Deception Point Page 85

Rachel's body went rigid. She wanted to step back from the railing, but she could not move. She was transfixed by the petrifying vista. â€Å"Incredible, aren't they?† Tolland said. His hand was on her shoulder again, comforting. â€Å"They'll tread water in the warm spots for weeks. These guys have the best noses in the sea-enhanced telencephalon olfactory lobes. They can smell blood up to a mile away.† Corky looked skeptical. â€Å"Enhanced telencephalon olfactory lobes?† â€Å"Don't believe me?† Tolland began rooting around in an aluminum cabinet adjacent to where they were standing. After a moment, he pulled out a small, dead fish. â€Å"Perfect.† He took a knife from the cooler and cut the limp fish in several places. It started to drip blood. â€Å"Mike, for God's sake,† Corky said. â€Å"That's disgusting.† Tolland tossed the bloody fish overboard and it fell thirty feet. The instant it hit the water, six or seven sharks darted in a tumbling ferocious brawl, their rows of silvery teeth gnashing wildly at the bloody fish. In an instant, the fish was gone. Aghast, Rachel turned and stared at Tolland, who was already holding another fish. Same kind. Same size. â€Å"This time, no blood,† Tolland said. Without cutting the fish, he threw it in the water. The fish splashed down, but nothing happened. The hammerheads seemed not to notice. The bait carried away on the current, having drawn no interest whatsoever. â€Å"They attack only on sense of smell,† Tolland said, leading them away from the railing. â€Å"In fact, you could swim out here in total safety-provided you didn't have any open wounds.† Corky pointed to the stitches on his cheek. Tolland frowned. â€Å"Right. No swimming for you.† 102 Gabrielle Ashe's taxi was not moving. Sitting at a roadblock near the FDR Memorial, Gabrielle looked out at the emergency vehicles in the distance and felt as if a surrealistic fog bank had settled over the city. Radio reports were coming in now that the exploded car might have contained a high-level government official. Pulling out her cellphone, she dialed the senator. He was no doubt starting to wonder what was taking Gabrielle so long. The line was busy. Gabrielle looked at the taxi's clicking meter and frowned. Some of the other cars stuck here were pulling up onto the curbs and turning around to find alternative routes. The driver looked over his shoulder. â€Å"You wanna wait? Your dime.† Gabrielle saw more official vehicles arriving now. â€Å"No. Let's go around.† The driver grunted in the affirmative and began maneuvering the awkward multipoint turn. As they bounced over the curbs, Gabrielle tried Sexton again. Still busy. Several minutes later, having made a wide loop, the taxi was traveling up C Street. Gabrielle saw the Philip A. Hart Office Building looming. She had intended to go straight to the senator's apartment, but with her office this close†¦ â€Å"Pull over,† she blurted to the driver. â€Å"Right there. Thanks.† She pointed. The cab stopped. Gabrielle paid the amount on the meter and added ten dollars. â€Å"Can you wait ten minutes?† The cabbie looked at the money and then at his watch. â€Å"Not a minute longer.† Gabrielle hurried off. I'll be out in five. The deserted marble corridors of the Senate office building felt almost sepulchral at this hour. Gabrielle's muscles were tense as she hurried through the gauntlet of austere statues lining the third-floor entryway. Their stony eyes seemed to follow her like silent sentinels. Arriving at the main door of Senator Sexton's five-room office suite, Gabrielle used her key card to enter. The secretarial lobby was dimly lit. Crossing through the foyer, she went down a hallway to her office. She entered, flicked on the fluorescent lights, and strode directly to her file cabinets. She had an entire file on the budgeting of NASA's Earth Observing System, including plenty of information on PODS. Sexton would certainly want all the data he could possibly get on PODS as soon as she told him about Harper. NASA lied about PODS. As Gabrielle fingered her way through her files, her cellphone rang. â€Å"Senator?† she answered. â€Å"No, Gabs. It's Yolanda.† Her friend's voice had an unusual edge to it. â€Å"You still at NASA?† â€Å"No. At the office.† â€Å"Find anything at NASA?† You have no idea. Gabrielle knew she couldn't tell Yolanda anything until she'd talked to Sexton; the senator would have very specific ideas about how best to handle the information. â€Å"I'll tell you all about it after I talk to Sexton. Heading over to his place now.† Yolanda paused. â€Å"Gabs, you know this thing you were saying about Sexton's campaign finance and the SFF?† â€Å"I told you I was wrong and-â€Å" â€Å"I just found out two of our reporters who cover the aerospace industry have been working on a similar story.† Gabrielle was surprised. â€Å"Meaning?† â€Å"I don't know. But these guys are good, and they seem pretty convinced that Sexton is taking kickbacks from the Space Frontier Foundation. I just figured I should call you. I know I told you earlier that the idea was insane. Marjorie Tench as a source seemed spotty, but these guys of ours†¦ I don't know, you might want to talk to them before you see the senator.† â€Å"If they're so convinced, why haven't they gone to press?† Gabrielle sounded more defensive than she wanted to. â€Å"They have no solid evidence. The senator apparently is good at covering his tracks.† Most politicians are. â€Å"There's nothing there, Yolanda. I told you the senator admitted taking SFF donations, but the gifts are all under the cap.† â€Å"I know that's what he told you, Gabs, and I'm not claiming to know what's true or false here. I just felt obliged to call because I told you not to trust Marjorie Tench, and now I find out people other than Tench think the senator may be on the dole. That's all.† â€Å"Who were these reporters?† Gabrielle felt an unexpected anger simmering now. â€Å"No names. I can set up a meeting. They're smart. They understand campaign finance law†¦ † Yolanda hesitated. â€Å"You know, these guy actually believe Sexton is hurting for cash-bankrupt even.† In the silence of her office, Gabrielle could hear Tench's raspy accusations echoing. After Katherine died, the senator squandered the vast majority of her legacy on bad investments, personal comforts, and buying himself what appears to be certain victory in the primaries. As of six months ago, your candidate was broke. â€Å"Our men would love to talk to you,† Yolanda said. I bet they would, Gabrielle thought. â€Å"I'll call you back.† â€Å"You sound pissed.† â€Å"Never at you, Yolanda. Never at you. Thanks.† Gabrielle hung up. Dozing on a chair in the hallway outside Senator Sexton's Westbrooke apartment, a security guard awoke with a start at the sound of his cellular phone. Bolting up in his chair, he rubbed his eyes and pulled his phone from his blazer pocket. â€Å"Yeah?† â€Å"Owen, this is Gabrielle.† Sexton's guard recognized her voice. â€Å"Oh, hi.† â€Å"I need to talk to the senator. Would you knock on his door for me? His line is busy.† â€Å"It's kind of late.† â€Å"He's awake. I'm sure of it.† Gabrielle sounded anxious. â€Å"It's an emergency.† â€Å"Another one?† â€Å"Same one. Just get him on the phone, Owen. There's something I really need to ask him.† The guard sighed, standing up. â€Å"Okay, okay. I'll knock.† He stretched and made his way toward Sexton's door. â€Å"But I'm only doing it because he was glad I let you in earlier.† Reluctantly, he raised his fist to knock.

The Rise of Monarchies

A new monarchy brings power to the royal family. It does this in many ways. A new monarchy reduces the power of nobility, and confiscates land from the nobles that are on â€Å"their† land. They also impose taxes and tariffs on whatever they want. A new monarchy will also create standing armies and hire mercenaries to protect their land and to grow their empire. Basically a new monarchy wants to bring money, power, and control to the royal family that is in rule. An example of two new monarchies is Henry VII of England and Ferdinand I of Spain.Both the royal families and states they represent are great examples of a new monarch from the time period of 1450 to 1550. Spain exemplifies the key characteristics of a new monarch. It all starts with the centralization of power in Spain towards one royal family. This all starts with the marriage of King Ferdinand II of Aragon and Queen Isabella of Castile. Before this marriage modern day Spain was fragmented into 4 four separate state s, Aragon, Castile, Granada, and Navarre. The marriage combined Castile and Aragon, which allowed Ferdinand I of Spain and Queen Isabella to control most of modern day Spain.Along with this event Ferdinand and Isabella centralized the system of justice and made towns more subservient to the royal will in Castile. Ferdinand now is gaining control and power of his land, so he does what a new monarch should do and rips power and authority from the nobilities on his land. Ferdinand stripped the Castilian nobles of some of their privileges while he dispenses their titles and positions. In Aragon he has trouble with the nobles but they later will alliance with the King in fear of a revolt in the lower class. Now The Spanish Royal Family has gained control of their land.In order for Ferdinand to keep his kingdom safe and undisturbed from outsiders, he takes the province of Granada from the Moors. This shows Ferdinand's rise in power in 1492 and shows Ferdinand having military power as well . Even though new monarchies impose taxes on whatever they want, the Spanish monarchy didn't as much as other monarchies, like England. The royal family did take money from the church by handling the populace's tithes and the sales of indulgences and keeping some for royalty, which shows rising power of the monarch.The monarchy also only got about 10% of its income from the people. Spain's real income came from the America's. The silver from the Potosi and Spain's trade really defined the monarchs economy, power, and control during the monarchs climax years. In result of the wealth Spain had they are able to build standing armies and state themselves as the most powerful state at the time. With Ferdinand being able to control his lands, become extremely wealthy, and have power, he has created a true new monarch. As well as Spain, the English and King Henry VII of England also created a new monarch.The key factor in the start of this monarch is definitely the War of the Roses. With t he Tudor Family â€Å"victory†, Henry Tudor, the last claimant of the throne of the Lancaster's, became the beginning of the Tudor's Monarch. Henry was an ambitious ruler. He wanted to make the Tudor state so powerful, no noble factions or challengers could challenge him or his state. As most monarchs did, Henry strengthened royal authority in England by creating the Star Chamber, which became one of the highest courts in the land.These justices dispensed justice, collected taxes, enforced troop levies, and maintained order. Even though this makes the government, or the royal family, more decentralized, it strengthened the efficiency and prestige of the monarchy. It helps Henry control his land which ultimately is a goal of a new monarch. Even though Henry has a justice system, he also exemplifies that the monarch has the most power. In fact he obtained from parliament writs of attainder and forfeiture, which allows him to declare anyone of treason, have them killed and take their property from them.This definitely states that the king has the most power and he can do whatever he wants. Along with gaining more power, Henry won the loyalty of most of the nobles on his land, which now centralizes the power of England to the royal family.. Another key characteristics of this new monarch is the fact that Henry imposed tariffs protecting the cloth and wool industries in his monarch. This decreed acts unifying weights and measures, and constructed edicts punishing vagabondage and begging.This not only states more power of the throne but shows Henry building his economy with protecting his industries. All in all Spain and England exemplifies the true new monarch and all of its characteristics. Both Henry and Ferdinand strip power from the nobility, build their wealth in industry, natural resources, taxes, and/or tariffs. Their wealth allows them to create armies and gain power and control on their own lands and in the lands they conquer. Basically they gain co ntrol of their lands, get wealth and ultimately have power, which states a new monarch. The Rise of Monarchies A new monarchy brings power to the royal family. It does this in many ways. A new monarchy reduces the power of nobility, and confiscates land from the nobles that are on â€Å"their† land. They also impose taxes and tariffs on whatever they want. A new monarchy will also create standing armies and hire mercenaries to protect their land and to grow their empire. Basically a new monarchy wants to bring money, power, and control to the royal family that is in rule. An example of two new monarchies is Henry VII of England and Ferdinand I of Spain.Both the royal families and states they represent are great examples of a new monarch from the time period of 1450 to 1550. Spain exemplifies the key characteristics of a new monarch. It all starts with the centralization of power in Spain towards one royal family. This all starts with the marriage of King Ferdinand II of Aragon and Queen Isabella of Castile. Before this marriage modern day Spain was fragmented into 4 four separate state s, Aragon, Castile, Granada, and Navarre. The marriage combined Castile and Aragon, which allowed Ferdinand I of Spain and Queen Isabella to control most of modern day Spain.Along with this event Ferdinand and Isabella centralized the system of justice and made towns more subservient to the royal will in Castile. Ferdinand now is gaining control and power of his land, so he does what a new monarch should do and rips power and authority from the nobilities on his land. Ferdinand stripped the Castilian nobles of some of their privileges while he dispenses their titles and positions. In Aragon he has trouble with the nobles but they later will alliance with the King in fear of a revolt in the lower class. Now The Spanish Royal Family has gained control of their land.In order for Ferdinand to keep his kingdom safe and undisturbed from outsiders, he takes the province of Granada from the Moors. This shows Ferdinand's rise in power in 1492 and shows Ferdinand having military power as well . Even though new monarchies impose taxes on whatever they want, the Spanish monarchy didn't as much as other monarchies, like England. The royal family did take money from the church by handling the populace's tithes and the sales of indulgences and keeping some for royalty, which shows rising power of the monarch.The monarchy also only got about 10% of its income from the people. Spain's real income came from the America's. The silver from the Potosi and Spain's trade really defined the monarchs economy, power, and control during the monarchs climax years. In result of the wealth Spain had they are able to build standing armies and state themselves as the most powerful state at the time. With Ferdinand being able to control his lands, become extremely wealthy, and have power, he has created a true new monarch. As well as Spain, the English and King Henry VII of England also created a new monarch.The key factor in the start of this monarch is definitely the War of the Roses. With t he Tudor Family â€Å"victory†, Henry Tudor, the last claimant of the throne of the Lancaster's, became the beginning of the Tudor's Monarch. Henry was an ambitious ruler. He wanted to make the Tudor state so powerful, no noble factions or challengers could challenge him or his state. As most monarchs did, Henry strengthened royal authority in England by creating the Star Chamber, which became one of the highest courts in the land.These justices dispensed justice, collected taxes, enforced troop levies, and maintained order. Even though this makes the government, or the royal family, more decentralized, it strengthened the efficiency and prestige of the monarchy. It helps Henry control his land which ultimately is a goal of a new monarch. Even though Henry has a justice system, he also exemplifies that the monarch has the most power. In fact he obtained from parliament writs of attainder and forfeiture, which allows him to declare anyone of treason, have them killed and take their property from them.This definitely states that the king has the most power and he can do whatever he wants. Along with gaining more power, Henry won the loyalty of most of the nobles on his land, which now centralizes the power of England to the royal family.. Another key characteristics of this new monarch is the fact that Henry imposed tariffs protecting the cloth and wool industries in his monarch. This decreed acts unifying weights and measures, and constructed edicts punishing vagabondage and begging.This not only states more power of the throne but shows Henry building his economy with protecting his industries. All in all Spain and England exemplifies the true new monarch and all of its characteristics. Both Henry and Ferdinand strip power from the nobility, build their wealth in industry, natural resources, taxes, and/or tariffs. Their wealth allows them to create armies and gain power and control on their own lands and in the lands they conquer. Basically they gain co ntrol of their lands, get wealth and ultimately have power, which states a new monarch.

Reviews on Financial Risk Management Essay

The definition and types of financial risk III. Risk management and the theoretical foundation IV. The process of financial risk management V. The challenges faced by the modern financial risk management theories ?Abstract? Financial risks are exposures of uncertainties for those participants in financial market. Financial risks can be divided into four categories: market risk, credit risk, liquidity risk and operational risk. Risk management has become more and more crucial for a market participant to survive in the highly competitive market. As the development of the global financial market, there are many phenomena that cannot be explained by traditional financial risk management theories. These phenomena have accelerated the development of behavioral finance and economic physics. The financial management theories have already improved a lot over the past decades, but still facing some challenges. Therefore, this report will review some important issues in the financial risk management; introduce some theoretical foundation of financial risk management, and discuss the challenges faced by the modern financial risk management. I. Introduction Financial risk is one of the basic characteristics of financial system and financial activities. And financial risk management has become an important component of the economic and financial system since the occurrence of financial in human society. Over the past few decades, economic globalization spread across the world with the falling down of the Bretton Woods system. Under above background, the financial markets have become even more unstable due to some significant changes. Many events happened during the decades, including the â€Å"Black Monday† of the year 1987, the stock crisis in Japan in 1990, the European monetary crisis in 1992, the financial storm of Asia in 1997, the bankruptcy of Long-Term Capital Management in 1998, and the most recent global financial crisis triggered in the year 2008. All these changes brought enormous destruction of the smooth development of the world economy and the financial market. At the same time, they also helped people realized the necessity and urgency of the financial risk management. Why did the crisis happened and how to avoid the risk as much as possible? These questions have been endowed more significant meaning for the further development of the economy. Therefore, this report will review some important issues in the financial risk management; introduce some theoretical foundation of financial risk management, and discuss the challenges faced by the modern financial risk management. II. The Definition and Types of Financial Risk The word â€Å"risk† itself is neutral, which means we cannot define risk a good thing or bad. Risk is one of the internal features of human behavior, and it comes from the uncertainty of the future results. Therefore, briefly speaking, risk can be defined as the exposure to uncertainty. In the definition of risk, there are two extremely important factors: first is uncertainty. Uncertainty can be considered as the distribution of the possibility of one or more results. To study risk, we need to have a precise description about the possibility of the risk. However, from the point view of a risk manager, the possible result in the future and the characteristic of the possibility distribution are usually unknown, so subjective factors are frequently needed when making decisions. The second factor is the exposure to uncertainty. Different human activities were influenced at different level to the same uncertainty. For example, the future weather is uncertain to everyone, but the influence it has over agriculture can be far deeper than that over finance industry or other industry. Based on the above description about risk, we could have a clearer definition of financial risk. Financial risk is the exposure to uncertainty of the participants in the financial market activities. The participants mainly refer to financial institutions and non-financial institutions, usually not including ndividual investors. Financial risk arises through countless transactions of a financial nature, including sales and purchases, investments and loans, and various other business activities. It can arise as a result of legal transactions, new projects, mergers and acquisitions, debt financing, the energy component of costs, or through the activities of management, stockholders, competitors, foreign governments, or weather. (Karen A. Horcher). Financial risk can be divided into the following types according to the different sources of risk. A. Market risk. Market risk  is the  risk  that the value of a portfolio, either an investment portfolio or a trading portfolio. It will decrease due to the change in value of the market risk factors. The four standard market risk factors are stock prices, interest rates, foreign exchange rates, and commodity prices. The influence of these market factors have over the financial participants can be both direct and indirect, like through competitors, suppliers or customers. B. Credit risk. Credit risk  is an investor’s risk of loss arising from a borrower who does not make payments as promised. Such an event is called a  default. Almost all the financial transactions have credit risk. Recent years, with the development of the internet financial market, the problem of internet finance credit risk also became prominent. C. Liquidity risk. Liquidity risk  is the risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss. Liquidity risk arises from situations in which a party interested in trading an  asset  cannot do it because nobody in the  market  wants to trade that asset. Liquidity risk becomes particularly important to parties who are about to hold or currently hold an asset, since it affects their ability to trade. D. Operational risk. Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Nowadays, the study and management of operational risk is getting more attention. The organizations are trying to perfect their internal control to minimize the possibility of risk. At the same time, the mature theory of other subjects, such as operational research methods, are also introduced to the management of operational risk. Overall, financial risk management is a process to deal with the uncertainty resulting from financial markets. It involves assessing the financial risks facing an organization and developing management strategies consistent with internal priorities and policies. Addressing financial risks proactively may provide an organization with a competitive advantage. It also ensures that management, operational staff, stockholders, and the board of directors are in agreement on key issues. III. Risk Management and the Theoretical Foundation Financial market participant’s attitude towards risk can be basically divided into the following categories. A. Avoid risk. It is irrational for some companies to think that they can avoid the financial risks though their careful management because of the following reasons. First of all, risk is the internal feature of human activities. Even though it doesn’t have direct influence, it could generate indirect influence though the competitors, suppliers or customers. Moreover, sometimes it might be a better choice for the manager of the company to accept risk. For example, when the profit margin of the company is higher than the market profit margin, the manager can increase the value of the company by using financial leverage principle. Obviously, it will be harder to increase the value of a company if the manager is always using the risk avoidance strategy. B. Ignore risk. Some participants tend to ignore the existence of risks in their financial activities, thus they will not take any measures to manage the risk. According to a research of Loderer and Pichler, almost all the Swedish multinational companies ignored the exchange rate risk that they are facing. C. Diversify risk. Many companies and institutions choose to diversify risk by putting eggs into different baskets, which means reaching the purpose of lower risk by holding assets of different type and low correlation. And the cost is relatively low. However, as to small corporations or individuals, diversifying risk is somehow unrealistic. Meanwhile, modern asset portfolio theory also tells us that diversifying risk could only lower the unsystematic risk, but not systematic risk. D. Manage risk. Presently, most people have realized that financial risk cannot be eliminated, but it could get managed though the financial theory and tools. For instance, participants can break down the risk they are exposed to by using financial engineering methods. After keeping some necessary risk, diversify the rest risk to others by using derivatives. But why do we need financial risk management? In other words, what is the theoretical foundation of the existence of financial risk management? The early financial theory argues that financial risk management is not necessary. The Nobel Prize winner Miller ;amp; Modigliani pointed out that in a perfect market, financial measures like hedging cannot influence the firm’s value. Here the perfect market refers to a market without tax or bankruptcy cost, and the market participants own the complete information. Therefore, the managers do not need to worry about financial risk management. The similar theory also says that even though there will be slight moves in the short run, in the long run, the economy will move relatively stable. So the risk management that is used to prevent the loss in short term is just a waste of time and resource. Namely, there is no financial risk in the long run, so the financial risk management in the short run will just offset the firm’s profits, and therefore reduce the firm’s value. However, in reality, financial risk management has already roused more and more attention. The need for risk management theory and measures soar to unprecedented heights for both the regulator and participants of the financial market. Those who think risk management is necessary argue that the need for risk management is mainly based on the imperfection of the market and the risk aversion manager. Since the real economy and the financial market are not perfect, the manager can increase a firm’s value by managing risk. The imperfection of the financial market is shown in the following aspects. First, there are various types of tax existing in the real market. And these taxes will influence the earning flow of the firm, and also the firm’s value. So the Modigliani ;amp; Miller theory does not work for the real economy. Secondly, there is transaction cost in the real market. And the smaller the transaction is, the higher the cost. Last but not least, the financial market participants cannot obtain the complete information. Therefore, firms can benefit from risk management. First, the firm can get stable cash flow, and thus avoid the external financing cost caused by the cash flow shortage, decrease the fluctuation range of the stock and keep a good credit record of the company. Secondly, a stable cash flow can guarantee that a company can invest successfully when the opportunity occurs. And it gets some competitive advantage compared to those who don’t have stable cash flow. Thirdly, since a firm possesses more resource and knowledge than an individual, which means it could have more complete information and manage financial risks more efficiently. If the manager of a firm is risk aversion, he can improve the manager’s utility through financial risk management. Many researches show that the financial risk management activities have close relation to the manager’s aversion to risk. For example, Tufano studied the risk management strategy of American gold industry, and found that the risk management of firms in that industry has close relation to the contract that the managers signed about reward and punishment contracts. The managers and employees are full of enthusiasm about risk management is because that they put great amount of invisible capital in the firm. The invisible capital includes human capital and specific skills. So the financial risk management of the firms became some natural reaction to protect their devoted assets. In conclusion, although controversy is still going on about the financial risk management, there is no doubt that the theory and tools of financial risk management is adopted and used by market participants, and continue to be enriched and innovated. IV. The Process of Financial Risk Management The process of financial risk management comprises strategies that enable an organization to manage the risks associated with financial markets. Risk management is a dynamic process that should evolve with an organization and its business. It involves and impacts many parts of an organization including treasury, sales, marketing, tax, commodity, and corporate finance. Company’s financial risk management can be divided into three major steps, namely identification or confirmation risk, measure risk and manage risk. Let’s illustrate it using the market risk as an example. First, confirm the market risk factors that have a significant influence to the company, and then measure the risk factors. At present, the frequently used measure of market risk approach can be divided into the relative measure and absolute measure. A. The relative measure method It mainly measures the sensitivity relationship between the market factors fluctuations and financial asset price changes, such as the duration and convexity. B. The absolute measure methods It includes variance or standard deviation and the absolute deviation indicator, mini max and value at risk (VaR). VaR originated in the 1980s’, which is defined the maximum loss that may occur within a certain confidence level. In mathematics, VaR is expressed as an investment vehicle or a combination of profit and loss distribution of ? -quantile, which stated as follows: Pr ( ? p ;lt;= – VaR ) = ? , where, ? p said that the investment loss in the holding period within the confidence level (1 –? ). For example, if the VaR of a company is 100 million U. S. ollars in 95% confidence level of 10 days, which means in the next 10 days, the risk of loss that occurred more than 1 million U. S. dollars may of only 5%. Through this quantitative measure, company can clear its risks and thus have the ability to carry out the next step targeted quantitative risk management activities. (Guanghui Tian) The last step is management risk. Once the company identified the major risks and have a quantitative grasp of these risks through risk-measurement methods, those companies can use various tools to manage the risk quantitatively. There are different types of risk for different companies, even the same company at different stages of development. So it requires specific conditions for the optimization of different risk management strategies. In general, when the company considers its risk exposure more than it could bear, the following two methods can be used to manage the risk. The first way is changing the company’s operating mode, to make the risk back to a sustainable level. This method is also known as â€Å"Operation Hedge†. Companies can adjust the supply channels of raw materials, set up production plants in the sales directly or adjust the volume of inflow and outflow of foreign exchange and other methods to achieve above purpose. The second way is adjust the company’s risk exposure through financial markets. Companies can take advantage of the financial markets. Companies can take advantage of the financial markets wide range of products and tools to hedge its risk, which means to offset the risk that the company may face through holding a contrary position. Now various financial derivative instruments provide a sufficient and diverse selection of products. Derivative products are financial instruments whose value is attached to some other underlying assets. These basic subject matters may be interest rates, exchange rates, bonds, stocks, stock index and commodity prices, but also can be a credit, the weather and even a snowfall in some ski showplace. Common derivatives include forward contracts, swaps, futures and options and so on. V. The Challenges Faced by the Modern Financial Risk Management Theory Over the recent years, as the focus of risk management hifts from a control function to one of global financial optimization, the concern shifts from modeling the behavior of engineered contracts in selected markets to modeling the evolution of the entire economy. This change of focus calls for a vastly improved ability to model the time evolution of economic quantities. (Sergio Focardi). While those who do risk management are interested in predicting if assets will go up or down, the over-riding interest is in the relationship in movement to different assets. Though linear methods such as variance-covariance help to understand the co-movements of markets, a different set of tools is necessary to better manage risk. (Jose Scheinkman). Paradigms such as learning, nonlinear dynamics and statistical mechanics will affect how risk – from market and credit risk to operational risk – is managed. While the first attempts to use some of these tools were focused on predicting market movements, it is now clear that these methodologies might positively influence many other aspects of economics. For instance, they could be useful in understanding phenomena such as price formation, the emergence of bankruptcy chains, or patterns of boom-and-bust cycles. Lars Hansen, Homer J. Livingston professor of economics at the University of Chicago, remarks that these new paradigms will bring to asset pricing and risk management at enhanced understanding once the implicit underlying fundamentals are better understood. He says â€Å"What needed is a formal specification of the market structure, the microeconomic uncertainty, and the investor preferences that is consistent with the posited nonlinear models. Commenting on the need to bring together the pricing of financial assets and the real economy, he notes that an understanding of what’s behind pricing leads to a better understanding of how assets behave. â€Å"For risk management decisions that entail long-run commitments,† he observes, â€Å"it is particularly important to understand, beyond a purely statistical model, what is governing the underlying movements in security prices. † Blake LeBaron, professor of economics at the University of Wisconsin-Medison, observes that there is now more interest in macro moves than in individual markets. But traditional macroeconomics typically provides only point forecasts of macro aggregates. In the risk management context, a simple point forecast is not sufficient; a complete validated probabilistic framework is needed to perform operations such as hedging or optimization. One is after an entire statistical decision-making process. The big issue is the distinction between forecasts and decisions. (Blake LeBaron) Arriving at an entire statistical decision-making process implies reaching a better scientific explanation of economic reality. New theories are attempting to do so through models that reflect empirical data more accurate than traditional models. These models will improve our ability to forecast economic and financial phenomena. The endeavor is not without its challenges. Our ability to model the evolution of the economy is limited. Prof. Scheinkman notes that unlike in a physical system where better data and more computing power can lead to better predictions, in social systems when a new level of understanding is gained, agents start to use new methods. Prof. Scheinkman says â€Å"Less ambitious goals have to be set. Gaining an understanding of the broad features of how the structure of an economic system evolves or of relationships between parts of the system might be all that can be achieved. Prof. Scheinkman remarks that we might have to concentrate on finding those patterns of economic behavior that are not destroyed, at least not in the short-run, by the agent learning process. VI. Conclusion The theory foundation of modern financial risk management is the Efficient Markets Hypothesis, which notes that financial market is a linear balanced system. In this system, investors are rational, and they make their investment decision with rational expectations. This hypothesis shows that the changing of the future price of financial assets has no relation with the history information, and the return on assets should obey normal distribution. However, the study of economic physics shows that financial market is a very complicated nonlinear system. At the same time, behavioral finance tells us that investors are not all rational when making decisions. They usually cannot completely understand the situation they are facing unlike hypothesized. And most times they will have cognitive bias, when they use experience or intuition as the basis of making decisions. It will lead to irrational phenomena like overreaction and under reaction when reflected on investment behaviors. Therefore, it will be meaningful to study how to improve the existing financial risk management tools, especially how to introduce the nonlinear science and behavior study into the measurement of financial risk.

Construction and business law Essay Example | Topics and Well Written Essays - 2250 words

Construction and business law - Essay Example Rather it can be said that the informal sources of law does not have a strong legal validity. In case of a conflict between the common law and the formal source of law always the formal source of law gains primacy. Courts which hear civil issues like issues related to debt, contract related matters and also property related issues. It also includes succession, real estate and custody related issues. The structure of the civil courts is as follows in the base lies the sheriff court, above it the Court of Session and above everything is the House of Lords. The Criminal Courts are those which deal with the criminal cases like rape, murder, theft, forgery and adultery. The structure of the Criminal Court is different from that of the Civil Court in the sense that at the base lays the District Court, then the Sheriff Court and above all the High Court of Judiciary. A real obligation always creates a debt and in the process becomes a principal obligation. In the English law there are two types of real obligation, they are namely land and rent. On the other hand the payment which is due against the land becomes a personal obligation. On the other hand it can be said that personal obligation and the real obligation are related to each other. One produces the other. For instance if land is the real obligation then in that case the fruits and flowers produced from that piece of land becomes the personal obligation. (Langdell, 2009, p. 199). The Inner House of the Court of Session is actually the appeal court. This court is divided into the First and the Second Divisions and each of the divisions have been given equal authority. The Divisions are presided by the Lord President and the Lord Justice Clerk respectively. The Inner House hears cases from the Outer House and some other Sheriff Court and Tribunals. The Outer House on the other hand hears cases at the first instance. They generally hear commercial cases, case related to contract and also judicial review. The judges of the Outer House also hear on the Intellectual Property Rights. Thus it can be said that the Inner House of Courts has more compared to the Outer House of Courts. (Court of Session - Introduction, n.d). The European Court of Justice is the highest Court of law in the European Law and it deals with all the laws of the European Union. This Court refers to the law of the community and it deals with all kinds of cases. The European Court of Human Rights on the other hand is the highest International Court. It deals with case related to the violation of the European Convention of Human Rights. Individuals can directly apply to the European Court of Human Rights. The main aim of the Court is to protect the human rights of the individuals or the states. Thus it can be said that the major difference between the two is that the European Court of Justice deal with all kinds of law and the European Court of Human Rights only deals with human rights related issues. Question 2: A courier company promises a 24 hour delivery service.' Its customer,a web-based travel agency, orders the couriers to deliver an essential computer component from the suppliers to their premises. En route, the couriers lose the package and end up taking 72 hours to deliver a replacement. The travel agency wishes to sue the courier company for the losses it has incurred as a result of the delay in delivery of the vital component.

Assignment Essay Example | Topics and Well Written Essays - 500 words - 46

Assignment - Essay Example This is called differentiation. Marketing lets business leadership find a valuable or innovative feature of a product or service and then promote to customers why this product should be purchased over similar competitor products. Marketing is also about cost controls using different metrics to measure whether a promotional campaign is meeting with success. For example, it might be discovered through market research that making a product costs the organization far too much with the operations budget. This would have an impact on the price to customers so that the company does not lose money in production. Marketing activity lets a business see all of its expenses and make changes to build a more productive manufacturing system. Controls in business strategy are very important to be successful and discover if the business can be more effective. The question as to whether or not marketers should continue to market cigarettes is an ethical issue. If there is consumer demand for the product and it is considered a legal substance, there really is no reason why marketers cannot continue to promote the product. Consumer safety is a big issue in marketing and general business, but in the case of cigarettes, it is consumers that are responsible to make decisions that are good for their health status. Governments and many different special interest groups have provided society with scientific knowledge about the dangers of cigarettes. There are likely few people in the world today, both young and old, that are unaware that cigarettes cause cancer and other serious illnesses and health problems. If consumers continue to buy the product, it is not likely because of tobacco company promotions, but because they enjoy consuming the product. Ethics differ from culture to culture so there is no one universal set of beliefs and values that should be forced on cigarette marketers. Then the answer is yes,

Political Consensus Decision-Making Essay Example | Topics and Well Written Essays - 1000 words

Political Consensus Decision-Making - Essay Example Perhaps the most notable instance this mode of political consensus has been implemented is in wartime situations. Within the United Kingdom the 20th century witnessed a major instance of wartime consensus proceeding World War II where it’s argued that consensus politics culminated in the Labour party’s victory. This essay considers that the idea of a wartime consensus culminating in Labour’s election victory fades the closer you get to it. The popular perspective had considered that following World War II the political situation in Britain was such that an overwhelming consensus resulted in the election of the Labour Party. Recognition of this perspective takes into account historical perspectives on the Labour Party. While the Labour Party has been in existence since the early years of the 20th century they assumed great control during the period surrounding World War II. In 1940 the Labour Party returned to government as a part of the wartime coalition; during this period Clement Attlee was appointed the Lord Privy Seal (Pimlott 1994, p. 225). Following the end of the war, the Labour Party contested the 1945 general election and won a large-scale victory. Clement Attlee then assumed control and one of the most radical government’s in British history was instituted. It is this victory that many have contested was the result of wartime consensus. ... mplements a number of notions within this spectrum of investigation, perhaps the central thorough-put of his argument is the contention that rather than constituting an actual consensus, this notion has been constructed by individuals attempting to establish a mythic ‘golden age’ of British history. As noted, this perspective has been embraced by a large number of theorists (Rollings 1994; Kelly 2002; Ellison 1994). The broad spectrums of these theoretical perspectives have considered a variety of ideological differences that occurred between the main political parties during this period. Rather than constituting a golden age of consensus politics, Pimlott (1994, p. 231) notes that there was considerable Conservative hostility towards universal welfare benefits. Kelly (2002, p. 21) considers that in 1956 Anthony Crosland made a large-scale plea for the left to oppose conservative ideas; this is believed to demonstrate a general lack of qualitative accord among political perspectives during this period. Pimlott has extended the situation through metaphorical notions. He states (1988, p. 232), â€Å"sandbagged in their electoral trenches, early postwar voters can be seen as the anonymous infantry of two implacably opposed armies in an era of adversarial politics, with the middle-way Liberals floundering in no man’s land.† To a large degree what Pimlott has established with these notions is a mode of myth-making that seemingly implements higher degrees of fact-based understanding. While Pimlott’s perspectives have gained widespread support there also exists a strong contingent of theorists who hold to the consensus perspective (Kavanagh 1994; Addison 1992). Paul Addison is the theorist perhaps most identified with consensus notions of post-war politics (Addison

Concerted practice is the most nebulous of the three categories caught Essay

Concerted practice is the most nebulous of the three categories caught by Article 101 TFEU - Essay Example 2 With regard to paragraph three and exceptions to the prohibitions in paragraph one of Article 101, those relate to what the law determines as contributing to society either through economic development, technical development, and improvements in the way goods are produced or distributed 3 Under the law, moreover, the European Commission has the power to impose the law, to investigate infringements relating to the violation of the prohibitions in Article 101, and to impose penalties and sanctions. 4 To this end, the Commission may compel suspected parties to share information. 5 There is some consensus that it is difficult to pin down the existence of concerted practice, as reflected in case law. 6 For instance, in cases where increases in prices occur in tandem among a group of players, the price increases themselves may not be sufficient to prove concerted practice. In some cases, for instance, as in Case c-47/09 involving the Netherlands T-Mobile business entity, just one meeting among parties was deemed sufficient to establish concerted practice. In 40/73 involving Sulike Unie, the ruling was that concerted practice may be direct or it may be indirect too, and that no written or verbal communication is necessary to establish concerted practice. In the first instance of consideration of concerted practice in case law, or Case 48/69 involving firms operating in a market that is oligopolistic in nature, the Court of Justice ruled that the presence of parallel price increases amounted to the existence of concerted practice, even if the parties to the case m ade a formal challenge to that ruling. This case involved Imperial Chemical Industries, in the industry involved in dyes. In this instance the Court of Justice established a definition of concerted practice as thus: â€Å"†¦a form of coordination between undertakings which, without having reached the stage where an agreement properly so-called

Scope for market Eclectic Institutes herbal medicine and supplements Essay

Scope for market Eclectic Institutes herbal medicine and supplements lines - Essay Example The researcher will utilize the emerging marketing journals and newsletters to collect the relevant information for the development of a successful marketing plan. The research will also rely on global and local specialists to get an insight into the current global market situation. The organization management will play a decisive role in facilitating the researcher with a broad evaluation of the institution’s marketing situation. To generate a quality plan, the study intends to use experienced research assistants and marketing thinkers. The magnitude of study will be based on the available financial support and human resources. The central objective of the research is to develop a practical and a realistic marketing plan that can stand historical challenges (Elle 1). The research also aims at increasing the institution’s sales and profitability by over 12% in the current profit. The research also intends to offer a workable mechanism that can ensure quality training to all stakeholders on the most effective ways of executing the proposed recommendation. Elle Blake. How to prepare a scope statement for a research paper, research method journals, 23, and 12, 1-7 retrieved on 28th august 2012. From:

Objectives Essay Example | Topics and Well Written Essays - 250 words - 1

Objectives - Essay Example In other situations, some resources may be available but does not factor into consideration nature of hand washing requirements. The objective is addressing leadership requirements in which the management is supposed to provide these resources. Awareness and knowledge by the health care providers –Health care providers may lack the knowledge on how to tackle hygiene related issues. For example, some health providers do not wash their hands after transferring patients between departments/wards (Takahashi & Turale, 2010). In addressing this issue, policy should be formulated and implemented that informs the health care providers on importance of properly washing their hands after accomplishing health related requirement. Encouragement on hands washing rather than wearing gloves –it is appropriate to determine whether it is necessary in any situation for health care providers to wear gloves (Takahashi & Turale, 2010). It constitutes practice inquiry whereby the research tries to quantify when and necessity of wearing gloves vs. when not supposed to wear the

The Challenge of Seeking a Career with an International Component Assignment

The Challenge of Seeking a Career with an International Component - Assignment Example This, therefore, creates challenges in managing the two and people seeking a career with an international component but must also be managed as their cultural background are obliged to find a way of balancing the two. Learning teamwork is the most fundamental way to work in such a context. Teamwork enables people with different backgrounds, skills, and expertise to come together and work collaboratively to achieve the set ends. With this in mind, one should learn to work with others by creating an attitude that makes them easy to relate and work with. It is critical to understand that people will have a different opinion and in a team, conflict is meant to arise on certain issues where people do not agree on something and the best thing to do is to learn to compromise on issues that may cause disagreements. Learning to live with people despite differences that may arise enables one to be in a demanding environment like the global workplace as it eliminates chances of disputes, which may hamper collaboration. In the global workplace, companies are now providing an environment of allowing people to be their own individuals despite being required to maintain the international context. This means that the companies will provide an environment that allows for collaboration and teamwork where people will learn from each other and understand one another (Martin 28). The companies also engage employees in constant training and one should ensure that they are adequately trained to conquer all the challenges that they may encounter while on the job. Training will enable one to be aware of how they will deal with people from different backgrounds and gives them a common way to ensure that they follow the guidelines of international labour laws. In order to manage a career with international component but must be managed as one's cultural background, it is necessary to ensure that one is well versed in the company’s values.     

Working within the Organization Case Study Example | Topics and Well Written Essays - 500 words

Working within the Organization - Case Study Example On the day of meeting, Antonio should evaluate the employees with the unit managers based on the marking of the last few days and his judgment to cover up the previous days. Antonio should discuss the information generated by the nursing staff regarding the overstaying patients. In case Antonio gets no information from the nursing staff, he should convince the unit managers that he does not have information because he was dealing with too much as a newly hired team leader. Now that it has been some time, he will make sure that he has the data with him in the next meeting. Antonio can organize and streamline his work by working according to the schedule described above. Antonio should divide the work roles among his subordinates and team members and oblige them to record all kind of information. This will not only enhance the system’s efficiency, but also Antonio’s load would be

Human Resources Management In Small and Medium Enterprises Essay Example for Free

Human Resources Management In Small and Medium Enterprises Essay Introduction Competitive advantage to a firm accrues from the judicious employment of three basic types of resources, namely Physical Capital Resources, such as Finances, Plant and Equipment Organizational Capital Resources – Structure and systems in the organization Human Capital Resources, which include the skills, competencies, experience and intelligence of employees.[1] Human resources are among the most important resources that an organisation utilises and hence its importance to any organisation can be easily understood. Small-to-Medium Enterprises (SMEs) are no exception to this rule, although this aspect is frequently lost sight of. This paper examines the role and importance of Human Resources in SMEs, and compares SMEs from two different cultural backgrounds – Taiwan and the UK. Role of Human Resources in SMEs The study of human resources management in SMEs needs to be strongly encouraged. CEO/founders in SMEs view human resource management decisions as very important to the growth of their enterprises[2]   A study into the perception of important HR issues in small organizations showed that top six issues were wage rates, availability of quality workers, government regulation, training, benefits, and job security[3] The role of Human Resources in SMEs is to contribute meaningfully to organisational objectives in a flexible and demanding environment. Lack of strategic employee management is widely accepted as characteristic of small enterprises. Decision-making has been perceived to be of relatively short-term nature compared to larger organisations, making small enterprises more flexible and less conflict-prone. At the same time, this also means that the advantages of long-term planning such as greater efficiency and effectiveness are lost. On the human resources front, this means that such organisations tend to have reduced capability to attract, retain and motivate the best human resources. This becomes important in view of the fact that out of thousands of small businesses that are established every year, only a few manage to survive in the long-term. While long-term planning and HR strategy are not the only reasons for this, they are among the important reasons. Hence an examination of the HR function as a strategic part of business, and its relevance to long-term planning, is in order. In addition, the role of recruitment and selection, training, and performance management, are also relevant to any discussion on the role of human resources. Planning and Human Resources Management Strategic planning for the organisation needs to be linked to individual goals. In turn, this means that the job design should take into account the long-term objectives of the organisation. â€Å"A framework for strategic management incorporating HRM involves developing a mission statement that answers questions of what businesses the organisation is in; determining goals that are general and long term; and establishing objectives that are short term and measurable. It should also encompass a complete SWOT analysis that incorporates HRM as a functional unit of analysis.†[4] One of the essential requirements of Human Resources Planning is proper job design. Human resources planning involves the matching of the knowledge and skills that are likely to be required in future with those that it has or will have. Human Resources Planning will help the organisation to estimate critical resource requirements, plan training and development needs, and link individual goals to organizational objectives. Job design involves specifying the characteristics of the job and the requirements such as skills for performing these jobs. Job design will thus provide the framework for a host of HR planning activities that can be linked to organizational objectives.[5] Recruitment and Selection Once the plans of the organization are clear the next important issue that any organisation needs to address is to get the right staff to implement the plans. â€Å"Surveys indicate that about 25 per cent of small businesses view the lack of qualified workers as a threat to their expansion and very survival.†[6] The problem assumes particular importance in the case of small enterprises because they almost always have a problem in attracting and retaining the best talent. This is partly due to the fact that they are unable to compete with larger firms for quality staff, because it is impossible for them to match the rewards and prestige that come along with positions in larger firms. Additionally, smaller firms have a reputation for being oriented towards a ‘hire and fire’ culture. Training Once the plans are clear, and the recruitment of the right people has been completed, it becomes necessary to motivate the staff, as well as to enable them to perform their tasks efficiently. This requires periodic training of the employees. Training is important in the case of small enterprises because they are more prone to changing environments and higher attrition rates. This makes it necessary for people to be more flexible, and to be trained in all aspects of the business. While the need for training of staff is thus greater in the case of a small enterprise, it is also accompanied by greater constraints that make it more difficult for these organisations to implement training programmes. Small organisations face two constraints in t his respect: Their budget for training may be more limited, and they may lack the necessary resources to carry out such training It is more difficult for small enterprises to spare their people for training programmes. In spite of the above limitations, however, small enterprises need to concentrate more on training, as it is an investment that needs to be done. â€Å"It has been suggested that top performing companies are distinguished by their higher spending on training and development.†[7] Performance Management Performance Management â€Å"includes work and job design, reward structures, the selection of people for work, the training of these employees, assessment of work performance and policies associated with rewarding and improving performance.†[8] Performance Appraisals are an important part of Performance Management and are useful in improving performance, assist HR planning, and identify development needs and potential for promotion. Small businesses, in general, lack a formal performance appraisal system. The disadvantages of not using structured and formal appraisal systems are that appraisals, and the consequent rewards, are often subjective, and may promote greater dissatisfaction. Consequently, appraisal systems and Performance Management play an important role in determining the alignment of HR planning with organisational goals, and ensuring that a proper climate is available for the achievement of the objectives. â€Å"In developing formal performance appraisal systems, small businesses not only are able to ensure that performance management may become strategically aligned with organisational goals, but also increase accountability, decrease under-utilisation of human resources, address concerns of productivity, and decrease employees’ concerns about fairness and accuracy.†[9] In addition, the salaries and rewards that are offered as part of the employment and the management of diversity within the workforce are important considerations for any organisation. These have a greater significance in the case of small organisations. As can be seen from the above, the role of Human Resources management in small organisations is an important one that needs to be well understood and implemented with care. One interesting extension to the role of HR management in small to medium industries is the use of Balanced Score Cards, which are normally viewed as the exclusive tool of large industries. The Balanced Score Cards approach shifts the focus to long-term growth, and includes measures of operational efficiency, customer satisfaction and employee related measures. The Balanced Score Card method thus includes a part of HR Management to assess the overall performance of the organisation. In a case study that included three SME organisations, Gumbus and Lussier present some interesting conclusions that have significance for the HR function in SME companies. The cases also serve to highlight the importance of HR in SME companies and the link between performance and HR. One of the three companies cited in the case is Futura Industries, an international company based in Clearfield, UT with 230 employees. It has over 50 years of experience in aluminium extrusion, finishing, fabrication, machining and design. The company believes that the two competitive weapons that put them ahead of competition are â€Å"their ability to hire and retain the best people and their devotion to the customer.† Futura’s President, Susan Johnson’s belief that committed and loyal employees make the difference has led the company into using the Balanced Score Card method. In the words of Ms. Johnson, the company â€Å"had all the financial metrics, lots of customer measures, and got ISO accredited three years ago †¦ but it is our employees that differentiate us from all other extrusion companies.[10] A Comparison of SMEs in the UK and Taiwan A study by Lin found that successful SMEs in Taiwan place greater emphasis on soft skills and attitudes rather than on hard skills. He infers that SMEs in Taiwan seemed to have a better grasp of its human resources.   â€Å"Whenever SMEs modernize equipment, alter production processes, revise compensation policies, and engage in other reorganisation activities, they take pains to handle employees responses and feelings with special care and invest heavily in skills development.â€Å"[11] According to Hu, the Human resource scenario in Taiwan is characterised by abundance of entrepreneurs and availability of high quality professionals. Hu traces this to the importance laid on education by Chinese, and the large-scale injection of high quality human resource into the island in the aftermath of the retreat into, and subsequent withdrawal from, Taiwan of the KMT government. In addition, the Taiwanese population has inherited from its ancestors the qualities of â€Å"hard working, brotherhood, strong family ties, competition, and similar attributes that form the basis for strong family businesses.†[12] According to McKenna Beech, the following values characterise the Asian HR scene[13]: Politeness and courtesy Emphasis on personal relationship Not losing face Harmony- avoidance of open conflict Predominance of group interests over individual interests Discipline and respect for authority and for elders Normative, rather than externally imposed control Trust and mutual help in business relationships Centralisation and authoritarianism As against the above, the HR scenario in Europe is characterised by the following features[14]: Pluralism as against unitarism Collectivism and social orientation instead of individualism, with the emphasis being on national, rather than individual, interests Legal framework: firing is more difficult Social Partnership: Employment security, protection of workers’ rights, and representation of workforce through trade unions. Social Responsibility: Concern for environment and other social obligations Tolerance for diversity Recognition of complexity and ambiguity. The characteristics enumerated under Asian values represent the Taiwanese scene, and the scenario in Europe is representative of the UK. From the above, it can be seen that the SMEs in Taiwan are formed with reliance on individual assistance, based on respect for authority, with trust and mutual relationships as the supporting factor. In the UK, and other European countries, it is the legal framework that gives the necessary assurance and support to the business rather than trust. In Taiwan authority is enforced, and followed, because it is natural to the culture. In the UK, the legal aspects are augmented by collective bargaining with a recognized trade union to achieve this purpose. Taiwanese take great care to handle employees’ feelings appropriately whenever major decisions need to be taken. This is replaced by collective bargaining and more formal communication in the UK. SMEs predominate in Taiwan, whereas larger firms represent the more prevalent form of business in the UK. SMEs constituted 99.43 percent of Taiwans total manufacturing firms in 1954, the highest level ever recorded; 95.26 percent in 1976, the lowest; and 98.07 percent in 1996. Among them, the smallest firms, employing fewer than 10 persons, accounted for 90 percent of all firms in the manufacturing sector in the 1950s.[15] On the other hand, SMEs generate roughly one quarter of the GDP of the UK. The generation of employment by SMEs varies from sector to sector, the highest being in the construction sector with 84% of the employment being generated by this sector. The SME sector, which was declining up to 1970, picked up momentum thereafter, and showed a rising trend till 1994. Since 1994, the number has remained constant.[16] As can be seen from these figures, the SME sector is less dominant in the UK than in Taiwan. Why Human Resources are important in firms The resource-based view of organisations explains variations in firm performance by variations in firms human resources and capabilities[17] Firms can gain competitive advantage by generating specific knowledge and skills that are difficult to imitate. This can be achieved through human capital development. The importance of Human Resource Development in small firms is thus self-evident – they help the firms to succeed by being competitive. In a study of more than 100 small enterprises in two towns from Germany, Rauch et al found that â€Å"human resources are essentially important and an optimal utilization of skills and knowledge increases small business growth.† [18] In order to harness this important resource and ensure it gives the best returns, an organisation needs to select its employees with care. It is expected that as firms grow, the skills and abilities required to perform various functions and activities no longer would be available from the familiar and informal recruitment sources preferred by the owner-manager[19] Apart from recruitment, other functions such as Training and Development, Performance Appraisal, and formal procedures and documentation help the organisation in improving efficiency. According to Kotey and Slade, â€Å"Benefits of formal HRM practices include meeting legal requirements, maintaining records in support of decisions in the event of litigation, treating employees fairly, and increasing efficiency.† [20] A study by Kotey and Slade involving more than 1300 small firms in Australia showed that as firms grow they tend to introduce formal HR practices and procedures. In the words of the authors, â€Å"While the analyses show that a significant percentage of SMEs implement formal HRM practices with growth, HRM remains informal in the majority of firms, particularly in small firms. It could be that implementation of formal HR structures and procedures necessary to support growth differentiates successful from unsuccessful SMEs.†[21] In a small organisation, people need to be more flexible and undertake a greater variety of jobs. This needs both motivation and skills. In turn, many employees may get better exposure and greater opportunities to learn and shoulder higher responsibilities in a small firm. All of these underline the importance of Human Resources Management in organisations, particularly small firms. The HRM model is â€Å"composed of policies that promote mutual goals, influence, respect, rewards and responsibility between employees in the organisation.†[22] These policies are promoted by practices such as team working, aligning performance objectives with organisational goals, and a flat organisation structure, all of which can be achieved only through a proper Human Resources Management in the organisation. Survey Research findings have confirmed the theoretical position with the conclusion that good HR systems is a source of competitive advantage. One study has shown that higher performance in a number of areas is correlated to good HR systems and practices. Companies that had significantly higher ratings on their HR practices also reported better market value, higher accounting profits, higher growth rates, better sales per employee, and lower employee turnover. Another study has found that newly started companies had a better survival rate if they had good HR practices. The probability of survival was found to vary by as much as 42% between the firms with the best HR practices and rewards, and those with the worst. Yet another study found that performance of the organisation was strongly linked with practices such as acquisition and development of skilled people, better job design, better autonomy, and positive employee attitude. All these studies clearly show that good HR could positively impact organisational performance practices, highlighting the importance of Human Resources in an organisation. Apart from improving performance good HR practices result in lower costs, while poor practices increase the costs to the organization. One of the contributing factors for this is the cost of employee turnover. â€Å"Interviewing and training recruits has significant out-of-pocket costs for the employer.† Replacing an employee involves expenses for Separation, Replacement, and Training. [23] Employee turnover costs can be divided into three major elements: Separation costs: These are the costs that are directly incurred when an employee leaves the firm, and include such costs as exit interviews, administrative and paperwork costs, disbursement of separation benefits, and revenues lost due to shortage of staff. Replacement Costs: These represent the cost of replacing the employee who has left and include the costs of advertising, sourcing, interviewing and selection. Training Costs: These are the costs that the company incurs for training and induction of a new employee. Apart from the actual expenditure on these activities, the costs of loss of efficiency in the initial stages, and the time lost during the training period should also be considered. Thus employee turnover could represent a fairly high cost to the organisation. Employee turnover can be classified into avoidable and unavoidable turnover. Most of the avoidable turnover results from lack of proper HR initiatives.[24] How Good/Bad employees affect the firm â€Å"A good employee is possibly the most valuable asset a small firm or SME can possess; a bad one could ruin the enterprise.†[25] Any firm, and more importantly a small firm, can ill afford to have people who do not perform. Robert Townsend, a noted Management expert was once asked the secret behind his ability to take over loss making firms, and changing them into profitable ones. The reply that he gave will be of interest to anyone asking how good or bad employees make or mar the firm. Mr. Townsend identified three factors that contributed to his success: Releasing the potential of employees so that they could perform at much higher levels by the practice of appropriate management styles Identifying people within the organisation who were blocking progress and preventing others from performing, and either changing their ways, or dismissing them Identifying people who had the ability and drive to take the company to greater heights, and promoting them. It can be seen that this highly successful Management practitioner reduced success to three simple rules, namely, eliminating deadwood, promoting and encouraging those with potential and creating the right climate in the company. This clearly shows that apart from creating the right environment, the most important requirement for success is the quality of people. Good people could transform a loss making company into a profitable one.[26] â€Å"Whether a firm is small or large, its only as good as its staff.†[27] This can be easily understood because the employees of the organisation make the vital difference between good and poor performance in every area. Apart from the demonstrated effect that this has on the firm’s performance, which has been cited earlier, this also stands to reason. A company depends on coordinated working by its employees towards a common goal to achieve its objectives. In order to meet these objectives, the organisation has to do what it does well. In other words, the competence of its employees should be good if it wants to achieve results. Secondly, the soft skills of the employees are important to achieve internal teamwork as well as to nurture customers with excellent performance and service. Thirdly, the employees of the company need to work efficiently if it is to have a healthy bottom line. All these objectives can be achieved only with good employees who know their job and possess the necessary hard skills, have the necessary soft skills, and are committed to the company’s success. In other words, a company needs good employees who have the right levels of knowledge, skills and attitudes. Conclusion Human Resources Management in Small-to-medium industries has been gaining a lot of attention lately. There is increased awareness among many of the SME entrepreneurs themselves about the importance of good HR practices and policies. It has been shown that organisations having formal Human Resources practices grow faster, and are more profitable, than those that do not do so. A comparison between SMEs in two countries, namely Taiwan and the UK, shows that the SME sector is more predominant in Taiwan, which is characterized by a culture that lays greater emphasis on group working, respect for authority, and mutual trust. This is contrasted by the UK situation where the SME sector is les pervasive, and the HR climate is characterised by formal and legal supports, collectivism, and social responsibility. Although the two situations are quite different from each other, the importance of formal HR systems in the SME segment is being recognised in both cases, and seem to affect performance positively, irrespective of the background. Works Cited A Causal Analysis. Entrepreneurship: Theory and Practice, 29(6): 2005: 681+. Bennett, Roger. Small Business Survival: Strategies for Delivering Growth and Staying Profitable: Second Edition. London, Financial Times Management, 1998. Burns, Paul. Entrepreneurship and Small Business. New York, Palgrave, 2001. Griffith, Roger W and Hom, Peter W. Retaining Valued Employees. London, Sage Publications, 2001. Gumbus, Andra, and Robert N. Lussier. Entrepreneurs Use a Balanced Scorecard to Translate Strategy into Performance Measures. Journal of Small Business Management 44(3): 2006: 407+. Heneman, Robert L., Judith W. Tansky, and S. Michael Camp. Human Resource Management Practices in Small and Medium-Sized Enterprises: Unanswered Questions and Future Research Perspectives. Entrepreneurship: Theory and Practice, 25 (1): 2000: 11. Holbeche, Linda. Aligning Human Resources and Business Strategy. Oxford, Butterworth-Heinemann, 2001. HRD in Small Organizations, Edited by Graham Beaver Jim Stewart. New York, Routledge, 2004. Hu, Ming-Wen. Many Small Antelopes Make a Dragon. Futures 35(4): 2003: 379+. Kotey, Bernice, and Peter Slade. Formal Human Resource Management Practices in Small Growing Firms. Journal of Small Business Management, 43 (1): 2005: 16+. Lin, Carol Yeh-Yun. Success Factors of Small- and Medium-Sized Enterprises in Taiwan: An Analysis of Cases. Journal of Small Business Management, 36(4): (1998): 43. McKenna, Eugene and Beech, Nic. Human Resource Management, A Concise Analysis. Essex, Pearson Education Limited, 2002 Megginson, David, Banfield, Paul, and Joy-Mathews, Jennifer. Human Resource Development. Kogan Page India Pvt. Ltd., New Delhi, 2001. Rauch, A., Frese, M., Utsch, A. Effects of Human Capital and Long-Term Human Resources Development and Utilization on Employment Growth of Small-Scale Businesses: Satava, David. The A to Z of Keeping Staff: Few Firm Employees Leave without a Good Reason-Heres How Not to Give Them One. Journal of Accountancy 195 (4): 2003: 67+. [1] L. Holbeche, Aligning Human Resources and Business Strategy, Oxford, Butterworth-Heinemann, 2001, pp.10-11. [2] R.L. Heneman, T.W. Judith and S. M. Camp. Human Resource Management Practices in Small and Medium-Sized Enterprises: Unanswered Questions and Future Research Perspectives. Entrepreneurship: Theory and Practice 25(1): (2000): p. 11 [3] HRD in Small Organizations, Edited by Graham Beaver Jim Stewart, New York, Routledge, 2004, p. 81. [4] Ibid, p81 [5] Ibid [6] ibid, p82 [7] ibid, p 85 [8] ibid, p 89 [9] ibid, p 89 [10] A. Gumbus and R. N. Lussier. Entrepreneurs Use a Balanced Scorecard to Translate Strategy into Performance Measures, Journal of Small Business Management, 44(3): 2006: p.407. [11]C.Y. Lin. Success Factors of Small- and Medium-Sized Enterprises in Taiwan: An Analysis of Cases. Journal of Small Business Management, 36(4): (1998): p. 43. [12] M. Hu. Many Small Antelopes Make a Dragon, Futures, 35(4): 2003: p. 379. [13] E.McKenna and N. Beech. Human Resource Management, A Concise Analysis. Essex, Pearson Education Limited, 2002, pp.4-5. [14] ibid [15] M. Hu. P. 379. [16]   P.Burns. Entrepreneurship and Small Business. New York, Palgrave, 2001, p12. [17] A. Rauch, M. Frese A. Utsch. Effects of Human Capital and Long-Term Human Resources Development and Utilization on Employment Growth of Small-Scale Businesses: A Causal Analysis. Entrepreneurship: Theory and Practice, 29(6): 2005: p681. [18] ibid [19] B.Kotey and P. Slade. Formal Human Resource Management Practices in Small Growing Firms. Journal of Small Business Management, 43(1): (2005): p.16. [20] ibid [21] ibid [22] E. McKenna and N. Beech, p34-35 [23] D. Satava. The A to Z of Keeping Staff: Few Firm Employees Leave without a Good Reason-Heres How Not to Give Them One, Journal of Accountancy, 195(4 ): 2003: p. 67. [24] R. W. Griffith and P. W. Hom. Retaining Valued Employees, London, Sage Publications, 2001, p10 [25] R. Bennett. Small Business Survival: Strategies for Delivering Growth and Staying Profitable: Second Edition, London, Financial Times Management, 1998. [26] D. Megginson, P. Banfield and J. Joy-Mathews. Human Resource Development. Kogan Page India Pvt. Ltd., New Delhi, 2001, p. 82. [27] Satava, David. The A to Z of Keeping Staff: Few Firm Employees Leave without a Good Reason-Heres How Not to Give Them One. Journal of Accountancy 195.4 (2003): 67+.

Competition among airlines: Air Mauritius

Competition among airlines: Air Mauritius CHAPTER 1 1.0 Introduction The Air Mauritius was created in the year 1967 which helped connecting our small island to the rest of the world. The company now has direct flights throughout Africa, Australia, Asia and Europe which sums up to around 20 regional and international destinations (Air Mauritius, 2013). Voted best Airline in the Indian Ocean (according to the World Travel Awards, 2013), the company represents Mauritius and is the only airline company of the country till date, hence its flag carrier. The latter boasts to give unique, high quality services and a special attention to its customers (Air Mauritius, 2013). According to its Annual Report 2012/2013, the company currently has 2,340 employees, 12 aircrafts in their fleet serving 19 destinations. Having had a turnover of EUR 450 Million, Air Mauritius offered 1.8 Million seats but carried only 1.3 Million passengers and had only 10,080 number of flights during the 2012-2013 period (Air Mauritius Annual Report 2012-2013). These statistics show that 500,000 seats remained unsold which might be due to the recession affecting our main tourist market; Europe. However, Air Mauritius has slowly recovered from major losses in the previous years. In the 2011-2012 period, the company accounted for a net loss of EUR 29.4 Million but for the current period of 2012-2013, there was only a net loss of EUR 2.5 Million (Air Mauritius Annual Report 2012-2013). Making losses is always bad for business but the recovery was amazing and we hope to see more of it in the upcoming years. Even though Air Mauritius recovered from losses, the company was not able to match the sales and revenue of previous years which proves the fact that the company is losing some of its customers. The company is partly owned by the government with 51% shares and 41% going to the shareholders. They all have a major role to play in order to protect the national flag carrier from stiff competition and the current economic crisis. It is very crucial for Air Mauritius to preserve its customers and attract new markets because the tourism industry heavily depends on it. The tourism industry is the main revenue generating industry in Mauritius and by being the only flag carrier; Air Mauritius plays an important role in the success of this economic pillar. Most of the tourists come to the island by air and we all want them to use Air Mauritius instead of coming through our fierce competitors like Air France, British Airways and Emirates. Air Mauritius is currently negotiating with Air France for a strategic partnership since the negotiations have failed with Emirates (BusinessMega.mu, 2013). Now that the company is focusing more on the Asian market, Air Mauritius is developing new strategies to increase the capacity of passengers to and from China, Singapore and Kuala Lampur (CAPA, 2013). The company also increased the frequency of flights mainly to China and India in order to attract tourists from the current profitable target market of the tourism industry. In February 2013, the government of Mauritius and the Republic of Maldives have both signed a bilateral agreement which aims to target the Chinese market, especially with destinations like Beijing and Hong Kong where both the Air Mauritius and Mega Maldives Airlines will offer direct services (Gov.mu, 2013). In mid-2012, Air Mauritius has formed a codeshare partnership with Air Austral which has had some financial difficulties just likes our own flag carrier. Th e codeshare partnership helped to restoring the Mauritius-Perth route several times per week (CAPA, 2013). Both Air Mauritius and Air Austral agree that Australia is a great potential destination for growth. A flag carrier is very important for countries that have it. It represents the image of the country but most importantly, it provides preferential rights, privileges and facilitates certain agreements with other countries. The government of Mauritius has recently decided to go towards an open sky policy for its flag carrier instead of sticking with the old limited sky policy. They are trying to imitate Emirates which has its success thanks to the open sky policy (Hough, 2013). This will prove to be successful for Mauritius only when sales at Air Mauritius are boosted again and there are more tourist arrivals. The local government has a forecast of 1 million tourist arrivals for the current year of 2013, which represents an increase of about 2.5% compared to last year (BusinessMega.mu, 2013). However this will not be possible without the help of Air Mauritius since most of these tourists will rely on air travel to come here and they may opt for other rival airline companies because of flight prices. Air Mauritius plays a major role in the economy of Mauritius and helped the tourism industry grow throughout its operational years and this is still an on-going process despite the company is suffering an economic turmoil (Prayag, 2007). The company’s fleet consists only of Airbus aircraft fitted with modern equipment and is it approved by the European Aviation Safety Agency. On-board the Air Mauritius, there are many services like the inflight entertainment, meals, duty free sales and magazines. The on-board menu consists mainly of the Mauritian cuisine but draws its inspiration from all around the world offering Asian, Indian and European flavours. The company also has certain strict no-pork and no-beef policies and even have special meals for needy people, like the diabetic meal for example (Air Mauritius, 2013). On its official website, the company describes the various types of meals that it can offer to its passengers. Some of these are the vegan meals, vegetarian meals, kosher meals, low-fat meals, child meals, baby meals and much more. This is quite an interesting strategy to satisfy customers and make them feel that they are well taken care of at Air Mauritius. Furthermore, the on-board entertainment includes popular Hollywood and Bollywood movies and documentaries to watch. There are various types of music to listen to and there are also some games for avid gamers or children. There exist two classes of travel with Air Mauritius; the Economy class and the Business class. In the economy class, the company boasts to have large passenger space with a 79cm pitch which provides a comfortable and relaxing flight experience (Air Mauritius, 2013). It is not an important factor which customers are concerned about but it is good to know that the economy class has a seating configuration of 2-4-2 layout with two final rows of 2-3-2 for a total of 265 economy seats (The Sydney Morning Herald, 2010). This setting is mainly for the Airbus A340E and of course there are certain various depending on the model of the aircraft. Seating arrangements in the business class have recently been upgraded with new lie-flat seats on the Airbus A340 and A330 (Air Mauritius, 2013). These seats provide the passengers with some privacy and better comfort than the previous ones. They are large enough to accommodate any type of person. Its functions are well in grasp of the passenger thank s to a remote control. The lie-flat seats also come with a massage option. Air Mauritius offers different flight check-in options for its customers. One may check in online on their official website and at the Sir Seewosagur International Airport or at various other airports like the Paris Charles de Gaulle, London Heathrow, Beijing Capital International Airport and much more. They also have a premium check-in reserved for business class passengers available at every airport. On its website, the company offers adequate accurate information about the check-in process and offers even FAQs to help out lost customers. These customers will also get help from Air Mauritius staff either at the head office found in Port Louis or at the SSR International Airport whenever they feel the need to. The Amà ©dà ©e Maingard Lounge is the principal lounge of Air Mauritius at the airport terminal. The lounge offers assistance from staff, books magazines, TV, business centre with computers, WIFI, children’s play area, and a bar buffet area offering a wide array of food and beverages. Surely, all these come at a price. Business class passengers and Kestrelflyer Elite members have free access to the lounge. However an economic class passenger may get access as well depending on availability and at some prices. Normally an adult will pay MUR 2000, MUR 1000 for a child and free access for an infant (Air Mauritius, 2013). But these tariffs are subject to change anytime. Recently, the SSR International Airport underwent major upgrades and introduced its new terminal which came into operation on 12 September 2013. The new terminal consists of three levels where the ground level where domestic arrivals and departures are taken care of. Then, level 1, where the Air Mauritius Lounge is situation alongside check-in counters and finally level 2, where international arrivals are taken care of. The Air Mauritius has been waiting for this upgrade eagerly and expects to increase customer satisfaction through a newer servicescape (Air Mauritius, 2013). With all these said, Air Mauritius expects to increase its number of customers while retaining the current ones and start making more profit again, in the years to come. One of the biggest advantages of travelling with Air Mauritius is that the company holds a perfect flight safety record and is the safest company to fly with in the Indian Ocean (World Travel Awards, 2013). This perfect record contributed into our flag carrier winning the Indian Ocean’s Leading Airline Award for 9 consecutive years. The record suggests that an Air Mauritius plane never crashed or killed anyone on-board due to safety issues. However, some planes experienced some technical faults whether in flight or on ground which also lead to delays in departure or arrivals. Just recently, in October 2013, the MK 034 flight had some major technical issues when leaving Plaisance for Paris. Only ten minutes after taking off, one of the engines blew out and caught fire mid-air causing the plane to lose speed and altitude. The pilot informed the passengers about the incident and decided to drop fuel at sea in order to be able to land back at the SSR International Airport. The pro cess took hours but MK 034 landed safely with panicked passengers. The plane was then grounded for repairs and replaced by another one to get the passengers to destination, Paris. It all occurred between 22h50 and 02h22 which caused a huge delay and a series of other flight delays the coming days because of a grounded aircraft (L’express.mu, 2013). These technical issues occur with almost every airline company in the world. The positive point for Air Mauritius here is that the pilot was able to get the passengers back on land safely. 1.1 Problem Statement Air Mauritius holds a strong leading position in Africa among the competition, however many airlines have surpassed the company, globally speaking (Prayag, 2007). Nowadays, we have companies like the Emirates, Air France, British Airways, Etihad Airways, Air Seychelles, Condor, Thomas Cook and Lufthansa who have become great examples of successful airlines which are currently in direct competition with Air Mauritius (Business Excellence, 2013). They started small-time somewhere, just like the Air Mauritius but are now leaders of the skies ahead of our flag carrier. However, the company is going to show that it is still a competitor to look out for among its competitors since Air Mauritius is planning to increase flight frequencies of certain destinations like Johannesburg and Beijing which will help reinforcing their connectivity across the globe. Since Europe has been affected by the economic crisis lately, the numbers of tourist’s arrivals have largely decreased. This is why the government of Mauritius has decided to re-orient the tourism industry towards a new market in order to increase demand. That new market is no other than Asia, targeting most precisely India and China. Thanks to this change, we can now clearly see why the Air Mauritius has increased flight frequencies towards these destinations and is constantly bombarding the general population with promotional packages to Beijing, Hong Kong or Mumbai. The â€Å"limited sky policy† and â€Å"no charter flights† helped boosting sales of the company in the past but recently in order to increase tourist arrivals and due to stiff competition, the local government is considering an â€Å"open sky policy† for a better future of the economy of the island (Prayag, 2007). This is being implemented because the government aims to boost touristâ€℠¢s arrivals and expects millions of tourist arrivals every year. If this proves to be a successful step, the main economic pillar of the island; the tourism industry, will prosper and eventually increase the revenue of the country. Having an excellent customer satisfaction is a great asset for an airline company as it will help with customer retention and the company will keep on achieving its primary goal; that is, making profit. But it seems that the Air Mauritius has not been able to satisfy all the customers lately. According to a reliable website that provides real customer reviews and much more information about airlines, Skytrax.com 2013, the service at Air Mauritius has worsened. Customers are complaining about poor food quality, rude on-board staff, uncomfortable seats, boring entertainment and the fact that the company is still using old aircraft with old technology while every other airline are investing on newer planes. These comments affect service quality and perception of customers in a negative way. Word of mouth may worsen the case and people will tend to think twice before buying a ticket at the Air Mauritius in the near future. Of course, whether they are true or not, these are just statement s and it is my duty to carry out this research in order to find out what is really happening about the service given to customers at the Air Mauritius. In today’s competitive airline environment, the on-board services of an airline are one of the aspects that customers lookout for before purchasing an airline ticket (Namukasa, 2013). Having poor inflight services will push these customers away from the airline company and they will tend to opt for another rival company. This is why the level of service quality must stay high at all times for an airline company or else it will not survive the stiff competition (Archana and Subha, 2012). There have been so many studies which examine the influence of airline service quality on passenger satisfaction and loyalty, for example, Archana and Subha (2012) in India, Huang (2009) in Taiwan and Munusamy et al. (2011) Malaysia but none for Mauritius, this is why this study is important. Aims and Objectives of the study The principal aim of this case study is to analyse how service quality has a major influence on passenger satisfaction and loyalty specifically at the Air Mauritius. This will be done by carrying out several in-depth data analysis and the collection of customer feedback as well. The study will help to identify areas where customer expectations are not being met at Air Mauritius and find recommendations to tackle these flaws. The specific objectives are: To understand the importance of Air Mauritius for the Mauritian economy. To examine the relationship between pre-flight service quality and passenger satisfaction together with passenger loyalty. To analyse the relationship between in-flight service quality and passenger satisfaction together with passenger loyalty. To assess the relationship between post-flight service quality and passenger satisfaction alongside passenger loyalty. To assess whether airline service quality has an impact on passenger satisfaction and loyalty and what are the positive and negative impacts, if any. To make recommendations, based on the results of the study. Outline of study Chapter 1 introduces the subject matter including the tourism industry, the airline industry and the airline company involved in this research. It also describes the economy of Mauritius and how dependant the island is on its flag carrier for the survival of the tourism industry which is the main source of income for the country. The aims and objectives of this researched are also given in this introductory chapter. Chapter 2 is the bulkiest of all and lays the foundations of this research with definitions, empirical studies and examples from other studies. It covers service quality in the tourism industry and in airline companies and describes the instrument used for this study. This chapter also defines the service quality in pre-flight, in-flight and post-flight services related to customer loyalty and satisfaction. Chapter 3 gives enough detail about the methodology used for this research and how the sample size, the questionnaire and the whole research was designed. Chapter 4 lays emphasis on the results of the survey carried out, together with appropriate discussions to interpret these results. This chapter makes good use of charts and tables to interpret the results of the study. Chapter 5 is the final chapter of this research and is all about the conclusions and recommendations of the study. It proposes different approaches that Air Mauritius might take in order to improve its services and attract more customers. This chapter also includes the recommendations made by the survey participants and also depicts the survey limitations and what can be done in future researches in order to tackle these limitations.