India and UK Financial Insurance Industry Analysis

India and UK Financial Insurance Industry Analysis Chapter 1: Introduction The financial performance of insurance industry can be assessed by knowing either its strategies or by knowing its profitability. Knowledge of strategy will helps in examining internal and external position of a company. Comparative study of insurance sector is analysis of financial performance of any insurance company. This is directly linked with the earning potential and effectiveness of management strategies of a company. Choosing a wise insurance is very crucial because of, balance to the risks and returns. The reason for choosing Indian and UK insurance industry for the research is because of improved economical status of the country and increase in the value of insurance in the country during last several years. The UK Economy is the largest in Europe and is also ranked as the fifth worldwide as per the market exchange rates, in terms of GDP (Broadberry et al, 1992) were Indian economy is now improving and it is now booming growth in insurance companies were greatest effect of Indian economy during the last several years. This would need a grate deal of financial planning knowledge, as well as the knowledge about the current financial market thus it can compare the other to the insurance companies the analysis of different insurance companies from India and UK. Also insurance companies has to manage their investment in such a way that the principal amount should not erode, investor should get the assured returns those company has promised. This would involve a grate deal of knowledge about the portfolio management of the risk and return and comparative study of insurance industries. Comparative study of insurance is also a topic of hunger for many economists. Till date many researches has been carried out for comparative study of financial analysis in banking sector and very few research has been taken on insurance industry. The main purpose of the research is to find comparative study of insurance companies in India and UK. What characteristic will determine of insurance industry is the main thrust behind the research. Further research is carried out to know in depth relationship of various characteristics that will make up the of Indian and UK insurance industry. The main outline objectives of the research are as under; A Research Design is the framework or plan for a study which is used as a guide in collecting and analyzing the data collected. It is the blue print that is followed in completing the study. The basic objective of research cannot be attained without a proper research design. It specifies the methods and procedures for acquiring the information needed to conduct the research effectively. It is the overall operational pattern of the project that stipulates what information needs to be collected, from which sources and by what methods. Objectives of the research This research has been carried out to comparative study of insurance companies and analyzes financial performance between Indian and UK’s insurance companies. The main aims of the research are: To analyze financial performance of insurance companies in India and UK To evaluate factors that determine financial performance of insurance companies To carry out strategic financial analysis of insurance in India and UK The structure of the research paper is as follows: Chapter 2 reviews the literature on comparative study of insurance sector; Chapter 3 describes the subject matter of the research: the Indian and UK economy and insurance industries ; Chapter 4 outlines the methodology and data used in this study; Chapter 5 presents the analysis and Findings and Chapter 6 discusses the results obtained in the context of the underlying theory the findings of other empirical research; Chapter 7 concludes the research outlining the limitations of the current study and makes recommendations for further work. Chapter 2: Literature Review 2.1 Theory Insurance is, a contract in which one party agrees to compensate another party fir any losses or damages caused by risk identified in the contract in exchange for the payment of a lump sum or periodic amounts of money to the first party. In simple meaning facilitates recompense during crisis situations, insurance means promise of compensation for any potential future losses. Insurance is a form of risk management mainly used to hedge against the risk of a contingent loss. It is designed to protect the financial security of an individual, company or other entity in the case of unexpected loss. Insurance is defined as the realistic transfer of the risk of a loss, from one entity to another, in exchange for a premium. It is a contract between two parties the insurer (the insurance company) and the insured (the person or unit seeking the cover) in which the insurer agrees to pay the insured for financial losses arising out of any unforeseen events in return for a regular payment of premium. These unforeseen events are defined as risk and that is why insurance is called a risk cover. Insurance may be described as a social device to decrease or eliminate risk of loss to life and property. Under the plan of insurance, a large number of people correlate themselves by sharing risks attached to individuals. The risks which can be insured against include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance. Analyzing insurance companies is very different from analyzing corporate and thus presents unique challenges and industry specific issues. The ability of any insurance company to meet its policy obligations is the foundation of the industry. Absent the trust of policyholders in the financial integrity of any insurer and the industry as a whole, this risk transfer mechanism/industry would collapse. This truth is even more acute in the ES industry where no guaranty funds exist, except New Jersey. However, rapid growth of Insurance sector during the situation liberalization period is seen as the most significant event in financial sector hist. in view of the fact that then, lot of changes take place in the sector as it was exposed to new challenges of competitive competition. For the first time, the private and foreign players were given entry and thus the sector saw a wonderful rate of growth in its business. A well-developed insurance sector is needed for economic development for a rising economy like India as it provides long-term funds for physical and social infrastructure progress at the same time make stronger the risk taking ability. The investment supplies for India in the upcoming years are well-known. Thus, Insurance sector, to some extent, can enable investments in infrastructure development to help maintain economic growth of the country. In this backdrop, we raise two questions: what is the contribution of insurance sector growth towards economic development and financial intermediation in India and United Kingdom. Our study does not stop here as we take a step further to examine the financial and economic growth effects of Insurance sector reforms and the rate of growth of reforms. The insurance companies offer a comprehensive range of insurance plans. The most common types include: term life policies, endowment policies, joint life policies, whole life policies, loan cover term assurance policies, unit-linked insurance plans, group insurance policies, pension plans, and annuities. General insurance plans are also available to cover motor insurance, home insurance, travel insurance and health insurance. Due to the growing demand for insurance, more and more insurance companies are now emerging insurance sector all over the world. With the opening up of the economy, several international leaders in the insurance sector are trying to venture into the insurance industry. The comparative study of insurance sector, Analysis of ratios are calculated from companys balance sheet and income statement and are used to evaluate the performance of the company in a particular reporting period. Analysis of ratios can be compared to the previous years in order to assess trends or between the comparable companies across the industry in classify to get the relative performance estimation. It is very important that every ratio should have a reference point the industry (sector) average or median. The ratio analysis works better if comparing ratios not with the complete set of companies within a particular industry, but with a preferred subset of companies that share certain features, produce the similar product, and have identical macroeconomic and governmental factors affecting them. For the study of companies, operating in several industries it can be helpful to run a cross-sectional analysis to identify a group of firms, involved in the same mix of industries. In some cases a comparison to the economy averages can be meaningful, especially in successful or constricting economies. Therefore, stable margins may be a good indicator during the recession, while the industry and economy averages are declined. It is also important to that usually conclusions can not be made from reviewing one set of ratios. That creates a necessity of a complex analysis of one set of ratios against another. The classification of the objective ratio for the comparison may require a substantial amount of work and a good judgment in order to evaluate a range of achievable and acceptable values. Although the understandable simplicity, such ratios have certain limitations that often make them most useful at identify questions to be answered rather than giving answers to them. There are multiple factors affecting and limiting comparative study of insurance sector, in particular the actual comparability of the firms and different accounting policies used by them are among the most important ones. The issue of comparability may become one the critical aspects to pay attention to while performing the analysis. Various macroeconomic or legislative factors may apply to the companies in the same industry but in different countries that sometimes makes a direct comparison inappropriate. Comparisons with other companies may become even more difficult because of different accounting policies, especially outside the US. Thus different accounting methods may result in significantly different ratio values that require normalization by the analyst. 2.2 Classification of insurance sector There are mainly two types of insurance life and non-life (general) Life insurance is concerned with making provision for specific event happening to the individual, such as death whereas General Insurance(non-life) is more commonly concerned with provision for a specific event affects properly, such as fire, flood , theft, burglary etc. The major difference between Life Insurance and General Insurance is the Principal of indemnity. Indemnity means â€Å"making good the loss† i.e. for tangible goods, one can make good for the loss that has been caused due to reasons like – theft, fire or natural disaster. Here basically we can value the exact monetary value of a commodity, but in case of life insurance the principal of indemnity does not work, since we can not value in any way the value of human life. 2.3 There are five main sectors: Life Insurance Home Insurance Auto Insurance Health Insurance Disability Insurance Section 2 (11) of Insurance Act 1938 defines Life Insurance Business as follows: â€Å"Life insurance Business is the business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is assured on death or the happening of any contingency dependent on human life and any contract which is subject to the payment of premium for a term dependent on human life and shall be deemed to include.† (Mukherjee and Hanif, 2007) In simple term we define life insurance as a contract in which the insurer in consideration of certain premium, either in a lump sum or by other periodical payments, agrees to pay to the assured sum of money , on the happening of specific event contingent on the human life. 2.4 Benefits of insurance industries Life insurance has long been a staple in basic estate planning. Life insurance  can provide an income tax-free death benefit* far in excess of the premiums paid. However, much of the life insurance proceeds can be wasted if the ownership and beneficiary designations are not properly structured. Superior to Any Other Saving Plan Unlike any other savings plan, a life insurance policy affords full protection against risk of death. In the event of death of a policy holder the insurance company makes available the full sum assured to the policyholder’s near and dear ones. Encourages and Forces Thrift A saving deposit can easily be withdrawn. The payment of life insurance premiums, however, is considered sacrosanct and is viewed with the same seriousness as the payment of interest on a mortgage. Thus, a life insurance policy in effect brings about compulsory savings. Easy Settlement and Protection against Creditors A life insurance policy is the only financial instrument the proceeds of which can be protected against the claims of a creditor of the assured by effecting a valid assignment of the policy. Administering the Legacy for Beneficiaries Speculative or unwise expenses can quickly cause the proceeds to be squandered. Several policies have foreseen this possibility and provide for payments over a period of years or in a combination of installments and lump sum amounts. Ready Marketability and Suitability for Quick Borrowing A life insurance policy can, after a certain time period (generally three years) ,be surrendered for a cash value. The policy is also acceptable as a security for a commercial loan, for example, a student loan. It is particularly advisable for housing loans when an acceptable LIC policy may also cause the lending institution to give loan at lower interest rates. Disability Benefits Death is not only hazard that is insured; many policies also include disability benefits. Typically, these provide for waiver of future premiums and payments of monthly installments spread over certain time period. Accidental Death Benefits Many policies can also provide for an extra sum to be paid (typically equal to the sum assured) if death occurs as a result of accident. Tax Relief Under the Indian Income Tax Act, the following tax relief is available 20% of the premium paid can be deducted from your total income tax liability. 100% of the premium paid is deductible from your total taxable income. When these benefits are factored in, it is found that most policies offer returns that are comparable or even better than other saving modes such as PPF, NSC etc. Moreover, the cost of insurance is a very negligible. The issue of comparability may become one the critical aspects to pay attention to while performing the analysis. Various macroeconomic or legislative factors may apply to the companies in the same industry but in different countries that sometimes makes a direct comparison inappropriate. Comparisons with other companies may become even more difficult because of different accounting policies, especially outside the US. Thus different accounting methods may result in significantly different ratio values that require normalization by the analyst. Seasonality may also affect the ratios if the business is a subject to seasonal fluctuations in demand, thus year-end values may not be enough representatives and should also be normalized. Most of the ratios are preferred to be within the industry averages or economy norms. For example, all turnover ratios belong to this category. However, for some ratios the extreme deviations from the industry averages may mean that the company is highly attractive for the investors. This is usually true for all ratios dealing with income or cash flows. There are different insurance companies that offer wide range of insurance options and an insurance purchaser can select as per own convenience and preference. Several insurances provide comprehensive coverage with affordable premiums. Premiums are periodical payment and different insurers offer diverse premium options. Insurance companies may be classified into two groups: Life insurance companies (which sell life insurance, annuities and pensions products) and Non-life, General, or Property/Casualty insurance companies (which sell other types of insurance). Life insurance is concerned with making provision for specific event happening to the individual, such as death whereas General Insurance(non-life) is more commonly concerned with provision for a specific event affects properly, such as fire, flood , theft, burglary etc. The major difference between Life Insurance and General Insurance is the Principal of indemnity. Indemnity means â€Å"making good the loss† i.e. for tangible goods, one can make good for the loss that has been caused due to reasons like – theft , fire or natural disaster. Here basically we can value the exact monetary value of a commodity, but in case of life insurance the principal of indemnity does not work, since we can not value in any way the value of human life. 2.5 Introduction of insurance sector India In India, the concept of insurance was never a serious thought as compared to other countries. People still are under insured, life insurance premium to gross Domestic Product (GDP) ratio is a mere 1.4% as compared to a healthier rate of 8% amongst other developing with poor state of services provided. Presently in India, the insurance sector is nationalized, services are rendered by Life Insurance Corporation of India (LIC) and General Insurance Company (GIC) along with its 4 subsidiaries .While LIC provides life insurance, GIC is concerned with non life insurance. – Motor, marine, fire, health and personal accident insurance. LIC employs people in various departments – publicity, public relation department , development department, personal department , accounts department, legal department ,investment department , inspection department, mortgages department vigilance department, foreign department, corporate planning department, building department etc. Of late, parliament’s nod for the insurance Regulatory and Development Authority (IRDA) bill has changed the whole scenario. With the passage of the bill, entry of Private Indian as well as foreign companies, a long with existing players, in the insurance sector will add variety and quality to the present insurance services. The other positive impact would be on creation of new employment opportunities. Till now employment in the insurance sector was considered akin to any government job, but now with private participation, it will assume significance importance and probably become an exciting career option. UK’s The UK Insurance sector remains a crucial contributor to the UK economy after the public, banking and manufacturing sectors. The industry accounts for approximately 10% of total UK IT expenditure, and positive growth is expected to continue for the next few years as insurance firms begin to realize the benefits to be gained from IT investment. Although the United Kingdom (UK) insurance market is now one of the five largest in the world, relatively little is known about the practices of the major firms and policy-makers which influence its operations. In particular, whilst the determinants of rating agencies’ assessments of United States (US) insurers is well documented, published studies have yet to provide comprehensive evidence about insurance company ratings in the UK. (Hardwick, P and et al, 2000) 2.6 Current scenario of insurance industry Breaking of strict monopoly of LIC was not an easy task where to an audience who spelled insurance as LIC. LIC is working for last 50n years and caved its name for itself in the Indian psyche. Insurance being long term contract, an established name means feeling of security and more importantly LIC policies come with the safety tag-the most touted government guarantee. To enter private insurers with an altogether new agency force, all ready to hawk freshly designed insurance policies. and the market scene – a government owned established insurance entity-the Life insurance Corporation with a field force of over 6,00,000agents and more than 80 products to choose from. Purchase of Insurance is a decision that determine by a number of demographic as well as personal behavior factors. Main responsible factors include Age, Income, Education, Risk, etc. Some of the important determinants as review by different scientists in their research are as under 2.7 Risk and return in industry Risk seems to be a fact of life experienced by an individual as well as by a whole organization. This risk may be economic, physical or financial. There is an increase in unexpected losses caused by natural disasters as well as accidental damage. Wealth is subject to possible loss, and therefore everyone from individual to the whole financial firm desire to invest in loss prevention activities that reduce the probability of loss (Hoffman, 2007). A sense of security may be the next basic goal after food, clothing, and shelter. There are various forms of risk is exist in the market. All the risks are differed from each other. Some risks creates a quick big impact on a business while, the impact of some risks can be seen at a long run. The risk in business is always associated with losses. Prevention and management of risk is only possible after having sufficient information regarding its intensity. Preventing and managing risk is one of the burning issues for the corporate world. The management of any company is always looking for the thing that will reduce the risk on their investment and definitely gives some output on the account of their investment. The ultimate thing that will satisfy this need is the return. Return is the proportionate sum of capital given to the investors for their investment. In other words, return is some kind of security against the investment made for any kind a business. Figure 2.1 Risks management in business Asset Market Credit Operating Business Event Liquidity Catastrophe Non-Catastrophe Risk Financial risk is mainly divided in to 2 main categories i.e. Systematic or Market risks and Unsystematic risk. The risk associated with an investment can be broadly divided into two categories based on nature and occurrence of risk. Some risks are associated with the firm, and that risks are called as firm-specific, whereas the rest of the risk is associated with market condition and generally affects all investments in whole market. The firm specific risk can be further sub-divided in to various categories. Some firm specific risks are affect s project value that is called Project specific risk and in some cases projects value is affected by the nature of competitions and that type of risks are known as Competitive risks. Some risks are affecting the value of a whole industry and so known as Industry associated risks. In some cases, all the companies in a market will affect by macro economic factors and so that type of risk is known as Market specific risk (Friend and Bicksler, 197 7). Default risk is the risk fallen on the part of financial institution or a creditors for your investments i.e. weather they are able to make a monthly return on your asset or not. To achieve short term financial goals most of the investors preferred cash investments. The only limitation with use of cash investments is that, they are unable to produce higher returns over long term as compared to other financial options. The only reason for this is cash investments are unable to adjust inflation rates. In other words cash investments are not preferable source of investment for long term project. So, what are the other options that will satisfies needs for investment of long term project. 2.8 Empirical research Economic decisions are made on both the negative as well as positive issues. Positive issue studies on insurance gradually integrated these issues via assimilating developments in the field of risk and uncertainty following works by Arrow (1963), Lewis (1989), (1953) and others. The economics on insurance demand became more attentive on evaluating the amount of risk to be shared between the insured and the insurer rather than evaluation of life or property values. Economic value judgments are made on both the normative as well as positive issues. Later studies on insurance gradually incorporated these issues via assimilating developments in the field of risk and uncertainty following works by von Neumann and Morgenstern (1947), Arrow (1953), Debreu (1953) and others. The economics on insurance demand became more purposeful when determining the amount of risk to be shared between the insured and the insurer rather than evaluation of property values. Headen and Lee (1974) studied the effects of short run financial market behaviour and consumer expectations on purchase of ordinary life insurance and developed structural determinants of life insurance demand. Morris and Barbara A (2003) study about Risk Insurance and mean study related with a Wedge between Insurers and Reinsurers, authored by credit analysts and legitimate disagreements between insurers and reinsurers about the values attributed. Criteria and claims values, insurers and reinsurers are equally concerned with the Risk. Cole et al, (2008) theoretical in observed research related to the comparative analysis between property-casualty insurance industry, studies commonly focus on either insurers or reinsurers. Richard et al (2008) give article of features a presentation and discussant comments on hurricane and wind insurance organized by Richard A., for the American Risk and Insurance Association (ARIA) 2007 Annual Meeting in Quebec City, Quebec, Canada. Venard et al. (2008) determine in the article of analyzes Hungarys insurance sector as an important part of the countrys economic transition from a centrally planned economy to a market economy. It details the historic economic development of the Hungarian insurance market from a state monopoly to a competitive. Yu, Tong et al 2008) study about Intangible assets facilitates insurers capacity to retain existing business and attract new clients. In his study it can be shows that analyze how the incentives to protect intangible assets affect asset risk-taking behaviour of property and ability insurers. Browne et al. (1993) concluded that income and social security expenditures are significant determinants of insurance demand. They further concluded that inflation has a negative correlation with demand of purchasing for insurance. Beck and Webb (2003) identified the two main services provided by life insurance: income replacement for premature death and long-term savings instruments. They further found that demographic variables, higher levels of education and greater urbanization as independent factors in explaining insurance demand. Income has been found to be having a positive association with health insurance purchase decision consistently in different studies conducted in different countries Propper (1989) in UK: Cameron, Trivedi (1988) in Australia and Hurd and McGarry (1997) in USA. Health insurance choice essentially entailed a simple decision whether or not to purchase private health insurance (Barrett and Conlon 2003). Binary discrete choice models using either logit or probit has been used to analyse determinants of this type of purchase decision. Cameron and Trivedi and Cameron (1991) specified a conditional expected utility function that is associated with alternative health care regimes. The consumer chooses the regime that maximizes expected utility. Feldstein (1973) has argued that as the price of health care increases, the demand for insurance should increase as well because this causes an increase in the risk of net worth depletion and thus an increase in the demand for insurance. Healthcare expenditure largely depends on healthcare costs. Recent research has documented that most of the secular change in health insurance coverage can be attributed to higher health care costs (Cutler et al. 2002). Zietz (2003) and Hussels et al (2005) has studied about purchasing behaviour of a customer to purchase life insurance over a period of 50 years. The research further concluded that there is a positive association observed between increase in savings behaviour, financial services industry and demand for life insurance. Beenstock et al. (1988) noted that marginal tendency to insure i.e. increase in insurance spending when income rises by 1$, differs from country to country and premium rates are varies directly with real rates of interest. Browne and Kim (1993) found from his study that income and social security expenditures are significant determinants of insurance demand; however, inflation has a negative correlation with demand of insurance. Beck et al. (2003) found out the two main services provided by life insurance: income replacement for premature death and long-term savings instruments. They considered three demographic variables i.e. young dependency ratio, old dependency ratio and life expectancy, higher levels of education and greater urbanization as independent factors in explaining insurance demand. Income is positively co-related with purchase of health insurance product, concluded from various studies conducted in different countries by Propper (1989) in UK: Cameron and Trivedi (1988) in Australia and Hurd and McGarry (1997) in USA. Barrett and Conlon (2003) concluded from their study that choice of health insurance essentially entailed a simple decision whether or not to purchase private health insurance. Binary discrete choice models using either logit or probit has been used to analyze determinants of this type of purchase decision. Cameron and Trivedi (1991) specified a conditional expected utility function that is associated with alternative health care regimes. The consumer chooses the regime that maximizes expected utility. Feldstein (1973) noted that as the price of health care increases, the demand for insurance should also increase. This is because an increase in the risk of net worth depletion. Healthcare expenditure largely depends on healthcare costs. Nyman (1999) noted that higher healthcare costs may led to higher demand for insurance in the face of rising costs. However, people belonging to different income groups are likely to respond differently to these changes. Kronick and Gilmer (1999) argue persons with low incomes and few assets buy insurance primarily to protect their health. Van De Ven and Van Praag (1981) noted that, education and income are generally positively correlated. Higher income generally decreases the opportunity cost associated with the purchase of private health insurance. Overall, increases in both income and education would be expected to lead to an increase in the probability of buying the insurance. Some studies conducted in context with the financial performance of General Insurance Companies of India. The Researcher has studied those research works which are as follows: Performance of various plans marketed by Life Insurance Corporation of India – A case study of Rajkot Division, A dissertation by Mrs.Sonal Naina evalua

Because of postmodernist changes in economic conditions

The current business environment is characterized by a considerable level of competitive rivalry and therefore businesses have to constantly reengineer their internal processes in order to build and maintain a competitive advantage. In this respect, a business organization has three strategies at its disposal: differentiation, cost-minimization and focus (cited in Dess, 2007).Because of postmodernist changes in economic conditions, businesses have been globalizing their operations in order to implement the strategy of cost minimization. This is because in some countries lower labor costs reduce the cost of operations. This enables businesses to build a competitive advantage.However given the high state of competitive rivalry in the current business environment, achieving sustainability is the critical success factor. Strategies of differentiation, cost minimization and focus cannot meet this objective of achieving sustainability. In order to meet this objective, the top management ha s to build the right organizational culture.Organizations structures must adapt constantly to the changes taking place in the external environment. As a result, the process of managing change becomes a critical success factor in the organizational context. When it comes to managing change involving an IT project, the strategic alignment process becomes relevant.This alignment takes place between IT strategy, business strategy, organizational issues and information systems issues. Managing change is a difficult process because alignment with strategic focus must be maintained. Otherwise the value of managing change will have been lost.In this regard, the critical consideration is to minimize the level of employee resistance. Most change management projects fail because of employee resistance. However the management can avoid this problem by involving the employees in the process from the beginning. In this respect, building an organizational culture based on ownership, responsibility and accountability is the critical success factor.This enables the management to enhance employee motivation.According to Hammer & Champy 1994, the process of reengineering internal business processes is best facilitated through implementing the balanced scorecard methodology. This methodology becomes particularly relevant in the context of David Harvey’s account of post-modernity. According to David Harvey’s account of post-modernity, the process of international business has facilitated the high speed of labor mobility.This means that working conditions cannot be monitored sufficiently. This is because businesses are reengineering their internal business processes in terms of globalizing their operations. The balanced scorecard methodology views the organization from four perspectives: financial, customer, learning and growth, and internal business processes.The advantage in managing change under the framework of the balanced scorecard is that this process emphasize s the interconnectedness between different process chains. This facilitates the development of the project management team.Because the different process chains are interconnected, managing change means that more than one department will be affected. This enhances the complexities of managing change. However the management must maintain the continuous improvement program as a result of post-modernity as described by David Harvey.This is because the rising level of competitive rivalry forces businesses to seek new segments of the market in order to maximize shareholder wealth. This leads to the process of globalization. Normally this would increase the cost of production since the supply chain must be managed on an international basis.However in the context of post-modernity as described by David Harvey, the management in an international business can conduct the process of global segmentation in order to standardize operations across political boundaries. This facilitates the impleme ntation of the strategy of cost minimization.This confirms the need for business process reengineering as described by Hammer & Champy, 1994. As a result of this framework for strategy formulation, the competitive advantage becomes sustainable.One of the critical considerations when it comes to globalization is the need for delegation of authority. This is because consumer tastes and preferences vary across political boundaries. As a result, businesses have to vary their strategies in order to target the local market effectively. However the international business environment is characterized by a fast pace of change and therefore, local business units must be given the autonomy to formulate their own strategies.However these strategies must be in alignment with the corporate strategic focus. For this reason, delegation of authority must be supported by an efficient and effective world-wide communications structure. However in the business environment characterized by post-modernity , businesses have to reengineer their internal operations in order to meet the demands of consumerism.This standardizes demand patterns to some extent and as a result reduces the cost of operations. This also leads to the development of a sustainable competitive advantage.

The Symbolic Role of Birds in Kate Chopins The Awakening...

The Symbolic Role of Birds in Kate Chopins The Awakening The Awakening by Kate Chopin is a truly enlightening novel about a young woman who begins to really live her life for herself, breaking out of the various barriers of society and family. Chopin uses symbolism as an excellent tool to slip her ideas to readers, causing them to think, giving readers a glimpse into the life of this young woman at a time when women were harnessed by many restraints. The birds that appear throughout the novel are the most intriguing symbols; they are used many different ways, to mean many different things, and to portray various emotions and situations. As the novel begins, Chopin likens Edna to a bird in a gilded cage. Edna is not†¦show more content†¦Edna is not a particularly motherly woman, unlike most women of her social circles. She certainly does not measure up to her husbands idea of a good mother, and in the beginning pages of the novel, he criticizes her. He reproached his wife with her inattentions, her habitual neglect of the children (637). Edna certainly does not fit in with the mother-woman role the other women of her acquaintance are astute in assuming, but she feels she has taught her boys to be strong and does not feel the need to hover around them. The use of birds is slipped in here also. The women of Grand Isle are fluttering about with extended, protecting wings when any harm, real or imaginary, threatened their precious brood (638). While Edna does not hate her children, she comes to realize the extent that they tie her down, and she feels that she has given up her life for them. As the novel progresses, Edna realizes she has friends who at times know her better than herself and are always willing to give advice. Mademoiselle Reisz realizes Ednas struggle but is very careful while conversing to Edna about her knowledge of the situation. She believes Edna is strong and tells her she must be like a bird; she [Mademoiselle Reisz] felt my shoulder blades to see if my wings were strong, she said. The bird that would soar above the level plain of tradition and prejudice must have strong wings. It is a sad spectacleShow MoreRelatedThe Awakening By Kate Chopin1563 Words   |  7 Pages The Awakening by Kate Chopin The title of Kate Chopin’s novella is significant and full of enriched symbols that reflect Edna’s Awakening. Edna is waking up her understanding of herself as an individual. Not as a mother nor a wife, but who she is as a woman and a sexual being. Throughout the novel, there are a few distinct types of awakenings; from her awakening to herself as an artist, realizing that she can have her own opinion over what kind of music she liked, and the most important, Edna realizedRead MoreA Solitary Soul By Kate Chopin1995 Words   |  8 PagesOn April 22nd, 1899, Herbert S. 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Symbolism, the interpretation of Ednas suicide, and awakenings play important roles in the analysis of all critics.    SymbolismRead MoreEssay on The Awakening751 Words   |  4 Pages The Awakening Analytical Essay THE AWAKENING Throughout Kate Chopin’s, The Awakening, numerous scenes of birth and renewal are depicted. Various symbols placed throughout the book show Edna Pontellier’s awakenings. For instance, many references are made to oceans and water. It is in the water that Edna has her first rebirth, but it is also the place where she chooses to die. Water symbolizes life, which is the reason that Edna’s renewal takes place there, but it also symbolizes darkness andRead MoreThe Symbolism Of Birds Throughout Chopin s The Awakening1564 Words   |  7 PagesThe Symbolism of Birds in Chopin’s The Awakening In the 1899 novella, The Awakening, Kate Chopin illustrates the social oppression that women experienced during the Victorian Era (1837-1901). The protagonist in the novella, Edna Pontellier, reflects the progressive women of the late 1800s who began to question the traditional gender roles of society. In contrast to customary women such as Adele Ratignolle, the model character in the story who displays very high standards of being a wife and a motherRead More feminaw Seeking a New Identity for Women in The Awakening Essay1461 Words   |  6 PagesSeeking a New Identity for Women in  The Awakening      Ã‚  Ã‚  Ã‚   In The Awakening, Chopin questions gender roles. Chopin seeks an identity for women that is neither wife nor mother. To achieve this end, she incorporates progressive feminist ideas into her writing. Yet, in the end, Chopin also shows that, because of years of conditioning, many women are unable to escape society’s stereotypical roles by any satisfactory means. The protagonist of the novel, Edna Pontellier, does not possess the skillsRead MoreKate Chopins The Awakening1871 Words   |  8 Pagesworshipping her children and submitting to her husband. Kate Chopins novel, The Awakening, encompasses the frustrations and the triumphs in a womans life as she attempts to cope with these strict cultural demands. Defying the stereotype of a mother-woman, Edna battles the pressures of 1899 that command her to be a subdued and devoted housewife. Although Ednas ultimate suicide is a waste of her struggles against an oppressive society, The Awakening supports and encourage s feminism as a way for womenRead MoreKate Chopins The Awakening is full of symbolism such as birds, clothes, houses and other narrative1200 Words   |  5 PagesKate Chopins The Awakening is full of symbolism such as birds, clothes, houses and other narrative elements are symbols with an extremely significant meaning. The birds are the major symbolic images from the very beginning of the novel: A green and yellow parrot, which hung in a cage outside the door, kept repeating over and over: `Allez vous-en! Allez vous-en! Sapristi! Thats all right! (Chopin pp3) In The Awakening, caged birds represent Ednas entrapment. She is caged as a wife and mother;Read MoreThe Awakening by Kate Chopin1366 Words   |  5 PagesKate Chopin’s novel The Awakening depicts a conflict between a woman’s inner desires and society’s standards. As the plot develops, the protagonist, Edna, has an increasing self-awareness that is termed in the story as an â€Å"awakening.† Once awakened, Edna begins a search to discover and define her self-identity and shed off the one placed on her by society. As Edna becomes impulsive and follows her desires, her self-awareness progresses into emotional and sexual awareness. She begins to realize thatRead MoreEssay on Kate Chopin and Edna Pontellier as Feminist s1554 Words   |  7 PagesKate Chopin and Edna Pontellier as Feminists Kate Chopin is known for her literary works that depict culture in New Orleans, Louisiana, and of womens struggles for freedom. She was born Katherine OFlaherty in Missouri, and later married Oscar Chopin in 1870. He was a Creole cotton trader from New Orleans. Later they moved to a plantation near Cloutierville, Louisiana, where her husband died in 1882. She returned to Missouri with her six children, and began her writing career. She began

Macroeconomics And The Current Economic Situation

Introduction Macroeconomics plays an important role in business activities of every organizations. Most of business entities were affected by Reserve Bank of Australia’s decision on the cash rate and other macroeconomic policies of the government. Hence it is crucial for every organizations to learn about the current macroeconomic situation and other macroeconomics factors that happening and changing every day. This report then will address and advise the latest current economic situation in Australia. There are many factors that we can discuss and mention in macroeconomics activities, however this report focus on more details about the recent movement GDP growth rate, unemployment rate, and commodity price. Importantly, the forecast about†¦show more content†¦China‘s stock market continues to going down and lead to consumer confidences and production in this country to decrease. Hence, Australia export for coal and other production input will suffer a drop. Moreover, mining investment has also experienced a substantial fall as a result of China’s equity market fall. According to RBA, the interest rate has remained unchanged at low 2.0 per cent in the previous period. This will be welcomed by housing investors. The low interest rate will discourage people to save and put their money in banks, and encourage them to start investing their money in property or other sources. A recent increase in dwelling investment, capital city and retail sale volumes can be explained by this. Housing credit has increase to around 7% and it is continue to be driven by investor. Business financing, on the other side, is growing slowly in June quarter and equivalent to 3% of GDP. Business credit growth has moderated over June quarter following by stronger growth in previous quarters. The cost of intermediated borrowing money for small and large business declined as a result of a decrease in the cash rate. However, consumer confidence has risen slightly as the result of an increase in optimism on economic. This index will reflect how confident people feel about stability of their income affects their economicShow MoreRelatedRelationship Between Macro Environment And The Demand For Dairy Product1342 Words   |  6 Pagesbetween the performance of the macroeconomic environment and the demand for dairy products. To begin with, the demand for dairy products are influenced by several factors, for example, the price, price of substitutes, income and demographic effects (Heien and Wessells 1988). Excluding the population factors, the other factors could be affected by macroeconomics. According to Erten and Ocampo (2012), the commodity prices are related to the situation of the macroeconomic. Also, the income distributionRead MoreWhat Is the Current Macroeconomic Situation in the Us?816 Words   |  4 PagesWhat is the Current Macroeconomic Situation in the US? In June 2012, Federal Reserve Bank of St. Louis President James Bullard states, â€Å"the current stance of monetary policy is ultra-easy, and remains appropriately calibrated given the macroeconomic situation in the U.S† (St. Louis Fed’s Bullard, 2012, par. 1). The statement, however, is ambiguous and subsequent information provided by Bullard contained no real clarifications. For example, Bullard explained that the â€Å"policy rate remains near zero†Read MoreCurrent Macroeconomic Situation in the US648 Words   |  3 PagesHead: Current Macroeconomic Situation in U.S Current Macroeconomic Situation in U.S The economy US is going through huge crisis these days. The evidences are its striking economic situation that is growing adverse day by day. By the end of March 2012, the unemployment rate of US had preceded by 8.2%. Although the GDP growth, income and consumption are not adverse until, the date but they are still below the trend rates that are not showing a positive response towards the future economic situationRead MoreEssay on Current Macroeconomic Situation in the United States867 Words   |  4 Pagesexperience solid economic growth. Actually, financial analysts have stated that the U.S. economy will be characterized by increased consumer spending, increased investments by businesses, reduced rate of unemployment, and reduction in government cut. Some analysts have also stated that the country’s economy will strengthen in 2014 with an average of 2.7 percent or more. However, these predictions can only be understood through an analysis of the current macroeconomic si tuation in the United StatesRead MoreComparing The Economic Profiles Of Brazil And France1677 Words   |  7 Pages EC4001/AP4001 Macroeconomic Report: Comparing the Economic Profiles of Brazil and France Daniel Williams K1355702 Table of Contents Page 1 Summary Page 2 Introduction Page 3 Macroeconomic Comparisons: GDP Page 4 Macroeconomic Comparisons: Activities in Trade Page 5 Macroeconomic Comparisons: Living Standards Page 6 Macroeconomic Comparisons: Labour Productivity Page 7 Conclusion Page 8 References Summary France and Brazil have shown to have different economiesRead MoreMacroeconomics and Its Impact669 Words   |  3 Pagesï » ¿Macroeconomics and its Impact on Entering the Business World Macroeconomics is the field of economics that studies the behavior of the aggregate economy. Macroeconomics  examines economy-wide phenomena such as changes in unemployment, national income, rate of growth, gross domestic product, inflation and price levels (Investopedia, 2011). In other words, macroeconomics examines economic trends in the economy as a whole, in contrast to microeconomics, which looks at the decisions made by firmsRead MoreThe Reserve Bank Of Australia ( Rba ) Introduced A New Monetary Policy786 Words   |  4 Pagesthe Australian general economic conditions throughout 2015 and through to 2016. What are the key objectives of macroeconomics and how do they effect and change the supply of money with interest rate? To make a decision the RBA must examine the economic growth and what guarantees long- run economic growth? Money has key functions but what are they and how does it function within the reserve bank? How will lowering the cash rate provide a solution to the economies situation? What is the result of aRead MoreLaws of Supply and Demand1244 Words   |  5 Pagesspecifically wrong about, while macroeconomics concerns things economists are wrong about generally. Or to be more technical, microeconomics is about money you don’t have, and macroeconomics is about money the government is out of† (Beggs, 2014). On a serious note however, macroeconomics and microeconomics are different from each other yet both play a crucial role. The Atlantis simulation gave a great example of the two important aspects of economics, microeconomics and macroeconomics. This simulation showedRead MoreThe Reserve Bank Of Australia Essay1345 Words   |  6 Pagesthe Australian general economic conditions throughout 2015 and through to 2016. What are the key objectives of macroeconomics and how do they affect and change the supply of money with interest rates? To make a decision the RBA must examine the economic growth and what guarantees long- run economic growth? Money has key functions, but what are they and how does it function within the reserve bank? How will lowering the cash rate provide a solution to the economy s situation? What is the result ofRead MoreThe Limits to Macroeconomic Policy Essay1255 Words   |  6 PagesThe Limits to Macroeconomic Policy A country’s economy represents an equilibrium driven by the vast workings of many moving parts. Some of these parts include governments, policy makers, trade partners, international investors and banking authorities. Today’s technological advancements have made it easier than ever for monies to traverse national borders quickly and efficiently. This capability facilitates inflows and outflows of capital in response to signals. Not all of these signals are