Recession Cause Changes In The Auditing Profession Finance Essay - Free Essay Example

Sample details Pages: 5 Words: 1553 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? The financial meltdown of 2007 was a calamity to the world economy. The meltdown initiated a period of severe instability to the global financial system which resulted in the failure of several financials giants and billions of dollars from stimulus packages issued by governments around the world. However, the collapse of the housing market was the epicenter of the financial meltdown. It created a domino effect which in turn shook the economic stability of the United States severely affecting financial markets, banks, corporations, small businesses, and ultimately consumers. Causes of the current financial recession: The financial collapse in 2007 was triggered due to the collapse of the housing market. The housing bubble in the United States started in the mid 90s. (Baker, 2008) In the years prior to the collapse, low interest rates were pushed by the Fed in an effort to increase homeownership in the United States. This led to a rapid and continuous increase in the demand as well as the prices of residential properties. Given the circumstances, Wall Street investment banks grouped the loans and offered them as mortgage backed securities to investors. Mortgage backed securities represented the right to the debt obligation on residential properties. Under the conditions at the time, it was blindly assumed that real estate values would continuously rise and when such is the case, where the value of an asset is assumed to be constantly increasing, the concept of risk associated with that asset diminishes. Therefore, lenders increased their issuance of loans to the general public. Subprime and adju stable rate mortgages, arms, were loans given to less than qualified buyers and their riskiness was almost always ignored. The extension of credit through subprime and adjustable rate mortgages resulted in millions of defaults around the country. The adverse affects of this process were made widely apparent when mortgage backed securities began to collapse as a result of widespread mortgage defaults. As the demand in the housing market was increasing rapidly, construction companies saw the need to accommodate prospective homeowners. This led to a home building frenzy which eventually led to a highly saturated market. Furthermore, when housing sales began diminishing, a large number of newly built homes were left empty and even more were left in progress as construction halted due to unprofitability. It is widely believed by many people that the main causes of this crisis were greed and market failure. However, the governments lack of appropriate policy making also contributed significantly to this crisis. Homes are often the most valuable asset of a family. Thus, it had always been an objective of the government to increase home ownership in the United States. Therefore, in an effort to support people, who otherwise were not worthy candidates for homeownership, the government pushed to lower lending standards. To keep recession away, the Federal Reserve lowered the Federal funds rate 11 times -ÂÂ  from 6.5% in May 2000 to 1.75% in December 2001 -ÂÂ  creating a flood of liquidity in the economy. (Manoj, Oct 2010) Down the road, these policies eventually led to the issuance of subprime and arm loans. Furthermore, later, as the demand for houses decreased, investors were the first to pull out causing another shock to the already stagnant market. (Christie, April 2007) Don’t waste time! Our writers will create an original "Recession Cause Changes In The Auditing Profession Finance Essay" essay for you Create order Did the auditing profession contribute to the financial meltdown? The purpose of auditing is to provide investors as well as other users of financial statements with complete and accurate financial information. This objective is achieved through analyzing and assessing a corporations financial information and issuing a statement based upon the gathered evidence. In achieving this object, it is essential to thoroughly examine a corporations major sources of revenue and their reliability. Furthermore, it is quintessential to determine whether or not a corporations business practices are ethical and lawful. Failure to follow these procedures can also be looked upon as a failure on the part of auditors to perform their job correctly. Therefore, taking into account the purpose of auditing, it is not farfetched to say that the auditing profession did indeed contribute to the financial meltdown, because of its failure to detect the highly risky business practices of many banks and corporations as well as failing to catch the material misstatements on th eir financial statements. Furthermore, during the financial crisis, auditors were placed under a lot of scrutiny by people for failing to perform their jobs correctly. For example, an audit of a mortgage company should have began with looking at their products and services, speaking to brokers and underwriters in detail, checking the creditworthiness of borrowers, examining all related paperwork, and assessing the risk of recovering the loans. An in depth analysis of the business process of such companies should have alerted auditors about the red flags of a possible failure. In many instances, lenders were practicing predatory lending, in which consumers were mislead into signing contracts of which they knew not the details of. In consistency with the objectives of auditing, it was the responsibility of auditors to discover and report such unethical acts in their reports. However, hundreds of firms continued to practice this method of lending so that they may sell the loans t o banks on Wall Street. The lack of specialized auditors for the financial industry was also another reason for the failure to detect the misstatements on financial reports. Due to the fact that many banks were performing operations with risky and highly complex financial tools such as derivatives, it was difficult for auditors to detect fraud and report accurately on these operations. Fannie Mae paid Deloitte $49.3 million in fees in 2007. The firm was hired by Fannie Mae in 2005 because its predecessor KPMG missed accounting errors that cost the housing finance company $9 billion in previously reported profit. (Berr, Sept 2008) The necessity for diligent auditors to perform their work with greater accuracy was evident in the years before the financial collapse. Shareholders lost large percentages of their investments and suffered greatly; it could have been possible for these shareholders investment to be safer if auditors would have been able to spot red flags related to the c ollapse. Will the recession cause changes in the auditing profession? The failure of several major banks, insurance companies, and mortgage companies, among others during this recession has left a lasting impression on the auditing profession. Due to the failure of many auditors to detect fraud and material misstatements on the financial statements of many firms, it is more than likely that the auditing profession will have to undergo more stringent policies and procedures. There is no doubt that stricter policies must be implemented to prevent any future financial crises. Enforcing auditors to focus more on governance as part of their audit would improve the audits effectiveness because it would allow auditors to gain insight on the activities of the board of directors as well as any relevant committees. Furthermore, this will also give insight on the different employee positions and what their rights and responsibilities are. By focusing on governance, auditors will also get a better understanding of the firms environment and be able to determin e the nature of the controls as well as that of the personnel. In addition, implementation of stringent guidelines for internal auditors would significantly reduce the risk of fraud and material misstatements. It would allow for a more ethical business environment because internal auditors would be present throughout the fiscal year and would be able to provide the board of directors with thorough assessments. An important change required in the auditing profession is to make the guidelines on when to use and not to use auditing specialists. In recent years, during the peak of the financial crisis, many auditors failed to detect risks associated with complex financial instruments used by corporations. Requiring the use of competent and diligent audit specialist will ensure the quality of the audit performed. On the other side of the spectrum, however, one can also argue that the blame for the financial crisis solely lies upon auditors. Auditors jobs are not to predict the f uture but instead their job is to make sure that corporations have provided reliable information on their financial statements. (ACCA, Oct 2010) Conclusion The financial crisis of 2007 was one of the worst economic disasters since the Great Depression. In the turmoil, hundreds of banks defaulted; financial giants, such as: Merryl Lynch, Lehman Brothers, and Bear Stearns went bankrupt or were bought out. The housing and mortgage crisis played out to be the originator of the domino affect which resulted in severe calamity across the financial world. Even with billions of dollars worth of government funding, many toxic assets were still left untouched and on the books of lenders. The auditing profession contributed to the financial crisis through a lack of following the proper procedures and failing to detect the risks that were present in these firms. It is up to the auditor to issue an opinion on the financial statements of firms and one could argue that the auditors failed to give an appropriate opinion. More stringent rules and regulations will help auditors be able to perform their jobs with greater competence. In the aftermath of t he financial crisis, the global economy has still not fully recovered. Furthermore, many economists believe that a double dip recession could be headed our way. Enforcing stricter auditing policies would definitely help mitigate possible threats to our financial stability and to our economy.

The Fight Over Assisted Suicide - 1746 Words

Over the last thirty years the fight over assisted suicide has earned a spot in the national spotlight, for both positive and negative reasons depending on your stance on the issue. There have been challenges made based off the constitution, the right to privacy and moral reasons for both sides. While there have been many notable persons of interest during this time some have helped the cause as others have hindered progress. There have been attempts to challenge physician assisted suicide based off the Fourteenth amendment of the constitution and the Due Process Clause. Those in favor have argued that in not allowing people access to physician assisted suicide is a violation of the Due Process Clause which was heard during the case of Cruzan v. Director, Missouri Department of Health in which the Supreme Court ruled it was the patients right to refuse medical treatment, even if refusal would lead to death (Cruzan v. Director, MHD). The Supreme Court also heard the case of Washington v. Glucksberg in 1997 during which time there were four physicians arguing that Washington’s assisted suicide ban was unconstitutional because it violated the Fourteenth Amendments Due Process Clause by placing undue burden of the liberty. The case was being arguing on behalf of four terminally ill patients. It was ruled by the Supreme Court at that time that assisted suicide is not a â€Å"right† under the fund amental liberties of the amendment (Washington v. Glucksberg). The Supreme Court alsoShow MoreRelatedEssay on Physician Assisted Suicide903 Words   |  4 PagesPhysician assisted suicide/dying (PAD) is it good or bad? PAD is referred to when physician provides patients who are terminally ill with prescriptions of a lethal dose of medication, upon the patient’s request, which the patient intends to use to end their own life (Merriam-Webster Dictionary, 2011); another option that is close to physician assisted suicide is Euthanasia. Euthanasia is the act or practice of killing or permitting the death of hopelessly sick or injured individuals (as personsRead MoreDoctor Assisted Suicide And Suicide1585 Words   |  7 PagesDoctor assisted suicide is a topic that has recently become a much larger debated issue than before. A timeline put together by Michael Manning and Ian Dowbigging shows that prior to Christianity, doctor assisted suicide was something that was tolerated , and was not heavily questioned (2). Yet, in the 13th century, Thomas Aquinas had made a statement about suicide as well as doctor assisted suicide, and his words shaped the Catholic teaching on suicide into what they teach today. Beginning in theRead MoreThe debate of Physician Assisted Suicide993 Words   |  4 PagesOver the years the medical field has developed many miraculous ideas and procedures. From organ transfers to blood transfusions, tons of lives have been saved. A doctor’s whole purpose is to help those dying to live. Yet, doctors have developed PAS, Physician Assisted Suicide, also known as Physician Assisted Death, and not to be mixed up with Euthanasia. Physician Assisted Suicide is morally wrong, gives doctors too much power, and it opens a door for those less critical patients to receive treatmentRead MoreAssisted Suicide Should Be Option1691 Words   |  7 PagesAssisted Suicide Should Be Option Lauren Bacall once said, â€Å"A man’s illness is his private territory and, no matter how much he loves you and how close you are, you stay an outsider. You are healthy.† This quote makes the point that no one knows exactly what someone with an incurable illness is going through. We are all outsiders. So, who is to say, for example, physician assisted suicide should be illegal? If a person has the constitutional right to live then a person should have the right to chooseRead MoreEssay Euthanasia1740 Words   |  7 PagesEuthanasia The right to die with dignity, euthanasia and physician assisted suicide is a very sensitive issue debated in this country today. Euthanasia is the act of painlessly ending the life of a person for the reason of mercy. It is sometimes referred to as mercy killing. Americans are hearing more and more horror stories of the elderly tragically killing his or her spouse in order to avoid painful and horrible deaths. It is sad and amazing the extreme measure one had to go throughRead MoreEssay on Euthanasia1395 Words   |  6 Pagescurrent society. Assisted suicide, self-deliverance, auto euthanasia, aid-in-dying are all terms that deal with the choice of achieving a good death; the choice of deciding for oneself when it is time to escape unimaginable pain and have the chance to die with the dignity we all deserve. According to the Euthanasia Research Guidance Organization (ERGO!) there are two main forms of suicide (Euthanasia Research Guidance Organization, www.finalexit.org). One is emotional suicide, which is definedRead MoreAssisted Suicide878 Words   |  4 PagesEnglish  12   Dec.  13,  2014   Block  5   Persuasive  Essay  Ã‚     Assisted  suicide  is  the  suicide  of  a  person,  done  with  the  help  of  another  person  but   mostly  a  physician.  (Wikipedia)  This  can  be  a  very  debatable  topic  because  it  has  actually  been   legalized  in  different  parts  of  the  world.  By  having  this  act  legalized,  it  doesn’t  really  mean  that   the  assistor  won’t  get  persecuted.  Many  people  may  not  agree  with  my  point  of  view,  but  in  my   opinion  assisted  suicide  should  not  be  legalized  at  all.      First  of  allRead MoreAssisted Suicide And Voluntary Active Euthanasia Essay1270 Words   |  6 Pageswith pain and fight through their disease. No methods have been discovered to cure these poor people. Everyday, he or she wish for relief on their significant unrelenting pain, but the only method right now is to end their lives. There are two methods that many terminally ill look to that are familiarized by our society, physician assisted suicide and voluntary active euthanasia. Physician assisted suicide is when the patient is prescribed lethal medicine by the doctor to commit suicide. While, voluntaryRead MoreEuthanasia And The Closely Related Procedure1584 Words   |  7 Pagesclosely related procedure, assisted suicide, are some of the most highly debated topics in ethics. Although the procedures are different in name, their definitions are quite similar. Euthanasia can be defined in two ways: passive or active. Passive euthanasia is defined as allowing the patientâ€℠¢s illness to kill them; refusing medical treatment. Active euthanasia, however, is defined as killing through lethal injection, which also happens to be known as assisted suicide. From the perspective of theRead MoreAssisted Suicide And Voluntary Active Euthanasia Essay1345 Words   |  6 Pagesterminally ill people struggle with pain and fight through their diseases. No methods have been discovered to cure these poor people, but, everyday, he or she wishes for relief on their significant, unrelenting pain. Also, the only alternative method right now is to end their lives. There are two methods that many terminally ill people look to that are familiarized by our society: physician assisted suicide and voluntary active euthanasia. Physician assisted suicide is when the patient is prescribed lethal

To What Extent Might the Cash Flow Statement Help to...

To what extent might the cash flow statement help to overcome the traditional limitations of financial statement analysis in evaluating the past performance and predicting the future successes or failures of business organisations? Accounting is the major means of organizing and summarizing information about economic activities. The information which is provided by the accounting practices through financial statement analysis, provides help to decision makers to take decision. There are various forms of Accounting models which is of great help example if the financial statements for an organization is made statements like Balance Sheet, Profit and loss Account etc it helps the organization out to makes its stand in the market†¦show more content†¦This is a disadvantage of Ratio because it has to be depended on other figures when it is individual it represents nothing There are certain standard set which cannot became for organisation now this again deviates from one another for different organisation. Ratio is not calculated on a daily basis it is prepared as and when the income statement and balance sheet is prepared that takes palace annually. MODERN MEHTOD OF ANALYSING: CASH FLOW STATMENT Cash flow is one of the most vital elements in the survival of a business to include CFs in the annual report of the company is a recent concept. Complementing the balance sheet and income statement, the cash flow statement (CFS), its a mandatory part of a company s financial repot, records the amounts of cash and equivalents entering and leaving a company. The CFS helps the investor to understand and figure out the position of the company from where the money comes and where the money is spent by an Survival of a business depends not only on profits but perhaps more on its ability to pay its debts when they fall due. Shareholders might believe that if a company makes a profit after tax , then this is the amount which it could afford to pay as a dividend. Unless the company has sufficient cash available to stay in business and also to pay a dividend, the shareholders expectations would be wrong. It can be positive, or negative, which is obviouslyShow MoreRelatedProject Management15109 Words   |  61 Pagesaimed at improving the quality of life of beneficiary communities, development and social welfare etc.. The principle be it in physical or qualitative terms. Despite significant aims and objectives of all these programs have been inputs of human and financial resources, many fell short to bring about overall changes in the existing socio- of expectations. Projects failed to meet the priority economic structure in the country providing thereby needs of communities; stated outputs were not achieved dignifiedRead MoreStrategic Marketing Management337596 Words   |  1351 PagesOur thanks go to Janice Nunn for all the effort that she put in to the preparation of the manuscript. Strategic Marketing Management Planning, implementation and control Third edition Richard M.S. Wilson Emeritus Professor of Business Administration The Business School Loughborough University and Colin Gilligan Professor of Marketing Sheffield Hallam University and Visiting Professor, Northumbria University AMSTERDAM †¢ BOSTON †¢ HEIDELBERG †¢ LONDON †¢ NEW YORK †¢ OXFORD PARIS †¢ SAN DIEGORead MoreExploring Corporate Strategy - Case164366 Words   |  658 Pagesillustrations and 15 case examples which have been chosen to enlarge speciï ¬ c issues in the text and/or provide practical examples of how business and public sector organisations are managing strategic issues. The case studies which follow allow the reader to extend this linking of theory and practice further by analysing the strategic issues of speciï ¬ c organisations in much greater depth – and often providing ‘solutions’ to some of the problems or difï ¬ culties identiï ¬ ed in the case. There are also overRead MoreBrand Building Blocks96400 Words   |  386 Pagesmarketing. Given these characteristics, they enjoyed only temporary sales spurts during recessionary times. No more. While still offering so-called price brands, retailers are also increasingly offering private label brands at the high end of the business. Such brands are competitive with national brands in quality and marketing support but have substantial cost advantages - in part because the cost of the brand management team, sales force, and advertising is lower and can be spread over hundredsRead MoreOrganisational Theory230255 Words   |  922 PagesPerspectives John McAuley, Joanne Duberley and Phil Johnson . This book is, to my knowledge, the most comprehensive and reliable guide to organisational theory currently available. What is needed is a text that will give a good idea of the breadth and complexity of this important subject, and this is precisely what McAuley, Duberley and Johnson have provided. They have done some sterling service in bringing together the very diverse strands of work that today qualify as constituting the subject

Analysis Of Alan Patons Cry, The Beloved Country - 962 Words

Nelson Mandela once declared, â€Å"As long as poverty, injustice and gross inequality persist in our world, none of us can truly rest.† Nelson Mandela explains that seeing the injustice and prejudice in society but not doing anything to try and fix it will ultimately not solve the issue of racial division. In the novel, Cry, the Beloved Country, by Alan Paton, a wise man named Msimangu, and Arthur Jarvis, a well-respected activist, are characters that seek an end to the racial divide in the country of South Africa. Msimangu and Arthur Jarvis each uniquely seek an end to division in their country through teaching hope and working for justice. Msimangu teaches Stephen Kumalo about his hope for South Africa because he understands the oppression†¦show more content†¦Msimangu absolutely changes the way that Stephen thinks. He hears Msimangu reading and realizes not only that he has incredible eloquence, but also that he shows benevolence through his words. Stephen describes Msimangu as â€Å"A man whose heart was golden†. His heart and intentions are in the right place. Though Msimangu could not be perfect, he cared and tried to bring as much patience and love as he could. Stephen sees this in him and it makes him want to show more patience and grace to others as Msimangu does. As a result, Stephen finds his sister, Gertrude, who has been living in poverty as a prostitute and has left her son to lead a tragic life. Yet, Stephen finds it in himself to forgive and reconcile with her, bringing both his sister and her son back into the family. Through Msimangu’s teachings, Stephen was influenced to make a d ifference and to show kindness and grace to those in his family and community. Another character that strove to bring justice to South Africa is Arthur Jarvis. Arthur actively seeks an end to the racial divide through his persistent work because he sees the hardship and despises how the natives of South Africa are treated. James Jarvis, Arthur’s father who was not aware of how his son fought for the natives, finds Arthurs writings after he has died: â€Å"We believe in help for the underdog, but we want him to stay under† (Paton 187). Arthur writes about the injustice and inequality in their country. The whiteShow MoreRelatedAnalysis Of Alan Patons Cry The Beloved Country847 Words   |  4 PagesReverend Stephen Kumalo, the protagonist of Alan Paton’s novel Cry, the Beloved Country, lives in the countryside of Ndotsheni. The countryside is in drought, over-farmed, and the land is dying. Despite all this, it is still representative of home and peace to the chara cters in the novel. It is the home of traditions and old trivial rules. However, a consistent theme it brings is young people leaving for the city, and therefore bringing new messages to South Africa as a whole. The novel presentsRead MoreJames Jarvis806 Words   |  4 PagesJames Jarvis In Alan Paton’s Cry, the Beloved Country there is two protagonists, Reverend Stephen Kumalo, and James Jarvis. Both characters play significant roles to the story but James Jarvis’ situation is noteworthy and inspirational. James is an influential, dynamic character because his opinion dramatically changes upon reading his son’s manuscript. A series of events influences James to shift his mindset into the mindset of his son. An analysis on James Jarvis’ changing mindset revealsRead MoreAnalysis Of Orson Scott Card s The Great Pattern 1676 Words   |  7 Pageswhat resonates with the contemporary writer is essential in determining whether the focus of aspiring writers should be imitating Fielding’s ‘writers of antiquity’, embracing the ‘great pattern’, or on more recent works. For the purpose of this analysis I will be considering works written within the last twenty years ‘recent’, whilst analysing what wr iters gain, or lose, from fiction written longer ago. Some themes in literature are forever relevant to the human condition. George Orwell’s Nineteen

Prescription Drug Abuse And Prescription Drugs - 1510 Words

Prescription Drug Abuse Prescription drug abuse is the use of prescription drugs in the incorrect manner, whether it’s taking a larger dose, taking someone else’s drugs, injecting or snorting them, or simply using them to get high. The three types of drugs that are most abused are opioid painkillers, sedatives or anti-anxiety medication and simulants. Opioids are the most commonly used simply because they are easy to obtain. One of the seven deadly sins is pleasure without conscience. The abuse of prescription drugs is a direct reflection of this teaching. People destroy their bodies, life and relationships around them. Too many people are dying and abusing prescription drugs each year; creating informative programs in and out of school†¦show more content†¦Any young person in college or high school has the opportunity of purchasing these drugs illegally from someone who’s just trying to make a little money. They could care less about how it could affect his or her wellbeing. Prescription drug abuse can lead to addiction, over dose or even death. More and more people are dying each day from drug overdoses. The use of the prescription drugs in the wrong manner can result in several different life altering side affects. Between the three main types of prescription drugs used the side affect can range from repertory failure, seizures, brain damage, extreme weight loss or even death. Our bodies were not designed to take these drugs in such a way. The body becomes dependent on the drugs and withdraws cause serious and painful side affects. The brain creates certain chemicals to help us deal with pain whether it’s mental or physical, and the abuse of prescription drug throws everything out of whack. It’s ironic how something that is designed to help us can also destroy us. (Prescription) Once prescription drugs become too hard to find and too expensive for most people they turn to heroin. Why heroin? Heroin is much cheaper and is just as easy to find. It can satisfy one just as the prescription drugs did. Heroin can be smoked or inject, but most teens stick to smoking the drug. The use of heroin has almost doubled because,

2008 Us Economic Recession - 1709 Words

INTRODUCTIONS The Global Financial Crisis of 2008 is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. It resulted in the threat of total collapse of large financial institutions, the bailout of small and big banks by national governments, and downturns in stock markets around the world. In United States, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. The crisis played a significant role in the failure of key businesses, declines in consumer confidence, declines in consumer wealth estimated in trillions of US dollars, and a downturn in economic activity leading to the 2008–2012 global recession and contributing to the European†¦show more content†¦By September 2008, average U.S. housing prices had declined by over 20% from their mid-2006 peak. As prices declined, borrowers with adjustable-rate mortgages could not refinance to avoid the higher payments associated with rising int erest rates and began to default. During 2007, lenders began foreclosure proceedings on nearly 1.3 million properties, a 79% increase over 2006. This increased to 2.3 million in 2008, an 81% increase vs. 2007. By August 2008, 9.2% of all U.S. mortgages outstanding were either delinquent or in foreclosure. By September 2009, this had risen to 14.4% Easy credit conditions Lower interest rates encouraged borrowing. From 2000 to 2003, the Federal Reserve lowered the federal funds rate target from 6.5% to 1.0%.[68] This was done to soften the effects of the collapse of the dot-com bubble and the September 2001 terrorist attacks. The Fed then raised the Fed funds rate significantly between July 2004 and July 2006. This contributed to an increase in 1-year and 5-year adjustable-rate mortgage (ARM) rates, making ARM interest rate resets more expensive for homeowners. This may have also contributed to the deflating of the housing bubble, as asset prices generally move inversely to interest rates, and it became riskier to speculate in housing. Weak andShow MoreRelatedThe Recession Since World War II Essay1228 Words   |  5 PagesThe Great Recession period was between the end of 2007 and the middle of 2009, which makes it the lengthiest recession since World War II. The gross domestic product (GDP) fell 4.3% from its peak in the fourth quarter of 2007 to its trough in the second quarter of 2009, the largest decline in the post-war period. The rate for unemployment was 5 % at the end of 2007 and increased to 9.5% in the middle of 2009 and reached 10 % in October 2009. The credit crunch had many effects on the economy. OneRead MoreThe Events Of The Summer Olympics And Michael Phelps Winning 8 Gold Medals1698 Words   |  7 PagesFrom the year 2008 many of us still remember the important events of the Summer Olympics and Michael Phelps winning 8 gold medals and being the first person to ever do this in history. We also remember the election of the 43rd president of the United States Barack Obama who was the first black president to be elected before going on and being elected for a second term. Out of all of these great events in American history in the year of 2008 the most remember event in this year is the financial turmoilRead MoreThe Great Recession in the year 20081063 Words   |  5 PagesRecession 16Specifically, Freund (2009) defines global downturns as years when world real GDP growth is (1) below 2 percent, (2) more than 1.5 percentage points below the previous five-year average, and (3) at its minimum relative to the previous two years and the following two years. 1975, 1982, 1991, 2001, and 2008 Freund (2009) describes the evolution of world trade following four previous global downturns. She finds that the size of the decline in world trade during these episodes is Read MoreThe Great Recession : Macroeconomics Project1096 Words   |  5 PagesTHE GREAT RECESSION MACROECONOMICS PROJECT Max: Hi I’m Max Lessins. This is Crash Course for economics and today we’ll be discussing the Great Recession, focusing on the fiscal and monetary policies used to recover from the 2008 economic meltdown. First, we need to understand how the Great Recession occurred. It all started with President Ronald Reagan in the 1980s. Reagan was famous for his supply-side economic views (Amadeo 1). He used top-down economics meaning he used government interventionRead MoreWall Street : The Great And Powerful Financial District Of The World1407 Words   |  6 Pagesproblems throughout its existence as recessions and depressions came into play and single handedly pushed America into a financial crisis. As early as 1929 till as recent as 2008 recessions still occur and throughout the existence of Wall Street they will never stop existing. The argument of whether or not a recession could be predicted is a topic that many have different views on, some say yes and some no, this argument will never simply go away as recession will still occur in the future. It isRead MoreFinancial Crisis Essay1119 Words   |  5 PagesIn 2016 it was estimated that the US wealth gap had reached a width previously seen in the 1920s. Since the 1970s America’s middle class has been shrinking, whilst the lower and upper classes have been growing, the former at a much faster rate to than the latter. It’s negative effects are best stated up John Taylor in the Hover Digest: â€Å"On the Fraser index, the United States ranked 2 in the year 2000 and it ranks 14 today. On the Heritage index it ranked 5 in 2008 and it ranks 12 today. On the WorldRead MoreAustralia s Economic Success And Growth Rates1699 Words   |  7 PagesEconomic Background: In the past two decades, the Australian economy has been, and continues to be a very strong and steady economy because of steady GDP growth rates, with an average around 3.5% annually (Heritage.org). Australia has also benefitted from considerably low inflation and unemployment rates. Because of these macroeconomic values, Australia is ranked third in the ranking of regional economies (Heritage.org). The reasons for Australia’s ongoing success is mainly because of the boom inRead MoreGlobal Economic Recession Essay810 Words   |  4 PagesAn economic recession is described as â€Å"a widespread decline in the GDP and employment and trade lasting from six months to a year.† (Word Net) The economic recession is an international problem that has been affecting countries like the United States, China, United Kingdom and others for over two years. The latest recession began when house prices and sales began to fall and large drop offs in business investments started. Ano ther causing factor of the recession was citizens with bad credit buyingRead MoreLending And Shadow Banking1444 Words   |  6 PagesIn 2008, one of the worst financial crises since the Great Depression occurred. The severity of this collapse cannot be understated as demonstrated by the bankruptcy of Lehman Brothers, the fourth largest investment bank in the US, and with many other financial institutions such as Merrill Lynch and the Royal Bank of Scotland having to be bailed out. In addition, the Global Banking System was within a whisker of collapsing and if it where not for the trillions of dollars invested in the system byRead MoreEssay On The United States Recession781 Words   |  4 Pagesdoing research on all the topics you gave us. After doing the research I decided I was most interested in the United states recession in 2008. It also interested me in finding out what we have done, in the middle of doing, and what we are going to do to get out of the recession. I decided to choose this topic about the US economy and what we were and are doing to get out of the recession because I wanted to learn more about why we went into a recession and how we are now working on how to get out

The Sociological Imagination and Understanding Personal...

The Sociological Imagination and understanding personal troubles as social issues: The Sociological Imagination allows us to question â€Å"things† or issues which are common and familiar to us and to find its deeper meaning. With the Sociological Imagination way of thinking, we find reasoning and uncover why many things in society are the way they are. The Sociological Imagination does not attempt to understand the individual and his or her problems alone, but focuses on issues and problems as it affects the greater society. In society, many factors called social structures, influences our behaviour, thinking patterns, reasoning and our logical approach too many challenges. According to Mills â€Å"In order to analyse the effects it is†¦show more content†¦People who commit suicide do not really want to end their lives as many seek the attention and acceptance they so dearly want from society. Thinking along the lines of the Sociological Imagination we need to understand the social forces, or the lack thereof, that drives people to commit suicide . Emile Durkheim discovered that levels of integration into society played a big role with suicide.Show MoreRelatedSociological Imagination By C. Wright Mills969 Words   |  4 Pages C. Wright Mills defined sociological imagination as the awareness of the relationship between personal experience and the wider society. Understanding and being able to exercise the sociological imagination helps us understand the relationship between the individual and society. Mills focuses on the distinction between personal troubles and public issues. Having sociological imagination is critical for individual people and societies at large to understand. It is important that people areRead MoreSociological Imagination Essay865 Words   |  4 PagesFrom The Sociological Imagination by C. Wright Mills addresses a distinction between personal troubles and public issues. Mills uses specific examples like unemployment and societal development. Mills explains the ability to connect the individual pr oblems with societal problems. Throughout the text, we can see how Mills uses the perspective of an individual to explain the perspective of society and vice versa. Using sociological imagination, I will explain how education is influenced by societyRead MoreThe concept of sociological imaginations allows us to get out of ones own judgment zone with700 Words   |  3 PagesThe concept of sociological imaginations allows us to get out of ones own judgment zone with regards to how we think about social problems. C. Wright Mills argument is that we should develop a method or a way of looking at things in the society from the point of view of the person experiencing the sociological phenomenon. In essence, we cannot look at things from ones own moral point of view; we need to look at things from the point of view of the person experiencing it. Mills believes that cannotRead MoreMills on Private Troubles and Public Issues1124 Words   |  4 Pagesa broader understanding of ourselves a nd the world in which we live, one must first understand ‘the sociological imagination’ and all that it entails. Mills describes this idea in terms of ‘private troubles’ and ‘public issues’ which continue to effect the lives of each and every one of us (Mills 1959: 8). While the connections between the two are evident, there are clearly a number of distinctions which determine the success or failure of either an individual or a society. Understanding that historyRead MoreWhat Can We Do? Becoming Part Of The Solution1619 Words   |  7 PagesThe Sociological Imagination is a concept first used by a well-known sociologist, C. Wright Mills, in 1959. In Mills article, The Promise, indicates that, The sociological imagination enables its possessor to understand the larger historical scene in terms of its meaning for the inner life and the external career of a variety of individuals(Mills, 3). Sociological imagination helps individuals to contempla te their own troubles in a deeper level and view their daily routines in an entirelyRead MoreThe Sociological Imagination Essay1065 Words   |  5 PagesPaper Grade: 75 / C The Sociological Imagination The sociological imagination is an idea or a way of thinking that interlocks an individual in a society with the society as a whole. Most people refer to sociology as the study of how people or individuals interact with each other. In order to fully understand sociology and the concept of the sociological imagination as proposed by C. Wright Mills, one has to be able to envision the individual and the society working together to better understandRead MoreThe Sociological Imagination, C. Wright Mills1268 Words   |  6 PagesIn the novel, The Sociological Imagination, C. Wright Mills is trying to present the concept of how an individual’s ability is able to develop reason by using the information surrounding him. Mills explains that the sociological imagination is an important concept because it is what differentiate sociology from other social sciences such as political science or economic. It is the concept that will help people to have a better understanding of our world , to be clear of the connections within societyRead MoreThe Concept Of Sociological Imagination : Connecting History987 Words   |  4 PagesClaudia Rosado Professor Williams Sociology 3 October 2014 The Concept of Sociological Imagination: Connecting History to Biography C. Wright Mills believed that sociological imagination connects history and biography by means of cause and effect. Society and all things surrounding it have a particular interconnection when it comes to change. As a result, one major alteration to everyday society causes human relationships in history to adapt to change. History is altered by man, without human interactionRead MoreSociological Imagination1017 Words   |  5 PagesThe concept of â€Å"sociological imagination† is one that can be explained many different ways. A simple way to think of the sociological imagination is to see it as a way a person thinks, where they know that what they do from day to day in their private lives (like the choices they make), are sometimes influenced by the larger environment in which they live (Mills 1959, 1). What C.W. Mills meant by this concept is that it is the ability to â€Å"understand the larger historical scene in terms of its meaningRead MoreAnalysis of the sociological imagination and its use in sociology.1483 Words   |  6 PagesSociological Imagnation The sociological imagination is the ability to look at the everyday world and understand how it operates in order to make sense of their lives. It is a state of mind, which enables us to think critically about and understand the society in which we live, and our place in that world as individuals and as a whole. C. Wright Mills, first wrote of the concept in 1959. His understanding of it being that it was a quest for sociological understanding involving a form of consciousness

Alcoholism A Growing Problem - 1468 Words

Alcoholism Alcoholism is a growing problem in today s society. What is alcoholism? Is it a disease? What are the causes of it? What toll does alcohol abuse have on individuals? American society? American economy? What kind of treatments are available to reduce/cure alcoholism? What is alcoholism? Alcoholism is a physical or psychological need for an alcoholic beverage, which is taken for non-medical reasons and produces a noticeable effect on the body (Sheen 93). People develop the need for alcohol for many different reasons. For a lot of people, those reasons are caused by friends/family. Some people think they need alcohol to fit in with their friends. Others think they need it to deal with family problems such as violent or careless†¦show more content†¦Alcohol abuse and alcohol dependence are not the same thing. †¢ â€Å"With abuse, a person uses alcohol in excess but may not have regular cravings, a need to use daily, or withdrawal symptoms during sudden stoppage. The person may often have heavy alcohol binge episodes separated by periods of not drinking. †¢ If a person is dependent on alcohol, he or she needs to drink regularly or even daily and drink more and more to get the same effects. The person also experiences withdrawal symptoms if he or she stops drinking and wants to quit drinking alcohol but can t† (http://www.webmd.com/mental-health/addiction/understanding-alcohol-abuse-symptoms). What are symptoms of Alcohol abuse? There are many symptoms of alcohol abuse including: †¢ â€Å"Temporary blackouts or memory loss. †¢ Recurrent arguments or fights with family members or friends as well as irritability, depression, or mood swings. †¢ Continuing use of alcohol to relax, to cheer up, to sleep, to deal with problems, or to feel normal. †¢ Headache, anxiety, insomnia, nausea, or other unpleasant symptoms when you stop drinking. †¢ Flushed skin and broken capillaries on the face; a husky voice; trembling hands; bloody or black/tarry stools or vomiting blood; chronic diarrhea; and drinking alone, in the mornings, or in secret; these symptoms are specifically associated with alcoholism.† (http://www.webmd.com/mental-health/addiction/understanding-alcohol-abuse-symptoms). â€Å"What are

Franklin Corner Bar And Liquor Store - 885 Words

Franklin Corner bar and liquor store has more than 20 competitors located in the area, including independent stores, Shoprite Wine and Spirits, and Joe Canals Discount liquor outlet. Franklin Corner markets solely through word of mouth. They are located between two large apartment complexes, which are where they get most of their customers. Their customers at the bar range from ages 40 to 60. At least 70% of their customers visit the bar 3 to 4 times a week. Even though Franklin corner’s bar has a very high customer retention rate, they earn most of their revenue by selling liquor. One of Franklin Corner’s top competitors is Shoprite Wine and Spirits. Shoprite has been one of the largest retail-owned supermarkets in the United States for decades. In 1965 Shoprite decided to extend their brand by opening liquor stores in several of their locations. Shoprite has an established reputation for selling low priced products compared to their competitors. Their stores are able to offer their consumers the lowest overall prices, and the greatest value, in the marketplace by buying in volume. Joe Canals discount outlet store is another top competitor to Franklin corner’s liquor store. Joe Canals carries a wide range of craft beer, wine and spirits at a low price point. They also have free wine and beer tastings weekly, celebrity appearances, wine and spirits education and special events. A disadvantage that both Shoprite and Joe canal has is the inability to expand to manyShow MoreRelatedProhibition Of The Usa Prohibition2994 Words   |  12 PagesVolstead act. This law was created in the hope of reducing the consumption of alcohol, but in actual fact it lead to; organised crime, bootlegging, gangsters, illegal smuggling, speakeasies and moonshines which all encouraged the consumption illegal liquor. This law also had many effects on the society such as the economy and the deaths related to alcoholic poisoning. Still today there is a debate on whether it was a moral noble action or a failure, but would America have been better off not havingRead MoreAmerican Histo ry Eoc Study Guide5327 Words   |  22 Pagesnear the factories where the people who lived in them worked. They had no indoor plumbing, little ventilation and light and were polluted and stinky. 33) Grant’s â€Å"Black Friday Scandal†: In 1869, speculators Jim Fisk and Jay Gould attempted to corner the nation’s gold market. They enlisted the help of Grant’s brother-in-law, who had pledged to prevent the president from finding out and acting to ruin the scheme. The conspirators bought huge amounts of gold and gold futures, sending the priceRead MoreLogical Reasoning189930 Words   |  760 PagesPreface Copyright  © 2011-14 by Bradley H. Dowden This book Logical Reasoning by Bradley H. Dowden is licensed under a Creative Commons AttributionNonCommercial-NoDerivs 3.0 Unported License. That is, you are free to share, copy, distribute, store, and transmit all or any part of the work under the following conditions: (1) Attribution You must attribute the work in the manner specified by the author, namely by citing his name, the book title, and the relevant page numbers (but not in anyRead MoreDeveloping Management Skills404131 Words   |  1617 PagesDeciding When to Delegate 464 Deciding to Whom to Delegate 465 Deciding How to Delegate Effectively 465 Review of Delegation Principles 470 International Caveats 471 443 SKILL ANALYSIS 474 Cases Involving Empowerment and Delegation 474 Minding the Store 474 Changing the Portfolio 475 SKILL PRACTICE 476 Exercises for Empowerment 476 Executive Development Associates 476 Empowering Ourselves 480 Deciding to Delegate 481 CONTENTS xiii SKILL APPLICATION 483 Activities for Empowerment and Delegation

Legal Aspect of International Trade and Enterprise

Question: Discuss about theLegal Aspect of International Trade and Enterprise. Answer: Issue The case law of Canada v. Australia- measures affecting the importation of Salmon included the complainant party from Canada while the respondent party from Australia under the agreement of SPS Arts 5.1, 5.5 and 5.6. The case involves the issue of prohibition on import of several salmon from Canada for the products including Canadian salmon that were fresh or frozen ocean. The complaint was made by Canada to the World Trade Organization for the restrictions on importing the Canadian salmon fish determining the agreement on Application of Sanitary and Phytosanitary Measures. The complainant argued that the import of salmon by Australia was against the agreement of SPS and articles under General Agreement on Tariffs and Trade (GATT). The major reason for imposing the ban on importing the salmon from Canada was to prevent the entry of prospect disease due to non-fresh products or the products that had been treated by smoke or heat. Canada contended that the product of salmon fish that a re fresh and therefore cannot be claimed as unsafe or unhealthy for the consumption whereas Australia contended that the ban was imposed for health concerns. Rules The case includes the articles of SPS 5.1 for the purpose of risk assessment that requires the processes carried by the members should be correct and healthy. It specifies the members should ensure the appropriateness of the measures, healthy techniques for the process of products meant for human consumption. The case also includes the rules on article 5.5 for prohibition on discrimination and concealed restriction on international trade. The members should ensure the economic and technical feasibility for the purpose of safety and healthy procedures in connection to the international trade. It is the responsibility of the members to conduct the international trade with the safety measures and requires to assess the potential risk that might affect the economy, industry as well as human health. Additionally, the case involves the article 5.6 considering the proper level of protection for the technical procedures within the reasonable time. The members or organizations are required to follow the proper norms of the procedures and rules to conduct the international trade especially for the import or export of the food and crops products. It should be ensured that the measures for trading in food products or crops for consumption of society should follow the corrective and safety measures. Application The concerned case was conducted between Canada and Australia for the assessment of the measures that affected the imports of salmon products in Australia. Considering the rules and measures of article 5 on the application of international trade, it is essential to comply the requirements with respect to the safety and correctness. The panel constituting the case of Canada and Australia was required to examine the risk assessment in conducting the trade of salmon within the different regions (Rogachev, Mazaeva and Egorova 2015). The panel was constituted to find the analysis on the reasons for delay in implementing the required measures and recommendation of DSB concerning the procedures and timing of undertaking the products. In case of salmon products, Australia was supposed to meet the sanitary measures since the product was meant for human consumption. The panel was constituted to form the analysis on the violation of the rules under articles 5 of SPS Agreement for observing the reasonability of the prohibition on import of the salmon fish. The articles on the agreement of SPS are applicable on the case of Canada and Australia because the measures on import and export of salmon require the compliance of articled rules. Article 5.1 of the agreement requires the organizational members to follow the sanitary measures for the products that are imported so that any kind of disease does not enter in the region. The panel was supposed to assess the evidences for proper application of the articled norms and measures for conducting the import procedures. The application of the articles and rules in case of salmon trade between Canada and Australia because the product of salmon was contended to be unhealthy and unsafe. It is important to follow the circumstances on international trade considering the hygienic food materials including salmon products (Patnaik 2015). Canada contended that their products did not contain any unhygienic elements and are not unsafe or prone to disease for the consumption in Australia. It was important to analyze the technical procedures for the products to be imported from other countries with respect to the protection of the society and communities. The articles require the companies or organizational members of WTO to conduct the international trade for the benefits of the countrys economy as well as the market industry so the society is able to consume the best and healthy products. Considering the first part of the article, it can be interpreted that the Australia had violated the rules for the purpose of risk assessment for the salmon product. Australia was required to conduct the measures for importing the products as customer ready because the prohibition on importing the product in Australia was required to be assessed. It was assessed that the import of salmon product by Australia was not in consistent with the agreement of Sanitary and Phytosanitary Measures (SPS) (Olper, Curzi and Raimondi 2015). As per the agreement, it is significant to conduct the importing procedures of salmon by examining its quality by following the justified treatment of international trade. Another important measure required to analyze the reasons for prohibition on the International Trade to protect the human consumption for the food and crops. It is essential to analyze the import measures of salmon because in case the unhealthy products are entered with the disease prone it wo uld affect the health of the society. The import procedures for the salmon product in Australia should be consistent with the regulations of article 5 with respect to the level of protection. The members of the World Trade Organization are required to consider the consistency for the feasibility of economic measures as well as the alternative measures to resolve the prohibition on the international trade. It is important to measure the level of protection to the society with the process of international trade of salmon since it was observed that the Canadian salmon was unhealthy and unsafe. It had been observed that the procedure conducted to the salmon product was not as per the appropriate measures as specified in the articles with respect to the packaging and usage of the products. It was observed by the panel that Australia had failed to implement the required measures for the safety measures as mentioned in the SPS agreement, as the requirement was to ensure the safety and sanitary measures (Schoder et al. 2015). Further, the panel interpreted that Australias import of salmon product from Canada was inconsistent in certain terms for performing the activities in reasonable time and manner. It had been analyzed that Australia was required to find and examine the alternative measures for providing level of protection with the import of salmon product. It had been analyzed that the s almon of Canada were untreated and observed to carry the diseases harmful for the consumption of the society therefore; the ban on its import was imposed on the countries. The panel also measured the enactment considering the Tasmania Government for the importation of salmon from Canada on the basis of the risk assessment as well as the agreement of SPS. However, it was observed in the further examination that the import of salmon products in Australia was in accordance with the procedures specified in the articles for the protection of the human consumption. As per the requirement of the article related to the assessment of international trading procedures it has been observed that the panel could not measure the complete analysis due to lack of facts and findings. Considering the other requirements of the article, it is important to inspect and examine the fish and fish products for measuring the safety due to artificial means (Akoto, Oppong-Otoo and Osei-Fosu 2015). It was analyzed that Australia had extended the allocated time to implement the reasonable measures for the specified products and the period of time for maintaining the sanitary issues concerned to the food products. As per the requirement of the articles on international trade, organizations are required to commence the assessment for the protection of community in t erms of health issues. It requires the products to be examined and tested to ensure its quality and freshness so that the consumption of such products does not harm the society. The articles also required to measure the technical, economical and industrial feasibility for conducting the beneficial procedures for importing the food products. Accordingly, Australia was required to conduct such measures for the purpose of importing fish products as it was meant to consume by the society and it has been observed that the Canadian salmon was disease prone. It was further noticed that articles 5.6 requires to measure the level of protection for the purpose of international trade that was required to be justified scientifically. The restriction was imposed on the import of the product to ensure the safety issues and health issues of the community. It was required by the articles to analyze and evaluate the alternative assessments to avoid the restrictions on the international trade that would be beneficial for the society, industry as well as for the economy (Doyle et al. 2015). Conclusion Considering the requirements of the articles regarding international trade it had been observed by the panel that Australia failed to comply with the regulations of the articles with respect to the risk assessment. Australia was also found to be inconsistent with the rules of protection level as per the requirement of the article 5 as well as concerning the disguised restrictions for import of salmon from Canada. Since the articles require appropriate assessment of risk for the import procedures concerning the benefit and safety of food products for the societys consumption. Further, it was noted that Australia did follow such measures to ensure the international trade for Canadian salmon would carry the infected disease and cause harm to the community on the grounds of health factors. It was further observed by the panel that the compliant made by Canada was justified as the respondent did follow the corrective and responsive measures to for the technical feasibility for the benefit s of the society. It was contended by the panel that the respondent did not follow the corrective and additional measures to secure the protection of the international trade for the fish products. As the salmon fish production for the purpose of consumers consumption was conducted by artificial procedures like smoking it was required to examine and evaluate the safety measures. In addition to this, Australia was required to perform the assessments of risk and other legal procedures within the reasonable time which it did not follow. It was found that Australia delayed the implementation of assessing measures for evaluating economical as well as health feasibility to protect the benefits of the society. For the purpose of conducting international trade it is essential to ensure the protective level especially for the food and crops that are meant for the human consumption. Any product if carries infected disease should not be imported in the region as it constitutes the harm to the society therefore, t he ban on importing the salmon from Canada was imposed. However, it was concluded that the agreement on SPS should be adhered by the regions and organizations for monitoring the assessment on the procedures for importing the food products. It was essential for Australia to assess the risk on frozen, fresh, non- frozen salmon to determine the safety of its consumption in the importing region. Further, the panel concluded that considering the evidences, it was observed that Australia did not follow the necessary measures within the reasonable time required to carry the import of salmon product. Hence, the complainant i.e. Canada was allowed to monitor the requirements and implementation of the SPS agreement and article 5. Reference List Akoto, O., Oppong-Otoo, J. and Osei-Fosu, P., 2015. Carcinogenic and non-carcinogenic risk of organochlorine pesticide residues in processed cereal-based complementary foods for infants and young children in Ghana.Chemosphere,132, pp.193-199. Doyle, M.P., Erickson, M.C., Alali, W., Cannon, J., Deng, X., Ortega, Y., Smith, M.A. and Zhao, T., 2015. Food Industry's Current and Future Role in Preventing Microbial Foodborne Illness within the United States.Clinical Infectious Diseases, p.civ253. Olper, A., Curzi, D. and Raimondi, V., 2015, June. Import Penetration, Intermediate Inputs and Firms Productivity in the EU Food Industry. InAllied Social Science Association (ASSA), Annual Meeting, Agricultural and Applied Economics Association, Boston, MA January(pp. 3-5). Patnaik, U., 2015. The Origins and Continuation of First World Import Dependence on Developing Countries for Agricultural Products.Agrarian South: Journal of Political Economy,4(1), pp.1-21. Rogachev, A., Mazaeva, T. and Egorova, E., 2015. Economic Mechanisms for Managing Food Security in the System" Production-Consumption-Import".Asian Social Science,11(20), p.185. Schoder, D., Strau, A., Szakmary-Brndle, K., Stessl, B., Schlager, S. and Wagner, M., 2015. Prevalence of major foodborne pathogens in food confiscated from air passenger luggage.International journal of food microbiology,209, pp.3-12. Bibliography Appelhanz, S., Osburg, V.S., Toporowski, W. and Schumann, M., 2016. Traceability system for capturing, processing and providing consumer-relevant information about Wood products: system solution and its economic feasibility.Journal of Cleaner Production,110, pp.132-148. Brawski, P., Grzybowska-Brzezińska, M., Dunn, J.W. and Stefanou, S.E., 2015. Factors shaping agri-food product trade in Poland.Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis,63(4), pp.1221-1228. Pelletier, N., 2015. Life Cycle Thinking, Measurement and Management for Food System Sustainability.Environmental science technology,49(13), pp.7515-7519. Pina, A. and Ferro, P., 2016. Linking Material Flow Analysis with Resilience Using Rice: A Case Study in Global, Visual MFA of a Key Food Product.Resources,5(1), p.4. Sha, S., Santos, J.I., Roheim, C.A. and Asche, F., 2015. Media coverage of PCB contamination of farmed salmon: The response of US import demand.Aquaculture Economics Management,19(3), pp.336-352. Thkp, S., Maijala, R., Korkeala, H. and Nevas, M., 2015. Patterns of food frauds and adulterations reported in the EU rapid alert system for food and feed and in Finland.Food Control,47, pp.175-184.

Attraction and Retention Depends on Business Success

Question: Describe about the Attraction and Retention for Depends on Business Success. Answer: Introduction Success in business depends on attracting and retaining the best talent in place in the present and for the future. It is preferable to look for quality than quantity. An employer should know how to attract great employees and make them stay. Because retention of great talent translates into profits, as these employees love what they are doing and are knowledgeable (Amundson, 2007). All in all, it will result in customer satisfaction and job satisfaction. A lot of companys resources are wasted on the employees inefficient for the job profile a company demands. Attracting here refers to the search of the talented and knowledgeable candidates for the company, and it includes the job analysis, selection, and appointment of the candidate. Retention of an employee means to make the appointed candidate stay in the organization. In this report, both the points are approached and described relevantly (Andersen, 2016). Wal-Mart Stores Inc is a multinational retail company that operates in more than twenty-five countries. It has a chain of discount department stores, hypermarkets, and grocery stores totalling around 11,500 stores spread throughout the world. Walmart is the largest private employer globally with more than two million employees. The Human Resource Management of Walmart has a very critical job and participation in the success of the company. The HRM department of the company aims to maximize the employee performance and ultimately maximizing the sales capacity (Arthur, 2012). The HRM department of Walmart has some major components like human resource planning, job analysis and design in its strategy. With the help of these major components, the HRM department of Walmart develops an adequate workforce through proper job description and specification as per the companys demands. After that a proper attracting applicants process, selection process, appointment process, rejection process, legal compliance, orientation, socialization and strategies to ensure the retaining of efficient employees are taken up by the HRM department (Bell, 2012). Job Analysis and Design of Walmart It is very important for a company to analyze the jobs that company has an opening in. This is done so the advertisement provided in the website should carry all the information required to find the best candidates for the company. For this, the organizational design needs to be understood, and then the job specification will be designed that will be able to find the best candidate for the job (Chi, 2007). Organizational Design- Walmart has a hierarchical functional structure which is implemented in the job design and analysis of the organization by the HRM department of the company. The organizational structure of the company makes it easy to distinguish between the characteristics of each job which is very important to find the correct employee for the job (Edenborough, 2012). They have a clear line of authority, communication, and command in the organizational structure. Though it is sometimes difficult to judge the and clearly define the job because of the changing global demands and the company is still following it traditional organizational structure. This may lead to the uncertainty in job analysis and design (Folsom, 2008). Methods of Job Analysis- the work-oriented and the worker-oriented job analysis are the two methods of job analysis used by Walmart. For the sales positions, the company applies the work-oriented analysis. This method is taken up by the company to provide information about the tasks and results. This method is applied by Walmart in the form of direct observations and interview of the applicants. The HRM department of the company observes the sales personnels activities directly (Han, 2008). To analyze the jobs of team supervisors and leaders, interviews are conducted. This method helps the HRM department of the company to establish expectable job results. When talking about the other method then the worker-oriented method of job analysis provides information on cognitive, perpetual, and interpersonal activities. To analyze the managerial jobs the company uses worker-oriented job analysis method. The company has a specific application of the worker-oriented job analysis method known a s Work Profiling System (WPS) that is designed especially for the managerial positions. The company has divide its job requirements in two parts which in not sufficient to accommodate all types of job opening in the company. Thus, the HRM department should think of some more alternatives for it (Jones, 2010). Job Description- Walmart is the largest retailer in the world with a variety of job descriptions. Its employee turnover is high, especially for the employees working on hourly basis which act as problem for the company (Kenny, 2012). Nevertheless, the companys HRM department uses the variables as criteria for job description, and they are as follows:- Position- the position where the opening has created Function- the function of the employee at that position Duties- duties need to be performed by the employee Performance Standards- standards that the employee should maintain in his performance Job Factors- factors that are required in the job and applicants Job Knowledge- if an employee has knowledge about the job as it will increase the performance of the employee (Koedel Xiang, 2016). Walmart emphasizes on analytical and problem-solving skills, abilities and knowledge for the managerial positions. For sale personnel, Walmart emphasizes on job knowledge and interpersonal skills. Interpersonal skills are very important as per the Walmarts HRM department as they directly communicate with the customers (L, Compton, Morrissey, W.J, Nankervis, 2014). Job Specification- Walmart has a wide collection of job specifications. But, in general, job descriptions divide into two parts essential attributes and desirable attributes. For sales positions, essential attributes are followed, and they are as follows:- Communication skills- this skill is very important because sales personal directly communicates with the customers (Parker, 2007). Business knowledge- an employee should have the knowledge of what business they are entering and going to work in. Products knowledge- Walmarts sells everything from Pin to a Plane there it is important that the employers take all knowledge about the various products sold by the company (Paul, 2014) Throughout the organization, these essential attributes are important for all the sales employees. All these attributes help the employee to deal with the customers, as they are one with whom the customers directly communicate. There are some attributes known as desirable attributes that are preferred by the company but do not make necessary for a sales employee to efficiently fulfil the job (Persky Merriman, 2012). The desirable attributes specified by the company are as follows:- Likable and sociable qualities- to be social and friendly with the customers and make the customer feel happy coming to the stores. Multi-tasking skills- if an employee is multitasking than it will help lot to run the processes of the company (Reed, 2014). Recommendations Walmart has a huge demand of employees with the rate it is increasing its stores. Thus, it is important that the company should have a bit flexible approach in the skills required for the positions in the company. With the changing global demands, the change in the structure of the company is also required, and that will affect the requirements of the job profile that the company wanted. Such changes are to be researched upon by the companys HRM department. Job analysis should be more detailed that emphasizes the exact composition demanded by the companies (Reitz, 2014). Process of Attracting Applicants All the company needs talented and knowledgeable employee working in there company. For attracting such talent companies use various methods. A website portal known as Walmart Careers is used for displaying the jobs available in the company across the world. It displays the opening and the job description (Robichaud, 2014). It also includes the skills and capabilities required for a particular position. One can go on this website and log in as a candidate applying for the job. A candidate has to put in the location and the field in which he wanted a job. If an opening is there then it will display the job description, minimum qualification required, and then the submission of the candidates resume is asked. This is the only method used by Walmart for attracting the applicants to work for the company and it is not sufficient for hiring the best talent for the company as many people are not internet savy (Rose, 2013). Recommendations Walmart is using just a single method of attracting applicants which are insufficient to attract proper talent. Many people do not have access to internet then it will be a lost opportunity for them. Giving a newspaper advertisement with the details about the job can help in attracting knowledgeable and talented people for the job opening (Safdar, Waheed, Rafiq, 2015) The Selection, Recruitment, Appointment and Rejection Process The HRM department of Walmart uses different recruitment sources and methods fitted to various positions in the organization. The retail industry specific criteria are also used by the company in the selection process. The recruitment practices of Walmart are discussed below (Sathya Dr.R.Indradevi, 2012). Walmart Recruitment Practices Recruitment Sources-the HRM department of Walmart uses external and internal recruitment sources for different positions in the company. The focus of the internal recruitment sources is on the current employees. It finds the candidates that are suitable to fulfil the opening or the new position at Walmart. The external recruitment sources are used to find the talent for the company from the labour market. The internal method of recruitment can increase expectations in the employees and if they do not get fulfilled it may affect the morale of the employees (Zhou, 2014). The different types of internal recruitment sources are used by Walmart. The most significant ones are as follows: - Current Employees Trainees Transfers The employees currently working for the company are the recruitment source for the positions like supervisory and managerial positions. The HRM department prefers to promote the hourly based sales employees to managerial positions (Bae, 2011). The HRM department of the company states that more than seventy percent of their managers started as hourly sales employees and now reached this position. For Walmart, their current employees are the biggest source of recruitments. On the job, trainees are also taken as internal recruitment source by the company. A small number of trainees working for the company like in the position in sales and marketing are promoted to take the higher positions in the department they were working in. This saves a lot of time of the company wasted in the talent hunt and training the new employees for the position. When a company takes major changes, then few people can get promoted for a period to fill in the gaps of the workplace, but when these recruitments will be sent back to their old designation then they will lose their morale and some may even feel cheated (Bais, 2012). The Walmart company deals in various fields for them it needs external recruitment source. The following sources are mainly used as the significant sources for the company:- Respondents to job advertisement Campuses Previous applicants. The companys website is the main human portal that is being used as the Walmart external source of recruitments. The job openings are regularly posted on the website. The recruitment source provides the cost benefits to the company. The HRM department is focusing in the campuses of colleges for the recruitment process. The external market increases the cost benefits for the company. There are many applicants that have already applied for the job. The company does not deal with such applicants, and no need of extensive research need to be done (Batistic, 2015). Recruitment Methods- as per the recruitment sources used by the company, the direct and indirect methods are the corresponding recruitment method. Under the direct method, the company directly get in-touch with the prospective employee. Like, occasionally the company goes for the campus selection. The HRM department contacts the students who might want to join the company by applying for the job opening. It is beneficial as it speeds up the recruitment process rather than waiting for the applicants (Cesario, 2015). The method enables the HRM department to apply certain criteria in the selection of students for being contacted. Like, students enrolled in business-related degree programs can be contacted for supervisory or managerial job openings. Though there is a disadvantage also to use the direct method as it limits the potential candidates number (Gberevbie, 2008). When an indirect method is taken for the recruitment, then the aim of HRM department of the company is to reach out to a large population of the worker. And this method is completed by posting an advertisement about the job opening on the website of the company. The majority of Walmart resources are provided to the company by using the indirect method of recruitment. The reach of such indirect method advertisement is on the global basis, thereby creating a large-scale support for the company. Also, using indirect method tend to be cost-effective. The HRM cost is also minimum in case of Walmart, as they place the advertisement on their corporate website (Greenhill, 2010). Selection Process at Walmart Selection Criteria- the job position decides the selection criteria of Walmart. The basic criteria consist of training, and education backgrounds check and checking of any criminal background. For the position of hourly salesman, the company uses knowledge retention and the interpersonal skills. It is very important for the employees to have interpersonal skill for this position (Manson Carr, 2011). This is because the sales personal directly communicates with the customer. Walmarts HRM department also demands skills like problem-solving abilities, and conflict management skills for the position of a supervisor or managerial. They are expected to perform the job of analyzing and solving problems in the workplace (Mishra, 2013). Methods and Techniques- most of the positions, in the Walmart are evaluated using structured interviews and job knowledge evaluation. To determine the details about the applicants perspective and expectations regarding Walmart structured interviews are used. The information collected from the interview helps in determining the person-job and person-organization fit (Ng, 2015). For many positions Walmart uses the personality and situational judgment test. Though theses test are normally used for finding an employee for managerial positions, and especially in the HRM department, finance, and others. The personality test helps the company in deciding whether the candidate can function as per the demand in the companys context and nature of business. The determination of analytical and problem-solving abilities is done through situational judgement tests. These different tests given to candidate ensure the HRM departments approach for the applicants for a position is comprehensive throug hout the Walmarts global structure (Rangriz Pashootanizadeh, 2014). Recommendations More recruitment areas should be established by the HRM department of the company to get the better applicants for the job opening. It is not necessary that the potential candidate is looking at the website of the company when the job opening arises, there using local advertisements methods will help in gaining a good number of potential applicants. College going students have a fresh approach, but they lack in experience and product knowledge, thus, the company will bear the loss while a student will turn into an efficient employee. Once he becomes a professional, he will start searching for better options. Thus filling up of a bond with the students becomes helpful in retaining them for long (Scroggins, 2007). Appointment Process at Walmart A company has a full procedure that it follows to judge the best employee for the company. In Walmart also a well-defined procedure is applied to appoint the best candidate for the company. The companys HRM department shortlist the three best candidates that fulfil the criteria required for the position opened in the company. The three candidates are interviewed by the panel of three and questions related to the job requirement, previous work-experiences, etc. are asked. If a candidate is liked by the panel, then they are given to fill a detailed form where there is a lot of information need to be filled (Yurtseven Halici, 2011). Then the candidate is called for the orientation process. In orientation process, the candidate is showed few videos about the company and the expectation that the company has from the candidate. It is a three days process, and at the end of it, a module test is taken by the candidate that is necessary to be passed (Andersen, 2016). If a candidate fails to clear the module test then the whole process of orientation is repeated to make the applicant familiar with the processes of the company. A training program is held once the candidate clears the module test, and after this, the candidate is signed for the position in the company he is hired for. A written agreement is given to the employee with all the right and benefits mentioned in the agreement regarding the employee (Arthur, 2012). Rejection Process of Walmart The candidates those who are rejected in the online process are being informed by an Email sent through the company website. The people who get selected for the interview but fail to clear it are given a thank you note for taking part in the interview and then asked to leave (Bell, 2012). The documents and information submitted by the candidates rejected by the company HRM department is kept saved in the database of the company. This is done because in future if any candidate applies again then the data regarding the applicant are available to the HRM department of the company and they can decide whether to call the applicant again for the job interview or not (Edenborough, 2012). Legal Framework Every employee has right to know his rights and benefits he is entitled to get from the company. Also, a written document that specifies the appointment of the candidate in the particular company is important for the applicant to get. This legal framework is as per the country where the store is situated. All this is known as the legal framework that is required to be fulfilled on the appointment of the employee. Walmart follows a proper legal framework while appointing the employee for the company (Folsom, 2008). Once the applicant gets finalized by the company he has to sign an agreement with the company, which generalize all the rights and benefits that an employee is liable to. All the facilities given by the company is also mentioned in the agreement like the break time, holidays, sick leave, overtime payment, etc. Walmart follows all the legal procedure framed for the employees as according to the country the store and the job positions. For example, if a candidate is finalized in a store situated in Australia then all the legal papers will be made as per the Fair Work Act of Australia. This is because Fair Wok Act is the legal policy for employees that safeguard the rights and benefits of the employees in Australia (Jones, 2010). Along with this the legal department of the company manages the other compliances also, like work health and safety law obligations. The privacy clause is also added in the employee and employer agreement to safeguard the interest of the company. The Equal Opportunity Act 1984 helps in overseeing the entire recruitment and employment life. If the employee is an immigrant, then that will also be part of the legal framework and then, they will require fulfilling the details of their home country and reasons to come here and working for the company (Kenny, 2012). Recommendations A more detailed legal process is demanded each country, as the company is spread out in about twenty-five countries which make it difficult to follow all the rules of each country. A common agreement with rights and benefits common to all the countries can be asked to be signed at starting of the employment relation. Along with the employees right, the legal document should also display the employers right also (Koedel Xiang, 2016). The Orientation and Socialization Process of Walmart Orientation Process of the Walmart An orientation programs help an individual to understand the company and its goals better. It also helps in familiarizing the new employee with the company. The orientation process in Walmart is of three days. The first two days of the orientation programs is all about filling various papers, watching videos, and learning about Walmart (Parker, 2007). The third and the last day of the orientation program of Walmart are spent on the computers dealing with various module series. These modules are known as CBLs. Each module is about a subject which an employee has to know about. Once all the modules are done, then a quiz on the modules are taken by the employee which has to be passed if an employee fails then he can again try it till the time he gets a pass. After this, a work schedule will be given to employees, and they are to report for it from the next working day (Paul, 2014). Socialization Socialization is very important for both the employees and the organization. Socialization helps the employee to get comfortable and adjusted with the new environment, responsibilities, and people. If an employee get adjusted with his working environment then he will give his hundred percent to the company and ultimately benefits the company (Persky Merriman, 2012). In Walmart, it is the duty of the managers to make the employee comfortable and feel valued for the company. He introduces the company and its members to the new employee and allows him to get familiarize with the various processes of the company. The socialization process is a very formal procedure in Walmart because of the organizational culture of the company. This provides the feeling of authority in the employee and proper and organized working procedures of the organization (Reed, 2014). Recommendations The socialization process in Walmart is very formal which make it difficult for the new employee to understand quickly. It also increases the pressure on the employee. So a bit flexible socialization process will help the employee to get quickly adjusted with the new environment. During socialization process managers should make the employee feel valued and responsible but not pressurized (Reitz, 2014). Walmarts Employee Retention Programs It is a very critical job to retain the talented and efficient employees in the company. Company like Walmart where the number employees are more than two million, then the turnover of the employees is also very high, especially in the hourly sales employees (Robichaud, 2014). To overcome this situation Walmart has come up with the following retention strategies:- Recognition Bonuses Training and development Promotions Academic credit Walmart provides the non-financial recognitions to the excellent employees like top-performing employees of all the stores. As per the business performance the bonuses are decided. Although bonus is generally for the employees working in the managerial positions of the company. To increase the employees morale and to fulfil the needs of the HR of the company, regular training and development is given to the employees as promotions (Rose, 2013). The company has a policy to first recruit the internal candidates to a better position then go looking for the new ones. Thus, in Walmart the hourly sale personal are promoted to supervisory and then to managerial positions of the company. Walmart is in an agreement with American Public University which provides an academic credit to the employees for the work they did at Walmart. This is the best retention strategy that Walmart has applied to retain its employees as it helps an employees to pursue a career and also climb the companys corporat e ladder (Sathya Dr.R.Indradevi, 2012). Recommendations Every individual has a different need therefore a company manager should identify those needs and accordingly give the non-financial or financial help in the form of promotion to the employee; this will help in retaining the employees. More form of promotions and bonuses are required to be applied on more than two million employees of the company.Training and development is good for increasing the morale of the employees but most of them does not take it as the promotion. Thus, it is important to explain them the importance of the training and development in their career (Zhou, 2014). Conclusion For a company its employees are great assets. But in some cases the employees can prove to be a burden for the company. Thus, it is very important to select the best, talented and knowledgeable employees for the company. For this it is very important that the company attracts the most efficient candidates for the company and hire them. The point does not end with hiring the employee, it is very important to retain those employees that are assets to the company. A company has to think carefully and then design the process of hiring personals because mistakes are generally very expensive for the companies. Walmart a well-known company that owns a number of stores throughout the world follows a traditional organizational structure and design and describe the jobs according to it. This is so far working for the company, but with the changing global market and needs for how long it will work cannot be judged. It is better that Walmart should think to expand its idea of hiring employees fo r the company. They should explore more methods of hiring employees along with different criteria and skills in the employees to achieve new success. The HRM department works hard to get the best talent for the company to bring success to the company. To explain the whole process the example of the Walmart and its attracting and retention program is discussed along with some recommendations that can help the company to improve its program and earned better employees for the company and retain them for the companys betterment. Hence, it is important for the company to attract the talent for achieving success but it is also necessary to retain them. References Amundson, N. (2007). the influence of workplace attraction on recruitment and retention.Journal Of Employment Counseling,44(4), 154-162. Andersen, H. (2016). Selective moving behaviour in ethnic neighbourhoods: white flight, white avoidance, ethnic attraction or ethnic retention?.Housing Studies, 1-23. Arthur, D. (2012).Recruiting, interviewing, selecting orienting new employees(5th ed.). New York: Amacon Bae, S. (2011). Organizational socialization of international nurses in the New York metropolitan area. International Nursing Review, 59(1), 81-87. Bais, D. (2012). Employee Retention Management:some Issues. IJSR, 1(4), 22-24. Bell, M. (2012). Book reveiw: Equality: The New Legal Framework.Social Legal Studies,21(1), 141-144. Batistic, S. (2015). Socialization tactics: The role of human resource systems in the socialization process. Academy Of Management Proceedings, 2015(1), 14148-14148. Cesario, F. (2015). Employees Perceptions of the Importance of Human Resources Management Practices. Research Journal Of Business Management, 9(3), 470-479. Chi, C. (2007). Job Compensable Factors and Factors weights Delivered from Job Analysis DataOB Perceptual And Motor Skills,104(3), 1193. Edenborough, R. (2012).Assessment methods in recruitment, selection and performance. London: Kogan Page. Folsom, A. (2008). A Performance Approach to Job Analysis.Performance Improvement Quarterly,14(4), 37-44. Gberevbie, D. (2008). Employee Retention Strategies And Organizational Performance. IFE Psychologia, 16(2). Greenhill, B. (2010). The Company You Keep: International Socialization and the Diffusion of Human Rights Norms. International Studies Quarterly, 54(1), 127-145. Han, Y. (2008). The Relationship between Job Performance and Job Satisfaction, Organizational Commitment, and Goal Orientation.Acta Psychologica Sinica,40(1), 84-91. Jones, R. (2010).Recruit, select induct staff. France: Pearson. Kenny, B. (2012). Review of Anita Chan's 'Walmart in China'.Global Labour Journal,3(2). Koedel, C. Xiang, P. (2016). Pension Enhancements and the Retention of Public Employees.ILR Review. L, R., Compton, Morrissey, W.J, Nankervis,. (2014).Effective recruitment and selection practices(6th ed.). NSW: Australia Cch.': NSW: Australia Cch.'. Manson, J. Carr, S. (2011). Improving job fit for mission workers by including expatriate and local job experts in job specification. Journal Of Managerial Psychology, 26(6), 465-484. Mishra, S. (2013). Is Client Retention more Important than Employee Retention - A Case Study on Indian PR Agency. Adhyayan: A Journal Of Management Sciences, 3(2). Ng, T. (2015). Embedding Employees Early On: The Importance of Workplace Respect. Personnel Psychology, 69(3), 599-633. Parker, S. (2007). `That is my job': How employees' role orientation affects their job performance.Human Relations,60(3), 403-434. Paul, D. (2014). Incentives - their value and accountability in business attraction and retention: the debate continues.Papers In Canadian Economic Development,10(0), 24. Persky, J. Merriman, D. (2012). Focus Issue: WalMart.Economic Development Quarterly,26(4), 283-284. Rangriz, H. Pashootanizadeh, H. (2014). Desirable System Requirements for Employee Performance Evaluation to Establishment of Meritocracy and Continuous Improvement by using TQMPE and AHP Model. Science, Technology And Arts Research Journal, 3(3), 185. h Reed, D. (2014). Leverage Employees' Values for Staff Retention and Development.Opflow, 26-27. Reitz, O. (2014). Job Embeddedness: A Concept Analysis.Nursing Forum,49(3), 159-166. Robichaud, A. (2014). Youth attraction retention in Northeastern Ontario: A regional strategy.Papers In Canadian Economic Development,13(0), 66. Rose, P. (2013). Bet You Missed It-PubMed and Walmart.Against The Grain,12(3). Safdar, R., Waheed, A., Rafiq, K. (2015). Impact Of Job Analysis On Job Performance: Analysis Of A Hypothesized Model.JDM,5(2). Sathya, S. Dr.R.Indradevi, D. (2012). Branding for Talent Attraction and Retention of Employees : A Literature Review.IJSR,3(8), 202-204. Scroggins, W. (2007). The Relationship Between Employee Fit Perceptions, Job Performance, and Retention: Implications of Perceived Fit. Employee Responsibilities And Rights Journal. Yurtseven, G. Halici, A. (2011). Importance of the Motivational Factors Affecting Employees Satisfaction. International Business Research, 5(1). Zhou, F. (2014). Analysis on Job Pressure and Job Performance and their Relationship.AMM,687-691, 5112-5115.

Informational Rents in Oil and Gas Concession Auctions

Question: Describe about research the reasons and justification behind host governments moving away from Concessions and replacing with PSAs/PSCs, and why IOCs have accepted such a dramatic change in their own share and profits from Exploration and Production activity in resource-rich countries. Answer: Introduction Traditionally, concession agreements were one of the most important instruments which the host governments used to guarantee foreign investors over oil resources. In the agreement, the International Oil Companies (IOCs) were given exclusive rights to explore, produce, and market oil for a finite period (Herkenhoff, 2014). The first concession right was in the United States in 1859 between Colonel Edwin, Titusville, Drake, and Pennsylvania oil. Concessions became popular in the early 20 th century when most developing countries, especially in the Middle East, were under colonial rule. Since most developing countries were at that time under the British and French rule, Britain and France were the first to obtain concession rights. In the 1960s, concessionary agreements were replaced by Public Sharing Contracts (PSCs) and Public Sharing Agreements (PSAs) due to the rise of nationalism, among other reasons. Reasons and Justification behind Host Governments Moving Away From Concessions to PSAs and PSCs The agreement granted the host government no rights apart from receiving payments based on production. The amount paid by International Oil Companies for the rights over natural resources was mostly uneven and was not tied to the value of resources, but the volume produced (Brasil and Postali, 2014). Since companies determined the amount of production, the interests of host governments (that of revenue maximization) and IOC (profit maximization) often diverged. With total control over the manner and the schedule in which the mineral deposits were explored, companies could reduce production in times of low oil prices without incurring some penalties. The concession agreement was broad, regarding geography and location. The wide limit meant that the interests of the host governments were not always congruent with the companies interests. Foreign companies were granted exclusive rights over large tracts of land, which in most cases extended over the entire country. A prime example is the concessions given by Abu Dhabi and Kuwait rulers, which was regardless of the companies financial interests in comprehensive exploration (Herkenhoff, 2014). International Oil Companies held significant leaseholds and with minimal production until such a time when the producer had the finances or the interests to develop the property further. The concession was signed for longer periods, which was sometimes more than 70 years. A good example is the oil contract between the British millionaire William Knox Darcy and the king of Iran on 29 March 1901, where William Knox Darcys company was given concession rights for exploration, exploitation, transportation and selling, and these rights continued for more than 60 years (Brasil and Postali, 2014). Due to the nature of the contract, the host governments could not seek out thirstier companies, thereby denying them of any potential sources of revenue. Though the host governments were justified to move away from concession agreements, its important to note that the contracts helped oil producing countries to discover oil for the first time. For example, in Iraq 1923, and Iran in 1908, the oil was found, and despite the many criticisms, the host countries have continued to enjoy many benefits later on. Concession agreement thrived because the host countries were unable to do the discovery by themselves because of financial and professional limitation, and most importantly, they had no power over exploration because they were colonies. Reasons that Explains the Willingness of Foreign Companies to Renegotiate Contracts that initially served them well Knowing that the original terms were unreasonable, companies feared that their refusal to negotiate would increase hostility with the locals and host government, potentially leading to more nationalism in the oil industry and the loss of valuable resource. Since the concession agreements were highly profitable, the less favorable terms would still mean profitable production. Therefore, any agreement allowing companies to tap into the benefits this vast resource was deemed as acceptable. Since the oil companies were becoming more vertically integrated- they produced, refined, and marketed nearly 100% of their product- access to resources was becoming more important than a reduction in returns, provided that the profits were guaranteed. Another reason companies were willing to move from concession agreement is that although they assumed all the rewards, they also assumed all the risks. They were overly cautious when bidding for virgin or non-productive areas because of production uncertainties. This was, however, to change under PSAs and PSCs where some countries share risks with the IOC. The formation of OPEC in the 1960s forced International Oil Companies to abandon the concession agreement. OPEC shifted the bargaining power from large oil companies to Oil producing companies. Failure to comply with the terms of this cartel would mean a complete loss of oil reserves to competitors. Furthermore, some countries engaged in direct negotiations with potential licenses when granting the concessions, thereby making concession system unfavorable due to alleged subject to undue influence and corruption (Herkenhoff, 2014). Fundamental Differences between the Concession Systems and PSA/PSC Systems Product Sharing Agreement was first practiced in Indonesia in 1966 as a bridge between concession agreement that gives resource sovereignty to a foreign firm and establishment of National Oil Companies that required some technical know-how (Polyakevich, 2010). Today, more than 10% of gas and oil production is done through the agreement. Furthermore, more than half of countries with oil potential have a tax system that is based on PSC/PSA. The agreement gives IOC the right to explore for natural resources. If the resources are found, the company has rights to recoup sunk costs and share in profits. If the resources are not found, then the company is out of pocket. The PSA incentive shoulders the risk of non-discovery. The major differences between PSC and the concession agreement are the levels of control given to International Oil Companies, levels of involvement by the host government, reward sharing schemes, and the compensation terms. On concessionary system, the IOC gets the license from the host government to take out and own a hydrocarbon in a specific area, and then in return, the state receives income taxation and a royalty payment from the IOC (Heilbrunn, 2014). In PSC/PSA, the state owns all the oil production and the IOCs only serves as contractors to provide financial and technical services for development and exploration operations. In return, production is shared between the IOC and the state as per the stipulation of the PSC. PSA is also different from the concession in that since it doesnt grant the company the ownership of the resource and the government may take an interest in technology transfer, as it prepares for the turning over of the resources to its hands (Goltelova, 2014). Unlike concession that grants the company rights to ownership of resources over specified period, PSA/PSC gives ownership of resources that is tied to recouping of sunk costs and the garnering of profits. It is only in PSC where there is sharing of oil profit. The portion of production left after the cost of oil has been deducted is shared between the IOC and the host government using a predetermined formula. Many countries have a production sharing mechanism that is based on the rate of return or any other assessment to the contractor on a given date (Pongsiri, 2004). These are countries like Tunisia, Libya, Liberia, Equatorial Guinea, India, and Azerbaijan. Unlike in concession, PSA/PSC gives the host government varying degrees of oversight over the decision making (Polyakevich, 2010). The projects life is crucial here. If the venture shifts to government control after the IOC has recouped the sunk costs and garnered the profits, the host must resume for this eventuality right from the start (Polyakevich, 2010). In simple terms, the decision control is to some extent reserved for the host government even in periods of robust private involvement. In comparison to concessionary agreements, PSC/PSA is involving in nature. The foreign company pays a royalty on gross production to the host government. After the deduction of the royalty, the foreign company is entitled to a pre-destined share (e.g. 45 percent) of the production to cater for cost recovery. The remainder (the profit oil), is shared between the host government and the IOC at a specified share (e.g. 70 percent for the government and 30 percent for the International Oil Company). The contractor is then supposed to pay an income tax from its share of profit oil. PSAs have substantially changed over the years and today they take different forms. There is a change of language in PSC/PSA. The state is described as the owner and the foreign company as the contractor, even though the practice is almost equivalent to the classical concessionary agreements (Polyakevich, 2010). PSA/PSC often contains a stabilization clause restricting future governments to pass any new law or change the tax rates, which can be detrimental to the companys future profits. Stabilization clause is very rare in concessionary agreements. The rationale behind producer countries favoring the greater economic rentals they receive through PSAs/PSCs The aim of the government is revenue maximization. Since the international oil industry is an industry in which, normally, huge economic rents can be received, for the reason that the market price exceeds the price required to keep the factor of production in active use and is above the price required to generate profits, host governments can receive more rentals without interfering with the profits. In the past, there has been recurring transformations in the comparative stability of power between host states, major IOCs and their National Oil Companies (NOCs), is insightful of the cyclical character of the gas and oil industry. Some periods, such as the 1970- the 1980s and the 2000s can be grouped as conflicting (Polyakevich, 2010). During these epochs, the rising and fairly high oil prices gifted the host countries with more revenues, which assisted them to re-negotiate their agreements with the International Oil Companies and to gain a bigger share of the economic rent. Depending on the local competencies, International Oil Companies have better knowledge of the actual production costs can inflate the current production cost and capture some of the rent. In such situations, the host governments are justified to seek out for more economic rent from IOCs. Furthermore, the rise of nationalism, sovereignty issues, environmental factors such as air, land and water pollution, externalities and the fact that oil is a non-renewable resource call for greater economic rental. The host governments favor PSAs/PSCs because despite them receiving royalties from the foreign companies, companies also share their profits with the government and pay income tax on their shares of profits (Heilbrunn, 2014). Production Sharing Contract is one of the most attractive models in inviting high investments particularly in virgin or non-productive areas. The government is on the safe side. Unexplored areas can be explored without the governments direct investment. Furthermore, the government can play off companies against each other to get one with the most attractive terms. Depending on the agreement, the contract may specify that all the project related equipment brought by the contractor be passed over to the host government and the cost of equipment be recovered as the operating cost. The contract may further specify that all geological data be the host governments property as was the case with the Pertamina agreement. By keeping the geological data, the host country may begin to see the nationwide picture of its basins. Why host governments have succeeded in extracting more money from the IOCs Some developing nations have succeeded in extracting more money from the International Oil Companies because some countries now have the ability to evaluate the oil assets on their own, independently access on the production costs, and more significantly, develop the oil reserves on their own (Goltelova, 2014). Many of the developing nations have a take it or leave it attitude since they have nothing to lose in the case when IOCs fails to play to their terms. Furthermore, the ever rising competition between the IOC always favors the host governments. They have many options available, and when one company fails to comply with the set terms, they can always seek another until they get the company with most attractive terms. Many countries have recently discovered some oil reserves. The overall availability of larger oil reserves in the host country, the stronger the bargaining power. IOCs know that they need to come back for more transactions, and they need to be seen as fair. In a context of repeat businesses, countries with a reputation for reliability and stability in sticking to the contract (even if unfavorable), can attach these qualities to their oil prices (Heilbrunn, 2014). IOC have often valued and accepted to do business with dictatorial regimes because they provide the much-needed stability (Heilbrunn, 2014). Another reason the host governments have succeeded in extracting more money from International Oil Companies is the emergence on OPEC- which is a sort of a cartel that determines the oil prices and fights for the welfare of the oil producing states (Heilbrunn, 2014). Since the oil-rich countries act like some form of monopoly, IOCs have nothing to do but to comply with the terms or be out of the business. Why the IOCs have continued to explore for, and exploit mineral, assets now their financial share of the profits has been severely reduced? International oil companies have continued to explore and exploit mineral assets despite their share of profits being eroded because under PSC, they enjoy autonomy and can optimize the EP to ensure cost recovery. The rise of OPEC, the vertical integration of IOC, and the rise of nationalism as stated before, also explains why IOC have continued to explore for, and exploit oil now their financial share of profits have been severely reduced. References Brasil, E. and Postali, F. (2014). Informational rents in oil and gas concession auctions in Brazil. Energy Economics, 46, pp.93-101. Goltelova, S. (2014). Production Sharing Agreement As a Special Technique in the Provision of the State Guarantees For Oil and Gas Projects Financing in Russia, (5), pp.324-336. Heilbrunn, J. (2014). Oil, democracy, and development in Africa. New York: Cambridge University Press. Herkenhoff, L. (2014). A Profile of the Oil and Gas Industry: Resources, Market Forces, Geopolitics, and Technology, Business Expert Press, New York [ISBN: 978-1-60649-500-1] Polyakevich, V. (2010). Sustainable development and evolution of production sharing agreements. Ottawa: Library and Archives Canada = Bibliotheque et Archives Canada. Pongsiri, N. (2004). Partnerships in oil and gas production sharing contracts. International Journal of Public Sector Management, 17(5), pp.431-442.