Dannon Case Study Essay

Danone, Dannon’s parent company, was one of the largest health-focused food companies in the world. Danone traced its heritage back to 1919 in Barcelona, Spain, when Isaac Carasso wanted to create yogurt with inherent health benefits. Through the years and different lines of succession, Danone continued to grow, but never lost its core vision of providing better health to people through their products. When this case was written, Danone’s global business focus was on fresh dairy (Activia yogurt), bottled water (Evian), medical nutrition, and baby nutrition. Danone viewed the United States as an emerging market for yogurt, thus Dannon’s marketing efforts needed to focus on growing U. S. yogurt consumption and expanding the category, while also growing its brand. (Marquis, p. 1) Dannon entered the US market in 1941 and by 2010 was poised to become the leader in America’s domestic yogurt sector. This was a major accomplishment for the simple fact that America’s yogurt market was practically non-existent at the time! A new product, called â€Å"Fruit at the Bottom† changed that and became an instant success. In 2007, even though Dannon had success, U. S. yogurt consumption was only 11. 8 lbs versus 62. 4 lbs in Switzerland and 42 lbs in France (Marquis, Exhibit 2) The implication of the latter statistics to Dannon was the U. S. was a high potential market for the next 5 to 10 years. (Marquis, p. 5) Dannon had maintained a strong commitment to CSR and was integrated into the company’s overall mission of â€Å"bringing health through food to as many people as possible. † Their CSR mission, however, was very internally focused and few customers knew about its activities. (Marquis, p. 1) Dannon’s CSR activities fell under the Regulatory and Corporate Affairs Department and focused around three key themes: nutrition and health, nature, and people. The case identified notable accomplishments in each of these areas, to include the U. S. Dannon Institute (nonprofit foundation dedicated to promoting excellence in the field of nutrition) with its many noteworthy educational programs. The question behind this case, as proposed by its senior director of public relations, was how Dannon’s long-standing, deeply ingrained corporate social responsibility (CSR) efforts could play a role in achieving Danone’s and Dannon’s overall marketing strategy. Discussion with Key Dannon Leaders brought out the following pro’s and con’s concerning the proposed idea of communicating Dannon’s CSR efforts to its consumers: Pro Con Possible increase in marketing of Dannon’s social mission Hard to measure ROI and benefits would be mostly intangible Possible increase in marketing individual products Limited, short-term sales impact Consumption of products might increase Impact of consumption might not be immediate Potential tax incentive or government assistance to promote health programs Competitors could take advantage of hallo effect Opportunity to communicate what Dannon stands for at the product level Change in overall budget priorities and expenditures for new program Opportunity to use Danone global brand Critics could say CSR efforts were only for publicity Brand campaign would have halo effects down to Dannon’s individual products Customers could perceive effort as disingenuous. Dannon employees would feel better about the company they worked for People don’t buy products just because they like the company’s CSR stance Would help build social interests May not support business interests Message might be too complex (Pro and Con information taken from case study, pages 9 -14) To Communicate or Not to Communicate? Dannon seems to be very focused on its Return on Investment (ROI) for marketing and communication dollars spent. While the question of whether or not to communicate its CSR seems very simple, research shows this important undertaking is very complex and there is no easy cookie-cutter answer for Dannon executives. What consumers feel does not always translate to what they buy. According to a 2010 survey, more than 75 percent of consumers surveyed say that social responsibility remains important to them despite the recession. In addition, 38 percent of these respondents indicated that they would spend the same or more on products or services from socially responsible companies compared to 2009. Yet, according to the very same survey, these sentiments do not have a significant impact on favorability and purchase intent — only 13 percent of folks actually proactively seek out CSR friendly brands and purchase them. (Lester, 2010) The latter finding seems to agree with other academic research. According to another survey, CSR impacts a very small group of people, namely the affluent. This report went on to state in its conclusion, â€Å"consumers with strong social preferences (and high income) buy CSR products and consumers with weak social preferences (or low income) buy non-CSR products. (Etile & Tyessier, 2011) General â€Å"assumptions† about CSR and consumer purchases may not be telling the whole story, though. Further research indicates consumers attach more CSR importance to certain industries. For example, the food and healthcare industries had an 88 percent importance rating for CSR initiatives – two of the top three in the entire survey (the other was energy). â€Å"Drilling down† even further shows the sector where CSR is both important to the consumer and CSR communications has performed extremely well is in the food industry. (Lester, 2010) One of the most telling findings in the 2010 CSR branding survey was the importance of tying social responsibility to a product. Its conclusion was consumers are more likely to select the product with an added social benefit hen given a choice between similar products. (Lester, 2010) Research shows a consumer’s loyalty to specific products also has an impact on a company’s overall brand. In an online article of The Economist, the author writes about the importance of brand in the context of specific product purchase. Once customers trust a certain product, they tend to look for the brand associated with it when selecting dissimilar products or services. (Case for Brands, 2001) This all being said, the flip side of the power and influence of a brand is its growing vulnerability – a single failed advertising campaign or hint of scandal can send customers fleeing. According to another article, â€Å"brands—and the multinationals that are increasingly identified with them—are not more powerful, but more vulnerable. Consumers will tolerate a lousy product for far longer than they will tolerate a lousy lifestyle. † (Who’s wearing the trousers, 2001) Pulling all of these points together lead me to the following conclusion: If Dannon intends to tie CSR into its product marketing, it should do so at the individual product level, and If Dannon intends to include CSR as part of its marketing and communications strategy, it needs to be sustained and intentional to have an affect (i. e. measurable ROI). My recommendation is Dannon follows my two suggestions above! Dannon has a distinct advantage in being a well-known name in both the health and wellness sectors as well as the food sector. Customers surveyed tend to research a provider’s reputation more stringently in these areas, as such, a combined external CSR and CR campaign would be, in my opinion, advisable. Dannon’s current CSR strategy, which is mostly internal, is good for its culture and employee retention. However, it does not maximize profitability and overall goodwill. Therefore, an external strategy must be added for full ROI maximization. Impact of a Corporate Parent Dannon is a wholly owned subsidiary of Danone and has a significant fiduciary responsibility to them. According to our case, Dannon is obligated to meet annual targets for profitability, operating free cash flow, manufacturing safety, and environmental sustainability. Dannon’s decision to change its marketing strategy, either as a branding exercise or for a specific product, would absolutely impact several of these obligations. (Marquis, p. 1) Obligation Potential Positive Impact Potential Negative Impact profitability a successively executed plan will increase customer sales and loyalty, both having a long term impact to the parent company’s bottom line. If customers feel the CSR communications are disingenuous, they will discontinue buying Dannon products, thus losing market share and reducing overall profits. operating free cash flow Increased profitability should increase overall free cash flow. Sustained marketing costs a lot of money and will reduce the company’s cash flow; assuming a long-term commitment, this will become a drag on profits if not successful. manufacturing safety No impact If cash flow is reduced, new equipment of safety training may not be purchased, thus allowing for accidents to happen. environmental sustainability No impact When cash flow is reduced, local operators might look for ways to cut expenses. One way to do that is to cut corners, especially in the ways waste is disposed of. customer loyalty A good campaign will increase the number of Americans buying Dannon products as well as the amount being consumed. Market share will increase and provide opportunities for new Dannon products to be distributed. All the reverse of the positive outcomes. Looking at our case, I think the impact to Danone is very minimal. It seems that Danone’s culture is to trust the country-based units and train its leadership to think globally. From my perspective, if Dannon executes a successful CSR campaign for a single product, the likelihood of success is extremely high. The Communication Strategy As indicated in the â€Å"To Communicate or Not to Communicate? † section of this paper, Dannon should take advantage of being in the market sectors where CSR impact is very high (health/wellness and food) and select a single product to use as a CSR marketing and communications platform. Because of its market penetration and dominance, I would use its top proactive health product, Activia, as the product. Danone and Dannon’s sustainable development model focuses around Nutrition and Health, People, and Nature. These three areas and how they relate to Activia would be my focus, with the specific bottom line result being how Activia contributes to a customer’s â€Å"personal health and nutrition naturally. † Once this is done, I would test my new outreach models in focus groups, specifically those that are already purchasing Activia (existing clients) and those that aren’t (potential clients). All successful marketing plan needs to keep both groups in mind; if no new clients are drawn to this approach, then go back to the drawing board. This strategy falls in line with Dannon’s desire to focus on growing the yogurt industry and proving its relevance to Americans. (Marquis, p. 5) When both groups trended positively toward the new marketing strategy, I would roll out a multi-faceted plan that includes print, web, television, internet, and social media. I would also tie this new communication in with the community grant programs that Dannon is already known for. This plan would need to be executed for 90 or 120 days and then measured for tangible ROI, specifically on the Activia product and secondarily on increases in other brand sales. Conclusion In conclusion, I believe that Danone was created with a definite CSR culture as part of their overall operating strategy. As such, all facets of their global organization reflect these core values, to include Dannon. I think this bodes well for an expanded, external CSR communications strategy because: Dannon risks very little in detractors saying they are simply communicating their CSR accomplishments as a profit motive – their legacy as a company, both locally and globally, state otherwise. Dannon is fortunate enough to be in the right sectors where CSR and CR are highly regarded. As such, they can leverage this fact to impact their product marketing even more. Dannon’s consumers, especially the health conscious, tend to have more disposable income and be more drawn to sustainable products and brands. Dannon has a single product, Activia, that is very high in market penetration and fits into both health/wellness and food categories. Again, this can be leveraged. Dannon can test the impact of communicating their CSR philosophy with a single product before exposing their entire brand. If Dannon’s product-based approach works well, then they have set a positive template to add new products, both within the United States and beyond. If it does not, then Dannon can quietly drop their marketing campaign without tainting all their products or the overall Danone brand. In the final analysis, I think Dannon is an ideal company to further communicate their CSR values. As a global company, they can impact and influence other organizations within the food industry. References Etile, F. & Tyessier, S. (2011). Corporate Social Responsibility and the Economics of Consumer Social Responsibility. Paris School of Economics. August 2011. Retrieved May 18, 2013 from http://ageconsearch. umn. edu/bitstream/120399/2/Etile_Fabrice_359. pdf Lester, B. (2010). Corporate social responsibility branding survey. Penn Schoen Berland. Retrieved May 18, 2013 from http://www. psbresearch. com/files/CSR%20Branding%20Survey%202010%20EXTERNAL%20FINAL. pdf Marquis, C. , Shah, P. , Tolleson, A. , & Thomason, B. (2011). The dannon company: marketing and corporate social responsibility (A). The Harvard Business School. Revised September 28, 2011. File number 9-410-121 The Economist. (2001, September 6). The case for brands. Economist. com. Retrieved May 18, 2013 from http://www. economist. com/node/771049 The Economist. (2001, September 6). Who’s wearing the trousers? Economist. com. Retrieved May 18, 2013 from http://www. economist. com/node/770992

Planet Organic Marketing Report

Through primary research we wish to study the marketing strategy for Planet Organic particularly in the use of interviews, questionnaires and in store visits. Having arranged an interview with the Store Manager of the Westbound Grove branch, we hope to ask questions that we feel could contribute towards our final marketing report. Through the use of the questionnaire this will give us particular help with looking into the demographics of our chosen retailer. We also expect to carry out secondary research with the help of Planet Organics newsletter, the Internet and the Planet Organic website.We will analyses newspapers such as The Daily Telegraph and The Guardian in which will enable us to view information on its retail competitors as well as general articles on organic farming. I nurturing ten process AT writing tons report we alma to nave regular contact Walt a spokesperson representing Planet Organic. This will help us gain both an informative insight into the marketing techniques and environment. To anchor our information on the micro/macro environment we will produce a SOOT analysis within our report, which highlights the Strengths, Weaknesses, Opportunities and Threats ofPlanet Organic. 2. Micro Environmental 2. 1 Company â€Å"Planet Organics natural ethos also extends to our beliefs about health and how complementary therapies and remedies can prevent and cure illness. Nourishing our families with good wholesome home cooking combined with a complementary approach to well being is the foundation for a healthy, vital life now and for generations to come. † Renee Elliott 2000 Planet Organic is a unique supermarket dedicated to organic and other ethically sourced products.They have 4 stores spread across some of the most affluent areas of London and have a large target arrest of organic consumers looking for essentially chemical-free , fresh or minimally processed food. Their mission is to raise awareness of British farming and organic goods while fi ghting against genetically modified foods. Renee Elliott a former American wine Journalist opened her first Planet Organic store in 1995 in Noting Hill, with each restaurant containing a designated seating area where customers can purchase foods from the deli counter, offering a selection of fresh Organic Produce.The shelves in all four stores are aligned according to Meat, Dairy Products, Confectionery and Health and Beauty. When walking into a Planet Organic Store you have immediately stepped into what is set out to be like a market stall of fresh fruit and vegetables. The shop is very appealing to the eye with its color coordination and neatly stacked shelves. The smell of the fresh deli counter makes shopping in Planet Organic thoroughly enjoyable instead of the hustle and bustle that you may encounter when shopping in other supermarkets such as Testes and Kingsbury.This is why Planet Organic continue to have such a loyal sense of customer value, they want to make your food shop ping experience enjoyable and relaxing. More and more people are choosing to arches and look into eating organic food because they want to know what they are eating, the reassurance that the environment has not been harmed in the process of which their food has been produced This year Planet Organic are celebrating 1 5 years since they opened as the first organic and natural supermarket in the I-J.Planet Organic became the first Soil Association certified organic supermarket in the I-J when they first started in 1995, they were also the first to have an organic British meat and fish counter within a supermarket. I en company were also ten TLS London retailer to KICK start ongoing trend of replacing plastic bags with biodegradable bags, this has been picked up on with many other large retailers such as Waitress, Testes and Kingsbury. Planet Organic now have their own website (www. Planetarium. Com) in which consumers can purchase products online and have them home delivered.This is u seful to their loyal consumers, as unlike many supermarkets such as Waitress and Marks and Spencer, accessibility is limited due to such a limited amount of stores. The website entices customers with ‘gift ideas' and gives factual information in ‘Renee's blob (The company director of Planet Organic). In this blob she introduces ewe and innovative recipes such as ‘Soaked Cinnamon and Apricot Porridge' and ‘Parmesan Baked Asparagus', she also directly targets mothers with young children, for example what to put in their packed lunch or meals that both grown ups and children will enjoy.This blob is updated almost weekly and is full of informative and current news that makes an entertaining read. Planet Organic also send out a monthly newsletter with details of latest products, environmental and health issues and ‘Planet Organic News'. They do this to keep that close relationship that is needed between a retailer and its consumers thus creating brand loyalt y. Planet Organic is not Just a foods supermarket; â€Å"We believe the body can usually heal itself, not with medicines that often Just suppress or mask symptoms, but with natural remedies that support the body in the healing process† (Renee Elliott).They particularly specialize in herbal remedies, vitamins and minerals as well as providing consumers with organically produced cosmetics such as make up and body lotions. 2. 2 Suppliers The company sells over 27 different products within each category. Books, Vitamins, supplements, natural remedies, body, face care and make up are only a small part of the company's success. They sell organic free range eggs and organic meat (all animals are vegetarian). Planet Organic only sells natural, free range organic products. The business was the first to be part of the Soil Association Organic Standard in the I-J.The soil Association is a charity, which campaigns for planet friendly food and farming. They believe that the connection bet ween food, soil and health of people is very important, which is also very important within Planet Organic. Planet Organic are forever introducing new products into the market, by promoting conventional farming, home grown products and raising awareness about health. By sourcing organic food from sustainable producers this reduces the environmental impact of consumption of items brought through its stores.Planet Organic have a British policy on buying meat and British first for fruit and vegetables. Suppliers come from local areas in London and Planet Organic is always trying to promote local businesses. Planet Organic sources and sells seasonal produce, which therefore minimizes transport and thus the impact on the environment in which helps to reduce the carbon footprint. Planet Organic maintain regular contact with tenet suppliers Ana attend trace snows to Tina ten Test new products I nee are committed to British farmers, bakers, producers and manufacturers and continue to mainta in high standards.Planet Organic is also part of Fair-Trade, which is an organized social group that helps people in developing countries to earn a respectable wage and living. Fair- Trade also ensures that better prices are obtained, decent working conditions, local sustainability and fair terms of trade for farmers and workers in the developing world. Companies are required to pay sustainable prices, which must never fall below the market price. Fair-Trade helps to stop the injustice of trade; which in the sat has been unjust and discriminated against the poorest and weakest producers.Fair-Trade enables the workers to improve their position and have more control of their lives. 2. 3 Intermediaries The intermediaries, also know are wholesalers, the middlemen or distributors, are what fill out the gap between the point of production and the point of sale. They can help overcome the lack of compatibility between the suppliers and the end customers (being Planet Organic) by reducing t he number of contacts between the two. This would also help in reducing the costs of the distribution and selling.The organization must decide whether to involve an intermediary, this can be determined by its size or also whether they trust the resources and skills of the produces to successfully meet the needs of the consumer. Most often the intermediaries add value to an organization in different ways, firstly to the marketing side as long as they are effective to the producers goods and the distribution channel, as they most likely know their target market. Making sure that the goods are stocked appropriately so that the economic and life-style needs match the shoppers, for planet organic being natural, healthy, environmental friendly products.Planet Organic uses intermediaries for the majority of their products. Around 60% meaning 40% of their products are delivered directly from the suppliers. They use 4 major consolidators, The Health Store and The Tree of Life are cooperate w holesalers for natural and organic products. They are two of the leading health Food wholesalers in the I-J. The Health Store is based in Nottingham and has been trading over 76 years throughout the I-J, Ireland and Europe. A Dutch company called the Royal Weakens NV that is based in the Netherlands owns the company Tree of Life. They distribute food products throughout North America and Europe.Planet organic uses their Newcastle branch. Another 2 intermediaries used by Planet Organic are Marigold and Lingering Organic. Marigold health foods are only based in the UK and distribute their products within a 60-mile radius from their warehouse in Kings cross using refrigerated vehicles. 60% of their product lines are organic. Lingering Organic is based in New Covent Garden, London and specializes in the distribution of organic Truly Ana vegetables Language started In ten early Bus's supporting local UK Tarts however they have now growers throughout Europe and the rest of the world.Plane t Organic also has an online shopping and delivery service. Goods to their consumers bought from the website are distributed from their Westbound grove branch. They have their own van for fresh items delivered only to certain areas within London. All other orders such as non-fresh items or for delivery outside the UK are sent mainly through Parcel Force and are carbon neutral. All of their distributors from the store use echo-friendly packaging. The cardboard boxes used for packaging are 100% post-consumer recycled and are made within the I-J, even the printed ink is made from vegetables.They use gummed paper made from starch as tape, the bubble wrap is biodegradable, which is an organic material that will quickly brake down in landfill and be absorbed back into the soil harmlessly. For their fragile items instead of Styrofoam they use expanded corn, which are completely comfortable. Parcel Force is part of the Royal Mail Group, and for over 14 years there express delivery services have been covering 27 million addresses in the I-J. 2. 4 Customers We conducted a customer survey at planet organics Westbound grove branch.The main research objective of this study was to find out what type of customers shop at lane organic and why. To collect primary data a questionnaire asked customers about the main purposes of their visit. The questionnaire was made up of 15 closed questions with a pre-set list of possible answers and was conducted inside the store itself. The customers who participated in the survey completed the questionnaire in our presence. We used a convenient sampling approach and a total of 36 questionnaires were collected during a two hour time slot. We determined the size of the sample by the resources availability and the limited timescale.Due to the Westbound grove branch being the largest of the 4 planet organic stores, made it important to approach customers shopping in different sections and aisles of the store including customers sitting down and having lunch. This is so that we did not to concentrate on 1 particular type of customer who might only be shopping for 1 specific type of product. It goes without saying that the results shown in figure 1 and 2 are a clear majority. Many customers, when asked if they shopped online with planet organic, were surprised to find out that they had a website with home delivery.This also goes to how that in figure 3 only 5% heard about planet organic online, the 31% form word of mouth and the majority with 61% saw the store when passing by. The 19% of male customers were mostly with families; one man said ‘I'm only here because my wife gave me the shopping list, she's crazy for organic'. However there were a few men that were vegetarians or had special dietary needs. Figure 1 Figure 2 Hogue s Hogue 4 The results show in figure 4 that the majority of customers lived locally with 58% and secondly worked locally with 17%.The 8% who were Just visiting, did so, along with another custom er who lived around the area. The least amount of customers were tourists with only 6%, on the other hand the few tourists had specifically sort after organic products, whether planet organic had been suggested to them or searching themselves on the internet. Moving on to figure 5 and 6 below, we can point out that most customers walk (with 69%) to the store taking them generally 5 minuets or less (with 47%), where as only 3% use their private vehicles or motorbikes.This result proves to us that they are highly likely too live locally as seen once again in figure 4. Customs traveling the longest accounted for 19% though no customers travel time kook longer than 30 minuets. Figure 5 Figure 6 Results in figure 7 below show that planet organic attracts a large range of their customers between the ages of 25 and 44, Just over 60%, with 28% aged between 25 and 34 and 33% aged between 35 and 44. The minority of customers are aged between 18-24, various reasons for this were due to student life and funds, not being aware of the benefits with organic food, visiting or happen to pass by.The customers aged 65 or over stated mainly that their reason for shopping there simply because planet organic was the closest supermarket to them. Notice in figure number 8 the majority of shoppers with 36% are in pm or later mainly due to finishing work. Before 1 lam with 11%, again before work, 17% of customers shop at different times, 14% between 1 lam and pm and 22% that shop between pm and pm. Figure 7 Figure 8 Planet organic clearly appears to have loyal customers acting on the information given figure 9, customers shopping one a week with 36% and those who shop more than once a week with 25%.Very few were there as a one off with only 3%. It is obvious in figure 10 that when asked whether they visited other planet organic stores round London and if so where, the question was no with 67%, they keep to their local Westbound grove branch in Backwater. However 25% had been to the bra nch in by Darlington place Camden, 5% to planet organic in Isolation and least with 3% Mussels Hill. Looking at figure 11 the majority with 33% of planet organics customers shop at Marks and Spence's, they more or less have similar price ranges, quality food and Marks and Spence's hold a variety of free range and organic foods.Minority of customers with 6% said they shopped at Tests. Customer's second and third main supermarket choices were Kingsbury with 19% and Waitress with 22% , e believe this is mainly due to the fact that Kingsbury and Tests are conveniently close to planet organic, within the same area. Hogue Y Hogue Figure 11 Seeing as Planet Organic hold a wide range of organic, gluten free, dairy free, wheat free, vegan and vegetarian products, the question was asked whether they were vegetarian or vegan. 28% stated vegetarian, 8% vegan and 58% said neither.The remaining 6%, who stated other, had special dietary needs such as lactose or wheat intolerant. This lead to a que stion concentrating on what type of products they regularly bought from planet organic. The most popular products bought, shown in Geiger 13, with 47% were general groceries including beverages, home and household products. The least poplar products with only 6% of customers mainly bought bakery, 8% came for the fruit and vegetables, 11% for health and body care products, 22% for lunch/dinner or food on the go.Also with 6% were customers who came and bought a selection of everything. Figure 12 Figure 13 One of the most interesting questions in our opinion is the main reason why people purchase organic food. Precisely 50% of planet organics customer's motives for purchasing organic food are that they understood it is much healthier for them. They leveled that organic produce will not be full of man-made chemicals and that organic meat for example did not contain antibiotics or hormones.They also believed that organic fruit and vegetables had not been harmed by fungicides or pesticide s. Organic foods are mostly kept the same from the time they are grown until the time they are displayed in the store. Nothing is added and foods are not processed, as a result of this, for 22% of the customers this was the reason they thought organic food tasted better and believed that buying organic meant buying quality. Other customers at 9% shopped at planet organic because buying organic reduce meant being environmentally friendly.They knew that organic animals were treated better than conventional animals. There were 8% of customers who mainly needed dietary product such as gluten free, dairy free or wheat free products. The remaining 11% of customer didn't specify a reason for shopping at planet organic other than the store being the closest to them and for convenience. As seen earlier in figure 45 this category co in sides with customers that were age 60 or over. Figure 14 Overall planet organics customers were very sociable and welcoming. They liked to express their views. We also asked a 1 5th question, which entailed occupation, however instead of formulating the question into a closed question we collected each individual answer through a box question. Out of all 36 customers that participated in out questionnaire neither of them had the same occupation as another. They ranged Trot sculpture artists, Dustless consultants, pr collocates, grapnel gleaner, lecturers, site managers and antique dealers to unemployed, retired and entertainment or fashion industry workers. The male customers seemed to have creative occupations such as architects.Where as the women who shopped in the diddle of the day said they were unemployed or charity workers, this could mean they were house wives or had no necessitate making money. 2. 5 Competitors Planet Organic believes in ethical and sustainable farming, therefore the natural and wholesome food company has a highly competitive and volatile business field. We mainly believe that the key competitors for Planet Organic are actually the larger leading supermarkets who have recently expanded their companies and opened their market field to consumers who appreciate organic products.Recent statistics have confirmed that large Supermarkets are responding to their customer requests ND are making efforts to both stock organic and locally-grown produce which allows consumers to be ‘green' shoppers, choosing from locally grown, ethically sourced goods. [The Telegraph, 15th October 2007. ] The organic food market is rapidly increasing therefore the competition between supermarkets is rising dramatically. The increase of product availability and the expansion of purchaser interest in premium foods have fuelled sales.Figures illustrate that fruit and vegetables comprise to be the largest sector of organic foods and the main entry point to the market. From 2002 to 2008 organic dairy products have more than doubled in retail ales and Minute predicts that the market is set to grow by over 54%, from 2007-2 012. (Minute Report, 1st February 2008. ) Three of the major UK retail chains; Waitress, Kingsbury and Marks and Spencer are all examples of supermarkets that are direct competitors for Planet Organic.All three supermarket chains have been awarded ratings of grade B by the National Consumer Council (NC) for their stocking of environmentally friendly foods and goods. Waitress has made enormous efforts over the past years to increase their organic range and their business sales are dramatically increasing due to their quality of fresh produce. Moreover, Waitress's main target audience is middle-class consumers, which conflicts with Planet Organic as they both aim to appeal to a similar target market.Waitress offers fair trade products to consumers in order to ensure that workers in less developed countries get a fair wage and are treated in a fair manner. Likewise, Planet Organic proposes the idea of selling fair trade products, which increases the competitiveness between the two busi nesses. In addition, Waitress is known as the best chain retailer when it comes to trading practices, sourcing from I-J farmers and committing to smaller appliers allowing them to stock the largest range of organic fresh produce.Yet, sources confirm that consumers find that the fresh produce at Waitress is exceedingly cheaper than Planet Organic, which means that many customers would resort to Waitress over Planet Organic itself. However, sources did corroborate that Planet Organic do stock a high percentage of products that are not viable to find elsewhere, but the question is can we do without most of those if needs be? [Urban Path- Planet Organic Reviews, 2nd January 2008. ] Furthermore, Kingsbury is another K retail canal Tanat Is a Key competitor Tort Planet organic, as It offers ten most suitable range of organic products for their target market.Kingsbury organic range primarily focuses on goods such as fruit, vegetables, dairy products and meat. It has been shown that food sa fety scares have promoted consumers to seek greater guarantee about the value and quality of the meat they buy. Therefore, with Kingsbury stocking organic meats, profits and loyalty with customers will increase as the consumers know they are receiving produce that is fresh, making organic stores such as Planet Organic observe them as being great competitors.Kingsbury has been voted the number one organic food retailer in the UK by a panel of consumers therefore this highlights the success that the organic products have had upon the other retail stores. Kingsbury sales have significantly been increasing due to the growing popularity of its organic and premium food ranges, and Mr. King (Chief executive) implies that â€Å"Kingsbury strong quality food offer has helped it take customers away from rivals such as Tests and Sad. † [The telegraph, 20th June 2007. Moreover, this entails that Planet Organic has suffered a loss of profit due to key permeated chains increasing their pro duce of organic foods. A further example is Marks and Spencer and how they have improved there value of organic food with sales rising 48% this year, with their organic range doubling in size to almost 500 products. M&S, like Planet Organic focus on targeting the middle class audience, by producing organic food that meets the higher food standards.M&S believe strongly in sustainable farming and free range products therefore, since 2009 their entire fresh whole ducks, geese and majority of turkeys came from free range products because of response to customer requests. Similarly, Planet Organic offers the same free range assistance which again can cause rivalry between the companies. However, especially since the recession consumers have believed Planet Organic is too pricey for a regular food shop and therefore alternate to M&S as there organic produce is cheaper and still satisfies the consumers.Overall, the rising sales of organic products in larger supermarkets puts smaller food s tores I. E. Planet Organic in danger, as the smaller suppliers have to think of new ways in which they can attract there target audience to come to there shops instead of committing to the argue supermarkets. Due to the fact that all of the above UK retail chains offer a similar supplies as Planet Organic they are all seen as a psychical threat to the company. 2. 6 Publics Publics are groups that have an interest or could potentially have an impact on Planet Organics abilities to achieve their goals and objectives.The general publics are one of the groups that can have a great impact on a Planet Organic. Whether the change is positive or negative, a change in the general publics attitude can cause change within Planet Organics reputation and profitability. Another group of people ho can have an impact on Planet Organic are their employees; these are people who are employed within the company, this can range from its sales associates to the farmers. Companies that could affect Planet Organic are Fair trade, Ere sign and Organic Standards.We also found six main groups, which have a great impact on Planet organics adjectives Ana products * Soil Association * Green Providers Directory * I-J Organic Directory * Organic Food * Cycle Lifestyle * Fair Trade I nose SIX companies Include: Planet Organic support all of these companies by stocking and promoting their goods thin their store. Planet Organic also provides leaflets and details about these organizations for its consumers to find more information on, they work closely together in order to create public interest.The above companies main concerns of health implications are similar to Renee Elitist's, which is great publicity for Planet Organic being linked with them and vice versa. Organizations such as Soil Association is not funded by the government as it is a charity based company relying on donations and support from members as the public in order to continue to carry out their work. The Food Ethic Council al so retirees over 80% of organic food sold within the I-J, aiming to inform the public about the many benefits of organic food and farming, they also have a similar mission statement to that of Planet Organic.

Financial System in China Essay Example | Topics and Well Written Essays - 2500 words

Financial System in China - Essay Example The financial markets and banking system in China is indeed a vast topic and will be quiet different from developed, developing, transitional and emerging countries. The focus will be on the role of financial institutions as intermediaries for their users, which includes investors, firms and government - and not to try to construct a detailed description of the contracts and operations in which they engage and the legislation in place. China's current financial system is dominated by a big banking sector that is quite inefficient. In order to reform the Chinese financial system sooner, there has to be a drastic reduction in the number of non-performing loans amongst the major banks to a normal level. This is a vital objective for the success of any reformation. Although the growth of the stock market in China has been rapid, its role of allocation of resources has been ineffective and limited in the country's economy. Further development of China's financial markets happens to be the most important long-term object. For sustainable stable economic growth, China should strive to halt or prevent any damaging financial crises, as well as a banking sector crisis, a "twin crisis" in the currency market and banking sector and a stock market or real estate crash. THE RELATIONSHIP BETWEEN THE FINANCIAL AND CORPORATE SECTORS OF THE CHINESE ECONOMY In the financial market sector, speculation and insider information has characterized the Chinese Financial markets and has not been very successful in the effective allocation of resources as the banking sector. The Shanghai Stock Exchange (SHSE hereafter) and Shenzhen Stock Exchange (SZSE hereafter) all established in 1990, are China's two main financial markets, and have been growing at a tremendous rate. But they have not been working a rate that can bring in some improvements in the Chinese financial market sector. Is all due to encumbrances and poor regulation that characterizes the regulatory environment particularly in the corporate and trading laws, the legal protection of investors, and as well as institutions that are responsible for the governing of enforcement of contracts have all been poorly developed.The poor and ineffective functioning of these markets is also linked to the fact that a reasonable amount of large blocks of shares are held by various government entiti es in listed companies (including state-owned banks). To greatly improve the functioning of the financial market, there should be a planned reduction of these government owned entities, and that is achievable by selling them off slowly over time. Lack of trained professionals has plagued market such as investment bankers, (business) lawyers and accountants. There is lack of incentive to effectively motivate financial intermediaries who should act as institutional investors for the smooth and efficient running of the market. They are just totally unavailable especially when one considers the role they play in improving the efficiency of the markets and strengthening the corporate governance of

Research on new discovery in biology Essay Example | Topics and Well Written Essays - 750 words

Research on new discovery in biology - Essay Example The coca plant has similar biochemical properties as those that produce alkaloids. The coca plant belongs to a group of plants with natural alkaloids, or nitrogen-containing compounds that produce diverse effects on the physiology of humans. The alkaloid compounds in these plants are proven to have strong pharmacological effects on people and are known to contain nicotine, caffeine, quinine, morphine, atropine, strychnine, and the illegal stimulant compound cocaine. The plants that contain alkaloids include the Solanaceae or potato family, the Brassicaceae or mustard family, and the Erythroxylaceae or coca family, to which the coca plant belongs. The close relatedness of these plants is not only justified by the fact that they all contain alkaloid compounds but also by the fact that they had a common ancestor around 120 million years ago and that the alkaloid compounds that they contain obey similar biochemical pathways. The significance of this fact is that if one were to uncover th e details of the natural synthesis of cocaine, then it is possible to study it from the point of view of the other plants to which the coca plant is related (How Plants Make Cocaine, 2012). ... The plant known as belladonna, which belongs to the Solanaceae family, produces the tropane alkaloid known as atropine, and the synthesis of this alkaloid was compared with that of cocaine in the coca plant. Although the biochemical pathway and mechanism involved in the synthesis of alkaloids is basically the same for all alkaloid-producing plants, and for both both belladonna and coca plants as well, the Max Planck Institute researchers hypothesize that the enzymes involved in the syntheses of different compounds must also be different from each other. The results of the experiment proved the hypothesis true when it was found out that the enzyme that produced the atropine in belladonna proved to be â€Å"completely different† from the one that eventually produced cocaine in the coca plant. This enzyme, which is known as AKR or MecgoR, is involved in the biochemical pathway of the synthesis of cocaine by converting the keto group into an alcohol residue, which is actually the same role assumed by the SDR, or short-chain dehydrogenase reductase enzyme in belladonna (How Plants Make Cocaine, 2012). Thus, although there was a basically similar pathway for the production of atropine and cocaine in both species of plants, the very small difference in the nature and identity of the enzyme that catalyzes the keto group towards the end of the pathway is the main factor behind the fact that the coca plant is able to naturally synthesize cocaine, and not another alkaloid compound. Moreover, it is very interesting for the Max Plank Institute researchers to find out that the synthesis of atropine in belladonna takes place in the roots of the plant before the atropine is transported to the leaves, while the synthesis of

Azerbaijan as a tourism destination Term Paper Example | Topics and Well Written Essays - 3250 words

Azerbaijan as a tourism destination - Term Paper Example Hence, the foreign tourist may decide to stay in a five star hotel; whereas the domestic tourist may decide to stay in a hotel which is relatively less luxurious in nature. From the perspective of economics though, it has to be mentioned that a foreign tourist may decide to come to certain cities of a country on frequent basis and hence should given proper attention. On the other hand the domestic tourists are also of equal importance as the local population of a country also acts like brand ambassador of the nation. Overall the Azerbaijan must make sure that the products or services offered are as per the nature and the need of the target market segment. For foreign customers, including the people who would visit the country for business purposes there should be availability of five star and equivalent luxury hotels. However, the needs of the domestic customers should be kept in mind. The domestic customers may not have the same purchasing power or may not want to spend so much of m oney while travelling. Hence, hotels that are not so luxurious in nature should also be a part of the overall product mix. But, quality of the products offered in the both the cases hold not be compromised. Market Segmentation Ever before segmenting the market it must be mentioned that the segmentation has been done based on the criteria of actionable market segments such as discrete, measurable, viable, appropriateness. Discrete means that the segment must be separately identifiable by the marketer based on specific variables of segmentation. Measurable means that the main features of the segments must be measurable through appropriate market research data. Viable means that the segments must be viable enough to generate revenue in the long run. Appropriateness refers to the fact that the segments must be mutually contribute to the positioning of the service or producer offered by the producer. Azerbaijan is the largest nation in the Caucasus region. It is on the cross roads of Wes tern Asia and Europe. It is the one of the largest population in the southern Caucasus. However, more importantly the country is the wealthiest population mainly due to the oil and gas reserves. Total GDP per capita of the country is $10, 340. The travel industry of the country started with various international travel agencies like AMEX or HRG. But now the country has other home grown leisure operators. The main travel season starts from June to August and New Year. Average time span of stay for foreign customers is seven to fifteen days. When it comes to foreign tourists Russia and Georgia are the two major sources of inbound arrivals due to the high level of business and neighboring locations (Czinzota, Ronkainen, Moffett, Marinova & Marinov, 2009). Domestic travelers (Azeri) travel in small groups which include children, parents and grandparents. The foreign tourists mainly include young professionals mainly from neighboring countries as well as people belonging to the upper mid dle class. The Geographic target market segments include both native and foreign citizens. Ideally the native citizens would most likely belong to the urban cities of the country and the foreign tourists would be most likely from countries like Russia, Turkey, and Georgia. Such tourists may visit the city for business and (or) vacation. For Demographic Segmentation people belonging

Introduction to Organisations and Management Essay - 3

Introduction to Organisations and Management - Essay Example To what extent and in what specificity the businesses differ would be analysed in a critical and comparative way in the next parts of this report. Understanding the structural and design differences of the organizations. The importance of an organization’s structure is not only in defining the firm’s formal reporting relationships, procedures, authority, control and decision making process but it also works effectively as a tool of implementing strategy. The organizational structure plays an important part in defining how the work is done and by whom it is done, how managers work and also define the accountability of individuals within the organization (Hitt et. al, 2009). Various organizations can implement different forms of organizational structure in accordance to their strategic goals and objectives. The major types of structure that are widely used across most organizations can be put into 4 categories: The Functional Structure, The Divisional Structure, The Matri x Structure and the Horizontally linked structure. The functional structure groups people of similar set of skills together under a department managed by an individual having knowledge of such skills. The Divisional Structure is rather concerned with putting together a group with similar abilities required for various works or departments across the organization. The Matrix structure brings together a group of people from an already existing department to work in another function where their set of skills may be useful, besides working in their pre designated department. Under the Horizontally linked structure the organizations group its workers depending upon the activity and processes it puts in place to offer its services (Wheelen & Hunger, 2010). Putting together the understanding of the above theories of organizational structure and looking at the two organizations of the case study, a distinct difference can be seen of how both organizations are set up and working. Watson Engi ne Components looks to be working on a stricter approach of the Functional Structure whereas H&M Consulting is inclined more towards a Matrix Structure. However one can also argue that while catering to different projects with different set of skills through a networked structure it implements more than a single organizational structure to enhance its performance. This thought is also put forward by C.W. Fontaine who says that often organizations with tens of thousands of people, implement different organizational structures to benefit different parts of the organization. (Fontaine, 2007) The criticality of such structural differences It is not only important to understand what differences lie between two organizations, but is also important to fully evaluate why such difference exist and what are the resulting effects on both. In the case of Watson Engine Components, the impact of being formed as a family business has probably played a decisive role in setting the organization stru cture and working policies. More so the business operates within a single type of production and engages a substantial level of blue-collar workers who are highly unionised. These issues probably have not escalated in a single day but working over a period of time under a certain structure has definitely made the organization heavily hierarchical. This coupled with lack of communication between employers and

Organizational Change Plan- Part III Essay Example | Topics and Well Written Essays - 1250 words

Organizational Change Plan- Part III - Essay Example Introduction Electronic Medical records (EMR) enable health institutions to manage medical and clinical data more efficiently, thus, improving the patient care (Laing, 2002, p. 41). Some of the benefits of implementation of EMR in health organizations include the easy access and retrieval of patient information, reduction in medical errors and improvement of the patient care delivery processes (Hakes & Wittington, 2005, p. 235). Some of the determinants of effectiveness of the implementation of the EMR include the quality of patient care delivered, the reduction in the operating costs in the organization related to patient information storage and retrieval, and the level of patient satisfaction with the health care (Laing, 2002, p. 43). The commitment and user-friendliness of the EMR to important stakeholders like the clinical staff and patients will also be utilized to access the effectiveness of the implementation of the change (Laing, 2002, p. 44). Another metric that will be util ized to access the effectiveness of the change is the degree of patient privacy and confidentiality protection. EMR will assist the clinical staff to access huge volumes of patient information in real time such as the laboratory tests, prior drug prescription and medical diagnosis. The quality, cost and satisfaction outcomes of the EMR change will have to be measured in order to ascertain the effectiveness of the organizational change. Some methods of measuring the costs of EMR include the systems maintenance costs, procurement costs and clinical staff training costs. The quality of the change can be measured through observation of the reduction in medical errors will be patient satisfaction outcomes will be measures through patient surveys and increase in patient numbers in the health organization (Laing, 2002, p. 43). Effectiveness of EMR Organizational Change Electronic medical records implementation will lead to improvement in patient care. The change will also lead to improveme nt in the patient satisfaction and reduction in costs of managing patient information. EMR will enable the clinical staff the access large amount of patient information from a central database, thus, improving the workflow efficiency in the health organization. The effectiveness of the EMR implementation will also be determined by the improved reputation of the health organization in the community and increase in the patient numbers. The effectiveness of the change will be also be determined by the improvement in patient safety and reduction in medical errors such as wrong diagnosis or unnecessary drug prescription to the patients (Hakes & Wittington, 2004, p. 237). The effectiveness of the change will also be determined by the reduction in billing errors and cost savings in clinical processes. Another determinant of the change is the degree of change acceptability by the workers which will be determined by the morale of clinical staff and ability to use the EMR in their work activi ties. The improvement in communication among the various departments in the health organization such as the laboratory, pharmacy and cardiology department will also determine the effectiveness of EMR implementation. Another determinant of the effectiveness will include the coordination of the patient care process from

Organizational Behavior in Walmart Essay Example | Topics and Well Written Essays - 1500 words

Organizational Behavior in Walmart - Essay Example According to the paper long before the inception of Wal-Mart, Sam Walton toured across the country and making a study of everything he came across that was related to discount retailing. The more he studied about it he was increasingly convinced that consumers in America needed a different kind of store. Therefore, Sam trusted his instincts and together with his wife Helen, pumped in about 95% of the money in Rogers, Ark for his very first Wal-Mart store in 1962 and by 1972, there were a total of 15 Wal-Mart stores across the country. In fact, it was in 1972 that Wal-Mart stock began for the first time on the New York Stock Exchange. By the end of the decade the company expanded to 276 stores scattered over 11 states. This growth was primarily due to the infusion of capital over the years. In 1983, the Wal-Mart store came of age as it expanded into â€Å"Sam’s Club member’s warehouse. In 1988, the first Wal-Mart supercenter was established, a complete grocery store com prising of 36 separate departments for general merchandise. By the year 1989, the Wal-Mart business boomed by way of 1402 stores and 123 locations for Sam’s Clubs. The rate of employment escalated 10 fold as the growth of sales shot up from $1 billion during the 1980’s to $ 26 billion in the years that followed. Currently, Wal-Mart is considered to be one among the world’s best and most successful retailers of the 21st century, with approximately 8,100 stores employing around 2.1 million employees and associates who serve approximately 176 million customers each year. From what we know of the history of Wal-Mart, that is not doubt that it could be a perfect example in portraying how the company manages its growth by always keeping its values insight.  

History of Islamic banking Term Paper Example | Topics and Well Written Essays - 1000 words

History of Islamic banking - Term Paper Example One of the major functions of commercial banks is to mobilize savings and offer loans to the potential investors in the economy (Saeed, 1996). The system of regular banking asks for a certain price known as interest on the loans being given to the investors (USAID, 2005). The rate of interest charged on loans becomes directly proportional to the time period for which the loan is offered. The system is not the same for all the banks following Islamic banking system. This process of banking donnot involve in offering loans that are interest free. It is believed that ‘riba’ or ‘usury’ which is known as interest is firmly forbidden under the regulations of Muslim law. Islamic banks are rapidly growing all over the world both in Muslim as well as non Muslim nations. So apart from Islamic nations like Egypt, Sudan etc; Philippines, U.K., Denmark are also widely establishing Islamic banks in their economies although they comprise Muslim population as minorities. Is lamic banking theory thinks that it is incorrect to take benefits from borrowers. Unlike the commercial theories of regular banking, Islamic banking follows ‘riba’ which is actually based on concepts like ‘mudaraba’ and ‘musharake’ (Hamza, 2013). Thus by this process the creditors cannot raise the nominal value of loans offered. The board of Islamic banks are formed with Shariah scholars who would see that the interest of the laws is duly considered by almost all the banks following Islamic laws. The principles of Islamic banking explains paying as later after buying is ‘halal’ but if someone charges on the credited money even that is also punishable (Hosein, 2011). The regular banks deny loans without collaterals or interests. Flexible verses Fixed Return on Deposits The commercial regular banking system offers fixed rates of return on the deposits made by the depositors. The rate of fixed return varies according to the time perio d for which the deposits are made. In general there are three types of deposits or accounts that can be opened in regular banks which are savings, current and fixed deposits. As estimated the highest return is received from the fixed deposits, then savings and finally current account deposits. The system is not the same with Islamic banks, the depositors depositing money in such banks get variable returns. This is because the returns are given from the profits made by the Islamic banks. So the depositors may land up with either profit or loss. These banks follow a strict rule of investing in the poverty alleviation and rural development programs. Often due to the greater importance given in the welfare aspects potential deposits face losses kept in these banks. It is found that the lack of interests in depositors is becoming problematic in the expansions of such banks. It is stated despite of all the problems faced by the depositors no one has actually faced problems of making a los s in an Islamic Bank. The command deposits kept in the Islamic banks are under the contract of ‘Wadiah’. The fund deposited in the Islamic banks is not used for investments in the market. The fund can only be invested if it is authorised by the depositors. The different current, savings, or other deposit plans offered by an Islamic bank are always made very attractive to the depositors. The contract of ‘Mudharaba’ often set the demand deposits in the Islamic banks. Sometimes the rate of interests that the depositors receive is directly proportional to

The Three Major Security Threats in Healthcare Essay Example for Free

The Three Major Security Threats in Healthcare Essay Nowadays Doctors and Nurses has several mobile devices in order to provide patient care. Virtualization is very important in providing adequate and affordable patient care in the rural health industry. Attempts to breach security happen every day in our agency. Preventing cyber-attacks and security breaches is a never ending battle in network security. Introduction I am an IT professional focusing on network security in the healthcare industry. Every day we monitor the network for phishing/pharming, DoS attacks, Trojans, and other security breaches. Mobile Devices, virtualization and lackadaisical end-users are the biggest threats to network security. Mobile Devices An article in GCN says it best, â€Å"Mobile devices are ubiquitous in todays society, and the number and types of devices used by physicians, nurses, clinicians, specialists, administrators and staff – as well as patients and visitors – is growing at healthcare agencies across the country.† Nowadays Doctors and Nurses has several mobile devices in order to provide patient care. Cellphones, laptops, and tablets are of the norm. I can’t remember the last time I had a doctor’s visit and the doctor didn’t update my chart using a laptop or tablet. All of these wireless devices make the network vulnerable. In my opinion wireless security has always been the hardest part of the network to protect because there isn’t a physical connection that can be monitored. End-users don’t always use secure passwords or they share passwords. At our agency an employee is not allowed to bring in a mobile device other than a personal cellphone to the workplace in order to reduce security breaches. â€Å"The Office of Management and Budget, Personal Identity Verification cards had been issued to 3.75 million federal employees as of Dec. 1, 2010, or 80 percent of the government workforce, and to 76 percent of contractors who are eligible to use the cards, about 885,000 contractors.† My agency uses Personal Identity Verification or PIV cards to gain access to wired devices on the network unfortunately that is not the case for wireless devices. Although we have two-party authentication in place for all devices it would be nice to have tertiary layer such as a smart card or PIV card for wireless devices. I don’t foresee a solution happening for a few years due to the cost in an already financially burdened healthcare system. It is true that â€Å"a reliance on off-the-shelf products means that there will be no PIV card readers available for workers signing on to check e-mail or read a document while out of the office.† Virtualization The agency I work for specializes in rural healthcare therefore often they don’t have the equipment or the staffing to complete tasks such as reading X-rays, providing behavioral health etc. Over the years we have had to implement Telehealth in order to meet these requirements. A patient in rural Minnesota may have his or her x-rays read by a physician in Billings, Montana. An individual may have weekly counseling sessions with a psychiatrist that is 500 miles away. Nowadays most healthcare companies use electronic health records to access patient information. Denial of Service DoS attacks happen when a hacker manages to overload a server to render it useless. A DoS attack is prevalent and damaging in virtualized environments and can preventsthe physicians and nurses from retrieving a patient’s information. If they are unable to access patient history to include what medications they are on or what they may be allergic to etc then they are unable to provide or give the wrong patient care which could be deadly. Therefore virtualization is very important in providing adequate and affordable patient care in the rural health industry. End-Users Our agency has mandatory computer security and security training every year in an effort to preempt attacks on the network. This mandatory training is required to be taken by every employee including the IT department. Attempts to breach security happen every day in our agency. Although we have security measures in place we have to constantly educate our end users on how to handle suspicious activity, password safety etc. Unfortunately there is always that one person that opens a suspicious email or shares their password or loses their token or PIV card and they don’t report it. This makes the network vulnerable. I have always believed that end users are a company’s biggest security risk. Allowing end users to access social media, personal email etc can allow for viruses to infect PC’s server’s etc. Once a virus is in the network it will spread like wildfire which will cripple the network. Prevention We use a lot of tools to constantly monitor the network to prevent DoS attacks, viruses, packet sniffing, phishing etc. We have implemented Websense as a means of policing what websites an end-user can surf to. We have firewalls in place to prevent end-users as well as outsiders from having access to IP ranges on our network as well as outside the network. We use access list on the routers as another layer of protection. We have penetration testers in our department whose only purpose is to look for packet sniffing and holes in the network. We have another group that monitor’s suspicious activity on the network such as a spike in bandwidth or an IP that is sending or receiving a large amount of information for specific length of time. Preventing cyber-attacks and security breaches is a never ending battle in network security. Conclusion Healthcare news states that â€Å"†¦Healthcare is driving the need for network security solutions that can cover multiple types of devices and infrastructure components.† Although we are largely driven by the Federal Communications Commission and HIPPAA my department is constantly implementing new devices and measures to secure the network and protect patient and employee information. This takes constant training and a lot of due diligence to accomplish that goal. References Are mobile devices already making PIV cards obsolete? Retrieved on October 13, 2013 from http://gcn.com/articles/2011/03/11/piv-status-update.aspx PIV Cards are in the hands of most federal employees and contractors, Retrieved on October 13, 2013 from http://gcn.com/articles/2011/03/11/piv-status-update.aspx Top Five Security Threats in Healthcare, Retrieved on October 14, 2013 from http://www.healthcareitnews.com/news/top-5-security-threats-healthcare

Public Debt And Its Political Implications Economics Essay

Public Debt And Its Political Implications Economics Essay The debt limit or so called debt ceiling is the total sum of money that the US government is allowed to borrow in order to cover the existing expenditures: national defense, interest on the national debt, Medicaid and Medicare benefits and other expenditures. The debt limit enables the government to cover the spending that was negotiated between Congresses and Presidents in the past. Nevertheless, it does not apply for new, unbudgeted expenditures. If the debt ceiling limits the government to pay for expenditures that are legal obligations (e.g. interest on the national debt, government employee wages, etc.), the debt ceiling can lead to the default of the US (US Department of the Treasury, 2012). The U.S. Debt-Ceiling Crisis and the Budget Control Act of 2011 In May 2011, the Treasury declared that the debt ceiling of US $14.29 trillion had been reached, but that extraordinary measures could prevent a default and keep government operational. For several months after this announcement, the debt ceiling was in the center of a political battle between the Republicans, who controlled the House of Representatives since the 2010 elections, and President Obama and the Democrats who controlled the Senate. The Republicans insisted on revenue increases and spending cuts as condition for their approval of an increase in the debt ceiling. Both parties could not come to a compromise and by the end of July, the countrys default approached. Finally, an agreement between President Obama and Congressional leaders was reached by the night of July 31, 2011 (Eells, 2013). On August 2, 2011, President Obama signed the Budget Control Act (BCA) that raised the debt ceiling and thus averted the looming, first-ever US government default. The Budget Control Act authorized the increase of the debt limit in three installments. First, the President can require the immediate increase of the debt limit by US $400 billion. Second, the debt limit can be increased by additional US $500 billion, if a joint resolution of disapproval is not enacted. Thirdly, the President can require an additional amount between US$1.2 trillion and US $1.5 trillion that is also the subject to congressional disapproval (Heniff et al., 2011). The first two debt increases, totaling US $900 billion, should be compensated by reductions in future federal spending. The BCA also determined caps on annual expenditures over the following ten years. Estimates on federal spending reductions by the Congressional Budget Office (CBO) totaled US$917 billion. For the years 2012 and 2013, the limits on security and non-security spending are separate. For the eight years thereafter, the spending cap will be effective on a single discretionary category (Heniff et al., 2011). Another part of the BCA was the establishment of a Joint Select Committee on Deficit Reduction. This Committee is tasked with proposing means to reduce the federal deficit by at least US $1.5 trillion over the next ten years. As a result, the BCA provides at least one dollar of spending cuts for one dollar in debt ceiling raise (Heniff et al., 2011). However, if the Joint Committee fails to produce spending cuts of at least US $1.2 trillion, then the President will be authorized to increase the debt ceiling by US $1.2 trillion that need to be compensated by a combination of the spending cuts nevertheless produced by the Joint Committee and across-the-board spending cuts, including military expenditures, education, transportation, Medicare etc. (GAO, 2012). The political battle between Republicans and Democrats had several negative consequences. The delays in raising the debt limit in 2011 resulted in additional borrowing costs for the Treasury of about US $1.3 billion only in the fiscal year 2011, which do not include the multiyear effects on potentially increased interest expenses for Treasury securities of future issues. Other challenges for the Treasury in managing the federal debt under the effects of these delays were the complexity, the time spent and the technical issues that arose before the staff. Moreover, the Treasurys employees had to focus on extraordinary actions instead of focusing on its important debt and cash management responsibilities and staff development (GAO, 2012). The US debt passed the 100%-of-GDP mark after the governments debt ceiling was increased. The new borrowing enlarged the US debt to US$14.58 trillion, surpassing the US $14.53 trillion size of the U.S. economy in the year 2010 and moving the USA into a fiscal situation similar to countries whose public debt is higher than their annual gross domestic product: Japan (229%), Greece (152%), Italy (120%), Ireland (114%) and Iceland (103%). The last time the U.S. debt exceeded GDP was in 1947 after World War II and the deficit was due to extraordinary war spending (Money News, 2011). As a result of the debt increase, Standard Poors (SP) downgraded its USA long-term sovereign credit rating from AAA to AA+ on August 5, 2011. The lowering of the long-term sovereign credit rating by SP reflects the rating agencys believe that the the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than was envisioned when agency assigned a negative outlook to the rating on April 18, 2011 (Swann et al., 2011). SP believed that the fiscal consolidation plan that was agreed by Congress and the President was not sufficient to stabilize the general government debt burden by 2015. Additionally, the political positions of Republicans and Democrats were still far apart and the two parties only agreed on minor savings in discretionary expenditures. The Select Committee had to provide more comprehensive solutions. The political disputes diminished the governments capability to manage public finances and distracted attention from the ultimate goals of a more balanced budget and improvement in economic growth. SPs prospect on the long-term rating is unfavorable. The agency can even decrease the long-term rating to AA, if, for instance, the US government cuts its spending less than was negotiated or the new arising fiscal burdens over the next two year period. The other two major rating agencies, Moodys and Fitch, kept their top credit ratings, although they pointed out that downgrades could follow if the US government fails to implement debt reduction measures or an economic slowdown happened (Detrixhe, 2011). After raising the debt limit to US $15.2 trillion in August 2011, Congress increased the debt limit to US $16.394 trillion in January 2012. By the end of August 2012, the amount of debt reached US $15.977 trillion, which is approximately US $417 billion below the debt limit. As the government borrows roughly between US $100 billion and US $125 billion a month, the debt was estimated to hit the limit in December 2012 (Sahadi, 2012). By December 31, 2012, the USA reached its debt ceiling, but the Treasury declared that it can pay outstanding debt obligations and other bills for the next two months. This means that a new political battle, between Congress and the White House, for another increase in the debt ceiling will start in the near future. Effects of the US government shutdowns in 1995-1996 In 2011, the US government was close to defaulting on its public debt. The potential negative consequences of a default are more severe than that of a shutdown. Nevertheless, recent shutdowns can give an example of potential harmful effects of such fiscal issues on the public and economy. In history, the US government has experienced several shutdowns (Figure XY) that occurred when Congress fails to adjust funding for the current fiscal obligations. In this situation the government can no longer borrow funds, but the federal government can continue to operate, given the Treasury has the opportunity to generate additional revenues or to implement special measures. Nevertheless, the continuing incapability to borrow would result in a default (Masters, 2013). Figure XY. Appropriations Funding Gaps: Fiscal Years 1977-1998 Fiscal Year Date gap Commenced   Full day(s)   of gaps Date gap terminated   1977 Thursday 09-30-76 10 Monday 10-11-76 1978 Friday 09-30-77 12 Thursday 10-13-17 Monday 10-31-77 8 Wednesday 11-09-77 Wednesday 11-30-77 8 Friday 12-09-77 1979 Saturday 09-30-78 17 Wednesday 10-18-78 1980 Sunday 09-30-79 11 Friday 10-12-79 1982 Friday 11-20-81 2 Monday 11-23-81 1983 Thursday 9-30-82 1 Saturday 10-2-82 Friday 12-17-82 3 Tuesday 12-21-82 1984 Thursday 11-10-83 3 Monday 11-14-83 1985 Sunday 9-30-84 2 Wednesday 10-3-84 Wednesday 10-3-84 1 Friday 10-5-84 1987 Thursday 10-16-86 1 Saturday 10-18-86 1988 Friday 12-18-87 1 Sunday 12-20-87 1991 Friday 10-5-90 3 Tuesday 10-9-90 1996 Monday 11-13-95 5 Sunday 11-19-95 Friday 12-15-95 21 Saturday 1-6-96 Figure : Appropriations Funding Gaps (Source: U.S. Library of Congress, Congressional Research Service) The longest US government shutdown was a shutdown in the years 1995-1996. The U.S. government was shut down for 21 days between the December 16, 1995 and January 6th, 1996 due to the budgetary mismatches between Democratic President Bill Clinton and Republican Speaker of the House Newt Gingrich. In 1995, Clinton denied to cut steeply Medicaid, Medicare and other non-defense expenditures for the 1996 budget. Gingrich responded with the threat that Congress would not approve the increase in the debt ceiling. This would lead the USA to default on its outstanding debt. The first shutdown lasted five days from November 13 until 19 when both parties made an agreement to balance the budget in seven years period. However, the White House and Congress could not agree how this procedure would be accomplished resulting in the second US shutdown for 21 days. Negotiations between the President and Congress over the next 21 days resulted in the agreed seven-year balanced budget plan. The plan cons isted of the tax increases and the little spending cuts (Fiscal Politics Policy from 1970s to the Present). Gressle (1999) showed the effects of the US government shutdown on the public and economy. The first and the second shutdowns in 1995-1996 years resulted in the furlough of an estimated 800000 and 284000 federal employees respectively. The second shutdown had vast effects on all sectors of the economy. A good example is the health care sector where new patients were not accepted into National Institute of Health (HIN) Clinical Center and the hotline calls to HIN regarding health problems were not answered. Around 20000-30000 applicants for US visa were not served each day resulting in million dollar losses for airlines and tourist industries. The closure of 368 National Parks led to the loss of 7 million visitors and US$14.2 million per day in tourism income by locals. After the 1995-1996 shutdowns, President Clinton improved his image (Lader, 2008). The majority of Americans understood that both shutdowns were due to the Republican obstinacy. Nevertheless, the shutdowns in 1995-1996 showed the aftermaths of divided government and the shift of the political policy to the rightwing. Fiscal Cliff There are a lot of expressions for the issue often called fiscal cliff: fiscal slope, austerity crisis or fiscal obstacle course. However, all of them describe the same process, particularly, the automatic tax increases and spending cuts that take effect on January 1, 2013. However, the first person who popularized the term fiscal cliff was the chairman of the Federal Reserve, Ben Bernanke. The chairman used this expression in a speech to a congressional committee in February 2012 in reference to a combination of spending cuts and tax increases set for January 1, 2013. Afterwards, the phrase was used widespread (Geoghegan, 2012). The majority of analysts predict that the implementation of the tax and spending cuts on January 1, 2013 will have no significant influence on the economy as a whole in the short run. At the same time, the long-term effects of these measures would be tremendous. If a deal can not be reached by the White House and Congress, it might have uncertain effects on the economy such as a market panic, a drop in consumer spending, a decrease in business investments, etc. The Congressional Budget Office calculated that the budget deficit would decrease by US $0.5 trillion from 2012 to 2013 and the economy would slow down due to a resulting recession. Almost all Americans would experience a rise of their tax bills with the estimated increase at US $3500 and an after-tax income decline by 6.2% for the average family (Lowrey, 2012). On Tuesday January 1, 2013, Congress approved a deal to end the long partisan dispute over the fiscal cliff. The main changes that were set were the end of last years temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, a rollback of the Bush tax cuts from 2001-2003, and the beginning of taxes related to President Obamas health care law. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect (Kenny, 2013). The agreement leads to the increase of the tax rate from 35% to 39.6 % for single persons who earn US $400000 and for couples with an income above US $450000 per year. Americans should also pay higher taxes on dividends and capital gains with the tax rate rising from 15% to 20%. Also, the tax for estates with a value above US$5 million will be taxed by 40% (previous rate 35%), but Republicans succeeded in indexing the threshold of US $5 million to inflation and thus smoothing the effects of the estate tax for wealthy Americans (Ungar, 2013). Among other changes were the extension of an additional year of unemployment benefits for nearly 2 million Americans, the doctor fix related to Medicare and tax credits for college tuition that were extended for another five years (Ungar, 2013). The agreement prevents a significant increase of income tax for around 100 million American families that earn less than US $250000 annually. However, the 2% payroll tax cut, that was originally part of the 2009 stimulus package, will expire (Montgomery and Helderman, 2013). The above measures will prevent the severe economic downturn that could happen in case of going over the fiscal cliff. President Obama pointed out in his brief statement that the new measures would produce US $620 billion in new tax revenues (Montgomery and Helderman, 2013). In conclusion, the new measures that were set to avoid the fiscal cliff were not the ultimate goal of neither Republicans nor Democrats. Republicans are not satisfied with the tax increases and the lack of spending reductions, while Democrats complain about the provisions regarding estates. It seems that the political dispute will continue in the near future and the agreement signed on December 31, 2012 was just a short-term fix to avoid the fiscal cliff. Foreign Holdings of US Public Debt and its Political Implications A crucial point in analyzing the current situation of US public debt and its political implications is the detailed understanding of foreign holdings. As of July 2012 (most recent data), foreign countries owned a total of US dollar 5.4 trillion of U.S. debt, which is approximately 34% of total debt outstanding of US dollar 15.9 trillion. The three largest single foreign holders are the central banks of China, Japan and Brazil. Comparing the situation in July 2012 with the state in July 2002, one can see that the proportion of foreign holdings in US public debt outstanding has grown from approximately 19% to 34% (Treasury Direct, 2012). Figure XY shows that as of July 2012, China is the largest single holder of US public debt with a share of approximately 7.2% followed by Japan with a corresponding share of about 7.0% (US Department of the Treasury, 2012). Figure : Foreign Holdings of US Public Debt (Source: Treasury Direct, 2012 U.S. Department of the Treasury, 2012) Given its low savings rate, the US economy is strongly dependent on foreign capital inflows from countries with high savings rates (for example China  [1]  ) to meet its domestic investment needs and to fund the federal budget deficit. Important to understand is that the willingness of foreign countries to invest in the US economy and to purchase US public debt has helped to keep US real interest rates relatively low in the past, which until recently, contributed to a great extent to a fast US economic growth and enabled the country to consume more that it produces for a long time. Some renowned economists also argue that the US dependency on foreign savings was a contributing factor to the US subprime crisis and the subsequent global financial crisis. However, the size and the recent growth of US public debt have raised concerns about the willingness of foreign countries to continue to invest in US public debt securities. For example, some Chinese analysts claimed that the gover nment should diversify its reserves away from US dollar assets into assets of other currencies. An important short-term political implication of Chinas large holdings in US public debt is that, if China might suddenly decide to sell a large share of its holdings, this would induce other foreign investors to sell off their holdings as well, which could dramatically destabilize the US economy. Possible consequences can be the depreciation of the US dollar as its supply on foreign exchange markets increased and a large increase in US interest rates as a crucial source of funding for investments and the budget deficit is withdrawn from financial markets (Morrison and Labonte, 2012). Therefore, China seems currently able to destabilize the US economy through the sale of a large share of its US debt holdings, which can be seen as a financial weapon (Sandbrook, 2012). In addition, in the long run, if China reduces its US securities, the US would need to replace it with other foreign or domestic investors to fill in the gap. Those investors would probably have to be acquired through higher interest rates compared to those of today. Increased interest rates would cause a fall in all kinds of interest-sensitive spending. The reducing of Chinese Treasury holdings would all else equal cause the foreign demand for US assets do decline, which would then lead to a dollar depreciation (Morrison and Labonte, 2012). All in all, given a large reduction in Chinas holdings of US public debt, the impact on the US economy would still be dependent on whether this reduction takes place gradually or suddenly. Some US policymakers also argue that Chinas large holdings of US public debt give it leverage over the United States on economic and noneconomic issues. An illustrative example of this concern is Ding Gang, an editor of Chinas Peoples Daily  [2]  , who wrote in an editorial in August 2011 that the Peoples Republic of China should create a direct link between the amount of US Treasury holdings with the US arms sales to Taiwan. Gang states Now is the time for China to use its financial weapon to teach the United States a lesson if it moves forward with a plan to sale arms to Taiwan. In fact, China has never wanted to use its holdings of U.S. debt as a weapon. It is the United States that is forcing it to do so. [à ¢Ã¢â€š ¬Ã‚ ¦] China has no choice but to use it as a weapon to defend itself when facing threats to Chinas sovereignty (Gang, 2011). Altogether, Chinas holdings in US public debt can be seen as a strong instrument to put pressure on the United States with regards to poli tical disputes between the two countries. As a result, the growing dependency of the US on China to purchase US Treasury securities to fund the countrys budget deficit has become a major concern to many US policymakers (Morrison and Labonte, 2012). However, the probability that China would suddenly reduce its holdings of US public debt is highly questionable because of the fact that doing so could potentially have a significant negative impact on the Chinese economy as well. The important causality which takes away Chinas incentive to sell is the fact that any Chinese attempt to sell a large portion of its US debt holdings could, on the one hand, dramatically reduce the value of its remaining holdings in international markets. On the other hand, a negative demand shock in the United States would also dramatically reduce US demand for Chinese exports, either through an appreciation of the Chinese Yuan against the US Dollar or a reduction in the US economic growth (especially if other foreign investors sell their US asset holdings as well and the United States are forced to raise interest rates in response) (Morrison and Labonte, 2012). This is especially severe because of the fact that China was the United States largest supplie r of goods imports in 2011. US goods imports from China totaled U.S. dollar 399 billion in 2011, a 9.4% increase from 2010 and up 299% since 2000. Imports from China into the United States accounted for 18% of overall US imports in 2010 (Office of the United State Trade Representative, 2012). A sharp reduction of US imports from China could therefore have a significant negative impact on Chinas economy, which heavily depends on exports into the United States for its economic growth. Moreover, in the case of China, economic growth is also seen as a vital source of political stability and therefore in the interest of the government. Consequently, it can be argued that the US and Chinese economies are mutually dependent  [3]  on each other, which, as a matter of fact, gives China very little leverage over US policy (Morrison and Labonte, 2012). The former US Treasury Secretary Lawrence Summers called the mutual damage which would occur to the US and Chinese economies the balance of financial terror (Dorn, 2008). For some time, this balance of financial terror as well as the global financial system has kept China off from exploiting their power position (Dorn, 2008). Nonetheless, regardless of the balance of financial terror, growing bilateral tensions over the US public debt between the United States and China can clearly be observed. For example, the government-controlled Chinese newspaper Xinhua News Agency expressed a lot of criticism on US economic policies regarding the US public debt situation: With its debt approximating its annual economic output, it is time for Washington to revisit the time-tested common sense that one should live within ones means (Xinhua News Agency, July 2011). The days when the debt-ridden Uncle Sam could leisurely squander unlimited overseas borrowing appeared to be numbered as its triple A-credit rating was slashed by Standard Poors (SP) for the first time on Friday. China, the largest creditor of the worlds sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of Chinas dollar assets (Xinhua News Agency, August 2011). To relieve further bilateral tensions between the two countries, China should pursue a more market-liberal path and the United States should abstain from implementing protectionist measures. Doing this, the US-China relationship should develop peacefully and global prosperity will continue. Consequently, the balance of financial terror would collapse and give way to free trade and capital freedom (Dorn, 2008). In conclusion, the main political issue from the perspective of the United States is not Chinas large holdings of US public debt per se, but rather the high US reliance on foreign capital in general and whether this reliance is sustainable in the future (Morrison and Labonte, 2012). Policymakers in the United States should therefore think about the medium- and long-run implications of the countrys high amount of public debt held by foreigners. To do that in an appropriate way, they have to take into account and to understand the economic and political relationships between the United States and its debt holders, with China leading the way. A first step to mitigate the problem is to launch political measures so that the United States increases its level of savings in the long-term in order to reduce the vulnerability to a possible shift away from US assets by foreign investors (Morrison and Labonte, 2012). The Role of U.S. Public Debt in the Global Economy Undoubtedly, the United States still plays an exceptional role in the global economy. First of all, the country is the largest economy in the world. Secondly, it clearly dominates the global monetary system: The United States capital markets are among the most liquid ones (Schuman, 2011) and the special status of the dollar as the worlds reserve currency has become an crucial aspect of Americas power, allowing the country to borrow effortlessly and maintain an assertive foreign policy (Warnock, 2010). In addition, the US dollar is the primary currency used in foreign exchange transactions and trade. Also, as already mentioned in the chapter before, countries such as China and Japan store their national wealth to a large extent in US public debt. The perception has always been that the United States has a safe haven status, meaning that when investors get nervous, they increase dollar-based assets, and especially also US public debt (Schuman, 2011). Having said all this, given the exc eptional status of the United States in the world economy, the global economic and political consequences of the development of US public debt are substantial. Increasing US public debt bears the risk of a fundamental change in the perception of the safe haven status of the United States. Schuman (2011) speculates on what would happen if this change in perception comes true  [4]  : US Treasury securities would be seen as riskier than before and would consequently lose their attractiveness. As a result, interest rates would increase in the United States, raising borrowing costs in the economy and making it more difficult for the US government to finance debt and budget deficits. This can potentially lead to a significant decrease in investments and consumption. The US dollar will presumably depreciate, which will devaluate currency reserves around the globe. All those effects taken together will have negative consequences on the growth of the US economy, lowering living standards for Americans and eventually leading to a slower growth of the world economy. To put it simple, a loss of confidence in the United States as a safe haven results in higher interest rates, which will automatically have negative consequences on the world economy (International Monetary Fund, 2012). Therefore, the exceptional role of the United States makes its public debt situation dangerous for the shape of the global economy due to the fact that overwhelming debt amounts can cause effects that potentially destabilize the world economy. In addition, the ten-year US Treasury bond has the status of the worlds risk-free asset, meaning that the United States is the basic standard by which risk in financial markets is assessed (Warnock, 2010). This is sometimes referred to as the risk-free standard and is a basic convention regularly used in all different kinds of valuations in the daily business world. In particular, the risk-free standard is an important measure in the context of corporate and asset valuation (Damodaran, 2008). Loosing the safe haven status of the United States as a possible consequence of the above-described developments means loosing the risk-free standard convention, resulting in global efficiency losses and higher risks of economic and financial fragmentation (Schuman, 2011). Although the United States exceptional status in the world economy makes its debt situation risky, that status obviously gives the country particular protection as well. A meaningful example of this protection is the warning of Standard Poors to downgrade the United States from its traditional prized AAA credit rating in April 2011 (Schuman, 2011): This warning was a strong signal that Standard Poors was not concerned about the special status of the US in the global economy, meaning that if the country is not able to get its debt situation under control, it will be confronted with a downgrade similar to those of Greece, Spain or Japan. However, financial market participants acted against what economic intuition and theory tells us. US Treasuries weakened immediately after Standard Poors announcement, a clear indication that investors were selling them. Nevertheless, they returned to their old strength shortly afterwards, suggesting that investors even bought US public debt after S tandard Poors warning instead of selling them to a large extent (Schuman, 2011). Moreover, some reactions of major US bondholders indicated that they are not concerned about the countrys financial condition. For example, at the time Japanese Finance Minister Yoshihiko Noda mentioned: [à ¢Ã¢â€š ¬Ã‚ ¦] basically we continue to believe that US Treasuries are an attractive product for us (Channel NewsAsia, 2011). A further crucial point in the context of the role of US public debt in the global economy is the argument that US policymakers have been relying probably subconsciously on the exceptional status of the United States (Schuman, 2011).  [5]  The particular role of the US in the global economy leads to the outcome that the country does not have to face dangers other nations could never avoid. A political implication of this behavior is presumably that according to some critical authors and journalists the United States are one of the few heavily indebted developed economies that does not have a credible plan to control deficits and debt  [6]  (Schuman, 2011). To put it in simple words, US policymakers have possibly been banking on being like American International Group (AIG) or General Motors (GM) in America or UBS in Switzerland, acting as if the country is too big to fail  [7]  . In conclusion, one can state that a debt crisis in Portugal for example can potentially create uncertainty through world financial markets, and if a larger country such as Spain fell into crisis, this uncertainty could have destabilizing effects. But US public debt bears the risk of crashing the entire operating system of the global economy. Hen

Waiting for the Barbarians Essay -- Literary Analysis, J.M. Coetzee

Many of us have heard of the â€Å"dysfunctional relationship† characterized by the twists and the turns of emotion and the outrageous behavior of two self-destructive individuals. However, we never envision ourselves in that situation, playing either the stereotyped role of the crazy woman or man, both blinded by love or another passionate emotion. However, in Waiting for the Barbarians, J.M. Coetzee creates an eye-brow rising, head-tilting relationship between the old and pedophilic magistrate and the damaged barbarian girl. The transformative relationship between the two individuals is based on torture, guilt, atonement, and power. Didactically, through their relationship, Coetzee intends for the reader to understand the effect of moral idleness and also to see himself reflected in the idea of the true barbarian. Quickly into the novel, torture can be discerned as an important theme which shapes the transformative relationship between the magistrate and the barbarian girl. The magistrate views himself as â€Å"a responsible official in the service of the Empire† who carries out his routine duties in a remote tranquil town, just â€Å"waiting to retire† (8). His remarkably quiet and content lifestyle is disrupted as a result of Colonel Joll’s arrival and quickly after nonsensical imprisonment and torture commence. Initially, by abstaining from the investigation and torture the magistrate perceives himself as the opposite of the evidently villainous man with â€Å"discs of glass suspended in front of his eyes† (1). Without directly causing the bruises and subsequent scars, the magistrate is still a participant in the torture by his association with the Empire. He is aware and even states that many of the prisoners, like the fisherman, are innoc... ...inistration’s desire to preserve its ideals of what is good and evil by creating a nonexistent enemy and a war. If the soldiers under Colonel Joll â€Å"could never catch them [barbarians],† were they even there to begin with? Creating problems with no valid foundation is equivalently as injurious as waiting for an evil deed to occur and waiting for others to solve the issue. Coetzee uses the odd relationship between the magistrate and the barbarian girl as penance to intellectually display the effects of guilt due to moral idleness. If empires, governments, and administrations are committing wrongful acts, as a citizen and most importantly, as a human, one should react and voice his opinions, instead of crouching in fear or helping when the damage has already been done. The novel makes us question whether we will be a another facilitator of the bystander effect.