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29/01/2016

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04/09/2013

Positive and negative externalities and their effects on the market equilibrium

A business is most often mainly concerned with the financial expenses and revenues involved in the production of its commodity. However it also creates costs and benefits which affects the society as a whole and cannot always be measured in monetary terms. Such costs and benefits are referred to as externalities and can be of both positive and negative nature. Examples of negative externalities include environmental pollution and undesirable urbanization. Examples of positive externalities can be increased employment, infrastructural development due to urbanization etc.

Individual costs and benefits arise from the production and consumption of all commodities. The private costs involved in the production of a soft drink may include the costs involved in acquiring the factors of production needed in the production process while the private benefits will include the utility received by the consumer from the consumption of the soft drink.

The total cost and benefits that arise from the production of a good or service, both personal and external account for the social cost and benefit of that particular good or service.

Equilibrium prices usually do not take into consideration the effect of social cost and hence the production of the commodity exceeds the ideal quantity which ensures that market price includes the prices of all the real factors of production.

Explain the problems of Scarcity and opportunity cost, and how these concepts are related.The fact that most resources a...
02/09/2013

Explain the problems of Scarcity and opportunity cost, and how these concepts are related.

The fact that most resources are limited in quantity in effect means that societies must engage in the most possibly efficient use of such resources. Since no society can claim to have limitless amounts of resources, it is clearly evident that scarcity is a universal problem and hence we have economic goods. Scarcity can be defined as the condition when demand of a good exceeds its current supply.
When resources are scarce, economies must decide how and where to allocate these resources. Opportunity cost can be defined as the next best alternative forgone, which in simpler words means the economic good that has to be given up in order to produce another such good and this points out the intertwined nature of the ideas of scarcity and opportunity cost.
A production possibility frontier (PPF) illustrates graphically, the different possible combinations of two economic goods that a country can produce utilizing all its available resources at that point in time.
This can be further explained with the help of an example. Let us assume that a certain country can produce two goods X and Y and their possible production combinations are shown in the table below.



Possibilities X (millions of pounds) Y (thousands)
A 0 15
B 1 14
C 2 12
D 3 9
E 4 5
F 5 0


The two most extreme possibilities are no production of X while 15 thousand units of Y and 5 million pounds of X while no production of Y. The other combinations of the two products lie in-between. The production possibility frontier of these two goods is illustrated below.




The economy can choose to efficiently produce any combinations under the production possibility frontier with its current input and technological knowledge.

02/09/2013

The nature of communications process and how it influences the integrated marketing communications mix:

The success of an organisation and the volume of its sales most often depend on effective communications more than any other factor and as such integrated communications marketing plays a key role in ensuring increased sales and meeting production targets. Integrated marketing communications (IMC) involves the streamlining of all the different methods of marketing and making them work hand in hand to present a unified experience for the customers and a reinforce the core brand message.

The communication process in its simplest essence involves the exchange of information between two or more people. Effective communications mean the successful exchange of the information best understood by the receiver and arranged in the most efficient manner by the sender.
A few different models of communications have been developed over the years. The classic communications models include Shannon’s information theory model or the active model, interactive model, intermediary model which is often referred to as the gatekeeper model and the transactive model.

The effect of such models on integrated marketing communications is that different promotional techniques have been developed with the integration of these models. These different types of promotion with regards to sales are listed below.
1. Advertising.
2. Sales promotion.
3. Direct marketing.
4. Public relation.

02/09/2013

Critically evaluate and explain how increasing workforce diversity impacts upon the HR Managers role in any TWO of the following areas:

• Recruitment of employees
• Developing employees
• Rewarding employees
• Engaging employees
• Managing employee performance

Table of contents:

1. Summary
2. Introduction
3. Developing employees
4. Rewarding employees
5. conclusion

1. Summary

The following paper is a critical evaluation and provides explanations of the impact of increasing workforce diversity on the roles and responsibilities of an HR manager in two chosen areas, namely developing employees and rewarding employees.
The HR manager is most often the figure responsible for understanding the importance of embracing the increasingly diverse nature of the workforce of recent times and hence devise and imply tools and methods to accommodate the needs and demands of effectively managing workforce diversity.

2. Introduction

Workforce diversity broadly includes a variety of aspects such as age, s*x, religion, ethnicity and each form of diversity has characteristic effects on the attitudes, values and behavior of an individual at work. Some define diversity in a manner that includes aspects such as the identities and perspectives employees add, such as profession, academic background, location and origin. One form of diversity that is often undermined is that of a widening age range of employees which results in significant differences in their experience and attitudes (Wagner, 2007). Another form of diversity within a workforce is race and in researches has often showed to be of great benefit especially when businesses are global and target markets are on the other side of the globe.

In the 1990s as a result of increasing globalization, a more diverse workforce was evident and had a significant and long lasting impact on the business world. Numerous journals, articles, books and other forms of publications were released which all advised on how to more effectively manage an increasingly diverse workforce (e.g., Cox & Blake, 1991; Fernandez & Barr, 1993; Mandell & Kohler-Gray, 1990; Thomas, 1990, 1991, 1996; Thomas & Ely, 1996). As speculated by many, it has been seen that flawed diversity programs may actually impact the workforce in adverse manners (Clark, 1998; Galen, 1994; Murray, 1993).

In the twenty first century, the most progressive employers have come to realize that the best business sense is to effectively manage and utilize the benefits that are present in a pool of skills brought in by an increasingly diverse workforce and one that reflects the multicultural society we live in.

3. Developing employees

Recent studies have indicated that increasingly diverse workplaces tend to be less integrated and exhibit higher levels of dissatisfaction. If not managed with the most effective tools and methods diversity can cause miscommunication and lead to falling productivity. This goes to show the importance of proper development of employees in the forms of diversity training and sensitizing the work environment to take into consideration the values of each individual employee.

As such the HR manager’s role of incorporating diversity policies and training programs is of utmost importance. The challenges involved with such commitments are often in degree of comprehensiveness, attainability and measure ability of the employee development programs and training tools.

To begin with, it is important to have a measure of the degree of diversity in the workplace. Therefore the HR manager must engage in a workplace diversity survey and possibly a workplace satisfaction survey as well. This will provide a view of the current situation and how that interprets t employee satisfaction and consequentially help tailor development plans and strategies of the workforce.

Developing a workforce is in its essence the process of investing in the employees to build, retain and improve upon a specific skill set that helps improve performance, communication and subsequently ensure that the right person has been chosen for the right job. Developing a diverse workforce is therefore aimed to include those purposes while ensuring fairness, understanding and workplace equality.

The plan of developing a diverse workforce can be implemented with the help of a set of tools and programs include diversity orientation and training, sensitizing employees and workplace.

3.1 Diversity orientation and training:

Providing employee orientation and training into a diverse workforce has been shown to be one of the most significant steps required to create a more integrated and productive workforce. This requires the HR manager to design effective workforce diversity training programs. Managing workforce diversity effectively means to provide an environment which nurtures the individual employee’s skills and assets which helps the organization propagate more efficiently towards its business goals.

The diversity training program itself must therefore successfully address all the aspects of workforce diversity such as gender, racial and age discrimination. Not only must the training program must teach employees to be aware of the differences that each individual employee possess but it must also emphasize to respect them.

Today’s HR managers must also keep in mind to design the training programs and tools to address the aspects of political and religious differences, brought in by the overwhelming level of globalization. Issues such as terrorism, religion and current military actions have shown to be of different emotional values to different employees when brought up in training programs.
The HR manager must therefore keep in mind to base the training program on principles such as integrity, respect, humility, acknowledgement of bias and prejudice, openness etc.
3.2 Sensitizing employees and workplace:

Despite the training and orientation the work environment remains the place where the diversity training shows its results and therefore, the workplace must as well promote diversity. The HR manager again has an important role to play by promoting a work environment that celebrates cultural, racial and all other forms of diversity.

The work environment must not fail to address the fact that different employees have different needs and values. The superiors must be aware of the different cultures, values and backgrounds of the employees. Therefore the training programs should reflect such issues as well. Similar approaches should be practiced on sensitizing the workers. Each worker must therefore know to value and respect the cultural, religious and personal values of his coworkers.
The HR manager’s function of integrating such practices into the work place should focus on different levels such as the group, the individual, the organization and the external environment.

3.3 Non training activities

The HR manager must also establish series of activities that reflect on the effectiveness of the training program itself. This should also provide a measure on the benefits that is brought about the workforce and also the organization by the influence of workforce diversity.

Such activities can be in the form of staff meetings, newsletters, evaluations and even social integration events such as mixed faith gatherings and celebration of different religious occasions.

Other forms of such non training activities often include events geared at building a more supportive workplace, events on woman abuse, s*xual and family violence awareness programs. These not only educate the employees on being supportive towards their coworkers but also provide important resources for the individuals themselves and assist them to ensure a better environment not only at home but also the workplace.

4. Rewarding employees

Today’s workforce in most cases not only include multiple generations but also a range of nationalities, religious and ethnic backgrounds and even s*xual orientations that need to be taken into consideration and as such keeping motivation high in more of a challenge than ever before. This requires critical and effective methods of rewarding and consequentially engaging employees.

For HR managers of multinational corporations the process of effectively rewarding employees is made even more complicated and difficult by the idea of equity over geographies. Ensuring equity means taking into account the range of standards of living across the different nations the organization functions on top of the currency exchange rate differences.

One issue introduced by diversity is the idea of collectivism, which is gaining significance at a fast pace due to the rapid growing nature of the biggest economy in the world, China. Rewarding in most cultures often are often on an individual scale while that Chinese economy is based on a practice of group rewarding due to the collectivist nature of their workplace.

The HR manager must keep in mind that the rewarding methodology must be flexible enough to accommodate such differences while still adhere to the philosophy and guidelines that are specified by the overall program objectives.

4.1 Designing effective reward program:

While the rewarding methodology might vary from one organization to another, the underlying principles must always address the diverse nature of the workforce with the aim to consequentially engage the employees in better performance, increased efficiency and integration. Hence the HR manager faces the task of incorporating the most important underlying factors into the rewarding system. These factors most often include
1. Sticking to the objective
2. Timely manner
3. Reward of choice
4. Equality.

4.1.1 Sticking to the objective:

The HR manager must always remember that the rewarding methodology must adhere to the specific goal set by the organization. No matter how appropriate the reward may seem, it will be more of an unwanted overhead if the reward does not stimulate developments in the desired aspects of the workforce as set in the overall organization policy.

4.1.2 Timely Manner:

One of the most significant aspects of strategic recognition is speed. The reward should be on time, closely following the effort that it recognizes and ensure that the recipient of the reward fully understands and accepts the reasons behind the appreciation of his actions. Continuous and frequent nature of the rewarding process often helps to instill a sense of competitiveness amongst the workforce regardless of the degree of diversity that exists in the workforce. The frequency of rewarding ensures visibility and maximum participation as well.

4.1.3 Reward of choice:

The very essence of workforce diversity means that the same reward may not be of the same level of incentive to everyone and hence fail its purpose. As such the HR manager must be able to understand the different forms of rewarding that prove to be of most effectiveness. Non cash awards in the form of gift cards and vouchers help fuel the non tangible income of the employee. These often stimulate increased social acceptance, increased self esteem and enhanced performance. On the other hand the rewarding process might allow the employee to earn points that in turn allows him to exchange for rewards the employee might see to be of interest and value to them personally.

4.1.4 Equality:

The HR manager’s most important role in deciding the rewarding methodology is to ensure equality. For instance, if the program only rewards the top percentile of elites it will be least effective. The reward must acknowledge the performance changes in the entire workforce and not just the top 10 percent. Most studies show that it’s the middle 80% of the workforce that exhibit the highest level of engagement and as such the reward program must address them with equality.

It is therefore evident that to be effective, an organizational reward system must be true to the philosophical motivation of people at work. One of the more popular methods of reward systems that are based on this understanding is gain-sharing.

4.2 Gain Sharing:

Gain sharing programs are commonly incentive plans aimed at improving the organizational performance of the employees in a common effort. The principle of gain sharing is that the economic benefits brought about are shared amongst the employees and the company (Joseph Boyett, Jimmie Boyett, 2004)

In most cases the workers voluntarily participate in management roles that involve making key decisions regarding reforms and the reward is based on the factors that are directly under the control of the employee (costs and efficiency). The gains are measured and the rewards are given out on the basis of a predetermined formula. The nature of the gain sharing program means that the rewards ae only distributed when the gains are achieved and hence do not add to company costs (Paulsen, 1991)

5. Conclusion:

The effects of increasingly diverse of workforce are undeniable and are evident in most cultures and economies. Regardless of the degree of diversification, it is of utmost importance that business practices not only accommodate methods of diversity management but also celebrate and promote diversity because of the benefits brought about by it. Under such circumstances the role of an HR manager in addressing these issues and introducing changes to manage and promote diversity while staying true to the organizational philosophy
is more difficult than ever before.

Appendices:

Korte, R.F. 2007. A review of social identity theory with implications for training and development. Journal of European Industrial Training, Vol. 31 No. 3, Emerald Group Publishing Limited

Lorbiecki, A. and Jack, G. 2000. Critical Turns in the Evolution of Diversity Management. British Journal of Management, Sep2000 Special Issue, Vol. 11 Issue 3.

Thomas, D.A. and Ely, R.J. 1996. Making differences matter: A new paradigm for managing diversity. Harvard Business Review 74:5, 79–90.

Tomervik, K. 1995. Workforce diversity in Fortune 500 corporations headquartered in Minnesota: Concepts and practices. Academy of Human Resource Development (AHRD) Conference Proceedings, St. Louis, MO.

Rynes, S. & Rosen, B. (1995). A field survey of factors affecting the adoption and perceived success of diversity training. Personnel Psychology.

Wheeler, M.L. (1995). Diversity: Business rationale and strategies (Report #1130-95-RR)

Joseph and Jimmie Boyett (2004) The Gainsharing Design Manual

Increased*
02/09/2013

Increased*

02/09/2013
The concept of equilibrium in a supply and demand model:Demand can be broadly categorized into two types, individual and...
02/09/2013

The concept of equilibrium in a supply and demand model:

Demand can be broadly categorized into two types, individual and market. Individual demand is in its simplest essence the quantity of good an individual is willing to purchase at a specific price at a specific point in time. On the other hand market demand signifies the total quantity demanded by all customers at a specific point in time. Market demand is the quantity of a good or service which buyers are prepared to buy at a given moment and at a given price (Economics a first course, Ian Hobday, 1988)

Similarly, supply in economics means the quantity of a good or service that is offered for sale at a specific point in time at a specific price. It does not signify the quantity of the good that is in existence but only the quantity that is available on the market at a given price at a specific point in time.
The market price, also known as the equilibrium price is therefore the price that is decided upon by the interaction of the forces of demand and supply. In other words, it is the price at which the good is available on the market.
Market demand is dependent on a few factors. These factors include changes in taste and fashion, changes in prices of other related goods and services, changes in advertising, population, availability of credit etc. Similarly, the market supply is also dependent on factors such as cost of production involved, weather and climate, technological advancements as well as tax and subsidies.
Equilibrium price can be illustrated with the help of diagrams that include demand and supply curves.


Under such conditions an increase in demand will shift the demand curve to the right. Hence this will pull up the equilibrium price and the also the quantity supplied, assuming all other factors to be remaining unchanged. A decrease in demand will have the opposite effect, pulling prices down and also the quantity supplied . the diagram below illustrates the effect of a right ward shift of the demand curve due to an increase in the market demand from D1 to D2, pulling the equilibrium price up from P1 to P2 and the quantity demanded from D1 to D2.



An increase in supply will pull down prices, moving the supply curve to the right and resulting in an increase in the quantity supplied, again assuming all other factor to be remaining constant. Similarly a decrease in supply will have the opposite effect, reducing the quantity supplied and puling prices up. The supply increases from S1 to S2 resulting in an increase in quantity demanded from Q1 to Q2 while equilibrium price falls to P2 from P1.

02/09/2013

Relative merits of alternate economic arrangements for overcoming the problem of scarcity in society:

In order to decide how to tackle scarcity all societies have tried out different methods of resource allocation and decision making which. Such methods varied widely, starting from the fully, centrally planned economies such as that of the former soviet Russia, to completely free market economies, such as that of the United States. However the most successful and long lasting ones are those that tend to lie somewhere in the middle of the two extremes. The most significant alternate economic arrangements and their merits are discussed below.

Planned/Command economy
Planned economies, or often known as command economies are those where the methods and policies involved in resource allocation are decided upon by the government. The planners in the government have complete freedom while deciding how to produce, what to produce and for whom to produce. Advantage of such an economic arrangement lie in the fact that the government can decide to pursue over all social benefits, allocate resources to aid the development of the economy and its infrastructure and consequentially reduce economic and financial disparity

Free Market economy
A free market economy is one that relies solely upon what is referred to as the market mechanism to decide on what, how and for whom the production of economic goods and services should occur. The market mechanism operates by the interaction of buyers and sellers and depends on the demand and supply of the goods, eliminating the need for the collection of inexplicably huge amount of information needed for central planning, like that in a command economy.

Mixed economy
A mixed economy is one where the government practices varying degrees of control over the economy while the forces of market mechanism also exist. In such economies the governments or the controlling bodies try their best to ensure fair distribution of resources so that overall economic benefits are achieved while making sure the market mechanism operates relatively smoothly.

02/09/2013

Differences Between Macroeconomics and microeconomics:

Modern day economics is broadly categorized into two branches, microeconomics and macroeconomics. Microeconomics is the sub field of economics that involves the study of the behavior of individual entities and organizations such as firms, business organizations and financial institutions, markets and households. The foundations of microeconomics are most often considered to have been laid down by Adam Smith, a Scottish philosopher and also widely recognized pioneer in the field of political economy. (The Wealth of Nations, 1776). With the progress of times microeconomics has come to include the study of the different market structures, International trade and finance and a list of many other significant topics.

Macroeconomics, the other significant sub field of economics deals with the overall characteristics and mechanisms of the economy. The study of macroeconomics is most often considered to have come to mainstream existence during the Great Depression of the 1930's, most significantly affecting the United States and England. Robert Maynard Keynes in his revolutionary work General theory of Employment, Interest and Money (1936) proposed new theories that analyzed alternating periods of high unemployment and inflation. Macroeconomics today includes the study of economic growth and development, interest rates and policies to control and manage money and how investments, consumption interact and the causes of financial crises.

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