Valuation Project Report

Valuation project report Valuation of the Incentive Stock Options for Procter & Gamble Co. Name: Haining Jiang Company background: In this valuation project, I will analyze a company which is mature and I am interested in. The name of the company is Procter & Gamble Co. the Procter & Gamble Company, together with its subsidiaries, engages in the manufacture and sale of a range of branded consumer packaged goods. The company operates in five segments: Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby Care and Family Care.In the year of 1837, William Procter and James Gamble settled in the Queen City of the West, Cincinnati, and established themselves in business. As a result, a new company was born: Procter & Gamble. Procter & Gamble became into a listed company at a stock price and dividend which are $ 1. 7 and $ 0. 01 per month respectively in 19 Jan. 1970. For many years, P & G keep following their purpose and social responsibility at every and every corner in the world: â€Å"We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come.As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper. † Until now, P & G has become the largest consumer packaged goods company in the world at $ 67. 17 of the share price and $ 0. 562 of dividend per month. Main contents: 1. Discounted dividend valuation The most basic model is the Gordon Growth Model, which prices the stock by the dividend and future growth of dividends. The formula would be like this: V0=D0 (1+g)(r-g)=D1r-gWhere D0 is today’s dividend, which would be $ 2. 21 in our case. r is the cost of capital, r will be calculated like: Assume : The market premium = 6%* The risk-free rate = 3%* Given number in the case: ? = 0. 27 So, r = 0. 03 + 0. 27 x 0. 06 = 4. 62% The best way to estimate g is: The term g can be viewed as the return on owner’s equity times the earnings retention rate b. b = (1 – dividend payout ratio) = 1 – 58% = 42% return on equity = 14. 05% So, Sustainable growth rate = gs = 42% x 14. 05% = 5. 901% r< g, so we may meet a big problem when using the V0 formula above.But, as far as we all know, it is not possible that the firm can grow faster than r forever. The high return will attract other investors into the market to compete and the firm’s rate will eventually fall. And, I determine the long-run growth rate of dividends, gL = 3%*. g < r. Even if this data is not real in the true P&G case, I think it’s will be fine to continue our model. V0=D0 (1+g)(r-g)= $ 2. 21x(1+0. 03)(0. 0462-0. 03)=$ 140. 51 1) Two-stage dividend growth When the P & G is growing faster than r, one can use a multistage model, where the growth stages are broken into two parts.The first is the supernormal growth phase call gs , which is the rate that is higher than r. So we can assume: at the first period ( r < g ): gS = 5. 901% (as we calculated above) n = 3*; At the second period ( r > g ): r = 4. 62% (as we calculated above) gL = 3% (as we calculated above) D0 = $ 2. 21 (real data from P&G) ; As we all know the formula is: V0 = t=1n[ Dt1+rt+ Vn(1+r)n] Vn= D01+ gsn(1+ gL)(r- gL) So, V3= 2. 21Ãâ€"1+ 0. 0593(1+ 0. 03)(0. 0462- 0. 03) = $ 166. 88 V0 = 2. 21x(1+0. 059)1(1+0. 0462)1+ 2. 21x(1+0. 059)2(1+0. 0462)2+ 2. 21x(1+0. 059)3(1+0. 0462)3+ 166. 88(1+0. 0462)3 = $ 152. 27 2) Three-stage dividend growth We assume the P & G company experienced a life-cycle with a three stages that are: an early, development stage with high growth, a maturing phase with moderate growth, and a declining phase with little, no, or negative growth. The current dividend of $ 2. 21 per share will not change. Dividends are expected to grow at a rate of 10%* for 2 years. Following that, the dividends are expected t o grow at a rate of 8%* for 2 years. After the total 4 years, the dividends are expected to grow at a rate of 4%* per year, forever. The rate of return unchanged: 4. 2% (as calculated in 1. 1). We can break the calculation in to six steps: (1) Calculate the dividends for years 1 through 5: year| Dividend growth rate| Dividend| 1| 10%| 2. 431| 2| 10%| 2. 674| 3| 8%| 2. 888| 4| 8%| 3. 119| 5| 5%| 3. 275| (2) Calculate the present value of each of these dividends for years 1 through 5: Year| Dividend| Present value| 1| 2. 431| 2. 3236| 2| 2. 674| 2. 4430| 3| 2. 888| 2. 5220| 4| 3. 119| 2. 6035| 5| 3. 275| 2. 6130| (3) Calculate the present value of the dividends beyond year 4: P4= $ 3. 275(0. 0462-0. 04) = $ 528. 23 (4) Calculate the present value of the price at year 4:PVP4 = $ 528. 23(1+0. 0462)4 = $ 440. 92 (5) Calculate the sum of the present value of the dividends: PVdividends in year 1-4= t=110Dt(1+0. 0462)t = $ 12. 51 (6) Calculate the price today as the sum of the present value of dividends in years 1-4 and the price at the end of year 4: P0=$ 440. 92+$ 12. 51 = $ 453. 43 3) The uses of the dividend valuation models (1) The price-earnings ratio also known as the price-to-earnings ratio or PE ratio, is the ratio of the price per share to the earnings per share of a stock. Let us observe these data from P&G firstly: ?| 2012| 2011| 2010| stock price| $66. 6| $64. 50| $60. 44| current earings per share| $3. 82| $4. 12| $4. 32| P/E ratio| 17. 37173| 15. 65534| 13. 99074| dividend payout ratio| 58%| 50%| 42%| If we take the DVM and divide both sides by earnings per share, we arrive at an equation for the price earnings ratio in terms of dividend payout, required rate of return, and growth: P0E0= Dividend payout ratio x (1+g)r-g We can conclude the information below according to the above formula: Increase in dividend payout rate will cause increase in P/E ratio, this point is also obviously in the table above, the data comes from the real P&G case.Increase in r will cause decrease in P/E ratio Increase in growth rate will cause increase in P/E ratio. (2) we can also use the DVM to relate the price-book value ratio to factors such as the dividend payout ratio and the ROE. We assume the B0 indicate the current book value per share and ROE0 indicate the current return on book equity. As we all know: ROE0 = E0B0 , and P0=D0 (1+g)(r-g)=D1r-g ; So, we can get the formula easily below: P0=B0x ROE0 x D0E0x (1+g)(r-g) So we could get the conclusion through analyzing the above formula: increase in B0 will increase in P0; ncrease in ROE0 will increase in P0; increase in D0E0 will increase in P0; increase in g will increase in P0; increase in r will increase in P0; I believe there are plenty of other conclusions we can get from those formulas, I just mention some of them in my valuation report here. But in other words, we can fully use the DVM to find all the related fundamental factors to have further understanding through DVM. 4) What if there no d ividends? I think it’s acceptable and expectable if the P&G isn’t paying dividends now, but chooses to reinvest its money.It is a sign that the dividends in the future will be even larger. Of course, I won’t stick around with the company long enough to receive any of those dividends. But because of the growth of the company, I will realize that the eventual dividends will be even larger with the increasingly share price. After that, I can sell me shares to someone else to get my profit from it. Summary: â€Å"Valuation is the process of determining what something is worth at a point in time. When we value investments, we want to estimate the future cash flows from these investments and then discount these to the present.This process is based on the reasoning that no one will pay more today for an investment than what they could expect to get from that investment on a time and risk adjusted basis. †1 I think the paragraph I cited above not only give us the best conclusion of by valuation project report, but also tell us a definitely reason we study finance. Please Note: If the number followed a * behind it, it means this number is assumed and the others without * are all real data from P&G company finance report. 1: cited from the â€Å"Dividend Valuation Models†, by Pamela Peterson Drake, Ph. D. , CFA.

3d Negotiation

www. hbr. org Savvy negotiators not only play their cards well, they design the game in their favor even before they get to the table. Playing the Whole Game 3-D Negotiation by David A. Lax and James K. Sebenius Reprint R0311D Savvy negotiators not only play their cards well, they design the game in their favor even before they get to the table. 3-D Negotiation by David A. Lax and James K. Sebenius COPYRIGHT  © 2003 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. What stands between you and the yes you want? In our analysis of hundreds of negotiations, we’ve uncovered barriers in three complementary dimensions: The first is tactics; the second is deal design; and the third is setup. Each dimension is crucial, but many negotiators and much of the negotiation literature fixate on only the first two. For instance, most negotiation books focus on how executives can master tactics—interactions at the bargaining table. The common barriers to yes in this dimension include a lack of trust between parties, poor communication, and negotiators’ â€Å"hardball† attitudes. So the books offer useful tips on reading body language, adapting your style to the bargaining situation, listening actively, framing your case persuasively, deciding on offers and counteroffers, managing deadlines, countering dirty tricks, avoiding cross-cultural gaffes, and so on. The second dimension, that of deal design—or negotiators’ ability to draw up a deal at the table that creates lasting value—also receives attention. When a deal does not offer nough value to all sides, or when its structure won’t allow for success, effective 2-D negotiators work to diagnose underlying sources of economic and noneconomic value and then craft agreements that can unlock that value for the parties. Does some sort of trade between sides make sense and, if so, on what terms? Should it be a staged agreement, perhaps with contingencies and risk-sharing provisions? A deal with a more creative concept and structure? One that meets ego needs as well as economic ones? Beyond the interpersonal and deal design challenges executives face in 1-D and 2-D negotiations lie the 3-D obstacles—flaws in the negotiating setup itself. Common problems in this often-neglected third dimension include negotiating with the wrong parties or about the wrong set of issues, involving parties in the wrong sequence or at the wrong time, as well as incompatible or unattractive no-deal options. 3-D negotiators, however, reshape the scope and sequence of the game itself to achieve the desired outcome. Acting entrepre- harvard business review †¢ november 2003 page 1 -D Negotiation neurially, away from the table, they ensure that the right parties are approached in the right order to deal with the right issues, by the right means, at the right time, under the right set of expectations, and facing the right nodeal options. Former U. S. trade representative Charlene Barshefsky, who has negotiated with hundreds of companies, governments, and nongovernmental organizat ions to spearhead deals on goods, services, and intellectual property, characterizes successful 3-D negotiations this way: â€Å"Tactics at the table are only the cleanup work. Many people mistake tactics for the underlying substance and the relentless efforts away from the table that are needed to set up the most promising possible situation once you face your counterpart. When you know what you need and you have put a broader strategy in place, then negotiating tactics will flow. †1 3-D Negotiation in Practice Even managers who possess superior interpersonal skills in negotiations can fail when the barriers to agreement fall in the 3-D realm. During the 1960s, Kennecott Copper’s longterm, low-royalty contract governing its huge El Teniente mine in Chile was at high risk of renegotiation; the political situation in Chile had changed drastically since the contract was originally drawn up, rendering the terms of the deal unstable. Chile had what appeared to be a very attractive walkaway option—or in negotiation lingo, a BATNA (best alternative to negotiated agreement). By unilateral action, the Chilean government could radically change the financial terms of the deal or even expropriate the mine. Kennecott’s BATNA appeared poor: Submit to new terms or be expropriated. Imagine that Kennecott had adopted a 1-D strategy focusing primarily on interpersonal actions at the bargaining table. Using that approach, Kennecott’s management team would assess the personalities of the ministers with whom it would be negotiating. It would try to be culturally sensitive, and it might choose elegant restaurants in which to meet. Indeed, Kennecott’s team did take such sensible actions. But that approach wasn’t promising enough given the threatening realities of the situation. Chile’s officials seemed to hold all the cards: They didn’t need Kennecott to run the mine; the country had its own experienced David A. Lax ([email  protected] com) is a principal of Lax Sebenius, a negotiation-strategy consulting firm in Concord, Massachusetts. James K. Sebenius ([email  protected] edu) is the Gordon Donaldson Professor of Business Administration at Harvard Business School in Boston and a principal of Lax Sebenius. They are both members of the Negotiation Roundtable forum at Harvard Business School and the authors of 3-D Negotiation: Creating and Claiming Value for the Long Term, forthcoming from Harvard Business School Press. anagers and engineers. And Kennecott’s hands seemed tied: It couldn’t move the copper mine, nor did it have a lock on downstream processing or marketing of the valuable metal, nor any realistic prospect, as in a previous era, of calling in the U. S. fleet. Fortunately for Kennecott, its negotiators adopted a 3- D strategy and set up the impending talks most favorably. The team took six steps and changed the playing field altogether. First, somewhat to the government’s surprise, Kennecott offered to sell a majority equity interest in the mine to Chile. Second, to sweeten that offer, the company proposed using the proceeds from the sale of equity, along with money from an Export-Import Bank loan, to finance a large expansion of the mine. Third, it induced the Chilean government to guarantee this loan and make the guarantee subject to New York state law. Fourth, Kennecott insured as much as possible of its assets under a U. S. guarantee against expropriation. Fifth, it arranged for the expanded mine’s output to be sold under long-term contracts with North American and European customers. And sixth, the collection rights to these contracts were sold to a consortium of European, U. S. , and Japanese financial institutions. These actions fundamentally changed the negotiations. A larger mine, with Chile as the majority owner, meant a larger and more valuable pie for the host country: The proposal would result in more revenue for Chile and would address the country’s interest in maintaining at least nominal sovereignty over its own natural resources. Moreover, a broad array of customers, governments, and creditors now shared Kennecott’s concerns about future political changes in Chile and were highly skeptical of Chile’s capacity to run the mine efficiently over time. Instead of facing the original negotiation with Kennecott alone, Chile now effectively faced a multiparty negotiation with players who would have future dealings with that country—not only in the mining sector but also in the financial, industrial, legal, and public sectors. Chile’s original BATNA—to unceremoniously eject Kennecott—was now far less attractive than it had been at the outset, since hurting Kennecott put a wider set of Chile’s present and future interests at risk. And finally, the guarantees, insurance, and other contracts improved Kennecott’s BATNA. arvard business review †¢ november 2003 page 2 3-D Negotiation If an agreement were not reached and Chile acted to expropriate the operation, Kennecott would have a host of parties on its side. Though the mine was ultimately nationalized some years later, Chile’s worsened alternatives gave Kennecott a better operating position and additional years of cash flow compared w ith similar companies that did not take such actions. This case underscores our central message: Don’t just skillfully play the negotiating game you are handed; change its underlying design for the better. It is unlikely that 1-D tactical or interpersonal brilliance at the table—whether in the form of steely gazes, culturally sensitive remarks, or careful and considered listening to all parties—could have saved Kennecott from its fundamentally adverse bargaining position. Yet the 3-D moves the company made away from the table changed the negotiation’s setup (the parties involved, the interests they saw at stake, their BATNAs) and ultimately created more value for all involved—much of which Kennecott claimed for itself. How 3-D Moves Work Successful 3-D negotiators induce target players to say yes by improving the proposed deal, enhancing their own BATNAs, and worsening those of the other parties. 3-D players intend such moves mainly to claim value for them- selves but also to create value for all sides. Claiming Value. 3-D negotiators rely on several common practices in order to claim value, including soliciting outside offers or bringing new players into the game, sometimes to create a formal or informal auction. After negotiating a string of alliances and acquisitions that vaulted Millennium Pharmaceuticals from a small start-up in 1993 to a multibillion-dollar company less than a decade later, then–chief business officer Steve Holtzman explained the rationale for adding parties to the negotiations: â€Å"Whenever we feel there’s a possibility of a deal with someone, we immediately call six other people. It drives you nuts, trying to juggle them all. But number one, it will change the perception on the other side of the table. And number two, it will change your self-perception. If you believe that there are other people who are interested, your bluff is no longer a bluff; it’s real. It will come across with a whole other level of conviction. † (For more on Millennium, see â€Å"Strategic Deal-making at Millennium Pharmaceuticals,† HBS case no. 9-800032. ) While negotiators should generally try to improve their BATNAs, they should also be aware that some of the moves they make might inadvertently worsen their walkaway options. For instance, several years ago, we The Three Dimensions of Negotiation Our research shows that negotiations succeed or fail based on the attention executives pay to three common dimensions of deal making. Focus Common Barriers Interpersonal issues, poor communication, â€Å"hardball† attitudes Approach Act â€Å"at the table† to improve interpersonal processes and tactics Copyright  © 2003 Harvard Business School Publishing Corporation. All rights reserved. page 3 1-D 2-D 3-D Tactics (people and processes) Deal design (value and substance) Lack of feasible or desirable agreements Go â€Å"back to the drawing board† to design deals that unlock value that lasts Make moves â€Å"away from the table† to create a more favorable scope and sequence Setup (scope and sequence) Parties, issues, BATNAs, and other elements don’t support a viable process or valuable agreement harvard business review †¢ november 2003 3-D Negotiation worked with a U. S. manufacturing firm on its joint-venture negotiations in Mexico. The company had already researched possible cultural barriers and ranked its three potential partners according to the competencies it found most desirable in those companies. After approaching the negotiations in a culturally sensitive spirit, and in what had seemed a very logical sequence, the U. S. team had nevertheless come to an impasse with the most attractive partner. The team abandoned those talks and was now deep into the process with the second most desirable candidate—and again, things were going badly. Imagine subsequent negotiations with the third, barely acceptable, partner if the second set of talks had also foundered—in an industry where all would quickly know the results of earlier negotiations. As each set of negotiations failed, the U. S. irm’s BATNA—a deal with another Mexican company or no joint venture at all—became progressively worse. Fortunately, the U. S. company opened exploratory discussions with the third firm in parallel with the second. This helped the U. S. company to discover which potential partner actually made the most business sense, to avoid closing options prematurely, and to take ad vantage of the competition between the Mexican companies. The U. S. business should have arranged the process so that the prospect of a deal with the most desirable Mexican partner would function as its BATNA in talks with the second most desirable partner, and so on. In short, doing so would have created the equivalent of a simultaneous four-party negotiation (structured as one U. S. firm negotiating in parallel with each of the three Mexican firms) rather than three sequential two-party negotiations. This more promising 3-D setup would have greatly enhanced whatever 1-D cultural insight and tactical ingenuity the U. S. firm could muster. In addition to strengthening their own position, 3-D negotiators who add parties and issues to a deal can weaken the other side’s BATNA. For instance, when Edgar Bronfman, former CEO of Seagram’s and head f the World Jewish Congress, first approached Swiss banks asking them to compensate Holocaust survivors whose families’ assets had been unjustly held since World War II, he felt stonewalled. Swiss banking executives saw no reason to be forthcoming with Bronfman; they believed they were on strong legal ground because the restitution issue had been settled years ago. But after eight months of lobbying by Bronfman, the World Jewish Congress, and others, the negotiations were dramatically expanded—to the detriment of the Swiss. The bankers faced a de facto coalition of interests that credibly threatened the lucrative Swiss share of the public finance business in states such as California and New York. They faced the divestiture by huge U. S. pension funds of stock in Swiss banks as well as in all Swissbased companies; a delay in the merger between Swiss Bank and UBS over the â€Å"character fitness† license vital to doing business in New York; expensive and intrusive lawsuits brought by some of the most formidable U. S. class-action attorneys; and the wider displeasure of the U. S. overnment, which had become active in brokering a settlement. Given the bleak BATNA the Swiss bankers faced, it’s hardly surprising that the parties reached an agreement, including a commitment from the Swiss bankers to pay $1. 25 billion to survivors. It was, however, an almost unimaginable outcome at the beginning of the small, initially private game in which the Swiss seemed to hold all the cards. Another way for negotiators to claim value is to shift the issues under discussion and the interests at stake. Consider how Microsoft won the browser war negotiations. In 1996, AOL was in dire need of a cutting-edge Internet browser, and both Netscape and Microsoft were competing for the deal. The technically superior, market-dominant Netscape Navigator vied with the buggier Internet Explorer, which was then struggling for a market foothold but was considered by Bill Gates to be a strategic priority. A confident, even arrogant, Netscape pushed for a technically based â€Å"browser-for-dollars† deal. In the book aol. com, Jean Villanueva, a senior AOL executive, observed, â€Å"The deal was Netscape’s to lose. They were dominant. We needed to get what the market wanted. Most important, we saw ourselves as smaller companies fighting the same foe—Microsoft. † But when all was said and done, it was Microsoft that had etched a deal with AOL. The software giant would provide Explorer to AOL for free and had promised a series of technical adaptations in the future. Microsoft had also agreed that AOL client software would be bun- harvard business review †¢ november 2003 page 4 3-D Negotiation Microsoft shifted the negotiations from Netscape’s technical browser-for-dollars deal toward wider business issues on which it held a decisive edge. led with the new Windows operating system. Microsoft—a direct competitor to AOL— would place the AOL icon on the Windows desktop right next to the icon for its own online service, the Microsoft Network (MSN). AOL’s position on â€Å"the most valuable desktop real estate in the world† would permit it to reach an additional 50 million people per year at effectively no cos t, compared with its $40 to $80 per-customer acquisition cost incurred by â€Å"carpet bombing† the country with AOL disks. In effect, Bill Gates sacrificed the mediumterm position of MSN to his larger goal of winning the browser war. How did 3-D moves swing the negotiations in Microsoft’s favor? Microsoft’s Web browser was technically inferior to Netscape’s, so the chances of Microsoft winning on those grounds were poor, regardless of its negotiating skills and tactics at the table. Instead, Microsoft shifted the negotiations from Netscape’s technical browser-for-dollars deal toward wider business issues on which it held a decisive edge. Rather than focus on selling to the technologists, Microsoft concentrated on selling to AOL’s businesspeople. As AOL’s lead negotiator and head of business development, David Colburn, stated in his deposition to the Supreme Court in 1998, â€Å"The willingness of Microsoft to bundle AOL in some form with the Windows operating system was a critically important competitive factor that was impossible for Netscape to match. † Instead of trying to skillfully play a poor hand when dealing with party X on issues A and B, Microsoft changed the game toward a more compatible counterpart Y, emphasizing issues C, D, and E, on which it was strong. These examples of 3-D value-claiming moves conflict with the standard 1-D interpersonal approach to negotiation. Actions taken away from the table—sharply altering parties and issues, restructuring and resequencing the process, changing BATNAs—are not primarily about 1-D interpersonal skills but rather about enhancing the underlying setup of the negotiation itself. Creating Value. By adding complementary parties or issues to the negotiating process, 3D negotiators can not only claim value for themselves but also create more value for all parties involved. In Co-opetition, their influential book on business strategy, Adam Brandenburger and Barry Nalebuff explored the con- ept of the value net, or the collection of players whose potential combination and agreement can create value. 3-D negotiators often facilitate in the development of such value nets. They scan beyond their specific transactions for compatible players with complementary capabilities or valuations, and they craft agreements that profitably incorporate these players. The world of foreign affairs offers many examples in which potentially valuable bilateral deals can be impossible unless a third party with complementary interests is included. In a 1985 issue of Negotiation Journal, University of Toronto professor and international negotiation specialist Janice G. Stein wrote the following about the importance of Henry Kissinger’s 3-D role in a crucial Middle East negotiation: â€Å"The circular structure of payment was essential to promoting agreement among the parties. Egypt improved the image of the United States in the Arab world, especially among the oil-producing states; the United States gave Israel large amounts of military and financial aid; and Israel supplied Egypt with territory. Indeed, a bilateral exchange between Egypt and Israel would not have succeeded since each did not want what the other could supply. † In an example from the business world, the owners of a niche packaging company with an innovative technology and a novel product were deep in price negotiations to sell the company to one of three potential buyers, all of them larger packaging operations. Instead of mainly working with its bankers to make the case for a higher valuation and to refine its at-the-table tactics with each packaging industry player, the niche player took a 3-D approach. Its broader analysis suggested that one of its major customers, a large consumer goods firm, might particularly value having exclusive access to the niche player’s technologies and packaging products, so it brought the consumer goods firm into the deal. The move uncovered a completely new source of potential value—and a much higher potential selling price. It also increased the pressure on the larger packaging companies: They would face more competition and might not be able offer the same kind of exclusive, customized packaging service to their customers. The potential elements of a value net are not always obvious at the start of a negotia- arvard business review †¢ november 2003 page 5 3-D Negotiation Mapping Backward to Yes What does a sophisticated 3-D strategy look like? Consider the experience of Henry Iverson and his partners, who acquired Concord Pulp and Paper (CPP) for $8. 5 million in a highly leveraged transaction. (All company names and details have b een disguised. ) After the basic deal was done, they needed additional financing to make profitable improvements at CPP. Federal Street Bank (FSB) turned them down flat, even after they had used such 1-D tactics as persuasive appeals and elegant lunches. It was time to move into the 3-D realm. But first, some background. To acquire CPP from its creditors, Iverson and his partners had put up $700,000 in equity and obtained $7. 8 million in financing from FSB, consisting of a $1. 3 million short-term loan against receivables and a $6. 5 million loan against assets. Soon after, the opportunity arose for CPP to add a recovery boiler, which would increase plant capacity by 100 tons a day, improve overall quality and margins, and boost yearly net cash flow by $4. 1 million. The boiler would cut CPP’s emissions in its host town of Concord by 95%. Over a two-year construction period, the boiler project would cost $9 million, $6 million of which would go to Bathurst and Felson Engineering (BFE) and the rest to smaller contractors. The FSB loan officer who delivered the bad news cited the bank’s policies: â€Å"We will loan against 50% of unencumbered inventory and 80% of receivables. CPP has neither, and its capital structure is already 93% leveraged. † When Iverson pressed, he was told that if he had more equity, FSB might consider a short-term construction loan—but only if a credible third party would provide guaranteed takeout financing after two years. So Iverson used 3-D negotiating tactics to scan widely and map backward from his current predicament to establish the prior agreements (with as-yet uninvolved parties) that would maximize the chances of an ultimate yes from the bank. Involve UIC. Iverson approached two insurance companies for takeout financing. Unified Insurance Company (UIC) had the most attractive fee structure; Worldwide Insurance had higher fees and was uninterested. Both flatly stated, â€Å"CPP is too leveraged. † Moreover, UIC would only lend against the cash flow of fully completed projects. Iverson coaxed a deal letter from UIC: For a commitment fee plus a share of increased profits from the boiler, Unified agreed to lend, conditional on the successful completion of the project—and more equity in CPP’s capital structure. Involve the EDA. Iverson’s attempts to raise more equity from investors failed, so he dug further and learned that the U. S. Economic Development Administration (EDA) could make junior (subordinated) loans to firms for certified job-creating projects; the overall loan limit was equal to the number of jobs times $50,000. Since the recovery boiler project would generate at least 30 new full-time jobs, this implied a junior 1. 2. loan of up to $1. 5 million. However, the EDA loan had to be 50% matched by a Local Development Administration (LDA), which did not exist in Concord. At this point, Iverson took stock of the barriers: the engineer wouldn’t proceed without money and, in any case, wouldn’t guarantee more than the boiler itself—the only thing BFE would build. The rest of the required system would be complex. Local and regional contractors were in no position to guarantee the overall project. FSB wouldn’t do a construction loan without guaranteed takeout financing and more equity. UIC wouldn’t do permanent takeout financing without a successful project and more equity. The EDA wouldn’t lend without matching funds from the LDA and a guarantee of a successful, certified, job-creating project. And there was no LDA to certify the jobs or provide matching funds. Involve the Town of Concord. Undaunted, Iverson approached the 3. Concord Town Council and proposed that it form an LDA, which could raise matching funds, to facilitate the recovery boiler project. He argued that construction and operation of the project would create new jobs and dramatically cut CPP’s odors and pollution levels. And it would add at least $180,000 a year in property taxes if the new boiler were built. The council received these arguments favorably but, before committing, wanted assurances that the project would actually work. Involve Derano. In great need of some plausible guarantee of project success, Iverson approached Derano, a large, national (bondable) engineering, design, and project management firm. Derano expressed serious doubts about managing an already-designed project with BFE and local contractors in place. But by offering to pay above the normal fee, Iverson got Derano to manage the overall project and to give a nonrecourse performance â€Å"guarantee†Ã¢â‚¬â€all conditional on CPP’s raising project financing. 4. harvard business review †¢ november 2003 page 6 3-D Negotiation Concord Pulp and Paper starts negotiations for funding here Derano (national project management firm) †¢ funding Finish 5 Town of Concord â€Å"guaranteed† project †¢ less pollution †¢ more jobs †¢ lower taxes Start 1 Recovery Boiler Project Bathurst and Felson Engineering †¢ funding 4 2 Economic Development Administration †¢ LDA †¢ certified jobs †¢ matching funds Federal Street Bank †¢ more equity †¢ guaranteed takeout financing Unified Insurance Company †¢ more equity †¢ actual project 8 7 6 LDA Go back to Concor d with Derano deal. Carrying Derano’s letter that gave the provisional guarantee, Iverson revisited Concord’s Town Council, which agreed to create an LDA. The LDA would be instructed to issue bonds for $500,000, backed by tax revenue increases and presold to wealthy citizens, local and regional contractors, and other area businesses. As a government entity, the LDA would also formally certify the expected successful job-creation impact of the recovery-boiler project. Go back to the EDA with the Derano letter and the LDA commitments. Iverson approached the EDA, arm-in-arm with the Concord LDA, which brought matching fund commitments and its formal job certification 5. 6. along with Derano’s guarantee) of the boiler project. With this backing, EDA committed to a $1 million junior (subordinated) loan (plus the $500,000 matching loan from Concord’s LDA)— all conditional on Iverson’s obtaining construction and long-term financing. Go back to UIC to modify its â€Å"more equity† provision. Iverson successfully negotiated with Unified Insurance to modify the â€Å"more equity† term of its commitment l etter to include junior debt, since the EDA–LDA subordinated debt met UIC’s real interest in a greater financial cushion for the UIC loan. Go back to FSB with Derano, LDA and EDA commitments, and UIC modification. Returning to the bank, Iverson argued that EDA–LDA loans 7. 8. would provide the functional equivalent of FSB’s requirement for more equity. In making the case to the riskaverse loan officer, he tactfully noted that UIC, a â€Å"notoriously demanding creditor,† was willing to treat it as such to financially cushion UIC’s permanent financing. Surely that would be adequate to protect FSB’s brief twoyear exposure. With this condition met—and given Derano’s performance â€Å"guarantee† and the LDA’s certification—the bank agreed that UIC’s commitment letter met its interest in guaranteed takeout financing. FSB’s new construction-loan commitment unlocked the EDA–LDA money, which started funds flowing to Derano and BFE. And the project was launched. harvard business review †¢ november 2003 Copyright  © 2003 Harvard Business School Publishing Corporation. All rights reserved. 3 page 7 3-D Negotiation tion. For example, a U. S. European conservation group wished to preserve the maximum amount of rain-forest habitat in a South American country. From membership contributions and foundation support, the conservation group had U. S. dollars it could use (after converting the dollars to local currency at the official exchange rate) to buy development rights. The owner of the land and the conservation group negotiated hard and tentatively agr eed on an amount of rain forest to be protected and a price per hectare based on local currency. But 3-D thinking ultimately improved the deal for all sides. The host country was indebted in dollar-denominated bonds, which were trading at a 45% discount to their face value (given their perceived default risk). The country had to use scarce dollar-export earnings, needed for many pressing domestic purposes, to keep its debtservice obligations current; of course, interest payments were determined by the face value of the debt, not the bond discount. These facts suggested that more value could have been created by adding two other sets of players to the initial negotiation between the landowner and the conservation group. In this green variant of a debt-for-equity swap, the conservation group bought country debt from foreign holders at the prevailing 45% discount. It then brought this debt to the country’s Central Bank and negotiated its redemption for local currency at a premium between the discounted value of the debt and its full-dollar face value (up to an 82% premium over the discounted value). The conservation group then used this greater quantity of local currency from the Central Bank to buy more development rights from the landowner at a somewhat higher unit price. This expanded four-party negotiation—sequentially involving the conservation group, international bondholders, the Central Bank, and the landowner—benefited everyone more than the best result possible in the initial negotiation between just the landowner and the conservation group. The bank was able to retire debt and cancel dollar-interest obligations, which were very costly to the country, using cheaper (to it) local currency without exporting more or diverting scarce export earnings. The conservation group was able to save more rain forest at the same dollar cost, and the landowner got a higher price in a currency it as better positioned to use. To find complementary parties and issues, as the conservation group did, you should ask questions that focus on relative valuation. What uninvolved parties might highly value elements of the present negotiation? What outside issues might be highly valued if they were incorporated into the process? Are there any parties outsid e the immediate negotiations that can bear part of the risk of the deal more cheaply than the current players? On the other hand, it is sometimes necessary to shrink—or at least stage—the set of involved issues, interests, and parties in order to create value. For example, rather than enter into a full multiparty process at the outset, an industry association that wants to negotiate a certain set of standards may benefit from first seeking agreement between a few dominant players, which would then serve as the basis for a later deal among the wider group. Or, negotiations to forge a multi-issue strategic alliance between two firms may be dramatically simplified by one side which instead proposes an outright acquisition. Certainly, the form chosen for a transaction can dramatically affect the complexity of negotiations and the value to be had. The planned merger of equals by Bell Atlantic and Nynex would have required separate negotiations with regulatory authorities in each of the 13 states served by the companies. To avoid having to undergo politically charged negotiations at 13 different tables, the parties changed the game by creating a functionally equivalent structure in which Bell Atlantic was the nominal acquirer. Indeed, it can be necessary to change the process, rather than the substance, of a negotiation. For example, two partners seeking to terminate their relationship may have difficulty determining exactly who gets what. But they may instead be able to agree to a special mechanism like the â€Å"Texas shoot-out,† in which one side names a price at which it would be either a buyer (of the other’s shares) or a seller (of its own shares) and the other side must respond. Often, changing the form of a negotiation by bringing in a skilled third-party mediator creates value. For example, two intensive mediation efforts by outside parties helped to finally thaw the frozen negotiations between Microsoft and the Justice Department. Many fundamentally different variants arvard business review †¢ november 2003 page 8 3-D Negotiation of mediation, arbitration, and other special mechanisms exist, but all are options to change the game itself rather than efforts to negotiate more effectively by purely interpersonal means. Implementing a 3-D Negotiation Strategy Sophisticated negotiators act in all three dimensions to create and claim value. While 3-D negotiators should play the existing game well , as tacticians and deal designers, they should also act as entrepreneurs, seeking to create a more favorable target game. They can do so by scanning widely to identify possible elements of a more favorable setup; â€Å"mapping backward† from the most promising structure for the deal to the current setup; and managing and framing the flow of information to improve their odds of getting to yes. Scan widely. To act outside the box, one must first look outside the box. By searching beyond the immediate deal on the table for elements of a potential value net, 3-D negotiators can retrain their focus on complementary capabilities and valuations that other players might add. Useful game-changing questions include: Who outside the existing deal might most value an aspect of it? Who might minimize the costs of production, distribution, risk bearing, and so on? Who might supply a piece missing from the current process? Which issues promise mutual advantage? What devices might bring such potential value-creating parties and issues into the deal? And at what point does complexity or conflict of interest between parties call for shrinking the scope of the negotiation? Scanning beyond the current game to claim value normally focuses on a parallel set of questions: Are there additional bidders or parties who could favorably alter BATNAs in other ways? Can certain issues be linked for leverage? Such scanning should result in a map of all the actual and potential parties (including other interested groups within an organization, if necessary). You need to assess their actual and potential interests and BATNAs, as well as the difficulty and cost of gaining agreement with each party and the value of having its support. Your map should also identify the crucial relationships among the parties: who influences whom, who tends to defer to whom, who owes what to whom, who would While 3-D negotiators should play the existing game well, as tacticians and deal designers, they should also act as entrepreneurs. find it costly to oppose an emerging agreement with key parties on board, and so on. The founders of new ventures almost always need to scan widely in order to construct the most promising sequence of deals that lead to a self-sustaining company. Consider the situation WebTV Networks founder Steve Perlman faced in the early and mid-1990s. He had obtained seed funding, developed the technology to bring the Web to ordinary television sets, created a prototype, and hired his core team. Running desperately low on cash, Perlman scanned widely and discovered an array of potential negotiating partners—ISPs, VCs, angel investors, industrial partners, consumerelectronics businesses, content providers, manufacturers, wholesale and retail distribution channels, foreign partners, and the like. He needed to engage in 3-D analysis to determine the right subset of potential partners to create the most promising deals to build his company. Map backward and sequence. It is helpful to think of the logic of backward mapping as being similar to the logic of project management. In deciding how to undertake a complex project, you start with the end point and work back to the present to develop a time line and critical path. In negotiation, however, the completed â€Å"project† should be a set of value-creating, sustainable agreements among a supportive coalition of parties. For instance, when Perlman’s WebTV was almost out of money, it might have seemed obvious that he should approach venture capital firms first. However, because VCs were deeply skeptical of consumer-electronics deals at that time, Perlman mapped backward from his VC target. He reasoned that a VC would find WebTV more appealing if a prominent consumer-electronics company were already on board, so Perlman embarked on a sequential strategy. After his first choice, Sony, turned him down, Perlman kept reasoning backward from his target. Finally, he was able to get Phillips on board. He then used Phillips to reopen and forge a complementary deal with Sony. Next he negotiated new venture money—at a far higher valuation—since both Sony and Phillips had signed on. With new money in the tank, it was fairly straightforward to thread a path of supporting agreements through manufacturers, wholesale and retail distribution channels, content providers, ISPs, and alliance harvard business review †¢ november 2003 page 9 3-D Negotiation A 3-D player’s ability to determine whether a related negotiation happens before or after his own—as well as whether the results become public—can greatly influence the outcome. partners abroad. As the WebTV case suggests, a common problem for a would-be coalition builder is that approaching the most difficult—and perhaps most critical—party offers slim chances for a deal, either at all or on desirable terms. To improve the odds of getting to yes, figure out which partners you would ideally like to have on board when you initiate negotiations with the target party. As the answer to this question becomes clear, you have identified the penultimate stage. Continue mapping backward until you have found the most promising sequence of discussions. Consider the successful sequencing tactics of Bill Daley, President Clinton’s strategist for securing congressional approval of the North American Free Trade Agreement, as reported in a 1993 New Yorker article: â€Å"News might arrive that a representative who had been leaning toward yes had come out as a no. ‘Weenie,’ [Daley would] say. When he heard the bad news, he did not take it personally. †¦He’d take more calls. ‘Can we find the guy who can deliver the guy? We have to call the guy who calls the guy who calls the guy. ’† Beyond pure sequencing, the 3-D negotiator can use the scope of the negotiation—how elements are added, subtracted, combined, or separated—to influence the chances of bringing each party on board. Issues can be added to make a deal more attractive (as Microsoft did with AOL) or a BATNA less attractive (as happened to the Swiss banks). And by not bringing on board a party to whom others have antipathy, negotiators can increase the probability of their success. That’s what James Baker did when building the first Gulf War coalition; by omitting Israel from explicit membership in the group, he was able to attract moderate Arab states. Manage the information flow. Some negotiations are best approached by gathering all affected parties together, fully sharing information, and brainstorming a solution to the shared problem. Frequently, however, vital 3D questions involve deciding which stages of the process should be public or private as well as how information from one stage should spill over to or be framed at other stages. A wry story illustrates the potential of such choices to set up a linked series of negotiations. A prominent diplomat once decided to help a charming and capable young man of very modest background from Eastern Europe. Approaching the chairman of the state bank, the statesman indicated that â€Å"a gifted and ambitious young man, soon to be the son-in-law of Baron Rothschild,† was seeking a fast-track position in banking. Shortly thereafter, in a separate conversation with the baron, whom he knew to be searching for a suitable match for his daughter, the statesman enthusiastically described a â€Å"handsome, very capable young man who was making a stellar ascent at the state bank. † When later introduced to the young swain, the dutiful daughter found him charming, with enviable talents and prospects, and acceptable to her father. When she said yes, the three-way deal allegedly went through—to everyone’s ultimate satisfaction. Setting aside the dubious factual base and ethics of this negotiation, notice how the diplomat’s 3-D actions set up the most promising game for his purposes. By separating and sequencing the stages of the process, as well as opportunistically framing his message at each juncture, the statesman created a situation that fostered an otherwise most unlikely outcome. Of course, had the banker, the baron, the daughter, and the young man been initially thrown together in a face-to-face meeting, it is doubtful that even the statesman’s suave 1-D approach could have closed the deal. Analogously, potential investors should be wary of the common tactic of separating deals to close both: for instance, getting investor A to commit funds based on the commitment of â€Å"savvy investor† B, when B has indeed committed, but only on the informal (and wrong) understanding that â€Å"reputable investor† A has unconditionally agreed to do so. Negotiations to assemble land for a real estate project offer another good example of the importance of staging the release of information. Early knowledge of a developer’s plans can be quite valuable to landowners in the target area. Since landowners may use this knowledge to extract maximum price concessions in later stages of assembly, the need for secrecy and separation of the individual negotiations is usually obvious. Indeed, the choice of which parcel to buy first, second, and so on, may depend on the relative odds that a given purchase will leak the developer’s intentions as well as whether the parcels already obtained would permit some version of the project to go ahead, or whether they would be useless with- harvard business review †¢ november 2003 age 10 3-D Negotiation out a later acquisition. Indeed, a 3-D player’s ability to determine whether a related negotiation happens before or after his own—as well as whether the results become public—can greatly influence the outcome. For example, according to a 1985 article in International Studies Quarterly, while the United States was in separate talks with Japan, Hong Kong, and Korea over textile trade agreements, a Korean n egotiator told the U. S. representatives, â€Å"We’ll ask Hong Kong to go first, then see what they get. The Koreans apparently regarded Hong Kong officials as highly skilled negotiators, with better language skills for dealing with the Americans. An observer reports that, â€Å"After waiting for Hong Kong and Japan to go first, Seoul asked for the features they had secured and then also held out for a bit more. † In essence, the order chosen by the Americans (as encouraged by the Koreans) revealed information about the U. S. approach that was of great value to the Koreans. One wonders whether the Americans should have rethought the sequence and started with Seoul. erfecting these 1-D skills, negotiators should also be innovative 2-D deal designers who have mastered the principles for crafting value-creating agreements. And the third, often-missing dimension—actions taken to change the scope and sequence of the game itself—can be crucial to a negotiation that would otherwise be completely out of tactical reach. Negotiators must take care to keep sophisticated 3-D moves from blurring into the unethical and manipulative. Yet without 3-D actions, coalitions vital to many worthy initiatives could never have been built. To create and claim value for the long term, great negotiators should be at home in all three dimensions. To do anything less is to risk playing a one- or two-dimensional strategy in a three-dimensional world. 1. A complete set of sources for this article can be found at www. people. hbs. edu/jsebenius/hbr/3-DNegotiation. pdf. †¢Ã¢â‚¬ ¢Ã¢â‚¬ ¢ That negotiators should be good listeners, persuaders, and tacticians is a given. But beyond Reprint R0311D; Harvard Business Review OnPoint 5372 To order, see the next page or call 800-988-0886 or 617-783-7500 or go to www. hbr. org harvard business review †¢ november 2003 age 11 Further Reading Harvard Business Review OnPoint articles enhance the full-text article with a summary of its key points and a selection of its company examples to help you quickly absorb and apply the concepts. Harvard Business Review OnPoint collections include three OnPoint articles and an overview comparing the various perspectives on a specific topic. 3- D Negotiation is also part of the Harvard Business Review OnPoint collection Masterful Negotiating, Product no. 5410, which includes these additional articles: Six Habits of Merely Effective Negotiators James K. Sebenius Harvard Business Review March 2002 Product no. 9411 Negotiating the Spirit of the Deal Ron S. Fortgang, David A. Lax, and James K. Sebenius Harvard Business Review February 2003 Product no. 3051 To Order For reprints, Harvard Business Review OnPoint orders, and subscriptions to Harvard Business Review: Call 800-988-0886 or 617-783-7500. Go to www. hbr. org For customized and quantity orders of reprints and Harvard Business Review OnPoint products: Call Frank Tamoshunas at 617-783-7626, or e-mail him at [email  protected] harvard. edu page 12

Selfridge Essay Example | Topics and Well Written Essays - 2000 words

Selfridge - Essay Example The impact of this culture cannot be underestimated. Corporate culture can be the "the hardest part of managing any enterprise...," and those companies that "know how to develop their cultures effectively enjoy significant advantages in both the productivity of their organizations and the quality of work life for employees" (Schulz 2001: 29). In Selfridges' management's approach, the company has set forth a corporate culture that, in part, seeks to bring personal responsibility into the workplace. This approach touches the needs of employees to engage in meaningful and responsible employment. A second notable result of the Selfridges' approach to culture is to provide for individual employee enrichment. The company actually accomplishes this by using the principle of job autonomy and team accountability to provide the individual worker with a sense of significant contribution to the final product. As each employee devotes himself to the process at hand, they are personally enriched by knowing that they are making a positive contribution to the overall operational goals of the organization; they see that the corporate goal is being accomplished through their own effort. This makes a significant impact upon the morale of the workforce because they are allowed to see the larger picture. They are not just employed in, for example, selling clothing. They are a part of a larger family that is supplying a valuable service to customers. Management, by choice or by necessity, oversees two types of HRM change; incremental change or the more dramatic transformational change (Conger, et. al 1999: 223). In the course of controlling the process, executives should seek to build and maintain an amicable and trustworthy change management methodology to ensure an enthusiastic workforce and a positive workplace environment. Management will never successfully implement an efficient transition if employees do not have confidence in them; yet they are vital in bringing about changes that impact the corporate culture: Organizations develop cultures that incorporate the values and practices of their leaders. Culture evolves through the accumulation of actions and events the members of an organization experience. Leaders-especially the organization's founders--play a key role in this evolutionary process. They, more than any other actor, are critical in structuring experiences within the group that point toward desired results. Leaders also emphasize some experiences over others and, in this way, further focus the acculturation process. (Fairholm 1994: 67) It is within the implementation of a new or altered culture-such as a change HRM approach-that employee confidence has its greatest impact on the workplace environment (Creech 1995: 35). It is a simple fact that HRM involves people talking to people. If management has been trustworthy and straightforward with its workers, they are going to be much more receptive to the changes that are being made. In a changing environment such as Selfridges, an executive or team leader that has a bad relationship with his people-or no relationship at all-could create an antagonistic

Health in education Assignment Example | Topics and Well Written Essays - 500 words

Health in education - Assignment Example In order to ensure children’s good health, the role of teachers, parents, the community, and the environment cannot be underplayed. Their contribution in any way offers vital information regarding their mental, physical, emotional, and social well-being. Health education for all the stakeholders; students, parents, teachers, and health professional is essential. This helps equip everyone with necessary information concerning procedures, steps to be taken, and ideal safety measures that need to be observed so that good health for children is ensured. Whatever observations have been made concerning the health of a child by the teacher, parent, or community is vital and essential in identifying changes in the health status of a child. More often than not, teachers and parents refer these types of illnesses and many others to the appropriate health professionals such as counselors. Counseling is a vital component of the coordinated early childhood health since it helps address health issues such as trauma, stress disorders, etc. Counseling can also help families appreciate and understand the need for professional health care especially in circumstances that they do not seem to see the need. As noted earlier, the community, parents, and teachers are only observers and cannot in any way attempt to diagnose the health problems of a child. This is where health services come in handy since it is the responsibility for health practitioners to diagnose and recommend proper actions.

English essay Example | Topics and Well Written Essays - 1000 words

English - Essay Example This indicates that the value on nutrition is very high, thus, influencing the trend of the consumer’s choice of diet (Hoyer & Macinnis, 2008). Humans have a tendency to pursue what is pleasurable for them and to avoid things that can be painful or upsetting (Mooij, 2004). This is the hedonistic nature of man that governs his behaviors and actions, and influences his decisions. This greatly influences that buying behavior of man, which when studied and analyzed can be helpful for understanding the trends that will be beneficial in creating new products or improving current products. This indicates that hedonism is influential in the choice of purchases of a consumer. This signifies that consumers tend to be attracted to those products that they consider pleasurable or beneficial for their wellbeing. It is then, important to consider giving the consumers what they need in fulfilling this value. Having the nutritional value of the food the restaurant serves implies value for the consumer’s needs. Whether the dish is nutritious or not, it allows the consumer to understand and to know what they eat, and the implications of what they are eating. With this, consumers feel that their needs and wants are served, and that their choices are important for the management of the restaurant. Giving out the nutritional value does not necessarily mean that the restaurant needs to indicate this in the menu. What is important is that there is nutritional value on the dishes within the restaurants that the customers will be able to notice. There is awareness that there is such information within their grasps and it will be their choice whether or not to check it. This will allow the restaurant to minimize loses, when the customer chooses not to order say a high-priced item which has more calories than usual but satisfies his craving for sweets because of the information

Parking Economics Essay Example | Topics and Well Written Essays - 500 words

Parking Economics - Essay Example Legal barriers restrict competition through methods such as patents or copyrights, public franchise and government licenses (Duffy 119). Price discrimination and a single price markets are the two main price strategies utilized in monopolies. For most monopolies, low prices facilitate larger output; therefore, single price strategy is efficient in determining output and price. Single price monopoly involves selling its entire output unit at similar prices to all customers. This strategy builds on the flux in demand for goods. In an elastic environment, single price monopoly works best by increasing the production of a unit and reducing the selling price thereby, increasing marginal revenue that translates to profits. However, in a rigid demand market setting, fall of price in the output translates to decrease in total revenue. In such markets, monopolies reduce the number of units produced and increase the price of each unit. This will decrease the total cost but increase the income profits (Duffy 120). In a perfect competition market, equilibrium occurs when the demand is equal to supply in regard to unit quantity and price. On the other hand, equilibrium in a single price monopoly markets occurs when the marginal revenue and the marginal cost are equal. Monopoly equilibrium relies on a higher price smaller output strategy. Perfect market competition is more efficient than a monopoly market because the marginal social benefits and the marginal social costs are equal. This equilibrium describes the maximization of consumer surplus and producer surplus hence production of efficient output. Firms that run a monopoly are not able to get maximum outputs from the available inputs. In summary, marginal social benefit exceeds marginal social cost leading to dead weight loss. However, this discrepancy can be averted through rent seeking which is the process of redirecting the surplus from a

Evaluation of Data Assignment Example | Topics and Well Written Essays - 500 words

Evaluation of Data - Assignment Example Interview schedules will be used and will complement the questionnaire to phrase and rephrase questions to ensure that the needed information is obtained. In addition, it stimulates the respondents to think and answer the questions appropriately. The processing of data prepares raw data for statistical analysis and presentation. Kothari, (1988) explains that this stage is appropriate for a scientific study and for making sure that all the relevant data is present for making comparisons and analysis. The checking of questionnaires, coding of responses and statistical analysis will be done. Data computation will be done through Statistical Package for Social Sciences (Morgan, 2011). Descriptive data analysis will be used to show the characteristics of each variable under study. Regression analysis will be used to identify the presence of certain relations among variables such as the adoption a new technologies in hospitals and the reduction of medication errors. Descriptive statistics such as mean, frequencies and percentages will be evaluated using SPSS so as to bring out a clear picture about the study. The research is expected to prove that new innovations can actually reduce cases of medication errors in hospitals. The main development that is expected to reduce medication errors is the bar code method of administering medication. The research will focus on the different innovations that help reduce medication errors. The interviewed nursing students are expected to point out reasons for their medication errors, if any, such as inadequate training and wrong patient details (Lan et al, 2014). They will identify new innovations in hospitals as the reason for reduced medication errors. The research will identify areas which need immediate attention. The research will point out several recommendations to the university and the hospitals where the nursing students were placed. The research will identify problems which lead to medication

Keeping Up Appearances At All Costs Mr. Nilson and The Japanese Quince Essay

Keeping Up Appearances At All Costs Mr. Nilson and The Japanese Quince - Essay Example The bird and the tree were fully alive, truly natural; Mr. Nilson merely existed - going through the motions behind the faade of a wealthy businessman. Appearances had to be maintained, even if this resulted in a lonely life and missed opportunities for friendship. The main problem with Mr. Nilson is his inability to break away from what he saw as the rules and strictures of polite Victorian society and make contact with another human being. He was a rich, London businessman, living in wealthy surroundings, a man who took care of his health and appearance. He was a creature of habit, leading an orderly life, which made him feel secure, even as he suffered some physical discomfort. His neighbour, Mr. Tandram seemed his exact replica, as in "well known in the City" and "of about Mr. Nilson's own height, with firm, well-coloured cheeks, neat brown mustaches, and round, well-opened, clear grey eyes, and he was wearing a black frock coat." (Galsworthy) How he looked to others was important for Nilson. The similarities run right through the story, ending in sadness for two lonely people who could have connected, if only they had not been so conventional, so concerned with how things looked, and with keeping up outside appearances. It was the tree, the blackbird and the beauty of the day that combined to touch their separate emotions and bring them together for a short time, to forget themselves.

Assessment of Artistic Quality Essay Example | Topics and Well Written Essays - 3250 words

Assessment of Artistic Quality - Essay Example Other types of art include decoration, literature, interactive media, crafts, fine arts, and applied arts (Davies, 2009, 134). Since time immemorial, art has been controversial. Some people may decide to dislike a particular art for various reasons. There have been incidences of art destructions especially those that are not appealing or outrageous to some people. Some artistic creations have been disliked simply because they depicted unpopular parties, individuals, rules or groups. Conventions involving art have in most cases, been conservative (Noà «l, 2008, 45). The iconographic content of art may result in controversies. An example can be derived from the depiction of the new motif of the virgins Soon alongside the crucifixion of Christ. Another example of artistic controversy is that Last Judgement by Michelangelo. This is because it breached decorum by the depiction of not only a duty but also the Apollo Like pose of Christ. This art became a nuisance to many people (Stecker, 2007, 35). The many controversies in artistic designs have necessitated assessments on this artistic project to ascertain the quality before they are displayed in the public domain (Kennick, 2009, 6). In a different generation, artistic evaluation has been done using various criterion. In this situation, I think artistic quality should be assessed before being displayed to the public in order to eliminate or reduce controversies. Despite being in existence, a wider criterion for artistic evaluations, I will in this paper focus on fine art (painting) and discuss three methods to criterion in artistic quality evaluations. These criterions include assessment in artistic style, artistic technique, and line. In most cases, people tend to assess a particular piece of art by attaching their personal feelings to the decisions that they take. The contents of the majority of formal arts throughout history have been determined by the commissioner and the patron instead of a particular artist.

STOCK EVALUATION Assignment Example | Topics and Well Written Essays - 1500 words

STOCK EVALUATION - Assignment Example The company’s stocks are traded at New York Stock Exchange and it also forms one of the companies in Dow Jones Industrial Average, and the S&P 500. The company’s total revenue for the year 2011 was over USD 67.41 billon with a net operating income and net income of USD 12.75 billion and USD 11 billion respectively. Its total asset and equity for the year 2011 was USD 189 billion and USD 81.19 billion respectively. Between the year 2000 and 2011, the company has regularly paid dividends to its shareholders, quarterly, with Average dividend of 0.19, Maximum dividend of 0.32, and Minimum dividend of 0.09. Economic Analysis The State of Overall Economy The economic analysis of a business comprises of analyzing not only the fundamentals of the business, but the overall Macro-economic as well as Micro-economic factors. It is also known as the top down approach because a stock analyst observes the macro and micro economic variable like, GDP, inflation rate, Repo rates, Interes t rates, consumer spending, various indices, political and economic stability, government policies, competitors, industry performance, etc. to judge the overall state of business, by analyzing first the Macro factors and then the micro factors – industry and competitors and then the company. ... It has direct impact on the consumer borrowing and lending. So, the lower rates encourages more borrowing and consequently creating more jobs and leading to economic growth. Consumer spending – It depends on the fiscal budget prepared by the government every year. The budget allocated to each sector of economy determines the retail prices, which is higher than wholesale prices. Thus, consumers will be encouraged to spend more when retail prices for the goods and services are lower. Higher spending will create more demand and more jobs that will expand the growth of economy and increase the GDP. Inflation – It is condition when the overall prices goods and services increases due to various reasons including demand-supply mismatch, increased government spending, etc. High inflation rates reduce the real value of money and hence low inflation rates are favorable for economic prosperity. Industry Analysis Nature of Industry The nature of the pharmaceutical industry is that this industry develops or produces and markets generic or branded drugs with the license for the use in various medicines. The most important part of this industry is the Drug License Authority that clears drug licenses of the companies belonging to the industry and the drug patenting. The regulations regarding testing, efficiency, patents, marketing of drugs is guided by the Food and Drug Administration in the United States. Major Competitors Some of the major players in the industry are GlaxoSmithKline, Pfizer, Abbott Laboratories, and Eli Lilly. According to a study conducted in 2008, Pfizer topped the list of pharmaceutical companies all over the world and emerged as the market leader. It was followed by Novartis from Switzerland and

Global Poverty, Development, and Global Processes Uganda Essay Example for Free

Global Poverty, Development, and Global Processes Uganda Essay It was British Prime Minister Winston Churchill who conceived the term â€Å"Pearl of Africa† pertaining to the small country teeming with magnificent scenery, wildlife, and friendly people. Uganda was really beautiful, until war tore it apart and left it in the clutches of poverty and underdevelopment. Uganda is a country in East Africa surrounded by other countries, making it a landlocked country. Its borders include Kenya on the east, Sudan on the north, the Democratic Republic of Congo on the west, Rwanda on the southwest, and Tanzania on the south. The name â€Å"Pearl of Africa† may have been based on the fact that it is at the center of different countries and it had great wildlife and natural resources, as well as a very welcoming people. With all the good qualities Uganda possessed at that time, Winston Churchill was merely stating the obvious in saying that it was Africa’s pearl. At the time when Uganda was given the â€Å"pearl† recognition, the country was really a picture of abundance in terms of natural treasures. It was considered to be one of the most bio-diverse countries in the African continent (Kasirye, 2005). It was blessed with jungle rainforests, boasting of more than a thousand species of birds, as well as other types of wildlife including mountain gorillas, chimpanzees, and other primates. It also has a site being passed by the Nile River, giving life to various animals and people inhabiting near the waters. Its diverse environment includes snow-capped glacier peaks, healthy and surviving rainforests, and a lot of wildlife all of which are great ecological importance to the people. At present, it is hard to say that Uganda still is the pearl of Africa because a lot has changed, following Churchill’s visit, when he gave Uganda its moniker. It wasn’t only the physical characteristics that changed in Uganda but also its people. This aspect is really crucial because it is what defines a country, and the changes that took place in Uganda may have long-term effect on the country and its people. Uganda may still have teeming wildlife and abundant natural resources, but in the present time, this may not be enough for it to be considered the pearl again. The changes that happened were really formative, affecting people’s prejudices and biases, thus affecting their decisions and activities. It was a common in Uganda’s politics to see one president getting overthrown by another. Most of their changes in leadership back in those days were results of drastic measures like coups and counter-coups. It was during the rule of Idi Amin when Uganda saw a really big change. It was not on the positive aspect though. Amin ruled over Uganda alongside the military, so anything that crosses his path would have to be illuminated. Many Ugandans died, while some were forced to flee to nearby countries. The Indian minorities which served as a backbone of their economy were driven away, causing a great fall in the country’s economy. Idi Amin tried to make his decade-long stay in power worthwhile by passing stricter laws to regulate the people and maintaining peace in the country (Short, 1971). His cruel means wouldn’t go unchecked when the neighboring Tanzania invaded Uganda with the help of Ugandan exiles. The Uganda-Tanzania war overturned the whole country, all in order to remove Amin from his position. His rule ended in 1979, replaced by another person that would also be removed shortly after (Fallers, 1955). After a series of coups and wars, the abundant resources that gained Uganda the titular â€Å"pearl of Africa† seemed to be getting smaller and smaller. It is true that the country is still teeming with wildlife, but the problem is that Uganda is running out of space to house that wildlife and its people. Uganda’s people aren’t just expanding in numbers but also expanding in expectations (Myers, 1971). After the problematic years of wars and settling political differences between leaders, they seem to be facing a problem of a different level, something that can’t be easily solved by taking arms and fighting one another. Uganda has a land area of less than 200,000 sq km, about twice the size of Pennsylvania. However, Uganda’s population of more than 30 million is ten times more than that of the said state. Now, we can no longer say that Uganda is still the pearl of Africa. Even though it has the resources and wildlife to boast, it’s still not enough to support the consumption of its population. It would have stood out if it could cater to the needs of the people of Uganda along with being a global wildlife landmark. But the predicament it is on right now is more of a pressing concern than maintaining its position as the pearl of Africa. Many people are cramped up in a small country, so it is expected that there would be a shortage of space and opportunities for the people. Uganda is more of a dead fish right now, instead of being the pearl of Africa. It tries to survive with the international aid from other countries, but still the problem continues. The population continues to grow, the number of moths to feed increases, the number of food and space available continue to shrink. In a nutshell, Uganda is suffering and is barely able to support its people. If these events continue, then the future would be vague for country. One problem that was worsened by wars and political unrest in Uganda was the HIV/AIDS pandemic, which was evident not only in the country, but all throughout the continent of Africa (Hooper, 1987). Sexual abuses brought about by war worsened this problem, as it spread throughout the country, affecting 20% of the population back in the early decades. It easily spread throughout the country because it was left unchecked, with political leaders more concerned about their positions instead of focusing on the welfare of the people. Coupled with poverty and overpopulation, HIV/AIDS easily spread throughout the population. It is common to expect this kind of problem in countries like Uganda. With political unrest, leaders give little interest to the things that really matter to the populace. There is insufficient funding for the efforts to solve the problem; worse, there could be no efforts at all in solving this kind of situation. Less developed countries like Uganda have very limited funds, and they’re often spent on things that won’t do the people any good. These funds would also be subject to the corruption of the political leaders, so only a small portion of the small budget would be appropriated for large scale problems like spread of diseases. On a lighter note, when the government of Uganda settled after the war and political unrest was resolved, the HIV/AIDS problem was given proper attention. Uganda’s HIV/AIDS problem was a success story because they were able to reduce the prevalence of the disease from almost 20% in the 1990s to just 5% in 2002. Well, compared with other countries, it is still high, especially with a population of 30 million. But the degree of the problem was greatly reduced, proving that it is not too late for Uganda. If they’re able to solve one problem, it is likely that they can solve more. Another matter of concern for Uganda is education. With the increasing number of population, more and more people are not able to go to school, both because of poverty and the lack of educational facilities. Consequently, the decline in the quality of education available for the people is hurting Uganda, as it causes them additional financial constraints. Education provides the people a chance to land a stable, good paying job, and for the government, this means efficient taxation. But with people unable to get good jobs or at least any job, then they would be a great blow to Uganda financially. The education problem is prevalent not only in Uganda but also to other parts of the world. It goes along with poverty, since poor families wouldn’t really be able to send their children to school. Instead of paying for education, they’d rather use whatever money they have to put food on their plate. The children are also expected to work to earn additional income for the family, instead of attending school. With the sheer number of Uganda’s people, the schools get filled easily. Even if a student is willing and able to go to school, if there is no school available, then they have no other choice but to do other things. Because of the wasted opportunities and financial constraints brought about by Uganda’s education situation, the government exerted more effort to finance education in the country. One set-up that they focused on was the introduction of student loans for the higher education in Uganda (Kajubi, 1992). Through this way, students would be encouraged to finish their studies even if they don’t have the money. Those who would be able to finish their studies with the help of these loans would be able to land better jobs or work for the government, and that would be the time for them to pay their loans. Currently, government efforts to solve education problems are just being executed. The short run effects aren’t really obvious, but the long run outcomes are the ones being anticipated. Focusing on education problems would hopefully solve their problems, though it would take some time to really see some concrete effects of their efforts. But still, there are a lot of children who are unable to go to schools, so the government still has to intensify their efforts to solve the problem of education in the country. There are also government efforts to revive Uganda’s title â€Å"pearl of Africa†. Promotion of the country is being done through websites and magazines, featuring Uganda’s nature spots and rich wildlife (Africapoint. com, 2008). Through these campaigns, Uganda is again being promoted as a tourist spot, just like what Winston Churchill did a few decades ago. With the help of contemporary mass media, people from different parts of the world learn about Uganda, and hopefully, attract them to come and visit. Tourism offers a source of income for the people, which could in turn help them with their daily needs. Uganda is a good example of how political mismanagement, wars, and other factors affect the development of a country. Uganda is not an isolated case. A lot of other countries experience the same situations as that of Uganda. But that shouldn’t stop them from desiring to improve and develop. Despite the constraints experienced by Uganda because of wars and political unrest, they are slowly recovering, with the help of the international community. More and more projects are pushed through, all for the improvement of the country and its people. Its global connections are really a big help, and hopefully, it would continue to benefit Uganda, so that they would again deserve to be called the Pearl of Africa. References: Africapoint. com. (2008). Uganda – The Pearl of Africa Glows Again. Retrieved April 1, 2009, from http://72. 14. 235. 132/search? q=cache:OqX1jq7MkQQJ:www. africapoint. com/downloads/Uganda-Tour. pdf+pearl+of+africacd=5hl=tlct=clnkgl=ph Fallers, L. (1955). The Predicament of the Modern African Chief: An Instance from Uganda. American Anthropologist, Vol. 57(No. 2). Hooper, E. (1987). AIDS in Uganda. African Affairs, Vol. 86(No. 345). Kajubi, W. S. (1992). Financing of Higher Education in Uganda. Higher Education, Vol. 23(No. 4). Kasirye, V. (2005). Uganda the Pearl of Africa. Retrieved April 1, 2009, from http://72. 14. 235. 132/search? q=cache:55WX2tzvlaYJ:www. worldharvestmission. org/Uganda_Report. pdf+pearl+of+africacd=10hl=tlct=clnkgl=ph Myers, N. (1971). Wildlife and Development in Uganda. BioScience, Vol. 21(No. 21). Short, P. (1971). Amins Uganda. Transition(No. 40).