For this paper I will upload the PDF for the minicase, and the writer must pay attention to details. I will also upload a template that the writer will use in completing this paper. The writer must use the template as it is please responding base on the headings and the formate. The writer will include any calculations as mentioned in the appendix section and also tables in necessary and will reference it in the summary. The writer will use APA format and rules throughout this paper.
• Mini-Case Study: Bullock Gold Mining
This case study, found on page 170 of your course text, deals with the process of determining future yields for a new gold mine. After reading the case study:
• Respond to the first two questions at the end of the study.
• Do not include your spreadsheet file; however, include your calculations in your response.
SAMPLE ANSWER
The Bullock Gold Mining Assignment
The estimates provided by Danto can be used by Alma to determine the revenue that is expected from the gold mine. The expense of opening the mine and the annual operating expenses is determined. Opening the mine will cost an initial capital of $750 million with a cash outflow of $75 million for 9 years. The expected cash flows from the mine for the 9 year period is represented by the table shown below.
Table 1. Summary Table
Year
Cash flow $ (million)
0
-$750
1
130
2
180
3
190
4
245
5
205
6
155
7
135
8
95
9
-75
Discussion
Payback Period
The payback period is the time taken by the investment to recoup the initial cash injected into the project. Lucrative projects have shorter payback period than the non-lucrative project that tends to have a long payback period. The calculation of the payback period of this case is summarized in the appendix A.
Net Present Value
The Net Present Value (NPV) involves the calculations of the percentage return rate, less the initial cash outlay. The NPV bigger than 1, implies that the project is lucrative and economically viable and is worth the risk (Griffin, 2009). On the other hand, the NPV value which is less than one implies that the investment is less lucrative since the returns will be less than the costs involved in the project (Cornett, Adair, & Nofsinger, 2013). In this case, the calculations of NPV are shown in appendix B.
Internal Rate of Returns (IRR)
In this case, a rate of 12% provides an IRR of $1,594,792,833. Since it can be discounted on both the higher and the lower rate, the project IRR higher than the discounting rate of returns is acceptable as shown in the Appendix.
Modified Internal Rate of Return
The modified IRR operates on the principle that the positive cash flows are reinvented at the firm’s cost of capital and the firms’ financial cost are done with the initial capital outlay (Bragg, 2009). In this regard, the modified IRR stands out as the most precise way of determining the cost and profitability of an investment as can be seen in the appendix Cullen, & Broadbent, 2012).
Conclusion
The Bullock Gold Mining case can be analyzed by the use of Payback Period, NPV, IRR, and modified IRR. From the calculations in the appendix, all the above calculations show positive results to imply that the project is worth investing in. Therefore, the Ballock Gold mine is a viable project.
References
Cornett, M., Adair, T., & Nofsinger, J. (2013).M:Finance.McGraw-Hill/Irwin; 2 edition
Bragg, S. (2009). Accounting Control Best Practices. Wiley
Cullen, J., & Broadbent, M. (2012). Managing Financial Resources (CMI Diploma in Management Series).Routledge; 3 edition
Griffin, M. (2009). MBA Fundamentals Accounting and Finance.Kaplan Publishing
DuPont Analysis of companies for the past three years
DuPont Analysis of companies for the past three years
Order Instructions:
This week the writer will build on what he completed on the first week with order #112856 and will add the respond to the questions hear below as week 2 and will take the completed solutions from #112856 and add as week 1 at the beginning of the paper like that he will be building the paper up as we go forward. Remember this is a continues assignment and it will run for a couple of weeks. As mentioned earlier, week one was order #112856 and the response to the questions below will be week 2 so take note and I have resubmitted a template hear to use to add week one and 2, so let the writer pay attention to those details. Also when the writer adds the references from 112856 to this paper, he must make sure the are in alphabetical order as per APA.
• Investment Analysis and Recommendation Paper – continued from #112856
During this week, you will assess the company you selected for your Investment Analysis and Recommendation Paper relative to its competitors in terms of financial ratios. Financial ratio reports are available on numerous Web sites (examples: Reuters, Google, Finance, Hoovers). Remember, different Web sites may use slightly different definitions.
Using income statements and balance sheets for your company AND at least one of its main competitor’s, respond to the following:
• Calculate the DuPont identity for both companies for the past three years.
• Discuss any differences and/or trends that emerge.
Write up a 2-page summary minimum of your findings, including any calculations you made, and how you gathered your information. Please follow the template and present the information base on the templates headings.
SAMPLE ANSWER
DuPont Analysis of companies for the past three years
Return on Investment (ROE) is the is one of the most important company analysis tools that is used to measure how well a company manages and creates value to their shareholders. However, the values on the ROE can sometimes be misleading in terms of real value and risks associated with a particular investment. The numbers in the ROE can easily be misleading to financial analysis if the individual components of the ROE have not been broken down to their individual components. In this regard, DuPont can bridge the gap created by the ROE and provide a reliable measure of how the company creates value for its shareholders (Mitchell, Mitchell, & Cai, 2013). DuPont is the financial analysis tool that enables the breakdown of the ROE into its various individual components such as financial leverage, asset turnover, and profit margin (Haskins, 2013). The following is the financial calculation of DuPont of Chesapeake Energy Corporation, together with their competitor, Anadarko Petroleum Corporation (APC) (Cheasapeake Corp, 2015).
DuPont takes utilizes the basis of the individual component of ROE which is given by;
Profit Margin X Asset Turnover X Leverage Factor
Chesapeake Energy Corporation (CEC) Financials for the past three years
2014
2013
2012
Total Assets
$40,751,000
41,782,000
41,611,000
Shareholders’ Equity
$16,903,000
15,995,000
15,569,000
Revenue
$20,951,000
17,506,000
12,316,000
Net Income
$1,917,000
724,000
769,000
Anadarko Petroleum Corporation (APC) Financials for the past three years
2014
2013
2012
Total Assets
61,689,000
55,781,000
52,589,000
Shareholders’ Equity
19,725,000
21,857,000
20,629,000
Revenue
18,470,000
14,581,000
13,411,000
Net Income
(1,750,000)
801,000
2,391,000
In the year 2012;
The DuPont for Chesapeake Energy Corporation is given by
Net Profit x Asset Turnover x Leverage Factor
(769,000/12,316,000) x (12,316,000/41,611,000) x (41,611,000/12,316,000)
= 0.0624 x 0.256 x 3.379 = 0.054
The DuPont for Anadarko Petroleum Corporation (APC) is given by
(2,391,000/13,411,000) x (13,411,000/52,589,000) x (52,589,000/20,629,000) =
=0.1783 x 0.255 x 2.541 = 0.116
In the year 2013;
The DuPont for Chesapeake Energy Corporation is given by
(724,000/17,506,000) x (17,506,000 / 41,782,000) x (41,782,000/15,995,000) =
0.041 x 0.419 x 2.612 = 0.045
The DuPont for Anadarko Petroleum Corporation (APC) is given by
(801,000/14,581,000) x (14,581,000/55,781,000) x (55,781,000/21,857,000) =
0.055 x 0.21 x 2.55 = 0.029
In the year 2014;
The DuPont for Chesapeake Energy Corporation is given by
(1,917,000/20,951,000) x (20,951,000/40,751,000) x (40,751,000/16,903,000) =
0.091 x 0.514 x 2.411 = 0.113
The DuPont for Anadarko Petroleum Corporation (APC) is given by
(1,750,000/18,470,000) x (18,470,000/61,689,000) x (61,689,000/19,725,000) =
0.095 x 0.299 x 3.127 = 0.089
Differences and trend that emerge
In the year 2012, the operating efficiency of APC (0.18) was higher than that of CEC (0.06) as can be seen in their profit margins. In the same year, it can be deduced that the asset use efficiency of between the two companies are almost the same since they stood at 0.255 for APC and 0.256 for CEC. On the other hand, the financial leverage for CEC was higher (3.4) than the financial leverage for APC (2.5).
In the year 2013, the operating efficiency of APC (0.05) was still higher than that of CEC (0.04). In the same year, the asset use efficiency of CEC was higher than the asset use efficiency of APC. Similarly, CEC had a higher financial leverage in the year 2013 than APC. Overall, it can be deduced that CEC performed better than APC in the year 2013.
In the year 2014, the operating efficiency of APC (0.095) was higher than that of CEC (0.091). However, the asset use efficiency of CEC stood higher (0.5) than that of APC (0.3). On the other hand, APC had a higher financial leverage (3.1) than CEC (2.4) as can be deduced from the financial calculations. The higher the financial leverage, the better a company is placed to provide good value for its shareholders (Brian, Sandra, & Jennifer, 2013)
References
Brian, J. H, Sandra, M. T. & Jennifer, C. H. (2013). Benefit Corporation Concerns for Cheasapeake Corp. (2015). Company Profile: Chesapeake Energy Corporation. MarketLine Financial Service Professionals. Journal of Financial Service Professionals. 74-82.
Haskins, M. E.(2013). A decade of DuPont ratio performance. Management Accounting Quarterly, 14(2), 24-33.
Cash Flows at Warf Computers, Inc. Mini-Case Study
Cash Flows at Warf Computers, Inc. Mini-Case Study
Order Instructions:
This paper is the repetition of 111878 and because the paper was poorly written the student did not pass and now have to repeat the class so make sure you get a different writer to handle this paper. hear below are the instructions please he should carefully read the instructions before completing this paper.
• Cash Flows at Warf Computers, Inc. Mini-Case Study.
This case study, found on page 42 of your course text, deals with a small computing firm that has developed a new, unique product and has decided to seek outside funding. You have been asked to help prepare the necessary financial statements. After reading the case study:
• Complete the financial statement of cash flows and the accounting statement of cash flows on the excel template provided and the respond to the questions mentioned.
• Briefly answer the three additional questions referencing cash flows and expansion plans found on page 43 (5-6 sentences each minimum).
Remember to include proper APA citations in all Mini-Case Study assignments.
I have attached a documents containing information that will be use in completing this paper. It is critical that the writer pay attention to details for this paper and all calculations must be clearly shown where require. The writer must respond to the 3 questions asked in the mini case as indicated in the assignment requirement. The questions are in the document of the mini-case study. I have also included an excel template that will be use for the calculations, the writer will just complete all calculations in the template.
Remember to include proper APA citations in all Mini-Case Study assignments.
Resources
• Adams, S. (2008, February). Fundamentals of business economics. Financial Management (UK), 46–48. Retrieved from Business Source Premier database.
This article provides an analysis of the principal-agent problem and discusses some of the ways that many companies address the issue.
• Rappaport, A. (2006, September). Ten ways to create shareholder value. Harvard Business Review, 66–77. Retrieved from Business Source Premier database.
In this article, the author states his belief that there are certain principles that when followed will result in increased shareholder value for a company. He provides a review of the 10 steps he has found to be most important and provides a brief description of each.
• Shleifer, A., & Vishny, R. (1997). A survey of corporate governance. Journal of Finance, 52(2), 737–783. Retrieved from Business Source Premier database.
The authors use a survey instrument to study how financial suppliers use corporate governance to assure that they receive a return on their investment.
• Almazan, A., Banerji, S., & DeMotta, A. (2008). Attracting attention: Cheap managerial talk and costly market monitoring. Journal of Finance, 63(3), 1399–1436. Retrieved from Business Source Premier database.
This article presents a new theory as to the best way to increase shareholder value by seeking market attention while the firm is undervalued
Readings
•Ross, S. A., Westerfield, R. W., & Jaffe, J. (2013). Corporate finance (10th ed.). New York: McGraw-Hill Irwin.
-Chapter 1, “Introduction to Corporate Finance”
This chapter introduces some of the basic ideas in corporate finance; namely, capital budgeting, capital structure, and cash flows. In addition, there is a discussion on maximizing the value of stock, one of the most important concepts in finance.
-Chapter 2, “Financial Statements and Cash Flow”
This chapter introduces and discusses basic corporate accounting procedures, as well as devices used to calculate a corporation’s cash flow from operations, changes in fixed assets, and changes in working capital.
SAMPLE ANSWER
Cash Flows at Warf Computers, Inc. Mini-Case Study
Question 1
The Warf Computers’ cash flows are undoubtedly satisfactory considering that the company has not been in operation for long. This is attributable to the fact that the company debt and equity is not considerable compared to many small companies which oftentimes tend to be highly indebted. Moreover, the company assets both current and fixed seem significant to drive the company operations for long. Ross, Westerfield & Jaffe (2013) note that a company is considered stable when there is considerable positive difference income and expenses as the case with Warf Computers’ cash flows.
Question 2
Accounting cash flow is the cash flow statement which accurately describes Warf Computers cash flows because it represents a detailed statement of each aspect of the company’s cash flows. As a result, accounting cash flow statement provided information which accounts for each activity undertaken by the company irrespective of whether it involves generation of income or spending.
Question3
From the answers provided in the above questions, it is evidently clear that Nick’s expansion plans can be achieved irrespective of them being relatively aggressive. This is due to the fact that the company can outsource funding from debts as well as other sources of income (Almazan, Banerji & DeMotta, 2008).
Cash Flow From Operations
$ 2,011
$ 1,292
$ 719
Investing
Fixed purchased
$ 140,000
$ (140,000)
Fixed sold
$ 330,000
$ –
$ 330,000
Intangible
$ 610
$ (610)
Totals
$ 330,000
$ 140,610
$ 189,390
Financing
Retire debt
$ 151,000
$ (151,000)
Proceeds from debt
$ 175,000
$ 175,000
Notes
$ 85
$ 85
Dividends
$ 225
$ (225)
Treasury Stock
$ 145
$ (145)
Proceeds from stock
$ 12,000
$ 12,000
Total Financing
$ 187,085
$ 151,370
$ 35,715
Change in Cash
$ 519,096
$ 293,272
$ 225,824
References
Adams, S. (2008). Fundamentals of business economics. Financial Management, 46–48.
I will email you other related documents later.
Please do the assignment.
Thank you for the discount.
SAMPLE ANSWER
Berkshire Hathaway International Insurance Company
Abstract
Berkshire Hathaway International has succeeded in branching itself enormously since its beginning. The company started as a textile company, and currently is has been able to dominate almost every sector in the business world. The focus of this paper is to address the impacts that can result when a new CEO replaces Warren Buffett. The paper will address how the new CEO will ensure that the success of Berkshire Hathaway is sustained. The paper conclude by emphasizing that a succession plan is a crucial aspect to ensure that investments are fostered as well as making sure that subsidiary companies are controlled effectively. The succession plan will revolve around HR branding, selection for the future, and creating a culture for the future.
Introduction
Who will become the next CEO (chief executive officer) at Berkshire Hathaway remains one of the million-dollar questions being asked by many corporatists. This is after Warren Buffett (the now CEO of Berkshire Hathaway) announced in 2010 that his position will be succeeded by team composed of senior CEO and approximately four key investment managers. He critically pointed out that, the newly selected managing team would have each of its members being responsible for an impeccable part of the company’s investment portfolio (Avolio, Fred, & Todd 2009). By the fifth month after Warren announced the statement, Berkshire Company gave that Todd Combs, who was then manager at Hedge Fund Castle Point Capital, would become one of the investment managers. Four months later, the company suggested that the fifty years old Ted Weschler (from Peninsula Capital Advisors) would also join the team of investment managers. The bigger question was who was to become the CEO, and Warren gave a slight relief to most Americans by giving a suggestion that, the CEO had been internally chosen, but was publicly unnamed. This was a suggestion that received a lot of criticism from business analysts who contended that the succession plan by Buffett lacked an exit-strategy, and that it often leaves a firm with lesser long-term alternatives. Therefore, the critics try to recommend successful CEOs should not be allowed to choose their successors. Therefore, the following paper will engage in portraying how a succession plan for Berkshire should look like by discussing several issues involving business process. A flow chart demonstrating an organizational chart with possible development career paths from a low-/entry-level position will conclude the discussion.
Part 1
Berkshire Hathaway HR branding
Recruitment strategy
HR branding involve all those processes aiming at altering human resource practices of company such as training recruitment, and compensation to perfect succession planning. Based from the stressed indication that the next CEO will come from the top-most portfolio companies, the most indispensible recruitment strategy for this position as well as for the investment managers is the use of poaching. Poaching can only be perfected if referrals are used together. Already, candidates for the position of Berkshire Hathaway’s next chief executive embrace the leaders of GEICO, and BNSF BNSF, and Berkshire Hathaway Reinsurance,. Considering this factor, what remains is just to confirm the best among the three to succeed Buffett. Using referral on poaching, several qualitative aspects of the candidate will be given by those who know each one of them. Even before interviews are scheduled to capture the personalities of the candidates, getting their attributes from the board at Berkshire will guarantee that next CEO of the Berkshire Hathaway will be of the employee’ most preferred candidate (Sosik & Jung 2010). Borrowing from the fact that Buffett is one of the most inspirational leaders, the next CEO therefore ought to have extra personal values. Such characters as longevity, frugality, and benevolence can only be observed and given by those nearest to the person (candidate). These qualities, which have made Buffett, excel in insurance, selling cars, and selling houses ‘are needed by the incoming CEO to exemplify the same’ (Bennis & Joan 2010). The efficacy of poaching is that it reflects the generic skill set of an applicant, which is not specific to the company. Poaching is more readily productive to the apprentice model (which gives promoting somebody within the organization to CEO level) as it is disastrous in practice. This is because the former CEO keeps mentoring the new CEO. Bennis & Joan (2010) and Sosik & Jung (2010) gives that the apprentice model creates the impression that the new CEO is still incompetent to handle the position thereby undermining his authority. The other reason why poaching is the best recruitment strategy is that Berkshire Hathaway is changing its business to consumer branding. Berkshire Hathaway under Buffett’s management has been re-branding the energy companies, certain insurance holdings, and real estate brokerages using the Berkshire Hathaway name. Therefore, launching a consumer brand with a global target will attract celebrity endorsement. The rationale behind celebrity endorsement on Berkshire products is meant to assist consumers to absorb that the brand is all about borrowing some qualities from their celebrities.
Diversity and legal consideration
Although poaching seems to be the best strategy for recruitment at the Berkshire Hathaway for the excellent succession planning, the method most of the times lead to lack of diversity and management issues at the workplaces. This is because practices such nepotism, which is the preference for hiring a relative of the current employee and decrease diversity in an organization is felt. Diversity at Berkshire therefore should aim at getting the right candidate who can add intellectual diversity and cultural opulence to personal attributes correlated to the HR branding. This condition of non-diversity is most likely to develop at Berkshire Hathaway as it is projected that Buffett is more likely to pick his son (Howard Buffett) as his successor (Sosik & Jung 2010). Taking into focus that Warren is eying his son to be his successor, it might raise many legal issues. Therefore, legal considerations have to be put in place to promote diversity at Berkshire Hathaway as far as HR branding is concerned. Relevant employment laws and standards strive to ensure that human rights are protected at work places irrespective of color, race, religion, or any other personal attributes. The laws also aim at guaranteeing equal treatment of candidates during recruitment with outlining legal rights of employees.
It can be stressed that legislations does not necessarily entails compliance to the laws, but nurturing a culture of acceptance in the workplace. Therefore, any appointment and recruitment should be approved and welcomed by all the concerned parties. Considering that there are mild conflicts with Berkshire of who will be the next CEO and investment managers, legal considerations have to be taken with keen. The Employment Equity Act, for instance, can help Berkshire to see that it gets the right candidate to be the CEO of the company (Sosik & Jung 2010). Other ACTS that can work for Berkshire Hathaway comprises of Equality Act 2010, Work and Families Act 2006, and Equality Act 2006. These Acts unanimously gives provisions that underline the prohibition of discrimination in employment (comprising recruitment and selection methodology) to aspects of race, nationality, sexual orientation, and religion and belief. Talking about sexual orientation is a sensitive matter towards Berkshire HR branding. This is because it clearly gives that the next CEO will automatically be a man (Avolio, Fred and Todd 2009, p. 432). This is against legislation regarding recruitment, which prohibits such kind of selection. Both males and females should be treated fairly and equally. For that reason, Berkshire can attract and retain the best candidate who is most competitive during this process of HR branding. Moreover, to fulfill a responsibility to treat candidates ethically and confidentially, the company should make available a search environment that respects the dignity and rights of all people. Berkshire should also put aside all personal agendas, biases, or political statements to give a justified evaluation to each candidate. Taking into account there is rivalry at the company regarding the successor of Warren Buffett, all the recruitment members should disclose all conflicts of interest to each other. Berkshire Hathaway can only achieve its goal in getting the right candidate by its members representing the company as a whole rather than group stakeholder.
Part 2: Selecting for future legal and ethical concerns in succession planning development
Selecting for future entail consolidating those products from HR branding to a common pool where a company will have ample time to pick the next successors easily. A successful succession planning will promise that the board at Berkshire Hathaway will have a better understanding and absorption of the skills and competencies mandatory to lead the company. Apart from this importance, the board will also enjoy a massive position in deciding whether to choose an insider or an outsider to head the company. On top of that, succession planning will assist in determining the ideal qualifications that are needed one to be the next CEO of Berkshire Hathaway international (Bennis and Joan 2010). In short, a successful succession planning provides the board with insights in making informed decisions among prospects and dilates its portfolio of alternatives. However, legal and ethical issues arise during succession planning. One of the ethical issues that arises is that a lack of board preparedness.
The lack of board preparedness Bennis and Joan (2010) can be correlated to the emotions prevail during succession planning. By now, there are minor conflicts and disagreements over who will be the next CEO to succeed Warren Buffett. Although there is an announcement that the CEO has been determined, failure to name him has raised many confrontations between board members. Some of the board members feel that Warren is making his appointment based on emotions or feelings rather than on competencies. The board also suggests that Buffett might be silent all this period about his successor due to the main precipitation of his son becoming his successor. Warren Buffett on his side feels that immediately he leaves his position and hands it to another person, detrimental effects will prevail (Avolio, Fred and Todd 2009, p. 445). That is why he is reluctant to quit his position. The board has been trying acting in response to non-ending media pressures and financial analysts’ inquiry. Therefore, out of emotions, the members will end up choosing a famous person rather than engaging in a holistic examination of particular traits, experiences, and competencies related for the post.
The second ethical issue that can arise from succession planning is a critical lack of knowledge regarding what works and what does not work. This can be given by the actions of Berkshire Hathaway projecting that the next CEO will come out of their portfolio companies. These types of CEO are known as prior CEO. What the board believes is that prior CEOs have massive experience during their tenure as heads of other companies. The board also has in mind that prior CEOs have a perpetual excellence in creating shareholder value, and have already established communication connections with investors and security analysts. However, the ethical issue that can arise from such picking is that rather than prior CEO performs better as expected, they result to become worse and act no better. On the other hand, Bennis & Joan (2010) legal issues present themselves in succession planning. One of the legal issues involves employment contracts. In simple terms, any existing employment contract at Berkshire Hathaway must be honored to avoid any employment law disputes after succession. Considering that Berkshire is going to a management alteration, which is one CEO and three to four investment managers, it must take into considerations the provisions given in contracts. Another legal issue, which can also be mirrored in the mirror of unethical factor, is unlawful age discrimination. From a legal perceptive, succession planning should be based on merit. Avoidance of unlawful age discrimination promotes diversity. The tendency of companies filling their replacement with people based on gender race, and nationality can lead to allegations of discrimination.
Skills and talent for a CEO at Berkshire Hathaway
Getting the impeccable replacement for Buffet remains a difficult task for Berkshire Hathaway’s board to decide. Investors, suppliers, customers, and every member of the company focus on the outgoing Warren. Therefore, there is need to capture a CEO with outstanding qualities to perfect the position held by Buffett (Lombardo & Robert 2009). Not only should the board focus on getting the right candidate at this current time, but also to set grounds at which future leaders should encompass. The skills and talents for a successful succession planning should comprise both short and long-term objectives, but not on replacing position. One of the distinguished skills that can be also a talent is the ability to be innovative. This skill is needed in the long-term, as the world today is becoming more and more globalised. Taking into account that Berkshire Hathaway is turning to consumer brands, the next CEO ought to have the skills needed to market these brands in the form of celebrity endorsement as this has become the more stylish, recommended, and accepted forms of advertising consumer brands (Weldon 2008). The modern globalised business is characterized with ‘increasing inflation and robust technological improvement’ calling Berkshire Hathaway to be faced by the rapidly business setting (Birdi, Clegg, Patterson, Robinson, Stride, Wall & Wood). The next CEO and investment managers at Berkshire Hathaway must exemplify the skills and talent to innovate on a continuous basis and deliver a variety of characteristics in the upcoming consumer brands and services in the field of insurance and house as well as car selling. The CEO will demonstrate the skills to anticipate the future and design a set of unsullied methodologies to affectively and efficiently address change and realize profitability in the long-term.
Being an indispensible risk taker is another skill needed for the short term and long-term realization of Berkshire Hathaway international goals. This entails that the prospective CEO must exemplify the ability to calculate risks after engaging in a deep evaluation of probabilities correlated with the profit and losses’ realizations of the decisions made. The next CEO of Berkshire Hathaway must dance to the tunes of the company developing the quest of owning the full of a company. Failure to possess this skill will make the company to lag behind against its competitions (Birdi, Clegg, Patterson, Robinson, Stride, Wall & Wood 2008, p. 469). However, a point of concern is that the ability to take risks should not jeopardize the survival or the overall profitability of an organization, but should be twisted toward increasing the profits of a firm.
The most essential skill that guarantees that a CEO will be productive at this time and in the future is being optimistic by nature. Being optimistic by nature is itself a talent. A CEO therefore must demonstrate the ability to think outside the box and design and formulate strategies that can efficiently solve the problems faced by Berkshire Hathaway. At the same time, the optimistic CEO must inspire the juniors and struggle hard to get through harder times. The ability to take action goes hand in hand with being optimistic (Sosik & Jung 2010). This is because it is when chasing a positive impact that CEO results to unleash an action. Taking action entails taking timely calculated action based on environmental aspects at work. However, this skill is restrained to impulsiveness. Therefore, the next CEO or investment managers at Berkshire Hathaway must not be impulsive, and an action must be constructed after careful thought and analysis. On other explanation, the action should not only be designed strategically to address change, but also on accepting those strategies in a way that they collectively foster the profitability of the company.
The prospective CEO at all cost must exhibit communication effectiveness. No business whatsoever can excel if there exist no convivial communication between CEO, employees below him, investors, and customers. Therefore, a CEO must effectively demonstrate the ability to communicate effectively with fellow employees while at the same time expands ideas and suggestions put forward by his associates. Having excellent communication skills is being correlated to inherence. Birdi, Clegg, Patterson, Robinson, Stride, Wall & Wood (2008) argue that CEO must be an open-minded person with ideas, and accept proposals fronted by the team members, rather than entirely focusing on proposals designed only by him. Communication with diverse people such as investors and other varied stakeholders requires an excellence in vocabulary skills. Having excellent vocabulary promises effective communication with employees that have diverse cultural values as in Berkshire Hathaway.
Humility as well as controlled emotion forms one of the immaculate skills for an effective CEO. Although CEOs should be aggressive in achieving goals, it should not be extended in losing temper when unpleasant issues arise in an organization. Nevertheless, a CEO should not remain rigid in behavior and fall short in pointing out failures that may arise. In short, a CEO should be placed at equilibrium when emotions are on focus (Saba & Martin 2008). This means that the officer should not be angered by small mistakes, but on the other hand, the CEO should not be overexcited by small wins. Rather, the CEO should exemplarily know how to appreciate employees and head them toward the right direction, which ultimately allows them to achieve the corporate aim of Berkshire Hathaway.
How interviews will be conducted
Interviews for a CEO are distinct to those conducted to any other employee of an organization. This is because CEOs are the top-most employees to oversee the operations of a firm. Hence, a comprehensive interview that will address personality issues, cultural richness, and intellectual multiplicity should be enhanced. Getting an excellent CEO at Berkshire Hathaway can only be perfected if structured interviews are conducted. The benefit of conducting this type of interview is that it gives precision and accuracy. This is because the questions asked during the interview are connected to job-related competencies, thereby enabling prediction on the job performance of the candidates (Caldwell. Dixonl, Joe Jonathan & Gaynor 2012, p. 178). Berkshire also ought for a structured interview due to legal considerations associated with it as when they are conducted; they are more likely to be legally defensible. Asking the same questions to all candidates during the interview enhances objectivity. Fairness is also enhanced as one of the ethical considerations as finally consensus on a final evaluation is reached. The following steps give insights about how an interview should be conducted:
Before the interview-, the interviewer should decide what kind of questions to be asked during the interview. Job descriptions, competency profiles, as well as merit criteria should be reviewed at this step (Lombardo & Robert 2009). Information should be made available to the candidates before the interview, giving the location for the interviews, welcoming interviewees for the interview, and arrange matters of accommodation if needed.
During the interview-, the interviewer introduces the interviewer not limited to the format of the interview, expected questions, and recording of the responses. Follow-up questions should be used question after question to enable the interviewer to elicit more data necessary to assess the applicant’s qualifications (Sosik & Jung 2010). Thanking of the interviewee after the interview comes last at this step, as well as giving an opportunity for the interviewed person to ask question.
After the interview- interviewer (s) analyses each candidate’s performance against the qualifications required to perform at that position. By reviewing the responses, interviewers are able to reach a consensus that the best candidate fits the vacancy.
Job descriptions and the flexibility needed for succession planning
Job descriptions provide the flexibility needed for successful succession planning. Job descriptions aim at bringing together the right people and the right job in which possibilities are endless. One of the ways in which job descriptions lead to flexibility in succession planning is by providing comparative analysis. Job descriptions aim at getting the right person for the complete understanding of its supply chains. This can only be realized if the recruiters exhibit the availability of talents and through the organization’s ability to attract these talents. Another avenue in which job descriptions achieves flexibility in succession planning is by talent planning (Chopra & Kanji 2010). Job description has to make a company to be engaged in talent planning whether at division, a unit, or corporate level. Job description aims at retaining good talents in an organization because in the modern day scarcity of talent and cost prevails. The first part of talent planning is talent identification, which mainly deals with looking for skills and competencies necessarily for a transfer. The second part engages the combination of comparative analysis and talent identification to show that the more the scarcer a talent is, the more effort should be garnered to retain and train internally. The third part of talent planning that is an amicable factor in flexibility in succession planning is scenario planning, primarily indispensible to future planning. The more possible future directions given to managers, the more talents are identified and nurtured in a pool of talents (Cameron & Robert 2011). The third way in which job description leads to flexibility in succession planning is by the creation of a pool of talents. Because a company cannot be able to detect and establish what kind of talents it needs over a period, it needs to emerge itself in construction, maintenance, and modification of a pool of varied candidates with a variety of skills. Therefore, the three approaches will make sure that job description satisfy its role in making succession planning flexible.
Part 3: Establishing a Culture and Structure for the Future
Training programs that must be in place and will they be conducted by internal or external providers
After a company has selected the best for future, the remaining thing to do is to establish a culture that there is a repetition of such practice. This is done by considering such aspects as training programs, performance appraisals, and compensation methods. For Berkshire Hathaway, the type of training program depends on the position of the employee. Taking into focus that the trending topic now is on CEO and investment managers, the type of training needed is of concerned. Types of training programs that is appropriate for this group is leadership and management training programs. Leadership training programs will be most appropriate for the next CEO of the company. Having Warren Buffett as a mentor to the upcoming CEO will encompass internal training with internal providers. Internal providers will act as a supervisor to the new CEO to train him or her to identify employee-training needs. Management training programs are also mandatory to the new CEO. The coming CEO, if coming out of the portfolio company, has the skills on how to manage an organization (Connors & Smith 2011). What remains is just introduction to the existing HR departments at Berkshire Hathaway. Management training programs should be provided by internal providers to ensure that the newly recruited CEO have an orientation to the general Human Resources Department in order to continue with the already started succession planning.
How performance reviews can be used for succession planning and training?
Performance reviews, succession planning, and training are intertwined. What this point means is that performance review/appraisal provides a suggestion of employees with leadership prospective as well as with development demands. Therefore, a CEO at Berkshire Hathaway ought to develop programs and interventions, which either offers employees with training or an opportunity to regenerate their skills. Thus, Chopra & Kanji (2010) performance appraisal works as an input to succession planning by spotting those employees with varied or specific competencies that Berkshire Hathaway knows that it will need in the future due to actions of turnover or retirement. In addition, performance appraisal strives to highlight the external factors influencing the demand of new skills. One recommendation to perfect performance appraisal on succession planning is by standardizing the appraisal, to be reviewed, assessed, and analyzed to underline competencies and development demands across all departments at Berkshire Hathaway (Jones-Burbridge 2012, p. 47). On matters of training, performance appraisal gives the CEO with an indication of the gaps between training and development by giving specifics where employees are scoring low on matters concerning the misapplication of technology. This immediately becomes the target area for creation and implementation of training programs, which progressively strive to amplify employee competencies and output.
Which performance review methods would best support succession-planning strategies?
Future oriented performance appraisal method is best for succession planning strategies. One of the methods under this group is management by objectives, which predominantly rates performance against the achievement of goals set by management. It has an advantage of evaluating managerial positions as those of CEOs. Apart from management by objectives, psychological evaluation comes vital when the future target of a company like Berkshire Hathaway is concerned. It is normally done on terms of unstructured interviews, psychological tests, or a depth discussion with supervisors. This type of performance evaluation method majorly focuses on emotional, motivational, intellectual attributes affecting performance of employees. The final performance evaluation method that is useful in succession planning is 360-degree feedback (Martin & Lombardi 2009). The future of Berkshire Hathaway is very important and CEO can implement this method with summarizing performance information on an individual from such stakeholders as supervisors, peers, customers, and team members. The advantage of these appraisals is that every employee is an appraiser to his or colleague. Inter-personal skills, team building capabilities, and customer satisfaction are some of the attributes analyzed by 360-degree feedback.
Compensation strategy and succession planning
Apart from training, compensation strategy becomes one of the indispensable tools in succession planning. Compensation strategy helps to create the effective and competitive firm, and the wrong setting of it destroys a company within the shortest time possible. Direct financial compensation is the ultimate compensation strategy that can best suit succession planning. Increase in direct financial compensation help to induce employees to stay longer in a company. Pay on performance falls under this group and it calls for an increase performance (Lombardo & Robert 2009). Non-financial compensation strategy can also work best for succession planning. This is because, even though there is no monetary value connected to it, the employee feels appreciated by the company. Berkshire Hathaway, for instance, in implementing its succession plan, should create job responsibilities that hold importance to the employees. Employees on this type of scheme are provided with more autonomy as well as provision of prompt and constructive feedback to the employee.
How might affirmative action considerations affect training and development strategies?
A diversified workforce is known to be the one that comprise three principles: affirmative action, equal employment opportunity, and diversity. A company as Berkshire Hathaway will find its training and development strategies being affected by affirmative action considerations. Berkshire Hathaway may be compelled to observe affirmative action to create diversity at the workplace (Algera and Marjolein 2012). Affirmative action will force Berkshire to introduce more training or complex development strategies to accommodate affirmative action. Training and development strategies that can be used to train and develop male trainees cannot work the same to their female counterparts. Therefore, a diverse workforce means diverse training and development strategy (Luthans & Bruce 2009, p. 293). The process of hiring a strong pool of women, minorities, and people with disabilities calls for extensive training and development requirement. This is opposed to well-trained personnel who will only need orientation to the setup of an organization, and start working. Apart from training programs, follow up after training also become expensive when affirmative action is put into consideration.
Summary
Succession planning has been seen as the process by which a business prepares for the unknown future. The future can in some of the times be emergency as the when death of a CEO occurs or a CEO becomes disabled. Hence, there is need to nurture skills and talents and assemble them in a pool so that when such emergencies occur, a company is not caught unaware. Training of employees is very important, and above all, compensation strategy conquers all in motivating and retaining employees. What brings lagging behind in succession planning is the issue of affirmative action, which dictates equality to all people including people with disabilities and women. However, when a smooth succession planning is perfected, a company is promised development.
Berkshire Succession plan
Business and succession detail
Business name: Berkshire Hathaway international
Business structure: Corporation
Current Owner: Warren Buffett
Planned succession type: a CEO who will work together with four other investment managers will replace Warren Buffet. He will be partially removed from the business, and will act as a mentor to the new CEO.
Successor details: the successor will come from one of the portfolio companies. Another prospective successor of warren Buffett will be his son.
Succession timeframe: immediately
Restrictions: the successor will be restrained by Berkshire Hathaway’s principles and policies
Proposed organization structure
Warren Buffett’s successor (CEO)
Todd Combs (investment manager)
Ted Weschler (investment manager)
Vacant (investment manager)
Vacant (investment manager)
Donald Wurster Senior executive management
Randy Zuke (manager)
Bev ward (office manager)
Dick Dalzell (operation manager)
Rob Cunningham (director information and technology)
Forrest krutter (secretary)
Kevin Jackson (network support)
Jennifer Tselentis (assistant controller)
Joe Rieck (treasurer)
Joahnne Manhart (executive assistant tax and internal)
Rebecca Amick (director internal audit)
Skill retention strategies:
The new administration employees will be introduced in a concept of skill retention atmosphere by mentoring and coaching. Roles and responsibilities will be allocated on the type of skills one possesses. Performance appraisal will be done to ensure that current skills still match with the business.
Training programs:
The possible successors will be introduced to leadership and management training programs. External providers will be invited to add more skills on the ones acquired internally through coaching and mentoring. Rather than the company has one vice person, that four investment managers will replace position.
Analysis of the chart
CEO is the top-most officers who make decisions affecting the whole of the firm. In addition, they set goals for the firm and direct the company to achieve its goals on top of managing the daily-to-daily activities of the firm (Chopra & Kanji 2010). The best form of recruitment on this level is internal as due to succession planning, the person to succeed CEO is already chosen or projected. The type of skills and training required for the CEO is both leadership and management training. This form of training should be reinforced by communication skills to perfect the roles at this position.
Investment managers, on the other hand, have the responsibility to carry out the goals set by the CEO. They also have the mandate to assist and motivate the first line mangers to accomplish the objectives of the firm. Middle level managers still need leadership and management skills and training (Luthans & Bruce 2009). They can be poached from other firms or being promoted from first-line managers. Due to succession planning, middle level managers strive to become CEOs one day.
First level managers or first line managers foresee the daily management of line workers. They interact with employees on a daily basis and report to middle level managers. It is very advisable to do internal recruitment to first line managers. They can be promoted from line positions such as clerical and production levels. The production level comprises those employees who execute roles from first line managers. The best avenue to recruit members of this level is by external recruitment (Lombardo & Robert 2009). College recruitment, use of professional bodies, and use of Social media can be used to absorb the qualified personnel to do clerical and production jobs at this level.
Annotated bibliography
ALGERA, PUCK M., AND MARJOLEIN LIPS-WIERSMA. (2012). Radical Authentic Leadership: Co-creating the Conditions Under Which All Members of the Organization Can be Authentic. Leadership Quarterly 23/1: 118-131.
Abstract: Recently, in response to ethical challenges and loss of meaning within business, leadership theory and research has seen a proliferation of literature on ‘Authentic Leadership’. In this paper we argue that Authentic Leadership (AL), in the way it is currently theorized, is in danger of not reaching its stated objectives. We systematically address the “paradoxes” and shortcomings in current theory and suggest an extended focus Leadership Annotated Bibliography Page 18 of study. To do so, we draw on four existential authenticity themes: 1) inauthenticity is inevitable; 2) authenticity requires creating one’s own meaning; 3) authenticity does not imply goal and value congruence, 4) authenticity is not intrinsically ethical. We systematically pursue the implications of these themes for the future b of Authentic Leadership theory and propose a more radical form of AL in which the focus of study shifts from the individual leader to understanding the conditions under which all members of the organization behave authentically. We suggest this is more likely to achieve the objectives of Authentic Leadership theory. [Copyright by Elsevier]
AVOLIO, BRUCE, J., FRED, O. WALUMBWA., AND TODD, J. WEBER. (2009). Leadership: Current Theories, Research, and Future Directions. TheAnnual Review of Psychology 60/1: 421-449.
This review examines recent theoretical and empirical developments in the leadership literature, beginning with topics that are currently receiving attention in terms of research, theory, and practice. We begin by examining authentic leadership and its development, followed by work that takes a cognitive science approach. We then examine new-genre leadership theories, complexity leadership, and leadership that is shared, collective, or distributed. We examine the role of relationships through our review of leader member exchange and the emerging work on followership. Finally, we examine work that has been done on substitutes for leadership, servant leadership, spirituality and leadership, cross-cultural leadership, and e-leadership. This structure has the benefit of creating a future focus as well as providing an interesting way to examine the development of the field. Each section ends with an identification of issues to be addressed in the future, in addition to the overall integration of the literature we provide at the end of the article. [ABSTRACT FROM AUTHOR]
BENNIS, W., AND JOAN, G. (2010). Learning to Lead: A Workbook on Becoming a Leader. Philadelphia, PA: Basic Books.
Leading an organization is different from managing it. Managers want to be efficient. Leaders want to be effective. If you want to develop your leadership skills, the first step is Learning to Lead … Using wisdom from the world’s best leaders, helpful self-assessments, and dozens of one-day skill-building exercises, Learning to Lead invites you to discover the joy of leadership”. From www.Amazon.com
BIRDI, K., CLEGG, C., PATTERSON, M., ROBINSON, A., STRIDE, C. B., WALL, T. D., & WOOD, S. J. (2008). The impact of human resource and operational management practices on company productivity: A longitudinal study. Personnel Psychology, 61, 467‐501.
Authors investigated the merits of human resource and operational management practices with 308 companies over 22 years.
Empowerment positively impacts organizational productivity, as well as the adoption of teamwork and extensive training (beyond simply job training).
Operational practices (e.g., TQM) did not did not relate to organizational productivity.
CALDWELL. CAM, ROLF, DIXON., LARRY FLOYD., JOE CHAUDOIN., JONATHAN, POST. AND GAYNOR, CHEOKAS. 2012. “Transformative Leadership: Achieving Unparalleled Excellence.” Journal of Business Ethics 109/2: 175-187.
The ongoing cynicism about leaders and organizations calls for a new standard of ethical leadership that we have labeled ‘transformative leadership.’ This new leadership model integrates ethically-based features of six other well-regarded leadership perspectives and combines key normative and instrumental elements of each of those six perspectives. Transformative leadership honors the governance obligations of leaders by demonstrating a commitment to the welfare of all stakeholders and by seeking to optimize long-term wealth creation. Citing the scholarly literature about leadership theory, we identify key elements of the six leadership perspectives that make up transformative leadership. It also suggest leaders who exemplify each perspective, describe the ethical foundations and message of each perspective, and offer ten propositions that scholars and practitioners Leadership Annotated Bibliography Page 6 can use to test the dimensions of this new transformative leadership model. [ABSTRACT FROM AUTHOR]
CAMERON, KIM, S., AND ROBERT E. QUINN. (2011). Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework. San Francisco: Jossey-Bass/John Wiley & Sons.
The Third Edition of this key resource provides a means of understanding and changing organizational culture in order to make organizations more effective. It provides validated instruments for diagnosing organizational culture and management competency; a theoretical framework (competing values) for understanding organizational culture; and a systematic strategy and methodology for changing organizational culture and personal behavior. New edition includes online versions of the MSAI and OCAI assessments and new discussions of the implications of national cultural profiles.
CHOPRA, PARVESH, K., KANJI, GOPAL, K. (2010). Emotional intelligence: A Catalyst for Inspirational Leadership and Management Excellence. Total Quality Management & Business Excellence 21/10: 971-1004.
Although a centuries-old phenomenon, emotional intelligence has received an enormous amount of attention and popularity in various academic and non-academic circles during the last two decades. Emotionally intelligent abilities, capacities and skills are increasingly becoming significant and inevitable almost in all works of life ranging from effective leadership, building teams, to the globe-spanning network of communication, development of human potential and performance, social skills and economic and political life. In this dynamic and complexly integrated international economic system, tomorrow’s leaders will have to facilitate others to develop their own leadership, skills, and potential with the help of emotional intelligence. Nevertheless, there still exists continuing debate among researchers pertaining to the best method for measuring this construct of emotional intelligence. Keeping this in view, the present paper aims to introduce a new measure, based on a holistic and system modeling approach, to conceptualize and measure the phenomenon of emotional intelligence. It develops, constructs, and validates a model that conceptualizes and measures the phenomenon of emotional intelligence by constructing and using a latent variable structural equation model within the certain boundaries of the psychosocial system. It will provide us with a measurement or index of emotional intelligence at individual level. An emotional intelligence index will indicate the extent to which a particular individual or a group of people is emotionally intelligent and which areas lack this intelligence, if any. Strengths and weaknesses of various components of the model will also indicate characteristics at a certain level in order to pinpoint what exactly an individual or group of individuals requires to improve its emotionally intelligent capabilities. [ABSTRACT FROM AUTHOR]
CONNORS, ROGER., AND TOM, SMITH. Change the Culture, Change the Game. (2011). (Roger Connors & Tom Smith.)
Based on an earlier book, Journey to the Emerald City, this fully revised installment captures what the authors have learned while working with the hundreds of thousands of people on using organizational culture as a strategic advantage.
JONES-BURBRIDGE, JO ANN. (2012). Servant Leadership. Corrections Today 73/6: 45-47.
Participants usually walk away with an awareness of the values of servant leadership and develop skills to practice the principles of servant leadership. Since research has shown that servant leadership actually works for individuals and for group settings, how does one ask followers and subordinates to display the characteristics of a servant leader? […] the notion of servant leadership has evolved over time to mean that the servant leader not only cares about what he or she does, but also about his or her followers.
MARTIN, K., SABA, J. & LOMBARDI, M. (2009 December). The 2009 HR Executive’s Agenda: Driving Business Execution and Employee Engagement. Aberdeen research report available online at www.Aberdeen.com
The data from this report is a compilation of surveys and interviews with more than 400 HR Executives and line of business managers. This report compares Best‐in‐Class companies, which is based on employee performance, engagement and retention, to Laggards in those areas. Some highlights include:
42% of Best‐in‐Class (BiC) organizations expect a budgetary increase for HCM (includes processes, programs, and technology) in 2009.
BiC are 55% more likely than all other organizations to anticipate a budgetary increase for HCM in 2009.
Core competencies have been defined for all job roles in 59% of BiC compared to only 26% of laggards.
79% of BiC formally review or assess the effectiveness of the organization’s HCM strategy at least once a year compared to 55% of laggards.
48% of BiC utilize executive/leadership development services compared to 28% of laggards.
LOMBARDO, MICHAEL, M., AND ROBERT, W. EICHINGER. (2009). FYI: for Your Improvement: A Guide for Development and Coaching, 5th ed. Los Angeles, CA: Korn/Ferry Company.
FYI For Your Improvement™ 5th Edition is an easy-to-use development tool that features a chapter of actionable tips for each of 67 Leadership Architect® Competencies, 19 Career Stallers and Stoppers and 7 Global Focus Areas. (PUBLICATION ABSTRACT)
LUTHANS, FRED AND BRUCE J. AVOLIO. (2009). The Point of Positive Organizational Behavior. Journal of Organizational Behavior 30(2): 291-307.
SABA, J. & MARTIN, K. (2008 October) Succession Management: Addressing the Leadership Development Challenge. Aberdeen Group research report available online at www.Aberdeen.com
This report was compiled from a survey of over 310 organizations looking at how they develop their leadership pipeline and how they implement best practices to improve leaders in key positions. The study breaks the participants into 3 specific groups (Best‐in‐Class, Average, and Laggards) based on Percentage of key vacancies filled by internal candidates, job performance successors, bench strength, and employee engagement.
Best‐in‐Class organizations are 40% more likely to focus on developing a leadership pipeline across all levels of the organization.
Best‐in‐Class are 64% more likely than the industry average and more than twice as likely as laggards to have a formal process for identifying high potential workers.
59% of Best‐in‐Class organizations have established clear linkages between leadership development programs and overall business objectives.
Best‐in‐Class organizations are 178% more likely than other organizations to utilize gap analysis or competency variance tools to compare candidates when determining promotion readiness.
SOSIK, J.J. AND JUNG, D.I. (2010). Full range leadership development: pathways for people, profit, and planet. New York: Psychology Press.
The Full Range Leadership Development (FRLD) model has become the premier leadership research paradigm. This book is written with the objective of demonstrating how ordinary people in all walks of life have used FRLD to achieve extraordinary results of developing people to their full potential, boosting company profits, and creating sustainable business practices. [FROM PREFACE]
WELDON, D. (2008 August) Strategies in Workforce Planning: Using Talent Acquisition and Performance Management Programs to Meet Tomorrow’s Business Needs. Aberdeen Group Research Report available online at www.Aberdeen.com
The data in this report was compiled from survey responses from over 200 organizations from various industries and geographies. The organizations were broken into 3 classes (Best‐in‐Class, Average, and Laggard) based on employee retention, workforce capacity utilization, employee performance, and skills ability.
Best‐in‐Class companies are two times more likely than Laggards to form partnerships with local colleges, universities, and other training institutions to help develop worker’s skills and capabilities.
71% of Best‐in‐class companies understand the core competencies required in key job roles compared to 55% of industry average companies.
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there are 3 case studies. I prefer to do case study 1. please find attached information. you need to follow marking criteria(assessment task 2) on page number 15-16 of unit outline. for my university database, just google, acu leo page and login with details as follows :I normally use CINAHL database, or MEDLINE. REference style APA. font size 12, double spaced line.
Password : ranokiran.
SAMPLE ANSWER
Medicine case study
Q.1. Congestive cardiac failure due to digoxin toxicity
Causes: Congestive cardiac failure (CCF) is caused by conditions that damage the cardiac muscle. This includes cardiac complications such as coronary artery disease (CAD) which causes the arteries to be blocked or narrowed severely; affecting the circulation of blood. Other disorders associated with overworking of the heart such as hypertension, cardiomyopathy, diabetes and kidney diseases are leading causes for congestive heart failure. In this context, Sharon McKenzie causes of congestive cardiac failure are attributable to digoxin toxicity. This could have deteriorated his renal function due to the electrolyte disturbances and hypertension. Additionally, digoxin toxicity also caused the alterations in heart rate and rhythm, irregular respiratory rate that had crackles in both lungs (Hosenpud & Greenberg, 2013).
Incidence: CCF is a lethal disease that affects about 3.5 million people by 2007-08. Despite the technological advancement, CCF is still the leading cause of death in Australia; and the most expensive accounting close to $5.2 billion. One of the key causes for CCF is digoxin toxicity which accounts for 10-20% of patients who are on long term use of digoxin therapy- more common among the elderly (National Heart foundation of Australia, 2011).
Risk factors: Digoxin toxicity risk factors vary with individuals attributes. To start with, individuals use of diuretics –the stronger the diuresis effect of furosemide the greater the risk for digoxin toxicity. This is also influenced by individual’s ability to regulate electrolyte disturbances. Other risk factors include age due to age related kidney and thyroid complications. CCF due to digoxin toxicity is also influenced by the concomitant medications such as herbal remedies taken by the patient which increases the concentration of the serum digoxin (Hosenpud & Greenberg, 2013).
Impact on the family and the patient: Other than the physical impact, the patient may become psychologically affected and could feel like their dignity is reduced- particularly when they have to become dependent on other people. The major impact of CCF to the family is financial burden. Although there is no precise data existing on the economic burden of the disease at family level, a rough estimate indicated that approximately $411 million is spent annually to cater for hospitalization costs and nursing home costs. The family members are psychologically affected to see their loved ones suffer. In most cases, the family members may undergo grief period because they fear that their loved ones could die- especially if the person is aged. The CCF patient needs care all the time, which could be a challenge, especially if the family members are working ((National Heart foundation of Australia, 2011).
2. CCF pathophysiology
Signs & symptoms
Pathophysiology
Shortness of breath and increased heart rate
This is a systemic response aimed at compensating hearts inability to pump blood. This response is aimed at increasing the cardiac output and stroke volume. This is mainly due to calcium overload which affects the afterload, which further affects cardiac contractility resulting to increase in myocardial expenditure causing myocardial cell apoptosis; this causes heart failure (Patel & Deoghare, 2015).
Increased fatigue & Chest pain radiating from the body
Increased fatigue is due to reduced blood supply to the vital body organs. The chest pain is an indicator of heart attack, which could result to due structural changes in the cardiac muscle (Patel & Deoghare, 2015).
Swelling of the periphery organs- ankles, feet legs
This is due to activation of the norepinephrine which results to augmentation of the myocardial contractility. This causes activation of renin-angiotensin- aldosterone system (RAAS) and the sympathetic system; making neuro-humoral adjustments that are required for maintaining arterial pressure and perfusion (Patel & Deoghare, 2015).
Wheezing and cough that comes with crackles congested lungs
Additionally, the activation of RAAS causes fluid retention. The fluids retained are collected in vital body organs such as the lungs, making the lungs get congested. This causes the crackles and wheezing sounds (Patel & Deoghare, 2015).
Changes in skin colour
Indicates that the body is depleted off oxygen. This is because the heart is unable to adequately supply the oxygen demand (Patel & Deoghare, 2015).
3 Common classes of CCF drugs
Cardiac glycosides have been used to treat CCF for over 3000 years. This group comprises of Digitoxin (crystodigin), Deslanoside (Cedilanid-D) and Digoxin (Lanoxin). The natural extracts main mechanism of action is by increasing the pressure for cardiac contraction. Cardiac glycosides increase the concentration of intracellular electrolytes- mainly sodium- using Na+ K+ ATPase; an enzyme that cleaves ATP to ADP. The energy releases from this metabolic hydrolysis drives the Na+ K+, thereby increasing the force and the the velocity of the muscle contraction. The second mechanism is through the rise in intracellular calcium. The rise in calcium ions also increases the contraction velocity and force. Consequently, the heart rate is slowed, increased filling volumes because contraction is stronger/ greater, the velocity of the AV node conduction is reduced and the AV nodal refractory duration is increased. However, these drugs side effects include EKG changes, anorexia, vision disturbances and headaches (Katz & Konstam, 2012).
Angiotensin Converting Enzyme Inhibitors (ACE inhibitors) drug group members include Captropril (Capoten), Lisinopril (Prinivil) and Enalapril (Vasotec). The ACE inhibitors main mechanism is through regulation of the blood pressure using Renin Angiotensin Axis. Renin is produced by kidney and released to the blood when Bp is low. Once released in blood, it is converted to angiotensin I, then to angiotensin II- which is potent vasoconstrictor. Angiotensin II causes vasoconstriction and causes disturbances in the homeostasis balance causing water retention. High blood pressure resulting due to vasoconstriction results to the overload of the left ventricle, and if untreated the ventricle will fail. ACE inhibitors work by blocking the conversion of Angiotensin I to II, by inhibiting the enzymatic activity of the enzyme responsible for the conversion, this way; it reduces he systemic blood pressure and consequently improves the the cardiac function. The reduced blood pressure lowers the oxygen demand by the myocardial, reduces the preload and afterload. Other studies indicate that ACE inhibitors also work by widening the blood vessels, thus improves the blood flow reducing the work load of the heart and thereby reducing the blood pressure. However, there are side-effects include distress in the gastro intestines, dizziness and skin rashes (Katz & Konstam, 2009).
4. Nursing care interventions for CCF digitalis toxicity
Despite the advancement in CCF management, digoxin toxicity is reported. In this case study, it is most likely that the patient was prespribed a dose that is high than the renal function. The main post admission nurse intervention is to a) stop digoxin toxicity, b) control disease symptoms, and c) monitor the patient’s levels of digoxin. In this context, the nurse must assess the severity of the toxicity. The nurse should also assess the etiology of the toxicity i.e. is it accidental ingestion of more than recommended dosage, was the overdose deliberate or is is due to reduced metabolism of the digoxin due to drug interaction or due to other prevailing medical complications such as diminished renal function. Other factor that must be put into consideration is the patient age, ECG changes, the chronicity of the intoxication and patient’s medical history. The findings from this assessment will guide the nurse when making clinical decision on the treatment (Wang Et al., 2010).
To stop the toxicity, the patient will have to be discontinued from taking the digoxin therapy. Instead, the patient will be given digoxin fab fragments to reduce the toxicity. In some cases, activated charcoal can be used for an acute overdose. The patient results indicate the possibility of renal failure; the best approach is to administer binding resin, which has been found. Other supportive care includes hydration of the patient using IV fluids, support of the ventilator function using oxygenation. Potassium supplements can be used to raise the potassium supplements. The nurse should continue monitoring the digoxin levels until the ideal levels for digoxin (0.5-0.8ng/ML is reached. Simultaneously, other function such as renal function and potassium levels should be done. Calcium and magnesium supplements should be used to correct the electrolyte imbalance. If the patient is acidotic, sodium bicarbonate can be administered to reduce hypertension, the patient should be treated using other groups of medicines including ACE inhibitors. This remedy reduces vasoconstriction and fluid retention (Yang Et al., 2012).
The patient should indicate relief of symptoms. The nurse will ensure that toxicity symptoms such as shortness of breath, irregular heartbeat and peripheral oedema are reduced. The nurse will monitor the apical-radial pulse after every medication administration in order to monitor changes in cardiac rhythm. Additionally, patient serum level will be monitored regularly to determine the therapeutic activity on toxicity. This will include monitoring the levels of magnesium, calcium, potassium and creatinine. From the report findings, the nurse can evaluate the effectiveness of the medical intervention. The patient should be discharged only when the expected outcome (relief of the symptoms and reduction of digitalis toxicity) is achieved (Wang Et al., 2010).
To prevent toxicity in the future, there is need to regularly monitor the levels of digoxin in the blood. Additionally, the patient and their family should be empowered to ensure that they are aware of indicators of digitalis toxicity. The patient should be encouraged to reduce stress, have adequate sleep, regular exercise and eat balanced meal, particularly the Mediterranean diets. The patient should be instructed to report any changes in their body such as depression, weakness, vomiting or general body weakness (Wang Et al., 2010).
References
National Heart foundation of Australia. (2011). 2011 addendum to the National Heart Foundation of Australia/Cardiac Society of Australia and New Zealand guidelines for the management of acute coronary syndromes (ACS) 2006. Heart, Lung And Circulation, 20(8), 487-502. doi:10.1016/j.hlc.2011.03.008
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Katz, A., & Konstam, M. (2009). Heart Failure: epidemiology, molecular biology and clinical management. Philadelphia: Lippincott Williams & Wilkins.
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1- I have read the case study, and did the analysis (you will see my findings under the attached document called “Strategic Audit Format DELL”. Please use my findings to write the report.
2- Please use the attached word document called “Dell Strategic Analysis Report” to write the REPORT, when you open this document, you will see what are the exact requirements highlighted in yellow.
SAMPLE ANSWER
Introduction
Michael Dell is the founder of Dell Inc. and this was done Austin, Texas in 1984 whereby, he had an unparalleled thought concerning the organization. Dell needed to offer PC frameworks to clients specifically by conveying the most solid registering answers to address individual issues at the obliged time with no mistake to their clients overall. Dell is a company that is majorly based in the US which does the business of selling hardware and other services that is spread all over the world. The Dell Company specializes in the production of computer systems for example, various software’s, hardware, mobile devices for networking and other electronics. The Dell Company does not only sell its products to personal consumers, but also sell its product to the institutions like the government, healthcare institutions and eve to the education sectors (Theobald, 2010). Through its very many segments, it gives its customers a wide spectrum of solutions as far as their services are concerned so that it can widen its scope of distributions to global markets. Some of the solutions that it gives to its customers range from a series of configured IT and even networking and storage of the products through embracing infrastructure technology that is done through consultation and applications. For the dell company to carry out its business effectively, it must develop a well framed business strategies and plans.
Dell is an organization that conveyed change to its immediate model of offering and in the year 2007, the organization wound up making the first stride towards a worldwide retail methodology. This method involved taking off issues by including retail as a new channel and growing its administration offering to fulfill its clients and fulfilled. Dell began to offer its two models of PCs at more than 3500 stores of Wal-Mart in United States, Canada and Puerto Rico. In 2003, the administration of Dell chose to change the name of organization from Dell Computer Corporation to Dell Inc. This was finished to the point of perceiving the quickly expanding expansive product offering offered by the Organization. Keeping in mind the end goal to lessen the general cost that it used to bring about, the organization reported to offer most or every last bit of its assembling offices inside 18 months. This was until January 31, 2007, Kevin Rollins leaves because of the poor monetary execution and negative NEWS scope of the organization that prompted the arrival of Michael Dell as the CEO of the organization.
About the industry
The PC industry is mainly dominated by big players such as Microsoft, Apple, HP, IBM, Samsung, among others. In 2007, Dell was taken over by HP in terms of the market share and the condition has remained the same to date. Currently, Apple is the largest technology company due to the size of their shares and their huge sales in various places in the world. The Launch of the Windows 3.0 changes the computer market industry in favor of Microsoft such that some players were locked out of business. The launch of smartphones has destabilized the market forces in the PC industry, since such phones have almost similar capabilities like the PC.
Company Background
Dell is an organization that works comparable with Microsoft windows that changed plan of action and elements of the business. Dell is dated to be one of the biggest innovation organizations of the world regarding aggregate estimation of its impacts that are so colossal and alarming to numerous financial specialists who are intending to venture in a PC based business. The organization’s Netscape gave the first open to all online worlds Browser, which was of incredible utilization of a large number of the individuals who are keen on its operations all inclusive (Dell, 2015). Dell is an organization that drove the business sector until Microsoft entered the business sector with Internet Explorer that brought any changes into the technological world. In the year 2007, HP took the first opening as far as a piece of the overall industry from Dell. Notwithstanding, the dispatch of Window 3.0 in 1990 and Windows 3.0 changed the plan of action of the Dell business to the Microsoft’s Advantage over Apple, IBM, Atari and many different frameworks. This was so much felt yet because of the way that clients weren’t bolted into one seller’s item things were conceivable and well operational. The dispatch of the iPhone acquired Genuine made changes the cell phone industry and was the first notion of versatile that could in the long run destabilize the PC area of DELL Company. It never took so long that the organization chose to present iPad that later denoted the start of the end of the PC business, which had been a huge business foundation of the Dell organization. Dell is an organization that has contenders like Apple II that was framed in the year 1977and IBM PC that was shaped in 1981. They have all been attempting to try their hardest and coach clients in the business sector in their procedure of contending to be the best. There has been high upgrades made on the nature of generation as this is the key part that will help DELL as an organization to hold its old clients and get new ones in the business.
The organization encountered a VR “Virtual Reality” Announcement by Microsoft in 2015 in blend with the “visualization Glasses”. Different organizations, for example, Samsung Oculus and velvet are said to have experienced the same Virtual Reality declaration by Microsoft that served to hone their abilities the way it accomplished for DELL. The VR Innovation that is utilized for utilization by Dell is going to lead the world and a decent substitution to numerous different gadgets that are exceptionally required and needed in the figuring business.
Past Problems in DELL
Dell is an organization that was confronted by issues in the past and they incorporate the Poor monetary conditions all through the world and the end of web air pocket that meddled with its operations. For as far back as 10 years, a great piece of the Personal PCs (PC) deals were for tablets and PCs in the $799-$999 territory. If the organization utilizes a PC or Laptop 20% of the time, the most astounding value they need to pay is $599 and this was recorded to be too low as they thought things could be on their side. In 2002, the general interest for the PC frameworks and administrations declined on account of the world monetary shortcoming. This turned into an extraordinary test for the DELL Company to manage as it couldn’t make to deal its items to its clients and achieve its objective according to its arrangements. There was the ascent of minimal effort equipment PC makers in China and numerous individuals because of the falling economy needed to get the modest equipment’s so they redirected their regard for purchase them in China. This turned into a downside to the organization that wound up losing the greater part of its clients because of the failing economy. Regardless of purchasing the PC equipment’s in China, they also understood that they were not up to the norms that they wanted and couldn’t help make quality PCs as needed by their clients along these lines they lost numerous clients to their rival Apple who was currently best in quality generation of items. Numerous clients who were in the wake of getting a quality items occupied their business with DELL and went to Apple. Dell stood up to a test due to the rapidly changing advancement that it was not used to. It fails to handle the conformities in development in the blessed time in this way, its opponents had an unassuming time of telling in the business division. The failure of getting a handle on the changing advancement in incredible time made Dell to be directly in its operation while customer required now to buy extraordinary online and they were without further ado urged to oversee Apple who had used the usage of the new development on a helpful reason. The Increasing Unit Sales and Volume however Sales salary kept decreasing as a result of contention in the perspective of esteeming. This provoked DELL not making incredible arrangement as a result of the high expenses top it put in its stock. Customers fled away as a result of the high expenses that they stood up to in DELL. Customization of Desktop “Less extravagant Price” was another test that DELL expected to face. This is because, the association now had low arrangements that couldn’t entirety to the hungered for formal level as it expected to hold its customers appropriately encountered an adversity. New associations that created were a danger in view of the fulfillment felt by Dell. These associations were arranged in – Chinese, Korean republics and in the United States of America. There was Slowed enthusiasm for the ranges of the association in view of the nonappearance of enough supports to finish the procedure. The PC business felt some shivering issue due to reality that development had not been handled, especially in DELL and this incited directed examination that made it to fall behind. In spite of their being numerous issues previously, the organization is as of now encountering some different issues that are as an aftereffect of the quickly changing industry drifts that are felt in the PC business. In the late the DELL’s PC business slammed in the first quarter of 2013 with the new PC shipments falling 14% contrasted and the same period a year ago (Dedrick, 2008). This has been as an aftereffect of the organizations that give best PC because of innovation that is utilized in their premises. They have utilized individuals with best brains who can help in changing the world with the innovation that they have within their reach.
There is another challenge that is being confronted by DELL Company in the later. This issue is presently connected with the way that PC Users now have significantly more decision than anytime recently, which influence what they purchase and they can choose to purchase cell phones or even iPads, tablets that perform comparative parts with PC’s. Notwithstanding this, they can secure them frame other reason at a less expensive cost as they are delivered by numerous organizations like Samsung, Apple among others. Dell is encountering a huge test that is connected with Industry Convergence and Domination of Larger Players who have now commanded the business sector. A portion of the enormous player in the PC’s business who have commanded the business are similar to Apple who are currently extremely overwhelm because of the fat that they give the best of items needed by their clients because of their brilliant and practical measures that given the offer of the organization’s items. Another test that is confronted by DELL is the way that most PC creators do little item advancement all alone. This has driven the organization to depend for the most part on their suppliers for item advancement, and on Microsoft and Intel for new advances that they will use in their creation. All things considered individuals have discovered they can do as much as 80% on a tablet that they used to do on a PC and they have turned structure, acquiring PC’s to the purchasing of tablets that are not delivered by DELL. This implies that they need to make low expenses as they don’t create tablets, which are presently needed by customers in the business. Because of the issues of advances and also advancement propelling consistently, the PC business has now been made fiercer and DELL as Company is feeling this extraordinary effect; since it doesn’t grasp innovation with its moving pace. This implies that a long time from now risks are there will be a couple of PCs at home. Furthermore, DELL is very tested with this exploration discoveries. Around then individuals will be wearing PCs (embedded) for instance, in eyeglasses and this will imply that if DELL does not change its line of creation it may endure enormous misfortunes. Exploration demonstrates that Future is anticipated that individuals will like a wearable PC or gadgets like savvy, Google glasses, VR and numerous more items, which are not made by DELL Company accordingly, an enormous test for them. This is an unmistakable sign to the organization that it’s truly experiencing a genuine test that if the right measures are not imparted set up it will have high issue. Hence, the administration of the organization ought to wake up and gaze grasping new changes in the innovative world at the earliest opportunity.
Company’s Vision & Mission
Dell is an organization whose vision is to be the best in matters to do with data innovation Systems that must be utilized in the Company on a worldwide level by conveying the best client involvement in all business sectors they serve (Burns, 2011). The mission of the organization is to be much focused and try their hardest to inspire their clients who are exceptionally needing their backing.
Company’s Goals and Objectives
Dell Inc. As of late set an objective for the year 2020, known as legacy of good, which is a Corporate Social Responsibility (CSR) activity and also intended to build up a maintainable planet in the whole environment. Dell Inc. has a set goal, which is to give great quality support of its client at the least cost conceivable. Dell has done a few Improvements in client productivity that will help avow its goals that it cravings to work with (Dell, 2015).
Company’s Structure
The structure of the company is based under three strategies that it has employed for use in its premises. These strategies are inclusive of the corporate strategy, business strategy that works hand in hand with the human resource department to ensure that all functionality of the company are in the right place. The third strategy that is employed for use is the functional strategy that ensures that all the functions of the company are well done according to all the plans that were set aside and ensures that all the workers in the company are given all the desired privileges together with being encouraged to worked harder to the success of the company. The company has structured their products in a desire way that really impresses the customers by ensuring that they simplify their products and services in accordance to the desires of their customers who will be more impressed if they obtain what they want. DELL Inc. The structure is in a way that impresses their customers and this enables them to be in a better position of even attaining more customers. The structure ensures that the company has a good management from top managers up to the lowest mangers and that they carry out their duties accordingly. This ensures that the industry gives a win with industry-leading end-user computing solutions that enhance the scale of alternative computing solutions.
Company’s Range of Products
Dell center business level technique is easiest method; the organization is themed to lead the business by promoting the pattern of minimal effort and lean assembling. Dell’s online form to request and Just in Time stock framework is a reasonable evidence that dell seeks after Low Cost Strategy as its Business Level system. Dell likewise seeks after Differentiation method, its aggregate customization alternative and building your own PC is an exceptional idea which no other Computer maker takes after. The main product of this company is personal computers.
Computer Platform
The significant highlight of the practical level procedure of Dell is that the organization concentrates on utilizing its solid abilities as a part of direct deals, minimal effort assembling, store network administration capacities so as to build the classification of its items through which the organization can convey increased the value of its purchasers at lower cost. Utilize the focused abilities of organization in servers and PCs to seek after chances of income development. Dissimilar to the contenders that take over the customary model of worth chain, Dell does not keep up in-house supply of completed product inventories.
Corporate structure/culture
The Current corporate structure includes groups and group administrators who report specifically to senior directors or venture supervisors. The hierarchical structure is level and power is assigned to representatives. Administration in Dell has confidence in engaging its workers, Dell has some essential rules and winning with respectability is a piece of it, it makes Dell’s way of life aggressive. Dell’s way of life is developmentally focused; it is intended to incite advancement and innovation in representatives.
SWOT analysis
Strengths of the Dell Company may include the following market leadership, direct sales strategies, price on the basis of performance, most updated technology and many other more.
Weaknesses include over reliance on the institutional and corporate sales, non-acceptability in the retail sectors. Lack of technology in the company is a weakness that brings operations down. Production of one product of the company is a weakness as people need a range of products that they can be able to choose from.
Opportunities: markets that are unexploited enhanced usage of the internet that results in increased demand for the laptops and even technological modernization. The Partnerships that are evident with local manufacturers in researching the market insight and the Favorable situation that come as a result, in safeguarding the green field investments is a strength to Dell Company. The exchange rate is to the advantage of the company, together with low labor costs and tax rates that they are now experiencing.
Threats may include: impulsive trends in the market places, a financial crisis that is a great challenge to the whole world and the price wars. There are high sanctions that have been experienced by the company and they have resulted in high weakness in the company. There are restrictions that deny the multinational companies like Dell to be able to move their profits to certain percentage and this becomes a weakness.
Societal Environment Analysis (Pest Tool)
Political factors: various aspects of the politics have great impacts almost in all parts of the world. They may range from the government directives and even the institutional policies. In the case of the Dell Company there is one big threat of politics or the legal environment this is mainly seen as a threat because political factors involve government regulations that define terms and conditions that any business must operate within. Therefore, it is very important to consider this factor since many countries are still restrained by some of these policies which are put to defend domestic manufacturers and producers.
The economic environment may include the nature of the economy in which various companies compete. Some of these economic factors are like company directives, restrictions that are put in the budgets and even the income generation measures of the organization. The main challenge for the Dell Company as far as the economic environment is concerned is the degree of piracy.
Social factors which include the culture of the society and in some cases it may include attitude and the values, especially the change in the lifestyle of the people, change in the consumption patterns, attitude towards work and even to some great extent in the education and health. These external social factors may affect the way the company provides solution to the problems so that they can meet the demands of the customers since customers can decide to work with one vendor that serves all their interests. The major social factors are inclusive of the increased global target audience, effects of the brand name that may or may not be liked by the customers. Other factors are inclusive of the literacy rates of a region and the factor that determines how a customer finds an easier way of shopping online to save time and money.
Technological issues: the most important technology issue for the computer industries is the speed and the rate of adoption of the newly introduced technology that can greatly affect the effectiveness of the organization. There are factors that influence the technology that is supposed to be used in the industry and they are inclusive of; the ease of access to new technology, decline in technology cost and the global production factor all aimed at enhancing the functionality of the new technology.
Industry Environment Analysis (Five Forces)
The most important tool that can be selected as a way to be used to analyze the situation of the company as far as control recline is concerned is the porter’s five forces model. This is mainly because it helps the company to understand its strong points against its competitors in the market places. According to this model, competition in the industry can be as a result of five forces that are combined together for example the competition, rivalry within the organization, possible entry of new competitors in the market, possible growth of the alternative products, and bargaining powers of both the suppliers and the customers. For the rivalry against its existing competitors, there are many players like the Toshiba, HP, Gateway and many other companies that offer cost and competitive benefits. Threats of new entrance into the market: Dell Company has the obligation to do better so that they can beat their competition through producing using the most recent technology and then put their prices in a way that they will compete favorably. The bargaining power of the buyers: for many computer industries, customer bargaining power has been very soaring this is mainly because of the very little reliability of the brand in the market places and also due to the products of many producers look like. The bargaining power of the suppliers: because of the fact that there are very few vendors who are capable of supplying the major components of the computer, the bargaining power of the trader in the computer industry has also elevated.
The availability of substitute products in the market places has greatly impacted on the sale and productivity of the computer elements. They have the oligopoly kind of the market structure since most of the producers of the computer parts produce similar products.
Internal environment
Corporate management and management team
Dell is a company that is majorly based in the US which does the business of selling hardware and other services that is spread all over the world. Dell Company specializes in the production of computer systems for example various software’s, hardware mobile devices for networking and other electronics. Dell Company does not only sell its products to personal consumers, but also sell its product to the institutions like the government, healthcare institutions and even to the education sectors.
Corporate culture
Through its very many segments, Dell Company gives its customers a wide spectrum of solutions as far as their services are concerned so that it can widen its scope of distributions to global markets. Some of the solutions that it gives to its customers range from a series of configured IT and even networking and storage of the products through embracing infrastructure technology that is done through consultation and applications. For the dell company to carry out its business effectively, it must develop a well framed business strategies and plans.
TOWS Analysis outcomes TOWS analysis outcomes
Basically, TOWS has been just SWOT which is spelled from behind if we are keen to observe and SWOT is an acronym of Strengths, Weaknesses, Opportunities and Threats. The results of the SWOT analysis can be represented in a matrix which contains the Strengths and Weaknesses as the internal pieces intersecting with Opportunities and Threats as the external factors. Appendix A shows a representation of TOWS analysis outcomes. ST (strengths-Threats) considers making use of the internal strengths in order to run away from the external threats. An example is when the company faces a threat of its funds decreasing at an alarming rate; the company will be posed to a challenge of finding other methods of obtaining funds like making use of volunteer management software so as to increase efficiency and effectiveness (Burns, P. 2011)
WT (Weakness-Threats) which is a defensive position in the matrix and functions to try and avoid threats while minimizing on weaknesses and is considered most of the time when the organization in question is in a really bad position. For instance, the company may be facing the threat of losing funds and the company reacts by merging some of its programs with other organizations to save on resources and wait until its funding becomes stable.
External Factors Analysis Summary
The external factors analysis summary illustrates an automated version of organizing external factors in terms of both threats and opportunities and looking at how an organization makes response to these factors basing their arguments on the importance of each of the two factors. In this case, the sum of the weight is not supposed to go beyond the weight give to each factor, that is, 1.00 is the most important factor while 0.0 is not important. Moreover, a rate is assigned to each factor whereby 5 stands for outstanding and 0 is poor. The weighed score is calculated by finding the product of weight and rate of each factor.
Internal Factor Analysis Summary
The internal factor analysis summary consists of a spreadsheet provision that is relatively easy to use in an attempt to analyze the strengths, weaknesses, threats and opportunities in a particular organization. Once again, the rate and weight are used in the analysis. In this case, the total sum of weight must not be more than the weight of each factor as given in the summary and 1.00 weights refer to the most important factor while 0.0 factors are not important. When a rate of 5 is assigned to a factor, the factor is outstanding while that which is assigned 1 is a poor factor. Nevertheless, the weighted score is calculated by obtaining the product of weight and rate of each factors.
TOWS analysis: Strategic factors analysis summary
Strategic factor analysis illustrates a combination of some of the most essential factors of both the internal factor analysis summary and external factor analysis summary. This strategic factor analysis also outlines an overall outlook of an organization based on its strengths, weaknesses, opportunities and threats. The rate, which implies how well an organization responds to the factors, and also the weight which stands for the importance of the factor are some of the issues that are taken into account. Weight for each factor is assigned whereby 1.00 is very important while 0.0 is not an important factor. Nevertheless, all weights must total to 1.00. A rate of 5 to a factor is considered as outstanding while that of 0 is considered to be poor. The letter X is typed to each factor to imply the significant amount of time each factor will take. The weighted score is established by finding the product.
TOWS matrix and strategic alternative summary
The TOWS matrix is helpful when it comes to visualization of the analysis whereas it is very vital to understand how the elements of the matrix work together for positive results. When any particular company or organization manages to match the internal strengths to external opportunities, it gets the advantage of increasing its competency towards its customers.
SO (Strengths-Opportunities): This implies using the internal strengths to maximize on opportunities available for instance spending more time and focus on writing grant proposals if there is a lot of grant money availed.
WO (Weakness-Opportunities) which implies an improvement of the internal weaknesses by utilizing the external opportunities available. For instance, if there are lots of grant monies available and the company does not have grant proposal writers, the company may consider hiring or employing an expert or consultant, or better still send an employee for training on grant proposal writing.
ST (strengths-Threats) considers making use of the internal strengths in order to run away from the external threats. An example is when the company faces a threat of its funds decreasing at an alarming rate; the company will be posed to a challenge of finding other methods of obtaining funds like making use of volunteer management software so as to increase efficiency and effectiveness.
WT (Weakness-Threats) which is a defensive position in the matrix and functions to try and avoid threats while minimizing on weaknesses and is considered most of the time when the organization in question is in a really bad position. For instance, the company may be facing the threat of losing funds and the company reacts by merging some of its programs with other organizations to save on resources and wait until its funding becomes stable.
Recommendations
Review of the mission and vision
The company should review their IT system manufacturing in order to enhance automation of their services. The implementation of IT in their operations will see the realization of low cost production and a subsequent increase in profits realized by businesses.
Review of the goals and objectives
The company should review that goals and their objectives and make them be in tandem with the lowest possible costs as they strive to enter the untapped computer market and increase their productivity. Provision of good quality goods and services to the customers and offering cheap computers should form part of the company goals. The overall objective of all these goals should be focused at improving the market share of the computer market and to improve on their productivity.
In order to ensure a brighter future with fewer uncertainties, the company must begin to diversify their portfolio and opt for vertical integration in their business operations. Focusing on one product alone is risky business since the business can be struck by unforeseen circumstances.
Corporate Strategy
In terms of corporate strategy, the company should focus on internationalization of their products in order to reach untapped market.
Business Strategy
In terms of business strategy, the company should focus on implementing proper structure of business operations to enhance their overall presence in the computer industry. Moreover, the company should develop their business competency to enhance their competitive advantage as they strive to increase their market presence and to gain a big market share.
Functional Strategy
The company should capitalize on the latest advances in technology and streamline their operations in line with Information Technology to improve on their efficiency and reduce operational costs. Another functional strategy that the company should consider is to expand their operations into new markets in order to increase their sales and their overall revenues. Since the production costs at the company are still relatively high, a cutting costs strategy needs to be implemented by implementing a costs effective value chain in the organization.
Strategy Implementation
For Dell to move forward, the company needs to come up with the strategy information across the organization that will increase overall business performance. Another form of strategy implementation is that the company should withdraw from some of the activities that can perform well at lower costs in the value chain in order to maximize their profits. This is because such activities are very expensive and would make the company avoid expensive costs related to the cost of production. The management at Dell should ensure that the critical and core competency issues are kept in house with the aim of ensuring that the company moves forward. Since the company is determined to make profits, the company should explore the alternatives of selling their products through retail outlets and devise a plant to reward sales people on direct commission. This will ensure that the sales people work hard to meet their target and the company stands to benefit through increasing their sales. Moreover, the company should focus on high revenues and market share by putting more focus on the product development and market development.
Keeping in mind the end goal to improve their game changer, the organization ought to proceed with their internationalization arranges and guarantee that their organization works in all sides of the globe. This can successfully be accomplished by securing nearby and promising PC organizations. Moreover, the organization ought to move to a bio-comparable business to help in items broadening to enhance the general danger of overreliance in one item. The organization can likewise change their assembling areas to empower them diminish expenses and make more benefits. Because of headway in innovation, Dell ought to exploit online stages to enhance their corporate distinguish by dispatching forceful showcasing in the online stages.
The organization needs to search for little however encouraging PC organizations and converge with them so as to avoid future rivalry and grow their regions. The assembling focuses likewise need to be moved into territories with shabby assembling expenses to diminish the organization operations and build their general benefit. The organization ought to likewise contract their advertising methodologies and to build their center to the individuals who need PCs. Dell has kept up their emphasis on the business with the point of turning into the business sector pioneer. The organization has enormously put resources into HR to empower advancement and imagination required in the association. Furthermore, the organization likewise has a key center that is gone for using the assets in zones with most extreme effect to the association and their clients. The organization has likewise profited the physical assets, for example, the hardware, offices, and account to backing their operations without diversions. The organization has additionally been fruitful in gaining and keeping clients through their quality items and corporate brand substance.
Strategic Evaluations and Control Standards
Dell should focus on their future strategy to enable them know exactly what they are looking for as part of their future strategy. In this regard, the company should decide on what they are looking for to measure the things that is likely critical to their business model. Dell also needs to put specific business performance measures that are established on the expected performance and actual performance. Constant evaluations must be carried out to ensure maximum control of the specific business performance with the aim of improving on the company operations. In the case where the company performance measures that fails to meet the company objectives, the management at dell should come up with specific correction strategies that are directed to areas with shortcomings. Moreover, the company should look towards further improving on its performance with their aim of becoming the market leader in the computers market. In this regard, the management at Dell should ensure that they work hard in the three forms of organizational controls such as operational control, strategic control, and management control.
References
Burns, P. (2011). Entrepreneurship and Small Business. Palgrave Macmillan.
“Fast Food, Fat Profits” (http://www.youtube.com/watch?v=ViZQkCYfufk).
The documentary featured several people implicated, in one way or another, with the fast food business or with the so-called obesity epidemic in America. The documentary channeled its materials through several frameworks (Goffman), which were employed in various ways from the beginning to end.
Your assignment for this week is to (1) identify at least two frameworks through which the documentary filtered its materials, objectively laying out how the documentary’s message was crafted into a cohesive and unitary whole. Please do not editorialize or make evaluative statements. I simply want you to identify what the frameworks are. Then, once you have objectively described two frameworks, I want you to (2) utilize “radical doubt,” which means you do not accept what is communicated at face value, that you assume the documentarian and the interviewees in the documentary have concealed information or they are providing a faulty representation of social reality. In other words, I want you to assume there is strong incentive to lie, mislead and evade.
It should be mentioned that practicing radical doubt is absolutely necessary for the growth of knowledge, in the generic sense, and for your own sociological growth, in the more specific sense. There are good reasons to practice radical doubt. For this assignment, your task is to show me what those reasons are. What is the value added of maintaining a cynical, doubting stance toward an author, authority, professor, expert, etc? Are there limits to the practice of radical doubt, of framing social reality through radical doubt?
SAMPLE ANSWER
Radical Doubt
This paper seeks to evaluate the “Fast Food, Fat Profits” documentary that features people and corporations that are implicated in the prevalence of obesity in America. These people have been seen to fund and develop a new fast food culture that has seen the development of cheaper foods in place of the traditional home made food. Their actions have resulted in the development of the fast profit fast food industry that has led to the obesity epidemic in America. The paper will analyze the documentary in terms of its structured frameworks that were employed in the development of the documentary from start to end. Radical doubt will be utilized in the content of the documentary to conclude that the documentary has strong incentive to mislead and lie to the public about the obesity pandemic and eating habits of the American people.
Two frameworks that were identified within the documentary that objectively laid out how the documentary’s message was crafted included the inability for access to real foods and the lack of nutritional education about the food and eating habits of most American people. The paper seeks to defy the claims made by the documentary by stating that it simply communicated the issues at face value and the participants of the documentary were individuals providing faulty representation of the actual social and health situation of America.
The inability for access to real foods has been regarded as a prominent factor that has led to the obesity pandemic. However, this is just in relation to city dwellers. It has been noted that many fast food restaurants are usually located in and around cities in place of grocery stores that once existed in the same location. In the suburbs and rural towns in America, the situation is however different. People did not lose their traditional eating habits and as a result, still conform to a regular home cooked meal; and a trip to the many grocery stores around town. These towns have minimal fast food establishments as many dwellers do not consume fast foods. As much as the people in the urban centers insist that fast foods are the cheapest form of food available, this is considered untrue. Many researchers have come to the conclusion that raw food bought from the grocery stores is sometimes cheaper than the ready meals bought in supermarket stores.
It has also been shown through studies that the lack of nutritional education has about the food and eating habits of most American people to alarming rates. Food culture has changed and people do not eat to live but live to eat. Sauce and soups in modern day foods are made of fats and oils which make them fatty. The availability of television advertising and easy access to cheaper fast foods has caused the change in food culture. People eat more and yet they rarely cook natural food in their own kitchens. The death of real food outlets and the prevalence of the middleman fast food corporations have resulted in the lack of sound nutritional education.
These corporations spend billions of dollars in food advertising budgets that brainwash the public on new eating habits that are not necessarily cheaper or even good for their health. The corporations have been acting as middle men between the farmers and the American public by getting the real food from the farmers at very cheap rates, in a concept termed as adding value to the food through processing it and selling it to the public thereafter. The argument being that the fast food corporations have brought food closer to their customers and have made eliminated the need of shopping from the farmer and preparation of this food for the client.
The second framework that was discussed in the development of the documentary was Nutritional education to the American masses. Nutritional education has been focused on clinical interventions, population studies and obesity regulation. These programs are aimed at educating health care providers who take care of patients with weight problems. The prevalence of the importance of nutrition in weight management has been a way of increasing revenue for nutritional and health care experts. Even though they claim that weight management and nutritional management can lead to safe and effective interventions to reduce and eliminate the obesity pandemic. They claim that it will help us more effectively deal with this most pervasive health problems relating to food and nutritional issues.
Nutritional education is at its peak in America. Many working professionals have joined the health and fitness bandwagon. These individuals have also been seen to be dieting and exercising on a daily basis which reduces their chances of getting obese. The American media has also been instrumental in using fit and light weight actors and models in their programmers and advertisements to ensure that people aspire to live their lifestyles and live as healthy and fit as possible as thee celebrities. All in all, this paper will conclude that the responsibility of nutritional development and education should not be left entirely to these fast food establishments. Parents are advised to ensure that their children eat healthier. They should also ensure that they increase their physical activities.
Explain how the selected theorist approach to each element of the metaparadigm applies to the following:
Nursing practice
Nursing education
Nursing research
Make a grid
Person- definition, applied to nursing practice, applied to nursing education, applied to nursing research
Health-definition, applied to nursing practice, applied to nursing education, applied to nursing research
Nursing-definition, applied to nursing practice, applied to nursing education, applied to nursing research
Environment-definition, applied to nursing practice, applied to nursing education, applied to nursing research.
SAMPLE ANSWER
Position outline of Starbucks
First Starbucks location was opened in year 1971.The hotel begun as a small and single shop focusing on sell of great brewing products and quality coffee. The Starbucks hotel experienced fast growth and went public in the year 1992 and grew tenfold by the end of 1997.Starbucks has established several other locations in the United States, Japan and Singapore. The hotel began expanding its brand around these nations. Various products were added which include the following: The company started providing the quality coffee in the United airline flights, Selling quality tea via Starbucks’ Tazo Tea firm and made use of internet that provided the people with a chance of purchasing their coffee through online means, they began to supply the ground coffee and the entire bean to the supermarkets and also producing quality ice cream made of coffee with Dreyer’s (Garza, 2010). The competency of the company is well-defined as great premium coffee and other products at affordable prices and reachable locations. The company advocates for moral business practices and principles. In the year 2010, the company was voted as the best ethical corporate by the Ethisphere magazine.it is recommended that the company should consider improving its marketing strategies so as to maintain competitive in the market since there many competitors who are up coming.
According the porteric’s generic competitive strategy; the company shows the strategy of differentiation simply because the company provides a great premium coffee. More so it has peculiar know-how within the accessibility of many locations and this separates them from their competitors. The competitive advantage of the company includes; lower cost and differentiation (Allison, 2010).
year
Current ratio
Acid ratio
Equity to debt ratio
Gross profit (%)
Net profit margin
2007
0.7922
0.4713
1.3404
24.02
0.1923
2008
0.8011
0.4902
1.281
20.05
0.1512
2009
1.2901
0.8623
0.84
56.01
0.3154
From the observed ratios above, it shows clearly that the ratio of Liabilities vs. Assets have improved and this was good result considering the uncertain pursuit. The acid ratio reflects the same. The ratio of debt to equity can be seen to decrease and this is indication business stability. The gross profit reflects a huge growth and this was worthy for established business. The net margin ratio within the year 2009 was encouraging and it has viable competitive benefit (LEE, 2011).
VRIO analysis of starbucks company
Capabilities and resources of starbucks hotel
Rare
Value
Exploited
Costly to copy
Competition impact
Strategic and prime location
The company is located in a high-visibility,high-traffic locations and the near several settings which include university campuses, office buildings, suburban and downtown retail centers
Tap into clients influence factor.
Yes
yes
Yes
No
Offers a temporary competitive advantage
The firm has world brand equity and recognition
It has the most known brand within the coffee house and was ranked in 91st among the best worldwide brands in 2013
Successfully influences its recognized brand equity through licensing its products and merchandizing them
Yes
Yes
Yes
Yes
Strong competitive advantage
Its stores have concepts and aesthetic appeal
The stores have a cool factor associated with them and they are visually appealing
The firm offer free wifi,warm atmosphere, great service and music.it offers an environment for group meetings points and this form a greater part of starbucks hotel experience.
The hotel was designed to reflect the special character of environmentally friendly neighborhood which they serve in
Yes
Yes
Yes
Yes
Greater competitive advantage
Human resource relation and business ethics
The employees are knowledge based and builds a healthy corporate culture
Have strong human resource management and great corporate culture which translates to better customer service
The employees offer great advantage which includes stock options and retirement accounts.the employees are well taken care of.
Yes
Yes
Yes
Yes
Offer strong competitive advantage
Mobile outlets and leveraging technology
The company has invested in technology such as starbucks Android and iOS
Yes
Yes
Yes
No
Provide temporary competitive advantage
Calt status and customer loyalty
The company has maintained goodwill with the communities in which they operate in
Have greater social responsibility initiative that are undertaken
The company stores are environment friendly,they focus on recycling to reduce waste
Yes
Yes
Yes
Yes
Offer strong competitive advantage
Work cited
Allison, M. (2010). Starbucks has a new growth strategy — more revenue with lower costs. Starbucks has a new growth strategy — more revenue with lower costs.
Garza, G. (2010). The history of Starbucks. The history of Starbucks.
LEE, K. (2011). CASE STUDY: STARBUCKS. CASE STUDY: STARBUCKS.
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Border States Industries Fuels Rapid Growth with ERP
Border States Industries Fuels Rapid Growth with ERP
Order Instructions:
Read the case and answer the followings:
1. What problems was Border States Industries encountering as it expanded? What management organization and technology factors were responsible for these problems?
2. How easy was it to develop a solution using SAP ERP software? Explain your answer
3. List and describe the benefits form SAP software
4. How much did the new system solution transform the business? Explain your answer
5. How successful was this solution for BSE? Identify and describe the metrics used to measure the success of the solution
6. If you had been in charge of SAP’s ERP implementations, what would you have done differently?
SAMPLE ANSWER
Border States Industries Fuels Rapid Growth with ERP
What problems was Border States Industries encountering as it expanded? What management organization and technology factors were responsible for these problems?
One problem Border States Industries encountered as it expanded was lack of appropriate system that could support its new lines of business. The Rigel system it had was only restricted and limited to electrical wholesalers. It therefore needed to solve this problem to enable it continue with its operations smoothly. The company as well suffered as processes were stopped as the managers worked on the proposed new solution. This therefore meant that the company had to incur losses in terms of its sales because of these day-to-day disruptions. It also faced problems related with shortage of experts/consultants with experiences in SAP softwares making it to hire consultants to consume it to look like its old Rigel in some of its areas (Shepherd & Cordier, 2010). This caused delays and inconveniences.
The problem therefore was caused by failure of management to plan. Had they planned and anticipated growth of business in advance they could have made early preparation. Technology factors as well contributed to the problems. Technology the company had adopted earlier was not reliable and this caused delays and interruptions that contributed to the company incurring more expenses.
How easy was it to develop a solution using SAP ERP software? Explain your answer
SAP was customized to conform to the old Rigel system. The software was easy to use after its customization. It allowed automatic interface with other systems from vendors such as Taxpayers systems Inc., TOPCALL International GmbH, Innovis Inc among others. This therefore made it easier for the company to transact with its suppliers and other stakeholders. For instance, TOPCALL system enabled the company to fax customers and vendors directly from the SAP system. This therefore, made it easier for the company to make transactions with its customers and remit taxes to the government among other functions.
List and describe the benefits from SAP software
The more recent version of SAP software had a number of benefits to the company. One of the benefits is that it supported bills of material and kitting not available in the older system hence utility customers could easily be serviced since it prepared kits that could be directly delivered to the site (Shepherd & Cordier, 2010). The SPA software as well allowed the company to process more than 360,000 claims every year. The software is also important in helping track more than 1.5 million unique items across various branches the company runs (SAP, 2013). The softwares also helped the company to increase its sales with 300 percent, profits increased by 500 percent and it allowed more than 60 percent of transactions to be carried out using electronic EDI. The SPA processing as well reduced by 63 percent.
How much did the new system solution transform the business? Explain your answer
The new system solution contributed greatly to business transformation. The company process and operations improved to drastic levels. The company began to turn over its inventory more than four times every year. This indicated that its stocks increased as transaction were processed quickly (Computer Economics Report, 2014). Furthermore, financial monthly statements and year to date financial results could be accessed within a day after the closure of the books. Most of the operations were done electronically and this reduced manual work which was slow and tiresome. For instance, the company incoming emails, preparation of bank deposits became computerized. Vendor invoices as well arrived through electronic means hence reducing the number of staffs that were required. The company therefore saved cost of labor. Transactional errors reduced as well enabling the company to reduce the huge losses it was incurring.
How successful was this solution for BSE? Identify and describe the metrics used to measure the success of the solution
The solution contributed to success of BSE. It allowed standardization of data and this allowed management to access to up to date information hence made quick decisive decisions pertaining to their operations that impacted positively on the company financial status.
The metrics used to measure the success of the solution was use of costs as percentage of sales. Gartner Group consultants categorized these costs as costs of goods sold, warehouse costs, overhead and administration, IT support and delivery. The analysis indicated that between the year 1998 and 2001 implementation cost of SAP software was $ 9 million and investment that was paid back by the savings accrued from the new ERP system in a span of two and a half years (Shepherd & Cordier, 2010). Furthermore, it was revealed that the software produced a saving of $30 million between 1998 and 2006. As a percentage of sales, delivery cost reduced by 0.5 percent, warehouse costs by 1 percent, while overhead costs by 1.5 percent.
If you had been in charge of SAP’s ERP implementations, what would you have done differently? If I were in charge of implementing SAP, I would have done a number of things differently. I would have incorporated in the software additional software for decision support. The softwares would be able to produce reports on the markets trends and the business in entirety to help in informing decisions. As internet grows and expands, I would as well come up with a system that would allow customers to make their purchases, make orders and even review invoice. This would ensure that the company remain the best option to shop hence make it gain a competitive edge.
References
Computer Economics Report. (2014). Fighting Complexity: Can SAP Run Simple? , 36(7), 16- 20.
Stetson Company has so far had a lot of financial challenges in some of its wings of operation such as the Fly Airways, Technology, and the Banking sectors. The occurrences of the issues such as the currency exchange rates, bidding process, risk management and the hedging options (Clark and Buffett, 2014). In this case, they prompted the finance department through the Directorate the department to come up with a report that comprehensively evaluates on these sectors as presented below.
Stetson Air
Free Cash Flow Methodology in Stetson Group Fly-Up Airways (FA)
Free Cash Flow, FCF is the available cash to the stakeholders when all the expenses, interests, taxes, capital expenditures and the present portion of the long-term debt have gone through the deduction from the revenues. FCF will be of value to the organization since it enhances the provision of an accurate financial picture of the company than the net income. Net income, in this case, is the accounting adjustments that at some may not have an impact on the Stetson’s health. For instance, Fly-up Airways may have a negative Free Cash Flow. The company may find it hard to continue doing business operations without borrowing from other financial institutions to sustain it. In addition, when the company experiences a downward trend in the cash flows, then it signifies that there will be stagnation in its growth (Wilson and Adler, 2013).
On the hand, the other value of the free cash flow to the Stetson Company is in the evaluation of the company’s financial ability in realizing its stated goals and then objectives to the stakeholders. In this case, the company that has positive cash flow, as in the case of Fly-up Airways of the Stetson Company, will attain the full financial strength in meeting its financial obligations.
The Revenues of FA = $325m
EBIT = 85m
The total working capital= $20m
Corporation tax is 30%
Debt to equity ratio = 70%/30%
In this scenario
Free Cash flow will be given by:
FCF=Sales Revenue – Operating Costs and Taxes – Required Investments in Operating Capital
=325 – 20
$305
Since FA has good free working capital, Stetson should continue with their plans of acquiring the company.
Evaluation on the Possible Defence Tactics That Might Be Adopted By Fly-Up Airways
Fly-Up Airways in the case of its failure in bidding process may adopt the below options to sustain the situation; Fly-Up Airways may go for the option of selling itself to the bigger companies through trade sales. As a result, the company, in this case, will act as a subsidiary buyer. Failure in the bidding process may also prompt the management of the Stetson Company to sell its assets, rather than the shares, to save the situation. As a result, a potential buyer may have the choice to choose from the most useful assets so as to save the company from further troubles (Wilson and Adler, 2013).
In the case, the Fly-Up Airways fails to find an appropriate buyer then it will go for the auction method of selling itself. In such situation, the company will strive itself so as to get the potential buyer with the highest bidding amount. All these processes, however, will have to take place through the stock exchange, as it is only the best way or place that a company can perform or initiate its acquisition well. In addition, many potential buyers are also available in the stock exchange market that, in this case, should provide for the options for the Fly-Up Airways in auctioning itself within the shortest time available.
In some cases, the Fly-Up Airways bidding process may receive the rejection. The company will, in this case, withdraw their offer further to reduce the chances of the bid becoming more and more hostile to the public. Cases of hostile bids have the tendency of generating conflicts of interests between the directors and the shareholders. For instance, in such bidding process, the directors may lose their jobs while the shareholders end up selling more shares than the previously announced figure for sale from the company.
The other option that the Fly-up Airways has in the case of the hostile reception of their bidding process is to avoid the use of the poison pills. Poison pills entail the schemes and the strategies involved in the issuance of more stock to the present holders, resulting in the dilution of the bidders share in the company. Such circumstances that may lead to the frustration of the bidding process should be avoided at all costs by the Fly-up Airways to evade the hostility in the bidding process (Wilson and Adler, 2013). Another option that the Fly-up Airways may adopt in the case of hostile bidding process is to look for friendlier potential purchasing companies. In addition, Fly-up Airways may also look for the white knight that together with the friendlier company may provide the option for quotation of higher prices of shares than the hostile bidder in the stock market (Wilson and Adler, 2013).
Advantages of Cash Offer or Mixed Mode Financial
Cash offers have the advantages of providing the option minimal and closing costs that can take place within the period of implementing the contract. However, the contract should be acceptable to both involved parties in such situations. On the other hand, the seller enjoys the benefit of not waiting for the approval of the mortgage In this case, the agent will have no fear of the issue of the properly not earning its appraisal. The instance is that it is the banks that mostly do need the appraisals while not either the seller or the buyer. In addition, the agents from the Fly-up Airways will enjoy the benefit of the few contingencies that, in this case, enhance their closeness to earning their commissions (Beattie, Fearnley, and Hines, 2011).
Disadvantages of Cash Offer or Mixed Mode Financial Offer
Buyers need to be more cautious in their contracts the engage in so as to enable their protection from having the contingencies in the contract. In this situation work with their agents who will guide them on the suggestions relating to the appraisal issues and also how to carry out such appraisal issues effectively. For instance, the elements that the agent may address, in this case, are the; Termite Inspection, Well and Septic, Building Permits, School Districts, Wetlands and Lot size. The agent, in this case, has, to ensure further, that the buyer makes all the verifications on the contents of the contract. As a result, it enables him or her get familiarized with the requirements and the legalities of the contract at large (Beattie, Fearnley, and Hines, 2011). The seller, on the other hand, may find it also hard to do his or her verifications on the funds involved in the transaction process that entails the third parties. The agent may sometimes have too much pride in handling the transaction process. For instance, he or she (agent) may end up ignoring some contents of the contract, especially when handling his or her client during the transaction process (Lee, 2006).
Stetson Technology
The Significance of Exchange Controls for the Investment Decision
The decisions on the exchange control investments come with some laws or regulations that the government uses to regulate the foreign exchange of the country’s currency. For instance, the government may initiate the exchange controls on a single currency such as allowing for the convertibility of the currency into the country’s currency.
In addition, the control of the exchange rates helps the citizens of the country in making the right choices on the investment decisions or choices. For instance, the individual may be able to evaluate the inflation trends of different countries. As a result, he or she will choose the best nation with favorable inflation trends so as to avoid failure in his or her business (Lee, 2006).
Strategies of Dealing with Restricted Remittance
Remittances are the monies that migrants from home send to their mother countries. The funds are also of importance towards the growth and the development of these nations. Countries, however, have to come up with the strategies for ensuring that this money gets back home despite their citizens staying abroad (Beattie, Fearnley, and Hines, 2011). For instance, the two governments in place of the countries where these citizens stay should cooperate with each for the realization of its success. The governments may work together towards their tax and their foreign affairs departments in revealing the information details concerning the citizen’s earnings. Consequentially, the tax departments may use such information calculation the expected or the amount that these migrants should send back home. In this instance, it will also be possible to track the individuals who never subject themselves at all for taxation purposes.
Viability of Investment in Cambodia
Cash Flow Statements will assist the investment in Cambodia in expressing how the Stetson Company raised the cash or money and the expenses of the money during a given period. As a result, Cash Flow Statements, in this case, will measure the Stetson Company’s to manage its incoming expenses in the coming days or periods (Palepu, 2007). In most of the occasions, Stetson Company will be in a good shape when it will be able continuously to generate more cash than its expenditure. As a result, the Cash Flow Statements just as was identified before, will serve as a tool for evaluating the company’s financial health status. In addition, it will also determine the abilities of the company to meet the incoming bill and liabilities during its normal operations or transactions (Palepu, 2007). A business that has more cash runs their operations better. However, cases of low negative cash flow for a year may come from the poor financial strategies that the company may have towards its growth and development. As a result, the real issue here of positive development does not get its required attention. With regards the financial analysis, there is a need for the Stetson Company continues to evaluate on its cash flow tends to avoid meeting such bad omens in the financial sector of the company (Alexander, Britton and Jorissen, 2007).
Potential Risk Exposures to a Company In Future
Potential Future Exposure is the expected maximum credit exposure for a given period with the consideration of the calculation of the level of confidence. As a result, PFE determines the counter party risks or the credit risks. The calculation of the Potential Future Exposure (PFE) entails the evaluation of the trades carried out with the possible market prices in the future, especially at the times of lifetime transactions (Beattie, Fearnley, and Hines, 2011). As a result, PFE may also assume the name sensitivity analysis of the risk with respect to the market prices. However, the expected maximum exposure is not the same as the maximum credit h exposure possible. As such, the maximum credit exposure defines the upper bound on the confidence interval for the possible future exposures (Alexander, Britton and Jorissen, 2007).
In most of the occasions, the credit managers remain focused on the present exposure evaluations such as the current market exposures and the outstanding receivables that, in this case, form part of the collateral management. However, the incoming problem here is that it emphasizes on the current but does not create the opportunity for the indication of the credit risks in the coming future (Clark and Buffett, 2014). Due to the losses that accrue from the credit risk, the instance, in this case, takes a bit long time to prosper into a more viable method of evaluating the potential exposure. In addition, the potential exposure is not the same as the present exposure since its existence is in the future. As a result, it gives a wide choice of the outcomes instead of the single point estimation case (Palepu, 2007).
Management of Risks
As much as the term goes with risk management, the objective of the Stetson Company is to eliminate the risk entirely from the company rather than just its management. However, risks are uncertainties that an individual or a company cannot do away with completely. Risks continue to occur and in most of the occasions they may prove hard to predict their time of occurrence (Kwok, 2005). However, Stetson Company may use the below strategies to manage the potential risks that may occur in the company; ensure that good risks and opportunities are identified, assessed, managed and reported. A
Aligning risk appetite and strategy enhance the embedding of risk management in decision-making, allocating resources to effectively and efficiently manage risks and ensuring efficient management of risks with the use of the best practices.
Stetson Bank
Stetson on Banking
Stetson’s Increased Exposure to Credit Risk As A Result Of the Borrowing Requirement
Stetson Company stands at high risks of exposure to the below categories of risk exposures; corporate, sovereign, Bank, Retail and Equity exposures.
Corporate Exposures
Corporate exposure defines the type of exposure that the Stetson Company will find itself in, in relation to the partnerships or the proprietorships that it will be doing business operations within the market structure. For instance, there is a need for a special guidance on the small or medium entity for the purpose of the avoidance of occurrence of this type of exposure (Clark and Buffett, 2014). As a result, corporate exposure exists in other further sub-classifications as given below that facilitate in the lending of the assets during the normal business operational activities (Smith, 2010). Object Finance that involves the funding of the physical assets in relevance to the expected cash flows from the rentals or leases on some of the identified assets in the company. Commodity Finance is the funding of the reserves, receivables or the inventories of the exchange traded commodities instead of the borrowings from the independent sources of finances (Beattie, Fearnley, and Hines, 2011). The income producing real estate that entails the financing of the real estate that is either rented or leased out by the debtor for the purposes of generating cash flow used to repay the exposure. High volatility commercial real estate that involves the funding of the commercial real estate so that to how a higher level of volatility of loss rates in comparison to some other forms carrying out lending (Elliott and Elliott, 2008)
Sovereign Exposures and Bank Exposures
Sovereign exposures define the loan given to a given country. Elements of this forms of the exposure are the central banks from different countries, public sector enterprises, multilateral developments that meet the threshold for the 0% mark for the risk weight through the standard guidelines approach (Hussey, 2011). Bank Exposures are the loans to banks or security firms through the regulatory capital requirement. Some domestic PSEs or MDBs fail to meet the threshold for the 0% mark of the risk weight through the standardized approach is also in the class of Bank Exposure of risks (Kirk, 2009).
Retail Exposures
Retail exposures include the loans that the Stetson Company makes to the individuals. For instance, the credit cards, overdrafts or the residential mortgages from some of the products for lending in the retail exposure categories. With the consideration of the maximum one million Euros, the exposures to small businesses that are under the management of the retail exposures are also in this category as well (Gibson, 2013). The management of the risk exposures due to retail business may not as such take place due to the influence of banks or on the individual basis for the purposes of evaluation of the potential risks to the business. However, it takes care of the exposures due to groupings that share the same characteristics (Fridson and Alvarez, 2011). As a result, retail exposures may further fall in; Residential mortgage, qualifying revolving exposure, other retail and equity Exposures.
Equity exposures are the direct interests in the assets and the incomes of a financial institution such as the case of the Stetson Company. In addition, it also entails the indirect interests such as the derivatives. An exposure will fall under the category of the Equity Exposure types (Lee, 2006). The return funds invested in the equities may only be attained by the sale or the liquidation of the person or who is responsible for the issuance of the equity
The Hedging Options Available To Stetson
In relation to the financial issues and management, hedgehog is the investment that the company undertakes with the primary objective of reducing or eliminating the risks in another possible investment for the company (Kirk, 2009). Stetson Company may use the below available options of hedging in its operations;
Perfect Hedge
The position that the Stetson Company will take to eliminate the risks of anther available option is the perfect hedge. However, the position will require full 100% negative correlation to the investment for hedging purpose that also in some instances is not easily available. Consequentially, there are either the imperfect or the near perfect hedges that, in this case, do occur at their best to the company (Palepu, 2007).
Equity Hedging
In this case, Stetson may go for its individual hedging of the long stock positions through the option of buying the protective options as long as there is the availability of options for trading the stock available. On the same note, hedging of the entire portfolios against the systematic market risks through the use of the index options may also take place (Ittelson, 2009).
Future Hedging
In this option, the trader has the choice of hedging the positions against the synthetic futures position. Stetson, in this case, may hedge the long futures position with the synthetic short future positions. On the same note, hedging of the short future positions may also take place against the synthetic long futures positions (Palepu, 2007).
Hedging Commodity Price Risk
In the case where the Company may be involved in the production of consumable raw materials, the company may remove the commodity price risk through hedging in the commodity’s future market. However, cases of the short hedges do lock the selling price of a commodity in plan for sale in the future (Ittelson, 2009).
Solution from the Data Given
Sometimes, parties may subject themselves to an agreement of making periodic payments mostly at the maturity of the swap
In the case of the above problem;
Swapped value=$2, 000, 0000
Libor+3 basis points=Libor+0.03%
FTSE=(100-92.75)=7.25%
In this case payment=a floating interest rate=libor+0.03% on 2,000,000
With a libor value of 6%p.a and a swap tenor of 180 days, the floating leg payer/equity receiver would owe:
(6%+0.03)*$2,000,000*180/360=6,030,000
As a result, this is the equity payer/floating leg receiver
At the same date, that is after 180 days, following the appreciation of FTSE by 7.25% from its level at trade commencement, Stetson would owe Harry 7.25%*$2,000,000=$145, 000. However, the FTSE at six month mark fell at 7.25% from the level of trade commencement. In this case, Stetson would owe hurry an additional 7.25%*$2,000,000=$145,000 because there is a negativity in the flow.
Assessment and Evaluation of the Specific Points Raised By Simon In Relation To Developments in the World Financial Markets.
The primary centre of focus of Simon in relation to the development of finance in the world financial markets is the issue of financial capitalism. For instance, financialization usually enhances the talks that primarily dwells on the financial capitalism that occurred at some time ago. During such times, the financial leverage tended to outdo the capital or the equity while the financial markets strived to outwit the dominance of the industrial economy the economics related to agriculture (Previts, Walton and Wolnizer, 2012).
According Simon, financialization is the economic systems that seek to aid in the reduction of all the values exchanged. The values may either be tangible, intangible, future or present promises of a financial instrument. Simon further postulates that the origin of the intent of financialization is to foster the reduction of any activity related to work product or service into an exchangeable financial tool such as the currency. As result, it would make it affordable for individuals in trading with the financial instruments in place (Smith, 2010).
Simon further added that workers through the financial tools such as mortgage may find it possible trade theses premises for future work, wages or homes. As a result, financialization takes care of all the insurance demands from such occasions (Wilson and Adler, 2013).
In the case of the above problem;
Swapped value=$2, 000, 0000
Libor+3 basis points=Libor+0.03%
FTSE=(100-92.75)=7.25%
In this case payment=a floating interest rate=libor+0.03% on 2,000,000
With a libor value of 6%p.a and a swap tenor of 180 days, the floating leg payer/equity receiver would owe:
(6%+0.03)*$2,000,000*180/360=6,030,000
As a result, this is the equity payer/floating leg receiver
At the same date, that is after 180 days, following the appreciation of FTSE by 7.25% from its level at trade commencement, Stetson would owe Harry 7.25%*$2,000,000=$145, 000. However, the FTSE at six month mark fell at 7.25% from the level of trade commencement. In this case, Stetson would owe hurry an additional 7.25%*$2,000,000=$145,000 because there is a negativity in the flow.
Conclusion
The report covers the Stetson Company financial issues. As a result, it gives the true picture of what the company needs to implement in collaborating with the department of finance. Consequentially, the effect of the findings if implemented will become a success to the operation of the company. For instance, the evaluation of the issues touching the currency exchange gives the preview to the company on what place or country to make a choice on for investments purposes. In addition, the issue of risks exposures presents a clear picture of what the threats the company is at during its operation and how to detect them in their occurrences. In so doing, the report further presents the way the manager or the company may manage such risks in the event of their occurrences. Last but not least, the paper also gives the way the Stetson Company react on the issue of hostile bidding process or scenarios. The paper reports majorly on the financial condition of the Stetson Company. As a result, the report, in this case, will serve as a valuable material to both the finance department and the company at large in the assessment of financial issues they face.
Bibliographies
Alexander, D., Britton, A. and Jorissen, A. 2007. International Financial Reporting and Analysis. London: Thomson Learning.
Beattie, V., Fearnley, S. and Hines, T. 2011. Reaching Key Financial Reporting decisions. Chichester, U.K.: John Wiley & Sons.
Clark, D. and Buffett, M. 2014. Warren Buffett and The Interpretation Of Financial Statements. New York: Scribner.
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Fridson, M. and Alvarez, F. 2011. Financial Statement Analysis. Hoboken, N.J.: John Wiley & Sons.
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