Application for a Loan Essay Example for Free

Application for a Loan Essay Briar Forest University is the dream project of Mr. Gary Cooper, M. A. PhD, a permanent resident of Briar Forest and a budding educationist who wishes to set up a University at Briar Forest for the following reasons: 1. A full-fledged university is long overdue in Briar Forest; 2. There is a growing global market for a full-fledged university; 3. Mr. Cooper owns a sizable land free from any encumbrances and appropriate in size for a full-fledged university; 4. Mr. Cooper has U. S. $1. 00 million to invest for the project; 5. Mr. Cooper has a dream to set up a university with true global environment, which would produce a new breed of prejudice-free and enlightened individuals, who would reflect a well-comprehended approach and attitude towards life, and thus would lead the society from the front. 6. He has weighed every detail on the prospect of this proposed venture with an appropriate team; 7. He has found his dream aligns with reality. Thus, the salient features of the proposed project have been placed below, before concluding on an approbatory note. Guiding Theme Mr. Cooper, PhD, has already earned a name in the field of Eastern Philosophy. It was in his internship days, he was greatly moved by a particular saying of the great Indian Philosopher, Swami Vivekananda; Education is the manifestation of perfection, which is already in humans. Since then he started dreaming on setting up a university which will cater to the society with a new breed of enlightened individuals who would be free from all prejudices and reflect a well-comprehended approach and attitude towards life. Thus he has chosen the above-mentioned saying of Swami Vivekananda as the guiding theme of the project. USP of the Project: There is no full fledged university in Briar Forest, in spite of being one of the significant hubs of trade and commerce in the area, where a huge population of local youth has to pursue their education outside the area, while the young executives who seek an MBA degree, are found to be avoiding any resident jobs here, due to the absence of a university that offers MBA program. Add to that, the new tax policy of the government has provided a huge scope for the prospective foreign student from all across the globe. Thus, primarily the USP of this project lies in its proposed placement, i. e. , Briar Forest. Proposed Educational Programs The university intends to introduce three major segments, like Undergraduate, Post Graduate and Professional courses, with conventional streams and respective subjects under them, under the provisions of the Education Council. Phases of Expense The one-time expenses involve the construction of the campus with strategically placed buildings and boundary, office equipments, vehicles for conveyance, digital communication and security systems, water and sanitary systems, fire-fighting systems, environment protection systems and beautification of the campus. Out of these, the primary focus has been placed on the construction of the buildings. A basic plan towards that is thus placed below: Types of Buildings: a. Main Buildings: These would house the main academic activity and students accommodation with appropriate space for administrative segments and adequate openings to facilitate the anticipated proceedings. Keeping in tune with the survey on the anticipated number of students, the foundations of these buildings would be empowered with 6-story capacity, where the floor-height according to the norms would be kept around 15 meters. The recommended FAR (Floor Area Ratio) apropos the anticipated proceedings stands as 1:3. The architectural design chosen for the project owes more to the European Renaissance period to create the vintage aura of old academic institutions, b. Annexes Buildings: They would hold purely administrative offices with Senate halls for executive meetings. These buildings would be two storied, though their foundation would have the provision for future extension of two more stories. The recommended FAR here stands at 1:2. Proposed architecture for these buildings contains a mixture of post-modern and present European mould for exteriors and interiors respectively, so that the exteriors wouldnt stand in stark contrast of the main buildings in spite of the absence of the frills, while the interiors would facilitate the modern style of office system. c. Supplementary Buildings: Canteens, Cyber Cafe, Plant and car shades around enclosures, fire-fighting or server stations, staff-quarters, etc. belong to this segment. While the Canteen, staff quarters and cyber cafe would be two storied provisioned with two more stories, the rest would be single storied, all with recommendations of post-modern exterior and modern interior. Placement of Buildings The main buildings would be clustered in the middle with equal division of the annex buildings among them, together facilitating the central quadrangle easily approachable from any side. Phases of Project The proposed project has been divided into two phases: One, the Kick-off phase and two Final phase. The kick-off phase would comprise two main buildings, one for student accommodation and the other for academic activities. Both of them at present would be complete with just two floors. These two buildings would have one annex building at their side, with Canteen or security establishments. Final phase would start right after the commencement of sessions in the Kick-off phase. Estimated Cost The cost of Kick-off phase has been estimated at U. S. $2. 75 million with U. S. $. 75 million as the caution money to meet the exigencies. Recovery of Investment The campaign conduced by the appointed professionals to prepare a list of the prospective investors, had brought in the names of 125 such persons. Out of that, Mr. Cooper has been able to finalize the master list of 85 persons who finally have signed the Memorandum of Understanding (MoU) with Mr. Cooper, wherein they would provide a joint fund of U. S. $12 million, on the inaugural day of the Kick-off phase. This serves as the guarantee for the recovery of the loan from any bank. An independent body of trustees, who would clear the EMIs of the bank through an automated process, would handle the said fund. While it has been decided by the Board of Aids that the loaned amount would be paid through 60 EMIs, the targeted period of the Kick-off phase has been fixed as two years from the date of commencement of the project. This augurs the beginning of the academic sessions right from the third year of the project – which would also add money to the proposed joint funding of the 85 partners of the Final phase. On the other hand, the estimated cost of the Final phase along with a caution money in tune of 10% stands at 8.8 million – a realistic situation which further guarantees the recovery of the bank loan of U. S. $2. 00 million from the remaining U. S. $3. 2 million in the Final Phase fund. Degrees to be Offered As like any contemporary university working with the guidelines of National Education Council, this university would introduce its courses in alignment with that, which would include Arts, Humanities, Social Sciences, Physical Sciences, Technology and Management, along with other regular degrees in Biological, Medical and Veterinary Sciences. To cater the growing demand of MBA course, the university would introduce the same right from its Kick-off phase, which will later be followed by extended courses like Global Summer Schools, Executive Education, or the Entrepreneurship courses, once the other Final Phase is completed. Faculty Selection The board of governors would handpick the professors and other staff through a stringent guideline, aligned with the theme of the proposed university. Induction of the Guiding Theme With a view to create a new breed of enlightened individuals who would be free from all prejudices and reflect a well-comprehended approach and attitude towards life, there would be a parallel indirect education that would be imparted in this proposed university – which would imbibe the universally recognized Values and Ethics in the students and would made them both mentally and physically equipped to lead the world – which is the ultimate dream of Mr. Gary Cooper, the founder and director of this project. CONCLUSION Judging from all angles, the proposed project definitely looks like a risk-free, profiteering venture for all its prospective parties, mostly due to its unique financial planning. Alongside, this project would surely cater the long-standing need of the proposed region, besides the growing overseas demand for higher education. The location of this project surely serves its USP (Unique Selling Proposition), while the guiding theme of it will surely add a useful dimension to the main curricula.

An introduction to the Nestle Company

An introduction to the Nestle Company Nestle was founded in 1866 by Henri Nestle with headquarters in Vevey, Switzerland. It has employed around 250,000 people and has factories or operations in almost every country in the world. It is one of the worlds biggest food and Beverage Companies. The Companys priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives. 1.1: PURPOSE OF RESEARCH The study of the research is to find the variable which has leads towards conflicts in Nestle Organization. The main purpose of the research is, firstly, to identify the causes of conflicts in Nestle and, secondly, to manage conflicts in Nestle organization. This report will be helpful for students who want to conduct a research as well as the company improving or solving the problems. 1.2: BACK GROUND OF THE STUDY All of us experience some type of conflicts in our daily lives. Tensions, antagonisms, and frustrations always occur when people work together. There are disagreements, perhaps even fights, between employees and the supervisor or between co-workers. Aside from personality clashes, people simply have different viewpoints about the way things should be done. The main purpose of conducting the research is to find out the conflicts, and finding the ways to manage and solve them in an organisation. In this context we have got the opportunity to conduct our research on one of the top organizations (Nestle). 1.3: DEFINITION OF CONFLICT Conflict is defined as the state of discord caused by perceived or actual opposition of needs, interests and values. A conflict can be internal or external. The concept of conflict can help to explain many social aspects of life such as social disagreement, fights between individuals, groups, or organizations and conflict of interests. Conflict as taught for graduate and professional work in conflict resolution which is defined as when two or more parties, with perceived incompatible goals, seek to undermine each others goal-seeking capability. However, conflict can also occur in cooperative situations, in which two or more individuals or parties have consistent goals, because the manner in which individuals or party tries to reach their goal can still undermine the other individuals or party. 1.4: NATURE OF CONFLICT Conflict may constructively be viewed as resulting from differing belief systems, varied perspectives on the situation and values resulting from participants accumulated life experience and conditioning, differing interests and objectives. Effectively dealing with conflict requires the expression and management of participants varying interests, belief systems, perspectives and values. Through the integration of participants perspectives, belief systems, interests and values, conflict and conflict resolution play important roles in individual and social evolution and development. Conflict arises when one or more participants view the current system as not working. At least one party is adequately unhappy with the position, that they are willing to own the conflict and speak with the hope of being able to influence the situation to arrive at an improved condition. Conflict may be sight as a process we put ourselves through to attain a new condition and self definition. Through conflict we have opportunities to be artistically self-defining. If nothing else, conflict allows us in future to do things differently. Through the resolution of conflict, we can evolve and redefine ourselves, our community, our relationships our society and our world. 1.5: LEVELS OF CONFLICT 1.5.0: Inter divisional conflict Inter divisional conflicts exists between the perceiver and another individual within the organization. Although the other person does not need to be aware of the conflict, the perceiver of the conflict situation recognizes the present or future impact conflict can have on job performance. 1.5.1: Intra group conflict Intra group conflicts occur between perceiver and his or her immediate group within the organization. The immediate group can consist of work team, department or union. Whether fully or only superficially aware of the conflict issue, the perceiver realizes that the conflict can directly or indirectly affect job performance. 1.5.2: Inter group conflict It arises between the perceivers immediate group and another group within the organization. Again, the perceivers involvement may not be critical, but he or she must be aware of the situation and the potential impact the conflict can have on work performance. 1.5.3: Organizational conflict Organizational conflict is a state of disagreement caused by the actual or perceived opposition of needs, values and interests between people working together. 1.6: TYPES OF CONFLICT A conceptual conflict can rise into a verbal exchange or result in fighting.Conflict can exist at a variety of types. These are Community conflict Diplomatic conflict Emotional conflict Environmental resources conflict Group conflict Ideological conflict Interpersonal conflict Inter-societal conflict Intrapersonal conflict Organizational conflict Religious-based conflict and Workplace conflict . 1.7: CAUSES OF CONFLICTS 1.7.0: Authority relationship Authority Relationship conflicts occur because of the existence of strong pessimistic emotions, misperceptions or stereotypes, poor communication or miscommunication, or repetitive negative behaviors. Authority relationship problems often increase disputes and lead to an unnecessary rising spiral of destructive conflict. Supporting the secure and balanced expression of perspectives and emotions for acknowledgment (not agreement) is one effective approach to managing relational conflict. 1.7.1: Management style For any organization to be effectual and efficient in achieving its goals, the people in the organisation need to have a common vision of what they are determined to achieve, as well as clear objectives for each individual, group/ team and department. Management style also needs ways of recognizing and resolving conflict between people, so that conflict does not become so serious that collaboration becomes impossible. The management of any organisation needs to have ways of keeping conflict to a minimum and of solving problems caused by conflict, before conflict becomes a major obstruction to work. Management style helps to avoid conflict where probable and organizing to resolve conflict where it does happen, as rapidly and smoothly as possible. 1.7.2: Communication barriers: Conflict will be greater when barriers to communication exist. If parties are separated from each other physically or by time e.g.; the day shift versus the night shift-the opportunity for conflict is increased. To illustrate suppose a company employs only one plant supervisor, who works the day shift and leaves orders at the beginning of each week for the workers on the night shift. By the end of the week, how ever, these orders have been only partially carried out. The supervisor cannot figure out why. Obviously, the supervisor absence from the night shift has posed a communication barrier, which in turn causes decreased output. As Bryans, P, Cronin argued in 1984 that Space or time separations could promote isolated group interests rather than advance a common effort towards joint goals. 1.7.3: Personal factors 1.7.3.0: Behavioral The way emotional experience gets expressed which can be verbal or non-verbal and intentional or un-intentional. 1.7.3.1: Physiological Its defined as the bodily experience of emotion. The way emotions make us feel in comparison to our identity. 1.7.3.2: Cultural values Culture tells people who are a part of it, Which emotions ought to be expressed in particular situations and what emotions are to be felt. 1.7.3.3: Physical This escalation results from anger or frustration. 1.7.3.4: Verbal This escalation results from negative perceptions of the annoyers character. 1.8: WAYS OF ADRESSING CONFLICTS There are basically five ways of addressing conflicts which were identified by Thomas and Kilman in 1976. These are 1.8.0: AHYPERLINK http://en.wikipedia.org/wiki/Accommodationccommodation Ones party surrenders its own needs and wishes to accommodate the other party. 1.8.1: AHYPERLINK http://en.wikipedia.org/wiki/Avoidance_(conflict)voidance Avoid conflict by ignoring it, changing the subject, etc. As an expedient means of dealing with very minor, non-recurring conflicts or Avoidance can be useful as a temporary measure to buy time. In many cases, conflict avoidance involves severing a relationship. 1.8.2: CHYPERLINK http://en.wikipedia.org/wiki/Collaborationollaboration Working together can find a mutually beneficial solution. Collaboration can also be inappropriate and time-intensive. When there is not enough respect, trust or communication among participants for collaboration to occur. 1.8.3: CHYPERLINK http://en.wikipedia.org/wiki/Compromiseompromise Finding a centre point where each party is partially satisfied. 1.8.4: CHYPERLINK http://en.wikipedia.org/wiki/Competitionompetition Take the ones point of view at the potential expense of another. It can be more useful when achieving the ones objectives outweighs ones concern for the relationship CHAPTER # 2 2.0: LITERATURE REVIEW Different researchers have published their reviews on conflicts in the organization. We are viewing two best reviews of the researchers articles. Mr. Philips in 1982 threw light on some of key conditions, which may lead to serious organizational conflicts; he gave his views in the book named as Community in Organization. According to M Phillips certain social relationships characterized various kinds of conflict behavior. Each one could occur in your work area. The more aware the managers are of these conflict settings, the better are the chances of correcting them and running a smooth operation. Mr. Philip identified communication as problem in his research. The causes of conflicts are structural factors, authority relationships, common resources, goal differences interdependence, jurisdictional ambiguities, specialization, status-inconsistencies, personal factors, communication, conflict management style, cultural differences, emotions, perception, personalities, skills and abilities, values and ethics. According to the researcher, possible solution; it is obvious that a perfect communication system is unlikely. But also per fection like rationality will not be achieved; organizations do have mechanism by which they can attempt the communication system as clear as they can. Philips also suggested that there are such devices available which can reduce the distortion and complications in communication process and suggested that communication recipients should be aware of the biases of the message senders and protect their own counter biases as protection devices. James M Leif John M Penrose in 1997 in the book Business Strategies Skills 5th Edition explained the nature of organizational conflicts identify the causes of conflicts i.e. Structural Factors, Common Resources , Goal Differences , Interdependence ,    Jurisdictional Ambiguities, Inconsistencies ,Personal Factors Communication barriers, Conflict management style ,Cultural differences ,Emotions Perception, Personalities, Skills and abilities, Values and Ethics, Behavioral and Physiological Cognitive. The researchers says that it is possible to avoid conflict by having mechanism such as voting to make decision without the disagreement of consensus. They also find that behavioral regulation fail to match the individual need of employee, conflict is bound to occur. In 1995 B R Siwal in his research Resolution Strategies to Conflict describes that conflict is a necessary and integral part of effective problem solving and realistic discussions. It is core sound of decision making because disagreement is the best vehicle for enlargement the perspective, discovering alternatives, and motivating creative interaction among each member. The effects of disagreement, though, depend on how it is administer by team members. Conflict can be integrative and constructive or it can be distributive and disruptive. When mismanagement occur, conflict can demolish team effectiveness, when handled well it can deeply enhance the quality of team work and make members sense proud of their work in the team. Training in the nature of conflict and the ways of managing it is an imperative need of all the people who participates in problem solving groups, such as those that make up work teams. The negative association of conflicts wants to be dispelled and substitute with more practical conceptions that made the justifiable distinction between disruptive and constructive conflict. When team members see that conflict can be a positive strength in conversation, they are better prepared to take up effective proposal attitudes and behaviors in trouble solving situations. Further more the differences between integrative and distributive conflict can help them learn how their own behavior contributes to the atmosphere of the team which they belong. Davor Dujak in 2008 describes in his research that in every organization conflict encounters on a daily basis. The conflict cannot be avoided but it is probable to mange them in a way that we identify them on time. It is essential to constantly track the organizational signals which position to their existence. If Organization does not respond accordingly, this can lead to the condition that conflict itself manages the organization. One of the more important determinants of productivity, performance and efficiency and finally the job satisfaction is also the conflict as an independent variable of organizational behavior. By systematic research of organizational behavior we want to make a positive influence on the dependents variables, but first we have to realize and get a good approaching to the individual elements of organizational behavior. In 2004 Melanie Lewis describes in her research that if conflict managed poorly or avoided, it can be very costly to an organization. If managed well, conflict presents an opportunity to uncover significance and promote a healthy work place. Many organizations are finding that their conflicts management systems have been good by financial investments, generating a healthy return. In additional they are recognizing the value of many less substantial benefits (lower turnover, increased efficiencies, improved morale and improve public relations). A precise four phased process assessment, design, implementation, operation and evaluation helps organizations design effective conflict management systems to gather the maximum benefit of conflict system. Moreover this four phased approach strongly encourages the team actually to seek to understand and incorporate the needs and interests of all affected constituency, and creates an environment in which the benefits of the system can be effecti vely communicated, implemented and administered. In 2010 De Dreu C.K describes in his research that conflict is a multidimensional with both relationship and task forms. Hence it is expected that if they change the managing type of conflicts, it will plays an important role in organizational performance. While if organization did not manage good, the conflict will plays a negative role. However the researcher discussed only two types of conflicts in his research namely affective and task conflict in order to play better role in organizational performance. After studying the reviews of different researchers, we will take help from different researches but our group decided that we will follow the research of M Philip because they dictate information about factors which are important for identifying conflicts and understanding the meaning of conflict and how it influences the organizations internal environment in solving problems. CHAPTER # 3 RESEARCH METHODOLOGY 3.0: Research type: The type of research that we are conducting is applied research because it is conducted for a particular organization. Applied research is practical applicability of research tools on a particular organizational situation. 3.1: data collection We will be collecting our data by using two sources which are as follows. 3.1.0: Primary data Our primary data is collected through conducting interviews and designed questionnaires from directors, managers and employees of Nestle. 3.1.1: Secondary data The secondary data is collected from past records of Nestle and books along with business articles to support our recommendations and suggestions. 3.2: Sample size During this survey we have taken responses from a Sample size of 30 which is further divided into two groups. We also conducted survey from 10 managers and 20 employees. The sampling type that we used is non random sampling technique because we want to get information from every third employee and manager of Nestle organization. Our survey is in questionnaire and interview form, so our questionnaires consist of open ended and close ended questions. We have conducted unstructured interviews, asked from the respondents to get more information. CHAPTER # 4 ANALYSIS 4.0: INTRODUCTION TO DATA ANALYSIS Data analysis is a practice in which the raw data is ordered and organized in order to extract useful information from it. The process of organizing and thinking about data is the key to understand what the data does and does not contain. There are varieties of ways in which people can approach data analysis, and it is infamously easy to manipulate data during the analysis phase to push certain conclusions. There are different methods for analyzing the data for example surveys, charts, frequency tables, graphs and personal observations etc. 4.1: ANALYSING FOR CORRECTION OF DATA We had conducted unstructured interviews for analyzing of questionnaires which we had made for collecting data from employees and managers to check whether the answers given by them are right or wrong. We had found no matches; the interview opposes the answers given by them in questionnaires. We have analyzed our data through frequency tables and bar charts. 4.2: FREQUENCY TABLE Frequency table is one of the important concepts in mathematical statistics and a good analyzing tool. A table divided into cells by category with counts for each category in each cell. It is a kind of display of a given data, in which the frequency of each data item is found. The frequency of a data item is the number of times it occurs in the data set. 4.3: BAR GRAPH A graph consisting of parallel, usually vertical bars or rectangles with lengths proportional to the frequency with which specified quantities occur in a set of data. A bar graph is a pictographic version of statistical data in which the independent variable can attain only certain discrete values. The dependent variable may be discrete or continuous. The most common form of bar graph is the vertical bar graph, also called a column graph. This type of display allows us to: Compare groups of data, and To make generalizations about the data quickly. 4.4: ANALYSIS OF QUESTIONNAIRES 4.4.0: FROM MANAGEMENT 1) More than the desired output of the employees make can be harmful to the organization?     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  a) YES b) NO Variables Codes Frequency Yes 01 9 No 02 1 Table: 4.4.0.0 Graph: 4.4.0.0 2) There is a free flow of communication among the employees:     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  a) YES b) NO Variables Codes Frequency Yes 01 10 No 02 0 Table: 4.4.0.1 Graph: 4.4.0.1 3) Employees are properly informed about decision taken?     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  a) YES b) NO Variables Codes Frequency Yes 01 7 No 02 3 Table: 4.4.0.2 Graph: 4.4.0.2 4) There is a consistency among the management policies:     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  a) YES b) NO Variables Codes Frequency Yes 01 8 No 02 2 Table: 4.4.0.3 Graph: 4.4.0.3 5) Key post should be through:     Ã‚  Ã‚  a)  Ã‚  Ã‚  Direct Appointment  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  b) Promotion Variables Codes Frequency Direct appointment 01 8 Promotion 02 2 Table: 4.4.0.4 Graph: 4.4.0.4 4.5.1: FROM EMPLOYEES 1) From how long have you been working in this organization?   6 months 1 year 3 years Or more than 3 years Variables Codes Frequency 6 months 01 4 1 year 02 2 3 years 03 10 Or more than 3 years 04 4 Table: 4.5.1.0 Graph: 4.5.1.0 2) What kind of boss do you like to work with?   Friendly Competent Leant Difficult Variables Codes Frequency Friendly 01 17 Competent 02 3 Leant 03 0 Difficult 04 0 Table: 4.5.1.1 Graph: 4.5.1.1 3) Which type of leaderships style do you like the most? Autocratic Democratic Variables Codes Frequency Autocratic 01 18 Democratic 02 2 Table: 4.5.1.2 Graph: 4.5.1.2 4) How does your management is doing the evaluation among the employees? Performance base Merit base Variables Codes Frequency Performance base 01 18 Merit base 02 2 Table: 4.5.1.3 Graph: 4.5.1.3 5) Which management level should be responsible for problems between employees? Choose any of the following Top level Middle level Lower level Variables Codes Frequency Top level 01 2 Middle level 02 17 Lower level 03 1 Table: 4.5.1.4 Graph: 4.5.1.4 Q6: How do you communicate the unforeseen problem with your manager or general manager?   Answer: Most of the respondents suggested that they like to meet the general managers directly for any unforeseen events. Q7: Do you think your organization should involve the employees in decision making? And why?   Answer: Most of employees consider that their managers are capable of taking right decisions and there is no need of involving employees. While few of them suggested that it can be a source of new and creative ideas. Q8: What can you suggest for a better management system?   Answer: Most of the employees have no idea about it. Few of them believe that friendly environment and better salaries can improve management system. 4.6: INTER ORGANISATIONAL CONFLICTS OF NESTLE The nature conflicts in Nestle found out through the unstructured interviews and through questionnaire with the directors the managers of NESTLE Peshawar are as follows: The first thing which found, was the lack of training given to the employees, managers said that in the organization, employees always have to work together in groups, and if some one feels that he/she cannot work within the group, then there is some problem with that employee, but at the same time managers said that it is the organizations responsibility to teach the employees how to work together in groups through proper training. They mentioned that without training the organizations might face serious types of irresolvable conflicts, which are definitely not fruitful to the organization. The second main reason mentioned by the manager of the company was the Selection Biases, manager said that selection biases may also lead to conflicts within the company, and these conflicts are normally personal as well. The manager said that if in cases the top management (directors) interferes in the process of hiring the employees, they might select the wrong person for the right job. On the other hand there may be serious conflicts going on between the managers the directors on the issues of authority and responsibility balance. Further if the manager takes big decisions like job confirmation salary decisions then, there may be conflicts, and these must be taken by the top management (directors). The manager of NESTLE also raised the point of communications problem. They believe that every information must be communicated from their tables. If in any case any employee bypasses the manger, there may be a conflict between them. Manager also said that there is no need of any employee who bypasses the manager to access to the top management (directors). Usually the organizations do have Coordinators who are directly answerable to the top management. He said that the manager will not be able to properly deal with him and conflicts between them will arise. The manager said that young unmarried employees usually indulge in office politics and make conflicts among the employees. According to him only married and experienced persons should be provided with the jobs. Racial problems also create conflicts among the employees. Bad attitude of the manager and arrogant nature of the boss is also one reason of conflicts. The manager said that effective person but highly cooperative person would be proffered in place of an efficient but uncooperative one. The managers presented the following ideas to prevent conflicts: Contractual Jobs Hire fire system. Authority to the managers Some of them had a bit different views. Director held the middle managements capabilities responsible for the conflicts within the organization. He also said that there is no relationship between the authority and reasonability with the conflicts. He proffered the autocratic style of management in the beginning, but it should be shifted to the democratic style in the later portions. Director said that although the centralized system slows down the process of working, but it will also decrease the conflicts between the employees. They said that, if you (Employee) have to be successful in the company, then you have to become a big YES SIR. One of the director also mentioned that horizontal conflicts are more common. Super seeded persons normally indulge in making conflicts. He said that super seeded persons should be terminated in place of super seeding them. Dress code can experience the anger from the employees due to Ethnic affiliations to some dresses. Directors were strongly in favor of Coordinator, they said that a coordinator channels the communication process between the manager and the top management. He also gave the following ideas to prevent the possible conflicts in the organizations: Promotions Clear line of Authority Not more than one employee from same Regional locations and same institutions/Universities. CHAPTER # 5 5.0: CONCLUSION The Organizational Conflicts is itself not a problem, but it is a serious symptom of some factors that are usually ignored while designing the organizational structures. From the literature review, taking samples (convenience) analysis of the data gathered. Some factors are identified that usually are the root cause of the conflicts. Some of these are: Ethnicity Personal Jealousy Arrogant behaviors (low temperament) Communication problems Due to the nature of the issue the responses from the top (Directors), middle (Managers) lower management (Employees) were totally contrary with each other. For this purpose structured questionnaires (covering both open ended and close ended questions) and unstructured interviews were conducted. That made the deductions possible by comparing the verbal and non verbal responses, rephrasing the same questions two-three times to check the consistency of the replies. The ethnic issue is the most important. Due to ethnicity no sampled branch has been successful in implementing the dress code yet. Even though, all the respondents favoured it. It is observed that employees belonging to KHYBER PUKHTUNKHWA are very low tempered. Their frequency of jobs switching is higher than others. It proves that they cannot work in teams and work with an arrogant manager. To conclude, who should be held responsible for conflicts, the manager is the key person who channels the communication whether upward or down ward. 5.1: RECOMMENDATIONS The current thinking should be for the maximum utilization of the companys resources and to push the power and decision making authority down the hierarchy of the organization. This can create more power and flexibility within the company as a whole. Good leaders should not have any problem in delegating power and responsibility. Disagreement with the supervisor should be encouraged as long as it leads to productive results. It is critical for the manager to get diverse work force to work well together and respect their differences. Diversity should be encouraged because it can help the organization in future to adapt to the changing global market. All problems can be prevented from happening and/or rectified, if the middle management (Manager) of the company justifies its position. Middle management plays an anchor role. Manager should be able to deal with all the employees who have different cultural backgrounds, personalities priorities. Hiring experienced and matured managers and providing them training could help the case. On job training of the employees. Open house discussions should be there at least one a month. While assigning the groups to the employees for tasks, it must be assured that all the groups are properly matched. REFERENCE B R Siwal, S 1995, Conflict Resolution Strategies, last viewed date 16 dec, 2010, http://www.scribd.com/doc/19166679/Conflict-Resolution Jacob.Bervich, S 1997, Conflict and Conflict Management in Organizations, last viewed date 12 dec, 2010, .http://docs.google.com/viewer?a=vHYPERLINK http://doc

Inherit The Wind Essay -- essays research papers

Matthew Harrison Brady, of Inherit the Wind by: Jerome Lawrence and Robert E. Lee, never fooled anyone. He may have seemed strong in the beginning but he no substance under the shell. Such a false front can be compared to water behind an earthen dam. It may hold some water for a time but once the water finds a weak point, the whole structure comes crashing down along with the fury of all the water behind it. Within brady, the water represents the gooey inner core of his personality. Once he loses his composure in front of his once adoring audience the entire fluid of his persona comes crashing out. The only strength of Matthew Harrison Brady is his power in deliveringh his ideas. As in the earthen dam example, the townspeople represent the city protected from the water by the dam. Once the dam breaks, all the townspeople below get wet and are shaken to their foundations. Matthew Harrison Brady, without a doubt, deserves no sympathy. One example of Brady’s overly self-confidence would be "No†¦I believe we should welcome Henry Drummond." (P g. 25). Ha! What a shock he is in for. His own "high and mighty" thinking is going to lead to his downfall. Even Brady is taken a tad aback by the news that Drummond will be joining the trial "Brady: (pale) Drummond?" (Pg. 25) While he basks in his loving audience of townspeople, he will yet be pulled down from his high throne to be questioned and scorned. While the town feels much stri...

Locke, Hobbes, Mill, Thoreau :: Politics Philosophy Sociology

John Locke John Locke explains the state of nature as a state of equality in which no one has power over another, and all are free to do as they please. He notes, however, that this liberty does not equal license to abuse others, and that natural law exists even in the state of nature. Each individual in the state of nature has the power to execute natural laws, which are universal. I believe that Locke is correct in his analysis of the state of nature however; Locke‘s theory includes many assumptions. First is the assumption of a system of morality, the natural law derives from a theory of justice, a set of rights. No one would have any "rights" at all in the absence of a moral code applicable to human actions, nor would there be any standard of "just" punishment. Locke frequently uses the term "rights" and appeals to conscience and "calm reason", all of which reflect his assumptions about justice and morality. For individual property to exist, there must be a means for individuals to appropriate the things around them. Locke starts out with the idea of the property of person; each person owns his or her own body, and all the labor that they perform with the body. When an individual adds their own labor, their own property, to a foreign object or good, that object becomes their own because they have added their labor. This appropriation of goods does not demand the consent of humankind in general, each person has license to appropriate things in this way by individual initiative. Locke then places a bound on this type of acquisition, a person may only acquire as many things in this way as he or she can reasonably use to their advantage. One can only take so much as one can use. Lock applies these rules to land: a person in a state of nature can claim land by adding labor to it, building house on it or farming on it, but only so much as that person can reasonably use without waste. Locke then defines labor as the determining factor of value, the tool by which humans make their world a more advantageous and rewarding place to inhabit. Locke states that in order for a civil society to be established, the individuals must forfeit some of their rights that they have in the state of nature. This needs to be done so everyone can live together in peace.

Coffee Commodity Chain

DEPARTMENT OF ECONOMICS ISSN 1441-5429 DISCUSSION PAPER 06/08 COFFEE COMMODITY CHAIN Tine S. Olsen and Brett Inder ¦ ABSTRACT: To explain the value added along the coffee commodity chain we propose and estimate a theoretical model of the coffee commodity chain. The theoretical model consists of four markets and five agents in the coffee commodity chain and predicts that prices in the coffee commodity chain move together but are also influenced by income, technology and production. A vector error correction model is used to test the theoretical predictions.In addition to the theoretical conclusions the empirical model confirms the beneficial role of the International Coffee Agreement and the importance of the level of production in determining coffee prices. Key words: global commodity chain, vector error correction model, coffee, value added JEL classifications: O01, F02, Q110, C320, F230, F14  ¦ Monash University Department of Economics (Olsen), Monash University Department of E conometrics and Business Statistics (Olsen and Inder). Corresponding author Tine S. Olsen, [email  protected] monash. edu.  © 2008 Tine S. Olsen and Brett InderAll rights reserved. No part of this paper may be reproduced in any form, or stored in a retrieval system, without the prior written permission of the author COFFEE COMMODITY CHAIN 1. Introduction Between being grown and picked by a farmer in a developing country and being consumed, most often in a developed country, coffee passes through many sets of hands. Inspired by the global commodity chain literature we here propose a theoretical and an empirical model of the coffee commodity chain. We want to find out what determines the value added at each stage of the commodity chain.The question touches upon the distribution of income among agents and countries in the commodity chain, the prevailing market structure at each stage of the production process, trade, bargaining power and other factors influencing the commodity chai n. Figure 1 provides a graphical representation of the value chain for coffee in Brazil, Colombia and the US. [Figure 1] Value added at the various stages of the chain is the difference between input and output price. For Brazil and Colombia producer’s share is producer price and processing and transport is export price minus producer price.For Brazil international processing and transport is the difference between import price of Brazilian coffee in US and the export price in Brazil and processing in US is the US retail price minus the import price of Brazilian coffee in the US. For Colombia processing in US and transport is the difference between the US retail price and the Colombian export unit value. Regarding weight-loss due to roasting, green coffee is the commodity at all stages of the chain until it reaches the consumer. We follow one pound of green coffee along the commodity chain and multiply the retail price by 0. since coffee looses 20% of the weight in roasting ( Daviron and Ponte, 2005, p. 242, n. 5). 2 Figure 1 shows that the share of value added acquired by Brazil and Colombia has decreased after 1948. Behind this observation lies that the share to producers has decreased in Colombia but remained roughly constant in Brazil while the shares to domestic processing and transport have decreased in both countries, in particular after 1990. What we attempt to explain by this analysis are the decreasing shares of income to producing countries and the disappearing margins to exporters.The framework of this analysis is global commodity chains, terms of trade literature and price transmission literature. Commodity chains for coffee are described by Talbot (1997; 2002) and Ponte (2002). Commodity chain analysis focuses on the good along the nodes of the chain, and looks at the flow of the good through the commodity chain, the transactions which take place along the chain, the geographical location of the chain, the agents involved in the chain, and the rules governing the chain (Talbot, 2002).North-South trade and growth literature is relevant in the analysis of commodity chains to model the terms of trade between North and South. Darity and Davis (2005) argue that in the study of uneven development the North-South trade and growth literature provides insights which have been neglected by the later literature of new growth theory and new trade theory. This has encouraged us to apply North-South models to the coffee value chain. The theoretical model derived in section 2 builds on Bloch and Sapsford (2000) who model primary commodities used as inputs in the production of manufacturing.Where Bloch and Sapsford (2000) take an aggregate view of primary commodities and manufactures, we here focus on coffee and hereby take an approach similar to Boratav (2001) who examines terms of trade for individual commodities. And just like Bloch, Dockery, and Sapsford (2004) we analyse the effect of mark-up on wages and commodity prices on the final consumer prices. Price transmission literature such as Hazell, Jaramillo, and Williamson (1990), Mundlak and Larson (1992), Baffes and Gardner (2003), Krivonos (2004), Morisset (1998) and Weldegebriel (2004) also offer a framework to analyse prices of commodities at different 3 odes of the commodity chain. This part of the literature views producer and retail prices as determined by world prices. In Bloch and Sapsford (2000) the price of manufactures, which is a good higher up in the value chain if it is interpreted as roasted coffee, is a function of the price of primary products because primary products are inputs in the production of manufactures. In the transmission literature it is assumed that the price formation happens in the world market and that market forces allow prices movements to trickle down to producers and consumers.The price trickles down because of trade, price signals and arbitrage. The causality between world prices and producer prices is therefore oppos ite in the terms of trade literature and the price transmission literature. The contradiction is created because the value chain literature focuses on the flow of goods while the transmission literature focuses on the flow of information and market signals. We can look at the problem in multiple time frames. In the long run, prices may be determined by economic fundamentals and can be modelled according to the terms of trade literature.In the short run the price may be a result of the global market situation and the transmission literature is applicable. We here propose a theoretical model which builds on the terms of trade literature but the same time accommodates features from the price transmission literature. The choice of countries in the empirical model poses the main limitation of the empirical analysis. Coffee is consumed in all countries across the world and production statistics are available for 71 countries1. Though an analysis comprising all consuming and producing coun tries is possible, the approach here is to only look at a few countries.The countries for analysis in this study are the largest producer, Brazil, the largest consumer, US, and Colombia as a country which depends heavily on coffee. 2 In the following, the theoretical model is presented in section 2. The empirical model, data and preliminary data analysis are presented in section 3 and section 4 reports the results. The theoretical hypotheses and empirical results are evaluated in section 5, which concludes. 4 2. Theoretical Model The commodity chain, which spans from producers to consumers, is modelled in the form of the prices at each node of the chain.The model builds on Bloch and Sapsford (2000), but instead of primary commodities and manufactures, we here follow the same commodity along the chain and the commodity is an input in the production at the next stage of the chain. The producer and intermediary one (often the exporter) meet in market one where the producer price is det ermined. In market two intermediary one sells the commodity to intermediary two (often the importer) for the export price. In market three intermediary two sells the commodity to intermediary three (often the roaster) for the import price.Finally in market four intermediary three sells the commodity to the consumer and receives the retail price. The model has this set of agents to reflect what price data is available at the various stages of the supply chain. Except for intermediary three, each agent takes the price and quantity produced in other markets as given. This assumption makes the markets separable. Intermediary three determines the price in market four by mark-up and we hereby follow Bloch and Sapsford (2000) in the assumption of different market structures in developing and developed countries.The assumption of imperfect competition in market four reflects the high concentration in the coffee roasting sector as described by Talbot (1997). The commodity is produced by the farmer according to the production function G = Ae? 0t L? 1T ? 2 ? G . G (1) Where, in the case of coffee, G is green coffee, LG is the labour input in coffee production, T the number of coffee trees and ? G is a random disturbance term, such as weather. t is time and represents technological progress in the production techniques. ? 0 , ? 1 and ? 2 are elasticities of inputs and technology.The number of trees is assumed to be fixed in the short term and is therefore not a variable input. 5 Exporters constitute the demand side in market one. They have the production function: X = Be ? 0t L? 1 G ? 2 ? X , X (2) where X, in the case of coffee, is green coffee packed, sorted and graded and located in the producing country. LX is the labour input necessary to export the product. It should be noted that green coffee, which is the output produced by the farmer according to the production function (1), is an input in the exporter’s production function.As before, t represents technolo gical progress and ? 0 , ? 1 , and ? 2 are elasticities of inputs and technology. The shocks, ? X , may represent strikes or other random shocks to the production process. The production functions for importers and roasters are defined in a similar manner with coffee from the previous part of the chain as an input. 1 M = De? 0t L? M X ? 2 ? M (3) R = Fe? 0t L? R1 M ? 2 ? R (4) Equation (3) is the production function for importers and equation (4) is the production function for roasters. M is green packed and sorted coffee imported into the consuming country.R is roasted and ground coffee sold in retail. The importer employs labour LM and the roaster employs labour LR . The factor prices are as follows. The price of LG is the wage rate in agriculture, wG ; the price of LX is the wage paid by exporters, wX . The price of LM is wM and the price of LR is wR . Coffee at stage J of processing has price pJ , e. g. G has the price pG . It is assumed that all inputs have positive but diminis hing marginal products in all four production functions: 1 > ? 1 > 0 , 1 > ? 2 > 0 , 1 > ? 1 > 0 , 1 > ? 2 > 0 , 1 > ? > 0 , 1 > ? 2 > 0 , 6 1 > ? 1 > 0 and 1 > ? 2 > 0 . It is also assumed that inputs together do not give rise to increasing returns to scale: ? 1 + ? 2 < 1 , ? 1 + ? 2 < 1 , ? 1 + ? 2 < 1 and ? 1 + ? 2 < 1 . 2. 1 Price Determination in Market One In market one we assume perfect competition and the price paid to farmers, pG , is determined by equilibrium in the market with demand and supply for green coffee. Supply is determined by profit-maximising coffee farmers and demand by profit-maximising exporters. Profit maximisation gives the supply function: pG = wG? 1? 1 ? Ae? 0tTG 2 ? G ? ? ? ?1/? 1 G (1 1 )/? 1 . (5) The optimal amount of coffee demanded by the exporter who profit maximises is: ( ) 1/(1? ?1 ? ? 2 ) G = ? p X Be ? 0t ? X pG ? 1 ? 1? 21? ?1 wX ? ?1 ? 1? 1 ? ? ? (6) . The equilibrium price in market one is derived by equating supply given by equation (5) an d demand in equation (6): ln( pG ) = a0 + a1 ln( p X ) + a2 ln( wG ) + a3 ln( wX ) + a4 ln(T ) + a5t + ? G (7) Where ( ( a0 = 1 (1 ? ?1 ? ? 2 ) ln ? 1? 1 A? 1/? 1 B? 21? ?1 ? 1? 1 ) (1 1 )/[? 1 (1? ?1 ? ? 2 )] ), a > 0 0 (8) a1 = ? 1 ? ?1 ) , a1 > 0 (9) a2 = 1 (1 ? ?1 ? ? 2 ) , a2 > 0 (10) a3 = 1 (1 ? ?1 ) , a3 < 0 (11) a4 = 2 (1 ? ?1 ? ? 2 ) , a4 < 0 (12) a5 = ? ( ? 0 (1 ? ?1 ) ? ? 0 (1 ? ?1 ? ? 2 ) ) (13) & ?G = ? ( (1 ? ?1 ) ln(? X ) ? (1 ? ?1 ? ? 2 ) ln(? G ) ) (14) 7 ? = (1 ? ?1 ? ?1? 2 ) ?1 (15) The coefficients will be interpreted in section 2. 5 below together with the rest of the coefficients of the model. 2. 2 Price Determination in Market Two In market two exporters sell to importers. The price is again determined by equilibrium between demand and supply.Supply is determined by profit maximisation by exporters and demand by profit-maximising importers. Supply in market two by the exporter is calculated from what amount of coffee is demanded in market one: 1/(1? ?1 ? ? 2 ) X = ? Be ? 0t p X ? 1 + ? 2 ? X pG ? ? 2 ? 2 ? 2 wX ? ?1 ? 1? 1 ? ? ? (16) The demand function by importers is derived by profit maximisation in a similar manner to the derivation of the demand function for exporters above. Making use of the symmetry of the production functions, the demand function is similar to (6). The price in market two is determined by equating demand and supply: n( p X ) = b0 + b1 ln( pG ) + b2 ln( pM ) + b3 ln( wX ) + b4 ln( wM ) + b5t + ? X (17) where the b’s are: b0 = ? ?( ? 1 + ? 2 ? 1) ln ( B? 2 ? 2 ? 1? 1 ) + ( ? 1 + ? 2 ? 1) ln ( ? 2? 1 ? 1? 1 1 D ? 1 ) ? , b0 > 0 ? ? (18) b1 = 2 (? 1 + ? 2 ? 1) , b1 > 0 (19) b2 = ? (1 ? ?1 ? ? 2 ) , b2 > 0 (20) b3 = 1 (1 ? ? 1 ? ? 2 ) , b3 > 0 (21) b4 = 1 (1 ? ?1 ? ? 2 ) , b4 < 0 (22) b5 = ? [ ? 0 (? 1 + ? 2 ? 1) + ? 0 (1 ? ?1 ? ? 2 ) ] (23) 8 ? X = ? ( ( ? 1 + ? 2 ? 1) ln(? X ) + (1 ? ?1 ? ? 2 ) ln(? M ) ) (24) ? = (1 ? ? 1 ? ? 2 ( ? 1 + ? 2 ) ) > 0 (25) ?1 2. 3 Price Determination in Market ThreeIn mar ket three, intermediary three purchases green coffee from intermediary two, or in the example of Brazil, the roasters purchase the coffee from the importers and produce roasted coffee according to the production function (3). The roasters’ demand and the importers’ supply are again given by profit maximisation. Given the similar production functions for roasters and importers, the derivations of the equilibrium price are as for market two. The equilibrium price is (expected signs in parentheses under the coefficients): ln( pM ) = c0 + c1 ln( p X ) + c2 ln( pR ) + c3 ln( wM ) + c4 ln( wR ) + c5 t + ? M + + + + ? (26) + /?The signs of the coefficients are determined in a similar way as in market two since the market set-ups are identical. 2. 4 Price Determination in Market Four In market four the price is not determined by supply and demand, but rather by a mark-up on the unit cost function because of imperfect competition. This is one of the conclusions by Prebisch (195 0) and Singer (1950) which Bloch and Sapsford (2000) also model. The price is determined by: p M? ?L w pR = m ? R R + M ? R? ?R (27) Where m is the mark-up. To derive pR the cost-minimising demands for labour and green coffee are derived and inserted into (27) which gives the price of oasted coffee: ln( pR ) = d 0 + d1 ln( R) + d 2 ln( pM ) + d3 ln( wR ) + d 4 ln(m) + d5t + ? R (28) where 9 ( ) ( ) d 0 = (? 1 + ? 2 ) ? 1 ln( B) + ? 1 (? 1 + ? 2 ) ln ? 2? 1? 1 + ? 2 (? 1 + ? 2 ) ln ? 1? 2 ? 1 , d 0 > 0 (29) d1 = (? 1 + ? 2 ) (30) ?1 ?1 ?1 (1 ? ?1 ? ? 2 ) , d1 >0 d 2 = (? 1 + ? 2 ) ? 2 , d 2 > 0 and d3 = ? 1 (? 1 + ? 2 ) , d 3 > 0 (31) d5 = 0 (? 1 + ? 2 ) < 0 , d 5 < 0 (32) ? R = ? (? 1 + ? 2 ) ln(? R ) (33) ?1 ?1 ?1 ?1 2. 5 Hypotheses Before commencing to estimate the system of the four equations, equation (7), (17), (26) and (28), it is necessary to address data limitations.To test the four equations for the coffee market it is necessary to have wages in coffee farming, wages in th e coffee-exporting sector, wages in the coffee-importing sector and wages in the coffee-roasting sector. These wage data are not available and the wages in producing countries, wG and wX , will be approximated with the gross domestic product (GDP) per capita in producing countries, y P . Wages in the importing sector and the roasting sector in the consuming country, wM and wR , are approximated with the GDP per capita for a consuming country, yC .In addition to data on wages, data on coffee trees limit the empirical analysis since data for coffee trees or acreage are not available for the desired timeframe of the analysis. The quantity of coffee trees enters equation (7) and coffee production enters equation (28). Both variables are in the empirical model represented by world coffee production. The alterations to the theoretical model, give the following four equations: ? pG = a0 + a1 p X + a2 y P + a4 q + a5 t + ? G + + + /? ? + /? (34) 10 p X = b0 + b1 pG + b2 pM + b3 y P + b4 yC + b5 t + ? X (35) ? pM = c0 + c1 p X + c2 pR + c3 yC + c5 t + ? M (36) R = d 0 + d1 q + d 2 p M + d 3 yC + d 4 m + d 5 t + ? R (37) + + + + + + + + + ? + + /? + + /? + /? 1 ? The expected signs of the parameters are indicated under the respective parameters; +/– indicate that the sign is uncertain from the adjusted theoretical model. World production is q, and the coefficients on income in market one and three are defined as: ? a2 = a2 + a3 = ? ?1 (? 1 (1 ? ? 2 ) ? ?1 ) * c3 = c3 + c4 = [? 1 (1 ? ? 2 ) ? ?1 (1 ? ? 2 ) ] (1 ? ? 1 ? ? 2 ( ? 1 + ? 2 ) ) (38) ?1 (39) The coffee commodity chain model consists of the four simultaneous equations in equation (34) to (37) from which hypotheses can be derived.Firstly, it is apparent that all prices are positively correlated. An increase in the price of coffee in market i–1 (increased input price) shifts the supply curve in market i left since it increases marginal costs and the equilibrium price is higher and the quantity traded lower. An increase in the price of coffee in market i+1 increases the supply in market i+1 and hereby the demand for coffee in market i and increases the price in market i. Secondly, the coefficients on national incomes have mixed signs. They depend on the input elasticities of labour at different nodes of the chain.If the input elasticity of labour in coffee growing (importing) is relatively large compared to the input elasticity of labour in ? ? coffee exporting (roasting) then a2 ( c3 ) will be positive. It may be assumed that production processes are relatively more labour-intensive early in the commodity chain because of less reliance on capital. In market two the coefficient on producer income is positive because it is an input price for exporters. In contrast consumer income is an input price for importers and decreases the export price. The coefficient on income, d 3 , in market four expresses a markup, and is positive.Overall coefficients on national incomes are expected t o pull coffee prices 11 up, only with the exception of the income in the consuming country which is assumed to depress the export price of coffee. Thirdly, coffee production has a positive impact on the retail price, but a negative impact on the producer price. It is expected that the effect of output is largest on the producer price because prices paid to producers are primarily influenced by conditions in the coffee market while the retail prices in consuming countries are outcomes of many factors, such as market structures, wages and technology.In a system with all four equations the coefficient on production is therefore expected to be negative. Fourth, the effects of technological change on the prices in markets one, two and three are uncertain, and negative for the retail price in market four. If it is assumed that production methods become more technologically progressive the higher up they are in the chain, the coefficients on the time trend will be positive in market one, t wo and three. Constants a0 , b0 , c0 and d0 , are positive but do not have any economic interpretation. G , ? X , ? M and ? R are random shocks with expected value zero. ?G , ? X and ? M are linear combinations of shocks to production in two markets. Therefore, the residuals generated by estimation of equations (34), (35), (36) and (37) are not independent of each other. Furthermore, any given price in the commodity chain depends on the prices at the previous and next stage of the chain. The four equations are hence simultaneous, and the econometric model accommodates for this. 3. Econometric Model and Preliminary Data AnalysisAnnual data from 1948 to 2004 are employed to estimate the theoretical model. An empirical analysis of the commodity chain for coffee from a single origin in a time series framework is not possible due to data limitations. Instead eight price series are used. These are producer 12 and export prices in Brazil and Colombia, import price of Brazilian coffee into the US, import unit value of (all) coffee in the US, the world price and the US retail price of coffee. Given the non-stationarity of the time series used to estimate the model, a vector error correction model (VECM) is appropriate.A VECM captures long-run paths of the series in the cointegrating vectors and short-run dynamics in the error correction equations. It is formulated as: ?y t = ?y t + ? 1? y t ? 1 + L + ? p ? 1? y t ? p +1 + ut , (40) where y t = ( ptG , B , ptG ,C , ptX , B , ptX ,C , ptM , B , ptW , ptM ,US , ptR , yt )? , ? is the loading vector of coefficients on error correction terms, ? is the coefficient vector for the cointegrating vector, ? j is the coefficient matrix on lag j and ut is the vector of error terms. ptG , j and ptX , j are respectively the producer and the export price in country j, where B is Brazil and C is Colombia. tM ,US ? B is the import price of Brazilian coffee in the US, ptM ,US is the import price of (all) coffee in the US, ptW is the wor ld price and ptR ,US is the retail price in the US. yt is relative income between consuming and producing countries and is used to avoid that the rank of ? = ? is not higher than the number of truly endogenous variables. According to the theoretical model national incomes have an impact on coffee prices, but coffee prices do not have an impact on national incomes. This is though not true for Brazil and Colombia for parts of the sample.Today Brazil and Colombia no longer rely heavily on export earnings from coffee (ICO, 2003) but historically this is not the case, and this analysis covers 1948-2004. Therefore, yt is treated as an endogenous variable. Sources for prices are as in Figure 1 above. World production of coffee is included as an exogenous variable. Source are Departamento Nacional do Cafe (1938, 1939/40), Deaton and Laroque (2003) and FAOSTAT online (2007). Real GDP are from Maddison (2007) and GGDC (2005) and the US CPI from BLS (2005a) has been used to reach nominal GDP. 13 To determine the stationarity properties of the series, unit root tests are carried out.It is pointed out by Morisset (1998) and Krivonos (2004) that coffee price responses may be asymmetric and we follow Enders and Granger (1998) and conduct unit root tests for variables which possibly adjust asymmetrically. The results are outlined in Table 1. [Table 1] All variables in Table 1 are expressed in natural logarithms. Lag-length is determined by the Akaike Information Criterium (AIC) and inclusion of a trend is decided from visual inspection of the series and the decision noted under â€Å"Trend† where â€Å"y† indicates that a trend is included and â€Å"n† that it is not.The F-statistic for the hypothesis that the series has a unit root shall be held up against the Enders and Granger (1998) critical value of 7. 07 when a trend and a constant are included in the regression and 5. 14 when only a constant is included. The results in Table 1 show that all series but world production have one unit root and hence are non-stationary and integrated of order one. The test statistic for the stationarity of world production is close to the 5% critical value by Enders and Granger (1998), so depending on significance level the series could also have been concluded to be nonstationary.It is not important to correctly identify the stationarity properties of world production, since the series is not an endogenous variable in the VECM and furthermore, it enters the model in first differences. No series adjusts asymmetrically according to this analysis, and asymmetries are disregarded when formulating the empirical model. Due to the possible impact from the International Coffee Agreement (ICA) a dummy variable, which takes the value one in the years the agreement was in place (1962 to 1989), is included. The ICA dummy is included in the short-run regressions because the ICA had an impact only on prices in the short run.In the long run quotas were adjust ed to meet market forces on supply and demand, but in the short run quotas stabilised coffee prices. 14 4. Results Before estimating the VECM in equation (40) the lag-length and the rank of the VECM are determined. Schwartz Information Criteria points at one lag and the AIC and the HannanQuinn Criteria point towards four. In the estimation process the model was first estimated with one lag and tests of the residuals indicated no problems regarding normality. There was no need to expand the number of lags and the model reported here has one lag.With one lag Johansens’s cointegration test gives the following rank of the VECM: [Table 2] Using the trace test, the hypothesis of rank one cannot be rejected, and from the maximum-eigenvalue test the hypothesis of no cointegration cannot be rejected. The test statistics are close to the 5% critical values which makes the decision regarding the rank of the matrix equivocal. The trace statistic for the hypothesis of one or less cointegr ating vectors is close to the critical value, but the test statistic for the hypothesis of rank three or less is clearly rejected.Therefore, according to the trace statistic there are one or two cointegrating vectors. Looking at the maximum-eigenvalue statistic, the test statistics and 5% critical values are relatively close until the hypothesis of three or less cointegrating vectors. Again, rank up to two is acceptable according to the test statistics. A model with two cointegrating vectors is preferred because this indicates seven trends among the nine variables and some variables share trends. 4. 1 Long-Run Equilibrium The preferred model has the following two estimated cointegrating vectors: 15 ptW = 0. 24 ptM ,US ? B + 0. 4 ptX ,C + 0. 15 ptX ,B + 0. 18 ptR ,US (2. 95) (2. 22) (2. 61) (4. 01) ? 0. 05 ptG ,B + 0. 34 ptG ,C ? 0. 28 yt ? 0. 00 t + 0. 43 (3. 58) (6. 35) (2. 86) (3. 76) ptG ,C = ? 0. 23 ptM ,US + 0. 10 ptM ,US ? B + 1. 05 ptX ,C + 0. 91 yt + 0. 01t + 1. 97 (5. 05) ( 0. 70) (5. 71) (5. 09) (41) (4. 51) (42) t-statistics are in parentheses under the parameter estimates. The first cointegrating vector, CIV1, in equation (41) represents the long-run equilibrium in the world market. The second cointegrating vector, CIV2, in equation (42) represents the long-run equilibrium between the two Colombian prices.The two cointegrating vectors are found by commencing with a general model with one cointegrating vector and all nine endogenous variables in this cointegrating vector. Insignificant variables in the cointegrating vector are removed sequentially. It is clear that the US import unit value is not significant in CIV1 and it is moved out to a second cointegrating vector. Other variables were included in CIV2 if they obtain significant coefficients in CIV2 or exhibit significant error correction. According to the first cointegrating vector, CIV1, six prices move together in the long run, and one moves opposite to this group.The world price, the import p rice of Brazilian coffee in the US, the export price in Brazil, the export unit value in Colombia, the US retail price and the Colombian producer price all move together in the long run. Five of the prices have roughly the same influence on the common path, but the world price, to which CIV1 is normalised, dominates through a higher coefficient (one). The Brazilian producer price moves in opposite direction to these six prices, but has a small coefficient in equation (41). The prediction of the theoretical model is that all prices should move together.Therefore, the coefficient on the Brazilian producer price contradicts the model, but the coefficient is small. 16 The second cointegrating vector, CIV2, shows Colombian prices (producer and export price) and the import price of Brazilian coffee in the US move together in the long run. It is clear that the two Colombian prices dominate the movements of the group of prices since the Colombian export price obtains an estimated coefficien t above one and CIV2 is normalised to the Colombian producer price.The import price of Brazilian coffee into the US is the least influential in the group since its estimated coefficient is 0. 10 and hence a tenth of the estimated coefficient on the Colombian prices. The import unit value of (all) coffee into the US enters CIV2 with a negative coefficient indicating that the Colombian prices and the import unit value of coffee in the US move in opposite directions to each other in the long run. As the Brazilian producer price in CIV1, this poses a challenge to the theoretical model which predicts that all prices should move together.However, the US import price and the Colombian producer price are far from each other in the coffee commodity chain and the coefficient is less than a quarter of the coefficient on the Colombian export unit value. Therefore, this coefficient, like the Brazilian producer price in CIV1 above, does not mean that the theoretical model is rejected, and prices are found to generally co-move in the long run. The coefficients on relative income are significant in both cointegrating vectors but have different signs. When relative income decreases, the six prices in CIV1 increase. In contrast, the three prices which co-move in CIV2 decrease.The effect of relative income on coffee prices in the long run are hence not clear from looking at the cointegration vectors. Technological progress, here modelled as a time trend, obtains estimated coefficients in the cointegrating vectors of the same sign as relative income. Technological progress hence moves the two groups of prices in different directions. Alternatively, if something else than technological progress is the reason for the coefficients on the time trend, something else makes the two groups of prices diverge over time. Over time the six prices in CIV1, which are 17 lose to the world market, move closer together. Opposite to this, the Colombian producer price moves away from the path of ot her prices in CIV2. 4. 2 Short-Run Dynamics The short-run structures show how the series adjust towards the long-run equilibria, and how the endogenous variables respond to shocks in exogenous variables. Error correction towards the two long-run equilibria happens according to the estimates in Table 3. [Table 3] Whether a variable error corrects and restores the long-run equilibrium between prices in a cointegrating vector is determined by looking at its sign in the cointegrating vector (the sign of ? and its sign in the loading matrix (the sign of ? ). If the combined sign is negative, the variable works towards restoring equilibrium. The two export prices, ptX ,C and ptX , B , and the import price of Brazilian coffee into the US, ptM ,US ? B , are the only variables which significantly adjust to disequilibrium between the variables in CIV1. These three prices work to restore an equilibrium which is dominated by the world price. The world price in contrast moves further away from t he equilibrium when a shock has created disequilibrium.The import price of Brazilian coffee into the US and the Colombian export price significantly adjust to disequilibrium between the prices in CIV2. Though the import price of Brazilian coffee into the US was not significant in determining the second long-run equilibrium (CIV2), it significantly works to restore it. The estimated parameters on the error correction term in the equations for the import unit value in the US, the Colombian producer price and relative income are not different from zero. This suggests that these variables do not 18 ork to restore the long-run relationship described by CIV2. The Colombian producer price is an important determinant of the equilibrium described by CIV2, but it does not adjust to restore this equilibrium. It thus influences other prices, but is itself not influenced by other prices. Relative income does not adjust to disequilibrium between the variables in CIV1 but its error correction towa rds the equilibrium described by CIV2 is significant on the 10% level. Relative income therefore works in part to restore the equilibrium between (among others) the Colombian prices in CIV2.This could show that any endogeneity of relative income is due to the importance of coffee prices for national income in Colombia. In addition to the error correction terms, the short-run equations include exogeneous variables. The four exogenous variables in the VECM are a constant (c), the dummy for the International Coffee Agreement (ICA) and the current and lagged first difference of world production of coffee, d(qt) and d(qt-1). The estimated coefficients on the exogeneous variables in the short-run regressions are presented in Table 4. [Table 4]None of the estimated constants in the short-run equations for prices are significantly different from zero. This suggests that time trends have been captured in the cointegrating vectors, but it is noticeable that the constant is positive and has hi gh t-statistics in the equations for the price of coffee imported into the US and the retail price in the US. This indicates that the prices, which have increased in an unexplained way, are prices in the US and that value added is largest further up in the coffee commodity chain. The constant is also positive with a high tstatistic in the short-run equation for the Colombian producer price.This could indicate that the attempts by the Federacion Nacional de Cafeteros de Colombia3 (FNC) to influence the prices of Colombian coffee have been successful. 19 The estimated coefficient on the ICA dummy is positive in the equation for relative income and in six equations for prices but negative in two equations for prices. However, it is never significant. The ICA increased six of the eight prices and it should be pointed out that the most significant, though not significant even at the 10% level, increases are for export prices and the import price of Brazilian coffee into the US.It was not producers which gained from ICA but rather exporters and importers of Brazilian coffee. So, there is weak evidence that while exporters benefited from the agreement the producers did not; the effects of the commodity agreement did not trickle down and reach them. First differences of world production and lagged world production enter with negative and significant signs in all regressions but one. This stresses the importance of production in determining prices in the short run. This is predicted by the theoretical model; increased production lowers price regardless of where in the chain the price is situated. . 3 Weak Exogeneity Tests of weak exogeneity are carried out to further test the driving forces in the system. A weakly exogenous variable has an impact on the long-run path of the variables of the system, but is not itself influenced by the variables in the system. The results from likelihood ratio tests are given in Table 5. [Table 5] In Table 5 the test statistics for the w orld price, the import unit value into the US, the Colombian export unit price, the US retail price and the two producer prices are lower than the 5% critical value, and the null hypothesis can not be rejected for these variables.These six prices are hence weakly exogenous. Agents at the ends of the chain, retailers, importers and producers, are hence not responding to deviations from the long-run equilibrium relationships between prices. As such, they are somewhat isolated from the world market. This is not 20 surprising since the price transmission literature asserts that the price determination happens in the world. Further up and down the chain other factors, such as market set-ups, intervention and incomes determine the prices.The hypothesis of weakly exogenous relative income is clearly rejected, indicating that it is correct to model income as endogenous in the system as discussed above. Also, the likelihood ratio test shows that the causality between prices and relative inco me is uncertain. Coffee prices and national incomes in Brazil and Colombia are interrelated. Coffee prices are important determinants of income in Brazil and Colombia, but national incomes also determine coffee prices. Regarding relative income it is clear that the results are equivocal.The coefficients in the cointegrating vectors obtained different signs and it may or may not be weakly exogenous according to the error correction coefficients and weak exogeneity tests. The final set of results which can shed light on the effect which relative income has on prices, is impulse response functions. They were estimated for the VECM and show that relative income has a negative impact on all eight coffee prices and hence that a decreasing income gap between producing and consuming countries increases coffee prices. 5. DiscussionRegarding the central question of what determines the value added at each stage of the commodity chain, it can be concluded that the prices definitely determine ea ch other, and that from outside the system of prices quantity has a large impact, but only in the short run. In the long run, relative income has an effect on all prices, and a closing income gap between producers and consumers increases prices. In addition, prices move in response to changes in technological progress. In this concluding section four overall conclusions are drawn. The first is of how the prices influence each other.The second is of how relative income impacts prices. The third is 21 of how production influences prices. And last how the time trend, which represents technology, influences prices. It is of utmost importance to determine which prices are detached from the chain. The theoretical model predicts positive correlation between the prices and this is generally found in the empirical model both by long-run co-movements and by adjustments to restore the long-run equilibria in the short run. Both CIV1 and CIV2 show co-movement among prices, but the VECM is estima ted with two cointegrating vectors.This indicates that there may be a break in the coffee commodity chain since one group of prices moves together in one manner while the other group moves in a different manner in the long run. The world market prices in CIV1 move together but the Colombian prices in CIV2 do not follow their movement, and the Colombian prices may be detached from other prices, possibly due to FNC. Since the Brazilian producer price is not significant in CIV2 and moves against the other prices in CIV1 it can be said to also be detached from the value chain.The error correction properties of the system and the weak exogeneity tests show that prices in the middle of the chain work to restore the two long-run equilibria. The prices at the ends of the chain, the producer prices and the retail price, and the dominating world price do not error correct. The lack of error correction by the prices at the ends of the chain indicates that they are not influenced by the long-ru n paths and points at breaks in the coffee commodity chain.The empirical results suggest that the world market is characterized by close linkages between prices but retail price and producer prices are less integrated with other prices. This finding may support the arguments made by the price transmission literature. The limited trickle down of price signals to producer prices confirm the findings of Fitter and Kaplinsky (2001) and Ponte (2002) who argue that surplus created along the chain falls on agents further up the chain, and not on producers. The discussion of intervention and integration in the 22 ransmission literature (Baffes and Gardner, 2003; Hazell et al, 1990; Krivonos, 2004; Mundlak and Larson, 1992) explain why the Colombian producer price and export price, which have experienced considerable intervention by FNC, are detached from other prices. It is not possible to reach an unequivocal conclusion regarding the impact of relative income by looking at the cointegratin g vectors, short-run dynamics or weak exogeneity tests. It is concluded that decreasing income gap increases prices in the world market, whereas it decreases the Colombian producer price.The negative relationship between relative income and all eight prices found by the impulse response functions confirms the expected signs of the coefficients on income in market one and two. The negative relationship between relative income and prices extends to market three. However, since income in consuming countries occurs in the numerator of relative income, relative income should obtain a positive coefficient if the hypothesis of decreasing importance of labour along the coffee commodity chain is confirmed. A negative ? c3 in equation (36) suggests that the roasting sector relies more on labour than the importing ector, in light of the discussion of equation (35) above. Income’s significance in the determination of producer prices, both in the theoretical and the empirical model, offer s support for the terms of trade literature, where prices are determined by underlying macroeconomic factors. Relative income also helps explain divergence of producer and retail prices as these prices reflect relative overall economic performance of producer countries compared to consuming countries. The theoretical model predicts that there is a negative relationship between prices and production. This is fully supported by the empirical model.The negative and significant coefficients on the differences of world production show that it could be the supply curves which shift outwards and create the decreasing prices. 23 According to the theoretical model the sign on the time trend (technological progress) is unknown and depends on whether the supplier or the demander in a given market experiences the most significant technological innovations. The negative sign of the estimated coefficient on the time trend in CIV1 shows that the prices in CIV1 move closer together over time than w hat is explained by relative income.Technological progress can be the explanation for this. A negative sign indicates that the technological progress is largest for the supplying parties in markets one, two and three and/or the negative sign of d 5 is confirmed. The latter case is particularly neat since CIV2, which holds a positive time trend, does not contain the US retail price, and the different signs of the time trend in the cointegrating vectors are not conflicting. They are not conflicting because in CIV1, which describes all four markets, d 5 causes a negative time trend.In CIV2, which describes market one, two and three, a5 , b5 and c5 represent relatively bigger technological progress by demanders which creates a positive time trend. A positive time trend could occur in market one, two and three in the theoretical model if the technological progress is largest for the demanding parties in these three markets. This development is not unlikely in the coffee commodity chain i f agents along the chain become more able to improve their production methods (technological progress) because they become wealthier either through market power and/or the value they add to coffee.This hypothesis can however not be tested with the data used for this analysis, but touches on the discussion in Ponte (2002). Therefore, the positive time trend in CIV2 could be capturing technological progress or some factor not included in the model that coincides with the passing of time. Market power and bargaining power are examples of unmodelled variables in the VECM. The almost significant positive constants in the regressions of US prices show that US import and retail prices tend to increase more than other prices.This could capture the mark24 up, m in (37). The negative constant in the short-run regression for the Brazilian export price could be caused by the coffee commodity chain being a trader-driven commodity chain, as argued by Talbot (2002), where international traders tra de large amounts of coffee with very little margin. Looking at the value chain for Brazil in Figure 1 confirms this, since the value added at the exporting stage, which is denoted processing and transport in Brazil, reduces to almost zero after 1990.It is no coincidence that this is the year after the breakdown of ICA, and it is also argued by Ponte (2002) that this event changed the power relations along the coffee commodity chain. The empirical model gives some insight into issues which are not explicitly modelled in the theoretical model. The theoretical model did not predict which prices would be dominating and which would be adjusting to movements in other prices. However, it is found that the world price is dominating and the export prices are responding.Boratav (2001) found that the ratio between world price and export unit value was stable, and the analysis here can extend the conclusion by suggesting that the export prices follow the world price. If the aim is to create a m ore equal income distribution among agents in the global coffee commodity, this analysis offers some insights of policies to achieve this. Income levels in coffee-producing countries are important determinants of the coffee prices and low national incomes pull coffee prices down even though the retail and import price in consuming countries might increase.Unless the general income level in producing countries increases increased income in consuming countries will not trickle down to the coffee farmers. Alternatively the structure of the chain can be changed and an income distribution more favourable for coffee farmers could be achieved. At the international level the International Coffee Agreement increased coffee prices, but more so export and import prices than producer prices. If the aim is to benefit those in the global coffee commodity chain who has the least – the farmers – an international agreement is 5 hence not the most efficient tool. Improved technology for farmers and increases bargaining power are other factors which would redistribute value within the commodity chain. Producer and retail prices which are detached from the world market, technological progress mainly by demanding parties in the chain and increasing mark-ups (or market or bargaining power) in consuming countries are all findings which support the idea by Darity and Davis (2005) to bring Karl Marx back into the picture.Though international commodity agreements, producer cartels and attempts to change the structures of the centre and periphery are not policies currently in vogue, it may be useful to keep them in mind when engaging in the world coffee market. 26 Value Chain for Brazil 1950 1960 1970 1980 year 1990 2000 20 0 40 20 40 % 60 % 60 80 80 100 100 Value Chain for Colombia 1950 Processing in US International processing and transport Processing and transport in Brazil Brazilian producer's share 1960 1970 1980 year 1990 2000 Processing in US and transportProcessing and transport in Colombia Colombian producer's share Fig. 1. Distribution of the Coffee Dollar along the Commodity Chain. Sources: Brazilian and Colombian producer prices: FAO (various years), FAOSTAT (2006) and ICO (2005). Export and import unit values: FAOSTAT online (2006) and U. S. Department of Commerce: Bureau of the Census (1989). Wholesale prices for Brazil: IFS (various years). US Retail prices: BLS (2005b). 27 Table 1. Asymmetric Unit Root Tests n 1 pW n 1 pM,B-US n 1 pM,US n 1 pR,US y y# 8 4 0 0. 19 0. 33 0 1 3 1 0. 2 0. 48 4 1 3 0. 66 0. 78 2 6 3 0. 65 0. 55 4 6 6 0. 31 0. 99 6 0 5 0 0. 99 0. 99 0 2 5 4 0. 37 0. 07 1 8 n 0. 99 0. 99 3 3 0. 00 0. 97 5 3 0. 98 0. 87 0 3 0. 52 0. 89 4 3 0. 42 0. 69 2 0 0. 22 0. 90 9 1 0. 55 0. 89 5 1 0. 93 0. 92 5 8 0. 75 0. 60 25. 499 1 1 I(1) symm . . . . I(0) symm 1 26. 032 0. 38 0. 00 I(1) symm 0 # Unit Root 5 0 8. 87 q y 4 Bartlett’s White Noise pX,C Asymmetric Adjustment 1 0. 97 Lags Lags n 0. 95 0. 32 pX,B 0. 59 0. 53 1 8 1. 21 n 1 0. 15 pG,C 0 1. 31 1 0. 99 2. 62 n 0. 19 0. 19 Trend 1. 80 pG,B Bartlett’s WhiteNoise s Asymmetric Adjustment Conclusion Unit Root Analysis of Series in Levels Analysis of Series in 1st Differences Series 29. 849 26. 732 28. 028 0 0 0 # 28. 842 32. 509 27. 076 29. 196 I(1) symm I(1) symm I(1) symm I(1) symm I(1) symm I(1) symm I(1) symm 28 5 5 4 ## 1 6 â€Å"Unit Root† contains the F-statistic for the hypothesis that the series has a unit root. â€Å"Asymmetric Adjustment† contains the p-value for the hypothesis of symmetry. â€Å"Bartlett's White Noise† contains the p-value from Bartlett's periodogram-based test for white noise.The null is that the error terms are white noise. # indicates that the lag-length selected by AIC did not result in white noise residuals and increasing the laglength did not amend the problem and the lag-length was hence decreased until the indicated number of lags. ## indicates that residuals from the regressions with the first difference of relative income fail Bartlett's periodogram-based test for white noise regardless of variations of the number of lags and the lag-length is chosen by AIC. Table 2.Rank for VECM(1) with nominal prices and relative income Trace Test Maximum-Eigenvalue Test 5% 5% Test Critical Hypothesized Test Critical No. of CE(s) Statistic Value Prob. * Statistic Value Prob. * None 232. 686 228. 298 0. 031 49. 706 62. 752 0. 486 At most 1 182. 980 187. 470 0. 083 46. 246 56. 705 0. 367 At most 2 136. 734 150. 559 0. 230 36. 528 50. 600 0. 617 At most 3 100. 206 117. 708 0. 372 31. 817 44. 497 0. 570 At most 4 68. 389 88. 804 0. 570 21. 460 38. 331 0. 885 At most 5 46. 929 63. 876 0. 556 19. 020 32. 118 0. 728 At most 6 27. 909 2. 915 0. 628 13. 839 25. 823 0. 736 At most 7 14. 070 25. 872 0. 652 8. 642 19. 387 0. 761 At most 8 5. 428 12. 518 0. 536 5. 428 12. 518 0. 536 Trace test indicates 1 cointegrating equation at the 5% level. Max-eigenvalue test indicates no cointegration at the 5% level. * MacKinnon-Haug-Michelis (1999) p-values. 29 30 Table 3. Error Correction Parameters ? pW 2. 04 pM, US 0. 52 pM,US3. 68 pX,C 2. 33 pX,B 4. 20 pR,US 0. 99 pG,B 1. 73 pG,C 0. 96 y -0. 16 CIV1 (1. 64) (0. 44) (2. 92) (2. 09) (3. 04) (1. 59) (0. 94) (1. 11) (0. 97) EC ? N 0. 99 Y 0. 07

Psychology Milgram experiment Essay

As a participant in Milgram’s (1963) study I would be tormented at the thought of inflicting pain to another person, I also would at least think about whether what I am doing is right and whether the experiment was really genuine or it was some macabre experiment bent on torturing other people. I would probably be one of the few in Milgram’s (1963) study who refused raising the voltage of electric shocks and maybe be among those who balked out of the experiment due to anxiety and guilt. After the debriefing, I would feel deceived and angry with the researcher because I was put through an ordeal that did not really happen. The experiment required that the researcher prod the participant to inflict more electric shocks, and I would probably base my willingness to push the button on the cries of the learner. I would surely refuse the researcher’s demands because I know I am not doing the right thing. On the other hand, if the debriefing would explain why deception was necessary, I would understand the experiment and maybe not hold it against the researcher. However, I am sure that I would still feel deceived and manipulated; it would be an experience that would stay with me for a long time and may even influence how I perceive experiments and researchers. If I was part of an ethics review committee, I would not consider Milgram’s (1963) study as acceptable and protective of participants because aside from debriefing, he did not have any other safeguard procedure to protect the participants. In Milgram’s (1963) study, the shrieks and cries of the learner increased the anxiety and guilt of the participant, and I think it was deliberately designed to evoke the feelings of anxiety of the participants no matter how he argued that the effects of the experiment to the participants were not anticipated. The learners were told to respond to the electric shock as if it was actually happening to them making it more believable to the participant, and by doing so; it also led the participant to believe that they are actually causing that reaction to the learners. Therefore, the potential benefits gained from the study does not outweigh the sufferings that it brought to the participants, and ethically, it does not justify the use of deception (Spata, 2003), the debriefing was also conducted late wherein the participants had already believed that they were responsible for another person’s pain and it failed to protect the welfare of the participants. Without the criticisms and reactions against the experiment on obedience, the ethical issue of using deception in experiments would have not been given attention. At present the American Psychological Association (APA, 2003) have only allowed deception when alternative procedures that are nondeceptive are not available and only if the potential benefits and knowledge gained from the research outweighs the risks of the effects of deception to the participants. In addition, deception is not allowed if the experiment would likely inflict physical and emotional distress to the participants.

Marketing and Nike Swot Analysis Essay

Nike Swot Analysis Strengths * A very professionally competitive company. * Has ownership of no physical factories so production can be moved to a more cost effective location when necessary. * Very well branded among consumers. * Offers their products worldwide. * Have offices in forty five different countries. * Fortune 500 company. * Employs over thirty thousand people across the world. * Has a very strong marketing campaign that increases brand familiarity. * Chains of retail stores such as Niketown. * Has ventured into many different rebranding opportunities with successful results. * Providing lightweight shoes by incorporating lunarlite foam materials. Read more: http://www.quality-assurance-solutions.com/swot-analysis-nike.html#ixzz2IzMDg4a0 Swot Analysis Nike Weaknesses * Profits are largely dependent on the footwear products while other branded products are not as strong. * History of violations of over time laws and minimum wage rates in Vietnam. * Accusations of poor conditions in the work place. * Accusations of exploiting workforces that will work for cheap in overseas countries. * Constant focal point for negative criticism by the anti-globalization groups. Read more: http://www.quality-assurance-solutions.com/swot-analysis-nike.html#ixzz2IzMHweg2 Swot Analysis Nike Opportunities * Creating sportswear items by incorporating the waste from regular manufacturing. * Stepping into the line of economy boosting projects that will encourage recycling. * Product development that changes as the trends change. * Expansion into sport sunglasses and jewelry lines. * Expansion in the global markets to create larger brand recognition. * Reducing controversy surrounding their trade and production practices. Read more: http://www.quality-assurance-solutions.com/swot-analysis-nike.html#ixzz2IzMJaFq6 Swot Analysis Nike Threats * Operating business internationally opens them to the possibilities of currency value fluctuations that can lead to losses. * Competitors are becoming more aggressive and creating high quality products that are taking from the profits of NIKE. * Sensitivity to price among consumers leads them to purchase the most cost effective pair of sports shoes. * Maintaining the reputation of being eco-friendly. * Managing the financial conditions in the economy today. Read more: http://www.quality-assurance-solutions.com/swot-analysis-nike.html#ixzz2IzMLVeVp SWOT Nike February 26, 2010 By Hitesh Bhasin Leave a Comment SWOT ANALYSIS Strengths: * Nike is the world’s no. 1 shoemaker. It designs and sells shoes for a variety of sports including baseball, golf, cheerleading, volleyball, tennis and football. * Nike uses a â€Å"Make to Stock† customer order which provides a fast service to customers from available stock. * Nike operates Nike Town shoe and sportswear stores, Nike factory outlets and Nike Women shops. Nike sells its products throughout US and in more than 180 countries. * Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price. * Nike is a global brand. It is the number one sports brand in the World. Its famous ‘Swoosh’ is instantly recognizable, and Phil Knight (Founder and CEO) even has it tattooed on his ankle. Weaknesses: * The income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes. * The retail sector is very price sensitive. However, most of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to the consumer. So margins tend to get squeezed as retailers try to pass some of the low price competition pressure onto Nike. Opportunities: * Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand however consumers that wear Nike product do not always buy it to participate in sport. In youth culture especially, Nike is a fashion brand. This creates its own opportunities, s * There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value items do tend to have associated with them, high profit * The business could also be developed internationally, building upon its strong global brand recognition. There are also global marketing events that can be utilised to support the brand such as the World Cup (soccer) and The Olympics. Threats: * Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands. * The market for sports shoes and garments is very competitive. Competitors are developing alternative brands to take away Nike’s market share. SWOT Analysis Nike, Inc. Would you like a lesson on SWOT analysis? Strengths. * Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying that ‘Business is war without bullets.’ Nike has a healthy dislike of is competitors. At the Atlanta Olympics, Reebok went to the expense of sponsoring the games. Nike did not. However Nike sponsored the top athletes and gained valuable coverage. * Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price. If prices rise, and products can be made more cheaply elsewhere (to the same or better specification), Nike will move production. * Nike is a global brand. It is the number one sports brand in the World. Its famous ‘Swoosh’ is instantly recognisable, and Phil Knight even has it tattooed on his ankle. Weaknesses. * The organization does have a diversified range of sports products. However, the income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes. * The retail sector is very price sensitive. Nike does have its own retailer in Nike Town. However, most of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to the consumer. Can you tell one sports retailer from another? So margins tend to get squeezed as retailers try to pass some of the low price competition pressure onto Nike. Your marketing qualification We’re delighted to offer you online marketing courses which give you total flexibility and the freedom to learn marketing when you like – from anywhere in the world. You can sign up to a course today. It takes 5 minutes! Marketing Teacher is the most popular marketing education content site in the world. You can gain certification and qualifications from Marketing Teacher. Opportunities. * Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand. However, like it or not, consumers that wear Nike product do not always buy it to participate in sport. Some would argue that in youth culture especially, Nike is a fashion brand. This creates its own opportunities, since product could become unfashionable before it wears out i.e. consumers need to replace shoes. * There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value items do tend to have associated with them, high profits. * The business could also be developed internationally, building upon its strong global brand recognition. There are many markets that have the disposable income to spend on high value sports goods. For example, emerging markets such as China and India have a new richer generation of consumers. There are also global marketing events that can be utilised to support the brand such as the World Cup (soccer) and The Olympics. Threats. * Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands. * The market for sports shoes and garments is very competitive. The model developed by Phil Knight in his Stamford Business School days (high value branded product manufactured at a low cost) is now commonly used and to an extent is no longer a basis for sustainable competitive advantage. Competitors are developing alternative brands to take away Nike’s market share. * As discussed above in weaknesses, the retail sector is becoming price competitive. This ultimately means that consumers are shopping around for a better deal. So if one store charges a price for a pair of sports shoes, the consumer could go to the store along the street to compare prices for the exactly the same item, and buy the cheaper of the two. Such consumer price sensitivity is a potential external threat to Nike.