Critically Assess the Personality (or Psychological) Traits Approach Essay

Critically Assess the Personality (or Psychological) Traits Approach to Explaining Entrepreneurship - Essay Example There is a positive link associating the environment and prevailing situation, and the characteristics needed in entrepreneurship, because personalities or characteristics of an individual are linked with the environment (Littunen, 2000). Therefore, based on this idea, experiences and further changes in the person’s life are crucial to the understanding of personality and entrepreneurship as well. In this paper, the proponent critically assesses the personality (or psychological) traits approach to explaining entrepreneurship. Entrepreneurs and the development of their personality traits Personality is defined as an individual’s pattern of behaviours that differentiate him or her from the other, creating certain uniqueness on that person (Feldman, 2003). There are varying psychological approaches in understanding personality and from psychoanalytic perspective, each personality is a significant effect of unconscious forces. These unconscious forces are integral parts of individual’s personality that could potentially determine behaviour. However, aside from this approach, there are still varying theories aiming to identify or understand what personality is all about and that includes the idea of understanding the interplay between the individual and environment (Feldman, 2003). It is important to understand that entrepreneurship is specifically an activity that is created in a business environment where an entrepreneur has the ability or even a chance to develop personal traits in the process in order to be successful in conducting or running an enterprise. In other words, there is a great possible reason to believe that creativity for instance can be learned along the process in conducting or doing a business because it could substantially promise an individual on how to successfully obtain his or her objectives. Moreover, it is possible to obtain the fact that it is not necessary to carry certain personality traits that successful busines s persons posses prior to venturing into business just to be successful. After all, business could be a series of trial and error in which along the process, an individual may find an opportunity to develop special skills or even personalities that could lead him or her to success in business. In the study of Littunen (2000), entrepreneurship was found to have an effect on the personality characteristics of the entrepreneur. On this ground, there is a significant reason to use individual’s characteristics in explaining what entrepreneurship is all about. After all, entrepreneurship could potentially develop certain characteristics and this would mean there is something powerful force about it that could substantially change a person. In great important detail, entrepreneurship enhances a person’s potential in the enterprise. In other words, entrepreneurship is a potential training ground for an entrepreneur to enhance more specific character or personality traits. This specifically proves that personality can be acquired aside from the fact that some theories potentially suggest that it could be innate at some point (Feldman, 2003). Although it was strongly argued that personality is innate based on the basic understanding on the twins’ personalities, there are substantial studies which can also prove that it can be learned through a person’s experience (Jacoby and Youngson, 2004). The following are specific examples

U01d1 The American Legal System Essay Example | Topics and Well Written Essays - 500 words

U01d1 The American Legal System - Essay Example The main basis of the common laws is based on the decisions that have been made in previous cases. During a hearing the judges make the decision on a case based on previous cases and previous decisions. It is also essential to understand that if a particular case has not been found in the common law, then the decision made by the judge on a case will become the law. Statutory laws on the other hand are the laws that are made by the government of the specific country. Here the governments play a major role in the law determination and they are also responsible for the development of punishments as well. These laws are made to basically meet the needs of the citizens, or to help in the formalization of the existing laws or even to resolve cases that are outstanding and need the government interference (Hillestad, 2004). Considering the health care systems, it is essential to note that the government has taken over the ‘driver’s seat’ for several organization and the hospitals that are run by the government now hold a monopoly in the markets. Here the local hospitals are given the rights to allow or not the starting up of other newer hospitals in the area (Schneller, Smeltzer, & Burns, 2006). Hospitals are given the right to prohibit any new competition in the markets and this in simpler words means that the local hospital tend to gain a monopolistic power in the industry. This is very similar to providing a company the legal rights to create higher levels of barriers to entry in the markets so that the new competition is completely eliminated. The laws those are present in the market at present are to a great extent the root cause for the several liabilities that have cropped up in the past. To ensure that the health care is improved and the issue of the health care is reduced, the governments needs to allow the health care organizations to be privatized instead of taking on the entire markets and also the level of laws and regulations need to be

Understanding the Motives and the Causes of Impulses Into Research Paper

Understanding the Motives and the Causes of Impulses Into International Relationships - Research Paper Example In the process of sharing these common resources and with the self-satisfaction tendency of individuals, there is need to put up mechanism to regulate self-centeredness of each individuals and to ensure that natural human rights – right to liberty, to life and to property – do not conflict with the similar rights for others in the same society. This mechanism is what constitutes politics and when it succeeds in its quest to preserve the natural rights of individuals under it while maintaining peaceful coexistence, then we may say that it is a legitimate political authority. Because the public is vulnerable to perpetuating individual interests, which may infringe into the rights of others, the conception of political legitimacy so that it fulfils its obligations cannot be left to the public. On this account, the legitimate political authority can be entrusted into the hands of philosophers who have the mental ability to conceive the best political order. Legitimacy in po litics qualifies the virtue of political institutions and political decisions on laws and policies. Philosophers are believed possess to the highest understanding of principles of nature and can be trusted to concoct the best political order. The philosophers’ in-depth analysis of concepts can evaluate the validity of claims and general discourse. With the limitation of human beings in terms of thinking and diversity in understanding and conception of ideas, philosophers too face the greatest threat of conceiving illegitimate and unethical political systems.

Fast Food Franchises Pakistan Essay Example for Free

Fast Food Franchises Pakistan Essay A survey was conducted amongst several people from different categories of the society to determine the conclusion of this report’s research. Also, certain threats to western fast food franchise were discussed. In this report we covered McDonalds, KFC and Pizza Hut as the main western franchise restaurants, with a few references to the Subway chain. 2. Introduction 2. 1. WHAT IS A FRANCHISE? A franchise is defined as a legal and commercial relationship between the owner of a trademark, service mark, trade name, or advertising symbol and an individual or group wishing to use that identification in a business. Each franchise business has been authorized by a parent company, or franchisor, to sell their goods or services either in a retail space or a designated geographical location. The franchise administers the method of conducting business between the two parties. Generally, a franchisee sells goods or services supplied by the franchisor or that meet the franchisors quality standards. The franchisee has the rights to market the product or service using the operating methods of the franchisor. The franchisee has the obligation to pay the franchisor certain fees and royalties in exchange for these rights. The franchisor has the obligation to provide these rights and generally support the franchisee. In this sense, franchising is not a business or an industry, but a method used by businesses for the marketing and distribution of their products or services. Both franchisor and franchisee have a strong vested interest in the success of the brand and keeping their customers happy. 2. 2. WHAT IS FAST FOOD? Fast food is any food that is quick, convenient, and usually inexpensive. It is a type of food that can be prepared and served very quickly. While any meal with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with low quality preparation and served to the customer in a packaged form for take-away. Fast food can be bought just about anywhere that sells food and snacks. Street vendors and drive-thru restaurants are probably the most common places to find fast food. Its so popular because for a cheap price you can usually get a meal thats satisfying. But fast food is inexpensive because it is usually made with cheaper ingredients such as high fat meat and foods that contain lots of unhealthy fats (saturated and trans-fats) and cholesterol, instead of nutritious foods such as lean meats, fresh fruits, and vegetables. Fast food in Pakistan is available almost anywhere, and the franchising of international fast food brands has created a new and successful market. 1 2. 3. WESTERN FAST FOOD CHAINS IN PAKISTAN Globalization has made our world a smaller place. Cultural exchange has exposed our society to foreign ideas and foreign foods have entered our country. The following is an introduction of the three most famous western franchises in Pakistan: 2. 4. McDonalds [pic] McDonalds first opened its store in Pakistan in September 1998. Since then, they have opened seventeen new stores throughout Pakistan. Today, millions of Pakistanis place their trust in McDonalds everyday to provide them with food of a very high quality as well as good service. In the past five years, the response to McDonalds coming from Pakistanis has been overwhelming. Currently, Lakson Group Companies has taken over McDonalds Corporation, USA and a local partner making it a 100% owned and operated Pakistani company. The first set of golden arches began shining back in September 1998 in the city of Lahore. The opening was met with great excitement, and about a week later the McDonalds in Karachi opened. As of 2005, there were 18 restaurants in Pakistan: 7 in Karachi, 1 in Hyderabad, 9 in Lahore, and 1 in Faisalabad. [1] 2. 5. KFC [pic] In Pakistan KFC was franchised by Artal Restaurants International in 1997. it was a Belgium based business group. KFC opened its first restaurant in Pakistan in 1997 at Nipa Chorangi, Gulshan-e-Iqbal, Karachi. KFC opened its first restaurant in Lahore, in June 1997, which was third in Pakistan. Today, KFC has more than 43 restaurants in Pakistan. The market is ripe for many more restaurants and the investors are keen to invest. In 2001, KFC franchise was taken over by Gray Mackenzie Restaurants International. Currently KFC in Pakistan is owned by a Dubai based company Cupola which is the worlds largest restaurant system with over 32,500 restaurants in more than 100 countries and territories. KFC is in a phase of growth and is expanding rapidly. The quality of their product is convincing the customers not to shift to any other brand. KFC has won several awards for there good food quality, customer relationship and for providing means of income for the masses of the country. The company is presently a giant in the fried chicken industry as there competitors are far behind. Presently they are trying to innovate there products for the ease of the customers, and they are also focusing on providing there customers with more healthy food. KFC is expected to dominate the huge local market of fast food restaurants in the Pakistan and provide high quality and healthier food to their customers. KFC has a huge scope of progressing further and has lots of opportunities in local market. KFC is expected to have more than 100 branches all over Pakistan in the near future. [2] 2. 6. PIZZA HUT [pic] When it was initially opened in Pakistan, over 10 years ago in December 1993, Pizza Hut got a very good response by the Pakistani consumer base. Pizza Hut–Pakistan is working under a franchise agreement between MCR (Private) Limited and TRICON Restaurants International (Former Pepsi Co restaurant International). Pizza Hut Pakistan reports to TRICON (India) TRICON Singapore simultaneously. Pizza Hut opened its first outlet in Clifton Karachi and the people of Pakistan welcomed them with open arms. As most restaurants do, Pizza Hut did not face the problem of taste development because it introduced some of the local taste in their Pizzas, like Chicken Tikka Pizza, Masala Pizza and Chappli Kebab Pizza. Currently, Pizza Hut has 14 outlets in all over Pakistan and it still aiming to further expand. It is the market leader in the pizza market within Pakistan. [3] 3. ECONOMIC AND SOCIAL IMPACT The establishment of western franchise fast food chains in Pakistan has affected the business activities to some extent. They have also developed new tastes for our society and lifestyles. Here are a few aspects of how McDonalds, KFC and Pizza Hut have contributed in our economy and social lives. 3. 1. [pic] †¢ McDonald’s in Pakistan is currently employing about 1,000 Pakistanis and each store is managed by Pakistani managers. †¢ McDonalds has investment of over Rs 300 crore in the country and payment of taxes and duties amounting to more than Rs 100 crore. †¢ Since McDonalds is doing so well in Pakistan they will continue to grow and add more stores in more cities in the future. †¢ The managers working for Lakson, reportedly monthly to the McDonalds headquarter located in Illinois. In the eighteen restaurant located in Pakistan all of the employees, managers as well as those working for Lakson are of Pakistani descent. †¢ Since McDonalds first opened in Pakistan back in September of 1998 they have been able to add things to their menu that cater to the needs of the Pakistanis culture. Almost all the people of Pakistan practice Islam. The Islamic dietary laws are called Halal. Halal is also the term for permitted foods. Prohibited foods as described in the Quran are called Haram. Some of these foods include pork and birds of prey, alcohol is also prohibited and stimulants, such as coffee and tea, are avoided by the most devout. There are also guidelines on how meat must be slaughtered. McDonalds has tried to work with this by offering menu choices such as the McArabia that are acceptable for Muslims. In Muslim countries all of McDonalds meat is slaughtered and prepared according to Islamic Halal standards. Not that long ago McDonalds change their burgers, cookies, and hamburger buns so they do not contain any lard, making more acceptable to more people in Pakistan. †¢ They also keep the classics on the menu. They do offer what they call a McArabia, which is chicken on flatbread with a special sauce and they also offer many of the originals such as the Big Mac and hamburger with chicken. So while McDonalds has modified their menu to include some local favorites they have also kept the infamous burgers and meals. †¢ As does the McDonalds in the United States, the McDonalds in Pakistan also caters to the children of the community. They offer four types of happy meals, which of course include a toy. Currently with the purchase of a happy meal the kids get a Kung Fu Panda Movie toy. †¢ Another exciting fixation that McDonalds Pakistan is doing is they are now offering their McDelivery service free of charge. This delivery service will deliver all menu items to customers with order of RS 150 or more. Since this service is relatively new it is only offered at two stores at this time. They include Karachi and Lahore, but other locations will be added to this list soon. †¢ Just like the McDonalds in the United States they also hold birthday parties at McDonalds in Pakistan. They even offer birthday packages with food and surprises for the kids. †¢ McDonalds has also become involved in the Pakistani community by taking part in local projects and charities. As stated in their vision McDonalds is firmly committed to giving back to the communities they operate in. They take part by giving money they receive in stores every month to Darul Skoon (orphan house). †¢ When McDonalds opened its first store in Pakistan the drive through lines were seven kilometers long. With lines this long is was obvious that many Pakistanis were happy to welcome McDonalds into their homes. †¢ According to The News International McDonalds in Pakistan has sold more burgers in Pakistan than anywhere else in the world. With only 18 stores currently in Pakistan this shows how busy McDonalds is. Many people are excited to have McDonalds because it is a brand-name and it gives them the opportunity to enjoy the same things that foreigners enjoy. †¢ McDonalds costs the same in Pakistan as in the US, and given the per capita GDP disparity between the two countries, it is the cheapest food in the United States, while being one of the most expensive in Pakistan. Even with the high cost people are still flocking to McDonalds. †¢ McDonalds business operation in Pakistan overall has been a complete success for the McDonalds Corporation as well as the Pakistani community. Both parties involved have gained more than their anticipated outcome from the arrival of McDonalds back in 1998. †¢ In the future it is believed that McDonalds will continue to grow within Pakistan and throughout the world. It is also felt that the Pakistani people will work very hard to keep McDonalds name and food service at the high quality people are used to. [4] 3. 2. †¢ [pic]The government of Pakistan receives over Rs. 10 million per month from KFC Pakistan as direct taxes. †¢ Around 95% of all food and packaging material used in KFC Pakistan is produced locally, which sums up to a purchase of over Rs. 35 million per month. †¢ For each new outlet developed by KFC Pakistan, it costs approximately Rs. 40 million, which is a huge amount for Pakistani construction industry. †¢ The products of KFC are not comparatively cheaper than the other brands in the market but still it doesnt matter much because the quality as compared to there competitors is so good that people still go to KFC. KFC has tried to cater to the local environment in recent years and some achievements and adaptations include: †¢ Offered discounts on festival like Eid and Ramzan (all you can eat deals). †¢ Expansion of outlets throughout Pakistan. †¢ Children diversified products (nuggets, chicky meals). †¢ Improved dessert section (deal with Wall’s ice cream). †¢ Employing over 1000 Pakistanis. †¢ Introduction of local menu such as Arabian rice. [5] 3. 3. [pic]One of the greatest strengths of Pizza Hut is its strong brand name. Pizza hut is a well-known and popular chain of restaurants not only all over the world but also in Pakistan as well. Its positive brand image has furthered helped it gain a competitive edge in the market. †¢ Pizza Hut offers a different varieties of pizzas that agree with the tastes of all members of the target market. †¢ Main strength lies in the variety of deals offered by Pizza Hut from time to time. Deals such as â€Å"Midnight Deal† and â€Å"Rupee 1 Deal† actually help attract customers from different income segments. It has also pioneered in introducing membership cards to offer the members pizza at discounted rate. Special dicount cards are also offered. †¢ Yet strength of Pizza Hut is the large number of outlets that can be found all over Karachi and also within Pakistan. Pizza Hut has its outlets in all major areas of Karachi. †¢ Pizza Hut branches also have an unmatched ambiance not found in other restaurants. The ambiance and the environment and the feeling of just being there and being seen there is also unmatched by its competitors. †¢ Pizza Hut employs thosuands of Pakistanis. Another internal strength of Pizza Hut is that it has an attractive compensation program and low employee turnover. It provides best compensation package in the industry. It has a Health Care Policy, according to which it provides medical facilities to all its employees. Thus resulting in lower employee turnover rate. †¢ Pizza hut branches,such as the one in Clifton, Karachi , have installed arcades to provide recreation for children. Dot puzzles and a colouring layout is designed behind te dinner mats for the children. [6] 3. 4. PUBLIC SURVEY ON ECONOMIC AND SOCIAL IMPACT A host of people were surveyed during this research to obtain the general public opinion on western franchises contributions : [pic] The survey conducted amongst several people in the writing of this report shows a general agreement that international franchise does bring valuable investment and income to Pakistan. Most people agree that there was an increment in government revenue since franchises were established here. [pic] The general survey suggests that most people consider the investment and revenue generated by the franchise industry as the most valuable contribution. Social progress was considered least important whereas the various career opportunities opened up by the franchise industry fared as the second best contribution. Many people agreed that the exposure to western culture through fast food was important too. [pic] In recent years, the health oriented approach to diet has taken a grasp over our society. Fast food is generally considered unhealthy because it is usually made with cheaper ingredients such as high fat meat and foods that contain lots of unhealthy fats (saturated and trans-fats) and cholesterol, instead of nutritious foods. However, the survey indicated that though the fast food maybe considered as unhealthy, the healthy approach to life does not affect the fast food industry very much. However, most people surveyed (33%) were not sure about this factor’s impact on business. 4. PROBLEMS AND THREATS FACED BY WESTERN FAST FOOD FRANCHISE Every business in Pakistan faces certain problems, and the western fast food franchises are no exceptions. Developing a franchise restaurant in a new country is difficult, and maintainence of business and market strenght is the toughest job for theses franchises. Here are a few problems they faced by Mcdonalds, KFC and Pizza Hut once they were established in Paksitan : 4. 1. PROBLEMS AND THREATS. †¢ [pic] POLITICAL: McDonalds, being an American restaurant, has faced problems due to politics and had to deal with the instability of the government. In 2007-08, Pakistan was having problems with their President Pervez Musharraf, an important US ally. There is also the conflict with Kashmir which could cause U. S. relations to deteriorate and cause McDonalds business in Pakistan to drop dramatically. †¢ GLOBAL: Another worry that can cause future problems for McDonalds is if the United States were to pull out the aid they are providing Pakistan for any reason. At that time since Musharraf was backing President Bush in the war on terror the United States was giving a large amount of aid and highly beneficial trade deals to Pakistan. Any mishap between the US and current Pakistani government can destroy the American business and influence. †¢ SECURITY: Some people who were angry about the bombings in Afghanistan in 2001immediately related McDonalds back to the United States and began to vandalize the property. Many people believe that McDonalds in one of the most popular American symbols, which of course puts it at risk when political upheaval begins. So while many Pakistanis enjoy McDonalds others see it as an American company and proceed to vandalize it due to what is going on with the war. There has been protesting against U. S. led attacks against Iraq and some groups have chosen to boycott against all western products including McDonalds. Along with these boycotts sales dropped a little, but there were not any drastic changes. [7] †¢ [pic] LOCAL FOODS: One of the mian competion for western franchises is the local food industry. Pakistan has a vast arsenal of traditional local menus. Hence, KFC still needs to capture fast food market because their market share in Pakistan is still low as compared to their competitor. †¢ DIESEASE: In 2005-07, Pakistan faced major a crises on the breakage of the bird flu virus. As KFC’s main specialty is chicken, in time of epedemics like bird flu they face heavy losses. KFC still needs to innovate their products to maintain competitive advantage. †¢ POLITICS: Politics has played a major role in the franchise food business. A couple of years back in Pakistan a few of KFCs branches were burned because the people thought that they were generating money for the US. †¢ HEALTH FACTOR : Fried Chicken is usually considered the most fat-containing food item. Oil in which chicken is fried is high in cholestrol, and the healthy approach to diet in recent years may hinder KFC’s growth. †¢ [pic]LOCAL FOODS: A major threat for Pizza Hut is the competition from local restaurants. Not only are other franchises a threat but also local restaurants such as Lal Qila, Usmania, Village etc. these restaurants pose as a potential threat to Pizza Hut because they also offer food which is the ultimate aim of the customer. †¢ POLITICAL: Pizza Hut, being an American franchise restaurant, has faced problems similar to that of KFC and McDonalds due to politcal reasons. Hostilty towards American influences can lead to a decrease in sales and hamper business activity. †¢ HEALTH FACTOR: Food form Pizza Hut is considered relatively heavy, due to the massive amounts of cheese used in their pizzas. The ever present salad bar has not dispelled health concerns as people believe that the sauces used in the salad themselves contain heavy fat contents. Pizza Hut has, however, tried to diversify its menu with the introduction of new appetizers. 4. 2. PUBLIC SURVEY ON PROBLEMS AND THREATS FACED BY WESTERN FAST FOOD Many people had their own opinions on which problem threatens the western fast food industry the most in Pakistan. One of the major issues was the health factor as the point of â€Å"well balanced diet† is highly debatable in terms of fast food. [pic] Many people believe that the most important threat faced by western fast food franchise is the security. Most franchises are of American origin, and hence the on going war on terror hugely affect Pak-US relations. Also, any instabilty in the political system can turn the franchise into victims of vandalism. A large propotion of people also expressed that the vast local food industry challenges the strenght of the western fast food franchise. They argued that since local foods are cheaper, few people can afford western fast food. Those who argued for global crises claimed that the recent recession can make western fast food unaffordable. 4. 3. HEALTH FACTOR AS A THREAT [pic] A majority of people agreed that the main rival to KFC, McDonalds and Pizza Hut is the more healthier menu of Subway. Subway offers a large variety of healthy meals with heavy vegetable and protein content as compared to other franchises. Hence Subway is a major threat to the business of these franchises. [pic] This survey on health was again conducted, but from a different angle. KFC and its fried chicken, which is highly oily, was considered appropriately as the most unhealthiest restaurant. However, in this second survey most people also argued that the many sauces used by Subway in its sandwiches contain large fat contents, so Subway may not necessarily pose a huge threat to the other franchises. 5. GENERAL CONSUMER RESPONSE In this report, research was also conducted on factors which compell the people to dine in these western fast food franchises. For this purpose we would like to like to categorize people as follows: i) Low category people ii) Middle category people iii) High category people Their responses are: i) Low category people:- These people eat fast food very seldom. They visit fast food restaurants only at special occassions,as it is not that much easy for everyone to afford the quality food provided by the western fast food franchises like KFC, McDonalds etc. Some of these people dont want to waste their money on fast food, and rather have food at their own homes. Besides this, these people are also not habitual of fast food. They are not encouraging the fast food business in Pakistan. Even if fast food has been banned in this country, these people wont be affected in any way. ii) Middle category people:- These people consume fast foods on a consistent basis. It depends upon the status factor. Many people like to boast about having dinner in a â€Å"foreign† and â€Å"branded† restaurant. They eat out in these restaurants once or even twice in a week. They pay a valuable response to fast food as they look for quality food and this response encourages the western fast food franchises. iii) High category people:- The people in this category have fast foods very often. They not only look for quality foods but they consider it as a means of having fun with friends. The natural ambience of these restaurants is also a major attraction to them. No matter how high the prices of food items at western fast food franchises go, these people are always ready to pay. They are helping to increase the trend of fast foods in Pakistan, which definitely encourages their business. Besides these categories there are also some health conscious people (as discussed previoulsy) who donot want eat fast food because of fat contents in these fast foods. Such people can be found in all categories discuused above. Reasearch on most important factor for dining in a western franchise fast food is as follows: [pic] The unmatchable quality of food offered by the western franchise fast food restaurants is the main factor of attracting people. Fast food is also widley considers to be tasty, as proved by the above consesnus. The price of food at these restaurants is also significant when opting to dine there. A very few people just dine in these restaurants because of the ambience and its attractiveness. The following is the survey on peoples preferences of various fast food franchises: [pic] Most people, particularly here in Karachi, prefer to dine at Pizza Hut. It is the different variety of pizzas offered that has given Pizza Hut its widespread popularity. Also most Pakistanis generally enjoy heavy diet, and pizzas fulfill this desire. As seen above, very few people enjoy the light delicacies offered by Subway. Chicken constitutes in the basic diet of people here, and it is no surprise to see KFC score 31%. 6. CONCLUSION In culmination, we would like to conclude that the establishment of western fast food franchises in Pakistan has indeed proved to be a successful business endeavor. The economic and social contributions outweigh the threats they face by a greater margin. With greater and successful planning, the western fast food franchises can easily minimize their threats and problems. Doing so can speed their progressive activities in Pakistan. We can also conclude that the general public response to these franchises in Pakistan is positive and many people are willing to dine at these franchise restaurants because of they high quality and standard they deliver. 7. QUESTIONNAIRE Franchise Food Chains in Pakistan Questionnaire 1. Select below the income band you fall under: o Rs. 5000-10,000 pm o Rs. 10,000-20,000 pm o Rs. 20,000-40,000 pm o Rs. 40,000 above pm 2. How often do you dine out in a month: o Once o Twice o Thrice o Never 3. Do you prefer Pakistani restaurants or western franchise? o Pakistani o Western 4. For western, kindly rate the following restaurants according to your preferences on a scale from 1-5 (1 being the highest): o KFC_____ o Pizza Hut_____ o Subway _____ o McDonalds _____ 5. What are the factors you consider most important when dining out in a western franchise? (Rank from 1-5, 1 being the highest) o Price_______ o Ambience_______ o Status Quo_______ o Taste_______. o Quality_______ 6. Do you think western franchise in food industry is bringing good investments in Pakistan? o Yes________ o If No, then why? 7. In recent years do you think that the more health oriented approach of people has affected the franchise food industry: o Yes o No o Not sure 8. Do you agree that Subway offers a healthier alternative to fast food? o Yes o No o Not sure 9. Rank on a scale from 1-5 (1 being the highest) the most important contributions of fast food chains in Pakistan: o Career Opportunities ________ o Investment/Revenues ________ o Social Progress ________ o Cultural Exchange ________. 10. Has the political situation in Pakistan drastically affected franchise food business: o Yes o No o To some extent o Not sure 11. What are the factors that can hinder the growth of Franchise food industry in our country? o Political Instability o Global Crisis o Security Concerns o Local Food industry o Others, Please specify: 12. On a scale of 1-4 (1 being the highest) rate the restaurants which offer the healthiest food. o Pizza Hut _______ o Subway _______ o McDonalds _______ o KFC _______ 13. According to you what percentage of the urban population consumes franchise fast food? o 60%-40% o 40%-20%. o 20%-10% o Less than 10% 9. BIBLIOGRAPHY WEBSITES: †¢ Corporate Webpage of McDonalds. McDonalds Corporate. 2004. Mar. 2005. . †¢  ¦Corporate Website of Pakistan McDonalds. McDonalds Pakistan. Aug. 2002. Mar. 2005. †¢ http://www. fratfiles. com/topics/kfc+pakistan/0 †¢ http://www. fratfiles. com/essays/55556. html †¢ http://en. wikipedia. org/wiki/Fast-food_restaurant †¢ http://answers. yahoo. com/question/index? qid= †¢ http://www. fratfiles. com/topics/pizza+hut+pakistan/0 [1] Reference: http://en. wikipedia. org/wiki/Fast-food_restaurant [2] Refer.ence:  §? Corporate Website of Pakistan McDonalds. McDonalds Pakistan. Aug. 2002. Mar. 2005. †¢ [3] Reference: http://www. fratfiles. com/topics/ ¦Corporate Website of Pakistan McDonalds. McDonalds Pakistan. Aug. 2002. Mar. 2005. [4] Reference: http://www. fratfiles. com/topics/kfc+pakistan/0 †¢ [5] Reference: http://www. fratfiles. com/topics/pizza+hut+pakistan/0 †¢ [6] Reference: Corporate Website of Pakistan McDonalds. McDonalds Pakistan. Aug. 2002. Mar. 2005. [7] Reference: http://www. fratfiles. com/topics/kfc+pakistan/0 [8] Reference: http://www. fratfiles. com/topics/pizza+hut+pakistan/0 [9] Reference: http://www. fratfiles. com/essays/55556. html.

Monetary Policy and Financial Institutions of Kenya

Monetary Policy and Financial Institutions of Kenya CHAPTER ONE 1.0 INTRODUCTION The world is turning into a â€Å"demon† to its own people as many are living in deplorable situations that are hardly bearable. The price level have risen sharply in the recent past coupled with dwindling wage levels and declining growth rate, especially, in majority of African countries where poverty has embedded itself to an extent that people in these countries live below one dollar per day. However, majority of governments have embarked on instituting major reforms through introduction of avant-garde monetary policy schemes, which forge the way forward through which the monetary authority re-design its policy by focusing primarily on price stability as the primary objective. In the last twenty years, majority of both developed and emerging economies respectively have embarked on IT framework as their best choice in conducting monetary policy, with none of inflation countries targeters abandoning the framework, save for Finland and Spain, that have already joined the European Monetary System (EMS) in late 90s. IT-framework; an approach to management of monetary policy was pioneered by the New Zealand Government in 1990 after it abandoned its pegged exchange rate five years later. By the year 2009, over twenty-five countries comprised of developed, emerging, and developing countries around the world had so far espoused the IT-Framework and have reported greater achievement of low inflation rate. Majority of these countries mainly from Latin America, East Asia and United Kingdom had experienced high bout of inflation and financial crises exacerbated by their former monetary policy regimes. These not only resulted to sacrificing output and employment but als o resulted to severe increase in international capital flow leading to a switch to floating exchange rate. 1.1 Historical Background In relation to many other African countries, the monetary policy and financial institutions of Kenya has developed rapidly within the last two decades and probably more advanced than other countries at a similar stage of underdevelopment. Kenya opened its own Central Bank in September 1966 with the hope that, it would at least generate secondary expansion by facilitating the creation of bank credit and accelerate the process of monetization of the economys subsistence sector, in spite, of its openness and sensitivity to fluctuations of primary commodities. The next decade following the establishment of her Central Bank witnessed interesting changes in Kenyas monetary and banking policies as the oil shock of 1973 created inflexibility in the foreign exchange reserves as they declined considerably. Hence, the magnitude and speed of reduction in credit expansion were not adequate to show the decline in foreign exchange reserves. In fact, the fear that tight monetary policy induced from outside could hamper the rate of development at home led to feeble corrective measures such as restraining inflation impact due to price boom of exports, which coincided with expansionary monetary policy under a low profile of interest rates. In the early 1980s and 1990s Kenya experienced high inflation resulting from a prolonged spell of drought and political instability that resulted from introduction of a multiparty system in the Kenyan political history in late 1980 and also general elections followed later in 1992. Besides, in 2002, the growth per capita was negative due to high corruption of the highly ranked government official and political interferences of major decision-making organs of government including the Central Bank of Kenya, as it could not carry out its mandate freely. In the year 2008, Kenya faced another dark moment in terms of its political stability as the whole country went into turmoil due to the highly disputed general elections of 2007. The once giant of East African countries went down into â€Å"ashes† and major sectors of the economy especially the financial sector got hurt the most. Since then, it has been very difficult for the resurgence of economic stability, political stability a nd financial institution even after the power brokering that gave birth to a coalition government in that same year. However, in late 2010, the coalition government of Kenya gave hopes to recovery of major sectors of the economy when the New Constitution unanimously voted into existence in a referendum. This Constitution has brought about major reforms in the financial and political arenas more specifically in the Central Bank of Kenya as per se; hence, major changes are expected to be instituted by CBK for an effective and independent monetary policy conduct. 1.1.2 Road map of Kenya towards adoption of ITF 1.1.2a) Central Bank of Kenya main policy objective The amended Central Bank of Kenya Act of 1996, CAP 491(4) permitted the Banks operational autonomy in the conduct of monetary policy and mandated price stability as one of its primary objectives through formulation and implementation of such principal object of the bank, thus, promoting the long-term goal of economic growth. In fact, the Central Bank of Kenya does not announce an inflation target; instead, it uses money growth reserve as her main nominal anchor of which the repo rate forms its main operational target. It is in this perspective that the CBK monitor and control inflation rate through interest rate transmission channel as a way of conducting monetary policy. Apart from the main objective that is price stability, the Bank has a mandate to balance its inflation goals against other goals such as exchange rate stability and promotion of liquidity, solvency and steady-market back up while ensuring equilibrium in domestic and external payments. 1.1.2b) Central Bank of Kenya attributes that favor ITF adoption The Bank like any other bank of its caliber is mandated by the legislation to carry out its objectives in a more coherent and consistent manner without any external interference, thereby commanding greater central bank independence. The ‘Old Constitution of the Republic Kenya of (1963) and ‘Newly Promulgated Constitution of the Republic Kenya of (2010) have further strengthened the Banks Act, thereby, empowering the bank to carry its main objective without political interferences and curbing time-inconsistency trap. The appointment and removal of the CEO of the Bank (governor) and his/her deputy rest with the president discretion for a period of four years term in office unless stated otherwise. In connection to the governor term of office termination, the president has a directive to appoint a tribunal comprised consisting of a chairperson and two members who hold offices in High Court or Court of Appeal. This tribunal enquires on matters related to termination of such appointments and make recommendation to the president. Nevertheless, these might undermine the Banks credibility in upholding autonomy in case the termination of the governor might be unlawfully since the appointing authority might compromise the tribunal to favor his/her decision. In conformity with the Act CAP (491), the MPC is hereby required to forward a report at least every six month to the Minister detailing all dealings the bank is undertaking hence the Minister shall table the MPC report before the Parliament for further amendment and deliberations. The Bank is exempted from any taxation whatsoever in respect to losses or profits. The Banks books of records and financial statements subjected for auditing by the Controller and Auditor General only if the Minister of Finance deems it appropriate for such auditing. Both Governor and Deputy Governor are indebted to adhere to the bank in totality and prohibited from engaging in any other paid businesses, professional activities or employment while still in office. These is in agreement with majority of literature such as (Klomp and Haan 2008) who based their idea on Cukierman Index which states the following inherent features for a central bank to be termed as more independent: (i) if the governor appointing authority rest with BOG rather than the president, is not prone to relieve of his/her duty, and has a longer tenure in office. (ii), if the government has no tendency to interfere with banks conduct of business, for example, in policy formulation and implementation; if there is a greater independence be it of legal instruments or goal instruments; and also if the government has no capacity to borrow from the bank. (iii) last but not least, if the bank main objective is price stability. 1.1.2c) Economic Independence of CBK Kenya has also experienced tremendous financial innovations intensifying greater implications to monetary policy transmission mechanism. The Bank is empowered to act as a fiscal agent of the government or any public entity. Similarly, the advance made by bank to the government is supposed to be secured with securities issued by government, of which are supposed to mature before twelve months, bears interest at market rate, and are advanced for a short-term period to the government. In compliance with the statute, the CBK has an authority to grant loans and advances not exceeding three years in fixed period to government as a Deposit Protection Fund Board (DPFB), while the bank has mandate to lend or give credit to public entity, although, it is limited in extending such credits. The main interest is built on the various chief features associated with the introduction of inflation targeting framework by most of the Central Banks of both developed economies and transitional economies around the world; borrowing heavily from various aspects of literature that have analyzed greatly the development of this framework in order to determine the viability of the framework in low income countries such as Kenya. indeed, little has been done in A model specific to the needs of Kenya will be developed while building a general structure within the framework of an ITF so as to distinguish between group characteristics of the inflation-targeting and non-targeting central banks since its inception, and the relationship between various variables mentioned in the hypothesis. In addition, the paper depicts lessons learned by countries that have already adopted the strict ITF since 1990s. What become apparent evident in process of this review, however, is that several contributory problems must first be solved before forming an informed judgment on the likelihood of low-income countries embracing the framework. The first of these problems is whether there are impetus and aspect linked with decisions to move from a specific monetary practice to another. Second problem revolves around the feasibility of other policy designs of monetary policy such as exchange rate regime and central bank independence Third problem will address chief pitfalls that could prevent low-income countries from embracing this policy design. The study hypotheses investigates the relationship between conditions that lead to adoption of inflation targeting framework in developed economies and examine if these pre conditions have a replicate effect in low income countries. The other parts of the paper shall be structured as follows: In section II, assess modification of monetary policy conduct under ITF by various developing countries central banks, the cons and pros of shifting to such strategy. In section III evaluate the exchange rate transition and its role to inflation targeting framework more specifically the following interrelated issues will be taken into considerations: the role of nominal exchange rate it plays as a nominal anchor, the costs associated with the real exchange rate overvaluation; and the approach for exiting the pegged exchange rate. Section IV reviews the role of the central bank independence since it forms the core tenet of conjecture that is built around the inflation targeting framework.Likewise, other contributory factors to embracing the framework will be captured in this Section. The paper concludes with the policy recommendation and the way forward. 1.3 General Salient features, Implementation and Experience A better strategy for monetary policy is built on the following inherent characteristics as summarized by Svensson Lars 1997; Friedman, 1990; McCallum, 1990 that is, it is supposedly to be highly correlated with the goal and has a tendency to be controlled by central bank with much ease than the goal itself. Similarly, the public and the central bank should be able to comply to it with much ease than the goal. In addition, transparency is of greater importance in terms of the efficiency and effectiveness of the bank communicating to the public its objective and procedure of conducting its monetary stance. Literature from (Bernanke and Mishkin 1997), Bernanke et al. (1999) and (Svensson Lars 1997) has vehemently mentioned various elements that form this framework which includes. First, price stability is formally chosen as the main intent of monetary policy, which indicates the monetary stance and the central banks principle of appraising its performance. Second, the central bank issues a declaration, which categorically states the numerical target for inflation within a specific, horizon-thus the bank has the latent to lessen the possibilities of falling into time inconsistency trap in carrying out its primary goal. Third, either the government can opt to choose the target, independently or collectively with the central bank, which is associated with appropriate changes in the central banks law thus enhancing instrument independence of the institution in achieving its target. Fourth, the ITF promotes high transparency in the conduct of monetary policy thus enabling flow of information from the central bank to the public and government. Svensson Lars (1997) stated that, when the authority anticipate the policy target deviation, the strategy should be attuned in such a way it is neither contractionary nor is it expansionary in accordance with keeping the policy on target. On this background, the IT-framework work best in forecasting future inflation, that is, the relevant information for forecasting monetary policy is of greater importance in predicting future inflation. Indeed, this transparency of inflation targeting forms a better juncture in terms of motivating and focusing the activities insi de the central bank. More so, there is high tendency of central bank accountability, which is often outlined in case of breach of inflation target, meaning it helps in clarifying what the central bank is capable and incapable for it to be accountable. Although, inflation targeting has proved to be the best modern strategy it does not lack some criticism or problems that characterizes it in terms of implementation and monitoring. For instance Svensson Lars (1997) has described some of the inherent problems that makes this strategy ineffective, which includes: central banks inability to restrain inflation due to the fact that, previous decisions and contracts play a vital role in determining current inflation. In other words, the authority can only have power over the future inflation. In addition, monitoring and evaluation of monetary policy by public faces a greater set back due to the inadequate control of inflation. CHAPTER TWO 32.0 Literature Review A large body of literature has been developed to analyze the effectiveness of an explicit numerical anchor since such framework was adopted in early 1990s. There exists a large number of literatures on major development of Inflation Targeting Framework since its inception in developed countries and emerging economies. However, there is little development in low-income countries in regards to adoption and implementation of this framework varies greatly in most of these countries because of lack of a well-developed financial market, inadequate fiscal position, political interferences and also lack of market integration in majority of them thus posing a bigger challenge to welcoming this framework as a way of monetary policy conduct. Therefore, the section borrows heavily from past studies that have since been done in order to demarcate the gaps that have made the framework ineffective. 3.1 Transition to Inflation Targeting Framework: Central Bank of Kenya In the past decades, the monetary policy encountered by most of the emerging markets economies has been depressing, these resulted to extreme periods of monetary instability, vacillating from high inflation, to colossal capital flight, and thereby led to downfall of many financial systems. However, the forecast for successful monetary policy in the majority of countries in transition have so far been augmented. This has been typified by considerable decline of inflation rate in Latin America region as an example of an emerging region, which dramatically fell from an average of above 400% in 1989 to less than 10% (Mishkin Savastano, 2001) According to Morande and Schmidt-Hebbel (997), â€Å"this objective of inflation control has been interpreted by public as formal targets or â€Å"hard† targets.† Thus enables the central bank to be more accountable by explicitly announcing a multi-year target for inflation. Downs and Vaez-Zadeh (1990) declared that â€Å"during the transition it is not possible to forecast market behavior†¦..[s]ince the old money-model is bound to be obsolete and perhaps of little use† (318). Indeed, the ‘old fashioned regime of money-growth targeting framework has proved inefficient in the recent past, although the Central Bank of Kenya has been able to maintain inflation rate as low as possible. Above all, the de-regulation of economic activities in the early 1990s marked a major landmark in the conduct of monetary policy in Kenya in terms of objectives, instruments and institutional framework. Mwega 1990(a) developed a model that sought to explain the changes in the CPI Growth e.g. real income (T) changes, changes in money supply (M2), changes in import prices and changes in previous years inflation rates (Pt-1) were the expansionary variables. In these results, he found money supply to be a significant determinant of inflation. Similar study was done by Ndungu (1993) where he did a comprehensive study on the dynamics of the inflationary process in Kenya for the period 1970-1991. He used a monetarist model, named the error correction form of model and empirically showed monetary growth, interest rates changes, real income growth and excess money printing which were significant determinants of inflation in Kenya assuming a closed economy. When he included the external economy, he found the exchange rate had a significant effect on the domestic price level. The results of his study indicated inappropriate government policies (monetary and fiscal) resulted lack of control of inflation especially in 1980-1990 where inflation level escalated. Mishkin and Schmidt-Hebbel (2007) in there panel data analysis comprising of both inflation-targeting industrial countries and non-inflation targeting industrial countries, argued that ITF has helped these countries in achieving stable inflation rate in the long-run where they are attributable in oil-prices and exchange rate shocks, and that are associated with strengthening of monetary policy independence and enhanced policy efficiency. Taguchi and Kato (2010) assessed the performance of the IT in East Asian economies where they adopted a co-integration approach between money and inflation. The estimation results were that, the ITF in the sample of few selected economies, except for Philippines, proved to work well as an anchor for controlling inflation through speeding up price adjustments (stabilizing inflationary expectations) against money supply in the context of floating exchange rate. Similarly, they argued that, â€Å"well-functioning inflation targeting framework was consistent with enhanced monetary autonomy under the post-crisis floating exchange rate.† Aizenman and Hutchison (2008) used a simple empirical model where they estimated panel data for 17 emerging markets for both inflation-targeters and non-inflation targeters and concluded that there was a stable inflation response running from inflation to policy interest rates for inflation-targeters in emerging markets who have anchored their inflation than in non-inflation targeters whose central banks respond less in such markets. Similarly, they argued that â€Å"the response to real exchange rate was much stronger in non-IT countries, however, suggesting that policymakers are more constrained in the IT regime where they attempt to target both inflation and real exchange rate and these objectives are not always consistent.† 2.2 An overview of the exchange rate transition and its role in ITF The Central Bank of Kenya policy objectives have been to protract an exchange rate that will ensure international competiveness while maintaining domestic rate of inflation at low levels through conduct of strict monetary stance. Calvo and Reinhard (2002) argued that Majority of emerging markets are facing problem in performing inflation targeting due to various issues of how to manage the exchange rate under the condition that their external debt is primarily denominated in U.S. dollars. Therefore, the idea of this framework is believed to work best under floating exchange rate regime.Hence, inflation targeting framework as a monetary policy strategy becomes unrealizable in majority of this countries due to too much concern towards exchange rate volatility. In recent times, countries with fixed exchange rate have a tendency to fix their domestic currency value to countries whose main objective is to anchor their inflation in readiness to keep inflation rate in check. Most of the countries that have adopted a crawling target or peg their currency tend to devalue at a firm rate in order to keep their inflation rate low vis a vis their counterpart anchoring countries. These periods marked a milestone that foresaw an accelerated money supply growth and high inflation, but at the same time there was a move to speed up economic reforms and accelerate the pace of liberalization. â€Å"An exchange rate regime makes central bank quite accountable because it has clear-cut goals [b]ut can actually weaken accountability of the Central Banks in emerging- markets countries, by eliminating important signal that can help keep monetary policy from becoming too expansionary† (Blejer, Ã…  creb, 1999, p. 41).Also, for the same reasons described in (Mishkin, 1999a) â€Å"exchange rate targeting can promote financial fragility and lead to foreign exchange crises that can also lead to full-fledged financial crises with disastrous consequences for the economy†(Cited by Blejer Ã…  creb, p.50) .Hence, a continuous adherence of exchange rate regime is probable to have far-reaching impact of economic sluggishness and exacerbate redundancy in the economy, w hich is exactly what Kenya has experienced in the past. Therefore, the Central Bank should move more assertively by provision of an extra credibility, where policy easing is desired to prevent output reductions, without igniting fears of renewed inflation. Mishkin Savastano ( 2001) acknowledged that â€Å" [t]here are three broad monetary policy strategies that can produce an explicit nominor anchor that credibly constrains the discretion of the central bank over the medium : â€Å"hard† exchange-rate pegs, monetary targeting, and inflation targeting†. In spite of this, majority of industiralized economies, notably the United States, have used a more or less the same strategy of anchoring inflation. However, it does not explicitly anchor inflation but it implicitly anchor its inflation. a monetary policy with an implicit but not an explicit nominal anchor sought of monetary policy strategy to achieve macro-economic goals. Whereas, the three monetary policy strategies have enabled emerging economies to set up institutions and mechanisms that have effectively and efficiently constrained the discretion of their monetary authorities; their suitability to conditions in different markets differs according to each strategy that is adopted by each country. Reinhart and Rogoff (2004) declared that, â€Å"Developing countries central banks tend to pursue exchange rate targets that considerably are more deterministic than their official pronouncements†¦.[while] a managed floater might be operating a fixed exchange rate or a crawling peg for extended periods†. Likewise, Kenya has undergone myriad exchange rate regimes in the past mostly driven by various economic cycles, and chiefly the balance of payments deficit. For instance, up to 1974, the exchange rate was pegged to the dollar, but later the devaluation of the currency resulted to a change of the peg to the SDR.1 from 1974-1984 period. This regime lasted until 1990 when a dual exchange rate system was adopted that lasted till October 1993 when, after a series of devaluations, the official exchange rate was abolished. (Mwega and Ndungu, 2001) acknowledged that â€Å"Kenya adopted a unified and flexible exchange rate in the early 1990s, as part of a market-based reform program designed to improve the investment environment and spur economic growth†(Cited by Ndungu, 2008). In addition, the (Kenyan Economic Survey, 1995) revealed that the nominal exchange rate suddenly depreciated by about 32%, moving to Ksh38 to the U.S dollar from Ksh 44 to the dollar, and inflation declined from 46% in 1993 to 28.8% in 1994 (as cited in Ndungu, 2000) as a result of shilling appreciating against dollar in 1995†. 2.3 Central Bank Independence The literature on ITF in emerging market economies suggests that this monetary policy strategy should be adopted only if some institutional preconditions are met. One of them is Central Bank Independence. Many scholars have given much attention to the central bank autonomy and the role it plays in adopting ITF. Indeed, where central bank is autonomous from government interference it is likely to insulate itself from political pressures to finance government fiscal deficits, which can result to over-expansionary monetary policies that would lead to inflation above target. Cukierman, Webb and Neyapti (1992) constructed Central Bank Index that was designed in two folds that is, legal independence and turnover rate of governors, where both revolved around central bank charters and legislation and the relationship it has over the overall performance of the economy. This paper provides an overview of the mushrooming literature on authority autonomy and precision relating it to the mechanis ms through which central banks have in the past adopted greater openness, thereby, focusing more on the role they play in adoption and effective implementation of inflation targeting framework. (Klomp and De Haan, 2010) used a random coefficient model and they estimated a sample of more than 100 countries to re-examine the relationship between CBI (measured by both governors TOR and central bank legal indicator) and inflation. They found Central Bank Index to be negatively insignificant with the level of inflation rate of country specific. Most literatures in developing countries have focused on de facto independence as a proxy of CBI that is governors turnover rate. Studies of Cukierman, Webb and Neyapti (1992) stated that the average and variance of inflation has a negative correlation to governors turnover rate in most of the developing. This is due to the fact that, majority of studies has expressed doubts over the reliability of most of indicators used to construct Central Bank Independence indices. Indeed, there exist a greater divergence when it comes to categorization of indicators used to measure CBI incase of high income countries, emerging countries and low income countries. Cukierman,1994 and Eijffinger and De Haan (1996) have categorically contended that, the CBI indices in majority of high income countries are arises from central banks laws interpretation and are of great concern to legal independence indicator, whereas, in developing countries de facto independence indicators form the main measure of central bank independence. Axel Dreher, Jan-Egbert Sturm, Jakob de Haan (2010) used a data set comprising of eighty-eight countries term of office of central banks governors since 1975-2005. They used logit model to test the likelihood central bank governor term of tenure geting terminated before their legal term in office expires. According to their results, the probability of a TOR as a measure of CBI tend to soar under certain condtions which includes: unstable political system, undue elapse of governor term of service in office and during elections period in self-governing countries. Accordingly, they indicated in their hypothesis that there was a higher chance of the governors getting replaced if there was huge drop out of veto players from the government. Alex, Webb and Bilin (1992)) developed legal independence where they mentioned some of the intrinsic features such as the degree of independence that the authority should bestow to the Bank, and lone dependence on legal component of independence. Beside s, the legal independence is significant in ascertaining inflation rate in developed economies. Whereas, turnover rate of governors forms a better turning point of inflation determination in developing countries. Likewise they argued that, in cases where governor legal term of office is shorter than that of government CBI is likely to be compromised by the government, thereby, resulting to increased TOR. More over, the governor is likely to be susceptible from government influence thereby derailing long-term objective of policy formation and implementation under the pretext of political pressure especially during election periods. (Kuttner Kenneth, Posen Adam 2010), took the same direction and indicated that undue appointment of governor in office result to construed information to the bank in terms of carrying out its primary objective of price stability. For instance, unjustifiable appointment of governor under low inflation periods may reinforce the exchange rate, while the opposite is always true. Since governors appointment seem to contain valuable information regarding the exchange rate and inflation rate. Gutierrez (2003) indicated that CBI has positieve impact in reducing the chances of governments incurring budget deficits through quasi-fiscal activities. Since such activities can be understood on their inflationary impacts. Posen and Kuttner (2010) estimated the effect of legal appointment of governor to office exchange rates and bond yield and argued that the main test was to verify the scope to which markets observe that the next governor will bring a swing in policy, whereby he/she is expected to determine the bearing of such swing. This is in conformity with the fact that, the news conveyed may favour either one side due to markets reaction after such appointment. 2.4 Financial Institutions Another important prerequisite for successful ITF stressed by the literature is a healthy financial and banking system. Several reasons can be advanced to explain the great importance of well-functioning financial system under inflation targeting framework. First, a sound financial system is essential to guarantee an efficient transmission of monetary policy through the interest rate channel which forms the major channel through which the CBK carries out its main objective of price stability, and more specifically forms an enabling environment of smooth exchange and provision of credit. Second, according to Mishkin (2004), a weak banking sector is potentially problematic to achieve inflation target, because the central bank would be hesitant to raise short-term interest rates for fear that this will impact the profitability of banks and lead to a collapse of the financial system. Third, countries characterized by weak financial institutions are more vulnerable to a sudden stop of cap ital outflows, causing a sharp depreciation of the exchange rate which leads to upward pres

The Changing Character Hamlet in Act II and Act IV of Shakespeares Hamlet :: Shakespeare Hamlet Essays

The Changing Character Hamlet in Act II and Act IV of Shakespeare's Hamlet In Shakespeare's Hamlet, although the character Hamlet makes similar points about himself in the soliloquies of Act II and Act IV, he seems to be less self-blaming and more in control of his emotions in the Act IV soliloquy. In the Act IV soliloquy, Hamlet is less self-blaming and more in control of his emotions. In Act II Hamlet blames himself for the delay in his revenge, "O, what a rouge and peasant slave am I!" (2:2:519). He also seems to be more self-abusive in his expressions, "Why, what an ass am I!" (2:2:553). Hamlet's deep depression is expressed through his comparison of himself to the lowest and most worthless things he can think of. However, in the Act IV soliloquy, Hamlet uses logic to reason his delay in killing Claudius, "How all occasions do inform against me and spur my dull revenge!" (4:4:32). While he is still a bit emotional, he is less self-abusive and more in control of his feelings, "How stand I then, that have a father killed, a mother stained." (4:4:56). Hamlet's reproach of his actions is gentler and less derogatory. He uses reason to explain how certain occasions have delayed him rather than blaming himself for backing out on his plans. In both soliloquies Hamlet makes comparisons between himself and other characters. In Act II he compares himself to an actor and in Act IV he compares himself to Fortinbras. In both soliloquies Hamlet uses the comparisons to put himself down for not carrying out his actions. In Act II Hamlet is angry with himself because he doesn't understand how an actor can get so emotional over a speech that he is reading, while Hamlet, who is actually in the real situation, is passive in his emotions, "Is it not monstrous that this player here, but in a fiction, in a dream of passion, could force his soul so to his own conceit." (2:2:520). In Act IV Hamlet expresses admiration for Fortinbras' courage and ambition to succeed and to fight for his name and honor, (".led by a delicate and tender prince, whose spirit, with divine ambition puffed." (4:4:48). Although both comparisons are different, both the actor and Fortinbras serve as role-models to Hamlet. He looks up to their actions to spur his am bition for revenge. At the end of each soliloquy Hamlet reaches a state of resolution, in which he seeks to find certain truths about himself and the outside world.

Tianjin Industrial Clusters :: essays research papers

Industrial Clusters in Tianjin Area About Industrial Clusters†¦ Nowadays, market competition is gradually changing from comptetition between enterprises to competition between value chains and even competition between industrial clusters. The development of industrial clusters is a social process changing from production of Ford type to specialized production. State owned enterprises cooperate with foreign companies, together to lower costs and improve market reaction to become world wide competitive. Industrial Clusters in Tianjin Factors that have triggered the development Tianjin to become an Industrial Cluster: 1.  Ã‚  Ã‚  Ã‚  Ã‚  Development of state owned enterprises as foundation. 2.  Ã‚  Ã‚  Ã‚  Ã‚  Large number of existent trained skilled industrial technical workers. 3.  Ã‚  Ã‚  Ã‚  Ã‚  Created manufacturing industry culture. 4.  Ã‚  Ã‚  Ã‚  Ã‚  Created industrial atmosphere and institutional environment. Measures that need to be taken to move Tianjin to a better world wide position: 1.  Ã‚  Ã‚  Ã‚  Ã‚  Government should promote research and cooperation with universities and create research institutions. 2.  Ã‚  Ã‚  Ã‚  Ã‚  Improve infrastructure to attract laborforce and international management. 3.  Ã‚  Ã‚  Ã‚  Ã‚  Reform state owned companies, and law frame. 4.  Ã‚  Ã‚  Ã‚  Ã‚  Strive toward a â€Å"Made in China† name. Overview of the 4 main important Industrial Clusters: Electronic Information Remarks:  Ã‚  Ã‚  Ã‚  Ã‚  -High LQ, (LQ =Location Quote, comparative advantage criteria of a certain industry in a certain region)   Ã‚  Ã‚  Ã‚  Ã‚  -Mostly foreign owned. (USA, Korea, Japan Taiwan)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  -Very good cooperation between companies along the supply chain. Major Players:  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Motorola (63% of sales). Main Problems:  Ã‚  Ã‚  Ã‚  Ã‚  -Mostly foreign companies leads to funds dependency (90% foreign, national average 73%. -State owned companies have small scale, insufficient investment, slow speed development, weak competitive power, brain drain and lack inner motivation force. -R&D interaction between companies, universities and research institutes are not present.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Green Battery Remarks:  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  -Research, Development, Production Leader in China   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  -Strong cooperation with Universties   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  -Extense variety of products, Li-on, Ni-MH, Amorphic Silicon batteries. Major Players:   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  -Sanyo, Ltd Peace Bay Power, Tianjin Lishen Battery Ltd, Lantian Power. Main Problems:  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  -Industrial Chain needs further improvement   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  -Lack of innovation due to inadequate R&D compared worldwide   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  -High degree of automation, but low degree of flexibility   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  -Fewer types of products, high costs and slow speed to meet market needs. Automobiles Remarks:  Ã‚  Ã‚  Ã‚  Ã‚  -High Tax rate on imported automobiles has promoted the establishment of Auto Makers.   Ã‚  Ã‚  Ã‚  Ã‚  -Almost 100% dependent on Foreign funds   Ã‚  Ã‚  Ã‚  Ã‚  -Rapid market demand growth leads to push the development of the Auto Industry.   Ã‚  Ã‚  Ã‚  Ã‚  -Since China enter the WTO acquisitions and mergers have been very dynamic in this branch.   Ã‚  Ã‚  Ã‚  Ã‚  -More than 700 foreign funded companies manufacture automobile accessories in China. Major Players:   Ã‚  Ã‚  Ã‚  Ã‚  -Toyota, Tianjin Automobile Group (more than 50 small and medium enterprises), FAW Group