Critically Evaluate How ICT Is Applied To the Tourism and Hospitality Essay

Critically Evaluate How ICT Is Applied To the Tourism and Hospitality Industries - Essay Example rating in the tourism and hospitality industries also face immense competition amid themselves owing to the increasing numbers of entrants and established brands offering similar products and services. Companies possess the need to develop effective strategies to deal with such scenarios. They need to perform effectively in every aspect of their business so that they can outdo the performance of their competitors and obtain greater advantages that can suffice their long-run sustainability needs. It is often argued in this regard that proper execution of the plans and decisions of the business is the ultimate approach that can substantiate effective performance demanded by a modern day organisation (Pride & et. al., 2010). In this regard, Information and Communication Technology (ICT) performs a key role in the proper execution of organisational operations, keeping in mind the needs of modern companies, which can be explicitly observed in the context of tourism and hospitality industries. ICT is often considered as one of the extensive constituents of Information Technology (IT). However, unlike IT, the concept of ICT stretches more on the aspect of communication. The concept of ICT in any form of industry including the tourism and hospitality industries commonly involves the execution of activities such as incorporation of telecommunications technology with computers and other essential software, which further allows the user companies to access, store as well as share information among their various operational departments. It would not be erroneous to depict in this regard that ICT has its influences in various sections of the business and it acts as a major driving force in deciding the performanc e of the business operations of companies functioning in any sector including tourism and hospitality sectors. The significance of ICT for companies operating in any sector can be affirmed from the fact that it is actively implemented in certain specific and vital

Evaluating the ISO 9001

Evaluating the ISO 9001 THE IMPACT OF IMPLEMENTATION OF ISO 9000 ON BUSINESS PERFORMANCE Abstract This research work is intended to evaluate the ISO 9001:2008 Quality Management System Standard, by going into its historical perspective, its dimensions in meeting quality management objectives and effectiveness in its operation internationally. The standard is generic in nature and can be applied to any kind or organisation in manufacture/production, services or a combination of these. It is founded on eight quality management principles that are respectively, customer focus, leadership, involvement of people, process approach, systems approach to management, continual improvement, factual approach to decision making and mutually beneficial supplier relationships. Application of these principles can lead an organisation to maintain sustainable business performance in a highly competitive business environment, benefiting the organisation, customers and other stakeholders. Implementation of the quality management system as per ISO 9001:2008 entails the following steps: * Nominating a leader for implementing the project * Formulating Quality Policy and Objectives * Providing appropriate training for all employees * Conducting gap analysis of the organisations system vis-à  -vis the Requirements in the standard * Filling the identified gaps through introduction of new procedures and new records. * Preparing Quality manual and documentation required at different levels. * Conducting internal audits and management reviews * Arranging Third Party Audit if certification is intended. There are differing opinions about the outcome of operational benefits of implementation of the system. Generally, benefits accrue to the organisation if the management is committed and do all what are necessary to involve managers and employees. There is a criticism that many organisations implement quality management systems out of external compulsions such as stipulation from customers or regulatory authorities. It is possible that internal commitment in such cases will be low. If that is the case, the benefits of implementation may be marginal. The ISO standards are voluntary and are internationally popular. These are followed in 175 countries in the world. The number of certifications on ISO 9001 is steadily growing. Organisations desirous of satisfying customers and achieving continual improvements should implement the system. Design/ methodology This research work aims to scan only published information on the subject of ISO 9001: 2008 standards. This will include the historical perspective of quality management, development of the international standards, the management principles built into the standards, implementation of ISO 9001: 2008 in an organisation and its effect on business performance besides the international acceptance of the ISO standard. There are books exclusively dealing with quality management, and the subject is covered in general in other management books such as operations management. The historical perspectives are expected to be obtained from these books as well as from the website of the International Organization for Standardization. There are popular Journals that are devoted on specialised subjects such as the International Journal of Productivity and Performance Management, Quality management etc. These journals contain a number of research papers relating to implementation of ISO 9000 and the findings of scholars on organisational performance. It is expected that the secondary data will adequately support the research objectives. Findings ISO 9001: 2008 is the latest version of the international standard on quality management. Quality management standards initially released in 1987 and its subsequent revision in 1994 were focused on quality assurance without particular focus on customers. Revision made in 2000 and revision in 2008 focuses on customers and includes relevant TQM principles. There are organisations implementing ISO 9001 out of earnestness for continual improvements and there are others implementing it for obtaining certification status to â€Å"signal† customers or for meeting regulatory requirements. The study concludes that those who implement the standards with an internal will, fully involving managers and employees will be benefited and those who implement out external pressures or other extraneous reasons, gain only marginally. The ISO 9001 standards are popular worldwide and the number of certifications is growing steadily. Originality value The researcher does not claim any new findings, as the study has been based on information already in public domain. The publication will have its own value due to its exclusive assemblage of ideas. This will be interesting for readers who want to get a composite exposure to ISO 9001: 2000 standards as this publication provides many ideas in one place. Key words Business performance, Customer focus, Customer satisfaction, Continual improvement ISO 9000, ISO 9001, ISO 9005, Product realization, Quality management, Quality Manual, Quality Policy, Quality objectives, Resource Management, Systems approach. Introduction It is the post World-War II business scenario that led organisations to recognise the cost of bad quality, and initiate the movement for improving quality of products and services to compete with international players. Across-the-border business, forced those who enjoyed a protected domestic market to either do or die. Consequently, companies started recognising the importance of adopting TQM for improved overall performance. The first ISO 9000 Quality Management System Standard was introduced by the International Organization for Standardization in 1987. It is understood that this was a modified version of the then existed British standard BS 5750.The first set of standards released in 1987 for Certification, comprises ISO 9001, ISO 9002 and ISO 9003. These were revised in 1994. The latter two standards were discontinued when updated in 2000 and in 2008, retaining only ISO 9001 with provisions for exclusions to suit those categories of organisations covered by the earlier standards of ISO 9002 and 9003. It has been mentioned in management books that there are two approaches to building a system. These are â€Å"building a system out of parts (the analytic approach)† and â€Å"building parts for a system (the holistic approach).† Hanna Mark D. and Rocky Newman W. in their book on operations management, 1 state that firms implementing TQM should take advantage of both the approaches. The authors narrate the experience of Ford Motor Company during the late 1970s to early 1980s about its decision to make own Transmission systems by â€Å"cloning† the Mazda Transmission plant 1 Hanna Mark, D Newman, Rocky,W., 2001. Operations Management (p.185) to partly substitute the system outsourced to Mazda. The Ford-built Transmission systems were found to cost much higher in meeting warranty related obligations. In other words the quality costs of Ford-made systems turned out to be higher. It is explained that the American employees defined a quality part as â€Å"one that was built to specifications.† The authors report that, when Ford employees were asked as to where the specifications came from, â€Å"employees pointed to the process engineers.† The process engineers stated that these came from the product engineers. The product engineers believed that making a specification more precise would raise quality, but at a higher manufacturing cost and therefore they wrote specifications compromising between acceptability and cost. Fords engineers later found that though Mazdas parts were four times likely to deviate from specifications, â€Å"there was much less variability form part to part.† The holistic thinking of the Mazda workers appeared to be the primary reason for superior performance. ISO 9001: 2008 quality management systems 2 is intended enable organisations to deliver quality products or services while continually improving and enhancing customer satisfaction. The standard is structured to adopt the â€Å"Process approach,† and is based on eight principles described in the publication that stands updated as ISO 9000 (2005) 3. These are well understood TQM principles. This research intends to go analytically into the eight principles mentioned above and to study its contributions to the management system. 2 ISO 9001:2008, Quality management systems- Requirements 3 ISO 9000:2005, Quality management systems- Fundamentals and vocabulary Research Objectives This research work has been planned to study: (1) Principles behind the Requirements in the standard ISO 9001: 2008 (2) Implementation of ISO 9001: 2008 in organisations. (3) Attitudes of business establishments towards implementation of ISO 9001: 2008 and its outcome on business performance (4) Attitude of countries towards ISO 9000. Research Design/ Methodology This assignment has been planned to rely on secondary data on various aspects of Quality Management and related information contained in publications. This will include books, Journals, publications of the International Organization for Standardization including information available on its website and secondary data on the subject displayed by others for commercial purposes on the Web. Literature Review There are books exclusively dealing with Quality Management. There are other books that cover limited but relevant aspects on quality such as contained in general books on management. It is expected that these books will provide adequate information. Several publications such as standards and supporting publications are available from the International Organization for Standardization. The subject of Quality Management and ISO 9000 are also covered in popular journals and it is intended to scan such journals. More sources will be identified during progressive stages of research. The initial sources identified for this research are listed below: BOOKS (1) ISO 9000: The Year 2000 and Beyond.3rd ed. (2000) by Perry L. Johnson This book covers the history of Quality movement and all aspects relating to the ISO standard in terms of requirements with explanatory notes, details of implementation, Third Party certification and benefits of operation of the system. (2) Encyclopaedia of Total Quality Management by Joel E. Ross (1995) This publication is very comprehensive, covering all aspects of Quality Management such as TQM, ISO 9000 and popular systems, tools and techniques that are applied currently. (3) Operations Management by Mark, D. Hanna Rocky W. Newman (2001) Chapter 5 in this book covers Total Quality Management and chapter 6 covers Quality Improvement Tools. Chapter 5 deals with TQM in general and gives details about ISO 9000, Quality Awards etc. (4) ISO 9001: 2000 Quality Management System Design by Jay Schlickman (2003) This book exhaustively covers all aspects of Quality Management and ISO 9001: 2000 in particular. (5) Total Quality 3rd ed. by Vincent K. Omachonu Joel E. Ross (2004) This book is devoted to Quality and it covers relevant aspects including ISO 9000. (6) ISO 9000 (2005): Quality Management Systems- Fundamentals and Vocabulary This publication explains the concepts employed in ISO 9000. This will support the analysis part of this research as this forms the basis for the ISO 9001: 2008 standard. (7) ISO 9001: 2008: Quality Management Systems- Requirements The requirements of the standard for implementation of the system are covered in this standard. This is a very important publication for this research. JOURNALS Journal articles appeared in relating to the subject have been identified for this research. Information contained in these articles to the extent these support the research will be used. The identified Journals are given below:  · The Quality Management Journal * Journal of Operations Management, * International Journal of Productivity and Performance Management * Quantitative Finance and Accounting * Journal of Manufacturing Technology Management.  · Benchmarking. Research Findings:General Principles of quality management Edward W. Deming, an American statistician was recognised as a guru on the subject of quality management, starting from his role in the Japanese industry in the latters pursuit for quality improvement in the 1950s. Demings model known as PDSA or PDCA is the basis for todays quality management, although many experts have improvised these into other models. Source: Schmoker Michael J., Wilson Richard B. p.17 There are four steps in PDSA. These are respectively Plan, Do, Study and Act.4 Developing a plan for a making product or for providing a service based on available data or information is the first step. The second step is to â€Å"Do† in the way it was planned. The third step is to â€Å"Study† (or check) the result to find whether the product or 4 Schmoker Michael J., Wilson Richard B., 1993. Total Quality Education: Profiles of Schools that Demonstrate the Power of Demings Management Principles. p.17 service achieved the planned attributes. The fourth stage provides for finding out the causes of deviations (if taken place) from planned results to modify the plan for subsequent cycles. J.M. Juran, another American quality expert, proposed the Financial and Quality Triologies which cover â€Å"planning, control and improvement.† The Financial Triology while said to succeed in some cases has its own limitations.5 Quality experts generally agreed that they need to address more organizational segments in the system, particularly customer satisfaction. Total Quality Management Total Quality Management (TQM) is an accepted approach to improve quality and achieve customer satisfaction. Deming, in his book â€Å"Out of the Crisis,† 6 had set out 14 points for the US industry to practise to regain lost competitiveness. When Deming brought up these points, he was criticized for â€Å"putting forward a set of goals without providing any tools for managers to use to reach those goals.† 7 Nevertheless most of these principles have been adopted later. A functional model of a quality management system taken from Schlickman Jay 8 is given in 2. 5 Gupta Praveen, 2004. Six Sigma Business Scorecard: Ensuring Performance for Profit. p.5. 6 Deming W. Edward, 2000.Out of the Crisis. pp.23, 24 7 Cohen Phil. â€Å"n.d.† Demings 14 points. [online] 8 Schlickman Jay .2003.ISO 9001:2000 Quality Management System Design.p.4. General findings about the standard Scope and application of ISO 9001:2008 The standard can be applied to all types of organisations irrespective of type, size or nature of the product, as the requirements in the standard are generic in nature. An organisation has the freedom to implement the requirements in the standard â€Å"for internal and external benefits.† It is also open to the organisation to decide on whether or not they seek certification. 9 The Process approach adopted in ISO 9001:2008. There are numerous processes and sub-processes in an organisation operated by functional and cross functional groups. In order to â€Å"do it right the first time† and â€Å"do 9 ISO Survey of Certifications (The). (2007) p.5. [Internet] the right things right,† processes should be managed effectively.10 Process management becomes effective, if processes are clearly defined and the right resources and controls are applied. Arbitrariness can creep into any process if process activities are not clearly defined. The publication of ISO 9000: 2005 gives a model of the process approach by considering the requirements in the standard as comprising four processes within the organisation, each process receiving input from an internal customer (within the organisation) or external customer. 3 gives the model of the process-based quality management system envisaged in the standard. 10 OR [Omachonu Vincent K., Ross Joel E.], 2004.Principles of Total Quality. p.225 While there are several processes and sub-processes in an organisation, the above model represents the requirements in the standard grouped into four processes. These are respectively management responsibility, resource management, product realisation and measurement, analysis and improvement. Principles forming the basis of the standard ISO 9000: 2005 lists out eight principles that have been incorporated in the standard. These are serially studied and analysed in the following sections: (1) Customer focus ISO 9000: 2005 (Cl.0.2. p.ii) states that organisations should â€Å"understand current and future customer needs† and â€Å"strive to exceed customer expectations.† Hill Charles W.L. and Jones Gareth R 11 observes that â€Å"a company must give customers what they want, when they want it and at a price they are willing to pay- so long as the companys long term profitability is not compromised in the process.† The authors mentioned this to highlight the importance of achieving superior responsiveness from customers. According to OR (11 Ibid.p.142), motivating the whole company to focus on the customer should be the first step. The means for this are â€Å"demonstrating leadership, shaping employee attitudes and using mechanisms for bringing customers to the company.† It is said that customer satisfaction is the result of a three part system that comprises (1) company processes, (2) company employees and (3) consistency of product or service to customer expectations (11 Ibid. p.208).The effectiveness of the system is a function of how well these three factors are integrated.† 11 Hill Charles W.L., Jones Gareth R.( 2004) Strategic Management. An Integrated Approach.p.142. (2) Leadership Defining Leadership is not as simple as it may appear to a common man. Northhouse Peter G., in his book 12 cites Stogdill (1974) to convey that â€Å"there are almost as many different definitions of leadership as there are people who have tried to define it.† The meaning in this case is to be understood in the context of the kinds of leadership required in organisations that require management and motivating skills to bring up cultural changes. Drummond Graeme., and Ensor John, 13observes that the â€Å"role of the leader is to get the best out of people and deal with the unexpected,† and â€Å"this is achieved by creating an environment where actions can take place.† The authors cite Adair (1984) to identify the following leadership needs: 1. Task needs- aiming to complete the project 2. Group needs- developing team spirit and morale 3. Individual needs- harmonising the above with the needs of the individual. The leader will â€Å"emphasize† task, group or individual needs depending on circumstances for accomplishing the objective. The above is diagrammatically presented 4. 12 Northhouse Peter G., 2003. Leadership: Theory and Practice 3rd ed. 13 Drummond Graeme, Ensor John, 2001. Strategic Marketing: Planning and Control.2nd ed.p.252 (3) Involvement of people. Involving personnel who are closest to the processes in decision making activities can bring better results, because it is they who are in the better know of things happening in their work environment and better placed to bring ideas for solving problems or for making improvements in processes or products. Improvements may be in the form of reduction in cycle time, reduction in cost, increase in throughput or in the form of decreasing the variations within the processes. HR policies in the company should be oriented to optimally improve employee involvement. As a basic step the wants and needs of employees have to be recognised. These can be achieved by motivating and appropriately empowering them to take their own decisions. Involvement can be improved by better communication with the workforce on customer requirements, communication of companys policies and objectives, providing training to update and improve job knowledge etc. (4) Process approach A process transforms inputs to outputs (ISO 9005: 2005.p.7). For the process to achieve the desired results, appropriate resources and controls are necessary. A holistic approach is required to get optimum results in terms of quality and cost, which means that the entire resources of functional teams should work with the common defined objective, without individual functions applying their own norms. The example of Ford Motor Company given in the introductory part of this research paper reveals the reported failure of the company to adopt a holistic approach. The process approach requires clearly defined roles of employees with a defined agenda and clear understanding of organisational policies and customer requirements. (5) Systems approach to management An organisation creates value for its customers. The contributions to value addition come from different functional groups. Value creation or addition also takes place in the entire supply chain. Therefore the organisation will be able to add value by facilitating the links in the supply chain as well. OR (10.Ibid.p.163) gives the example of Wal-Mart deriving advantage from the entire supply chain by using a â€Å"sophisticated computer-based information system that improved the output of many other activities such as distribution, purchasing and warehousing.† The systems approach uses benchmarking and data analysis to improve quality of products and services through various means. (6) Continual improvement Any organisation will require continual improvement for sustaining business in a highly competitive environment. Therefore this has to be a permanent objective. It calls for aligning activities of the organisation with organisational plan and making employees aware of the plans, providing training for them to realize that it is everybodys business. Benchmarking performance indices and communicating these to all and motivating them to achieve the set goals leads to continual improvements. (7) Factual approach to decision making A system generates data and this data requires to be transformed into useful information. This is possible through systematic analysis of these data. Effective decisions can be made by use of analysed data. Data and information should be maintained in a readily retrievable form to take correct decisions. (8) Mutually Beneficial Supplier Relationships An organisation and its suppliers are interdependent. If the relationship is maintained on a continuing basis the potential available with the suppliers can be fully exploited. Product improvement can take place from the initiatives of either side. Implementation of ISO 90012008 in Organisations The method of implementation of the system in an organisation venturing for the first time will involve the following steps as paraphrased from a document retrieved from Internet. 14 The proposal is to be considered a new project and resources have to be identified and earmarked for implementation. First a senior member of the management has to be placed as â€Å"Management Representative,† with responsibilities as described in clause 5.5.2 of the standard, that include developing implementing and maintaining the system. A steering committee comprising members from different functions should be constituted to work as a team for implementation of the project. The Management Representative is to be formally trained to take up the responsibilities. Other members and employees in general will require awareness training. This shall be arranged. The organisation has to formulate its Quality Policy as per requirements given in section 5.3 of the standard and measurable objectives originating from the policy have also to be identified as given in clause 5.4.1. The documentation requirements as given section 4.2 in the standard include: * A Quality Manual addressing all the requirements in the standard. * Procedures stated as essential in the standard besides procedures considered necessary by the organisation. * Records to evidence effective operation of the standard. The documentation hierarchy and guidance on preparation is available in ISO 10013. 15 Section 4.2.3 and 4.2.4 in the ISO 9001:2008 standard defines the controls prescribed for documents and records. Documents provide information for performing work and records evidence the performance of work. Section 8.2.2 of the standard prescribes Internal Quality Audits. Trained personnel are required for this. Nominating Auditor candidates and training them also forms part of the implementation project. Auditors can derive guidance form ISO 19011.16 Once the documents and records are in place, internal audits shall be performed according to a plan. Audit findings call for corrective and/or preventive actions as per requirements in clauses 8.5.2 and 8.5.3 of the ISO 9001standard. After one or two internal audits followed by Management Reviews complying with requirements in section 5.6 in the standard, the organisation will be able to present itself for Third Party audit and obtain accredited certificates. 15 ISO 10013:2001. Guidelines for quality management system documentation 16 ISO 19011:2002. Guidelines for quality and/or environmental management systems auditing Attitudes of business establishments towards implementation of ISO 90001: 2008 and its outcome on business performance. A research study by Costa Micaela Martà ­nez, et al., in the Quality Management Journal, 17 had observed that the 2000 version of ISO 9001 became closer to TQM (The statement would as well apply to the 2008 version). The researchers concluded that, merely implementing the new standard will not improve performance unless firms â€Å"adopt the changes seriously and do not merely try to add new lines to their Quality Manual.† This raises a general question whether all those who implement the ISO 9000 systems do it with all seriousness.† An article appeared in Review of Quantitative Finance and Accounting, 18 concludes that: â€Å"many companies seek an ISO 9000 certificate because their clients expect or their competitors are registering for one.† Nevertheless, by obtaining registration (certification), the management, â€Å"signals its commitment to quality.† The survey by the authors revealed that shareholders of large firms have benefited, while it is not so in the case of small firms. Terziovski, et al., 19 on their study of certified and non-certified Australian and New Zealand firms observed that: â€Å"ISO certification does not significantly impact performance measures like operating performance, customer satisfaction, employee relations and business performance.† They conclude that benefits of the certification will accrue as recognition of the 17 Costa Micaela Martà ­nez, Lorente à ngel Rafael Martà ­nez (2007)ISO 9000:2000: The Key to Quality? An Exploratory Study. 18 Ferreira Eurico J.,et al.(January 2008) Long-run performance following quality management certification. 19 Terziovski M., Samson D., Dow D., 1997. The business value of quality management systems certification: evidence from Australia and New Zealand certified firm to organisations prescribing ISO certification as a minimum requirement for acceptance as viable suppliers. Another finding was reported by Quaze HA, et al, 20 is that implementation of ISO 9000 brings benefits â€Å"such as improvement of product and service quality, efficiency and productivity, customer confidence, and competitive advantage. This view is not shared by another researcher Dalgleish who reports that ISO 9000 certification brings hindrance than help. It is pointed out that the â€Å"certificate leads to a ‘pass/fail mentality, the ISO 9000 certificate hinders quality and efficiency- the very things it is supposed to encourage.† One study by Jang Woan-Yuh, Lin Ching-I.21 in its literature review reveals that organisations that pursue ISO 9000 certification willingly are more likely to report improved organisational performance than those that only obtain certification under customer pressure. The study concludes that external motivation for implementing ISO 9000 does not guarantee positive results. It is the approach of managers and employees that determine the success. The findings of Dick Gavin P.M. et al 22 also points to the same conclusion that: â€Å"although there is some evidence to indicate that quality management system certification has some causal influence on business performance, there is also evidence for the existence of a substantial mechanism whereby better performing firms self-select to adopt certification.† 20 Quaze HA, Hong CW, Meng CT, 2002. Impact of ISO 9000 Certiï ¬ cation on Quality Management Practices: a comparative study. P.53-67 21 Jang Woan-Yuh, Lin Ching-I (2008) Successful ISO 9000 implementation in Taiwan:How can we achieve it, and what does it mean? 22 Dick Gavin P.M., et al (2008) Shedding light on causation between ISO 9001 and improved business performance. Attitude of countries towards ISO 9000. A concise overview highlighting the benefits of implementing ISO 9000 and ISO 14000 given in the ISO website 23 indicates that over a million organisations have implemented these standards in 175 countries all over the world. The ISO Survey 2007 (9. Ibid) gives the statistics of ISO 9001 and 14001 certifications issued from 2000 to 2007. The charts provided in Appendix 1 gives the country wise data of certifications. The data does not lend itself for an objective analysis as the these do not reveal any analytical relativity with the size of the country or the size of its industrial base. It is therefore difficult to analyse these data. It is however seen that the annual growth of certification has been declining from the early years of certification. It is understandable that the growth rate will be higher when a system is newly introduced and the growth stabilises after the initial growth to a lower level. The survey however reveals that it is popular in all the countries in the wor ld. Limitations of the study The study has only scanned accessible secondary data and no attempt was made to verify published research findings through primary data collection. However, the study has relied on multiple sources and therefore should be credible. As such, the study may also be considered balanced in as much as differing opinions have been reported. Conclusions The eight quality management principles that formed the basis of ISO 9001:2008 standards are well conceived and these take the standard to a TQM level. Organisations implementing the standard with the objectives of fully realizing the potentials can expect overall benefits and continual improvements in quality of products, services and customer satisfaction. Organisations implementing the system half heartedly are unlikely to realize the quality related potentials. ISO 9001: 2008 can be implemented by any organisation irrespective of size or type, including servic

The accident Essay -- essays research papers

The Accident Every once and awhile I'll look back on my life and I'll laugh. Particularly at the times I spent with my best friend Nate and all the mischief we caused. I look back now and I think what the HELL were we doing? How did we not die? Have you ever sat down and had a conversation with a male teen between the ages of 14-17? I should've been locked away for that period of my life, I swear I was temporarily insane. I had NO concept of "consequences" or "repercussions". I did whatever, whenever. Unfortunately this little package of immaturity also came with other misleading thoughts such as a sense of invincibility, a total disregard for any authority, and taking pretty much EVERYTHING in my life for granted. What's also unfortunate, is that I had to learn all of these life lessons the hard way, and in one horrible night when I was just sixteen and a half years old. As I said, Nate and I are best friends, a little out of touch now, but best friends nonetheless. I guess it was the fact that we were both rebelling against the environment we were slowly growing up in that it made us so much alike. In a town where white-pride isn't just common, more like a way of life, we were just a couple of 12 year old kids looking for an escape. What's strange about growing up in a small town is that it encourages a sense of self-value, independence, and creativity which can be lost in large towns or cities. I mean, if you're not doing something creative in our town, what the hell else would you be doing? So, Nate and I developed a VERY similar sense of humor. A dry sense of humor that I assume no one else really appreciated because we didn't have all that many other friends. We entered middle school with hopes of new experiences and meeting new interesting people. This was when I met Jeff, my other life-long-hetero friend. Jeff and I played hockey together when we were eight. He quit, and I hadn't seen him since. Once I introduced him to Nate, we all became very close friends. Finally the day came that every 16 year old dreams about. Jeff and I got our licenses. We were both a little older than most people in our graduating class, so we were a couple of the lucky kids. And on top of that, we both had very nice cars. Mine a ... ... at Nate, he was clutching his chest from a deep cut he got from the seat belt, I was almost too ashamed to look directly at him, his face covered in blood. He looked at me and said â€Å"I’m sorry, I shouldn’t have egged you on, I’m sorry†. Before I could respond Jeff interjected, â€Å"Nah, I shouldn’t have taken you guys down here, this was a stupid idea, I’m an idiot. I‘m just so glad you guys aren‘t dead.† I couldn’t believe this, I screwed up, almost killing one of my best friends and here they were trying to make excuses for MY mistake. The car was totaled, we drove through a fence, hit a tree and then a mound of dirt which was what tossed the car on its side. The backseat had collapsed, everything in the trunk was now in the front of the car. Most of it hitting Nate on the way there. We stood there. Quiet. In shock from all the life lessons we had just learned in about 5 seconds. You could almost feel the childhood slip away. It was then that I realized how lucky I was to have such great friends, and how precious life really is, and how it can be altered, permanently, so quickly. I’ll think about this night every once in awhile. It reminds me how happy I should be to still be alive.

Analysis of Commercial Bank Balance Sheet

CONTENTS INTRODUCTION DEFINITION_ OF COMMERCIAL BANK_ *â€Å"Banks and other deposit taking institutions are financial intermediaries whose assets consist overwhelmingly of loans to a wide variety of borrowers and whose liabilities consist overwhelmingly of deposits. † THE ECONOMICS OF MONEY BANKING AND FINANCE 3rd* Edition PETER HOWELLS & KEITH BAIN Pg 32 A sound system of banking is very important for any economy. Commercial banks are directly related to the payment system of the economy. Generally most commercial banks are controlled by the central bank of that particular country. The central bank can never allow the banking system to fail because if banks start to fail the payment system will fail. They may allow some banks to fail but the government will never allow big banks or the whole payment system to collapse. This is very evident from the recent where government have pumped in huge amount of money to save the so called â€Å"too big to fail† banks. Banks helps in the payment services through various kinds of deposits, debit cards and credit cards ANALYSIS OF COMMERCIAL BANK BALANCE SHEET For my assignment I have picked up Lloyds TSB as my bank. Lloyds TSB is one of the four biggest bank in the UK. I have taken 2007 annual report as the group has published only the 2008 interim report. The second item which we see in Lloyds TSB balance sheet is loan and advances to banks. It reflects the interbank relationship. This figure has fallen for most of the commercial bank and also for Lloyds TSB there is an decrease of 16. 50%. This is due to the financial crisis which has hit banking sector very badly and many banks have failed as a result. Llyods TSB gives loans to customer just like any other commercial bank and bank charge an interest for giving loans which is higher than the interest on deposit. But there is always a default risk attached with the loan which the bank gives. Commercial Banks gives different kinds of loans starting from mortgage, education loan, overdraft facility etc. In case of Lloyds TSB mortgage comes out to be 48. 4% of loans to customer. And thing we should bear in mind is that mortgage are long term loan and it can be for 30 years as well. Customer Accounts got an increase of 11% and there is an increase of 11% from 2006 to 2007. LIABILITIES OF LLOYDS TSB Lloyds TSB is also having some fixed deposit like Certificates of deposit. In these deposits customers cannot withdraw there money before a specified time and they also receive some interest as well. Second are the commercial papers which are unsecured promissory notes to meet short term obligations. Certificate of Deposit comes to around 14,995 million GBP and commercial paper is 17,388 million GBP for Lloyds TSB. Lloyds TSB is also having reserves after paying reserves. This reserve can be used in case of emergency or any unexpected risks The main risks that commercial banks face due to their exposure to different kinds of assets and liabilities are liquidity risks, market risk and credit risk. Lloyds TSB faces liquidity risk because of deposit in central bank. They have a deposit of 4330 million GBP. This means that they cannot give this amount as loans because it’s stuck with the central bank. This amount has increased considerably from 2006 to 2007. The bank faces liquidity risk because of their mismatch in assets and liabilities side. The group liquidity risk exposure is 33,185 million GBP. The main sources of liquidity risk for the bank are deposits from banks and customer accounts. As we seen above the assets of Lloyds TSB are long term whereas the liabilities are short term. The commercial bank is the main source of payment service in any economy. Whenever bank gives loan they are exposed to default risk. Default risk arises whenever a company or individual is unable to meets its obligation on interest or principle payment of the loan. The bank faces asymmetric information problem as well. Though the bank does proper due diligence before giving out any loans but asymmetric information problem cannot be ruled out with any banks at all. Due to asymmetric information we have adverse selection and moral hazard problem. Adverse selection problem comes to picture before entering into the transaction. In short the bank has to filter the good borrowers and the bad borrowers. Sometimes the bank may give loan to the bad borrowers and may suffer of this. Though banks have put checks like credit history before making out the loan but adverse selection problem cannot be neglected completely. The other problem which is created because of asymmetric information is moral hazard problem. The moral hazard problem starts after the bank has sanctioned the loan. Borrowers may get into undesirable activities. The main objective for which the loan was sanctioned may never get fulfilled. The other side of moral hazard problem is the conflict of interest between the borrower and the bank. Borrowers may try to act on their interest rather than the interest of the bank. Banks like Lloyds TSB can overcome the problems of adverse selection and moral hazards if they have proper check and control on their customers but rarely any bank achieves 100% success in these problems. These are two most important risks which any financial intermediary faces in order to serve their most important duty i. e. ayment services to the economy. Just like any other financial institution the group also faces credit risk. {text:bookmark-start} â€Å"Credit risk {text:bookmark-end} is risk due to uncertainty in a counterparty's (also called an {text:bookmark-start} obligor {text:bookmark-end} ‘s or {text:bookmark-start} credit's {text:bookmark-end} ) ability to meet its obligations. Because there are many types of counterparties—from individuals to sovereign governments—and many different types of obligations—from auto loans to derivatives transactions—credit risk takes many forms. † (www. riskglossary. om). After the group’s acquisition of Halifax of Scotland, the credit rating of the bank has come down. In order to counter credit risk credit rating plays a very important role. The group exposure to credit risk is 356,860 million GBP. PART 2 Asset Liability Management â€Å"The ALM group within a bank has been concerned with control of interest rate risk on the balance sheet. For some bank it may be equally important to manage interest rate risk arising from off balance sheet, but it is instructive to look at the traditional methods and progress to the relatively new procedures. (HEFFERNAN, SHELAGH A. 2005) Moreover banks have mismatch in maturity of their asset and liability. Banks use asset liability management to manage interest rate risk, mar ket risk and credit risk. Let’s take an example where all deposits are on fixed rate of interest but all loans are made on floating rate of interest. Commercial banks mainly use three types of markets to cover these risks. These are money market, capital market and derivative market. Capital Market is generally used by large companies or governments to raise funds for the long period. Capital market can be of two types like primary market, securities are traded for the first time and secondary market, and in this securities are traded after they are traded in the primary market. Another subdivision of capital market is bond market and stock market. There are various stock market around the world like London Stock Exchange, whereas bond market includes different kinds of bonds like government bonds (US Treasury bills), foreign bonds etc. One of the most important changes in this market is the development of asset backed securities. text:bookmark-start} â€Å"Securitization {text:bookmark-end} is a financial transaction in which assets are pooled and securities representing interests in the pool are issued†. (http://www. riskglossary. com/) When securitization is backed by any assets such as student loan, mortgages this becomes asset backed security. Lloyds TSB also securitizes its assets in order to overcome its liquidity problem. The process of securitizati on has become quite complex with the introduction of Collateralized Debt Obligation, Collateralized Loan Obligation etc. And these complex securities are the heart of the financial crisis. Lloyds TSB is not having much exposure to these complex securities. Banks get into off balance sheet activities to get more profit. It helps the bank to get fee income. One more advantage of off balance sheet activity is that it does not appear into the balance sheet of the bank. The derivative market is also used by the bank to hedge their risks. â€Å"By their nature, derivatives instruments can be used for hedging different types of risks. Owing to this, banks and insurance companies use derivatives in the management of their Asset Liability Management† (Cornelius Nandyal, 2001). The derivative market is going through lot of new changes. Regulators are trying to put lot of new regulations in order to bring transparency. Banks use interest rate swaps, credit default swaps, total return swap, credit linked notes etc. But different people have different views on derivatives. According to Warren Buffet derivatives are weapon of mass destruction and can act as time bombs in the future. Whereas Alan Greenspan says â€Å"Derivatives have permitted the unbundling of financial risks. Because risks can be unbundled, individual financial instruments now can be analyzed in terms of their common underlying risk factors, and risks can be managed on a portfolio basis†. Banks have also used money market for asset liability management. The most important organ of the money market is the interbank market. In interbank market banks with surplus lend to bank with deficit. This market is severely hit by the recent financial crisis. Banks don’t know about the financial soundness of the bank to which they are lending. This has increased the liquidity problem of the bank. Other types of market are the gilt repo, commercial paper market and the certificate of deposit market. As we have seen above Lloyds TSB invest in commercial paper and certificate of deposit. Securitization and the Global Financial Crisis DIAGRAMATIC EXPLANATION OF SECURITIZATION: {draw:frame} Source: http://www. usbancortrusteeservices. com/images/ygpa7_chart_offering_structure_ptnm. pg The recent crisis started because of the sub prime mortgage loans that originated in the USA. But these loans were repackaged and sold all round the world, so this crisis which began in USA became a worldwide crisis. Securitization gives banks lot more leverage. The seeds of the recent crisis were sown in when the Federal Reserve made interest rates around 1% and the economy was pumped with lot of cash. Banks started giving these loans as mortgage to the s ub prime customers, without any credit check and at very easy terms and condition. Once interest rate started to increase in 2004, borrowers started to default on their loans. With the increase of interest rates house prices started to come down. Credit rating agencies who gave these securities AAA rating made these securities junk. The assumption on which these rating agencies were working was that house prices will keep raisingin the future as well. â€Å"The combination of low capital requirements imposed on AAA-rated assets and a commonly held perception that they were â€Å"safe,† allowed banks to hold on to any senior tranches that were not sold to investors. But when the structured finance market collapsed in late 2007, the investment banks found themselves holding hundreds of billions of dollars of low-quality asset pools, many of which consisted of leveraged buy-outs loans, subprime mortgages, and bonds from CDO’s in process-that is, where the tranches had not yet been sold to other investors. † (Coval et al, 2008) No one knows the worth of these complex securities which the banks are holding. Banks have stopped lending to each other because no one is sure of how much the other bank is holding. So interbank market is almost closed.

Appreciating Visual Art forms through Fashion

Art can be defined as the product or process of deliberate arrangement of elements in a manner to affect the emotion or senses of a viewer (Tolstoy, pp.28). A diverse range of human activities, forms of expression and creations encompass art. These would include visual and the performing arts that entail music, sculpture, paintings, literature and film among others.Visual art is the form of art that mainly produce works that can be appreciated visually (Bell, pp. 17). These include paintings, drawings, videos and films, fashion, photographs, graffiti, tattoos and even crafts.   Visual art can also be broken down to performing arts (plays, drama and other human performances), textile arts (fashion and fabric work), and conceptual art (artistic manipulation and representation of concepts).According to Bell, visual art is not only used for its aesthetic value but also for its practical application in industrial design, decorative art, fashion design, graphic design and also interior d esign. He adds that the aesthetic value of a piece of work may differ with its use among different users (pp. 19).Tolstoy adds that art has been seen to adhere to certain principles and elements that complete the different forms we have. Principles and elements of art include visual elements that are used to produce different works of art. These include line, shape and color with an addition of space, balance and movement.The use of color line and space has the capability of creating movement balance and space in a peace of art. Artists use these principles and elements of art to create works that send a message, affect emotion or are for aesthetic value (pp, 28).Visual art utilizes the elements and principles of art in that artists use color to make paintings, lines for drawings and also paintings, space in their drawings and paintings and also the creation of balance space and movement through the use of line color in their pieces of work.Different forms of visual art are products of different artists being inspired by personal preferences, different people, events, emotional experiences and/or other factors in creating different forms of visual art (Tolstoy, pp. 28).Visual art and fine art are closely interrelated. Fine art utilizes the elements and principles of art and takes a wide range of scope from paintings, to calligraphy, music and dance among others. The difference between fine art and visual art is that fine art is purely for aesthetic value unlike visual art that can be used in industrial application such as sculptures. Fine art can be termed as visual art is it is appreciated though seeing.This essay will concentrate on the appreciation of visual art in the fashion industry. Different visual art forms have been used in the fashion industry based on the preference of the artist, collector or the designer. Designers may choose to produce various visual works of art or even collect them. Collectors of visual works of art include photographers and c ollectors of antiques, paintings and other visual works who range from individual designers to museum employees (Abbott, pp. 22).Their work involves the collection and arrangement of these works of art in a manner that will affect the emotion or sense of the viewer in the message it conveys. The works of such an artist may also be for aesthetic value if not both to convey a message and for beauty. These artists also serve the function of storing history and events (Fashion Projects, para 1).The photographs and items collected act as a preservation of the information or art work conveyed therein which can be reviewed in future. In fashion, these collections (photographs and other items) are used for beauty as well as different functional uses. An example would be the imprints of iconic figures’ pictures on fabric such as bags, t-shirts, pendants and even shoes (Abbott, pp. 36).

Free Essays on California Blackout

California Blackouts Beginning in the winter of 2000, California’s power supply has had a shortage leading to many blackouts across the state. Electricity cannot be stored; it has to be generated, transformed, and distributed to meet the exact demand. Therefore, a power shortage occurs when the demand is not immediately met. There are four main causes of the blackouts: restricted hydroelectric power, no new facilities, growing population, and price mitigation. First, California has been relying on Pacific Northwest power industries to supply the generation of power. Because of recent droughts in the area, reservoir levels are too low to keep up with the growing demand for electricity in California. They cannot generate enough power to be considered a reliable source. Hence, the hydroelectric power companies have breached their agreement to supply power. Second, since 1970 there have been no new nuclear power plants built. The reason is that there has been tremendous pressure from environmentalists to keep the area free of the nuclear power industry. In addition, there have been no new generators produced to keep up with the growing population. Third, the growing population has posed to be another source of the problem. There have been dramatic increases in computers, air conditioners, and entertainment systems. Also, there have been increases in energy intensive businesses. Fourth, power shortages have created an increase in demand for electricity. The price for electricity has now increased dramatically from five cents per KWH to over one dollar per KWH. However, the Public Utility Board has limited distributors to charge only seven cents per KWH. Due to these conditions, suppliers are in billion-dollar debt. The government needs to use its powers of the utility industry to aid California in its power shortages. In order to get the region back into the 21st century the local governments are going to have ... Free Essays on California Blackout Free Essays on California Blackout California Blackouts Beginning in the winter of 2000, California’s power supply has had a shortage leading to many blackouts across the state. Electricity cannot be stored; it has to be generated, transformed, and distributed to meet the exact demand. Therefore, a power shortage occurs when the demand is not immediately met. There are four main causes of the blackouts: restricted hydroelectric power, no new facilities, growing population, and price mitigation. First, California has been relying on Pacific Northwest power industries to supply the generation of power. Because of recent droughts in the area, reservoir levels are too low to keep up with the growing demand for electricity in California. They cannot generate enough power to be considered a reliable source. Hence, the hydroelectric power companies have breached their agreement to supply power. Second, since 1970 there have been no new nuclear power plants built. The reason is that there has been tremendous pressure from environmentalists to keep the area free of the nuclear power industry. In addition, there have been no new generators produced to keep up with the growing population. Third, the growing population has posed to be another source of the problem. There have been dramatic increases in computers, air conditioners, and entertainment systems. Also, there have been increases in energy intensive businesses. Fourth, power shortages have created an increase in demand for electricity. The price for electricity has now increased dramatically from five cents per KWH to over one dollar per KWH. However, the Public Utility Board has limited distributors to charge only seven cents per KWH. Due to these conditions, suppliers are in billion-dollar debt. The government needs to use its powers of the utility industry to aid California in its power shortages. In order to get the region back into the 21st century the local governments are going to have ...

Electrochemical Cell EMF Example Problem

Electrochemical Cell EMF Example Problem The cell electromotive force, or cell EMF, is the net voltage between the oxidation and reduction half-reactions taking place between two redox half-reactions. Cell EMF is used to determine whether or not the cell is galvanic. This example problem shows how to calculate the cell EMF using standard reduction potentials.The Table of Standard Reduction Potentials is needed for this example. In a homework problem, you should be given these values or else access to the table. Sample EMF Calculation Consider the redox reaction: Mg(s) 2 H(aq) → Mg2(aq) H2(g)a) Calculate the cell EMF for the reaction.b) Identify if the reaction is galvanic.Solution:Step 1: Break the redox reaction into reduction and oxidation half-reactions.Hydrogen ions, H gain electrons when forming hydrogen gas, H2. The hydrogen atoms are reduced by the half-reaction:2 H 2 e- → H2Magnesium loses two electrons and is oxidized by the half-reaction:Mg → Mg2 2 e-Step 2: Find the standard reduction potentials for the half-reactions.Reduction: E0 0.0000 VThe table shows reduction half-reactions and standard reduction potentials. To find E0 for an oxidation reaction, reverse the reaction.Reversed reaction:Mg2 2 e- → MgThis reaction has a E0 -2.372 V.E0Oxidation - E0ReductionE0Oxidation - (-2.372 V) 2.372 VStep 3: Add the two E0 together to find the total cell EMF, E0cellE0cell E0reduction E0oxidationE0cell 0.0000 V 2.372 V 2.372 VStep 4: Determine if the reaction is galvanic. Redox reactions with a posi tive E0cell value are galvanic.This reactions E0cell is positive and therefore galvanic. Answer:The cell EMF of the reaction is 2.372 Volts and is galvanic.