Is Competition Good

Review of Industrial Organization 19: 37–48, 2001.  © 2001 Kluwer Academic Publishers. Printed in the Netherlands. 37 Is Competition Such a Good Thing? Static Ef? ciency versus Dynamic Ef? ciency MARK BLAUG University of Amsterdam, Amsterdam, The Netherlands Abstract. This paper addresses the rationale for antitrust legislation. It is a striking fact that the legitimacy of antitrust law has been taken for granted in the United States ever since the Sherman Act of 1890 and, until the advent of the so-called Chicago School, it was even taken for granted by conservative American economists. Europeans, on the other hand, have always been lukewarm about legal action against trusts and cartels and this attitude is found right across the political spectrum in most European countries. Nevertheless, in both the U. S. A. and Europe, the ultimate justi? cation for antitrust law derives from economic doctrine regarding the bene? cial effects of competition. But what exactly are these bene? cial effects and how secure is the contention of economists that competition is always superior to monopoly? Surprisingly enough, competition, that central concept of economics, is widely misunderstood by many economists, both as a market phenomenon and as an organizing principle of economic reasoning. I. A Little History of Thought I begin by drawing what I believe is a fundamental distinction in the history of economics, as far back as Adam Smith or even William Petty, between two different notions of what is meant by competition, namely, competition as an end-state of rest in the rivalry between buyers and sellers and competition as a process of rivalry that may or may not terminate in an end-state. In the end-state conception of equilibrium, the focus of attention is on the nature of the equilibrium state in which the contest between transacting agents is ? nally resolved; if there is recognition of change at all, it is change in the sense of a new stationary equilibrium of endogenous variables in response to an altered set of exogenous variables; but comparative statics is still an end-state conception of economics. However, in the process conception of competition, what is in the foreground of analysis is not the existence of equilibrium, but rather the stability of that equilibrium state. How do markets adjust when one equilibrium is displaced by another and at what speed will these markets converge to a new equilibrium? But, surely, all theories of competition do both; existence and stability are tied up together and to study one is to study the other? By no means, however; it is easy to show that, for centuries, competition to economists meant an active process of jockeying for advantage, tending towards, but never actually culminating in, an 38 MARK BLAUG equilibrium end-state. Only in 1838, in Cournot’s Mathematical Principles of the Theory of Wealth was the process conception of competition totally displaced by the end-state conception of market-clearing equilibria. At ? rst this did not succeed in wiping the slate entirely clean of an interest in competitive processes but in the decade of the 1930s – those years of high theory as George Shackle called them – the Monopolistic Competition Revolution and the Hicks-Samuelson rehabilitation of Walrasian general equilibrium theory, forti? d by the New Welfare Economies, succeeded in enthroning the end-state conception of competition and enthroning it so decisively that the process view of competition was virtually buried out of sight. Let me elaborate. It is a striking feature of the language of The Wealth of Nations that the term â€Å"competition† invariably appears with a de? nite or inde? nite article preceding it: â€Å"a competition between capitals†; â€Å"the competi tion with private traders†, and so forth. For Smith, competition is not a state or situation, as it is for Cournot and for us, but a behavioural activity; it is a race – the original sense of the verb â€Å"to compete† – between two or more individuals to dispose of excess supply or to obtain goods available in limited quantities. What we nowadays call competition or the market mechanism was for him â€Å"the obvious and simple system of natural liberty†, meaning no more than an absence of restraints or ree entry into industries and occupations. Neither competition nor monopoly was a matter of the number of sellers in a market; monopoly did not mean a single seller but a situation of less than perfect factor mobility and hence inelastic supply; and the opposite of competition, was not monopoly, but co-operation. Producers in The Wealth of Nations treat price as a variable in accordance with the buoyancy of their sales, much like enterprises in modern theories of imperfect competition. This was not a conception invented by Smith because by 1776, competition had long been analyzed by a whole series of eighteenth century authors as a process which brings temporary â€Å"market† prices into line with cost-covering natural prices, those â€Å"natural† prices were indeed â€Å"the central price, to which the prices of all commodities are continually gravitating†, and in saying that Smith invoked Newtonian language to dignify a conception of price-determination that had a long tradition going back to the seventeenth century. To obtain that end-state in which market prices equal natural prices and the rate of pro? is equalized between industries, there had to be a considerable number of rivals, possessing common knowledge of market opportunities; they had to be free to enter and exit different lines of investment; but that was all and even that much was never spelled out explicitly as necessary prerequisites for competition – only once did Smit h ever mention the number of rival ? rms involved in competition. It was Cournot who ? rst had the notion of sellers facing a horizontal demand curve when their numbers become so large that none can in? uence the price of their own product. Competition, which once meant the way in which ? rms take account of how their rivals respond to their actions, now meant little more than the slope of the average revenue curve depriving ? rms in the limit of any power to make the price. Thus was born, decades before the Marginal Revolution of the 1870s what IS COMPETITION SUCH A GOOD THING? 39 one writer has wittily called â€Å"the quantity theory of competition† (quoted in Blaug, 1997, p. 68). Edgeworth’s Mathematical Psychics (1981) followed Cournot in providing all the trappings of the modern de? nition of perfect ompetition in terms of a large number of sellers, a homogeneous product, perfect mobility of resources and perfect knowledge on the part of buyers and sellers of all alternative opportunities. However, Marshall’s treatment of the competition always carefully labelled as â€Å"free competition† was much closer to Smith’s â€Å"simple system of natural liberty† than to that of C ournot and Edgeworth’s perfect competition. Even Walras hesitated to follow Cournot to the letter. Indeed, it was not until the 1920’s that the modern textbook concept of perfect competition was ? ally received into the corpus of mainstream economics, largely due to the impact of Knight’s classic, Risk, Uncertainty and Pro? t (1921). But it is doubtful whether the idea was in fact fully accepted in 1921 and a good case can be made for the thesis that it was Robinson and Chamberlain a decade later who hammered down the theory of perfect competition in the very process of inventing imperfect and monopolistic competition theory (Machovec, 1995). The replacement of the process conception of competition by an end-state conception, which was ? alized in 1933 or thereabouts, drained the idea of competition of all behavioural content, so that even price competition, the very kernel, of the competitive process for Adam Smith, David Ricardo and John Stuart Mill now had to be analysed as â€Å"imperfect† competition, a sort of deviation from the norm. Indeed, every act of competition on the part of a businessman was now taken as evidence of some degree of monopoly power, and hence a departure from the ideal of perfect competition, and yet pure monopoly ruled out competitive behaviour as much as did perfect competition. II. Perfect Competition, the Unattainable Ideal All I have said so far merely reiterates what Schumpeter said in 1942 and Hayek repeated in 1949: â€Å"perfect competition is not only impossible but inferior, and has no title to being set up as a model of ideal ef? ciency†; â€Å"what the theory of perfect competition discusses has little claim to be called ’competition’ at all and its conclusions are of little use as guides to policy† (quoted in Blaug, 1997, p. 69). But this message, delivered over a half-century ago, fell on deaf ears and the endstate theory of perfect competition is more ? mly in the saddle today than it ever was in the 1940s when Hayek and Schumpeter, not to mention John Maurice Clark (1949, 1961), were writing. And why? The answer is simple: it is that most of us were taught that although perfect competition is rarely if ever attained, nearly-perfect competition is said to be observable in some markets (agricultural markets being a favour ite example) and these approximations to the state of perfect competition somehow replicate many 40 MARK BLAUG f the desirable characteristics of perfect competition; in a word, second-best is so nearly ? rst-best that we may indeed employ ? rst-best as a standard. Open any textbook and what do we ? nd? The concept of perfect competition is said to be like the assumption of a perfect vacuum in physics; descriptively inaccurate, to be sure, but nevertheless productive of valid insights about actual economies. Thus, Samuelson and Nordhaus (1992, p. 295) in the 14th edition of their Economics concede that a perfect and absolutely ef? ient competitive mechanism has never existed and never will â€Å"but the oil crisis of the 1970s† is only one of their many examples of how an empirically empty competitive model can nevertheless produce the right answers to a concrete imperfectly competitive situation (for other textbook treatments, see Blaug, 1997, pp. 69–70). This is prec isely what Reder (1982, p. 12), called the notion of â€Å"tight prior equilibrium†, which he thought was characteristic of the Chicago School of Economics: â€Å"one may treat observed prices and quantities as good approximations to their long-run equilibrium values†. Call this the good-approximation assumption. Unfortunately, the idea of a near or far approximation to perfect competition has absolutely no logical meaning. We seem conveniently to have forgotten the famous Lipsey–Lancaster (1996) second-best theorem published in 1956, according to which we are either at a ? rst-best optimum or it matters not whether we are at second-best or tenth-best because we cannot rigorously demonstrate that doing away with a tax or a tariff that put us at tenth-best will bring us closer to ? st-best in a welfare sense of these terms. This theorem has not been conveniently forgotten; it has been deliberately forgotten because it wreaks havoc with the end-state, ? rst-best conception of competition. Must we therefore cease to give advice on competition policy? I think not; but what it does mean is that instead of gnostic pronouncements about the desirability of any move in the direction of ? st-best perfect competition, we must engage instead in qualitat ive judgements about piecemeal improvements, embracing a dynamic process-conception of competition, which is precisely the old classical conception that Schumpeter, Hayek, Clark and modern neo-Austrians have urged us to adopt. To grasp why it was necessary to revive this tradition, we must spend a moment explaining why modern price theory is so strong on the nature of the competitive equilibrium end-state and so weak on the process by which competition drives a market towards a ? al equilibrium. III. The Awful Legacy of General Equilibrium Theory When Walras literally invented general equilibrium (GE) in 1871, he was just as much concerned with the process-conception of competition known as â€Å"the stability problem† as in what we have called the end-state interpretation of equilibrium known as â€Å"the existence problem† – is simultaneous multimarket-equilibrium possible in a capitalist economy? But gradually, in successive editions of his Elements of Pure Economics, the existence problem came ever more to the fore, while the sta- IS COMPETITION SUCH A GOOD THING? 41 bility problem receded in the background (Walker, 1996). Even so, Walras’s view of how markets adjust in disequilibrium was always somewhat naive. It is a story which we all learn in our ? rst course of economics: in response to the appearance of excess demand and supply, prices adjust automatically as independently acting buyers and sellers â€Å"grope† their way to a ? al equilibrium. When this tatonnement story is well told, it sounds utterly convincing and at such times we are apt to forget that many markets, particularly labour markets and â€Å"customer markets†, react faster in terms of quantities than in terms of prices (as Marshall always insisted in opposition to Walras) and sometimes only in terms of quantities (see Blaug, 1997, pp. 71–75). But prices and quantities aside, what about product ifferentiation and competition by maintenance and service agreements, what about Schumpeterian competition in terms of new products and processes, new methods of marketing, new organizational forms and new reward structures for employees? In short, all the forms of rivalry between producers which Chamberlain and Robinson have taught us to call monopolistic or imperfect competition (the irony of calling what cannot exist, perfect competition, and what always exists, imperfect competition, never ceases to amuse me! . Walras struggled manfully to provide a rigorous solution to the existence problem but never got much beyond counting equations and unknowns to ensure that there were enough demand and supply equations to solve for the unknown equilibrium prices and quantities in the economy. As for the stability problem, he solved that after much hesitation by simply eliminating disequilibrium transactions as â€Å"false trading† (another wonderfully ironic piece of rhetoric). Although he never mentioned the concept of a ? tional auctioneer announcing different prices until an equilibrium price is discovered, whereupon trade is allowed to take place – this is one of those historical myths that subsequent generations have invented – it is dif? cult to avoid the conclusion that he simply gave up the effort to provide a convincing account of how real-world competitive markets achieve GE. Such an account has in fact never been provided even to this date. In 1954, Arrow and Debreu ? nally solved the existence problem by modern mathematical techniques – topological properties of convexity, ? ed point theorems, Nash equilibria, etcetera – of which Walras could never have dreamt but, in so doing, they travelled even further than Walras had from anything smacking of descriptive accuracy: there are forward markets in their GE model for all goods and services in the economy, including all locations and conceivable contingen t states in which these goods and services might be consumed, and yet no one holds cash to deal with the likelihood that income and expenditure may fail to synchronize. They were perfectly candid about this failure to describe actual economies. Indeed, they made a virtue of the purely formal properties of their model. 1 1 As Debreu (1959, p. x) expressed it in his Theory of Value: â€Å"The theory of value is treated here with the standards of rigor of the contemporary formalist school of mathematics . . . . Allegiance to rigor dictates the axiomatic form of the analysis where the theory, in the strict sense, is logically entirely disconnected from its interpretation†. And yet this book claimed to be a work in economics! 42 MARK BLAUG They cracked the existence problem, not to mention the uniqueness problem – is there one unique vector of prices at which GE exists? but they never tackled the stability problem. In other words, after a century or more of endless re? nements of the central core of GE theory, an exercise which has engaged some of the best brains in twentieth-century economics, the theory is unable to shed any light on how market equilibrium is actually attained, not just in a real-world decentrali zed market economy but even in the toy economies beloved of GE theorists. We may conclude that GE theory as such is a cul de sac: it has no empirical content and never will have empirical content. Moreover, even regarded as a research program in social mathematics, it must be condemned as an almost total failure. That is not to say that highly aggregated computable GE models, such as IS-LM, are pointless or that a GE formulation of an economic problem, emphasizing the interdependence of all sectors of the economy, may not prove illuminating but simply that Walrasian GE theory – the notion that the existence of multi-market equilibrium may be studied in a way that is analogous to solving a set of simultaneous equations – has proved in the fullness of time to be an utterly sterile innovation. The real paradox is that the existence, uniqueness and stability of GE should ever have been considered an interesting question for economists to answer: a complete satisfactory proof of all three aspects of the problem would no doubt have been a considerable intellectual feat in logic but would not in any way have enhanced our understanding of how actual economic systems work. IV. The Welfare Implications of GE Of course, Walras hoped to show, not just that GE is possible, but that it is good. But here too he never got much beyond the idea that voluntary exchange between two parties improves both of their welfares – otherwise, why would they have traded? What is true of bilaterial exchange will also be true of competitive exchange between a large number of traders if individual producers cannot themselves set prices, so that all consumers face identical prices for identical homogeneous commodities. This is precisely where the notion of perfect competition as an end-state of rest comes into welfare economics grounded in GE theory. Pareto, who was a much better technician than Walras, carried on where Walras left off. He too was convinced that GE is good for everyone but as a follower of Ernest Mach in philosophy, he hated such metaphysical ideas as maximising happiness, utility, welfare, or call it what you will, and he strenuously objected to interpersonal comparisons of utility (ICU) on the grounds that such comparison could not be operationalised. Pondering these issues, he realised that the one circumstance that avoids ICU is a social state which meets with unanimous approval or at least with the absence of con? ict in which one person is only made better off at the expense of another person. In other words, we want a state which is so ef? cient that there is no surplus, no waste, no slack, â€Å"no such thing as a free lunch†. But is not perfect competition just such a state? Of course, it may leave some people rich IS COMPETITION SUCH A GOOD THING? 3 and some people poor but that will be the consequence of the fact that we started with unequal endowments of the individuals in our economy – some people are born clever and some people have rich parents – but, given those endowments that are not themselves explained by GE theory – no theory ever explains everything – the GE model will grind out the rental prices of all the services of land, labor and capital as well as the prices of all goods , produced with those services. Once we have somehow arrived at the end-state of perfectly competitive equilibrium, it will be impossible to make one person better off without making another person worse off except by interfering with the initial endowments of agents. In this way, Pareto thought that he had ? nally found an admittedly narrow de? nition of the bene? cial effects of competition that was totally free of that positivist bugbear, ICU. The idea, only later called â€Å"Pareto optimality†, fell into oblivion as soon as it was announced but was rescued along with Walrasian GE theory in the 1930s by John Hicks and Nicholas Kaldor. They extended the scope of Pareto optimality by arguing that any economic change, whether from a position of competitive equilibrium or not, was welfare improving if the gains to bene? ciaries of that change were large enough to enable them at least in principle, to bribe the losers voluntarily to accept the change. The existences of such potential Pareto improvement (PPI), as they are nowadays called, still involves no ICU because it is grounded on the voluntariness of market exchange. In short, Hicks and Kaldor (with a prodding from Lionel Robbins) stayed true to the Paretian conception of how an economist should study welfare economics. At ? rst glance, the Hick–Kaldor compensation test does seem virtually to pull a rabbit out of a hat but further re? ection soon showed that the achievement was semantic, not substantive. Why is it a potential and not an actual PI? The moment we try to implement PPI by encouraging gainers and losers to negotiate a bribe, they will engage in strategic bargaining and even without fancy game theory, it is easy to see that they may never reach an agreement. If the change has political signi? cance, the state may then intervene to force the parties to agree – in which case we have said goodbye to our taboo on ICU. No matter how we slice it, in the end we cannot avoid (1) a qualitative judgement from on high of the size of the PPI – remember that there is no objective way short of voluntary trade to measure the magnitude of a gain or a loss to the parties concerned – and (2) an interpersonal comparison of that gain and loss to the respective parties. But all that brings us back to Marshall and Pigou whose Economics of Welfare (1921) had none of Pareto’s compunctions about ICU and was perfectly content to declare that a pound sterling taken from a rich man by a progressive income tax hurt him less than the pleasure it gave the poor man when it was handed over to him. We have not quite reached the end of the story. The Arrow–Debreu proof of the existence of GE in 1954 was almost contemporary with Arrow’s proof of what he labelled the First and Second Fundamental Theorems of welfare economics. The ? st theorem demonstrates that every competitive equilibrium in a decentralized economy is Pareto-optimal, which we have already discussed, and the second 44 MARK BLAUG theorem demonstrates that a Pareto-optimum can always be achieved via perfect competition if lump-sum taxes and transfers are feasible, so that whatever were the original endowments of agents, we can still make everyone better off with a perfectly compe titive economy. Immense pains are taken in every textbook of microeconomics to persuade readers of the validity of those two theorems. And they are valid – as mathematical exercises. Lump-sum taxes and transfers are changes which do not affect economic behaviour and even the most ingenious modern welfare economists have never been able to come up with a convincing example of such things. 2 I think that we may safely conclude that the First and Second Fundamental Theorems of welfare economics are just mental exercises without the slightest possibility of ever being practically relevant. They are what Ronald Coase (1988) called â€Å"blackboard economics†, an economics that is easy to write on a blackboard in a classroom but that bears no resemblance to the world outside the classroom. V. Why Is Competition Good? I contend that perfect competition is a grossly misleading concept whose only real value is to generate examination questions for students of economics. 3 It is misleading because it breeds the view that economics is a subject like Euclidean geometry, whose conclusion may be rigorously deduced from fundamental axioms of behaviour plus some hard facts about technology. But of course this does not imply that competition is bad. I, along with most economists, believe that competition is good. But if perfect competition is impossible, and Pareto-optimality almost impossible, what is the basis of this belief in the desirability of competition? It is based on a concept of dynamic ef? ciency, the outcome of competitive processes, and not the static ef? ciency of Walras, Pareto and the First and Second Fundamental Theorems of welfare economics. The schizophrenia of economists on this issue is simply extraordinary. The manin-the-street favours capitalism because it is ultimately responsive to consumers’ demands, technologically dynamic and produces the goods that are wanted at low cost; of course, it also suffers from periodic slumps, more or less chronic unemployment even in booms, and frequently generates a highly-unequal distribution 2 They would have to be randomly assigned to individuals or else to re? ect some personal noneconomic characteristic, such as more consonants than vowels in one’s last name. It used to be thought that a uniform poll tax was a perfect example of a limp-sum tax but as Mrs. Thatcher discovered it had a most profound effect on economic behaviour: almost a million people disappeared from the electoral roll in Britain because the poll tax could not be collected without a home address. 3 I concede reluctantly that it has its uses for purposes of answering comparative statics questions on taxes and subsidies but even these have much less practical signi? cance than is usually assumed (see Vickers, 1995). IS COMPETITION SUCH A GOOD THING? 5 of income. 4 Still, on balance the good outweighs the bad and without becoming Panglossian, he or she votes for capitalism – and so do virtually all economists. But is this what we teach in our textbooks? To ask the question is to already answer it. Can one actually teach the principles of dynamic ef? ciency? Of course, one can and that is what we do in every course in industrial organization (and in every course in man agement schools), where, alas, we have to undo the brainwashing that students have undergone in their courses on microeconomics. In so doing, we employ historical comparisons and case studies, and these can only cultivate the ability to make informed judgements about speci? c attempts at what Popper called â€Å"piecemeal social engineering†, making the world a little better here and there, because we do not know enough to make the whole world best once and for all. VI. Some Conclusions: Coase and Posner Beliefs in the ef? cacy of antitrust law ? ts neatly into the concept of dynamic ef? ciency, or what Clark called â€Å"workable competition†. A question like: should we break up Microsoft or just reprimand and perhaps ? e the company? does not lend itself to a precise answer by the edicts of economists and it is just as well that it does not. Empirical science frequently proceeds on the untidy basis of what is plausible rather than what can be formally demonstrated beyond any doubt. The structureconduct-performance paradigm of yesteryear, associated with names of Edward Mason and Joe Bain, did j ust that but that has since been superseded by game theory and transaction cost on the one hand and the Chicago School of Richard Posner and Robert Bork on the other hand. In between we ? d Ronald Coase and the widely misunderstood Coase Theorem as the very centre piece of the law and economics movement. Since this so-called inappropriately named theorem picks up a number of the themes in welfare economics that we have discussed above, let us close with a brief discussion of it. As stated by its inventor, George Stigler (1966, p. 113), the Coase Theorem is the proposition that â€Å"under perfect competition private and social costs will be equal† and hence â€Å"the composition of output will not be affected by the manner in which the law assigns liability for damage†. This combines two claims in one, the ? rst of which will be familiar to us: (1) an ef? ciency claim that perfect competition is always optimal if voluntary bargaining between the affected parties to their mutual advantage is possible at zero transaction costs, de? ned as the costs of making deals, negotiating contracts, and policing the enforcement of those contracts (Allen, 2000), and (2) an invariance claim that the ? nal allocation of resources is invariant to different initial assignments of property rights provided these are in fact clearly de? ed. A voluminous literature has shown that both propositions are either highly contentious or else a tautology if perfect competition, perfect information and zero 4 In an instructive essay, Richard Nelson (1981 reiterates my charge of schizophrenia and adds to my list of the bene? ts of a private enterprise system of capitalism that of â€Å"administrative parsimony†, an echo of Hayek’s discussion of the merits of competiti ve prices as information signals. 46 MARK BLAUG transaction costs are rigorously de? ned (Medema and Zorbe, 2000). Lo and behold, however, Coase has argued ever more vehemently that transaction costs can be reduced by appropriate judicial decisions but that they can never be reduced to zero even under Cournot-type perfect competition. Of course, if we de? ne perfect information as literally foreseeing every alternative opportunity under all possible contingencies, now and in the future, it follows immediately that we can write and enforce contracts at zero costs (zero in ? nancial outlays, in time and even in cognitive effort), in which case only increasing returns to scale will prevent us achieving perfect competition. Once transaction costs are zero and competition is perfect, it follows immediately that the distribution of property rights cannot matter. In short, the Coase Theorem is just a logical corollary of perfect competition and perfect information but that does little to persuade us that it is much more than a logical theorem. 5 As for the more controversial invariance claim, income and wealth effects in consumption patterns and the strategic behaviour of the injured and injuring parties as they enter into voluntary bargaining (the old objection to Hicks–Kaldor compensation payments) will certainly make the ? al allocation of resources sensitive to the way in which the law of the moment assigns liability for damage. Are we really to believe that my claim against the American Tobacco Company for giving me lung cancer will be decided in 2002 in exactly the same way it would have been decided in 1940? Coase (1964, p. 105) said it all 35 years ago: Contemplation of an optimal system may provide techniques of analysis that would otherwise have been missed and, in certain special cases, it may go far to providing a solution. But in general its in? uence has been pernicious. It has directed economists’ attention away from the main question, which is how alternative arrangements will actually work in practice. It has led economists to derive conclusions for economic policy from a study of an abstract of a market situation. Richard Posner, in his in? uential textbook, Economic Analysis of Law (1998), now in its ? fth edition, subsumes Pareto optimality and the Coase Theorem in an ef? ciency logic of â€Å"wealth maximization†. He claims not only that common law, statute law and judge-made law should serve to maximize wealth, so that for example entitlements in property law should be shifted to the more productive litigants as evidenced by their willingness to pay, but that legal entitlements and hence resources actually tend to gravitate towards their most valuable use if voluntary exchange is permitted. Without saying so, Posner clearly believes that we can 5 Moreover, as Allen (2000, pp. 904–905) argues quite rightly, the famous Modigliani-Miller Theorem of corporate nance – if capital markets are perfect, the value of a ? rm is invariant to its debt-equity ratio – and the Ricardo Equivalence Theorem of government ? nance – if capital markets are perfect, the level of household wealth is invariant to the ratio of taxes to the size of the public debt – are both special cases of the Coase Theorem because all taxes, debt obligations and equity shares are simply delineation s of property rights; in a world of zero transaction costs, both ? rms and governments could decide on debt levels by tossing a coin. IS COMPETITION SUCH A GOOD THING? 47 isolate PPI, divorcing ef? ciency from equity without committing ourselves to ICU, in short, he believes in classic or rather neoclassical Paretian welfare economics. Although he deals at length with distributional issues arising from liability rules and various forms of taxation, he never lays down any general principles about income redistribution, such as, for example, Pigou did: any transfer of income from the rich to the poor that does not diminish national income was deemed desirable by Pigou. What he argues, when criticized, is simply that users of distributive justice will have to be addressed outside the framework of standard economic analysis (Parisi, 2000). But this is exactly what Pareto, Kaldor and Hicks said years ago. Orthodox welfare economics, including the â€Å"ef? ciency of the common law hypothesis† upheld by Posner, has simply stood still ever since the 1930s. This notion of a neat divorce of ef? ciency from equity, of an objective value-free de? nition of ef? iency, has haunted economics from its outset but it is, of course, a will-o’-the-wisp: there is in fact a different ef? ciency outcome for every different distribution of income, and vice versa. Ef? ciency is necessarily a value-laden term and welfare economics is necessarily normative, that is, a matter of good or bad and not true or false. 6 However, there is real merit in treating ef? ciency and equity questions lexicographically, so that we can be as explicit as possible about our di stributional judgements, but that is not because we can ever decisively separate them. My complaint about Posner is that he evades all these fundamental questions in applied welfare economics. Not only does he fail to tell us how to add equity to ef? ciency but he does not even tell us whether ef? ciency means static ef? ciency or dynamic ef? ciency. There is an almost deliberate fuzziness of language in all his writings, which smacks of ideology rather than science. If we are going to employ the economist’s language of ef? ciency, we ought to be told just how to apply it and why ef? ciency should be our standard for judging the consequences of the law. One of Clark’s old rules of â€Å"workable competition†, such that entry into industries should be kept as free as is technically feasible taking due account of sunk costs, if necessary by antitrust legislation, is more relevant for public policy than Posner’s continual appeal to the principle of wealth maximization. The Chicago school does not deny that there is a case for antitrust law but they doubt that it is a strong case because most markets, even in the presence of high concentration ratios, are â€Å"contestable† (Bork, 1978). How do we know? We know because the good-approximation assumption: the economy is never far away from its perfectly competitive equilibrium growth path! Believe it or not, that is all there is to the â€Å"antitrust revolution† of the Chicago School. 6 Some economists believe, extraordinarily enough, that welfare economics is positive and not evaluative at all (see Hennipman, 1992; Blaug, 1992, chap. 8, 1993). 48 References MARK BLAUG Allen, Douglas W. (2000) ‘Transaction Costs’, in Bouckaert and De Geest, eds. , pp. 893–926. Blaug, Mark (1992) The Methodology of Economics, 2nd edn. Cambridge: Cambridge University Press. Blaug, Mark (1993) ‘Pieter Hennipman on Paretian Welfare Economics: A Comment’, De Economist, 141, 127–129. Blaug, Mark (1997) ‘Competition as an End-State and Competition as a Process’, in Not Only an Economist. Recent Essays. Cheltenham: Edward Elgar, pp. 66–86. Bork, Robert H. (1978) The Antitrust Paradox: A Policy at War with Itself. New York: Basic Books. Bouckaert, Boudewijn, and Gerrit De Geest (2000) Encyclopaedia of Law and Economics, 3 Vols. Cheltenham: Edward Elgar. Clark, John Maurice (1961) Competition as a Dynamic Process. Washington, DC: Brookings Institution. Coase, Ronald G. (1964) ‘The Regulated Industries: Discussion’, American Economic Review, 54, 194–197. Coase, Ronald G. (1988) The Firm, the Market and the Law. Chicago: University of Chicago Press. Debreu, Gerard (1959) Theory of Value. An Axiomatic Analysis of Economic Equilibrium. New Haven: Yale University Press. Hennipman, Pieter (1992), ‘Mark Blaug on the Nature of Paretian Welfare Economics’, De Economist, 140, 413–445. Lipsey, Richard C. , and Kelvin Lancaster (1996) ‘The General Theory of Second Best’, Review of Economic Studies, 24, 1956, pp. 11–32, reprinted in Richard C. Lipsey, Microeconomics, Growth and Political Economy. Selected Essays, Vol. 1. Cheltenham: Edward Elgar, pp. 153–180. Machovec, Frank (1995) Perfect Competition and the Transformation of Economics. London: Routledge. Medema, Steven G. , and Richard O. Zerbe (2000), ‘The Coase Theorem’, in Bouckaert and De Geest, eds. , pp. 36–92. Nelson, Richard R. (1981) ‘Assessing Private Enterprise: An Exegesis of a Tangled Doctrine’, Bell Journal of Economics, 12, 93–100, in Peter Boetke, eds. , The Legacy of Friedrich von Hayek, Vol. III. Cheltenham: Edward Elgar, pp. 80–98. Parisi, Francesco, ed. 2000) The Economic Structure of the Law: The Collected Essays of Richard A. Posner, Vol. I. Cheltenham: Edward Elgar. Reder, Melvin W. (1982) ‘Chicago Economics: Permanence and Change’, Journal of Economic Literature, 20, 1–38. Stigler, George J. (1966) Theory of Price, 3rd edn. New York: Macmillan. Van Cayseele, Patrick, and Rog er Van den Bergh (2000) ‘Antitrust Law’, in Bouckhaert and De Geest, eds. , Vol. III, pp. 467–498. Vickers, John (1995) ‘Concepts of Competition’, Oxford Economic Papers, 47, 1–23. Walker, Donald A. (1996) Walras’s Market Models. Cambridge: Cambridge University Press.

Machiavelli vs. Thoreau (Compare and Contrast Essay) Essay

The way one should govern and the way for one to be governed will always be an ongoing struggle. How can a government maintain order and the safety of its people yet at the same time preserve its citizens’ natural right to be free? The ideas from Niccolo Machiavelli, an Italian aristocrat, who published â€Å"The Prince† in 1513 for a Medici prince as a guideline on how to rule a country, gives a conservative approach to how one should govern. Henry David Thoreau’s â€Å"Civil Disobedience† published in 1849, offers a liberal approach on how one should be governed. Machiavelli stresses the importance of maintaining order while Thoreau suggests reform. Although their views are different both men approach their positions in an aggressive manner. Machiavelli’s approach for his audience would be through fear and power while Thoreau’s approach for his audience would be through nonviolent acts, such as being a nuisance to the government. Machiavelli’s audience would be any person in a position of power, particularly that of a prince. Machiavelli uses aphorisms and historical references when introducing his argument. Not only would he present his argument but he also presents an opposing point of view and discredits it. Thoreau’s audience would be people who share his views on a less controlling and a moral government. Thoreau appeals to his audience through the use of aphorisms as well as analogies with which people would be able to identify. Machiavelli insists that a ruler must do whatever is in his power to rule his people regardless of whether his actions are moral or immoral and that â€Å"†¦it is safer to be feared than to be loved when one of the two must be lacking†¦.For one can generally say this about men: that they are ungrateful, fickle, simulators and deceivers, avoiders of danger, greedy for gain, and while you work for their good they are completely yours, offering you their blood, their property, their lives, and their sons†¦Ã¢â‚¬  (Jacobus 44). These comments support the pessimistic views that Machiavelli has about mankind. He theorizes that man is immoral therefore justifying a ruler being immoral. He states that in return for a ruler’s protection that a man must give his life. Contrary to Machiavelli’s views on morality, Thoreaus states, â€Å"That government is best which governs not at all† (Jacobus 145) and that â€Å"It is truly enough said that a corporation has no conscience; but a  corporation of conscientious men is a corporation with a conscience† (Jacobus 146). Thoreau believes that it is a man’s moral beliefs that would make a moral government. He believes that a man, if left at his own will, will do what is right and in return, if in government, will do what is right for the people. When governing a country, a ruler must have an army. In that aspect, Machiavelli states â€Å"A prince, therefore, must not have any other object nor any other thought, nor must he take anything as his profession, but war, its institutions, and it’s discipline†¦Ã¢â‚¬  (Jacobus 37) and that â€Å"†¦between an armed and unarmed man there is no comparison whatsoever, and it is not reasonable for an armed man to obey and unarmed man willingly, nor that an unarmed man should be safe among armed servants† (Jacobus 38). These statements suggest that a ruler must always prepare for war and military strength is more intimidating than any other type of force. In order to maintain a country, a ruler must have a strong army to defend it. Thoreau’s opinion on the military seems to differ in which he describes an army as â€Å"†¦small movable forts and magazines at the service of some unscrupulous man in power† (Jacobus 147). He clearly describes men as machines of a ruler lacking morals, rather than men protecting country. Machiavelli emphasizes a ruler maintaining order and control while Thoreau emphasizes on the citizens ruling or having an impact on their government. For example, Machiavelli’s approach on how this order can be established would be through appearance. When Machiavelli states, â€Å"And men in general judge more by their eyes than their hands; for everyone can see but few can feel. Everyone sees what you seem to be, few perceive what you are, and those few do not dare to contradict the opinion of the many who have the majesty of the state to defend them; and in the actions of all men†¦Ã¢â‚¬  (Jacobus 47), he is stating that what a ruler does that his citizens do not know about should not affect his reputation, as most people will follow the majority if the majority believes that their ruler is just and fair. He then continues to explain how this can be accomplished. Machiavelli continues to explain how a ruler can be deceiving when need be but can also be depicted as â€Å"†¦merciful, faithful, human, forthright, religious†¦Ã¢â‚¬  (Jacobus 47),  leader yet at the same time, he states, â€Å"†¦in order to maintain the state he is often obliged to act against his promise, against charity, against humanity, and against religion† (Jacobus 47). In these statements, Machiavelli is arguing that in order for a leader appear moral he is often subjected to immoral acts. Thoearu’s views seem to disagree with Machiavelli’s reasoning as Thoeau states, â€Å"A minority is powerless while it conforms to the majority; it is not even a minority then; but it is irresistible when it clogs by its whole weight† (Jacobus 155). Thoreau believes in the good in men and that every man will do what is right for himself and if he believes a government to be immoral then it should be a man’s duty to rebel for what is right. Although one might be a part of the minority, an impact can still be made if the group stands together. The power struggle between government and individual freedom has been and always will be a never-ending battle. Comparing Machiavelli’s standpoint, which would be order and control, and Thoreau’s standpoint, being individual freedom, would give one an idea of this conflict. Even though both men were from different countries and lived during different times in history, their contrasting ideas still live through people in societies today and will echo into the minds of others in societies to follow.

Abnormal Psychology: Abnormality

1) Abnormality is defined from an average where common behaviour is defined as â€Å"normal† and rare behaviour is defined as abnormal. These characteristics can be shown and placed on a scale â€Å"graph† that would reveal how common their score is in comparison to everyone else. There are problems deciding how rare behaviour has to be to be considered abnormal, phobias could be defined as normal as they affect a lot of the population. Different cultures have different definitions of being abnormal. Something that is rare to use might be defined as normal to a different culture. Statistical infrequency is a way to define events that are more or less common, this frequency is represented with a curve the most common events are the high part of this curve and the less common are the lowest part of the curve. The most infrequent occurrences are considered abnormal and statistically infrequent; these are events that occur rarely. In some situations statistical infrequency is used to define mental retardation, but statistical infrequency doesn’t focus on the bad points only, abnormal behaviour isn’t always undesirable e. . being better at sports, genius’s. Using statistical infrequency means we are unable to distinguish the good and bad abnormalities. 2) The diagnostic term for the patient is schizophrenia the doctor will evaluate the patient and ask about symptoms, medical history, and see if theres anything physically wrong with the patient. There are no tests to identify mental illnesses, the doctor would send the patient for tests to rule out any other illnesses first. If theres nothing physically wrong and the symptoms persist the doctor may refer the patient to a psychiatrist these people are trained for treating mental illnesses. These trained people use a specially designed interview to evaluate the person, they also see how the person is within themselves and socially, and watch the persons attitude and behaviour, the doctor would ask if they have Hallucinations,Delusions If extremely bizarre, they would see if their speech is Disorganised They can usually diagnose a mental disorder based on these factors. Doctors may misdiagnose patients suffering with schizophrenia symptoms, the patient may be embarrassed about being diagnosed with this condition so may not tell the doctor about hallucinations or any other disturbing behaviour, its difficult to diagnose schizophrenia with it being a mental disorder an may be diagnosed as another mental condition. 3) Discuss evidence that schizophrenia has a biological cause. Twin studies show that they have a higher concordance rates than dizypotic twins. The closer the relative the higher the concordance . Biological causes schizophrenia Our genes are involved with the inheritance or development of schizophrenia, multiple chromosomes are transmitted to people in generations and are later diagnosed with schizophria, there is a 70% chance of inheriting schizophrenia. Evidence shows that identical twins do not develop schizophrenia, i resent study shows that 28% of twins have a chance of developing schizophrenia if the other twin already has it. Stress can cause episopes of schizophrenia, there are also other factors like poverty, poor diet, ill health, drug use. Researchers have found that people suffering from schizophrenia tend to have been born in winter. There are no definite causes of schizophrenia. Chemotherapy is used to treat chemical imbalance’s in the brain, its changes the way the brain and body works. 4) Discuss the role of the family in the causation of schizophrenia. The double bind theory states that schizophrenia is a abnormal patter n in family communication, a person is given mutually contradictory signals by another person, this places the person in an arkward situation causing conflict. Liem et al compared communication patterns within the family with an without a schizophrenia, there was evidence that families process a role in relapse of schizophrenia patients following stabilisation. Familys hign in critgicism, hostility lead to more relapse, the double bind theory is a distressing communication within the family, the use of confusion makes it difficult to respond or to resist conflict. 5) Evaluate the effectiveness of cognitive therapy for schizophrenia, and discuss problems in assessing its effectiveness. This treatment is increasingly popular this has good success rates for epression, OCD, eating disorders and anxiety, its less effective with schizophrenia and dipolar depression. It works by the way we think at attitudes that influence our behaviour, irrational thinking is seen to be the cause of the mental disorders; it also works by changing the way the client thinks. This therapy has fewer side effects than any other treatments, this is a long term strategy but could make the patient worse if it doesn’t work and it’s not a quick recovery process. People could give up on this treatment feeling it’s not working because it takes a long time.

Comparison of ratios over a two-year period Research Paper

Comparison of ratios over a two-year period - Research Paper Example Besides, financial ratio analysis can also be used to assess the performance of different departments and managers and how their overall performance may have an impact on the performance of the whole firm. Sparklin Automotive Company is in business since 1990 and is supplying different automotive related parts across the whole country. In order to better assess its performance for the year 2005 and 2006, a comprehensive ratio analysis is important. This will provide a critical insight into areas such as liquidity management, overall asset management, the nature and extent of firm’s debt as well as assessing the profitability during these two years. Ratio Analysis Explanation Ratio analysis is the process of calculation and comparing the ratios which have been extracted from the different financial statements. By forming the historical trends, ratio analysis can actually provide an insight into the performance as well as charm in the company to perform in the long run based on the historical data. Ratio analysis is also important from the perspective of assessing the performance of the managers and understanding as to how the organization is performing. By computing financial ratios, a firm not only compares its performance with the competitors but also get an insight into its own historical performance. Ratio analysis therefore can be used for two different purposes or in two different manners i.e. making comparisons through trend analysis and comparing the ratios with the competitors. When financial ratio analysis is used for the purpose of trend analysis, a firm or a manager can actually get an insight into how the trends in different ratios are pointing towards the performance of the firm. For example, if a manager wants to assess as to how the overall inventory has been managed through out the year, she can compute the inventory turnover ratio and days in inventory to get an insight into how the inventory of the firm has been maintained and how sales have been generated. Ratio analysis therefore provides an ability to perform objective analysis of the performance of the firm. (Bull, 2007) Ratio analysis can either be used by the firm for its own evaluation purposes so that managers can assess what is required to be done in order to improve different areas lacking in achieving the targets. Secondly, ratio analysis can also be used by the investors to not only assess the historical performance of the firm but based on this assessment make forecasts as to how the firm may perform in future. Ratio Calculation Ratio Formula 2005 2006 Current Ratio Current Assets /Current Liabilities 1.475:1 1.403:1 Debt to Equity Ratio Total Liabilities / Total Equity 0.449:0.551 0.440 : 0.56 Inventory Turnover Sales / Inventory 6.11 times 4.620 Times Receivables Turnover Sales / Receivables 18.24 times 18.16 times Gross Margin Gross Profit / Sales 49.19% 40.70% Evaluation of the Ratios Current Ratio Current ratio is one of the basic indicators for assessing the liquidity position of the firm and indicates as to whether the firm has the required liquid assets to pay off its immediate liabilities. A current ratio of higher than 1 is considered as acceptable because for ever $1 of current liabilities firm has more than $1 of current assets to settle these

Literature review matrix Essay Example | Topics and Well Written Essays - 750 words

Literature review matrix - Essay Example   The researchers designed two phases for the study. In the first phase, participants were interviewed and their responses noted down while in the second phase, the researchers studied participants independently and noted their observations.   In the results, the researchers were able to identify some factors which influence the proper implementation of evidence based practices. They included organizational and practice issues, multi-professional relationships and the role of project leaders.   Some of the factors that were identified as influencing the process of implementing evidence based practices include number of years in the nursing practice, the age of the nurses and the number of years since obtaining the last professional degree.   Majid, S., Foo, S., Luyt, B., Zhang, X., Theng, Y. L., Chang, Y. K., & Mokhtar, I. A. (2011). Adopting evidence-based practice in clinical decision making: nurses perceptions, knowledge, and barriers. Journal of the Medical Library Association: JMLA, 99(3), 229.   Rycroft†Malone, J., Harvey, G., Seers, K., Kitson, A., McCormack, B., & Titchen, A. (2004). An exploration of the factors that influence the implementation of evidence into practice. Journal of clinical nursing, 13(8), 913-924.   Dalheim, A., Harthug, S., Nilsen, R. M., & Nortvedt, M. W. (2012). Factors influencing the development of evidence-based practice among nurses: a self-report survey. BMC health services research, 12(1), 367.   Van Achterberg, T., Schoonhoven, L., & Grol, R. (2008). Nursing Implementation Science: How Evidence†Based Nursing Requires Evidence†Based Implementation. Journal of Nursing Scholarship, 40(4),

Information Needs by Position, Function and Role Essay

Information Needs by Position, Function and Role - Essay Example Certainly, having an appropriate organizational model in place is a precondition for long stint success (Pugh, 1990). This is because of its ability to identify and address the innumerable business and human realities of the corporation in question. An organization is a three layer system where at the bottom the organization’s material flows (activities of the first kind). Decision makers, managers of the organization are at the top. The middle layer receives information from the bottom, processes it and presents it to the decision makers. Decisions made in the top layer influence the bottom layer activities. For organization mangers to make qualitative decisions, they need to receive qualitative information on time (Pugh, 1990). This will result in the delivery of decisions to the bottom layer on time. Qualitative realization is attained if these information flow procedures are ensured by the middle layer. The two fundamental requirements of an organizational structure includ e division of labor into distinct tasks and coordination of that labor. This is such that the workers are able to accomplish the company’s goals. ... It may choose to cluster these utilities together under the department of marketing. Bigger establishments may organize so much of these undertakings that they isolate sales into a department different than the other functions (Pugh, 1990). Hence, qualitative information is required on the customer’s needs as well as the company’s performance in the market. The company should have information on how to establish market niche. The other information needed is the need for competitor intelligence. The company should be equipped with strategies to beat the competitor. Roles Once a corporation has proven how functions are convened, then functions must be allocated to the people who have the capability to perform them. Many establishments make roles to execute these functions. Companies should have information on ranks with job explanations that will assist employees to know the range, function and parameters of their roles. This will create a system of accountability and rel iability between all the people working in an organization (Pugh, 1990). In corporations big enough to have several people in a branch, roles aid in making sure that each person is taking care of central functions without replication or desertion of tasks. For instance, in a finance division, they might have a controller, accounts payroll person and an accounts collections person. All these people form part of a crew with an inclusive job to manage the firm's cash flows. However, every one of them has a set of duties that boost efficiency and ensure the assiduousness of the team. Information needs associated with organizational roles include information on training programs and motivation strategies for the employees. There is a need for

Measuring the effectiveness of creative posters Literature review

Measuring the effectiveness of creative posters - Literature review Example According to Mogel (1993) advertising, ‘criers’ originated in Babylonia during 3000 BC. People would take come on to the street carrying their products and shouting louder about the merchandise. Later in 2200 BC, the development of hieroglyphics in Egypt gave way to paper and ink document used to interpret word and sound concept. Egypt further invented outdoor advertising carving public notices on stelae in 2000 BC (www.nonlineagency.com). If Egyptians were good at promoting Romans knew how to make a convincing sales pitch and early examples of advertising were found in the ruins of Pompeii. Advertising has been around for as long as there have been goods to sell and a medium to talk them up. The field of advertising took a giant step after the invention of printing press and movable type by Johannes Gutenberg, a German in 1447. In 1631, first classified newspaper ads were printed in France’s La Gazette by Renaudot which made him the first French journalist and th e inventor of personal ad (Tungate, 2007). Advertising further developed and flourished with the introduction of first English daily newspaper in 1702 and first newspaper advertising in the United States was carried out by Boston News-Letter in 1704. Advertising agencies began in early 1800 during the period when newspapers flourished (Mogel, 1993). Advertising, today, is a huge business making millions of dollars in profit and is not limited only to paper advertising but has expanded its horizon into radio, visual media and internet. This paper critically reviews various literatures in form of books, journals, articles, etc. on creative posters and to measure its effectiveness. Review of Literature Businesses rely on its marketing plan to promote their products which vary depending on their budget. No matter whatever the size of budget is, advertising is the key player in marketing plan because it makes the consumer aware of the product. Wells, Burnett and Moriarty (2007) mentioned that marketing is the way product is designed, tested, produced, branded, priced, distributed and promoted. Whereas advertising plans and decision making take place in the context of overall marketing strategy that includes statement of marketing objectives (Koekemoer and Bird, 2004). O’Guinn, Allen and Semenik (2008) mentioned that advertising is one of the primary tools available for marketing and is only one of the major areas of marketing responsibility. The marketing concepts suggest determining the customer needs and wants and then to develop, manufacture, market and service goods to fill those needs and wants (Wells, 2007). According to Saxena (2009) and Alozie (2009) advertising plays a significant role in awareness creation and attitude formation but has limited role in marketing strategy. Advertisement is the promotion of a company’s products and services through different mediums to increase the sales of the products and services. Advertising is further cla ssified into print, broadcast, outdoor, covert and public service (Management Study Guide, 2011). Out of home advertising further encompasses many advertising forms including outdoor (billboards and signs), transit (both inside and outside the vehicle), skywriting and variety of other media like public walls and furniture. According to OAAA (qtd. in Belch and Belch, 2003) total

Research Method Essay Example | Topics and Well Written Essays - 2250 words

Research Method - Essay Example 6. When a financial organization decides to take part in financing activities, there are a number of risks that the move. The risks include political risks and foreign exchange risk. The risks make it difficult for the institution to maintain reliable and constant revenue. 7. Paying the amount in three months’ time may be reached at if the paying company is capable of availing the amount in three months’ time. Financial ability is the main contributes much to the financing action. The bank would prefer the payment to be made in twelve months since the longer the bank transacts the payment, the higher the bank interest earned (Pratt, 2011). 8. Once the USASuperCars accepts the HSBC’s offer, the risk will lie on the financial institution too. The bank, on the other hand, may gain or lose depending on the exchange rates. The probability of the bank making a loss are minimal because HSBC native currency is in sterling pounds which are stronger that the dollars. 9. The fixed sum of money is about $2,150,000 without exchange rate risk while HSBC has 29% chance to lose and 5% chance to gain more than $200,000. Analyzing the information keenly, the exchange rate is risky to HSBC. The bank is either going to generate a profit of five percent of the loss of about twenty-nine percent. Â  I am writing this report to make financial decisions for Corvette Company, which sells luxury sports cars to various countries in the world. The company is situated in the United States and deals with a unique brand of cars. The good reputation of the company has seen it move far ahead of other car selling companies. The success of the company is due to coordination between different departments. The managing board makes decisions that have seen Corvette retain it unbeaten reputation in the entire globe. Good quality and affordable produce are indeed the pushing force behind its success (Guffey & Loewy, 2013). I will analyze the financial risks,

W3 Asign2 Strategy Map & Balanced Score Card Essay

W3 Asign2 Strategy Map & Balanced Score Card - Essay Example (Cokins, G., 2013) Using these two tools, this paper will attempt to identify the KPIs for Rotor-Rooter, a plumbing company that is based and provides services primarily in the United States. It was difficult to identify the KPIs for Roto-Rooter because aside from company-owned operations in the United States they also have independent contractors and independent franchises locally and internationally. (Roto-Rooter, 2014) Since the writer is of the belief that the independent contractors and franchises should probably have their own KPIs, this paper will focus on the performance of the company-owned branches. As mentioned earlier, this tool presents the objectives and KPIs needed to meet those company goals. For this company, the key indicators of performance start with, under Learning Growth, enhance technical skills for all Level 1 employees and improve managerial & administrative skills for Level 2 employees. I think these are important because Rotor-Rooter’s business requires its employees at these levels to practice technical skills to complete their work and organizational skills and management skills to coordinate with their many branches, franchises and contractors, respectively. For the Learning Process stage, the KPIs are to implement training programs for current and new employees and to implement management training programs to meet the objectives at the first level of the map. For the Customer Level, the KPIs are to attain customer retention at 100%, to continue providing quality service, and to provide after sales service. Finally at the Financial Stage, the KPIs are to increase revenue and to increase productivity. A balanced scorecard contains individual KPIs with a predefined target measure, and KPIs that are project-based and process-based. (Cokins, G., 2012) For Roto-Rooter, the balanced scorecard will show, as KPIs for the managers and employees, target outputs with

Importance of heroism and glory in the Iliad and in the Aeneid Essay

Importance of heroism and glory in the Iliad and in the Aeneid - Essay Example Heroism can be defined by actions that require bravery, nobility, and often sacrifice. Heroism is exemplified by the character of Achilles in The Illiad. Achilles is a great warrior who also reveals deep emotional complexities for the events that take place in the story. Foley defines the Greek hero as being unseasonable, either negatively or positively extreme and antagonistic towards the god who has the most similar characteristic to the hero (87). Achilles follows all three of these categories, including the last in his antagonism towards the god Apollo, with whom he shares not only character attributes, but similarities in physical appearance (Foley 88). The role of heroism, however, played an important part in culture for both the Greeks and the Romans as it represented the beginnings of the notion of salvation. The stories of Greek and Roman gods portrayed some of the worst characteristics in humanity, but often it was the hero who redeemed the nature of man kind by his actions (Progress 343). Glory can be defined by exaltation of its subject matter. In the case of The Aenid, the glory of Rome is justified through the exalted nature of the emotional context of the actions within the poem. The intent was to glorify the community of Rome, thus bring unity.

The Concept of Literacy to Prospective Teachers Essay

The Concept of Literacy to Prospective Teachers - Essay Example This begins with children who come into the classroom from different backgrounds, learning methods and special needs that should be enhanced. Each of these requires different formats for teaching literacy while helping children with their specific characteristics that are within the classroom. By developing this, there is the ability to create deeper understanding and knowledge that is a part of the education of children while enhancing learning abilities by meeting children with the culture which they understand. The development that is created from this becomes easier while allowing all students from diverse backgrounds to have their needs met with literacy (Flint, 2007). The second point which would be made would expand on the idea of reaching cultures into developing and working with specific tools for students. Language development is one that is based on creating skills and working with children to develop these with the use of scenarios and circumstances. Both oral and reading skills are developed specifically by helping to create the right learning environment so the skills are continuously practised and developed in a way that ensures all children are able to develop the right approach to reading and writing. This means that the environment in the classroom needs to be established in a manner that allows children to understand and develop their literacy skills over time and with continued support from the environment and teaching that is available. Using this as a foundation invites in cultural diversity and enhances the needs each child has (Flint, 2007). The third relevant point that would be used with teachers would be from the different ways in which children can be introduced to practising skills while boosting the diversity of the classroom.

Fast Food in the Cafeteria Essay Example for Free

Fast Food in the Cafeteria Essay Many people think that fast food is bad for our health and that it shouldn’t be allowed in school. More healthful options should be promoted but what’s the use of healthy food in school if the kids don’t want to eat it? Nobody least of all adults LIKE eating healthy if given a choice everyone always goes for the fast food. When we eat lunch at school we get the bad end of the stick. they feed us cardboard pizza, meat that isn’t even meat and has been washed in ammonia to kill bacteria, we get fries that aren’t fries, slimy ravioli, and lunch that generally looks unappetizing and tastes little better than that. the dilemma is should schools offer fast food such as KFC, Taco Bell or McDonalds? I say yes. Based on 2009 US Industry report, there were 303,989 fast food locations in the US alone. â€Å"Fast food was the main food source for up to 38% of children† stated researcher Shanthy Bowman, PhD, with the U. S. Department of Agriculture in Beltsville, Maryland. She also demonstrated that when kids eat fast food, they eat more food all day long and over one year time period, a child can pack on 6 extra pounds because of high fast food eating. The result of overeating is a nation that is becoming obese and overweight. The result of obesity? More illness and soaring healthcare problems. When we say fast food, we are thinking junk food yum (insert drool here). Fast food has become one and the same from hamburgers to pizzas, to French fries, hot dogs and more. Fast food has high calories, fats, saturated fats, sugar and salt content. The fats, sugar, and salt in fast food draw us kids like a magnet and because fast food doesnt contain much fiber we dont feel full afterward so we tend to eat more later on. Compared with kids didnt eat fast food, fast food eaters ate an average of 187 more calories a day. At that rate, â€Å"the child would gain 6 extra pounds each year, if they didnt get enough exercise to burn it off†, wrote PhD Bowman. At the same time, fast food causes a number of health problems in children. The excess of sugar in fast food and sodas lead to diabetes in children; their bodies failing to produce the insulin that controls the sugar levels and metabolism. Fats and saturated fats lead to high levels of cholesterol in the blood, Cholesterol leads to various heart problems, These heart problems increase the risk of major heart diseases such as Coronary Heart Disease. Also the lack of vitamins can make the children become anemic, lethargic and get tired very easily. Deficiency in calcium makes their teeth, nails and bones weak. Many times the added preservatives and coloring agents used in fast food can cause cancer in children. The most common and the core cause of all the diseases in children, is obesity due to fast food. Obese children spend little time doing physical activities or sports, and this lack of activity leads to a sedentary lifestyle, which further on leads to mental stress and other emotional disturbances. According to Centers for Disease Control and Prevention website, results from 2007-2008 National Health and Nutrition Examination Survey showed that 17 percent of children and teenagers ages 2-19 years are obese. That means one in 6 children is obese. Are you tired of eating nasty, dried, greasy, overcooked, overpriced cafeteria food? I know I am. Its time to make a change. It would be a good idea for a fast food chain to consider opening their newest location in schools because doing so would help students and increase money for the school. â€Å"As they try to keep pace with student taste, lunchrooms across the country have given up meatloaf and mashed potatoes for brand-name fast-food items. † (source B) Bringing in a fast food restaurant as a matter of fact would be good because it would help students. Students would stop skipping lunch a start eating in the cafeteria, Eating lunch is better than not eating. Studies show how test scores improve when students eat. When students like lunch, they’ll eat it! They won’t be tempted to throw it out or give it to another student. In addition to helping students, a fast food restaurant in the cafeteria would benefit the school because first of all, the restaurant would give a percentage of its profits to the school and secondly the restaurant might even participate in the Adopt-a-School program. With more students buying lunch, profits would increase, and if other students hear that that school has fast food in the cafeteria they might be attracted to the school because of the restaurant, increasing profits even more. All this extra money could be used for supplies, computers, or books, all of which would make our educational experience at school much better than it is now. Helping students and schools is something that everyone enjoys doing. Putting a fast food restaurant in place of cafeteria food would do both. Hopefully if we got this restaurant no one would ever think of the food as being nasty, greasy, overcooked or overpriced, everyone would be happy. Cafeterias are a vital part of a students high school career. It is a place of social interactions and various degrees of shenanigans, whether it is over breakfast, lunch, or walking to classes with friends. Cafeterias are not just for keeping societys niches alive, however, as school cafeterias are also used to provide a form of food for the general student body. Cafeteria food has been a theme of debate for years and will remain to be so for years to come. From the bagged-lunch versus the school-prepared dilemma, to the question of what exactly is in the meat-like substances cafeteria food has an air of mystery and intrigue. While there are admittedly many reasons not to consume the cafeteria food, it has a few redeeming qualities about it. Food provided through the public education system can sometimes have a less-than-savory flavoring when first chewed over, but soon becomes edible when the taste is acquired. Cafeteria food may be tasteless and inedible at times, but remember: what doesnt kill you, makes you stronger. After four years of consuming the bland entrees, students graduate high school with brand-new taste buds and an aversion to all things flavorful and delicious. If variety is the spice of life, cafeteria food is as spicy as a Flamenco dancer. One never knows what he or she will receive on Wednesdays- pizza, hotdogs, or a creative combination of the two. Not only is the student unsure of exactly where the chicken patties come from, or what they are really made of, but the school lunches provide an array of fruit and salad. Most students have no choice in what they eat for lunch they eat it because they are hungry and have no other option. fast food in the cafeteria though would change that. Students could eat what they liked and even if they paid for it the funds would go to the school and the school could use that money to buy things for the students that would enhance our learning experience. every student would go to lunch and actually eat the food even if they had to pay for it because it’s something they like to eat, not tasteless junk. So overall putting fast food in the cafeteria is a good thing but also a bad thing. It’s a debate that would probably go on forever but nobody would win. decide whether to put it in the cafeteria or not. either way it makes no difference except to our taste buds. BIBLIOGRAPHY Nicole Harms ehow contributor â€Å"obesity coronary heart disease† Monycutza007 â€Å"Children Adn Fast Food† 11/27/10 http://www. cyberessays. com/Term-Paper-on-Children-Adn-Fast-Food-23508/ Amy Kalafa August 22nd, 2011 â€Å"Whats in Your Childs School Lunch? † â€Å"The unsavory nutrition facts on cafeteria food† google. com fast food in the cafeteria.

Liquefied petroleum gas

Liquefied petroleum gas Direct Flame Production of Carbon Nanotubes (CNTs) From Liquefied Petroleum Gas (LPG) Abstract Liquefied petroleum gas (LPG) is a common household fuel used for cooking purpose in India. LPG is very rich in its carbon content because of its specific mixing components of predominantly C3 alkane (Propane C3H8) or C4 alkane (Butane C4H10) which provides a better chance of producing strong and good quality nano products like nanotubes, nanotubes nanowires, nanoparticles etc. In our laboratory a lab scale flame reactor is designed and developed for producing carbon nanotubes using LPG as the carbon source in the presence of air as an oxidant under atmospheric conditions. The design aspects and the best operational conditions of the flame reactor for producing carbon nanotubes are discussed. The nanotubes obtained were purified and were further characterized using SEM, TEM XRD and Raman. KEYWORDS: Carbon Nanotubes (carbon); TEM (Transmission electron microscopy); LPG (alkanes); Raman (Raman spectroscopy); XRD; Flame Synthesis; 1. Introduction Liquified petroleum gas (also called as LPG or Autogas) is a mixture of hydrocarbon gases used as a fuel in heating appliances and vehicles and it is increasingly replacing chlorofluorocarbons as an aerosol propellant and a refrigerant to reduce the damage and degeneration of the ozone layer. LPG is a clean, convenient energy source, which can be stored as a liquid under moderately high pressure and used as a gas in commercial and residential heating applications. It is a common household fuel used for cooking purpose in India, LPG is rich in its carbon content because of its specific mixing components of predominantly C3 alkane (Propane C3H8) or C4 alkane (Butane C4H10) which provides a better chance of producing strong and good quality nano products like nanotubes, nanotubes nanowires, nanoparticles etc. Carbon nanotubes (CNTs) are among the amazing objects that science sometimes creates by accident, without meaning to, but that will likely revolutionize the technological landscape of the century ahead. Our society stands to be significantly influenced and shaped by carbon nanotube applications in every aspect, Carbon nanotubes have been synthesized for a long time as products from the action of a catalyst over the gaseous species originating from the thermal decomposition of hydrocarbons [1]. Since their discovery by Sumio Ijima [2] several ways of preparing them have been explored. The CNTs have been synthesized by various methods e.g. electric arc discharge, laser evaporation and chemical vapor deposition (CVD) [3-5]. Though researchers have been successful to synthesize multi-wall nano tubes they can produce only in milligram to gram quantities in a few hours. However as many potential applications [6-7] of CNTs require kilogram to ton quantities. Apisit Songsasen et al [8] have synthesized CNTs by means of catalytic decomposition of LPG on a Zeolite-supporting Nickel catalyst. Qian et al [9] have reported the formation of CNTs by the decomposition of liquefied petroleum gas (LPG) containing sulfur in the presence of Fe/Mo/Al2O3 catalyst, Since this contains sulfur of a few to several hundred ppm, which can lead to poisoning the catalyst heavily, few reports currently exist on using LPG or natural gas directly for production of carbon nanomaterials, only Prokudina et al [10] has reported CNT synthesis from LPG by CVD method, but till date no information and literature is reported on direct flame synthesis of CNTs by LPG. The main challenge in this field is to develop methods to produce nanotubes on a large scale and at low cost. As Flame synthesis of nano carbons being a continuous flow method, in which flowing gaseous feedstock mixture could produce CNTs in large quantities it has several advantages like easy scale up, partic le size control, dual role of feed gas which serves both as carbon source and fuel, and in-situ generation of catalyst. Hence it is one of the preferred methods for bulk production of not only CNTs but also other nano particles and nano metal oxides. This method is very useful and is of widespread importance. Many groups have investigated gas-phase continuous-flow production of carbon nanomaterials using other hydrocarbons. These studies typically involve passing a mixture of carbon source gas and organo metallic catalyst precursor molecules through a heated furnace. In this paper we report the direct flame synthesis of carbon nanotubes using LPG and air as our gaseous feedstock in a diffusion type burner without any external use of a catalyst and synthesis at optimum process parameters. 2. Experimental The flame reactor (Fig.1) has been indigenously designed to produce carbon nanotubes at our university. The detailed setup and process instrument and diagram (PID) of the reactor (Fig. 2) has been discussed in detail in our previous work [11]. In general our reactor operates under atmospheric pressure. The measured quantity of the LPG and the oxidant reaches the ignition chamber where the partial combustion process occurs where the CNTs are produced. During the process we have observed the dark orange flame color which is perfectly in a spindle form. Along the entire length of the flame, its temperature was recorded using a K-type thermocouple where this temperature can provide some data regarding the growth of nanotubes. The soot thus produced is captured on a glass fiber filter (Axiva GF/A) with the aid of a vacuum pump and the collected soot is scrapped carefully and weighed and later heat treated and oxidized at 550 OC in the presence of air for 60 minutes to remove any traces of amorphous carbon impurities and then the sample is reweighed in order to estimate the loss of amorphous carbon as an impurity then the samples are later characterized by SEM, TEM, XRD and Raman for their quality. The total amount of thermally oxidized and purified sample from the experiment (for 30 minute run) weighed only 0.8g. 3. Results and Discussion3.1 Scanning Electron Microscope Analysis The samples were analyzed using Phillips XL 30 series Scanning Electron Microscope (SEM) from National Center for Compositional Characterization of Materials (NCCCM), Hyderabad. From the Figs (3a 3d) we can see a dense growth of carbon nanotubes at various flow rates with respect to the oxidant to fuel (O/F) ratios between 0.7 1.0 slpm/slpm (standard litre per minute). The average diameter range of the CNTs from the SEM image was found to be around 200 nm -1000 nm and lengths greater than 40 ÃŽ ¼m. 3.2 Transmission Electron Microscope Analysis The TEM (Technai -12, FEI) images (Fig 4a) shows the presence of thickly packed multiwalled CNT with an average diameter of 150 250 nm which is still surrounded by traces of carbonaceous nanoparticle aggregates possibly caused due to the dispersion of the sample in the solvent. This can be assumed that the agglomerated carbon nanoparticles were actually protected by the CNTs during the thermal treatment, as the CNTs might have formed a net like layer covering the nanoparticles and protecting it from the heat and oxidation. Fig 4b shows a thick multi walled CNT around 250 nm in its diameter with lots of traces of agglomerated carbon nanoparticles which can be accounted for the presence of C60 particles which is also in agreement with the XRD analysis in Fig 5. The broken caps of the CNTs also reveal the disorientation and a defective growth of the grapheme layers as seen in the Raman analysis in Fig 6. 3.2 X-ray Diffraction Analysis The XRD (PW1830 Phillips) analysis was carried out using CuKa1 type of radiation with a wavelength (l) of 1.54060 Ã…. XRD (Fig. 5) of nanotubess produced using LPG-air at an O/F ratio of 0.7 slpm/slpm shows a heterogeneous crystallinity in the sample. The raw scan detected three strong peaks. The first peak at 2ÃŽ ¸ angle of 25.77O was found with (110) orientation of atoms along its plane with peak corresponding to graphite with an orthorhombic type of system and an end-centered lattice. The second peak at 2ÃŽ ¸ angle of 43.159O was found with (245) orientation of atoms along its plane with peak corresponding to C60 molecule with a cubic type of system and a primitive lattice. The third peak at 2ÃŽ ¸ angle of 83.475O was found with (112) orientation of atoms along its plane with peak corresponding to graphite with a hexagonal type of system and a primitive type lattice respectively. 3.2 Raman Analysis Raman analysis (Horiba Jobin Yvon T64000, Raman Spectrophotometer) was carried out only on the best sample (Fig.6) which clearly shows the D band G band respectively. The D band (the disorder band is well-known in disordered graphitic materials and located between 1330-1360 cm-1 when it is excited with a visible laser) it is expected to be observed in Multi Walled Nanotubes (MWNT). However when the D band is observed in SWNTs [12], it is assumed to contain defects in the tubes. The G band or (TM- Tangential Mode) [12], corresponds to the stretching mode of the -C-C- bond in the graphite plane [12]. This mode is located near 1580 cm-1. From the figure we can say that the nanotubes are in the slightly disordered graphite phase based on the D band wavelength present at 1349 cm-1. This D band also confirms the presence of amorphous state of carbon in the bulk sample. Based on the G band from the figures, there appears two peaks at 1560 and 1600 cm-1 respectively which proves the presenc e of multi layers of disordered graphene sheets. On analyzing the level of graphitization using the D and G band intensities ratio, we find that the sample is normally well graphitized with small degree of crystallinity and its ID/IG ratio was found to be around 0.939. 4. Conclusions Carbon nanotube (CNT) is a versatile group of applied chemicals with high degree of applications on larger scale in various disciplines. The synthesis, purification and the cost still remains an un-doubted debate around the world hence an economical approach is to be developed in order to produce large amounts of good quality CNTs from an economical and a resourceful fuel. LPG as a general commodity plays a major role since its availability in India is high and it is a very economical source of fuel as well. Here, we were able to successfully synthesize semicrystalline, CNTs from LPG with an average diameter of 100 500 nm using the direct flame synthesis approach. References [1]. Bharat Bhushan, Springer Handbook of Nanotechnology, Springer-Verlag Berlin Heidelberg, New York, 2004, Chap: 3, pp 39 40. [2]. S. Iijima, Nature 354, (1991), 56. [3]. T.W. Ebbesen and P.M. Ajayan, Nature 358, (1992), 220. [4]. T. Guo, P. Nikolaev, A.G. Rinzler, D. Tomanek, D.T. Colbert and R.E. Smalley, J. Phys. Chem. 99, (1995), 10694. [5]. J. Kong, A. M. Cassell and H.J. Dai, Chem.Phys. Lett. 292, (1998), 567. [6]. Zhou X T, Lai H L, Peng H Y, Au F C K, Liao L S, Wang N, Bello I, Lee C S, Lee S T, Chem Phys Lett 318, (2000), 58 62. [7]. Zhou X T, Wang N, Au F C K, Lai H L, Peng H Y, Bello I, Lee C S, Lee S T, Mater. Sci. Eng. A 286 (2000) 119 -124. [8]. Apisit Songsasen and Paranchai Pairgreethaves, the Kasetsart Journal. (Natural. Sciences) Number 3, 35, (2001), 354 359. [9]. W. Qian, H. Yu, F. Wei, Q. Zhang and W.Wang, Carbon 40, Issue 15, (2002), 2968-2970. [10]. N.A. Prokudina, E.R. Shishchenko, O.S. Joo, D.Y. Kim and S.H. Han, Advanced Materials, Vol. 12, Issue 19, (2000), 1444 1447. [11]. Vivek Dhand, J.S Prasad, M. Venkateswara Rao, K. Naga Mahesh, L. Anupama, V. Himabindu, Anjaneyulu Yerramilli, V.S. Raju, A.A. Sukumar Indian Journal of Engg Mat. Sci, 14, (2007), 240-252. [12]. http://www.jobinyvon.com/usadivisions/Raman/applications/Carbon03.pdf

Corporate Social Responsibility Advantages and Disadvantages

Corporate Social Responsibility Advantages and Disadvantages Abstract The report is endowed with detailed and exhaustive information about the essential for corporate social responsibility and reporting. The report draws from corporate social responsibility and reporting literature in other to conclude and recommend appropriately to businesses and authorities. Different theories (CSR-: Integrative, Instrumental and Ethical; CS-reporting:- Legitimacy, Political and stakeholder) theories were taking into consideration and compared with practices of organisation using case studies and secondary researched information. One of the most important information emphasised on in the report was the need to understand who organizational stakeholders are, and understanding their needs in other to report legitimately to them. Cases from researched articles were drawn to compare with what authors said, and case of British Airways was also highlighted for its reporting contents. Case studies from Anglo and MS were also employed to compare with theory. The conclusion stated that the engaging in CSR is still vital for both economic and social and physical reasons and the benefits of participating outweighs the cost which may involve fines, loss of reputation. The social reporting concluded that it legitimate to report activities as it a huge step towards accountability and more importantly enhances trust. The GRI guideline was recommended as the best reporting guideline to employ for businesses and authorities as it the most widely used standard. Chapter 1: Introduction 1.1 Introduction to subject In spite of the vast amount of literature on corporate social responsibility and reporting, this area of study maintains it multifaceted, intricate and constantly developing conception which constitutes of diverse practices and theories. The last 20 years through increase in technology, globalization and global warming as seen more light shed on CSR and reporting. Globalization has erected diverse kinds of markets for companies and also enhanced competition. Many large organisations today are taking unprecedented move from one country to another with cost been the prime driver. Profitability is the main objective of corporation as they seek greener pastures (cheaper resources and Cheaper Labour). This objective is usually met through large layoffs which arguably can be considered unethical. Global warming has also played a critical role in enhancing CSR. Many practices of large corporation have come under intense scrutiny. Oil companies, Mining Industry and airline industry are all examples of companies that are influenced by CSR practices. People are becoming more environmentally friendly and this has affected the way many organisations operate. The subject of customers needs and satisfaction in many business practices now includes CSR as customers daily decision is influenced by this. The research will tackle the essentials of CSR and reporting and explore the benefits and drawbacks of CSR and its reporting to businesses that engage in this activity. It highly essential to clarify that the research does not seek to produce a generic right or wrong view to the many questions about CSR but seeks to produce it own argument from relevant empirical evidence which has been carried out by academics. 1.2 Aims Objectives, structure of project Aim of this project is to extensively explore the imperatives for corporate social responsibility and reporting and make recommendation to parties such as authorities and businesses who are undecided about his subject. The objectives are: To gain a comprehensive understanding of CSR and it effect on Public Sector, Private sector and Emerging economies To explore the case for and against CSR and also discover its effect on organizational performance To research in depth previous literature on CSR and reporting and compare with case study, secondary findings and draw appropriate conclusion Chapter 1:- will give a depth introduction to CSR and how it has involved and some of the factors that has brought this subject to attention. It will also include how CSR is perceived in different sectors such as Private, Public and Emerging country. Chapter 2:- will draw from academic sources and present the case for and against CSR. It will examine both side of the argument and show how debatable their findings are. It will also use examples to fortify statement or beliefs researched by authors Chapter 3:- will build on chapter 2 and present theoretical assumption that academics have presented. It will show models, concepts and also argue them against other approaches illustrated by academics. Most significantly it will bring both opponents and proponents together to battle their findings. Chapter 4: will also build on chapter 3 and will compare practices of organisation to what the theory state. It use both secondary research materials and case study and compare it to what academics have found out Chapter 5 6: this aspect covers the corporate social reporting and examines what authors and academics have stated about this subject using theoretical backgrounds to compare what practices by organisations. Chapter 7: methodology would show how this research was carried out, some of the resources used to carry out the research and why this research best fit this project Chapter 8: will evaluate both chapter 3 and 4 and would present an appropriate conclusion and recommendation building from what has been found out in the main report. Chapter 9: will show the references list from reference in text. 1.3 Corporate Social responsibility According to Crane, Matten and Spence (2008) CSR is still a debated theme among many businesses and institution. They continue to write that CSR has evolved over the years and has become a key issue in every industry. Many academic hold different views on CSR, some believe that CSR is just a â€Å"superficial window dressing†, it just another medium through which large companies hide their mischievous deeds whilst appearing to be responsible. Matten and Moon (2004) companies are realizing that in other to maintain it operations, they may have to abolish some practices such as Environmental pollution and violation of human rights as a result of growing pressure from media and regulation from government. Typical examples of companies are Oil and Chemical companies. Crane, Matten and Spence (2008) discovered that other industries such as tourism and retail are encountering a high demand to ensure lawful practices to the environment through their business operation. This industries where previously considered to be sanitary, but face continuous pressure to legitimise their practices. There are several millions of articles and journals that deal with CSR all giving different definition to CSR. The past couple of years according to McWilliams, Siegel and Wright (2006) have seen an agreement in most definition of CSR compared to previous years where definition has been exceptionally broad. Previous academic Davis (1973) cited in Spence (2008) addressed CSR as â€Å"the firms consideration of, and response to, issues beyond the narrow economic, technical and legal requirement of the firm†. Years later, Caroll (1979) cite in Spence (2008) took a broad approach to his definition which state â€Å"the social responsibility of business encompasses the economic, legal, and discretionary exceptions that society has of organizations at a given point in time†. Current definition seems to have taken a different route to a generic view such as Brown and Dacin (1997) define it as â€Å"status and activities with respect to its perceived societal stakeholders obligation†. As seen above, there are different complex definitions stated by different authors on CSR. In this research, the aim is not to use any of the definition or create another view or definition of CSR, the research will intensely evaluate and recommend to businesses and authorities based on empirical evidence made available by academics. 1.4 CSR Private Sector The private sector consists of large organizations to Small medium organizations. Brammer and Pavelin (2005) these organizations also play a critical part in CSR. According to Grayson and Hodges (2004) there is a notion that CSR is accustomed to large organizations who are owned by shareholders; they write that one of the key reasons for emphasizing CSR from the perspective of large organization is that, it raises the question on interest. Should the company be run on shareholders interest or from the perspective of the environment such as communities and customers? Husted and Allen (2006) argue that large organizations compared to SME face higher scrutiny from public due to their visibility. Therefore, CSR policies may have to be imbibed in the organizational code of conduct to create a structured approach for employees to adhere to. However SME as illustrated by Graafland, Van de Ven and Stoffele, (2003) present a dissimilar representation. Their study, as shown that 20 of Small Medium size Enterprise detailed their information on CSR operation compared to 62 percent of large organizations. As further discussed by Spence (1999) chief reason for this is that SME are mostly run between a small number of people whom the manager entrust essential decision to. Therefore an informal approach to CSR will be seen compared to approach by large organization. Compared to large organization who are open to the public as a result of their size, SME are normally small and their relationship (business) are usually between manager, supplier and employees. This relationship as shown by Spence and Schmidpeter (2002), are highly imperative as good personal relation and trust in this context can be identified as CSR. 1.5 CSR and Public Sector Agencies and government organization are examples of public sector who also encounter similar pressure to act in a socially responsible manner. Such examples according to Seitandi (2004) of this pressure are better equal opportunity and conscientious sourcing. He also noted that both public sector and private sector engage in similar CSR policies. Gardner (2006) CSR within the public sector has immensely grown over the last few years. Chief to this growth are Schools and Hospitals who are obliged to social objective and needs. This has enhanced the need for greater accountability with the public sector. Crane and Matten (2007: 488-498) write that government initiative in CSR is steadily increasing beyond it operation as bold steps are being taken to promote CSR related issues within among the public. They also noted that CSR is a voluntary act, therefore incentives and other benefits have been created by government to employ more businesses to get involved and espouse more socially responsible practices. An example of this as written by Moon (2004) is the UK government who have persuaded CSR among the British companies with initiatives such as Academy of CSR (training employees on CSR constantly) and Ethical trade (practicing fair trade). The European Union has also invested a large amount of effort to promote CSR within the environment. This has met several restrain as CSR in EU can still be considered as an â€Å"Anglo-Saxon† idea as noted by Commission of the European Communities, (2002) Ball (2004) finally, as there has been a continuous demand on private sector to asset more accountability in their reporting towards the public, so as also there has an increase in the public sector using some of the mechanisms for CSR e.g. social reporting to enhance more accountability to the public. 1.6 CSR Emerging Economies CSR in some emerging economies tend to take a very different approach. Crane, Laura and Spence (2008) argue that Russia and China are typical examples of economies that possess a classic approach to CSR. They write that Russia regime of privatization and switch to capitalism has stirred a shady and crooked government which has affected the concept of CSR in Russia. Grafski and Moon, 2004) in most popular places Russia, CSR is virtually an unknown concepts. China approach to CSR is quite different to Russia, even though it government still plays an immense role in directing and policing the economy: businesses have made effort significant effort in acting in a socially responsible manner. Some examples of action taking by Chinese businesses are endeavouring to build schools and housing for the less privilege in local communities. Miller (2005) depicted that CSR within the few years in China will rise due to it constantly growing economy. Chapter 2 Literature Review 2.1 Introduction Dyllick and Hockerts (2002) noted that there are two types of views when considering the debate about CSR. Authors with a narrow perspective on CSR strongly believe that the organization is not obliged to any society activities as far as it continues to pay rent which creates economic substance to stakeholders. Authors with a broad view contend that the organization through other means should certainly subject itself as an instrument of public policy 2.2 Case for CSR The argument proposes that organization can benefit from an environment that is acting in a socially responsible way. An example is the reduction in crime has money will be invested to enhance the security of business properties. In conclusion, a good society will produce a good business Davis (1973) cited in Crane, Laura and Spence (2008). Generation of psychologists such as Likert (1961) also suggested that a key part of CSR is including employees in key decisions and business operations. All barriers that make employees feel alienated should be abolished as this can propel more money for the organization. Brown and Fraser (2006) contend that engaging corporate social responsibility has more benefits to organizations and authorities than its total cost and strongly emphasis the need for organizations to embark on CSR for a good economic interest. James and Maurrasse (2003) in their research in businesses discovered that companies who engage in social and environmental program to better their community possessed a higher financial rewards and better positioning in the market. He argues that it is a necessity for businesses who wish to expand with better reputable perception to engage in CSR. Manning (2004) report highlighted that companies who are successful hold traits of CSR in the strategic goals. They understand the need to better their community, communicate with the public which can seal trust and avoid environmental and social pollution. He writes that organizations who fail to engage in CSR miss an a strategic avenue to re-affirm their position in the market 2.3 Case against CSR Opponents of CSR place emphasis on trusts as major reason why corporation cannot be adhered to Vogel (2005). Cheit (1972) calls it â€Å"Gospel of social responsibility† created to enhance the power of owners through non-managerial system. Cheit also considers it to be all about organization â€Å"talking the talk† and not â€Å"working the work†. 2.3.1 Capabilities Theodore Levitt (1968) argued that business owners and managers are not fully equipped to handle social related issues due to their nature of work. He cited that CEO are expert at their field not a social related issues as immense time and hard-work has been dedicated to his field. This has made the business person independent from the environment around. Other major academics contend that the course of organization which is channelled towards effectiveness and efficiency will affect the business from dealing with social difficulties and needs. 2.3.2 Organizational Structure Moir (2001) due to the scenery of culture, structure and regulations, it argued that social responsibilities may not be do-able in business organization especially large conglomerate. This is one of the most stinging assault on CSR. Baron (2000) claim that CSR cannot function appropriately as organizations are solely designed to erect the very problem (social responsibility) they desire to cure. He concluded by stating that â€Å"inexperienced and naive† is the word used for proponents of CSR. 2.3.3 Social Goals are evitable This attacks stems from that organizations are not obligated to seek social goals. Hill, Stephens and Smith (2003) condemn proponents by stating that organizational managers are deficient of social awareness as they are elected for business purposes by shareholders and therefore possess no legitimate obligation to seek social needs or objectives. Strom (2002) write â€Å"At whose command†. He stated that a representative body should be appointed for this purposes not business parties. Critics of CSR Bronn Vrioni (2001) question the value that will be imbibed in social responsibility decisions of organizations. Will organization concept affect this socially responsible act? â€Å"Dangers of Social responsibility† a paper written by Levitt (1958:44) cited in Crane, Laura and Spence (2008) highlighted that it â€Å"a strong urge which is driven by guilt that has stirred major organizations to re-think â€Å"Cultural, Social, Political and Institutional topography of society†. Vogel (2005) outlined another essential argument, when he stated that the economic role of organizations will be immensely impinge on if CSR is taken on board as the competitive position of the firm will be weakened, through given shareholders wealth away instead of investing it in project with a high net present value. Sahlin (2006) who possess a highly pragmatic view on CSR, questions who the organization will be responsible to? Employees or Customers? May supporting a part of the business community cause deficiency to another? why should hard-earned money be given to â€Å"customer†? This certainly illustrates a lack of clarity on the word â€Å"social† and also a clear definition of what â€Å"responsibility† is. Liston-Heyes Ceton (2007) noted that companies in the United states who operate within a government that is liberal tend to engage in the distribution of corporate profit, compared to its competitors that operate within government that are less liberal. Its therefore theoretically possible to conclude that political and legal purposes are affected by CSR. Niskonen (1971) argues strongly that some businesses use CSR as means to influence society standards and meet their needs. This may be done through direct political influence. De-Winter (2003) cites the example of multi-fabber the textile company who protected players in it sector instead of regulating them. The company did this by relinquishing key decision making to labour unions and companies such as GAP and Primark whilst at the same time simultaneously maintaining its power and growth in the textile industry. The companys primary act was to prove ethical but the hidden process was unethical. Strom (2002) directed his argument at firms who use their social awareness as an instrument for competitive advantage. An example of this act cited in Devinney (2008) was the mining company which indicted its multinational counterparts by exploiting it attained â€Å"reward on CSR position† to downside other competitors in the industry through parading measures that will impede the value of other mining firm and then approach them for takeovers at discounted price. Strom writes that â€Å"is the technique to CSR morally right?† In accordance with Bierce (1911) â€Å"pursuing private interest through public means†. Maloney McCormick (1982) research in the Unites States on the â€Å"Clean Act Regulation† further supported Strom (2002) evidence. Their research highlighted that although the â€Å"environmentalist† were favoured in the statutes and rules set by governing agency, it was erected in a way that will prevent new entrants from coming in the market. This gives an advantage to those who are already up and running as new entrants will be required to meet rigorous and expensive criterion. This research was further corroborated by Dean and brown (1995) Lantos (2001) cited in () business are not built to act as delegate to the society. The impoverished and deprived are not responsibility for businesses neither is the society. Devinney (2008) affirms that unless there is an unequivocal profit opportunity, businesses will tend to be reserved on social matters. He also argued that businesses engage in product experimentation, but will boycott any social experiment. He cited the example of companies in the southern part of America who do not participate in any experimentation with sexually oriented groups e.g. Gay. Friedman (1970) observed a good example of this argument among the Swedish government who when asked about the financial guarantee for Saab motor company, stated that â€Å"nursery schools, police and nurses is why voters voted me not to buy car factories going bankrupt†. This re-affirms the role of managers to the business and government to the society cogoi (2006) 2.3.5 Does CSR affect Performance? There are various literatures on the connection between CSR and performance. A variety state that is difficult to measure what aspect of CSR can affect corporation performance Schimdt Rynes (2006) firstly there are not clear signs that acting appropriately by showing good behaviour influences the length of businesses value. This can be seen from two points of view. From the financial market outlook, stambaugh and Levin (2005) argued that between 1% and 2.5% of corporations that are enlisted on the â€Å"ethical indices† lose their value compared to other competitors as a result of â€Å"anti-liquid trading effect†. A different approach was also used by Ter-host Zhang (2007) they also achieved a similar result. Devenney (2008) stated that the value of equity may not be affected by who possess the equity when trading effect is absent. He cited that the example of COIPERS who chose to remove tobacco from its portfolio. After this move, it did not affect the â€Å"operational† performance of the firm, despite it costing pension holders $700 million. Chapter 3: Corporate Social Responsibility THEORIES 3.1 Introduction The arena of CSR maintains its broad, complicated and debatable position. The last ten years has seen a surge in research on CSR than ever before. This surge has created new vocabulary, hypothesis and assumptions on this subject. Some of the new vocabularies used in conjunction with CSR are corporate governance, corporate accountability, and sustainability development. Wood and Logdon (2002) also established corporate citizenship. Diverse approaches to CSR have enacted different theory. Votow (1972) write that CSR possess different meaning to different individuals. Federick (1998) discussed four theoretical stages associated with CSR: CSR 1 theory â€Å"Ethical Philosophical concept† CSR 2 theory â€Å"Action-oriented managerial concept† CSR 3 theory â€Å"Ethics and valued base on normative element† CSR 4 theory â€Å"Effects of science religion† Another academic who contributed to this discipline was biummer (1999) who introduced four types of theory from six criterions (Intention, relationship to profits etc). His theory was widely criticized because it breadth and depth was limited. For the purpose of this research, the most significant theories will be used and explained to attain more depth on CSR as stated in our objective. In addition to the work of Parsons (1961) Crane, Matten and Spence (2008) developed four different theories that can be connected to the political, cultural and economical aspect of CSR. Instrumental theories these theories consider business as a vehicle for wealth. They believe that businesses will only relate with the society if there is an avenue for profit. Theory also state that the only mutual relationship that business has with the society is for economic substance. Political theories these theories buttress on the power of the organization socially. Its emphasises on the role that business hold socially and its duty in the political field. Integrative theories these theories stem from the notion that organizations most include the needs and objectives of the society. Its strongly state that since organizations need and depends on the society at large for profitability and growth, therefore society in return should considered when making decisions that may affect it. Ethical theories these theories realizes the connection with CSR and Ethical values. This theory dictates that business must perceive and accept CSR from an ethical perspective. 3.2 Political theories The focal point of this theories deal with how organisation and society interrelate and the influence the organisation possess. Smith and Higgins (2000) write that there are two significant approaches amongst other approaches that can be drawn from this theory. 3.2.1 Corporate Constitutionalism One of the first academic that researched on this subject was David (1960). He extensively examined the part of influence that organisation holds in the society and the result of their influence. He writes that this influence is critical when debating on the subject of CSR. His understanding holds firm on the notion that companies are â€Å"social institution† and appropriate use of the influence in the society is indispensably important. The idea of companies participating in the society solely for maximization of wealth Davis (1960) disagrees with Bethoux, Didry and Mias (2007) which is the economic theory. â€Å"The social power† and â€Å"Iron law of responsibility† where the two standards that Davis (1967) established to show how firms can administer their social power. Iron law of responsibility refers to companies who misuse their social influence. He writes companies who misuse their social influence in a way that not appropriate to the society will end up losing their overall influence and a responsible party will fill the gap left void. Social equation according to Davis (1967, pg 48) cited in Spence, Matten and Dirk (2008) refers to â€Å"social responsibilities of businessmen which erects from the power they possess† Davis noted that the balance of social influence and responsibilities must be thoroughly appreciated and recognized by organizations and business owners. In light of this, he discards the notion of â€Å"no responsibility of businesses†. Davis (1967, pg 68) extensively argued that constituency entity possess the ability to pressure organisational functional power. In addition, he stated that this entity posses similar ability that â€Å"government constituency† hold but differ as they do not obliterate the influence or power the organization hold but channel them in a way that it can be used for the benefit of the society. 3.2.2 Corporate citizenship Several factors which range from globalization to enhanced technology have given rise to this new notion. In concurrence with Andriof and McIntosh (2001), these factors have given organizations more power socially and economically than governing bodies. Matten et al (2003) established three perceptions on corporate citizenship as different individuals posses different interpretation of this conception. Matten et al (2003) the first one is the â€Å"limited view†- from this view corporate citizenship is employed similarly to social activities, investment or when the organization embarks on community project. Second, the â€Å"equivalent to CSR view† carol (1999) outline that â€Å"corporate citizenship† from this perspective illustrate the duty of organization towards the society. Third, â€Å"extended view† matten and crane (2005) this view stem from the notion that as a result of failure to protect right â€Å"citizenship† by major institutions such as government bodies, organizations may have to step in to â€Å"protect citizenship†. Authors such as Dion (2001) and Duffer (1994) admittedly write that corporate citizenship portrays the duties of organizations towards the community. They hol d that corporate citizenship to organization is partnering with local community to better the environment. 3.3 Instrumental theories The approach this theory takes is somewhat different from other theory listed above. The instrumental theory believes CSR is only a stratagem for business which will eventually lead to the maximization of wealth for shareholders. One author who distinctively supported this was Freidman (1970) he stated that â€Å"the only responsibility of business toward society is the maximization of profits to shareholders† Windsor (2001) achieving profitability objective means taking into consideration the interest of stakeholders. Mitchell et al (1997) argued that when the concern of stakeholders is met, it can aid in increasing value for shareholders. In light of this, several researches has been done on the relationship between financial performance and CSR. Key and Popkin (1998) and Roman et al (1999) both carried out major research and identified a positive relationship in financial performance whenever a company engages in social responsibilities. However, Griffin (2000) pointed out that such research done between CSR and CFP should be examine more extensively as they can be difficult to appraise. Instrumental theory can be identified and divided into two main groups according to Spence, Crane and Matten (2008): 3.3.1 Maximize value of shareholder Rowley and Berman (2002) maximizing return for shareholder is primary reason to invest in any social obligation or needs. They continue in stating that an honest investment should be made to benefit shareholders and if any weighty cost may affect the firm, the project should be discontinued. Friedman (1970) cited in Spence, Matten and Dirk (2008) gave a typical example where he stated that it will benefit a business that is situated in a small community to dedicate essential resources to the community. This enables the firm draw potential employees, build good image and loyalty with public and possibly reduce â€Å"wage bill†. 3.3.2 Tactics for attaining competitive advantage Husted and Allen (2000) Examine how business can attain a competitive advantage and meet it â€Å"social needs and Goals† through allotting it resources. Two major approaches where discussed Investing in a socially competitive context Porter and Kramer (2002) strongly argue that in other for a company to sustain its competitive advantage, investing in benevolent or charitable movement is essentially required. They concluded that this action can enhance the value of a company socially. Burke and Logsdon (1996) noted that greater wealth and other key benefits are received by the company who employ charitable activities together with the goal of the organization. Resource based view dynamic capabilities Barney (1991) introduced human capital, physical resources and knowledge as essential prerequisite for an organisation to possess a competitive advantage over its rivals. This according to Barney is the resource based view. Teece et al (1997) presented a different approach to â€Å"dynamic capability†. He discusses factors such as innovatively, development and tactics behind resources used to create competitive advantage. From this perspective, petrick and Quinn (2001) and Hillman and Keim (2001) developed a social and ethical resource capabilities which firms can use to gain competitive advantage. They propose that firms can posses an added advantage by enhancing their relationship with key stakeholders such as suppliers, customers, communities and employees. 3.4 Integrative theories One of the first academic that carried out an extensive research on these themes was Preston Post (1975). He noted that these theories examine how organi Corporate Social Responsibility Advantages and Disadvantages Corporate Social Responsibility Advantages and Disadvantages Abstract The report is endowed with detailed and exhaustive information about the essential for corporate social responsibility and reporting. The report draws from corporate social responsibility and reporting literature in other to conclude and recommend appropriately to businesses and authorities. Different theories (CSR-: Integrative, Instrumental and Ethical; CS-reporting:- Legitimacy, Political and stakeholder) theories were taking into consideration and compared with practices of organisation using case studies and secondary researched information. One of the most important information emphasised on in the report was the need to understand who organizational stakeholders are, and understanding their needs in other to report legitimately to them. Cases from researched articles were drawn to compare with what authors said, and case of British Airways was also highlighted for its reporting contents. Case studies from Anglo and MS were also employed to compare with theory. The conclusion stated that the engaging in CSR is still vital for both economic and social and physical reasons and the benefits of participating outweighs the cost which may involve fines, loss of reputation. The social reporting concluded that it legitimate to report activities as it a huge step towards accountability and more importantly enhances trust. The GRI guideline was recommended as the best reporting guideline to employ for businesses and authorities as it the most widely used standard. Chapter 1: Introduction 1.1 Introduction to subject In spite of the vast amount of literature on corporate social responsibility and reporting, this area of study maintains it multifaceted, intricate and constantly developing conception which constitutes of diverse practices and theories. The last 20 years through increase in technology, globalization and global warming as seen more light shed on CSR and reporting. Globalization has erected diverse kinds of markets for companies and also enhanced competition. Many large organisations today are taking unprecedented move from one country to another with cost been the prime driver. Profitability is the main objective of corporation as they seek greener pastures (cheaper resources and Cheaper Labour). This objective is usually met through large layoffs which arguably can be considered unethical. Global warming has also played a critical role in enhancing CSR. Many practices of large corporation have come under intense scrutiny. Oil companies, Mining Industry and airline industry are all examples of companies that are influenced by CSR practices. People are becoming more environmentally friendly and this has affected the way many organisations operate. The subject of customers needs and satisfaction in many business practices now includes CSR as customers daily decision is influenced by this. The research will tackle the essentials of CSR and reporting and explore the benefits and drawbacks of CSR and its reporting to businesses that engage in this activity. It highly essential to clarify that the research does not seek to produce a generic right or wrong view to the many questions about CSR but seeks to produce it own argument from relevant empirical evidence which has been carried out by academics. 1.2 Aims Objectives, structure of project Aim of this project is to extensively explore the imperatives for corporate social responsibility and reporting and make recommendation to parties such as authorities and businesses who are undecided about his subject. The objectives are: To gain a comprehensive understanding of CSR and it effect on Public Sector, Private sector and Emerging economies To explore the case for and against CSR and also discover its effect on organizational performance To research in depth previous literature on CSR and reporting and compare with case study, secondary findings and draw appropriate conclusion Chapter 1:- will give a depth introduction to CSR and how it has involved and some of the factors that has brought this subject to attention. It will also include how CSR is perceived in different sectors such as Private, Public and Emerging country. Chapter 2:- will draw from academic sources and present the case for and against CSR. It will examine both side of the argument and show how debatable their findings are. It will also use examples to fortify statement or beliefs researched by authors Chapter 3:- will build on chapter 2 and present theoretical assumption that academics have presented. It will show models, concepts and also argue them against other approaches illustrated by academics. Most significantly it will bring both opponents and proponents together to battle their findings. Chapter 4: will also build on chapter 3 and will compare practices of organisation to what the theory state. It use both secondary research materials and case study and compare it to what academics have found out Chapter 5 6: this aspect covers the corporate social reporting and examines what authors and academics have stated about this subject using theoretical backgrounds to compare what practices by organisations. Chapter 7: methodology would show how this research was carried out, some of the resources used to carry out the research and why this research best fit this project Chapter 8: will evaluate both chapter 3 and 4 and would present an appropriate conclusion and recommendation building from what has been found out in the main report. Chapter 9: will show the references list from reference in text. 1.3 Corporate Social responsibility According to Crane, Matten and Spence (2008) CSR is still a debated theme among many businesses and institution. They continue to write that CSR has evolved over the years and has become a key issue in every industry. Many academic hold different views on CSR, some believe that CSR is just a â€Å"superficial window dressing†, it just another medium through which large companies hide their mischievous deeds whilst appearing to be responsible. Matten and Moon (2004) companies are realizing that in other to maintain it operations, they may have to abolish some practices such as Environmental pollution and violation of human rights as a result of growing pressure from media and regulation from government. Typical examples of companies are Oil and Chemical companies. Crane, Matten and Spence (2008) discovered that other industries such as tourism and retail are encountering a high demand to ensure lawful practices to the environment through their business operation. This industries where previously considered to be sanitary, but face continuous pressure to legitimise their practices. There are several millions of articles and journals that deal with CSR all giving different definition to CSR. The past couple of years according to McWilliams, Siegel and Wright (2006) have seen an agreement in most definition of CSR compared to previous years where definition has been exceptionally broad. Previous academic Davis (1973) cited in Spence (2008) addressed CSR as â€Å"the firms consideration of, and response to, issues beyond the narrow economic, technical and legal requirement of the firm†. Years later, Caroll (1979) cite in Spence (2008) took a broad approach to his definition which state â€Å"the social responsibility of business encompasses the economic, legal, and discretionary exceptions that society has of organizations at a given point in time†. Current definition seems to have taken a different route to a generic view such as Brown and Dacin (1997) define it as â€Å"status and activities with respect to its perceived societal stakeholders obligation†. As seen above, there are different complex definitions stated by different authors on CSR. In this research, the aim is not to use any of the definition or create another view or definition of CSR, the research will intensely evaluate and recommend to businesses and authorities based on empirical evidence made available by academics. 1.4 CSR Private Sector The private sector consists of large organizations to Small medium organizations. Brammer and Pavelin (2005) these organizations also play a critical part in CSR. According to Grayson and Hodges (2004) there is a notion that CSR is accustomed to large organizations who are owned by shareholders; they write that one of the key reasons for emphasizing CSR from the perspective of large organization is that, it raises the question on interest. Should the company be run on shareholders interest or from the perspective of the environment such as communities and customers? Husted and Allen (2006) argue that large organizations compared to SME face higher scrutiny from public due to their visibility. Therefore, CSR policies may have to be imbibed in the organizational code of conduct to create a structured approach for employees to adhere to. However SME as illustrated by Graafland, Van de Ven and Stoffele, (2003) present a dissimilar representation. Their study, as shown that 20 of Small Medium size Enterprise detailed their information on CSR operation compared to 62 percent of large organizations. As further discussed by Spence (1999) chief reason for this is that SME are mostly run between a small number of people whom the manager entrust essential decision to. Therefore an informal approach to CSR will be seen compared to approach by large organization. Compared to large organization who are open to the public as a result of their size, SME are normally small and their relationship (business) are usually between manager, supplier and employees. This relationship as shown by Spence and Schmidpeter (2002), are highly imperative as good personal relation and trust in this context can be identified as CSR. 1.5 CSR and Public Sector Agencies and government organization are examples of public sector who also encounter similar pressure to act in a socially responsible manner. Such examples according to Seitandi (2004) of this pressure are better equal opportunity and conscientious sourcing. He also noted that both public sector and private sector engage in similar CSR policies. Gardner (2006) CSR within the public sector has immensely grown over the last few years. Chief to this growth are Schools and Hospitals who are obliged to social objective and needs. This has enhanced the need for greater accountability with the public sector. Crane and Matten (2007: 488-498) write that government initiative in CSR is steadily increasing beyond it operation as bold steps are being taken to promote CSR related issues within among the public. They also noted that CSR is a voluntary act, therefore incentives and other benefits have been created by government to employ more businesses to get involved and espouse more socially responsible practices. An example of this as written by Moon (2004) is the UK government who have persuaded CSR among the British companies with initiatives such as Academy of CSR (training employees on CSR constantly) and Ethical trade (practicing fair trade). The European Union has also invested a large amount of effort to promote CSR within the environment. This has met several restrain as CSR in EU can still be considered as an â€Å"Anglo-Saxon† idea as noted by Commission of the European Communities, (2002) Ball (2004) finally, as there has been a continuous demand on private sector to asset more accountability in their reporting towards the public, so as also there has an increase in the public sector using some of the mechanisms for CSR e.g. social reporting to enhance more accountability to the public. 1.6 CSR Emerging Economies CSR in some emerging economies tend to take a very different approach. Crane, Laura and Spence (2008) argue that Russia and China are typical examples of economies that possess a classic approach to CSR. They write that Russia regime of privatization and switch to capitalism has stirred a shady and crooked government which has affected the concept of CSR in Russia. Grafski and Moon, 2004) in most popular places Russia, CSR is virtually an unknown concepts. China approach to CSR is quite different to Russia, even though it government still plays an immense role in directing and policing the economy: businesses have made effort significant effort in acting in a socially responsible manner. Some examples of action taking by Chinese businesses are endeavouring to build schools and housing for the less privilege in local communities. Miller (2005) depicted that CSR within the few years in China will rise due to it constantly growing economy. Chapter 2 Literature Review 2.1 Introduction Dyllick and Hockerts (2002) noted that there are two types of views when considering the debate about CSR. Authors with a narrow perspective on CSR strongly believe that the organization is not obliged to any society activities as far as it continues to pay rent which creates economic substance to stakeholders. Authors with a broad view contend that the organization through other means should certainly subject itself as an instrument of public policy 2.2 Case for CSR The argument proposes that organization can benefit from an environment that is acting in a socially responsible way. An example is the reduction in crime has money will be invested to enhance the security of business properties. In conclusion, a good society will produce a good business Davis (1973) cited in Crane, Laura and Spence (2008). Generation of psychologists such as Likert (1961) also suggested that a key part of CSR is including employees in key decisions and business operations. All barriers that make employees feel alienated should be abolished as this can propel more money for the organization. Brown and Fraser (2006) contend that engaging corporate social responsibility has more benefits to organizations and authorities than its total cost and strongly emphasis the need for organizations to embark on CSR for a good economic interest. James and Maurrasse (2003) in their research in businesses discovered that companies who engage in social and environmental program to better their community possessed a higher financial rewards and better positioning in the market. He argues that it is a necessity for businesses who wish to expand with better reputable perception to engage in CSR. Manning (2004) report highlighted that companies who are successful hold traits of CSR in the strategic goals. They understand the need to better their community, communicate with the public which can seal trust and avoid environmental and social pollution. He writes that organizations who fail to engage in CSR miss an a strategic avenue to re-affirm their position in the market 2.3 Case against CSR Opponents of CSR place emphasis on trusts as major reason why corporation cannot be adhered to Vogel (2005). Cheit (1972) calls it â€Å"Gospel of social responsibility† created to enhance the power of owners through non-managerial system. Cheit also considers it to be all about organization â€Å"talking the talk† and not â€Å"working the work†. 2.3.1 Capabilities Theodore Levitt (1968) argued that business owners and managers are not fully equipped to handle social related issues due to their nature of work. He cited that CEO are expert at their field not a social related issues as immense time and hard-work has been dedicated to his field. This has made the business person independent from the environment around. Other major academics contend that the course of organization which is channelled towards effectiveness and efficiency will affect the business from dealing with social difficulties and needs. 2.3.2 Organizational Structure Moir (2001) due to the scenery of culture, structure and regulations, it argued that social responsibilities may not be do-able in business organization especially large conglomerate. This is one of the most stinging assault on CSR. Baron (2000) claim that CSR cannot function appropriately as organizations are solely designed to erect the very problem (social responsibility) they desire to cure. He concluded by stating that â€Å"inexperienced and naive† is the word used for proponents of CSR. 2.3.3 Social Goals are evitable This attacks stems from that organizations are not obligated to seek social goals. Hill, Stephens and Smith (2003) condemn proponents by stating that organizational managers are deficient of social awareness as they are elected for business purposes by shareholders and therefore possess no legitimate obligation to seek social needs or objectives. Strom (2002) write â€Å"At whose command†. He stated that a representative body should be appointed for this purposes not business parties. Critics of CSR Bronn Vrioni (2001) question the value that will be imbibed in social responsibility decisions of organizations. Will organization concept affect this socially responsible act? â€Å"Dangers of Social responsibility† a paper written by Levitt (1958:44) cited in Crane, Laura and Spence (2008) highlighted that it â€Å"a strong urge which is driven by guilt that has stirred major organizations to re-think â€Å"Cultural, Social, Political and Institutional topography of society†. Vogel (2005) outlined another essential argument, when he stated that the economic role of organizations will be immensely impinge on if CSR is taken on board as the competitive position of the firm will be weakened, through given shareholders wealth away instead of investing it in project with a high net present value. Sahlin (2006) who possess a highly pragmatic view on CSR, questions who the organization will be responsible to? Employees or Customers? May supporting a part of the business community cause deficiency to another? why should hard-earned money be given to â€Å"customer†? This certainly illustrates a lack of clarity on the word â€Å"social† and also a clear definition of what â€Å"responsibility† is. Liston-Heyes Ceton (2007) noted that companies in the United states who operate within a government that is liberal tend to engage in the distribution of corporate profit, compared to its competitors that operate within government that are less liberal. Its therefore theoretically possible to conclude that political and legal purposes are affected by CSR. Niskonen (1971) argues strongly that some businesses use CSR as means to influence society standards and meet their needs. This may be done through direct political influence. De-Winter (2003) cites the example of multi-fabber the textile company who protected players in it sector instead of regulating them. The company did this by relinquishing key decision making to labour unions and companies such as GAP and Primark whilst at the same time simultaneously maintaining its power and growth in the textile industry. The companys primary act was to prove ethical but the hidden process was unethical. Strom (2002) directed his argument at firms who use their social awareness as an instrument for competitive advantage. An example of this act cited in Devinney (2008) was the mining company which indicted its multinational counterparts by exploiting it attained â€Å"reward on CSR position† to downside other competitors in the industry through parading measures that will impede the value of other mining firm and then approach them for takeovers at discounted price. Strom writes that â€Å"is the technique to CSR morally right?† In accordance with Bierce (1911) â€Å"pursuing private interest through public means†. Maloney McCormick (1982) research in the Unites States on the â€Å"Clean Act Regulation† further supported Strom (2002) evidence. Their research highlighted that although the â€Å"environmentalist† were favoured in the statutes and rules set by governing agency, it was erected in a way that will prevent new entrants from coming in the market. This gives an advantage to those who are already up and running as new entrants will be required to meet rigorous and expensive criterion. This research was further corroborated by Dean and brown (1995) Lantos (2001) cited in () business are not built to act as delegate to the society. The impoverished and deprived are not responsibility for businesses neither is the society. Devinney (2008) affirms that unless there is an unequivocal profit opportunity, businesses will tend to be reserved on social matters. He also argued that businesses engage in product experimentation, but will boycott any social experiment. He cited the example of companies in the southern part of America who do not participate in any experimentation with sexually oriented groups e.g. Gay. Friedman (1970) observed a good example of this argument among the Swedish government who when asked about the financial guarantee for Saab motor company, stated that â€Å"nursery schools, police and nurses is why voters voted me not to buy car factories going bankrupt†. This re-affirms the role of managers to the business and government to the society cogoi (2006) 2.3.5 Does CSR affect Performance? There are various literatures on the connection between CSR and performance. A variety state that is difficult to measure what aspect of CSR can affect corporation performance Schimdt Rynes (2006) firstly there are not clear signs that acting appropriately by showing good behaviour influences the length of businesses value. This can be seen from two points of view. From the financial market outlook, stambaugh and Levin (2005) argued that between 1% and 2.5% of corporations that are enlisted on the â€Å"ethical indices† lose their value compared to other competitors as a result of â€Å"anti-liquid trading effect†. A different approach was also used by Ter-host Zhang (2007) they also achieved a similar result. Devenney (2008) stated that the value of equity may not be affected by who possess the equity when trading effect is absent. He cited that the example of COIPERS who chose to remove tobacco from its portfolio. After this move, it did not affect the â€Å"operational† performance of the firm, despite it costing pension holders $700 million. Chapter 3: Corporate Social Responsibility THEORIES 3.1 Introduction The arena of CSR maintains its broad, complicated and debatable position. The last ten years has seen a surge in research on CSR than ever before. This surge has created new vocabulary, hypothesis and assumptions on this subject. Some of the new vocabularies used in conjunction with CSR are corporate governance, corporate accountability, and sustainability development. Wood and Logdon (2002) also established corporate citizenship. Diverse approaches to CSR have enacted different theory. Votow (1972) write that CSR possess different meaning to different individuals. Federick (1998) discussed four theoretical stages associated with CSR: CSR 1 theory â€Å"Ethical Philosophical concept† CSR 2 theory â€Å"Action-oriented managerial concept† CSR 3 theory â€Å"Ethics and valued base on normative element† CSR 4 theory â€Å"Effects of science religion† Another academic who contributed to this discipline was biummer (1999) who introduced four types of theory from six criterions (Intention, relationship to profits etc). His theory was widely criticized because it breadth and depth was limited. For the purpose of this research, the most significant theories will be used and explained to attain more depth on CSR as stated in our objective. In addition to the work of Parsons (1961) Crane, Matten and Spence (2008) developed four different theories that can be connected to the political, cultural and economical aspect of CSR. Instrumental theories these theories consider business as a vehicle for wealth. They believe that businesses will only relate with the society if there is an avenue for profit. Theory also state that the only mutual relationship that business has with the society is for economic substance. Political theories these theories buttress on the power of the organization socially. Its emphasises on the role that business hold socially and its duty in the political field. Integrative theories these theories stem from the notion that organizations most include the needs and objectives of the society. Its strongly state that since organizations need and depends on the society at large for profitability and growth, therefore society in return should considered when making decisions that may affect it. Ethical theories these theories realizes the connection with CSR and Ethical values. This theory dictates that business must perceive and accept CSR from an ethical perspective. 3.2 Political theories The focal point of this theories deal with how organisation and society interrelate and the influence the organisation possess. Smith and Higgins (2000) write that there are two significant approaches amongst other approaches that can be drawn from this theory. 3.2.1 Corporate Constitutionalism One of the first academic that researched on this subject was David (1960). He extensively examined the part of influence that organisation holds in the society and the result of their influence. He writes that this influence is critical when debating on the subject of CSR. His understanding holds firm on the notion that companies are â€Å"social institution† and appropriate use of the influence in the society is indispensably important. The idea of companies participating in the society solely for maximization of wealth Davis (1960) disagrees with Bethoux, Didry and Mias (2007) which is the economic theory. â€Å"The social power† and â€Å"Iron law of responsibility† where the two standards that Davis (1967) established to show how firms can administer their social power. Iron law of responsibility refers to companies who misuse their social influence. He writes companies who misuse their social influence in a way that not appropriate to the society will end up losing their overall influence and a responsible party will fill the gap left void. Social equation according to Davis (1967, pg 48) cited in Spence, Matten and Dirk (2008) refers to â€Å"social responsibilities of businessmen which erects from the power they possess† Davis noted that the balance of social influence and responsibilities must be thoroughly appreciated and recognized by organizations and business owners. In light of this, he discards the notion of â€Å"no responsibility of businesses†. Davis (1967, pg 68) extensively argued that constituency entity possess the ability to pressure organisational functional power. In addition, he stated that this entity posses similar ability that â€Å"government constituency† hold but differ as they do not obliterate the influence or power the organization hold but channel them in a way that it can be used for the benefit of the society. 3.2.2 Corporate citizenship Several factors which range from globalization to enhanced technology have given rise to this new notion. In concurrence with Andriof and McIntosh (2001), these factors have given organizations more power socially and economically than governing bodies. Matten et al (2003) established three perceptions on corporate citizenship as different individuals posses different interpretation of this conception. Matten et al (2003) the first one is the â€Å"limited view†- from this view corporate citizenship is employed similarly to social activities, investment or when the organization embarks on community project. Second, the â€Å"equivalent to CSR view† carol (1999) outline that â€Å"corporate citizenship† from this perspective illustrate the duty of organization towards the society. Third, â€Å"extended view† matten and crane (2005) this view stem from the notion that as a result of failure to protect right â€Å"citizenship† by major institutions such as government bodies, organizations may have to step in to â€Å"protect citizenship†. Authors such as Dion (2001) and Duffer (1994) admittedly write that corporate citizenship portrays the duties of organizations towards the community. They hol d that corporate citizenship to organization is partnering with local community to better the environment. 3.3 Instrumental theories The approach this theory takes is somewhat different from other theory listed above. The instrumental theory believes CSR is only a stratagem for business which will eventually lead to the maximization of wealth for shareholders. One author who distinctively supported this was Freidman (1970) he stated that â€Å"the only responsibility of business toward society is the maximization of profits to shareholders† Windsor (2001) achieving profitability objective means taking into consideration the interest of stakeholders. Mitchell et al (1997) argued that when the concern of stakeholders is met, it can aid in increasing value for shareholders. In light of this, several researches has been done on the relationship between financial performance and CSR. Key and Popkin (1998) and Roman et al (1999) both carried out major research and identified a positive relationship in financial performance whenever a company engages in social responsibilities. However, Griffin (2000) pointed out that such research done between CSR and CFP should be examine more extensively as they can be difficult to appraise. Instrumental theory can be identified and divided into two main groups according to Spence, Crane and Matten (2008): 3.3.1 Maximize value of shareholder Rowley and Berman (2002) maximizing return for shareholder is primary reason to invest in any social obligation or needs. They continue in stating that an honest investment should be made to benefit shareholders and if any weighty cost may affect the firm, the project should be discontinued. Friedman (1970) cited in Spence, Matten and Dirk (2008) gave a typical example where he stated that it will benefit a business that is situated in a small community to dedicate essential resources to the community. This enables the firm draw potential employees, build good image and loyalty with public and possibly reduce â€Å"wage bill†. 3.3.2 Tactics for attaining competitive advantage Husted and Allen (2000) Examine how business can attain a competitive advantage and meet it â€Å"social needs and Goals† through allotting it resources. Two major approaches where discussed Investing in a socially competitive context Porter and Kramer (2002) strongly argue that in other for a company to sustain its competitive advantage, investing in benevolent or charitable movement is essentially required. They concluded that this action can enhance the value of a company socially. Burke and Logsdon (1996) noted that greater wealth and other key benefits are received by the company who employ charitable activities together with the goal of the organization. Resource based view dynamic capabilities Barney (1991) introduced human capital, physical resources and knowledge as essential prerequisite for an organisation to possess a competitive advantage over its rivals. This according to Barney is the resource based view. Teece et al (1997) presented a different approach to â€Å"dynamic capability†. He discusses factors such as innovatively, development and tactics behind resources used to create competitive advantage. From this perspective, petrick and Quinn (2001) and Hillman and Keim (2001) developed a social and ethical resource capabilities which firms can use to gain competitive advantage. They propose that firms can posses an added advantage by enhancing their relationship with key stakeholders such as suppliers, customers, communities and employees. 3.4 Integrative theories One of the first academic that carried out an extensive research on these themes was Preston Post (1975). He noted that these theories examine how organi