Management Information System Research Paper Example | Topics and Well Written Essays - 750 words - 2

Management Information System - Research Paper Example Internet is the interconnection of networks across the world which connects computers to servers hence linking the billions of people around the world. The internet which begun in the 1970s has continued to experience tremendous growth in technology and clientele base. Internet is provided by the internet service providers which offer connection to designated internet domains. Sending of information though the internet is a complex process that most people who are not computer technocrats cannot understand. However, the simple explanation is that each computer has an Internet Protocol Address which is unique to that computer. Once information is sent through the internet, it has to be decomposed sending information to the designated address and then reassembled when it reaches the designation and the process is repeated over again with information sought. This process happens so fast that people do not even notice (Laudon & Laudon, 2014). Internet users connect to the internet through the three different domain name system: top-level, second-level and third-level domains. With each domain level, the information is narrowed down to the specifics of the information searched. The top-level domain includes government level, organizational level, and education among other which are abbreviated with .com or .org among others. It is at the third level that information is refined to the main search words. Some of the common internet services include emails, transferring files, having news groups and using the World Wide Web to send or retrieve information such as graphics and texts. The most common internet usage is the chatting and sending of instant messages commonly the social media (Abbate, 2000). The internet with all its glory and numerous advantages also has its own disadvantages. People have the freedom to load in any information on the internet which can then be accessed by others

Trade Balances Essay Example | Topics and Well Written Essays - 250 words

Trade Balances - Essay Example The treasury notes has also grown the economy of China through keeping the currency weaker, hence the products from China becomes cheaper. Also, selling debts to China have allowed the economy of U.S. to grow through funding the programs of the federal government. Other factors that have led to this increase in debt level include the China’s strategy of keeping its yaun lower in value so as to ensure its export prices are competitive. In case the dollar falls in value, the government of China buys Treasuries thus increases the dollar demands. These leads to more supply of dollars, hence increasing the debt. This debt level is significant to the United States economy in terms of its credit worthiness with other trading nations such as Canada and the European Union. It indicates the possibility of U.S trading with others comfortably showing that it pay its debt well as dictated by it financial rations such as current ratio, debt ratios among other profitability ratios. This debt level has an impact on the value of US dollar. The government takes advantage of the falling dollar value and buys more Treasuries which leads to more supply of dollars to the U.S. (Cavanaugh, 1996). A debt level significantly reduces the value of the dollar against the owed nation in the world

Ethical Issues In Marketing Vulnerable Customer Groups

Ethical Issues In Marketing Vulnerable Customer Groups Ethics are defined as the set of principles which guide a persons conduct towards being morally right. When a person is faced with some moral dilemma, the choice that the person makes largely depends upon the values and ethical principles that person holds. It is over and above just being legal. Due to being dependent upon the personal values and principles a person holds, ethical code of conduct cannot be described in absolute terms. Like in all the disciplines of life, recognizing and quantifying what is ethical in marketing and what is not is difficult. In a broader sense, ethics in marketing mean implementing standards of moral rights and wrongs and of fairness in the marketing practices of an organization. The main objective of any business is said to be shareholders wealth maximization. In order to achieve this objective, the organization has to perform better than its competitors and create a competitive advantage for itself. This competitive advantage is mainly dependent upon the perception the customers hold of the products or services of the organization. An organization can create competitive advantage by means of its marketing decisions, behavior and practices. This includes aligning its marketing mix as per the customers requirements. The organization will gain competitive advantage only when the customer will perceive the marketing mix i.e. product, price, place and promotion to be of value. The focus has increased towards being ethical in marketing practices mainly due to two reasons. First, when an organization works ethically, the customers tend to develop more positive perception and attitude towards its products and services and the organization as a whole. This leads to long-term positive relationship with the customers. When the marketing practices of an organization depart from being ethical and the standards that are considered to be acceptable by the society are not followed, the organization taints its own image. It may lead to bad publicity for the firm, dissatisfied customers, lost business, lack of trust, and in some case even a legal action. Second, ethical abuses lead to pressure from either the society or the government for the firms to be more responsible. Since such ethical abuses do occur, people tend to believe that such marketing practices abound. As a result of this, consumer interest groups and some professional associations exert influence on marketing practices and keep them checked. An indicator of this is several regulations that have been designed just to protect the consumers rights. However, in order to be good to some stakeholders the organizations may sometimes make decisions which are not good for other stakeholders and effectively turn against those stakeholders interests. The ethical issues may not be only in terms of consumer, but they may also be for other stakeholders like the suppliers, employees, distribution chain etc. Categorizing Ethical Issues in Marketing Ethical issues in marketing can be categorized as follows: Unethical Product and Distribution Practices Several product-related issues, especially regarding the quality of products and services raise questions about ethical conduct in marketing. The most frequent complaints are voiced regarding the products which are of unsafe nature. Other than this, the problems are regarding poor quality of product or service, product/service not containing what is promoted or the product/service becoming obsolete or going out of style before they are used. The company which is making products that is of poor quality or is potentially unsafe for its consumers may jeopardize its image and develop a reputation for poor quality products or services. It may also put itself in situation of product claims or legal actions. Sometimes, however, the changes in an industry itself occur and the products become obsolete so fast that the consumers may misinterpret it as planned obsolescence e.g. in computer industry. Ethical issues may arise in the distribution process as well. Since the marketing personnel and sales representatives are evaluated mostly on the basis of sales performance, they may face performance pressure and this pressure may lead to ethical dilemmas. This may lead to unethical practices like pushing sale for products with higher commission, exerting influence on vendors to reduce promotions for competitors products, or making false promises regarding shipment dates and quantities. Deceptive Marketing Practices Deception is making the customer believe in the value provided by the product/service which it actually doesnt provide. It may take the form of misrepresentation or omission of key facts or misleading practices. This may also involve omission of important terms and conditions of sale and bait-and-switch selling techniques in which a product/service is offered usually at a lower price and the customers are then encouraged to buy more expensive items. Selling the potentially hazardous products without disclosing the dangers is also considered as deceptive and unethical marketing practice. There may also be packaging deception which is mislabeling regarding the content, weight, size, or use information of the product. Offensive and Objectionable Materials and Marketing Practices The promotional materials, advertisements and publications that are perceived as objectionable may create strong negative reactions for the organization. Such things may be perceived as objectionable or even offensive for some when they contain material which is related to certain stereotypical images, sex, or religious practices. Some things may carry different meanings in different locations and religions which may also be problematic if not handled properly. When people find the products or the promotion and advertising media as objectionable, they may force the vendors to stop carrying the product. So, it is in the interest of the company to screen such things and make them suitable so as to match to the tastes and preferences of their target market. Direct marketing also involves objectionable practices ranging from minor irritants like the frequency and timing of sales calls, letters or e-mails, to the ones that are even illegal. The practices that may raise ethical questions are persistent and annoying telemarketing calls, sales disguised as contests, use of mailing lists containing personal mail IDs, junk mails etc. However, there have been some steps and regulations to control these practices like Do not call registry to avoid telemarketing calls etc., but they are not sufficient and much needs to be done in this regard. Marketing Research and Benchmarking This is another area in which ethical questions may arise. Consumers and entities being benchmarked may consider it an invasion on their privacy. They are usually resistant on giving out personal information. However, in order to obtain correct and better data, researcher may act by unfair means. The same may happen in case of benchmarking. In some cases, the questions may be modified in a way to gain information which the respondent would not be willing to share otherwise. The organizations have to impose ethical standards for themselves in such instances. Ethical Issues in Marketing to Vulnerable Customer Groups The vulnerable customer groups include children, elderly, certain minorities, and religious groups. These customers may be influenced comparatively more easily as they have either less knowledge about these practices or they are vulnerable in terms of their minority or religion. Children have always been important marketing target for certain kind of products. However, in recent times more and more marketing efforts are being focused on children. Children have great influencing power while making any purchase decision. But, generally, their knowledge is less developed and limited about the products, media, advertisements, and the selling strategies adopted by the firms. Due to these reasons, they are more likely to be attracted to the strong images projected towards them and the psychological appeals directed towards them. Ethical questions arise in such environment when children are exposed to questionable practices e.g. advertisements attracting them towards products which are potentially harmful like alcohol and tobacco. The advent of Internet and direct marketing practices to market the products to children has become a major ethical issue in todays environment. There are very less, almost negligible, controls which can supervise the content which goes over the web sites. The marketers can present objectionable and misleading material to the minors without any regulation. Due to all these issues, there is increasing need to control the content being presented to children. It requires higher levels of regulations for marketing to children. Ethical Issues in International Marketing There is a relationship between the culture of a country and the perceived ethical perceptions of the citizens of that country. Due to globalization of the markets and hence the marketing practices, the marketers have to deal with the ethical issues arising in cross-cultural scenario. In this cross-cultural environment, the marketer may have to choose between entirely different set of ethical norms and values. A marketer may not wish to leave her own ethical values and adopt the cross-cultural values and this may pose the ethical dilemma. A practice which is generally accepted as being right in one country may be completely unacceptable in another. The situation gets more complex due to lack of clearly defined ethical standards and code of conduct. Major ethical problems in international marketing are as follows: Small or large scale bribery Bribery is mostly considered to be an unethical practice. However, in some countries it may be acceptable to get some work done or speed up the process. Gifts/Favors/Entertainment These include items like gifts, personal travels etc. which may be intended to get some job done. However, it may be considered just as a gift in some cultures, it may also be considered as being a source of influence in other cultures. Pricing The ethical issues regarding this include unfair price differentials, pricing to eliminate local competition by selling products at prices which are well below those in home country, or adopting pricing practices which are illegal in home country but are legal in host country like price fixing arrangements and forming cartels. Products/Technology This may involve ethical issue of selling the product/service which is banned in home country but not in the host country or which is inappropriate or unsuitable for people in host country to use. Questionable commissions to Channel partners This may include unethical practices like paying unreasonably high commissions to channel partners like dealers, distributors, sales personnel etc. to carry the products of this firm and restricting the products of competing firms. Involvement in political affairs This includes the issues of exertion of political influence by multinationals, or indulging in marketing practices in countries which are at war with the home country. Cultural differences There may be potential misunderstandings as some practices may be considered as right in one culture and immoral or even illegal in another. Reasons behind Ethical Issues in Marketing For any ethical issue arising in marketing, first we need to understand the reason of its emergence. Following are the reasons or ethical dilemmas or tensions due to which ethical issues arise: Consumer Autonomy vs. Marketing Effectiveness The consumer should be autonomous and should be allowed to make free choice about the product/service. At the same time, the marketing effort should be effective which means that it should help the organization to achieve the intended financial results and to do so affect the consumer behavior. Most of the times, the effectiveness criteria which can be described as achievement of sales goals takes preference over the consumer autonomy. The problems arising out of this type of tension may include misleading advertisements, concealment or misrepresentation of critical information etc. This can best be explained by the example of Amazon.com which offered different prices to different customers on the same day. The concept of differential pricing is perfectly in sync with the marketing effectiveness. However, it was against the concept of consumer autonomy. Consumer Choice vs. Consumer Protection Consumers should be given alternatives to choose from as per the consumer choice concept. Consumer protection says that the consumer should be protected from abuse. Consumers may not always choose the product which is good for them. This is especially true for consumers like children, elderly or poverty-stricken. Target marketing to such vulnerable consumers is an example where these two goals diverge. Target marketing is a core concept of marketing. However, when it involves vulnerable consumer segment, it may attract criticism. This raises a question that the product is serving the distinct needs of the segment or taking advantage of their vulnerability. Consumer Satisfaction vs. Revenue Growth Firms should increase their profits and they should also focus on delivering satisfaction to their customers. Most of the times these two objectives can go hand-in-hand. However, sometimes these objectives diverge because fulfilling the requirements and obligations of current customers may come in way of incremental revenue generation. E.g. If a firm discovers a fault in its product, should it recall it, offer free or discounted replacement or use the same resources for further revenue generation. If a recall is not done it may cause reduction in customer satisfaction. There have been several instances in which companies have forsaken their revenues for customer satisfaction. The latest example in this can be taken from Honda recalling almost 7 lakh Jazz and City cars globally due to a defect. However, there have also been the cases where companies chose not to act even after detecting the defect and the customers have suffered due to this. Customer Participation vs. Total System Efficiency As per the marketing theory, entire marketing process from product development to communication and distribution should be made as efficient as possible. It also says that the consumers should participate in the process. However, to gain more efficiency, the processes require standardization which may not be quite engaging for the customers. Customer Welfare vs. Price Discrimination In industries having high fixed costs and expiring capacities, like airlines, hotels etc., price discrimination is very important to maintain profitability. In such cases, the firms should try to capture the consumer surplus by exercising price discrimination. On the other hand, the firm should also contribute to consumer welfare and price discrimination is believed to reduce this consumer welfare as it results in increased price dispersion for the products/services. Ethical issues such as predatory pricing occur due to this reason. Predatory pricing initially offers lower prices to the customers, but subsequently it leads to reduced innovation, variety and increased prices. Selling branded goods at price premium is also considered as being an ethical issue due to this particular reason. Employee Satisfaction vs. Short-Term Profit Employee satisfaction has often been related to customer satisfaction which in turn leads to the success of an organization. If the organization maintains conditions such as ethical climate in the organization, then it may lead to improved employee satisfaction and service quality. However, this may come in conflict with the profit goal of the organization to maintain its competitive advantage. This may lead to situations where companies take advantage of their employees, avoid safety and health standards and go against labor unionization. There have been cases when companies have put the health and safety of their employees just in order to maintain their profits and earnings. Collaborative Supplier Relationships vs. Short-Term Cost Control Longer term relationships with suppliers enhance the firms results. The smaller the number of suppliers, i.e. the more collaboration a company has with its suppliers, the better the results of a firm are. However, the mass merchandisers take so much margin out of small suppliers that the small suppliers are forced to leave the business. Hence, such things lead to ethical issues. Changing Perception to Resolve the Ethical Issues in Marketing Ethical issues cannot be resolved easily due to the fact that there are no concrete guidelines regarding what is ethical and what it not. However, a marketer may try to resolve the ethical dilemmas she faces by applying some logics which are different from generally followed logics. Following are some of the ways that may help in resolving some of the ethical issues arising in marketing: Changing perception about the unit of exchange Changing perception about unit of exchange between the organization and consumer from just being a product or service to the benefit of than product or service may help a company make better ethical choice. Where a product focus makes a company think that since the product is intended for a particular segment, it will always provide benefit to the segment, a benefit focus makes the company think in terms of actual benefit that is being provided to its consumers. E.g. while marketing an alcoholic or tobacco product; the marketer may think that there is a good demand for the product, so the consumer should be provided with additional choice. However, when the focus is on benefit being provided to the consumer, the company may take responsible action like also providing information about the health hazard of such products. With this logic, a firm would not sell a potentially harmful product to its customers with conviction that they are do ing it for harmful purposes. Customer as a Co-Creator of Service Generally a customer is regarded as only a recipient of products or services. The marketer segments the customer, places its products, and distributes and promotes to the customers. However, if the marketer involves the customer and does things in interaction with the customer it may work to reduce two potential ethical dilemmas of consumer autonomy vs. marketing effectiveness and consumer participation vs. total system efficiency. When the customer is working in collaboration with the marketer, more transparency can be introduced which will further lead to marketing efficiency. E.g. in case of differential pricing, with collaborative actions more transparent discounting may be introduced which will further allow the customers to make informed choices. Such an approach makes sure that deception or any other type of manipulation with consumers judgment doesnt happen. When the consumer is co-creator of service, the perception of marketer will shift from making the process as efficient as possible to making it of more value to the customer. Value determination from producer to consumer Recognizing the fact that value is determined by the consumers may help the firms decide between societal benefits and mere profit maximization. This helps in resolving the ethical dilemmas of consumer welfare and price discrimination. The companies may look closely at the totality of their value proposition including all its consequences like social and environmental consequences. Instead of focusing on the product and its functional benefits, the value is determined from the perspective of consumer. Here, as long as the price discrimination is transparent, the choice made by the customers reflects the perceived value she attached with the choice. It reflects the notion of consumer welfare in the terms of customers perceived value of status, quality, convenience, innovation, variety and assurance. This logic also shows that the price premiums charged by companies are evidence of customers willingness to pay more for the trust inspired by the brand name. Firm-Customer Interaction As per this concept, the customers should be active participants instead of just being acted upon. This reduces the tension between the goals of satisfying current customers and working for incremental revenues. It also works to reduce the firm-supplier tension of collaborative relationships and profit maximization. These ethical dilemmas get diluted because the firm recognizes the value of customer relationships and this is willing to invest in the same. An example of this is the implied meaning of a brand as being a promise. There is a moral obligation for a company to deliver what a brand promises. Failure to deliver that value may harm the consumer perception and hence the firm-customer relationship. On the other hand, fulfillment of this leads to the strengthened relationship between the firm and the consumer. Recognizing the source of economic growth Traditionally, the firms consider the wealth to be the things which they own i.e. the resources which can be acted upon. However, the firms should consider that the main source of their economic growth is the skills and knowledge of the employees which act on these resources. This recognition may help in reducing the ethical dilemma of employee satisfaction vs. short-term profit. What an organization should do? Following are some guidelines that an organization may adopt in order to be ethical in its marketing practices: Take responsibility First and foremost, an organization should be able to take the responsibility of its actions. The organization should make sure that any marketing decisions and actions meet the customers needs and are able to satisfy them. In addition to this, these marketing decisions and actions should also cater to the broader needs of the society. The responsibility also extends to the employees and other organization that the firm deals with like suppliers or dealer agencies. The organization should not choose to encourage the unethical behavior in terms of any of these stakeholders. Recognize your customers rights Any organization has specific duties towards its customers: The customers should be able to expect that the products and services they intend to use are fit accordingly. The communication regarding the products or services should not be deceptive. The organization should intend to work in good faith. The organization should have appropriate policy to handle the grievances a customer might have. The organization should be considerate about the rights and interests of vulnerable groups and should not exploit them. Balance the Customer Interests with Marketing Needs Marketing has a number of objectives ranging from providing information about the product/service, stimulating the demand and boosting the sale, emphasizing the product value and differentiating the product from those of competitors. Hence, it may get difficult for an organization to strike a balance between these objectives of marketing with the ethical commitment to the consumer for providing honest, clear and unambiguous information. The situation may be aggravated if the business conditions are not good. However, the organization should focus on the long-term benefits in terms of better branding and customer loyalty while taking decisions on ethical issues. Recognize the inherent possibility of Ethical Issues Ethical issues arise when the interests and viewpoints of different stakeholders like the organization itself, customers, employees, and society etc. clash. Such issues are, however, very prominently inherent in certain industries or with certain kind of products e.g. tobacco and alcohol products. The organization should consider whether to advertise for them, to what extent to advertise and what the target customers for the advertisements should be. But, in such industry, no matter what decision an organization takes, it may have to bear the brunt of social ethicality merely be being in the particular industry. Be Environment-Friendly Green issues have come to prominence and have become major point of concern in recent times. Several organizations have made changes in their methods in order to be environment friendly. Some have even adopted special practices to give back to the environment. However, when the organizations try to improve the perception of their products/services by communicating these practices to the customers and other stakeholders they tend to get skeptical about the motives and claims of the organization. The organization should be able to promote such motives and claims so these are accurate and are able to be substantiated. Importance of Corporate Social Responsibility Conventionally, customers are primarily influenced by the product/service features, price and availability while making a choice about the product/service. However, with growing concerns about sustainable practices, environment-friendliness and social responsibility, there is one more dimension which has started influencing customer decisions. This dimension is of the policies a company adopts for its products and services. Customers are getting increasingly sensitive about the production processes, and the level of social responsibility with which organizations deal with their employees, invest their money, or indulge in other activities. Customers tend to prefer the products/services from a company which is relatively more socially responsible. Hence, it is a benefit for the organization to be ethically correct for its customers. In order to gauge the level of social responsibility of the organization, it should consider following factors: Are the products safe and being manufactured with sustainable materials, processes and under responsible conditions? Are the advertising practices being followed honest, clear and socially acceptable? Does the product provide value for money to the customers along with providing profits to the organization? Is the organization indulging in unethical selling practices? Does the organization ensure fair access to its products and services through its distribution channels? Is it easy for customers to get their issues resolved and does the organization meet customer requirements? Review all the aspects of marketing The organization should review all aspects of marketing including product design, pricing, distribution and promotion. Product Design and Development The organization needs to consider how the product will be produced i.e. the methods of manufacturing, materials and other resources to be used in the production. The company should assess whether the all these things including the production process are safe or they have any impacts on society or environment. The organization should also consider the potential use of the product/service. It needs to consider whether the product has the potential of being exploited and misused. The organization should take into consideration, the disposal of the product after it has been used. Pricing The prices of the products/services should provide value to the customers. It should not necessarily be the lowest price on the market. However, the company should be able to convey the value to the customers that they are getting for the price they pay. Packaging and Labeling Packaging has an important role in terms of brand identity and is very critical for sale. However, there are growing concerns with regards to packaging due to environmental impacts of the discarded packaging. The organization should also ensure that the labeling provides clear information regarding the use of the products. If there are some potential health or safety hazards associated with the product, they should be clearly brought to notice of the customer through means of labeling. Distribution In terms of distribution, the organization should make sure that the products are freely accessible to the customers without any discrimination e.g. of geographies. If the business is heavily dependent upon retailing, there may be another set of ethical issues that may arise. With growing concentration of retail business, retailers have gained considerable power to exert influence over the customers as well as the suppliers. The retailer may get involved in unethical practices like stocking products for only some of the companies who pay them more margins. All these issues should be tackled carefully and the power of influence should be divided carefully.

Essay examples --

Sympathy is a feeling of understanding which cannot be easily denied. Feeling sympathy towards someone or something comes naturally to humans. It is not required that one must undergo the same challenges to understand a person’s struggle. The extent of one’s sympathy depends upon the extremity of one’s plights. Regardless of who or what, everyone has felt sympathy or has been given sympathy. Euripides, a famous Grecian playwright wrote Greek tragedies known for eliciting sympathy from the audience. An example of this is Euripides’ play Medea. Medea is one of Euripides’ most well known characters Euripides created Medea to be a sympathetic character. Medea was originally published in Greek; therefore many aspects of the play may have been lost in translation as it is difficult to translate both the literal and implied meaning of the original play. Although many may dispute that Medea is a sympathetic character it is evident through, various sacrific ial acts of love, Medea’s unstable mental state and role as a foreign woman in the ancient Greece society help Euripides portray Medea as a sympathetic character as conveyed by his social commentary. Sacrifices are often made in one’s everyday life. However, it is the repercussions of these sacrifices that elicit sympathy from one’s peers. Medea with, â€Å"...her heart unhinged in her love for Jason...persuaded the daughters of Pelias to kill their father† (Euripides 8-10). Euripides uses a mythological allusion by briefly referring to the legendary journey of Jason and the Argonauts. Euripides portrays Medea as a character who selflessly victimizes herself. Through this sacrificial act of love Medea, victimizes herself by acquiring enemies on Jason’s behalf. Furthermore, Medea betrays her... ...cal to further develop a clear understanding of her motives. Although Medea’s actions were arbitrary and illogical, the reasoning behind her actions was completely selfless and motivated by love. Additionally, Medea’s irrational state of mind contributes to her illogical selfless actions. Euripides demonstrates how Medea allows herself to be a victim to her anger which overpowers her rational thinking. Furthermore, Euripides’ social commentary on the role of women and foreigners in the ancient Greece society display how Medea is poorly judged due to both these factors and her disinterest in conforming to societal norms. Therefore, it is apparent that Euripides created Medea as a sympathetic character. Although many aspects of the original play may have been lost in translation, it is proven that Medea is in fact a sympathetic character as shown through her plights.

China – Geert Hofstede

4/22/13 China – Geert Hofstede THE HOFSTEDE CENTRE (index. php) GET CERTIFIED Select a Country United States in Intercultural Management and (/certification- Culture by Organisational courses. html) in comparison with the below China THE HOFSTEDE CENTRE (thehofstede-centre. html) 118 80 91 GEERT HOFSTEDE (geerthofstede. html) NATIONAL CULTURE (nationalculture. html) 66 DIMENSIONS (dimensions. html) 62 30 46 29 40 COUNTRIES (countries. html) APPLICATIONS (applications. html) 20 COURSES (interculturalmanagement-courses. html) PDI IDV China MAS UAI LTO United States ORGANISATIONAL CULTURE (organisational-culture. tml) EVENTS AND COURSES (eventscourses. html) FAQ (faq. html) What about China? If we explore the Chinese culture through the lens of the 5-D Model, we can get a good overview of the deep drivers of Chinese culture relative to other world cultures. Power distance This dimension deals with the fact that all individuals in societies are not equal – it expresses the attitude of the culture towards these inequalities amongst us. Power distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally.At 80 China sits in the higher rankings of PDI – i. e. a society that believes that inequalities amongst people are acceptable. The subordinate-superior relationship tends to be polarized and there is no defense against power abuse by superiors. Individuals are influenced by formal authority and sanctions and are in general optimistic about people’s capacity for leadership and initiative. People should not have aspirations beyond their rank. Contact Imprint (contact. html) (imprint. html) Individualism The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members.It has to do with whether people? s self-image is defined in terms of â€Å"I† or â€Å"We†. In I ndividualist societies people are supposed to look after themselves and their direct family only. In Collectivist societies people belong to ‘in groups’ that take care of them in exchange for loyalty. At a score of 20 China is a highly collectivist culture where people act in the interests of the group and not necessarily of themselves. In-group considerations affect hiring and promotions with closer in-groups (such as family) are getting preferential treatment.Employee commitment to the organization (but not necessarily to the people in the organization) is low. Whereas relationships with colleagues are cooperative for in-groups they are cold or even hostile to out-groups. Personal relationships prevail over task and company. Masculinity / Femininity geert-hofstede. com/china. html 1/2 4/22/13 China – Geert Hofstede A high score (masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being def ined by the winner / best in field – a value system that starts in school and continues throughout organisational behaviour.A low score (feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be the best (masculine) or liking what you do (feminine). At 66 China is a masculine society –success oriented and driven. The need to ensure success can be exemplified by the fact that many Chinese will sacrifice family and leisure priorities to work.Service people (such as hairdressers) will provide services until very late at night. Leisure time is not so important. The migrated farmer workers will leave their families behind in faraway places in order to obtain better work and pay in the cities. Another example is that Chinese students car e very much about their exam scores and ranking as this is the main criteria to achieve success or not. Uncertainty avoidance The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen?This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways. The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the UAI score. At 30 China has a low score on uncertainty avoidance. Truth may be relative though in the immediate social circles there is concern for Truth with a capital T and rules (but not necessarily laws) abound. None the less, adherence to laws and rules may be flexible to suit the actual situation and pragmatism is a fact of life.The Chinese are comfortable with ambiguity; the Chinese language is full of ambiguous meanings that can be difficult for Western people to follow. Chinese are adaptable and entrepreneurial. At the time of writing the majority (70% -80%) of Chinese businesses tend to be small to medium sized and family owned. Long term orientation The long term orientation dimension is closely related to the teachings of Confucius and can be interpreted as dealing with society’s search for virtue, the extent to which a society shows a pragmatic future-oriented perspective rather than a conventional historical short-term point of view.With a score of 118 China is a highly long term oriented society in which persistence and perseverance are normal. Relationships are ordered by status and the order is observed. Nice people are thrifty and sparing with resources and investment tends to be in long term projects such as real estate. Traditions can be adapted to suit new conditions. Chinese people recognize that government is by men rather than a s in the Low LTO countries by an external influence such as God or the law. Thinking ways focus on the full or no confidence, contrasting with low LTO countries that think in probabilistic ways. geert-hofstede. com/china. html 2/2

Financial Analysis of AB InBev

The Anheuser-Busch InBev Company (AB InBev) was established throughout the years through mergers and acquisitions. AB InBev is the largest brewery in Jupille, Belgium. They operate in North America, Latin America, South America, Europe, and Asia Pacific. Due to political upheavals in Germany and Bohemia in 1848, many German immigrants settled in St. Louis, Missouri (â€Å"Anheuser-Busch,† 2011). Eberhard Anheuser was a trained soap maker and became part owner of the Bavarian Brewery. By 1860, he bought the investors’ shares and the brewery name was changed to E. Anheuser & Co. Adolphus Busch married Lilly Anheuser, Eberhard’s daughter and later Adolphus purchased half ownership of Anheuser’s brewery, becoming a partner (â€Å"Anheuser-Busch,† 2011). Due to Busch’s innovations, the brewery became the first to use pasteurization, allowing the beer to be shipped long distances without spoiling. By the early 1880’s, the brewer introduced a rtificial refrigeration, rail-side icehouses, and refrigerated railcars. These innovations allowed the company to grow and distribute their beer across the country. To market the beers Busch used traditional selling methods; however, Busch’s methods were more organized and deliberate than his competitors. Busch â€Å"pioneered the use of giveaways and premiums, and used his brewery as a showplace for the public to visit† (â€Å"Anheuser-Busch,† 2011). The brewery company was renamed Anheuser-Busch Brewing Association in 1879 to recognize Adolphus’ efforts. The company became one of the nation’s leading breweries in 1901 when it broke the one million barrels of beer sales mark (â€Å"Anheuser-Busch,† 2011). Over the years, the company grew through acquisitions and mergers and became AB InBev. In 1989, a group of investors purchased Brahma, the number two beer in Brazil. In 1999, the brand took over the number one spot and was combined with its chief competitor to form AmBev. AmBev expanded throughout South America and became the third-largest brewer in the world. In 2004, Interbrew, the European beer company, acquired a majority stake in AmBev, which created InBev. In 2008, InBev purchased Anheuser-Busch; resulting in the new company AB InBev (Allen & Zook, 2012). Anheuser-Busch (AB InBev) The publicly traded company (Euronext: ABI) is based in â€Å"Leuven, Belgium with American Depositary Receipts on the New York Stock Exchange (NYSE: BUD)† (Anheuser-Busch InBev [AB InBev], 2011) and is not only the leading global brewer, but is one of the world’s top five consumer product companies. AB InBev’s portfolio contains over 200 brands of beer with fourteen brands that generate over $1 billion per year in revenue. The brewer invests in their greatest growth potential brands such as Budweiser with 45% of sales originating in North America. The company owns 50 percent equity interest in Mexico’s leading brewer and owner of the Corona brand, the subsidiary Grupo Modelo. With their approximate 116,000 employees based in twenty-three countries worldwide, AB InBev is geographically diversified, along with a balanced exposure to developing and developed markets, the company has a completive edge. AB InBev is a multinational beverage company and is the largest brewer, with almost 25 percent global market share. They are the third largest FMCG company by firm value (AB InBev, 2011). AB InBev was chosen for a financial analysis due to its longevity and innovated ideas and marketing. It is hoped that AB InBev’s financial records will show that their innovated methods will show a continuous financial growth. The Annual Report For this analysis, AB InBev’s 2011 annual report is used and it compares 2010 and 2011. The audit was performed by Pricewaterhouse Coopers. The report is in millions and AB InBev saw a $2,197m in profit gain from 2010 to 2011 and a $1,114m in cash flow from operating activities before changes in working capital and use of provision. The change in working capital was $1,183m resulting in an increase of $2,581m of cash flow from operating activities. There was a negative increase in the investing and financing activities, $185m and $2,239m respectively. In 2010, AB InBev had a net increase in cash and cash equivalents of $602m and $759m in 2011. Overall, in 2011 AB InBev realized $39 billion revenue (AB InBev, 2011). The Balance Sheet When assessing the financial report, it may be difficult to see positive revenue. In order to understand, one must know how interpret the financial statement as a whole. The balance sheet provides information about AB InBev’s assets, liabilities, and shareholder’s equity. Assets are things that a company can sell or use. These items include physical property, inventory, equipment, etc. Intangibles are also assets – things that cannot be touched, but nevertheless have value, i. e. patents and trademarks, investments the company makes. And of course cash is the main asset. Liabilities are amounts that the company owes to others. These amounts can include a loan secured to launch a new product, rent for use of a factory, or money owed to a supplier, etc. Liabilities also include future obligations, i. e. goods or services promised to be provided in the future. Shareholder equity (or capital or net worth) is the money that would be left if a company sold all of its assets and paid off all their liabilities. Any money left over belongs to the owners (or shareholders) of the company. The balance sheet’s â€Å"equation† is Assets = Liabilities + Shareholders’ equity (Garrison, Noreen, & Brewer, 2010). The balance sheet is set up with the assets listed and tallied on the left side, while liabilities and shareholders’ equity on the right. The assets are usually listed in order of how quickly they can be converted into â€Å"real† cash. Current assets are things that the company plans to convert to cash within one year, i. e. inventory. Noncurrent assets are things that are expected to be converted to cash longer than a year. Noncurrent assets include fixed assets (not available for sale, i. e. office furniture). Liabilities are usually listed according to their due dates. Liabilities are either current or long-term. Current liabilities are debts that the company expects to pay off within a year; on the other hand, long-term liabilities are due in more than a year. Shareholders’ equity (SE) is the amount invested by the owners. SE is calculated by subtracting the company’s earnings or losses from the owner’s investment in the company’s stock (Garrison, Noreen, & Brewer, 2010). In assessing AB InBev’s balance sheet for 2011, the company had $39,046 million in revenues, a 4. 6% increase, and a gross profit of $22,412 million. It is stated in the annual report that a selective price increase was taken in the last quarter in anticipation of higher commodity costs. Cost of Sales (CoS) increased by 1. 6%. This increase was due; according to AB InBev in part to lower aluminum can costs in Latin America and procurement savings and implementation of their best practice programs in North America. The total operating expenses increased by 3. 7%. This was partly due to distribution expenses increasing by 9. 2%. Brazil had higher transportation costs, while Latin America South saw higher labor costs and higher transport tariffs in Ukraine and Russia. Sales and marketing expenses increased by 4. 1% because, specifically in North America, more investments in brand offset savings in non-working money. Administrative expenses increased by 0. % due to fixed cost savings in the United States offset by salary increases and expansion costs in China and Brazil. Other operating income was $694 million compared to $64 million in 2010 mainly because of tax incentives in China and Brazil (AB InBev, 2011). The Income Statement An income statement shows how much revenue a company earned and the costs assoc iated with earning said revenue. The bottom line of an income statement normally shows the company’s net losses or earning. This statement tells how much the company has made or lost over the accounting period, usually for a year or a portion thereof. Income statements reports earnings per share (EPS). (To calculate EPS, the total net income is divided by the number of outstanding shares of the company). An income statement also shows how much shareholders would receive if the company distributed all of the net earnings for the accounting period; however, most companies reinvest their earnings (Garrison, Noreen, & Brewer, 2010). Income statements begin with the total amount of revenue made during an accounting period and then deduct certain costs and operating expenses associated with earning said revenue. The bottom line tells how much the ompany earned or lost during the period. The beginning is the â€Å"gross† revenue (or sales). The next line is the amount the company does not expect to collect (referred to as allowances), i. e. discounts, or returns. After deducting these allowances from the gross revenues (or sales), the result is net revenues. The next lines are operating expenses. Although these expenses can be lis ted in various order, the line after net revenues is usually costs of sales. Costs of sales is the amount the company has spent producing the goods or services sold during the accounting period. Subtracting cost of sales from net revenues gives a subtotal of gross profit (also known as gross margin) (Garrison, Noreen, & Brewer, 2010). The operating expenses are listed next on the income statement. These expenses support a company’s operations, i. e. salaries, marketing, etc. Because operating expenses cannot be linked to the production of products or services being sold, they are different from costs of sales (Garrison, Noreen, & Brewer, 2010). Depreciation is also deducted. Depreciation is the amount of wear and tear on assets (machinery, tools, etc. ) that are used over long term. This amount is spread over the periods they are used and is called depreciation or amortization. After this deduction from the gross profit, the income from operations is arrived. This amount is before interest and income tax expenses (Garrison, Noreen, & Brewer, 2010). The next section allows companies to account for interest income and interest expense. Interest income is earned from interest-bearing savings accounts, money market funds, etc. Interest expenses are monies paid in interest on loans, etc. Some companies show these separately and some combine the two. The income and expenses are totaled and then deducted from the operating profit to arrive at operating profit before income tax (EBIT). Finally, income tax is subtracted and the bottom line of net profit or net loss (also known as net income, net earnings, or net operating income) is calculated (Garrison, Noreen, & Brewer, 2010). On AB InBev’s income statement, sales are the same as on the balance sheet. (AB InBev, 2011). In North America, EBITDA increased 1. 5%, $6. 573 million with a margin expansion increase up to 42. 9%, driven by growth in overhead cost reductions and gross profit. In the combined statement (the gathering of all AB InBev’s companies), the EBIT for 2011 is $12,607 million and an EBITDA of $15,357 million (AB InBev, 2011). Cash Flow Statements While a balance sheet is a snapshot and the income statement shows if the company made a profit or lost money, a cash flow statement shows if the company generated cash. Cash flow statements shows the inflow and outflows of the company’s cash. This statement is very important because it proves that the company has enough money to pay expenses, purchase assets, and stay competitively profitable. Whereas other financial statements shows an absolute dollar amount at a particular time, a cash flow statement show changes during the accounting period. The cash flow statement uses the information from both balance sheet and income statement. Cash flow statements are divided into three major sections: operating activities, investing activities, and financing activities. (Garrison, Noreen, & Brewer, 2010). AB InBev’s financial report consolidates the activities, followed by a breakdown of the activities including explanations. Operating activities rose from $9,905million to $12,486 million; investing activities increased from a negative $2,546m in 2010 to negative $2,731m in 2011; and financing activities rose from $6,757m to $8,996m in 2011. However, the net increase in cash and cash equivalents increased from $602m to $759m (AB InBev, 2011). Operating activities. The first section of a cash flow statement analyzes inflow from net income or loses. This section usually reconciles the net income (taken from the income statement) to the actual cash the company received from and used in its operating activities. This process adjusts net income for any non-cash items, i. e. adding depreciation expenses back, and for any cash that was a source or a use provided by other operating assets and liabilities (Garrison, Noreen, & Brewer, 2010). AB InBev’s financial report of cash flows shows an increase in operating activities. This increase is due to a higher profit and strong contribution from changes in the working capital. The increase in working capital is the result of on-going trade initiatives; furthermore, there is an increase in trade payables that are linked to higher capital expenditures. These expenditures have longer payment terms (AB InBev, 2011). Investing activities. Investing activities shows the inflow from all investing activities. These activities usually include purchases or sales of long-term assets, i. e. property, plant, and equipment (PPE) as well as investment securities. If a company buys machinery, this activity would be listed as a cash outflow because cash was used. However, if the company sold some investments from their portfolio the proceeds would be an inflow from investing activities because it is a source of cash (Garrison, Noreen, & Brewer, 2010). AB InBev’s investing activities were $2,731m in 2011, compared to 2010 which was $2,546m. This increase is by higher capital expenditures mainly in Brazil and China. To partially offset this increase, the company sold short-term debt securities. The company invested in 2010 to facilitate liquidity and capital preservation in Brazil. Net capital expenditures were $3,256m in 2011 and $2,123 in 2010. This increase is primarily linked to investments for expansion in China and Brazil in order to meet demands in the growing market. Approximately 57% was used to improve production facilities while 33% was used for logistics and commercial investments. Ten percent was used for purchase of hardware and software and improving administration (AB InBev, 2011). Financing activities. The last section is financing activities. This part of the cash flow statement shows the typical sources of inflow, including cash raised by selling stocks or bonds and borrowing funds from a bank (Garrison, Noreen, & Brewer, 2010). Cash inflow from financing activities was $8,996m in 2011, compared to 2010’s $6,757m. The 2011 amount reflects higher dividend payouts, net repayments, and settlements of derivatives that were not part of a hedge. AB InBev could borrow enough to meet its liquidity needs; the company’s policy is to rely on cash flows from operating activities to fund its continuing operations (AB InBev, 2011). Analysis of AB InBev’s Financials According to the 2011 annual report, Anheuser-Busch InBev saw a year of solid performance and progress. AB InBev experienced growth, expanded their EBITDA margin, grew EPS, and made strides in de-leveraging the balance sheet. AB InBev experienced a strong growth from their three well-known global brands: Budweiser, Stella Artois, and Beck’s. These brands were up by 3. 1%. Stella Artois volumes increased by 5. 9%, with a 24% surge in sales in the United States, 13% in Argentina, and 200% in Brazil. The company continues to expand and grow in China and Brazil. The company raised its dividends to 1. 20 euros per share, a 50 % increase. â€Å"These results were achieved despite weak consumer confidence in several markets and increases in commodity prices. Faced with adverse conditions, our people did what they do best. They took ownership of the situation, focused on what they can impact, and did not let short-term factors distract from our long-term goals of connecting with consumers, driving shareholder value, and working toward our dream: to be the Best Beer Company in a Better World† (AB InBev, 2011). The United States shows signs of an economic recovery. An increase in US profits are supported by the company's new NFL sponsorship. Felipe Dutra, AB InBev’s CFO said the increase could also â€Å"have something to do with the unseasonably mild weather† (AB InBev, 2011). The newly launched Bud Light Lime and Bud Light Platinum performed well. Dutra said â€Å"We believe we have the right brands to exploit that opportunity,† before, during and after the Olympic games. Budweiser has also extended sponsorship of the soccer World Cup through 2018. AB InBev will continue to rely heavily on their strategic brands (AB InBev, 2011). Conclusion A fundamental part of their culture is never being entirely satisfied with their results: â€Å"we always challenge ourselves to dream bigger and achieve more. . . † (AB InBev, 2011). With continued global growth and expansion and early payoffs of debt, AB InBev will continue to see profits. The company’s innovated thinking will carry it into the millennium.ReferencesAllen, J., & Zook, C. (2012, May 4). The strategic principles of repeatability: How nonnegotiable fuel growth. 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