What Is International Trade - 1669 Words

What is international Trade? International trade is the exchange of capital, goods, and services across international borders or territories, which could involve the activities of the government and individual. In most countries, such trade represents a significant share of gross domestic product (GDP). This type of trade allows for a greater competition and more competitive pricing in the market. The competition results in more affordable products for the consumer. The exchange of goods also affects the economy of the world as dictated by supply and demand, making goods and services obtainable which may not otherwise be available to consumers globally. In the topic of trade economists agree, it is that trade among nations makes the world†¦show more content†¦Macaulay was observing the practical problems governments face in deciding whether to embrace the concept: â€Å"Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular.† Why countries trade? In one of the most important concepts in economics, Ricardo observed that trade was driven by comparative rather than absolute costs (of producing a good). One country may be more productive than others in all goods, in the sense that it can produce any good using fewer inputs (such as capital and labor) than other countries require to produce the same good. Ricardo’s insight was that such a country would still benefit from trading according to its comparative advantage—exporting products in which its absolute advantage was greatest, and importing products in which its absolute advantage was comparatively less. Though a country may be twice as productive as its trading partners in making clothing, if it is three times as productive in making steel or building airplanes, it will benefit from making and exporting these products and importing clothes. Its partner will gain by exporting clothes—in which it has a comparative but not absolute advantage—in exchange for these other products (see box). The notion of comparative advantage also extends beyond physical goods to trade in services—such as writing computerShow MoreRelatedWhat Are The Benefits Of International Trade?986 Words   |  4 PagesWhat are the benefits of international trade? International trade is the means to which other countries can use and enjoy other products from around the world. When a country becomes part of that trade agreement, then they have the ability to leverage their goods to gain wealth and stability. As stated in the article by Economy Watch. Benefits of International trade. â€Å"The global trade can become one of the major contributors to the reduction of poverty.† There are a couple of scenarios that makeRead MoreWhat Are The Benefits Of International Trade?976 Words   |  4 PagesWhat are the benefits of international trade? International trade is the means to which other countries can use and enjoy other products from around the world. When a country becomes part of that trade agreement then they have the ability to leverage their goods to gain wealth and stability. As stated in the article by Economy Watch. Benefits of International trade. â€Å". The global trade can become one of the major contributors to the reduction of poverty.† There are a couple of scenarios that makeRead MoreWhat ´s International Trade1442 Words   |  6 PagesIntroduction International trade is to explain why countries to import and export cargo, and barriers to trade and many different steps and trade barriers have been taken down and explain some economic factors must be protected trade. When foreign trade is not strongly change, government spending and taxes, like most of the headlines, it aroused some peoples blood in economics. Both exports and imports will affect the livelihood and way of life. These people are very anxious, but those who worryRead MoreWhat Would Our Nation Do Without Globalization and International Trade? 1574 Words   |  7 Pagesstrategies. Becoming international is an important factor in assisting organizations in becoming globally competitive. Strategic imperatives have helped in the development of globalization. Organizations can no longer stand still while their competitors grow stronger. This causes organizations to seek out new markets. Survival is a key indicator for an organization to enter into a global market place. What would our nation do without globalization and international trade? Below is a list ofRead MoreWhat role does the WTO play in international business? Argue the case that the WTO is either helpful or a hindrance to international trade, giving particular examples to support your case.3304 Words   |  14 PagesTITLE OF ASSIGNMENT: What role does the WTO play in international business? Argue the case that the WTO is eithe r helpful or a hindrance to international trade, giving particular examples to support your case. 1. INTRODUCTION International trade has been increasingly frequent since industrialisation. Today globalisation becomes well-known among people. As economies have become more open, countries become more dependent on one another. However, rarely is free trade truly free trade due to country interventionsRead MoreRecent Decades Have Witnessed an Acceleration of Economic Globalisation, in Particular International Trade. Is Trade Openness the Key Strategy to Achieve Economic Development? What Lessons Could You Draw for Policy Making?3265 Words   |  14 Pageswitnessed an acceleration of economic globalisation, in particular international trade. Is trade openness the key strategy to achieve economic development? What lessons could you draw for policymaking? Support your arguments with economic theory and empirical evidence from developing countries’. Introduction In this essay, I shall critically examine the statement put forward – and test whether trade openness is the key strategy to achieving economic development, andRead MoreRole And Importance Of International Trade747 Words   |  3 PagesThis paper defines, and examines the role and importance of international trade. As many of us are aware, international relations between nations mean many things. International trade plays a major role in establishing those relationships. International trade can be described as the act of exchanging goods and services to and with other countries. It has a vast economic and political impact on the decisions that the government chooses to engross themselves in for the improvement of not just the countryRead MoreEssay on International Trade Simulation987 Words   |  4 Pagessummarize the International Trade Simulation, explain the basic concept of International Trade, emphasize the four key points from the reading assignments in the simulation , and apply these concepts to my workplace. Simulation Summary In the International Trade simulation, you are the Trade Representative of a small country called Rodamia. You are introduced to international trade--the theory of comparative advantage and the impact of tariffs, quotas, and dumping on international trade (Applying InternationalRead MoreThe Impact Of Foreign Policy On International Trade Essay1494 Words   |  6 Pagesinvolvement of government in international trade, many people have posed their opinion about what the role of government should be in it. Different factors are involved when it comes to deciding what this should be. It impacts a lot of people, so in order to do that, trade policy must be properly defined, identify what the roles of government currently are, and their involvement in it, and then analyse what should be their role. Trade policy is how a country carries out trade with other countries (CommercialRead Morehehe1372 Words   |  6 PagesEinfà ¼hrung International Trade Ningbo University BA International Trade Economy Winter Semester 2013 / 2014 Dr. Thomas Schuster Guest Professor Useful Information Office hour: After the lecture or at any other time upon appointment E-Mail: drth.schuster@web.de Assistent †¢ Fu Suying †¢ fusuying@nbu.edu.cn †¢ Phone: 13566627298 Classes: †¢ Tuesday 8.00-9.35 a.m. every week †¢ Thursday 8.00-9.35 a.m. every even week Dr. Thomas Schuster Ningbo University International Trade

Christianity and Buddhism - Free Essay Example

Sample details Pages: 2 Words: 535 Downloads: 2 Date added: 2019/06/16 Category Religion Essay Level High school Tags: Buddhism Essay Christianity Essay Did you like this example? Religion is the moral compass of many; their reason for being and the motive to their everyday actions. Religious practices often become as much of a cultural experience as they do a spiritual one. Christianity and Buddhism are vastly different from each other yet they have one common goal, to live a peaceful existence. Christianity was formed in 33 AD in Jerusalem by Jesus of Nazareth, who claimed to be god in human form, while Buddhism was formed sometime in the late sixth-century B.C.E. by a man in India named Siddhartha Gautama, also known as Buddha, after his spiritual realization(Diffen,;Vail; Adamson). Both Buddhism and Christianity convey the messages of morality, justice, and love(. Christianity is a monotheistic religion, as its believers only believe in one God; Buddhists believe in several gods. The intent of Buddhism is to be liberated from the cycle of life and death by reaching an enlightened state called nirvana. The main idea of Christianity is to love and obey God and form a bond with Him through his son Jesus by spreading the idea of Christianity so others can be delivered as well(Diffen). Don’t waste time! Our writers will create an original "Christianity and Buddhism" essay for you Create order The basic principles of Christianity are based on the life and teachings of Jesus of Nazareth, the Messiah, the son of God, in opposition to Buddhism that is based on the life and teachings of Gautama, a normal man from India who never declared himself divine. Many believe that Buddhists worship Buddha but in Buddhism, there is no God; there is no judgment day which is a huge contrast to the belief of Christians which is that there is a God, an all-powerful God, who will come to earth to judge them for all of their sins. Buddhists do not believe in the concept of sin while confessing to your sins is a staple of the Christian faith(ETB; Adamson). Buddhists believe that the never-ending cycle of death, birth, and rebirth are caused by a persons desires, oppositions, and misunderstandings. Christians believe that sin is caused by lust and bad deeds with the notion that their sins are forgiven through the sacrifice of Jesus(Adamson). Buddhists believe that when one dies they are then reborn to begin the cycle of death, birth, and rebirth that can only be discontinued by reaching Nirvana. By reaching Nirvana one has escaped suffering indefinitely(Diffen). The Christian faith believes that after one dies their soul leaves earth and goes to either Heaven, Hell, or Purgatory and spends the rest of eternity there. Christians believe that they will be delivered through the life, death, and sacrifice of Christ while Buddhists believe that they will reach Nirvana on their own accord by living an honorable life. (Diffen). Both Christianity and Buddhism are two of the most practiced religions in the world. As of 2017, 2.3 billion of the worlds population practices Christianity, 0.5 billion being Buddhists(Hackett, McLendon). The Buddhist population is 500-600 million while the Christian has over 200 billion followers worldwide(Diffen). The majority of the worlds Buddhist population is located in Asian countries like Thailand, India, Japan, China, and Korea while the majority of the Christian population is located in the United States, South America, Europe, Austrailia, and New Zealand(Diffen).

Determining The Profitability Of A Financial Institution - Free Essay Example

Sample details Pages: 23 Words: 6807 Downloads: 10 Date added: 2017/06/26 Category Statistics Essay Did you like this example? CHAPTER 1 Rapid changes in financial service industries make it essential to determine the profitability of financial institution. Banks plays a key role in financial market of a country and for this ità ¢Ã¢â€š ¬Ã¢â€ž ¢s very important to evaluate that bank operate in efficient manner also what are the factors which affect the profitability of banks. A bank generates profit from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. Historically, profitability from lending activities has been dependent on the needs and strengths of customers. In modern era, investors have demanded a more stable revenue stream and banks have therefore placed more emphasis on transaction fees, primarily loan fees but also included service charges on an array of deposit activities and other services (international banking, foreign exchange, insurance, investments, wire transfers, etc.). Lending activities provide the huge size of income to commercial banks. In the past 10 years banks have taken many measures to ensure that bank remain profitable while responding to increasingly changing market conditions. Don’t waste time! Our writers will create an original "Determining The Profitability Of A Financial Institution" essay for you Create order Financial sector of Pakistan structured on Scheduled and Unscheduled Banks. Scheduled Banks are regulated by the State Bank of Pakistanà ¢Ã¢â€š ¬Ã¢â€ž ¢s Regulations, through different wings, and are subject to different SBP regulatory requirements such as capital and liquidity reserve requirements. The financial division analysts were projected à ¢Ã¢â€š ¬Ã…“higher profitabilityà ¢Ã¢â€š ¬? in 2008. That projection made possible because State Bank of Pakistan has raised its discount rate in which the banks can invest to earn a good return. The rising lending rates contributed considerably to ensuring an increased profitability acknowledged by State bank of Pakistan. Factors that affect the profitability of Commercial Banks are both Endogenous and Exogenous. Endogenous factors are within the Control of Management such as quality of management and its policies, efficiency of management in generating revenues and controlling costs, bank capitalization and location. Exogenous factors are outside management control, especially macro economic indices such as Interest rates, Exchange rates, Inflation, and other regulatory and market constraints. The banking sector has been a source of stability for this country, because as you have seen in many countries, the banking sector has weakened and outright nationalization has taken place in some countries. However, the reforms that have taken place in Pakistan banking sector over the past 8 to 10 years have given stability and strength to this sector. There are some ratios, by which can measure the strength of a banking sector, and the most important amongst those ratios is Capital Adequacy; our countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s average capital adequacy 8 percent some banks have less or some banks have more. Macro stability taken some time to trickle down was not something that happens over a month or two, because macro stability causes improvement in the confidence and that improvement caused investment decisions to become positive. As Pakistan banking sector presented stable condition. The country was not very export-dependent either, which is why the global decrease in trade has not had a big impact on Pakistan. Pakistan has the potential to achieve self-sufficiency over a period of time and create a major surplus for agriculture. Banks in Pakistan over the last eight to ten years have been more selective in the client base, apart from the consumer side, because the consumer loans are only 14 percent of the total loans its much lower than other countries. Country had faced some problems in the consumer loans, especially those banks that had become too aggressive in this sector, but the rest whether ità ¢Ã¢â€š ¬Ã¢â€ž ¢s corporate or agriculture have remained stable. Growth of Banking Sector: Profitability of the banking sector has been breaking its own record year after year during this ongoing decade. The commercial banking sector in Pakistan regulated by the state bank of Pakistan. SBP introduced several structural changes. Beside higher standards of corporate governance at management and board level, the banks are adhering to SBP prudential regulations, consistent with BIS standards. 36 Commercial Banks (26 local banks and 10 foreign banks) of which 22 were listed on stock exchange. Many merger/acquisition took place. Asset of banking sector registered a increase to reach at Rs 3.7 trillion (2005) with annual growth rate of 15.2% that outpaced economic growth (2005-06) 85 % of banking sector are in private hands. 1.3 Earning And Profitability Strong earnings and profitability profile of banks reflects the ability to support present and future operations. More specifically, this determined the capacity to absorb losses, finance its expansion programs, pay dividend to its shareholders and build up adequate level of capital. There were many different indicators used to serve the purpose, the best and most widely used indicator return on assets (ROA). Earning demanded most visible in case of foreign banks in 1998. The stress on earnings and profitability was expected although the steps taken by the SBP to improve liquidity. Not only liquid assets to total assets ratio turn down sharply, earning assets to total assets also dropped. T-Bill portfolio of banks declined considerably, as that were less compensated. Banks reduced return on deposits to sustain their spread. The financial institutes were not able to contain the decline in ROA due to declining stock and remuneration of their earning assets. CHAPTER 2 LITERATURE REVIEW Research on the determinants of bank profitability has focused on the returns of bank assets and equity, and net interest rate margins. It has traditionally explored the impact on bank performance of bank-specific factors, such as risk, market power, and regulatory costs. Many researchers have focused on the impact of macroeconomic factors on bank performance and profitability. According to Flennery (2000) tested the hypothesis that market rate fluctuations adversely affect commercial bank profits. The finding have responded of revenue and cost of fund to market rate changes then determine whether regulators should take pains to stabilize market conditions. Market rate levels emerge as a prominent influence on intermediary costs and revenues, but the effects of market rate changes effectively cancel one another for most large banks. The research found significant sensitivity to interest rate and it was unstable over the time. By Brick (1994) estimated of market risk, interest rate risk, and foreign exchange risk continues to be unstable. The result of risk differed by bank type and period. As interest rate risk declines, foreign exchange increases; the result suggested that the market continues to reflect changes in the economic and regulatory situation of commercial banks in the pricing of bank stocks. The adverse impact of Interest Rate fluctuations on the profitability of Commercial Banks can be hedge with sound application of modern interest rate risk management theories and tools. Used accounting decompositions, as well as panel regressions, Al-Haschimi (2007) studied the determinants of bank net interest rate margins in 10 Sub Saharan African countries. Author found that credit risk and operating inefficiencies explain most of the variation in net interest margins across the region. Macroeconomic risk has only limited effects on net interest margins in the study. DemirgÃÆ' ¼ÃƒÆ' §-Kunt and Huizinga (1999) used bank level data for 80 countries for the periods 1988à ¢Ã¢â€š ¬Ã¢â‚¬Å"95; analyze how bank characteristics and the overall banking environment affect both interest rate margins and bank returns. In considering both measures, this study provides a decomposition of the income effects of a number of determinants that affect depositor and borrower behavior, as opposed to that of shareholders. Results suggested that macroeconomic and regulatory conditions have a pronounced impact on margins and profitability. Lower market concentration ratios lead to lower margins or profits, while the effect of foreign ownership varies between industrialized and developing countries. Foreign banks have higher margins and profits compared to domestic banks in developing countries, while the opposite holds in developed countries. Hualan Cia and Weing (1992) studied on the effect of interest rate change on stock return and bank profitability, investigated the sensitivity of Canadian banks stock return and the profitability to change in interest rate. Used the data of Canadian banks on both the actual and unexpected change of different time series of interest rate indices, the short, intermediate and long term interest rate have significant negative correlation with bank stock return and profitability. The analysis showed through regression analysis by calculated the ratios of financial statements of banks. This measured the Canadian bank profitability against interest rate changes found that the net interest income and net income were not significantly related to change of interest rate. Flannery (1981) the study examined the relation between the interest rate sensitivity of common stock returns and the maturity composition of the firms nominal contracts. Used a sample of actively traded commercial banks and stock savings and loan associations, common stock returns are found to be correlated with interest rate changes. The co-movement of stock returns and interest rate changes positively related to the size of the maturity difference between the firms nominal assets and liabilities. Facts supported the hypothesis that the effect of nominal interest rate changes on common stock prices related to the maturity composition of a firms net nominal asset holding. For commercial bank and SL stocks, changes in interest rates were found to be significantly related to stock price movements. Also cross-sectional variation in the interest rate sensitivity measure was significantly related to the maturity mismatch of the bank assets and liabilities. Dependable with the nominal contracting hypothesis, the maturity composition of nominal contracts was found to be a significant factor affecting common stock returns. Coyne (1973) Commercial Bank Profitability by Function, The study was concerned with the cost, price and profit by function. It estimated the profit for real estate, installment, commercial and agricultural loans, and investments for banks stratified by size of deposit and the method, that was used to make that determination; the degree to which the average price (interest rate) by function known to the bank and, expressed by a sample period, whether it was equal to or greater than the cost of funds by function; and the degree to which the bank was able to determine its profit by function. The results of the surveyed were representative of the aggregate commercial banking community, the study concluded by the cost of funds estimates to average balance sheet for the Representative Bank of America (RBA).Raw data were obtained from the Federal Reserve Bank of Clevelands functional cost analysis of forty-one banks. Surveyed to the chief executive officer of 510 commercial banks provides insight into the manner in which commercial banks utilize. The author designed to provide a method of cost and profit calculation to the numerous small and medium-sized banks who indicated in response to the authors survey that the author knew little or nothing about the costs by function. The results of the investigation in general and the profitability of RBA in particular representative of the entire banking community, this study was provide help to individual banks as well as policy-making levels of state and national government where questions concerning matters such as usury laws and price (interest rate) controls appear to be taking a disproportionately large amount of time and effort to resolve. Goddard, Molyneux and Wilson (2004) determined the dynamic panel and cross-sectional regressions used to estimate growth and profit equations for a sample of commercial, savings, and co-operative banks from five major European Union countries during the mid-1990s. Methodologically unified the growth and profit strands in the previous empirical literature. Profit was an important prerequisite for future growth. High capital assets ratio tendency grow slowly in banking sector, and growth was connected to macroeconomic conditions. There were few systematic influences on bank growth. The resolution of profit appears higher for savings and co-operative banks than for commercial banks has attempted to unify the growth and profit strands in the literature by examining the performance of European banks during the 1990s. It reported univariate, bivariate, and multivariate versions of a two-equation model, which attempts to capture two-way causality between growth and profit while controlling for a range of other determinants of bank performance. The growth regressions suggested as banks became larger in relative terms, their growth performance tended to improve further. This pattern was strongest for commercial banks. Banks that sustained high capital-assets and liquidity ratios records low profitability. There was some evidence of a positive association between concentration and profitability, but little evidence of a link between bank-level x-inefficiency and profitability. While such patterns continue, concentration in European banking exhibited a natural tendency to increase. There was proof of positive perseverance of growth, although this tends to decline when additional control variables were included in the bivariate and multivariate growth models. The estimated coefficients on the covered profit term in the growth equations lend strong support to the notion that profit is an important sign to future growth. In the profit regressions, there was some variation in the estimated short-run between ownership types and countries. This reflected the fact that savings and co-operative banks are subject to various business and geographical restrictions that smother competition. The study favored th e SCP hypothesis of a positive association between concentration and profitability, but little apparent relationship between bank level inefficiency and profitability. In Latin America, Gelos (2006) studied the determinants of bank interest margins using bank and country level data. Author found that spreads are large because of relatively high interest rates because of macroeconomic risk, including from inflation, less efficient banks, and higher reserve requirements. In a study of United States banks for the period 1989à ¢Ã¢â€š ¬Ã¢â‚¬Å"93, Angbazo (1997) found that net interest margins reflect primarily credit. In addition, there was evidence that net interest margins are positively related to core capital, non-interest bearing reserves, and management quality, but negatively related to liquidity risk. Ho and Saunders (1981) applied the model of to analyze the determinants of interest margins in six countries of the European Union and the US during the period 1988à ¢Ã¢â€š ¬Ã¢â‚¬Å"95. Authors found that macroeconomic volatility and regulations have a significant impact on bank interest rate margins. The results also suggested an important trade-off between ensuring bank solvency, defined by high capital to asset ratios, and lowering the cost of financial services to consumers, as measured by low interest rate margins. Athanasoglou, Delis and Staikouras (2006) applied a dynamic panel data model to study the performance of Greek banks over the period 1985à ¢Ã¢â€š ¬Ã¢â‚¬Å"2001, and find some profit persistence, a result that signal that the market structure not perfectly competitive. The results also showed that the profitability of Greek banks shaped by bank-specific factors and macroeconomic control variables, which were not under the direct control of bank management and industry formation, did not appear to significantly affect profitability. Athanasoglou (2008) studied the profitability behavior of the south eastern European banking industry over the period 1998à ¢Ã¢â€š ¬Ã¢â‚¬Å"2002. The empirical result suggested that the enhancement of bank profitability in those countries requires new standards in risk management and operating efficiency, which, according to the evidence presented in the paper, crucially affect profits. A key result that effect market concentration was positive, while the picture regarding macroeconomic variables was mixed. A number of studies have emphasized the relation between macroeconomic variables and bank risk. Saunders and Allen (2004) surveyed on pro-cyclicality in operational, credit, and market risk exposures. Such cyclical effects mainly results from systematic risk originate from common macroeconomic influences or from interdependencies across firms as financial markets and institutions consolidate internationally. It ultimately exacerbates business cycle fluctuations due to adverse effects on bank lending capacity. Using equity returns data over the period 1973à ¢Ã¢â€š ¬Ã¢â‚¬Å"2003, Allen and Bali (2004) examined the disastrous risk of financial institutions. Results suggested evidence of pro-cyclicality in both tragic and operational risk measurements, implying that macroeconomic, systematic, and environmental factors play a considerable role in determining the risk and returns of financial institutions. Pi and Timme (1993) investigated the relationship of concentration of decision management and control in one person on the cost efficiency level of the bank and return on assets. On the basis of the study found that the banks whose Chairman and CEO be same person had significantly less efficiency than those banks that possessed not similar governance structure and show that performance was affected by top management structure. Isik and Hassan (2003) estimated cost, allocate, technical, pure technical and scale efficiency of Turkish banking industry from 1988 to 1996. This study considered capital, loan able funds as bank short-term loans, long-term loans, risk adjustment off balance sheet items and other earning assets as output of bank. Thistle, McLeod and Conrad (1989) have found that (a) balance sheet composition depends on both the level and change in interest rates , (b) banks response to changes in interest rates in different, depending on whether rates are rising or falling. Authors determined the relation between banks portfolio of assets and liabilities and interest rate was stable. Several possible caused of instability. The econometric techniques employed allow for continuous change in the structure of the empirical model. The study found that the portfolio-interest rate relationship depends on the level of interest rates and exogenous assets, as well as their rate and direction of change Samy Ben Naceur (2005) investigated the impact of banks characteristics, financial structure and macroeconomic indicators on banks net interest margins and profitability in the Tunisian banking industry for the 1980-2000 periods. The study found individual bank characteristics explained a substantial part of the within-country variation in bank interest margins and profitability. High interest margin and profitability tend to be associated with banks that hold a relatively high amount of capital, and with large overheads. The study found that the inflation had a positive force for net interest margin; while economic growth has no incidence. Another factor was financial structure and its impact on banks interest margin and profitability; found that concentration be less beneficial to the Tunisian commercial banks than competition whereas for stock market development had a positive effect on bank profitability. This reflected the corresponding between bank and stock market growth. The study found that the disintermediation of the Tunisian financial system was favorable to the banking sector profitability. Some authors examined on banking of south European region, the determinants of bank interest margins adopt two alternative modeling frameworks used dealership approach and a micro-model of the banking-firm approach, study found bank as a dynamic dealer, setting interest rates on loans and deposits to balance the asymmetric arrival of loan demands and deposit supplies by Staikouras. The bank interest margins were shown to be fees charged by banks for the provision of liquidity. The alternative approach was the micro-model of the banking firm, the study found the banking firm in a static way, setting where demands and supplies of deposits and loans simultaneously clear both markets. Choi, Elyasiani and Kopecky (1992) estimated a multi-index model that considered market risk, interest sensitivity, and exchange rate risk of commercial bank stock returns. Dummy models were used to separate the period of pre- and post-October 1979 and to split the results attributable to money center banks from other banks. A significant exchange rate effect occurs for money center banks after October 1979, while interest sensitivity was stronger before October 1979. The exchange rate effect was attributing to raised hedge foreign loan exposure of money center banks. The bank profitability typically measured by the return on assets (ROA) and/or the return on equity, usually expressed as a function of internal and external determinants. Internal determinant factors that were mainly influenced by a bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s management decisions and policy objectives. Such profitability determinants are the level of liquidity, provisioning policy, capital adequacy, expenses management, and bank size. On the other hand, the external determinants, both industry and macroeconomic related, also known variables that reflect the economic and legal environments where the financial institution operates. By Bourke (1989) determined; Liquidity risk, arising from the possible inability of a bank to accommodate. Decreased in liabilities or to fund increases on the assetsà ¢Ã¢â€š ¬Ã¢â€ž ¢ side of the balance sheet, considered an important determinant of bank profitability. The loans market, especially credit to households and firms, risky and has a greater expected return than other bank assets, such as government securities. That expected a positive relationship between liquidity and profitability. Duca and McLaughlin (1990) studied that variations in bank profitability were largely attributable to variations in credit risk, since increased exposure to credit risk normally associated with decreased firm profitability. Miller and Noulas (1997) suggested that the more financial institutions are exposed to high risk loans, the higher the accumulation of unpaid loans and the lower the profitability. Even though leverage (capitalization) has been demonstrated to be important in explaining the performance of financial institutions, its impact on bank profitability was ambiguous. As lower capital ratios suggest a relatively risky position, one might expect a negative coefficient on this variable. Molyneux and Thornton (1992) observed a positive relationship, suggesting that high profits earned by firms be appropriated in the form of higher payroll expenditures paid to more productive human capital. It should be appealing to identify the dominant effect, in a developing banking environment like Malaysia. Authors used Bank size to capture potential economies or diseconomies of scale in the banking sector. The variable controls for cost differences and product and risk diversification according to the size of the financial institution. The first factor could lead to a positive relationship between size and bank profitability were significant economies of scale, while the second factor negative one was increased diversification leads to lower credit risk and lower returns. Berger, Hanweck, Humphery (1987) discussed that marginal cost savings can be achieved by increasing the size of the banking firm, especially as markets develop. Eichengreen and Gibson (2001) suggested that the effect of a growing bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s size on profitability may be positive up to a certain limit. Beyond the point, the effect of size was negative due to bureaucratic and other reasons. Bank profitability be sensitive to macroeconomic conditions despite the trend in the industry towards greater geographic diversification and larger use of financial engineering techniques to manage risk associated with business cycle forecasting. Generally, higher economic growth encourages bank to lend more and permits them to charge higher margins, as well as improving the quality of their assets. 2.1 The Determinants of Bank Performance: Studies on the determinants of bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s interest margin and profitability have focused on single country sides and a panel of countries. 2.1a Single country studies As most of the studies on bank performance are conducted in the US and emerging markets. Neeley and Wheelock (1997) explored the profitability of a sample of insured commercial banks in the US for the 1980-1995 periods. Authors found that bank performance positively related to the annual percentage changes in the stateà ¢Ã¢â€š ¬Ã¢â€ž ¢s per capita income. The main Studies on the determinants of bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s performance in emerging countries were carried out in Colombia Barajas et al. (1999) document significant effects of financial liberalization on bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s interest margins for the Colombian case. Although the overall spread has not declined after financial reform, the relevance of the different factors behind the bank spreads were affected by such measures. Another change linked with the liberalization process was the increase of the coefficient of loan quality after the liberalization. Afanasieff, Lhacer and Nakane (2002) make used of panel data techniques to uncover the main determinants of the bank interest spreads in Brazil. Ben Naceur and Goaied (2001) investigated the determinants of the Tunisian bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s performances during the period 1980-1995. The research indicated that the best performing banks were those who had struggled to improve labor and capital productivity, maintained a high level of deposit accounts relative to their assets and had been able to reinforce their equity. Guru, Staunton and Balashanmugam (2002) attempted to identify the determinants of successful deposit banks in order to provide practical guide for improved profitability performance of these institutions. The study was based on a sample of 17 Malaysian commercial banks over the 1986-1995. The profitability determinants were divided in two main categories, internal determinants (liquidity, capital adequacy and expenses management) and the external determinants (ownership, firm size and external economic conditions). The finding of that study revealed that efficient expenses management was one of the most significant in explaining high bank profitability. Among the macro indicators, high interest ratio was associated with low bank profitability and inflation was found to have a positive effect on bank performance. 2.1b Panel country studies The panel country studies were focused on European companies and developed and developing countries. Molyneux and Thornton (1992) were the first to explore thoroughly the determinants of bank profitability on a set of countries. Authors used sample of 18 European countries during the 1986-1989. The finding represented a significant positive association between the return on equity and the level of interest rates in each country, bank concentration, and government ownership. Abreu and Mendes (2002) investigated the determinants of bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s interest margins and profitability for some European countries in the last decade. The authors reported that well capitalized banks face lower expected bankruptcy costs and advantages translate into better profitability. Although with a negative sign in all regressions, the unemployment rate was relevant in explaining bank profitability. Bashir (2000) examined the determinants of Islamic bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s performance across eight Middle Eastern countries for 1993-1998. A number of internal and external factors were used to predict profitability and efficiencies. Controlling for macroeconomic environment, financial market situation and taxation, the results showed that higher leverage and large loans to asset ratios, lead to higher profitability. The author reported in his study that foreign-owned banks are more profitable that the domestic. The result also found the evidence that taxation impacts negatively bank profitability. Final result of study was that macroeconomic setting and stock market development have a positive impact on profitability. DemerguÃÆ' §-Kunt and Huizingha (1999) examined the determinants of bank interest margins and profitability using a bank level data for 80 countries in the 1988- 1995 period. The set of variables included several factors accounting for bank characteristics, macroeconomic conditions, taxation, regulations, financial structure, and legal indicators. The study reported that a larger ratio of bank assets to GDP and a lower market concentration ratio lead to lower margins and profits. Foreign banks have higher margins and profits than domestic banks on developing countries, while the opposite prevail in developed countries. DemerguÃÆ' §-Kunt and Huizingha (2001) presented evidence on the impact of financial development and structure on bank profitability using bank level data for a large number of developed and developing countries over the 1990-1997 period. The study found that financial development has a very important impact on bank performance. It reported that higher bank development was related to lower bank performance. Stock market development on the other hand, leads to increased profits and margins for banks especially at lower levels of financial development, indicating complementarities between bank and stock market. CHAPTER 3 THEORETICAL FRAMEWORK AND HYPOTHESIS The interest rate assummed to be one of the most important factors that affect commercial banks profitability. The issue which deals in the study was the affect of market interest rate fluactuation has adversly related to commercial bank profitability. This thesis study bring opportunity to established a relationship between fluctuations in interest rates and the performance of commercial banks in Pakistan during the period of 2004- 2008. The main purpose of this study was to determine the implication of fluctuations in market interest rates on the profitability of commercial banks in Pakistan. This study provide à ¢Ã¢â€š ¬Ã¢â‚¬Å"Major causes of interest rate fluctuations à ¢Ã¢â€š ¬Ã¢â‚¬Å"The extent to which commercial banks are set to manage interest rate related risks. Major causes of Interest Rate Fluctuation were unstable government Policies, Unstable Economic Environment, unavailability of long-term funds, Inflation. The factors that affect the commercial bank profitability were significant mismatch in the maturity profiles of Assets and Liabilities, Frequent Interest Rate Fluctuations, under capitalization of banks, Poor Collateral of credits. Pakistanà ¢Ã¢â€š ¬Ã¢â€ž ¢s financial sector included nationalized, foreign, and private banks; and Non-banking Financial Institutions (NBFIs) which include Development Finance Institutions (DFIs), Investment Banks, leasing companies, modarabas, and housing finance companies. Scheduled Banks know as also commercial bank regulated by the State Bank of Pakistan regulated through different wings, and subject to different SBP regulatory requirements such as capital and liquidity reserve requirements. Factors that affect the profitability of Commercial Banks are both Endogenous and Exogenous. Endogenous factors are within the Control of Management such as quality of management and its policies, efficiency of management in generating revenues and controlling costs, bank capitalization and location. Exogenous factors are outside management control, especially macro economic indices such as Interest rates, Exchange rates, Inflation, and other regulatory and market constraints. Interest rate comes under this category. 3.1 Discount rate: The discount rate is an interest rate a central bank of country charges depository institutes that borrow reserves from it. The rate of interest set by the State bank of Pakistan that member banks are charged when commercial bank borrow money through the SBP interest on an annual basis deducted in advance on a loan. 3.2 Bank Profitability: A bank generates a profit from the differential between the level of interest it pays for deposits and some different source of funds, and the scale of interest accuse in its lending activities. Strong earnings and profitability profile of banks reflects the ability to support present and future operations, that determines the capacity to absorb losses, finance its expansion program, pay dividend to its shareholders and build up adequate level of capital. Although different indicators are used to serve the purpose, the best and most widely used indicator are return on assets (ROA), Net Income, and Net interest income. CHAPTER 4 RESEARCH METHOD The method used in the study was regression analysis through à ¢Ã¢â€š ¬Ã…“Curve linear regressionà ¢Ã¢â€š ¬? apply for determined discount rate fluctuation has adversely impact on bank profitability. This section provides information about sources of data, sample size, and discussion of variables. 4.1 Data Collection This study used data analysis from secondary source. The data of financial statements are taken from annual reports of commercial banks for 5 years 2004-2008. 4.2 Data Sample The total sample of commercial bank in Pakistan is 27 listed in Karachi stock exchange out of which the sample size of research was 12 Commercial Banks in Pakistan. The market discount rate is independent variable and net income, net interest income and return on assets are dependent variables which collected from annual reports during the sample period. 4.3 Regression Analysis and Curve Linear Regression Change in Net income ΆNIt = ÃŽÂ ± + ÃŽÂ ² ΆIt Here, ΆNIt is the change of net income for a bank, computed by (Nit-Nit-1)/Nit-1 (It) is discount rate. It indicate how capable the management of banks has been converting the bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s asset into net earnings. Return on Assets ROA = Net Income /Total assets This ratio indicate efficient  management  at using its assets to generate earnings. Change in Net interest income ΆNII = ÃŽÂ ± + ÃŽÂ ² ΆIt Here, ΆNIIt is the change of net income for a bank, computed by (Niit-Niit-1)/Niit-1 (It) is discount rate. The net interest margin measures how large spread between interest revenue and interest cost it can achieve by controlling the bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s earning asset. 4.4 Variables: 4.3a Dependent Variable: Return On Asset: Ità ¢Ã¢â€š ¬Ã¢â€ž ¢s an indicator of profitability measurement of a bank or company.  ROA provide the idea  to how efficient  management is  at using its assets to generate earnings.  It Calculate by dividing a companys annual earnings by its total assets. ROA  explain what earnings were generated from invested capital (assets). The ROA figure provided an idea  how effectively the company can converted the money  into investment. The higher the ROA number, the better, because the bank is earning more money on less investment. Net Income: Net income represents the amount of money remaining after all costs, depreciation, interest, taxes, and other expenses have been deducted from a companys total sales. Net income also known as net profit, or net earnings. Ità ¢Ã¢â€š ¬Ã¢â€ž ¢s one of the most closely followed numbers a company can produce, and it plays a part in many other financial measures. Net income is not only a measure of company earned cash during a given period. Ità ¢Ã¢â€š ¬Ã¢â€ž ¢s also important to know that changes in accounting methods can influence net income figures, and in many cases these changes may have little to do with a companys actual operations. Changes in net income were used for much analysis. In general, when a bank or companys net income is negative or is fairly low, this could suggest a myriad of problems, ranging from inadequacies in customer or expense management to unfavorable accounting methods. Some institutes strive to minimize taxes and will therefore intentionally attempt to minimize their reported net income. Net interest Income: Net interest income is a financial measure for banks, calculated by the amount of money the bank receives from interest on assets (commercial loans, personal mortgages, etc) minus the amount of money the bank pays out for interest on liabilities (personal bank accounts, etc). The variable usually calculated for banks, this figure can also be calculated for other corporations, simply by subtracting the amount of interest paid on liabilities from the amount of interest earned from assets. 4.3b Independent Variable Interest rate In the study the discount rate was used as an interest rate which a central bank of country charges to depository institutes that borrow reserves from it. State Bank of Pakistan offered the discount rate to the commercial banks. CHAPTER 5 DATA ANALYSIS AND RESULTS The study included three indicators to measures of performance; return of assets (ROA), change in net income (NI), and change in net interest income (NII). ROA have been used to measured performance studies. ROA measures the profit earned per dollar of assets and reflect how well bank management use the bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s real investments resources to generate profits while NI is focused on the profit earned on activities. Table 1 Variable Summary Dependent Variable Independent Variable ROA NI NII IR Number of Positive values 53 35 53 60 Number of Zeros 1 1 1 0 Number of Negative values 6 24 6 0 Number of (user missing) 0 0 0 0 Missing values (system missing) 0 0 0 0 The Curve linear regression procedure produces curve regression statistics and related plots for 11 different curve estimation regression models. Here variables appear to be related linearly, used a simple linear regression model. When variables were not linearly related, apply transforming data. When a transformation does not work, need a more complicated model. There be many models in the Curve Estimation procedure: linear, logarithmic, inverse, quadratic, cubic, power, compound, S-curve, logistic, growth, and exponential. The Curve Estimation routine in SPSS is a curve-fitting program to compare linear, logarithmic, inverse, quadratic, cubic, power, compound, S-curve, logistic, growth, and exponential models based on their relative goodness of fit for models where a dependent variable predicted by a single independent variable. This study has identified the profitability indicators that explain the variation in interest rate to evaluate the impact of interest rate on commercial bank profitability. This investigation has used the regression analysis through curve estimation. The model has been used in this study were Linear and Logarithmic regression to know the significance level of dependent variables in relation with independent variable. Linear model Y = b0 + (b1 * x) where b0 is the constant, b1 the regression coefficient for x, the independent variable. It required multivariate normality. The dependent variable related to the independent variable in a linear method. Here the interest rate was adversely related to three dependent variables. Logarithmic model Y = b0 + (b1 * ln(x)) where ln() is the natural log function. In the b0 is constant, b1 the regression coefficient for x, the independent variable. Through the log function the model tested the relation of interest rate and three dependent variables. 5.1 ANOVA Table 2 Sum of mean Square df Mean Square F Sig Linear ROA .001 1 .001 .325 .571 NI 7.762 1 7.762 .273 .603 NII .506 1 .506 3.063 .085 Logarithmic ROA .000 1 .000 .205 .653 NI 3.104 1 3.104 .109 .742 NII .666 1 .666 4.101 .047 In this table there are results of two equations Linear and Logarithmic in ANOVA analysis. The table contains two sets of equations, which represents the mean, frequency, and significance level of the variables. This table represented that Sig. (p value) = 0.047 As p 0.05 the predictors are significantly better than would be expected by chance. The regression line predicted by the independent variables explains a significant amount of the variance in the dependent variable. It would normally be reported in a similar trend to other ANOVAs: F (ROA, NI, NII) .325, .273, 3.063 were 0.05 F (ROA, NI, NII) .205, .109, 4.101 were 0.05 This shows that ROA, NI and NII are having insignificant result. The result proved that interest rate and Commercial bank profitability has adversely related to each other. ANOVA, Analysis of variance, a method of testing the null hypothesis that several group means are equal in the population, by comparing the sample variance estimated from the group means to that estimated within the groups. Table showed Sum of squares mean by the degrees of freedom it gives the Mean Square and F provided the significance value. It can see that the Regression explains significantly variance. It was based on the comparison of two estimate variances one representing the variance within groups, often referred to as error variance; and the other representing variance due to differences in-group means. If the two variances do not differ significantly, one can believe that all the group means come from the same sampling distribution of means and there was no reason to claim that the group means differ. However, the group means differ more than can be accounted for due to random error, there is reason to believe that were drawn from different sampling distributions of means. The larger F ratio, the greater is the difference between groups as compared to within group differences. An F- ratio equal to or less than one indicates that there is no significant difference between groups and the hypothesis is correct. The hypothesis was correct there was no significant level among independent variable with dependent variables. ANOVA procedure can be used correctly if the following condition: The dependent variables should be interval or ratio data type. The data used f ratios which interpreted the bank profitability. The population normally distributed and the variance is equal. 5.2: Coefficient Table 3 Unstandardize Coefficients Standardize coefficients t Sig B Std Error Beta Linear ROA .010 .018 .075 .570 .571 NI 1.050 2.007 .068 .523 .603 NII -.268 .153 -.224 -1.750 .085 Logarithmic ROA .003 .007 .059 .452 .653 NI .240 .728 .043 .330 .742 NII -.111 .055 -.257 -2.025 .047 The next part of the output, the Coefficients table, showed variables were individually significant predictors of dependent variable. Regression Coefficient measured how independent variable predicts the dependent variables. Here the interest rate predicts the ROA, NI, and NII. The table showed unstandardized Coefficient that provides the independent variables the regression equation. The Standardized Beta Coefficient column showed the contribution that an individual variable makes to the model. Here p 0.05 show significance of variable in the facts represent that dependent variables ROA, Net income and Net interest income had no significance level related to independent variable. Numerical value of the parameter estimated directly associated with an independent variable. The regression coefficient represents the amount of change in the dependent variable for a change in independent variable. In this study interest rate (discount rate) is independent variable and ROA, NI, NII are dependent variable. In regression coefficients are partial coefficient because each variable takes into account this represents the relationship of interest rate with ROA, Net Income and Net Interest Income. The facts represented that there was negative association between them. The coefficient is not limited in range, as it based on the degree of association and the scale unit of the independent variable. In linear regression, the size of the coefficient for each independent variable gives the size of the effect that variable is having on dependent variable, and the sign on the coefficient (positive or negative) gives the direction of the effect. In regression with a single independent variable, the coefficient tell how much the dependent variable is expected to increase (if the coefficient is positive) or decrease (if the coefficient is negative) when that independent variable increases by one. The result examined that as the interest rate raised it caused to decrease the level of return through the ratios. CHAPTER 6 CONCLUSION AND DISCUSSION The study determined that hypothesis was accepted interest rate fluctuation has adversely related with commercial bank profitability. The hypothesis tested by regression analysis of curve estimation through three dependent variables these are ROA, NI, NII and one Independent variable interest rate. The data used for analysis were from secondary source. Data taken from annual reports for the period 2004-2008 of commercial banks in Pakistan. As a result of the approved progress toward the relationship of interest rate and commercial bank profitability showed the association between them. The study examined that there was negative association between the interest rate and commercial bank profitability, as the causes of increasing interest rate was inflation. The study developed a framework for investigating through key ratios which showed the profitability of financial institutes that leads to more significant approach. Result proved the hypothesis. CHAPTER 7 IMPLICATION The analysis of the bank profitability against interest rate changes is important for investors, to measure Commercial bank profitability against interest rate risk. This study found the sensitivity of Commercial bank profitability to changes of interest rate. This investigation helped to increase the commitment of managers of commercial banks to hold sound interest rate management policies and minimize their exposure to interest rate risks. This study encouraged the policy makers and bank regulators to implement fiscal and monetary policy regime that will ensure interest rate stability.

Capital Punishment Just or Unjust - 953 Words

A man by the name of Gary Mark Gilmore spent most of his life either in trouble or in jail being punished for it. He was born December 4 1940 and he grew up in Portland, Oregon. He was abused by his father and when the family moved to Salt Lake City, he started on a life of crime. When the family moved back to Portland, Gilmore became a neighborhood tough and dropped out of school at the age of 14. His involvement in a car theft ring opened his long criminal record. He was arrested a second time, and was sent to a boy s reformatory, where he spent most of the time in solitary confinement. After his release, he was arrested again and spent much of the two years in jail. In 1961 he moved back with his parents, but was arrested two more†¦show more content†¦In 1986 a young white woman was killed at a dry cleaners in Monroeville, Alabama. For the next 8 months the police were unable to come up with any likely suspects. Finally, police arrested Walter McMillian, a black man w ho lived in a nearby town. McMillian denied murdering the woman; he claimed he was with his relatives all day, in fact, his story was corroborated by several people. Nevertheless, he was arrested, tried, convicted, and imprisoned on death row even before formal sentencing. For more than six years McMillian was on death row until finally was proved innocent. A study by the Stanford Law Review found that between 1900 and 1985, 349 people were incorrectly convicted of capital crimes and later found to be innocent on the basis of reexamination of cases. Of these, 23 were actually executed. The debate over the merits of capital punishment had endured for years, and continues to be an extremely indecisive and complicated issue. I, personally am for the death penalty. I believe in the eye for an eye punishment. If someone kills they should be killed, no questions asked. I just would not want an innocent person executed for a crime that they did notShow MoreRelated Capital Punishment: Just or Unjust? Essay1927 Words   |  8 PagesCapital Punishment: Just or Unjust?   Ã‚  Ã‚  Ã‚  Ã‚  Can you imagine knowing the exact day, time, and place you were going to die, not to mention how your death was to come about? Day after day of mental pain just knowing that days, hours, minutes and even seconds from now you are going to be killed. The night before, tossing and turning, playing through your head just the way you imagine your death is going to be, asking yourself heaven or hell, suffering or short? If only you can take that one momentRead MoreRacial Discrimination And Capital Punishment1682 Words   |  7 Pagesand capital punishment has been a heated topic discussed ever since the 1972 case Furman v. Georgia. In the article, â€Å"Does Racial Discrimination Make Capital Punishment Wrong?† by Stephen Nathanson, his position in this argument is affirmative as he argues that racial discrimination makes capital punishment wrong since death penalty is administered in an arbitrary manner. Arbitrariness is the quality of being determined by chanc e or impulse, and not by reason or principle. He claims capital punishmentRead MoreAnnuling Capital Punishment Essay602 Words   |  3 PagesHomicide is unjust. Since youth we have been taught this unquestionable truth. Ask yourself, then, what is the death penalty? In its easiest structure, the death penalty is characterized as one individual taking the life of another human. Incidentally, that is the meaning of homicide. There are 36 states with capital punishment, and they should change. 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It is still used in many other countries around the world such as the United States, China and India, as it is believed to lower the crime rate within their country. Capital punishment was basically a form of torturing the suspect, but to their death as a consequence of their heinous crime. Many believe that capital punishment should be reinstated into Canada, while others are

Hhgh Free Essays

string(136) " considered when it is fair and transparent, since favouritism might occur; while external channel of recruitment base on the contrary\." Free Human Resources Literature Review richard | October 20, 2011 4 0 Rate This Article Table of Contents [show] LITERATURE REVIEW 1. 1 Human Resource Management In a rapid competitive business environment, the procedures of outlining the role, function and process of Human Resource Management (HRM) within a dynamic and uncertain environment are ongoing for many decades. In the early 1980s numerous books and articles were published by American Business Schools professors to support the widely recognition of HRM concept, and the environmental volatility in today’s contemporary business that specifically identify conflict and heterogeneity (Soderlund and Bredin, 2005). We will write a custom essay sample on Hhgh or any similar topic only for you Order Now Due to its diverse origins and many influences, HRM covers essential aspects of central concern in organisations such as individual, practice, educational theory, social and organisational psychology, sociology, industrial relations, and organisational theory (Soderlund and Bredin, 2005).. To date there is no widely acceptable definition for HRM and what it entirely involves in our daily business world (Brewster and Larsen, 2000). Fewer satisfactory definitions have been propounded by different writer such as (Soderlund and Bredin, 2005), whom perceived HRM as 1) an ‘executive personnel responsibility’, that mainly concern with management activities; 2) classified HRM as management philosophy that concerns with people treatment and, finally 3) discerned HRM as interaction management between the firm and its people. Due the conflicting theoretical conception and hypothetical disagreement about the general acceptance of the definition, Price (2007) definition would be used to in this literature because it better explained and cover huge areas of the study. According to Price (2007): â€Å"A philosophy of people management based on the belief that human resources are uniquely important to sustained business success. An organization gains competitive advantage by using its people effectively, drawing on their expertise and ingenuity to meet clearly defined objectives. Human resource management is aimed at recruiting capable, flexible and committed people, managing and rewarding their performance and developing key competencies†. The dynamic and uncertainty in HR contemporary organisations are tremendously moving towards a radical dimension (Analoui, 2007). Recent debate by many researchers have laid more emphasis about matching and incorporating the HR-department with other strategic functioning departments within organisation (Soderlund and Bredin, (2005); Analoui, (2007); Price, (2007). 1. 2 HR IN A CONTEMPORARY ORGANISATION HR is essentially crucial in today’s contemporary organisations because it induce high-performance management through the use of employees; by enhancing their levels of customer’s service, productivity, growth, profits and quality control (Armstrong, 2000). Lado and Wilson (1994, p 701) outlined a separate interconnected activities, roles, processes and other aspects that are aimed to attracting, maintaining, and developing the firm HR activities in contemporary organisations, such as: 1) planning; 2) recruitment and selection 3) training; 4) performance management; 5) benefits and rewards; 6) compensation; 7) and 8) career development (Banhegyi et al. , (2008) and (Robbins Coulter, (2002). 1. 2. 1 Planning Planning in Human Resource has been discussed in different HRM contexts for many years (Wren, 1994). HR planning was initially an important aspect of ob analyses and was often used as bases for determining strengths and weaknesses among the employees and to develop the skills and competences they needed (Gallagher, 2000). As individual career plans started to gain more popularity, companies gradually started to pay more attention to the certain skills and competences among individual employees as a way of aligning and dealing with t he companies’ succession planning (Kuratko and Morris (2002). As this aspect been scrutinised rigorously by many researchers, HR planning is still a complicating and complex issue of debate within the HR practices (Schuler, 1986). In 1978, McBeath addressed his view of HR planning by highlighting a set of issues that he regarded as being important with respect to the HR planning. These were; An estimation of how many people the organization needed for the future A determination of what ability, skills, and knowledge requires to compete An evaluation of employees ability, skills and existing knowledge A determination of how the company could fill the identified competence gaps Storey (1995) argues that HR planning today is a very important task of every contemporary organization’s HR department. According to him, HR planning mainly involves the identification of skills and competence within the organization, the filling of identified competence gaps, and the facilitation of movements of employees within the organisation. An essential part of the HR planning is the succession planning which aims to ensure the supply of individuals and filling of gaps on senior key positions when they become vacant and replenish competences to areas where they are most valued (Wolfe, 1996). 1. 2. 2 Recruitment and selection In organization the system that responsible for placing diversifies talents throughout is refers to as recruitment and selection processes. The process of recruitment and selection is an ethical approach by a firm to seek and attract the most competent and suitable applicant for a vacant position (Analoui, 2007). Price (2007) inferred that recruitment strategies can be divided in three significant approaches: suitability – the most qualified applicant for the position, malleability – moulded within the cultural norms, and flexibility – the most reliable and versatility employee. These factors are quite complicating and can be easily mistaken during the process of hiring employees. Suitability is a critical aspect hence it mainly concerned with the process of hiring the most suitable applicant for the position. The process of selecting and retaining potential employees is the greatest organisational competitive battle in modern days (Pfeffer, 1994). Having the greatest talent simply implies that the firm will be able to compete aggressively in the market. This phenomenon are quit prevalent in our daily business life and has also pushes organisations to gain a niche by employing the most renowned managers to lead the thriving future. 1. 2. 2. 1 Channels of Recruitment Russo et al. , (1995) cascaded channels of recruitment into external and internal recruitment, and formal and informal channels. Internal recruitment channels mainly involve the use of intercommunication between other strategic areas of the organisation and the entire HR department. This approach enhances the firm to prioritise and target in-house or current employees (Russo et al. 1995; Analoui, 2007). Internal recruitment can be fully considered when it is fair and transparent, since favouritism might occur; while external channel of recruitment base on the contrary. You read "Hhgh" in category "Papers" 1. 2. 3 Training In today’s contemporary organisation, employees ‘skills and knowledge can make a positive impact on the firm‘s productivity (Guzzo, J ette Katzell, 1985). Organisations have to counter some difficulties while training a single or more employees (Ostroff Kozlowski, 1992). Previous literatures argue the affordability of some organisations that eprive themselves for a single individual employee particularly when human resources are limited: this can hinder the productivity on the short term and destabilize the organization (Bishop, 2003). He continues to stress that such perception about training implies that organisation should embark on a cost reduction strategies and focuses on in-house or on-job-training (OJT). Formal training is just one of the possibilities for organisations to enhance the personnel performance level, as important roles are covered also by organizational socialization (Chao, 1997) and multitasking (May, 1997). It was suggested in the early 1990s that organisational socialisation is a fine process for newcomers to source out information’s about the organisation, learn about the necessary tasks and how to perform their responsibility; clarifying their roles and relate with others inside the organisation (Ostroff Kozlowski, 1992). This philosophy was also supported by Rollag Cardon (2003) as they indicated that the process of socialisation within a firm enhance newcomer to incorporate and learn in a well conducive atmosphere. . 2. 4 Performance Management The concept of measuring performance or managing performance within organisations is to strategize how firms can get the utmost benefits from their employees (Dransfield, 2000). The approach to measuring performance can be classified as a three-step approach that composed by objectives, appraisal and feedback. The first step is the setting of performance objectives that are quantifiable, easy to measure and simple to communicate thr oughout the organisation (Dransfield, 2000). After that, the process of performance appraisal should take place (Bredin, 2008). The management of performance includes design of work systems, facilitation of knowledge utilisation, sharing and creation, and appraisal and reward systems (Cardon Stevens, 2004). However, this phenomenon has been supported by different researchers claiming that performance management/appraisal is an outstanding process to determine and supervise employees output within the firm, so as it would be less complicating to ssess and achieve maximum performance (Zhu Dowling, 1997). It is an excruciating process to implement and evaluate a systemic approach that can accurately pinpoint employee who is responsible for results within an organisation (McKenna Beech, 2008). However, outcomes of individual behaviours such as job satisfaction, employee turnover, absenteeism (Dyer and Reeves, 1995); motivation and commitment (Seibert, Silver, Randolph, 2004), are proximal hence human resource processes are inte rconnected. In as much that the human resource practices are intended to achieve result in this area; there effect can also have a tremendous influence on the aforementioned outcomes (Bloom, 1999). 1. 2. 5 Benefits and rewards Eliciting high contributions within an organisational environment is highly essential for the firm as well as the employees (Appleby and Mavin, 2000). For instance, expectancy theories have explicated aspects of anticipated rewards in line with employee’s motivations. This indicated that every employee will have to face with a logical decision in accordance to the present economical circumstance (Tannenbaum and Dupuree-Bruno, 1994). As a result to that employee considerable effort will manifests into an intended realisations and fulfillment of a specific desire outcome. Such manifestation enhances the explanation of the crucial aspect of organisational reward system and how it can be sustain and elicit the firm human capital investment Tannenbaum and Dupuree-Bruno (1994). The conceptions of both internal and external rewards are highly valued by organisations and its employees. Not only the obvious fact that employees yearns more about promotional opportunities, higher pay or better benefits, but also their desires and anguish spins from autonomy, personal growth and valued responsibility. Different authors have suggested the positive relationship, size and the implementation of innovative ideas in human resource practice as a result to economic of scale (Baldridge and Brunham, (1975) and Moch and Morse, (1977). This conception has locus the local firms at greater disadvantage in-terms of retaining or recruiting top-notch talent (Tannenbaum and Dupuree-Bruno, 1994). Figure 2: model for reward management Source: Bratton Gold, 2003, p. 282 1. 2. 6 Compensation According to Patel Cardon (2010) compensation is vital for contemporary organisation as it contributes to attract and retain high skilled workers with superior salaries, and it encourages a desired stakeholder behavior regarding recognition and legitimacy. Minbaeva et al. (2003) inferred that compensation would enhance motivation among personnel too. Even though non-financial compensation can really work as a positive stimulus for the workers, providing monetary benefits is necessary to increase the productivity of the employees on the individual or group level (Gomez-Meja, 1992). Balkin and Swift (2006) suggest a more flexible approach toward the payment issue. They proposed to relate it to the life stage of the organisation with a higher rate of non-monetary benefits during the first years of activity, and a re-equilibration whenever the company enters the mature stage. Non-monetary paybacks are represented by stock options, stocks or other form of equity sharing that enhance the participation and the motivation of employees, while spreading the risks over a larger number of people (Graham et al. , 2002). The aforementioned ownership sharing represents also a long-term planning for compensation, as Graham et Al. (2002) stated, but also short-term rewards exist. These are represented by profit sharing policies aiming to encourage the employees toward group work, or to control the organizational outcomes (Heneman Tansky, 2002). 1. 2. 7 Career development (CD) Many practitioners and scholars within human resource development (HRD) field have claimed that the utmost crucial aspect of the practices is career development (McLagan, 1989; Weinberger, 1998; Swanson Holton, 2001). However, this area of studies has been given little attention (Upton, Egan Lynham, 2003). With the intense competition in the 21 century, many organisations have realised that in order for them to stay competition they have to improve their employees and enhance their career development (Boudreaux, 2001); rather than individual career development (Swanson Holton, Upton, Egan Lynham, 2003). Therefore, many organisations are now taking a proactive measures towards equipping their staffs and educationally (Leana, 2002) or create a climate that supports their staffs at all levels of the organisation to be more resultant and productive (Sullivan, 1999); which Boudreaux, (2001); Brown, (1997) referred to as ‘‘shared responsibility’’. However, learning within an organisation is quite critical and expensive; (McDonald, Hite Gilbreath, 2002). The most common learning methods within organisations are informal (i. e. n-the-job coaching, sessions, lesson learned, development assignment) Power, Hubschman, Doran, (2001) and formal learning (i. e. as training/workshop and other forms of professional training conducted by professional bodies internally or externally (McDonald, Hite Gilbreath, 2002). 1. 3 The importance of HR in organisation The sole aim of HRM is to guarantee that the firm human capitals are being used in the fullest capability to produces the greatest organisation results that meets with the firm needs Nadeem Moiden, (2003) and Gilley and Gilley, (2007). Therefore, the philosophy of empowering employee’s capabilities is coined to the conception that HR is extremely crucial for sustainable competitive advantage and organisational success (Koch McGrath, 2003). HR in organisation is also crucial because its assist managers and employees through a change process (Hendry, Jones, Arthur Pettigrew, 1991). Businesses can gain enormous competitive advantages when their employees are used effectively to drawing on their expertise and ingenuity to meet clearly defined objectives. When organisation recruit the most effective, capable, committed and flexible people; and managed and reward them accordingly their performances, competencies and efficiency would help the firm productivity immensely (Price A. , 2007). Managers that tactfully execute organisational goals depend on the HR practices to deliver excellences so that they can achieve the utmost business performance (Becker, B. and Gerhart, B. , 1996). However, the HRM field has been isolated and misunderstood by many researchers and practitioner, failing to realise that without employees there would be no functioning organisation Argote, McEvily and Reagans (2003). As employees remain the most expensive and reliable asset of the organisation, the practices of HR will remain a vital area of discussion (Becker, B. and Gerhart, B. , 1996). 1. 3. 1 Advantages and disadvantages of HR As many other departments within an organisation encounter, challenges are inevitable and are present in our daily business lives. There are three main disadvantages, or some may refers to a challenges facing HR, namely: 1. Managers â€Å"need to support corporate productivity and performance improvement efforts† (Dessler, 2008, p 87). 2. Employees play an expanded role in employers’ performance improvement efforts† (Dessler, 2008, p 87). All the basics contents associated with high-performance organisation, such as high-technology team-based production, are rather futile without high levels of employee competence and commitment. 3. The challenge, derived from the first two, is that â€Å"employers see that their human resource units must be more in volved in designing – not just executing – the company’s strategic plan† (Dessler, 2008, p 87). 1. 4 Strategic HR roles in dynamic and uncertainty environments Strategic HRM (SHRM) roles consist of strategies executions and formulations. The strategies execution has been the predominant aspect of the SHRM’s strategic job. Strategies formulators always set and margin their formulations in line with the corporate and competitive strategies and aligned the firm policies and practices towards their strategic formulations (Dessler, 2008). In recent years, there has been a trend shift and researchers have now identified SHRM to take an active role with the top managers in the firm to formulate the company’s strategic plans. The gliding competitive environment due to a globalized economy has lead to that many employers are pursuing improved performance by improvement of commitment and competence level of their employees. Dessler, (2008) outlined four strategic tools that could be used to enhances employees abilities and proficiencies, such as employees satisfaction, loyalty, motivation and satisfactions. 1. 4. 1 Employee satisfaction Employee satisfaction is the individual satisfaction as a professional person, that is, the individual has an effect on his attitude. Organization member to its operating characteristic is the cognitive evaluation, employees get through the more realistic values and expectations of the gap between the value obtained after the meeting whether or not all aspects of work attitudes and emotional responses. It involves the work of the degree of organizational commitment and work motivation is closely related (Saari, L. M. , Judge, T. A. , 2004). Superior-subordinate communication is an important influence on job satisfaction in the workplace, in which the way a subordinate perceives a supervisor‘s behavior can positively or negatively influence job satisfaction. Nonverbal messages play a central role in interpersonal interactions with respect to impression formation, deception, attraction, social influence, and emotional expression (Burgoon, Buller, Woodall, 1996). 1. 4. 2 Employee loyalty Employee engagement is personified by the passion and energy employees have to give of their best to the organization to serve the customer. Engagement is characterized by employees being committed to the organization, believing in what it stands for and being prepared to go above and beyond what is expected of them to deliver outstanding service to the customer. Engaged employees feel inspired by their work, they are customer focused in their approach; they care about the future of the company and are prepared to invest their own effort to see that the organization succeeds (Cook, 2008). Engagement can be summed up by how positively the employee: Thinks about the organization; feels about the organization; proactive in relation to achieving organizational goals for customers, colleagues and other stakeholders. Employee loyalty can be divided into active and passive loyalty. The former refers to the subjective staff loyal to the company with the desire (Cook, 2008). This desire is often due to a high degree of organization and employee goals and now there are consistent with organizational help for employees‘ self-development and self-realization factors. Passive loyalty is when the employees themselves do not wish to remain in the organization, but due to some constraints, such as high wages and welfare, transportation, etc. , have to stay in the organization. Once these conditions disappear, the staff can no longer feel organizational loyalty (Cook, 2008). The basic elements of enterprise employees, their enthusiasm on behalf of corporate morale, awareness of their work reflected in the subtle strength of enterprises (Pepitone and Bruce, 1998). 1. 4. 2. 1 Wages and benefits systems Salaries and benefits in the eyes of employees affect their loyalty is one of the important factors. â€Å"Money is not the most important, but no doubt a very important†, whether corporate or professional loyalty, loyalty is established on the basis of material, good pay system to ensure the basic material needs of the employees, will have good professional loyalty, and corporate loyalty (Cook, 2008). 1. 4. . 2 Enterprise human resource management system As indicated above human resource management is compulsory for each company and one of the most important courses; how to send staff to the right on the job, motivate employees, training and study staff, will be affected to some extent, staff loyalty. In the development of the unscientific, resulting in unfair business, become a mere formality, which often occurs. Negative phenomena that affect the performance of their staff, or even result in employees slack, complain more, rumors filled the air, to lose morale. Figure 3 Maslow’s hierarchy of needs Source: Maslow, (1943) 1. 4. 2. Retaining top employees Excellent staff should have: First, high loyalty, company loyalty by recognizing the company’s values, to share weal and woe, and common development; second, right attitude, initiative, and study to make improvements, work hard and willing to do, know that they are doing, those things that do and should not do, great development potential; Third, professional ability, can work independently, with skill, and can continue to improve (McKeown, 2002). The roles of great employees are being productive and increased passion for and commitment to the organization‘s vision, strategy and goals (Cook, 2008, p. 31-32). . 4. 3 Employee Motivation Motivating employees wa s highlighted as an indispensable part of HRM in many studies (e. g. Pinnington and Edwards, 2000; Dessler, 1997; Stone, 2005). Pinnignton and Edwards (2000) divided motivational incentives into two parts: motivating individuals and motivating groups. The former one pays the attention on individual needs and the later one highlight the equity principia. Some incentives played big roles in motivational process, for instance, the good communication between organization and employees (e. g. Ivancevich, Konopaske and Matteson, 2008; Stone, 2005; Dessler, 1997), High Job satisfaction (e. . Lambert, Hogan and Barton, 2001; Wright and Bonett, 2007), Good Payment and treatment (Carpenter and Sanders, 2004) and so on. Meanwhile, relating to the interesting issue on employee turnover often happened in the company, job satisfaction is one kind of factor that influences the turnover intent of employees. Lambert, Hogan and Barton (2001) pointed out that job satisfaction is a key mediating variab le between the work environment and turnover intent, and suggested that managers take the focus on the work environment to improve employee’s job satisfaction, and ultimately lower turnover intent. Carpenter and Sanders (2004) opined that the investment in TMT (Top Management Team) could be way for attracting and retain talent for organization. Thus, it is required, and should be considered into the HRM process too. 1. 4. 4 Employee satisfaction Employee satisfaction is mainly concern with the satisfactions that derived from the individual as a professional person. One common research finding is that job satisfaction is correlated with life satisfaction (Rain, et al, 1991). This correlation is reciprocal, meaning people who are satisfied with their lives tend to be satisfied with their jobs vice visa. However, some research have argued this concept that that job satisfaction is not significantly related to life satisfaction because of their variable such as nonworking satisfaction and core self-evaluations are taken into account (Rode, J. C. 2004). Organization member to its operating characteristic is the cognitive evaluation. Employees get through the more realistic values and expectations of the gap between the values obtained after the meeting whether or not all aspects of work attitudes are emotional responses. This consists of the extent of firm involvement and related motivational activities (Saari, L. M. , Judge, T. A. , 2004). Burgoon, Buller, Woodall, (1996) one of the most suitable means of influencing employees satisfaction is the manners at which superior relate and communicate with subordinators. The meshing and mashing of interpersonal relationships between the two distinctive groups or status plays a significant roles in terms of respect, attractions, formative impression or emotional expression, deceptions and social influences (Burgoon, Buller, Woodall, 1996). Weiss and Cropanzano, (1996) inferred that such immediacy and friendliness will cumulate the essential elements of job satisfaction (Weiss and Cropanzano, 1996). The way employee’s feels and thought that their jobs being appreciated are very much essential in terms of employees job satisfactions (Organ, D. W. , Ryan, K. , 1995); turnover (Saari Judge, 2004); and absenteeism (Wegge, et al, 2007). Job satisfactions ultimately looks at the general aspects of satisfactions employees gained from their work in entirety (Mount Johnson, 2006) How to cite Hhgh, Papers

Bluescope Steel Company-Free-Samples for Students-Myassignment

Questions: 1. What are the key Environmental issues faced by BlueScope Steel? 2. What are the key resources used by the company? 3. How can Blue Scope gain from better work practices? 4. How do they measure and record current usage of resources? 5. How was Blue Scope able to implement waste reduction? 6. Out of the hints and tips listed on the 2nd page of the case study, select 3 tips and explain how they can be applied at ACK? Answers: 1.BlueScope is facing various environmental challenges in carrying out its manufacturing processes. Some of the key challenges include; Greenhouse gas emissions, the company believes that this is an important issue that requires response and hence taking part in reduction of the emissions to protect its employees as well as the communities at large (Mathieson, et al, 2005). Air pollution, the company is concerned with the quality of air used by both its employees and the community at large hence investing in air filtration systems. Climate change, as result of change in climate leading to water shortage and drought among the community members, the company has come up with water harvesting system for preservation to use during dry times. 2.Key resources used by the company are; Coal is a key resource used in energy production used in producing raw steel. Water is a key resource used in steel production both in circulation and finishing processes. Iron that is mainly produced by use of coal energy is the primary set of raw steel that is processed to make the steel product as a complete. 3.BlueScope can gain better work practices by; Enhancing creative and strategic management activities to help understand new trends in work practices. Ensuring a clear set of ethics to be followed by both the management and the junior employees. Ensuring positive working relationships with all the companys stakeholders to ensuring a positive working environment. Ensure a strong and productive human resource department to ensuring the well- being of all the employees for positive productivity. 4.The company is able to measure and record current usage of resources by taking count of all the inputs and outputs taking place within its environments. This ensures that all raw materials, production processes, labor supply as well as products distributed in the market are recorded. This helps the company to come up with a detailed report on its inputs and outputs relating to its level of growth. 5.BlueScope was able to implement waste reduction idea by; Creating an environmental committee that consisted of the company staff members who engaged in the waste reduction mission by focusing on means of waste distribution and means of waste reuse (Ness, et al, 2015). Improving filter cake management also enhanced waste reduction as the water residue from steel production was controlled appropriately. 6.Enhancing management systems by the staffs to protect the environment by implementing rag and grove recycling programs resulted to waste reduction. The hints and tips given can be applied at ACK as discussed below; Saving water. Since water used in cooling system does not require to be either fresh or non-fresh, ACK can use this while teaching on processing to minimize water usage by recycling cooling water instead of running the main water source while cooling. Saving energy. To reduce the amount of energy used in processing activities, ACK can explore more heat recovery options available in various options. Example using waste heat to help heat the space that can later enhance energy production. This ensures that direct heat used is less as the preserved heat is used in space heating. Reducing waste. ACK management can decide to come up with an education plan to teach both members of staff and students about the various waste reduction initiatives to help reduce waste in the environment. References Mathieson, J. G., Truelove, J. S., Rogers, H. 2005. Toward an understanding of coal combustion in blast furnace tuyere injection. Fuel, 84(10), pp. 1229-1237. Ness, D., Swift, J., Ranasinghe, D. C., Xing, K., Soebarto, V. 2015. Smart steel: new paradigms for the reuse of steel enabled by digital tracking and modelling. Journal of cleaner production, 98, pp.292-303.