Systems and Operations Management Assignment Example | Topics and Well Written Essays - 3000 words

Systems and Operations Management - Assignment Example Competition between Airbus and Boeing as the world's dominant commercial aircraft manufacturers sets the overall tone for the air transportation industry. Currently both companies dominate about 90% of the air transportation market with very few major competitors on the horizon. Their latest models of A380 and Boeing 747 proved that companies are willing and able to meet the constantly changing demand of the customers in terms of flight efficiency and increased number of seats. While Boeing 747 was welcomed positively by the customers, development and introduction of A380 at the market reduced the market share of Boeing by approximately 14.8% (Newhouse, 2007). In such a way, Airbus A380 proved to be the world’s most advanced spacious and efficient aircraft (McKeegan, 2007). The current paper will analyze the role of systems and operations management, including Soft Systems Methodology, at Airbus and their integration within the business. In addition, the paper will explain how the Airbus information systems and operations management should be updated in order to support and improve their business efficiency. Finally, the paper will analyze the people, technology and organizational issues involved in improving the operations at Airbus. Brief Overview of Airbus and A380 Development Airbus has been in business for about 30 years and is jointly owned by European Aeronautic Defense and Space Company-EADS (80%) and BAE systems (20%), which are two of the largest defense contractors (Addison, 1993). Now Airbus is a single company, headquartered in Toulouse, France, began as a French-German consortium in 1970 that was soon joined by Spain and later Britain. Each company would deliver its sections as fully equipped, ready to fly items. In 2000 DaimlerChrysler Aerospace, Aerospatiale-Matra and CASA in Spain merged to form EADS (Gunston, 2010). In 2001 BAE Systems (formerly British Aerospace) and EADS formed the Airbus Integrated Company to coincide with the develo pment of the new Airbus A380, which will seat 845 passengers and be the world's largest commercial passenger jet. The development of A380 has been agreed as industrial cooperation across Europe, mainly Germany, France, the United Kingdom and Spain. The final assembly of the aircraft should have been done by DaimlerChrysler Aerospace in Hamburg, Germany and Aerospatiale-Matra in Toulouse, France. The picture below shows the basic dimensions of A380 in comparison with other aircrafts like B777-300, B747 and A340-600 (Newhouse, 2007). The Airbus product line consists of 14 aircraft models, starting from the 100-seat single-aisle A318 jetliner to the 525-seat A380 in three-class categories or 825-seat in one-class category with 2-4-2 seating configuration, which is now the largest civil airliner in service. The aircraft has wider seats than in previous versions and the size of individual seat screen is also wider. Until April 2011, Airbus received 234 orders for their A380 aircraft whil e 46 have been already delivered to the customers and started being in operation (see Table 1 in the Appendix). The Airbus A380 project was delayed for 18 months with an additional

Juvenile Offenders Essay Example | Topics and Well Written Essays - 1000 words

Juvenile Offenders - Essay Example As the discussion outlines from a cost-benefit point of view, it makes sense to terminate the probation period. There are many costs associated with running intervention programs such as probation. Evidence shows that the defendant has reformed and is no longer a threat to the society. An early release will help reduce the costs associated with monitoring him during the probation period. It is therefore sensible to allow the defendant to integrate into the community and use the available resources to help other individuals through such intervention programs. The damages caused by the defendant are quite enormous, but these costs cannot be compared to the overall costs incurred by tax payers in financing such programs. By releasing the defendant, the court will send a message to the entire country and the world on the importance of saving costs through early termination of probation. There are many juvenile offenders who might be in a similar situation, and if this is applied to all, the country will save on these costs. This study highlights that the defendant, being only a 17-yealr old boy, is yet to complete school and start building his life. It is the desire of every citizen to see young men and women grow into mature and responsible adults. Termination of the probation period will help in achieving this. It will give the defendant enough time for his studies, and engage in income generating activities. However, by keeping him on probation, the defendant wastes precious time doing community service and other probation-related activities. Under the current circumstances, the probation period already served by the defendant appears to have yielded the desired result, and therefore it is important to allow him to build his life.

Economic Factors Affecting UK Non League Football Clubs

Economic Factors Affecting UK Non League Football Clubs An investigation of the economic factors affecting the commercial success and sustainability of UK non league football clubs Introduction Football clubs are traditionally not the strongest or most profitable businesses. This is supported by Deloitte’s (2007) annual report into the state of football finance, which stated that, outside of the Premier League, UK football as an industry recorded a net operating loss. Even in the Premier League, where clubs benefit from higher levels of sponsorship, media exposure and TV revenues, four clubs posted an operating loss in the 2005 / 2006 season. This implies that, the lower the division a club is in, the harder it is for them to survive and become commercially sustainable, let alone successful. Indeed, there is an argument that many football clubs will not survive without some form of outside financial support, such as a rich benefactor or owner. However, with increasing pressure from fans to spend money on securing the best players and challenging for success, whilst not increasing ticket prices to cover any additional expenditure, many wealthy businessmen, and even mu lti millionaires, are finding that bankrolling a football club is beyond their means. This is reflected in the view of Henk Potts, a strategist at Barclays who claims that â€Å"Any business model that revolves around 11 overpaid players kicking a piece of dead cow around on a wet November evening is no place to put your money† (Tomlinson, 2004). Issues such as these are exacerbated at the non league level. Not only must non league clubs put up with similar demands for success, but they often find themselves within the catchment area of a league, or even Premier League, club. In addition, with the rise of cable and satellite television, many people who would have previously watched their local non league teams on a regular basis can now choose to watch a variety of league matches from the comfort of their own home. This has put downward pressure on attendances for a number of non league clubs, making it even harder for them to survive and succeed. Ashford Town is a prime example of such a struggling club. As can be seen from the six years of accounts in the appendix, Ashford Town’s level of debt has increased from less than  £40,000 at the end of 2002 to more than  £90,000 at the end of 2007. In the same period, the club’s losses, and hence net worth, has fallen to - £70,000, with the club posting a net lo ss in every single one of the last six years. Attempting to address issues such as these is something which has been the subject of significant amounts of research and discussion over the past few decades. As such, this dissertation will not attempt to reach a solution to all of the numerous issues affecting the modern UK football industry. Instead, it will attempt to determine the extent to which contemporary management theories and techniques can be used by non league football clubs aiming to improve their sustainability. This aspect has been chosen because, in spite of the significant amount of research carried out into the sustainability of football as a business model, there has been little attention paid to smaller non league clubs. As such, the initial investigation will entail a detailed and structured review of the existing literature, around how the commercialisation of football has developed and what useful lessons this can provide. This will be followed up by a questionnaire survey of ten non league football clubs, i ncluding Ashford Town, to determine the extent to which they have followed contemporary business practices, and the extent to which said practices have aided their commercial sustainability. Finally, the results of these investigations will be used to attempt to put together a business plan for Ashford Town, in an attempt to demonstrate how the club may be able to turn its current, loss making, performance around. Aim and objectives As discussed above, the main aim of this dissertation will be to carry out an investigation of the economic factors which impact on the commercial success and sustainability of non league football clubs in the UK, and how contemporary management theories may be able to assist in boosting said success. In order to achieve this, it will be necessary to examine how football has developed as a commercial enterprise, and how this has impacted on the divisions of revenue and profits within the industry. As part of this, it would be useful to analyse the main revenue streams of football clubs, as well as the main parts of their cost base, and how these can best be managed. One of the main sources of revenue for most clubs will likely be gate receipts, however many clubs will likely make a significant amount of revenue from marketing, commercial activities, and sponsorship, particularly in the upper leagues where commercial opportunities are likely to be larger. However, it is expected that commercial and marketing opportunities will also exist in the lower leagues, and even for non league sides. As such, this piece will also investigate the extent to which non league teams take advantage of these opportunities, as well as the need to control for factors such as on pitch performance and success, with the associated potential prize money and increased takings. The following objectives will be addressed as part of this study: To assess the factors which underlie the commercial success of football clubs, and hence also the factors which could lead to clubs going into administration, and potentially ceasing to exist. To examine some of the most successful football clubs and football business practices in the UK, and identify how these clubs and practices can contribute to maintaining commercial sustainability. To examine the extent to which contemporary models of business organisation and competitive strategy are relevant to football clubs. To identify and analyse the role broader business opportunities can play in increasing the stability of football clubs. To identify areas of financial savings and cost efficiency which can be used by football clubs without adversely affecting their on pitch performance. It is expected that, in answering these objectives through the literature and primary research, sufficient insight will be obtained to allow the formulation of conclusions and recommendations for non league football clubs wishing to boost their income, or control their costs. These conclusions and recommendations will be used to analyse the commercial business potential of Ashford Town, as a key example of a struggling non league football club. As such, part of the final report will include recommendations for inclusion into sustainable business plans detailing how the club can learn from other clubs, and economic and management theories, to ensure future economic stability. Ideally, in addressing the various objectives above, and looking at the ongoing performance of Ashford Town, it should be possible to gain an understanding of the critical factors which can affect the commercial sustainability of the football club. As such, the findings can then be applied to Ashford Town, helpin g to contribute to the recommendations around the formation of a sustainable business plan. Methodology Research is defined as the collection of data in order to answer research questions or address research objectives. As this obviously presents a significant range of potential data to collect, and numerous ways to collect it, there are various defined theoretical approaches, the most important of which will be assessed in this section. These are: action research, surveys, case studies, experimentation, grounded theory and ethnography (Saunders et al, 2007). The first of these, action research, involves researchers actively collaborating and working with practitioners in their chosen field in order to investigate a well defined issue or problem, with the aim of finding practical solutions to said issue. As such, action research is a highly involved research methodology, which enables researchers to examine an issue in significant depth, investigating the root causes and creating detailed cause and effect chains. However, it can cause the researcher to have too narrow a focus when exam ining the problem, leading them to ignore contributing factors from outside their field of study. Indeed, in a study such as this one, where the aim is to determine what the factors affecting football club commercial success are, action research is likely to be unsuitable. Surveys, on the other hand, are more often used for descriptive and exploratory research, as they enable the researcher to cover a wide scope and thus make recommendations for future research and study. In addition, surveys allow researchers to collect significant amounts of both qualitative and quantitative data, thus supporting a broad range of qualitative and quantitative analysis techniques. This is because surveys can include questionnaires and various types of interviews. Of course, the counter to this is that the broad reach of surveys makes it hard for researchers to gain much depth to their research, and surveys are unlikely to reveal the root causes of the phenomena they observe. Case studies represent something of a middle ground, combining the best aspects of action research and surveys, and thus allowing for both depth and breadth to be obtained. This is because they carry out research at a distance from an organisation, thus avoiding the researcher becoming too involved with the organisation, and developing a narrow view. However, the attempt to achieve both depth and breadth means that the research will not actually achieve full depth or full breadth, rather it will fall somewhere in between (Saunders et al, 2007). The other three approaches, experimentation, grounded theory and ethnography, do not actually refer to the collection of data, but to the methods used to observe and categorise said data. Of these, experimentation is based on setting up specific scenarios, in order to determine how said scenarios occur, and then compare the results to theoretical predictions. As part of this, certain external factors can be controlled, whilst others are allowed to vary, hence making it easier to observe and categorise certain factors as either causative or non causative, and also to rank the impact of each factor. Unfortunately, such experiments are often difficult to set up, particularly when attempting to observe large and complicated phenomena. In addition, there is an argument that the level of control implied in experimentation creates unrealistic environments, within which individuals do not behave as they do when not being observed or where nothing is controlled (Saunders et al, 2007). In cont rast, grounded theory focuses on observing scenarios naturally, observing what the factors are affecting said scenario, and attempting to use theoretical perspectives to explain what occurs. These theoretical perspectives are then tested against other scenarios, and refined until they describe the behaviour of the phenomenon as well as possible. Finally, ethnography is more inductive, and involves simply observed the phenomenon, looking at the factors which have combined to cause it, and attempting to decide which key factors and behaviours have caused the phenomenon to behave as it did. In contrast to grounded theory, ethnography does not attempt to objectively define the various factors and theoretical models affecting an observed phenomenon. Instead, ethnography focused on the qualitative effects which both the factors and the individuals concerned have on a phenomenon, and also looks at the perceptions the actors have of the key causal factors (Saunders et al, 2007). In this case, because this dissertation is attempting to analyse a more general phenomenon,: the factors affecting the commercial success of football clubs, a broad research perspective should be taken. As such, this piece will use a survey, to help frame and investigate said factors, as well as using a limited case study of Ashford Town, to examine the fact ors which specifically impact on this club. Ethnography will be used as a guiding principle when analysing the results and attempting to determine which factors are most important to non league football clubs. This is because football clubs are not renowned for their use of specific management theory and techniques, and hence any attempt to directly fit their behaviour to the theory would likely harm the relevance of the results to other clubs looking to make use of them. In addition, the nature of football, where success is defined by on pitch results rather than profitability, means that existing theory is unlikely to be an exact fit to the football context. As such, ethnography will be used to help explain the techniques used, and how these could fit to management theory and observations. The surveys themselves will include both a questionnaire and an interview with the club officials, either the club Secretary or Chairman, regarding the commercial realities confronting the club, as well as the existing financial situation including any handouts from wealthy club benefactors, loans, grants, and sponsorship. Unfortunately, details of the income and revenue streams are not available, and thus it is impossible to complete a full and detailed analysis of income streams and expenditure analysis, with the exception of those of Ashford Town. As such, the findings will be used to analyse the revenue and costs of Ashford Town, with the aim being to assist in assessing the clubs overall position; and whether it is under performing, or whether a business and financial saturation point has been reached. Given that only the financial accounts, and not the management accounts, of Ashford Town are available, detailed analysis of the revenue streams and costs will not be possible. As such, and as discussed above, the quality and depth of data is likely to limit the extent to which specific recommendations can be made. In addition, this dissertation will attempt to make use of both qualitative and quantitative data, as both of these types of data can make positive contributions to a study. Qualitative data methods aim to gather data which is difficult to represent in a numerical form. As such, qualitative data gathering tends to focus more on asking people their opinion around certain topics, as well as their perceptions of various factors. As such, qualitative data tends to be richer than its quantitative equivalent, although it is usually not as easy to analyse and represent it in graphical forms or through statistical analysis techniques. This is because qualitative data can help to explain why relationships occur between data, as well as helping to explain relationships that are not as unclear when examined from a quantitative point of view. In contrast, quantitative data collection methods tend to based on simply gathering and analysing quantitative observations and data, or data which can be represented in a numerical form. This is usually achieved through actually observing quantifiable phenomena, such as the profits made by football clubs or the number of clubs going into administration. However, it can also be gathered by asking individuals to assess qualitative factors from a quantitative point of view, such as by asking them to rank factors on a Likert scale, like the importance of their sources of income (Saunders et al, 2007). As a result, whilst this piece will look to use some quantitative data, the primary research and data analysis will be performed via qualitative data, analysis, and interpretation. As a consequence of the above discussion, this dissertation will use one main method of primary data collection, and one secondary method, to address the research questions. This will thus help increase the value of the dissertation, by providing more depth and insight to the analysis, as well as allowing triangulation with the results from the literature review, which will increase the validity of any conclusions and recommendations (Saunders et al, 2007). The main method of primary data collection will be the questionnaire survey of ten non league football clubs. This data will be used to assess the various factors impacting on these clubs, and their relative importance, as well as looking at the key income streams and costs incurred by the various clubs. As such, this data will be both qualitative and quantitative, and will act as the survey part of the methodology. The secondary set of primary data will be obtained from the financial accounts of Ashford Town, which will be provid ed. Whilst these accounts are not likely to be very detailed, they will help add depth to the study, and will demonstrate the actual financial situation the club is in as well as help contextualise the possible additional revenue streams the club is able to generate. As such, this section will represent the case study part of the study, whilst being driven and directed by the results of the survey discussed above. This will enable the provision of additional depth, through an in depth look at the actual accounts of a non league football club. This will help provide the ideal balance of breadth and depth. In addition, the collection of data from two distinct sources, the internal survey of staff and the financial results intended for external use, will help create a more accurate and independent triangulation between the various results, as well as a better analysis of the factors underlying them. This cross sectional data collection and analysis is critical in facilitating the use of both quantitative and qualitative analysis, as discussed above, and will help to further increase the value and the academic impact of this dissertation. However, given that commercial sustainability is not a concept which can be easily described through simple quantitative data, the qualitative part of the report is likely to be more important when attempting to determine the factors which underlie the commercial success and sustainability of non league football clubs. Regarding the sample size, it was necessary to find a balance between the need to have a large sample size, and the need to maintain a manageable quantity of data, as well as to fit all of the data collection and analysis in what is a very short period of time. As such, it was decided to collect data from just ten selected non league football clubs. These clubs are Ashford Town FC, Bromley FC, Burscough FC, Chatham Town FC, Corinthians FC, Croydon Athletic FC, Dartford FC, Ebbsfleet United FC, Whitstable FC and AFC Wim. These clubs have been selected as they were most responsive to initial attempts to contact them, and are also within reasonably close geographic proximity thus making the collection of data somewhat simpler. As such, they also represent teams from a fairly close geographic area, and thus should be affected by similar factors and economic effects. When carrying out questionnaires with the clubs, no club requested complete anonymity, and indeed all expresses an interest in seeing the final results of the study to see if it would be of use to them in determining how to best improve their business performance and sustainability. As each questionnaire is relatively straightforward, it was decided to only use one questionnaire for each club, to keep the data set simple and consistent. In order to analyse the qualitative data which is produced from the surveys, it will be necessary to use a research strategy to interpret and validate the data. Positivism has been selected as the research strategy for this piece because, of the four main research philosophies, or paradigms, which can be used to guide and interpret qualitative research, positivism is the one which is most concerned with the facts, rather than the impressions arising from the research (Saunders et al, 2007). This makes positivism ideal for analysing the subject of health and safety in the oil industry, as this can be an emotive and important issue for many workers in the oil industry, as has been shown in the literature review. As such, it will be necessary to avoid forming impressions when carrying out the research, and particularly when analysing the results of the questionnaires. Positivism can help avoid such subjectivity by ensuring that the researcher takes a scientific approach to the research, and minimises the impact of impressions and judgements. Indeed, positivism is based in the original work of Comte, who argued that knowledge can only even be relative, and hence will always be affected by the method used to gather it (Sellars, 1939). This implies that any attempt to interpret the motivations of a respondent in a research project will be affected by the method of data collection, and thus will be blurred. As such, the researcher should concentrate solely on the observed facts, rather than attempting to contextualise or rationalise their observations. However, the main disadvantage of positivism is that, simply be observing or recording an event, such as someone’s views on health and safety, can tend to influence the motivations of the subject, and hence their responses. As a researcher using a positivist paradigm cannot speculate on any potential changes in motivation, this may mean that the actions observed will not be wholly consistent with the actual behaviour in the absence of observation. For example, if a senior manager at an oil company were asked their opinion about health and safety legislation, they may give a different answer to their true opinion of the subject, as they may feel that their public persona needs to be displayed in a certain way. This can hopefully be avoided, to a certain degree, in the questionnaires by not revealing the overall purpose of the survey; assuring the respondent of neutrality; and ensuring that the questionnaire is as neutral as possible. This is based on the argument that if the su bject is unaware of what their responses will be used for, they will be less likely to change their behaviour accordingly. Caldwell (1980) also argues that the face that positivism is based on observations, and not on the fundamental motivations behind said observations, means that it is incompatible with financial and economic viewpoints. This is because economics is based on the study of people’s motivations and decisions in situations where everyone is seen as either a buyer or supplier, and hence everyone acts according to a motivation. For example, when asked if they would prefer additional health and safety legislation, oil executives would naturally answer no, as the cost of compliance would decrease their profits. This occurs because the oil executive’s salary depends on their financial performance, hence they are motivated to avoid anything which may have a negative effect on said performance. Whilst this incompatibility and bias has not been empirically proven; Caldwell (1980, p. 53) argues that it has â€Å"been sufficiently robust to cause many contemporary analysts to turn to alternative approaches†. This implies that such factors need to be addressed when constructing the questionnaires, and that questions which will have an innate connection to, or dependence or, economic and financial factors should be avoided. This implies that, as discussed above, the financial impacts of the health and safety legislation will need to be studied as a secondary priority. Literature Review The history of professional football and commercialism Wray (1982) argues that the late nineteenth century, when significant riches were brought into the UK by the Industrial Revolution and during the Victorian era, was the start of true commercialisation of sport in the UK. This assessment is based on a study of the economics of the gate receipts taken by the football industry in Scotland between 1890 and 1914. This analysis showed that, not only were some entrepreneurs looking to profit from football by commercialising its, but others were looking to do so with the aim of winning more matches, tournaments and hence glory and status. Indeed, whilst the majority of the companies involving themselves in sports such as cycling and horse racing were simply looking to use the sport to create wealth for themselves and their shareholders, the majority of football clubs in Scotland were converted to business principles purely to enhance sporting success. As such, conventional profit and shareholder utility maximisation goals arguably applied mu ch more to other sports than to football, where supporter utility maximisation took precedence. However, Wray (1982) also claims that there was a significant focus on supporter and team utility in other team sports such as cricket, and this was again due to the motives behind the owners, directors and shareholders in many cricket teams. It appears that the British affinity with sports such as football and cricket meant that they developed with the aim of satisfying the fans, whilst the other sports, with less of a spectator following, developed more with the aim of providing financial returns. In addition, the drive towards commercialisation, and in an attempt to assure competitive success, Wilders (1976) reported that, in 1976, all the 92 clubs in the English League, except for Nottingham Forest, had become limited liability companies. This allowed the owners to spend large amounts of money; with no fear of debtors looking to their personal funds should the club fail to break even. In addition, of those companies, more than half the boards of directors held enough shares to make it virtually impossible for the other shareholders to outvote them on any matter. In particular, in 1967, Wilders (1976) reported that there were 22 clubs where the chairman and board of directors owned more than half of the shares; and a further 55 where the board of directors owned over 25 per cent of the shares. In addition to this, in more than a third of said clubs approval was required by the board of directors if anyone wished to sell their shares. As such, the distribution of shares change d very little as the game commercialised, and the clubs continued to be run for the benefit of the directors and chairman, with ordinary shareholders having very little say in the running of the clubs or the returns they earned on their investment. Sloan (1969) also argues that football’s commercial development was driven largely by the significant non financial advantages and disadvantages of being employed as a professional footballer. The main argument appears to be that playing football is a source of great enjoyment for a significant number of people, as witnessed by the thousands of amateur and non league sides which pay without any financial reward. As such, football tends to give players a degree of satisfaction which few other jobs provide, as well as potentially allowing the best players to become national celebrities, with associated additional income and exposure from activities such as writing books; commenting on other footballers performances; and advertising various products and services. In addition, during the initial development of the sport, clubs tended to provide players with houses let at below market rents, as well as giving them significant freedom outside of training and match days. In addition, the fact that the season only covers around nine months of the year, excluding internationals, means that players tend to have significant amounts of free time during the summer break, and even when training they often have several hours free each day. This is countered by the fact that players require a high degree of fitness, and will often need to be away from home for several nights if their schedule demands it. However, Sloan (1969) concludes that football seems to confer more advantages to players than disadvantages, which has helped to raise the profile of professional and semi professional football, and thus contribute to the number of players, and hence number of clubs, in the modern game (Sloan, 1969). This obviously places pressure on the market, with it being difficult and expensive for supporters to follow more than one club, hence making it difficult for smaller clubs to attract supporters. However, countering this is the fact that, since early on in the evolution of the English Football League, the transfer system acted to restrict the movement of labour, to an extent that is rarely seen in other industries. The rules of the transfer system state that any player who wishes to appear for a league club must be employed by that club, in the case of professional players, and must be registered with the Football League, as well as the English Football Association. As such, the only way a player may move between clubs is if both clubs and both ruling bodies approve the transfer. As such, this procedure requires both clubs, the player, the Football League and the FA to consent, effectively giving clubs monopolies over the services of their players for the duration of their fixed length contracts. This is a situation which would not be accepted in other industries, and has regularly been compared with trading slaves, with players often having very little say in where their clu b makes them move (BBC, 2008). Indeed, the fact that transfers almost always involve the payment of a fee by the club who the player is joining further enhances the slave trade connotations. As such, whereas most businesses would attempt to attract new employees by offering higher wages or better working conditions, football clubs are forced to offer high wages, better working conditions, and pay a large fee to the club from which they source the new player. Given that the fees have risen from  £1,000 in 1905,  £10,000 in 1928,  £100,000 in 1961, and into the tens of millions by the present day, it is clear that the increased demand for the best players is forcing clubs to devote ever more funds to transfer fees and wages, particularly when bidding against other clubs to secure the best players (Sloane, 1969). However, in spite of the multi million pound deals which they have been charged with sourcing and carrying out, Wilders (1976) reported that the majority of managers still tended not to have any form of formal training. Indeed, in Wilders’ (1976) survey of 28 English League managers, 16 managers claimed that they would have benefitted from some sort of business and financial course when carrying out their duties and developing their careers. Wilders (1976) claims that this is not the most surprising aspect, the most surprising aspect is that twelve of the managers surveyed believed that they did not need any formal training, and that their experience as a player would be sufficient to help them discharge their managerial responsibilities. However, this belief that playing experience alone provides sufficient training and skills for the demands of football management is arguably one of the reasons why so many clubs have failed to develop as businesses: the skills of professiona l footballers do not tend to include financial and business dealings, or the need to balance budgets. Indeed, the results of the survey indicated a general belief that the majority of football managers knew about the footballing side of their job, but generally knew very little about the need to manage the financial side of the business. As such, the general belief that the best footballers tend to make the best managers has not necessarily been borne out, with many of the best managers having been mediocre footballers at best. In fact, Wilder (1976) claims that the technical gifts needed to make a footballer can often hinder the effective management of clubs. The rise of commercialisation Whilst commercialisation has been a significant trend in the football industry in the UK for the past few years, its only since the 1980s that football in the UK, and the whole of Europe, has truly developed as a major commercial industry. This is evidenced by the fact that, in 1986 the 22 First Division clubs in England had a combined annual tur

The Multiple Person Complex :: Writing Education Teaching Essays

The Multiple Person Complex Well, I am embarrassed to admit this, but the assignment of the metaphor for life at a university was not something I worked very hard to write. Even more embarrassing is that it is evident when you read my paper. When I look back on it, I don't see a metaphor at all. A comparison? Yes. But there's no metaphor in my paper. That proves to me, and everyone in the class, that I didn't put a lot of thinking into my writing. So I have to ask myself why a paper that was easy enough to write could have turned out so wrong. I think that I truly intended to use a jigsaw puzzle as a metaphor for my experiences of life at Bemidji State University. But as I wrote the paper, I remember feeling removed from the project and the contents. I was merely "creating" in to hand in. So I started with an object I could use for a metaphor, the puzzle, then just wrote out a simple comparison. I didn't even think about it not being a metaphor until I got it back a couple of days ago. It wasn't at all how I viewed life at the college. It was simply easier to do, than to explain way I really felt, like some strange force just keeps pushing me through school, and that I don't feel comfortable with the idea of what my education will bring me, or won't bring me. Instead of putting my real experiences on the paper with my real voice pulling the reader into my paper, I ended up with a dull, simple paper that didn't even fulfill the assignment. The difference between me as the writer and the "me" portrayed in my papers is evident in my paper "Thoughts on Organization." I was very unsure of how to do the assignment, so I followed Marnie's advice and just started writing as things came to me. I wrote my thoughts as they occurred, basically. My little quirky comments are very true to my personality. In the metaphor paper I didnà ­t use any of them. In fact, I purposely kept them out, thinking they had no place in a paper or essay. (How very institutionally OS of me, huh?) The reason I put the into other papers, is because I worked really hard on the, gave them long consideration, and wrote them with me as the "character" in them.

Ralph’s first impression of Piggy Essay

I had just been in a plane crash, a massive plane crash. I was tired and hot, and didn’t know where I was. I stumbled out of the bushes from a swarm of trees, and had observed, that I was lost. I took off my sweater, for the heat was exasperating. I was sweating profusely as my hair stuck to my forehead and shirt clung to my body. I stumbled among the creepers and tripped upon broken trunks. The sun was glaring down at me and suddenly a bird flew upwards and squawked. It was followed by a boys voice shouting, â€Å"Hi! Wait a minute!† It suddenly started raining, and the boy said, â€Å"Wait a minute, I got caught up. I can’t hardly move with all these creeper things.† He then came out from the bushes and I was surprised at how plump his knees were! They were scratched from the thorns, whereas some of them had stuck in his skin. He withdrew the thorns cautiously and turned round. He was shorter than I was, and much fatter. He rambled on about the island, mumbling about grown-ups. I told him about the pilot not being in the passenger seat when he was supposed to be in the cabin in the front. He squinted through to look at the reef. He talked more about other passengers that must have been on the plane. The other boys, that must have left earlier. We talked for a while, talking about the plane, the crash, and the rest. He was different to me. I’m blonde and well built, boxer -like, you could say. He was just fat and wore glasses! He seemed quite common as well, had quite a cockney accent to his voice. He eventually asked me my name. I replied, â€Å"Ralph†. I didn’t ask his back, but he carried on the conversation and if I had. He started talking about his aunt and his asthma, and wiped the lens of his glasses. He swiped the sweat from his cheeks and pushed his glasses on the crook of his nose. He then got distracted by the fruit and just sat by some foliage. I then walked through to the branches and I suddenly heard some panting behind me. I then climbed over a broken trunk and I was out of the jungle. The ground below was something I had never seen before. The grass was so fine and green, with torn coconut shells and bits of bark scattered around the floor. I looked out to the water and saw a blue so strong with such whiteness flicking against the reef. The view in front of me was breathtaking and indescribable to its incredibility. The most amazing effect of all, was the heat. The heat was so powerful that you could almost see it. I jumped down to the beach where the sand was thick. I took off my clothes and just watched the scenery before me. I threw the sand upon my chest and just was just bedazzled by the water. The other boy came up to me after that. Saying that we should have a meeting with the rest of the boys that must be on the island. He said he didn’t want the rest of the boys calling him what they called him back home. I was curious then. I asked him, â€Å"What was that?† He whispered in my ear, â€Å"They used to call me `Piggy’.† I laughed so much my stomach hurt! I jumped up and started teasing him, â€Å"Piggy! Piggy!† He made me promise to not tell the others though. I started swimming and it felt so refreshing. Piggy watched me as I swam through squinted eyes. Piggy dipped his toe into the water and said, â€Å"It’s hot!† â€Å"What did you expect?† â€Å"I didn’t expect nothing. My auntie—-† â€Å"Sucks to your auntie!† He was becoming annoying now and i just wanted to swim. I was still taking in all the information about the crash, landing on it and finding Piggy, being all alone with no adults at all. This was going to be fun†¦ He started talking about his asthma too. By then I was quite irritated by him and just shouted, â€Å"Sucks to your ass-mar!† I told him about my father being in the Navy and he stood naked now, cleaning his glasses with a sock. I started to drift away on the water I could sense that Piggy would become reliant on me, as I was the first to know him and for him to know me. He seemed quite sensible, possibly too sensible. Even though he was quite physically unattractive, it seemed he didn’t mind. He was quite sure of himself and had good ideas after that. It was obvious he was going to be teased about his size, and wait until I tell them about his name!

Nineteenth Century: the Beginning of Modern Europe

Modern Europe started at the opening of the nineteenth century which brought a lot of changes to Europe. The ambition to colonize territory grew stronger in order to support the increasing needs for raw materials. Capitalism abolished feudalism and many Europeans ventured to make a living in the New World. These unrests was the result of the industrial advancements like the introduction of big steam ships and the opening of two major canals that bridged oceans and made traveling efficient. However, unrest was not just felt in Europe but also in the colonies. The opening of the two major canals opened up the colonies to the ideas of the social contract philosophers and these triggered the colonies to seek independence from the mother country. However, the old view of racial superiority and manifest destiny seemed to decline. The slave trade was abolished. However, in nineteenth century Europe, major imperialist still did not desire to get loose of their colonies and the competition to discover and colonize seemed renew. Many battles were fought between countries specifically Britain, France, Spain, Portugal and Germany regarding disputes between territories. Yet, many European statesmen in the nineteenth century had already expressed unwillingness to support further expansion and agreed to ultimately grant liberty to the colony. Moreover, the nineteenth century was also the start where women asserted their right s to suffrage and many privileges that only men held in the past. Nineteenth century was the stage where meaningful transformations in women occurred. Society started to acknowledge the contributions that women brought to the society. Women started to unraveled themselves and freely spoke their ideas unlike in the sixteenth century where women used to employ male names in order to persuade the society to hear their ideas just like the case of the Bronte sister. Moreover, in the nineteenth century, the church became less and less powerful. Church -derived morality were already unpopular. Morality in the nineteenth century appeared to be no longer derived from religious affiliations but to social groups where a person belongs. Science had also improved a lot. Many discoveries further improved the lives of many European. Standardizations of measures were also instituted. The British had claimed the suppose position of the prime meridian were standard time will be calculated. The start of the nineteenth century was also the start of modern Europe. This is the time where totally deviant ideas were observed to have begun, flourished and grew. This is also the time where Europe started to take on new identities and became open to the view of other races.

Socialism and an American Utopia essays

Socialism and an American Utopia essays A dreamer is someone who believes in things being better than the way they are, being perfect. Not many people have sub-par dreams. A politician is someone who seeks for personal or partisan gain. If you take a politician and a little bit of a dreamer and mix them together, you get a person such as Jane Addams or Edward Bellamy. They both believed that American society could achieve a greater degree of democratic equality and social justice. Both of them tried to make their dream come true by influencing society in different ways. They both had two different ideas about the ways and the result of this so-called "American Utopia." Above all Addams believed that each person had an ability to contribute to society and that if society did not give them a proper chance to develop their skills, human life would go to ruin. Her political views are very simple to understand. She was a socialist. Dictionary.com defines socialism as any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy. It also defines it as the stage in Marxist-Leninist theory intermediate between capitalism and communism, in which collective ownership of the economy under the dictatorship of the proletariat has not yet been successfully achieved. She is not only a women's rights activist, Nobel peace prize winner, distinguished public orator, but also a politician with an unrealistic dream. Socialism will not and can not work or survive in America. Many political science majors, as well as others, believe Socialism is a proper replacement for, what they refer to as, a democratic capitalism because that is what many believe. Many people equate capitalism with democracy but it's not true. I would refer to it as a mix of Capitalism, just because our society is built on material items which cost capital, and Darwinian Democra...

Gay Marriage Essay

Gay Marriage Essay Gay Marriage Essay Gay Marriage XBCOM/275 2/23/2013 Kris Dunn Not everyone has heard of or eaten at Chick-Fil-A, a restaurant that prides itself on these healthier menu choses with servicing chicken sandwiches instead of beef, and itself strong Christian beliefs. The inventors of the chicken sandwich, Chick-Fil-A, are in hot water these days following comments made by their president, Dan Cathy, who said the company was "guilty as charged" in its stance against gay marriage. The controversy began when Cathy elaborated on his "guilty as charged" comment saying "I think we are inviting God's judgment on our nation when we shake our fist at Him and say, 'We know better than you as to what constitutes a marriage." To anyone one familiar with the family-owned chicken chain, Cathy's views should come as little surprise. All of the chain's 1,600 restaurants nationwide are closed on Sundays, the Christian Sabbath, to allow employees to "worship if they choose to," a decision that was "as much practical as spiritual" according to the company's website. In a day and age where almost four percent of Americans are shown to be gay, lesbian, bisexual or transgender, it is bad for business to say that they are wrong and being heterosexual is right. Why can’t everyone be happy no matter what that means? If they are not hurting or killing any one or forcing their beliefs on another person, let them do their thing. A new study by The Williams Institute of the UCLA School of Law asks, â€Å"How many people are lesbian, gay, bisexual, and

Accounts Sba Essay Example for Free

Accounts Sba Essay ? The aim of my project is for me to arrive at a comprehensive understanding of the financial sector of the business world. To draw up the financial records for the year 2009 for Jen’s Supermarket and to comment on the entity’s performance using appropriate tools of Analysis Description and Overview Jen’s Supermarket is a developed and simulated entity owned by Jenevonne Kirton, who is the sole proprietor. Jen’s Supermarket is a developed supermarket which sells a variety of food items and miscellaneous goods, serving most of the island in its convenient location. The supermarket employ fifteen staff along with Ms. The capital at beginning was 202800 while at end it was 208165 which showed an increase by 5365 at the end of the month. Suggestions/Recommendations Current Ratio It is recommended that Jen’s Supermarket 1. Uses the excess money to expand the business by opening another supermarket. 2. Introduce new product to the business and purchase new equipment. Gross Profit It is suggested that Jen’s Supermarket should 1. Source cheaper suppliers to facilitate the demand of goods so profitability would be greater at the end of the month. 2. Offer new promotions every week and offer the customers raffles at a chance to win prizes at the end of the year. These are given to help Jen’s Supermarket increase gross profit and sales. Conclusion It is clear that Jen’s Supermarket keeps adequate records for the business to demonstrate the profitability over the financial period for the month. It could however, increase the current ratio and gross profit by incorporating the suggestions/recommendations outlined. Nevertheless Jen’s Supermarket made a good net profit for the month of December in 2009. Overall based on the performance of the business Jen’s Supermarket was able to make a profit of 6365 despite the low sales of 104 850. Accounts Sba. (2018, Nov 13).

Hitler and music in the third Reich Essay Example | Topics and Well Written Essays - 3000 words

Hitler and music in the third Reich - Essay Example This "Hitler and music in the third Reich" essay outlines the impact of Richard Wagner's music on Hitler and what that has to do with World War II. All his musical works were made on the assumption that they will be performed on the stage hence called â€Å"Musikdrama. He wrote all the scripts directly and added music to the scripts. Wagner generated a German epic saga combining music and drama in one unified art work. He took inspiration from German mythology and medieval literature. Wagner was motivated by the medieval myths and literature as Lohengrin, Tristan, Ring des Nibelungs (Das Rhinegold, Die Walkure, Gotterdammerung). Wagner brought plots and characters in medieval myths and literature to his music. The structure of the Ring cycle is complicated and has several topics. However, most of his operas’ topics are love stories. As Wagner accepted the subject of German myths, he also accepted religious elements. He extended this to the unique ritual that inspires nationalism. Wagner’s music drama shows the process of ritual when it is on the stage. This means that his music drama reveals strong religious character. Therefore, people cannot forget the scenes of his music drama easily, because of its strong ritual characteristic. Hitler was one of those people who could not forget Wagner’s strong and powerful opera. Wagner indicts the Jews and metaphorically links them to the characters in the operas. Wagner’s music dramas, made during the time when unification of Germany was taking place, reve al patriotic enthusiasm greatly. In Wagner’s Ring drama, there are a lot of metaphorical words that indicate Jewish characters. In Wagner’s ring opera, Nibelungs, the curse, demons, goblins, and the lust for gold refers to Jewish characters. Wagner casts the voices of Alberich and Mime in an abnormally high register and gives them tritons and other awkward internals to sing which made their voices creak, croak, and buzz. Wagner also used Jewish names for his evil characters. Wagner casts the voices of Alberich and Mime in an abnormally high register and gives them tritones and other awkward internals to sing which made their voices creak, croak, and buzz. Wagner also used Jewish names for his evil characters. In Wagner’s opera â€Å"Das Rheingold†, â€Å"gold-hungry† characters are very consonant with Wagner’s writings about how the Jews seek to control the world through their use of money (gold). In Lohengrin, there are inspirational words, such as those of King Henry to h is knights that wakened in them the primal urge of race and nationalism.   â€Å"Let the Reich’s enemy now appear.   We’re well prepared to see him near.

Pornography Essay Example | Topics and Well Written Essays - 1500 words

Pornography - Essay Example Lynne uses his experience as a civil rights campaigner, and his understanding of the constitution, to argue that those who make and use pornography have unalienable constitutional rights. By approaching pornography in this manner, Lynn challenges previous defenses of this subject, who have mainly focused upon aspects of the Freedom of Speech. Lynn firstly addresses the issue of campaigns by groups attempting to challenge non-pornographic works: "All this is of concern because of the belief that speech, written or visual, has the power to alter (or at least reinforce), perceptionsthus to shape attitudes and in the long run, actions" (Lynn, page 366). Lynn points out that the First amendment prevents such efforts to coerce government into limiting free speech, while admitting that those who believe in free speech also believe in the ability of that speech to change people's minds, or alter their opinions. (Lynn, 366). This, then is Lynn's conception of the battleground between those who wish to ban pornography, and those who believe it should continue to be allowed: do words and images have enough power to permanently affect a person's attitude Lynn considers the position of certain groups of feminists (Lynn, 366), who have picketed pornographic films; and others which have used civil rights laws to make those who produce or sell pornography uncomfortable about doing so, resulting in a reduction in those making or selling such items. Lynn adds that these laws would include scenarios including those where women are "'presented as sexual objects who enjoy pain or humiliation' to those which depict women in 'posturesof servility or submission or display'". Of course, not all of those images involve women being treated badly, and it is this conception of pornography by those opposed which disturbs many who are not opposed. Lynn states that the definition of pornography is not objective, and that it is as much of a loaded phrases as other anti-pornography words and descriptions. Lynn does not believe that pornographic images or words are responsible for the behavior of those who make or watch them. In his view, pornographers are as entitled to constitutional speech, insisting that it is necessary to understand that pornography is a communication. While it may not communicate primarily though words, he says, this is no restriction to citing the constitution in its defense. Providing evidence that other laws have upheld this non-linguistic speech: "The courtupheld the claim that live nude dancing was "Speech", and lower courts have accorded First Amendment protection to the 'emotive'communication of rock and roll (Lynn, 368). Though Lynn's argument, the defense of the rights of pornographic communication is the defense of the rights of many other forms of communication which are similarly non-verbal. Lynn also uses another of speculative methods to suggest that pornography has a positive role to play in creating images of women, being especially important in revealing the sexual needs or desires of older women, differently abled women, and those of shape and size not usually depicted in films or novels, and even invokes feminists in support of this idea: "Depictions or ways of living and acting that are radically different from our own can enlarge the range of human possibilities open to us" (Lynn, 368). After arguing for the

International Business Essay Example | Topics and Well Written Essays - 750 words - 7

International Business - Essay Example These economic activities are vital since they (international trade) significantly lead to the increase in the growth of the gross domestic product (Elms, & Low 2013). This is the primary essential meaning of the GVC at the international and at the global levels. The report of this analysis concentrates on how individual countries benefit from the global value chains. The essay further investigates how the GVC affects the growth. In an essence, the provision of GVC within a country opens the ways of individual companies and organization to trade globally. This goes a long way in contributing to the creation of their value chains; it also gives them the opportunity to hire employees that are more competent. Iit further gives them an advantage of learning from other countries and organizations thereby developing a good culture that leads to individual prosperity and success of companies. Big companies operating under the GVC often have an advantage since they can easily get access to t he market thus having a big market share. This leads to bigger profit margins which allows them to higher technical employees, get access to modern technology, and gain competitive advantage. This is contrary to small countries and companies which survive in the Market. GVC is of little benefit since it exposes them to the competition from the companies that are already established (Gereffi, Humphrey, & Sturgeon 2005). The most competitive employees go to big companies, which are established to pay them (potential employees) as they want. There are various factors on which the dependence of the potential impact of the global value chain is inclined. First is the type and nature of the global value chain. A beneficial value chain is one which provides an opportunity from which countries and industries can learn. Without the provision of the capability of learning, the industries themselves will stagnate and never have the opportunity of advancing. The GVC should also be one, which is elastic; this is to say that the product of goods and services offered and provided by the company within a particular locality should provide opportunity of growth of other products. This gives the opportunity of industrial expansion for other industries and other businesses. According to the World Economic Forum (2013), industries in developed countries like Japan dealing with electronic equipments have had the potential of expansion to deal with other technological things. For instance, phone-manufacturing companies have often expanded to make computers and other visual and electronic devices. This is contrary to industries in other small countries which only specialize in the assembly of these machines. Their capabilities are confined to assembly and not in the manufacture of innovation of various technologies which can enable them to expand to other endeavours. The other factor is the type of business and the environmental factors in the host country and economy. It is importa nt to determine whether there is an environment friendly to industrial learning, and the skilful management of the firms. The firms must also be willing to invest in developing new skill by investing in the workforce (Koopman, Powers, Wang, & Wei 2011). This is done by continuous and ongoing trainings in a firm. It is also important to note that the benefit of the global value chain in a country is determined by whether local firms have the capability of competing in their local countries. Local competition is the stamina that can determine

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

Individual - Essay Example This paper will discuss how entrepreneurs use creativity to develop business ideas and innovations. Entrepreneurs are able to use creativity through managing risks and uncertainties. This is through analyzing ideas and determining whether they are worth investing in. They then determine the best strategies to use and how to maximize returns through the use of scarce resources. This plays a significant role in enabling them to capture value from innovation (Van and Becker, 2004). Entrepreneurs are able to use creativity through identifying the opportunities for change. Currently, the market has become dynamic. Different aspects keep on arising thereby, creating gaps that can be used to develop ideas (Hoang and Antoncic, 2003). Entrepreneurs are able to manipulate these opportunities to come up with creative ideas. For instance, they are able to observe the tastes and preferences of the customers and note when the customers are changing their consumption behavior. Entrepreneurs pinpoint such opportunities and taps them, thereby coming up with a business idea. Through brainstorming and enquiring from relevant sources, they are able to come up with innovative ideas which attract the interests of the target market (Knutsen, 2002). According to Van and Becker (2004), entrepreneurs calculate the costs of taking up a bright idea forward against the potential gains if that idea succeeds. They know clearly that failure is an intrinsic part of the process. However, they always calculate the risks in order to minimize it completely. In addition, they ensure that they have all materials required to exploit the opportunities in order to gain the necessary benefits (Van and Becker, 2004). Entrepreneurs are able to come up with creative ideas through being alert to changes in the external environment (Voudouris et al., 2007). Whether entering a new market, introducing new products or services, or initiating innovative technologies, they always think of novel ways

Nutrition Assignment Example | Topics and Well Written Essays - 750 words

Nutrition - Assignment Example If your intake is above goal, list 2 foods with the highest fiber content. 10. If your fat intake is higher than the recommendation, list 2 specific foods from your two-day intake you could reduce, eliminate or replace with other foods in order to lower the fat content. If your fat intake is less than the recommendation, list 2 dietary changes have you made to reduce this number. If your fat intake is within the range list two foods that you consume from your record that allow you to maintain the recommended intake. 16. If your protein intake is higher than the recommendation, list 2 specific foods in your two-day intake you could reduce, eliminate or replace with other foods in order to lower the protein content. If your protein intake is less than the recommendation, note whether this is intentional. If so, why? If not, what 2 specific foods could you increase in order to meet the recommendations? If your protein intake is within the range list two foods that you consume from your record that allow you to maintain the recommended intake. It is recommended that most adults limit their sodium intake to 2300 milligrams per day. In 2010 that recommendation was reduced to 1500 mg per day for adults > 51 years of age. Additionally, if you are African American, hypertensive, diabetic, or have chronic kidney disease, your sodium needs to be reduced to 1500 mg. On average, how many milligrams of sodium did you consume per day? ____1100______ 17. How does your diet compare to the recommendation? If you exceeded the recommended limit identify 2 specific changes you could make in your two-day record to lower sodium intake? If you consumed less than the recommended amount of sodium, list 2 specific ways you intentionally keep sodium low. 18. Your printout lists your daily intake of vitamins. Choose 2 vitamins for which your intake was under the recommended amount. Then list 2 foods you could

Reading response Essay Example | Topics and Well Written Essays - 250 words - 21

Reading response - Essay Example The Allies were forced to sign off as post First World War the allies were dependent on the United States for not only military and arms but also for fuel, food and other basic requirements. However, only some of the Wilson 14 points made it to acceptance particularly five of them the rest were rejected on the event of being overly ambitious and unrealistic. The impracticality of these points dominated the Great European powers and the experiences of wartime. Apart from the Russian evacuation and the Belgium restoration the other points created more negative vibe than positive effects. For example, the settlement of colonial claims, the French disputed territories; the Italy border adjustments based on nationality etc. all caused more tension and new national disputes rather than solving any problems. Thus not all the points presented by the President were fruitful in generating world peace. The most important point in my view and according to the historical perspective is the last point. ‘Establishment of the League of Nations to secure mutual guarantees of independence and territorial integrity.’ ("President Wilsons Fourteen Points"). This League of Nations was formed through the start of the Second World War and aimed at diluting national sovereignty and creating global and international government. However, this did not materialize as per the speech but this point was the backbone of the 14 points speech by the President Wilson in

Nutrition Assignment Example | Topics and Well Written Essays - 750 words

Nutrition - Assignment Example If your intake is above goal, list 2 foods with the highest fiber content. 10. If your fat intake is higher than the recommendation, list 2 specific foods from your two-day intake you could reduce, eliminate or replace with other foods in order to lower the fat content. If your fat intake is less than the recommendation, list 2 dietary changes have you made to reduce this number. If your fat intake is within the range list two foods that you consume from your record that allow you to maintain the recommended intake. 16. If your protein intake is higher than the recommendation, list 2 specific foods in your two-day intake you could reduce, eliminate or replace with other foods in order to lower the protein content. If your protein intake is less than the recommendation, note whether this is intentional. If so, why? If not, what 2 specific foods could you increase in order to meet the recommendations? If your protein intake is within the range list two foods that you consume from your record that allow you to maintain the recommended intake. It is recommended that most adults limit their sodium intake to 2300 milligrams per day. In 2010 that recommendation was reduced to 1500 mg per day for adults > 51 years of age. Additionally, if you are African American, hypertensive, diabetic, or have chronic kidney disease, your sodium needs to be reduced to 1500 mg. On average, how many milligrams of sodium did you consume per day? ____1100______ 17. How does your diet compare to the recommendation? If you exceeded the recommended limit identify 2 specific changes you could make in your two-day record to lower sodium intake? If you consumed less than the recommended amount of sodium, list 2 specific ways you intentionally keep sodium low. 18. Your printout lists your daily intake of vitamins. Choose 2 vitamins for which your intake was under the recommended amount. Then list 2 foods you could

Milk and Supermarkets Essay Example for Free

Milk and Supermarkets Essay Introduction In recent years, the relationship between supermarkets with UK farmers that called oligopsony is a heated topic in the society. Some people hold the view that the advantages of oligopsony overweigh those disadvantages. Nevertheless, others believed that it is one way that UK farmers controlled by the supermarkets. It is natural that people come from different backgrounds will have various attitudes to the same issue. In the report, the advantages and disadvantages of oligopsony for both supermarkets and UK farmers are discussed. In addition, nowadays the supermarkets in the UK in order to increase the profit, they use different types of marketing methods. Such as intense price competition, loyalty schemes and provides non-food products and service. The smaller retailers were influence by those marketing methods also reported as follows. 1. 0 Oligopsony Oligopsony is â€Å"similar to an oligopoly (few sellers), this is a market in which there are only a few large buyers for a product or service. This allows the buyers to exert a great deal of control over the sellers and can effectively drive down prices. †(www. investopedia. com A good example of an oligopsony would be the UK supermarket industry, in which a small number of large buyers (such as Asda, Tesco, and Sainsbury’s) control the UK farm market. Such control allows these supermarkets chains to dictate the price they pay to farmers. 1. 1 The effect on supermarkets According to the BBC news (http://news. bbc. co. uk), Tesco account the UK supermarkets share is 31. 6%, Asda took over 17% in the UK supermarkets share, which is ranked second. The third biggest one is Sainsbury’s, which accounted 15. 8%. (Appendix 1) The total percent of big three supermarkets took over more than 50% in all the UK supermarket industry. These supermarkets owned market power in two ways which are selling to consumers (oligopoly power) and buying from producers (oligopsony power). in another words, It means that the few firms have considerable market power in paying low price for inputs and makes it more difficult for the farmers to make a profit. For example, a big supermarket could contract with a dairy producer that the big one will buy all of product. The farmer agreed with the contract and started to supply the dairy to the big supermarket. Nevertheless, maybe the supermarket pay less and less later, and the farmer just can accepted lower price because the farmer produce too much dairy to supply to the big supermarket and it is not too easy to find a new buyers. Farmers who produced milk, vegetables, or other agricultural products have limited choice range, because in the UK, most of agricultural goods are bought by the big supermarkets. Oligposony gives the big supermarkets bargaining power in use lower prices with farmers. In this relationship, the big supermarkets have the absolute advantages over the farmers. They can made it possible that lower the price of agricultural goods, so that these supermarkets can give a reasonable price for the customers which will help the big supermarkets improve the competition with others competitors. In addition, they also can ask the special requirements for the product quality, the farmers are controlled and forced to accept a lower price of their product. 1. 2 The effect on the farmers. Oligopsony this relationship between supermarkets with UK farmers is ensures the agricultural goods can sell to the big supermarkets. Famers have the fixed buyers so they are need not worry about to find new buyers. However, due to most agricultural goods are bought by big supermarkets, the farmers have less choice. Famers used to have some bargaining power on the basis of seasonality. Because there are other competitors, they do not know what price has been offered by other producers and this forced them to offer their produce at a low price to ensure a sale. Especially the perishable foods. The supermarkets â€Å"dictate not only how much they will pay, but also how the produce will be packaged, stored and delivered. †(www. corporatewatch. com) â€Å"The small number of companies dominating both dairy processing (currently six processors control 93% of the industry) and retailing (six supermarkets control 65% of liquid milk and 70-85% of dairy produce sales) means that there is a significant imbalance of market power in the UK dairy sector.. †(â€Å"Supermarkets under fire†, February, 2003). It is easy to know that supermarkets have power in dairy industry in the UK. Though supermarkets have brought buying power to the dairy farmers, however, the big supermarkets in order to increased their power in the dairy sector, they developed own brand milk products. Since 1995, the price of fresh milk has declined; supermarkets have maintained their selling price and increased their profits at expense of both farmers and consumers over the same period. (Appendix 2) â€Å"The National Farmers’ Union has been particularly concerned about the plight of the UK’s dairy farmers. They claim that of the ? 1. 70 which a supermarket customer may pay for two liters of milk, less than 50p will go to the farmers. †(http://www. anformeresources. com) Charles Peers who are an Oxford shire organic farmer, he has said â€Å"There are two hundred thousand farmers, dealing with, basically speaking, three supermarkets, two grain merchants, four fertiliser companies. Not a chance†¦.. They’ve got power, real power. † From these, we can seen that oligopsony made it is possible that the farmers are forced to accepted a low price to sell their products, and the big supermarkets such as Tesco, Asda or Sainsbury’s are have the power in the UK market. 2. 0 How the supermarket to boost profits. In the past 40 years, the small independent shops shifted to huge supermarket chains. â€Å"In 1960 small independent retailers had a 60% share of the food retail market. By 2000, their share was reduced to 6% while the multiples share increased to 88%. †(Institute of Grocery Distribution, Grocery Retailing 2002) Andrew Simms, who works for the New Economics Foundation, says that: â€Å"we are witnessing the death of small and independent retailers and new retail feudalism is emerging as a handful of brands take over our shopping. † (http://www. corporatewatch. org.uk). Though the supermarkets have the market power in the UK, as a business organization, how to increase the profit is the first thing should be considered. In recent years, the huge supermarket chains use various types of marketing methods to increase the profit and the loyalty. Such price competition, loyalty schemes and provide non-food products and service. Supermarkets use various ways to convey price information to consumers, The price promotions including price reduction, a percentage discount, a voucher. In 2009, there was a new price war among the big supermarkets in the UK. Tesco planned to launch a new advertising campaign, which will â€Å"compare the cost of customers baskets of shopping against the prices of its competitors. †(http://www. belfasttelegraph. co. uk) Asda has already hold a new wave of discount on thousands of products that including fresh food and household products. And â€Å"100 frozen food products and 200 everyday health and beauty lines, such as shampoo and deodorant, would be sold for ? 1. †(http://www. belfasttelegraph. co. uk) Andy Bond, the retailer’s president and chief executive officer, said: â€Å"2009 is going to be a very difficult year. Sainsbury’s, the third biggest supermarket in the UK, also joined the price war, â€Å"Vowing to grow its Basics range to more than 600 products by the end of January, The supermarket said more than half of these products would be priced at less than ? 1. †(http://www. belfasttelegraph. co. uk) Except the price war, some of the supermarkets in the UK also offer loyalty schemes to attracting potential consumers. Tesco is a good example, every time when they shopping in Tesco, they will get points according to how much they spend. Sometimes, Tesco also listed products that buy one can get 500 points more to increase the demand of this product. Every month, Tesco will sent voucher or coupons to the loyalty card member’s home. The more you spend, the more you get. Using loyalty schemes not only will attracting potential consumers especially female, but also it is a low cost way to know the customer’s lifestyle. When the customer registers the loyalty card, they should fulfill the personal details. Tesco will well know what is popular among the customer depend on these details. Since 1995, the major supermarkets in the UK start provide the non-food product and services such as pharmacies, clothes stores in Asda, petrol retailers, and banking and financial in Tesco. The effect on the supermarkets will be dramatic, especially due to the growing consumer propensity for the â€Å"one-stop† shop. Non-food products and services will help the big supermarkets increased the market share in the UK, and improve the competition itself. What is more, it is also function as reduce the risk of products, as the proverb said: â€Å"do not put all your eggs in one basket. It is means that for a supermarkets, non-food products and services will share the risk with food products. 2. 0 The effect on the smaller retailers.

Factors Influencing Stock Prices in Indonesia Exchange

Factors Influencing Stock Prices in Indonesia Exchange There are many definitions of stock with different point of view. Bernstein states that stocks are partial ownership of companys assets which are subordinated with debt (Bernstein, R. 2002). Stock is a device that implies an ownership position in a company and signifies a claim on its proportional share in companys assets and profits. Only certain companies have stock called corporation. Limited partnership and Sole proprietorship do not issue stock (WebFinance, Inc., 2010). According to Vernimmen et al. (Vernimmen et al. 2009, p. 527), A stock or a share is a security that is not redeemed. The investment can only be recognized through disposal and whose revenue flows is uncertain. Corporations need financial resources and this required resources usually come from ordinary or common stocks, preferred stocks, and medium to long term lenders or debenture holders. Common stock is everlasting capital for the corporation. The owners who invest in this type of stock are called ordinary or common shareholders and any profit retained after paying debenture interest will be distribute to them called dividend. Preferred stocks are issued to public in order to acquire capital and these stocks have rights to specified yearly fixed percentage dividend on the paid-up capital. Preferred stocks are less common in stock market (Anandarajah, Aseervatham, and Reid 2005). The following are the characteristics of common stock and preferred stocks: (Scott et al. 1999). Preferred Stock A hybrid security which has similar characteristics to bonds and common stocks. It is similar to bonds in its dividends which are limited in amount. It is similar to common stocks in that it has no fixed maturity date, dividends are not deductible in terms of tax purposes, and non-payment of dividends will not cause bankruptcy. Common Stock. Common stock shares imply an ownership in corporation which does not have maturity date and exists as long as the firm does. Stock exchange is an organization which helps connection between potential buyers and potential sellers of stocks. Stock exchange can be physical place, network of computers, system of telephone link, etc. A stock market is a place where stocks can be purchased and sold (Samuel, J.M., Wilkes, F.M., and Brayshaw, R.E. 1996). Most of countries around the world have stock exchanges. The number of stock exchanges around the world is growing significantly. Based on continents, stock exchanges around the world can be divided into 6: Africa, Asia, Europe, Middle East, North America, and South America. Indonesia Stock Exchange called IDX is one of the stock exchanges in Asia (Stock Exchanges Worldwide Links, n.d., 2010). Principally, there are 2 advantages are obtained by investor who buying or having stocks in stock exchanges (Indonesia Stock Exchange, 2007): Dividend. Dividend is sharing profit awarded by a company because of holding stock for a relatively long period until ownership term is in period where an investor is recognized as shareholder who has right to get dividend. Capital Gain. Capital gain is the difference between selling price and buying price acquired from trading activities. Those advantages cause investors choose stocks as an attractive alternative than put their money in fixed deposits that have low interest rates (Chuan, 2004). Basically, investors who buying or having stocks will also have some risks (Indonesia Stock Exchange, 2007): Capital Loss. Capital loss is a situation when an investor is selling the stocks at lower price than the buying price. Liquidity Risk. A company with shares held by public is declared for its bankruptcy by the Court. Shareholders or investors will have the last priority of claiming their rights after all liabilities are fulfilled. The rest of the companys wealth will be shared proportionally to the shareholders. Shareholders will not obtain anything from the liquidation if there is no rest left. The overall price movements of common stocks of corporations traded on stock markets are called stock market price indexes. Corporate stockholders will get benefit from company through dividends and have right to vote in company. Investors capital gains and losses will affected by increasing and falling of stock prices (Frumkin 2000). Norman (Frumkin, N. 2000, p. 277) states that The dividend yield, which is the rate of return on a share company stock, is a companys annual cash dividend percentage of companys annual stock price. Nowadays, the price of stocks in Indonesia Stock Exchange is changing rapidly. The average price of stocks in Indonesia Stock Exchange increased significantly (approximately 20%) during 2006. The average price decreased approximately 19% during January 2008 and declined again approximately 16% during March 2008. The significant change of stock prices in Indonesia Stock Exchange is caused by external environmental factors or macroeconomics factors (Frensidy, B. 2008). There are many external environmental factors that impact financial system including stocks. Those factors are economic growth, inflation, exchange rates, interest rates, etc (Evans, et al. 2000). Many investors lost their money because of the significant change of stock prices in Indonesia Stock Exchange. Investors lost their capital because they sell their stocks at lower price than the buying price (Indonesia Stock Exchange, 2007). By analyzing external environmental factors, investors can predict the future price of stocks more accurately. To minimize the risk or capital loss, investors have to understand external environmental factors influencing stock prices in order to make correct decision whether they have to buy, sell, or hold the shares. The research will identify external environmental factors which have significant influence on stock prices and explain the relationship between those factors and stock prices in order to accomplish that goal. Objectives, Research Question, and Research Hypotheses The objectives of the research are: To identify the variables of external environmental factors influencing the stock prices in Indonesia Stock Exchange. To analyze the influence of external environmental factors on stock prices in Indonesia Stock Exchange. Based on the objectives, the research questions are as follow: Which external environmental factors influence stock prices in Indonesia Stock Exchange? How does external environmental factors influence on stock prices in Indonesia Stock Exchange? Based on the research question, the research hypotheses are built up: External environmental factors encourage the change of stock prices in Indonesia Stock Exchange. External environmental factor have strong correlation with stock prices in Indonesia Stock Exchange. Scope This research study will focus on external environmental factors influencing the stock prices in Indonesia stock exchange, which will be explained more briefly in chapter 2 literature reviews. Some external environmental factors influencing stock prices are applied to explain the correlation between external environmental factors and stock prices in Indonesia Stock Exchange. The analysis of what kind of relationship (positive or negative) between external environmental factors and stock prices will also be clarified in this research. The literature reviews will consist of some external environmental factors which influence stock prices especially in Indonesia Stock Exchange. A survey will be performed in order to collect data about the change of several external factors and stock prices in Indonesia Stock Exchange. Based on collected data, a model will be offered to analyze the relationship between stock prices and external environmental factors. Lastly, this research will be limited and focused on the following: The research is only focused on JSX composite index or (Indonesian: Indeks Harga Saham Gabungan, IHSG). This research is only focused on external environmental factors which influence stock prices. The data collection period of this research is 5 years from 2005 to 2009. Chapter 2 LITERATURE REVIEW Literature Review of External Environmental Factors and Stock Prices in Indonesia Stock Exchange This chapter will summarize external environmental factors which influence stock prices. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, the major external environmental factors influencing stock prices in Indonesia Stock Exchange will be provided in this chapter. Categories of Stocks and Types of Orders In the market, there are various names of stocks that refer to different categories of stocks (Chuan, 2004): Figure 2.1 Categories of Stocks Source: adapted from Chuan, 2004 Blue Chips refer to stocks that are steady with good fundamentals. Undervalued Stocks refer to stocks which are well-established by companies with solid balance sheet. Such stocks are generally unnoticed by investors, traded with small volume, and receive little reporting from media and analysts or experts. Growth Stocks refer to stocks which are established by recognized companies that have high growth sectors and their business are predicted to enlarge quickly over the coming years. Such stocks are generally traded with higher PER (Price Earnings Ratio) even though they lack of history of strong earnings base. While companies show continual rise in their earnings, the price of these stocks will increase. Penny Stocks refer to stocks that have small capitalization and traded bellow one dollar. Small-Cap Stocks refer to stocks that have very few issued shares and traded in low price at stock market. Such stocks are usually not bought by foreign institutions and funds. Small-Cap Stocks have some risks as follow: Smaller companies tend to less flexible to major crisis because they are less diversified and more prone to market shocks and monetary crisis. Trading volumes are low and less liquid. Therefore, investors may not find the buyers in stock market when they want to sell the stocks. Small-Cap Stocks are more sensitive to news and rumors. There are 3 types of orders used in the buying and selling of stocks as follow (Chuan, 2004): Market Order Market order is an order to buy or sell stocks instantly at the best current price. For example, investors place market order to sell AAA shares. It means investors buy AAA shares at current offering price. Limit Order Investors which place limit order will set a certain suitable price to buy or sell a particular stock. Stop Order Stop order is an order to buy or sell the stocks that are traded at certain price level immediately. This certain price level is known as stop price. For instance, investors place stop order to buy AAA shares at $5.00. If AAA shares begin to trade at $5.00, the order becomes market order and broker will buy shares at the best current price. In terms of selling stop order, the order is placed bellow current price to help investors decrease their possible losses and keep their profit. Timing and Stock Investment Investor would discourage when the price of their stocks decreased significantly after they had bought the stocks or to be trapped in market crash after they had invested their money in the stock market. Good timing is the most crucial factor for investors in stock market. Even the best stocks will become useless investments if investors buy them at wrong time (George, A. 2008). The major problem is good timing cannot be determined easily because stock market is influenced by large amount of factors and events that are beyond prediction. Investors have to understand factors influencing stock price and involve some insight to determine good timing whether they have to buy, sell, or hold their stocks (Chuan, 2004). In stock investment, price is mechanism by which practically all goods and services are exchanged. In this case, price has strong power or price is a king because price will determine whether stocks become excessively expensive or inexpensive (George, A 2008). The price of stocks tends to increase when there are more buyers than sellers in stock market. Buyers are tense in stock market based on expectation of future price increase. There are some signals which make buyers believe that future stock price will increase (Chuan, 2004): Positive indication from market trend. Rumors in stock market. Information concerning better earnings prospects for company. External Environmental Factors Influencing Stock Prices There are several external environmental factors influencing the uptrend or downtrend of stock prices in stock market. Those external environmental factors are: Worldwide stock market. Local economy. Political factor. Inflation. Foreign Exchange Rates. Interest Rates. Commodity Prices. Worldwide Stock Market The performance of world economy will have effect on local economy or Indonesian economy due to globalization. The worldwide economy especially US, China, Japan, and Singapore economy will help to enhance Indonesian economy because those countries are major trading partners of Indonesia (CIA, 2010). Therefore, positive economic performance of those countries will give favorable result for Indonesian Stock Market (Chuan, 2004).Indonesian stock prices get significant impact from US, China, Japan, and Singapore stock prices. JCX composite index or IHSG obtain significant influence from worldwide stock market especially DJIA (Dow Jones Industrial Average), Nikkei 225, Hang Seng and Strait Times. Investors always look at those stocks before and during trading stocks in Indonesia Stock Exchange. Export partners and import partners of Indonesia will affect local economy and price of JSX composite index in Indonesian Stock Exchange (Samsul, M. 2006). For example, JCX composite index in 7 May 2010 decreased significantly (71.29 points or 2.54%) because of the decrease of worldwide stock market. Dow Jones Industrial Average decreased 407.05 points or 3.75%, Nikkei decreased 331.1 points or 3.1%, Hang Seng decreased 213.12 points or 1.06%, and Strait Times decreased 6.7 points or 0.59%. The decrease of worldwide stock market had significant influence on Indonesian stock prices (Meryani, A. 2010). Figure 2.2 Indonesia Export Partners 2009 Source: adapted from CIA, 2010 Figure 2.3 Indonesia Import Partners 2009 Source: adapted from CIA, 2010 Local Economy GDP or Gross Domestic Product is regularly used as an indicator of economic performance of the country. Brux (Brux, J.M. 2008, p. 351) states that Gross Domestic Product (GDP) is defined as the market value of all final goods and services produced in the economy in a given time period (usually one year). There are two different types of GDP as follow: Nominal GDP. Nominal GDP is GDP that determined at current prices or actual prices of a particular year. Real GDP. Real GDP is GDP which adjusted for inflation. GDP is generally used as indicator of standards of living in a country. If GDP is high, there is an assumption that economy in a country is doing well and this country has high standards of living. When GDP is growing, there is an assumption that economic activity in a country and standards of living are rising (Brux, 2008). When GDP of a country shows positive growth, it is usually followed by positive trend in stock market. Therefore, GDP is often used by investors to estimate turning points of their stocks and to time their investment.GDP growth and other economic data are published in newspaper. When investors read this information, investor should know how to use the information wisely. For instance, when banking sector is predicted to perform badly, investors should leave out banking stocks in their stock investment. This information will help investors to choose their stocks and make correct decision whether they have to buy, sell, or hold the shares. When economic condition in a country is good, stock prices generally tend to increase. However, investors have to be careful because it is also a sign that good days are numbered. Economy which is growing too fast will be difficult to maintain its growing or to be sustained (Chuan, 2004). Political Factor Stock price can be affected by regional, national, and international political situation. Political crisis usually will have negative impact in stock market trends. Stock prices generally will drop significantly because of political crisis (Chuan, 2004). Inflation According to Hook (Hook, J.A. 2003, p. 110), Inflation is A condition in which the economy experiences a continuous increase in the average price level of all goods and services. The price of certain goods and services may decrease but the average price of all goods and services increases. Financial service industries and banking are influenced significantly by inflation (Hook, J.A. 2003). Inflation can also be defined as a state that has continuous increase in prices of goods and services. Inflation will increase the cost of doing business because price of goods and services increases significantly. Therefore, it is expensive to do business during inflation and profit margins of business will decrease due to higher price of raw materials, rentals, etc (Chuan, 2004). Potential earnings of companies will determine the demand for a stock. Therefore, potential earnings of many companies generally decreased during inflation period due to the lower demand for stock. The lower demand for a stock will cause the decrease of stock prices in stock market. Investors should look at the growing of inflation and sell their stocks before inflation happens. Investors can use commodity prices and interest rates as indicators of inflation trend. When commodity prices and interest rates are rising, those factors indicate the coming of inflation. Investors should have carefulness to enter the stock market (Chuan, 2004). Foreign Exchange Rates Taylor, F. states that foreign exchange rate is the ratio which is used to convert one currency into another. Most countries around the world have their own currencies released by certain official agency which is called monetary authority or central bank. Currency is medium of exchange which is used to buy goods and services (Taylor, F. 2003). According to Philip (Philip et al. 2000), there are types of exchange rate system as follow: Flexible Exchange Rates. Flexible exchange rates system is an exchange rate system which the value of currency is permitted to react to market forces without any intervention by central banks or monetary authority. Fixed Exchange Rates. Fixed exchange rates system is an exchange rate system which associate countries agree to fix the value and changes only occur under certain particular condition. This exchange rate system can reduce uncertainty from international trade and support long term investment in international trade. Managed Floating. Managed floating is an exchange rate system which currency is allowed to respond to market changes but central banks are allowed to interfere in order to protect the value of the currency especially when central banks believe that depreciation is only temporary. Stock-Oriented models of exchange rates which also known as portfolio-balance approaches view exchange rates as equating demand and supply for certain assets especially stocks and bonds. Financial assets are valued by present values of future cash flows, expectations of relative currency values have significant role in price movements especially for internationally held financial assets. Therefore, stock prices are influenced by exchange rates movement (Ajayi and Mougoue, 1996). JCX Index or IHSG gets significant influence from the fluctuation of USD/IDR exchange rate. USD/IDR indicates how many IDR (Indonesia currency) per US dollar. The decrease of IDR currency in term of US dollar is generally followed by the decrease of several Indonesia stock prices such as Telkom, ASTRA International, Bakrie Telecom, Kalbe Farma, etc (Sihombing,G. 2008). Figure 2.4 shows that the fluctuation of USD/IDR exchange rate is very high. Therefore, Indonesian investors should look at USD/IDR exchange rate as consideration in trading stocks (Yahoo, 2010). Figure 2.4 USD/IDR Exchange Rates from 2005 to 2010 Source: Yahoo, 2010 Interest Rates Frumkin (Frumkin, N. 2000, p. 190) states that Interest is the cost of borrowing money, and interest rates are the price of money. Interest rates which refer to yields are the annualized percentage that interest is of the principal of the loan. Interest rate is a good indicator of inflation trends because of its role as regulatory device to monitor the inflation trends. If interest rate increases, the cost of borrowing money will become higher and more expensive. Investing and developing business will be more expensive. Therefore, the economic growth is decrease and the inflation is under control. Besides as an indicator of inflation trends, interest rates also affect stock market and have significant influence in stock prices. When interest rate in a country is low that indicates stable or low inflation rates, stock market generally shows its positive trends and has tendency to be more active. Many investors prefer to put their money on other investments rather than put their money in bank deposits due to lower fixed interest rate. Investors will obtain lower return from bank deposits than return which comes from other investments especially stocks or shares. In addition, the cost of borrowing money becomes cheaper and this makes investors advance their additional borrowing for investment. Therefore, low interest rate will give positive impact to stock market in terms of rising stock prices. Investors have to be more careful when there is news about increasing interest rates. Investors should look at the change of interest rates regularly because of the impact of interest rates on their stock prices (Chuan, 2004). Increasing interest rates will give a negative effect on many companies which have large debts or loans because of the rising of cost of borrowing. The profit of the companies and ability to grow will decrease. When the profit of companies decrease, stock prices generally becomes less attractive and their stock prices decrease. When interest rates become high, investors usually react in two possible outcomes as follow (Mladjenovic, P. 2009): Investors may sell some of their stocks to pay their interest loans or debts. If many investors sell their stock, it will give negative effect on stock prices. Stock prices tend to decrease because there are more sellers than buyers in stock market. Higher interest rates may cause investors swap change their investment from stocks to bonds or bank deposits which offer higher return. In Indonesia, interest rate decisions are decided by Central Bank of Republic of Indonesia. Indonesia interest rates dropped significantly over the years that can be seen in figure 2.5. The decrease of interest rates will attract more investors to invest their money on stock market (Trading Economics, 2010). Figure 2.5 Indonesia Interest Rates from 2006 to 2010 Indonesia Interest Rate Source: Trading Economics, 2010 Commodity Prices Basic commodities which are required in the production process of most goods and services are good indicators of inflation trends. Those commodities are oil, rubber, steel, etc. When the prices of those commodities increase, the cost of goods and services will also increase. Therefore, when the prices of most commodities increase, it may be an indication of inflation. Investors should have carefulness to enter the stock market. Besides as an indicator of inflation trends, commodity prices especially oil prices also affect stock market and have significant influence in stock prices (Chuan, 2004). Higher oil prices will have significant impact on stock market returns especially the aggregate effect of stock prices. Higher oil prices may cause the rising of production cost which will give great forces on industry equity returns. In oil exporting countries, higher oil prices will increase profits from oil, gas, coal, and vary resources industries. Higher oil prices may cause the rising of stock prices especially for oil exporting countries which depends on relative significance of the industries (Chen, A. H. 2008). JCX composite index or IHSG gets significant influence from the fluctuation of oil prices. For instance, the price of oil in early 2008 increased significantly to US$ 147 per barrel and then decreased drastically to US$ 36 per barrel. The price of JCX composite index followed the fluctuation of oil prices. In the early 2008, JCX composite index increased to IDR 2800. At the end of this year, JCX composite index decreased to IDR 1100 (more than 100%) because of the decrease of oil prices. Indonesian stock prices generally follow the fluctuation of oil prices. When the oil prices decrease, stock prices usually also decrease and otherwise. Therefore, Indonesian investors should look at the movement of oil prices as consideration in trading stocks (Sidarta, W. 2010). Research Framework Stock price in Indonesia Stock Exchange is the main axis in the research framework. The potential external environmental factors which influence stock price are: Economic factors. Economic factors consist of worldwide stock market (DJIA, Hang Seng, Nikkei, and Strait Times), local economy (GDP), inflation, interest rates, exchange rates (USD/IDR exchange rates), and commodities prices (oil price). Interest rates and commodities prices have correlation with inflation because the movements of those factors are indicator of inflation trends. Political factors. Stock price can be affected by regional, national, and international political situation such as political crisis. All of those potential factors will become consideration factors for Indonesian investors in order to make correct decision whether they have to buy, sell, or hold their stocks. The research framework can be seen in figure 2.6. Figure 2.6 Research Framework POLITICAL FACTOR ECONOMIC FACTORS STOCK PRICE (JCX Composite Index or IHSG) INTEREST RATES INFLATION OIL PRICES EXCHANGE RATES (USD/IDR) LOCAL ECONOMY (GDP) WORLDWIDE STOCK MARKET (DJIA, NIKKEI, HANG SENG, STRAIT TIMES) Source: The Researcher Summary The research topic in this study is An Empirical Study of Factors Influencing Stock Prices in Indonesia Stock Exchange. The report consists of introduction, literature review, and reference. Chapter 1 introduction identifies background of the research, objectives of the research, research question, research hypotheses, and scopes. Chapter 2 literature review provides knowledge and theories that are related to research topic. Summary and explanation of external environmental factors which influence stock prices will be provided in this chapter. At the end of this chapter, the author provides research framework in this report. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, references show the sources of all information used in this research. Factors Influencing Stock Prices in Indonesia Exchange Factors Influencing Stock Prices in Indonesia Exchange There are many definitions of stock with different point of view. Bernstein states that stocks are partial ownership of companys assets which are subordinated with debt (Bernstein, R. 2002). Stock is a device that implies an ownership position in a company and signifies a claim on its proportional share in companys assets and profits. Only certain companies have stock called corporation. Limited partnership and Sole proprietorship do not issue stock (WebFinance, Inc., 2010). According to Vernimmen et al. (Vernimmen et al. 2009, p. 527), A stock or a share is a security that is not redeemed. The investment can only be recognized through disposal and whose revenue flows is uncertain. Corporations need financial resources and this required resources usually come from ordinary or common stocks, preferred stocks, and medium to long term lenders or debenture holders. Common stock is everlasting capital for the corporation. The owners who invest in this type of stock are called ordinary or common shareholders and any profit retained after paying debenture interest will be distribute to them called dividend. Preferred stocks are issued to public in order to acquire capital and these stocks have rights to specified yearly fixed percentage dividend on the paid-up capital. Preferred stocks are less common in stock market (Anandarajah, Aseervatham, and Reid 2005). The following are the characteristics of common stock and preferred stocks: (Scott et al. 1999). Preferred Stock A hybrid security which has similar characteristics to bonds and common stocks. It is similar to bonds in its dividends which are limited in amount. It is similar to common stocks in that it has no fixed maturity date, dividends are not deductible in terms of tax purposes, and non-payment of dividends will not cause bankruptcy. Common Stock. Common stock shares imply an ownership in corporation which does not have maturity date and exists as long as the firm does. Stock exchange is an organization which helps connection between potential buyers and potential sellers of stocks. Stock exchange can be physical place, network of computers, system of telephone link, etc. A stock market is a place where stocks can be purchased and sold (Samuel, J.M., Wilkes, F.M., and Brayshaw, R.E. 1996). Most of countries around the world have stock exchanges. The number of stock exchanges around the world is growing significantly. Based on continents, stock exchanges around the world can be divided into 6: Africa, Asia, Europe, Middle East, North America, and South America. Indonesia Stock Exchange called IDX is one of the stock exchanges in Asia (Stock Exchanges Worldwide Links, n.d., 2010). Principally, there are 2 advantages are obtained by investor who buying or having stocks in stock exchanges (Indonesia Stock Exchange, 2007): Dividend. Dividend is sharing profit awarded by a company because of holding stock for a relatively long period until ownership term is in period where an investor is recognized as shareholder who has right to get dividend. Capital Gain. Capital gain is the difference between selling price and buying price acquired from trading activities. Those advantages cause investors choose stocks as an attractive alternative than put their money in fixed deposits that have low interest rates (Chuan, 2004). Basically, investors who buying or having stocks will also have some risks (Indonesia Stock Exchange, 2007): Capital Loss. Capital loss is a situation when an investor is selling the stocks at lower price than the buying price. Liquidity Risk. A company with shares held by public is declared for its bankruptcy by the Court. Shareholders or investors will have the last priority of claiming their rights after all liabilities are fulfilled. The rest of the companys wealth will be shared proportionally to the shareholders. Shareholders will not obtain anything from the liquidation if there is no rest left. The overall price movements of common stocks of corporations traded on stock markets are called stock market price indexes. Corporate stockholders will get benefit from company through dividends and have right to vote in company. Investors capital gains and losses will affected by increasing and falling of stock prices (Frumkin 2000). Norman (Frumkin, N. 2000, p. 277) states that The dividend yield, which is the rate of return on a share company stock, is a companys annual cash dividend percentage of companys annual stock price. Nowadays, the price of stocks in Indonesia Stock Exchange is changing rapidly. The average price of stocks in Indonesia Stock Exchange increased significantly (approximately 20%) during 2006. The average price decreased approximately 19% during January 2008 and declined again approximately 16% during March 2008. The significant change of stock prices in Indonesia Stock Exchange is caused by external environmental factors or macroeconomics factors (Frensidy, B. 2008). There are many external environmental factors that impact financial system including stocks. Those factors are economic growth, inflation, exchange rates, interest rates, etc (Evans, et al. 2000). Many investors lost their money because of the significant change of stock prices in Indonesia Stock Exchange. Investors lost their capital because they sell their stocks at lower price than the buying price (Indonesia Stock Exchange, 2007). By analyzing external environmental factors, investors can predict the future price of stocks more accurately. To minimize the risk or capital loss, investors have to understand external environmental factors influencing stock prices in order to make correct decision whether they have to buy, sell, or hold the shares. The research will identify external environmental factors which have significant influence on stock prices and explain the relationship between those factors and stock prices in order to accomplish that goal. Objectives, Research Question, and Research Hypotheses The objectives of the research are: To identify the variables of external environmental factors influencing the stock prices in Indonesia Stock Exchange. To analyze the influence of external environmental factors on stock prices in Indonesia Stock Exchange. Based on the objectives, the research questions are as follow: Which external environmental factors influence stock prices in Indonesia Stock Exchange? How does external environmental factors influence on stock prices in Indonesia Stock Exchange? Based on the research question, the research hypotheses are built up: External environmental factors encourage the change of stock prices in Indonesia Stock Exchange. External environmental factor have strong correlation with stock prices in Indonesia Stock Exchange. Scope This research study will focus on external environmental factors influencing the stock prices in Indonesia stock exchange, which will be explained more briefly in chapter 2 literature reviews. Some external environmental factors influencing stock prices are applied to explain the correlation between external environmental factors and stock prices in Indonesia Stock Exchange. The analysis of what kind of relationship (positive or negative) between external environmental factors and stock prices will also be clarified in this research. The literature reviews will consist of some external environmental factors which influence stock prices especially in Indonesia Stock Exchange. A survey will be performed in order to collect data about the change of several external factors and stock prices in Indonesia Stock Exchange. Based on collected data, a model will be offered to analyze the relationship between stock prices and external environmental factors. Lastly, this research will be limited and focused on the following: The research is only focused on JSX composite index or (Indonesian: Indeks Harga Saham Gabungan, IHSG). This research is only focused on external environmental factors which influence stock prices. The data collection period of this research is 5 years from 2005 to 2009. Chapter 2 LITERATURE REVIEW Literature Review of External Environmental Factors and Stock Prices in Indonesia Stock Exchange This chapter will summarize external environmental factors which influence stock prices. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, the major external environmental factors influencing stock prices in Indonesia Stock Exchange will be provided in this chapter. Categories of Stocks and Types of Orders In the market, there are various names of stocks that refer to different categories of stocks (Chuan, 2004): Figure 2.1 Categories of Stocks Source: adapted from Chuan, 2004 Blue Chips refer to stocks that are steady with good fundamentals. Undervalued Stocks refer to stocks which are well-established by companies with solid balance sheet. Such stocks are generally unnoticed by investors, traded with small volume, and receive little reporting from media and analysts or experts. Growth Stocks refer to stocks which are established by recognized companies that have high growth sectors and their business are predicted to enlarge quickly over the coming years. Such stocks are generally traded with higher PER (Price Earnings Ratio) even though they lack of history of strong earnings base. While companies show continual rise in their earnings, the price of these stocks will increase. Penny Stocks refer to stocks that have small capitalization and traded bellow one dollar. Small-Cap Stocks refer to stocks that have very few issued shares and traded in low price at stock market. Such stocks are usually not bought by foreign institutions and funds. Small-Cap Stocks have some risks as follow: Smaller companies tend to less flexible to major crisis because they are less diversified and more prone to market shocks and monetary crisis. Trading volumes are low and less liquid. Therefore, investors may not find the buyers in stock market when they want to sell the stocks. Small-Cap Stocks are more sensitive to news and rumors. There are 3 types of orders used in the buying and selling of stocks as follow (Chuan, 2004): Market Order Market order is an order to buy or sell stocks instantly at the best current price. For example, investors place market order to sell AAA shares. It means investors buy AAA shares at current offering price. Limit Order Investors which place limit order will set a certain suitable price to buy or sell a particular stock. Stop Order Stop order is an order to buy or sell the stocks that are traded at certain price level immediately. This certain price level is known as stop price. For instance, investors place stop order to buy AAA shares at $5.00. If AAA shares begin to trade at $5.00, the order becomes market order and broker will buy shares at the best current price. In terms of selling stop order, the order is placed bellow current price to help investors decrease their possible losses and keep their profit. Timing and Stock Investment Investor would discourage when the price of their stocks decreased significantly after they had bought the stocks or to be trapped in market crash after they had invested their money in the stock market. Good timing is the most crucial factor for investors in stock market. Even the best stocks will become useless investments if investors buy them at wrong time (George, A. 2008). The major problem is good timing cannot be determined easily because stock market is influenced by large amount of factors and events that are beyond prediction. Investors have to understand factors influencing stock price and involve some insight to determine good timing whether they have to buy, sell, or hold their stocks (Chuan, 2004). In stock investment, price is mechanism by which practically all goods and services are exchanged. In this case, price has strong power or price is a king because price will determine whether stocks become excessively expensive or inexpensive (George, A 2008). The price of stocks tends to increase when there are more buyers than sellers in stock market. Buyers are tense in stock market based on expectation of future price increase. There are some signals which make buyers believe that future stock price will increase (Chuan, 2004): Positive indication from market trend. Rumors in stock market. Information concerning better earnings prospects for company. External Environmental Factors Influencing Stock Prices There are several external environmental factors influencing the uptrend or downtrend of stock prices in stock market. Those external environmental factors are: Worldwide stock market. Local economy. Political factor. Inflation. Foreign Exchange Rates. Interest Rates. Commodity Prices. Worldwide Stock Market The performance of world economy will have effect on local economy or Indonesian economy due to globalization. The worldwide economy especially US, China, Japan, and Singapore economy will help to enhance Indonesian economy because those countries are major trading partners of Indonesia (CIA, 2010). Therefore, positive economic performance of those countries will give favorable result for Indonesian Stock Market (Chuan, 2004).Indonesian stock prices get significant impact from US, China, Japan, and Singapore stock prices. JCX composite index or IHSG obtain significant influence from worldwide stock market especially DJIA (Dow Jones Industrial Average), Nikkei 225, Hang Seng and Strait Times. Investors always look at those stocks before and during trading stocks in Indonesia Stock Exchange. Export partners and import partners of Indonesia will affect local economy and price of JSX composite index in Indonesian Stock Exchange (Samsul, M. 2006). For example, JCX composite index in 7 May 2010 decreased significantly (71.29 points or 2.54%) because of the decrease of worldwide stock market. Dow Jones Industrial Average decreased 407.05 points or 3.75%, Nikkei decreased 331.1 points or 3.1%, Hang Seng decreased 213.12 points or 1.06%, and Strait Times decreased 6.7 points or 0.59%. The decrease of worldwide stock market had significant influence on Indonesian stock prices (Meryani, A. 2010). Figure 2.2 Indonesia Export Partners 2009 Source: adapted from CIA, 2010 Figure 2.3 Indonesia Import Partners 2009 Source: adapted from CIA, 2010 Local Economy GDP or Gross Domestic Product is regularly used as an indicator of economic performance of the country. Brux (Brux, J.M. 2008, p. 351) states that Gross Domestic Product (GDP) is defined as the market value of all final goods and services produced in the economy in a given time period (usually one year). There are two different types of GDP as follow: Nominal GDP. Nominal GDP is GDP that determined at current prices or actual prices of a particular year. Real GDP. Real GDP is GDP which adjusted for inflation. GDP is generally used as indicator of standards of living in a country. If GDP is high, there is an assumption that economy in a country is doing well and this country has high standards of living. When GDP is growing, there is an assumption that economic activity in a country and standards of living are rising (Brux, 2008). When GDP of a country shows positive growth, it is usually followed by positive trend in stock market. Therefore, GDP is often used by investors to estimate turning points of their stocks and to time their investment.GDP growth and other economic data are published in newspaper. When investors read this information, investor should know how to use the information wisely. For instance, when banking sector is predicted to perform badly, investors should leave out banking stocks in their stock investment. This information will help investors to choose their stocks and make correct decision whether they have to buy, sell, or hold the shares. When economic condition in a country is good, stock prices generally tend to increase. However, investors have to be careful because it is also a sign that good days are numbered. Economy which is growing too fast will be difficult to maintain its growing or to be sustained (Chuan, 2004). Political Factor Stock price can be affected by regional, national, and international political situation. Political crisis usually will have negative impact in stock market trends. Stock prices generally will drop significantly because of political crisis (Chuan, 2004). Inflation According to Hook (Hook, J.A. 2003, p. 110), Inflation is A condition in which the economy experiences a continuous increase in the average price level of all goods and services. The price of certain goods and services may decrease but the average price of all goods and services increases. Financial service industries and banking are influenced significantly by inflation (Hook, J.A. 2003). Inflation can also be defined as a state that has continuous increase in prices of goods and services. Inflation will increase the cost of doing business because price of goods and services increases significantly. Therefore, it is expensive to do business during inflation and profit margins of business will decrease due to higher price of raw materials, rentals, etc (Chuan, 2004). Potential earnings of companies will determine the demand for a stock. Therefore, potential earnings of many companies generally decreased during inflation period due to the lower demand for stock. The lower demand for a stock will cause the decrease of stock prices in stock market. Investors should look at the growing of inflation and sell their stocks before inflation happens. Investors can use commodity prices and interest rates as indicators of inflation trend. When commodity prices and interest rates are rising, those factors indicate the coming of inflation. Investors should have carefulness to enter the stock market (Chuan, 2004). Foreign Exchange Rates Taylor, F. states that foreign exchange rate is the ratio which is used to convert one currency into another. Most countries around the world have their own currencies released by certain official agency which is called monetary authority or central bank. Currency is medium of exchange which is used to buy goods and services (Taylor, F. 2003). According to Philip (Philip et al. 2000), there are types of exchange rate system as follow: Flexible Exchange Rates. Flexible exchange rates system is an exchange rate system which the value of currency is permitted to react to market forces without any intervention by central banks or monetary authority. Fixed Exchange Rates. Fixed exchange rates system is an exchange rate system which associate countries agree to fix the value and changes only occur under certain particular condition. This exchange rate system can reduce uncertainty from international trade and support long term investment in international trade. Managed Floating. Managed floating is an exchange rate system which currency is allowed to respond to market changes but central banks are allowed to interfere in order to protect the value of the currency especially when central banks believe that depreciation is only temporary. Stock-Oriented models of exchange rates which also known as portfolio-balance approaches view exchange rates as equating demand and supply for certain assets especially stocks and bonds. Financial assets are valued by present values of future cash flows, expectations of relative currency values have significant role in price movements especially for internationally held financial assets. Therefore, stock prices are influenced by exchange rates movement (Ajayi and Mougoue, 1996). JCX Index or IHSG gets significant influence from the fluctuation of USD/IDR exchange rate. USD/IDR indicates how many IDR (Indonesia currency) per US dollar. The decrease of IDR currency in term of US dollar is generally followed by the decrease of several Indonesia stock prices such as Telkom, ASTRA International, Bakrie Telecom, Kalbe Farma, etc (Sihombing,G. 2008). Figure 2.4 shows that the fluctuation of USD/IDR exchange rate is very high. Therefore, Indonesian investors should look at USD/IDR exchange rate as consideration in trading stocks (Yahoo, 2010). Figure 2.4 USD/IDR Exchange Rates from 2005 to 2010 Source: Yahoo, 2010 Interest Rates Frumkin (Frumkin, N. 2000, p. 190) states that Interest is the cost of borrowing money, and interest rates are the price of money. Interest rates which refer to yields are the annualized percentage that interest is of the principal of the loan. Interest rate is a good indicator of inflation trends because of its role as regulatory device to monitor the inflation trends. If interest rate increases, the cost of borrowing money will become higher and more expensive. Investing and developing business will be more expensive. Therefore, the economic growth is decrease and the inflation is under control. Besides as an indicator of inflation trends, interest rates also affect stock market and have significant influence in stock prices. When interest rate in a country is low that indicates stable or low inflation rates, stock market generally shows its positive trends and has tendency to be more active. Many investors prefer to put their money on other investments rather than put their money in bank deposits due to lower fixed interest rate. Investors will obtain lower return from bank deposits than return which comes from other investments especially stocks or shares. In addition, the cost of borrowing money becomes cheaper and this makes investors advance their additional borrowing for investment. Therefore, low interest rate will give positive impact to stock market in terms of rising stock prices. Investors have to be more careful when there is news about increasing interest rates. Investors should look at the change of interest rates regularly because of the impact of interest rates on their stock prices (Chuan, 2004). Increasing interest rates will give a negative effect on many companies which have large debts or loans because of the rising of cost of borrowing. The profit of the companies and ability to grow will decrease. When the profit of companies decrease, stock prices generally becomes less attractive and their stock prices decrease. When interest rates become high, investors usually react in two possible outcomes as follow (Mladjenovic, P. 2009): Investors may sell some of their stocks to pay their interest loans or debts. If many investors sell their stock, it will give negative effect on stock prices. Stock prices tend to decrease because there are more sellers than buyers in stock market. Higher interest rates may cause investors swap change their investment from stocks to bonds or bank deposits which offer higher return. In Indonesia, interest rate decisions are decided by Central Bank of Republic of Indonesia. Indonesia interest rates dropped significantly over the years that can be seen in figure 2.5. The decrease of interest rates will attract more investors to invest their money on stock market (Trading Economics, 2010). Figure 2.5 Indonesia Interest Rates from 2006 to 2010 Indonesia Interest Rate Source: Trading Economics, 2010 Commodity Prices Basic commodities which are required in the production process of most goods and services are good indicators of inflation trends. Those commodities are oil, rubber, steel, etc. When the prices of those commodities increase, the cost of goods and services will also increase. Therefore, when the prices of most commodities increase, it may be an indication of inflation. Investors should have carefulness to enter the stock market. Besides as an indicator of inflation trends, commodity prices especially oil prices also affect stock market and have significant influence in stock prices (Chuan, 2004). Higher oil prices will have significant impact on stock market returns especially the aggregate effect of stock prices. Higher oil prices may cause the rising of production cost which will give great forces on industry equity returns. In oil exporting countries, higher oil prices will increase profits from oil, gas, coal, and vary resources industries. Higher oil prices may cause the rising of stock prices especially for oil exporting countries which depends on relative significance of the industries (Chen, A. H. 2008). JCX composite index or IHSG gets significant influence from the fluctuation of oil prices. For instance, the price of oil in early 2008 increased significantly to US$ 147 per barrel and then decreased drastically to US$ 36 per barrel. The price of JCX composite index followed the fluctuation of oil prices. In the early 2008, JCX composite index increased to IDR 2800. At the end of this year, JCX composite index decreased to IDR 1100 (more than 100%) because of the decrease of oil prices. Indonesian stock prices generally follow the fluctuation of oil prices. When the oil prices decrease, stock prices usually also decrease and otherwise. Therefore, Indonesian investors should look at the movement of oil prices as consideration in trading stocks (Sidarta, W. 2010). Research Framework Stock price in Indonesia Stock Exchange is the main axis in the research framework. The potential external environmental factors which influence stock price are: Economic factors. Economic factors consist of worldwide stock market (DJIA, Hang Seng, Nikkei, and Strait Times), local economy (GDP), inflation, interest rates, exchange rates (USD/IDR exchange rates), and commodities prices (oil price). Interest rates and commodities prices have correlation with inflation because the movements of those factors are indicator of inflation trends. Political factors. Stock price can be affected by regional, national, and international political situation such as political crisis. All of those potential factors will become consideration factors for Indonesian investors in order to make correct decision whether they have to buy, sell, or hold their stocks. The research framework can be seen in figure 2.6. Figure 2.6 Research Framework POLITICAL FACTOR ECONOMIC FACTORS STOCK PRICE (JCX Composite Index or IHSG) INTEREST RATES INFLATION OIL PRICES EXCHANGE RATES (USD/IDR) LOCAL ECONOMY (GDP) WORLDWIDE STOCK MARKET (DJIA, NIKKEI, HANG SENG, STRAIT TIMES) Source: The Researcher Summary The research topic in this study is An Empirical Study of Factors Influencing Stock Prices in Indonesia Stock Exchange. The report consists of introduction, literature review, and reference. Chapter 1 introduction identifies background of the research, objectives of the research, research question, research hypotheses, and scopes. Chapter 2 literature review provides knowledge and theories that are related to research topic. Summary and explanation of external environmental factors which influence stock prices will be provided in this chapter. At the end of this chapter, the author provides research framework in this report. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, references show the sources of all information used in this research.