Ethics in the Enron Company Essay Example | Topics and Well Written Essays - 750 words

Ethics in the Enron Company - Essay Example More reprehensible is the attempt of the top corporate hierarchy to feign total innocence throughout the investigation and blame everything on their subordinates. In the light of the Enron scandal, the US Congress immediately passed a law that would reform and revamp corporate practices in the country. Background: The History of Enron Enron began as a small energy company in Houston in 1985 founded by Kenneth Lay. The subsequent deregulation of the energy market gave the company an opportunity to expand into energy related ventures and pretty soon Enron catapulted itself into the world’s largest financial and energy trading company. Its $10 million electricity sales in 1994 ballooned to $4 billion just 3 years later and in 1998, the company’s asset was reported to reach $23 billion (Solomon 34). It did businesses in various markets and industries and provided and traded internationally in the following: energy resources and commodities; financial and risk management ser vices, and; electronic commerce (Joint Committee on Taxation 2003:55-56). In a move that shocked the business world, which by then was one of America’s ten largest companies, filed a Chapter 11 bankruptcy on December 2, 2001. A few months earlier, Enron had been the subject of an investigation by the Securities and Exchange Commission (SEC) after it had publicly reported a $618 million third-quarter loss as well as a $1.2 billion decrease in shareholder equity. Enron’s seemingly sudden financial debacle took the world by surprise because accounting records released quarterly by the company did not in any way reflect its ailing financial condition (Joint Committee on Taxation 2003:55-56). Discussion: Ethics and Enron Subsequent investigation into the Enron case by the Justice Department revealed a pattern of fraudulent practices employed by Enron to show off a facade of financial wealth and stability. These fraudulent practices included exaggeration of earnings in its r eports, concealment of debts and losses through the use various subsidiary partnerships. In the wake of the Enron scandal its top officers were charged and convicted with various offences including fraud, conspiracy, insider trading, and money laundering. Lay, who was convicted of a total of various corporate offences died before his sentence could be served while Skilling, the company’s COO, was punished with imprisonment for a good number of years. In addition, various offices who rendered services for Enron were also not spared such as: Vinson & Elkins, Enron’s Houston law firm, which was made to pay $30 million to Enron for providing erroneous advice to the company; Merrill Lynch, a brokerage and investment firm, which was ordered to pay $80 million to SEC, and; Arthur Andersen, Enron’s editor, who was barred from further practicing in auditing and charged with obstruction of justice for the destruction of Enron auditing documents during the investigation (F errel et al 2010: 420-425). Lay and company’s primary defense strategy was to deny that Enron committed any wrongdoing and instead blame everybody, such as an adverse media, market panic and short-selling, but themselves. Moreover, the top corporate hierarchy often claimed innocence of what was going on and blamed their

Pre School Observation Essay Example | Topics and Well Written Essays - 1500 words

Pre School Observation - Essay Example It can be noticed that many children in the class are overweight but Edwin seems to be have a well proportioned body. Edwin is one child in the class who has good physique. 3. The three things that acknowledged his status as a preschooler was his talkative attitude, his impulsive behavior and his hyperactivity. I observed the way he talked, which was without a break. Moreover he was not able to stand in one place; he was very impulsive and acted whatever he spoke out in words. Also he was not standing in one place and was moving continuously. 4. Looking from the health perspective, Edwin was a normal child with good physique and a cheerful attitude. But it is a fact that he is bit over grown compared to his classmates. His body also showed an overgrown aspect which when compared to his aged children become odd. I can take this fact as a hereditary attribute as his parents both are tall and well built. Emotionally he seemed to be strong with good activity and physical capabilities. 1. While observing closely, the three gross motor skills that can be pinpointed are the way he walked, ran and did sit dups. I noticed that while walking, he was not placing his foot with pressure on to the ground and it seemed as if he is not touching the ground with his feet. While running, I observed that he ran with his shoulders stooped to front which was not a healthy way of running, this can hurt his shoulder with time. When I asked the class do sit –ups, he could not get up properly and had to place his hands on legs. I could see that Edwin was not enjoying the sit – up movements. 2. While comparing what I read in book and activity of Edwin it can be understood that what Edwin was doing was not exactly right. The walking part can be understood as he his hyper but to place shoulder stooping while running is not a recommended activity. Doing sit – ups he was normal as

Operation Management Essay Example | Topics and Well Written Essays - 6000 words

Operation Management - Essay Example Indeed recognition of a modern telecommunication infrastructure is very much essential for boosting up the growth of the economy as well as its social well being (U. S. Industrial Outlook, 1994: Business Forecasts for 350 Industries, 1994, p.28). The report deals with a small US based Telecom Company and its application of operation management practices backed with diverse theoretical frameworks of operation management (discussed in the theoretical framework section). The company in application is basically a provider of telecom manufacturing services to various small scale technology companies. The company has employee strength varying between 30 and 35 and is situated in the United States of America. The areas of specialization of the company are circuit cards manufacturing, system level assemblies and precision sheet metal. The company also receives funds from a big telecom company which provides products like metal chassis and assemblies. Coming to the development pattern of the company, the revenues of the company in the fourth quarter of the year 2012 increased by a small percentage compared to the fourth quarter of the fiscal year in 2011 but the net income of the company declined significantly as compared to the previous year. The growth of the company taxed the current operational processes and a necessity for an automated solution was necessary for the purpose of processing as well as analyzing the telecom invoices. There was also an increase in the number of employees by the company for meeting the demands of the customers and also there were escalations in the number of services being purchased by the employees of the company. The cost per employee also increased because the employees used cell phones, pagers and other electronic gadgets without proper oversight. There was also increase in the costs of internet access for the telecommuters. An urge for Total Quality Management procedure was highly felt. There was development in the information techn ology database along with the advancement in the tools. But the development in the IT tools was not properly engaged in streamlining the billing procedure of the company. Data collection in the United States is more or less straightforward but there is a great difference in the billing processes among various countries as various countries using different ledgers and various global solutions and also with respect to the knowledge of global currencies. Variations in vendor commercial performances added layers of intricacies to the billing organization chore. It can be stated that the company’s financial strength is declining a bit but the company also has a potential market presence and directs towards maintaining a strong position for itself. 2. Outline of the purpose of the study The company encountered a bad phase of revenue decline from year 2004 to 2007 during which it served some of the big companies in the telecom industry as its client. The problem was that these were all high volume but low margin accounts and pricing pressure adversely affected the company’s profit portfolio. After that it moved into the domain of military and aerospace industry which escalated the company’s growth to a certain level. But the military and the

Porters Five Forces of Competition Essay Example for Free

Porters Five Forces of Competition Essay Porter’s Lesson: Michael E. Porter’s article, the five competitive forces that shape strategy, is an article that dissects the true underlying factors of competition and industrial structure. Throughout the context of the article, Porter thoroughly explains how competition and profitability does not only derive from production of goods and services or the level of sophistication of a firm. Instead, he claims that in order for an industry to be truly competitive and profitable, the industry as a whole must hold a solid structure. Porter educates the audience by introducing the five key forces of strategy that will essentially lead to a firm’s prevalence of competitiveness. He labels these forces as direct competition, customers, suppliers, potential entrants, and substitute products. Porter claims that each of these forces of competition plays their roles within any competitive and even temporarily non-competitive industry. Porter’s main lesson for his audience is that in order for an individual firm or an industry to succeed, it must strategically know how to react to any shift within the industry, whether its competitiveness, supply and demand, economical issues, potential entrants, or even natural issues. Porter also strives to explain how a company could or could not earn a return on investment based on the intensity of the competition within the industry. All in all, Porter explicitly explains each of the five forces that shape an industries competition with a breakdown of different factors for each force, as well as real life examples that make the topic very clear for the audience to understand his lesson. Analysis of the Lesson: Of the five forces, Porter clearly educated the reader about the importance of potential entrants and their threat to an industry. I felt that one of Porter’s greater lessons in this matter was when he described the seven major sources of entry barriers, and how an incumbent can strategize to react to the competitiveness of the industry if a desired entrant were to exist. One aspect that really sparked my interest was when Porter went about explaining the entrant’s hesitancy of entering into an industry based on the level of retaliation from the existing firms within the market. On the other hand, it was also interesting to know that the entrant could also alarm the incumbents, when the entrant has a large amount of capital to invest as they enter from another market which they succeeded in. Another force that Porter dissected is what most people would think of in reaction to the term competition, and that is direct competition of one firm and another, or for the lack of a better word, rivalry. Porter made a statement, and that was, â€Å"The degree to which rivalry drives down an industry’s profit potential depends, first, on the intensity with which companies compete and, second, on the basis on which they compete.† As Porter discussed the different factors that affect the intensity of a rivalry, he noted that intense rivalry tends to destruct profitability if the battle between two firms is focusing solely on price because at that point, price competition is simply transferring profits directly from an industry to its customers, which will ultimately result in the degradation of an industry. I couldn’t agree more with Porter about the fact that when it comes to rivalry between multiple firms, the industry can find an advantage when each competitor aims to serve the needs of different customer segments, by focusing on a variety of price, products, services, features, or brand identities. Most people would think of a rivalry in terms of competition, and not necessarily take the time to think of other factors that are just as important when it comes to an industry’s competitiveness. Many are so focused on what goes on within their own market that they forget to acknowledge the outside forces until it slaps a firm across the face. Porter used an example of the photographic industry as he explained the importance of substitute products. Here he argued that long time competitors such as Kodak Fuji, two large photographic film companies, were in a position to lose profitability if they didn’t focus on outside forces, such as the entry of digital cameras. Although they are not as profitable as before, both companies made large investments, along with large amounts of research and development, and both prevailed in continuing to be somewhat profitable and slightly competitive in their industry rather than falling off all together. After reading that example, I instantly thought of different firms that didn’t focus on innovating at times where substitute products came into play, and those companies are no longer around. A few examples of companies that fell or are bound to fall are Blockbuster, Circuit City, Best Buy, K-Mart, and Sears. Once Porter ended his presentation of the five forces of competition and profitability, he continued to approach his final lesson, and that is the value created if a strategist accurately analyzes the five forces of competition within an industry. He enlightened the audience that if a strategist understands the competition within the industry, he will not only prevail beyond existing rivals, but could also uncover new opportunities such as differences in customers, suppliers, substitutes, potential entrants, and rivals that can become the basis for distinct strategies leading to superior performance. The only minor detail I felt that should have been added to this section on value is the possibility of losing value based on time devoted towards each force. Porter most definitely stated the facts when explaining the potential for new opportunities if understanding the industry as a whole. One thing he didn’t explain is what could also happen if a strategist possibly focuses on one aspect for too long, or fails to devote enough time to one competitive force versus another. I would imagine that this could possibly cause problems to arise rather than opportunity if a firm were to not manage its strategic time wisely. My Takeaways: I am fortunate that I am currently involved in a family business that allows me to relate to so many aspects of this article. My family currently owns and operates a five-store, soon to be six, supermarket chain in several parts of southern California. Like many other businesses, the everyday operation of a supermarket is exposed to countless aspects of business and its overall environment. I myself am within the world of supermarkets six out of the seven days in the week, and I can most definitely admit that this article completely enhanced my understanding of the terms competition and profitability. The amount of connections I could make with topics in this article to my everyday work is countless. For this paper, I’ll simply discuss what stood out most. First, I’ll have to give my takeaway on price competition and bargaining power. Item prices throughout the stores are what I’d consider to be the bullets in a gunfight between two competing supermarkets. There was a topic I discussed in my analysis that stated, â€Å"Firms that solely focus on price competition ultimately gives industry profitability to the customer.† In the supermarket industry, buyers constantly negotiate with suppliers for the lowest costs to provide customers with the most aggressive prices. This also relates to the section on buying power that Porter touches on. Here I learned, any store can simply raise prices or drop prices at store level, but the company that will prevail is that who is dominant in getting the lowest cost from the supplier, resulting in more aggressive margins verse the competitor. If both you and your competitor have the same price on one item, allow the competitor to give its profit to the customers by you being the one to pay less for the supply. The second factor that I can relate to which I will discuss is threat of new entrants and retaliation. If someone pulls up a map of supermarkets in a specific area, they will find seven to ten different supermarkets in a five mile radius. Competition from one company to another usually occurs within each region. At times, successful independent supermarket chains will raise awareness of other supermarket chains in a specific region by preparing to open a new store or buying out a current store that is not profitable. This is when the incumbents will do everything in their power to keep their customers from going to the new store that is most likely going to enter with highly aggressive pricing. At this time, you will see incumbent’s prices dropping, promotions increasing, advertisements become incredibly aggressive, prizes being given out, and any other form of retaliation a company can perform to keep its market share. As stated before, the connections are countless, and I could truthfully admit that I could write a twenty page paper on all the topics I can relate to in this article. I discussed a few relations above, but I must also state that this does not limit what I took away from Porter’s article that I can apply to my family’s business today. All in all, it was a highly educational read and a great tool for any business who seeks to increase competitiveness and profitability, let alone a great tool for any individual who plans to one day be a successful businessman.

Environment Industry Marketing

Environment Industry Marketing The report is about the analysis of the environment of automobile industry and the marketing strategy for Ford Motor Company. It initiates with examining of external environment of automobile industry by using PEST analysis and Porters five forces analysis. After the internal analyses that focus on the resource audit on brand, products, markets, technology, people and son on, the value chain analysis of the company will be conduct. Then the generic competitive strategies would be discussed through SWOT analysis, Ansoff Matrix and BCG Matrix in order to identify the general business strategy taken by the Ford Company. After specifying the company strategy by those analysis tools, the strategic evaluations would be drawn together with the strategy control methods. Finally, a suggested recommendation for the company future development will be mentioned at the end of the report. I. INTRODUCTION 1.1 Aim of The Report This report aim to identify the external environmental of the global automobile industry, measure and evaluate viable and sustainable marketing strategies using by the Ford Motor Company. Through appropriate theoretical concepts and models, together with appropriate methodologies, the organization within its contextual setting will be carefully examined, and justify recommendation will be mentioned. Though the report, how a successful corporation is operated and how its business strategy is implemented and controlled will be understood. 1.2 Company Background Ford Motor Company is an American multinational corporation and one of the worlds largest automaker based on worldwide vehicle sales. It has manufactures and distributes automobiles in 200 markets across six continents and has about 300,000 employees and 108 plants worldwide[1]. Ford now encompasses many global brands, including Lincoln and Mercury of the US, Jaguar and Land Rover of the UK, and Volvo of Sweden and one-third controlling interest in Mazda as well[1]. Ford introduced methods for large-scale manufacturing of cars under different brands and large-scale management of an industrial workforce and its combination of highly efficient factories and low prices revolutionized manufacturing had made the company successfully become a world leading auto manufacture. 1.3 Rational of Company Selection Automobile industry is a consistant developing industry in the global in the 21st century. Ford Company is a world leading automobile manufacture, which has its business all over the world. To analysis the global automobile industry environment and the development strategy for such a world famous company would be a greate help to understand how business strategies are generated, implementated and controlled and meanwhile to see how would the company do to keep its business perform well when facing a complicated environment and a decline market. 1.4 Company Vision, Mission and Value The companys vision is to become the worlds leading company for automotive products and services. And the companys mission is to become a global, diverse family with a proud heritage, passionately committed to providing outstanding products and services. And together with a company value that do the right thing for our people, our environment and our society, but above all for our customers[2]. Based on its vision, mission and company value, the Ford Company is endeavor to keep its leading position in the global, and make effort to provide excellent products and services that satisfied its customers. Approaches that be taken to fulfill it goals and objectives with considering the harmony of business environment and modern society. II.EXTERNAL ANALYSIS 2.1Environmental Analysis 2.1.1 Industry Background The world automobile industry has well developed for many decades and stable progress was made during recent years. Now the automotive manufacturing sector produce over 60 million vehicles every year[3] and contribute about 2.45 trillion Euro annual revenues[4]. There are numerous world famous carmakers all round the global, and although the competition in automobile industry becomes more and more fierce, it is still one of the biggest markets in global industry. 2.1.2 PEST Analysis Finlay[5] point out that remote environment affect businesses by an indirect way and would cause changes in a companys operation. The automobile industry touches on a wide range of aspects, such as manufacture, supply chain, retailing and so on. As a result, many factors such as government policies, local regulations, and social culture differences would influence this industry. By modeling the remote environment with PEST analysis (see appendix I), factors that would affect the global automobile industry would be examined. 2.1.2.1 Political and Legal .Competition Policy Anti-monopoly policies such as the EU competition policy tack several barriers to competition to make sure firms operate under a certain legal framework[6]. This policy has force a perfect competition in automobile industry and will absolutely affect auto manufactures marketing strategy to some extend through preventing firms from colluding by price-fixing and as well controlling the size of firms. . Environment Legislations Nowadays, much attention has been devoted to the environmental issues. Organization such as European Environmental Liability Directive has formulated many laws and regulations for environment protection[7]. Those legislations force manufactures to think over the environmental damage their operations may bring along, so that manufactures have to take action to protect the environment. . Automobile Industry Legislations and Policies First, regulations in many regions have introduced different emission limits for diesel and gasoline vehicles. Since 2005, all automobiles have to reach the Euro 4 emission standard in European countries[8]. And in America, stricter emission standard is set since 2005[9]. Besides, some governments are encouraging automakers to produce environmental friendly vehicles. For example, UK government had asked automobile manufactures to design new ultra low carbon family car in 2003[10], which says can be the step stone of the new generation fuel efficiency cars. .Taxation With the imposition of a fuel tax, consumers will have to think more carefully about their purchasing decisions. In the global, many countries has very high fuel tax, such as in the UK, it has took tax higher up to 81.5% of the total price of fuel[11]. And in Europe, EU has imposed a minimum taxation of 0.287 Euro per liter on gasoline[12]. As a result of such a high fuel tax, the usage of cars would be reduced to a great extent for many people. 2.1.2.2 Economic .Economic Growth and Inflation For these years, the global economy is growing steady. Predictors say that the average world growth rate of 4.9 percent in the period 2003-2006 will continue at least for the next two years[13]. In terms of inflation, there is a survey shows that an increasing global inflation with the annual rate of consumer price inflation in the U.S. went up to 4.2 percent in May,2007; 2.2 percent in Great Britain and 2.5 percent in the Euro zone[14]. As a result of the increasing inflation, people may prefer to spend their money right now instead of saving money in the bank and it would encourage people to consume products such as automobiles. .Trade Globalisation has removed many barriers to cross-border activities and international trade can create great opportunities for local businesses to expanding their business into new areas overseas to meet a whole new set of potential customers[15]. The ever-closer international business relationship would provide the manufacture more cost-effective resources and meanwhile provide customers the opportunities of wider choices. .Labour Force The unemployment number in the global is increasing every year. It is said that no matter in the developed countries like United States and the United Kingdom or in the developing countries in China, and India, they are generating less employment than it has in the past even though economic growth is strong[16]. So, in many places all around the world, the speed of job creation cannot catch up with the pace of population growth. This large number of unemployment indicates that many people may have not have steady income to afford a car. .Personal Income and Distribution of Wealth Despite a high and growing global average income[17], global distribution of wealth, consumption, and opportunity still remain severely unbalanced. The wealthiest 20 percent of the population consumes 80 percent of the resources[18]. As a result, people who could afford an upper class product only account for a small proportion of the total population and most people only has the average income. 2.1.2.3 Social-cultural .Demographics population Although recent long-term demographic projections suggest a fast deceleration of global population growth, evidence shows that the number of elderly people is growing fast[19]. As a result, manufactures should consider product that oriented to the elderly. household Some experts claim that there was a decline in the average size of household in the 21st century[20]. Due to the increasing number of elder people and the smaller size of household, I think the small car may become the main stream for its practicality. .Private and Public Transportation Though the public transportation may not be the first choice of some people, it is still the best substitute of private transportation such as private cars. This is especially true when increasing automobile usage generates some negative impacts such as congestion, traffic accidents and additional vehicle emissions. So some government is tending to shift people away from private transportation to public transportation with the effort that improving the performance[21]. .Environment Issues Environmental problems that touch us all has now has drawn the attention of public. People become more awareness about environment issues such as air pollution and greenhouse gas emission. For example, Public are informed by many channels about the impacts of transport can bring, such as the climate change, human health affections and loss of biodiversity [22]. As a result, consumers may become more cautious when purchasing cars. Meanwhile it is obviously the usage of environmental friendly products would turn up an increasing trend. .Other Social Concerns car parking Parking can be a big problem for many drivers. It is always hard to find a place for parking and the price charged for parking is sometimes goes very high [23]. As a result, some people would rather to use public transportation instead of using their private cars. road safety Road accident is always a big issue for drivers. Take UK for example, according to the 2005 annual report of UK department of transportation[24], there is a total number of casualties in 2005 were 271,017 with a number of 3,201 people killed and 28,954 injured. The high risk of driving would influence consumers decision on purchasing. public health Recent years some diseases such as SARS had challenged social stability[25]. This had effect peoples customs and their behavior to some extend. For example, there is a sharp decrease of public transportation usage rate during the period of SARS in 2003. These public health issues more or less have influenced the global automobile market. 2.1.2.4 Technology .New Energy Since increasing attention has paid to environmental issues, researchers are searching actively for new exploitable resources that can instead of petrol and diesel. Bio-fuels are one of the most favorite substitutes at current, which says made from renewable resources such as agricultural crops or waste. They are more environmental friendly and can be refined as conventional petrol that used in todays engines[26]. Another substitute is natural gas that is relatively cleaner compare with other alternatives. Besides, it is claimed that natural gas is not only a cheap energy, but also can well suited to motoring uses[27]. In addition, Lewin[28] believe hydrogen fuel cell cars that will hit the market in near future and many automakers are planning to launch this kind of product. Besides, solar power is also a feasible substitute for carmakers. It is claimed that the very first solar power deal for reviving car batteries had made by a Canadian manufacturer of solar panels with the VW[29]. .Computer Aided Design Program Wernle and Bolduc[30] point out that vehicles design in the new century must be distinctive and alluring so that it would win a ideal market share. It is always a hard and time consuming process for car designer to design a car that not only combine with great comfort and safety performance, but also has unique style. Now, with the help of some computer programs such as Alias it would save much time for automakers to get cars to market quicker by reducing the number of clay models and prototypes[30]. . GPS and Car Navigation System It is report that Garmin Ltd., the largest GPS device maker in the world had sold around 5 million units in 2006 for personal navigation equipment[31]. Nowadays, GPS becomes more and more important to car drivers in every day life. With the help of GPS system information associated by odometers, gyroscopes[32], a car navigation systems can get drivers wherever they want to go. Information is transmitted by autonomous navigation systems without the participation of an external server by the use of a two-way communication between navigation center and the onboard vehicle sensors. The system can calculate the optimal route automatically and then give necessary guides and some programmes even can provide users with additional information such as hotels and shopping malls showing on its digital maps. As GPS and car navigation system has widely accepted by many people, it will become an important factor when people making their consideration. 2.2 The Structural Analysis of Industries Competition between firms is crucial to modern economies[33]. In competitive environment, there is a set of external influences which is able to affect organisations action[34]. Organisations have to fully understand that environment in order to make effort to create competitive advantage so that to achieve success. In the following part, Porters five-forces (see appendix II) approach will be used to examining the competitive environment. 2.2.1 The Threat of Entry Johnson[34] suggest that the barriers to entry determine the threat of entry. If the barriers are high then the threat of entry would be relatively low[35]. The entrance barriers in global car industry can be proposed as following: . Economies of Scale Since the ever falling car price[36], in order to reduce cost, many carmakers keep increasing their output volume. For example, Toyota Motor Manufacturing had increased from 220,000 to 285,000 on Toyota Corolla and Avensis models in UK 2004 annual production capacity and Mazdas domestic production capacity has increased by 14 percent in the same year[37]. Thus, new entrants who want to come in this industry have to come in with either at a large scale and risk strong reaction from existing companies or they have to come in at a small scale and accept a cost disadvantage[35]. . Production Differentiation For carmakers, it is always hard to create distinctive products, as the basic techniques of car manufacturing are no longer a secret for few manufactures. Now the focus is gradually turning to safety[38], style, comfort and new technology for example a computer control panel such as providing the driver with telematics, GPS[39] because of the quality gap among the different manufacture become narrower. As a result, it would obviously more time consuming and would spend more money for those carmakers to design a new model that is different from the competitors. .Capital requirement of Entry To entry the automotive industry requires not only advanced technological but also enormous capital[40]. It costs a lot on designing a new model, production, distribution and so on. And the larger the scale the company has the more capital would be spent. So entrants who want to come into this industry should first make sure if they have enough money. . Cost Disadvantages Independent of Scale Porter[35] state that established companies may have cost advantages such as proprietary product technology, favorable locations, favorable access to raw materials. Many famous carmakers have already established their cost advantages. Take the example of Ford, it spend around 450 million on automotive research and development in Britain to keep advanced technology every year. As a result, it is difficult for a competitor who does not have cost advantages to break into the industry. To sum up, the entry barriers in world automobile industry is relative high, so it is not an easy work for new entrants to come in to this field. 2.2.2 Bargaining Power of Suppliers Suppliers may have strong power over the industry if the industry is dominated by few suppliers or the switching costs is high to change one from another [34]. When considering the components segment of automobile industry, it is now facing a globalization trend. Rivals not only exist in the domestic market, but also rise from abroad, which means that the components segment is full of competition and the bargaining power of suppliers would be reduced. Beside, car companies are now seeking component makers and original equipment manufacturers in some developing countries such as India, China and Far East in order to save money[41]. Honda, which used to source major part of its components from UK suppliers, for example, is now reducing its UK vendor base. As a result, this worldwide sourcing trend has become a threat that limited the power of suppliers. In addition, in auto industry there is a trend of allying with other manufacturers to share design and development costs recently. It is said that vehicle manufactures are working together much closer with their partners and try to develop vehicle platforms jointly. Most of large car manufacturers like Ford, GM, and Volkswagen have cut down their number of platforms[42] and some models will use the same platform in order to reduce cost. Manufacturers can not only reduce their manufacturing cost to some extend by this way, but also would become more powerful when bargaining with components suppliers because increasing volumes of components may need. And meanwhile it may help manufacturers reduce raw material costs. In a word, the bargaining power of suppliers in global automobile industry is low. It is an opportunity for many car manufacturers that provide a chance of planning their purchasing strategy better and more profitable. 2.2.3 Bargaining Power of Buyers According to Porters[35] theory, buyers have the power of forcing down prices, bargaining for higher quality and more service, and playing competitors against each other. In the following part, the bargaining power of buyer in global industry will be discussed from several different aspects. .Products Differentiation As in global car market the product differentiation is not very obvious due to the auto manufacture acknowledge is no longer a secret. There are lots of carmakers in this market, and the basic functions of their products are almost the same and the only differences would be the design and some other additional functions. So customers can always find alternative supplier who offers a cheaper price, gives the most satisfied product, and provides the best customer service. . Importance of Purchasing If the product is very important for the buyers, the bargaining power of buyers may relative high[35]. In automobile market, the importance of purchasing seems rather low. Statistic shows that in developed countries, the average ownership of cars is quite high, take Britain as an example, statistic shows that 3 in 4 households have access to a car and over half (52%) of all rural households had two or more cars in 2005[43]. So in those countries to purchasing a new car may not be so necessary for most of the families. . Information Searching If buyers have full information about product, demand, market price, their bargaining power would be greater than those with less information[35]. We are now entering a great new era of information. People can seek product information through various methods, such as friends, sales assistant and different medias. And it is said that individuals especially those who are highly involved with the purchase of a product are thought to be more active on information searching[44]. Todays mass media, no matter the newspapers, magazines, radio, or television, all contain a large amount of information. Besides, the entering of Internet era has simplified the process of information searching process to a great extend. All these factors mentioned above have provided consumers with more information. What it comes down to me is that in automobile industry, the car manufacturers marketing strategy would be effected by the relative high customer bargaining power. 2.2.4 Pressure From Substitute Products Substitutes play a limitation role in industry[35], it provide the same function as the product of the industry to restrains industry making profit. There are several means would be the substitute products of automobile. . Public Transportation Public transportation would come first to most of people when thinking about the substitute of private cars. More and more people are willing to give up cars and use public transportation especially when the service of public transportation is better. Besides, since there are increasing number of SOHO workers, many people choose to work at home by Internet. So they do not need a car to drive to work, thus the significance of owning a car is decreased. . Car renting and Car Sharing Today, the ever-rising petrol price becomes another factor that forces many people reduce the usage rate of their cars. Many people choose to rent a car for travel or share one car between friends instead of driving alone. As a result, demand of purchasing a car would be decreased and there is increasing demand for car rental especially now some rental firms have provided more complete and customerizedservices[45]. To summarize, public transportation, car renting and car sharing could be some of the substitute methods of owning private cars. All of these means have pressed threaten on the world auto industry. 2.2.5 Intensity of Rivalry Among Existing Competitions Porter[35] point out that rivalry occurs for the reason that one or more competitors feels pressure or sees the opportunity to improve position. In global automobile industry, rivalry among the competitors is very strong and the major competitors are closely balanced so that the rivalry is increasing intense. Besides old rivals such as General Motors, Ford, Volkswagen, those Japanese carmaker like Toyota and Honda now are gaining stronger power in this industry. Because there is little differentiation among the products, when deciding purchasing, one rival is always compared to another constantly in price, quality, durability, and many other aspects. As a result, in order to gain market share in the automobile industry, company should provide better product as well as better service so that it could take the market share from their competitors. 2.3 Strategic Group Analysis To identify strategic groups which has similar strategic characteristics, following similar strategies or competing on similar bases can help to understand the most direct competitors and of any given organization and also can help identify potential opportunities and threats[34]. Strategic groups in automobile industry can be identified according to the products class and status such as those upper class manufactures such as BMW, Mercedes Benz, and up medium, medium and lower medium manufactures such as Honda, Ford and other market segment such as racing car and so on. In different regions, each groups power are vary. It is essential to Ford Company to identify different situation in different places all over the world, so that the business strategy can be chosen properly. III. INTERNAL ANALYSIS 3.1 Resource Audit Resource audit is useful in understanding strategic capability according to Johnson[34]. To identify the availability of resource that can be used is important for a business. In the following, the resource of Ford Company would be examined. 3.1.1 Brand The Ford Motor Company controls the many car marques wouldwide, such as Jaguar, , Land Rover, Lincoln, Mazda, and Volvo[1]. Through acquisition, Ford Company got control of some famous brands such as Land Rover, Jaguar and Volvo. Based on the customer knowledge and trust of those upper class brands, the sales of other segments and brands of Ford car had been promoted[46]. By building the image of Combining solid refined design and the best new technologies available[2], the company becomes a powerful rival in the market, and the brand has widely accepted by many people. 3.1.2 Products and Market Ford has numerous locations where Ford vehicles are developed, manufactured, sold or distributed[47]. These plant and office locations work to provide a basis of the companys leading position in car market for many years, which take responsibility in manufacturing vehicles and power products, technological developing, purchasing and distribution its products all around the world. Although with high cost-effective Ford models such as Transit, Fiesta and Focus that have become the best seller for many years[82], there would be a problem of shrinking of market and declining in profitability recent years. 3.1.3 Finance According to Ford Company 2006 annual report[48], although the company is at loss during the year for the unsatisfied performance in North American market, the situation in Europe market is still profitable with the sales of vehicles that generated the major income and cash of the companys automotive sectors revenue. In addition, the interest on finance receivables generated the primary income of the companys financial services sectors revenue. Based on its vehicles and financial service sales, the company has the ability to support some technology development or have some further investment such as diesel engineering[49]. 3.1.4 Technology Ford invests heavily in new technology. In Britain only, it spends around 450 million on automotive research and development annually. In Dunton Technical Centre, it has the largest automotive design and engineering facility in the UK and one of the most advanced facilities of its kind in Europe[47]. The emphasis on technology enables the company have a solid basis of product development. As a result, competitive advantage through new technique, programmes such as digital in-vehicle system called Sync created with Microsoft[50] that is turning out this summer is a good example. 3.1.5 People In order to equip its employees with stronger capability, Ford offers well equipped learning resource centers and training programmes for all employees. These human resource management actions has not only trained sufficient qualified employees for the company, but also provided a base for producing conversations of companys strategic change[51]. On the other hand, recent bad performance forced Ford Company to shear its employees. It is said that a downsized Ford would shed up to 30,000 jobs and 14 factories by 2012 in order to be more innovative[86]. 3.2 Value Chain Analysis Value chain (see appendix III) analysis has been widely adopted as a way of understanding the relationship between strategic capability and organisations resources. As to Ford Company, in its very early years, the company has controlled the entire value chain[52], now it endeavors to integrate its multi-tiered value chain which include chief elements such as real-time quality feedback from the market to tier, inventory reduction, transaction reduction, collaborative visual design studios, rapid customer feedback, accelerated time to market[53]. Through those actions, the resource utilization is enhanced so there would be less resource is wasted during the production and transaction. Besides, the cost efficiency has increased by building the economies of scale, reducing supply cost and effective communications between suppliers and buyers. In addition, a carefully planned marketing mix and a better service would promote effectiveness, such as the efforts that the Ford Company put on CarsDirect and online selling[54]. IV. GENERIC COMPETITIVE STRATEGIES 4.1 SWOT Analysis 4.1.1 Strengthens Companys Large Scale Ford Company is one of the largest automotive manufacturers in the world. It manufactures and distributes automobiles in 200 markets across six continents[1]. The large size has brought the company economies of scale as well as name recognition and customer trust. Product Diversity Through acquisition, Ford Company now has owned many world famous brands include Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo[1]. The companys products has penetrated into every segments of auto industry and each brands has its own strengthens in different segment, such as Land Rover is famous of its 4X4 vehicle and Lincoln is a well know luxury car. Profitable Financial Services Division The financial services division, Ford Motor Credit, plays a key role in keeping the company afloat. Even the automotive division are reported at loss[48], there is evidence that the financial services still remain profit. As a result, the revenue made by financial services division would be a great help when its automotive sector is not performing well. Strategic Alliance By cooperating with some strategic alliance, the company can benefit a lot from the advantages of their partners. Ford has announced to start offering Sony-branded audio systems in Ford and Mercury automobiles[55] and Microsoft software will be used for the Ford Sync radios[56]. Besides, Ford Company also support racing teams such as NASCAR[57]

Cell and Voice Over Internet Protocol Research :: essays research papers

Cell and Voice Over Internet Protocol Research Our contract is coming up for renewal from Nextel our current provider of cellular service, and SBC our local and long distance landline service. I will research three cellular service and Voice over the Internet Protocol providers (VoIP). By looking at three of each will give a good idea of what is out there and what trends of services to expect. For cellular, I will choose a phone to increase our work force productivity that cannot be done with our current type of phone, and find a plan that can meet our changing needs. For VoIP, pricing plans and equipment included. Finally I will give my conclusion on which companies to go with and why. Cellphone Providers Cingular phone   Ã‚  Ã‚  Ã‚  Ã‚  BlackBerry 7100g Features: Built-in Speakerphone, Bluetooth capable, Polyphonic speaker and downloadable ring tones, Downloadable games and graphics, Blackberry handheld software, and Quad-band world phone operates on 850/1900 and 900/1800 MHz GSM/GPRS networks (http://onlinestorez.cingular.com/cell-phone-service/cell-phones/cell-phones.jsp?source=INC230056&_requestid=50674). Clingular plans Nation 1000 FamilyTalk w/Rollover – 79.99 first two lines, 14.99 per additional line this package comes with 1000 anytime minutes, nights and weekend is unlimited, mobile to mobile is unlimited. Nation 1500 FamilyTalk w/Rollover – 99.99 first two lines, 14.99 per additional line this package comes with 1500 anytime minutes, nights and weekend is unlimited, mobile to mobile is unlimited (http://onlinestorez.cingular.com/cell-phone-service/wireless-phone-plans/cell-phone-plans.jsp). Nextel phone BlackBerry 7520 features: Walkie-Talkie Services, Speakerphone, Color display (65K colors), Group Connect Walkie-Talkie, Multimedia Messaging Service, Direct Talk - The Off-Network Walkie-Talkie, Web and Email Capable, Ring Tones, Applications & Games, Adheres to Military 810F Spec (http://nextelonline.nextel.com/NASApp/onlinestore/en/Action/DisplayPhones). Nextel Phone Plan Nextel National 1000 has 1000 monthly minutes for 55.99, the night and weekend minutes are unlimited direct connect is included. (http://nextelonline.nextel.com/NASApp/onlinestore/en/Action/DisplayPlans) TMobile phone The BlackBerry 7100t is the first of its kind--a full-featured mobile phone that delivers the power of BlackBerry e-mail. This is one sweet little phone, loaded with all of the cool features you want, like integrated Bluetooth ® connectivity, speakerphone, and downloadable ringtones. Moreover, surf the Web the way it was meant to be with an ultra-large, high-resolution color screen (http://www.tmobile.com/products/overview.asp?phoneid=246167&class=pda). T- Mobile phone plans The FamilyTime plan is 69.99 a month with 1000 whenever minutes, and the weeknight and weekends are unlimited (http://www.t-mobile.com/plans/FamilyTimeRatePlanDetails.asp). Voice over the Internet Protocol What is VoIP/Internet Voice?   Ã‚  Ã‚  Ã‚  Ã‚  VoIP allows you to make telephone calls using a computer network, over a data network like the Internet. VoIP converts the voice signal from your telephone into a digital signal that travels over the internet then converts it back at the other end so you can speak to anyone with a regular phone number.

Essay --

ISSUES, CHALLENGES AND WAY FORWARD There remains considerable gap between the health HR in position and that required for public health sector. This shortage is attributed to delays in recruitment and postings not being based on work-load or sanctions. Lack of sound HR management policies has also resulted in irrational distribution of available HR and suboptimal motivation. The envisioned public health cadre to manage NRHM and NUHM (or now National Health Mission) is not yet in place. Insufficient focus on public health is a major weakness of the system and must be urgently corrected. Effective public health management requires a certain degree of expertise and it calls for an urgent real need for a dedicated public health cadre (with support teams comprising of epidemiologists, entomologists, public health nurses, inspectors and male multipurpose workers) backed by appropriate regulation at the state level. Availability of skilled HR remains a key constraint in expanding health service delivery. A mere expansion of financial resources devoted to health will not deliver results if health manpower is not available. An expansion of public sector medical schools and public health institutions is necessary in this process. The norms for public health service providers were set long ago and are considered very inadequate according to today’s requirements and expectations. Even those under IPHS also need to be revised periodically based on the rapidly changing modern times. The shortfall of doctors and specialists is a serious issue. Availability of public health functionaries is very low. The doctors and specialists in position do not necessarily mean that they are physically present at their respective centres and performing their du... ...the convergence and development of public health systems that are responsive to the health and well being of the people, it is important to recognise the need for a comprehensive strategy that must include the public health HR (both professional and auxiliary health personnel). In India, availability of health HR in the public sector is quantitatively inadequate and most of the States/UTs lack a dedicated public health cadre. To develop a robust public health cadre in our country, the public health HR needs to be strengthened in a systematic, organised and well-planned manner. Though there are certain issues and challenges, yet the creation of a new public health cadre would result in an efficient public health management system delivered by teams of well-qualified and competent workers who would be able to deal with changing public health priorities in the country.

Aig Scandal

[pic] THE INTERNAL CONTROLS AND FINANCIAL ACTIVITIES THAT LED TO THE BAILOUT OF OUR NATION’S LARGEST INSURANCE COMPANY By: Monte Schwartz PREFACE Anyone who watches TV has most likely seen the American International Group (hereinafter AIG) commercial with the little boy who walks into his parent’s room while they are sleeping. When his mother asks if he had a nightmare, he says â€Å"no† and that he’s worried about his parent’s financial future. After a twenty-second spiel about his worries, the father says, â€Å"Buddy, we’re with AIG† and he goes, â€Å"Oh! and walks out of the room and (assuming) back to his bedroom. [1] AIG, established as a Delaware corporation in 1921 by Maurice â€Å"Hank† Greenburg, is primarily engaged in insurance-related and financial activities in the United States and European countries (over 130 combined total); including but not limited to home insurance, car insurance, life insurance and various investments. Imagine that this boys parents’ discover one day with their financial planners that they lost all of their investments and insurances in which they paid dearly.The parents had agreed to make an investment so they and their children could have a secured future protection against market risks. Well, it became a reality for many Americans. This devastating loss left many taxpayers with misappropriated assets along with a burden to pay the â€Å"bill† for the bailout of AIG. PART I: HOUSING MARKET SCANDAL: VIOLATIONS IN BUSINESS OPERATIONS To understand the accounting scandal of AIG, one must first understand its business transactions and operations leading up to the SEC investigations. In 1993, President Bill Clinton signed into law the OmnibusBudget Reconciliation Act, commonly known as the OBRA-93 or the Deficit Reduction Act. Part XIII, is our primary focus, the Revenue Reconciliation Act which allows limitations on executive compensations by limiting the deductible for tax purposes to $1 Million unless the compensation was earned through performance, bonuses or equity: ultimately increasing the average executives paycheck. [2] When an executive’s paycheck percentage is primarily a bonus, those profits can lead to decisions that are not in the best interest, short-term and long-term, of taxpayers or shareholders.You may think what this Act has to do with AIG, but this act is the very essence of why AIG failed as a business. AIG had paid its top executives a whopping $165 million in bonuses after it had received bailout funds. In early 1995, the Clinton Administration issued new and revised regulations to the Community Reinvestment Act, or CRA (in which was created by the Jimmy Carter administration) which de-emphasize a lender to make subjective assessment measures in favor of strictly numerical quotas, or as others may say, racial quotas. 3] In simpler terms, private banks were compelled to provide loans to low income famili es and minority neighborhoods as long as the person was making some sort of income to repay the loan and did not require any initiation of a credit check. In more ways than one, this was a Federal scheme that pressured and extorted banks into loaning money to people at high-risk. The new regulations also instructed lenders to take into account how well they responded to complaints from groups such as Minority Community Activist organizations like ACORN.In December of the same year, Henry Cisneros (herinafter Cisneros), then head of Department of Housing and Urban Development (hereinafter HUD), moved Fanny Mae and Freddie Mac towards a requirement that 42% of the mortgages would now serve predominantly minority neighborhoods and low to moderate income families. In 2000, Andrew Cuomo (hereinafter Cuomo), Cisneros’ successor, established an even more aggressive social-engineering goal by increasing the number of mortgages to 50% by method of dramatically hiking Fanny Mae’ s and Freddie Mac’s mandates to buy mortgages to under-serve neighborhoods for the very low income. 4] Cuomo also encouraged them to strongly enter the sub-prime loan markets, which are credit-default swap markets. And who sold the credit-default swaps? AIG did, because it was an insurance on bonds. Large banks buy bonds and insurance policies so that if a company, say General Electric, should declare bankruptcy, the large bank is out on whatever premium amount it paid and receives money from whoever sold the insurance policy, which in this case was AIG since AIG was the biggest underwriter of credit-default swaps. 5] Take for instance, as an example, General Electric (GE)[6]. There are only two (2) reasons as to why a bank would purchase credit-default swaps. Either they do not want to provide the full credit amount as it may be a risk or they are looking to hide something, like a cash transaction. Suppose that Bank A wants to better its business relationship with GE and so GE asks for $70 million on credit. The bank, in return, speaks to their senior credit manager that the maximum they can provide is $50 million, due to risk exposure.However, in order to satisfy the customer, the bank lends the $70 million anyway and writes off the $20 million difference by purchasing a credit-default swap from Bank B. The only problem is, GE believes the entire $70 million came from Bank A. Now, Bank B was â€Å"AIG Financial Products† (hereinafter AIGFP), a division of AIG. Bank A was Bank of America, Wells Fargo, JP Morgan Chase, etc. PART II: THE ACCOUNTING SCANDAL: VIOLATIONS OF INTERNAL CONTROL There are four (4) most common ways of distorting a company’s financial condition.They are revenue recognition, cost or expense recognition, accounting for reserves and accounting related to business combinations. [7] AIG distorted their financials via accounting for reserves. What does that mean though? In accounting, companies use reserves to cover future costs such as taxes, possible litigation and pay-off debts or other liabilities. When a company intentionally falsifies information and misleads auditors of true financial reports, these fake transactions are better known as â€Å"sham transactions†.In 2001, the Securities Exchange Commission (herein after SEC) began investigating and making allegations that AIG was providing investors, shareholders and auditors with false financial statements, showing two sham schemes where the company altered its balance sheets through bogus transactions in efforts to conceal the company’s losses on investments related to the credit default swaps. By September of 2003, the SEC filed a lawsuit against a company known as Brightpoint Inc. (hereinafter Brightpoint), in which is a wholesale distributor of electronics.Their allegations included, but not limited to, improper use of insurance policies in attempting to reduce a loss by 11. 9 Million in efforts to show the public a smaller lo ss. As a result, Brightpoint’s Financial Statements overstated their net income. The SEC found their net income overstated by 61%. [8] It was revealed later in the discovery period that AIG was involved in assisting Brightpoint to spread out their losses over a time period. This technique is known as â€Å"retroactive insurance† which combined two policies into one.The two policies were the Retroactive Coverage and a Prospective Coverage. The â€Å"policy† was supposed to cover the cost of losses over a three-year term. The idea was to â€Å"smooth† the financial statement so that the public did not see such an impact of losses by AIG clients. Brightpoint paid a monthly premium for this policy of $15 Million. This tactic, while completely fraudulent, allowed Brightpoint to show an Insurance Receivable of $11. 9 Million. See, SEC v. Brightpoint (2003). Retroactive Coverage is not insurance.It just moved cash from one place to another, which the SEC called a â€Å"round-trip of cash†. Brightpoint deposited monies with AIG and later on, AIG would return the funds; yet mark it off in their books as if they made an Insurance Claim Payment. There was no risk being transferred. Once Auditors realized that this policy wasn’t quite an Insurance Policy, Brightpoint began making â€Å"restatements† to their financial statements. It is obvious that there is fraud when the books require numerous â€Å"restatements†. After the SEC had filed their lawsuit, AIG quickly made agreements to settle for $10 Million.This was only a civil penalty. No criminal penalties were administered by the Federal Courts for this â€Å"Retro-active Policy†. This payment of $10 Million resulted in AIG’s profit a mere $100,000. See, SEC v. Brightpoint (2003). Brightpoint was not the only company received â€Å"assistance† from AIG around the same time frame. Another company, known as PNC Financial Services Group Inc. (her einafter PNC), was also involved. In short, PNC was a Pennsylvania bank holding company. AIG helped PNC to move $762 million of assets off of the balance sheets. 9] By now, it seems AIG was a â€Å"pro† at distorting balance sheets. They didn’t like low net incomes and they helped others by sharing their tactics of â€Å"distortion†. The SEC calls these â€Å"PAGIC† transactions, since net incomes magically show profit. PNC had transferred their assets to another entity which PNC held major interest. They had created three (3) transactions which were intended to reduce their losses in regards to loans and venture capital investments by â€Å"transferring†, according to the SEC summary findings.PNC had then failed to account for these transfers as an asset or a loan which failed to appear on their balance sheets. This reduced their exposure to â€Å"troubled loans and volatile assets†. (See SEC v. PNC Financial Services, Inc. ) These transact ions were obviously structured to benefit PNC and its interested entities by increasing the value of their net income. Recently, as of January 2010, the SEC has also filed a complaint against a company known as Gen Re (General Reinsurance Corporation) which SEC has evidence of involvement in assisting AIG and other Financial Companies in using this sham scheme.The SEC makes allegations that Gen Re â€Å"knowingly provided substantial assistance to both AIG and Prudential in connection with their own violations of the books and records and internal control provisions of the federal securities laws, Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1932. †[10] AIG falsely reported on its financial statements increases to both loss reserves and premiums written via sham reinsurance transactions. Gen Re helped AIG’s balance sheet transactions appear as thought AIG had an increase in loss reserves[11] by $500 million, which obviously was far from the ac tuality.The loss reserves should have been $250 million – half of the claimed amount – according to the SEC findings. There is also another accounting scandal involving AIG and the Federal Reserve Bank of New York. The individual parties involved Hank Greenberg, the CEO and founder of AIG and Timothy Geithner, then President of the NY Fed. Bank. The party investigating was the House Oversight and Government Reform Committee (hereinafter Committee), whose senior chairman is Darrell Issa, also Republican Representative of California.Over twenty-two (22) hearings, discovery proceedings, interrogatories were produced on behalf of the Committee towards Timothy Geithner in why the Federal Reserve ordered AIG to refrain from disclosing in the notes of the financial statements all the facts of the bailout. Geithner, in hearings, attempted to defend the bailout by suggesting that had AIG collapsed, America would face a Great Depression. This answer was something the Committee h ad heard numerous times before. They demanded a new answer.Even if the case is true, that America would have faced a Great Depression, the Committee smelled a bad scene unfolding, especially since two of Geithner’s closest advisors, Mark Patterson (chief of staff) and Henry Paulson Jr. (former ex-chairman of the Federal Reserve), were both ex-employees of Goldman Sachs. In AIG’s bailout, Goldman Sachs had received $13 Billion. In defense to the bailout, Timothy Geithner’s general counsel had claimed that the disclosures were unnecessary since the company’s regulatory filings had offered more detailed information.In opposition to this statement, Issa released a five-page list of derivative transactions, also known as â€Å"Schedule A†[12] which is a comparative list of notional value, total collateral and negative mark to market values, respectively. Notional value is the value of the derivatives underlying assets at spot price (current price). The total collateral posted is the total securities for the guaranteed repayment of a loan and the negative mark to market measures the fair market value of accounts, which can change overtime.Between the three comparisons, it is clear that â€Å"Schedule A† shows little reason for the Federal Reserve Bank of New York insisted that information should be kept private. PART III: THE RESULTS: BAILOUT & BONUSES A â€Å"bailout† is the giving of financial assistance (via the Fed, therefore taxpayers) to a failing business to save it from collapse. A bailout can be through the use of cash or a loan; however it can only happen when a company faces potential bankruptcy.With AIG’s housing market scandal and accounting scandal, it faced bankruptcy because it reported an overstatement of net revenue on its annual financial statements leading investors and shareholders to believe the company was a success. AIG initially received $85 Billion from the government as a loan, and th en sometime in March 2009, they received another $88 Billion. Now that we know what financial assistance was received, term $173 Billion, what did AIG do with all the bailout money? Well, now we can look closer at Figure 1-1 in determine where the money has gone. 44 Million went back into the Banks of the United States. AIG paid itself $600 Million. Golden Sachs received $13 Billion and Merrill Lynch: $7 Billion. The chart also includes bailout money that each of the 50 states received, totaling $12 Billion, even though they were originally supposed to receive $15 Billion. $113 Billion went to guarantees, such as bond guarantees and securities guarantees. If you look closer, you will see that foreign banks and countries received more bailout money than the United States did. France, Germany and the United Kingdom received the bulk of the funds, a whopping $49 Billion.These countries received, rounded, 80% of the AIG foreign funds. See below figure for details of the funds AIG disbur sed to large banks and foreign countries. [pic] And what about that $165 Million â€Å"bonus† contract AIG had? Senior Judicial Analyst, Judge Andrew Napolitano states that (1) the â€Å"existence of a contract is the building block to our commercial society† and that (2) therefore, the contract to pay top executives a $165 million cannot be broken because the â€Å"constitution prohibits the government, federal and state, from interfering with valid contracts and these contracts were valid when they were signed. [13] Much of the debate of where all of the taxpayer bailout funds come into scrutiny but that is another issue of AIG. The majority of the housing market and accounting scandals began during the Jimmy Carter administration when he enacted the CRA. Then, in the Bill Clinton administration, while he may have had good faith intentions to help the minority communities, he literally forced banks to handout loans when the applier had a high credit risk.Then, Cuomo increased the percentage of mortgages that were required to serve minorities via credit-default swaps which AIG were the primary underwriters. This factor, along with the sham balance sheet insurance transactions was the reason AIG nearly went bankrupt. While the bailout certainly helped AIG in avoiding bankruptcy, thousands of American citizens who file and pay annual income tax returns (the 50%), lost their investments and insurances to secure their futures all due to tax-schemers and executives who are high on themselves and want a bigger return. PART IV: AIG:WHAT IT IS NOW Since the discovery of AIG’s fraudulent behaviors in business and financial activities in 2001, the company has had to face many lawsuits from investors and shareholders; some are still pending. The CEO of AIG, Hank Greenburg as well as a few top executives were forced to resign. Some executives received a two (2) year prison term, which isn’t a very long time when considering how much money was misappropriated. Just recently, Oct 2, 2012, the company revealed a new image for their name. They have changed their logo which is the cover image above.They claim the new logo is â€Å"transparent† and â€Å"simplistic†. Does a new logo change the history of a company though? In a company that had so much potential yet failed to secure the futures of the Americans who they insured, the reputation is irreparably damaged and until it repays the billions of dollars back to the government (or, taxpayers). Until then, AIG is owned by the Federal Government. ———————– [1] â€Å"AIG Commercial†  © 2005 < http://www. youtube. com/watch? v=9VvGW98D3XA> [2] Korzenik, Jeffrey D. Forbes. om â€Å"The Tax Code Encourages Big Wall Street Bonuses† Feb 2009. < http://www. forbes. com/2009/02/04/wall-street-bonuses-opinions-contributors_0204_jeffrey_korzenik. html> [3] Money Gather: â€Å"Bill Clinton Helped Cau se the Housing Crisis† September 2008. [4] Morris, Dick. Take Back America. Pg 266, Harper, April 13, 2010. Print. > [5] The Big Picture. â€Å"Credit Default Swaps are Insurance Products. It’s Time we Regulated them as Much. † March 2012. [6] General Electric was in no way shape or form related to the AIG scandal; this is strictly an example. 7] See Pricewaterhouse Coopers LLP, 2009 Securities Litigation Study 30 (2009), available at http://10b5. pwc. com/PDF/NY-10-0559%20SEC%20LIT%20STUDY_V7%20PRINT. PDF. [8] Securities Exchange Commission v. Brightpoint Inc. , (2003) http://www. sec. gov/litigation/complaints/comp18340. htm [9] Securities and Exchange Commission v. PNC Financial Services Inc. http://www. sec. gov/litigation/admin/33-8112. htm [10] Securities and Exchange Commission v General Re Corporation, 10 CV 458, PACER [11] Loss reserves in the Insurance industry are an estimate of the value of a claim or group of claims not yet paid. [12]

Open-Economy Macroeconomics Notes

Ch28 â€Å"Open-Economy Macroeconomics† FOREIGN TRADE AND ECONOMIC ACTIVITY Imports ? goods and services produced abroad and consumed domestically Exports ? goods and services produced domestically and purchased by foreigners Net exports ? defined as exports of goods and services minus imports of goods and services Net foreign investment ? counterpart of net exports Denotes net US savings abroad and is approximately equal to the value of net exports ? ? ? appreciation in the exchange rate and a corresponding decline in net exports; monetary easing does the opposite. The impact of changes in interest rates on net exports reinforces the impact on domestic investment In a full-employment closed economy (always holding other things constant), higher government spending, lower taxes, or lower desired private saving will raise the real interest rate and lower equilibrium saving and investment net exports are determined by the difference between national saving and national investment, which is determined by domestic factors plus the world interest rate changes in exchange rates ? re the mechanism by which saving and investment adjust Domestic expenditures ? equal to consumption plus domestic investment plus government purchases Examples of open-economy saving-investment theory in the small open economy an increase in private saving or lower government spending will increase national saving; this will lead to a depreciation of the exchange rate until net exports have increased enough to balance the increase in domestic saving an increase in domestic investment, say, because of an improved business climate or a burst of innovations, will lead to a shift in the investment schedule; this will lead to an appreciation of the exchange rate until net exports decline enough to balance saving and investment. In this case, domestic investment crowds out foreign investment an increase in world interest rates will reduce the level of investment. This will lead to an ncrease in the difference between saving and investment, to a depreciation in the foreign exchange rate, and to an increase in net exports and foreign investment (this would be a shift along the investment schedule) integration of a country into the world economy adds an important new dimension to macroeconomic performance and policy o the foreign sector provides an important source of domestic investment and a potential outlet for domestic saving o higher saving at home— whether in the form of higher private saving or higher public saving will lead to higher net exports o a country’s trade balance is primarily a reflection of its national saving and investment balance rather than of its absolute productivity or wealth ? The volume and value of imports will be affected by domestic output and the relative prices of domestic and foreign goods – Marginal propensity to import ? the increase in the dollar value of imports for each $1 increase in GDP ? Because a fraction of any income leaks into imports in an open economy, the open-economy multiplier is smaller than the multiplier for a closed economy. OPEN ECONOMY Multiplier = 1/ (MPS + MPm) Where MPS = marginal propensity to save and MPm = marginal propensity to import ? ? – Real exchange rate ? corrects for movements in the price levels in different countries Overvalued currency ? one whose value is high relative to its long-run or sustainable level High mobility of financial capital ? hen financial investments can flow easily among countries and the regulatory barriers to financial investments are low ? Foreign trade produces a new and powerful link in the monetary transmission mechanism when a country has a flexible exchange rate. When m onetary policy changes interest rates, this affects exchange rates and net exports as well as domestic investment. Monetary tightening leads to an ? o o adjustments in a country’s trade accounts require a change in domestic saving or investment in the long run, adjustments in trade accounts will be brought about by movements in the country’s relative prices, often through exchange-rate changes ptimal currency area ? one whose regions have high labor mobility or have common and synchronous aggregate supply or demand shocks. In an optimal currency area, significant changes in exchange rates are not necessary to ensure rapid macroeconomic adjustment European Monetary Union ? one of history’s great economic experiments. Never before has such a large and powerful group of countries turned its economic fortunes over to a multinational body like the European Central Bank. Never before has a central bank been charged with the macroeconomic fortunes of a large group of n ations with 325 million people producing $16 trillion of goods and services. While optimists point to the microeconomic benefits of a larger market and lower transactions costs, pessimists worry that monetary union threatens stagnation and unemployment because of the lack of price and wage flexibility and insufficient labor mobility among countries. The financial crisis of 2007-2009 is the first major test of this new monetary system. Stable macroeconomic climate ? taxes are reasonable and predictable and that inflation is low, so lenders need not worry about inflation confiscating their investments ? promoting economic growth in an open economy involves ensuring that business is attractive for foreign and domestic investors who have a wide array of investment opportunities in the world economy. The ultimate goals of policy are to have high rates of saving and investment in productive channels and to ensure that businesses use bestpractice techniques. Achieving these goals involves setting a stable macroeconomic climate, guaranteeing dependable property rights for both tangible investments and intellectual property, providing exchange-rate convertibility that allows investors to take home their profits, and maintaining confidence in the political and economic stability of the country Success for the countries of North America and Western Europe: robust economic performance o rapid and sustained economic growth emerging monetary system o conduct independent monetary policies with flexible exchange rates, while smaller countries either float or have â€Å"hard† fixed exchange rates tied to one of the major blocks reemergence of free markets Competitiveness ? refers to the extent to which a nation’s goods can compete in the marketplace; this depends primarily upon the relative prices of domestic and foreign products Productivity ? easured by the output per unit of input, fundamental to the growth of living standards in a nation; to a first approximation, a nation’s real income grows in step with its productivity growth ? conclusion on productivity and competitiveness ? as the theory of comparative advantage demonstrates, nations are not inherently uncompetitive. Rather, they become uncompetitive when their prices move out of line with those of their trading partners. The surest route to high productivity and high living standards is to expose domestic industries to world markets and to encourage vigorous domestic competition with foreign companies that have adopted the most advanced technologies –

Fifa world cup 2014 Essay

The 2014 World Cup begins on June 12, when Brazil plays Croatia in the opening match. Reporters and editors for The Times will count down to the start of the tournament each day with a short capsule of news and interesting tidbits. Perhaps the biggest change at the World Cup will be the introduction of goal-line technology for those rare instances of dispute. Far more common in the game are vexing tackles from behind, which FIFA, soccer’s world governing body, has expressed new concern about. Diving, or simulation, or what basketball fans call flopping, remains an act that can enrage players and fans. Potential World Cup referees and assistant referees from Asia, Oceania and Europe who this week attended a workshop at FIFA headquarters in Zurich were instructed to pay special attention to the nasty tackles from behind that halt the flow of play and can lead to injury. FIFA’s head of refereeing, Massimo Busacca, said referees working the World Cup would be instructed to react to any signs of rough play. â€Å"The safety of the players is very important, so the referees have to read the situation carefully at the beginning of the game,† Busacca told reporters. â€Å"If players start committing this type of foul, we have to take action to avoid it. We have to say, ‘We do not want to see this kind of football in this competition.’ â€Å"This is the role of the referee, to try to understand and anticipate. Sometimes the players forget because of the adrenaline. The role of the referee is to say: ‘Do you want to play today, or do you want to take a shower?’ We must try to avoid these situations which can destroy football.† More recently, the focus has been on diving, where players embellish a foul or near-foul in a bid to secure a free kick in an advantageous spot on the field. But according to the English referee Howard Webb, who called the 2010 World Cup final in South Africa, diving is a lesser issue for match officials. â€Å"It’s one of the things we are always asked to be vigilant about because when it’s not accurately identified, it can have quite a damaging effect on the game,† Webb said. â€Å"If you look at the number of decisions made around simulation, they are quite low compared to the vast number of decisions we have to make. Although it’s a small problem, it has a big impact when it does happen, so of course it becomes quite serious.† In Zurich, the 17 referees and 31 assistant referees (linesmen) were taken through a series of medical, physical, psychological and technical tests. FIFA said it had also begun to employ video analysis of match situations to help game officials.  FIFA is planning another seminar, beginning April 7, for officials from Concacaf and South American nations.

Jonathon Livingston Seagull Essay

1. The fictional book, Jonathon Livingston Seagull written by Richard Bach, sold over a million copies during its debut in 1970 and stayed on The New York Times Top Ten list for 38 weeks in a row. The story focuses on Jonathon the seagull’s passion for flying and his belief that there is more to life than scavenging for food. Bach explores the idea that there is more to this life than what meets the eye and the extreme satisfaction you receive when doing something you are great at and have a passion for. 2. The setting of this story takes place on some sea shore where thousands of seagulls live. The sea shore setting described in the book really helps to paint a picture of what Jonathon and this flock of seagulls experienced daily, â€Å"It was morning, and the new sun sparkled gold across the ripples of a gentle sea.†(Bach pg 3) 3. Jonathon Livingston Seagull is the protagonist in this story with his strong drive and persistence to be different from the flock and to be his own seagull. The antagonists in the story are the Elders of the flocks of seagulls because they are very closed mined leaders and they force Jonathon and other seagulls to be outcast from society and ban them to a life of isolation and despair. Chiang was an Elder Gull that taught Jonathon very specialized flying techniques and improved his skills and taught him things about life. When Jonathon was outcast from the gull community everyone in the community thought that Jonathon was a reckless and irresponsible seagull, so when Jonathon finally returned to the community and everyone saw how amazing his flying skills were they changed their minds and many of them asked to be taught by Jonathon himself which was breaking the gull community law, This is an example of foil characters. â€Å"His thought was triumph. Terminal velocity! A seagull at two hundred and fourteen miles per hours! It was a breakthrough, the greatest single moment in the history of the flock, and in that moment a new age opened for Jonathon Gull.† (pg 16-17) 4. The plot of this story is a traditional plot type. The story ends with the last words of his Jonathon’s teacher, â€Å"Keep working on love.† Through his teachings, Jonathan understands that the spirit cannot be really free without the ability to forgive, and that the way to progress leads for him, at least through becoming a teacher, not just through working hard as a student. So, if any seagull believes that it is free to do what it wants to, it becomes Jonathan the seagull, for whom, possibilities were endless. Every law is an illusion. Once we become conscious of this, our existence gets a new meaning. a. The biggest conflict was Jonathon going against the norm of the seagull community and ultimately getting expelled from the community for his irresponsible acts. â€Å"For his reckless irresponsibility†, â€Å"Violating the dignity and tradition of the Gull family.† (pg 24) b. The situation at the end where Jonathon returned to the breakfast seagull flock was significant because it demonstrated forgiveness and compassion. These gulls hated Jonathon and wanted nothing to do with him and yet he still had the courage to forgive them and even teach them how to fly like he does. â€Å"You have to practice to see the real gull, the good in every one of them, and help them to see it in themselves.†(pg 89) 5. -This book was definitely one of the more inspiring books that made me think out of the box that I have read in quite some time. For example, I really liked one of the messages that implied that if you want to have a fulfilling happy meaningful life you need to stop following the crowd and make your own path even if there are consequences. If you find something that you are good at and enjoy doing stick with it and master it and watch how it will shape you life. -This story uplifted my spirits and motivated my behavior change in several ways. For example, Jonathon Livingston Seagull is a great example to me because not only does he go against the norm and try to learn everything about his passion in life, he also learns forgiveness and compassion for the other seagulls of the community and wants to teach them how to live a wonderful life. I have noticed in my life that I am most happy when I have found something that I love to do and also when I am helping others find that same thing or serving them in some manner and I think Jonathon mastered this aspect of true charity. â€Å"You have to practice to see the real gull, the good in every one of them, and help them to see it in themselves.†(pg 89) 6. In conclusions the book had both strong and weak contributing factors. The strong factors were that it had a very unique, interesting story line that kept the reader interested enough to keep reading. Bach also used implied messages of inspiration and important values in this life which in my opinion was very cool and had a strong plot. Some of the weak factors were that the book almost needed to be read straight through in one sitting to really get the message and make sense. It was not very challenging to read which could be good and bad. The setting was not very descriptive, it basically just took place either in the air or on the sea shore. I think the proper age group for this book would be late high school students and college students and even young adults. Richard Bach impacted me by creating a plot and story line that delivers a messages that anything is possible in life as long as you want it enough and practice at it thus, I am now interested in making some changes in my life. Works Cited Back, Richard. Jonathon Livingston Seagull. New York: Scribner, 1970.

A Productive American Economy essays

A Productive American Economy essays America's economy today has plundered to a new low and unless we do something about the current trends, the situation will only worsen. In 2008, America experienced a tragic financial crisis and the blame was instantly placed on the shoulders of Wall Street. However, many economists, such as Robert B. Reich, argue that the cause of this economic meltdown did not come from people messing around with the stocks and corporate shares but rather from the actual structure of the country's economy. In the book, Aftershock, Reich discusses the structure of our economy in what he calls the basic economic bargain. At the root of a highly productive economy, the workers are not only employees but also consumers (Reich 28). The earnings from these workers are used to purchase the goods and services produced by other workers. But when the workers' taxed earnings no longer suffice for their most basic needs, then the basic bargain becomes broken. This causes the production of goods and services to be greater than what the consumers are capable of purchasing. The broken basic bargain attributes to the growing gap between the rich and the poor by allowing the wealthy to earn more while the working middle class pays more. Raising the tax rates on the wealthy will help repair the basic bargain and allow for the economy to Production of goods and services comes at a cost and those costs must be balanced out by an equal amount of demand. So the real problem is not just the fact that the vast majority of people have less purchasing power but there also needs to be more demand. The nation's economy is driven by the needs and wants of the everyday consumer. Jobs arise from the consumer sector, especially from services, which in turn spur up growth. During economic downturns like the one we are currently in, consumers purchasing investments such as real estate, automobiles, and other physical capital have s...

Labor Day A Holiday for Workers Everywhere!

Labor Day A Holiday for Workers Everywhere! Happy Labor Day weekend! This weekend, the United States and Canada commemorate the contribution of workers to society- your daily efforts, all you produce, and how you bolster the country’s economy. That likely includes you, so that means this holiday is yours to celebrate. What is Labor Day?Aside from the obvious fact that all hard work deserves a day off in its honor, Labor Day originated when groups of people around the country took a stand to improve their horrible working environments.The first Labor Day took place in 1882 in New York City. It was the height of the Industrial Revolution, and many Americans- including young children- were working 12 hours a day, 7 days a week, just to have the basics.The hours were long, the conditions were unsafe, and the pay was low. Faced with these terrible conditions and looking to protest, 10,000 workers met at City Hall and marched the streets- the first Labor Day parade in the country’s history.In the years that followed, o ther states adopted the trend, celebrating the importance of workers to a successful society.  Congress officially recognized the holiday in June of 1894 as the first Monday in September.Celebrating Work with†¦ RelaxationFor many, Labor Day is the unofficial end of summer- the last hurrah before kids go back to school, the temperatures begin to drop, and apples and pumpkins find their way into farmers’ markets.Soak up your long weekend of sunshine (fingers crossed rain isn’t on the agenda)! Pack a picnic, find a local parade, hit up the beach, or just enjoy time at home with your family and friends.And, if you’re lucky enough to have Monday off, enjoy your well-deserved break from all the hard work you do.

buy custom American Sports and the Civil Rights Movement

buy custom American Sports and the Civil Rights Movement American Sports and Racial Discrimination Introduction Annually all the Americans are required to file all their tax returns for verifications. However, the day is memorable for all Americans in the sports arena as its the day Jackie Robinson took to the field to compete with Brooklyn dodger in the baseball, 1942 .As he was the first black-American to play the game in major league and he did it during a time activists and blacks- American human rights defenders were at their toes to align the rights of all American. Historically, this followed after the national basket league was formed in the American sports and it integrated both African and white American players. Most of the young men joint the military services in the World War II during the period between 1941 and 1945. However, demand for basketball players was at higher notch and white American players couldnt meet the demand, hence, black players such as Jackie Robinson found their way to the game. Players from most of the black teams for example the New York renaissance popular ly known as Rens and even Harlem Globetrotters began to play for the national team in the NBL game.

Free Essays on Sophocles

Colonus, a village near Athens, was the place of Sophocles' birth, and the date, 495 B.C., thus making him thirty years younger than Aeschylus and fifteen years older than Euripides. His father, Sophilus, a man of wealth and excellent repute, gave him the benefit of all the literary accomplishment of the age. His powers were developed and refined by a careful instruction in the arts of music and poetry, and to the natural graces of his person further attractions were added through the exercises of the palà ¦stra. That he was a comely and agile youth is shown by his selection, at the age of sixteen, to lead with dance and lyre the chorus which celebrated his country's triumph at Salamis. In his younger days he appears to have been somewhat over fond of women and wine, and this he himself admits in one of his sayings recorded by Plato: "I thank old age for delivering me from the tyranny of my appetites." Yet, even in his later years, the charms of the gentler sex were at times too strong for the great dramatist. Aristophanes accused him of avarice, though there is nothing in what is known of Sophocles to substantiate the charge, and this is further disproved by the utter neglect of his affairs, which brought on him the imputation of lunacy, refuted by reading to his judges a passage from a newly-written play. The occasional excesses referred to appear to have been the only blemish on an otherwise blameless and contented life. Dramatic Career The commencement of his dramatic career was marked by a victory in competition with Aeschylus, under exceptional circumstances. The remains of the hero Theseus were being removed by Cimon from the isle of Scyros to Athens, at the time of a tragic contest which had excited unusual interest on account of the fame of the older and the popularity of the younger candidate. Instead of choosing judges by lot, as was the custom, the archon administered the oath to Cimon and his colleagues, asking th... Free Essays on Sophocles Free Essays on Sophocles Colonus, a village near Athens, was the place of Sophocles' birth, and the date, 495 B.C., thus making him thirty years younger than Aeschylus and fifteen years older than Euripides. His father, Sophilus, a man of wealth and excellent repute, gave him the benefit of all the literary accomplishment of the age. His powers were developed and refined by a careful instruction in the arts of music and poetry, and to the natural graces of his person further attractions were added through the exercises of the palà ¦stra. That he was a comely and agile youth is shown by his selection, at the age of sixteen, to lead with dance and lyre the chorus which celebrated his country's triumph at Salamis. In his younger days he appears to have been somewhat over fond of women and wine, and this he himself admits in one of his sayings recorded by Plato: "I thank old age for delivering me from the tyranny of my appetites." Yet, even in his later years, the charms of the gentler sex were at times too strong for the great dramatist. Aristophanes accused him of avarice, though there is nothing in what is known of Sophocles to substantiate the charge, and this is further disproved by the utter neglect of his affairs, which brought on him the imputation of lunacy, refuted by reading to his judges a passage from a newly-written play. The occasional excesses referred to appear to have been the only blemish on an otherwise blameless and contented life. Dramatic Career The commencement of his dramatic career was marked by a victory in competition with Aeschylus, under exceptional circumstances. The remains of the hero Theseus were being removed by Cimon from the isle of Scyros to Athens, at the time of a tragic contest which had excited unusual interest on account of the fame of the older and the popularity of the younger candidate. Instead of choosing judges by lot, as was the custom, the archon administered the oath to Cimon and his colleagues, asking th...

10 Reasons You Should Be Using Blog Comments

10 Reasons You Should Be Using Blog Comments Ask anyone how they promote their blog, and chances are pretty good that commenting on other blogs wont top the list. Most of us turn to social media to promote our blogs  because it works, and works quickly and measurably. With all of the social media outlets available, and a recent startling movement by a few large blogs to close blog comment sections, its easy to dismiss the idea of using your precious time going to blogs and leaving comments. Often, the comments you see are either great post, thanks!, blatant link spam, or (horrors) like something youd find in YouTube. Why Are Blog Comments Losing Favor? Bloggers have a love-hate relationship with their own blog comment section, too, for several reasons. Blog comments are not great for measurement. Judging your blog by the comments section can be disheartening. Though the number of comments helps towards your social proof, it is often less an indicator of actual readership and more an indicator of how controversial your post is. The truth is, blog comment numbers arent an accurate indicator of actual readership. Most readers dont participate on your blog, a phenomenon known as participation inequality. This means that 90% of the people lurk and dont participate, while 1% account for most of the participation. (Nielsen Norman Group) This means, as Nielsen pointed out, that blog comment sections arent a good place to get feedback because 1% of the people doing the talking might not be the most ideal percentage to base changes on. You might have nine readers that love what youre writing, but if you only hear from the one that doesnt (and more often than not, people are spurred on by a negative reaction to leave a comment), it is disheartening. Blog comments are tempting for spammers. Incessant spamming is one of the reasons Copyblogger decided to close the comment section on their blog. The amount of time it took to police spam comments, and the sheer volume, was a tipping point. In a little over eight years, Copyblogger has published more than 130,000 approved comments. Which is pretty amazing, right? But over that period, that’s only about 4% of the comments that were left on the site. The remaining 96% were pointless, time-wasting spam. Thats over 3 million spam comments that Copyblogger has had thrown their direction!  On my low-traffic personal WordPress blog, I am frequently blown away by the amount of spam I receive in the comments. In just a few months, the numbers climb high. Granted, I have a plugin in place to catch nearly all of it (as does Copyblogger), but there are still a handful each day that gets by and end up in my email asking for moderation. I can only imagine how much Copyblogger had to deal with. Numbers that big are terrifying to some degree when I realize how quickly, without a simple spam plugin, my blogs comment section would a disaster. Spammers are incredibly sneaky. Ever get one of those comments that you just cant be sure if its spam or not, its that real? Spammers know that many bloggers require moderation only on the first comment made on a site. Once theyve been approved, they have free rein. So they leave a comment that you decide is real, and open the door to them. The threat of spammers, and the wasted time dealing with them, is exhausting. Blog comments have to be moderated. When it comes to comments on my personal blog, I have my WordPress settings as tight as they can be and a strict policy in place as to what kinds of comments Ill allow (no insulting me or other readers, stay on topic, no excessively foul language, etc.).  Spammers and the bad behavior of netizens  have forced me to moderate my comments when in the early days of blogging I took pride in letting the discussion unfold in real time sans moderation. I regret that I have to moderate, but without moderation, conversation can turn ugly. Bloggers are responsible for what appears on their blog; it is their property. You do not want to allow questionable comments that insult, attack, threaten or suggest harm to another person. While logical fallacies, overused memes, and trolls are probably inevitable even in legitimate comments, most of the truly awful you can head off at the pass by simply keeping it from being published. Moderation of blog comments means comments dont appear right away. It means some commenters dont understand why their comments dont appear and they submit multiple similar comments. It means some folks get upset when they dont see their legitimate comment right away and get after you for censoring   them (yep, its happened to me). But without moderation of comments, your blog will be spam central. Long and short of it? Because of spammers and people who cant behave, your comment section is going to take some effort to maintain and protect. Moderation will be required. Bloggers are afraid of Google. The idea of your comments section somehow bringing a penalty to your site is terrifying to bloggers. Though Matt Cutts has reassured bloggers that taking part in blog comments in a legitimate way is perfectly fine, recent penalty action taken by Google has bloggers a bit on edge. With good moderation and spam controls, and making sure that links in the comments section are no follow (which WordPress now does) you can protect yourself somewhat. It is important to take a serious rein on your comments section and be purposeful about it. You dont have to be afraid of SEO penalties as long as you protect your own comments section and dont use other blogs comments sections as a way to spam for your own site. Conversation is on the social networks, not the blog. Another reason Copyblogger provided for ending their comments was that the discussion was happening elsewhere, on social media.  This is discouraging if you are trying to build social proof on your actual blog, and see social media comment streams as a form of sharecropping your content off of your blog property. A blog comments section might seem antiquated in the face of this new conversation. If youve been blogging a while, youve probably noticed that social media has meant two things for your blog comments: They have dwindled considerably as people go to social media. The comments are shorter as social media shortens attention spans or gives people a place to write their own thoughts. (In the early days of blogging, some blog commenters had no blogs; they used blog commenting as the way they built their online reputation and authority.) Comment systems, though, are evolving. Plugins that support social media integration, or a comment system like Disqus, help tie your blogs comments into that social pulse. In that sense, you can bring that outside conversation back onto your own property. People are doing it wrong. Yes, some people (as in, you and me an others) arent doing the whole blog commenting thing the right way. Its hard to have purely altruistic motives, sometimes. What is it were doing? Well We participate in blog comments for linking purposes.  If you head into it at all thinking that youll get a link back to your site, youre doing it wrong. Youll be moderated, spammed, and possibly penalized. All we have to say is nice post, good job.  A comment section is for conversation. While Im familiar with the feeling of enjoying a post, having nothing to say, but wanting to let the blogger know, it would be better to share the post on social media and say this was a good post rather than create acres of comments that say good job. Anyone else roll their eyes when trying to sift through good job! and I agree! comments to get to something meatier? Were trolls. Were just there to argue and be jerks. Lets admit it. Weve all lost it in a blog comments section somewhere, and hang our heads in shame at who we became. We dont understand our comment is in the wrong place. How many times have you read a blog post where the author helpfully suggested a tech fix of some sort, just to be kind, and the comment section quickly fills with people (of all temperaments) wanting help from the author troubleshooting why it didnt work?   Sometimes we mistake a blog post on a particular topic as the place to go for help on that topic, and it isnt. Blog comments are for the strong. New to blogging? You may or may not be ready for the emotional toll some blog comments can take on you, depending upon what kind of posts you write and how much of a flashpoint your topics are. Blog comments can be hurtful and discouraging if you let them get to you. Even if you moderate them, you are still going to read them whether you publish them or not. It can be an open door to letting people shred or mock what was a very important thing to write about. If you are prone to taking things personally or are unable to distance yourself from what random strangers say to you, blog comments can be a real drag on your motivation to keep blogging. On the other hand, if you stick with it, you learn a very valuable skill: how to ignore people who are insignificant in your life. Comments on your blog will either give you a thick skin or cause you to give up.Why Blog Comments Are Important After reading all of that–practically an entire blog post on why you should abandon blog comments ASAP!–you might be convinced to do just that. Surely they arent worth the hassle or the threat of your innocent blog commenting activity creating a penalty for your blog. Hold on just a minute. Most of us arent Copyblogger, and arent experiencing the level of spam they were. Most of us dont have the volume of conversation happening elsewhere that they do; our social media conversations are smaller and need a home base on the blog. And, most importantly, participating in the comment sections of blogs does have a positive impact. All of the negatives aside, I love blog comments on a carefully moderated blog. Why? 1. Discover new blogs. I have probably found more useful sites, links, information, and downloads not through online searches but by people in blog comment sections sharing a relevant source. Plus, a well-written comment with a thoughtful take on the topic will often cause me to visit the website of the commenter. That comment is a preview of how their blog posts will be. I have found a huge chunk of the blogs I load into my RSS reader through blog comments sections, and where do you suppose I turn when I want to find content to share? That RSS reader. Taking time and leaving a relevant, useful comment is a way to bring people over to your website. Plugging yourself shamelessly in every post is a turn-off. 2. Learn more about the topic. A well-researched blog post isnt all there is to say on a topic. Word count or time restrictions can keep your ultimate guide blog post from not quite being the ultimate guide. The experience, knowledge, and resources commenters can bring to your post in the comment section add to the understanding of the topic. Im fairly certain, for example, that when you get to the end of this post, youll be thinking she forgot to mention this important thing and youll take it upon yourself to mention it (hint hint). Thats the beauty of blog comments: readers get to help build on the original post, helping the author and other readers learn more about the topic. Whether opposing view or adding to the supporting view, theres more to be said about most topics, and readers can help each other by commenting. 3. The enjoyment of being a regular. A coffee shop near where I work knows what Im going to order before I order it. I love that. I love going in and having them pick up the conversation where we left off. Its the joy of being a regular. The comment section of your blog is where the regulars (or the usual suspects, if its that kind of blog :-) gather. They know each other, they know your blog and can link back to old posts or other specific comments from the past. Regulars help turn your blog from being a sequential posting of articles into something organic that references itself. Plus, theres the ownership issue. I have had a handful of people who have read and commented on my personal blog for more than ten years, some of whom Ive met and weve become real-life friends. When you comment (and get response) regularly on a blog, you almost feel like you have ownership there, that its important you stay involved. Thats exactly the kind of reader and commenter you want.  Heck, some regulars even police the comments section and help you, as if they were forum moderators. They feel like its partly their place, too, and they want to help keep it clean. Blog comment sections are like the coffee house of the internet, where you introduce the discussion and let the regulars get busy discussing it. 4. Networking that works. Taking part in your own blog comment section shows the world youre not a hermit.  It says that you   are not just a one-way street, blasting your content out to them but unwilling to hear them back. (This is especially important if you are trying to build your blog traffic and get a bigger audience.) Being a one-way content pusher is sort of the equivalent of handing out business cards en masse and not bothering to do much listening as you turn around and walk away. It doesnt work. The back and forth conversation in blog comments, and and honest willingness to listen, is good networking. Just like you find new blogs to read, you make connections with the other regulars and break free of the limited circles of your social media. Blog comment sections bring in people you might not have discovered, otherwise, and truly expand your networking circles. One-sided networking never works. In order to make connections that matter, we have to be willing to give and take, and meet people outside of our usual social groups. 5. People link to where theyre being talked about. Ive found that if I have written a post that is getting some serious comment action, involving other bloggers and asking questions often leads to them writing a post about the conversation, and linking to my original post.  When Ive had a long run in a comment section and been actively participating, and I think Ive left some pretty good comments, you know what I do? I link to the post and often blog about it. It functions on the same principle as why small town newspapers run so many photos of the local sports team. I learned early on as a small town newspaper reporter that mentioning the names of people in the community in stories, and featuring their kids in school activities, was how you sold papers. Its the same reason people buy that expensive Whos Who book: theyre listed in it. We like to promote whats promoting us. 6. Easier-to-follow conversations. A lot of conversation happens on social media, sure, but it isnt always easy to follow. Some might be on Twitter (where following a discussion is like chasing the tail of a kite on a windy day), others on Google+. Different people saying interesting things, but because those multiple conversations are on different platforms? Never the two shall meet. And, conversation on social media fades away as the news feeds change. Its always been a frustration of mine that this happens. Admittedly, some of the social features of some comment systems that adjust the order of the comments according to votes by readers can be confusing, as they arent a threaded in-order conversation. While that technique helps commenters police out bad comments (in theory) it does add to confusion, too. But, at least all of the discussion is in one place. Taking part in blog comment sections makes it easier for readers who find the post to follow along and make sense of how the discussion goes. Latecomers can see what has already been said. 7. Social proof for your blog. If you see a listing of four blog posts, three with 6 comments listed, and one with 145 comments listed, which post are you going to dive into? Probably the 145-comment post. Clearly there is something going on there and lots of people are actively talking. We like to see what others are talking about, and we are more likely to join in because there are enough others in the conversation that it wont be too terrifying (this is especially true for lurkers who dont participate much). This is social proof in action, the idea that where we see a crowd, there must be something good.  Asking questions in your own comments is a good way to keep the ball rolling. Comments help encourage other comments; its a very good reason to respond to comments in your blog posts. Blog comments are great social proof. The more you have, the more you get.8. Get new ideas for fresh content. Has this ever happened to you? You write a post about topic. The discussion is active, and you find yourself leaving long comments. Pretty soon you think its probably best to write a whole new blog post because the topic has expanded and given you a lot to talk about, all thanks to the blog comments section. At the very least, youve probably found yourself realizing that there were questions or directions your readers have suggested that would make a great new blog post (or two or three). Thats happened here on this blog, even. It was in our blog comments where a reader brought up the need for social proof. It was a comment that piqued my curiosity and got me doing some research. I eventually wrote a blog post. Ive also written blog posts based on comments found on other blogs, too. Inevitably, I link back to the other blog (win for them), and I get a great post idea (win for me). Plus, I have a legitimate reason to leave a comment and say I wrote a post about this here and perhaps get some new readers. The comment section is a great place for idea generation. Its a group of people, batting ideas around.