A Report on the Balanced Scorecard for Yunnan Lucky Air

A Report on the Balanced Scorecard for Yunnan Lucky Air The Chinese airline industry is a heavily regulated industry which provides limiting flexibility to both new as well as growing airlines. In the recent years many low-cost airlines have mushroomed, Lucky Air being one of them. Lucky Air was founded in July 2004 with an initial capitalisation of US$2.2 million. The ownership of the airline is with Hainan Airlines, Shanxi Airlines and Yunnan Shilin Tourism Aviation.The airline exists in a crowded field of around 15 low-cost Chinese airlines. The airline, though growing, anticipates a potential squeeze in its business. The management of Yunnan Lucky Air, hereinafter referred to as Lucky Air, approached us to advice them on monitoring their performance closely so as to achieve their organisational mission and objectives. After initial discussions with the management of the airlines, my team has recommended the use of a Balanced Scorecard to monitor its performance. I present in this report a Balanced Scorecard for Lucky Air that translat es the airlines mission and strategy into a comprehensive set of performance measures. Recent Trends in Lucky Air Lucky Air is currently based in Kunming in Peoples Republic of China. The airline has its main base in Dali airport and runs its flights between Dali to Kunming and Xishuangbanna. The routes in this region have greatly contributed to most of its profits. It is slowly reaching out to other regions in China. The overall growth of the airline has been facilitated by the limited route licensing policy of the Chinese government that has given Lucky Air a near monopoly status within Yunnan. The number of passengers carried by the airline has grown from 500,000 passengers over 5,746 flight hours in 2006 to 1.2 million over 17,875 total flight hours. During the same period, its operating revenue tripled from US$31.2 million to US$104.3 million. Over the recent years, Lucky Air has also grown in terms of flights to and from destinations outside the Yunnan province. As in early 2008, the additional routes represented almost 87 of its 150 weekly flights by the airline. Lucky Air Strategy Lucky Air operates as a low-cost, high-efficiency airline. This is the basis of its key strategy. The low-cost and high efficiency is maintained through: Using single type of aircraft leading to reduced maintenance and operational costs. Having only one category of seat class, thereby simplifying pricing. Having no seat assignments or in-flight entertainment. Increasing on-time departure and arrival by having short haul point-to-point routes. Operating mostly in secondary cities to avoid congestion and reduce landing costs. As a part of its expansion strategy, in recent times Lucky Air has tried to build its competitive advantage by focusing on e-commerce. Customers can buy and refund tickets online by paying 5% to 20% less than anywhere else. The airline has created an online community for its passengers and hopes to reach more customers directly via its website and build more brand recognition and a loyal customer base. In addition, Lucky Air has invested in own call centres to facilitate ticket booking. Balance Scorecard for Lucky Air Lucky Airs strategy rests around it being a low-cost, high-efficiency airline. A scorecard can measure the airlines performance across four different but linked perspectives that are derived from its vision, strategy and objectives. These perspectives include: Financial, Customer, Internal and Learning Growth. The left-hand side of the diagram represents the cause-and-effect relationships across the four perspectives that describe low cost and high-efficiency strategy. (Refer Appendix A for an explanation of the Lucky Air Scorecard and Appendix B for Cause and Relationship between perspectives) Benefits and Limitations of the Scorecard Like any other performance measurement tool, a Balanced Scorecard is not foolproof. Before the scorecard that has been designed for Lucky Air is implemented, the benefits and limitations of the scorecard need to be examined and understood. Benefits of Lucky Air Scorecard Balance Scorecard has led companies to develop a variety of corporate scorecards suggesting a process approach to innovations in performance measurements. (Source: Epstein and Birchard, 2000 and Hoque and James 1997). The benefits that can be obtained from a Balanced Scorecard depend on not just its design but also what it is used for and how it is applied. In general, a Balanced Scorecard will help Lucky Air: Enhance traditional financial accounting measures of Lucky Air by including certain non-financial measures. Thus, Lucky Air, through a Balanced Scorecard, can examine the drivers of financial performance by focusing at least three other perspectives: customers, internal business processes, and learning and growth. (Source: Kaplan and Norton, 1992, 1996). Acquire an effective means for clearly translating a firms vision and strategy into tool for communicating the firms strategy to the various sections of the organisation. In the case of Lucky Air, the Balanced Scorecard can show how focusing on the customer and the services can lead to increased profits. (Source: Chow, 1997; Source: Kaplan, 1992) Motivate performance against established strategic goals. A handful of critical measures have been identified for each perspective and the corresponding targets have been defined. The performance measures force managers to focus on the measures that are most critical. The targets provide managers with a framework to manage the various activities in line with the corporate objectives. For example, a manager can clearly see that managing on ground time is critical and it needs to be kept below 20 minutes. Ensure that its employees understand the long-term strategy of the organisation and also the association between the employees actions and the chosen strategic goals. It can provide strategic feedback and promote learning within the airline through the monitoring of short-term strategic results. Allocate resources and set priorities based on the initiatives contribution to long-term strategic objectives. (Source: Kaplan and Norton, 1996). Evaluate and judge the decisions, policies, plans of the airline. For example, the success or otherwise of the decision of adopting e-commerce as an expansion strategy by Lucky Air can be examined in terms of the four perspectives and its impact on the profitability of the airline. Fosters organisational learning and continual improvement when it is used as a strategic management tool. Limitations of Lucky Air Scorecard Though Balanced Scorecard may be an effective tool for many organisations, it may not help in improvement of performance of all organisations. A Balanced Scorecard is only a tool and the deployment of the tool rests with the airline itself. It is not easy to provide practical guidance for deployment of the scorecard. Some of the key limitations that can cause a Balanced Scorecard initiative at Lucky Air to fail are as follows: Effectiveness of a balanced scorecard depends on a well defined strategy and an understanding of the linkages between strategic objectives and metrics. (Source: Howard Rohm pp.4). If this is lacking its deployment will be unsuccessful. The biggest limitation of the Lucky Air scorecard is that it has been designed by an external team of consultants who have been in discussion with some key players in the airline. It did not involve a cross-section of the airline in developing the system. Thus if the scorecard of Lucky Air fails to link the correct drivers in the internal and learning and growth perspective to the desired outcomes in the financial and customer perspectives, it will not be effective. A scorecard may not be effective if it includes a few measures for each perspective. For example, success of Lucky Air is not only a result of the training and motivation of the ground crew but the entire staff. Thus a scorecard with too few measures may not depict enough of Lucky Airs strategy and does not represent a balance between desired outcomes and performance drivers of the outcomes. Likewise if too many measures are included, the managers attention may get so diffused that he may pay insufficient attention to those measures that can make the maximum impact. No balanced scorecard can be flawless with respect to its design. The Lucky Air scorecard too may have certain design flaws which may not be visible now. These will only be detected when the scorecard is implemented. It is only over a period of time that a company will learn about the effective drivers of performance. (Source: Norreklit, 2000) The scorecard on its own will not be effective if Lucky Airs top management is not committed to it. The top executives may end up looking at Balanced scorecard as a quick fix that can easily be installed in the airline. The scorecard may have its limitations if the top management simply uses it as a checklist for operational improvements or to expand the compensation system to include non-financial measures. (Source: Atkinson, A. et al, 2004) The scorecard seems to have too much internal focus. The scorecard is only depicting incentives for desired behaviour changes in the ground crew and not focusing on other employees. Conclusion and Recommendation A scorecard balances traditional financial measures of success such as profits and return on capital with non-financial measures of the drivers of future financial performance. It can prove to be an effective tool for Lucky Air if it is appropriately deployed by the airline. Appropriate deployment will require complete commitment from all levels in the organisation by making its implementation everyones job. Moreover, the initial Balanced Scorecard should only be taken as a starting point and needs to be looked upon on an ongoing basis. Frequent reviews of the scorecard are required and new performance measures identified as a Balanced Scorecard evolves over a period of time. Data on various measures or metrics needs to be collected on a regular basis and the targets of the metrics should be sufficiently linked to rewards and incentives to motivate their accomplishment. APPENDIX Appendix A: Explanation of the Lucky Air Scorecard The classes which can be formed and the parameters which may be put in the balance scorecard are: Financial: How is success measured by Lucky Airs owners, namely, Hainan Airlines, Shanxi Airlines and Yunnan Shilin Tourism Aviation? The financial parameter can be evaluated by assigning values to parameters like total revenue or increase in revenue from tickets, total amount refunded due to cancelled tickets etc. It is also measured in changes in the plane leasing costs, maintaining and operating costs etc. Customers: This is the customer perspective. It focuses on how the airline creates value for the customers. Customer perspective provides an insight into the perceptions customers hold for Lucky Air. Internal: What internal processes should Lucky Air excel in to satisfy customers and shareholders? Internal Processes can be known from turnaround time, on-ground time, arrival and departure delays, number of ticketing errors, customer care services etc. This would help in attaining an idea of the operations of the organization in question. Learning and growth: What employee capabilities, information systems and Lucky Airs climate does the airline need to continually improve its internal processes and customer relationships? It focuses on the motivation and training of the crew members. Starting at the bottom of the diagram, the strategy has a learning and growth objective to train and motivate ground crew with the expectation that this will lead to better improved ground turnarounds, from arrivals to subsequent departures, for its planes. This internal objective enables Lucky Air to have its planes depart on time and to get better utilisation of its airplanes and flight crews, further enabling it to earn profits even at prices that are lowest in the industry. It also focuses on improvement of internal processes to realise bigger revenue opportunities. The low prices and on-time departures attract more customers, improve customer loyalty and lead to a growth in revenues. The combination of revenue growth and low costs finally results in high profits and high return on assets. The strategy is clearer through the cause and effect relationships among objectives in each of the four balanced scorecard perspectives. These can be stated as follows: Increase revenues through increased sales to existing and new customers (financial) Grow to be service oriented ( customer perspective) Excel in providing services through continuous process improvements ( internal) Bring into line employee incentives and rewards with the strategy (learning and growth)

Unprincipled Ambition in Shakespeares Macbeth :: Free Macbeth Essays

Unprincipled Ambition in Macbeth      Ã‚   The Bard of Avon saturates the pages of the tragedy Macbeth with ugly feelings of ambition - unprincipled ambition which is ready to kill for itself. Let's thoroughly search out the major instances of ambitious behavior by the husband-wife team.    Samuel Johnson in The Plays of Shakespeare explains the place of ambition in this tragedy:    The danger of ambition is well described; and I know not whether it may not be said in defence of some parts which now seem improbable, that, in Shakespeare's time, it was necessary to warn credulity against vain and illusive predictions. The passions are directed to their true end. Lady Macbeth is merely detested; and though the courage of Macbeth preserves some esteem, yet every reader rejoices at his fall. (133)       Blanche Coles states in Shakespeare's Four Giants that the protagonist's ambition was not the usual narrow, personal ambition:    He has admitted to a vaulting ambition. We have no other evidence of personal ambition except, possibly, his own word in this speech. Onrushing events crowd the thought out of his mind and out of our view. We do have ample evidence of his ambition for his family, ambition for a son who might succeed him. [. . .] We think normally of ambition as a personal thing, but it is not always so. Macbeth's stupendous imagination, as revealed later in the play, gives him a breadth of vision altogether out of keeping with a narrow, personal ambition. (50-51)    In "Memoranda: Remarks on the Character of Lady Macbeth," Sarah Siddons mentions the ambition of Lady Macbeth and its effect:    [Re "I have given suck" (1.7.54ff.)] Even here, horrific as she is, she shews herself made by ambition, but not by nature, a perfectly savage creature. The very use of such a tender allusion in the midst of her dreadful language, persuades one unequivocally that she has really felt the maternal yearnings of a mother towards her babe, and that she considered this action the most enormous that ever required the strength of human nerves for its perpetration. Her language to Macbeth is the most potently eloquent that guilt could use.   (56)    Clark and Wright in their Introduction to The Complete Works of William Shakespeare interpret the main theme of the play as intertwining with evil and ambition:   

The Different Lives of Jake Barnes and Brett Ashley in The Sun Also Ris

In the novel The Sun Also Rises we read about two characters that seem to depend on each other. Ernest Hemingway writes this story ingeniously to show how these two characters are intertwined with one another. One character can't get away from the other because of the friendship they share. We have to look at the lives of Jake Barnes and Brett Ashley from both points of view to understand how they are complicated. Brett Ashley was a different type of lady. She drinks all the time and enjoys the company of men. When she feels unhappy she drinks more. Hemingway's character the count said, "Let's enjoy a little more of this," Brett pushed her glass forward. The count poured very carefully. "There, my dear. Now you enjoy that slowly, and then you can get drunk" (Hemingway 66). She does not work because she is always depending on men to pay for everything. She always depends on Jake to save her when she runs into trouble. The only good that came from Brett was that she didn't take any money from Mike when she left with Pedro. The other time she was good is when she...

Diary Of Hatchet Essay -- essays research papers

Diary of Hatchet Brian Robeson, the main character, is a very interesting kid. After the first few pages you could tell that he was strong-minded, twelve or thirteen year old kid. His parents were divorced and he spent some time with his dad. He lived far away so Brian had to take a plane. From the back of the book I knew that he gets in to a plane accident and has to survive on his own. I was surprised that the author went right to the plane wreck. I thought it would have a somewhat boring beginning like most other books I read. Brian keeps talking about how his parents got divorced and he cries every time he thinks about it. He calls it the big "secret." Brian keeps describing visions of his mom kissing some new man, not his father. You can tell that he takes the divorce very seriously and sometimes gets emotional. 10/05 In this part of the book, Jake, the pilot, has a heart attack and dies. To be honest, I, myself, have thought about what I would do if I was on plane and the pilot died. I really don't know what I would do, I don't know how to fly a plane. Luckily, Brian had been taught by Jake how to fly the plane. Brian didn't know how to land so he flew the plane into a lake. This part of the book was hard to believe, there was a lot of "coincidents." Brian showed his intellectual side when he realized that when Jake was suffering from his heart attack he turned the plane to the left. That could greatly increase the time it ...

Mgt/521 Swot Analysis

Business Analysis Part 1: Apple Inc. XXXXXX MGT/521 XXXXXX Business Analysis Part 1: Apple Inc. If an investor needs to decide whether to put money into a company, a careful analysis of that business is be the first step in making a decision. It is important to understand several factors that point to a company’s stability: the company’s place in the market, its future prospects, and its financial health, just to name a few. This business analysis will look at Apple Inc. to assess whether it would be a company worth investing in.First a SWOT analysis will be conducted and will identify what aspects of the analysis are most important in making the decision to invest. Secondly, the company’s internal and external stakeholders will be identified and examined, in order to see if the stakeholders’ needs are being met and how. By analyzing these two important overviews of Apple Inc. it will reveal whether the company is a sound home for investment. SWOT Analysis When deciding to invest in a company or not, a shrewd businessperson will begin with planning.Planning is a continuous process that is important because ever-changing markets require constant adjustments of goals and the processes to meet them. Key in planning is including a careful analysis of a company’s strengths, weaknesses, opportunities, and threats. This type of analysis is known as a SWOT analysis (Nickels, McHugh & McHugh, 2010). A SWOT analysis of Apple Inc. reveals some important facts about its popularity and opportunities in the market. Strengths Apple Inc. ’s most important tool in the market is its ability to leverage its strong brand image.Apple’s product designs are well recognized throughout all markets. This allows new products to rapidly gain a share of the market upon release. Released to the US in April of 2010, the iPad enjoyed unit sales of 7. 5 million, with a net of $5 billion in sales of iPads and related products (Datamonitor: Apple Inc. , 2011). This showcases how quickly the tech market reacts to new releases by the company. This strong brand image has been developed by iconic advertisements that have long set Apple apart in the personal computer market.This began with the company’s 1984 Superbowl ad, which positioned â€Å"IBM as the Orwellian Big Brother of the computer industry† and Mac users as those breaking free from that oppression (Kenney, 2007). This individual vs. corporation image has continued into their more recent advertisements. Benoit and Delbert (2010) analyzed a series of ads that began airing in May 2006. The â€Å"Get a Mac† campaign used actors Justin Long and John Hodgman to portray a Mac and a PC, showcasing Apple computers’ strengths over the market-dominating PC (Benoit & Delbert, 2010).By depicting their computers as easy-to-use, fun-loving and friendly, Apple further solidified its brand image in the market by being different from its competitors, allowin g its new products to quickly capture the market. Weaknesses Weaknesses of Apple Inc. are important in the decision to invest in the company because they point to internal issues that need to be shored up. One major weakness is Apple’s involvement in several patent infringement lawsuits. Nokia and Motorola Mobility have both filed suits with Apple claiming patent infringement (Datamonitor: Apple Inc. 2011). Cisco has also been involved in an ongoing suit about the trademark name of the iPhone and which company actually owns the name (Chumney & Cowart, 2010). The lawsuits create a weakness for Apple in a few ways. First there is the negative image associated with being sued. This will only detract from the company’s long-held image of being an individual fighting against the oppressive PC regime if the company is seen engaging in its own questionable legal practices. Second, lawsuits of this nature require time and money that could be better spent elsewhere.An unfavorab le verdict in any of these suits would affect the company’s financial health and operations (Datamonitor: Apple Inc. , 2010). Opportunities As it is shown that Apple’s popular image is its biggest strength, Apple has the opportunity to make this image multi-faceted by focusing on its commitment to safe environmental practices. Schultz and Helleloid (2010) relate a 2007 incident in which Greenpeace released a report criticizing Apple for is environmental practices and ranking it behind some of its major competitors like Hewlett-Packard and Dell Computers.Rather than respond positively to Greenpeace’s challenge to improve its practices, Apple merely released a statement that they were already environmentally aware and were meeting their own company standards. This played out poorly for Apple in the media, resulting in a direct challenge to Apple by Greenpeace at the Macworld expo in San Francisco in January 2007 (Schultz & Helleloid, 2010). Apple has the opportuni ty to showcase its environmental practices to enforce its brand image as a conscientious individual.Although the company publishes its environmental practices on its website, it could expand the exposure of this information in one of its savvy marketing campaigns (â€Å"Apple And The Environment†, 2011). Threats Although Apple’s brand image has put it at the forefront of smartphone and tablet design, it is facing the threat of losing its market share to Google Android-based products. With Google acquisition of Android Inc. in 2005, the market for smartphones has seen increasing competition for the iPhone from manufactures like HTC and Samsung (Datamonitor: Apple Inc. 010). This Apple vs. Android competition is also playing out in the tablet market. Castelluccio (2011) writes that in spring 2010, â€Å"the iPad owned 90% of the market† but â€Å"the Canaccord group estimates Apple’s share of the tablet market will be 56% this year† quickly crowded o ut by its competitors (p. 58). This growing threat to the tablet and smartphone markets that Apple had previously cornered will be a key battle as Apple works to contain this threat.Because Apple has made its name through its strong band image, and because that image has led them to pioneer new products in the smartphone and tablet markets, Apple’s branding is one of the most relevant factors in deciding to invest in the company. Apple’s steady popularity as the fun, easy-to-use choice for electronics equipment indicates its long-term strength as an investment. The other important factor is Apple’s opportunity to shore up this image by promoting its environmental practices.Because of the Greenpeace debacle in 2007, Apple has the chance to strengthen its important branding by introducing new marketing that will paint it as the responsible choice for environmentally concerned consumers. This too would add to the company’s longevity as an investment. Stakeho lder Analysis In order to determine if stakeholder needs are being met, the stakeholders must first be identified. Internal stakeholders include employees, marketers, internal retail stores, and executives. External stakeholders of Apple are customers, investors, media, third party retailers, local and national communities, and the environment.Apple is meeting the needs of their internal stakeholders, but has some shortcomings in meeting the needs of external stakeholders. Apple’s major internal stakeholders’ needs are being met; Apple has high employee satisfaction rates, and their retail branches are well known for successful promotion of the company’s ever-important brand. Employees of Apple are satisfied with the company’s management style with nearly 97 percent of employees approving of the general management of founder and CEO Steve Jobs just before he announced his resignation.In fact, during his tenure Jobs was known for being â€Å"adept at attr acting employees who share his vision and fierce sense of loyalty to Apple and is mission† (Steve Jobs, Beloved By Apple Employees? , para. 9, 2011). By attracting those who shared Jobs’ ideals, Jobs was able to create a cohesive employee base who could work together in reaching company goals. The other major internal stakeholders, Apple’s internal retail stores, are also doing well. Apple’s primary marketing strategy has been to focus on their retail stores and the inclusive community of Mac users represented there.The strategy of well-placed, beautifully designed retail stores draws in both Mac pros and newbies. Not only does Apple get one-seventh of its revenue from its retail branch, but the first-time buyers that are drawn in account for nearly half of Mac sales in the stores (Snell, 2004). Apple has decided to focus its energies and meet the needs of its retail branches and it has resulted in increased sales and presence in the electronics market. Th e strength of the retail stores and the loyalty of the company’s employees show that Apple pays close attention to internal stakeholder needs.External stakeholders, though, are not all faring so well. Apple’s major external stakeholders are customers, investors, the community and the environment. Of them, only investors and the community have needs as well-met as the company’s internal stakeholders. Apple has been a solid bet for its investors, even during the recent upset of Jobs’ stepping down as CEO. Ranked as BusinessWeek’s number one best performing company in 2006, Apple has long been a growing company and a safe bet for its investors (The Ranking, 2006). However, with the recent news of Jobs’ departure, there has een some question of the company’s stability (Morris, 2011). The company did a good job of quelling any speculation by immediately naming a successor, new CEO Time Cook, and assuring its investors with the news that Co ok has been running things for some time now, as Jobs battles personal health concerns (Robertson & Metz, 2011). This quick action assures that investors’ confidence in the company is well founded, and confidence is an important need for investors. As with any large company the community has a stake in Apple in the needs for charitable assistance from those who contribute to society.Apple has met the community’s needs by contributing matching donations to employee’s charitable giving, up to $10,000 per employees for qualified organizations (Apple to Match $10K in Charitable Contributions Per Employee, 2011), Giving matching contributions like this allows Apple’s employees to support the community through their chosen organizations, diversifying Apple’s support, and adding to customer satisfaction via Apple’s goodwill. Apple’s customers and the environment are two facets of Apple’s stakeholder needs that both need shoring up.Fri edman (2011) relates the history of customer issues with Apple’s design choices, but the company has rarely responded to that input. Poor customer relations have tarnished Apple’s stellar brand at times, Lee, Burrows, and Woyke (2007) demonstrate that the company’s fast growth contributes to this issue; as Apple expanded from computers into personal music players, laptops, phones and other hardware, it did not match that with growth in its technical services divisions. Because Apple’s major strength lies in its brand and image, it is important that the company have customer relations that support that image.Apple could better meet the needs of its customers by having better trained technical support and sales staff, to meet the growing demand for service. As mentioned earlier, one of Apple’s biggest opportunities is in meeting the needs of the environment and being environmentally aware. A recent report released by five environmental groups claims that one of Apple’s main suppliers is polluting the environment. The Chinese manufacturer of iPhone and iPad touchscreens is accused of poisoning some workers, too. (Apple to discuss suppliers' alleged pollution with NGO, 2011).This type of press shows that Apple still needs to make improvements in its environmental efforts, or it will spill over to affect the company’s goodwill in other areas, like community and customer relations. Apple could counteract this by seriously auditing each one of its suppliers for environmental standards and use its powerful marketing tools to showcase its new green initiatives. Conclusion Having examined Apple, it is clear the company has a strong brand image and place in the market. Is biggest opportunity lies in enhancing this image through improved environmental initiatives.Though there are some issues with the growing Android market and trademark lawsuits, Apple remains a strong prospect for its investors even during times of transit ion. Apple’s growth and clear self-image play large parts in making it a safe decision for its current and future investors. References Apple and the Environment. (2011). Retrieved from http://www. apple. com/environment/ Apple to discuss suppliers' alleged pollution with NGO. (2011, September 1). Business Daily Update. Retrieved from http://go. galegroup. com. ezproxy. apollolibrary. com/ps/i. do? amp;id=GALE%7CA265861417&v=2. 1&u=uphoenix&it=r&p=GPS&sw=w Benoit, W. L. , & Delbert, J. (2010). â€Å"Get A Mac†: Mac versus PC TV Spots. In , Relevant Rhetoric: A New Journal of Rhetorical Studies (pp. 1-12). Relevant Rhetoric: A New Journal of Rhetorical Studies. Retrieved from EBSCOhost. Castelluccio, M. (2011). The Tablet Horizon– An Update. Strategic Finance, 93(2), 57-58. Retrieved from EBSCOhost. Datamonitor: Apple Inc. (2011). Apple Computer, Inc. SWOT Analysis, 1-10. Retrieved from EBSCOhost. Friedman, L. (2011). The Customer Is Sometimes Right.Macworld, 28( 4), 100. Retrieved from EBSCOhost. Kenney, M. (2007). The apple way: 12 management lessons from the world's most innovative company. Journal of Applied Management and Entrepreneurship, 12(1), 113-113-115. Retrieved from http://search. proquest. com/docview/203919095? accountid=35812 Lee, L. , Burrows, P. , ; Woyke, E. (2007). A Bruise or Two On Apple's Reputation. BusinessWeek, (4055), 081-083. Retrieved from EBSCOhost. Nickels, W. G. , McHugh, J. M. , & McHugh, S. M. (2010). Understanding business (9th ed. ). New York, NY: McGraw-Hill/Irwin. Schultz, P. L. ,

Australian initial public offers

Australia has been characterized by a varying trend in its initial public offerings between the years 2003-2007.  Ã‚   There has been continued initial under-pricing in the daily capital market and high under performance of the initial public offers.Broadly, Australian IPO’s have greatly been influenced by the government activities with its intention to promote public policy. Through out the time, the government has been in strict control of the IPO’s in an attempt streamline the economic activities.Australia has gone under rapid changes in the IPO’s of companies which were initially owned by the state. Over the years since 2003 the government has restructured the IPO’s to focus a more economic growth. In nearly all the cases, firms owned by the government have been inefficient in comparison with those of the private sector.(Prasad, Vozikis) Since 2003, Australia has been faced with the problem of under pricing, which has been using the two-tiered pricin g system allowing, retail investor to only pay a set fixed price as they leave investors from other institutions to form the price through bidding. This is an attempt to allow small sized investors with varied investment inefficiencies to have a chance of a probable investment in the capital. Over the years, since 2003, small retail investors are let to have their IPO order first before the bigger institutional investors.For both of the public and state companies, IPO’s have generally being under priced. There two basic reasons behind this, majority been market asymmetry and any possible government regulation to attain political interests.The variability of the under pricing is highly determined by the size of the issue, in which case high issues may imply lower under pricing statements due possible lower rates of subscription.   (Suchard, Woo, 2003) However, to the government, under pricing of IPO’s is a strategy geared toward immediate increase in the value to the gains from offer.   The IPO’s under pricing are structured towards achieving various economic policies.For every IPO, the domestic investors are mostly favored than private investors. This is an attribute that the government uses to minimize the cash outflow by the foreign investors. This is through the recognition attached to the capital outflows from economies. Through under pricing, investors are normally able to buy many shares which in turn give relatively high returns after the offer high returns.Market asymmetry is the major reason behind under pricing of IPO’s, where investors with large investment schemes are more informed about the market information to the new market share issue than small marginalized investors.To cater for this, the government regulation is to ensure that these marginalized investors are given the first favor.   In the purchase of the shares, huge investor would really buy them in bulk form at their under price situation.To the small i nvestors, they will always benefit from receiving the new shares at a desirable chance. (O’Flynn, 2004)   Other investment entities like bankers may be in fear of possible litigation that may be accompanied by significant decline of the government to developed credibility in polices concerning market orientations.   Therefore, under pricing is a silent attempt by the government to control the prevailing status of the economy through adjustments in the capital markets.From the manner in which the IPO’s are released, they actually help to safeguard the weak and less developed investor from the activity of big investors who are well informed about the market system.Basically, timing of IPO’s Australia is normally scheduled when the government wants to release some of its ownership it has in its public owned companies.   Its basic intention is to create income to finance different government structures.   Either, IPO’s by the privately owned companies is done when the companies want to acquire income from the public for further expansion of its activities.   For both cases, initial public offers have showed almost the same characteristic in their under pricing characteristics. (Gharghori, Chen, Robert, 2006)In its use of two-tiered pricing system, the government helps to keep the low informed investors from any exploitation from the big markets.The subject of finance has struck the activities of many scholar who have been extensively been under the study of the influence of corporate finance and any market blocks that affect sourcing of this finance by different sized incomes in the investment concept by firms. It has been seen that, this concept is determined by the liquidity value of these forms in Australia.Such liquidity is basically determined by different firm’s context that pertains their cash flows.   Investment depends on this ratio, where firms subject to a high liquidity a faced with higher investment than those with low liquidities whose investment is relatively low. (Prasad, Vozikis, Ariff, 2006)However, under pricing in Australia has been a vote to the subject of asymmetry and possible imperfections that exists in the market system. On understanding the rigidities that exists in the market system, the Australian government has undertaken to ensure under pricing to safe guard the interest of the low investor in the understanding of the market structures that work in favor of the big investors. (O’Flynn, 2005)Therefore, for the Australian government, it’s rational to undertake such activity since it basically leads capital development for the low income investors.ReferenceSuchard, J& Woo, L (2003) Are Hot Markets Driven by Hot Resource Shares or    Hot Commodities? Australian Journal of Management, Vol. 28Prasad, D, Vozikis, G & Ariff, M (2006) Government Public Policy, Regulatory Intervention and Their Impact on IPO Under pricing. Journal of small Business Management , Vol. 44O’Flynn, J (2004) Australian Capital Territory: January to June 2004. The Australian   Journal of Politics and History, Vol. 50

NAFTA: Gainers and Losers

Economic cooperation has been a trend in neighboring countries to promote a free-trade zone for the benefit of its constituent countries. The largest of such, the North American Free Trade Agreement, was found in 1994 by the three North American countries. The members of NAFTA are the US, Canada and Mexico which includes a total of 416 million people and a GDP totaling to $12 trillion (Pohlmann, 2006). NAFTA aimed to totally remove trade barriers between the members for 15 years, which is scheduled to be in 2009. It also reduces the non-tariff trade barriers like sanitary regulations significantly. Although NAFTA major advantages, many are against it. Most of them are in the non-economic areas, and following are examples: US labor unions, environmentalists and Mexican farmers. They believe that NAFTA has unfavorable effects on them. Not all Mexicans are against it, in fact some of them had high hopes that the implementation of this contract would help boost their economy (Pohlmann, 2006). The NAFTA issue is debated in the Congress, with three major subjects: employment, environment and immigration from Mexico to the US. Tariffs had been an important factor in NAFTA for tariffs are taxes on imports and it usually makes imported products more expensive in order top benefit local products. NAFTA participants agreed to cut down the tariffs by 50% and they also agreed to reduce tariffs to 0 in the succeeding fifteen years. Economists clearly saw the benefits NAFTA could have with all its participants. They based their reasoning with the principle of comparative advantage wherein their country would be more organized in creating their goods. Thus each country would produce the goods wherein they are more efficient in producing and they would trade those goods with the goods of other country (which they are very good in producing in their own). However, there are those who contested the free trade contract believing that it would have certain effect on employment as well as on income. There are those who argue that there would be a great deal of unemployment because of rivalry in Mexico. They argued that since wages are much lower in Mexico as compared to United States, then businessmen would start moving their businesses in Mexico. However, there are those who argue that the reason behind higher wages in US lies on the fact that worker efficiency is greater in US as compared to Mexico. NAFTA proved to have great consequence in terms of employment in US. According to a study conducted by the US International Trade Commission (ITI), the US government could gain moderately from a free trade agreement with Mexico. A historical study also showed that NAFTA could produce about 134, 000 jobs in the US. However, a simple method of study conducted by Baldwin and Kahane showed the effects NAFTA could have in terms of employment. The particular study had been conducted in order to see which division would have employment gains and which would undergo job losses. A tabular data had been used in order to create two variables, that of â€Å"gainers† and that of â€Å"losers†. Among the gainers are electrical and non-electrical machinery alike as well as rubber chemicals. However, on the side of the losers we have textiles, glass, leather products and the like. It is important to distinguish gainers from losers and thus an explanation is provided in the quotation be low. The term GAINERS is associated to the number of employees in areas that were projected to have job gains, while the term LOSERS is related to job losses (Kahane, 1996). Thus, the effect of NAFTA allowed a rise in trade in both Canada and Mexico. There is also no clear evidence that US indeed lose jobs because of Mexico. And all in all it showed that there are industries which gained because of the NAFTA agreement while there are also those industries that had had their share of losses as had been mentioned in this paper. Reference: Kahane, L. (1996). Congressional voting patterns on NAFTA: an empirical analysis – North American Free Trade Agreement [Electronic Version]. The American Journal of Economics and Sociology. Retrieved June 4, 2007 from http://findarticles.com/p/articles/mi_m0254/is_n4_v55/ai_18910967. Pohlmann, D. (2006). The Economic Impact of NAFTA on Mexico [Electronic Version]. Scholarly Publishing House. Retrieved June 4, 2007 from http://www.grin.com/en/preview/67522.html. Rosson, P., Runge, F., & Moulton, K. S. Preferential Trading Arrangements: Gainers and Losers from Regional Trading Blocs [Electronic Version]. Retrieved June 4, 2007 from http://www.ces.ncsu.edu/depts/agecon/trade/eight.html.