Category: Economics

Introduction

The usage of mobile phones in the United Arab Emirates has been increasing exponentially over the past few years. Major mobile companies such as Samsung, Apple, and BlackBerry have established their markets in the UAE and are competing for the same market. As customer satisfaction determines the competitiveness of these companies, the study aims to evaluate the level of customer satisfaction in the usage of Samsung, Apple, and BlackBerry models of mobile phones in Dubai.

Definition of Research Problem

The usage of mobile phones in the United Arab Emirates is a common phenomenon owing to the rapid advancement in information technology and the embracement of mobile phones as essential communication gadgets. Compared to other countries in the Middle East, mobile phone usage in the UAE is higher because the government has invested heavily in information technology infrastructure, digitized information, supported e-learning education, and established e-businesses.

To keep abreast with technological advancements in the mobile industry, customers use diverse types of mobile phones. Usually, handset features and manufacturers are the major determinants of the types of mobile phones that customers buy. According to Almehairi and Bhatti (2014), the adoption of technological devices such as mobile phones and their usage is dependent on economic factors, personality traits, demographic variables, features of mobile phones, and social forces, among others. In this view, it is evident that the use of mobile phones in the UAE is subject to many forces that influence customer tastes and preferences. In other words, customers in Dubai display diverse levels of satisfaction with the mobile phones that are in the market.

Given that the needs and preferences of customers are complex and diverse, mobile phone companies use diverse methods to satisfy their customers. Major mobile companies such as Samsung, Apple, and BlackBerry have established their markets in the UAE and are competing for the same customers. Customer satisfaction and loyalty have enabled Samsung, Apple, and BlackBerry to do well in the UAE market. Customer satisfaction is an important aspect of marketing because it determines customer loyalty to a given product or a brand in the market (Rahman 2014).

The ability of a product or service to satisfy diverse customer needs and preferences is directly proportional to the customer satisfaction features it contains. Bayraktar et al. (2012) state that customer satisfaction is a key feature in mobile phone industry, which boosts competitiveness of mobile companies, expands market share, and increases profitability.

Moreover, customer satisfaction is beneficial to mobile companies because it reduces marketing costs, reduces the elasticity of price, and improves brand image. Despite such benefits, customer satisfaction is very dynamic in that it varies according to social, economic, and technological factors associated with a certain model of mobile phones.

The dynamic nature of mobile phone markets and the stiff competition are major factors that Samsung, Apple, and BlackBerry are grappling with in a bid to satisfy their customers. The mobile market is dynamic because technology is constantly evolving, new inventions are becoming common, and thousands of applications exist (Soomro & Sarwar 2013).

Competition is becoming stiff with time as mobile companies strive to come up with novel products that are not only quality and innovative, but also affordable to customers. In this view, the determination of customer satisfaction is essential as it forms the basis of understanding their tastes and preferences. Although Samsung, Apple, and BlackBerry have established their respective markets in Dubai, they have continued to experience dynamic patterns of customer needs and preferences.

Customer satisfaction and loyalty is difficult to achieve in the mobile industry because the needs of customers are not only diverse, but also complex. To satisfy their customers well, companies usually research about the needs and preferences of customers before manufacturing products that meet these needs and preferences. Therefore, the determination of customer satisfaction with mobile phones manufactured by Samsung, Apple, and BlackBerry is essential in understanding customer needs and preferences as well as in marketing the stance of each of the company and associated mobile phones.

Objectives

1. To determine the proportion of customers who use Samsung, Apple, and BlackBerry mobile phones in Dubai.
2. To ascertain the attractive features of mobile phones that influence customer satisfaction with Samsung, Apple, and BlackBerry mobile phones.
3. To rate Samsung, Apple, and BlackBerry and determine the model that gives the highest level of satisfaction among customers in Dubai.

Data Collection and Analysis

Data Collection

The study used mixed research design, which comprises qualitative and quantitative research methods. Mixed research design is advantageous because it gives researchers the freedom to collect both qualitative and quantitative data, hence, giving robust information about a research phenomenon (Creswell 2013). The qualitative study collected qualitative data that determined customer satisfaction with Samsung, Apple, and BlackBerry mobile phones. In contrast, quantitative data assessed the level of satisfaction of customers with Samsung, Apple, and BlackBerry phones.

The target population of the study is the people of Dubai. Given that the study sought to establish the usage of mobile phones, attractive features of mobile phones, and level of satisfaction with mobile phones in Dubai, the appropriate target population is the people who live in Dubai because a significant number of them own mobile phones, particularly the smartphones.

To obtain a study sample from the target population, the study used the convenience method of sampling to select 200 participants. Convenience sampling is advantageous because it is not only simple and quick to perform, but also cheap to undertake (Thompson 2012). In sampling the participants, the study selected a less busy street, where researchers interacted easily without causing unnecessary congestion when interviewing the respondents.

The procedure of data collection entailed interviewing individuals in a less busy street using open-ended questions. According to Babbie (2009), open-ended questions are effective in interviews because they are very informative, do not restrict respondents, and allow researchers to seek clarification. The researchers introduced themselves to the people in the street and requested for their participation in the study by responding to the selected interview questions.

The study interviewed respondents using the following questions:-

1. What model of mobile phone do you own?
2. How long have you owned your current mobile phone?
3. What was your previous model of mobile phone?
4. What is the most attractive feature of the model of the phone that you own?
5. What are the features that you would recommend the company to change in the model of mobile phone that you own?
6. Can you change the model of the mobile phone that you own?
7. Can you recommend the model of the mobile phone that you own to anyone?
8. Since you bought your mobile phone, have you experienced any technical failures?
9. Do you get the necessary support from the vendor of your mobile phone?
10. On a scale of 1 to 10, can you rate the level of satisfaction with your mobile phone model?

Data Analysis

The pie chart below indicates the proportion of mobile phones owned by people in Dubai, according to the 200 respondents selected from the streets of Dubai.

The pie chart above shows that the largest proportion (37.5%) of Dubai residents own Samsung phones, followed by Apple (25%), and BlackBerry (17.5%) in that order. The other types of mobile phones constituted 20% of the total phones owned. From the proportion, it is evident that Samsung dominates the mobile market in Dubai.

Regarding the extent of ownership, most respondents (72%) indicated they have owned their phones for more than one year. In the aspect of the previous model of the mobile phone, 45% of the respondents showed that they owned different mobile phone models before switching to their current models. These findings confirm that the needs and preferences of customers are dynamic because they vary from time to time depending on the prevailing market forces.

Table 1: Responses of the Attractive Features of the Phone

The above table indicates that the mobile operating system is the most attractive feature of a mobile phone. It satisfies the unique needs of 40% of customers in Dubai. The most common mobile operating systems are Android OS, Symbian OS, Windows 8, Linux OS, Apple OS, and BlackBerry OS. The operating systems used by Samsung, Apple, and BlackBerry are Android, Apple, and BlackBerry respectively. According to Venkateswaran et al. (2014), Android OS is the dominant mobile operating system because it enjoys 57% of the market share globally.

Likewise, the findings of the study show that Samsung is the leading mobile phone in Dubai owing to the attractiveness of its operating system. The second leading feature of the mobile phones in Dubai is compatibility with mobile applications. Customers are more satisfied with phones that are compatible with many applications than those that are compatible with few applications. Ham and Park (2011) observe that the Android OS, compared to other mobile operating systems, is compatible with numerous applications in the market. Hence, compatibility with Android OS explains why most people rated it as the best mobile operating system.

Other leading features of the phones that determine satisfaction of customers are the connectivity to the Internet, Bluetooth, and USB (25%), pixels of camera (22%), security (22%), memory size (20%), video calling (15%), colour (8%), and screen capture (5%). Regarding the recommended features, most respondents noted that the mobile companies should increase memory to support multiprocessing of applications.

In determining loyalty and satisfaction of customers, most respondents showed that they would not change the model of their phones. Moreover, most respondents indicated that they would recommend their friends to buy the models of the mobile phones they own because they are satisfied with them. About 15% of the respondents indicated that they have experienced technical failures when using their mobile phones and they sought support from the available vendors. Harrison, Flood, and Duce (2013) write that the availability of vendor support is necessary in the mobile industry because mobile phones are fragile and delicate products that require constant maintenance and repair.

The respondents also rated their models of mobile phones on a scale of 1 to 10. Samsung received an averaged rating of eight, Apple received an average rating of seven, and BlackBerry received an average rating of five. In this view, Samsung has the highest satisfaction rating, which indicates that it is the most satisfying model of mobile phones.

References

Almehairi, M & Bhatti, T 2014, Adoption of virtual shopping: Using smartphones and QR codes, Journal of Management and Marketing Research, vol. 17, no. 1, pp. 1-12.

Babbie, E 2009, The Practice of Social Research, Cengage Learning, New York.

Bayraktar, E, Tatoglu, E, Turkyilmaz, A, Delen, D, & Zaim, S 2012, Measuring the efficiency of customer satisfaction and loyalty for mobile phone brands with DEA, Expert Systems With Applications, vol. 39, no. 1, pp. 99-106.

Creswell, J 2013, Research Design: Qualitative, Quantitative, and Mixed Methods Approaches, SAGE Publisher, New York.

Ham, H & Park, Y 2011, Mobile Application Compatibility Test System Design for Android Fragmentation, Communications in Computer and Information Science, vol. 271, no. 314-320.

Harrison, R, Flood, D & Duce, D 2013, Usability of mobile applications: Literature review and rational for a new usability model, Journal of Interaction Science, vol. 1, no. 1, pp. 1-16.

Rahman, M 2014, Factors Affecting Customer Satisfaction in Mobile Telecommunication Industry in Bangladesh, Business, Management, and Education, vol. 12, no. 1, pp. 12-22.

Soomro, T & Sarwar, M 2013, Impact of smartphones on society, European Journal of Scientific Research, vol. 98, no. 2, pp. 216-226.

Thompson, S 2012, Sampling, John & Wiley, London.

Venkateswaran, T, Menaka, V, Swarnalakshmi, R & Arun, R 2014, A Comparative Study over Android and Windows 8 Mobile OS, Online International Interdisciplinary Research Journal, vol. 4, no. 1, pp. 260-268.

The economy of Saudi Arabia is oil based and the government controls all the major economic activities in the country. Oil was discovered in Saudi Arabia in 1930s by geologists from U.S but its large scale production started after World War II (Rodney, 2004). Saudi Arabia is ranked as the largest exporter of petroleum and it accounts for 18% of proven petroleum reserves in the world. Petroleum contributes 55% of the overall GDP and it accounts for 90% of export earnings (Ramady, 2010).

Oil in Saudi Arabia accounts 75% of government revenues and it is produced by the parastatal giant Saudi ARAMCO on behalf of the government (Ramady, 2010). Saudi ARAMCO is the largest fully integrated private oil company in the world. Most of the Saudi oil exports are transported from one region to another, using tanker passing through Ras Tanura and Juaymah; those fuels that are going to the east-west go using pipeline (Rodney, 2004).

Oil income

After World War II in 1973, Saudi Arabia became the fastest growing economy due to increase in petroleum revenues. It increased its trade in the world and the government got enough revenue for development, defense and aid for other Arab and Islamic countries (Rodney, 2004); in the mid-1980s, high oil prices led to development of many oil fields in the world leading to global oil consumption reduction.

This called for introduction of an element of planning for uncertainty for the first time, Saudi Arabia oil production which had increased in 1980-1981 by 10 million barrels per day reduced to 2 million barrels per day in 1985 and this led to government budgetary deficits (Ramady, 2010). This made Saudi Arabia to give up its role as the greatest manufacturer with OPEC and it accepted a production quota in 1985.

Since then, oil policy in Saudi Arabia has been to maintain market and quota shares in order to ensure constancy in the global oil market. The government has been encouraging private sector involvement in petroleum sector in order to expand its oil production capacity in response to the increasing global demand (Rodney, 2004).

The Saudi Arabia government has sought to allocate its petroleum income to it undeveloped oil based; it also seeks to maintain its traditional Islamic values and customs such as Hajji and Umrah (Ramady, 2010). Oil wealth has contributed significantly in improving living standards of Saudi Arabia population. It has contributed to development of infrastructure, improved education, health facilities and social services.

However its high population growth has put pressure in the economy thus straining the government in financing further improvements in living standards. Lack of skilled Saudi Arabians graduates has been leading to lack of economic diversification and development. This has led to about 4.6 million non-Saudis been employed in the economy (Ramady, 2010).

The government has however emphasized on development of private sector employment of Saudis in order to reduce foreign worker; it also aims to reduce Saudis unemployment from 9.6% to 5.5% by investing in human resource development (Ramady, 2010).

Saudi Arabia Comparisons

Hajji and Umrah

Hajji is a religious duty in the Muslim society that must be carried out in every strong Muslim who can afford it at least once in a lifetime; it is a sign of solidarity to the Muslims and their submission to God (Ham, shams & Madden, 2004). Saudi Arabia kingdom has always been guided by Islamic teachings and principles which is emphasized in the basic law.

Caring for holy places has been a top priority of the successive development plans which aims at developing the two Holy Mosques in order to facilitate performance of Hajji and Umrah (Ham, shams & Madden, 2004). Under the eighth development plan, the holy places were expanded significantly. Expansion of Holy Mosque and prophets Mosque were monumental achievements that enabled pilgrims and visitors to conduct their worship and rituals comfortably.

Also in the eighth development plan the stone casting bridge was implemented to enable pilgrims to perform the rituals of casting stones smoothly (Ham, shams & Madden, 2004). The ministry of Hajj was allocated finances amounting to SR3.2 billion under the ninth development plan.

This was to facilitate implementation of states directives regarding serving pilgrims and Umrah performers. The finances were also for educating pilgrims and Umrah performers and familiarizing them with regulations, rights and duties to enable them to perform rituals comfortably (Ham, shams & Madden, 2004).

Conclusion

Saudi Arabia economy is oil based and it is the largest oil producer in the world. Oil exports have contributed greatly to government revenues which have continuously been used to improve the living standards of Saudis.

The government has continued to promote private sector involvement in petroleum production in order to increase its production capacity for the increased global demand. It also seeks to maintain its traditional Islamic values and customs such as Hajji and Umrah. The ministry of Hajji was allocated finances in order to maintain the holy places for Hajji and Umrah to be conducted smoothly and easily.

References

Ham, A., shams, M., & Madden, A. (2004). Saudi Arabia. New York: Lonely planet.

Ramady, A. (2010). The Saudi Arabia economy: policies Achievements and Challenges. New Jersey: Springer.

Rodney, W. (2004). Economic development in Saudi Arabia. London: Rutledge.

Introduction

The recent research on the public opinion concerning wealth and employment in Korea has shown that there is a general dissatisfaction with the job market in the country. Thus, the majority of young people have to work part-time in order to pay for their studies. In the meantime, they fail to find a well-paid job even when they receive a degree (Joy par.2). Whereas the social opinion might be treated as a subjective estimation of a real set of things, the statistic shows that there are valid reasons for that sort of disappointment. Thus, the Korea Institute for Health and Social Affairs reports that the unemployment rate among the young people is rising steadily (Joy par. 5). As a result, the question arises concerning the factors that determine these economic problems. Some specialists believe that one of the causes is the dominance of large conglomerates or chaebols (Baek, Kang and Park 300).

Large conglomerates tend to have a significant influence on a countrys economy. The extent of this influence is critical as it determines the extent of the economys self-dependency and, as a result, its competitive capacity. There is a widespread assumption that huge corporations take up the dominant position in Korean national economy, depriving small and middle size businesses of an opportunity to develop and extend (Feenstra and Hamilton 286).

In order to evaluate the impact that chaebols have over Korean economy, it is essential to perform a thorough analysis of their structure, background, as well as their strengths and weaknesses. Thus, the paper at hand is aimed at examining the chaebol phenomenon and its role in the national economy of Korea.

Corporate Governance

Before analyzing the chaebol phenomenon, it is essential to get acquainted with the notion of corporate governance and its basic aspects as they are of key importance for understanding the chaebols performance. Corporate governance consists of the relationships and accepted standards of behavior between the different members of a limited liability company. These members might be represented by shareholders, top managers, employees, clients, creditors and other important agents that, to a smaller or larger extent, determine the strategy of a particular firm (Feenstra and Hamilton 200).

The terms of relationships and the norms of behavior that represent the framework of the agents collaboration can be referred to the notion of corporate governance. The key principle of successful corporate governance resides in encouraging the creation of a healthy competitive environment and focusing on the prosperity and the growth of the national economy.

In other words, the principal aims of efficient corporate governance might be divided into five groups. The first group of aims focuses on protecting the rights and the interests of shareholders. The second groups main target is to assure the equal treatment of all the shareholders, including the minority groups. This aim implies the necessity to reconsider every decision in case it is likely to violate shareholders rights. The aim of the third group is to encourage the shareholders to participate actively in corporate governance. The next group of aims implies maximizing the disclosure and the transparency of all the financial operations that are carried out inside the firm. The final group of aims concentrates on protecting the established norms and standards by performing regular monitoring on the part of management boards that are responsible to both the firm and its shareholders (Feenstra and Hamilton 217).

Therefore, the key concern of corporate governance is to focus on the protection of its shareholders capacity to manage the companys performance. Shareholders are represented by the owners of a firm; therefore, their interests are essentially connected with the prosperity of this firm.

Moreover, corporate governance is concerned about maintaining integral reputation. The reputation of integrity is critical for any company as trusting relations reduce particular transaction costs within companies  the partners receive a relatively valid guarantee for consistent compensation and a potentially reliable partner in perspective (Feenstra and Hamilton 201). Therefore, transparency and reliability are critical factors describing effective corporate governance.

One of the most meaningful aspects concerning successful corporate governance is its managerial structure. Thus, managerial boards are to be separated from the ownership of the firm so that they are enabled to assure the transparency and accountability and to guard the interests of all the shareholders inside the corporate structure. Such boards should be unbiased in regard to the investors of a firm because they are supposed to provide a critical service that implies monitoring the performance of a company.

The relevant overview of the corporate governance will serve to be an assisting framework for evaluating chaebols structure as well as pointing out its principle benefits and disadvantages.

Chaebols structure

The term chaebol is borrowed from the Chinese language, where chae means wealth or finance, and bol stands for lineage, faction or clique (Kim 2005, 5). Chaebols structure has a series of distinguishing peculiarities that mainly concern its administrative and controlling aspect. Thus, Kim (2005) describes chaebol as family-controlled, debt-dependent, diversified business groups that dominate the Korean economy (4). In other words, the term chaebol might be applied to those groups of independent firms that are administrated and financially controlled by a single family.

There is also a scientific opinion that the relevant structure essentially has three key characteristics. First, and foremost, a chaebol firm should necessarily be comprised of several affiliated firms that operate in different industry fields. Secondly, the ownership and all the other controlling functions are performed by the dominant family exclusively. Finally, this entrepreneurship accounts for a significant percentage of the countrys economy (Almeida et al. 22).

It is, likewise, necessary to add that despite the fact that chaebol firms can be controlled by different professionals, the principal managing function belongs to the so-called chongsu, the main blockholder who comes from the owner family (Murillo and Sung 2). In order to provide a better idea of what a chongsu is, one might turn to the example of the Samsung Company. In this case, Mr.Lee, the firms chongsu, holds 0.57% of the entire group share and controls a vast spectrum of the companys cross shareholding, even though he is neither the chairman nor CEO. Therefore, Mr.Lee is an unofficial general manager responsible for the final decision making in the company.

Weaknesses of the Chaebol System

Most of the drawbacks of the chaebol system are connected with its administrative structure. Thus, the fact that the controlling function is performed by the groups chongsus creates a series of critical problems. To begin with, chaebols groups are more likely to perform unreasonable and risky investments. The relevant phenomenon might be explained by the simplified access to the loans provided by domestic banks. Moreover, chonguses decision making is often determined by the intention to retain control over the group and improve its general image and position in the society. In addition, they are highly concerned about expediting the propertys succession to their relatives which makes them invest into risky new firms in order to enhance power to their descendants. As a result, it is almost impossible to evaluate the outcomes of a particular investment (Murillo and Sung 7).

Secondly, the strong trading bonds within a chaebol group oblige the shareholders to purchase essential production from sister companies in spite of the fact that other firms might have a more beneficial offer. Hence, such groups neglect profit maximization, focusing, instead, on the stability (Murillo and Sung 7). In fact, they try to meet the interests of one company by means of damaging the interests of another.

Finally, it is the principles of delegation of power that have a negative influence on the performance of chaebol companies. Such groups prefer to delegate authority to the eldest son in the family regardless of his skills and abilities. One of the most vivid examples of this authority expansion is Samsung, where the authority is shifted only to the eldest children of its founder (Murillo and Sung 8). The unwillingness to adopt meritocratic principles in authoritys transfer often leads to the inefficient management and does significant harm to the companys prosperity. In addition, chaebol firms show less business transparency in comparison with non-chaebol companies that is determined by the family relations inside the group (Park, Shin and Suh 60).

Benefits of the Chaebol System

Practice shows that chaebol companies are particularly successful in political lobbying and developing social networks. As a result, they normally receive a substantial support from the local government or different political leaders (Murillo and Sung 8). Moreover, due to the family oriented administration structure, such firms are normally more focused on the long-term perspectives from the management standpoint (Park, Shin and Suh 60). In other words, decision-makers feel highly responsible for the future outcomes of their policy.

In addition, Kims research has revealed a positive impact that family ownership has on the companys general performance. According to Kim, this phenomenon might be explained by the fact that such administrative structure leads to the interpenetration of the shareholders interests as well as the encouragement of contributing to specific firm investments (Kim 2005, 26).

Some surveys also show that chaebol companies are beneficial from the new business opportunities perspectives as its shareholders often possess consistent knowledge in diverse business fields (Park, Shin and Suh 59).

Reasons for Diversification and Associated Problems

Nowadays, a diversified conglomerate is the principle form of operating for the majority of the large Korean companies. The most common examples of such business groups are Samsung, Hyundai Motor, SK and LG. Researchers point out a series of reasons for chaebols diversification. First of all, it is the risk of a one product company that prompts the owners to extend. Secondly, chaebols have to operate within a highly competitive environment. As a result, diversification is one of the solutions to maintain their competitive advantage. Moreover, diversification is often essential in order to maintain the tradition to pass the business on to the young generation inside the family (Park, Shin and Suh 59).

However, the diversification of chaebols, likewise, creates a series of critical problems. The major part of these difficulties resides in management costs. Specialists note that management costs are apt to rise as long as a company extends internally (Park, Shin and Suh 63). As a result, Korean chaebol groups tend to experience significant management bearings that can reduce their competitive capacity in the global market.

Another critical difficulty associated with chaebols diversification is the lack of transparency that creates problems with transfer pricing, cross-subsidy, and self-dealing (Park, Shin and Suh 64). As a result, exit costs increase as well as the inefficiency of chaebols performance.

Background

First of all, it is essential to note that close family ties represent a traditional element of Korean culture. Therefore, there is no surprise that company owners are inclined to pass their business on to their children and relatives (Park, Shin and Suh 58). Nevertheless, the chaebol system in Korea began developing rapidly only in the latter half of the twentieth century. At that point, the local government performed the selection of the top companies who received the exclusive privilege to supervise beneficial projects in military and building fields. Among the principal advantages that these companies received, it is necessary to point out various exporting subsides, considerable tax reduction, and loans. As a result, by 1980s, chaebol groups had become independent businesses that did not need any external assistance from the state. Their industrial abilities had become excessive, and the government was obliged to carry out certain measures in order to regulate these conglomerates and prevent the negative impacts they were likely to have on the national economy. One of such measure was the creation of the anti-chaebol campaigned initiated by the president.

Chaebol companies began experiencing critical difficulties at the end of the twentieth century when the Asian financial crisis broke out. A significant part of the Korean banking sector went bankrupt depriving, in such a manner, chaebols of the considerable support they used to receive. As a consequence, chaebols had no other choice but to turn for help to the local government, which, in its turn, asked for IMFs assistance. The IMFs participation improved the situation as well as brought in some significant changes. For, example, chaebols were, then, highly recommended to make their managing policy more shareholder-oriented in order to raise the activity of the latter. Moreover, the new tendency for corporate transparency appeared, and every big chaebol was obliged to provide its financial statements on the regular basis. Lastly, although firms received more direct financial assistance from foreign investors, such indirect financing as bank loans was reduced significantly. Some analysts note that this change was critical for chaebol companies the main problem of which resides in their considerable dependency on domestic debts (Kim 2005, 10).

Chaebol Groups in the Framework of Korean Crisis

Causes

First, and foremost, it is necessary to point out that one of the principal causes of the Korean financial crisis in 1997 was a widespread decline in corporate value within chaebol groups. Analysts tend to explain this phenomenon by the fact that family groups pursued private benefits (Kim and Kim 47). One of the clue factors, which prompted and gave chaebol groups a chance to dispossess their minor shareholders, was a considerable gap between their right for the cash flow and their voting right. Whereas chaebols right for the cash flow was always relatively small, comprising about 20% only, their voting right was almost unlimited due to the developed web of cross holdings within affiliated companies. Thus, the chaebol groups received a chance to avoid the disciplining forces of the controlling markets, and, as a result, this incentive led to profit decline, value destruction, and diversification.

Key Problems

The value destruction that chaebol groups provoked during the crisis period reduced shareholder wealth and had a negative impact on the national economy, in general. As a result, Korea was almost sure to undergo a sharp depreciation of the national currency. Nevertheless, the government managed to maintain the value at surprisingly high levels until November 1997 when it turned out to exhaust all the foreign reserves (Kim and Kim 49). As a result, the government was obliged to allow the exchange rate floating independently, and the value of currency decreased sharply. The crisis coincided with considerable changes in the administration. The new members of administration implemented a number of reforms that were mainly aimed at changing the structure of chaebol groups (Baek, Kang and Park 270).

The Negative Impact of Chaebol Groups

Unfortunately, the practice of dominant corporate governance in Korean chaebol groups is still widely spread in spite of all the reforms and measures taken. Despite the fact that it is obligatory for chaebol groups to introduce independent directors into the board, these people are still unwillingly admitted to the decision-making process within a firm (Choi, Park and Yoo 951).

As to the informational effectiveness in the local stock market, it failed to establish yet; therefore, the company value is poorly reflected in the stock price of the firm. Thus, the Korean market for corporate control works rather unproductively (Ferris, Kim, and Kitsabunnarat 264). As a result, managers and controlling members are more likely to violate their fiduciary duties, and they, generally, tend to be more criminally prosecuted (Song 3).

On the whole, specialists point out a series of negative aspects of the chaebols influence. First of all, it is the attempt of chaebol groups to concentrate the maximum of economic power within a single family. Thus, for example, in case if one of the top chaebols in Korea, such as Samsung Electronics, reports a decline in profits in one of the quarters, one might reasonably have concerns about the negative impact this decline might have on the national economy, in general (Jung 27). One of the key problems is that whereas the majority of Korean chaebol groups have a huge share of the local economy, their contribution to the real economy is rather insignificant. Hence, a large percentage of huge chaebols operating in the field of manufacturing prefer to invest their money into foreign subsidiaries rather than domestic economy.

The second negative factor connected with Korean chaebol is the tendency to practice an unwarranted evasion of tax. The justice system tries to be particularly careful in dealing with chaebol representatives. As a result, even if a chaebol leader is ever caught in corruption, there is little possibility of his going to jail. Thus, for example, Lee Kun-hee, Samsung chairman, was pardoned although he was found guilty of unwarranted tax evasion because of his help to the government (Jung 30). Moreover, the corporate tax rate in Korea is significantly lower than in other countries. This phenomenon might be explained by the fact that the government is highly indebted to large chaebols; hence, it does not take the risk of doing anything that may hurt the interests of massive corporations driving the national economy.

Another side of their negative impact on the local economy resides in the fact that the chaebols groups in Korea prevent small and medium-sized enterprises (SME) from development. This has a highly negative influence on the domestic economy  the national debt continuous to grow, while small business has no chances for expansion. Some economic analysts believe that chaebols intentionally try to do harm to the activity of other economic players. They hoard their profits, focus mainly on the foreign suppliers, discriminating, in such a manner, the domestic ones, and, most importantly, prevent SMEs from growing, while the latter provide workplaces for almost 90% of Korean residents. In addition, the problem becomes even more concerning with the fact that chaebols gradually encroach into the territories that typically belonged to SMEs such as, for example, bakery business.

Challenges that Chaebol System Faces

According to the recent survey, one of the key challenges that Korean chaebols are about to face is the transfer of authority that currently implies the shift from a parent to a child. Such approach has shown to be unproductive as the intention to delegate power to a daughter or a son prevents the owner from focusing on skills and talents of a potential manager. Therefore, decision makers will have to search for alternative solutions that will help them assure effective and high-quality management. It is essential to note that chaebols performance is not just the concern of their owners but also the government as the growth of the national economy depends largely on the companys performance. As a result, the society and decision makers should create an environment favorable for the development of various entrepreneurial activities. Many specialists believe that consistent changes in the policy of power delegation are likely to contribute significantly to the creation of such an environment (Park, Shin and Suh 59).

The Essential Changes in Chaebols

Chaebol groups have overcome considerable changes since the crisis. In the meantime, their structure has still numerous drawbacks. Specialists point out two important fields that need a reformation in order to achieve efficient corporate governance. First, and foremost, it is necessary to establish a strong interconnection between shareholder value and managerial incentives. Secondly, it is critical to assure consistent control on the part of the board of directors (Kim and Kim 51).

In the framework of the first option, analysts state that the simplest way to connect shareholder value with managerial incentives is to assure performance-based pay that can be achieved by linking stock prices and operating profitability. It is necessary to note that before the chaebol groups commonly avoided merit-based compensation; thereby, the majority of employees received their payments in accordance with rank and seniority. In other words, higher profits meant higher bonuses; however, the final amount of these bonuses was essentially connected with the rank and seniority instead of performance itself.

As a result, the only possibility for an employee to receive a higher reward was to receive a promotion, first. Meanwhile, rapid promotions were not commonly encouraged. Such payment practice was widely accepted by chaebol groups as it served to be the reflection of the cultural traditions that implied hierarchy. The inefficiency of such an approach was evident  company executives were focused on increasing their own rewards, they implemented schemes aimed at shifting profits out of their companies. During the crisis period, such a strategy resulted in a series of bankruptcies. The most vivid example is the Daewoo Group that used to be the one of the largest chaebol groups in Korea. After its bankruptcy, the business community turned highly concerned about rising shareholder value in order to assure a long-term survival and essential competitive advantage.

It is necessary to note that some measures have already been taken in this field. Thus, some chaebol companies adopted particular forms of performance-based pay. Recent studies of Korean chaebol companies showed that a significant part of managerial compensation is currently related to stock market performance. Moreover, the stock performances sensitivity of pay can be now compared to U.S. and Japanese rates (Kim and Kim 52).

In the framework of the second option, it is essential to introduce outside directors that will be able to perform independent control. This reform was thoroughly addressed after the crisis. Thus, each chaebol group was required to assure that at least one quarter of its board directors is comprised by independent members. Moreover, the number of independent directors increased up to 50% in 2001(Kim and Kim 55). Research has shown that this measure has a positive outcome. Thus, most of the companies that fulfilled the requirement showed significant profit raise, reduced number of tunneling issues, and the increased frequency of broad meetings. Therefore, it is evident that chaebol groups should admit independent directors to the inner decision making in order to assure a more consistent control as well as to protect the interests of minority shareholders.

Conclusion

The analysis of chaebols influence on the national economy of Korea has shown that the character of this impact is rather ambiguous. On the one hand, large conglomerates in Korea serve to be a substantial support for the local economic sector. On the other side, there is a series of factors that characterize this business form as negative. First, and foremost, the excessive influence of chaebols on Korean economy makes the latter riskily dependent on the performance of huge corporations. It means that in the case of a bankruptcy of one of the chaebols, Korean economy will experience significant damage.

Another critical point about the negative impact that chaebols have on the national economy is their dominance over all the other business forms, such as, for example, small and middle-sized entrepreneurship. Thus, the latter are deprived of the chance to develop effectively as large conglomerates take up more and more market sectors.

In addition, the research has shown that chaebols are particularly liable to breaking the law and exercising corruption due to the tolerant attitude of the government and the juridical institutions.

In the meantime, it is assumed that the complete destruction of such a business form as a chaebol would not be beneficial. Instead, it is suggested that a series of measures are implemented in order to reform some of the basic principles of chaebols structure. It is essential that such companies involve independent managers that will assure a more reliable and independent control of decision making processes within these firms. Moreover, it is, likewise, critical to reconsider the strategy of the shift of power that currently exists in chaebols.

Works Cited

Almeida, Heitor, Sang Yong Park, Marti Subrahmanyam and Daniel Wolfenzon 2010, The structure and formation of business groups: Evidence from Korean Chaebols. Web.

Baek, Jae-Seung, Jun-Koo Kang, and Kyung Suh Park. Corporate governance and firm value: evidence from the Korean financial crisis. Journal of Financial Economics 71.1 (2004): 265-313. Print.

Choi, Jongmoo Jay, Sae Woon Park, and Sean Sehyun Yoo.  The Value of Outside Directors: Evidence from Corporate Governance Reform in Korea. Journal of Financial and Quantitative Analysis 42.4 (2007): 941-962. Print.

Feenstra, Robert, and Gary Hamilton. Emergent Economies, Divergent Paths: Economic Organization and International Trade in South Korea and Taiwan, New York, New York: Cambridge University Press, 2006. Print.

Ferris, Stephen, Kenneth Kim, and Pattanaporn Kitsabunnarat. The costs (and benefits?) of diversified business groups: The case of Korean chaebols. Journal of Banking and Finance 27.2 (2003): 251-273. Print.

Joy, Anna 2015, Koreas Give Up Generation. Web.

Jung, Dong Hyeon 2013, Debates on Korean Chaebol. Web.

Kim, Euysung 2005, The Impact of Family Ownership and Capital Structures on Productivity Performance of Korean Manufacturing Firms: Corporate Governance and the Chaebol Problem. Web.

Kim, Euysung, and Woochan Kim.  Changes in Korean Corporate Governance: A Response to Crisis. Journal of Applied Corporate Finance 20.1 (2008): 47-58. Print.

Murillo, David, and Yun-dal Sung. Understanding Korean Capitalism: Chaebols and their Corporate Governance, Barcelona: ESADEgeo Center for Global Economy and Geopolitics, 2013. Print.

Park, Hong, Geon-Cheol Shin, and Sung Hahn Suh. Advantages And Shortcomings Of Korean Chaebols. International Business & Economics Research Journal 7.1 (2008): 57-66. Print.

Song, Ok-Rial 2003, Ineffective Derivative Suits and Corporate Control Market in Korea. Web.

M & I bank is an organisation that has its customers as the main focus. This is why the major spheres they targeted during the improvement program were sales and customer service processes (OpenSpan 2011). The bank has always provided its clients with advanced customer experiences, yet they were in need of special tools that would help the organisation to integrate and coordinate the functions of their back and front offices in reference to customer service. Besides, the leaders of the bank intended to maximise the efficiency of the working processes. For that they needed to eliminate needless and time consuming tasks and replace them with faster and more innovative operations.

The managers noticed that one of the factors that held back the working process at M & I were multiple paper and manual processes as a big amount of data was still stored in form of printed and written down documents (OpenSpan 2011). The large scale thinking applications the bank had used previously provided no control over the operations and little enhancement could be done. The managers realised that what they required was a tool that could increase the speed of the banks front and back offices working process, improve its efficiency. Besides, it all needed to be done in a simple way without wasting too much time on reorganisation.

The managers conducted a professional discussion and identified 18 transactions that they needed to transfer to the frontline (OpenSpan 2011). For that they started to use OpenSpan automation tool which is specifically designed to help the banks coordinate people and technology optimising the interactions between bank employees and applications (OpenSpan for Banking and Financial Services 2015). OpenSpan provides solutions concerning the control over operations costs, the improvement of customer service, risk management, and revenue generation (OpenSpan for Banking and Financial Services 2015).

Having adopted OpenSpan automation tool, M & I bank launched a test period deploying operations enhanced by OpenSpan in just a few branches for 3 to 4 weeks. As the innovation showed success, the tool started to be employed by all the other M & I branches. OpenSpan enhanced the business functionality of the banks systems and operations and showed impressive results right away. After years of using OpenSpan M & I bank managers started to develop more applications and automations. The tool allows developing a concept or a prototype approach, testing and deploying it within short periods of time. As a result, the adoption of OpenSpan improved the customers experience at M & I, made the duties and working process of the bank employees easier, and secured the organisation from the risk of fraud.

One of the main challenges facing the modern banks is the quality of customer service they provide. This aspect is extremely influential since it is responsible for the attraction and retention of clients and capitals. To maximise the quality of customer service the banks and financial organisations are to minimise the time spent processing and finding the information needed to assess the customers needs. This includes such processes as communications (emails and fax), access to archives, data input and processing, information provided by back office (investment, trade confirmation), and responses of the front office (Bank efficiency up, customer churn down 2015). The inclusion of several different departments and workflows make customer service slower and less effective.

References

Bank efficiency up, customer churn down 2015. Web.

OpenSpan 2011, M&I Customer Case Study  Bank Process Improvement. Web.

OpenSpan for Banking and Financial Services 2015. Web.

Executive Summary

The main purpose of this report is to understand the consumer buying behavior. The findings that were noted are that a consumer has diverse requirements and wishes.

The marketers should search for relationships between their products and lifestyle group, for example for a middle-aged she would prioritize her needs to cosmetic surgery this is to enable her to feel like she is still young and the lowest need being tattooing and piercing and since she is mature and she would like to present herself in a respectable manner she would only prioritize on cosmetic surgery, eye surgery and laser skin treatment.

And The old lady, she would prioritized her options to eye surgery to avoid wearing glasses, followed by the laser skin treatments to prevent her from looking too old and avoid the wrinkles from appearing

Thus, buyers with different ages have different needs and spend different amounts on necessities and non necessities. Thus, the marketer should have be able to know the target market of its product and ways in which he/ she could attract these markets e.g. the could be able to attract consumers through promotions like bonus packs to prompt the consumers to buy and perhaps buy more than they otherwise would.

Introduction

Consumer behavior is a rational psychological process which allows consumers to critically evaluate their purchase options with the aim of justifying the reasons behind their purchases in order to maximize their own satisfaction. Consumer behavior involves on how consumers decide whether or not to purchase a product.

The consumers decision is usually based on consumers decision making process with respect to understanding what the consumer wants, consumption and disposition of goods and services, activities, decision-making units ( overtime) (Kotler 2003, 12).

Consumer behavior means more than just the way that a person buys tangible goods; it also includes consumers use of services, activities experiences, and ideas. Marketers are very concerned with the manner in which consumers buy products and services. However, marketers are also intensely interested in consumer related to using and disposing of a product.

This include; acquisition  the process by which a consumer comes to own the product; usage- the process by which a consumer uses the product; and disposition  the process by which a consumer discards a product (Porter 1990, 8). The sequence of acquisition, consumption and disposition can occur over time in a dynamic order.

Entire markets are designed around linking one consumers disposition decision to the customers acquisition decisions, for instance, when consumers buy used cars they are buying cars that others have disposed of and should be aware of it.

Body modification

Some of the image altering options reflecting the variety of behaviors by the illustration were: body art for fashion (tattooing and piercing); cultural body art as a reflection of ethnicity; myriad services of cosmetic enhancement- laser skin treatments for wrinkles and hair; Botox, collagen, cosmetic dentistry; body contouring using systems such as endermologie; eye surgery instead of using glasses; cosmetic dentistry i.e. veneers and whitening; and cosmetic surgery.

Marketers have to identify its customers reference group so as to meet the customer demands. A referenced groups influence on particular individuals varies depending on particular products and brands therefore in some instances the influence of this group may either be significant or insignificant.

Reference groups appear to influence both product and brand choice strongly e.g. Some consumers have body parts pierced as a form of self expression, while others do it to fit into a group, still others believe that body piercing is a form of beauty or that it enhances sexual pleasure.

individuals often purchase goods and services that reflect their particular age at the time of purchase. With time, consumers buy different products and services that would best suite them that time.

For example where, for a female teenager she would be more concerned with her appearance be fascinated with tattooing and piercing for beauty as well as cosmetic surgery during her teenage years, but during her middle aged when she is more mature she tends to be concerned about how her appearance will influence her children, as a mature lady and responsible and respectable lady.

People tend to relate what they believe in and how the behave with the groups they are associated with. The groups play a very big role as they tend to introduce individuals to new practices and lifestyle, they also influence the behavior expressed by an individual while they also demand a compliance of the stipulated practices.

Interview Results

Note: Each attribution is related from 0 to 10, where 10 represent the highest level. For the teenager she was more into her appearance where the highest level was in tattooing and piercing for beauty as well as cosmetic surgery, such as whitening and the lowest being laser skin treatments since their skins have not been affected by the toxins of the cosmetics and now that she is young she will not be needing the skin laser treatments.

For the middle aged, her highest level was cosmetic surgery this is to enable her to feel like she is still young and the lowest rank being tattooing and piercing and since she is mature and she would like to present herself in a respectable manner she would only prioritize on cosmetic surgery, eye surgery and laser skin treatment.

The old lady, she prioritized her options to eye surgery to avoid wearing glasses, followed by the laser skin treatments to prevent her from looking too old and avoid the wrinkles from appearing.

Once a consumer is in position to earn an attractive amount of money, he/she will be attempted to buy expensive products as opposed to a consumer who is earning very little who will only buy cheap products because that is what they can afford. (Lancaster & Withey 2006, 45) explain that economic situation of an individual influences on an individuals power attitude toward spending versus saving.

Society is made up people with different social classes. These classes mostly are defined in terms of status, wealth, living condition among other factors. the society has the upper class these are the rich who are regarded to have too much wealth at their dispose, then there are those who define as the middle class who earn average income while the low class are the poor who have very little wealth at their disposal.

Depending on which class a consumer is from, it is always going to influence their being decision that why an individual from the upper class social status will always buy good in bulk because they can afford to pay for them while the low class consumer will only buy goods that will presently be of use because thats only what they can afford (Ford 1990, 322; Waterschoot and van den Bulte 1992, 88).

Analysis and Comparison of results

Consumer behavior does not necessarily reflect the action of a single individual, a group of friends, coworkers, or an entire family may have an impact on the decision making of the individual and their attitudes towards the product. However, some decisions about whether to acquire, use, or dispose of a product are related to personal goals, safety concerns or desire to reduce economic, social or psychological risk.

There are several factors that may influence buyer behavior which include;

Culture

Every individual is a member of a particular cultural group or society. Depending on the cultural practices of that particular society, an individual is likely to be influenced while purchasing a product or service because of the cultural practices present. Culture can be defined as the beliefs of a group of people how they behave, and their thoughts about various subjects.

For example when a child is growing up, what the child learns from the parents and other individual relating to the child like teachers, friends, and family members would likely influence the childs behavior as he/she grows up. Thats why people of different cultural societies end up purchasing goods and services because of the influence they have from their cultural background.

Within the cultural factors lies sub factors which also influence buyers behavior. In each cultural group there is a sub division of a group of people having the same kind of behavior and share values based on one common belief.

According to Anderson (1982, 14) he states that the sub cultural divisions are very important market segments as their provide markets to programs that are set up to meet their needs. Marketers are then encouraged to come up with products that best satisfy the needs of the people in a particular geographic group.

Another sub factor is social class. The society is made up people with different social classes. These classes mostly are defined in terms of status, wealth, living condition among other factors. the society has the upper class these are the rich who are regarded to have too much wealth at their dispose, then there are those who define as the middle class who earn average income while the low class are the poor who have very little wealth at their disposal.

Depending on which class a consumer is from, it is always going to influence their being decision that why an individual from the upper class social status will always buy good in bulk because they can afford to pay for them while the low class consumer will only buy goods that will presently be of use because thats only what they can afford.

Marketers mostly choose to design products once they are sure of the kind of social class they are targeting. Clearly classification of social classes creates a distinct position in which products and services are designed and branded from clothing, home furnishings, leisure activities and automobiles Some marketers focus on their efforts on one social class thus products will not sale to the market as anticipated

Social factors

How a consumer behaves is also influenced by various social factors such as;

Reference groups

These are groups that have some kind of influence on a persons attitude or behavior. The influence may be direct or indirect.

For example groups formed by leaders may influence the opinion of their followers, religious leaders and church groups may influence what the congregation believes in; the artists may influence their funs and so on. People tend to relate what they believe in and how the behave with the groups they are associated with.

The groups play a very big role as they tend to introduce individuals to new practices and lifestyle, they also influence the behavior expressed by an individual while they also demand a compliance of the stipulated practices. These groups put pressure on the consumer consent and influence on the choice of product and service purchase (Kotler 1999, 102).

Marketers have to identify its customers reference group so as to meet the customer demands. A referenced groups influence on particular individuals varies depending on particular products and brands therefore in some instances the influence of this group may either be significant or insignificant.

Reference groups appear to influence both product and brand choice strongly e.g. Some consumers have body parts pierced as a form of self expression, while others do it to fit into a group, still others believe that body piercing is a form of beauty or that it enhances sexual pleasure.

Family

Most people base their buying decision based on if it would be of use to the family members. Families are considered as one of the most important buying units within the economy and therefore of great importance to marketers. Marketers through conducting research can effectively know which role each and every member of the family plays as far as consumer behavior is concerned.

That is why the marketers have to be aware of the person who has the most influence in determining product choice. If for example the woman has the most influence then marketers would use various ways to attract that market.

Roles and statuses

A role can be explained as a set of various activities a person is required to carry out within the society. Each role is determined by the individuals status.

Most people will choose products that communicate their role and status in the society, for instance the middle aged her highest level was cosmetic surgery this is to enable her to feel like she is still young and the lowest rank being tattooing and piercing and since she is mature and she would like to present herself in a respectable manner.

Koontz & Weihrich (2009, 59) suggest that marketers are well aware of the role which status influences the nature of purchases conducted within the society.

Personal factors

A consumer judgment to buy a product can also be subjective on individual traits. These characteristics may include: Age: Individuals often purchase goods and services that reflect their particular age at the time of purchase.

With time, consumers buy different products and services that would best suite them that time. for example where, for a female teenager she would be more concerned with her appearance be fascinated with tattooing and piercing for beauty as well as cosmetic surgery during her teenage years, but during her middle aged when she is more mature she tends to be concerned about how her appearance will influence her children, as a mature lady and responsible and respectable lady.

Occupation and economic circumstances

An individuals occupation or line of work also influences the nature of purchase that he/she is involved in and therefore often marketers use this fact to market various products. A teenager will buy cheap cosmetics while a middle aged lady will likely buy more expensive cosmetics. Products alternatives are greatly influenced by the economic state of affairs that a consumer is exposed to.

Once a consumer is in position to earn an attractive amount of money, he/she will be attempted to buy expensive products as opposed to a consumer who is earning very little who will only buy cheap products because that is what they can afford. (Lancaster & Withey 2006, 45) explain that economic situation of an individual influences on an individuals power attitude toward spending versus saving.

Marketers usually use research data on personal income, savings and interest rates while designing products so that they can effectively segment, place and target specific consumers. When there is an economic recession hit the commercial world marketers were force to redesign products so that more affordable products could be made available to consumers.

Lifestyle

How a person chooses to live is defined as lifestyle. An Individuals living lifestyle is articulated in the various activities, interest and opinions that surround his/her daily livelihood. Marketers look at what relationship their product has to a person lifestyle.

For example, cosmetic manufactures produce products that are beauty oriented. The marketer target individuals who are cautious about their image and thus his goal are to design a brand that is a direct reflection the lifestyle of various individuals.

Personality and self- concept

Different people have different personalities. Depending on the situation an individual is said to posses different personality traits. Personality can be a great influence to a consumer while deciding to purchase a product.

For example, a cosmetic company might discover that many prospectors show high self- confidence, dominance and beauty. This suggests designing the cosmetic advertisement to appeal to these traits. Marketers also try to develop brands images that match the target markets self image.

Consumers must decide whether to acquire, use or dispose of an offering. They may need to decide whether to spend or save their money when they earn extra cash. How much they decide to spend may be influenced by their perceptions of how much they recall spending in the past (Charles et al 2009, 127).

Psychological factors

How an individual chooses to buy a product is influenced by four major psychological factors namely:

Motivation

In a given period of time as an individual there are many needs that one has. There are theories that tend to explain more about human motivation. Some are as follows:

Sigmund Freud motivation theory: This theory assumes that the psychological factors influencing individuals actions are mainly unaware, and that an individual cannot comprehensively appreciate his impulses, for instance the middle aged her highest level was cosmetic surgery this is to make her feel like she is still young and the lowest rank being tattooing and piercing and since she is mature and she would like to present herself in a respectable manner she would only prioritize on cosmetic surgery, eye surgery and laser skin treatment (Dwyer, Schurr and Oh 1987, 17).

Laddering is a method which can be used to accurately determine a persons motivations that influence his behavior. Then marketing experts can make important strategic decisions that are involved with the design of messages that appeal to consumers.

Maslows theory: This theory classifies needs into: psychological needs, safety needs, social needs, esteem needs, and self actualization needs with the highest level being self actualization needs. Maslow suggests that individuals will attempt to cater for their most important needs first.

When an individual achieves certain needs within this hierarchy these needs will no longer motivate them and therefore will move forward to cater for other needs which motivate him most. Maslows theory assists marketers understand how plans, goals and motives are the main reason behind purchases made by consumers.

Herzbergs theory: Fredrick Herzberg came up with the factor theory that differentiates issues causing discontent from the satisfiers therefore taking centre stage in determining human behavior (Davis 1961, 45). Herzbergs theory has two implications.

First, sellers should do their best to avoid factors that bring about dissatisfaction. Secondly, the manufacturer should precisely identify satisfiers and therefore aim to incorporate them in production in order to motivate consumers to purchase his/her products. These satisfiers determination to formulate the key variation as to which product the customer buys.

Perception

It is the course of action by which an individual selects, organizes and understands information inputs to build a significant representation of the world. Perception depends not only on the nature of the stimuli but also on the immediate environment unto which the stimuli emanates from (Anderson and Narus 1990, 49).

People can appear to have diverse perceptions of the similar product since there are three perceptual processes: selection attention, its where the person screens all that she/he sees and hears and pays interest simply to preferred ones, selective distortion, its the affinity to change information into exceptional meanings and understand the information in a way that determine to fit the consumers perceptions, selective retention; people will disregard much on what they learn however, they will be likely to hold on to the information that supports their attitudes and beliefs.

Selective retention defines why marketers use presentation and repletion in delivering messages to their target market (Ford 1980, 344).

Learning

Learning its the changing of an individuals performance though experience. Learning experts insist that learning occurs when different forms of stimuli are introduced within the environment to reinforce behavior and responses of individuals. Cues are slight stimuli are the main drivers that define behavior exhibited by individuals.

Learning theory enables marketers formulate various forms of stimuli that are incorporated into marketing strategy with the main aim of influencing consumer behavior. Various cues are used by marketers to reinforce consumer behavior by designing marketing messages that can easily influence human behavior

Beliefs and attitudes

Through knowledge, people achieve beliefs and attitudes. Thus it influences their consumer behavior. A belief is a vivid notion that an individual holds concerning something. Beliefs may be based on facts, view or faith. Manufacturers are greatly responsive and concerned in the values people bear in their minds regarding their goods and services.

These philosophies make up brand descriptions and associations that can lead consumers into displaying desired actions once consumers are exposed to a set of pre determined images. If a few viewpoints are mistaken and stall purchase, the manufacture will want to initiate an operation to approve these beliefs.

For example, the use of laser treatment for hair had a negative effect on the consumer; the manufacturer should launch another product that would not have the same effect to the consumers. An attitude is a set of favorable or unfavorable opinions/conclusions, about certain objects or ideas.

Ethics play a major function in consumer behavior. Some consumers may want to avoid products made by factories with questionable labor practices (Halinen 1995).

The Buying Decision Process

These are:

Problem recognition

The buying procedure begins as soon as the buyer recognizes a difficulty or need. The demand can be triggered interior or exterior stimuli. In case of interior stimuli, an individual basic need arises to a verge level and becomes a drive. In case of exterior stimuli a want is aroused by peripheral stimuli.

Information search

Recommendations

A manufacturer of goods and brands where group control is well-built must establish how to achieve and persuade the belief leaders have in these growths. A belief leader is someone in informal product connected to relations who offers information or informs regarding a precise product or product type.

A marketer ought to contact opinions leaders by identifying demographic and psychological distinctiveness allied with opinion control, identifying the medium read by opinion leaders along with directing messages at them e.g. the firm are more responsible to advertise their services of tattooing and piercing to young adult in view of the fact that they are more to beauty than selling laser treatment for wrinkles which would be more valued by the old.

Marketers should search for relationships between their products and lifestyle group, for example for a middle-aged she would prioritize her needs to cosmetic surgery this is to enable her to feel like she is still young and the lowest need being tattooing and piercing and since she is mature and she would like to present herself in a respectable manner she would only prioritize on cosmetic surgery, eye surgery and laser skin treatment.

And The old lady, she would prioritized her options to eye surgery to avoid wearing glasses, followed by the laser skin treatments to prevent her from looking too old and avoid the wrinkles from appearing (Heide 1994, 74).

Marketers should also try to develop brand images that match the target markets self image, for instance setting up a laser treatment infirmary to an educational institution thats full of students who range from 18 to 24 instead of body art facility for fashion or a cultural body art as a reflection of ethnicity.

The marketer should have a selection attention that means marketers have to work hard to attract consumers notice, for instance through the first information that is acquired through the first sight, the package of the product should catch the attention of the consumer where the model advertising the product should be appealing and the product should make sure that the aim of the achiever which is beauty should be noted on the product (BAC 2011, 13).

References

Anderson, J. and Narus, J., 1990. A model of distributor firm and manufacturer firm working. Journal of Marketing, Vol. 54, pp. 42-58.

Anderson, P., 1982. Marketing, Strategic Planning, and the Theory of the Firm. Journal of Marketing, 46, 723.

BAC, 2011. Cosmetic industry in Russian Federation: Business Report 2011. Moscow: Business Analytic Center (BAC).

Charles, L. et al, 2009. Essentials of Marketing. Natorp Boulevard: Cengage Learning.

Davis, K. R., 1961. Marketing Management: Text and Cases. New York: The Ronald Press Company.

Dwyer, F. R., Schurr, P. and Oh, S., 1987. Developing buyer-seller relationships. Journal of Marketing, Vol. 51, pp. 11-27.

Ford, D., 1980. Buyer/seller relationships in international industrial markets, European. Journal of Marketing, Vol. 14 No. 5, pp. 339-54.

Ford, D., 1990. Understanding Business Markets: Interaction, Relationships and Processes. Industrial Marketing Management, Vol. 5, pp. 319-32.

Halinen, A., 1995. Presentation Development of buyer-seller relationships: suggestions for future in London.

Heide, J., 1994. Interorganizational governance in marketing channels. Journal of Marketing, Vol. 58, pp. 71-85.

Koontz, H. & Weihrich, H., 2009. Essence of Management an International Perspective. New Delhi: Tata McGraw Hill.

Kotler, P., 1999. Principles of marketing, (2nd edn). New York: Prentice Hall, 1999.

Kotler, P., 2003. Marketing Insights from A to Z: 80 concepts every manager needs to know. New Jersey: John Wiley & Sons Inc.

Lancaster, G. & Withey, F., 2006. Marketing Fundamentals: CIM Course book. London: Oxford publishers.

Porter, M., 1990. Competitive advantage, illustrated edn, Northampton, MA: Free Press.

Waterschoot, W. and van den Bulte, C., 1992. The 4P classification of the marketing mix revisited. Journal of Marketing, Vol. 56, pp. 83-93.

Introduction

Al Hilal Bank is an Islamic bank with its headquarters in Abu Dhabi (Al Hilal Bank Aims par. 1). The main goal of the bank is to respond to the primary Islamic values and to see the world from a different perspective (Al Hilal Bank par. 1). It provides various banking operations such as wholesale banking services, personal banking, asset acquisition finance, foreign exchange contracts, and working capital and trade finance (Bloomberg: Company Overview par. 1).

It could be said the bank cares for its employees and considers them as an essential element of the planning process. Al Hilal Bank pays close attention to the recruiting process in order to increase efficiency and effectiveness of operations (Al Hilal Bank par. 1). The main aim is to hire successful and hardworking people to remain competitive in the world.

Speaking of specifics of this case, a current goal of Al Hilal Bank is to become the smartest bank in the United Arabic Emirates (Al Hilal Bank Aims par. 1). Mohammad Berro claims that the bank will achieve a desired goal in five years by increasing popularity of mobile and computer applications (Al Hilal Bank Aims par. 1). It could be said that it will reduce a number of working processes in other spheres and attract attention to the smart banking. This research paper emphases implementation of this goal by project management of Al Hilal Bank.

This research focuses on evaluation of project management in Al Hilal Bank. The case study method is used to acquire this information. After the evaluation process, possible conclusions are made. Some issues, which might affect effectiveness of the organization, are considered. Results help to find possible answers to the questions to improve a current state.

Objectives and goals of the research

It is important to understand and determine primary objectives and goals of the research before starting the exploration. Firstly, it should be said that project management is rather complex and sophisticated. It consists of several elements such as project planning, scheduling, implementation, controlling, and monitoring (Nagarajan 5). All these elements are pivotal for successful project management. However, only one stage is evaluated, as Al Hilal Bank is currently in the implementation phase. The planning stage terminated, and it is time to continue with the next step. Other stages will be discussed briefly. It will help to see the whole process.

The main goal is to discover the implementation process of Al Hilal Bank. It is clear that the bank has to establish an objective in each implementation stage (Binder 249). It will help the company to have successful results after the completion of the evaluation phase.

Additionally, a comparison between the key correct process, current process and project managers roles has to be made. This fact will help to evaluate a current situation. Moreover, one more aim is to determine a problem and its type. This aspect will help to discover various possibilities to solve a problem.

Another goal is to show that a global and competitive company such as Al Hilal Bank might face certain complications in project management. The key objectives are to determine the ways of finding solutions to difficulties and discover companys effectiveness on the current stage.

Evaluation of all these aspects will help to determine Al Hilal Banks effectiveness in the banking industry in the United Arab Emirates. It will also help to see managing process from a different perspective and understand the banks way of finding solutions to the problem.

Type of problems demonstrated in the paper

Project management might face different problems during all the phases of the project implementation. As a process is usually limited by time and resources (Burkov and Burkova 1242).Consequently, problems related to the successful estimation of the required time and scheduling of the stages are the most common issues that the management faces. Inability to find alternative solutions and other ways of implementation is another issue, which has a negative impact on the efficiency of project management (Nagarajan 5). Moreover, some companies are not able to evaluate risks and their possible impact on flow of a project (Roberts 146).

However, these problems are not discussed in this case. Al Hilal Bank faces challenges related to the communication issues. Misunderstanding is a common complication in everyday life. Communication skills are vital for the goal achievement and finding the best solutions to the issues. Nevertheless, it has to be mentioned that a lack of communication might be a reason for not meeting the deadlines.

The key of correct process in Al Hilal Bank

Speaking of correct process, the project managers are trying to achieve the final aim by the deadline. The key process is to focus on financial planning. It is the most effective and fast way to reach the final goal. The project managers have to pay significant attention to the distribution of the financial resources, as it is critical in this situation. In case of Al Hilal Bank, project managers have to understand the importance of financial planning and try to avoid a lack of control.

However, it has to be mentioned that achievement of the main goal is rather difficult. It involves making decisions on the multiple levels of the hierarchy, which is established in the bank. Taking into account other small phases of the project is also vital while reaching a final goal.

Key process and current process

In order to evaluate a condition of Al Hilal Bank, it is necessary to compare the key process with the current process. Firstly, a current process has to be described. Understanding significance of the current process is important, as it allows seeing a full image of the current stage.

As it was mentioned earlier, Al Hilal Bank is planning to become the smartest bank in next five years (Al Hilal Bank Aims par. 1). The goal is rather massive. Subsequently, it will require some time to implement all the required phases. However, it could be said that the implementation process has began already, as computer and mobile applications are available for all platforms. Additionally, the company participates in various events, which support its corporate image and give a chance to show its smart side (Al Hilal Bank Aims par. 5).

Compared to Al Hilal Banks key process, it could be said that it is slowly moving in the right direction. In order to achieve its final goal, the bank has to reduce its spending in other spheres. It might require some time, as reconsidering the states of expenditure is a sophisticated process. In conclusion, it could be said that Al Hilal Bank is partly located in the planning and scheduling stages. All the actions have to be continuously evaluated to avoid high risks and losses.

Project managers roles

Additionally, in order to recognize a problem in project management, project managers roles have to be evaluated. Moreover, influence of the roles has to be discovered, as this fact helps to see a reason for the current stage of the progress. Furthermore, it evaluates the actions of the projects managers and possible ways to improve a current condition.

It could be said that project managers play a vital role in this process, as there are essential contributors to the final decisions. In general, the project managers are responsible for calculations and estimations of possible costs and resources (Abaza, Siddiqi, Arsic, and Passley par. 2). In case of Al Hilal Bank, the project managers have similar roles, as they pay close attention to financial planning and resource distribution. This fact implies that the project managers successfully perform their duties, and the final goal of the plan will be reached in time.

Actual problems in Al Hilal Bank

Project managers usually face a significant amount of problems during all stages of planning. A lack of communication is the main problem that Al Hilal Bank currently opposes. It seems that the bank does not pay enough attention to its employees. The workforce does not feel as their suggestions and decisions are taken into account. It could be said that this fact creates misunderstandings and slows the speed of the implementation process in Al Hilal Bank.

In order to find possible solutions to this problem, a project manager should be able to find successful methods of communication with employees (Nagarajan 5). In this case, establishing a trustful relationship with the workers is vital. The workforce is an important asset of the company, as it was mentioned previously. Moreover, as Al Hilal Bank has some difficulties while establishing a communication framework, project managers pay close attention to this issue and try to avoid misunderstandings in the company.

Conclusion

In conclusion, it could be said that having an effective and detailed planning is vital for a company. Effective project management helps Al Hilal Bank to stay competitive in the banking industry. Moreover, it helps to generate higher revenues and create a high brand recognition in the world. It could be said that the bank is able to find effective solutions to a problem. Its implementation process is detailed, and it responds to the key values of the company.

However, it has to be mentioned that even though Al Hilal Bank is a pure success in the United Arabic Emirates, it still experiences some difficulties in the implementation process. A lack of communication between project managers and employees is one of them. It was surprising to discover that the organization, which appreciates hard work of their employees, might experience and face social issues. It is essential for every organization to establish an effective project management network and have a good relationship with its employees. If Al Hilal Bank ignores this issue, it might lead to the problems in project management. Additionally, it does not respond to the key values of the bank, as it is originally supposed to consider its employees as an important asset.

Recommendations

It is critical for Al Hilal Bank to find a solution to the lack of communication. Establishing a trustful relationship is vital for effective implementation and organization in each project stage. Paying closer attention to the workforce will help to reduce misunderstandings and boost the efficiency of Al Hilal Bank.

There are several solutions to this problem. Firstly, giving employees a right to participate in the decision-making process will help to increase the level of trust inside the bank. Employees will feel as a part of the team and improve effectiveness of the working processes. However, senior managers might not consider this solution as the most relevant, as they might not want to share their responsibilities with the regular employees. In this case, an illusion of making decisions might be a suitable solution to this problem. Workers would understand their significance. However, their decisions will have only a slight effect on the final decision. The bank has to fix this issue, as it might affect its reputation.

Another solution is to increase the importance of the corporate culture. Various entertaining activities will help to see employees and managers from the different perspectives. It will encourage a friendly atmosphere in the bank and help to improve communications skills of all employees.

Moreover, Al Hilal Bank could create a box of ideas. The main goal of the box will be to create a friendly atmosphere in the organization and encourage employees to share their thoughts. Once a month, the ideas will be checked and evaluated. The most successful solutions will be awarded and might be considered as possibilities for the future implementation. This fact will help to create a competition between the employees. It will increase their effectiveness and make them work harder.

Works Cited

Abaza, Hussein, Khalid Siddiqi, Zoran Arsic, and Grifton Passley. Monitoring Project Progress: Project Managers Perspectives. International Journal of Construction Project Management 6.1 (2014): 63-74. Print.

Al Hilal Bank: A Bank that Dreams. 2015. Web.

Al Hilal Bank Aims to Become UAEs Smartest Bank. Gulf News. 2015: n.pag. Web.

Binder, Jean. Global Project Management: Communication, Collaboration and Management across Borders, Burlington: Gower Publishing Company, 2007. Print.

Bloomberg: Company Overview of Al Hilal Bank PJSC 2015. Web.

Burkov, Vladimir, and Irina Burkova. Network Programming Technique in Project Management Problems. Automation and Remote Control 73.7 (2012): 1242-1255. Print.

Nagarajan, Hari. Project Management, New Delhi: New Age International (P) Limited, Publishers, 2004. Print.

Roberts, Paul. Effective Project Management: Identify and Manage Risks, Plan and Budget, Keep Projects under Control, Philadelphia: Kogan Page Limited, 2011. Print.

Introduction

Economists concentrate on measuring the gross domestic product (GDP) of a particular country as a way of evaluating the progress and appropriation of resources. However, to measure quality of life they rely on more than just the GDP indicators (Constanza, 2008).

This essay seeks to explain how economists will measure quality of life and the problems they are likely to encounter. It also highlights the benefits of indicators used by economists. The essay shows that economists use a number of indicators to explain the affordability of essential services, their accessibility in society, and the satisfaction levels of the general population when accessing services and goods.

Measuring quality of life using indicators

As a way of measuring quality of life, economists first measure the size of an economy and then use social indicators to determine the distribution of wealth. Social indicators used by economists include life expectancy, education standards, housing standards, distribution of income in society, air pollution, congestion, and access to clean drinking water. In addition, economists will also look at social investments and present consumptions. They measure consumption by households and incomes earned by households and match them with the GDP indicator.

They can come up with additional observations to influence their verdict on the quality of life. In countries with sufficient social security programs, household incomes reveal resilience against the devastating effects of recession on household incomes. Thus, the presence of social security can act as an indicator of quality of life. In theory, an increase in social security expenditure will lead to improved livelihood.

Based on this understanding, economists lump quality of life indicators together in a survey and then use the descriptive results of the survey to offer an outlook of peoples lives. According to Diener, Inglehart, and Tay (2013), life satisfaction surveys are thought to complement existing indicators by reflecting the influences of diverse facets of quality of life and allowing respondents to freely weight different aspects (p. 498).

Benefits of using quality of life indicators

The indicators provide meaningful data for future planning of resource allocation in society. They allow governments to come up with policies that increase citizen engagement in the process of governance for the benefit of everyone. Through policies influenced by quality of life indicators, societies are able to preserve their environments and develop urban areas in sustainable ways that ensure there is no compromise in quality of life. Overall, indicators make wealth distribution efforts equitable because they provide different parameters for determining neediness of a community or household.

As explained by Greenwood and Holt (2010), indicators of quality of life can better equip local communities to deal with a variety of issues and to develop an economic development strategy that improves the overall standard of living (p. 39). The use of indicators in popular quality of life surveys allows economists in different countries to have a universal basis for comparing results, even though not all indicators may be identical in different surveys.

Problems with quality of life indicators and why they are still useful

The mostly used standard survey today covers more than 110 countries and provides different scores for indicators measured. The problem facing many economists as they undertake the measurement task is the inability of non-monetary indicators to be objective. Many of them remain subjective and require a combination with monetary indicators to become comprehensive and reliable measurements. As they use life-satisfaction surveys, economists face a challenge of explaining differences in cultures.

They also have to explain the effect of language differences in different countries or psychological factors that can be responsible for the distortion of responses. Another problem with surveys is that they will carry questions that match the dominant view of life. As an example, Teneguzzi (2015) reports that, affordable housing is one of the many factors that contribute to the overall quality of life of Albertans and the attractiveness of our province to do business in (par. 4).

Conclusion

Economists rely on quality of life indicators in addition to GDP when they are measuring the quality of life of a particular country. They use indicators such as access to clean drinking water and education standards of a country. The indicators allow economists in their research and practicing capacity to assist governments in making development policies, wealth distribution policies and to compare progress of societies. Unfortunately, indicators can be cumbersome to use, especially for comparison among countries, because they are subject to prejudicial, language and cultural influences. Nevertheless, they remain inexpensive when used in surveys as instruments for measuring quality of life.

References

Constanza, R., Fisher, B., Ali, S., Beer, C& & Bond, L. et al. (2008). An integrative approach to quality of life measurement, research, and policy. Sapiens, 1(1), 16-21.

Diener, E., Inglehart, R., & Tay., L. (2013). Theory and validity of life satisfaction scales. Social Indicators Research, 112(3), 497-527.

Greenwood, D. T., & Holt, R. P. (2010). Local economic development in the 21st century: Quality of life and sustainability. Abingdon, OX: M. E. Sharpe.

Teneguzzi, M. (2015). Alberta residential landlords oppose rent controls. Web.

Introduction

In the past as Albrecht & Sack (2010) point out businesses have relied institutional information like accounting to make choices pertaining the growth of a business organization. Traditionally, information would be compiled and analyzed to make a report that would form a basis for decision making. Before the decision was concluded and implemented the business organization consulted expertise for accurate translation of the reports.

This procedure was cumbersome and costly. Besides challenges with the cost and time, obtaining information was difficult for shareholders. The businesses also had to keep up with the competition posed by other players (p. 5).

Ferguson in the first episode Dreams of Avarice of the video series The Ascent of Money reveals that the historical events that have taken place in relation to money are of relevance to understanding the global business environment in the future. He highlights practices that have been used in the past, and are being used and those likely to be used in the future.

Practices such as borrowing and lending of finances, how it grew from shylocks and borrowing to bank loans which led to the credit cards. This essay will discuss the future of global business environment using the first episode dreams of avarice.

The future of the global business environment

The future of global business environment is changing to technological advancement. Information storage and retrieval are advantages that come with the use computerized systems in banking.

The information is also made easily accessible for processing of information and there are fewer error experienced as would have been with paperwork. The cost is remarkably low. It relieves the shareholders of large sums that would be used obtain data.

Information exchange in business

Exchange of information has become easy as digitalized devices have been made affordable to citizens. In addition there are computer programs designed specifically to meet the needs of banking and therefore data presentation as well as transmission is conducted in a straightforward manner.

The use of credit facilities by citizens is an example. The credit cards are used to pay for services or goods on credit. The card bears information about the clients bank details. During the transaction, information is exchanged, the card is authenticated and then the client is able to purchase goods and services.

The future of the global business environment is universal as Albrecht & Sack (2010 p. 5) indicates. The inaccessible parts of the world are slowly being made reachable through the developments in infrastructure. Roads are being built.

In the past the wars that took place in the world cause major damages to infrastructure and crippled businesses. As a result banking institutions were closed. This is revealed in the dreams of avarice because as it portrays, every war that happened in the world has affected the finances of institutions. Some gain while others loose.

Universalism and Developments and business environment

Developments and universalism has made it possible for people to access both imported and locally produced goods in localities. People can pay overseas products recognized universal credit cards.

Into the bargain, developments in transport system have contributed to the completion of companies to sell their product to possible consumers. The competition is going to be more advanced because recent developments make availability of information accessible to those who need it and those who do not.

Financial institutions and business environment

The banking system is not immune to this competition and the free flow of information. The financial institution whether private or state owned will fight to dominate the consumer market as evident in Ferguson dreams of avarice.

Competitors have information about other financial institution such that the slightest changes would be detected immediately and measures of correcting the alteration be employed within the shortest period possible.

The global business environment is dominated by the power that also controls the economy. The dream of avarice shows them that power is concentrated among few financial institutions that set the pace for the rest. To improve the financial income, an institution can borrow and expand its range of services to improve on the income. Borrowing is therefore seen as an inevitable to realize the dream of being a millionaire.

The powerful financial institutions set the ladder for competition so high so that they maintain their superiority. The borrowing firm must conform to the laid down instructions of the company that lends as it has always been. The powerful institutions led to gain more revenue as the get interests from the lending.

The clients needs are taken as the priority in organization. The goals and objectives of the company major on customer satisfaction. In order to make huge profits, the organizations must meet the clients needs adequately, efficiently and effectively. For instance, clients instant solutions and the credit card are widely used.

They can purchase utilities and pay for them later. In this case, the client will use their credit card to purchase goods and services on credit and pay later. The credit is given without collateral. Credits are given on the assumption that the client will pay. The process involved in paperwork on borrowing and time are eliminated as the credit card brings a lot of convenience.

The future of the globalised business environment will have fewer people trained in the financial accounting as new software being used has replaced them. Thus there is going to be few experts whose main task will be to invent computer software that can be used to for accounting and financing.

Using their expertise they can make large sums of money after they establish their business. The dreams of having a lot of money is the driving force of many and therefore people are determined to make money at the slightest opportunity.

Share holders will invest only in the dominant institution as they are assured of making revenue if they invest in organizations that have the power. This is because over time business theories that have been used in the past have become outdated and investors would wish to make millions by investing with those who dictate the market (Albrecht & Sack, 2010, p. 7).

In future, the banking industry is likely to modify its strategy in order to make use of short term opportunities. These opportunities last within a specific period favored by certain conditions and the organizations can make a lot of money. This environment requires administrators who make accurate choices within the shortest period possible. Decisions made consider the option that will lead to maximum benefits in order to gain the millions.

It is possible for other financial institutions to emerge. They bring with them new innovative of ideas making the competition steeper. The new companies meet the wants of the customer as they use available information as well as research to come up with the new ideas.

The existing companies modify their services not to lose clients. The main purpose of creating other institutions is to make services available to consumers and get revenue in the competition. Competition benefits the client because they receive quality goods and services. For instance credit facilities enable clients to expand their businesses.

The future global business environment will require experts who are conversant with the modern systems of business. Accordingly, new careers will emerge. They will be capable of working in a dynamic and changing world that is full of contest. For this reason, they will be responsible of helping the organization survive from unpredictable market trends. These risks will require specialized business deals like contracts.

In future technology will be much advanced. New softwares that are created after a short period are likely to be more superior. As already observed, technology has reduced the bulkiness that was experienced during storage of data. In the days to come, data will be stored in storage devices that are small in size offered by banks become outdated within a short time (Albrecht & Sack, 2010, p. 9).

Employees will be recruited for shorter contract in the future global business environment. The competition in the markets make product last for a short time. Workers thereby live with job insecurities because projects taken on contracts can only be extended only if they are relevant in the time and bring income.

According to Albrecht & Sack (2010) risks in the globalised business environment can be a used in a business to be successful. The important thing is to be able to manage the risk. The risks are evident in contracts that are made without certainties of returns as well as the credit facilities given to clients (p. 9).

The future global business environment will have different mechanisms of administration and strict controls in the finances. The traditional budgeting process and the procedures used making future plans will be abandoned. This is due to the nature of the market which is constantly changing.

To be able to maximize on profits, the organization must make the arrangement for raising capital for a new project flexible. This is because delays in allocation of resources of a certain service might lead to loss of clients and loss of profit.

Products such as bank statements have been replaced by technology and financial institutions must quickly change to the use of technology to give statements online like other banks.

Consequently, the bureaucracy in organizations will be faced out as devolution in management is being adopted in the global environment. Therefore decision making and implementing changes will be made in time. Furthermore, management information will be available to more employees.

Conclusion

The dreams of avarice have always guided the economic actions of financial institutions. Over time people have formed revolutions and even gone to war with a motive to accumulate wealth. As an initiative to develop institutions and individuals have borrowed money to expand and increase their wealth. In the modern global business environment there are changes that will lead a global economy.

The future will be dominated by the use of technology to make it possible to acquire money easily. There are also short term contracts that capitalize on opportunities in the dynamic environment to make profits. Consequently, experts with understanding about the dynamic environment will be used to make quick and accurate decisions.

Reference List

Albrecht, W. S & Sack, R. J. (2010). Accounting education series. Accounting Education: Charting the course through a perilous future, 16 chapters 2. Retrieved from: <http://aaahq.org/>

The product we are going to implement is absolutely new for consumers, so internal investment may be available for business. Requesting for internal investment, we are going to point to new marketing strategies and expansion where funded resources are going to be spent.

The chocolate business which is going to be led has financial resources to undertake internal investment (Sprague, 2008). The business should try to spread as much as possible information about the specifics of the business to the potential internal investors to make those interested in the revenue they are going to receive in the future.

A corporate business sponsor is a good opportunity for the company. Having conducted a research it was concluded that there is a sponsor who is ready to finance this kind of business. ING Australia Holdings Limited and ING Australia Pty Limited are the Australian departments of the ING Corporate Investments B.V.

This organization is ready to invest its corporate finances in business which is a strong niche player. Having developed a new niche on the market, the organization should show the priorities and benefits of this business. Having only a business plan, this organization should show its best sides to ING, pointing to the minimal risks.

The development potential should be shown as well. Robust cash flow substantiated forecast is obligatory if Indulge wants to get corporate investment from ING Corporate Investments B.V.

This organization also declares other requirements for the company which is interested in being invested, namely engagement of other shareholders, experiences and skilled management, the possibilities for the creation of the value and main requirement is that h business should be understood for the company (ING 2011).

Other Required Resources

Except for funding and financial resources, business requires other types of resources, like people, assets, and a business plan. Having searching for investment, it is obvious that we are going to use other peoples resources. Thus, the rent of the space and equipment with the opportunity of further buy-out is a good start for the shop.

Being a simple business, the use of outside advisors may be a good alternative as, still, some decisions should be made in marketing, management, advertising, shop running, etc. Dwelling upon other resources in business, it should be mentioned that it is possible to reduce the costs by means of employing graduate students.

Their services are not very expensive as they lack experience, but the fresh ideas they have are really great. There should be a person responsible for business liability, harassment, and risks. The services of attorney may be used if they are necessary, thus this resource should be outsourced only in emergency cases.

An accountant is a human resource which is inevitable in our case. Internet resources also become important for business development and modeling dynamic online services. It is necessary to create a web site of the company with the novelties offered in the shop and an opportunity to place orders for delivering in the near located offices (like an additional service).

Thus, using only the necessary activities in the organization, it is possible to minimize and marshal resources, which is a guarantee of a successful business. There is no necessity to keep much staff is a shop, different human resources may be outsources when they are necessary. But, it is important to draw the line and employ the required number of resources (Stevenson 2007).

Reference List

ING 2011, ING Corporate Investments B.V., Commercial Loans. Web.

Sprague, C 2008, Cash Flow, Cash Flow  Research Starters Business p. 1.

Stevenson, HH 2007, Resource requirements, in JA Timmons & S Spinelli (eds), New venture creation: entrepreneurship for the 21st century, The McGraw, New York.

Introduction

In economic terms, common pool resources can be viewed as natural or artificial systems. The characteristics and size of these systems make it hard to exclude potential beneficiaries from their exploitation (Auer 217). As a result of their nature, they are often referred to as common property resources. Classic examples of such resources include seawaters, rivers, irrigation schemes, and fishing grounds. Such forms of wealth are not limited to private owners of capital.

On the contrary, they are accessible to all members of the community. As a result of this public access, the resources are susceptible to overuse and degradation. It is worth noting that these common pool forms of capital are core to human existence. They act as sources of essential products, such as food and water, which are necessary for the survival of mankind. As such, human beings cannot live without these resources. In light of this, it is important to put in place laws and regulations to govern their utilization to ensure sustainability.

The use of common pool wealth is mostly determined by the owners. They may be owned by private individuals, corporations, or community groups. They may also be under the control of local, national, or regional governments. When common resources are owned by no particular person or entity, open access is practiced. The use of this capital is regulated by the application of locally formulated strategies, rules, and regulations (Xepapadeas 591). Common property regimes are mostly used for the preservation and maintenance of these resources. It is noted that when properly managed, communal wealth can regenerate. It can also be saved from exhaustion. Effective and sustainable management can be achieved by setting limits on the amount of harvest and entry. The laws formulated to address this should be strictly enforced to promote sustainable exploitation.

In this paper, the author is going to analyze an economic issue from a legal perspective. The economic problem selected for this review is the aforementioned common pool resources. The legal frameworks informing the exploitation and management of these assets will be reviewed. The impacts of these legal instruments on the public sources of wealth will also be analyzed.

Resource Allocation

As stated earlier, most common pool resources are open to members of the society who are at liberty to exploit them. In most cases, there are no set laws and regulations to govern the use of such sources of capital. The practice has led to the congestion and overuse of these resources. Some of them have been destroyed to the point that they are no longer useful to the communities living around them (Xepapadeas 591). Strict regulations help to curb the degradation of the resources. Resource allocations systems that are commonly used are discussed in detail below. They include open access and common property regimes.

Open Access Regimes

The regimes are commonly used to regulate the exploitation of resources in cases where it is not possible to put in place restrictions. There is little oversight over the usage of such resources (Brentwood 64). Utilization in such cases is on a first come first served basis (Furuzawa and Kiminami 181). As a result, competition is high. The probability of the resources being degraded is also high. However, open access regimes ensure that the resources are exploited optimally. It is noted that optimal exploitation stimulates economic growth. In addition, the maximum benefits and potential of these assets are realized. The practice also encourages industrialization since raw materials are readily available. Industrialization leads to economic growth and is a source of employment for the members of the community living around the resources.

Open access regimes are often used where the resources are vast. Under such circumstances, restrictions would be uneconomical since the goods contained in the assets are excessive and would effectively serve a large population (Furuzawa and Kiminami 181). Examples of common pool resources where open access regimes are used include seas, lakes, and rivers. All members of the communities living around these areas are allowed to exploit them for their own benefit. The economy of such communities is improved. For instance, water bodies support fishermen in the region. The fishermen invest in this trade to support their families and the larger community. Gains made from the sale of such goods stimulate economic growth.

Open access regimes also help members of the society to remain independent. All individuals have the right to exploit the goods contained in the resources. As such, they move to areas where they will be in a position to earn a livelihood. In light of this, open access regime helps create employment opportunities. They are also important in promoting equitable distribution of resources (Carter 158). People from areas that are considered disadvantaged in terms of resource availability can move to the regions where the assets are concentrated. The individuals can then use the gains that they have made as a result of exploiting these resources to develop their own backgrounds.

Disputes are common in such a system since no one can claim ownership over the resources. There are no rules and regulations informing exploitation. As a result, the disputes may be widespread. Furthermore, there are no dispute resolution mechanisms in place. Open access regimes make every good contained in the common pool asset accessible to all individuals. Consequently, the resources become scarce, while their demand remains high (Carter 158).

Scarcity fuels more conflicts. In some cases, it may lead to outbreak of civil wars. For instance, Sierra Leone, one of Africas most resource-rich nations, experienced a civil war as different parties attempted to control diamond and iron mines. In such a case, the use of open access regimes in the exploitation of common pool resources may lead to a decline in the economy of a region. It may fail to stimulate economic growth as envisaged by the governments.

Common Property Regimes

Proprietors and custodians of common pool resources may decide to come up with measures to control the amount of wealth harvested. The measure is often referred to as common property regime (Weeden and Chow 169). It is aimed at coordinating the activities undertaken in light of these resources so as to ensure sustainability. The regimes are community based initiatives and are implemented at local levels. In most cases, they are established through consensus among community leaders. All the members of the community have a moral obligation to abide to the rules and regulations that are agreed upon.

The effectiveness of the common property regime is dependent on the cohesion between members of the community using the resource. In most instances, the terms of the regime are deliberated upon by the members before a consensus is arrived at. The laws are binding to all members of the community. For this reason, the common pool resource should be maintained as a single entity without being split among individuals. Splitting of the communal asset among the members of the community would make it hard to manage.

Every individual would have the right to make decisions concerning the portion assigned to them. In such cases, competition would occur as each party attempts to reap maximum benefits from the resource. Individual and isolated exploitation may lead to optimal utilization in some cases. However, the resources may be exhausted and depleted (Wolsink 833).

Common property regimes also ensure that access to the resources is not free. Access is monitored by the appropriators. There are regulations governing entry. For these reasons, common pool assets that are managed under these regimes cannot be considered as public goods (Wolsink 833). Outsiders are denied the right to exploit or access them. On the other hand, insiders are allowed to benefit from the goods associated with the resources. Once the goods are drawn, the resources are considered to be the private properties of the insiders. They are at liberty to use the goods in whichever way that they choose.

The exclusion of outsiders is important to the members of the community since it reduces competition for the goods obtained. The community that has control over the resource is likely to enjoy economic growth owing to the sale of the items created. If the goods obtained from the resource are scarce in other areas, the community will accrue additional benefits. The market value of such items is likely to go up due to their scarcity. Preventing outsiders from accessing the resources also makes it easy to manage them. External agents are not concerned with the sustainability of the resources. On the contrary, they only seek to exploit them (Philip 72). For this reason, they are more likely to degrade the resources compared to the members of the community.

However, in some cases, exclusion of external parties may be detrimental to the local economy (Philip 72). The community members may lack the capability to optimally utilize the goods obtained from the resources. In such cases, the sources of wealth are underutilized. Maximum benefits are not reaped from the resources. The economic growth of the outsiders is also hampered since they are denied the right to utilize the wealth. One may argue that restricted access to outsiders is important for the preservation of common pool resources. However, it is important to ensure that the reasons for the move are justified and are economically significant. When the restrictions are applied, boundaries should be clearly defined to avoid the occurrence of conflicts.

Common property regimes set limits in relation to utilization of resources. They specify the amount of goods that can be harvested within a given duration of time (Galinato 954). It is important to note that the harvesting of these products is the main economic activity of the people living near these resources. For instance, people living near water bodies practice fishing as their main economic activity. As a result, the assets are the main source of livelihood for these communities. Care should be taken when striking a balance between conservation of the resources and the impact of the regimes on the economy.

Setting a low limit may lead to underutilization of the goods produced. The resources will be of little economic use to the society (Philip 72). Underutilization may also be viewed as wastage of valuable resources, leading to their accumulation. The assets will not be in a position to satisfy the needs of the local industries. They may also fail to satisfy subsistence consumption. As such, the benefits associated with the resource will be unnecessarily reduced. As a result, potential gains will be lost to the members of the society. However, low limits will be of great importance to the community if the resource is under threat of depletion (Galinato 954). The practice may lead to the restoration of previously degraded resources.

Just like lower limits, setting higher limits in terms of the goods harvested has its share of advantages and disadvantages. To begin with, the practice may lead to overexploitation of the resources. The practice is favorable to local industries in the short-term, but it is not sustainable (Philip 72). Such a regime may lead to the collapse of local industries when the resource is totally degraded. It is important to determine the economic implications of limits set by various regimes in a bid to control the exploitation of community wealth. The resources should be used to stimulate economic growth. However, sustainability is equally important.

The role of common property regimes is to ensure that the resources are utilized in a beneficial and sustainable manner. The common property should also bring about economic growth in the community where they are located. To achieve this, a number of steps must be followed in formulating the regimes. For starters, boundaries that are clearly defined should be set. The boundaries are used to mark the areas where the regimes are applied (Galinato 954).

The rules to be applied should then be formulated and discussed by the appropriators to ensure that a consensus is arrived at. Following the consensus, a monitoring system should then be put in place. Appropriators are to be held accountable for the utilization of the resources. Sanctions should be put in place to penalize appropriators who do not adhere to the set rules. Mechanisms for conflict resolution should be identified to ensure that disputes are settled amicably (Wolsink 833). The primary aim of the regimes should be to ensure that the resources available are fairly allocated to all members of the society. The allocation is done in a manner that will promote economic growth and enhance sustainability at the same time.

Privatization

Privatization is another mechanism that can be used in the allocation of common pool resources. It refers to the transfer of previously publicly owned property to private entities and individuals (Wolsink 833). In this system, private property rights are awarded. The previously publicly held common pool resources are divided into parcels and allocated to members of the community surrounding it. Individuals that get allocations are considered by the law as the rightful owners of the respective parcels. They are required to utilize the goods contained in the parcel responsibly. Their responsibilities include preventing pollution, depletion, and other forms of degradation. The system is of great economic importance when sustainability is achieved. The goods produced are availed to the consumers throughout the year.

The privatization system assumes that the individuals will use common pool resources more efficiently when they are solely responsible for them. Irrational behavior by members of the public is curtailed. Individuals are likely to carefully consider the consequences of their actions before making decisions regarding the use of the resources (Altrichter and Basurto 154). They are also likely to consider ways through which sustainability can be achieved so that they can continue to reap goods obtained from the resource. For example, an individual who is allocated a parcel of land in a forest will consider planting more trees after harvesting so that they can accrue more profits in the next season. Sustainability is vital in promoting economic growth since there is a continuous generation of resources, such as raw materials, which are important in maintaining the productivity of local industries.

Privatization also plays an important role in making sure that disputes between individuals are avoided. The rights to the common pool resources are given to specific individuals. As such, disputes are averted. The law of the land protects and recognizes the individuals who are awarded the parcels. Peace is important to sustainable and fast economic growth (Altrichter and Basurto 154). With privatization, peaceful coexistence is fostered since instances of conflicts of interest are reduced. Members of the community live in harmony with each other. In most cases where privatization mechanism has been used, clear boundaries are demarcated. There are also strict laws that deter people from trespassing into private property. Fencing can also be done to protect the goods contained in the parcels from theft and utilization by intruders and other unauthorized parties.

However, in some cases, privatization may be impractical. Such a situation may occur in instances where common pool resources are indivisible and in instances where it is difficult to demarcate the land. Ocean land, for example, cannot be divided amongst individuals. Even if privatization was to occur, it would be difficult to safeguard the resources from intruders. The nature of the resource also allows for the free flow of goods, such as fish, from one location to the other. Under such circumstances, degradation may occur since no individual is responsible for the resources. The vast nature of such resources makes it difficult to monitor them (Weeden and Chow 169).

Conclusion

Common pool resources can be natural or man-made. It is difficult to exclude the resources from the individuals who utilize them due to the fact that their lives greatly depend on the assets. The communities around the resources are in turn required to protect them from degradation, pollution, and depletion (Altrichter and Basurto 154). Protection of the assets from overuse and congestion will ensure sustainability. The resources are allowed time to regenerate and produce more goods for harvesting by the communities (Weeden and Chow 169).

As a result of their vast nature, common pool sources of wealth are often difficult to allocate to the members of the community. Three mechanisms are often used when it comes to the allocation of these assets. The mechanisms include open access, common property, and privatization regimes. The three approaches have various advantages and disadvantages in terms of their contribution to the economy. Their use in the allocation of these resources also depends on their nature.

Works Cited

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