Key Success Factors †Organizational Culture Essay

In this assignment we introduce the idea that the organizational culture is the personality of an organization which can be defined, measured, sustained and changed and have an important impact on an organization’s effectiveness. We want to define organizational culture as it is presented by two theorists, indicate levels of expressions of culture in an organization, and provide specific strategies or tools to modify organizational culture. We know that every individual has something that psychologists have termed â€Å"personality†. An individual’s personality is made up of a set of relatively permanent and stable traits. When we describe someone as innovative, relaxed, warm or conservative, we are describing personality traits. An organization, too, has a personality, which we call the organization’s culture. Organizational culture is an important situational variable that influence all members of an organization to various degrees, so it is important to have a sound understanding of this construct to manage and work effectively in an organization. In this paper project we want to define organizational culture as it is presented by two theorists, indicate levels of expressions of culture in an organization, and provide specific strategies or tools to modify organizational culture. Chapter IDefinitions of Organizational CultureWe will present how Schein defines organizational culture in â€Å"Organizational culture and leadership†(1992) as it is presented by Yukl in â€Å"Leadership in Organizations†(1998) and Ott’s definition of the organizational culture in â€Å"The Organizational Culture Perspective†(1989) as it is presented by Lawson and Shen in â€Å"Organizational Psychology†(1998). Schein’s definition of organizational cultureSchein (1992) defines culture of a group or organization as shared assumptions and beliefs about the word and their place in it, the nature of time and space, human nature, and human  relationships. Schein distinguishes between underlying beliefs (which may be unconscious) and espoused values, which may or not be consistent with these beliefs. Espoused values do not accurately reflect the culture when they are inconsistent with underlying beliefs. For example, a company may espouse open communication, but the underlying belief may be that any criticism or disagreement is detrimental and should be avoided. It is difficult to dig beneath the superficial layer of espoused values to discover the underlying beliefs and assumptions, some of which may be unconscious (Yukl,1998). The underlying beliefs representing the culture of a group or organization are learned responses to problems of survival in the external environment and problems of internal integration. Schein say that the primary external problems are the core mission or reason for existence of the organization, concrete objectives based on this mission, strategies for attainting these objectives, and ways to measures success in attaining objectives (Yukl, 1998). All organizations need to solve problems of internal integration as well as problem of external adaptation. Objectives and strategies cannot be achieved effectively without cooperative effort and reasonable stability of membership in the organization. Internal problems include the criteria for determining membership in the organization, the basis for determining status and power, criteria and procedures of allocating rewards and punishments, an ideology to explain unpredictable and uncontrollable events, rules or customs about how to handle aggression and intimacy and a shared consensus about the meaning of words and symbols. The beliefs that develop about these issues serve as the basis for role expectation to guide behavior, let people know what is proper and improper and help people maintain comfortable relationship with each other (Yukl, 1998). Robbins (1994) and others sustain too that the shared values determine in large degree what employees see and how they respond to their  world (Robbins,1990; Robbins, 1994; Stoner and Freeman, 1992)When confronted with a problem the organizational culture restricts what employees can do by suggesting the correct way – â€Å"the way we do things around here†(Bower,1966) – to conceptualize, define, analyze, and solve the problem (Robbins, 1994). We believe that the internal and external problems are closely interconnected and organizations must deal with them simultaneously. In conclusion, Schein (1992) defines the organizational culture as shared assumptions and beliefs about the world and their place in it, the nature of time and space, human nature, and human relationships. Organizational culture have distinct dimensions that can be defined and measured. This is important to know in order to develop and use change strategies of the culture. Ott’s definition of the organizational cultureOn the other hand Ott (1989), in â€Å"The Organizational Culture Perspective† describe organizational culture as a social constructed, unseen, and unobservable force behind organizational activities. Organizational culture is a social energy that moves organizational members to act and unifying theme that provides meaning and direction to and mobilizes the members. It functions as an organizational control mechanism, informally approving or prohibiting behaviors (Lawson and Shen, 1998). In short, organizational culture is a hypothetical construct that must be inferred from the share thoughts, feelings, values, and actions of organizational members. Last, Ott suggested that organizational culture is a concept, construct, energy, idea, rather than a thing that can be directly observed, measured and manipulated. But we do not agree that the organizational culture is just a concept, energy, idea and can not be observed, measured or manipulated because then we can not discuss about managing and changing the organizational culture.  If culture exists, and we argue that it does, it should have distinct dimensions that can be defined, measured, and changed. I n â€Å"Organization Theory – Structure, Design and Applications† Robbins (1990), propose that there are ten characteristics that when mixed and matched tap the essence of an organization’s culture:1. Individual initiative, which is the degree of responsibility, freedom, and independence that individuals have. 2. Risk tolerance. The degree to which employees are encouraged to be aggressive, innovative, and risk-seeking. 3. Direction. The degree to which the organization creates clear objectives and performance expectations. 4. Integration. The degree to which units within the organization are encouraged to operate in a coordinated manner. 5. Management support. The degree to which managers provide clear communication, assistance, and support to their subordinates. 6. Control. The number of rules and regulations, and the amount of direct supervision that are used to oversees and control employee behavior. 7. Identity. The degree to which members identify with the organization as a whole rather than with their particular work group. 8. Reward system. The degree to which reward allocation are based on employee performance criteria in contrast to seniority, favoritism and so on. 9. Conflict tolerance. The degree to which employees are encouraged to air conflicts and criticisms openly. 10. Communication patterns. The degree to which organizational communications are restricted to the formal hierarchy of authority. These ten characteristics include both structural and behavioral dimensions which means that organizational cultures are not just reflections of their members’ attitudes and personalities. A large part of an organization’s culture can be directly traced to structurally related variables (Robbins, 1990). John P. Kotter in â€Å"Leading Change† (1996) sustain that culture refers to norms of behavior and shared values among a group of people. Kotter(1996) says too that culture is not something that you manipulate easily but it is possible to make the transformation. â€Å"The first step in a major transformation is to alter the norms and values.† (Kotter, p.156,1996,). He sustain that cultures changes only after you have successfully altered people’s actions, after the new behavior produces some group benefit for a period of time, and after people see the connection between the new action and the performance improvement. In conclusion, organizational culture is not just a concept, construct, idea, energy, ghost which can not be seen or measured but it is a system of shared meanings with a certain structural and behavioral dimensions that are closely associated and interdependent. In every organization there are patterns of beliefs, symbols, rituals, myths and practices that have evolved over time. These in turn create common understanding among members as to what the organization is and how its members should behave. Organizational culture refers to norms of behavior and shared values among the people items which can be changed to increase the performance of an organization. Chapter II Levels of expression of organizational cultureAccording to Schein (1992) organizational culture is discernible at three different levels: artifacts, values and basic assumptions. ArtifactsIt is widely agreed that the most readily observable but least exact expression of the shared meanings of the culture are represented by artifacts. Artifacts include things and the arrangement of things in an organization, as well as observable behaviors captured by organizational stories and ceremonies, rites and rituals (habitual activities rooted in values and basic assumptions like weekly or monthly departmental meetings or presentations), and norms (unwritten rules for appropriate and inappropriate behaviors). Artifacts of a culture are quickly detected but the share meaning is the key for appreciating and becoming deeply aware of the organizational culture. Values Values, defined by Schein (1992) as someone’s sense of what ought to be, as distinct from what is, represent the second level of organizational culture. Shared values are important concerns and goals shared by most people in a group that tend to shape group behavior and that often persist over time even when group membership changes (Kotter, 1996). The basic issue at this level of organizational culture is the members’ determination of what works or is successful for a given organizational problem. Values can be both espoused and enacted; however, adults pay the greatest attention to enacted or operationalized values and are more inclined to modify their own values in response to them than to values that are solely expressed or espoused (Lawson and Shen, 1998). The validity of a given value is determined by testing the preferred solution against physical or social realities. For example, out of many comparable manufacturing processes, one is selected or valued because it yields the most durable product or particular activities are performed in particular ways because the feel right or are accepted by a large majority of organizational members as the right thing to do. Hence, what works and what members agree works becomes the anvil against which values are hammered out for a particular organizational culture. Basic assumptionsAccording to Schein (1992) when the initial preferences for organizational problem solving continue to be successful, organizational members increasingly take the originally tentative solutions for granted and come to believe that their selected solutions actually reflect reality because they have continued to be successful. If a solution works repeatedly, it must be true, and any doubt about its efficacy is eliminated from the minds of the members and eventually from the cultural mind of the organization. For example, if the members of an organization share the beliefs that they must first and foremost learn to harmonize human actions and desires with the elements of the world, such as clean air, water, open spaces, and respect for vegetation and other living creatures it is most likely that they will be working for a â€Å"green organization†. As the members act on their fundamental beliefs and the organization succeeds, grows, and prospers, the fundamental beliefs are taken for granted and simply acted on without further reflection or regard. According to Schein (1992) when these fundamental beliefs are shared, taken for granted and nondebatable, they become the basic assumptions of the culture. Changing basic assumptions is an anxiety-provoking and difficult process that involves double-loop organizational learning or basically changing the important things you have done and still do, rather than single loop learning which involves getting more efficient at what you now do (Lawson and Shen,1998). In conclusion to this chapter we have understood that there are several level of expression in the organizational culture like artifacts, values and basic assumptions which can be determined analyzed and changed. Artifacts are observable behaviors but least exact expression of the shared meanings of the culture; values represent important concerns and goals shared by most people in a group that tend to shape group behavior and also we have the basic assumptions which are the fundamental beliefs shared by all the members about the organization which are very difficult to change, but it’s possible to do this. Chapter III Cultural Change StrategiesOrganizational learning and organizational culture are intimately linked to each other, and this linkage  provides the bases for instituting organizational cultural change. A number of different changes are possible, including elimination of existing cultural forms that symbolizes the old ideology, modification of existing cultural forms to express the new ideology, and creation of new cultural forms (Yukl, 1998). Schein’s change strategySchein’s (1992) leader-centered change strategy is perhaps the most fully articulated. It is a strategy that involves a clinical relationship between outside consultants and informed and cooperative insiders whose primary joint task is to identify and then change the basic assumptions of the organizational culture primarily by changing either the leaders’ assumptions or changing the leaders. The external or outside consultant has the distinct advantage of independence and transience (Wallace and Hall1996). As an outsider, the external consultant is independent of the organization’s hierarchy and status system. Detached financially, socially, and emotionally from the consultee’s system. The outside consultant is in a position to be more objective in the assessment and diagnostic stages of the consultation process, and is free to offer new perspectives and paradigms for action. We consider that the outside consultant it’s very important to have in a change process from the organization. Schein (1992) identified specific primary strategies that can be applied to change an organizational culture. All these strategies focus on the formal (and informal) organizational leader or leadership team and include for example: what leaders pay attention to, measure, and control; how leaders react to critical incidents and organizational crisis; observed criteria by which leaders allocate scarce resources; deliberate role modeling, teaching, and coaching; observed criteria by which leaders recruit, select, promote, retire, and excommunicate organizational members. Schein (1992) also identified secondary strategies and reinforcement mechanism to change organizational culture that include modifying  organizational rites, rituals, and stories; structuring reward system to promote change; and revising formal statements, such as the organizational mission statement (what we do), vision statements (what we aspire to be), value statements and recruitment materials. Schein’s cultural change process focuses primarily on the leader or leadership team and involves the external consultant working closely with organizational insiders who are committed to organizational change and have sufficient influence to an impact on many members of the organization. Lawson and Shen Cultural Change StrategyLawson and Shen cultural change strategy combines features of different approaches that, in one way or the other involve changing norms, or unspoken rules of behavior, reward systems and organizational rites or organized and planned activities that have both practical and consequences (Lawson and Shen, 1998). Basically, there are three phases to these cultural change strategy: assessment; construction and implementation of cultural and learning change projects and organizational outcome measures and project modifications. Lawson and Shen (1998) recognize too the importance of the external consultant in the changing process of the organizational culture. Phase 1, assessment, involves three steps: identifying the client, increasing cultural awareness and establishing baselines. In the first step the external consultant focuses on identifying the organizational processes of motivational systems, leadership, decision making, conflict resolution, and individual – organizational change as the client for the change program, rather than a particular individual, group, or unit. It is important to indicate that these organizational processes will change only if individual members who give life to them change their shared and unifying patterns of thoughts, feelings, values, and actions about the critical issues in the organization. Phase one also involves increasing cultural awareness by assembling as many of the documents that serve as a preliminary directory of an organizational culture. To obtain information about organizational stories, jokes,  ceremonies and rituals; information from external persons or organization that interact regularly with the target organization. And establishing cultural baselines by creating a document that describes the current organizational culture. From the assessment document, the leadership, committed organizational members and the change consultant can identify the cultural baselines and focal processes around which the consultant can build cultural change projects. Phase 2, construction and implementation of cultural and learning change projects, is the action phase. Once the draft mission statement is completed, the consultant expect some suggestions for revision and discuss the document to give everyone an opportunity to participate in the process. The external consultant expect suggestions from the internal consultant or from the manager of the organization. The internal consultant is aware of the existence of sensitive records and data; through experience the inside consultant has prior knowledge of the organization’s history, social structure, power structure, communication channels, politics, and local customs and beliefs in the organizational community. In addition, it is important to have a good collaboration between the external consultant and the internal consultant because the insider has command of the organization’s language – the jargon (favorite terms and phrases unique to the organization) which is very important to make an implementation of cultural and learning change (Wallace and Hall, 1996). Here it is appropriate to establish some learning experiments in which a current process that supports the new mission statement is described and root causes of problems and barriers to change are identified and then to start implementing a change in a given process while monitoring changes in performance. Last it is important to initiate or reinforce an existing rite of enhancement. Phase 3, organizational outcomes measures and project modifications, includes a synthesis and interpretation of performance or outcome measures for all  cultural change projects and then decision about what modification of existing cultural change project are required and established as the way to do things in the organization. It is critical to provide systematic feedback to members so they become aware of their individual and collective sense of efficacy (capacities to execute specific patterns of actions), identify the extent of resistance to change and help to identify barriers to change in the organizational culture (Lawson and Shen, 1998) . Cultural transformation requires time and if the leadership is not prepared for a sustained campaign then the focus will be lost and the transformation effort will dwindle and die. A good collaboration between the external consultant and the leadership of the organization is required for the success of the changing process which may take a couple of good years. Kotter (1994) affirm too that culture changes only after you have successfully altered people’s actions, after the new behavior produces some group benefit for a period of time, and after people see the connection between the new actions and the performance improvement. In conclusion to this chapter we have understood that a number of different changes are possible to make in an organizational culture, including elimination of existing cultural forms that symbolizes the old ideology, and creation of new cultural forms in the organizational culture to save an organization and to make it if profitable and more efficient. We indicate that both cultural change strategies are worthy to be followed considering that both accept the importance of an external organizational psychologist consultant who is working closely with the internal consultant / manager and is promoting change strategy that involves the leadership team and change strategy for the other members of the organization by creating reinforcement mechanisms to modify organizational rites, rituals, to promote an holistic change in the organization. ConclusionsIn conclusion to this paper project it is essential to remember that organizational culture is a situational variable that influences, to  various degree, all members of an organization. We have learned that organizational culture is the unifying and shared pattern of thoughts, feelings, values, and actions that serve to bind together organizational members and distinguish them from nonmembers. Organizational learning and organizational culture are linked to each other and this provides the bases for instituting organizational cultural change. We have seen two specify change strategies and the steps to implementate them which can be applied in a wide variety of organizations. We have understood that a solid understanding of organizational culture minimizes the unnecessary expenditure of attention and emotions regarding what, how, when and why to think, value, feel, and act in the workplace. REFERENCES _____Yukl, G. (1998). Leadership in Organizations. (4th ed.). Upper Saddle River, NJ: Prentice Hall_____ Kotter, P. John, (1996). Leading Change, Boston: Harvard Business School Press_____Lawson, R.B., Shen, Z. (1998). Organizational Psychology. Oxford: Oxford University Press_____Robbins, P. Stephen, (1990). Organization Theory – Structure, Design, and Applications. Englewood Cliffs, New Jersey: Prentice Hall_____ Robbins, P. Stephen, (1994). Management -fourth edition. Englewood Cliffs, New Jersey: Prentice Hall_____Stoner, A. James, Freeman, R. Edward, (1992). Management. Englewood Cliffs, N.J.: Prentice Hall_____Wallace, A. William, Hall, L. Donald (1996). Psychological Consultation – Perspective and Applications. Pacific Grove, C.A.: Brooks / Cole Publishing Companycopyright  © Sorin Balogh

Continuous Human Activities Towards Global Warming

The phenomenon described as global warming has been well studied and documented by researchers throughout the world for several years. It is a phenomenon that has the potential to destroy our planet and all life on it. This essay will briefly define global warming, provide evidence of global warming, outline the main causes of global warming and discuss both the known and potential impacts of global warming on the planet earth. Comments are also made concerning actions being taken as well as others that need to be taken to protect our planet from the potential catastrophic consequences of continued global warming. For thousands of years the earth has gone through many changes in climate. In the last decade however, the earth has experienced notable increases in temperature, resulting in rising sea levels, changes in precipitation as well as other climate changes. The earth has not experienced such dramatic climate changes before in it's history as it has in the last one hundred years. Some of these climatic changes have been blamed on global warming. What is this phenomenon referred to as global warming? Global warming is the term used to describe a moderate increase in the earth's temperature as a result of human activities. Examples include, the burning of fossil fuels and the production of chlorofluorocarbons (CFCs) which build up greenhouse gases in the atmosphere. The greenhouse effect is a term used to describe the warming of the earth's surface due to the presence of carbon dioxide and other atmospheric gases, which trap radiant heat at the earth's surface. Diagram 1 illustrates the greenhouse effect. The denser these gases the more heat that is trapped. Energy from the sun drives the earth's weather and climate, and heats the earth's surface; in turn, the earth radiates energy back into space. Atmospheric greenhouse gases (water vapour, carbon dioxide, and other gases) trap some of the outgoing energy retaining heat. This is not unlike the glass panels of a greenhouse. (EPA 1) The increase in the amounts of greenhouse gases such as carbon dioxide and methane from industries and cars causes energy to be trapped in the earth's atmosphere resulting in a rise of global temperatures. Without a little greenhouse effect though, life as we know it could not possibly exist on the earth. The natural greenhouse effect causes the mean temperature of the earth's surface to be approximately 33 degrees Celsius warmer than it would be if natural greenhouse gases were not present in the earth's atmosphere. (The Greenhouse Trap, 1) However, scientists are worried that human activities are intensifying the greenhouse effect. Cairncross writes, â€Å"global warming is likely to be the result of the build-up of carbon dioxide, methane and nitrous oxide† (Cairncross 111). The three main greenhouse gases produced by human activities are carbon dioxide, methane and nitrogen gas. Carbon dioxide is the most common greenhouse gas produced by humans. It is responsible for over half of the increase in greenhouse gases present in the atmosphere. This is primarily due to the burning of fossil fuels. Each year, the burning of fossil fuels releases 5. 5 billion tonnes of carbon dioxide into the atmosphere. (footnote) The main sources of carbon dioxide include, electric utilities (35%), transport (30%), industry (24%), and the other 11% is produced by residential buildings (Brisbane Adventist College www. ozkidz). The graph below shows the dramatic increase in carbon dioxide gases in the atmosphere. It is believed that since the Industrial Revolution began about 250 years ago, atmospheric carbon dioxide has increased from a value of about 275 parts per million before the Industrial Revolution to about 360 parts per million in 1996, and the rate of increase has speeded up over this span of time (Hartmann). Scientists have determined this by measuring the carbon dioxide levels in the air that became trapped in glaciers, hundreds of years ago. They then compare this to the amounts of carbon dioxide in today's air. Global warming was first predicted in 1896, by a Swedish chemist named Svante Arrhenius. Arrhenius realized that the amount of carbon dioxide being released into the atmosphere was increasing rapidly due to industrialization. Arrhenius predicted that doubling the amount of carbon dioxide in the atmosphere would raise the earth's average temperature by about 5 °C (Herring). Though no one really paid any attention to him, Arrhenius's prediction was surprisingly accurate. He was only off by about 2 to 3 degrees. This is very remarkable, considering he had to make the calculations by hand without the aid of scientific equipment. It was not until the 1980's that it was determined global warming was actually occurring, almost a hundred years after it was first predicted by Arrhenius. Global warming has already raised the average temperature of the earth's surface by about 0. 5 degrees within the last one hundred years (Bates 6). The top ten warmest days in recorded history have all occurred within the 1990's. Global temperature changes between 1861 and 1996 are outlined in Diagram 2. It has been estimated that global average temperatures will increase of as much as 9 degrees F (5 degrees C) before the year 2999 (6). Up until recently most of the carbon dioxide produced was absorbed by the world's oceans, trees and soils. The rest remained in the atmosphere. Unfortunately, now we are producing more carbon dioxide and our oceans, trees and soils are absorbing less. This is partly attributed to the fact that our forests are being destroyed. Research has been done to show that as many as 60 acres of rain forest are being destroyed, every hour, every day of the year. (The Rain forest Trust Inc. ) In the world, only 22% of the old growth forests are still alive. This is because more forests are being cleared to make room for farming and the trees are not being replaced. This destructive process is called deforestation. Deforestation has been going on since man began clearing land for agriculture and has increased substantially during the industrialization period. The dramatic decline in the earth's forested areas can be seen on Figure 1. Figure 1 shows that between the years 900 and 1990 the earth's forested area has declined from 40% to 20%. The rain forests of the world are being destroyed at an alarming rate. Their loss is very concerning because they do not grow back easily. Forests are important because they absorb carbon dioxide from the atmosphere and release oxygen back into the atmosphere. Forests help reduce carbon dioxide levels in the atmosphere. If current trends continue, the world's rain forests could disappear in the next few decades. As a result of the loss of these forests, global temperatures are rising faster than they ever have because less carbon dioxide is being removed from the atmosphere. Should global temperatures continue to increase at present day rates, scientists believe that there may be many negative impacts from global warming. For example, should temperatures continue to rise, polar ice caps and glaciers will melt, causing the sea and ocean levels to rise. Many beaches will sink beneath the water and many parts of low lying counties will be submerged below water. It is also possible that some coastal areas will be completely covered by water. The world's ocean levels have already risen about four to six inches since 1990 and it is expected to rise another six inches by the year 2100. (Leatherman) This could flood many coastal cities, leaving thousands of people homeless. Maps 1 and 2 show the potential impact of raising sea levels on North Carolina and Florida respectively. Another potentially disastrous effect of global warming is a reduction to the general health of people. There are some diseases that only affect people that live where the climate is extremely warm. As a result of a general increase in temperature there will be more people dying everyday because of heart problems related to heat exhaustion. Hospital admissions show that death rates increase during extremely hot days, particularly among the very old and very young people living in cities. Diseases in tropical areas, like yellow fever and malaria would be more common in areas like Canada and the United States should temperatures rise. This would cause thousands to die each year from these tropical diseases. Global warming trends will also change rainfall patterns. Some areas of the world will become wetter while others will become drier. Historical evidence suggests that the grain-growing areas of North America are likely to have less rain (Bates 19). This would result in the Great Plains becoming a grassland or desert and the corn belt would experience more frequent droughts. These changes in rainfall patterns will test the agricultural and water management skills of many countries. It is still possible for both industrialized and developing countries to stop global warming. To prevent serious environmental problems associated with global warming we will have to bring together widely different cultural, political and economic interests to pursue the majority of the world's people to make sacrifices for the sake of future generations. In December 1997, an agreement was made between 160 countries, in Kyoto, Japan, to cut greenhouse emissions by 5. % below 1990 levels by the 2008-2012 period. This means that the United States and Japan will have to lower their greenhouse emissions by 7 and 6 percent respectively. This reduction is to be accomplished by a blend of taxes and regulations, with some subsidies for implementing green technologies. (proquest article) Most companies are trying to work well ahead of the agreement date and reduce greenhouse emissions now. Should a company cut their emissions to the point where they reduce their emissions by more than 5. 2%, they can receive pollution credits, which can be sold to other companies. Stopping global warming will not be an easy task. There are going to have to be many initiatives taken to stop global warming. The only way we will be able to accomplish this is by getting the whole world to work together and reduce the production of carbon dioxide. This is especially true for the United States, a country which is the biggest polluter on the planet. The most effective way to prevent global warming is to stop emitting dangerous greenhouse gases into the atmosphere. A good way to reduce carbon dioxide emissions is practice the three R's; reduce, reuse and recycle. Purchasing food and other products in reusable and recycled packaging can help reduce carbon dioxide emissions by 230 pounds per year, while recycling all household waste newsprint, cardboard, glass and metal can reduce carbon dioxide emissions by an additional 850 pounds per year (http://www. p2pays. org/ref/01/00183. htm). Less use of automobiles, greater use of bicycles and more reliance on walking would also help to reduce carbon dioxide emissions into the atmosphere. There are other gases like nitrogen and oxygen that have little or no effect on greenhouse warming. We need to find ways to replace the dangerous fossil fuels with these less harmful gases instead. We should immediately start implementing alternative energy sources like solar power, hydropower, and wind power. These sources of energy do not add to global warming but are very expensive to implement today. When we entered the 20th century, the human race did not have the technology to greatly alter the delicate balance of our planet. During the 20th century the human race quickly developed technologies and industrial processes that began to affect the balance of our planet. The problems related to global warming, which we face at the start of the new millennium cannot be separated into compact, well defined groups. The issues we face today are not just increased carbon dioxide levels, deforestation, increased sea levels, or increased polar ice melting. These issues are all interrelated and global in nature. They are also not just problems of science, they are political, economical and cultural problems. Global warming will only became a political and cultural priority when people see it as a serious problem which is likely to affect them personally. We first need to be able to understand clearly the direct impacts which global warming will bring before we will begin to change our values and lifestyles to one based on sustainable development practices. Sacrifices will have to be made from our current high standards of living in industrialized countries. While there does not appear to be any agreement on the scope and timing of the effects of global warming, we as a civilization face an uncertain future if we do not change our ways. Bates writes, â€Å"we stand at the edge of an onrushing catastrophe† (Bates 190). The human race needs to collectively act to avoid a global crisis. We as humans have the ability to change and adapt to change around us and to decide what our life will be like. Governments of the world will need to work together to stop global warming. There is only one planet that we can live on right now, so we need to respect it and protect it. We must stop destroying our only home. Are we as Canadians prepared to make the sacrifices needed to change our attitudes about our high standard of living and the pursuit of personal wealth in order to save our planet?

Winter Poetry – Skating at Night William Wordsworth

Wordsworth shows a positive fond memory of winter that is personal to him. He gives a feeling of excitement by using ‘and'. Also he shows how noisy it is by using ‘bellowing' and ‘not a voice was idle'. Even though it was cold Wordsworth would rather be outside with his friends then inside: ‘I heeded not the summons. Wordsworth also wants excitement and freedom: ‘Proud and exulting'. He likes to play games with his friends, like a native foxhunt: ‘Games confederate of the chase' He uses similes and metaphors to show he is exhilarated and has loads of energy: ‘Untired horse' and ‘the resounding horn'. Wordsworth has used onomatopoeia and alliteration to show the effect of speed: ‘We hissed along' and ‘The pack loud bellowing' speed is also shown by using the word ‘flew', the simile ‘Tinkled like iron' shows the brittle side of winter. Wordsworth uses the word ‘melancholy' to show that the beautiful scene, he once knew, is fading with old age a shows a slight sadness to the poem. Winter Percy Bysshe Shelley Shelley uses alliteration to show that winter is harsh ‘the wind was his whip' this also shows that it is a negative and destructive time. He writes: ‘One choppy finger' to make you wonder what winter will do next. Shelley portrays winter as an evil character using personification such as: ‘whip' ‘lip' to make it more effective. Shelley also makes winter sound brittle: ‘His breath was a chain'. Shelley shows how cold and powerful winter can be by writing: ‘He came, fiercely in his chariot-throne by the tenfold of the arctic zone' Shelley also shows that even the more evil things like weeds have to hide from winter: ‘Weeds which are forms of the living death fled from the frost' Using alliteration: ‘flight from frost' gives winter an eerie feel which makes things vanish like ghosts without a trace. When icicles hang by the wall William Shakespeare Shakespeare uses everyday characters to show the realism of his poem to create a typical winter scene: ‘Dick the Shepherd'. He shows that even though the weather is awful life goes on: ‘ways be foul, then nightly sings the staring owl'. Using rhyme gives the feel of movement but is broken when the owl makes its sound: ‘Blow' ‘Snow' ‘Saw' Raw'. Everyone gets effected by the cold: ‘Coughing drowns the parsons saw' ‘Marian's nose is red and raw'. Using words like ‘nipp'd' and ‘ways be foul' shows that is a cold mucky time. Shakespeare tells it how winter was there and then. There is no sympathy for winter. Emmonsail's Heath in Winter John Clare Clare gives no critical comment during his poem, he just observes what's around him: ‘Crimpled leaves' ‘an oddling crow' ‘the old heron'. His poem is also very detailed which adds to the effectiveness of the poem. Clare puts a lack of stress on the words: ‘While the old heron'. He uses personification to bring the lake to life and make it a bigger part of his observation: ‘Lonely Lake'. Clare uses alliteration to create the sense of movement: ‘Starts slow' but at the same time give a sense of calmness: ‘Melancholy wing' ‘An oddling crow in idle motion'. The scene is in harmony even the gypsy fits in: ‘the gypsy makes his bed'. Clare give affection to the ‘bouncing woodcock' Clare uses the word ‘Rove' to show how much he has observed from wandering about. Clare's poem is based on observation and is portrayed like a fairytale scene where everything is in harmony and fits in with the world around it. Conclusion In the Poem ‘Skating on Ice' the poem is based on a very personal scene, which is special to Wordsworth. He makes the poem exciting, exhilarating and gives a sense of movement. This poem is effective for these reasons and makes you really believe that you are their taking part in the chase. In Clare's poem ‘Winter' it reflects winter as being horrible and destructive. This is my favourite, as I believe this is how a typical cold winter day acts. Winter has been given the human characteristics to great effect showing everything winter is known to do. Shakespeare creates a sense of realism in his poem ‘When icicles hang by the wall' by give the poem everyday characters. He gives no sympathy, which makes it sound more real and effective. This poem is probably the most real out of all four and it portrays winter as a typical thing that happens. Clare's poem ‘Emmonsail's Heath in winter' is based on observation. He makes everything sound beautiful and in harmony with everything else. He makes everything very calm leisurely. This poem portrays winter as a beautiful time almost like a well-painted painting.

African studies Essay Example | Topics and Well Written Essays - 500 words - 1

African studies - Essay Example Mammo elucidates the fact that the rate of development in Africa cannot be considered to have been substandard as compared to other parts of the world. African development was significantly affected after its colonization by European countries. It is worth noting that colonization was characterized by slave trade between the seventeenth century and twentieth century. Instead of Africans developing there continent, there were sold as slaves in other parts of the world particularly in America to work in the farms. Therefore, Africa remained underdeveloped as other parts of the world were developing at a very rapid rate (Mammo 24). The partition of Africa into colonies led to disproportionate allocation of resources since some of the colonies had higher quantities of mineral resources than others. Subsequently, this has led to some African countries enriching themselves from these resources leaving others poor (Europa Publications 33). European colonization also led to the discrimination of Africans. According to Europa Publications, racial discrimination against Africans was rampant in the 19th century whereby the colonizers considered Africans as lesser humans (33). Africans were not allowed to mix with Europeans and were therefore forced in selected villages. It is worth noting that the effects of discrimination against Africans is still felt today especially in America. The partitioning of Africa and the fact that Africans were forced to live in segregated villages is one of the contributing factors of ethnic conflicts that are prevalent in African countries. When colonization came to an end in the twentieth century, most of the African countries were left subdivided into ethnic regions. Therefore, there has always been a struggle for power between these ethnic communities in Africa. In the fight for independence in many parts of Africa, individuals united

Case analysis on Terri Schiavo Essay Example | Topics and Well Written Essays - 250 words

Case analysis on Terri Schiavo - Essay Example After a few weeks, she was taken off life support and allowed to breathe on her own. Terri's husband and appointed guardian, Michael, put her into therapy at a Florida nursing facility, then filed and won a medical malpractice suit against her primary care physician and gynecologist in 1992. He had her removed from life support, put into a hospice, and then tried to move on with his life. The main argument of the case on ethics happened between Terri's husband and her parents. They believed that she could potentially thrive with additional therapy, but her husband decided it was time to let her go. The case was highly-publicized and taxpayer-funded. Mrs. Schiavo, doctors agreed, for all intents and purposes, was clinically â€Å"brain dead.† Her case changed the laws on America's spin on handling the final hours of the legally brain dead, even when their hearts are still pumping. I would have sided with the parties who knew that her life ended on the day she was pronounced bra in dead. The infamous and late Dr. Jack Kevorkian would have agreed. Dr. Daniel Eisenberg, an expert on Jewish medical ethics, currently employed by the Department of Radiology at the Albert Einstein Medical Center in Philadelphia, PA, would not have agreed.

Critiquing a Website Essay Example | Topics and Well Written Essays - 3000 words

Critiquing a Website - Essay Example The website being evaluated in this report is the www.southalabama.edu/alumni. It is used by old students and friends to establish connections with the alumni association of the University of South Alabama. Visitors can access the latest news regarding the alumni activities and also take membership if they meet the criteria. The website also has a newsletter which updates the members about the latest happenings. Information is also available about scholarships along with forms. Ferocious jaguar eyes are what that greet you when you visit the homepage of the University of South Alabama National Alumni Association. The dark background against the bright colored banner does not have a desirable visual effect. One could nearly miss the white colored title of the webpage as it is overshadowed by the bright color of the banner. There are more than half a dozen links that are crammed up on the left side of the page. One needs to actually hunt for the "Home" link. It is the 16th link from the top and has small paw icon associated with it. There is no uniformity in the links on the left side of the page as some of them have tiny icons associated with them and some don't. There is description present on the homepage about the alumni which is too short. The homepage has two links with different names which open up to the same page, "Alumni Board" and "Board of directors ". Similarly "Contact Us "is linked thrice on the homepage and that is redundant. Apart from this there are different font sizes and bold text used in

Child Developmental theories Essay Example | Topics and Well Written Essays - 500 words

Child Developmental theories - Essay Example Three of the theories can help direct the physical and occupational therapy on children include Sigmund Freud and Erik Erikson’s psychoanalytic child development theories and Jean Piaget To begin with, the application of Freud’s psychoanalytic theory in physical and occupational theory can be of great value in the sense that emphasizes the importance of childhood experiences and events on development. Unlike other theorists, Freud focused mainly on the mental disorders, as opposed to normal functioning in child development. In his theory, Freud described child development in a series of psychosexual stages. The stages, according to Freud include oral, anal, phallic, latency and genital. In this regard, Freud noted that each of the stages require the satisfaction of a libidinal needs which can also play an important role during adulthood. Freud also found out that it is not easy for a child to complete each of the stages successfully and noted that a child would develop a fixation that would later impact adult personality and behavior. Therefore, understanding this theory might help physical and occupational therapists in applying effective therapies on childr en by taking regard their developmental stages and patterns. Another developmental theory that can be of value to therapists is Erik Erickson’s emotional psychological development theory. This theory was build upon Freud’s earlier works. Erickson identified eight important stages in a child’s development. According to Erickson, each of these stages is marred by a conflict that must be resolved in order for a child to develop emotionally and socially. In addition, he noted that each stage has both negative and positive outcome, though people tend to be at either ends of the spectrum. Erickson also noted that the failure of success in dealing with the crisis in each of the stages

The Benefits and Dangers of Nuclear Energy Essay

The Benefits and Dangers of Nuclear Energy - Essay Example However, there are plenty of risks associated with the exploitation of nuclear energy. â€Å"What makes decisions on nuclear energy hard is that they do not call for one final apocalyptic choice between the obviously good civilian uses that lead to peace and the obviously bad military alternatives that lead to war† (Wohlstetter, 1968, p.2). This paper analyses the advantages and disadvantages of nuclear energy Advantages of nuclear energy A 1,000 megawatt equivalent (MWe) coal plant with optimal pollution abatement equipment will annually emit into the atmosphere 900 tons of sulfur dioxide, 4,500 tons of nitrous oxide, 1,300 tons of particulates, and 6.5 million tons of carbon dioxide. By contrast, a nuclear plant of 1,000 MWe capacity produces annually some 35 tons of highly radioactive spent fuel (Sovacool, 2007, p.107-108). The above statistics clearly suggest that nuclear energy is more environmental friendly than other energy sources. While majority of the other prominent energy sources are causing huge damages to the environment, nuclear energy is comparatively safe and secure as far as environmental problems are concerned. Rangarajan, (2010) mentioned that â€Å"Reduction in the CO^ emissions is one of the most important benefits in the use of nuclear energy† (Rangarajan, 2010, p.6). ... Carbon emission is not at all a problem for nuclear energy as the technology used to exploit nuclear energy liberates no greenhouse gases. Edelhart, (1976) pointed out that â€Å"In spite of the high construction costs, uranium fuel was so cheap that it kept overall investment on a par with other energy ‘systems† (Edelhart, 1976, p.52). Uranium is abundant in many of the countries and it can be sued effectively as a fuel to operate nuclear power plants. In short, nuclear energy is highly economical compared to other energy sources even though the construction costs of nuclear power plants are slightly expensive. â€Å"The amount of energy generated in a nuclear plant is many times greater than that produced by other conventional means† (Rangarajan, 2010, p.6). Einstein’s famous formula E=MC2 can be used to calculate the energy produced by nuclear power plants. Here E represents energy, M represents mass of the nuclear fuel and C represents the velocity of l ight. Since velocity of light is 3 X 108 m/s, 1 kilo gram of nuclear fuel can generate an energy equivalent to 9 X 1016 Joules. No other energy source can provide such huge amounts of energy as nuclear power plants do. Nuclear fission is the technology used in nuclear power plants. Chain reaction is taking place in nuclear fission process. If not controlled properly, chain reaction can cause explosions. However, we can control chain reactions with the help of suitable materials. According to Sakharov, (1978) â€Å"Nuclear energy is the only economically feasible energy source in the next few decades-of replacing the use of oil†(Sakharov, 1978, p.13). â€Å"It is also not necessary to develop the technology needed for

Conflict and friendships Essay Example | Topics and Well Written Essays - 1750 words

Conflict and friendships - Essay Example l consensus among developmental psychologists that security is one of the most important properties of children and adolescents’ relationships with their friends†. For example, when compared with securely attached individuals insecurely attached persons usually display lower levels of companionship with their friends, lower security levels, which are reflected in lower expectations from the friendship to help to cope with difficulties, and higher conflict levels with the friends / Hazan & Shaver, 1987/ . There are also studies, which focused on the relation of attachment styles with sex differences. These studies have shown that women display higher levels of Companionship, Protection, and Affective Bond, which men showed Aid, Security, and Help / Saferstein, Neimeyer & Hagans, 2005/. Accorging to Bukowski et al. (1994) â€Å"one of the most persistent themes in the theoretical literature regarding children’s and early adolescents’ friendship relations is that these relations are affordances for feelings of acceptance, validation, and attachment†. So, attachment style theory suggests that attachments are generally described ob the basis of certain characteristics sex of the friend is among them. One more theory investigates the dependence between the family experiences of a child and its ability and success in building close relationships with its peers. Thus, the researchers of this sphere maintain that there is a direct link between the close parent-child relationships and the quality of friendships established by a child. Both attachment and social learning theories supported the findings that children with close relations confiding relations with their mothers possessed higher quality of friendships. The most prominent such dependence becomes in comparison with children from complex or stepmother families / Dunn, Davies, OConnor & Sturgess, 2001 /. However, there is the point where the supporters of this theory split. One believe that it is the

Why people on goverment assistance should be drug tested to recieve Essay

Why people on goverment assistance should be drug tested to recieve assistance - Essay Example Pollack shows that in the states of Mississippi and Illinois, families receive varying benefits meant for poor families, especially single mothers. For example, in Illinois, the monthly based amount for the temporary assistances to needy families stands at 432 dollars compared to 170 dollars in Mississippi. The varying amounts received by poor families is seen a problem, additionally, there has been an increasing number of families requesting for benefits. Despite the rising problems of tackling increasing poor families, a number of states have introduced the idea of drug testing. This is an act whereby a member of the family requesting for benefits is put into test to ascertain if he or she is under drug influence. Pollack argues that the screening done by the government on families to receive benefits meant for poor does not address anything. According to the author, some states have achieved less or nothing despite their efforts to bring forth this matter of drug testing. The drug testing done on states like Michigan has failed or achieved less for the last 13 years according to the author. Additionally, legislators in Michigan are hoping that the act of drug testing for benefits is best and will be beneficial since it has been done in 29 other states. With the 29 states, 8 states have benefited from drug testing. According to Spencer, drug testing is currently undergoing in 28 states. The legislators in those states explain that drug testing must be done in order to lock out individuals requesting for benefits yet they are on drugs. In Oklahoma, the Republican Governor Mary Fallin explains that drug testing is done so as not to humiliate taxpayers. Parts of the taxes paid by the Oklahoma citizens are used to help the poor in terms of Temporary Assistances to Needy Families. The Governor explains that in order to avoid funding or subsidizing drug abuse by some of the individuals requesting for assistances from the government, drug testing must be done. This shows that legislators are supporting drug tests on those asking for government assistances based on the idea of drug abuse by those who benefit from the package. The governor of Oklahoma says that tests will be done and those who pass the drug testing are provided with the benefits while those who fail or refuse the test will be barred from getting the benefits until they reform. The process of drug test is also happening in Tennessee with the main focus being drug abuse by the individuals requesting for government assistance. Spencer also explains that drugs have brought problems to the society especially poor people. In addition, drug abuse is also problematic to the working class. There have been also increasing number of people requesting for help from the government to support themselves since the 2008 financial crisis. The fact is that there has been a rise in the number of the unemployed, cost of goods, housing and health care insurance. The government has to address all tho se cases with the help of funding. The idea of drug testing arises because high numbers of poor people in the society are drug users. Drug abuse can only be broken on those requesting for benefits if they are sure that they are to undergo the testing before they receive the benefits. Additionally, the government is fighting to address all the cases mentioned above and others like unemployment benefits. Millions of dollars have to be used in addressing those issues inclusive of drug abuse. In order to reduce these cases, drug testing is important as it is one way of reducing drug abuse. Additionally, taxes from tax payers will be channeled elsewhere like unemployment benefits and welfare benefits. Furthermore, Carpenter (1), explains that tighter budgets and high demands by the people from the

Music 100 Essay Example | Topics and Well Written Essays - 1000 words - 1

Music 100 - Essay Example The instrument used at the performance was violin and each was tasked in producing a specific performance and adding value to the day’s performance. Fusing the orchestra with the Chinese traditional instruments gave it a fusion that uniquely displayed diversity in the music world. The group gave an excellent show as it gave an instrument version of the song. As much as many pieces where displayed at the event, our focus will be on â€Å"Heaven Earth Mankind† by the symphony orchestra lead by Dr. Thomas Cockrell. It represented all genre and represented diversity in the performance an analysis of the performance showed how other pieces represented a single genre. The theme being the moon festival, the piece was ideal as a fusion with the Asian instruments gave it an excellent outcome. Other notable instruments where the Harps which played the harmony and the cellos which where tasked in ensuring the rhythm was as per planned. The Cockrell‘s led group utilized the three instrument in ensuring a success to their performance. The most notable of them all was the violin representing each voice category. An excellent event disserved an excellent performance and that is what the symphony orchestra gave. The instruments took turns in providing a breathtaking moment. Just like a sea wave, the violin variably changed the mood. The beginning was a little bit slower maybe to create attention. As the climax approached, the violin became louder and rapid representing a dancing mood. The bridge of the performance saw only the sopranos play their instruments. As the title of the performance suggests, a heavenly mood was engulfed into the room. Some minutes later, the other instruments joint the wagon. Two minutes later, they stopped and before the audience had applause, they picked again and this time they played them rapidly until the conductor signaled the end of the performance. Other pieces

Describe the Role and Status of Women in the 1940s and 1950s Essay Example for Free

Describe the Role and Status of Women in the 1940s and 1950s Essay After the First World War women had gained a huge step towards having equality with men. In 1918 married women over the age of 30 were given the right to vote. During the war women had proved themselves as capable as men, not only as nurses near the front lines working in very dangerous positions but also back in Britain working to help the war effort in jobs that before the war they could never have even had a chance of getting. However women were still a long way of having any vague equality with men, and when the men returned from war things changed as men were still considered far above women. Although it had got worse since the end of the war it should be recognised that womens role in society had been greatly improved since the days before the First World War. During the Second World War many of the men were conscripted to go away to war. This meant that their jobs now needed to be filled in order for the country to work., women got jobs in all areas of employment from working in manual labour to working in banks. They also managed to prove that they could do the jobs just as well as men and were able to work in jobs that had previously been for men only. Gaining all these new jobs had been a huge leap towards women gaining equality with men, however when the men returned from war most if the women lost their war time jobs. This happened because of a number of reasons. Firstly, public opinion in general believed that the soldiers who had been fighting deserved to come back to jobs and not have to struggle with unemployment. Also some bosses of small and large companies felt that men were still better and didnt want to employ women over men. A women who had worked as a welder during the war years was told, Oh my goodness, youve got the best qualifications that we ever had apply for the job, but your a woman, and I wonder what the boys would say if I employed a woman A newspaper editor was told when she was dismissed,Oh its nothing wrong with your work, but we have to safeguard the succession and the successor has to be a man. Bosses who were taking this line, and most of them were were infact taking and supporting the governments line. The governments official line said it is doubtless true that there are many jobs done during the war by women for which men are better suited, both mentally and physically. And, if there is to be a nation in the future, there must be children and children mean homes and endless chores. So that there must naturally be a drift back from the services and the factories to domestic work. I believe that this is showing that men and the government (dominated by men) were showing an incompetence to realise that women were able to do the jobs that men traditionally did. So although women had again gained a further step towards equality after the war they had again lost some of that newly gained freedom when the war ended in 1945. However not all women were displeased at societys attitude as after the war many women wanted to start families and now the men had come back from the war they were able to do this. The evidence for this lies in an area known as the baby boom, when the birth rate soared dramatically after the war. Even after the war when women were gaining more equality with men they did not have equal pay rates as men. A woman doing the same amount of work as a man would be paid two thirds of what a man would be paid. Women didnt, understandably find this fair and in August 1943 them women who worked at a Rolls Royce factory went on strike and after a week on strike they were given equal pay. However all over the rest of the country women continued be exploited by societies views. Even the government were not willing to even think about women being equal to men. When female school teachers asked for equal pay with men, Churchill dismissed their demand with one word. Even though now he was falling out of favour with the people and was soon to lose the general election, it showed that some men and in incredibly important positions within society, had no respect still for womens role in society. This meant that their status remained below a mans status even though in some cases they had become more equal, such as the right it do certain types of jobs. Before 1948 the government offered no medical assistance to women or their children only a small amount to men. In 1942 the Beveridge report was published which illustrated the importance of setting up a Welfare State which would look after all citizens equally. In July 1948 the National Health Service Act and the National Insurance Act were introduced for a weekly payment by all people earning wages. This was a huge advance for womens equality and their place in society as it now made them equal. In the first few months thousands of women went to the NHS to be treated of illnesses that they had previously had to suffer in silence. The introduction of the Welfare State also brought about the Butler Education Act. This meant that the minimum age to leave school was now raised to fifteen for all children. This was another huge advance for girls in school as it meant that there was now not only had free secondary education, and therefor this meant that the government recognised girls ability to thrive within a working and intellectual environment. It also meant that they were being put on the same level platform and being given equal opportunities in schools as boys, which would then go onto to effect the whole generations and its way of dealing with women as equals. However the system was slightly corrupt and it was not entirely equal. When pupils went up into secondary schools they had to take an 11+ exam to determine which type of school they would go in to. There were three different types, grammar for the most academic, secondary modern and technical for pupils who would be more suited to manual and primary sector jobs. Although the system seemed to give equal opportunities for both girls and boys there were infact more grammar schools for boys than there were for girls. The Welfare State also introduced family allowances to try and deal with poverty among families with a large numbers of children. It meant that for each child a small payment was paid to the women to help keep the child. This meant that the women now had some control over the finances within the household and that the man could not just go out and spend the money needed for the children. I believe that in the 1940s and 50s womens role in society improved greatly and that there were huge leaps made towards equality. However there were still some major issues that still had not been resolved and needed to be if there was going to get equality between men and women

Monetary Policy and Financial Institutions of Kenya

Monetary Policy and Financial Institutions of Kenya CHAPTER ONE 1.0 INTRODUCTION The world is turning into a â€Å"demon† to its own people as many are living in deplorable situations that are hardly bearable. The price level have risen sharply in the recent past coupled with dwindling wage levels and declining growth rate, especially, in majority of African countries where poverty has embedded itself to an extent that people in these countries live below one dollar per day. However, majority of governments have embarked on instituting major reforms through introduction of avant-garde monetary policy schemes, which forge the way forward through which the monetary authority re-design its policy by focusing primarily on price stability as the primary objective. In the last twenty years, majority of both developed and emerging economies respectively have embarked on IT framework as their best choice in conducting monetary policy, with none of inflation countries targeters abandoning the framework, save for Finland and Spain, that have already joined the European Monetary System (EMS) in late 90s. IT-framework; an approach to management of monetary policy was pioneered by the New Zealand Government in 1990 after it abandoned its pegged exchange rate five years later. By the year 2009, over twenty-five countries comprised of developed, emerging, and developing countries around the world had so far espoused the IT-Framework and have reported greater achievement of low inflation rate. Majority of these countries mainly from Latin America, East Asia and United Kingdom had experienced high bout of inflation and financial crises exacerbated by their former monetary policy regimes. These not only resulted to sacrificing output and employment but als o resulted to severe increase in international capital flow leading to a switch to floating exchange rate. 1.1 Historical Background In relation to many other African countries, the monetary policy and financial institutions of Kenya has developed rapidly within the last two decades and probably more advanced than other countries at a similar stage of underdevelopment. Kenya opened its own Central Bank in September 1966 with the hope that, it would at least generate secondary expansion by facilitating the creation of bank credit and accelerate the process of monetization of the economys subsistence sector, in spite, of its openness and sensitivity to fluctuations of primary commodities. The next decade following the establishment of her Central Bank witnessed interesting changes in Kenyas monetary and banking policies as the oil shock of 1973 created inflexibility in the foreign exchange reserves as they declined considerably. Hence, the magnitude and speed of reduction in credit expansion were not adequate to show the decline in foreign exchange reserves. In fact, the fear that tight monetary policy induced from outside could hamper the rate of development at home led to feeble corrective measures such as restraining inflation impact due to price boom of exports, which coincided with expansionary monetary policy under a low profile of interest rates. In the early 1980s and 1990s Kenya experienced high inflation resulting from a prolonged spell of drought and political instability that resulted from introduction of a multiparty system in the Kenyan political history in late 1980 and also general elections followed later in 1992. Besides, in 2002, the growth per capita was negative due to high corruption of the highly ranked government official and political interferences of major decision-making organs of government including the Central Bank of Kenya, as it could not carry out its mandate freely. In the year 2008, Kenya faced another dark moment in terms of its political stability as the whole country went into turmoil due to the highly disputed general elections of 2007. The once giant of East African countries went down into â€Å"ashes† and major sectors of the economy especially the financial sector got hurt the most. Since then, it has been very difficult for the resurgence of economic stability, political stability a nd financial institution even after the power brokering that gave birth to a coalition government in that same year. However, in late 2010, the coalition government of Kenya gave hopes to recovery of major sectors of the economy when the New Constitution unanimously voted into existence in a referendum. This Constitution has brought about major reforms in the financial and political arenas more specifically in the Central Bank of Kenya as per se; hence, major changes are expected to be instituted by CBK for an effective and independent monetary policy conduct. 1.1.2 Road map of Kenya towards adoption of ITF 1.1.2a) Central Bank of Kenya main policy objective The amended Central Bank of Kenya Act of 1996, CAP 491(4) permitted the Banks operational autonomy in the conduct of monetary policy and mandated price stability as one of its primary objectives through formulation and implementation of such principal object of the bank, thus, promoting the long-term goal of economic growth. In fact, the Central Bank of Kenya does not announce an inflation target; instead, it uses money growth reserve as her main nominal anchor of which the repo rate forms its main operational target. It is in this perspective that the CBK monitor and control inflation rate through interest rate transmission channel as a way of conducting monetary policy. Apart from the main objective that is price stability, the Bank has a mandate to balance its inflation goals against other goals such as exchange rate stability and promotion of liquidity, solvency and steady-market back up while ensuring equilibrium in domestic and external payments. 1.1.2b) Central Bank of Kenya attributes that favor ITF adoption The Bank like any other bank of its caliber is mandated by the legislation to carry out its objectives in a more coherent and consistent manner without any external interference, thereby commanding greater central bank independence. The ‘Old Constitution of the Republic Kenya of (1963) and ‘Newly Promulgated Constitution of the Republic Kenya of (2010) have further strengthened the Banks Act, thereby, empowering the bank to carry its main objective without political interferences and curbing time-inconsistency trap. The appointment and removal of the CEO of the Bank (governor) and his/her deputy rest with the president discretion for a period of four years term in office unless stated otherwise. In connection to the governor term of office termination, the president has a directive to appoint a tribunal comprised consisting of a chairperson and two members who hold offices in High Court or Court of Appeal. This tribunal enquires on matters related to termination of such appointments and make recommendation to the president. Nevertheless, these might undermine the Banks credibility in upholding autonomy in case the termination of the governor might be unlawfully since the appointing authority might compromise the tribunal to favor his/her decision. In conformity with the Act CAP (491), the MPC is hereby required to forward a report at least every six month to the Minister detailing all dealings the bank is undertaking hence the Minister shall table the MPC report before the Parliament for further amendment and deliberations. The Bank is exempted from any taxation whatsoever in respect to losses or profits. The Banks books of records and financial statements subjected for auditing by the Controller and Auditor General only if the Minister of Finance deems it appropriate for such auditing. Both Governor and Deputy Governor are indebted to adhere to the bank in totality and prohibited from engaging in any other paid businesses, professional activities or employment while still in office. These is in agreement with majority of literature such as (Klomp and Haan 2008) who based their idea on Cukierman Index which states the following inherent features for a central bank to be termed as more independent: (i) if the governor appointing authority rest with BOG rather than the president, is not prone to relieve of his/her duty, and has a longer tenure in office. (ii), if the government has no tendency to interfere with banks conduct of business, for example, in policy formulation and implementation; if there is a greater independence be it of legal instruments or goal instruments; and also if the government has no capacity to borrow from the bank. (iii) last but not least, if the bank main objective is price stability. 1.1.2c) Economic Independence of CBK Kenya has also experienced tremendous financial innovations intensifying greater implications to monetary policy transmission mechanism. The Bank is empowered to act as a fiscal agent of the government or any public entity. Similarly, the advance made by bank to the government is supposed to be secured with securities issued by government, of which are supposed to mature before twelve months, bears interest at market rate, and are advanced for a short-term period to the government. In compliance with the statute, the CBK has an authority to grant loans and advances not exceeding three years in fixed period to government as a Deposit Protection Fund Board (DPFB), while the bank has mandate to lend or give credit to public entity, although, it is limited in extending such credits. The main interest is built on the various chief features associated with the introduction of inflation targeting framework by most of the Central Banks of both developed economies and transitional economies around the world; borrowing heavily from various aspects of literature that have analyzed greatly the development of this framework in order to determine the viability of the framework in low income countries such as Kenya. indeed, little has been done in A model specific to the needs of Kenya will be developed while building a general structure within the framework of an ITF so as to distinguish between group characteristics of the inflation-targeting and non-targeting central banks since its inception, and the relationship between various variables mentioned in the hypothesis. In addition, the paper depicts lessons learned by countries that have already adopted the strict ITF since 1990s. What become apparent evident in process of this review, however, is that several contributory problems must first be solved before forming an informed judgment on the likelihood of low-income countries embracing the framework. The first of these problems is whether there are impetus and aspect linked with decisions to move from a specific monetary practice to another. Second problem revolves around the feasibility of other policy designs of monetary policy such as exchange rate regime and central bank independence Third problem will address chief pitfalls that could prevent low-income countries from embracing this policy design. The study hypotheses investigates the relationship between conditions that lead to adoption of inflation targeting framework in developed economies and examine if these pre conditions have a replicate effect in low income countries. The other parts of the paper shall be structured as follows: In section II, assess modification of monetary policy conduct under ITF by various developing countries central banks, the cons and pros of shifting to such strategy. In section III evaluate the exchange rate transition and its role to inflation targeting framework more specifically the following interrelated issues will be taken into considerations: the role of nominal exchange rate it plays as a nominal anchor, the costs associated with the real exchange rate overvaluation; and the approach for exiting the pegged exchange rate. Section IV reviews the role of the central bank independence since it forms the core tenet of conjecture that is built around the inflation targeting framework.Likewise, other contributory factors to embracing the framework will be captured in this Section. The paper concludes with the policy recommendation and the way forward. 1.3 General Salient features, Implementation and Experience A better strategy for monetary policy is built on the following inherent characteristics as summarized by Svensson Lars 1997; Friedman, 1990; McCallum, 1990 that is, it is supposedly to be highly correlated with the goal and has a tendency to be controlled by central bank with much ease than the goal itself. Similarly, the public and the central bank should be able to comply to it with much ease than the goal. In addition, transparency is of greater importance in terms of the efficiency and effectiveness of the bank communicating to the public its objective and procedure of conducting its monetary stance. Literature from (Bernanke and Mishkin 1997), Bernanke et al. (1999) and (Svensson Lars 1997) has vehemently mentioned various elements that form this framework which includes. First, price stability is formally chosen as the main intent of monetary policy, which indicates the monetary stance and the central banks principle of appraising its performance. Second, the central bank issues a declaration, which categorically states the numerical target for inflation within a specific, horizon-thus the bank has the latent to lessen the possibilities of falling into time inconsistency trap in carrying out its primary goal. Third, either the government can opt to choose the target, independently or collectively with the central bank, which is associated with appropriate changes in the central banks law thus enhancing instrument independence of the institution in achieving its target. Fourth, the ITF promotes high transparency in the conduct of monetary policy thus enabling flow of information from the central bank to the public and government. Svensson Lars (1997) stated that, when the authority anticipate the policy target deviation, the strategy should be attuned in such a way it is neither contractionary nor is it expansionary in accordance with keeping the policy on target. On this background, the IT-framework work best in forecasting future inflation, that is, the relevant information for forecasting monetary policy is of greater importance in predicting future inflation. Indeed, this transparency of inflation targeting forms a better juncture in terms of motivating and focusing the activities insi de the central bank. More so, there is high tendency of central bank accountability, which is often outlined in case of breach of inflation target, meaning it helps in clarifying what the central bank is capable and incapable for it to be accountable. Although, inflation targeting has proved to be the best modern strategy it does not lack some criticism or problems that characterizes it in terms of implementation and monitoring. For instance Svensson Lars (1997) has described some of the inherent problems that makes this strategy ineffective, which includes: central banks inability to restrain inflation due to the fact that, previous decisions and contracts play a vital role in determining current inflation. In other words, the authority can only have power over the future inflation. In addition, monitoring and evaluation of monetary policy by public faces a greater set back due to the inadequate control of inflation. CHAPTER TWO 32.0 Literature Review A large body of literature has been developed to analyze the effectiveness of an explicit numerical anchor since such framework was adopted in early 1990s. There exists a large number of literatures on major development of Inflation Targeting Framework since its inception in developed countries and emerging economies. However, there is little development in low-income countries in regards to adoption and implementation of this framework varies greatly in most of these countries because of lack of a well-developed financial market, inadequate fiscal position, political interferences and also lack of market integration in majority of them thus posing a bigger challenge to welcoming this framework as a way of monetary policy conduct. Therefore, the section borrows heavily from past studies that have since been done in order to demarcate the gaps that have made the framework ineffective. 3.1 Transition to Inflation Targeting Framework: Central Bank of Kenya In the past decades, the monetary policy encountered by most of the emerging markets economies has been depressing, these resulted to extreme periods of monetary instability, vacillating from high inflation, to colossal capital flight, and thereby led to downfall of many financial systems. However, the forecast for successful monetary policy in the majority of countries in transition have so far been augmented. This has been typified by considerable decline of inflation rate in Latin America region as an example of an emerging region, which dramatically fell from an average of above 400% in 1989 to less than 10% (Mishkin Savastano, 2001) According to Morande and Schmidt-Hebbel (997), â€Å"this objective of inflation control has been interpreted by public as formal targets or â€Å"hard† targets.† Thus enables the central bank to be more accountable by explicitly announcing a multi-year target for inflation. Downs and Vaez-Zadeh (1990) declared that â€Å"during the transition it is not possible to forecast market behavior†¦..[s]ince the old money-model is bound to be obsolete and perhaps of little use† (318). Indeed, the ‘old fashioned regime of money-growth targeting framework has proved inefficient in the recent past, although the Central Bank of Kenya has been able to maintain inflation rate as low as possible. Above all, the de-regulation of economic activities in the early 1990s marked a major landmark in the conduct of monetary policy in Kenya in terms of objectives, instruments and institutional framework. Mwega 1990(a) developed a model that sought to explain the changes in the CPI Growth e.g. real income (T) changes, changes in money supply (M2), changes in import prices and changes in previous years inflation rates (Pt-1) were the expansionary variables. In these results, he found money supply to be a significant determinant of inflation. Similar study was done by Ndungu (1993) where he did a comprehensive study on the dynamics of the inflationary process in Kenya for the period 1970-1991. He used a monetarist model, named the error correction form of model and empirically showed monetary growth, interest rates changes, real income growth and excess money printing which were significant determinants of inflation in Kenya assuming a closed economy. When he included the external economy, he found the exchange rate had a significant effect on the domestic price level. The results of his study indicated inappropriate government policies (monetary and fiscal) resulted lack of control of inflation especially in 1980-1990 where inflation level escalated. Mishkin and Schmidt-Hebbel (2007) in there panel data analysis comprising of both inflation-targeting industrial countries and non-inflation targeting industrial countries, argued that ITF has helped these countries in achieving stable inflation rate in the long-run where they are attributable in oil-prices and exchange rate shocks, and that are associated with strengthening of monetary policy independence and enhanced policy efficiency. Taguchi and Kato (2010) assessed the performance of the IT in East Asian economies where they adopted a co-integration approach between money and inflation. The estimation results were that, the ITF in the sample of few selected economies, except for Philippines, proved to work well as an anchor for controlling inflation through speeding up price adjustments (stabilizing inflationary expectations) against money supply in the context of floating exchange rate. Similarly, they argued that, â€Å"well-functioning inflation targeting framework was consistent with enhanced monetary autonomy under the post-crisis floating exchange rate.† Aizenman and Hutchison (2008) used a simple empirical model where they estimated panel data for 17 emerging markets for both inflation-targeters and non-inflation targeters and concluded that there was a stable inflation response running from inflation to policy interest rates for inflation-targeters in emerging markets who have anchored their inflation than in non-inflation targeters whose central banks respond less in such markets. Similarly, they argued that â€Å"the response to real exchange rate was much stronger in non-IT countries, however, suggesting that policymakers are more constrained in the IT regime where they attempt to target both inflation and real exchange rate and these objectives are not always consistent.† 2.2 An overview of the exchange rate transition and its role in ITF The Central Bank of Kenya policy objectives have been to protract an exchange rate that will ensure international competiveness while maintaining domestic rate of inflation at low levels through conduct of strict monetary stance. Calvo and Reinhard (2002) argued that Majority of emerging markets are facing problem in performing inflation targeting due to various issues of how to manage the exchange rate under the condition that their external debt is primarily denominated in U.S. dollars. Therefore, the idea of this framework is believed to work best under floating exchange rate regime.Hence, inflation targeting framework as a monetary policy strategy becomes unrealizable in majority of this countries due to too much concern towards exchange rate volatility. In recent times, countries with fixed exchange rate have a tendency to fix their domestic currency value to countries whose main objective is to anchor their inflation in readiness to keep inflation rate in check. Most of the countries that have adopted a crawling target or peg their currency tend to devalue at a firm rate in order to keep their inflation rate low vis a vis their counterpart anchoring countries. These periods marked a milestone that foresaw an accelerated money supply growth and high inflation, but at the same time there was a move to speed up economic reforms and accelerate the pace of liberalization. â€Å"An exchange rate regime makes central bank quite accountable because it has clear-cut goals [b]ut can actually weaken accountability of the Central Banks in emerging- markets countries, by eliminating important signal that can help keep monetary policy from becoming too expansionary† (Blejer, Ã…  creb, 1999, p. 41).Also, for the same reasons described in (Mishkin, 1999a) â€Å"exchange rate targeting can promote financial fragility and lead to foreign exchange crises that can also lead to full-fledged financial crises with disastrous consequences for the economy†(Cited by Blejer Ã…  creb, p.50) .Hence, a continuous adherence of exchange rate regime is probable to have far-reaching impact of economic sluggishness and exacerbate redundancy in the economy, w hich is exactly what Kenya has experienced in the past. Therefore, the Central Bank should move more assertively by provision of an extra credibility, where policy easing is desired to prevent output reductions, without igniting fears of renewed inflation. Mishkin Savastano ( 2001) acknowledged that â€Å" [t]here are three broad monetary policy strategies that can produce an explicit nominor anchor that credibly constrains the discretion of the central bank over the medium : â€Å"hard† exchange-rate pegs, monetary targeting, and inflation targeting†. In spite of this, majority of industiralized economies, notably the United States, have used a more or less the same strategy of anchoring inflation. However, it does not explicitly anchor inflation but it implicitly anchor its inflation. a monetary policy with an implicit but not an explicit nominal anchor sought of monetary policy strategy to achieve macro-economic goals. Whereas, the three monetary policy strategies have enabled emerging economies to set up institutions and mechanisms that have effectively and efficiently constrained the discretion of their monetary authorities; their suitability to conditions in different markets differs according to each strategy that is adopted by each country. Reinhart and Rogoff (2004) declared that, â€Å"Developing countries central banks tend to pursue exchange rate targets that considerably are more deterministic than their official pronouncements†¦.[while] a managed floater might be operating a fixed exchange rate or a crawling peg for extended periods†. Likewise, Kenya has undergone myriad exchange rate regimes in the past mostly driven by various economic cycles, and chiefly the balance of payments deficit. For instance, up to 1974, the exchange rate was pegged to the dollar, but later the devaluation of the currency resulted to a change of the peg to the SDR.1 from 1974-1984 period. This regime lasted until 1990 when a dual exchange rate system was adopted that lasted till October 1993 when, after a series of devaluations, the official exchange rate was abolished. (Mwega and Ndungu, 2001) acknowledged that â€Å"Kenya adopted a unified and flexible exchange rate in the early 1990s, as part of a market-based reform program designed to improve the investment environment and spur economic growth†(Cited by Ndungu, 2008). In addition, the (Kenyan Economic Survey, 1995) revealed that the nominal exchange rate suddenly depreciated by about 32%, moving to Ksh38 to the U.S dollar from Ksh 44 to the dollar, and inflation declined from 46% in 1993 to 28.8% in 1994 (as cited in Ndungu, 2000) as a result of shilling appreciating against dollar in 1995†. 2.3 Central Bank Independence The literature on ITF in emerging market economies suggests that this monetary policy strategy should be adopted only if some institutional preconditions are met. One of them is Central Bank Independence. Many scholars have given much attention to the central bank autonomy and the role it plays in adopting ITF. Indeed, where central bank is autonomous from government interference it is likely to insulate itself from political pressures to finance government fiscal deficits, which can result to over-expansionary monetary policies that would lead to inflation above target. Cukierman, Webb and Neyapti (1992) constructed Central Bank Index that was designed in two folds that is, legal independence and turnover rate of governors, where both revolved around central bank charters and legislation and the relationship it has over the overall performance of the economy. This paper provides an overview of the mushrooming literature on authority autonomy and precision relating it to the mechanis ms through which central banks have in the past adopted greater openness, thereby, focusing more on the role they play in adoption and effective implementation of inflation targeting framework. (Klomp and De Haan, 2010) used a random coefficient model and they estimated a sample of more than 100 countries to re-examine the relationship between CBI (measured by both governors TOR and central bank legal indicator) and inflation. They found Central Bank Index to be negatively insignificant with the level of inflation rate of country specific. Most literatures in developing countries have focused on de facto independence as a proxy of CBI that is governors turnover rate. Studies of Cukierman, Webb and Neyapti (1992) stated that the average and variance of inflation has a negative correlation to governors turnover rate in most of the developing. This is due to the fact that, majority of studies has expressed doubts over the reliability of most of indicators used to construct Central Bank Independence indices. Indeed, there exist a greater divergence when it comes to categorization of indicators used to measure CBI incase of high income countries, emerging countries and low income countries. Cukierman,1994 and Eijffinger and De Haan (1996) have categorically contended that, the CBI indices in majority of high income countries are arises from central banks laws interpretation and are of great concern to legal independence indicator, whereas, in developing countries de facto independence indicators form the main measure of central bank independence. Axel Dreher, Jan-Egbert Sturm, Jakob de Haan (2010) used a data set comprising of eighty-eight countries term of office of central banks governors since 1975-2005. They used logit model to test the likelihood central bank governor term of tenure geting terminated before their legal term in office expires. According to their results, the probability of a TOR as a measure of CBI tend to soar under certain condtions which includes: unstable political system, undue elapse of governor term of service in office and during elections period in self-governing countries. Accordingly, they indicated in their hypothesis that there was a higher chance of the governors getting replaced if there was huge drop out of veto players from the government. Alex, Webb and Bilin (1992)) developed legal independence where they mentioned some of the intrinsic features such as the degree of independence that the authority should bestow to the Bank, and lone dependence on legal component of independence. Beside s, the legal independence is significant in ascertaining inflation rate in developed economies. Whereas, turnover rate of governors forms a better turning point of inflation determination in developing countries. Likewise they argued that, in cases where governor legal term of office is shorter than that of government CBI is likely to be compromised by the government, thereby, resulting to increased TOR. More over, the governor is likely to be susceptible from government influence thereby derailing long-term objective of policy formation and implementation under the pretext of political pressure especially during election periods. (Kuttner Kenneth, Posen Adam 2010), took the same direction and indicated that undue appointment of governor in office result to construed information to the bank in terms of carrying out its primary objective of price stability. For instance, unjustifiable appointment of governor under low inflation periods may reinforce the exchange rate, while the opposite is always true. Since governors appointment seem to contain valuable information regarding the exchange rate and inflation rate. Gutierrez (2003) indicated that CBI has positieve impact in reducing the chances of governments incurring budget deficits through quasi-fiscal activities. Since such activities can be understood on their inflationary impacts. Posen and Kuttner (2010) estimated the effect of legal appointment of governor to office exchange rates and bond yield and argued that the main test was to verify the scope to which markets observe that the next governor will bring a swing in policy, whereby he/she is expected to determine the bearing of such swing. This is in conformity with the fact that, the news conveyed may favour either one side due to markets reaction after such appointment. 2.4 Financial Institutions Another important prerequisite for successful ITF stressed by the literature is a healthy financial and banking system. Several reasons can be advanced to explain the great importance of well-functioning financial system under inflation targeting framework. First, a sound financial system is essential to guarantee an efficient transmission of monetary policy through the interest rate channel which forms the major channel through which the CBK carries out its main objective of price stability, and more specifically forms an enabling environment of smooth exchange and provision of credit. Second, according to Mishkin (2004), a weak banking sector is potentially problematic to achieve inflation target, because the central bank would be hesitant to raise short-term interest rates for fear that this will impact the profitability of banks and lead to a collapse of the financial system. Third, countries characterized by weak financial institutions are more vulnerable to a sudden stop of cap ital outflows, causing a sharp depreciation of the exchange rate which leads to upward pres

Exploration of the Economics of Poverty

Exploration of the Economics of Poverty 3.1. Introduction A significant body of the literature has been dedicated to examining wide spreading of poverty  and its gradual explosion issues together with pioneering steps in research and practice towards poverty  eradication have created an unprecedented outburst of studies about business literature for poverty  eradication. The following section is a review of literature about how multinationals attend low-income markets where poverty  occurs on a large scale. The review is carried out with a concern about poverty alleviation and some implications and appropriate frameworks for MNCs executives to help to alleviate poverty while selling to the poor. From this viewpoint, the literature review is divided into three main sections: BOP inititiative, buyer behavior and marketing strategies. It examines some key elements of the BOP initiative companies motivation; the BOP business model; the role of micro finance. With a number of successful stories acknowledged in the literature, the sectio n also reviews how to adopt MNCs marketing mix to attend the BOP profitably. 3.2. Part 1: Poverty in Business Perspectives Billions of people living in the extreme poverty, who are in many cases denied access to proper services, energy, water, health, and above all the opportunities to improve their economic and social outlook, is a significant societal problem. Even though the high economic growth of large-population countries, such as China and India, has brought about many job opportunities and brought down the overall poverty  level, it is still not sufficient to reach other targets in the Millennium Development Goals (MDGs) (World Bank, 2004). Along with the increasing concern of NGOs and other non profit organization towards poverty alleviation, business perspectives have been gradually positioned as a useful tool in contributing to poverty reduction. Such interest has appeared to become much more worldwide through being catalyzed by pioneer approaches, both in practice and theory, which have awakened business attention to the problem of poverty. Indeed, there is an abundance of academic literature on the. It appear to have been dissected from all imaginable angles Poverty in business perspectives has a diverse appearance, such as the vast majority of 4 billion people living on less than $1 or $2 a day (Prahalad and Hammond, 2002), poor producers (Karnani, 2007), gender (Thierry, 2007), self-employed poor people, micro entrepreneurs, micro franchisees (Gibson, 2007), employees, business owners, etc. Within these much attention is lately placed not on poverty as a whole but on its attributed and its causes. 3.2.1. Companies Motivation to Attend Low-Income Markets Much of the debate about poverty alleviation has been provoked by suggestions that multinational corporations (MNC) with extensive financial resources are in the best position to lead the process of selling to the poor. The construction of a new image of poverty in business perspectives, for example, is much contributed by the pioneering idea of Prahalad and Hammond (2002) who focus on the large buying power of 4 billion people earning less than $ 2000 each per year at the lowest tier of the economic pyramid â‚ ¬Ã¢â‚¬Å" Bottom of the pyramid. Prahalad and Hammond (2002) advise private companies to view poverty as a potential of serving an unexploited, multitrillion-dollar market and alleviating the level of global poverty while still earning a profit. By infusing the profit motive into value creation, the hope is that private companies will take the leading role in serving the BOP and, thus, the purpose of alleviating poverty will more likely succeed. From this follows/Keeping thi s in mind, the main two motivations for profit seeking companies to attend this market is: The opportunity to covert BOP segments purchasing power into profits; and The ability to bring prosperity to the poor, and thus alleviate poverty. This was supported by 3.2.1.1. Purchasing Power and Profitability A key component surrounding literature is that even poor people could be profitable customers. a) Creating New Business Opportunities Such strong view rests on the idea that the potential growth for many multinational (MNC) and medium sized companies does not rest on the low-income market in the developing countries. Instead, its source is the immense size of potential market of $13 trillion at purchasing power parity (PPP) that the two-thirds of the world population with unmet needs are supposed to represent. Projections and demographic trends also indicate that by 2050, more than 85% of the worlds population will fall within this category. This portends an abysmal decline in effective demand. By empowering the poor, businesses naturally create new business opportunities by raising effective demand and consumption levels. b) Corporate Social Responsibility (CRS) since it will help to reduce poverty and more importanlty for the company, it will be crucial to their long-term competitiveness and success. One of the most interesting implications of BOP is the radical impact it can have on a companys core business model. .. for instance, claims that organizations which set out to empower poor communities by providing basic education and skills acquisition, improving local human capital, protecting the environment, and developing the culture of accountability and transparency, are practicing some components of CSR which is essential for the long-term sustainability of any company. Indeed, many large corporations have announced CSR benefits that impacts on their profitability and claim it to be a key element of development. Besides, adds that a comprehensive set of CSR policies, practices and programmes incorporated in companys business strategy can increase productivity, contribute to competitiveness, improve staff recruitment and retention rates and create a more positive corporate image. All in all, concludes that d) Government support Political Capital It is obvious that businesses that empower the poor strike a compelling partnership with the government. Most of the time, politicians take undeserved credit for attracting such private investments etc. 3.2.1.2. Poverty Alleviation and Prosperity to the Poor a) Job Creation Businesses whose products and services address basic and common needs can enter the bottom of the pyramid market segments more effectively, and with a deeper social impact through partnerships with highly innovative community groups. They can scale their impact significantly by leveraging their expertise and experience in developing skills and engaging such community groups actively in delivering their products and services. This way, communities are better served, if an increasing number of people engaged in the business are people from their immediate neighborhoods, giving it a local flavor and a compelling sense of stake in the business. adds that expansion by multinationals into emerging markets creates new jobsproduct-distribution networks and shops, for exampleand income earned from those jobs ripples through local economies, creating more new jobs, a phenomenon that economists call the multiplier effect. b) Training, Education and Skills enhancement â‚ ¬Ã¢â‚¬Å" Profit-seeking companies can also play an important role in educating BOP consumers. Banerjee and Duflo (2007) point out, that BOP consumers can be entrepreneurial and do several different types of jobs. However, due to their lack the skills they can not get higher paying jobs. The provision of funding and training is a way multinationals can support the poor. Education is also necessary not just for getting a job, but to make more informed decisions in other areas, e.g. health education can improve food choices. Besides, education and information can also help BOP negotiate better rates and recognizing counterfeit goods. c) Community Development: Through basic empowerment in terms of education and job creation, the community systematically grows out of the crutches of poverty. Beyond the occasional CSR embarked upon by businesses, empowered indigenes gradually but steadily develop their communities by training other relatives of theirs and embarking on micro projects that eventually add up to improving the lot of their communities. Not only, the company makes more profit, and the peoples lifestyle changes. The poor also benefit because they have access to services such as banking and insurance that once were denied them, he says. 3.2.2. Challenges of Attending Low-income Markets Nevertheless, there is a great branch of the literature about the nature, scope, and value of serving low-income segments (Karnani, 2007a; Martinez and Carbonell, 2007; Aiyar, 2006; Jaswal, 2007) that questions the ease with wich multinationals may enter the BOP and whether profits exist there at all. They argue that it is very unlikely that companies will be able to attend the BOP market profitably. Landrum (2007) points out that the costs of serving this segment can be very high. BOP customers are usually much dispersed geographically; they are very heterogeneous, which reduces the opportunities for obtaining significant economies of scale; and their individual transactions usually represent a low amount of money. In addition, consumers at the BOP are very price sensitive, which, again, makes profitability a difficult goal to achieve. For example, Karnani (2007a) posits that the poor may want the same products as the rich do but by virtue of being poor, they cannot afford them. The differences between business realities and development imperatives are not easy to reconcile, states () Some recent case studies also suggests that unlimited business opportunities and poverty eradication through profits may set unrealistic expectations for business executives (McFalls,2007). Second, the traditional timelines for achieving social goods versus profits differ (Harjula, 2005). Businesses may use a five-year horizon as their benchmark for returns. In contrast, social goals like reducing smoking and other unhealthy lifestyle behaviors may take generations. Thus, rather than viewing the poor primarily as consumers, this group suggest a focus on this segment as producers, i.e.potential entrepreneurs that can improve their economic situation by increasing their income level. Karnani suggests that raising income will alleviate their poverty, provide cost effective products to other consumers, and allow the formerly poor to consume more. Raising their incomes may require that they become producers with stable jobs and wages. Focusing on poor people as self-employed poor people, micro entrepreneurs, Gibson (2007) also suggested that constructing and running micro franchising models that pair franchisors (MNCs or non-governmental organizations), micro franchisors (independent business people) with other poor people to expand the business and get other poor people involved in a self-employment venture can help empower poor people to raise their standard of living and gain a greater degree of financial stability. CONCLUSION It postulates that if companies take the correct steps and devote sufficient resources to satisfying the needs of the BOP, they can overcome barriers to consumption. However, companies must be willing to invest time, resources and training to insure that the producers create products with some barriers to entry and are asonable level of productivity. BOP projects must be integrated into key areas in operations where decisions on new products and markets are made and executed. For most companies, BOP therefore requires comprehensive organizational change and heavy involvement of key business areas responsible for new market creation- something that far exceeds what is required to implement most other sustainability activities. Therefore, while there are potentially compelling reasons for widening the definition of market opportunities beyond consumer goods for low-income segments, the following part of literature review focuses on the BOP concept in its original form, i.e., as a business strategy aimed at selling profit-seeking products to low-income segments while simultaneously contributing to the resolution of significant societal problems in these regions.