Category: Uncategorized

Facility design and management

Sector Description

The sector of choice is soccer as a professional sport currently run at a high specificity level of management and investment across the globe. In view of the appropriate facilities needed in a modern soccer club, highest possible standards are needed for the management and design of facilities for the ideal club. With professional soccer stars around the world gracing the sport and attracting huge investments into the sector, growth in soccer resonates well with its following around the world. As a leading industry, soccer clubs businesses are modern business ventures where sport science and commercial activities meet to bring out the best results. Despite the presence of competition from certain sports as lucrative business opportunities, soccer empires continue to thrive around the world with enticing entertainment attributes attached to its following. The efforts behind the success can only be attributable to excellent and accurate sport facilities design and competent management both as a business and as a sport (Aman, Barghchi and Omar, 2009).

Growth and Advancements in Soccer Club Facilities

Although Europe sets the yardstick of success and sustainability of soccer, variously referred to as football, there is growth of the sport around the world as an important entrainment and business venture. As an illustration, the UK has one of the oldest soccer traditions deeply enshrined in its national culture and the oldest tournament is celebrated in the country. Soccer clubs in England are among the oldest, with some of the most decorated clubs around the world having a history dating back to the late 19th Century. With such a historical background, his facilities at the disposal of the clubs have had a tremendous evolution and perfection over the years, assisted by continued innovation and increased investment. Initially, soccer was not a professional sport but its evolution has seen dramatic changes in its management as a socioeconomic tool around the world. Today, growth has witnessed mammoth investment making soccer clubs among the most powerful brands. Professional players are multi-millionaires thanks to the remuneration that the entertainment industry on which the soccer sector is currently built on.

Case Study

In a specific consideration of a modern soccer, club with state-of-the-art facilities, investment and management, London’s Chelsea Football Club fits the bill. Established in 1905, Chelsea is one of the top English clubs and the current UEFA Champions League holders. A decade of excellent results at Chelsea since 2003 coincides with the commercial takeover by the Russian billionaire Roman Abramovich, which underscores the importance of investment towards efficient management.

Major Changes since 2005

The year 2005 marked a major event at Chelsea, having attained a century of active sports in the national league. Contribution of expertly composed team with improved sporting facilities and programs proved successful for the club as it won domestic cups and excelled in European highest stage of competition. In 2007, Chelsea built an excellent facility for the team’s sporting programs to accommodate the best scientific trends that the world of sports can offer. Cobham training centre world-class facilities include over 30 high quality soccer pitches for training, revolutionary undersoil heating system, artificial indoor winter training pitch, 17m long swimming pool, hydrotherapy systems with video recording enhancement, sedum grass roof observing green policies, biometric entrance technology for players, several restrooms as well as ample parking space (ChelseaFC, 2007a).

The design of Cobham training facility makes the best possible impression of sport management at the Chelsea Football Club facility. Rehabilitation facilities of the cob ham complex are perhaps among the best in the UK, with modernized therapy, fitness, and recovery facilities on offer. A medical zone with modernized medical section, doping control section, treatment section, medical studio, performance, recovery and nutrition facility, emergency attendance section and doctor’s room paint the medical image of the Cobham training complex (ChelseaFC, 2007b).

Management of affairs at Chelsea Football Club is mandated to the Management Board headed by the Chairman assisted by the CEO. Various management attributes that make Chelsea Football Club a top club in the UK and Europe is perhaps the adherence to the basic principles of sporting success (Bingham et al., 2008). Financial support at Chelsea has been an important pillar of organization since the arrival of the owner in 2003, from when top coaches and managers as well facilities have been mobilized. Policy development at Chelsea also illustrates the undying ambition with strict achievement criteria. Talent identification and nurturing using the facility and a network of scouting around the world always pays off at the club. Training facilities at Cobham and an efficient coaching system compliments outlined goals at the club. Participation at the highest European competition has been the primary agenda at Chelsea and despite having performed well for close to a decade without winning at that level, the club can now reap the fruits of hard work, management, and dedication. Scientific research and embracing of technology at the facilities offered to the playing staff is a top-level experience. As mentioned above, soccer across Europe and indeed around the world is a thriving business embracing commercial tenets guided by sport science principles. A club such as Chelsea FC shows that the possibility of reaching success in entertainment and investment can only be through proper management and controls.

However, the financial situation at several soccer clubs in Europe leading to their bankruptcy has led to an outcry by the European football governing body, UEFA. The introduction of financial fair play rules targeted at ensuring that clubs are sustainable in their business is perhaps an important cautionary approach to protect the game from irregular commercialization at the expense of the sport (FFP, 2012). Several clubs have gone under receivership in the UK for instance Portsmouth FC and Rangers FC. Difficult economic times in Europe for instance have led to sudden lean revenues and inability to meet ordinary bills. In future, clubs will be restricted to certain budget limitations to avoid liquidation for the sake of the sport. Continued cooperation between financial management, sport science, and sport management will lead to better experiences in soccer industry. The control of the multi-billion entertainment industry attracting stadia entry revenues, television rights revenues, shirts/ jerseys sales revenues, sponsorship and other commercial partnership revenues require expert intervention (Tulley, 2011). Chelsea FC is an example of a rising sport investment and sport management outfit with modernized facilities, yet troubling financial environment poses a threat that could suddenly kill the (Roman) business empire within a short time.

References

Aman, M. S., Barghchi, M., & Omar, D. (2009). “Cities, Sports Facilities Development, and Hosting Events,” European Journal of Social Sciences, 10(2):185-195

Bingham, J., De Bosscher, V., De Knop, P., Shibli, S., & Van Bottenburg, M. (2008). The global sporting arms race: an international comparative study on sports policy factors leading to international sporting success, Oxford, UK: Meyer & Meyer Verlag

CFCnet (2009). “Cobham, A World Cass Facility,” Retrieved from: HYPERLINK “http://www.cfcnet.co.uk/2009/03/20/cobham-a-world-class-facility/” http://www.cfcnet.co.uk/2009/03/20/cobham-a-world-class-facility/

ChelseaFC (2007). “Cobham in Depth: A Building to Meet All Needs,” Retrieved from: HYPERLINK “http://www.chelseafc.com/page/LatestNews/0,,10268~1068030,00.html” http://www.chelseafc.com/page/LatestNews/0,,10268~1068030,00.html

ChelseaFC (2007). “Cobham in Depth: The Medical and The Media,” Retrieved from: HYPERLINK “http://www.chelseafc.com/page/LatestNews/0,,10268~1068031,00.html” http://www.chelseafc.com/page/LatestNews/0,,10268~1068031,00.html

FFP (2012). “Financial Fair Play- The Future of Football,” Retrieved from: HYPERLINK “http://www.financialfairplay.co.uk/” http://www.financialfairplay.co.uk/

Tulley, W. (2011). “”The Evolution of Sports Facilities,” Retrieved from: HYPERLINK “http://www.articlesbase.com/outsourcing-articles/the-evolution-of-sports-facilities-5264144.html” http://www.articlesbase.com/outsourcing-articles/the-evolution-of-sports-facilities-5264144.html

HOMEWORK7

TECH331-TECHNOLOGY PROBLEM ANALYSIS

STUDENT AFFILIATION

PROFFESSOR NAME

DATE

FACTORS AFFECTING ACQUISITION AND RETENTION OF ATT&T SUBSCRIBERS IN THE USA.

Mobile telephony in USA has been growing greatly. The subscriber base is now above 15.0 million with a mobile penetration rate of 59 percent. The subscriber base is expected to rise to 140.28 million, or 70.25percent penetration, by year-end 2016. The annual churn rate is growing as customer acquisition increases. Customer acquisition and retention is very important as it leads to profitability of a firm . It also leads to higher market share, high efficiency and high productivity. Retaining customers has a cost though it is way cheaper than acquiring new customers. This is why retention strategies are not as easily imitated as acquisition strategies.

This research identifies and analyses the customer acquisition and retention strategies in the USA mobile telephony, specifically, ATT&T mobility- the leading mobile services provider in USA among others. Among the top wireless providers it was ranked the second in 3Q15 customer wireless retention. Specifically, the study addresses Brand, image and reputation which scores a close second to quality of services as an important strategy of selection among clients. It also addresses trade promotions, tariffs, customer care and services, distribution systems, brand and line extensions and market extensions. The study also analyses how the above are used to acquire and retain customers.

The findings indicate that the customers do shift from one mobile phone provider to another due to factors such as network coverage, tariffs, presence of friends and peers in the same network and offers by the mobile phone providers .Nearly half of Americans use total of data allocated by their network and the rest indicate it happens occasionally(Haque13).

Conclusion

The strategies mentioned above were found to influence attraction and retention of customers. On customer service, it was evident that the customers were kept waiting for long before they were attended to but it is gradually changing because of fear of losing the customers. ATT&T mobility offers good quality products and services and that’s why they are well entrenched. ATT&T mobility also offers a variety of tariffs but it is felt that the tariffs should include less costly calling rate across other networks. Trade promotions are also an attraction and retention strategy and distribution and corporate customers think so too. The distribution systems and ordering processes are efficient and the remuneration structures are good. According to Birke his can be attributed to its increase in customer retention through postpaid services which includes 90% of their customers (Postpaid retention of customer’s services 3).

Recommendation

ATT&T mobility should therefore conduct market research prior to product definition and the firm should continue being innovative. On distribution systems, undercutting should be addressed and the firm should improve its relations with the trading partners by holding regular meeting and training the channel members regularly to improve on trade support in products and materials. On customer service, the firm should decentralize call center services and further increase the number of call centers. The firm should also improve loyalty programs. Employees should also be involved in decision making to gain their commitment and support and also to improve their morale.

Reference

Haque,A.(2013).Customers Perception Towards Cellular Mobile Telephone Operators (23rded.). ORIC publications.

Birke,D.(2013).Social Networks and their Economics:Influencing Consumer Choice (1st ed.).John Wiley & Sons.

Factors Affecting Change

Author

Institution

Social tensions in an organization can lead to changes in an organization. One of the existing social tension that can lead to changes in an organization concerns the communication network. The network of communication may be such that every employee in an organization is capable of viewing the communication amid parties in an organization. For example, consider an organization that carries its communication through the social media such as the Facebook. Such an organization is likely to expose even confidential matters. Changing this mode of communication in an organization will facilitate confidentiality of information between parties. Another social tension in an organization entails the language and dressing code that employees should use, where these are not defined in an organization. Because of diversity in culture, people have a difference in the way they value a certain mode of dressing and language. Therefore, due to this difference, an organization should be ready to change its culture and define a language and dressing code that employees should use.

One of the conditions for change is that it should be achievable. An organization should consider realizing a change that is attainable; in case the change is not achievable, the organization will not be capable of implementing the change (Burke, 2002). Another condition for change is that it should be agreed upon by all the parties. This makes it easy to meet the objectives of implementing the change. Leadership influences the change process through initiating the process and being in the frontline in implementing the change. A leader can create conditions for change through engaging all the parties to a change process and engaging experts to know whether the change is attainable (Burke, 2002).

References

Burke, W. W. (2002). Organization change: Theory and practice. Thousand Oaks, Calif: Sage.

Factors Affecting Chinese Consumers On Purchase Of Jewellery in Afghanistan?

1.0 Chapter 11.1 BackgroundThe global jewellery goods market has increased considerable over the last twenty year. Today, it is estimated to be worth $20 billion. In spite of operating within a comparatively stable business environment for decades, jewellery goods firms have faced recent challenges from external forces (Yeoman and McMahon-Beattie, 2006). The industry is faced by globalisation, intense competition, increased consumer sophistication and maturity in markets (Djelic and Ainamo, (1999). For example, Nueno and Quelch (1998) found that sales volume in luxury brands decline by 3% averagely each year from 1990 to 1993. The recent global financial crisis as well affected the luxury goods market. LVMH an American luxury firm reported that its sales dropped by 4% in the US market and by 5% in Japanese market in 2008.

The increased external pressure is forcing jewellery and other luxury companies to transform themselves from family-owned and private companies to public companies, while at the same time they try to exploit international markets (Bhat and Reddy, 1998). Foxall (2005) observes that China as an emerging market offer big opportunity for jewellery goods companies.

As noted by Agarwal and Wu (2004) China is the biggest emerging market and boosts of a fast growing economy. With high economic growth of China, there is increase in personal income, which is resulting in a new segment of wealthy individuals referred to as China’s “new rich” (Wu, 1997). This point is further echoed by Blackwell et al (2001) who notes that increasing number of rich individuals in China has meant that more people are able to reside in affluent neighbourhoods and buy luxury products. a report carried by Ernst and Young (2005) indicated that China was the third biggest consumer of premium fashions and luxury products, and Chinese market is projected to account for 30% of entire global luxury goods sales by 2015.

Several luxury goods firms including those dealing specifically in jewellery have set up shop in China to exploit China’s vibrant economy and the emerging rich consumer group who is in love with and can afford jewellery goods. Gucci, Bally and Lois Vuitton are some of the luxury that have already set shop in China, and have operated for over ten years. Indeed, as early as 2004, Ermenegildo Zegna had 40 stores in more than 20 Chinese cities, and China is its fourth-biggest market. Armani had 30 stores by 2006, and Prada was not left behind as it has 10 stores as at 2006 (Wiedmann el al, 2007). All these luxury goods firms plan to put more efforts in their businesses to increase their sales. Nonetheless, not all luxury goods companies that enter Chinese market succeed, some are only able to record minimal profits, while others struggle to survive within the market (Yeoman and McMahon-Beattie, 2006).

Table of Contents

TOC o “1-3” h z u HYPERLINK l “_Toc367043269” 1.0 Chapter 1 PAGEREF _Toc367043269 h 4

HYPERLINK l “_Toc367043270” 1.1 Background PAGEREF _Toc367043270 h 4

HYPERLINK l “_Toc367043271” 1.2 Research Aim and Objectives PAGEREF _Toc367043271 h 7

HYPERLINK l “_Toc367043272” 1.3 Research justification PAGEREF _Toc367043272 h 8

HYPERLINK l “_Toc367043273” 1.4 Structure of the thesis PAGEREF _Toc367043273 h 8

HYPERLINK l “_Toc367043274” 2.0 Literature Review PAGEREF _Toc367043274 h 10

HYPERLINK l “_Toc367043275” 2.1 Introduction PAGEREF _Toc367043275 h 10

HYPERLINK l “_Toc367043276” 2.2 The meaning of jewellery products PAGEREF _Toc367043276 h 10

HYPERLINK l “_Toc367043277” 2.3 What does luxury goods entail? PAGEREF _Toc367043277 h 11

HYPERLINK l “_Toc367043278” 2.4 Outlook of Chinese jewellery market PAGEREF _Toc367043278 h 12

HYPERLINK l “_Toc367043279” 2.5 Consumption of jewellery as a luxurious product PAGEREF _Toc367043279 h 13

HYPERLINK l “_Toc367043280” 2.6 Jewellery goods consumption in Chinese market PAGEREF _Toc367043280 h 16

HYPERLINK l “_Toc367043281” 2.7 Cultural orientation and jewellery products consumption PAGEREF _Toc367043281 h 19

HYPERLINK l “_Toc367043282” 2.8 Theory of planned behaviour PAGEREF _Toc367043282 h 24

HYPERLINK l “_Toc367043283” 2.8.1 Application of planned behaviour to Chinese buying behaviour of jewellery PAGEREF _Toc367043283 h 26

HYPERLINK l “_Toc367043284” 2.9 Summary of the chapter PAGEREF _Toc367043284 h 28

HYPERLINK l “_Toc367043285” 3.0 Chapter 3 PAGEREF _Toc367043285 h 31

HYPERLINK l “_Toc367043286” Methodology PAGEREF _Toc367043286 h 31

HYPERLINK l “_Toc367043287” 3.1 Introduction PAGEREF _Toc367043287 h 31

HYPERLINK l “_Toc367043288” 3.2 Research Designs PAGEREF _Toc367043288 h 31

HYPERLINK l “_Toc367043289” 3.3 Data collection PAGEREF _Toc367043289 h 32

HYPERLINK l “_Toc367043290” 3.3.1 Secondary data method PAGEREF _Toc367043290 h 32

HYPERLINK l “_Toc367043291” 3.3.2 Primary data PAGEREF _Toc367043291 h 32

HYPERLINK l “_Toc367043292” 3.4 Data collection methods PAGEREF _Toc367043292 h 33

HYPERLINK l “_Toc367043293” 3.4.1 Interview PAGEREF _Toc367043293 h 33

HYPERLINK l “_Toc367043294” 3.2.2 Questionnaire PAGEREF _Toc367043294 h 34

HYPERLINK l “_Toc367043295” 3.5 Sampling strategy PAGEREF _Toc367043295 h 35

HYPERLINK l “_Toc367043296” 3.6 Viability and Reliability PAGEREF _Toc367043296 h 35

HYPERLINK l “_Toc367043297” 3.7 Data analysis PAGEREF _Toc367043297 h 36

HYPERLINK l “_Toc367043298” Chapter 4: PAGEREF _Toc367043298 h 37

HYPERLINK l “_Toc367043299” Investigation: Results and analysis of results PAGEREF _Toc367043299 h 37

HYPERLINK l “_Toc367043300” 4.1 Demographic aspects of the respondents PAGEREF _Toc367043300 h 37

HYPERLINK l “_Toc367043301” 4.2 Dimensions of satisfaction PAGEREF _Toc367043301 h 41

HYPERLINK l “_Toc367043302” 4.2.1 Store Type and Location PAGEREF _Toc367043302 h 41

HYPERLINK l “_Toc367043303” 4.2.2 Other variable Correlations PAGEREF _Toc367043303 h 43

HYPERLINK l “_Toc367043304” 4.2.3 Product Aspects of Jewellery PAGEREF _Toc367043304 h 45

HYPERLINK l “_Toc367043305” 4.2.4 Product characteristics PAGEREF _Toc367043305 h 46

HYPERLINK l “_Toc367043306” 4.2.5 Value created-including PAGEREF _Toc367043306 h 47

HYPERLINK l “_Toc367043307” 4.3 Findings from interview from the 20 managers PAGEREF _Toc367043307 h 48

HYPERLINK l “_Toc367043308” Chapter 5: PAGEREF _Toc367043308 h 50

HYPERLINK l “_Toc367043309” 5.1 Conclusion PAGEREF _Toc367043309 h 50

HYPERLINK l “_Toc367043310” Chapter 6: PAGEREF _Toc367043310 h 52

HYPERLINK l “_Toc367043311” 6.1 Recommendations PAGEREF _Toc367043311 h 52

HYPERLINK l “_Toc367043312” Appendix PAGEREF _Toc367043312 h 54

HYPERLINK l “_Toc367043313” Questionnaire PAGEREF _Toc367043313 h 54

HYPERLINK l “_Toc367043314” Reference PAGEREF _Toc367043314 h 64

though China’s rapid economic growth with definitely continue to offer considerable opportunities for luxury goods companies and particularly those dealing in jewellery, cultural differences, changing consumer behaviour and differences in Chinese consumer markets presents major challenges for these firms operating in China. Tse (1996) notes that the buying of jewellery goods by Chinese consumers could be driven by factors that differ from those in their home markets such as the US and European markets.

According to Tse (1996) present studies on consumption strongly show western culture and stress on individualistic objectives and that in a collectivist culture such as China, the consumer behaviour and motivations for buying luxury products maybe remarkably different with those observed in individualistic culture. However, Wiedmann et al (2007) disagree with this argument and states that consumer behaviour concerning luxuries products like jewellery is “culture independent”, therefore, does not differ across cultures. Yet again, behaviour is guided by attitudes, which are arise from values and therefore related to culture (Triandis, 1995). Attitudes are influenced by beliefs; consequently, consumers with different beliefs regarding buying goods may use different processes in searching for product information and in making buying decisions, this will certainly result in different consumer behaviour. As noted by Wong & Ahuvia (1998) though same products maybe available in Asian and Western markets, consumers from these two different cultures may have different reasons for buying same products. Wong and Ahuvia (1998) add that culture can affect consumer’s perceived motivations, values and even beliefs regarding goods, including jewellery. Phau and Prendergast (2000) points out that empirical research reveals that consumer in collectivist societies have different perceptions and attitudes towards jewellery and other luxury products than those of individualistic cultures.

Another important aspect that jewellery goods firms have to take into account is the diversity existing in Chinese consumer market. Cui & Liu (2000) states that though in general Chinese consumers are experiencing raise in their income and show increased demand for luxuries products, patterns of buying jewellery goods differ significantly within these consumers. Indeed, Triandis (1995) explains that people in each society whether collectivist or individualistic, differ in their personal cultural orientation. More so, the cultural orientation of collectivist and individualistic could either be horizontal or vertical. Different cultural orientations observed among Chinese consumers could result in different beliefs about buying jewellery goods and therefore different buying patters. To be successful in Chinese markets, jewellery goods firms ought to understand the different cultural orientation of their target consumers to formulate responsive marketing strategies.

Information and data on jewellery goods available in past literature is very limited (Vickers and Renald, 2003; Beverland, 2004). Though China is a significant market for jewellery goods, research is limited on the Chinese jewellery goods market as well as on Chinese consumer behaviour in relation to jewellery goods. According to Xiao (2005) this can be attributed to two main factors. First, players in the jewellery goods industry hold that “the golden principle for success in the jewellery market is to remain stylish, reliable and effective, and instead of asking what customers want, you should tell them what they ought to have”. Indeed, few firms in the jewellery goods industry frequently examine developments that occur within the market place for jewellery products (Xiao, 2005). Secondly, jewellery goods firms only lately made a mark in Chinese market and other emerging markets; this explains the limited applicable and consistent data exist on consumers of jewellery products in these markets. As observed by Crane (1997) research is needed for formulating an analytical system to promote scholars’ knowledge of buying behaviour relating to jewellery goods in Chinese market, and to assist players formulate marketing strategies appropriate for this market. The necessity for such kind of research has motivated the present research to investigate the factors affecting Chinese consumers to buy jewellery.

1.2 Research Aim and ObjectivesThe main aim of this research is to determine the factors that influence Chinese consumers to buy jewellery. Accordingly, the specific objectives set for this research are:

To investigate the Chinese consumers behaviour in regard to cultural orientation

To establish the main factors that determines Chinese consumers’ intention to buy jewellery as luxury products by applying the Planned Behaviour theory.

Determine behaviour dimensions that influence Chinese consumers to purchase jewellery

1.3 Research justificationIt’s generally accepted that China as a market provides significant long-term opportunities for jewellery goods firms; however, lack of awareness with the market situation may hamper these firms’ ability to exploit the opportunity that exists. Being able to understand consumer behaviour relating to jewellery goods is necessary for various business activities including product development, promotion activities, branding strategies and customer relations. Manufactures, designers, and even retailers in the jewellery goods industry have to know and understand the consumer behaviour of these products so as to gain from the market opportunities. This calls for proactive analysis of the buying behaviour of Chinese consumers to produce results with relevant implications for firms currently operating or those planning to open their operations in Chinese market.

It’s against this background that the findings of the current research offer valuable and significant information for players with jewellery goods industry. The research documents the setting and potential of the jewellery goods in Chinese market. More so, the results offer in-depth into consumer behaviour relating to jewellery products.

1.4 Structure of the thesis

The thesis is arranged in five chapters as outlined below

Chapter 1: Introduction: this chapter provides the background information of the research, aim and objectives and research rationale

Chapter 2: the literature review: gives a review of the past literature on luxury goods and market with special attention on jewellery market, a review of Chinese cultural orientation and who it influences consumer behaviour, and theory of planned behaviour.

Chapter 3: methodology: this chapter underlines research design, data collection methodology, sampling, questionnaire formulation and data analysis.

Chapter 4: data analysis: This chapter gives details of data analysis and presents interrelates data.

Chapter 5: Conclusions, Recommendations: this chapter revisits research questions, summarises the research findings and offers conclusion, and recommendation based on the research findings. It also will provide direction on future research work.

2.0 Literature Review2.1 IntroductionThis chapter will reviews past studies on the current topic to determine academic basis to apply when formulating the theory to be used. The first aspect to examine will be defining jewellery products, before reviewing the meaning of luxury products in general. This will be followed by examining the general outlook of the industry as well as the consumer behaviour. In addition, the review will examine Consumption of jewellery as a luxurious product, Jewellery goods consumption in Chinese market, Cultural orientation and jewellery products consumption and lastly examine Theory of planned behaviour in relation to consumption of jewellery.

2.2 The meaning of jewellery products

The online dictionary defines jewellery as “articles of gold, silver, precious stones, etc., for personal adornment,” or “any ornaments for personal adornment, as necklaces or cuff links, including those of base metals, glass, plastic, or the like” HYPERLINK “http://dictionary.reference.com”http://dictionary.reference.com Similarly McCreight (1997) defines jewellery as all forms of decorative items worn by men and women. He adds that jewellery is normally made with precious stones and gems like gold, diamond and silver (McCreight, 1997). Nonetheless, they can be made from other materials including bones, iron, plastic and stones. According to McCreight (1997) people have fashioned jewellery from metal, and the main metal they have used is nickel, which can be used in costume jewellery for example buttons.

Jewellery has been around for many centuries (McCreight, 1997). In ancient years, jewellery was usually worn by only those in the upper social class as away of showing their status. During that time, jewellery was made for practical uses and not for decoration as the case right now. Presently, all sort of jewellery has been made to be worn on virtually every part of the body including the toes, fingers, tongue, stomach and many others (Tait, 1986).

Tait (1986) explains that there are a number of rules that have to be followed when buying jewellery, be it diamond or gold. Each occasion have its type of jewellery. For example, McCreight (1997) explains that while a person can buy unconventional deigns and styles of jewellery for official occasion, the same person will buy different jewellery for weddings, which will normally require diamonds, gold and other precious stones. In general, the size, quality and type of the precious stone will determine the price of the jewellery. Certainly diamond jewellery is some of the most expensive. However, the price of jewellery usually includes the uniqueness of the gemstone. Recent studies show that the biggest jewellery market is the United States (KPMG India, 2007).

2.3 What does luxury goods entail?Jewellery is grouped under luxury goods and it’s important to explain luxury goods. According to Dubois, Czellar and Laurent (2005) luxury products such as jewellery, expensive watches and bags have a common attributes, they are expensive, high quality, exclusive, desirable and inaccessible. On their part, Riley, et al (2005) this kind of differentiation features offers clues to identify luxury goods; Riley, et al (2005) have defined luxury goods as having a target a niche market with exclusive distribution, unlike mass products that target the entire market. When people buy luxury goods such as jewellery, they are mainly influenced by status and prestige of the brand name. This is different with mass products, where consumers look for functionality and price (Riley, et al 2005). This kind of differentiation features offers clues to identify luxury goods; however, this cannot be the only way of identifying luxury goods since the values that are based on their intrinsic attributes keep changing with time (Djelic and Ainamo, 1999). We have defined luxury goods because some of the concepts and theories under review cover luxury goods in general, but are applicable to jewellery goods.

Most jewellery are associated with luxury, this implies that many people consume jewellery as a luxury product. Accordingly it’s important to define luxury jewellery. According to Dubois, Czellar and Laurent (2005) luxury jewellery have certain attributes; these attributes include expensive, high quality, exclusive, desirable and inaccessible. As it can be noted these qualities are same to those of other luxury products. This dissertation will mainly examine consumption of luxury jewellery, such as articles and ornaments made from diamonds, gold, silver, precious stones.

2.4 Outlook of Chinese jewellery marketSince ancient times, jewellery consumption has been a critical social practice in many societies across the world (Barry, 1994). According to Djeclic and Ainamo (1999) the jewellery goods industry has experienced great transformation particularly over the last few years.

Since the 1970s, China has been undergoing rapid economic growth and has emerged as a leading market of jewellery products (Agarwal and Wu, 2004). The robust Chinese economic means that more people are getting richer, indeed, Thomas (2007) points out that by 2006 millionaires in China had reached 300. This increasing number of wealthy Chinese is starting to embrace high cost jewellery products. In addition, those Chinese that can buy jewellery is increasing, Ernst and Young (2005) projects that Chinese jewellery market could reach 29% of total global sales by 2015. The number of Chinese travelling across the world has increased tremendous and account for nearly 80% of the jewellery purchases made by Chinese in foreign countries (Okonkwo, 2007).

According to a market research by Business wire, Chinese jewellery industry in 2012 suffered slightly because of the European debt crisis, this saw a decline in demand in Chinese jewellery market. Still, in 2012 Chinese jewellery market increased by 19% in 2012, though this was lower compared to 40.7% increase in 2011 (Business Wire, 2013). In 2012, decline was witnessed in gold, diamond and sliver jewellery sales. Data carried by Business wire (2013) indicate that gold jewellery consumption in Chinese market represents nearly 50% of the net jewellery sales. In 2012, 502.5 tones of gold jewellery were consumed in Chinese market. Chinese consumer prefer pure gold and solid gold (Business Wire, 2013). Agarwal and Wu, 2004

Diamond jewellery as well account for a big percentage of Chinese jewellery market. The report indicates that the biggest market share in diamond segment is the wedding market that accounted for 70% of net diamond jewellery sales. Most of the diamond jewellery is imported to the country since China does not have diamond deposits. But, the volume sold in 2012 declined by 6.36%. Presently the major Chinese diamond markets are Beijing, Shanghai, and Guangzhou among other big cities (Business Wire, 2013).

The Hong Kong and other foreign brands into Chinese jewellery market have increased the level of competition within the industry. Retailers are competing based on brand names, design styles and sales distribution channels. Some jewellery firms are applying expansion strategies to control terminal sales channels tightly, and thereafter take control of the sales initiative as a strategy of getting higher sales and surviving the competitive market.

2.5 Consumption of jewellery as a luxurious product

Consumer behaviour concerning jewellery goods, which as stated before is a luxury good therefore results from various motivation for example, three forms of interpersonal impacts on jewellery consumption, which are “Veblen effect”, “snob effect” and “bandwagon effect” Veblen effect, means that a certain luxury product is bought because of its high pricing (gives exclusivity feeling to own it). Snob effect is the preference of products because of their uniqueness from other products. Lastly, bandwagon effect is where a preference for a certain product increases because more people are purchasing it. When these three effects interact they either increase or reduce demand for jewellery products. For example, if the Veblen effect is high (the jewellery is highly exclusive) then the demand will be high, but if it declines, the product will loss its exclusiveness and its demand will fall. Vigneron and Johnson (2004, 67). Other motivation comes from the following effects, personal, the hedonic and perfectionism. Accordingly, Vigneron and Johnson (2004) asserts that consumers may think that they can get five values by buying jewellery, these values include conspicuous values, unique value, social values, hedonic values and quality value, all these value is perceived. Hedonic value is the beauty that one derives from the luxury product, while the quality value is the perceived superiority of the product. These two values combine to make the product worth owning. The first three values conspicuous values, unique value, social values interact together to create a visible but unique product that rises owns social status. The second objective of this research is to establish the main factors that determine Chinese consumers’ intention to buy luxury jewellery products. In this lies the inevitability to review the values of purchasing luxury goods and by extension jewellery goods.

Vigneron and Johnson (2004) explains that perceived conspicuous value of luxury products in this case jewellery is the idea that the purchasing of jewellery is seen as symbol of status and wealth, and high prices enhances the conspicuous value and the status of wealth. Social status that is associated with jewellery goods s an essential aspect in conspicuous consumption.

According Vigneron and Johnson (2004) to this value entails the notion that consumers buy luxury goods, in this case jewellery to show uniqueness with the aim of improving both their individual and social image by showing their individual preferences, or going against the common trend. If a large number of individuals have same jewellery brand, it loses its prestige for those consumers who want to own a unique value of jewellery. According to Vigneron and Johnson (2004) some consumers seek uniqueness by buying new brands on the market. Such consumers may as well decline a certain jewellery of it is been purchased by large number of people (mass market). Vigneron and Johnson (1999) applied the terms “very exclusive,” and “rare” to explain the uniqueness customers seek to get.

Vigneron and Johnson (2004) describe perceived social value to imply the behaviour by consumers to buy luxurious products such as jewellery in order to achieve the prestige of belongs to certain social class. they went on to ague these type of consumers are concerned with social value that comes with owning certain brands of jewellery want to fit in particular wealthy lifestyle. They want to be distinguished from the lower social class. They view they jewellery an element of their identity, Vigneron and Johnson (2004) states that social referencing as well as advancement of an individual’s self-esteem by owning jewellery is pursued by those individuals who want to achieve social value. The terms “leading” “rewarding”, “powerful” and “successful” are applied by Vigneron and Johnson (2004) to describe social perception.

Several researchers have tried to formulate a measuring scale to evaluate the interpersonal influence against luxury product buying; many of these scales focus on social effects related with consumer behaviour. For example, Eastman et al (1999) formulated a self-report evaluation scale to measure luxury product consumption. They carried out six studies to refine their uni-dimensional construct scale. Accordingly, the scale has the five items listed below:

“I would buy a product just because it has status”

“I am interested in new products with status”

“I would pay more for a product of it had status”

“The status of a product is irrelevant to me”

“A product is more valuable to me if has some snob appeal”

2.6 Jewellery goods consumption in Chinese marketCulture greatly influences how an individual values wealth and luxury (Rose and DeJesus, 2007). According to Dubois and Duquesne (1993) the social value put on jewellery purchase reveals a considerable effect of culture. Individualistic and collectivistic societies differ in their value system, but they both drive consumers to buy luxurious goods such as jewellery in different approaches (Schutte and Ciarlante 1999). According to Schutte and Ciarlante (1999) status-seeking consumption in Asian cultures in buying of luxuries products stresses social meaning expressed by the products. They add that social meanings are conveyed through signals like price and brand name and not necessarily quality of the product (Schutte and Ciarlante, 1999). Schutte and Ciarlante (1999) further claims that Asian consumer buy luxury goods like jewellery to gain social recognition and comply with the social norms.

Chinese culture is group-oriented, the collectivism of the Chinese advances the belief that people who share same group are inter-related and therefore should adhere to the norms of that group and to live in harmony (Leung, 1996). Indeed in their study, Hui and Tan (1996) established that Chinese workers emphasised social relationships as well as group welfare at the cost of individual needs and desires. Similarly, Yau (1994) agrees that Chinese culture puts a great value on interpersonal relations as well as social orientations, and therefore emphasising group norms.

Tse (1996) has asserted that consumption in traditional Chinese culture was viewed as a means of serving higher-order demands than an activity that has to be taken by a person. Tse (1996) therefore agues that Chinese consumers place a lot of emphasis on social aspects and values of a brand compared to their American counterparts. Tse (1996) goes on to suggest that Chinese consumers put more value on aesthetics when buying jewellery; nonetheless, the emphasis placed on aesthetics may be drive by a need to attain social status or social identity.

According to Tse (1996) Chinese people always keep a certain social gap those in different social group and try to close this social gap that separate them. Therefore, consumption is normally used as a way to maintain or close the social gap. Yet, again one is expected to behave properly within his/her social class. According to Hui and Tan (1996) Chinese people also have a strong need to be distinguished from others. For example, the Chinese people (mainland China) always want to be differentiated from their brothers in Taiwan and Hong Kong. In seeking this difference they use material thing (Tse, 1996). Hui and Tan (1996) adds their voice to this debate by stating that jewellery and luxury goods in general have usually been applied as social tools to open the gap between social groups and match with peers from the same social group. The above situation becomes outstanding when the class of social groups have been formed with the continuing rapid economic growth in China. Accordingly, the drive to use jewellery and other luxury goods to strengthen social identity has increased from the newly rich class (Hui and Tan (1996)). Still, Tse (1996) suggest that Chinese consumers are bound to put a lot of emphasis on the views of their reference social group in reaching buying decision compared to American consumers.

These cultural features of Chinese people indicates that the “Veblen effect”, “snob effect” and “bandwagon” are critical for Chinese consumers when buying and displaying jewellery goods. Yet again, it cannot be proposed that only interpersonal factors drive Chinese consumers to buy jewellery goods. Triandis (1995) argues that each society has individualistic and collectivists attributes. Triandis (1995) adds that the teachings of Confucianism, Buddhism and Taoism have shaped Chinese people’s life in a way that Chinese traditions stresses inter-group norms, competition, quality and individuality. Indeed, observed individual differences demonstrate adequate differences on an assumption held by a certain homogeneous society.

More so, many factors can result in cultural changes. Chinese society is undergoing rapid economic growth and slowly being influenced by western values (Triandis (1995). According to Triandis (1995) China’s quest of economic reforms as well as open-door policy adopted in 1978 has greatly impacted its traditional cultural values. Western culture is becoming popular in China particularly among the young generation, which is increasingly accepting western norms and products. However, Leung (1996) observes that the young generation may buy jewellery goods driven by different factors that are same as they parents’ generation. Accordingly, the young generation may place a greater emphasis on individual values. Studies done by Tse (1996) seem to agree with this observation since he established that hedonic consumption among Chinese society is increasing.

These changes in consumer behaviour among the young generation has a considerably implication in analysing Chinese consumer behaviour regarding jewellery products. In addition, consumerism in China is comparatively new (Schutte and Ciarlante, 1999). Leung (1996) notes that m

Factors Affecting Effective Management Of Asset Liability In Commercial Banking: A Case Of Equity Bank.

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE FINAL YEAR RESEARCH PROJECT OF THE BACHELOR OF COMMERCE DEGREE KCA UNIVERSITY

JUNE 2013

CHAPTER ONE

INTRODUCTION

1.0 INRTODUCTION

The research proposal focuses on establishing the factors affecting effective management of Asset Liability in commercial banking with special reference to Equity Bank. This chapter entails the background of the study, statement of the problem, research objectives, and research questions, justification of the study, significance of the study as well as the scope of the study.

1.1 Background of the Study

Asset Liability Management (ALM) is a critical function to the banks and financial institutions in present environment due to volatile global market, proliferation of new financial products and changing environment of regulatory system (Harrington, 2007). It is a dynamic and comprehensive framework that helps banks and financial institutions to measure, monitor and manage the market risk. Under this system, structure of balance sheet is managed in proper way to ensure that the net earnings from interest are maximized and risks are minimized. The ALM system has various functions to manage risks such as liquidity risk management, market risk management, trading risk management, funding and capital planning, profit planning and growth projection (Eng, 2008). It enables the banks to take business decisions in a more informed framework through considering risks. It is an integrated approach that covers both types of amounts financial assets and liabilities with the complexities of the financial market.

The banking sector still remains an important index of entrepreneurship and economic development in Kenya. The Central Bank of Kenya is given the responsibility to provide a lot of attention to harmonization of legislation regulating banking sector, to its compliance to the Kenya Banking Control directives. New regulations for capital sufficiency calculations have been approved allowing for assessing market risk taken by commercial banks and determining the need for additional capital (Crosse & George, 2000). Commercial banks focus their activities on the aim of profit maximization at the same time trying to remain liquid and ensuring security. This study is aimed at investigating how Asset liability management can be performed best in commercial banks where Equity Bank has been used to represent other commercial banks in Kenya.

Asset Liability Management (ALM) plays a critical role in weaving together the different business lines in a financial institution. Managing liquidity and the balance sheet are crucial to the existence of a financial institution and sustenance of its operations. It is also essential for seamless growth of the balance sheet in a profitable way. Currently, even large multinational financial institutions are in a deep liquidity crisis and in direct need of external intervention for survival (Bierwag, 2002). The practical importance of ALM and Liquidity Management has been somewhat underestimated. Even managements of large institutions, regulators, and observers saw how well reputed firms and trusted institutions folded up and were not able to find a way out of the deep liquidity crisis. This resulted in regulators attaching high importance to new measures needed to ensure a sound liquidity management system.

Consequently, regulators have enhanced and in some geographies, thoroughly serviced, regulatory oversight on ALM and liquidity management.

1.2 Statement of the Problem

Over the last few years, the Commercial Banking sector in Kenya has continued to grow in assets, deposits, profitability and products offering. The growth in the banking sector has experienced a boost through the provision of Asset Liability to its customers (Kannan, 1996). However, commercial banks have experienced a big challenge in managing asset liability that can cause huge losses for the businesses. To begin with, there has been a problem in commercial banks to meet governments’ policy standards on the management of asset liability. Managers do not take the responsibility to take good control of Asset liability in commercial banks.

It is a big challenge for commercial banks to disclose all their income to the government for tax purposes whereby, by disclosing they will pay taxes hence making little profits (Sinkey, 1992). In commercial banks, the market can be so small to provide asset liability which may take too long to be repaid. The banks may find themselves making losses by customers not meeting their loan demands to the banks. This is a big challenge that requires commercial banks to substitute the available funds to the unpaid liabilities. Many commercial banks have problems in managing Structural Gaps which must be critically and continuously monitored. This imposes a risk to the management of asset liability whereby gaps that must be realized and settled are not able to be established. Managing Interest Rate Sensitivity has also been a challenge to ALM managers (Flannery, 2006).

Hence this study is aimed at investigation of the factors affecting effective management of asset liability in commercial banks with special Equity Bank, Kenya.

1.3 Research Objectives

1.3.1 General Objective

The main aim of the study is to establish the factors affecting the management of Asset Liability in commercial banks with special reference to Equity Bank.

1.3.2 Specific Objectives

i. To establish the effect of Government Policy on the management of Asset Liability in commercial banking.

ii. To find out the effect of Interest Rate Sensitivity on the management of Asset Liability in commercial banking.

iii. To determine the effect of structural gaps on the management of Asset Liability in commercial banking.

1.4 Research Questions

i. To what extent does government policy affect the management of Asset Liability in commercial banking?

ii. To what extent does Interest Rate Sensitivity affect the management of Asset Liability in commercial banking?

iii. To what extent do structural gaps affect the management of Asset Liability in commercial banking?

1.5 Justification of the Study

In present scenario, ALM is important for the banking industry due to deregulation of interest regime. It helps to assess the risks and manage the risks by taking appropriate actions. For the purpose of understanding the ALM process and various strategies that are helpful for the banks to manage the market risk, the researcher seeks to investigate asset liability management practices that can be used in commercial banks. In the past studies, most of the authors widely analyze the problems of asset and liability management in their research works. However, much focus is on individual problems of commercial banks performance such as balancing profitability and risk, or portfolio optimization problems. Opinions are generalized to emphasize on harmonization of performance in commercial banks while striving to balance profitability, liquidity and security. In this study, the factors that affect effectiveness in the management of asset liability in commercial banks are areas that authors have not dealt with. This study therefore, takes the initiative to take into account and analyze asset and liability management practices for the achievement of growth in commercial banks.

1.6 Significance of the Study

1. The Management in Equity Bank

This study discusses the factors affecting the effectiveness of asset liability management in commercial banks. The research shall be of great importance to the management in Equity Bank since it advances knowledge and understanding of the key asset liability management practices that improves the performance of the organization.

This research shall also help the management to put in place or strengthen their existing practices in the management of asset liability to improve financial performance in their organizations.

2. Management in Commercial Banks

Managers in other commercial banks will benefit from this study since information provided here is not restricted to be used by only Equity bank managers. Managers and in other commercial banks within the country can use the information provided in this study to manage the asset liability as well as other financial management requirements that enable a firm to operate profitably. This will help in enabling the achievement of more competitive and better performing commercial banks in Kenya.

3. Other Researchers

Future researchers shall be able to use the information in this study to find out more on the factors affecting the effectiveness in the management of asset liability in commercial banks in Kenya and other countries. By developing this study, researchers will provide information that helps in developing the good management of asset liability for commercial banks.

1.7 Scope of the Study

The study is aimed at investigating the factors affecting the effectiveness of asset liability management in commercial banks in Kenya. The research will take Equity Bank to represent other commercial banks within the country and to expound on the role of asset liability management practices on the performance of commercial banks. The study will target all employees working at equity bank head office totaling to 185 in number. The research investigates various asset liability practices that commercial banks must use to enable good financial performance of their businesses. Some of the factors that are discussed in this study Government Policy, market interest sensitivity as well as structural gaps.

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

The researcher will use a variety of available books and the internet to describe past studies done by different scholars on matters concerning the factors affecting the effective management of asset liability management in commercial banks. The researcher expounds specifically on how government policy, interest rate sensitivity as well as structural gaps affects the effective management of asset liability management in commercial banks.

2.2 Review of Theoretical Literature

2.2.1 Government Policy

Commercial banks have been recommended to adopt an asset liability management policy (ALM policy) that will enable them addresses limits on the maximum size of major asset liability categories, pricing loans and deposits, correlating maturities and terms, controlling interest rate risk and establishing interest rate risk measurement techniques, controlling foreign currency risk, controlling the use of derivatives, requiring management analysis and expert consultation for derivative transactions, frequency and content for board reporting (Jain, 1996). The purpose of adopting an ALM policy by commercial banks will assist the credit union to manage risk and to comply with the Standards in the policy. When complying with the ALM policy, it must not conflict with requirements prescribed by the Act and Regulations, and any relevant interpretive bulletins or guidelines issued by the government body.

It is optimal for key regulatory requirements to be repeated in ALM policy, for greater user clarity and ease of reference. Section 78(1) of the Regulation 76/95 also requires commercial banks to establish ALM policies and procedures. When establishing ALM policies and procedures, management and the board should ensure they meet regulations requirements (Hampel, 1998). Over the last few years the Kenyan financial markets have witnessed wide ranging changes at fast pace. Intense competition for business involving both the assets and liabilities, together with increasing volatility in the domestic interest rates as well as foreign exchange rates, has brought pressure on the management of banks to maintain a good balance among spreads, profitability and long term viability. These pressures call for structured and comprehensive measures and not just ad hoc action.

Cates (2008) argues that, the Management of banks has to base their business decisions on a dynamic and integrated risk management system and process, driven by corporate strategy. Banks are exposed to several major risks in the course of their business; this include credit risk, interest rate risk, foreign exchange risk, equity / commodity price risk, liquidity risk and operational risks. It is evident that interest rate and liquidity risks in banks form part of the Asset-Liability Management (ALM) function. ALM organization involves structure and responsibilities as well as the level of top management involvement (Gup, 1997). The ALM process involves Risk parameters, Risk identification and Risk measurement, Risk management, Risk policies and tolerance levels. Information is the key to the ALM process.

Considering the large network of branches and the lack of an adequate system to collect information required for ALM which analyses information on the basis of residual maturity and behavioral pattern it will take time for banks in the present state to get the requisite information. The problem of ALM needs to be addressed by following an ABC approach, that is analyzing the behavior of asset and liability products in the top branches accounting for significant business and then making rational assumptions about the way in which assets and liabilities would behave in other branches (Kaufmann, 2004). In respect of foreign exchange, investment portfolio and money market operations, in view of the centralized nature of the functions, it would be much easier to collect reliable information. The data and assumptions can then be refined over time as the bank management gain experience of conducting business within an ALM framework. The spread of computerization will also help banks in accessing data.

Asset liability organization requires the board to have overall responsibility for management of risks and should decide the risk management policy of the bank and set limits for liquidity, interest rate, and foreign exchange and equity price risks. The Asset Liability Committee (ALCO) consisting of the bank’s senior management including CEO should be responsible for ensuring adherence to the limits set by the Board (Simonson & George, 2002). They are also responsible for deciding the business strategy of the bank on the assets and liabilities sides in line with the bank’s budget and decided risk management objectives. The ALM desk consisting of operating staff should be responsible for analyzing, monitoring and reporting the risk profiles to the ALCO.

The staff should also prepare forecasts or simulations showing the effects of various possible changes in market conditions related to the balance sheet and recommend the action needed to adhere to bank’s internal limits. The ALCO is a decision making unit responsible for balance sheet planning from risk return perspective including the strategic management of interest rate and liquidity risks (Murply, 2006). Each bank will have to decide on the role of its ALCO, its responsibility as also the decisions to be taken by it. The business and risk management strategy of the bank should ensure that the bank operates within the limits / parameters set by the Board. The business issues that an ALCO would consider, first, will include product pricing for both deposits and advances, desired maturity profile of the incremental assets and liabilities among others. In addition to monitoring the risk levels of the bank, the ALCO should review the results of and progress in implementation of the decisions made in the previous meetings. The ALCO would also articulate the current interest rate view of the bank and base its decisions for future business strategy on this view (Mishkm, 1995).

2.2.2 Interest Rate Sensitivity

In asset liability management, there is need to differentiate sensitive and non sensitive liabilities. Liabilities such as Capital, Reserves and Surplus, Current Deposits, Savings Bank Deposits Sensitive to the extent of interest paying are non sensitive liabilities. The non-interest paying portion may be shown in non-sensitive area. Term Deposits and Certificates of Deposit and re-prices on maturity are sensitive. The amounts should be distributed to different areas on the basis of remaining maturity (Yeager & Neil, 2009).

However, in case of floating term deposits, the amounts may be shown under the time area when deposits contractually become due for re-pricing. Liabilities such as borrowings are fixed Sensitive and re-prices on maturity. The amounts should be distributed to different areas on the basis of remaining maturity (Crosse & George, 2000). Borrowings are floating sensitive and re-prices when interest rate is reset. The amounts should be distributed to the appropriate bucket which refers to the repricing date. For borrowings that are Zero Coupon Sensitive and reprices on maturity. The amounts should be distributed to the respective maturity buckets. Regarding the level of interest rate risk acceptable to the bank the board should also approve policies that identify lines of authority and responsibility for managing interest rate risk exposures (Harrington, 2007). The board should get regular information about the interest rate risk exposure of the bank and periodically review the performance of senior management in monitoring and controlling these risks in compliance with the approved policies.

In addition, the board or one of its committees should periodically re-evaluate significant interest rate risk management policies as well as overall business strategies that affect the interest rate risk exposure of the bank. Senior management must ensure that the structure of the bank’s business and the level of interest rate risk it assumes are effectively managed, that appropriate policies and procedures are established to control and limit these risks on both a long-term and day-to-day basis, and that resources are available for evaluating and controlling interest rate risk (Sinkey, 1992). Asset Liability Management is also responsible for maintaining appropriate limits on risk taking, adequate systems and standards for measuring risk, standards for valuing positions and measuring performance, a comprehensive interest rate risk reporting and interest rate risk management review process as well as effective internal controls. Rate sensitive assets (RSA) are any loans or investments that can be repriced either up or down in interest rate within a given time frame (Bierwag, 2002). The following represent some examples of assets that would be considered rate sensitive: Federal Funds sold, Securities purchased under agreement to resell, All loans maturing within a given time frame, All securities maturing within a given time frame, Principal payments on all securities that are to be received using current prepayment, speed assumptions, Principal payments on all loans that are to be received including the impact of expected prepayments if deemed to be significant, All loans with floating interest rates, and when the floating rate can change with respect to caps and floors as well as the repricing characteristics of the underlying index, All securities with floating interest rates, and when the floating rate can change with respect to caps and floors as well as the repricing characteristics of the underlying index (Simonson & George, 2002).

Special attention shall be paid to any assets having embedded options like calls, prepayments, repricing, among others. For better management of asset liability, it is important to define lines of responsibility and accountability for both individuals and committees over interest rate risk management decisions (Kannan, 1996). There is need for defining authorized instruments, hedging strategies and position taking opportunities. Identifying quantitative parameters that define the level of interest rate risk acceptable for the bank, is also necessary for certain types of instruments, portfolios, and activities.

Ensure that there is adequate separation of duties in key elements of the risk management process to avoid potential conflicts of interest such as the development and enforcement of policies and procedures, the reporting of risks to senior management, and the conduct of back-office functions (Flannery, 2006). All interest rate risk policies should be reviewed periodically and revised as needed. The management should define the specific procedures and approvals necessary for exceptions to policies, limits and authorizations. Banks should identify the interest rate risks inherent in new products and activities and ensure these are subject to adequate procedures and controls before being introduced or undertaken. Major hedging or risk management initiatives should be approved in advance by the board or its appropriate delegated committee (Eng, 2008). Banks should have interest rate risk measurement systems that capture all material sources of interest rate risk including re-pricing; yield curve, basis and option risk exposures and that assess the effect of interest rate changes in ways that are consistent with the scope of their activities.

As noted by Hampel (1998), interest rate sensitive liabilities in each time band are subtracted from the corresponding interest rate sensitive assets to produce a repricing “gap” for that time band. This gap can be multiplied by an assumed change in interest rates to yield an approximation of the change in net interest income that would result from such an interest rate movement. The size of the interest rate movement used in the analysis can be based on a variety of factors, including historical experience, simulation of potential future interest rate movements, and the judgment of bank management. A negative, or liability-sensitive, gap occurs when liabilities exceed assets including off balance sheet positions in a given time band (Cates, 2008).

This means that an increase in market interest rates could cause a decline in net interest income. Conversely, a positive or asset-sensitive gap implies that the bank’s net interest income could decline as a result of a decrease in the level of interest rates.

2.2.3 Structural Gaps

In a commercial bank with a mature ALM function, this is arguably the most critically and continuously monitored aspect, since the ALM Managers seek to manage the structural gaps in the Balance Sheet. While liquidity management focuses typically on short-term time ladders, the structural gap management shifts the focus on time ladders more than a year (Kaufmann, 2004). This aspect of ALM stresses the importance of balancing maturities as well as cash flows on either side of balance sheet. It strategizes dynamically on balancing the gaps, issuing timely guidelines to adjust focus on ‘right’ product types and tenors, and actively involve ALCO in this process. In a static gap the ALM function takes into consideration assets maturing in short, medium and long time ladders and seeks to balance it in comparison with liabilities maturing across short, medium and long term ladders.

The gaps reports typically point to funding gaps and excess funds at different points in time. The challenge with the ALM function is that the gaps are dynamically evolving and need continuous monitoring as the balance sheet changes every day. Duration is considered as a measure of interest rate sensitivity (Jain, 1996). Macaulay’s duration is traditionally accepted as a good measure of ‘length’ of portfolio or a measure of center of gravity of discounted cash-flows over life of an asset (or liability).

It’s common practice to measure duration of portfolio for different product types as well as on an overall portfolio level. It’s useful to simulate how duration of portfolio will be affected by future events. For a dynamic gap it is normal practice to rely on dynamic gap reports to simulate future gap positions for assumed business volumes and exercise of options such as prepayments. In addition to proposed new volumes, prepayment transactions and assumed deposit roll-overs, the ALM manager would like to include a proposed hedge transaction (Murply, 2006). ALM practitioners prefer to focus on the ratio of assets and liabilities exceeding one year and often want to set acceptable limits around this. Where there are operative limits, the ALCO meetings will usually monitor the ratio, and the institution constantly endeavors. Asset liability management in commercial banks is improved by controlling and maintaining structural gaps that may be experienced.

To manage these gaps commercial banks gap and interest rate exposure is compiled and reviewed on a separate basis. The GAP reports will be used to measure risk to net interest income arising from the repricing of assets and liabilities over time. Funds gap or gap is positive when the peso amount of sensitive assets exceeds that of sensitive liabilities. The gap is negative if sensitive liabilities exceed sensitive assets (Yeager & Neil, 2009). When sensitive assets are equal to sensitive liabilities, there is a zero fund gap. With a positive gap, the interest margin would increase if short-term rates rose and decrease if short-term interest rates fell. With a negative gap, the interest margin would decline if short-term rates rose and increase if short-term rates fell.

If there is zero gap, interest margin will be stable or will not change regardless of the rise or fall of short-term rates. The first strategy is to accept fluctuation in interest margin and do nothing about it. The second strategy is to manage the funds gap over the rate cycle. If management expects a fall in short-term interest rate and there is a positive gap, it should widen the gap or increase rate sensitive assets (Mishkm, 1998). If management expects a rise in short-term interest rate and there is a negative gap, it should narrow the gap or increase rate sensitive assets. The third strategy is for the bank management is to decide not to take interest rate risk by seeking a zero gap position. The fourth strategy is for the management to use artificial hedges where financial futures to cover the loss that might result from the rise or fall of short term interest rate. When short term interest rises, Zero fund gap or perfect match and positive gap or where more rate sensitive assets (RSA) are financed by Fixed Rate Liabilities (FRL) (Cates, 2008).

For a negative gap or where more Fixed Rate Assets (FRA) exists, they are financed by Rate Sensitive Liabilities (RSL). The interest margin performance of individual banks varies during such cyclical periods. These differences in interest margin performance appear to be explained primarily by endogenous factors such as the nature of the bank’s assets and liabilities and the reaction of the bank to expected exogenous factors (Sinkey, 1992). In the typical funds gap management system, management is asked to classify all items in each side of the bank’s balance sheet into groups of items whose cash flows are sensitive and those whose cash flows are insensitive to changes in short term interest rates.

Thus, an asset or liability is identified as sensitive if cash flows from the asset liability change in the same direction and general magnitude as the change in short-term rates. The cash flows of insensitive or non sensitive assets liabilities do not change within the relevant time period. Funds gap is negative if sensitive liabilities exceed sensitive assets (Bierwag, 2002). When sensitive assets are equal to sensitive liabilities, there is a zero fund gap. With a positive gap, the interest margin would increase if short-term rates rose and decrease if short-term rates fell. With a negative gap, the interest margin would decline if short-term rates rose and increase if short-term rates fell. If there is zero gap, interest margin will be stable or will not change regardless of the movement of short-term rates. If management expects interest rates to fall and there is a positive gap, it should widen the funds gap or increase rate-sensitive assets. On the other hand, management should narrow the banks funds gap or increase rate sensitive assets if interest rates are expected to rise and there is a negative gap. If used effectively, such gap management decisions should lead to higher returns.

According to Harrington (2007), commercial banks that follow a positive strategy in asset liability management should pay considerably more attention to comparative weight of the volume of assets with flexible interest rate than to equilibrium of liabilities with flexible interest rate. Positive gap is understood as situation when the share of income-earning assets with fixed interest rate will be less than the share of liabilities with fixed interest rate in total volume of interest generating liabilities of the bank. As the result, bank total returns received on the credits will decrease (Kannan, 1996).

However, because of existing positive gap between assets and liabilities the total income of the bank will be subject to changes to larger extent than costs. The bank’s profit decreases correspondingly. If along with the drop of interest rate in the market the present value of assets increases, the present value of liabilities with fixed interest rate also increases. Although the bank follows the positive strategy in asset and liability management, net return of the bank decreases.

2.3 Review of Critical Literature

The ALM core function consists of managing maturity gaps and mismatches while managing interest rate risk within the overall mandate prescribed by ALCO. This study did not provide any information on the core action that the asset liability management must take to ensure good management of asset liability. A financial institution typically relies on certain measures to evaluate and manage interest rate sensitivities. This research did not focus on how to deal with Interest Rate Sensitivity Gap Reports where the ALM function seeks to monitor interest rate sensitivity by generating so-called interest rate sensitive gap reports. The research did not discuss the function of interest rate gap reports which provide a cash flow laddering based on re-pricing profile and frequency of interest rate sensitive assets and liabilities. Commercial banks attach much importance to assessing the impact of interest rate changes, new business, change in product-mix and roll-over of deposits on net interest income. Income statements that allow for comparison of net interest income under different scenarios are immensely helpful in understanding the impact of mild market movements and shocks on the income statement as well as balance sheet.

The study has not established the ALM functions whether it seeks to generate daily gaps on short-term ladders and ensures that cumulative gaps operate within pre-set limits.

2.4 Summary

This study has established the building blocks of an ALM solution from all perspectives while observing those aspects that the institution must address functionally as part of their ALM solution. Proper asset and liability management allows for achievement of banking harmony in the bank’s performance. This means that the balance in combining its striving for maximization of the profit at the same time ensuring its liquidity with the least risk. Whatever strategy is used in managing asset liability in commercial banks in its performance, it shows that it is able to follow contemporary systemic approach in asset and liability management, what has direct impact not only on the bank’s performance, but also the profit.

2.5 Conceptual Framework

Independent V

FAA, Flight Standards, Air Carrier Branch, ASO-240, task and Commitment

The vision of the air carrier branch

The vision of the company is to champion excellence in quality risk management, and be the valued provider of aviation safety promotion. The air carrier division is focused on being the industry leader in the provision of the requirements stipulated by part 121: Operation quality risk management oversight. While service delivery is the goal of the company, the company is interested to managing innovation and technology to deliver first class flying experience. This will not only gear the company towards achieving its goal as the company of choice for the company primary customers.

How does the company strategize for its future?

Efficient predictable and cost effective air space is some of the critical factors that lead to the achievement of the coveted position of the industry leader. These are the goals of the company that the company has realized to hold that position. However, the company is in the process of quality improvement and will always strive to ensure that customers are accorded the best service always.

The company has been on the lookout for operational excellence in all areas of interest and to be valued by all the stakeholders. The air carrier branch has set out to leverage its industry experience to realize the recognition in the market. This is realized by providing a holistic approach to risk management and aviation safety. Then air carrier branch also recognizes that Being the industry leader in support provision is one thing, and maintaining that position in the industry is another. This means that the air carrier branch will always strive to break its past record and exceed the expectation of its customers by over delivering. This involves collaboration with various stakeholders in assessing their quality safety need and recommend appropriate measures to managing risks.

The future of the company

The company is an industry leader in developing and operating environmentally friendly aviation system with minimal carbon footprints and energy impacts with the view of sustaining growth and development.

Sustainable development is the backbone of this organizations operation. Therefore the development of proper strategies that enable the realization of the sustainability objectives to develop and operate an aviation system that reduces aviation’s environmental and energy impacts to a level that does not constrain growth and is a model for sustainability. Some of the emerging issues that the company has to contend with include the carbon footprint. The GHG contributed by airlines is one of the leading percentages. Therefore, the company has to strive to check on its carbon footprint by using environmentally friendly sources of energy, and for example, the company is in the process of using biofuels because of their relatively low effect on the ozone.

Some of the strategies that the company has implemented include the following:

Improving the scientific knowledge of the causes of environmental pollution, and focusing on the development of tools geared at effective management of the environment. The company is also interested in the acceleration of the next generation technology with the view of improving its operations in order to reduce the level of noise, fuels that are burnt and the level of emission. This means that the company will focus on the continued growth and improvement of the system activity. While accelerating of the next gen technology is one way of improving the efficiency of the system, the company also promotes researches and development with the aim of accelerating advancement in the engine, and other relevancy technologies.

The company is also into the research and development of the sustainable airport facilities and vehicles and other set of operational practices geared at reducing emission, energy consumption as well as eliminate water content problems. However, the company also aims ate achieving the 60% reduction in the reduction of the general level of un-recycled wastes. Sustainable aviation fuels include the nuclear fuel and biofuels. Nevertheless, the company’s goals are also to develop relevant policy approaches and other economic incentives focused promoting an integrated method to planning, regulation compliance, and decision making.

The company also focuses on ensuring that the aviation stakeholders make inputs into the addressing of the general sustainability of the environmental in their planning of operations and the actual operation s

Improved Global Performance through Collaboration

The company also strategizes to realize the optimal performance at all times by effective global collaboration. This involved collaborating with global partner s in order to achieve the optimal global performance. Optimal global performance involves benchmarking its operation and using the benchmarks to gauge the performance of the branches. However, this is not possible with globalization alone but also through development and implementation of a seamless global air transport to remain competitive in the provision of high level of safety and sustainability into e air space. However, these can only be realized through efficient allocation of resources and projectization of the key problem areas.

Some of the strategies that the company has established to realize these include the inclusion of all global partners in the development of a single framework. The framework can be used to ensure that the unique requirement of the various regions are benchmarked. This is to ensure there is no fallout between the company systems and those of their partners. The systems that the company focuses on include the airspace planning, and development, sustainability plans and safety collaborations. The company recognizes the regional variation in the goals, objectives and principles of various stakeholders. Therefore, the company works hard to integrate its aviation safety measures tom meet the changing need and regulation as this is the only way the company wills to afloat.

The company will overcome challenges in the global arena through enhanced International Corporation and harmonization in the general legislation, polices, principles, regulatory requirements well as the procedures used in the civil aviation and air navigation. The company also plans to ensure it has a stable foothold in the aviation industry incorporating a number of international considerations in the FAA process. The future of the company is also pegged on the improvement of the safety, efficiency and environmental performance. This is only achieved through collaborative research. This is also achieved by the company through learning from the emerging aviation leaders

Innovation to deliver aviation access

The company plans to match the system capacity with the demands of users to ensure that the air navigation is extremely reliable and increases the predictability and cost effectiveness. The future of the company is also reliant on the proper maintenance of the system capacity, predictability and reliability in times of adverse weather conditions.

The company also focuses on ensuring that the range of functions is fully supported by the airport systems, in order to reach the remote populations. This is also extended to the emergency responses to ensure that the airport system is capable of meeting the emergency needs. The company ensures that the next gen system is implemented and is fully operational and utilized according to the aviation systems needs

Next level of Safety

While the company’s field of operations in the general air safety, it is necessary to note that the company is interested in being the industry leader in the ensuring the safety of the airspace. This is a feat the company can only realize by analyzing the past trends and data and use an effective tool to manage risks before they occur. , the company uses the FAA safe and efficient airspace management system and augment the overall approaches used in the traditional air safety management which relied on the analysis of the accident after it has occurred, the new systems implemented by the FAA is instrumental in the determination of the accident trends and take a proactive stance.

Workplace

The company is also providing the most friendly work place to its employees, employees are a very important part of the company. The company recognizes the fact that its future is dependent on the employees. Therefore, It also strives to ensure that the employees derive their work satisfaction in the company. The company also ensures that the employees work life balance is optimal, and employees are happy at the pace of work. Employees to the company are assets and not expanses. For the company to hinge it future on its employee, the company recognizes cultural diversity as it needs a perfect mix of skills.

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Facebook and Sororities

This research work focuses on analyzing the article given analyzing all the arguments given by the writer, it gives the support for points I agree with and points out at the misguiding ones that one’s, which may mislead the people. Who said that, what done, whom one is, determine the reception one receive. There is a sigh of relieve as one can feign to how one want to seen. This is courtesy of the social media, most notably the Facebook. Facebook is a perfect platform where one can advertise or in a larger sense image. Much of activities go on in Facebook where a number of people are in a direct access on them. Whatever has been updated on the Facebook page on a large-scale becomes trending in the social network? People attribute the post to the owner. What he or she posts tells of his or her thinking, feelings, emotions, perspective, perception and other qualities attributable to a human being. From my personal point of view, I do not totally agree with the way the author of the article argues about facebook branding. Some of his points are well calculated and true while some are a total miss and does not conform to facebook branding. This research work analyses the article citing the area in, which I agree with the author and other parts where the author’s argument are a total misinformation to the public (Biba, pg.1).

In Facebook, people mostly meet new friends of whom they do not know of their personal information: that of their background, social, academic, religious and others. It thus becomes easy for one to rebrand himself or she afresh in the way he or she deem fit, and not in line of whom he or she appear to be. His or her friends in Facebook cannot question the information posted as no one has other information to use in grounding it.

A fellow can show false picture of how beautiful or handsome, how learned, how successful and many more he or she is. Most people make sure that what posted, the picture or article well edited, no flaws. His or her profile picture toned: color balanced: hair tuned to surpass that impression worn by models. Individual had gone a further notch of dating their friends. This only to be astonished when the morning comes to realize they dated who is far from what they wished for, more of a monster (Biba, pg.1).

People say a snippet of who they are. They only write or tell only the positive things in their life. They tell all the achievements and the positive reception that come their way with no mention of any downfall. This appears in their profile accounts and their postings. It is from here that the friends build their opinion on them. Most of them contribute positively to the same and probably confirm their liking on it.

The daily follow up of the happening in the accounts of the friends slowly form the picture of whom they are without one realizing how disguised they are. Utterances following include he is humble, cute humane, responsible and many more only to find afterward how senseless killer apparently. Sorority, being a group of students or girls associated with a common purpose mostly in academic and social activities has not left behind in Facebook indulgence. This is mostly in the recruitment process. They select college using the same. Individual account of a potential member followed: her profile analyzed her post followed with the comments following. How beautiful she is, how trustworthy, how dependable she can be to the crew. Is she just a walk on the show or even a crying puppy, oh yes, she is better on herself (Biba, pg.1).

The sorority members also use to rank colleges. The Facebook page tells on the number of the member subscribed to it, the number and wellbeing of the fans it boosts on enjoying. The number of activities they involve in, the reception each activity get will tell how active or dormant the group is by the dynamism of the activities on their walls and other more. Prestige and satisfaction experienced when all these achieved. Thanks to Facebook performance lacking are not a tussle hassle activity especially when want to know and join the relevant one (Biba, pg.1).

Sorority Facebook page help in building the impression. This can obviously be a positive or negative one. The layout, the photographs of the members on the page, the contents speak volume. It can draw a prospective member closer or even drag her a mile further. The facial expression smeared on the members face: beauty of the activities, prominent names involved, and a perfect and artistic page layout tells how it can be if one joins the individuals.

It is a platform where parties selected, set, organized and informed on their happening. Different events are readily available in the internet to choose. The sorority chooses those that fetch a high value to affirm their stands. They post all the arrangement in respect to the same like, the wearing, the mode of transport, and their company composition just to tell how sophisticated they are. The parties a prospective member attends, how she presents herself at the event, what she does there communicate much of her. The photographs she takes their and how she takes them implies something.

Different groups and individuals have different taste and preferences. These taste and preferences can tell one state of prestige and sophistication. The preference of the colors, way of organizing events, grading of the events is nothing but the way they attach value in what they do. On the prospective member preferences, the food movies watched, clique associated with, her stands on issues, politically, socially and even economically. This will inform on how she will adopt or be of value to the sorority.

Facebook platform used as voting and bidding page. The prospective members listed with their attributes and personal stands. The fans and members can form their views and use them to select the prospective member who is of their choice. The members can decide to vote or have bid for the perfect individual who correctly fits their clique. The winner or the chosen one posted on the same social site for the fans, and members to know, and the subsequent procedures can comfortably take place from there in to organize the incoming party (Biba, pg.1).

Instead of using other forms communicating like texts, calls letters and other, it is fast and economical to advertise their intention to recruit a new member to the fans and other members. It is from there also that the respective member gets informed. She uses the same to communicate the sorority and inform of her intention from where the deal is strike.

In life, there is a process of self-presentation than it is on social network, where we perform whom we are managing this in various forms in different forms and context. The difference between this two is that, on the social site, it has been more reflexive as users have much more time to get carefully craft the identity that the display. While creating a fake profile been outlawed on Facebook, hijacked identity or in completely fictitious representations still exists on the site. Debate does emerge as been on the running as whether Facebook profiles used to create and convey idealized version of selves. Even if the social sites serve as an extension of the social context in which people real personality characteristics can be expressed in the routine daily use of the technology, the simple distinction between offline and online no longer capture the complex interrelationship that symbolize use and the way Facebook got fixed in lives. This is especially in the young generation (Biba, pg.1).Users of Facebook are vital in shaping the presentations of other as they provide their comments and wall postings. User presentation takes into account the diversity of an audience consisting of familiar and unfamiliar relationship. The Facebook users can be conceptualized as a team performance that achieves unusual cooperation in confirming each other’s performance of one. The way that identity performed on personal pages through a combination of text, image and sound is unique. Such crafted representations are purposeful and outer-directed pointing to the connection between user profiles and the mainstream culture industry. Many users will provide access to their daily diaries, complete with photographs that may or of course may not be heavily selective. Those users do not necessarily create personal artifacts but prefer to display material: quotes and images, for example, that are in the public domain. As such, these users predominantly claim their identities implicitly rather than explicitly; they show rather than tell and stress group and consumer identities over personally narrated ones (Biba, pg.1).What yet remains to be more fully explored and documented are some of the precise ways that users do present themselves for groups of others. It appears to be taking the lead by asking the right level of empirical question, how do users present themselves to approach the right networks? Users speak about the way they present identity, through a range of semiotic resources, specifically with an interest in the kinds of categories of identity they use. One of the central concerns of discourse studies is the way that discourses, values, ideas and identities disseminated, maintained and legitimized in society. If we take the idea of team performance of identity, rather than an identifiable elite media source, as is commonly the site of analysis in discourse studies, we can nevertheless monitor what kinds of identities and, therefore, values, ideas and broader discourses are present on Facebook.An Identity as a cluster of lifestyle) choice provides a person with rules, roles and relationship criteria for living. Lifestyle thus determines the range of choices and aims in someone’s life, as a more or less integrated set of practices, which an individual embraces because they give material form to a narrative of self-identity. Further, the concept of lifestyle does not relate to a resistant relationship to other more essential factors of identity or to a dominant culture, but rather emphasizes distinctions in practice with class culture. Whereas other regimes of identity gets constrained by socially constructed or imposed models of identity and by the institutions that maintain them; the arguably more advantageous lifestyle identity; has the drawback of being dependent on people’s financial resources. In the twenty-first century, lifestyle identity has come to the fore as this reflects the interests of large corporations who seek to fuse ideas, attitudes and values to consumer patterns (Biba, pg.1).

As mentioned early in this research work, the author gave out some misleading points regarding facebook branding. For instance, from his point of argument, the author is someone with deep knowledge of IT and other computer related areas and he argues like everyone thinks on his same way of thinking. He forgets that there are certain people with little or no computer knowledge who may not understand the basis of his argument. This fact makes the author insensitive of his surroundings. The relations people have on facebook are the same relations people have when offline. For instance, despite one accepting the friend request of a stranger the way he or she relates to them is the same way he or she would relate to other strangers offline. The author argues that this is not the same case, which I greatly disagree with his form of argument on this matter.

Works Cited

Biba, Erin. “Facebook: Personal Branding Made Easy.” Wired 2011: Print.

Literature review

Extant literature on TQM has been dedicated to the critical success factors, modes of implementation failure and its effects on organizational performance. In this chapter, we present a review of extant literature on TQM, its definition, definition of quality, factors affecting its implementation, and a review of literature on TQM as a conceptual framework/philosophy.

Definition of Quality

Several authors have attempted to define the concept of Total Quality Management (TQM). However, a lot of confusion surrounds the definition of the quality. The concept of quality holds different meanings to different individuals (Garvin, 1988). Until today, no consensus has been reached on the definition of quality as Wicks (2009) pointed out. This implies that no consensus has been reached on the actual meaning and definition of the concept of TQM.

According to Crosby (1989) quality denotes conformance to various requirements. The essential parameters in this definition are that; one is aware of the requirements and be able to translate them into measurable service or product characteristics. It is therefore necessary for individuals and companies to quantify the characteristics of a given product or service in order for them to determine if their quality is high or low.

According to Deming (1988, p.54), quality has two important definitions. Generally, he sees quality as a multidimensional concept that allows a company or individual to produce products and services that meets customer’s expectations. He argued that the concept of quality must be determined by the level of customer satisfaction. He also noted that quality is a multidimensional concept that can never be defined in terms of a simple or single parameter. He proceeded to say that quality exists at various degrees because it can be equated to the various levels of customer satisfaction.

The work of Feigenbaum (1983) noted that quality is the total aggregate product as well as service characteristics of engineering, marketing, manufacturing as well as maintenance via which the given product or service would meet customer’s expectations. The views of Feigenbaum and Deming are synonymous. Feigenbaum too just as Deming believes that the concept of quality must take into account the level of customer satisfaction and is multidimensional. The only difference between their views is that Feigenbaum believes that customers’ changing needs and expectations are highly dynamics. Top management must therefore play a role in maintaining quality by recognizing this evolution in the very definition of quality at the various phases of a product and industry life cycle (Feigenbaum ,1983, p.7).

According to Ishikawa (1985), industries engage in quality control in order for them to achieve the manufacturing of products that have a high quality that can adequately satisfy the needs of their customers. His main points are that the concept of quality goes hand in hand with customer satisfactions and that quality is a concept that must be defined in a comprehensive manner. He also believes that customer needs and expectations are in a constant state of flux and this means that quality too is dynamic. The price of a given product is also an essential element of its quality.

According to Juran (1988), quality is made up of certain product characteristics that meet the needs as well as expectations of customers. The customers must in this case be satisfied with the product or service offering. Quality denotes a state of freedom from all sorts of flaws and deficiencies.

The work of Goodman, O’Brein and Segal (2000, p.49) defined quality as the process of consistently manufacturing products that meet client’s expectations. This is done while also mitigating errors prior to as well as after the delivery of such a product to the client. The whole idea is to product a product that completely satisfies the clients.

The work of Dervitsiotis (2003) took a rather systematic approach to the concept of quality. In his definition, he noted that quality is the process of meeting and even exceeding the needs as well as of all the business stakeholders. The stakeholders in this cases are customers, employees, the community and even the suppliers.

Definition of TQM

Extant literature has been dedicated to the definition of TQM. These definitions are based on either its functions or applications (Mann & Kehoe, 1994). For example, the work of Dale and cooper (1994) defined the concept as the mutual cooperation of all members of an organization and as well as its corresponding business process for the sake of producing products and services, that meet the needs as well as expectations of clients”. Kanji (1990) on the other hand based his definition on the process as well as practices of TQM. He noted that TQM an organization’s way of life that is committed to realization and delivery of customer satisfaction via a continuous improvement process.

Several studies have been dedicated to the criticizing TQM as a philosophy. The work of

Park Dahlgaard (2002) noted that there are two main negative sources of criticism against TQM. The first criticism is related to concerns on the implementation of TQM as well as the failure of the process to deliver according to expectations.

. A debate has been raging on whether organization experiencing failure have implemented TQM or other forms of philosophy. The other source of criticism is on the basis of the concept as a general theory of management. This form of criticism is based on the fact that there is a general lack of criticism on the definition as well as the fact that the main characteristics of the concept ambiguous and not in any way related to other existing theories of management.

TQM as a movement has always responded to these criticisms by continuously adding more tools and ideas into the extant definitions of TQM. This therefore means that single and consensual definition is hard to arrive at. Most of the existing definitions are either vague or incomplete (Olsson & Bokor ,1995), The confusion in the definition of TQM is attributed or blamed on the divergent opinions as well as confusion surrounding the evolution of TQM as well as the meaning of the concept of quality.

The critical success factors

Extant literature has been devoted to the analysis and identification of the factors that are critical to the successful implementation of TQM. These studies appear to have an emphasis on three main areas. These areas according to Tari, (2005) and Claver et al. ( 2003) are ; involvement from quality leaders, prescribed assessment models as well as empirical research. The work of Dale (1999) noted that training, management leadership, process management, employee’s participation as well as the planning as well as use of quality measures for the purpose of realizing continuous improvement are the main critical success factors for TQM.

The work of Sila and Ebrahimpour (2005), Karuppusami and Gandhinathan (2006) as well as Sebastianelli and Tamimi (2003) pointed out that the initial or pioneering empirical research that focused on TQM’s operationalization via the identification its critical success factors was that of Saraph et al. (1989). Since the publication of their work, several other authors have attempted to identify the factors that determine how successful or unsucessful TQM implementation are. The most significant literatures in this category are the works of Karuppusami and Gandhinathan (2006) and Sila and Ebrahimpour (2005) due to their systematic analysis as well as summary of previous research on this topic.

The work of Karuppusami and Gandhinathan (2006) employed a total of 37 studies on TQM in order to identify a total of fifty six critical success factors (CSF) of TQM. Their choices for these studies were based on the fact that their validity and reliability in regard to the critical success factors were acceptable in statistical terms. By means of Pareto law or analysis, their work grouped these fifty six critical success factors in a descending order and then appropriately divided them into two main groups that were titled as either ‘useful many’ or ‘very useful’. The ‘useful many’ category accounted for close to 20 percent of all occurrences while the ‘vital few’ accounted for close to 80 percent of the CSF. According to their analysis, the most important critical success factor for TQM implementation is top management commitment. This study therefore appropriately confirmed what Sila and Ebrahimpour (2003) had found a little bit earlier.

The work of Ramayah and Saad (2006) investigated the relationship existing between various TQM practices. Their study used the concept of multicollinearity in order the existing between the various TQM practices. The practices that investigated included management support and commitment, , employee empowerment, employee involvement , information and communication, customer focus, training and education, service quality as well as continuous improvement .They also investigated the relationship between these TQM practices and the prevailing market orientation. The outcome of their investigation revealed that continuous improvement, information and communication, employee empowerment and customer focus have a great impact on the quality of service delivery while customer focus as well as employee empowerment have a great effect on market orientation.

The work of Jusoh, Yusoff and Mohtar (2008) indicated that top management leadership, customer focus, process management, data as well as information management, performance management, partnership as well as resource management are the practices are the TQM factors that can be used effectively within R&D facilities.

The application of Structural Equation Modeling (SEM) in the analysis of the relationship between the CSF has yielded mixed results. Such an analysis however, has generally indicated that information analysis, leadership, customer focus and human resource focus have a positive correlation with customer satisfaction in organizations. The work of Ali, Mahat, and Zairi,(2010) that was carried out in order to investigate the major critical success factor of TQM with a focus on human resources indicated a lot on the human resource elements of TQM practices. Customer focus, visionary leadership, staff selection as well as deployment, communication, training and education, innovation as well as creativity, recognition and employee motivation, staff competency, as well teamwork spirit are the important elements of human resource-based TQM practices.

A critical review of literature on the critical success factors

Leadership and the commitment of top management

Extant literature has been dedicated to the roles of leadership and the commitment of top management as critical success factors of TQM. Several authors have noted top management commitment to be a prerequisite for achieving high levels of organizational commitment (Buch and Rivers, 2002). The work of Leiter and Maslach (2002) regards the commitment of senior management as a more important factor in TQM implementation. Top management’s commitment is also noted to be an important factor by various empirical studies (Saraph et al., 1989; Ahire et al., 1996; Thiagarajan, 1996; Ramirez and Loney, 1993; Rao et al., 1999; Lau and Idris, 2001; Dayton, 2001; Sureshchandar et al., 2001).

People management

According to the work of Wuagneux (2002), the revised EFQM model of excellence have placed a greater emphasis on the role of people on the management and success of companies. A consideration must therefore, be made on the role that is played by culture as well as employee motivation on the creation of successful organizations. The work of Kanji (1998) effectively proposed the application of a people management principle that took into consideration ‘team work’ as well as the fact that people are the source of quality as one of the main TQM principles.

The involvement of employees as well as their commitment to the organizational goals as prescribed by the TQM model is a precondition to a successful implementation of TQM practices (McAdam and Kelly, 2002; Buch and Rivers 2002 ). Employee empowerment has therefore been shown by a large number of authors to be a critical success factor of implementing TQM (Dale et al., 2001; Davidson et al., 2001; Rao et al., 1999; Martinez-Lorente et al.,1998; Zhang et al., 2000).

Middle management involvement

The involvement of middle management is considered by Thiagarajan and Zairi (1997) as a technique for optimizing employee involvement in an organization’s quality process. This is because these middle managers are the ones responsible for initiating several key major adjustments to product quality. The middle managers ahs a critical role play because they are required to have an expert opinion and grasp of all the TQM principles while also being able to explain these principles to the rest of the workers. This way, the TQM philosophy is appropriately communicated to the entire organization’s team as noted by Oakland (2000).

Training and employee education

Extant literature has been dedicated to the study of employee training and education as critical success factors of TQM. The work of Mathews et al (2001) indicates that the training that acts as a basis of quality management is a strong determinant of the effectiveness of the various quality measures that are undertaken. The work of Zhang et al. (2000) reiterated the importance of training and education to the success of all TQM initiatives. A series of empirical studies have indicated that both training and education are essential to the successful implementation of TQM (Thiagarajan and Zairi, 1998; Quazi and Padibjo, 1998; Rao et al., 1999; Zhang et al., 2000; Yusof and Aspinwall, 2000; Black and Porter, 1996; Tamimi, 1998; Pun, 2001; Calisir et al., 2001; Dayton, 2001)

Employee reward and appreciation

The concepts of reward and appreciation/recognition are very important critical success factors for TQM implementation. The work of Oakland (2000), indicates that the concept of TQM is inherently user-driven. The work of Kemp et al. (1997) however, noted that recognition or acknowledgement is important since it helps in increasing employee involvement in the running of a company. Several authors have also explored the importance of employee reward and acknowledgement in the overall TQM process (Haksever, 1996; Li et al., 2001; Everett, 2002; Martinez-Lorente et al., 1998).

Teamwork

According to the works of Oakland (2000) and Goh (2000), one of the most popular Japanese approach to the attainment of quality production is use of kaizen team or quality circles. A review of extant literature reveals that the concept of teamwork is essential for TQM techniques to be successful (Cebeci and Beskese, 2002; Everett, 2002; McAdam and Kelly, 2002). According to the work of Mehra et al. (1998), one of the crucial elements of an organization’s human resource function that has been noted to be a critical success factor to the successful implementation of TQM initiatives is teamwork.

Quality organizational policy and strategy

Experts in quality management have often insisted on the need for the development of strategic planning process that has its foundations on total quality concept (Sinclair and Zairi, 2001; Hitchcock and Willard, 2002; Sureshchandar et al., 2001) .

Communicating for the sake of quality

The work of Kanji and Asher (1993) noted that effective communication system is an essential component of the total quality process. This means that an effective communication system is paramount to the success of any kind of quality initiative (Sureshchandar et al., 2001). Organizational change must be communicated effectively for resistance to be mitigated (Salegna and Fazel, 2000; Claver et al., 2001).

Efficient supplier management system

Supplier quality management is an essential element of all TQM initiatives. This is because materials and other purchased elements are often a main source of problems related to quality (Zhang et al., 2000). Several authors have argued that firms must first establish an efficient supply chain partnership in order to motivate their suppliers to avail the materials that are needed to satisfy customer expectations (David, 2002; Clifton, 2001). These findings are further supported by other studies (Thiagarajan et al., 2001; Lau and Idris, 2001).

An accredited system for quality management

Extant literature has been devoted to the exploration of accredited and independent quality management systems. Example is ISO 9000 certification that can be argued to be the starting point for quality-based competitiveness. The TQM process is a sure way of gaining a competitive advantage as exemplified in a wide range of literature (Kolka, 2002; Williams, 1997; Van der Weile and Brown, 1998).

According to the work of Oakland and Porter (1994) and Shipley (2002), most organizations regard ISO 9000 certification as the initial step in the implementation of TQM. A highly documented quality assurance system is also a critical element of every TQM strategy. This strategy’s success is however, subject to how consistently it can manage a organization’s processes (Zhang et al., 2000). The work of Beattie and Sohal (1999) indicated that most organizations implement ISO 9000 quality system concurrently with other quality standards (Beskese and Cebeci, 2001; McAdam and McKeown, 1999).

Moren-Lozon and Peris (1998) created an integrated model for organizational design, strategic management and quality management. In this model, they grouped quality organizations into two main categories- quality assurance and TQM organization. The quality assurance organization is characterized by high level of conformity to quality standards while the TQM organization is characterized by elements of internal as well as external employee involvement, customer satisfaction and continuous improvement. This, according to Jabnoun (2000) indicates low-level formalization coupled with a centralized organizational structure.

The work of Oakland and Porter (1994) indicated that one of the main responsibilities of top management at the initial phases of TQM program implementation is the setting up of an organization structure that is of high quality. Oakland (2000) reiterated that such a structure would lead to the creation of a framework that enables quality operations. Quality organization is therefore, considered as a crucial element in the attainment of a successful implementation of TQM initiatives.

In order to achieve a high level of customer satisfaction, the work of (2000) reiterated the importance of efficient management of internal-supplier relationships as the very first phase of supporting an organization’s process management. Via a translation process involving the translation of the consumer-supplier chain at an enterprise-wide level, organization can achieve a better focus that would in the end translate to value creation (McAdam and Kelly, 2002).

The significance of customer focus can be seen in the fact that such a function is assigned the greatest weight in the European Quality Award and Malcolm Baldrige Award (NIST,1999; EFQM, 1999).

Benchmarking

Several authors have discussed the importance of benchmarking in the successful implementation of TQM initiatives (Sinclair and Zairi, 2001). Dow et al. (1999) never hesitated to mention that benchmarking is a challenging quality practice that helps organization by providing them with a systematic analysis of their achievements of all crucial quality objectives.

Benchmarking has been argued and even demonstrated to be result in success in organizations requiring change management. For instance, benchmarking can result in the success of organizations requiring process re-engineering as noted by Thor and Jarrett (1999). It also noted by Cassell et al., (2001) to result in improved level of operational performance as well as overall change in organizational action and thinking. According to Jarrar and Zairi (2000) , benchmarking is a practice that is increasingly being appreciated as a powerful strategy for improving performance at an enterprise-wide level.

The work of Dervitsiotis (2000) noted that several key organizations such as European Foundation for Quality and the American Productivity and Quality Centre are serious with the promotion as well as training of their members and employees in benchmarking as an important approach in the achievement of business excellent.

Self-assessment

According to Oakland (2000), the concept of self-assessment is important to organization since it helps them in highlighting their strengths and opportunities while also helping them to attain continuous improvement in their processes and operations (Conti, 1999)

Factors hindering TQM implementation

According to Ab Rahman et al (2011), organizations must be ready to determine the factors hindering the implementation of TQM for their TQM initiatives to be successful. This study is very important to this study since it explored the factors affecting the successful implementation of TQM in Islamic countries. It also explored the factors hindering TQM implementation in these countries. All Middle Eastern countries are Islamic nations. According to Khan (2001), the main concern regarding the implementation of TQM in Islamic nations like the ones located in Middle Eastern countries is the notion that the concept of TQM is totally alien and not relevant to the Islamic religious and cultural norms.

Some of the main problems facing the implementation of TQM are general lack of lack of strong organizational leadership, lack of strategic quality planning, lack of effective human resources development and management, the total lack of capability of managing quality process, as well as total disregard of customer satisfaction as well as quality results as noted by Kravchuke and Leighton (1993).

Extant literature has been devoted to the analysis and identification of the factors that are critical to the successful implementation of TQM. These studies appear to have an emphasis on three main areas. These areas according to Tari, (2005) and Claver et al. ( 2003) are ; involvement from quality leaders, prescribed assessment models as well as empirical research. The work of Dale (1999) noted that training, management leadership, process management, employee’s participation as well as the planning as well as use of quality measures for the purpose of realizing continuous improvement are the main critical success factors for TQM.

The work of Sila and Ebrahimpour (2005), Karuppusami and Gandhinathan (2006) as well as Sebastianelli and Tamimi (2003 pointed out that the initial or pioneering empirical research that focused on TQM’s operationalization via the identification its critical sucessfactors was that of Saraph et al. (1989). Since the publication of their work, several other authors have attempted to identify the factors that determine how successful or unsucessful TQM implementation are. The most significant literatures in this category are the works of Karuppusami and Gandhinathan (2006) and Sila and Ebrahimpour (2003) due to their systematic analysis as well as summary of previous research on this topic.

The work of Karuppusami and Gandhinathan (2006) employed a total of 37 studies on TQM in order to identify a total of fifty six critical success factors (CSF) of TQM. Their choices for these studies were based on the fact that their validity and reliability in regard to the critical success factors were acceptable in statistical terms. By means of Pareto law or analysis, their work grouped these fifty six critical success factors in a descending order and then appropriately divided them into two main groups that were titled as either ‘useful many’ or ‘very useful’. The ‘useful many’ category accounted for close to 20 percent of all occurrences while the ‘vital few’ accounted for close to 80 percent of the CSF. According to their analysis, the most important critical success factor for TQM implementation is top management commitment. This study therefore appropriately confirmed what Sila and Ebrahimpour (2003) had found a little bit earlier.

The work of Ramayah and Saad (2006) investigated the relationship existing between various TQM practices. Their study used the concept of multicollinearity in order the existing between the various TQM practices. The practices that investigated included management support and commitment, , employee empowerment, employee involvement , information and communication, customer focus, training and education, service quality as well as continuous improvement .They also investigated the relationship between these TQM practices and the prevailing market orientation. The outcome of their investigation revealed that continuous improvement, information and communication, employee empowerment and customer focus have a great impact on the quality of service delivery while customer focus as well as employee empowerment have a great effect on market orientation.

The work of Jusoh, Yusoff and Mohtar (2008) indicated that top management leadership, customer focus, process management, data as well as information management, performance management, partnership as well as resource management are the practices are the TQM factors that can be used effectively within R&D facilities.

The application of Structural Equation Modeling (SEM) in the analysis of the relationship between the CSF has yielded mixed results. Such an analysis however, has generally indicated that information analysis, leadership, customer focus and human resource focus have a positive correlation with customer satisfaction in organizations. The work of Ali, Mahat, and Zairi,(2010) that was carried out in order to investigate the major critical success factor of TQM with a focus on human resources indicated a lot on the human resource elements of TQM practices. Customer focus, visionary leadership, staff selection as well as deployment, communication, training and education, innovation as well as creativity, recognition and employee motivation, staff competency, as well teamwork spirit are the important elements of human resource-based TQM practices.

According to Crosby (1979) quality denotes conformance to various requirements. The essential parameters in this definition are that; one is aware of the requirements and be able to translate them into measurable service or product characteristics. It is therefore necessary for individuals and companies to quantify the characteristics of a given product or service in order for them to determine if their quality is high or low.

According to Deming (1988, p.54), quality has two important definitions. Generally, he sees quality as a multidimensional concept that allows a company or individual to produce products and services that meets customer’s expectations. He argued that the concept of quality must be determined by the level of customer satisfaction. He also noted that quality is a multidimensional concept that can never be defined in terms of a simple or single parameter. He proceeded to say that quality exists at various degrees because it can be equated to the various levels of customer satisfaction.

The work of Feigenbaum (1983) noted that quality is the total aggregate product as well as service characteristics of engineering, marketing, manufacturing as well as maintenance via which the given product or service would meet customer’s expectations. The views of Feigenbaum and Deming are synonymous. Feigenbaum too just as Deming believes that the concept of quality must take into account the level of customer satisfaction and is multidimensional. The only difference between their views is that Feigenbaum believes that customers’ changing needs and expectations are highly dynamics. Top management must therefore play a role in maintaining quality by recognizing this evolution in the very definition of quality at the various phases of a product and industry life cycle (Feigenbaum ,1983, p.7).

According to Ishikawa (1985), industries engage in quality control in order for them to achieve the manufacturing of products that have a high quality that can adequately satisfy the needs of their customers. His main points are that the concept of quality goes hand in hand with customer satisfactions and that quality is a concept that must be defined in a comprehensive manner. He also believes that customer needs and expectations are in a constant state of flux and this means that quality too is dynamic. The price of a given product is also an essential element of its quality.

According to Juran (1988), quality is made up of certain product characteristics that meet the needs as well as expectations of customers. The customers must in this case be satisfied with the product or service offering. Quality denotes a state of freedom from all sorts of flaws and deficiencies.

The work of Goodman, O’Brein and Segal (2000, p.49) defined quality as the process of consistently manufacturing products that meet client’s expectations. This is done while also mitigating errors prior to as well as after the delivery of such a product to the client. The whole idea is to product a product that completely satisfies the clients.

The work of Dervitsiotis (2003) took a rather systematic approach to the concept of quality. In his definition, he noted that quality is the process of meeting and even exceeding the needs as well as of all the business stakeholders. The stakeholders in this cases are customers, employees, the community and even the suppliers.

The role of quality information system in manufacturing companies

In the past couple of years, a lot of research has been conducted on the role of quality information system in the operations of companies. The work of Mjema et al (2005) explored the role of information technology on quality management. Tang and Duan (2006) on the other hand, investigated the role and application of integrated quality information system (IQIS) on the Chinese manufacturing industries. Their work concluded that an IQIS system in feasible with a high level of reliability and efficiency being achieved in the very end by Chinese manufacturers. The work of Muravlyova (2001) investigated the use of quality management information systems in the production of electrical machines. What is clearly evident is that studies on the application of QIS in Middle East are quite rare.

References

Ab Rahman et al (2012).Barriers and Benefits of Total Quality Management Implementation in Libyan Manufacturing Companies.Middle East Journal of Scientific Research 7 (4)

Ahire, S.L. (1996), ` `An empirical investigation of quality management in small firms’ ’, Production and Inventory Management Journal , 2nd quarter, pp. 44-50

Ali, N. A., Mahat, F., & Zairi, M. (2010). Testing the criticality of HR-TQM factors in the

Malaysian higher education context. Total Quality Management & Business Excellence,

21(11), 1177-1188. doi: 10.1080/14783360701349534

Black, S. and Porter, L. (1996), `Identification of critical factors of TQM’ ’, Decision Sciences , Vol. 27, pp. 1-21.

Beattie, K. and Sohal, A. (1999), ` `Implementing ISO 9000: a study of its benefits among Australian organisations’’, Total Quality Management , Vol. 10 No. 1, pp. 95-10

Facebook Critical Analysis

Author

Institution

Introduction

Social networks have become a fundamental aspect of the lives of many people in the contemporary human society. It has gained wide and expansive use in almost every aspect of the contemporary society penetrating even fundamental sectors such as security and defense of countries. Of course, there are variations in the popularity of different social sites. Nevertheless, there is no doubt that Facebook comes as the most or among the most popular social site. It has more than half a billion people all over the world, a higher number than the entire United States population. Its growth rise and controversies are explored in the CNBC documentary “The Facebook Obsession”.

“The Facebook Obsession” outlines the rise of the social-media site as told by the company’s founders, their friends, as well as their foes. The correspondent delivers an all-inclusive look at the impact that the internet phenomenon has on the people, an impact of which many people are unaware. The documentary outlined the positive impact that the site brings, as well as some classic negatives such as privacy concerns, instant web personalization and protests. It starts with the story of a woman from Ohio who had used the internet phenomenon to track her biological mother. It also incorporates interviews of aggrieved early cofounders of the social-media site, as well the man who launched Facebook campaign for President Obama. However, one of the most fundamental highlights of the documentary is outlined in the story of a teacher who had made certain complaints pertaining to her students, her job, as well as parents in the school district. Given that she did this on her Facebook profile, she thought that only her family and close friends would see her status updates. She learnt that this was not the case in a hard way as she was eventually fired. This drove the point home; that nothing is private in Facebook.

As much as this may be a single, isolated case of a teacher or individual, it outlines the effects that Facebook has changed the workplace. In fact, it is a testament of the effects of information technology on organizational culture, as well as the entire society.

Facebook has changed organizations in various ways. One of the highly affected aspects of organizations is communications. In fact, this is the fundamental pillar of all social-media sites. Facebook offers a distinctive avenue for broadly passing real-time messages to the audiences that an organization wants to reach (Klososky, 2010). Individuals have the capacity to write messages from any place in the world at any time and pass it to interested parties. On the same note, Facebook has flattened organizations through the distribution of access to information (Klososky, 2010). It is worth noting that all parties are equal in Facebook, in which case any party can access information on the social network. The elimination of hierarchies comes as the biggest challenge to middle managers in organizations by social networks (Notter & Grant, 2011). They may be rendered obsolete as they may no longer be needed to pass messages in and out of the organization. In any case, organizations can use social media networks to reach broader audiences at lower costs.

In addition, Facebook has changed certain aspects pertaining to the recruitment process of organizations. It has always been recognized that the recruitment of the appropriate candidates is fundamental to the growth and sustainability of organizations. In the past, however, many organizations used to use referees to dig for background information pertaining to the candidates. This, however, has been changed entirely as employers have been provided with an opportunity to gain knowledge about the prospective candidates, including the background and ideals that the person holds (Notter & Grant, 2011). As much as Facebook has not been incorporated as a formal component of the process of recruitment, it has been naturally integrated thanks to the amount of data that it reveals pertaining to an individual. On the same note, consumer marketing companies have been lining up to utilize the networks to get their customized demographics with personalized messages. Facebook has revolutionized marketing by changing the focus from purchased media advertisement to a system where organizations create their own content and outlet. Social marketing, from a leadership perspective, allows for authentic leadership, which is a necessity for leaders in the 21st century. It is impossible for leaders to hide information on the social network especially considering that they reveal their personalities and beliefs, in which case they would be forced to be transparent and accountable. This explains the saga outlined in “The Facebook Obsession”.

The society has not been spared as far as the effects of Facebook, as well as other social-media sites are concerned. Facebook has been credited with merging societies and breaking or eliminating the boundaries separating societies. It has eliminated physical obstructions that hinder communication making it difficult for societies to remain as isolated units that stand alone (Kilduff & Tsai, 2003). On the same note, Facebook has enhanced the momentum for globalization as societies are merged while divisions that separate societies and people are eliminated.

However, there are instances where Facebook increases isolation within societies. This is especially considering that many people rely excessively on it for communication. In essence, they have difficulty socializing in the real world, in which case they become introverts and are thus isolated from the society (Bradley & McDonald, 2011). On the same note, Facebook has altered the communication patterns and allowed individuals to ‘talk’ directly to those that they like. This is because it eliminated the anxiety and embarrassment that characterizes real life communication. These communication patterns do not depend on socially established norms or etiquette, in which case communication is relatively more straightforward.

Nevertheless, Facebook has reduced the role played by social statues, wealth and class. It goes without saying that every person is approachable in this social site, with people becoming “friends’ with celebrities and people way beyond their league (Notter & Grant, 2011). Communication through Facebook has shaken the most fundamental structures that held hierarchy in the society.

Challenges to organizations

The benefits with which Facebook and other social-media sites come have long been acknowledged. They include expansion of market reach for organizations, enhancing the personal touch, as well as improving a company’s reputation. In addition, Facebook is known to be an economical or low-cost method of marketing in which case it lowers the cost of marketing for many organizations (Bradley & McDonald, 2011).

However, it comes with a number of challenges that threaten the same organization. First, it is worth noting that Facebook increases the difficulty of tracking misleading or negative statements pertaining to the organization (Klososky, 2010). This is especially considering that the social-media phenomenon is an enormous conversation in which everyone can participate, in which case businesses have difficulty tracking defamatory or negative statements pertaining to their brand. Even in instances where the organizations are rightly accused, their response may have limited effects especially where the defamatory statements have made it to the social-media website.

On the same note, Facebook comes with the challenge of accidental release of private and confidential information. In most cases, people who have inside information may inadvertently spill it, thereby eliminating the competitive advantage of the company (Klososky, 2010). Prior to the entry of social media, if letters ended up in the wrong address, they would be retrieved or re-obtained thereby protecting the information. This has become difficult with the entry of Facebook as it is likely to have reached millions of people by the time it is retrieved (Klososky, 2010).

In addition, there is the danger of unauthorized persons speaking or making statements on behalf of the company. Companies face the difficulty of monitoring the social activity of their employees or preventing them from making statements on matters pertaining to the company without proper authorization. In fact, companies or organizations may strive to allow employees to assert their beliefs and personalities online (Kilduff & Tsai, 2003). This freedom, however, presents the challenge or risk of a social medial post pertaining to the company’s perceived objectives and directions may damage its reputation. Unfortunately, it is extremely difficult to monitor the activities of the workers in the social media (Notter & Grant, 2011). On the same note, scholars have outlined that social media reduces the productivity of workers especially considering that some workers have no control over the amount of time that the employees spend on the social-media site. Data or identity theft is also a real threat in the world of social media, especially considering the malware and scams that are rife in the internet (Notter & Grant, 2011).

Recommendations for adaptation to the challenges

Needless to say, the challenges that Facebook brings to organizations can have adverse effects on the sustainability of the organization both in the long and the short terms. However, this would not necessitate the banning of Facebook in organizations, especially considering that it comes with some benefits that have the capacity to propel the organization to higher heights of excellence (Kilduff & Tsai, 2003). Companies need to take certain measures to ensure that they enjoy the benefits that come with social media while eliminating the challenges.

The larger part of the challenges rests in the protection of data and information. In essence, organizations must ensure that they determine and carefully examine the amount of information that they can release to the public. This examination should also encompass the individuals who have or are privy to that information (Bradley & McDonald, 2011). In addition, they should release an official Facebook page from which customers can get authentic information on the organization. This should also be updated by responsible individuals, with the information being carefully selected before being released into the Facebook change (Kilduff & Tsai, 2003).

On the same note, the organization should make policies on how their workers should behave on the internet and the social-media network. These policies should encompass the acceptable behavior on social media, as well as the information that they can give on the same. The employees should be prohibited from making any reference to the organization unless otherwise authorized by company personnel. This does not mean limiting the interaction of the employees rather it underlines the importance of safeguarding all information. In addition, companies should desist from sharing information that touches on their fundamental pillars over the social-media website. Such information should only be shared in websites that allow for the encryption of the information to eliminate the possibility of information theft.

References

Kilduff, M., & Tsai, W. (2003). Social networks and organizations. London [u.a.: SAGE

Notter, J., & Grant, M. (2011). Humanize: How people-centric organizations succeed in a social world. Indianapolis, Ind: Que.

Klososky, S. (2010). Enterprise social technology: Helping organizations harness the power of social media, social networking, social relevance. Austin, Tex: Greenleaf Book Group Press.

Bradley, A. J., & McDonald, M. P. (2011). The social organization: How to use social media to tap the collective genius of your customers and employees. Boston, Mass: Harvard Business Review Press.

Extension of Proposed GCC Rail to Istanbul (Muscat-Istanbul Rail Track)

Student’s Name:

Institution:

Introduction

The countries in middle East are relaxing of their political and financial history. Some are battling for power and others for monetary strength. The district can possibly turn into a focal point of exchange and trade instead of turning into a focal point of world legislative issues which they selected to be as of right now of time. Taking a gander at the Middle East district all in all, it turns out to be clear that it has everything to succeed, characteristic assets in the Arabian Gulf Countries, populace of North African and other Arab Middle Eastern Countries. Dissimilar to others in the area, Arabian Gulf Countries have grown quickly in most recent 40 years or somewhere in the vicinity because of ascend in oil costs, political steadiness in these nations and great financial arranging. They additionally unionized as “GCC” with the expectation to support financial and political collaboration route in 1981. The truth of the matter is likewise that their exchange with other remote nations e.g. India and China is a great deal more in worth than that with one another. They are likewise taking a shot at GCC Rail, which will join every one of the six countries with a current rail system. This rail system will advance logistic offices in this developing area and will help boosting Intra GCC exchange too. Another Middle Eastern Country which as of late performed exceptionally well on the financial front is Turkey. Turkey is likewise now the biggest economy in Middle East regarding total national output. Streets, rail routes and other logistic means assume exceptionally basic part in incorporating nations in a locale, sadly aside from GCC Rail arrange, no viable exertion has been made to create logistic courses among Middle Eastern Countries. Once amid our dialog on “exchange and logistics in Middle East”, course educator recommended that an exchange course may be created which would interface GCC with Turkey going through Iraq and Syria (Muscat-Istanbul Rail Track) or as it were GCC Rail Track may be reached out to Istanbul yet welcomed your consideration towards political and financial impediments.The Risks and Rewards of Muscat-Istanbul Rail Track

The development extends in the GCC district never need desire. The scale and pace of foundation improvement put most different parts of the world solidly in the shade. Rail undertakings totaling $194 billion are currently a key piece of that blend, with a scope of the metro, light rail, and long separation courses either in progress or in the propelled arranging stages. The biggest of those activities intends to unite the GCC part states, encouraging the stream of travelers and cargo and giving a coordinated transport system to bridle and upgrade the financial advantages of new ports, air terminals and logistics zones. The advantages of rail incorporate decreased cargo transport expenses, expanded traveler portability, more prominent monetary mix and the natural advantages originating from the lessened street activity or enhanced urban travel. While those anticipated advantages normally pose a potential threat in authority declarations and press remark on the locale’s rail plans, it is critical to consider at the most punctual conceivable stage their particular effect on the utilization and advancement of other area (Consultancy, 2015).

While demographic and financial demonstrating may deliver amazing projections for traveler movement and income, the generally easygoing nature of between city traveler travel implies that income streams in light of “ridership” stay both unexpected and problematic. Shorter-separation suburbanite movement may be insignificantly more unsurprising, and fairly less defenseless against monetary weights, political or mechanical disturbance. Then again, for unsurprising, legitimately enforceable and in this manner fundable salary streams potential rail financial specialists are significantly more inclined to hope to cargo. This matters in light of the fact that it specifically influences both the administrative and contractual parts of rail advancement and the physical state of the foundation (Saadi, 2012).

Cargo has the ability to give the essential contractual supporting to huge scale rail advancement. Administrators’ entrance to the system is by, and large taking into the account gets that force a movement responsibility all through the term of the assentation. A contractual movement responsibility interprets, in venture terms, to a lawfully enforceable salary stream. Cargo access assentations likewise usually force stringent security prerequisites and working principles. From an administrative viewpoint, there is the abundant degree of institutionalization through the reception of model understandings and criteria-based general authorization administrations (Saadi, 2012).

Cargo likewise brings particular administrative difficulties. Transportation of dangerous substances, especially utilizing base that is to any degree imparted to traveler activity or prone to influence local locations or connecting business uses, obliges close and stringent regulation together with very much created and powerful episode reaction and fiasco recuperation arranging. Those issues must figure unmistakably in any danger evaluation or business case assessment for rail speculation. They encourage straightforwardly into the contractual portion of danger, protection and reinsurance prerequisites and, without a doubt, into the necessity for a state part of the backup plan of the final resort (Saadi, 2012).

The base prerequisites for cargo and traveler additionally separate. Cargo must be coordinated with both ocean transport and inner street and rail conveyance systems. On the ground, that focuses towards the improvement of vast scale multi-purpose cargo terminals, ideally with access to a created rail appropriation organize additionally to street haulage. While the fare of crude material and items may be to a great extent or even completely served by rail, imports and dissemination inescapably oblige street interfaces as products approach the “last mile”. Proficient arranging is thusly fundamental if blockage hotspots and bottlenecks are to be dodged (Consultancy, 2015).

For traveler movement, by differentiation, the essential need is for direct access to urban and downtown areas, whether for driving or more easygoing between city transport. Aside from the intrinsic logistical differences, wellbeing prerequisites direct as much detachment as is practicable in the middle of cargo and traveler administrations and offices. Where track must be shared, the key administrative test is to focus the need in the middle of traveler and cargo administrations. In different purviews, that has a tendency to result in cargo access to tracks outweighing everything else overnight while traveler administrations win amid the day and especially at top driving hours. Track access administrations have a tendency to apply a “flex” way to deal with cargo administrations, distributing time openings to cargo administrators that may be moved inside of a concurred reach to oblige different clients of the line. By differentiation, traveler administrations have a tendency to be managed on a “hardwired” premise, with particular time openings for track access dictated by the fundamentally more prominent exactness of distributed traveler timetables. Track access is a rare asset, and a key administrative target is to guarantee its ideal utilization. By and by, that has a tendency to mean 24-hour utilization partitioned in the middle of cargo and traveler activity (Dowden, 2014).

The normal advantages from the venture are colossal. The present method of transporting load is to a great extent finished with cargo trucks, a method of transport which, especially over long separations, can be wasteful, inclined to mischances and extravagant. A move to a cargo train has the capacity expel 50 trucks from the street and convey 1,000 tons of merchandise, likewise, cargo trains lessens the vitality expenses between 60%-80% over street transport, decreases street blockage and climatic poisons, and expenses up to 30% not as much as street transport. The system would help to change the substance of the transportation scene, profiting the area in general, and redirecting movement from the street onto the rail, lessening clogging. The development of the trans-Gulf railway system would go a long way to serve the region’s expanded freight and passenger transport needs (Oxfordbusinessgroup, 2014).

Predicting and managing impacts on adjoining land use. For the most part, the first open door for bordering private or business proprietors or occupiers to survey the presumable effect of rail advancement happens when point by point arrangements are distributed as a component of the authorization process for a plan. Where a task will slice through existing area utilizes, authorization may include the obligatory procurement of area or of rights over it. It is generally clear immediately whether a specific parcel will doubtlessly be needed, and the key question then turns into the measure of any pay payable in admiration of its procurement (Saadi, 2012).

Far less clear is the effect ashore that is recognized as being inside of the “breaking points of deviation”. However definite the starting studies and arrangements, notable experience has demonstrated that a rail route is never manufactured entirely as per the arrangements. Minor deviation, on a level plane or vertically, must be allowed to overcome building issues that get to be obvious just once development has started. At the point when considering the potential effect of a plan, abutting proprietors or occupiers ought to expect that the line will stay to the most extreme degree allowed. The distinction can be noteworthy. In an early UK case, development of a line in Scotland would have had no visual or another effect on close-by houses as it would have finished cutting a slope. Notwithstanding, experiencing troublesome ground conditions the rail route organization practiced its entitlement to digress, with the outcome that the line passed amazingly near to those houses with noteworthy visual effect, clamor, and interruption. There was no cure in light of the fact that the rail organization had done close to practice its legitimate privilege (Omran, 2012).

The project will be preserving development potential. Railroad improvement requires the production of a safe operational passageway. The impact was portrayed by Lord Radcliffe, a senior English judge, like driving a “steel obstruction” through the nation. To guarantee the railroad’s protected operation, the focuses at which other area users go too far must be kept in a base. Rights over the rail route, whether, by the method for a scaffold, underpass or level intersection must be restricted. In numerous previews, those rights are characterized by and restricted to the utilization of the connecting area at the date the rail route was built. That is on account of the configuration and limit of any intersection must be resolved at the start, with the outcome that physical cutoff points to the size or weight of vehicles are prone to have been figured into the outline to guarantee that any expenses borne by the railroad organization are kept to a base. On the off chance that land has improvement potential, there is regularly an exceptionally solid case for abutting proprietors to arrange for intersection rights that surpass current necessities, despite the fact that that may mean tackling an extent of the expenses connected with that introductory base. The more drawn out term danger of disinfection, or of needing to arrange for amplified rights during a period when the railroad organization has no compelling reason to make concessions, are liable to exceed that beginning expense. It is additionally key to guarantee that rights are particularly conceded in a manner that obliges, instead of points of confinement, future improvement or changes in utilization (Kerzner, 2013).Challenges of Muscat-Istanbul Rail Track

There is going to be noise, nuisance, and chemical reactions. Rail undertakings influence was connecting proprietors and occupiers amid the development stage. Furthermore, once the line is in operation. Rail administrators have, however, long experience, get to be adroit at recognizing the effects on especially touchy uses, for example, recording studios, and have a tendency to land at arranged settlements with those clients. Different clients should, for the most part, make moves to guarantee their own particular security and solace. Measures can incorporate upgraded soundproofing for private premises or inns nearby the line, or choices at an early stage to guarantee that the introduction of another structure. In those cases, obligation and expenses are prone to rest with the designer (Kiprono, Kemei, & Rotich, 2015).

There can likewise be some exceptionally sudden impacts. As a rule, the GCC rail undertakings are planned at first to keep running on diesel. Be that as it may, the configuration briefs incorporate limit for future zap of lines ought to that demonstrate monetarily attractive. Where lines are energized, abutting proprietors and occupiers must be aware of the danger of “electrolysis”. The sensation was initially seen in Melbourne, Australia when electric prepares and cable cars were presented in 1919. Power takes the easy way out and has a tendency to move through the earth and, especially, through any conductive material, for example, metals in the region. The impact can be fundamentally quickened erosion of close-by structures – not uplifting news if the structure being referred to is the steel casing of a building. There is plentiful building skill to manage such issues, yet antagonistic effects are still infrequently reported (Meredith & Mantel Jr,2011).

While it is essential to be aware of potential issues, rail advancement without a doubt offers noteworthy open doors for improved monetary action. Rail offers straight courses that a very much served by pipes and another framework that is profoundly suitable for shared utilization. Information transfers administrations can be essentially reached out, with fiber associations giving key backhaul limit. New stations likewise have a tendency to make centers for monetary movement, including noteworthy retail opportunities whether for the comfort segment or to address the “last half mile” issue for products conveyance. For property designers, whether business or private, enhanced transport connections, including the choice of rail or urban travel administrations, can physically add to esteem. Drawn closer productively, rail can be a tremendously positive component in the financial blend of the area.

The arrangement is essentially for the single track, standard gauge line, conveying both travelers and cargo, with the twofold track on the most prevalent courses. Fundamental to understanding this is the GCC Railway Authority, which is arranging the connection up, locale wide. It includes working with every national power to verify that its own residential rail improvement arrangements dovetail with the needs of the vast system. The production of uniform specialized gauges is additionally a piece of the vision, similar to the institutionalization of methods. There are, on the other hand, various designing difficulties that need to be tended to. With summer temperatures regularly well over 40°C, and the significant temperature changes that happen during the evening, rail lines must have the capacity to withstand critical variances in climatic conditions. There is likewise the issue of keeping the desert sands under control, as rises movement (Hall, 2012).

Another issue is HR. With each GCC state seeking after its own individual rail extent, a lack of experienced and prepared faculty to take a shot at the GCC Rail activity may be an obstacle. What’s more, Customs and fringe checks between GCC individuals are not generally as smooth as some may wish. Guaranteeing that travel crosswise over boondocks is as proficient as could reasonably be expected is essential to the venture’s prosperity. With the rail blast in the Gulf now obviously going full bore, the possibilities of the GCC Rail connection up happening have never been more noteworthy. The advantages for organizations and financial specialists are clear as well, from those gatherings straightforwardly included in rail framework to the numerous that may profit by speedier and more cost proficient provincial transport (Hwang & Ng, 2013).Recommendations

There are various difficulties making headway. The railroad architects will need to defeat the tricky desert conditions, moving sand have truly made rail ventures troublesome and unfavorable in the locale. Other than challenges with steel, the states ambassadors will need to overcome social and lawful contemplations termed “delicate issues, for example, traditions, security, pirating and migration for ostracizes.

Presently it is the essential part of the services of transportation to control the railroad framework, as national rail line powers don’t exist yet. The advancement of these administrative establishments will be indispensable for the accomplishment of the rail frameworks. Which is no simple undertaking, the Gulf States still contrast ideologically as much as socially, boundaries a joint task may help to succeed.

Everyone in the Middle East is discussing cargo. On the off chance that you have vast volumes over more separations, then trucks will lose and trains will win. Organizations that have since a long time ago depended on lorries to ship their merchandise from ports to urban communities will now be given another method of transport hitherto untested in the locale, with the exception of in Saudi Arabia. The fundamental contention is that if the separation is too short, organizations may not yet be influenced to move to railroads. It obliges a standard change on the grounds that individuals are not used to this method of transportation so that it will take some training. It is extremely trying for rail route speculators to rival trucks, and we are confronting issues with numerous entrepreneurs. As an administration organization, we are attempting to make it appealing and give motivating forces for individuals.Conclusion

Sponsored by high oil costs, solid government money related offsets and a proceeded with wave of open spending on framework undertakings and social projects, GCC nations are situated to witness further strong monetary development in the following two years.

On the other hand, the nation’s endless region and changed topographical components alongside its eager due dates and goals has offered ascent to a novel arrangement of financing, logistical and designing difficulties that require inventive and clever arrangements.

The normal advantages from the task are far reaching. The present method of transporting load is to a great extent finished with cargo trucks, a method of transport which, especially over long separations, can be wasteful, inclined to mishaps and extravagant.

The system would help to change the substance of the transportation scene, profiting the area all in all, and redirecting activity from the street onto the rail, diminishing blockage. The improvement of the trans-Gulf railroad framework would go far to serve the area’s extended cargo and traveler transport needs.

It is a less expensive method of transport when contrasted with different methods of transport. The majority of the working costs of rail routes are in the way of altered expenses. Each increment in the rail line activity is trailed by a batement in the normal expense. Rail transport is prudent in the utilization of work additionally as one driver and one watchman are adequate to convey a great deal more load than the engine transport.

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