans from existing consumers. With stock prices of the 4 major players in the industry tumbling even before the announcement of the December 2006 ruling, mostly as a pre-emptive reaction, the situation is dire. This has left the consumer finance companies with the option of either leaving the market, or restructuring themselves to suit the new environment. The two main strategies for remaining in the sector would be expansion and diversification. 3. 4 Japan – Expansion At moment, there is estimated total of 10,000 registered money-lenders in Japan. Of these, there are only 4 major players (Aiful Corp. , Acom Co. , Promise Co. Takefuji Corp. ) that are currently listed on the Japanese stock exchange, whilst the rest are all individually casting small shadows. However, considering the increased requirements for operations as well as the diminished margins, it is now harder to maintain operations as a small player. More sophisticated risk management and cost-cutting are all necessary aspects that need impleme ntation for survival. It is expected that a large proportion of these smaller companies will eventually consolidate to be able to mount a substantial fight for survival or be forced to cease operations. Current estimates are that the eventually, Japan will only be left with 3,000 consumer finance companies. Already, that trend is starting to take shape. The current estimate of 10,000 registered money lenders have already dwindled from a previous figure of 14,000 as of February 2007. Two of the larger players, Acom and Promise have also taken a step further than anyone else in the industry, by negotiating partnerships with major banks, Mitsubishi UFJ Financial group and Sumitomo Mitsui Financial Group respectively. This strengthens their competitiveness, as these consumer finance companies will be able to provide the bank with their expertise in handling smaller and riskier consumer loans, whilst the banks will be able to support these companies as they transcend into a more developed state. 3. 5 Japan – Diversification of Products Traditionally, the Japanese consumer finance companies could be classified into two main group; those dealing in consumer loans; and those providing credit card services. While the former group has been hit hard directly by the new regulation, the latter has been relatively unscathed. The main reason would be that interest rates for credit cards were already below the 20% limitation. Consumer finance companies are now finding that there is an unexplored market that they can now explore, to make up for their losses in the consumer loan segment. To compound incentives for this strategy, the credit market has yet to truly blossom in Japan yet, due to a prior preference for cash instead. For example, credit card shopping only accounts for 10% of consumption in Japan, and this is relative to the 25% figure for the United States. 3Finance companies in USA There are many companies in the USA which provide consumer and business finance services in all sectors of the financial markets. Being the world’s largest financial market, USA has a very diverse group of finance companies that cater to auto, personal, small enterprise, insurance, and mortgage lending, among others. Citi Financial, HSBC Finance, GE Money, Prudential Finance, Zurich Financial, and Capital One are just a few examples of such finance companies. Just as in Singapore and other nations, these finance companies typically serve clients who are either too small or have poor credit ratings to obtain loans from the larger banks. The consumer finance industry in the USA is too large to be discussed in full detail in this report. Hence we will only be discussing a particular type of finance company which in the past year has come under scrutiny from all corners of the financial markets – subprime mortgage lenders. While major commercial and investment banks have all taken in losses amounting to USD 170b from writing down Colleteralized Debt Obligations and Mortgage Backed Securities, mortgage finance companies in the USA have mostly been responsible for the origination of such losses. 3. 1 USA – Subprime mortgage lending by finance companies Subprime mortgage lending by finance companies enabled consumers in the USA with poor credit histories to obtain loans to purchase homes with higher interest rates than that charged by banks. These consumers were previously unable to obtain such loans from the major banks and lenders due to their poor credit histories. To entice consumers to accept such higher interest rates, these finance companies typically include ‘teaser rates’ during the initial periods of the loan where the interest rates were lower, and the rates were then subsequently increased significantly after the introductory period. Because many consumers could no longer afford the high interest payments after the introductory period, many were forced to refinance their subprime loans with another subprime loan. This was acceptable pre-2005 since housing prices were on the rise, and this meant that home owners were building equity which enabled them to refinance loans easily. However, after 2005, home prices started to decline and fell below the value of the loan, and thus could not be used as collateral for refinancing. A steep rise in defaults and foreclosures caused more than 100 finance companies in the US to file for bankruptcy beginning late 2006. Even New Century Financial Corporation, then the nation’s second largest mortgage lender, was not spared. Excessive risk taking and making loans to subprime customers meant that such finance companies were exposing themselves to moral hazard excessively. 3. 2 USA – Securitization of subprime loans Many a subprime finance company did not actually hold on to the subprime loans as assets after making them. Instead they securitized, or sold off the loans to issuers and special purpose vehicles. These financial vehicles bought these loans and other investment grade instruments and repackaged them into the CDOs and MBSes that were to blame for the credit problems in financial markets today. These instruments were subsequently bought up by investment and commercial banks, and hedge funds, due to the impression that the risk from the subprime loans have been adequately spread out. However, this was not the case, since once defaults and foreclosures started to hit the issuers, the values of the CDOs were compromised, resulting in huge write downs by banks. What followed was a large credit crunch in financial markets, the effects of which are still unresolved today. Hence, what was supposed to be a mortgage finance sector problem has been spread to all areas of the financial markets through loans securitization, which was started by finance companies in the US. Regulatory Issues The Finance Companies Act (Cap. 108) was established in 1967 to regulate the growing finance companies sector. Listed in the Act are several restrictions that limit the activities of the finance companies. The purpose of these limitations is to protect investors, by controlling the exposure of the company to riskier asset classes and transactions, since finance companies are less able to diversify such risks away than the major banks. These limitations may include capital structure requirements, restrictions on dealings, necessary approval for expansion and others as well. In essence, the provisions within the Finance Companies Act require that finance companies seek MAS for approval to engage in activities other than the most basic lending and depositing services. Since the major banks have a similar set of banking rules and regulations to adhere to, we will be focusing our discussion on a few key regulatory provisions which are specific to the Finance Companies Act. One regulation of particular interest has already been briefly mentioned in the previous sections of this report. In s7 of the Finance Company Act, there are strict capital requirements in place for finance companies. S7 provides that a registered finance company will need a minimum of $50 million in issued and paid up capital. What this requirement does is to limit the industry to only the stronger players. This requirement, as put in place since January 1995, might be responsible for the running out of the several smaller finance companies, and serves as well as a substantially high barrier to entry. S23 of the Finance Companies Act lists out some of the prohibitions of dealings by finance companies. In particular, s23(1)(e) and (f) aims to limit the amount of risk which the finance companies are able to take. This is done by restricting the issuance of substantial loans which exceed 50% of their total credit facilities, and also by prohibiting unsecured loans and advances exceeding S$5,000. It can be seen from these regulations that MAS understands the higher risk nature of the customers served by finance companies, and tries to protect both the customers and the companies from over-exposure to such risks. While s23(1)(b) prevents investments in foreign currency, gold and other precious metals, and s23(1)(c) prevents any acquisition of shares, stock, debt and other convertible securities in foreign denominations, exemption from these restrictions might be granted as stated under s23(2)(a)&(b). S23(2)(a)&(b) states would be that concessions in these aspects might be granted depending on the ruling of MAS. Furthermore, s53 gives room for the authorities to exempt a finance company for some or all of the provisions in the Act. We feel that this shows that MAS recognizes that not all finance companies are ready to take on such dealings yet, but that they are not shutting the door on such transactions in the future. Prospects & Future developments of Finance Companies Effects of the credit crunch In the short run, we would expect that finance companies would experience a udden growth in their revenue segments due to commercial banks tightening credit. The sub-prime meltdown in the United States has severe implications for all industries. However, rather than affecting the finance companies negatively, we foresee that there is a possibility that they might profit from it instead. With several banks being hit severely, we are currently observing the beginnings of a credit crunch as banks start to tighten their credit and adopting a more conservative stance in negotiating loans. This would even be true in Singapore, as we uncover the extent of Asian banks exposure to collateralized debt obligations. DBS Bank has already booked S$200 million worth of write-downs while UOB has S$45 million worth of write-down. These commercial banks have reportedly tightened credit measures with more reluctance to take on risky debts. What this might imply would be that more consumers will have their loan applications rejected from banks, and will therefore look to finance companies for their capital needs instead. At the same time, the market for loans is expected to grow by 13% in 2008. While this is lower than the 20% growth recorded in 2007, it represents that the market is still expanding despite the tightening of credit by major lenders. At the moment, the total loans made by finance companies are sitting at S$8,389 million. The total loans made by commercial banks, however, stands at S$201,424 million. The above figures indicate that if banks were to lose even a small percentage of their market share in loans to finance companies, this would translate to a potentially significant percentage of loans growth for these finance companies. Hence, if finance companies are able to take advantage of the loss in confidence of the banks, and the tightening of credit by said banks to capture the market left behind by the banks in the wake of the sub-prime crisis, there will be room for growth. Consolidation of the segment In the long run however, we adopt a more pessimistic stance towards the development of finance companies. One of the trends that we mentioned was that of consolidation of the finance companies in the past decade. Three such finance companies remain and have performed relatively well over the past few years or so. However, commercial banks are encroaching into traditional strongholds of these finance companies, such as SMEs and smaller personal loans which were once considered unprofitable to service. This is as commercial banks now want to profit from the higher yielding consumer base that these finance companies rely on as they continue to look into other profitable segments that they have neglected in the past. DBS, OCBC and UOB have in the past decade started moving towards these opportunities that they had forgone in the past. There is also increased competition from new entrants such as GE Money and SingPost who now offer consumers more consumer finance choices instead of the remaining 3 finance companies. This increased competition may reduce revenues in the future, especially for Singapura Finance and Sing Investments, since Hong Leong is far and away the major player in this sector and may be able to better cope with these changes. These 2 smaller firms might find it more difficult to continue to perform as well when banks use their financial muscle and influence to try and break into this market. Thus, we foresee a real possibility of further consolidation and perhaps a change in the structure of the future finance company here in Singapore. Hong Leong Finance is special, in the sense that it is much bigger than the other finance companies in the scene. To brand it as a finance company in the same breath as the other 2 does not do Hong Leong’s reputation justice. However, when compared to the commercial banks, they still do not measure up as significant competition. The other 2 finance companies seem to stand little chance should the commercial banks and corporations start infringing on this niche segment that they have survived on. The implications of these is the sign that the finance companies are in a sunset industry and with the exception of Hong Leong, finance companies might struggle to eke out an existence once competition gets more intense. It may revert to a situation where the smaller firms have to merge or be acquired by a larger finance company, in this case, Hong Leong, or risk not being able to survive in the segment. Hong Leong, as mentioned, is unique in the sense that it is such a dominant force in the finance company sector, but yet unable to make the step up to be on the same level as even the smaller commercial banks. In the near future, we could see Hong Leong forming an entire classification on its own, as the alternative to the commercial banks. Following the entry of commercial banks and other competitors into its traditional revenue segments, Hong Leong has been actively looking for other opportunities to diversify its revenue generating segments. We have mentioned some of these earlier in the report. Recently, Hong Leong was commissioned to take up underwriting duties which provides it with a new area of development where they could vary their income sources. It has also established a wealth management arm in light of the growing sector in Asia as a whole.