Category: Corporation

Introduction

Hong Kong and Shanghai Bank Corporation [HSBC] was established in 1865 in the UK. The firm has experienced numerous changes over the years. The firms name was changed to HSBC Holding PLC in 1991. The firm is committed towards achieving a high level of competitiveness within the global banking industry. In an effort to achieve a high competitive advantage, HSBC has integrated growth as one of its corporate level strategies. Aswathappa (2008) asserts that growth strategy enables an organisation to improve the scope and scale of its operations.

The firm has entered a number of markets by adopting inorganic and organic growth strategies. One of the organic growth strategies that the firm adopts in the international market entails foreign direct investment. On the other hand, the firm has integrated the concept of merger and acquisition as its inorganic growth strategy. HSBC targets firms with high market potential in its acquisition process.

The market growth strategy adopted by the firm has played a remarkable role in enhancing the firms market expansion. By 2013, the firm had established 9,500 outlets in different parts of the world. The firm targets emerging markets as one of its investment destination. Examples of such markets include China, India, Brazil and Mexico.

This paper evaluates HSBCs strategic rationale in entering and operating in emerging markets. Secondly, the paper evaluates HSBCs organic growth strategy and its decision to expand its financial services in Chinas rural areas. Additionally, the major challenges faced by the firm in its operation within the Chinese banking industry are identified and analysed. Finally, solutions on how to deal with the identified challenges are identified. Different models which include the PESTLE model, the Porters five forces, the Hofstede model and the SWOT analysis model are used in evaluating the prevailing market conditions in the Chinese banking industry.

Analysis

HSBCs rationale in entering emerging markets

HSBCs decision to expand into the emerging markets was informed by a number of reasons. First, emerging markets are characterised by high market demand for financial services compared to mature markets. Subsequently, the likelihood of achieving the set organisational goals by establishing an outlet in emerging markets is relatively high.

The high market potential in the emerging markets arises from the fact that such markets are characterised by a low rate of penetration with regard to financial services. Furthermore, emerging markets are characterised by a high population growth rate. Subsequently, the demand for financial products and services in these markets is relatively high compared to supply. Financial institutions can exploit the prevailing market opportunity by providing diverse financial products and services. Additionally, the banks rationale to enter the emerging markets was informed by the need to provide banking services to diverse corporate customers. These markets are characterised by a high rate of growth with regard small and medium sized enterprises. This presents an opportunity for HSBC to maximise its profitability.

Macro environmental analysis

HSBCs success in the Chinese banking industry will be influenced by changes in the external environment. Aswathappa (2008) opines that the attractiveness of a particular industry is influenced by the prevailing macro-environmental forces such as the political, economic, social, environmental, legal and technological forces. Therefore, HSBC should understand the external business environment and the industry structure in its target market before entering. This can be attained by integrating the PESTLE analysis, the Porters five forces model, and the Hofstede model. These models will aid in gauging the likelihood of success.

The PESTLE model

The political-legal environment

China has been characterised by a high level of political stability over the past decades. However, the degree of political stability has reduced over the past few years. Morrison (2014) asserts that the number of public order disturbances increased by 50% between 2003 and 2006 (p.5). This shows the likelihood of China experiencing a high degree of political risk is high. Subsequently, HSBC might incur losses arising from such social unrests.

In an effort to prevent social unrests, the Chinese government has implemented strict measures to control accessibility of information by the general public. One of the measures that have been adopted entails blocking internet access. This might adversely affect HSBCs ability to undertake online marketing and other e-commerce activities such as online payment.

Despite this, China has implemented a number of legal reforms over the past three decades. For example, the Chinese government has eliminated trade barriers hence providing foreign companies an opportunity to enter the Chinese market. Furthermore, the government has streamlined licensing procedures hence making it easy for multinational companies to obtain operating licenses (Lam 2011). These legal reforms have led to improvement in the level of predictability and transparency in the countrys legal environment. Another major legal reform relates to liberalisation of the Chinese banking industry hence eliminating government control.

Economic environment

China has undergone remarkable economic growth over the past three decades. This has arisen from implementation of effective monetary and fiscal policies. The countrys economic growth has been enhanced by the recent economic reforms. The country had adopted a closed economy system for decades, which limited trade with other countries.

Upon its accession to the World Trade Organisation, China changed its economic system to an open economy in order to conform to WTOs requirements. This led to elimination of trade barriers, which increased trade between China and WTO member states. These changes have led to remarkable economic growth in China. Today, China is ranked amongst the fastest growing economies in the world (Morrison 2014).

China has made significant progress despite the 2008-2009 global financial crises. The government intervened by implementing a comprehensive stimulus program in an effort to promote economic growth. Subsequently, China has recovered from the economic recession (Morrison 2014). It is estimated that Chinas Gross Domestic Product (GDP) will grow at an average rate of 7% between 2014 and 2018. HSBC should consider implementing effective operational strategies in order to leverage on the projected economic growth (Morrison 2014).

Technological environment

The banking industry in China has undergone remarkable change arising from the high rate of technological innovation (Pereiro 2002). Banks are increasingly integrating electronic payment systems in an effort to attain a high level of operational efficiency and to provide customers with more convenient banking services. This trend might affect HSBCs future success in China if it does not adjust its operations to market changes. Furthermore, technological innovation poses a security threat in HSBCs operation through cyber crimes. Therefore, the firm will be required to implement effective security measures to counter such threats.

Social-cultural environment

China has experienced a rapid population growth over the past decades. Furthermore, Chinese are appreciating different financial products and services in an effort to improve their wellbeing. Subsequently, multinational banking companies are increasingly targeting China in an effort to exploit the high market potential. The high population in China has also played a significant role in attracting investors in the financial sector in an effort to market their financial products and services.

The Porters five forces model

Degree of rivalry; High

The Chinese banking industry is characterised by a high concentration ratio. A report released by China Banking Regulatory Commission shows that 50% of the industry is dominated by 5 major banks. Furthermore, the industry is characterised by a high rate of product homogeneity, which makes product differentiation to be difficult. This has led to remarkable increment in the intensity of competition. The intensity of competition is further increased by the high rate of growth amongst commercial banks as a result of relaxation of rules governing the banking industry by the Chinese government (Morrison 2014).

Threat of new entrants; moderate

HSBC is likely to face intense competition in the Chinese banking industry arising from the high threat of market entry. The high market potential in the Chinese banking industry is attracting both domestic and foreign financial service providers. Furthermore, the legal reforms in China have provided multinational companies an opportunity to enter the market. Despite this, firms entering into the Chinese banking industry must be approved by the Banking Regulation Commission (Morrison 2014). This is one of the main barriers to entry. Therefore, one can argue that the threat of entry in the Chinese banking industry is moderate.

Threat of substitute; low

The high rate of technological innovation has increased the intensity of competition within the global banking industry. The emergence of alternative payment systems and platforms has significantly reduced the need for traditional banking services. Currently, customers can access banking services online.

To safeguard itself from the high rate of technological innovation, HSBC will be required to improve its financial products and services in order to align itself with the market changes. In addition to this, China is experiencing an increment in the number of financial services companies such as trust fund and securities firms. However, these companies have not penetrated the entire Chinese market because of the strict and uncertain regulatory environment. Therefore, the threat of substitute is relatively low.

Buyer bargaining power; low

Accessing credit finance from Chinese banks is relatively difficult because of the high rate of interest required to service the loan. This makes the cost of credit from financial institutions to be high. Despite the high demand for credit finance, borrowers do not have the capacity to influence the rate of interest, which lowers the customers bargaining power.

Supplier bargaining power; high

Aswathappa (2008) asserts that the banking industry is characterised by different suppliers such as investment and securities companies. The suppliers develop different financial products, which are distributed to customers.

Suppliers within the Chinese banking industry have a relatively high bargaining power emanating from the tight regulations implemented by the government.

The Hofstede Model

China is ranked amongst the most culturally diverse countries in the world. It is important for HSBC to understand the prevailing cultural diversity in order to successfully expand into Chinas rural areas. This will enable the firm to effectively integrate cultural diversity in its human resource management practices hence increasing the likelihood of developing a strong organisational culture.

Hofstede (2001) emphasises that understanding the host countrys cultural dimensions is critical in firms internationalisation processes. HSBC will be required to adjust its management practices in order to align itself with the prevailing cultural dimensions. There are five main cultural dimensions according to Hofstede. They include; individualism/collectivism, uncertainty avoidance, power distance, masculinity/feminity and long-term orientation. Below is an analysis of how HSBC will be affected by the cultural dimensions.

Uncertainty avoidance

Hofstede (2001) defines uncertainty avoidance as the extent to which individuals are sceptical of the future. A high uncertainty avoidance index shows that individuals in such a society avoid uncertain situation. Chinas uncertainty avoidance index is estimated to be 46, which is relatively low. This means that the Chinese are generally comfortable with situations characterised by uncertainty. Therefore, HSBC will not experience major difficulties in its quest to implement change in its outlets located in China.

Individualism dimension

This dimension evaluates the extent to which individuals in a particular society are interdependent of each other. Subsequently, HSBC will be required to integrate the concept of teamwork in order to be successful in achieving its goals. Failure to integrate teamwork in its HR management practices will adversely affect the firms long-term survival.

Power distance dimension

According to Abu-Jarad, Yusof and Nikbin (2010), power distance explains the extent to which the members of the society are comfortable with inequality. Additionally, power distance is used to explain the extent to which a particular society accepts decentralisation or centralisation of power. Chinas PDI is estimated to be 80, which is relatively high. This means that Chinese accept considerable power distance between leaders and their subordinates.

Masculinity/feminity dimension

This dimension explains the extent to which division of labour is practiced between the male and female genders. Chinas masculinity index is estimated to be 66, which is relatively high. Hofstede (2001) asserts that a high masculinity index shows that the male gender is preferred in performing some duties. The high masculinity index in China shows that HSBC has take into account the societys perception in allocating roles between male and female employees. Furthermore, Wilbur (2013) opines that the likelihood of conflict in a society characterised by a high degree of masculinity is relatively high compared to a society characterised by a high degree of feminity (p.46). A high masculinity index shows that individuals in such a society are committed to their work. Subsequently, the likelihood of employees experiencing work-related stress is high. To deal with this challenge, HSBC will be required to implement effective work-life balance strategies.

Long-term orientation

Wilbur (2013) defines long-term orientation as the degree to which individuals in a particular society are focused towards attaining long-term goals rather than short-term goals. Therefore, a society characterised by a high long-term orientation index is very flexible, which means that employees can adjust to change. Chinas long-term orientation index is estimated to be 118, which means that Chinese are persistent in achieving long term goals.

Microenvironment

HSBCs success in the Chinese banking industry will be influenced by the effectiveness with which it leverages on its strengths, weaknesses, opportunities and threats.

HSBC SWOT analysis

The chart below illustrates HSBCs strengths, weaknesses, opportunities and threats.

HSBCs organic growth and rationale for targeting Chinas rural areas

HSBC has adopted organic growth as its market entry strategy. The decision to adopt this strategy was informed by the need to increases its profitability by introducing its financial products and services to new customer groups. Additionally, the firms decision to adopt this strategy was informed by the need to develop a comprehensive understanding of the customers needs. Aswathappa (2008) argues that organic growth provides businesses with an opportunity to gain sufficient understanding of the prevailing market condition. Subsequently, business managers are able to identify areas of improvement hence increasing the likelihood of future success. By adopting organic growth, HSBC will be able to develop new products in order to satisfy the market needs.

HSBC has targeted Chinas rural areas in its market expansion effort. It is estimated that over 75% of Chinas population reside in the rural areas and do not have access to credit finance from financial institutions. Additionally, a significant proportion of Chinas rural population is unbanked. This presents a high market opportunity for HSBC to exploit by providing its financial products and services. Consequently, HSBC will be able to enhance the level of its profitability.

Conclusion

Aswathappa (2008) asserts that emerging markets are characterised by high market potential. Subsequently, firms are increasingly considering expanding into these markets in an effort to maximise their profitability. HSBC has established its operation in a number of emerging markets. This has played a remarkable role in improving the firms competitiveness within the global banking industry. The firm has integrated both organic and inorganic growth strategies in its market expansion efforts.

China is ranked as one of the most attractive emerging markets. Some o the factors that have increased the countrys attractiveness is the high rate of economic growth and the high population (Aswathappa 2008). Subsequently, Chinese have experienced a remarkable increment in their purchasing power. Furthermore, the countrys commitment in undertaking legal reforms has enhanced its attractiveness. HSBC has targeted China as one of its investment destinations.

Decision to enter the Chinese market was informed by the high market potential especially in the rural areas. A significant proportion of the countrys population resides in the rural areas and does not have access to bank products and services. HSBC might achieve its profitability objective by establishing branches in these areas. However, it is imperative for the firm to understand the prevailing market conditions and the customers needs and expectations before implementing its expansion strategy. Subsequently, the firms management team should take into account the following aspects.

1. HSBC should undertake a comprehensive market research in order to understand the countries, political, economic, social, legal, and technological trends affecting the banking industry. This will aid in development of the right financial product. This will give the management team insight on how to adjust the firms operational strategies.
2. HSBC should assess its internal environment in order to understand its strengths, weaknesses, opportunities and threats. This will enable the firm to implement effective operational and management practices to promote its growth.
3. HSBC should take into account Chinas cultural dimensions in the process of formulating its management practices. This will increase the likelihood of the firm developing a strong and efficient human capital base.

Reference List

Aswathappa, K 2008, International business, Tata McGraw Hill, New Delhi. Abu-Jarad, I, Yusof, N & Nikbin, D 2010, A review paper on organizational culture and organizational performance, University of Malaysia, Malaysia. Web.

Hofstede, G 2001, Cultures consequences: Comparing values, behaviours, institutions, and organizations across nations, Sage Thousand Oaks, CA. Web.

Lam, W 2011, Beijings Wei-Wen imperative steals the thunder at NPC, China Brief vol. 11, no. 4, pp: 2-4. Web.

Morrison, W 2014, Chinas economic rise; history, trends, challenges and implications for the United States. Web.

Pereiro, L 2002, Valuation of companies in emerging markets; a practical approach, John & Wiley, New York. Web.

Wilbur, D 2013, Leveraging Hofstedes cultural dimensions theory to improve the quality of information operations. Web.

In order to succeed in a competitive market, corporations need to pay much attention to their investment decisions to gain benefits and profits. The process of making effective decisions involves several steps, and it needs to be discussed in detail along with a list of options that are available to corporations for their investment (Trang & Tho, 2017). The purpose of this paper is to provide an explanation of how the majority of corporations make specific investment decisions to add to their profitability and competitive advantage.

The first step in the decision-making process related to investing in the analysis of a current situation with the help of certain tools, such as the cash flow analysis and the analysis of the cost of capital. These tools are important to indicate the current position of a corporation in the market, evaluate its attractiveness to potential investors, and influence its own investing decisions (Goodman, Neamtiu, Shroff, & White, 2013). The second step in the decision-making process is the identification of available options or perspectives in order to improve the discussed situation (Hori & Osano, 2014). Thus, financial managers and members of strategic teams in corporations focus on determining areas to invest in and increase capital.

These areas and options include possibilities for investing in their own business through purchasing assets, resources, and technologies and improving processes in order to make operations cost-efficient, as well as to make their products and services innovative. At this stage, managers in corporations choose the most appropriate assets and resources to invest in, and they plan to receive more revenues because of expansion activities, increased sales, and improved quality (Shroff, Verdi, & Yu, 2013). This approach is actively used by corporations when they do not focus on mergers and acquisitions as part of their strategy.

Another option to choose is the possibility to invest in other businesses, including suppliers, smaller companies, and start-up companies with a high potential for further growth. For example, large corporations often use their venture capital funds in order to invest in firms in the technology industry and receive financial gains in the future (Hori & Osano, 2014). This strategy allows corporations to expand their operations and enter new attractive and actively developing markets because these investment decisions are based on proper evaluations of the latest market trends, as well as on forecasts for the future.

One more option is associated with the investment in foreign industries and markets. Corporations usually choose to expand their activities in many foreign countries because of cost-efficient resources, low taxes, and attractive gains (Ding & Qian, 2014). The decision regarding opening foreign subsidiaries and investing in suppliers from foreign markets depends on the analysis of external environments that influence the development of the industry and competition in the selected country (Shroff et al., 2013). This type of investment decision is associated with investing in stocks, which often results in improving companies positions in the market (Ahmad & Anees, 2016). Moreover, corporations can also invest in hedge funds in order to increase their return on assets and improve the currently followed capital distribution strategy.

The third step that corporations should complete in order to make an investment decision is the assessment of options and their advantages and disadvantages. At this stage, managers concentrate on forecasting future cash flows with reference to their investments and the analysis of net present value (Trang & Tho, 2017). As a result of the conducted assessment, financial and strategic development managers in corporations choose those specific options and projects to invest in that are most attractive and potentially profitable for them.

From this point, to make effective investment decisions, it is important to evaluate projects or options for investing in relation to each other in order to receive a full picture regarding forecasted profits. After that, managers and financial experts prioritize options for investment depending on the analysis results. From this perspective, those managers who have developed skills in making financial forecasts and analysis to support investment can potentially make more efficient investing decisions (Goodman et al., 2013).

However, researchers also state that corporations should pay more attention to their investment decisions and the need for investing in order to avoid the problem of overinvestment that is typical of large companies rather than small private firms (Shroff et al., 2013). Thus, investing decisions of corporations are influenced by the fact that managers are often oriented to increasing companies investment levels.

The analysis of the scholarly literature on the problem indicates that managers in corporations follow a certain process in order to evaluate investment projects and options. Companies can choose from investing in their own business operations, in their suppliers and other companies in the market to receive a share, in foreign companies, in opening subsidiaries, in purchasing stocks, and in hedge funds. All these options are appropriate for different types of corporations, various environments, and specific market situations. Therefore, in order to make a proper investment decision, corporations concentrate on conducting detailed financial analyses that help them evaluate alternatives and choose the most attractive path for investment.

References

Ahmad, B., & Anees, M. (2016). Investment decisions stock buybacks or stock prices? Journal of Business Strategies, 10(2), 51-68.

Ding, Y., & Qian, X. (2014). Investment cash flow sensitivity and effect of managers ownership: Difference between central owned and private owned companies in China. International Journal of Economics and Financial Issues, 4(3), 449-456.

Goodman, T. H., Neamtiu, M., Shroff, N., & White, H. D. (2013). Management forecast quality and capital investment decisions. The Accounting Review, 89(1), 331-365.

Hori, K., & Osano, H. (2014). Investment timing decisions of managers under endogenous contracts. Journal of Corporate Finance, 29, 607-627.

Shroff, N., Verdi, R. S., & Yu, G. (2013). Information environment and the investment decisions of multinational corporations. The Accounting Review, 89(2), 759-790.

Trang, P. T. M., & Tho, N. H. (2017). Perceived risk, investment performance and intentions in emerging stock markets. International Journal of Economics and Financial Issues, 7(1), 269-278.

Article Summary

The article Virtual Corporations elaborates on the concept of corporations that rely primarily on electronic means in order to coordinate operations, communicate instructions, implement manufacturing requests and enable a system that enables a company to operate beyond what its current resources are capable of doing. Before proceeding it is important to note that the various concepts within the article center around 3 precise models for virtual corporations (Dominguez & Garrido, 2009).

The first model is comparable to a temporary network of firms that are placed together in order to exploit market opportunities as they arise while utilizing the innate specialties each firm possesses in order to produce the best results. Such a model can actually be seen in the present with the rise of outsourcing and offshoring wherein multiple firms usually work in tandem across national borders in order to produce certain products or services.

The second models that the article elaborates on are virtual companies that focus on creating virtual products in order to address consumer needs. This particular type of virtual company often takes the form of software development firms that specialize in the development of applications that directly serve consumers. Corporations such as Java, Sun Microsystems, McAfee, AVG, Norton and other virtual production companies are some of the best examples of this particular type of company.

It should be noted, though, that the aforementioned examples have yet to reach the status of virtual corporations, however, due to the way in which their services and methods of operation continue to evolve, it is likely that they will virtual companies within the coming years. The last model the article elaborated on focuses on turning fixed workforce costs into variable costs during periods in which the market demands a particular market or service.

This particular model is actually utilized in the present by numerous retailers such as Wal-Mart, Costco, and Wholefoods who have set up a flexible workforce scheduling system based on computer programs that take numerous external factors into consideration before assigning employees to particular shifts. One way of understanding such a concept is through the current outsourcing industry.

As mentioned within the article, a virtual corporation acts as a network composed of a variety of organizations that focus on different aspects of a corporations manufacturing process. In most cases, the ability of a firm to produce certain items is inherently limited by the resources they have on hand. This does not refer primarily to monetary resources but can actually encompass aspects related to manufacturing facilities, skilled labor, natural resources, etc.

Through outsourcing, a virtual corporation is able to make use of the facilities, manpower and access to natural resources that one of its members has in a different country. As such, it does not have to physically construct the facilities nor develop the necessary processes and train employees to create the products; rather, it can make use of such aspects that are already present in another one of its members.

One iteration of such a process that can be seen in the present is the relationship that Foxconn enjoys with Apple, Sony, and the Microsoft corporation wherein the company acts as a third-party manufacturer for their flagship products such as the iPad, the Sony Playstation 3 and the Microsoft Xbox 360.

When examining Apple, Sony and Microsoft it can be seen that all 3 companies have in effect outsourced various aspects of their manufacturing process to third-party manufacturers, which enables them to operate in a similar way to the format of a virtual corporation elaborated on within the article. They no longer possess the manufacturing facilities themselves and instead rely on partners within their supply chain that have the appropriate facilities, manpower and method of mass production.

This enables such corporations to work with resources they do not currently have and focus more on the product development and operations side of the business. Full virtualization on the other hand, as indicated within the article, comes in the form of multiple partners within the same virtual corporation that focus diverse specialties (i.e. marketing, promotions, HR, manufacturing etc.) and can easily disband and move on to other projects once the a particular product has lost its market value.

Some aspects of such a degree of corporate virtualization have actually manifested itself within Silicon Valley, wherein virtual corporate teams do exist to a certain extent, which focus on the development of particular applications and disbands once the development stage is over.

As explained within the article, there are four characteristics that are in demand within a technology-oriented enterprise, namely: high market responsiveness, fast developments, low cost, and finally high levels of creativity, innovation and efficiency. Supposedly, virtual corporations are able to address all these issues since they rely on electronic rather than the traditional brick and mortar method of doing business (Dominguez & Garrido, 2009).

For example, virtual corporations were indicated as inherently having a high degree of market responsiveness due the greater facilitation of information and technology between firms which enabled them to better adapt to changing market forces as compared to more traditional organizations that had to rely on their own internal mechanisms in order to adapt to change.

It should also be noted that virtual corporations also act as low-cost entities that focus on innovation and efficiency, the reason behind this originates from the fact that by combining the specializations of various partner firms and through proper information and technology sharing within the virtual infrastructure that the company has developed, this in effect increases the overall level of innovation within the company and increases the level of efficiency it has in developing and producing the products it is selling.

Creativity in this instance, manifests itself through the shared plans that the various partner firms contribute towards in order to manifest the finished product output of the company. Towards the end of the article, it concludes with a section on possible future trends regarding virtual corporations and indicates that within the next few years, it is quite possible that full virtual corporations may come to exist, but at the moment they do not.

When it comes to the statement should exist in the near future it actually becomes immediately obvious that the article has in fact alluded to the concept of virtual corporations as potentially becoming the future corporate structure of companies within the near future, however, it never really indicated that they currently existed. In fact, when examining the article again it was noticed that aside from Agile Web Incorporated, the article failed to give any solid evidence regarding the presence of other virtual corporations within the market at the present.

This does not seem to be a failure on the part of the writers to provide sufficient examples, rather, it extends from the fact that the writers did not have any other examples from the present to accurately utilized within the article. Thus, the article ends on a tantalizing note wherein it presents readers with the numerous possibilities that could possibly exist as a direct result of virtual corporations and presents the means by which it could be accomplished (Dominguez & Garrido, 2009).

Criticizing the Article

The main criticism I have against the article is that it states that it will be many years from now before a true virtual corporation can actually exist. This is actually rather fallacious given the current popularity of virtual products and the means by which they are created today. First and foremost, the assumption that it would take years before virtual corporations exist neglects to take into consideration the current popularity of the Apple Application store and how many of the apps created on it were actually conceived by virtual corporations.

Many of these virtual corporations actually came into being within the various development centers within Silicon Valley wherein select individuals acted as corporate partners who contributed their skills in order to help develop an application that can be sold on the Apple Application store, after which it was usually the case that these virtual corporations split up with their individual members going on towards other ventures within the area.

While this is no where near the globally encompassing virtual corporation that was envisaged by the article, the fact remains that it is clear evidence that virtual corporations do in fact exist at present.

In fact, there are other such examples of online virtual corporations existing such as through services such as Elance.com or odesk.com wherein various services related to writing, virtual assistance, marketing and product promotion can be outsourced to virtually hundreds of possible partners with an internal application existing on both sites enabling easy collaboration on shared projects in order to accomplish the designated goal of the virtual company.

It can also be seen that the creation of open-source software projects such as Mozilla Firefox and Linux often involved teams of individuals from numerous global locations all contributing towards the subsequent creation and distribution of the software.

Not only that many of todays companies have increasingly been utilizing electronic services as the primary means by which they run their business. For example, Amazon.com is a clear example of a company that is on the forefront of being one of the first major corporations to become a virtual corporation.

It is based on examples such as these that it becomes clear that while the article was right regarding the shift towards virtualization, it got the timeline wrong given that various iterations of virtual companies with real-world goods already exist with one of the worlds largest online retailers set to become on of the first in what can be expected as a long line of new virtual companies that will come to dominate the market within the next century.

Reference List

Dominguez, S., & Garrido, J. (2009). Virtual corporations. Electronic Business, 3992  3996.

Executive Summary

Following the plan of XYZ Corporation to transition from GAAP to IAS, this report will explore the major areas that the corporation should take into account and recommend areas of importance. IAS reporting standards are universal reporting principles that will ensure the uniformity of financial reporting internationally. The major findings include that there will be a dramatic change in the names of financial statements.

The corporation should engage sound audit and reporting practices in their reporting mechanisms. The transition will come with heavy investments in the costs of developing employees and changing reporting structures. However, XYZ Corporations transition will offset the costs borne after it starts realizing the benefits of the transition. The report concludes that investing in the transition will be a heavy investment with long term benefits thus a worthwhile development.

Introduction

The International financial reporting Standards (IFRS) were introduced in 2001 replacing international accounting standards (IAS) (Tweedie, 2004). The standards were offered by the IASB (International Accounting Standards Board). The standards are mandatory for all public companies listed on stock exchanges including the NYSE (New York Stock Exchange).

The standards are implemented for the consolidated accounts reporting of companies (Gordon, 2008). Before the transition to IAS, every country had its own standards for guiding the calculation; GAAP (Generally Accepted Accounting Principles) standards. The rationale for the shift to IAS was based on the need to eliminate the incapacity of investors to reach informed decisions from the records drawn on the basis of GAAP (Beuren, Hein and Klann, 2008).

Research Findings

Making the transition to IAS will affect the financial records of XYZ Corporation

The transition from GAAP to IAS by XYZ Corporation will cause significant changes in the financial records of the corporation (Kwok and Sharp, 2005, p. 75). The changes include the significant change in the format of the financial records prepared, as opposed to those prepared under GAAP standards (Benzacar, 2009, p. 29). The statements of the corporation will change in the different areas mentioned. Next, the title of the corporations balance sheet will change from balance sheet to group balance sheet, and the name fixed assets will change to non-current assets (Benzacar, 2009, p. 29; Tsalavoutas and Evans, 2010, p. 820). Capital and reserves are renamed as equity; profit and loss accounts are renamed to retained earnings, and the total capital invested is renamed as total equity (Benzacar, 2009, p. 29).

Through the change of the names, the name titles of financial records will coincide with the information presented in other records, which will make it easier for outsiders to evaluate the financial health of the company in question (Benzacar, 2009, p. 29-30).

The rationale behind the need to change names includes increasing the comparability of different financial records:

• The new names will show a cohesive financial representation of the corporations activities allowing the readers to see the relationship between the items presented in different financial statements, demonstrating that the statements complement each.
• Through the change of names, information will be disaggregated so that it can help a reader foresee the future cash flows of corporations like XYZ.
• With the names showing a better association between the information presented in the different records, readers will be able to evaluate the liquidity, as well as the financial flexibility of organizations like XYZ Corporation (Benzacar, 2009, p. 29-30; Benzacar, 2009, p. 29-30).

The shift to IAS will require the development of a universal accounting language by the IASB, which may not be possible

The development of a universally accepted language should form a major component of the objectives of the IASB while enforcing the transition into the IAS, which XYZ Corporation is pursuing (Stittle, 2004, p. 139). As a result, even with the adoption of the IAS, XYZ corporations should realize that it may not receive maximum benefits from the transition as language plays one of the most critical roles in the generation of the varied accounting models for related areas (Evans, 2004, p. 235; Jacob and Madu, 2009, p. 356).

The issue that will face XYZ Corporation in its shift to IAS will include the limitation it will face due to the inaccuracy of the IASB in translating accounting statements and concepts from one language to the other (Jacob and Madu, 2004, p. 356).

This limitation is supported by Evans (2004, p. 235) who argued that an exact transfer or equivalents of meaning during translation is often almost impractical in financial reporting. Consequently, it will not be possible to realize total homogeneity or to convey the exact meaning of the IAS accounting standards from one language to the other (Stittle, 2004, p. 139; Evans, 2004, p. 235; Salamudin et al., 2010).

This limitation of the language used by the IASB is likely to cause confusion in the comprehensibility of the financial data presented by different organizations including that presented by XYZ Corporation after it is translated into other languages like German, Spanish, and Vietnamese (Evans, 2004, p. 235).

Therefore, international investors intending to invest in organizations like XYZ corporations are likely to get the wrong picture about the financial health of institutions as translations may eliminate the weighty nature of the financial concepts and the variables in the statements (Evans, 2004, p. 235; Stittle, 2004, p. 139-140).

The XYZ Corporation is likely to develop its financial records on the basis of distorted statements drawn from the records of other organizations due to the limitation (Evans, 2004, p. 235; Stittle, 2004, p. 139,140). In extreme cases, the information presented by XYZ corporations and that of other organizations is likely to be distorted through translation. This is likely to result in concerns over the reliability of IAS standards (Stittle, 2004, p. 139,140).

The cost will be a major consideration among the companies making the transition to IAS

The cost will be a far-reaching aspect when deciding whether to change from GAAP to IAS. As noted by Ballas, Skoutela, and Tzovas (2010, p. 934), the transition will entail more than special knowledge among the accountancy team of corporations. This will also lead to the alteration of the information models of the organizations.

This presents the need to invest in the training of the staffs alongside the transition (Gordon, 2008 p. 232). As a result, the transition to IAS becomes quite expensive to XYZ Corporation both in the short and long term as there will also be a need to invest in the continuous development of the companys accounts (Pickard, 2007; Gordon, 2008, p. 232).

The major areas of investment during the transition include dedicating funds for software development. Thus, the corporations will require their software development team whether internal or external to develop new software that meets the standards of IAS accounting (Gordon, 2008, p. 232).

Apart from the development and maintenance of the financial records software, the employees of the company should be trained in the areas of using the software in formulating financial records that are in line with the new and emerging standards (Pickard, 2007, p. 36). Some of the areas that will need major investments in XYZ Corporation will include the development of an employee-base and the maintenance of the infrastructure available at the company (Ballas, Skoutela and Tzovas, 2010, p. 934).

Recommendations

While undergoing the transition from GAAP to IAS, the XYZ Corporation should note that the criteria for its endorsement should be explored in an in-depth manner. In this case, it should draw clear differences between the decisions related to standard setting and adoption, as well as the endorsement of the standards (Benzacar, 2009). Additionally, during and after the transition, the interpretations of IAS should be reserved under the directives of IFRIC (International Financial Reporting Interpretations Committee (UNCTAD, 2012).

The transition to IAS should be accompanied by the key concern of engaging sound audit consultants, practices and standards, as well as reinforcing the accounting mechanisms of the corporation. This will ensure that the corporation meets the expectations of the IAS standards in executing its audit and accounting functions (Jacob and Madu, 2009).

The transition to IAS will require a heavy investment in funds to be employed in the transition, change of present accounting mechanisms, as well as contracting consultants to help in the transition and its maintenance (Jacob and Madu, 2009). However, apart from the costs incurred by the corporation during and after the transition, the benefits of the transition will outweigh the costs of the transition, as well as improve the standing of XYZ Corporation globally.

Conclusion

IAS is an integrated set of financial reporting standards developed on the basis of internationally articulated financial principles. The transition from GAAP to IAS was intended to eliminate the difficulties experienced by international investors. The transition should be accompanied by sound audit consultations and practices so as to ensure that the new standards are observed. Despite the heavy investment during the transition, the benefits will outweigh the costs borne by XYZ Corporation in the long term.

References

Ballas, A. A., Skoutela, D., and Tzovas, C. A. (2010). The relevance of IFRS to an emerging market: evidence from Greece. Managerial Finance, 36 (11): 934-935.

Benzacar, K. (2009). IFRS brings a radical change to financial statement presentation. Web.

Beuren, I., Hein, N., and Klann, R. (2008). Impact of the IFRS and US-GAAP on economic-financial indicators. Managerial Auditing Journal, 23 (7): 632-634.

Evans, L. (2004). Language, translation and the problem of international accounting Communication. Accounting, Auditing & Accountability Journal, 17 (2): 235.

Gordon, E.A. (2008). Sustainability in global financial reporting and innovation in institutions. Accounting Research Journal, 21 (3): 232.

Jacob, R.A., and Madu, C.N. (2004). Are we approaching a universal accounting language in five years? Foresight, 6 (6): 356.

Jacob, R. A., and Madu, C.N. (2009). International financial reporting standards: an indicator of high quality? International Journal of Quality & Reliability Management, 26 (7): 718-719.

Kwok, W., and Sharp, D. (2005). Power and international accounting standard setting Evidence from segment reporting and intangible asset projects. Accounting, Auditing & Accountability Journal, 18 (1): 75.

Pickard, G. (2007). Simplifying global accounting. Journal of Accountancy, 204 (1): 36.

Salamudin, N., Bakar, R., Ibrahim, M. K., Hassan, F. H. (2010). Intangible Assets Valuation in the Malaysian capital market. Journal of Intellectual Capital, 11 (3): 393.

Stittle, J. (2004). The reformation of European corporate reporting: Towards a model of Convergence or confusion? European Business Review, 16 (2): 139,140.

Tsalavoutas, I., and Evans, L. (2010). Transition to IFRS in Greece: financial statement effects and auditor size. Managerial Auditing Journal, 25 (8): 820.

Tweedie, D. (2004). Looking ahead at 2004: a global standard-setters perspective. Balance Sheet, 12 (2): 5.

UNCTAD. (2012). IFRS Implementation. Web.

In analyzing the current position of JVA Corporation and its future performance projections, the best strategy to employ so as to save and preserve the overall net profitability of the company is reviewing the corporations performance and revenue after every six months. Under this strategy, the corporation will either increase or reduce the employee pay and review their performance after six months (Noe et al 2010).

The corporations employees will get a pay increase twice a year depending on individual performance, if the strategy is adopted, unlike the current strategy where employees with satisfactory performance are compensated once in a year. Employees who do not perform will have their compensation package subsequently reduced twice within a year. This will encourage the employees to work hard and improve their performance since; none of them will wish to have their individual pay reduced (Noe et al 2010).

The strategy should be in place for a period not exceeding a year given the expected improvement in the performance of the JVA Corporation. It is expected that after this duration, each employee will have improved their performance and thus leading to an upward compensation during the package review. After attaining the required performance standards, it will be wise for the corporation to switch back to annual pay review (Noe et al 2010).

The half- year pay and performance review strategy will be applied to both employees within and outside the United States. This is because a very small fraction of the international employees are the managers, who are entitled to a full time salary. Out of the 185,000 corporation employees, 3,500 are management staff employees.

This shows that they take a very small percentage of the wage bill to achieve the overall objectives of JVA Corporation. However, the review should be based on the location of the employee since the product market trends differ from one geographic region to another.

Proper implementation of the strategy will benefit the corporation in several ways as the corporation will be in a position to evaluate its performance half way through the year. Therefore, it will be able to adopt new performance approaches or continue with the existing ones. The corporation, will also save the cost incurred in compensating employees whose performance are unevenly distributed within a year; those that perform highly either in the first half of the year or the second (Noe et al 2010).

The result will be a motivated and improved performance by employees throughout the whole year since each employee will target a double upward pay review. As mentioned earlier, the corporation should swiftly switch over to annual review once the required set standards are attained. In this regard, JVA will be in a position to save a lot from downward pay review on underperforming employees during the initial implementation of the strategy (Noe et al 2010).

On switching over to the annual review, again substantial savings will be made since the compensation packages; earlier paid twice in a year will be available once a year but with same or better performance standards. The strategy is bound to have subsequent effects on the community if adopted.

The double pay review will encourage more people to seek employment in the corporation, especially the temporary staff. The motivation given to the employees will automatically lead to better and improved product quality. The community members also stand a chance of getting more job opportunities should the strategy lead to expansion of the corporation, as a result, a need for more labor force. In conclusion, the strategy will be the best remedy for the upward revival of JVA Corporations overall profits (Noe et al 2010).

Works Cited

Noe, Raymond, John Hollenbeck, Barry Gerhart and Patr Wright. Fundamentals of Human Resource Management. New Jersey: McGraw Hill, 2010. Print

Introduction

Verizon Communications Inc., headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to mass market, business, government and wholesale customers.

Verizon Wireless operates Americas most reliable wireless network, serving more than 93 million customers nationwide. Verizon also provides converged communications, information and entertainment services over Americas most advanced fiber-optic network, and delivers innovative, seamless business solutions to customers around the world (Verizon, 2010).

The company was established in 2000 as a result of the merger between Bell Atlantic Corp. and GTE. Corp Verizon. The company had a competitive edge from the very beginning on account of the fact that the two originating organizations had experiencing considerable market exposure and had developed into well-known brand names.

The company has evolved significantly with a human resource capital of over 222,900 employees across the world (Hoovers, 200). The company offers a wide range of telecommunication products and services. These products encompass wire-based as well as wireless products and services. The company is led by the highly experienced CEO McAdam Lowell.

I am responsible for a diverse set of responsibilities in the company. This diversity in responsibility is present on account of the fact that I am a junior manager in the supply chain department. As a result, I find myself facing challenges of different nature on a daily basis.

However, in essence, senior personnel in the department identify the responsibilities of a junior supply chain manager to incorporate the identification, organized acquisition and subsequent distribution of information and goods in order to facilitate the operation of the supply chain.

In specific terms, I ensure that the supply chain for raw material remains efficient and operational without any hindrances. The raw material I acquire is subsequently used for the production of the companys products. In order to ensure that the raw material supply chain keeps running smoothly, it is essential that I contribute to the efficiency of the supply chain process on a consistent basis.

I generally attempt to make this contribution by actively seeking out problem areas and developing strategies to ensure that they do not come up again. I also engage in the development, implementation and monitoring of supply chain policies.

Problem Statement

As a result of my position in the company, I was able to become aware of numerous organization-level problems. The problem statement will serve to provide the paper with the direction for the research. The problem statement for this paper is: Why is job satisfaction in employees low? Employee satisfaction refers to the employees sense of well-being within his or her work environment. It is the result of a combination of extrinsic rewards, such as remuneration and benefits, and intrinsic rewards, such as respect and appreciation.

Positive changes in the HRM systems and the way in which managers and supervisors interact with staff on personnel issues can increase the level of employee satisfaction. While a high level of employee satisfaction cannot be absolutely tied to higher levels of retention, motivation and performance, a low level of employee satisfaction is a definite source of low levels of performance (Management Sciences for Health, Inc., 2009).

Literature Review

There are a number of triggers that can lead to the development of job dissatisfaction. In some cases, the employee may experience an event that unsettles the employee and contributes to the establishment of a decision to leave the organization for the first suitable alternative that comes by (Barling & Cooper, 2008, p. 200). In other cases, the job dissatisfaction may come down to a level where the employee may choose to leave the organization without deciding on an alternative course of action before leaving the organization.

Job Satisfaction and Performance

Employee job satisfaction plays a significant role in determining the efficiency with which employees commit their efforts to the organization. Under normal circumstances an employees job satisfaction represents the combined effect of a number of key variables. For one, employee job satisfaction relates directly to the clarity in the employees job description.

One of the most fundamental sources of employee job satisfaction is the absence of a concrete job description (Jennifer, 2009, p. 92). This leads to confusion in the employees responsibilities and results in the development of chaotic situations during times when the employees performance is of crucial importance to the organization. However, it is extremely important to realize that employee job satisfaction is not directly related to employee performance.

Employee performance is only one of the many variables that are influenced as a result of employee job satisfaction. It can therefore be deduced that low performance does not always indicate low employee job satisfaction (Larson, Lakin, Bruininks, & Braddock, 1998, p. 25). The literature analysis revealed that employee performance is frequently associated with job satisfaction and this mistake often leads to major mistakes in strategy development.

Intrinsic and Extrinsic Influences

Job dissatisfaction can be caused as a result of a number of reasons. While modern day research has asserted that job satisfaction and job dissatisfaction may not necessarily represent two extreme opposites, it is imperative to note that the presence of job dissatisfaction is often caused as a result of some of the extrinsic and intrinsic characteristics of the job.

The job satisfaction and/or dissatisfaction that an employee experiences, is generally considered to be the combined influence of these extrinsic and intrinsic variables. These extrinsic variables may include the working conditions in which the employee is functioning, the remuneration that the employee is receiving, the security of the job in question, and the career path that the employee perceives is open to him/her (Sullivan, 2009, p. 276).

Intrinsic characteristics of the job that have been established to be key influencers of job satisfaction and dissatisfaction include variables such as the self-actualization that the job provides to the employee and the characteristics of the job that instill a will to grow in the employee. In addition, the employees job dissatisfaction/satisfaction may also be influenced by the achievements and recognition that the employee manages to acquire in his/her occupational capacity.

Job Dissatisfaction across the Hierarchy

A major source of job dissatisfaction is the conflict between co-workers. This conflict can take place horizontally across the hierarchy as well as vertically. According to research, the most common hierarchy-associated job dissatisfaction comes as a result of the presence of a relationship between a superior and a subordinate that develops friction as a result of the differences between the two (Hollenbeck & Wright, 2007, p. 336).

In such cases, the self-esteem and pride of the disputed co-workers can create considerable complexity and job dissatisfaction often deteriorates at both ends. Both the employees begin to feel that they are not being taken seriously. Another case in which job dissatisfaction can harm an organizations growth is if the subordinates begin to perceive that their managers do not consider them to be significant parts of the organization.

In such cases, employee performance may also experience consistent fluctuation and job dissatisfaction may increase dramatically. In essence, management related issues can have a significant impact on job dissatisfaction. Furthermore, management related issues demand attention in order to ensure that employees engulfed in them do not enter a downward spiral of job dissatisfaction.

Job Satisfaction and Turnover

A discussion on job satisfaction cannot be considered to be adequate and complete without highlighting the relationship between job satisfaction and turnover. Researchers have indicated that the relationship between employee turnover and job dissatisfaction is not as strong as it is generally perceived to be (McKenna, 2000, p. 280; Kail & Cavanaugh, 2007, p. 458).

However, this does not mean that there is no relationship between decreased employee satisfaction and turnover altogether. As employees continue to experience low job satisfaction, the idea of leaving the organization moves from being an idea to becoming an opportunity. The perceived opportunity cost of leaving the organization experiences a significant decrease.

Mobleys Turnover Process Model

Once employee experiences job dissatisfaction, the initial train of thought invites the employee to evaluate his/her value. This then proceeds to evaluate the opportunity cost of switching from the present organization to another organization. The employee ten initiates a search for better options and continues to evaluate them (Barling & Cooper, 2008, p. 197).

Every option that appears to be feasible further enunciates the job dissatisfaction and the process eventually comes to a conclusion with the employee quitting the current job and switching to the alternative.

In The Verizon Perspective

This dimension, when placed in the perspective of the current subject, is of extreme importance because Verizon has come a long way in a very small period of time. This exponential growth has taken place on account of the invaluable talent that the company has managed to acquire and retain over the last few years. If low employee job satisfaction brings up employee turnover, the company will lose one of its most important strategic assets.

Yet another disadvantage of employee dissatisfaction is that the employees can move from being an asset to the organization to becoming a liability. In such cases the employee may cause harm to the organization. As a result an employee suffering from employee dissatisfaction should be treated with careful consideration. Unless the source of the job dissatisfaction is addressed the employee cannot be expected to commit to the organization for long instances of time.

Analysis

The problem at hand has been created on account of the fact that the employees are not being able to perceive the growth opportunities that are open to them (Robbins, 2004). This form of job dissatisfaction is generally observed in cases where the employees feel that their growth in the organization has reached a stand-still and there are no opportunities for them to move up the corporate ladder.

In such cases, the employees tend to give only partial attention to their responsibilities and begin evaluating alternative job openings in other organizations in an attempt to find positions that promise them more growth opportunities. In addition, the development of this attitude also places employees in a position where they choose to take relatively less interest in projects that demand commitment and consistency.

This can also be seen as an influence of the job dissatisfaction on the employees. Verizon has come a long way in the past few years and such an attitude amongst the employees can place Verizon in a high-risk position where it may lose key employees in the most sensitive of times.

In addition, the recent global recession has made the job market shrink which has only resulted in an active desire in employees to ensure their job security. Employees now tend to switch readily to jobs that promise them more growth perspectives in an attempt to avail the opportunity while it is still available.

There is a need for dynamic leadership in this problem. The management is faced with a problem that should not be present at an organization-wide level. The presence of job dissatisfaction can be dealt with easily when it is present at an individual level or at a department level. However, it becomes extensively complicated when the problem is present at an organizational level. This is because the resolution of such a problem at the organizational level requires wide-scale changes to be implemented.

The problem becomes more complicated for Verizon because the job dissatisfaction in this case is because the employees in the organization perceive that the organization has no more growth to offer them. In order to eliminate this problem, the solution needs to be one that instills the employees with self-actualization and allows them to realize that the organization recognizes and subsequently rewards their hard work and efforts.

However, since the problem encompasses that job dissatisfaction is present at an organization-wide level, there is a need to ensure that the measures implemented bring a decrease in the job dissatisfaction and do not simply lift up the scale so that each employee finds himself facing the same dead end at the end of the day. The management needs to establish the precise nature of growth that each employee desires in order to provide them with a solution to their job dissatisfaction.

Solutions

The first solution considered for the purpose of the resolution of the problem of increasing employee job dissatisfaction is that which borders on training employees. The solution asserts that the employees experiencing job dissatisfaction should be given the opportunity to pursue training in marketing techniques. This will not only enable them to function better but will also allow them to experience positive intrinsic and extrinsic exposure.

The solution rests on the rationale that by training the employees, it will become more convenient for them to see their potential career paths and to come closer to achieving self-actualization (Vashisht, 2006, p. 159; LaRock, 2010, p. 135). The solution also rests on the premise that the employees are experiencing job dissatisfaction on account of job related variables and are dissatisfied with their position and prospective growth opportunities in the organization.

The second possible solution is one that seeks to take a direct and uncompromising approach to the removal of job dissatisfaction. The approach asserts that employees should be given higher salaries and commissions in an attempt to reduce turnover rate. The solution rests on the understanding that the monetary motivation is the strongest of all motivations and should therefore remove job dissatisfaction (Jensen, 2001, p. 203).

The solution also entails that the organization will seek to adopt a remuneration policy that will give the employees higher rewards for profits made. The solution recommends an organization-wide increase in pay-scales and will rely significantly on the companys profitability. The solution is one that seeks to proceed by implementing an organization wide change in an attempt to address individual issues.

The third possible recommended solution is that a relatively specific approach should be supplemented with a case-to-case basis approach. This potential solution asserts that the employees should be allowed to discuss the issues that are causing the generation of job dissatisfaction.

This can be done through monthly or bi-monthly meetings in which the employees are given a chance to discuss the factors that are causing job dissatisfaction. Once these factors have been singled out, the management will then take decisions to ensure that policies and changes are made to address the factors causing job dissatisfaction.

This is an approach that seeks to function by taking individual employee job dissatisfaction reasons into account and then creating a number of generic solutions to address them (Bornat, 2006, p. 193; Webb & Grimwood-Jones, 2003, p. 55). This will eventually lead to a corporate setup that will be tailored to the needs to the employees experiencing job dissatisfaction.

Considering the three possible solutions given above and the literature analysis, it is clear that an appropriate solution in the subject case would be one that seeks to take a specific approach. The third solution fits the bill.

The first solution does not qualify because it will address only a specific set of factors influencing job dissatisfaction. The training will allow the employees to function better but may not necessarily address issues such as inter-organization conflict and the like.

The second solution cannot be implemented because it takes a very broad approach to the problem. While it may allow employee turnover rates to decrease, it will not facilitate in the removal of the need for training and the need to facilitate better coordination between co-workers.

As a result, there is a need for a solution that can take individual job dissatisfaction causing factors into account so that each can be addressed. This approach will not only enable the organization to acquire a better understanding of the demands of the employees but will also serve to provide every employee a sense of value (Baumeister & Vohs, 2004, p. 16).

The process will instill a sense of individuality in the employees and will also enable the company to acquire an understanding of employee trends. The information acquired from the interviews will also come in useful to address future observations of job dissatisfaction.

This solution will also adequately answer the problem statement because it will allow the company to acquire a clear perception of the individual reasons that are resulting in job dissatisfaction. Once the causes for the presence of job dissatisfaction have been identified, the organization can create categories from the causes collected in order to make it easier to address the problems.

While this approach will prevent the organization from channeling extensive resources towards efforts designed to meet the needs of every individual employee, it will also enable it to address employee needs with a considerably specific and individual-based approach.

The solution has been chosen on account of the increased need to address the employees specific needs. However, it cannot be denied that the company has a vast human resource capital and therefore if the assessment of individual employee needs will require the organization to engage in a move that will require the channeling of extensive capital towards human resource development.

As a result a favorable approach would be one in which the human resource management department will be assigned the responsibility of carrying out organization-wide surveys and interviews to assess employee satisfaction. These surveys and interviews can be developed to facilitate information collection and processing. The surveys can be customized to acquire an insight into the intrinsic and extrinsic variables that are of key relevance to job satisfaction.

Reflection

This case study allowed me to benefit on multiple levels. At a personal level, I felt a sense of accomplishment after solving this case study. Thanks to the requirements of this case study I became aware of the invaluable knowledge that this course has provided me with. I now feel significantly confident about my managerial skills.

At an academic level, the study allowed me to acquire a better understanding of research design. I was able to assess the efficiency of my research approach. I observed that by the end of the research I had streamlined my understanding of research approaches.

At a professional leadership level I was able to determine how it is possible to identify the problems that can befall the best of business practices and how these problems can be eliminated through careful consideration. In addition, I also learnt about the relevance of the role of a manager in such problematic scenarios.

In terms of the contribution that this case study made to my knowledge of managerial development, I consider this case study to have been extremely useful. Thanks to the time I spent researching for this case study, I was able to understand the function of managerial development to an organization. I was able to understand how decisions made for managerial development can have organization wide implications.

References

Barling, J., & Cooper, C. L. (2008). The SAGE Handbook of Organizational Behavior: Micro approaches. New York: SAGE Publications Ltd.

Baumeister, R. F., & Vohs, K. D. (2004). Handbook of self-regulation: research, theory, and applications. New York: Guilford Press.

Bornat, J. (2006). Developments in direct payments. Bristol: The Policy Press.

Hollenbeck, N., & Wright, G. (2007). Fundamentals Of Human Resource. New York: Tata McGraw Hill.

Hoovers. (200). Verizon Communications Inc. Web.

Jennifer, G. (2009). Understanding and Managing Organizational Behavior. New Delhi: Pearson Education India.

Jensen, M. (2001). The Everything Business Planning Book: How to Plan for Success in a New Or Growing Business. Avon: Everything Books.

Kail, R. V., & Cavanaugh, J. C. (2007). Human development: a life-span view. Belmont: Cengage Learning.

LaRock, T. (2010). DBA Survivor: Become a Rock Star DBA. New York: Apress.

Larson, S. A., Lakin, K. C., Bruininks, R. H., & Braddock, D. L. (1998). Staff recruitment and retention: study results and intervention strategies. Washington, DC: American Association on Mental Retardation.

McKenna, E. F. (2000). Business psychology and organisational behaviour. New York: Psychology Press.

Robbins, S. P. (2004). Organizational behavior: concepts, controversies, and applications. New York: Prentice Hall.

Sullivan, L. (2009). The SAGE Glossary of the Social and Behavioral Sciences. New York: SAGE.

Vashisht, K. (2006). A Practical Approach to Sales Management. New Delhi: Atlantic Publishers & Distributors.

Webb, S. P., & Grimwood-Jones, D. (2003). Personal development in the information and library profession. New York: Routledge.

Introduction

Emirates Nuclear Energy Corporation is a government agency that has been charged with the responsibility of providing safe, clean, and reliable energy supply to the United Arab Emirates from nuclear sources. Energy is vital to the development of the United Arab Emirates social and economic agendas.

The current power sources may not be sustainable in the long run due to the great energy demand. Energy demand in the United Arab Emirates is increasing at annual rate of approximately 9 percent, a figure that triples the global energy demand average of 3%. The estimated time span of ENEC is to provide power to the nation by the year 2017. Completion is expected to be achieved in the year 2020.

Objectives

Due to the aforementioned reasons, this project will:

• Examine the corporate governance strategies relevant for the privatization of Emirates Nuclear Energy Commission.
• To establish the difference privatization will bring to the company in terms of resources and manpower
• To establish the feasibility of this undertaking in comparison to other companies that manage nuclear transmission such as Exelon in the United States.

Rationale

To be able to set up the infrastructure, ENEC requires substantial amount of resources. Such projects also require excellent management skills to be undertaken successfully. The government may not provide the required resources adequately. This therefore calls for the involvement of the private sector. To avoid conflicts between the two sides, it is sensible to privatize the company i.e. reduce government influence significantly.

An example of a private company that has achieved success in providing nuclear energy is Exelon Company in the United States of America. The company deals with generation, transmission and delivery. The company supplies energy in 47 states and it further extends to Canada and Columbia. Its success lies in being the largest power generator with 34, 700 megawatts of power.

It also supplies electricity to over 6.6 million clients in the United States. The company recorded operating revenues of approximately $ 23.5 billion in the year ended 2012. The success of this company is also another factor that has prompted the study of the possibility of transforming Emirates Nuclear Energy Commission from a state owned firm to a private firm.

Procedures

Information for this project will be gathered using qualitative means. Qualitative means in this case will focus on published material. To establish the objectives, data will be gathered from various online sources notably, the websites of the two companies. Information will also be gathered from various texts. The gathered data will then be processed i.e. coded appropriately.

Intent of the Project

This project aims to examine the corporate governance strategies that can be employed by the Emirates Nuclear Energy Commission to achieve sustainable growth. This includes the proposed change of ownership and control i.e. from being privatization. This will be through examining corporate governance strategies that may work for the company. The project will examine various matters that form corporate governance, strategic management and planning. A conclusion will then be made based on the study of the above aspects.

Corporate Governance

Corporate Values

Emirates Nuclear Energy Commission being a corporation, it should adhere to the principles of corporate governance. These principles deal with corporate matters such as code of conduct, professional ethics and general personal behavior. The key values of corporate that should be considered by the management and staffs of corporations include integrity, dependability, performance status, accountability, reputation and the dedication of the company towards attaining set goals and commitment. The company employees for the good of the organization should uphold these values. It is evident that a government due to various factors such as political influence and limited resources cannot achieve the above values comfortably.

The Principles

Principles of governance are spread over a range of company issues. In the case of ENEC, the company is to be privatized therefore the management should focus on the principles regarding treatment of shareholders.

The relevant principles require the company to set up a platform for the development of an efficient corporate governance framework, recognize the rights of shareholders and distribute shareholders roles, treat shareholders equally, appreciate the roles of stakeholders in corporate governance, and provide relevant information with due diligence.

Setting up of a Corporate Governance Structure

Being a corporation, the management of ENEC should have in place an effective corporate governance structure. This means that the code of conduct, charter and other articles should reflect excellence in corporate governance. Training and development mechanisms should also be designed in a manner that allows for organizational growth and success.

The rights of shareholders and key ownership functions

Currently, the Emirates Nuclear Energy Commission is fully owned by the government of the United Arab Emirates. This means that all key ownership functions are conducted by the state. After privatization, the management will have to consider the rights of the incoming shareholders. For the company to be run effectively, all necessary information that should be made available to the shareholders should be availed at appropriate times such as at the annual general meeting.

Equitable treatment of shareholders

This principle aims at protecting minority shareholders. All shareholders should be treated equally by the organization. This is key and mandatory therefore the management of Emirates Nuclear Energy Commission should consider it. Equitable treatment of shareholders helps to create investors confidence that may come in handy when the company will be seeking more funds for expansion and other related projects.

Role of stakeholders in corporate governance

After privatization, there are likely to be more than one shareholder in the company. It is vital that the numerous shareholders be involved in the decision making process of the company. This is in an implied and stated law of the agreements therefore the board and management should uphold it.

Disclosure and Transparency

For privatization to be effected, the current management of the organization should take considerable care and reveal all the information necessary for the transaction to be effected. The private company afterwards is also required to do the same to the shareholders. The shareholders should have free access to relevant authentic information regarding the operations of the company. For instance, Exelon Company in the United States has been able to achieve success due to its transparency in disclosing information to its shareholders.

The Responsibilities of the Board

The organization should have an established corporate governance structure that will identify the roles and responsibilities of the board, management and other stakeholders. Among the things that should be outlined is the power of the management to avoid contradictions that may arise. It is vital to consider the powers of the stakeholders before the company makes any major decision.

Ethics and Behavior

An effective risk management programme requires an ethical and dependable decision making platform. All employees and stakeholders should adhere to the code of conduct strictly after implementation. This should be considered to ensure that the organization do not deviate from its moral and official limitations and obligations.

Strategic Management Responsibility

Strategic management revolves around three aspects that are the corporation, board of directors and corporate governance.

The corporation: The Emirates Nuclear Energy Commission like other corporations, it has an established mechanism that allow raising of capital and improving manpower through various means such as through the proposed privatization. Capital is provided by shareholders who will invest in the company individually or as groups. The work force includes the staff and management who provide labor and expertise for the company. The aim of corporate governance will be to protect the weak especially minority shareholders.

Corporate governance functions will require three parties: shareholders who will be the owners of the company, directors who will ensure that the company assets are not misappropriated, and managers who will use the company assets to carry out company functions.

Furthermore, as required by corporate governance regulations, the company will uphold excellent board ethics, provide a controlled environment for company affairs to be carried out, always disclose relevant information in a transparent manner, ensure the shareholders rights are respected, and it will ensure that the board is commitment to achieve success.

Furthermore, the company will ensure adherence to acceptable board practices such as establishing guidelines that will define the roles and authority of the management, ensure that each member of the board and management understands his/her roles to avoid conflicts and ensure that the composition of the board is sound and there is a mixture of skills.

Change of Ownership: Change of ownership and control of organizations creates confusion and agency problems if not handled well. This occurs especially when the new owners start to embark on new ventures that were initially not being pursued by the company.

Board of Directors

The board will be selected by the shareholders to represent the shareholders interests. In the strategic management process, the board has various functions such as

to monitor the development of the company and the influencing factors both within the company and outside the company, to act as advisors to the management on matters that may have been overlooked, and to evaluate the managements proposals, decisions and actions and take the relevant decision i.e. agree or disagree. The board will also offers strategic advice to the company on matters that affect the companys mission and vision.

The organizations articles and bylaws will determine the composition of the board. There will be emphasis on separation of functions to enhance performance within the organization. Members of the board will include directors employed by the company and directors who may be employees of other entities, or people with interests in the company.

As a modern entity, the formed company will also embrace the modern trends in the composition of board of directors such as the inclusion of institutional investors in the board of directors. There will also be provision for ownership of stock by the executives and directors of a company. Furthermore, the board will be more inclined towards balancing the economic goals of the company and the social needs. For instance, Exelon takes part in many corporate social responsibility activities to the communities that receive their services.

Top Management

The Chief Executive Officer will head the top management. The Chief Operating Officer, Chief Financial Officer and executive vice presidents will assist the Chief Executive Officer where applicable.

The top management will handle the strategic role of the company, as this will form its primary role. The role of the management will include making day-to-day decisions within the company and overseeing the daily activities. They will also offer strategic leadership i.e. think strategically and influence the other workers in creating a sensible future for the organization.

The functions relevant for the strategic management of the company will include designing strategic options for the company, act as role models for the other people in the organization to follow, and to enhance the performance of the organization by coordinating and integrating the functions of the various departments in the organization. The top management will also be directly involved in the handling of stakeholders.

Handling of stakeholders will be done based on the various principles that govern the management-stakeholder relationship. These are the management should respond to the concerns of shareholders i.e. their voice should also be heard during decision-making, the management should also implement policies that cover the concerns of stakeholders. The stakeholders should therefore find the practices easy to work with incase they want to air their grievances or contributions.

Moreover, the management will adopt mechanisms that will address the concerns of the shareholders irrespective of where they are located, appreciate the relationship between the efforts and rewards of the stakeholders i.e. there should be fair distribution of burdens, rewards and risks among the stakeholders.

The managers will also ensure good working relations with other entities with an aim of minimizing risks. Risk management in this case tries to reduce the effects of risks in case they occur. There will be avoidance of activities that may jeopardize the companys relationship with the stakeholders. Managers will also appreciate potential conflicts that may arise between (a) amongst themselves as corporate stakeholders, and (b) between the managers and stakeholders in view of legal and moral obligations that exist between them.

Strategic Planning

A strategy is a future: oriented plan practiced at a large scale. The strategies will help in the achievement of company goals through interaction with the environment within and outside the organization and in setting the platform for managerial decisions to be made and implemented. Moreover, the strategies will help on testing the readiness of the company in dealing with competition.

Strategic management will help in setting decisions and actions that will help in the achievement of the companys objectives. Strategic management will also be vital in areas such as formulating the companys mission, conducting SWOT analysis, assessing the environmental factors, evaluating the preparedness of the company with regard to other external factors and in decision making with regard to achieving the companys mission.

Conclusion

The above strategic measures are necessary for ENEC to achieve success like Exelon. However, to achieve the above substantial resources will be consumed by the company in terms of work force and funds. There is great demand for energy in the United Arab Emirates that if well harnessed, could be a potential source of profits for the company.

The most suitable step will be for the company to privatize their operations due to the perceived benefits it may gain. Furthermore, as indicated earlier government commissions are affected by politics thereby affecting their operations.

Introduction

Management positions entail making of decisions most of which have great effects on the image of an organization. A mistake in decision making committed by one person turn out to be quite expensive to an organization as it may lead to organizational image tarnishing and customers losing trust in the organization. One of the areas that requires careful observation of details in regard to decision-making is outsourcing services to an external party in an attempt to reduce costs. In this paper, a case study on Krause Corporation is discussed.

To make or Buy

In the case study, Steve was been instructed to find ways of cutting down the cost of the pipes which were required (Meyer, n.d.). One of the ways to cut down the costs was to opt for purchasing of the pipes required in contrast to making them.

He, however, knew too well that the quest for cost reduction was never to overrun the need to uphold quality. Quality was of top priority; cost reduction, actually, took the second priority. The need to ensure that the quality of pipes was guaranteed was therefore, the very first factor that was to be observed (Meyer, n.d.).

After carrying out a survey, Steve discovered a supplier who seemingly was in a position to meet the needs of Steve of supplying high-quality pipes at a price which was seemingly below the market price (Meyer, n.d.).

If Steve was to go for this option then it could be assumed that he would have achieved his objective of getting quality pipes at a reduced cost. However, with 14 years of experience on supply management, Steve knew that this deal was too good and therefore, there was a need to countercheck the details before he could make a commitment.

The purchase option offered more promise than the make option. It should be noted that with the purchase option the pipes of the specific quality needed would be supplied; another factor to note also is that the standard of pipes that the supplier promised to deliver was seemingly above that which the company could make consistently. The price which was below the market price was another significant factor, which made the purchase option the best to pick.

Considering that the two utmost significant factors were observed in the purchase option, there was a need for Steve to dig for more information about the details of the supplying process in order to ensure that the supplier would be reliable. It is always advisable to ensure that when outsourcing services to a third party, attempts are be made to interact with the third party to clarify the stakes involved (Burt, Petcavage & Pinkerton, 2010).

In the case study, Steve would have made clarification on why only high-quality pipes were required clarifying the impact that leaking pipes would cause. Steve would also clarify that the contract being undertaken was a big contract for the company (the company for which Steve worked for), and it could impact on the company negatively if there was going to be any mistakes or backfiring. This would enable the supplier to be aware of what kind of contract he was getting into.

Conclusion

With 14 years of experience in supply management, it was expected that Steve would be in a good position to extract enough information from the supplier on the reliability of supplying the required product. Consequently, if the supplier proved to be reliable then Steve would accordingly go ahead and recommend the purchase option.

References

Burt, D. N., Petcavage, S. D., & Pinkerton, R. L. (2010). Supply management (8th ed.). Boston, MA: McGrawHill.

Meyer, B. (n.d.). Krause Corporation. Institute for Supply Management. Web.

Recommended Sales Forecasting Method

Every organization including Zara aims at maximizing sales revenue while minimizing the costs incurred in production. Maximizing the revenue realized in sales requires that the organization utilize best sales forecasting strategies so that the inventory held by the company is sold.

Zara manufactures much of the clothes sold in the company stalls. The manufacturing process takes only 15 days from the time the manufacturing decision is made to the time manufactured products are delivered to the market. This is a far less period when compared to other large-scale fashion designers and retailers such as Henez & Mauritz (Certo & Certo, 2008).

Given the large clientele of the firm and the level of competition of the industry, it is important that the firm utilize the open-model time series technique that involves store-by sales forecasts. This is because Zara manufactures and sales many fashion styles to different groups of customers.

Store by store sale forecast would enable the firm to segment the market and produce fashion styles that fit into specific markets within a short period. In addition, stores that indicate increased demand of fashion styles should be supplied with more of the given fashion of clothes. This forecasting method for sales is not only relevant, but it is also important since the company would be able to know specific type of product to be manufactured for a specified group of customers.

Procedures, Policies and Rules

Opening of a new store is an important function to the organization since it is equivalent to unveiling of the company brand in the location of the new store. The main goal of the event is to create a celebration that would promote the brand of the company. As the company intends to open a new store in a given place, it should begin by establishing a committee that will oversee the necessary preparations for the opening of a new store.

Members of the committee should include all managers of other stores since they can help in idea generation and planning. The planning process should begin by setting the dates in advance (Certo & Certo, 2008). The dates and time set should maximize the opportunities for broad based participation from the firm and the community in which the store is to be established.

The programming of the main event should enable display of the variety of fashion products offered by the company since this forms the company brand to be sold in the store. Emphasis should be put on the benefits and best qualities of the products to be provided. The established planning committee should come up with budget estimates for the event. Invitations to be made should be received in advance (i.e. three weeks before the main store opening ceremony).

PERT Network: Critical Path Activities in Store Opening

PERT was established to help organizations manage projects that are perceived as complex. The tool helps an organization in listing the important activities in the execution of a given project. In this given project for Zara

Corporation on opening a new store, critical activities form important activities that cannot be ignored by the firm and help the company complete the project in time and cost efficiently. The identifiable critical path activities in this project include:

Project committee: the committee should be set up immediately the opening ceremony is identified and certain to happen. It should be responsible for all planning among other activities.

Planning: this is a critical activity because it failure to plan for the ceremony is planning to fail. It involves setting of the goals of the ceremony, the dates and main events of the activity.

Budgeting: the success of the ceremony depends on the preparations made. The preparations involve various activities that require financial expenditure. The committee should establish all required resources and set aside funds for their purchases and/or availability.

Program: the program of the main event is part of the critical path because it helps in making the ceremony a success. The program should focus on providing a chance for the display of the various company products, promotion and marketing of the brand of the company. Its ignorance could greatly affect the success of the ceremony.

Guest invitation: the planning committee should not overlook this important activity. Invited guests should receive invitation letter at least three weeks to the main event. They may act as motivators for local residents to purchase company fashion products.

Store Launching: this is the last activity for the project since it is the climax of the project. Successful launching of the new store involves preparations following the above set steps and activities. The launch of the store is a one-day event that marks the beginning of operation of the store in the region.

Reference

Certo, S. & Certo, T. (2008). Modern Management: Concepts and Skills. 11 Ed. Pennsylvania: Pennsylvania State University.

Knowledge management is an array of procedures that control the formation, distribution, and use of information. Knowledge management value chain comprise of four stages these are, knowledge acquisition, storage, dissemination, and application. Knowledge is an intangible firms asset. Therefore, its use requires adequate control (Wake, 2010). This paper discusses knowledge management at Etisalat Corporation.

Knowledge creation

Reflectively, knowledge acquisition or creation is the first step of knowledge management. Knowledge acquisition comes about after interaction between tacit and explicit knowledge in individual human minds (Wallace, 2007). Knowledge moves from human mind to the organization.

Team work is essential in creating knowledge. Since in these forums, companies acquire knowledge from employees. At Etisalat Corporation relies on data mining for creation of knowledge. It uses data mining techniques and software to obtain customers information.

Also, the company also uses neural networks in speech recognition and image analysis. The company makes use of experts in knowledge management to help in knowledge discovery. In addition, the company creates knowledge using knowledge work systems such as CAD and VRML.

These systems aid employees in creation and integration of new knowledge in the organization. Finally, the company owns Etisalat Corporate Social Responsibility Centre. The objective of this center is knowledge creation in areas of areas of corporate governance, corporate social responsibility, business ethics, and work life balance through research (Etisalat CSR Centre, 2012).

Knowledge storage

Knowledge storage takes place in different ways. It can either be in soft or hard copies. Storage can be as simple as keeping information in books. Etisalat Corporation stores information in databases. At the company, storage keeps knowledge created visible. Besides, it enhances resource base of the organization.

This improves competitive advantage of Etisalat. In addition, storage supports the company with up to date and accurate market intelligence for other departments. This ensures that they have the best sources for investment decisions. Finally, storage helps the company in handling vast information they receive on a daily basis. This ensures smooth running of the business.

Knowledge dissemination

Companies use various ways to distribution information across the organization such as search engines, collaboration tools, e-mails, and portals. Dissemination of information need should be properly managed so that correct information is directed to the intended staff members (Wallace, 2007).

Etisalat Corporation uses intranet and groupware tools to disseminate information. In addition, the company makes use of seminars and workshops. Knowledge from management is received in a number of ways such as intranet, staff meeting forums, employees meetings.

Often, some of the information management disseminate are changes in procedures and policies, changes in daily routines and major changes in the organization that affects employees and the business as a whole (Wallace 2007). Etisalat Corporation has a knowledge management department. The department controls dissemination of information using security controls. This ensures that employees access what is relevant for their line of duty.

Knowledge application

Knowledge application is the use of knowledge in decision making process. It aims adding value to the organization by coming up with new products, new business practices and new markets. Etisalat gains a lot from the knowledge management department. The department provides adequate information on market surveys and customer information.

It facilitates growth of the company. Currently, the company has appearance in 18 countries across Africa, Middle East and Asia. The company is also a leader in provision of new products in the market.

For instance, the company is pioneering the launch of the first commercial 4G service on its nation-wide LTE network and promises to deliver a compelling mobile broadband experience to customers (Etisalat Corporation, 2012). Based on innovation, the company is ranked tenth in the world. It indicates that the company is successful in making use of knowledge.

References

Etisalat Corporation. (2012). Company profile.

Etisalat CSR Centre. (2012). Overview. Retrieved from https://www.lbs.edu.ng/

Wake, W. (2010). Knowledge creating company. Retrieved from https://xp123.com/articles/tag/xp/

Wallace, D. (2007). Knowledge management: Historical and cross-disciplinary themes. United States of America: Greenwood publishing Group.