The Social Responsibility of Business Is to Increase Profits

Milton Friedman, â€Å"The Social Responsibility of Business is to Increase Profits† In the article, â€Å"The Social Responsibility of Business Is to Increase Profits,† Friedman states that â€Å"businessmen believe that they are defending free enterprise when they proclaim that business is not concerned merely with profit but also with promoting desirable social ends. † This social responsibility is defined as Corporate Social Responsibility (CSR), which is the belief that â€Å"corporations owe a greater duty to their communities and stakeholders† by having a â€Å"social conscience. This, among other things, includes being environmentally responsible, contributing to non-profit organizations, and eliminating discrimination. Friedman argues that â€Å"only people can have responsibilities† but that â€Å"businesses as a whole† cannot, as they are not persons. Since the corporate executive is an employee of the shareholders, and therefore only â€Å"responsible to his employers. † The corporate executive has primary responsibility to his employers to conduct business as they see fit, and manage the business to create the most profit while following the â€Å"basic rules of the society†.It is then seen that the corporate executive is acting as a â€Å"public employee,† while serving shareholders and should be directed by those shareholders how to spend their money. However, Friedman acknowledges that managers of corporations, while serving shareholders, are also people in their own right and may have their own social responsibilities that do not always follow those of the owners of the corporation. In that case, if the manager chooses to act based on his own beliefs instead of the direction of the shareholders, he is not performing in the best interests of the shareholders and is â€Å"spending the customers' money. This has a direct financial impact to both customer and employees. This can lead to the managers’ termination as he has not performed as directed by the shareholders by not making as much money as possible. It is also discussed that because â€Å"society is a collection of individuals,† there are individuals that can coerce others to conform to certain social norms and while others may not agree, they can be overruled and then must conform. This then leads to a â€Å"political mechanism† which can regulate how corporations operate and dictate their â€Å"social responsibility,† which, in theory, would extend the cope of the political mechanism. Friedman believes that a political mechanism is not necessary to achieve social responsibility because in a free society, â€Å"there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engage in open and free competition without deception o r fraud. † One question that can be posed from Friedman’s article is whether shareholders should prioritize the responsibilities that managers have as their agents.While we can acknowledge that shareholders invest in a corporation to make a profit and that managers are hired to maximize those profits, it is the responsibility of the shareholders to provide guidelines to those managers and prioritize his/her responsibilities. While we can assume that the first priority of the shareholders would be to maximize profits for the corporation, subsequent priorities could fall within the guidelines of community outreach, exceeding legal obligations or being environmentally sensitive.If we presume that corporations elect to be â€Å"socially responsible,† we should expect shareholders to provide policies and procedures to their managers. Without these, what responsibility does the manager have outside of maximizing profits? As Friedman suggests, the manager could be compe lled to act on his own beliefs and moral obligations to his community, church or charitable organization. But, since these would be at his discretion, what check and balances would he have with the shareholders? Would he be using money otherwise returned back to the shareholders and supporting organizations that are opposed by the shareholders?Because corporations are established to profit and shareholders invest money with expectations of a greater return, managers cannot be given a directive to be â€Å"socially responsible† without providing specific criteria of checks and balances to which needs to adhere. Therefore, it is imperative to the success of a corporation for managers to not act solely but rather to act within the policies of the shareholders. What Friedman implies is that shareholders should only be concerned with maximizing profits and not be obligated to be â€Å"socially responsible. In that case, the manager would only have one priority, to maximize profit s. However, what if that manager determined that social endeavors is the best option to maximize profits? This would make the corporation socially responsible while still maintaining maximum profits. The argument presented by Friedman in this case is that while the manager is performing as expected by maximizing profits, this type of â€Å"social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions. This â€Å"cloak† refers to corporations acting socially responsible but for the sole purpose of making profits rather than performing such endeavors for the sole purpose of benefiting society. An example would be a solar company providing â€Å"free† electricity to a campus in exchange for use land to promote their environmentally aware product. However, what they don’t tell you is that the electricity is being sold back to the power company for a profit. The perception is that the company has a social conscience when in reality it is being done for profits.While I agree with Friedman’s assessment that managers, as employees of shareholders, are responsible for maximizing profits, I disagree that corporations should only comply with governmental policies and should not adopt policies to be socially responsible. At the time Friedman wrote this article, western democracies and communist countries of Europe were in the middle of the Cold War and the idea of a global economy was not as prevalent in society as it is today.Consumers in those countries leaned towards buying locally over buying foreign products. Since the end of the Cold War, consumers have changed purchased habits to buy products from companies, regardless of their country of origin if it were the best product. However, this led to the matter of public opinion towards corporations playing a larger role in how well they integrate themselves into a community or help preserve the environment is a factor in ho w consumers choose to purchase products.For instance, if a company is considered â€Å"green,† it is determined to the environmentally friendly. This would lead consumers who support environmental protection to lead towards purchasing products from that company. Therefore, I believe that corporations take into account public opinion when deciding on whether to enact â€Å"social responsible† measures and that these measures are above and beyond the minimum requirements established by governing agencies.I am also convinced that shareholders, more today than ever, budget funds to contribute to socially acceptable contributions and directing managers how to spend these. It is my opinion that due to public opinion and a global influence on corporations, that a successful free market cannot be judged solely by the financial gain of a corporation, but in conjunction with how these corporations influence positive changes in society.

Breaking Away from Stereotype

The United States of America has been called the â€Å"melting pot† of the world. It is a country that is open to diversity and welcomes culture, race and ethnicity of all sorts, for as long as it complies with its laws. United States become a nation rich in immigrants who found new home in a foreign land. Most of the big and key cities in the United States are culturally and racially diversified. This diversity is taught to be an asset of the society. If not understood well, this diversity may also lead to internal and external conflicts such as discrimination and stereotyping. Stereotyping can be as harmless as thinking that Chinese cooks the best orange chicken or Indians have the best chicken curry, but it can also be as destructive as stereotyping Muslims as potential terrorists or Mexicans as potential illegal aliens. Stereotypes come in different forms and it is also apparent in the news, media, television, songs and even literatures. Latino or Hispanic race, for example, has been a hot topic of racial stereotyping. A Latino man behind a cash register may often hear a customer asking â€Å"habla Ingles†. Failure to assimilate to American culture, including language, is one stereotype Latinos are facing. In the story â€Å"Rain of Gold†, written by Victor Villasenor, most of the characters spoke little or no English until they entered the United States. Another literary work, a poetry, written by Pat Mora entitled â€Å"Immigrants† contained lines that read â€Å"before the baby can even walk, speak to them in thick English, hallo, babe, hallo†. There may be some humor to the poem, but it stereotypes the Latino immigrants as having â€Å"thick English† accents. â€Å"Rain of Gold†, written by Victor Villasenor was about the three generations of two Mexican families whose hardship and adventures date back in the Mexican Revolution of 1910. The book chronicled the characters’ escape from Mexico and entry into the United States. It was entitled â€Å"Rain of Gold† because it is the English translation of the characters’ home town of â€Å"La Lluvia de Oro†. In the book, the characters spoke little or no English, which may still be apparent today in our society. However, from the book, we cannot generalize that Mexicans cannot assimilate the way of living or system of other culture. In the book, it was also written that the characters learned to use the survival techniques of Native Americans in order to survive the difficulties they were facing in their environment. The poem â€Å"Immigrants† by Pat Mora also wrote examples on how Mexican try to adapt the American culture by eating hot dogs and apple pie, by naming their children Bill and Daisy, or by buying their children football or blonde dolls with blue eyes. In the modern America, most stereotypes related to the Latino race are exaggerated in the movies or in the media. The movies would often depict Latinos as blue collared workers with little education, family with more than four children, or young Latino with literacy problem. Another stereotype that is attached to the Latino culture is the use of spiritual healing or magic. There are three literary works that took note of the Spiritual healing practice of the Latino culture. â€Å"Rain of Gold† by Victor Villasenor noted that during trying times, the character held on the belief of spirits and asked for their guidance and healing. â€Å"The Curing Woman† by Alejandro Morales was about the power of the traditional healers who use spiritual connection to heal physical ailments. It is about a Spanish woman named Marcelina who learned how to use â€Å"white magic† from her Spanish mother, Dona Marcelina Trujillo. â€Å"White magic† uses herbs, plants, minerals, chants and astrological formulas to cure diseases of the human body. â€Å"Curandera†, a poem written by Pat Mora describes the dependency of a Latino woman to the nature as means of survival and healing of the people. In the poem, the curandera (a woman who practices folk medicine), uses the elements found in the desert, plants, sunlight, and wind to heal other people to survive. Living in a modernized society and the availability of technology used as tools in medicine will create plenty of skepticism and mockery to spiritual healing as a form of cure. The use of spiritual healing will be rejected by most of American populations who grew up with vaccines, radiography, and antibiotics. It will be a challenge for any Latinos practicing this part of their culture to make someone else outside of their race to understand. Another Latino stereotype that affects most Latino men, is the machismo schema attached to Latino men. It is viewed that in Latino culture, men are the dominant gender, and women are submissive to their male counterparts. However, in â€Å"Rain of Gold† written by Victor Villasenor, the character of Dona Margarita, a wife and a mother, possessed strength that was even able to boldly reprimand the character of her husband. Dona Margarita’s strength and support was valued in the book as one of the reason of fulfilling the family’s dreams. She was able to express her anger and frustration on her husband, Don Victor, when he gambled and got drunk. Her family felt hope when she did not give-up her hope that her daughter, Sophia, was still alive. Although she wanted to give the leadership role to her husband Don Victor, the book made it apparent that she is the strength of her family. However, the story also depicted Dona Margarita as a housewife whose primary role is to raise her children and manage the household. Most Latino written works also depicted the common stereotype that Latinos mostly worked blue collar jobs. For example, in the â€Å"Rain of Gold† by Victor Villasenor, most men worked as miners, while some worked as soldiers. In the movies, most Latino females play characters such as nanny, cashier, waitress, or housekeeper. In conclusion, I believe that the Latino race does not only suffer from being stereotyped by people from another culture, but also from the literary works of Latino authors. Pat Mora, for example, used the â€Å"thick English† accent of Latinos to provide some humor to her poetry. In more than two literatures the â€Å"spiritual or magical healing† was also noted, providing a stronger connection between this practice and the Latino race. Personally, I believe that I am a victim of the movies and television programs who effectively instill cultural stereotypes in me. Fortunately, I was able to know numerous Latinos that proved that the stereotypes should not be used as a general depiction of their race. A research study survey noted that the stereotypical images of the Latinos in the media are not accurate and that most Latinos who participated in the survey were able to assimilate well into the US culture (Latino Professional Survey, 2006). The survey noted that 98% of the survey respondents were fluent in English and 80% were college graduate (Latino Professional Survey, 2006). This defies the common stereotyping that Latinos cannot speak English very well and mostly occupy blue collared jobs.

Ethics and Morality of Business Essay Example | Topics and Well Written Essays - 2500 words

Ethics and Morality of Business - Essay Example Career development programmes are not just altruistic pursuits. These are followed keeping the future human resource requirements in mind. Similar is the case with ethics. Given a level playing field, most organizations do not shy away from ethical behaviour. With the explosion of information and the communication revolution, the media plays a crucial role in building and tarnishing reputations of businesses. Hence, every organization tries to enhance its reputation among all its stakeholders. Ethics is a novel outlook for businesses that have single mindedly pursued the bottom line so far. Hence, there exists a twilight zone where business and ethics meet. In the modern world, differences are blurring and concepts are getting re-defined constantly. Business can reap benefits without compromising on basic human values. There is no need to give up on competitiveness to be morally right. Hence, it is possible to conduct business ethically, which is essentially a win-win situation. Conc epts Rationalism dictates that everything should be useful and justifiable. Utilitarianism and utility analysis as used by business vary significantly. When a firm uses a utility, it weighs the positive and negative consequences of a certain action as it relates to itself; and a utilitarian analysis weighs these  'results of an action on everyone affected by it' (De George, 2010, pg 44). Morality is concerned with creating good consequences, not having good intentions. One should do whatever will bring the utmost benefit to all of humanity. Morality guides people’s actions in order to create a better world. Bentham (1748–1832) is rightly considered the father of modern utilitarianism. He explained utility as the balance of pleasure and pain that a human being experiences (as cited in Binmore, n.d.). â€Å"The principle of utility . . . is that principle which approves or disapproves of every action whatsoever according to the tendency which it appears to have to aug ment or diminish the happiness of the party whose interest is in question.† (Bentham Jeremy, B. E. 1748-1832). Bentham thought that entire morality could be derived from ‘enlightened self-interest’, and that a person who always acted for his own satisfaction in the long run, would always act rightly. However, there are critics of Bentham. ‘The good’ cannot be quantified or measured. Similarly, the notion or definition of ‘the good’ was extreme. At the same time, other considerations like human rights and justice, which are relevant, are ignored. John Stuart Mill said that happiness in not the same as pleasure. Man shared the lower quality ones with animals for e.g. food, water etc. The higher quality pleasures were unique to man and involved the higher faculties (Mill, 1863, Pg 11). He showed that utilitarianism was in sync with moral rules. Utilitarians ought not to calculate beforehand whether each action would maximize utility. Instead , following a general principle (under which a particular action falls) leads to happiness. Henry Sidgwick highlighted common sense morality, which is morality accepted by the majority without detailed thinking involved, in his book Method of Ethics (Crisp, 2000). He stated that not all principles of common sense morality are apparent. He was in favour of ethical hedonism according to which any action should produce the greatest amount of pleasure. He was of the opinion that no man should destroy his own happiness (Ibid).

Is a Computer playing chess using 'brute force' unbeatable Essay

Is a Computer playing chess using 'brute force' unbeatable - Essay Example The computer intelligence and cognition is simply based on the several moves that are stored in its memory. It goes through all the possible moves and chooses the one with the best probability (Razmov V (2010)). The brute force method also tended to have a non evaluative advantage over and above the chess master Garry Kasporov. Human mind cannot record and evaluate all the possible moves in a given situation as it doesn’t have that much retaining capacity. However, after Garry Kasporov defeated the chess player Deep Blue, they refused for a re-match because they feared that Garry had understood their algorithm codes and approaches (Feng-Hsiung, H., 2006, p. 51). They did not want the world to believe that Deep Blue actually has no cognitive power or intelligence except for its highly fast processing power. Thus, the brute force method does not use any artificial intelligence or cognitive powers; it simply is a fast processing and evaluating method used by the computer chess player. It thus looks possible and realistic as Garry Kaporov was able to break the code of the computer and win against it. Chess News (no date)  Nettavisen: We have tested the worlds best chess program  [Online]. Available at:  http://en.chessbase.com/post/nettavisen-we-have-tested-the-world-s-best-che-program  (Accessed on 10

Why do people bullying Research Paper Example | Topics and Well Written Essays - 2000 words

Why do people bullying - Research Paper Example Some of his classmates revealed that he was a victim of bullying for years. Some said that they saw it coming but did not expect it to be that far. Another victim, another life was lost because of bullying. Bullying has been a social issue that concerns all people from different walks of life. It has a number of reasons as well as effects. Various experts have conducted studies and wrote manuscripts about it. Over the years, more and more people have become aware about the matter. Indeed, bullying is a serious social concern that needs to be appropriately addressed by each sector and individual. There is no single definition of bullying. Several authors have explained it in various ways. Nonetheless, the definitions boil down to similar factors such as physical, verbal, and psychological behaviors (De Voe, and Chandler 1). It is the employment of force, abuse, or intimidation. Bullying can take in different forms like hitting, sarcastic comments, and insulting gestures. Few countries have policies regarding it. Nonetheless, there are already passed bills in the United States. This kind of violence is quite common than what people usually think (Romain 90). Evidences have shown that more than a few children have been targets of bullies. From childhood, this continues to affect teenagers, and even adults in the workplace. According to the Youth Risk Behavior Surveillance System, 20% of students in grade school suffered from bullying. Furthermore, the National Youth Violence Prevention Resources Center stated that around 25% of American students get bullied. The students having immoderate attributes such as homosexuality and obesity have higher risks of being victims. There are many factors attributing to the occurrence of bullying. These can be social issues, family factors, personal history, or provocative targets. For example, much of social recognition comes from having power or authority. In order for others to sense one’s supremacy, abuse is sometimes being utilized. Homes that do not foster respect and acceptance are likely to produce children who are not empathetic. This leads to selfish and insensitive behaviors. Researches have also revealed that people who have personally suffered from bullying are likely to bully others as well. Furthermore, there are certain people who can be really annoying for some. This kind of characteristic makes others goaded to abuse or intimidate. There are certain motives why some people become violent and demean others. Mostly, children bully because they want to ascertain their social status. They want to be perceived as â€Å"cool† or popular. This is affected by the social constructs that afflict the community. Those who appear bossy and insensitive are regarded positively by many. Another probable factor is the presence of role models. Some become bullies because of social learning. They want the recognition or reinforcements that other bullies have had. Moreover, violence in mass med ia has greatly affected young mind sets. More and more characters are being portrayed to be terrorized. Also, the mere show of violence in the contents of the films influences viewers to be likewise aggressive in their dealings with the people around them. Bullying affects an individual’s physical, social and mental, and emotional aspects. Due to the pressures involved, victims experience depression and angst (Coloroso 53). Related are emotions of sadness and seclusion. If not intervened, these negative feelings may persist until adulthood. Furthermore, a person’s sense of self lessens due to a negative concept brought about by the oppression that he has

Diseases Essay Example | Topics and Well Written Essays - 500 words

Diseases - Essay Example The CDC estimates that there are approximately 300 strains of Lyme disease (Matthews, 2012). Characteristics of the disease: Lyme disease is a bacterial infection that is caused by the spirochaete Borrelia burgdorferi. This bacterium also possesses several serotypes. Lyme borreliosis is transmitted through nymph and tick bites belonging to the genus lxodes. Humans are mainly infected by nymph bites. Lymph disease is mostly prevalent during the summer period. The onset of the disease is characterized by early lesions on the skin which have a central zone and expand in ring form. Other symptoms include myalgia, fever, rash, chills and migraines (McPhee & Papadakis, 2010). The patient also has a case of unexplained tendonitis, depression, insomnia and the appearance of floaters in the eyes. The disease may also progress to meningeal pathology and can also involve the central nervous system. Joint pains are also characteristic of later stages of the disease. Other symptoms that are less common in Lyme disease include inflammation of the eye, severe fatigue and hepatitis (McPhee & Papadakis, 2010). Treatment of the disease involves administrations of oral and intravenous antibiotics such as doxycycline, amoxicillin and cefuroxime (McPhee & Papadakis, 2010). Problems with diagnosing, preventing, treating or eradicating the disease: Firstly it is difficult to stop Lyme disease due to the fact that the vectors (ticks) are impossible to eradicate entirely. There is also difficulty in the diagnostic process of Lyme disease due to the fact that the â€Å"bull’s eye rash† that is considered a positive indication of the disease does not appear in all the patients. In addition, the disease has adverse impacts on organs of elimination; therefore, any type of rash can be a sign of Lyme disease. Other conditions that have been associated

Assignment on Macroeconomics Essay Example | Topics and Well Written Essays - 1500 words

Assignment on Macroeconomics - Essay Example Financing deficit by borrowing in the futures through bonds with a premium interest is not a good prescription to finance additional expenditures. Running a budget deficit places upward pressure on interest rates (Arestis & Sawyer, 2010, pg.328) When a government has to raise money, which in this case is to finance Social Security, Medicare or other programs for the elderly, one of the tools it can use to sell bonds or promissory notes which the buyer or investor can cash in at a maturity date which the government guarantees. Raising money for such laudable programs is not a problem, only the method it is being raised in this case because it has a contagion or ripple effect in the other sectors of the economy. We all know that business needs capital either to start or to expand. Business is essential in a given economy as it does not only pays taxes for the government to spend on its programs but it also provides jobs which in turn yields more taxes to the government through the inco me tax of the employees. Also, it produces goods and services which other entities may utilize to create value and in the process also yields tax to the government. Suffice to say, business is important in the over-all health of any given economy. Business also incurs costs; either for its operation or the overhead of maintaining itself to be a going concern as a business. One of the expenses it has to pay is interest expense or the cost of money. It is necessary for business needs additional capital for it to expand and respond to competition, changing technology or to simply adapt with the times to remain competitive. So when interest rates are jacked up to invite investors to avail the bonds for the government to finance the spending on Social Security, Medicare, and other similar programs, it inadvertently harms other components of the economy such as business. Plainly, what the government is doing in this case is to make the cost of money more expensive so that there will be mo re buyer of its promissory notes or bonds. When cost of money becomes high, it will precipitate a vicious cycle in the economy. If we may recall the recent crisis both in Asia July of 1997 and United States in 2009, interest rates became so high that nobody can afford to loan it or banks were just hesitant to lend money due to the high prevailing interest rates thinking that they will not be repaid or that borrowers will default on it. So when interest rates or cost of money is high, business will freeze their expansion programs or whatever projects they have on the table. This will result in the freeze hiring of additional workers, business becoming less competitive resulting in the over-all contraction of the economy. So while there will be money that will be raised for financing the government social programs such as Social Security, Medicare, etch, it will eventually back fire in the future. Not only that the economy will contract, but there will also be lesser jobs available. B usiness will implement cost-saving measures and this will precipitate a recession as business are interconnected, one supplies the other or dependent with the other. When there are lesser jobs available or when companies are refusing to give its employee a salary raise, there will be less money available in the pockets of the consumer. When there is less money in the pockets of the consumer, they will tend to spend less. When there is less spending in the economy, there will be less incentive for the industry to produce. For one man’s spending is another man’

Commercial Law Essay Example | Topics and Well Written Essays - 3250 words

Commercial Law - Essay Example Consequently, it is not impossible, theoretically, for a bank to have a charge over the cash deposited by one of its customers and which functions as the security with regard to a loan provided to the customer. This effectively discounted the Court of Appeal’s conceptual impossibility contention that had been supported by it (McCormack, 2002, p. 7). Such reciprocity in indebtedness is common to several commercial transactions and this decision by the House of Lords has provided immense relief to the commercial community. This is due to its capacity to do away with ambiguity and promoting transactions that are of immense benefit. The fact that there are legally valid and effective alternate transactions does not reduce the importance of the aforementioned category of transactions (Re Bank of Credit and Commerce International S.A. (No. 8), 1998). These alternatives cover the contractual rights of set off and rendering the deposit a flawed asset, which the third party in the position of the depositor or depositor cannot withdraw. The court ruled with great insight that the device of a charge back ensured powerful protection to a bank. This was by means of the flawed asset techniques and the contractual set off, and not due to the charge over the asset (Re Bank of Credit and Commerce International S.A.... 187). Commercial transactions are always exposed to the risk of insolvency or default. This is mitigated by employing credit derivatives, which create exposure to or hedge the credit risk inherent in debt instruments, like bonds and loans. There is nothing novel about this function, which had been undertaken by debt syndication, cash securitisations, and loan participations. These initiatives had been utilised to control the credit risk of debt instruments. Such credit risk had been managed by the practice of sell – down of the investor of lender’s risk in the debt instrument (Ali, 2004, p. 326). All the same there is a crucial difference between the previous credit risk management strategies and credit derivatives. The latter separate the credit risk of a debt instrument from itself and this risk is transferred to a third party. In addition, the debt instrument is retained or disposed of to another party. This renders credit derivatives, tools of credit risk management that have much greater precision. Lenders and investors are protected against credit risk, due to credit derivatives; and the economic benefit of the debt instrument is not transferred (Ali, 2004, p. 326). Moreover, insurance and reinsurance companies, banks, bond insurers and hedge funds are the chief sellers of credit protection. Credit risk protection is provided by these financial institutions, first, by the sale of protection under credit default swaps to investors or lenders. Second, by the making investment of funds in securities issued under a programme of synthetic securitisation (Ali, 2004, p. 326). Companies of Scotland were not permitted to create a floating charge with regard to the whole or part of their undertakings and

Native American Essay Example | Topics and Well Written Essays - 1000 words

Native American - Essay Example The use of stringed instruments such as guitars and fiddles and the application of music synchronization to Indian music were initially introduced by the Europeans. With the migration of the Europeans and their African slaves to western Americas, both the European and African music started to influence Native American music traditions (Prinzing). In the American Indian humanity, music has always portrayed an important role — a medium of communication with the spiritual kingdom, and of inviting mystical force into their daily existence. It has become a fundamental expression of American Indian identity (Fields). â€Å"The importance of American Indian music is found not in its impact on modern scholarship and composition but in the traditions and values it expresses to and for the Indian people. This oral tradition has survived solely because the music was too important to be allowed to die† (1976). Indian songs are an integral component of any activity, and encompass power in and of itself (Fields). There are songs for all events. There are songs for the efficiency of labour, success in hunting and fishing, winning in betting and gambling, making of rain, safety of the home and the family, power to heal, abundant harvests, lullabies, songs of romance, worship songs, corn-grinding songs, social dance songs, game songs, and legend songs (Rhodes 6). Some Indian songs are for teaching roles in society. Lullabies not only put babies in deep slumber, but furthermore aid as guidance and preparation for a life ahead. The songs are intended to facilitate happiness, good health, and the making of a better person and a useful part of humanity. One Indian lullaby says, â€Å"My little son, you will put a sealing spear into your canoe, without knowing what use you may make of it when you are a man† (Densmore 226). Another lullaby for a little girl says, â€Å"This little girl will pick black salmon berries when the women go to get berries†

Events Management_Evaluate the current level of understanding of Essay

Events Management_Evaluate the current level of understanding of Events Impact and Events Stakeholder Management and how it int - Essay Example Conversely, changing circumstances in each of the phases may require the events coordinator to re-visit previously completed duties. Stakeholders The complicated business environment compels event organisers to create relations with numerous stakeholders. These stakeholders each have their own desires, positions, and expectations, and businesses are confronted with stakeholder reputation risk if these requirements and expectations are not adequately addressed. Stakeholders can bring threats as well as opportunities for businesses. For example, if an organisation is well respected, stakeholders may give it more latitude to function. Conversely, a bad or lacklustre reputation can cause stakeholders to pass rules that make it harder for the organisation to carry out basic functions. Knowledge, reflection, and a basic comprehension of the desires of the organisation’s stakeholders and the reputation management procedures will profit any institution, in spite of its size or stature . There is no company that does not have stakeholders. The term ‘stakeholder’ refers to any individual or group that can somehow influence or is influenced by an institution’s actions, behaviour and performance. ... It is such reactions that are important. The positive reaction of consumers is crucial as it allows the institution to be able to depend on the consumers when it requires some financial assistance. The word ‘stakeholder management’ defines the execution and development of organisational strategies, along with practices that take into account the objectives of the institution’s stakeholders. Stakeholder Management also includes discussion, process generation, and relationship formation that occur between a business and its numerous stakeholders. Any of the stakeholders can negatively or positively affect a business’s reputation, and therefore require varied strategies to balance the situation. Research studies in the past have proven that there is much that institutions can do to constructively cater to the needs of stakeholders (McKercher, 2006). The supervision of, and relations with stakeholders require careful attention if a firm wishes to make the most of its chances, while diminishing any existing threats when handling their stakeholders. Research studies have shown that when a business initiates relationships with important stakeholders, it actually saves on future expenses by eliminating litigation costs, boycotts, pressure campaigns, or even lost income as a result of bad relationships. Good relations with workers also increase the probability that they will be contented with the business as well as their jobs (Jones, 2005). This makes them more likely endorse organisational practices while avoiding interferences in company policies. The assessment of relationships includes a two-way communication procedure with the outcome, whether positive or negative, affecting both

Kalpana Chawla Essay Example for Free

Kalpana Chawla Essay Teachers Day BY vtnay2085 Speech given on the Teachers Day. Ghiyasuddin School, Wednesday 13th September 2006 Madam Aishath Adam, Senior Assistant Principal, Supervisors, members of the staff, Teachers and Dear Students. Assalaam Alaikum and Good afternoon. Today, we are here to celebrate great teachers and great teaching. As a fellow teacher, I find awkward to speak about teachers or for teachers. But, first, let me convey to all the teachers, my personal greetings and best wishes on the teachers day. Dear Teachers: Though a fellow teacher, I want to say I am proud of you. I am proud of your edication to the profession and for the personal sacrifices you make to teach our children. I am delighted of your devotion to train their questing minds, and for your inspiration of their hopeful hearts. I am proud that you take this responsibility seriously †that you see it as sacred trust. We celebrate teachers day, because we value you. I want to remind you that all the parents, students and the wider community deeply appreciate your commitment to teaching and to the children. There is no substitute for education. Firstly, because its the most precious gift we can give our children. Secondly, because its the most critical investment in our future. And thirdly, because its the most effective strategy which will enable us to survive and to thrive in a changing world. Dear Students: I became a teacher because of some of the happy experiences I had in school. There were teachers who touched my soul; who helped me realize my own potential. I decided to become a teacher because I want to help change someones life. Sometimes, it is hard. We have our own families, financial life and life problems that challenge us, like everyone else. Sometimes we are exhausted by our workload nd responsibilities. This is why teachers need encouragement and support. So that in turn, we can devote ourselves to our students. Dear staff and students; On Teachers Day every year, we remember our teachers, we remember our childrens teachers. We recognize these very dedicated people. People who give of themselves and take a personal interest in their students. Teachers who have touched our liv es, moulded us into what we are today, and are helping to shape tomorrows people, tomorrows students. Just as a country is as good as its people, so its citizens are only as good as their teachers. Therefore a great deal depends on you, teachers, and I salute you, all of you, those here today, and those absent, for your passion, dedication, commitment and contributions. I wish to all the teachers a successful career in teaching   a career in which you find happiness, health, friendship and love. Happy Teachers Day and thank you. Kalpana Chawla By Vaishakhi Status Deceased Born July 1, 1961 Karnal, Haryana, India Died February 1, 2003 (aged 42) Over Texas Previous occupation Research Scientist Time in space 31d 14h 54m selection 1994 NASA Group Mission insignia Sts-87-patch. ng STS-107 Flight Insignia. svg Kalpana Chawla , was an Indian-American scientist and a NASA astronaut. She was one of seven crewmembers killed in the Space Shuttle Columbia disaster. Early life Kalpana Chawla was born in a Punjabi Hindu family at Karnal, Haryana, India. [l] She was born in Model Town Karnal. Kalpana in Hindi means imagination. Her interest in flying was inspired by J. R. D. Tata, a pionee ring Indian pilot and industrialist. [2][3]. Kalpana has two sisters (Sunita ; Deepa) and a brother (Sanjay). Being the youngest, the family members gave her the nickname Montu. She met and married Jean- Pierre Harrison, a flying instructor and aviation writer, in 1983 and became a naturalized United States citizen in 1990. [4] [edit] Education Chawla completed her earlier schooling at Tagore Public School, Karnal. She earned her B. E. degree in aeronautical engineering at Punjab Engineering College in Chandigarh in 1982. She moved to the United States in 1982 and obtained a M. S. degree in aerospace engineering from the University of Texas at Arlington (1984). Chawla went on to earn a second M. S. degree in 1986 and a Ph. D. degree in aerospace engineering in 1988 from the University of Colorado at Boulder. Later that year she began working for NASA Ames Research Center as vice president of Overset Methods, Inc. where she did CFD research on WSTOL. [2] Chawla held a Certificated Flight Instructor rating for airplanes, gliders and Commercial Pilot licenses for single and multiengine airplanes, seaplanes and gliders. She held an FCC issued Technician Class Amateur Radio license with the call sign KD5ESl. [edit] NASA career Chawla Joined the NASA astronaut corps in March 1995 and was selected for her first flight in 1998. that flew the Space Shuttle Columbia flight STS-87. Chawla was the first Indian-born oman and the second person of Indian origin to fly in space, following cosmonaut Rakesh Sharma who flew in 1984 in a Soviet spacecraft. On her first mission Chawla travelled over 10. 4 million miles

Personal Healthy Living Plan Essay Example for Free

Personal Healthy Living Plan Essay

Establishing A Pay Structure Commerce Essay

Establishing A Pay Structure Commerce Essay Compensation is an important factor for HR people. Indeed, it is a way to motivate employees and increase their job satisfaction. However, determine the right compensation for each individual inside the company is not an easy task: it will depend on several factors that will be discussed in this paper. Organizations make decisions to define a job structure, or relative pay for different jobs within the organization. They establish relative pay for different functions and different levels of responsibility for each function. Organizations also must establish pay levels, or the average paid for the different jobs. These decisions are based on the organizations goals, market data, legal requirements and principles of fairness. Together, job structure and pay level establish a pay structure policy. To be effective, the compensation must be competitive in the market, perceived as fair by employees, accurately based, motivating and easily understandable. Thus, in order to achieve it a pay structure policy can help in this process. A pay structure dresses a hierarchy of job types and grades with the associated compensation and benefits. It is a term for the array of pay rates within the organization and representing the degree of slope in its pay policy (Milkovich Newman, 2002). Characteristics of a particular pay structure include the number of levels in the structure, the size of the pay differentials between each level in the structure, and the rate at which employees can progress through each level in the structure (Gerhart Milkovich, 1992). In order to realize this paper, I interviewed to HR managers that gave me their thoughts about the subject and experience. The paper will begin with the legal requirements that a company has to respect when setting compensation in the United States, and then it will focus on the factors. Legal Requirements At work employees are protected by several regulations in terms of selection, health and safety, labor, etc and of course pay. When establishing a pay structure, organizations face some laws put in place by the government that may vary according to the country where the employees of the company work. There are mainly five types of constraints that companies have to take into consideration in order to avoid troubles: equal employment opportunity, minimum wages, pay for overtime and prevailing wages for federal contractors and child labor. Equal Employment Opportunity The Equal Employment Opportunity (EEO) gathers several laws from the Civil Rights Act, American With Disabilities Act, Age discrimination in Employment Act and Genetic Information Nondiscrimination Act. These laws protect employees from discrimination in hiring, promotion, discharge, pay, fringe benefits, job training, classification, referral and other aspects of employment according to employees race, color, religion, sex, origin, disability, genetics and age. Thus, to meet the standard of EEO, employers must provide equal pay for equal work, regardless of these criteria. However it does not guarantee equal pay between men and women or young and old, etc. Indeed, differences in pay may appear but they must have good explanations relative to the business such as job responsibilities, skills, performance etc. To summarize, two employees doing the same job cannot be paid differently because of the previous criteria mentioned otherwise it would be considered as illegal. However, if one of the employees has some particular skills, or other business related considerations, the two employees might have a different pay. Fair Labor Standards Act The Fair Labor Standards Act (FLSA) is administered by the Wage and Hour Division (WHD) and establishes the federal minimum wage, overtime pay and child employment standards that most of companies must comply with. It applies to most of companies operating in the US and exempts some employees such as executives, professionals and outside sales persons. Under the FLSA, the employer must pay at least the minimum wage established by the law. Nonetheless some states and local governments have established higher minimum wages. In cases of where an employee works under state and federal minimum wage law he should be paid with the highest one. A minimum wage corresponds to the lowest compensation an employee can receive for the work s/he has performed. In 2012, the current minimum wage set by the FLSA in the United States is $7.25. In addition, the FLSA establishes a youth minimum wage for the first 90 consecutive days of employment of people under 20 years old which represents around 85% of the minimum wage. The FLSA also requires overtime pay for hours worked beyond 40 in each week. Thus employees should be paid at a different rate for extra hours. This rate is set at one and a half times the employees regular pay rate including bonuses. Overtime pay is required even if the employer did not ask the employee to work more. Moreover, there is no limit on the number of hours an employee can work during a week. Finally, employers must meet FLSA requirements concerning child labor (children younger than 18 years old) which basically restrict the use of child labor within a company. They must be paid at the minimum wage, as adults, or youth minimum wage (for the first 90 days). Any violation of the act may result to penalties and sanctions. Prevailing Wages for Federal Contractors The U.S. Department of Labor (DOL) Employment Standards Administrations Wage and Hour Division (WHD) administers laws and regulations requiring minimum wages to be paid to workers performing construction work on federally-funded contracts or providing services to the federal government. Federal contractors must meet the requirements to pay at least the prevailing wages in the area where there employees work, that is to say the hour rate paid to the majority of workers in a specific area. It is defined by regulatory agencies. It exists two federal laws that cover employees pay policy in this field: Davis-Bacon Act for construction contractors that receive more than $2,000 in federal money. Walsh-Healy Public Contracts Act for all government contractors receiving $10,000 or more in federal funds. Economic Factors on Compensation An organization cannot make spending decisions independent of the economy. Organizations must keep costs low enough so that they can sell their products profitably, however they must be able to attract workers in a competitive labor market. Thus, to remain competitive, employers must meet the demands of product and labor markets. Product Markets Product market is a market in which competing final goods and services are exchanged. Companies must be competitive in product markets so that they can generate enough profit in order to pay their employees. The more the competition, the more companies will reduce costs because they are unable to increase prices without losing money. In addition, product markets seek to buy at the lowest price, so organizations must limit their costs as much as possible. Indeed, an organization that has high labor cost will have to raise its prices for similar products already available on the market. In this way, product markets place an upper limit on the pay an employer can afford to offer for a specific job. Labor Markets In order to define labor market, we need to define its demand and supply. The demand side focus on the employers actions, that is to say how much he is willing to pay and how much employees he is looking for. The supply side consists of workers who want to earn as much as possible. To attract and keep workers, employers must pay at least the going rate in their labor markets. That is to say, to remain competitive in the labor market, organizations in a similar area have to pay this minimum amount to hire the most qualified employees. In this way, labor markets place a lower limit on the pay an employer must be willing to offer for a specific job. Pay Policy Identification Organizations make decisions about whether to pay at, above or below the pay rate set by these market forces. Paying above the market rate may make the organization less competitive in product markets but give it an advantage in labor markets. The organization benefits only if it can attract the best candidates and provide the system that motivate and enable them to do their best work. Furthermore, the efficiency wage theory (A. Marshall, 1920) explains that paying employees above the market rate increase productivity and efficiency for firms. Indeed, thanks to that they would be able to avoid shirk, reduce employees turnover, attract the best people, provide motivation for employees and allow them to eat so that they are less willing to be sick. Organizations that pay below the market rate need creative practices for recruiting and training workers so that they can find and keep enough qualified people. It is the less recommended strategy. If an organization choose it, it is probably because it has not enough financial resources to pay its employees, however in order to keep employees or even attract them the company must provide other non-financial advantages. Companies that are using this strategy experience high rates of employees dissatisfaction, high turnover and low productivity. The most use strategy is to match the market by paying the same pay for same jobs. Indeed by setting the same pay level, companies are able to remain competitive while managing their labor costs. Benchmarking In order to define the going rate in the market, companies use benchmarking. It consists for them to compare their own practices in terms of pay with the ones practiced by their competitors. Benchmarking is done through pay surveys to the right competitors, for the right jobs, and through the right methods (phone interviews, personal interviews, questionnaire, etc.). This is usually done by some agencies, especially the US bureau of labor statistics, with National Compensation Survey; rather than by the company itself. While developing a pay survey, companies must take into the two previous factors mentioned in pay level decisions (product market and labor market). Indeed, according to the goal of the company, it will focus more on product markets or labor markets comparisons. Pay structure related to jobs Along economic forces, organizations must consider the relative contribution each job should make to the organizations overall performance. Creation of a pay structure requires that the organization develop an internal structure showing the relative contribution of its various jobs, called job structure. One way to do it is through job evaluation. Job evaluation Job evaluation has several objectives, it can help to: Define what positions and job responsibilities are similar Decide right pay grades and other compensation issues Develop job classifications Help employees along their career path Organizations typically begin with a job evaluation to measure the relative worth of their jobs. A job evaluation committee identifies each jobs compensable factors and rates each factor. These compensable factors are the specificities that each job requires and that the company decided to value most and pay for its employees, such as education, skills, effort, job complexity, responsibilities, working conditions, experiences of the employee, etc. Then, for each factor the organizations define several degrees (usually no more than five) in order to judge the degree of a factor existing in a job. Once it is done, the committee assigns points for each factors and degrees. In order to simplify this process the committee may write down a job evaluation manual and use it to evaluate each job according to their significance into the organization. Pay Structure Creation The committee can research market pay levels for key jobs, then identify appropriate rates of pay for other jobs, based on their number of points relative to the key jobs. The organization can do this with a pay policy line, which plots a salary for each job. The pay policy line is a graph that shows the relationships between job evaluation and pay rate. It is then used to define the compensation for non-key jobs, for which the company has no data. The organization can combine jobs into several groups, called pay grades. For each pay grade or job, the organization typically establishes a pay range that will determine a minimum, midpoint and maximum of pay for a specific job or job within a specific pay grade, using the market rate or pay policy line as a midpoint. Thus, the salary of an employee may change according to some factors such as performance, seniority, etc. However, for some reasons, it is possible that an employees pay fall outside the pay range that the organization established. For instance, when an employee pay rate fall below the pay range for the job, it is called green-circle rate. It can happen when the employee has been promoted to a new position that is under a new pay grade. Conversely, when the employee pay rate fall above the pay range for the job, it is called red-circle rate. It can happen when the employee is demoted and keeps his/her current compensation. When these kinds of situation happen it is im portant for the company to solve the problem, nonetheless it is still rare. Differences in working conditions or labor markets sometimes call for the use of pay differentials to adjust pay levels. For instance, some companies pay a differential for night work to compensate them. Alternatives to Job-Based Pay To obtain more flexibility, organizations may reduce the levels in the organizations job structure. This process of delayering creates broad bands of jobs with a pay range for each. Other organizations reward employees according to their knowledge and skills. They establish skill-based pay systems, or structures that set pay according to the employees level of knowledge and what they are capable of doing. This encourages employees to be more flexible and adapt to changing technology. However, if the organization does not also provide systems in which employees can apply new skills, it may be paying them for skills they do not actually use. Monitoring Compensation Costs The Human Resource Department should routinely compare actual pay with the pay structure to see that policies and practices match. A common way to do this is to measure a compa-ratio for each job or pay grade. The compa-ratio is the ratio of average pay to midpoint of the pay range. Assuming the pay structure supports the organizations goals, the compa-ratio should be close to 1. When compa-ratios are more or less than 1, the HR department should work with managers to identify whether to adjust the pay structure or the organizations pay practices. http://www.dol.gov/whd/flsa/index.htm#.UPHgI-TxajM

Goldratts The Goal Essay -- Goldratt Goal Bottleneck Essays

Goldratt's "The Goal" â€Å"The Goal† by Goldratt is a book about the Theory of Constraints, TOC. It is about the behavior of manufacturing facilities. It deals with bottlenecks that are the manufacturing constraints and the variability that creates them. The book states that a manufacturing organization cannot run at 100% and that you cannot balance the assembly line. It seems that your efforts for efficiency must be focused on the worst bottleneck. The loss caused by a bottleneck is a loss for the entire system. Focusing on improving the throughput of the bottleneck increases the flow for the entire manufacturing line. If there is a bottleneck, then all other areas are capable of excess capacity. Don’t try to improve non-bottlenecks, as it is a waste of time and effort. The TOC integrates into Total Quality Management, TQM, except for one main theory. TQM supports continuous improvement of the system while the TOC does not support continuous improvement of every process. The TOC says that we must focus on the constraint. Q: What is the Theory of Constraints about? A: Developed by Dr. Eliyahu M. Goldratt, TOC states that any system has at least one constraint. Otherwise, it would be generating an infinite amount of output. Bearing this in mind, TOC is easily explained through use of the "chain" analogy - "a chain is only as strong as its weakest link." If we look upon our organization as a chain, where each department is a "link" in the chain, what constrains our organization from achieving its goal? Only through addressing the weakest link, the constraint, can substantial improvements be made. In other words, if the constraint dictates the pace of an organization's ability to achieve it's goal, it makes sense that addressing the constraint will allow the organization to achieve a substantial rate of throughput faster. There are five steps in applying TOC: 1.  Ã‚  Ã‚  Ã‚  Ã‚  Identify the system's constraints. Of necessity this included prioritization so that just the ones that really limit system progress toward the goal. 2.  Ã‚  Ã‚  Ã‚  Ã‚  Decide how to exploit the system's constraints. Once we have decided how to manage the constraints within the system, how about the majority of the resources that are not constraints? The answer is that we manage them so that they just provide what is needed to match the output of the constrained resources. We NEVER let them supply mo... ...achine was running and an operator on your line was to set it up if it went down, you could take your break at your convenience. A few months went by and new coaches were hired. They decided they wanted to closely monitor the operator to see when they took their breaks and for how long. The decision was made to stop the machines when you go on your break and/or lunch. The new coach obviously wanted to make a good impression and bring something new to the table. They changed our staggered breaks to scheduled breaks. The results after a few weeks showed production was down and efficiency was at a record low. It showed machines were not running at full capacity for a tour. Immediately their superiors decided we would go back to the staggered lunches and breaks. The downtime was then reduced and our departmental efficiency went up. They realized it was not as important to monitor the person, as it was to have the machine running. Now I know this does not stand up to the problems Alex and his staff faced with UniCo but this is what I face everyday. I found a case study that was used at the TOC World 2000 Seminar in St. Paul MN last year. I thought I would include it for your enjoyment

Essay --

The Benefits of Synthetic Meat By Jordon Ham Lake Michigan College Synthetic meat is one of the worlds most recent scientific uprises. This changes the way the world consumes our daily need for meat. If there is a way to cut down on the processing of livestock, it would save money, animals, and we would never have a fear of running out of food or catching a disease. This new way of making meat can bring a new outlook at the world’s meat. With the benefits to in vitro meat, or cultured meat, it could become more popular.   Ã‚  Ã‚   In price, cultured meat is cheaper. In 2010, the simple high in total savings was $243,240. (N. Fiala) This doesn’t seem like much but the first â€Å"steak† was made in 2003 at Harvard University. In 2008, PETA offered a $1 million prize to the first company to bring lab-grown chicken meat to consumers by 2012.(Levine) It is projected that in the years 2010-2020 the savings will jump to $2,432,400.(N. Fiala) This jump is just because the growth of the cultured meat. In the prediction for 2010-2030 the savings would be $4,864,800 and 2010-2040 estimated to be $7,297,200. (N. Fiala) This is a huge saving in just the production in meat. There is a down side to cultured meat. If they were to go with in vitro meat the farmer that raise the cows for the conventional meat would lose their jobs. This would cost the government to pay for them until they find a new job. Also, if you think that the prices for the lab equipment is high and the supplies need for synthe tic meat, but the prices for livestock are almost as high. They have to pay for the feed for the animals and the time and space for them to roam. If they do not treat them right and pay for these things the right way, they could be... ...Mejia. N.p., 28 Apr. 2008. Web. 7 Nov. 2013. . Levine, Ketzel (2008-05-20), Lab-Grown Meat a Reality, But Who Will Eat It?, National Public Radio, retrieved 2010-01-10 Meat, Future. "Cultured Meat; manufacturing of meat products through "tissue-engineering" technology." Future Meat. N.p., 1 Sept. 2013. Web. 8 Nov. 2013. . N. Fiala. (2010). â€Å"The Value of Cultured Meat:An Estimate of the Externality Costs of Meat Consumption†New Harvest. (Online Article).http://www.new-harvest.org/img/files/fiala_2010.pdf Notaro, Kris. "The Crusade for a Cultured Alternative to Animal Meat: An Interview with Nicholas Genovese, PhD PETA." IEET. PETA, n.d. Web. 25 Oct. 2011. .

George Thomson :: essays research papers

George Thomson b. 1757, d. 1851 Scottish folksong editor and publisher. For 59 years he worked for the Board of Trustees for the Encouragement of Art and Manufactures in Scotland. Joined the Edinburgh Musical Society, played the violin in the orchestra and sang in the choir. He developed an interest in Scottish folksongs set to classical arrangements and about 1791 he decided to publish a comprehensive collection for voice and piano trio, by the most renowned European composers. This cost a great deal of his private money and was not complete until 1841. Haydn was engaged to arrange folksongs and these were published in 1792 and 1795. Pleyel arranged other tunes and the first part of the "Select Collection of Scottish Airs" was published in 1793. From the Preface:- "The Symphonies and Accompaniments next engaged his solicitude. For the composition of these, he entered into terms with Mr Pleyel, who fulfilled part of his engagement satisfactorily; but having then stopt short, the Editor found it necessary to turn his eyes elsewhere. He was so fortunate, however, as to engage Mr Kozeluch, and afterwards Dr Haydn, to proceed with the Work, which they have finished in such a manner as to leave him nothing to regret on Mr Pleyel's breach of engagement." Beethoven, Weber, Hummel and Bishop were also involved, Beethoven writing 126 settings and Haydn 187. As mentioned above, this was not a cheap undertaking and, sadly, cannot be deemed a musical success, the Scottish folksong being largely of an alien nature to the arrangers, and if, as claimed in the Preface, Haydyn tackled the work con amore, Beethoven was angered by the simplification of his piano accompaniments to suit the demands and abilities of the drawing-room market. Indeed, he later refused George Thomson's approaches to write chamber music, incorporating Scottish folktunes, pricing himself out of the publisher's means. George Thomson :: essays research papers George Thomson b. 1757, d. 1851 Scottish folksong editor and publisher. For 59 years he worked for the Board of Trustees for the Encouragement of Art and Manufactures in Scotland. Joined the Edinburgh Musical Society, played the violin in the orchestra and sang in the choir. He developed an interest in Scottish folksongs set to classical arrangements and about 1791 he decided to publish a comprehensive collection for voice and piano trio, by the most renowned European composers. This cost a great deal of his private money and was not complete until 1841. Haydn was engaged to arrange folksongs and these were published in 1792 and 1795. Pleyel arranged other tunes and the first part of the "Select Collection of Scottish Airs" was published in 1793. From the Preface:- "The Symphonies and Accompaniments next engaged his solicitude. For the composition of these, he entered into terms with Mr Pleyel, who fulfilled part of his engagement satisfactorily; but having then stopt short, the Editor found it necessary to turn his eyes elsewhere. He was so fortunate, however, as to engage Mr Kozeluch, and afterwards Dr Haydn, to proceed with the Work, which they have finished in such a manner as to leave him nothing to regret on Mr Pleyel's breach of engagement." Beethoven, Weber, Hummel and Bishop were also involved, Beethoven writing 126 settings and Haydn 187. As mentioned above, this was not a cheap undertaking and, sadly, cannot be deemed a musical success, the Scottish folksong being largely of an alien nature to the arrangers, and if, as claimed in the Preface, Haydyn tackled the work con amore, Beethoven was angered by the simplification of his piano accompaniments to suit the demands and abilities of the drawing-room market. Indeed, he later refused George Thomson's approaches to write chamber music, incorporating Scottish folktunes, pricing himself out of the publisher's means.

Ranbaxy Laboratories

| Ranbaxy Laboratories Ltd. | | â€Å"Personally, I feel that companies who constantly innovate to provide better products and services and who can offer superior value propositions to the consumer are the ones likely to command more respect globally than others† Malvinder Mohan Singh, former CEO and MD, Ranbaxy Laboratories Ltd Table of Contents Executive Summary5 The Company5 Hybrid Business Model6 Porter’s Five Force Analysis7 Bargaining Power of Buyers8 Bargaining Power of Suppliers9 Threat of New Entrants10 Threat of Substitutes11 Threat of Rivalry12 Value chain analysis13Inbound logistics13 Operations13 Outbound logistics13 Sales and marketing13 Service14 Procurement14 Technological Development14 Human Resource Management14 Firm Infrastructure14 VRIO Analysis16 Internal Analysis- A Resource Based View16 Factors Leading to Growth18 Strategy18 Business-level Strategy18 Focus on Differentiated Products18 Corporate-level Strategy20 R&D in Ranbaxy20 NDDR – A sep arate Entity Decentralization20 First Mover Advantage20 Information Security and Information Synergy21 Acquisitions21 Agreements and Collaboration22 Recommendations22Medium term Strategy (5-7 years)23 Long term Strategy (10-15 years)25 References26 Exhibit27 I. Market Share27 II. Market Structure & Herfindahl-Hirshman index27 IV. Market Forecast31 V. Competitor Analysis31 VI. Ranbaxy Financials32 VII. Pharmaceutical Industry Future33 VIII. Conservation of energy and its impact37 Executive Summary Product patent regime implemented in India from Jan 2005 compelled Indian pharma companies to relook in to their marketing strategies so as to become competitive & strongly withstand in the competition with MNC’s & big giants in domestic markets.Product patent regime posed Indian pharmaceutical companies to change their strategies. If the Indian companies wanted to withstand in competition & survive, they have to invest more in the R&D for development of New Chemical Entities (NCEâ⠂¬â„¢s). Before patent regime, with the help of reverse engineering & process patent companies were enjoying copying MNC’s molecules & introducing their own brands & investing less in NCE’s. The rapid growth of the Indian Pharmaceutical Industry was sponsored by the non-recognition of product patents for drugs under the Indian Patent Act, 1970.However, the case reversed with the advent of signing of the TRIPs agreement. This change ensured that firms should reorient themselves for R&D-based innovation to survive. This would enable them to compete in regulated and open market. Ranbaxy Laboratories Ltd. adopted a â€Å"High-Risk-High-Returns† strategy to respond to the challenging business environment brought about by the introduction of the new patent regime. But the financial health of the firm was affected severely by the increasing expenditures on risky R&D and patent challenges with inadequate returns.High cost acquisitions in foreign markets and setting own manufacturing & selling facilities abroad in order to increase its geographical presence added further to the problem. Eventually, Ranbaxy had to redefine its business model. In 2008, a strategic combination of an innovator and generic powerhouse was brought in by Ranbaxy by selling its 63. 92% shares to Daiichi Sankyo Company Ltd. The study reveals how Ranbaxy adopted a new strategy every time the company confronted a new challenge in the ever so changing scenario of Indian Pharmaceutical Industry.From pioneering the art of reverse engineering and becoming a cost-effective firm globally, the firm went on to become the first Indian Pharmaceutical firm to launch the first original drug developed by an Indian entity, Synriam, and reaping profits by way of para IV filings for the star-drug Lipitor. Ranbaxy made a way out through its strategies to claim its top position in the Indian Pharmaceutical Industry and globally. The Company Ranbaxy Laboratories Limited is one of the India's lar gest pharmaceutical companies. It is an integrated, research based, international pharmaceutical company.It produces a wide range of quality, affordable generic medicines, that are trusted by healthcare professionals and patients across geographies. Ranbaxy is ranked 8th amongst the global generic pharmaceutical companies, and has a presence in 23 of the top 25 pharmaceutical markets of the world. The global presence of the firm encompasses 49 countries, and it has world-class manufacturing facilities in 11 countries to serve customers in over 125 countries. Ranbaxy entered into an alliance in June 2008 with Daiichi Sankyo Company Ltd. The combined entity now ranks among the top 15 harmaceutical companies, globally. The strategic deal will place Ranbaxy in a higher growth trajectory and it will emerge stronger in terms of its global reach and in its capabilities in drug development and manufacturing. A detailed portfolio of company’s financial positioning and market structure is provided in the exhibits. (Exhibit I, II and VI) Hybrid Business Model Ranbaxy is working very closely with Daiichi Sankyo to extract synergies in various geographies. Ranbaxy markets Daiichi Sankyo’s brands in countries such as Romania and Malaysia.Additional resources and capabilities are also being directed towards this region. These capabilities will result in improved business performance in other markets also, like Africa, Middle East and Asia. Branded business is the core factor that differentiates Ranbaxy from most other Indian generic companies. Ranbaxy has its own teams in more than 40 countries, while many Indian companies elect to sell their products through distributors. The ‘Global Hybrid Business’ team took several initiatives during the year to leverage synergies between Ranbaxy and Daiichi Sankyo, individually and collectively.Their collaboration is maturing with time and the synergies now extend beyond marketing and cover a significant part of the pharmaceutical value chain. A manufacturing and supply framework was established between Ranbaxy and Daiichi Sankyo Espha Co. Ltd. during the year and they are working together to develop products for the Japanese market. Porter’s Five Force Analysis The analysis is done from the perspective of an average incumbent player in the industry. Overall attractiveness of industry is moderate at 3. 1 points. The key buyers are hospitals and pharmacies.The key suppliers are active pharmaceutical ingredients and clinical trial services providers. The pharmaceutical market witnesses fairly strong buyer power. Oligopsony status strengthens buyer power. The price control policies of state and private sector institutions also add to buying power, as they are the ultimate purchasers of drugs. The business of pharmaceutical companies depends vitally on obtaining high quality equipment, materials, personnel, and third-party clinical testing services. The regulators must be satisfied th at the products of new entrants are safe and effective.Pharmaceutical industry also experiences substitutes in terms of non-drug therapies and like. In addition, cheaper generic copies are substituting research based drugs as they are no longer protected by patents. Bargaining Power of Buyers Pharmaceutical manufacturers sell to drug wholesalers. These then sell on to pharmacies, or to healthcare institutions as hospitals. Most pharmaceutical products require prescription except for OTC and similar drugs. Marketing of prescription drugs is therefore heavily directed at medical practitioners.Medical condition may entail several different drug treatments leading to product differentiation and weakening buyer power. Differentiation includes efficacy, side effects, ease of use and cost-effectiveness. The reverse happens when generic copies are available. The buyer power is also increased because the ultimate source of funds for most drug purchases is a public or private-sector health in surer or similar body. Such large purchasers exert monopsony market power ad it is very common for them to use one or more specific price control strategies. In some scenarios governments may directly set drug prices, making any departures illegal.In case of reimbursements governments may set a very low price for new or existing drugs. Under reference price regimes reimbursement levels are determined by contrasting the price of a drug in therapeutic category and/or peer group countries. If therapeutic category contains generics the reference price is pushed down for on-patent drugs in the same category. If peer group countries have lower per capita incomes, a similar effect occurs. Price-volume or profit control may also exist. Beyond the stipulated amount manufacturers have to offer either price reductions or compensatory disbursement to government.Overall, industry attractiveness due to buyer’s bargaining power is moderate at 3 points. Bargaining Power of Suppliers Manufact urers of active pharmaceutical ingredients (APIs) are major suppliers to the pharmaceutical market. This forms a sub-sector of the chemical industry. Many leading pharmaceutical companies enjoy less bargaining power of suppliers due to major investments in fine chemicals manufacturing which provides a high degree of self-sufficiency. APIs are provided on a contractual basis and so pharmaceutical companies risk elevated switching costs if they think about moving their business to a different place.Sequentially, pharmaceutical companies make use of sourcing managers to diminish costs and to lessen supplier power. However chemical manufacturers can demand higher prices in case of development of new therapeutic agents as it requires sourcing of newer APIs. Most companies purchase raw materials from many suppliers thereby lessening their reliance on any one company. In general, suppliers have little differentiation as laboratory equipment and chemicals are mostly uniform. Thus companies have a many options to acquire the best quality and cost relationship, diminishing supplier power.But, there are cases requiring specialized facilities or raw materials, such as sterile processing of biological materials. These cases increase supplier power. Forward integration by suppliers is highly unlikely; however due to chemical synthesis capabilities they are ideal candidates for production of generic drugs. Recent years have seen a trend of large pharmaceutical companies producing their own chemicals to enhance profits, however smaller companies lacking the resources necessary to do this have relied on API manufacturers.Pharmaceutical companies outsource their drug testing and clinical trials to third-parties. As these trials are very important for regulatory approvals, these service providers constitute important suppliers. Overall, the industry attractiveness due to supplier’s bargaining power is moderate at 3. 28 points. Threat of New Entrants Market entry is affect ed by regulation and legal frameworks in quite a few ways. A company that wants to market its products is obliged to show that its drugs are safe and effective, to a national regulator. The Drug Standard Control Organization (CDSCO) plays this role in India.A start-up company needs significant up-front investment which must be accessible for the time it takes to develop and test the product. It is time-consuming to meet these regulatory requirements; it may take 10-15 years to get a drug to market. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), out of 5,000 to 10,000 screened compounds, only 250 enter preclinical testing, of which only 5 enter human clinical trials, and finally just 1 will be approved. Another regulatory barrier to entry is the use of restrictive formularies: only certain drugs may be listed as preferred for a specific therapeutic category.This means that non formulary alternatives can only be prescribed under special circumstances an d with prior consent from the appropriate authority, or with more sizeable co-pays from the patient. Thus the potential market for non-formulary drugs is smaller than the size of the therapeutic class market. New entrants to the market are also slowed by the strength of intellectual property protection. Overall, industry attractiveness is moderate at 3. 44 points. Threat of Substitutes As far as substitutes are concerned patients may prefer traditional remedies.Physicians may decide on non-drug treatments if they deem them more apt. Switching costs for patients are moderately low. Though, they may be more important for the final buyers, the healthcare providers. For example, presume a healthcare system reviewed the clinical data and determined that a chronic condition that is treated by drugs taken for the patient’s lifetime can be treated by a simple surgical procedure. This would be a valuable and inexpensive alternative. However, it may need more surgical teams to be train ed and more availability of operating theatres, requiring funding from the healthcare system.The attractiveness of industry due to threat of substitutes is moderate at 2. 75 points. Threat of Rivalry The general structure of the industry is reflected as near perfect competition (Exhibit II). Industry has also witnessed high growth over the years (Exhibit III) Several multinational corporations dominate the Indian research-based pharmaceutical industry, beside smaller firms as biotech players fixed on a small quantity of new products. There is some proof of consolidation, which reduces rivalry as players increase their product portfolio or geographical spread.Certain specific therapy areas may have more effective concentration. Therefore products can be highly differentiated based on their clinical effectiveness. Generic companies can be profitable by selling the same molecule at lesser price than the original. This shows that setting up good-quality manufacturing processes is not ve ry expensive. A resulting effect of this is that it is comparatively trouble-free for research-based companies to increase output, for example by licensing agreements with other companies, eliminating the need to expand their own production facilities.This tends to increase rivalry. Exiting the market is moderately easy. Many assets can be classified as ‘weightless’. For example trademarks, patents, synthetic methods, and others. These can be sold comparatively easily. Many of the production facilities and equipment and R;D will find uses outside pharmaceutical industry. Overall, industry attractiveness due to the degree of rivalry is moderate at 3 points. Value chain analysis Inbound logistics Ranbaxy has implemented various ERP solutions to minimise cost of inbound logistics. Operations CMC- Chemistry, Manufacturing and Control – Trial manufacturing of small scale API and intermediates of some of Daiichi Sankyo’s pipeline products is ongoing at Ranbaxyâ €™s manufacturing facilities. The result is huge cost savings and efficiencies for Daiichi Sakyo. * PDR- Product Development Research – Daichii Sankyo’s knowhow is being used to reduce deviation rate of products. Transfer of new drug research to Daichii Sankyo has enabled Ranbaxy to focus on generic research. * Ranbaxy achieved a total of 230 filings across markets. * Rationalization of potable water supply by operating one system instead of earlier practice of two systems. Measures for Conservation of Energy resulting in savings of 11. 71 million rupees. (Exhibit VIII) Source: Ranbaxy Files Outbound logistics The company has also focussed on cost cutting at this level to strive towards its goal of cost leadership. Sales and marketing * Ranbaxy used its strong distribution network to introduce Daiichi Sankyo’s innovator products in Singapore, Malaysia and Italy. * Marketing synergies are rolled out in India and Romania. Source: Ranbaxy Files Service * Ranbax y ensures high levels of service to distributers. Procurement To gain advantage a project related to supply chain of API and drug product is ongoing. The intent is to promote rationisation and increase price efficiency to mitigate risk. Technological Development * Anti counterfeiting system to reduce pilferage. * Flexible multipurpose manufacturing to de-risk business and utilise production capacities optimally. Human Resource Management * Daiichi Sankyo talent exchange programme to ensure cultural synergies and skill enhancement. * Rotated employees through international assignments to create global leaders. * Additional features added in PMS. Introduction of whistle blower policy. * Long term ESOPs applicable to people in 43 countries and multiple nationalities. Firm Infrastructure * Upgradation of global manufacturing capabilities to enhance capacities, efficiencies and strengthen processes and compliance. * Dosage form facility in US has been upgraded and manufacturing capacity increased. * Investment in Greenfield facility in Africa. * Plan of a Greenfield facility in Malaysia. * Setup of a dedicated facility at Paonta Sahib. * Quality compliance, quality improvement and signing of consent decree with FDA. Implemented 22 global quality standards. * Implemented enterprise wide quality management system (TrackWise, Documentum, LMS etc). The company has inculcated sufficient changes in the value chain to be in line with its hybrid policy. As the company strives to be a global leader it has made huge investments in firm infrastructure. Also human resource management has been suitably enhanced to create a culture that assists in growth. VRIO Analysis Under the hybrid business model Ranbaxy has transferred new drug discovery to Daiichi Sankyo, while Ranbaxy will take care of generic drugs.Utilising these synergies Ranbaxy has also implemented flexible manufacturing at many facilities. Resource| Valuable| Rare| Costly to imitate| Used by organisation| | Daiichi Sankyo’s R;D| Yes| Yes| Yes| Yes| Sustained competitive advantage| Flexible manufacturing capabilities| Yes| Yes| Yes| Yes| Sustained competitive advantage| Expertise in acquiring Abbreviated New Drug Applications (ANDAs)| Yes| Yes| No| Yes| Temporary competitive advantage| SYNRIAM a breakthrough molecule for Malaria| Yes| Yes| Yes| Yes| Sustained competitive advantage|Internal Analysis- A Resource Based View The purpose of this section is to utilize the concept of resource based approach to determine the resources and the interactions that exist among these resources leading to differential performance of Ranbaxy in the Indian pharmaceutical industry. The internal analysis could be thought of as strengths and weaknesses of the SWOT framework applied to a firm. The RBV focuses on idiosyncratic and costly to copy resources, the exploitation of which may give a firm a competitive advantage. I.Assets: These refer to the ‘resource possession’. They are the factors of production that the firm may draw upon to provide valuable goods and services to the customers. They are both, tangible as well as intangible in nature. As a part of this project, these assets were identified in case of Ranbaxy, which are as follows: 1. R;D Expenditure: Firms that invest heavily in R;D are more likely trying to compete on the basis of innovativeness and technology breakthrough although high investment does not necessarily guarantee generation of successful innovation.Ranbaxy has been investing heavily in the R;D of new drugs. The ration of R;D expenses to Sales stands at 11% for Ranbaxy (2009-10) compared to the 5% industry average. 2. Marketing Expenditure: Morgan et al. (2009) find that marketing excellence do lead to superior performance. Marketing as a resource has been considered in itself to have huge potential in making a difference to the firm’s performance. Due to the venture into OTC products (Volini, Revital etc), the marketing expenditure has inc reased by 18% over 2010’s expenditure, when compared with the industry average. . Tacit Knowledge (Company’s Age): As a firm grows, with age, it develops a network of relationships with various institutional actors like government, suppliers, customers, banks and other institutions (Makhija, 2003). The stock of tacit knowledge can be only built over time as the individual learns a particular skill or as member of a group or as a team learns to interact with each other. Thus, as the company ages, the interactions build, networks build, resources build and relationships build. The company is over 50 years old and was incorporated in 1961. . Culture: Ranbaxy firmly believes in providing autonomy to their employees and in letting the employees discover their potential while working for them. Individuals are given fair bit of responsibility quite early in their careers and hence, their actions impact the business. This has resulted in a culture of entrepreneurship within th e organization. The spirit of innovation and creativity supports this entrepreneurial culture. An employee should not be part of R;D to bring about innovations. Creativity is promoted in all the parts of the organization.Genuine mistakes are considered as a part of learning and calculated risk taking behavior is encouraged. II. Capabilities: This is better understood in terms of ‘resource utilization’. Capabilities are those constituents of the firm which help exploit the resources in implementation of the firm’s strategies. 1. MD Experience: Ranbaxy is flourishing under the able guidance of Mr. Arun Sawhney who joined Ranbaxy in May 2008 and was elevated to the position of President-Global Pharmaceutical Business in January 2010. Since August 2011, he is CEO ; Managing Director.Mr. Sawhney is a veteran in industry, with international experience of three decades in the Chemical and Pharmaceutical industry. He has held senior functional and management positions pr eviously in global pharmaceutical companies like Max-Gb, Bayer India Limited and Dr. Reddy’s Laboratories Limited. Factors Leading to Growth The key to Ranbaxy’s growth lay in the strategic decisions taken by its management from time to time. These strategies – specific patterns of decisions and actions – helped them achieve a competitive advantage.It exemplifies how symbiotic interdependencies can be managed and harassed for the organisation’s benefit, by manipulating the specific and general environmental forces. Ranbaxy’s main strategy to manage its environmental forces seems to be through forming strategic alliances for the various products and markets. The company has followed an r-strategy i. e. the strategy of entering a new environment early, and has thus reaped the benefits of being an early entrant in new market. Strategy Ranbaxy is focused on increasing the momentum in the generics business in its key markets through organic and i norganic growth routes.It is the company's constant endeavour to provide a wide basket of generic and innovator products, leveraging its unique Hybrid Business Model with Daiichi Sankyo. As part of the Hybrid Business Model, Daiichi Sankyo will utilise Ranbaxy's strong manufacturing capabilities and expertise in developing generic medicines for the Japan and market them through Daiichi Sankyo Espha Co. , Ltd. The company will also increasingly focus in high growth potential segments like Vaccines and Biosimilars. These new areas will add significant depth to the existing product pipeline.Business-level Strategy Focus on Differentiated Products The company realized the importance of having a versatile product portfolio and thus is focusing on offering differentiated/value-added new products to the Indian masses. Ranbaxy has accelerated its pace to bring in new differentiated products in the Indian market to consolidate its leadership position. Ranbaxy is building upon the practice of related Diversification – entry into a new domain that is related in some way to an organization’s domain- to gain a competitive advantage Examples:- 1. Rank in Therapy SegmentsOver the last few years, Ranbaxy has realigned its domestic operations to the needs of its target customer groups to have a more focused relationship with the doctors. This is aimed at providing customer specific quality services surpassing expectations. By forming relationship with doctors, demonstrates that Ranbaxy manages symbiotic resource interdependencies by the way of co-optation to manage its specific environment better. 2. Entering into the Oncology Segment Since Ranbaxy did not have a significant presence in the Oncology segment, it entered into a strategic alliance with Zenotech Laboratories Ltd.Of Hyderabad, India, a company with a strong hold in this segment. 3. Strengthening presence in Asthma Segment In- Licensing agreement demonstrates that Ranbaxy makes use of the informal stra tegy of long term contracts to manage its resource interdependencies. Ranbaxy has entered into ‘In- Licensing’ agreement with Euro drug laboratories, the Netherlands-based pharma company for the Asthma product Doxophylline – a Novel Xanthine Bronchodilator. It is a strategic step in the direction of expanding the product portfolio through differentiated products for the Indian Market, in the post patent era. 4. NCE Products – India FocusRecently a licensing agreement with a swissbio- pharmaceutical company, Debiopharm, was signed for the New Chemical Entity (NCE) Drug in the Gastroenotlogy segment. 5. Strengthening Product Basket in New Markets In Canada, soon after the launch of its products in 2005, Ranbaxy is further expanding its product portfolio through in- licensing and has already emerged as a pioneer in this area. In mid 2006, Ranbaxy Pharmaceuticals Canada Inc (RPCI) and Janssen – Ortho Inc (JOI) entered into a licensing and supply agreeme nt for a generic version of Risperidone compressed tablets, sold under Ranbaxy’s label, Ran Risperidone.Corporate-level Strategy R;D in Ranbaxy NDDR – A separate Entity Decentralization Ranbaxy received an in- principle approval from the Board of Directors to De- merge its Drug Discovery Research (DDR) operation. This is a significant step in creating an independent pathway for DDR with dedicated resources and enhanced focus for long term value building. Ranbaxy’s state-of-the-art research infrastructure and scientific talent pool can be more effectively leveraged through an independent vehicle that better aligns assets with priorities to accelerate the company’s drug discovery programs.The resulting operational freedom and flexibility will also help to open up new growth opportunities, while providing a platform for increased collaboration. By the way of Decentralization of NDDR, Ranbaxy has promoted flexibility and responsiveness by allowing the researc h department to make on the spot decisions. Ranbaxy practices division if labour and specialization by allocating dedicated resources and creating scientific talent pool to DDR. The core competency of DDR is to discover new drugs First Mover Advantage Ranbaxy saw a great business opportunity in Japan, and hence entered the market in the year 2002 through a strategic alliance with a midsized research pharmaceutical company, Nippon Chemiphar Co, Ltd (NC) of Japan. Ranbaxy owned 10% equity * The company further consolidated its presence in Japan by increasing its equity stake in the NPI, from 10% to 50% in 2006 and NPI thus became a 50:50 joint venture between Ranbaxy and NC. Information Security and Information Synergy * Information security has been a priority at Ranbaxy since 2006. ‘Operation Safed Sagar’ was initiated to protect the company’s information assets. The program is focussed on bringing behavioural change in people, sensitizing them to the importance of Information Security. By using Information Security, Ranbaxy has demonstrated that it uses IT * To make critical information accessible to employees. * To facilitate beliefs norms and values of Ranbaxy. * To enhance motivational effects of cultural values. Acquisitions * June 2005 Efarmes in Spain * March 2006 Senetek in the US * March 2006 Allen in Italy * March 2006 Terapia in Romania * March 2006 Ethimed in Belgium July 2006 Mundogen in Spain * Sep 2006 Cardinal Drugs in India * Dec 2006 Be-Tabs in South Africa In the year of 2007 alone, Ranbaxy made and acquisition of 13 established and well recognized brands of the dermatology segment from Bristol- Myers Squibb in the US. Thus Ranbaxy has aggressively adopted merger and takeover strategy for growth in newer markets. Agreements and Collaboration Agreements and Collaborations 1. Agreement with GSK Extended * Strategic alliance with GlaxoSmithKline (GSK) helped Ranbaxy expand its drug development responsibilities and further fi nancial opportunities. Ranbaxy was to conduct stages till clinical proof is established. GSK thereafter will conduct further clinical development and take resulting products through the regulatory approval process to final commercialization. By forming strategic alliance with its competitor, GSK, Ranbaxy has demonstrated that it uses strategic alliance to manage its competitive interdependencies. . 2. Collaborating with DST * Under this collaboration, Department of Science ; Technology (DST) will provide financial support by way of soft loans to Ranbaxy. * The funding will enable Ranbaxy to conduct the pre clinical toxicity tudies/safety studies and take the molecules up to human phase-1 clinical trials. Recommendations Since its inception, Ranbaxy has been innovating on way to conquer the market. The strategies the company would adopt would be highly influenced by the external stimulus of the pharmaceutical industry. Following are the expectations from the Pharmaceutical Industry i n the times to come and how Ranbaxy should strategise to reap in the opportunities of the changing times. Medium term Strategy (5-7 years) Focus on increasing the scale of generic operations 1.Indian market to be at USD 55 billion with potential for more With market diversity on the rise, the drivers of the growth have proliferated and become more nuanced. Among the various drivers of the growth epidemiology factors, increasing affordability, enhanced accessibility, and rising acceptability are the most prominent (Exhibit VI). This opportunity can be fully utilized by Ranbaxy if it continues to ace its present strategy of capitalizing on generic drugs. This has to be accompanied by heavy investments in R;D for securing the leadership position in the times to come.But the cost strategy can made effective only by focussing on generics. 2. Mass therapies will remain important even though speciality therapies will increase share Mass therapies have evolved to comprise two differing oppo rtunity areas. The first which makes up the majority of the opportunity is acute indications within therapeutic areas such as respiratory and gastro-intestinal that have been traditionally treated by general practitioners (GPs) and consulting physicians (CPs). The second segment comprises older therapies in chronic indications such as diabetes, hypertension, and epilepsy.With the growing cases of both the types in India, Ranbaxy can actually look forward to organic or inorganic growth so as to be able to serve the particular area. The venture can be through differentiation or entering the market jointly by some other player. 3. Metro and Tier I Markets will drive growth while rural market will increase its share Metro and Tier I markets each account for about 30% of the Indian pharmaceuticals market. Mass therapies constitute a majority of this market. During the last 5 yrs, Metro and Tier I markets have grown at an estimated rate of 14 to 15 percent, in line with the overall market .The expectation is that the current momentum will continue and this segment will become a USD 33 billion market by 2020. This calls for a very strong distribution so as to penetrate in the rural sectors of the country. This is very important particularly in case of India wherein more than 70% of the population resides in rural areas. Low cost strategy will help the firm to gain success in the particular area. Apart from the distribution network, Ranbaxy can take the leverage of the Govt’s initiatives to expand healthcare in the rural areas. 4.Hospital channel will increase significantly in influence, though retail will stay important. Currently, as much as 80 to 85% of the market is being accounted for by the retail segment. Even in 2020, the expectation is that the retail segment will remain the mainstay of the market. However, consumption in hospital settings will rise to a considerable 20 to 30% share of the market. India will continue to witness a remarkable rise in medi cal infrastructure throughout the next decade. Not only will there be a dramatic rise in infrastructure, the nature and mix of hospitals and care delivery centres will undergo major shifts.As a result, the expectations are that the hospital segment of the pharmaceuticals market to grow at well above 20% and reach a size of USD 14 billion by 2020. The firm can leverage the opportunity by attaining the corporate-level strategy wherein the firm can get into strategic alliance so as to become the sole strategic partner to supply medicines to the hospital. More so, the firm can also get into ventures of laboratory partnerships. The laboratory collection centres needs comprehensive chain of branches across the country. The same infrastructure can be utilized to expand the retail chain of pharmacy. . Drugs worth more than 45 billion USD going off patent by 2015 Indian pharma companies have depended heavily on drugs coming off patent in the US to fuel their growth. But with the patent cliff nearing its end, they are now widening their horizon to include new growth areas. In 2012, drugs worth $ 35,514 million went off patent in the US. In contrast, in 2013, only 30 medicines worth $16,966 million are expected to come off patent and the value would fall to $ 2,952 million by 2020. Ranbaxy has won several ANDAs in the recent history, the prominent one being the ANDA of the star-drug â€Å"Lipitor†.The marketing exclusivity obtained by the company by the ANDA can help boost the profitability. Ranbaxy must continue doing to sought for more acquisitions of ANDAs so that the company can harp in the profits and at the same time build the reputation of a reliable manufacturer worldwide. Long term Strategy (10-15 years) The organisation should diversify into other revenue streams Contract Research Bio-Pharma Contract Manufacturing New Drug Development The three major segments – domestic formulations, formulation exports and bulk drug exports – have traditio nally been the backbone of the Indian pharmaceutical industry.With the generics market set to become extremely competitive in the long term (next 10 years), Ranbaxy should look to make the most of the current generic opportunity and achieve a substantial scale of operations. (Refer to Exhibit VII for Indian Pharmaceutical future forecasts. ) However, going forward, with more MNCs foraying into India and a shrinking generic market, Ranbaxy will have to increase their reach in segments such as contract research, biopharmaceuticals and new drug development (NDD). Global challenges will force the organisation to offer a whole gamut of products and services to ensure stable revenues and margins.The company can leverage its hybrid structure to achieve this long term diversification need. References 1. Barney, J. B. (1986), â€Å"Strategic factor markets: expectations, luck, and business strategy†, Management Science, Vol. 32 No. 10, pp. 1231-41. 2. Amit, R. and Schoemaker, P. J. H. (1993), â€Å"Strategic assets and organizational rent†, Strategic Management Journal, Vol. 14 No. 1, pp. 33-46. 3. Morgan, N. A. , Vorhies, D. W. and Mason, C. H. (2009), â€Å"Market orientation, marketing capabilities, and firm performance†, Strategic Management Journal, Vol. 30 No. 8, pp. 909-20. 4. Makhija, M. 2003), â€Å"Comparing the resource-based and market-based views of the firm: empirical evidence from Czech privatization†, Strategic Management Journal, Vol. 24, pp. 433-51. 5. Cappelli, P. , Singh, H. , Singh, J. V. and Useem, M. (2010), â€Å"How the best Indian companies drive performance by investing in people†, Harvard Business Review, March, pp. 91-7. 6. http://www. moneycontrol. com/stocks/top-companies-in-india/market-capitalisation-bse/pharmaceuticals. html 7. http://www. ranbaxy. com/news/newsdisp. aspx? cp=993;flag=LN 8. http://www. crisilresearch. com 9. Marketline reports 10. Ranbaxy. com Exhibits I.Market Share Ranbaxy has a mar ket share of 4. 78 % in Indian industry. Also Company has its considerable earnings from the global markets. Region| Sales in US$ in Million| % Share| USA| 791| 41. 5| India| 412| 21. 62| Europe| 297| 15. 59| CIS| 108| 5. 67| Africa| 189| 9. 92| Asia Pacific| 108| 5. 67| Thus, Ranbaxy needs to develop their global strategy as more than 75% of its revenue is generated from their global business. II. Market Structure ; Herfindahl-Hirshman index | Company Name| Market Cap (Rs. Crore)| s (% of market Cap)| s2| 1| Sun Pharma| 84,736. 49| 23. 76| 564. 55| 2| Cipla| 31,418. 31| 8. 81| 77. 61| | Dr Reddys Labs| 30,889. 01| 8. 66| 75. 02| 4| Lupin| 27,046. 65| 7. 58| 57. 52| 5| Wockhardt| 22,623. 49| 6. 34| 40. 24| 6| GlaxoSmithKline| 17,896. 05| 5. 02| 25. 18| 7| Ranbaxy Labs| 17,042. 95| 4. 78| 22. 84| 8| Cadila Health| 15,200. 53| 4. 26| 18. 17| 9| Divis Labs| 13,754. 59| 3. 86| 14. 88| 10| Glenmark| 13,726. 38| 3. 85| 14. 81| 11| Piramal Enter| 9,951. 71| 2. 79| 7. 79| 12| Ipca Labs| 6,3 95. 77| 1. 79| 3. 22| 13| Torrent Pharma| 5,839. 88| 1. 64| 2. 68| 14| Biocon| 5,439. 00| 1. 53| 2. 33| 15| Strides Arcolab| 5,409. 10| 1. 52| 2. 30| 16| Sanofi India| 5,345. 52| 1. 50| 2. 25| 17| Aurobindo Pharm| 4,796. 25| 1. 4| 1. 81| 18| Pfizer| 3,150. 36| 0. 88| 0. 78| 19| Abbott India| 2,953. 23| 0. 83| 0. 69| 20| Jubilant Life| 2,942. 72| 0. 83| 0. 68| 21| Sun Pharma Adv| 2,655. 82| 0. 74| 0. 55| 22| Unichem Labs| 2,115. 98| 0. 59| 0. 35| 23| Wyeth| 1,914. 96| 0. 54| 0. 29| 24| Novartis India| 1,885. 05| 0. 53| 0. 28| 25| AstraZeneca| 1,884. 75| 0. 53| 0. 28| 26| Alembic Pharma| 1,869. 14| 0. 52| 0. 27| 27| Fresenius Kabi| 1,863. 13| 0. 52| 0. 27| 28| FDC| 1,690. 56| 0. 47| 0. 22| 29| Ajanta Pharma| 1,558. 75| 0. 44| 0. 19| 30| Natco Pharma| 1,358. 77| 0. 38| 0. 15| 31| Claris Life| 1,198. 18| 0. 34| 0. 11| 32| Merck| 1,048. 25| 0. 29| 0. 09| 3| Panacea Biotec| 907. 74| 0. 25| 0. 06| 34| JB Chemicals| 703. 92| 0. 20| 0. 04| 35| Elder Pharma| 676. 49| 0. 19| 0. 04| 36| Hikal| 628. 01| 0. 18| 0. 03| 37| Shilpa| 625| 0. 18| 0. 03| 38| Dishman Pharma| 599. 98| 0. 17| 0. 03| 39| Indoco Remedies| 576. 4| 0. 16| 0. 03| 40| Orchid Chemical| 566. 79| 0. 16| 0. 03| 41| Plethico Pharma| 453. 26| 0. 13| 0. 02| 42| Shasun Pharma| 444. 3| 0. 12| 0. 02| 43| Vivimed Labs| 416. 49| 0. 12| 0. 01| 44| Nectar Life| 386. 85| 0. 11| 0. 01| 45| TTK Healthcare| 375. 52| 0. 11| 0. 01| 46| Sequent Scienti| 373. 44| 0. 10| 0. 01| 47| Sharon Bio Medi| 369. 76| 0. 10| 0. 01| 48| Aanjaneya Life| 357. 1| 0. 10| 0. 01| 49| Fulford| 288. 62| 0. 08| 0. 01| 50| Parenteral Drug| 279. 62| 0. 08| 0. 01| |   | 3,56,630. 63|   | 938. 78| The above data indicated the Market Capitalization of the top 50 pharmaceuticals companies. The Herfindahl index 938. 78 indicates that the pharmaceutical industry in India is low concentration and thus highly competitive industry. The high number of companies represent monopolistic environment, but market represents an Oligopolistic nature with top 8 fir ms having a market share of nearly 70% (69. 21%, Eight firm concentration ratio). Sun Pharma is the largest firm in the Indian industry with 23. 6% followed by all others with market share less than 10%. Thus we can conclude that Indian pharmaceutical industry is highly competitive and fragmented at the bottom. III. Market analysis The Indian pharmaceuticals market has achieved strong, double digit growth for the 2007 – 2011 periods. The market is expected to maintain this level of robust growth from 2012 through to the end of the forecast period in 2016. The Indian pharmaceuticals market had total revenues of $12. 3 billion in 2011, representing a compound annual growth rate (CAGR) of 17. 6% between 2007 and 2011. The performance of the market is anticipated to grow at a CAGR of 17. % for the five-year period 2011 – 2016, which is expected to drive the market to a value of $27. 3 billion by the end of 2016. Year| $ billion| % Growth| 2011| 12. 3| 15. 3| 2010| 10. 7| 1 7. 6| 2009| 9. 1| 18. 9| 2008| 7. 6| 18. 9| 2007| 6. 4| | | | | India pharmaceuticals market value: $ billion, 2007–11 Market Share Company| Market Share (%)| Cipla Ltd. | 4. 1| Ranbaxy Laboratories Ltd. | 3. 6| Lupin| 2. 7| Dr. Reddy’s | 2. 3| Others| 87. 3| India pharmaceuticals market share: % share, by value, 2011 IV. Market Forecast In 2016, the Indian pharmaceuticals market is forecast to have a value of $27. billion, an increase of 122% since 2011. The compound annual growth rate of the market in the period 2011–16 is predicted to be 17. 2%. Year| $ billion| % Growth| 2011| 12. 3| 15. 3| 2012| 14. 2| 15. 4| 2013| 16. 7| 17. 6| 2014| 19. 7| 17. 8| 2015| 23. 1| 17. 7| 2016| 27. 3| 17. 8| V. Competitor Analysis Dr. Reddy’s $ million | 2008| 2009| 2010| 2011| 2012| Revenues | 1,067. 40| 1,482. 30| 1,500. 20| 1,594. 40| 2,065. 00| Net income (loss) | 82. 1| -110. 3| 22. 8| 235. 7| 304. 4| Total assets | 1,828. 00| 1,788. 60| 1,714. 70| 2,028. 00| 2,550. 40| Total liabilities | 817. 2| 891. 1| 798. 7| 1,046. 30| 1,324. 20|Key Ratios Ratio | 2008 | 2009 | 2010 | 2011 | 2012| Profit margin | 7. 7% | (7. 4%) | 1. 5% | 14. 8% | 14. 7%| Revenue growth | (22. 2%) | 38. 9% | 1. 2% | 6. 3% | 29. 5%| Debt/asset ratio | 44. 7% | 49. 8% | 46. 6% | 51. 6% | 51. 9%| Return on assets | 4. 5% | (6. 1%) | 1. 3% | 12. 6% | 13. 3%| Cipla Limited $ million | 2008 | 2009 | 2010 | 2011 | 2012| Revenues | 926. 0 | 1,134. 7 | 1,219. 6 | 1,371. 0 | 1,521. 1| Net income (loss) | 149. 7 | 165. 8 | 230. 9 | 205. 0 | 239. 9| Total assets | 1,223. 7 | 1,422. 0 | 1,560. 2 | 1,835. 1 | 1,995. 9| Total liabilities | 422. 1 | 493. 9 | 298. 5 | 412. 1 | 365. 3|Key Ratios Ratio | 2008 | 2009 | 2010 | 2011 | 2012| Profit margin | 16. 2% | 14. 6% | 18. 9% | 15. 0% | 15. 8%| Revenue growth | 15. 3% | 22. 5% | 7. 5% | 12. 4% | 10. 9%| Debt/asset ratio | 34. 5% | 34. 7% | 19. 1% | 22. 5% | 18. 3%| Return on assets | 13. 8% | 12. 5% | 15. 5% | 12. 1% | 12. 5%| Lupin Limit ed $ million | 2008 | 2009 | 2010 | 2011 | 2012| Revenues | 612. 8 | 822. 0 | 1,031. 4 | 1,242. 1 | 1,511. 9| Net income (loss) | 87. 2 | 107. 1 | 145. 5 | 184. 1| 185. 2| Total assets | 718. 0 | 857. 5 | 1,085. 6 | 1,307. 3 | 1,693. 6| Total liabilities | 444. 9 | 550. 3 | 532. 0 | 595. 9 | 821. 6| Key RatiosRatio | 2008 | 2009 | 2010 | 2011 | 2012| Profit margin | 14. 2% | 13. 0% | 14. 1% | 14. 8% | 12. 2%| Revenue growth | 40. 4% | 34. 1% | 25. 5% | 20. 4% | 21. 7%| Debt/asset ratio | 62. 0% | 64. 2% | 49. 0% | 45. 6% | 48. 5%| Return on assets | 14. 5% | 13. 6% | 15. 0% | 15. 4% | 12. 3%| VI. Ranbaxy Financials $ million | 2008 | 2009 | 2010 | 2011 | 2012| Revenues | 1,585. 1 | 1,582. 6 | 1,621. 7 | 1,912. 8 | 2,169. 1| Net income (loss) | 125. 1 | (203. 0) | 63. 3 | 319. 5 | (619. 0)| Total assets | 2,008. 2 | 2,830. 8 | 2,594. 3 | 3,022. 9 | 3,605. 6| Total liabilities | 1,410. 0 | 1,899. 4 | 1,655. 8 | 1,812. | 2,726. 8| Key Ratios Ratio | 2008 | 2009 | 2010 | 2011 | 2012| Pr ofit margin | 7. 9% | (12. 8%) | 3. 9% | 16. 7% | (28. 5%)| Revenue growth | 23. 2% | (0. 2%) | 2. 5% | 18. 0% | 13. 4%| Debt/asset ratio | 70. 2% | 67. 1% | 63. 8% | 60. 0% | 75. 6%| Return on assets | 6. 5% | (8. 4%) | 2. 3% | 11. 4% | (18. 7%)| During the year 2011, the Company resolved its legacy issues with U. S. Food and Drug Administration (â€Å"FDA†) and signed a Consent Decree with FDA in which the Company committed to further strengthen its procedures and policies to ensure data integrity and to comply with current good manufacturing practices.This is considered to be a positive development for the Company as it will provide greater clarity around the outlook for the business in the U. S. The Company has made a provision of Rs. 26,480 million ($500 million) for settlement with the U. S. Department of Justice, which the Company believes will be sufficient to resolve all potential civil and criminal liability. Further, due to sharp depreciation of rupee foreign excha nge charge of Rs. 16,584. 08 million was made during the year. The combined impact of these two exceptional items on the performance of the Company was Rs. 43,064. 08 million.Due to the above exceptional items, the Company incurred a loss (after tax) of Rs. 28,834. 16 million in the year. * The debt to equity ratio for Ranbaxy is the highest among the big 4 pharmaceutical companies in India (refer to appendix for competitor figures). * The company’s average return on asset has been considerably lower than that of the other top players in the industry (refer to exhibit V for competitor figures). * While the company’s sales have picked up the constant less than expected return on asset will be a cause for concern for the investors. VII. Pharmaceutical Industry Future Medium termManufacturing opportunities for Indian players to remain upbeat * Increasing no. of drugs going off patent and decline in R;D productivity among the large global players provides an immense potent ial for Indian formulation and bulk drug players. * According to research the Indian Pharmaceutical Industry is set to grow at CAGR of about 17%. * Healthy growth momentum in formulation export to continue. * Rising ANDA approvals are a testimony to India’s capability in this area, coupled with strong pipeline of ANDA approvals in the medium term. * Bulk exports are expected to witness robust growthLong term Growth in generic market to slow down over the next decade Over the last 40 years, since its inception, the Indian pharmaceutical industry has thrived on the generic model by leveraging on its process chemistry skills and low-cost manufacturing advantage. This has enabled players to tap the huge generic opportunity abroad. However, the R;D productivity of large global pharmaceutical players (innovators) has considerably slowed down over the past few years which is underscored by the declining number of new molecules (New Molecular Entities – NMEs) being approved by the US FDA each year.Taking this trend forward, the lack of new drug launches between 2010 and 2015 onwards will mean that the generic opportunity set to open up in the next decade (post 2020) is likely to be significantly lower. (assuming average age of 8-10 years of patent exclusivity) These changes in the global pharmaceutical landscape could cause a slowdown in the generics segment and hence, the Indian pharma industry will be forced to look at newer avenues for growth. * Large global players suffering from low R;D productivity.Over the past few years, R;D activities by large global players have resulted in the innovation of only a handful of new and significant molecules. Meanwhile drug development costs have escalated. The cost for developing a new molecular entity (NME) has more than doubled to $1. 5 billion over the past 5 years. During the same period, the number of NMEs approved by the US FDA continued to hover around 15-20 with an occasional rise to over 20 as seen in 20 04 and 2008. * Higher risks and lower returns: New drugs over the last two years fail to deliver.In addition to low R;D productivity, innovators' returns from novel molecules have substantially declined over the last few years. None of the new drugs approved over the past 2-3 years have been blockbusters (with sales over $1 billion) or even sales greater than $750 million. This decline in sales is primarily due to the availability of substitutes (generic as well as patented) for existing diseases. Rising emphasis on usage of generics has also steadily reduced the prescription of patented molecules. Over the past few years, off-patent drugs have been the key growth drivers in the generic market.According to research post 2020, growth in the generic market is likely to slow down to 3-5 per cent. Fewer drugs going off-patent coupled with lower prices of the patented drugs (as a result of the availability of substitutes) will be the key reasons that will result in a significantly lower incremental generic opportunity. VIII. Conservation of energy and its impact Measures for conservation of energy | Impact resulting into saving (in rs Million)| * Increase in steam to fuel ratio from 10. 2 to 11. 4 by increasing the condensate recovery| 3. 0| * Rationalization of potable water supply by operating one system instead of earlier practice of two systems| 2. 04| * Operational optimization of process air compressor by supplying air from instrument air compressor| 1. 55| * Fuel emulsification system for furnace oil to improve the combustion efficiency in boiler by 3%| 1. 40| * Installation of Solar Heating system for boiler feed water| 1. 20| * Modifications in cooling tower by replacing the fans and pumps with low energy consuming & efficient fans and pupms in old utilities for pilot plant and Lovastatin plant| 0. 9| * Flexiblity was built into the system to facilitate operation of a single chiller unit at night time| 0. 63| * Reconditioning of cooling towers resulting in bringing down the cooling water temperature by 4’C thereby improving the chiller efficiency| 0. 47| * Re-engineering of air flow in AHU’s in two production blocks thus saving energy| 0. 26| * Replacement of old window ACs with energy efficient split ACs, and installing new ACs in 2 Conference Rooms thereby avoiding operation of centralized cooling during weekend meetings| 0. 17|