Interaction of Fiscal and Monetary Policy

INTERACTION OF FISCAL AND MONETARY POLICY IN INDIA Introduction: Before understanding how the fiscal policy and monetary policy operate in coordination with each other, let us first understand the objective behind the formulation of these policies in brief. Monetary Policy: Monetary policy is the process by which monetary authority of a country, generally a central bank controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth.The central bank in our country is Reserve Bank of India. The main objectives of monetary policy are price stability, controlled expansion of bank credit, promotion of fixed investment, promotion of exports and food procurement operations etc. Fiscal Policy: Fiscal policy refers to the expenditure that government undertakes in order to provide goods and services, and the way in which the government finances those expenditures.Main objectives of fiscal policy of our country are to reduce income inequalities through progressive taxation, to control inflation, to facilitate balanced regional development, employment generation, to allocate resources to social and developmental objectives, to reduce balance of payment deficits etc.At the outset, it must be recognized that both fiscal and monetary policies are essential components of overall macro-economic policy and thus cannot but share the basic objectives such as high economic growth on a sustainable basis implying equity considerations also, a reasonable degree of price stability and a viable balance of payments situation. However, all these objectives may not always be in harmony, and major concerns of each component may be different apart from the differences in time horizon of the concerned policy focus.For achieving an optimal mix of macroeconomic objectives of growth and price stability, it is necessary that the two policies complement each other. However, the form of complementarity will vary according to the stage of development of the country’s financial markets and institutions. In order to exercise these objectives there are certain tools available with the government and the central bank. Let us look at the tools available with the central bank to exercise monetary policy objectives effectively. There are five main tools which RBI uses to execute the monetary policy.They are repo and reverse repo rate, cash reserve ratio, open market operations, statutory liquidity ratio, and bank rate. The tools related to fiscal policy are public expenditure, income of the government, government borrowings. Evolution of monetary and fiscal policy interface in India: The framework for monetary and fiscal policy interface in India stems from the provisions of the Reserve Bank of India Act, 1934. In terms of the Act, the Reserve Bank manages the public debt of the Central and the State Governments and also acts as a banker to them.The interface between these two poli cies, however, has been continuously evolving. In the pre-Independence days, the Colonial Government adopted a stance of fiscal neutrality. However, requirements of the World War II necessitated primary accommodation to the Government from the Reserve Bank. In the post-Independence period, the monetary-fiscal interface evolved in the context of the emerging role of the Reserve Bank. Given the low level of savings and investment in the economy, fiscal policy began to play a major role in the development process under successive Five-Year Plans beginning 1950-51.Fiscal policy was increasingly used to gain adequate command over the resources of the economy, which the monetary policy accommodated. Beginning the Second Plan, the Government began to resort to deficit financing to bridge the resource gap to finance plan outlays. Thus, the conduct of monetary policy came to be influenced by the size and mode of financing the fiscal deficit. Consequently, advances to the Government under the RBI Act, 1934 for cash management purposes, which are repayable not later than three months from the date of advance, in practice, became a permanent source of financing the Government budget deficit.Whenever government’s balances with the Reserve Bank fell below the minimum stipulation, they were replenished through automatic creation of ad hoc Treasury Bills. Though the ad hocs were meant to finance Government’s temporary needs, the maturing bills were automatically replaced by fresh creation of ad hoc Treasury Bills. Thus, monetization of deficit of the Government became a permanent feature, leading to loss of control over base money creation by the Reserve Bank. In addition to creation of ad hocs, the Reserve Bank also subscribed to primary issuances of government securities.This was necessitated as the large government borrowings for plan financing could not be absorbed by the market. This, however, constrained the operation of monetary policy as it led to creati on of primary liquidity in the system and entailed postponement of increases in the Bank Rate in order to control the cost of Government borrowings. The Reserve Bank Act, therefore, was amended in 1956 empowering the Reserve Bank to vary the cash reserve ratio (CRR) maintained by banks with it to enable control of credit boom in the private sector emanating from reserve money creation through deficit financing.The single most important factor influencing monetary policy in the 1970s and the 1980s was the phenomenal growth in reserve money due to Reserve Bank’s credit to the government. With little control over this variable, monetary policy focused on restricting overall liquidity by raising the CRR and the SLR to high levels. The balance of payment crisis of 1991 recognized the fiscal deficit as the core problem. It, therefore, necessitated a strong and decisive coordinated response on the part of the Government and the Reserve Bank.Assigning due importance to monetary manag ement, fiscal consolidation was emphasized and implemented in 1991-92. An important step taken during the 1990s with regard to monetary-fiscal interface was phasing out and eventual elimination of automatic monetization through the issue of ad hoc Treasury Bills. Even though fiscal dominance through automatic monetization of fiscal deficit has been done away with over the years in India, the influence of fiscal deficit on the outcome of monetary policy has continued to remain significant given its high level.High fiscal deficit, even if it is not monetized, can interfere with the monetary policy objective of price stability through its impact on aggregate demand and inflationary expectations. Fiscal-Monetary Co-ordination: In Inflation Management: Maintaining a low and stable level of inflation is one of the major goals of macroeconomic policy. Since inflation is viewed by the traditional monetarist approach as a monetary phenomenon, monetary policy is recommended as the major tool for inflation management.However, the role of fiscal policy in inflation control is also recognised both in terms of the impact of high fiscal deficit on aggregate demand and inflation as well as short-term inflation management through its policy of taxes and subsidies. Also, given the two-way interaction between fiscal deficit and inflation, optimal co-ordination between monetary and fiscal policies would be critical to achieve the goal of price stability. This section attempts to understand the role of fiscal and monetary policies in inflation management and the implications of the interaction between these policies on inflation.MSS scheme: Another example of fiscal-monetary co-ordination came in the form of introduction of the Market Stabilization Scheme (MSS). Under the MSS, treasury bills and dated securities were issued by the government. The scheme aimed at improving monetary policy that was expected to lose its efficacy in the face of paucity of instruments to sterilize liqu idity arising from large capital inflows that required intervention in the foreign exchange markets. The initial burden of sterilization was borne by the outright transactions involving the sale of dated securities and treasury bills.However, due to the depletion in the stock of government securities, the burden of liquidity adjustment shifted to LAF. The LAF was essentially designed to handle marginal liquidity surpluses/deficits. For absorbing the liquidity of a more enduring nature, the MSS was conceived. Fiscal-monetary policy co-ordination also received a fillip from the Debt Swap Scheme (DSS), which was recommended by the Finance Commission. It enabled the state governments to substitute their high-cost loans from the centre with fresh market borrowings and a portion of small saving transfers.How should the coordination be? In view of the complex nature of interface, coordination between fiscal and monetary policies has to be considered from several angles. Both are aspects of shared overall macro-economic policy objectives. Hence, at the first level, the question is whether the relevant fiscal-monetary policy mix is conducive to the macro objectives. The relevant policy mix relates to the level of fiscal deficit, the pattern of financing especially the extent of monetisation and the dependence on external savings.Secondly, whether operating procedures of monetary and fiscal authorities, especially debt and cash management are consistent and mutually reinforcing. The interactions between operations of monetary authority and public debt management described earlier in this part of the presentation are obviously relevant. Thirdly, whether credibility of both monetary and fiscal policies is achieved in a desirable direction. Thus, a credible monetary policy can help moderate interest rates provided the fiscal authority does not give rise to a different set of expectations.Fourthly, whether due cognizance has been taken of the fact that monetary and fiscal p olicy adjustments operate in different timeframes. Monetary policy as is well known , can be adjusted to alter monetary conditions at a shorter notice than fiscal policy. Monetary policy changes can be undertaken at any time, unlike fiscal policy changes most of which are generally associated with the Annual Budget. Finally, harmonious implementation of policies may require that one policy is not unduly burdening the other for too long. Mutual respect and reinforcement is undoubtedly the ideal to which both policies and authorities should subscrib

Food Web Case Study Essay

A food web is a type of graph that depicts the relationship between the prey and the predators, also known as a system of food chains and how one another are related. This can be better explained as a connection in a community. Food webs are important because it is a direct illustration of the relationships among certain species within a certain community. Right away the graph will reveal the type of species, what they interact with, the structure in which the environment they are located, and show the relations between each species. Because it is called a food web, the name has already shown that the relationship that will be represented will be a relationship concerning food. Within any given food web, there can very possibly be more than one food chain located inside of the actual food web itself. The different types of food webs will pertain specifically to that environment only. Ecological interactions determine flow of the food web. Food webs will vary from simple to complex dependent on the type of food web being viewed. Competition â€Å"Animals need air to breathe as a source of food, to eat to provide certain minerals to provide some of the body’s needs and to drink (BioTopic.com, 2014).† Because the needs vary from one species to another, there comes the need to compete for many things for the need to survive. Even if this means that the species themselves are considered part of the food web as a meal for a larger species. With not only the competition to survive to make it out alive through another day, there is the need to create a family and also find a safe place to live (BioTopic.com, 2014). Because these animals have mates to take care of, children to feed, and the need to protect what is theirs comes a whole new definition of the word competition. Many competitors within the food chain can at times be after the same types of food, searching for the same type of shelter can cause  issues between not only species, but the living organisms that thrive within these eco systems like plants. Plants are also in need of resources (BioTopic.com, 2014). Although their needs will differ from most animals, they are constantly in need of oxygen during daylight hours. Oxygen for plants is a source of nutrients and energy that allow them to grow and thrive. Resources that animals compete for (BioTopic.com, 2014) 1.Food 2.Water 3.Space 4.The opportunity to mate Resources that plants compete for (BioTopic.com, 2014) 1.The food that animals waste 2.Some plants are pollinated by animals 3.Water, Light, Minerals Food Webs Source web is a type of food web in which one or more types of prey are eaten by their predators and so forth up the food web. A community web will reveal a connection of who eats who. Energy flow web is a type of food web that will depict the energy amongst the consumer of the energy, and the source in which the energy is coming from. A Sink web is a type of web that illustrates this prey eating another prey, and this prey eating the next prey, and the next prey eating the next prey. Paleecological web will visualize the ecosystem showing pictures that depict all the way back to fossil. A functional web will resemble in look to that of the community web. It will show the relations between connections of predator/prey, energy flows, the smaller food web within the web, and a predictable pattern for what type of species need what types of food and natural resources. The most common of the food web are the community web and the functional web. They are the types of webs that most users are more familiar with in terms of what they are called and what they entail. Boxicity Tropic Status Trophic levels depict how the producers, carnivores, and the herbivore have similar yet different types of feeding positions. The First level consist of the plants, the second level consist of the herbivores, carnivores are definitely in the third level and sometimes the fourth. When one species or organism is located in the food web, they are ultimately participating in food transfers. Which is food chain going from species to species, or organism to organism. Rose Plant > Aphids > Beetle > Chameleon > Hawk (Bcb.com, 2014). The example listed here is a great example to use because it shows one organism eating another. Real Life Applications †¢Animals that fertilize the grass. †¢Grass that uses sunlight to grow †¢Animals that eat grass, and in turn produce milk, meat, or their fur coat. †¢I use myself for my last example. I am a human being, located within my own food web. I eat food that come animals. I need the oxygen that omits from trees and plants to survive. I go to work every day to provide for my family so that I can feed them. When I am applying for a job I am in competition with others that are looking to take care of their families, therefore we are in competition with each other. I consume the natural resources that my eco system has to offer. I eat animals that in turn may eat other animals. The image above is also a real world depiction that relates a directed multi graph that is the food web to a real world scenario to better understand the relations in a mathematical way. References Bcb.com. Tropic levels. Retrieved on April 14. 2014. Retrieved from: http://www.bcb.uwc.ac.za/sci_ed/grade10/ecology/trophics/troph.htm Biotopics.com. Competition. Retrieved on April 14, 2014. Retrieved From: http://www.biotopics.co.uk/newgcse/Competition.html Figures Retrieved From: www.googleimages.com file:///C:/Users/Green/Downloads/mth221_r2_food_webs_case_study.pdf McGuigan, Robert A. 13 Food Webs. Retrieved on April 14, 2014. Retrieved from: http://highered.mcgraw-hill.com/sites/dl/free/0073383090/299355/Apps_Ch13.pdf

The editor's note Essay Example | Topics and Well Written Essays - 500 words

The editor's note - Essay Example She said, â€Å"literally for the first time I read about Arab women in America, things I did not know, figures not exposed to the American media, and the most interesting thing in the magazine, is that youre talking about Arab women social life; not only that but you also have a page for teens, which allows them to write about the problems they face." And here comes another crucial month for us. This month’s issue integrates interesting and varied topics that I am literally in a dilemma as to what I should incorporate in this letter. First of all, let me clarify our choice for the campaign article. In this issue we focused on sensitizing people about cancer and also featured Negma, Egypts second forum, which took place in Boston, American Muslim Union annual branch, Egypt Cancer Networks fundraising dinner, and Noonelneswa’s first annual spring as well as community recognition occasion. Concerning our wellbeing feature, we presented a brave Arab face that successfully wrestled breast cancer and currently lives cancer free life. Further, because of the fact that April is the National Cancer Control Month, we incorporated an interview with an Arab-American woman who has tirelessly worked with the community in the fight against cancer. In your copy, please find the â€Å"best of the best† page so that you can di gest the information about one of the best-ranked high schools in New Jersey, which pioneered Arabic language class. I regret that I cannot find all the space to highlight for you all the interesting items featured in this month’s edition. As I conclude, you would be doing yourself no good if you missed the story about a British journalist, Lauren Booth, who is a sister-in-Law to the former British Prime Minister, Tony Blair, who converted to Islam. She wore a veil and travelled across the world in a bid to facilitate and drive the Palestinian roots. In her endeavor, she recently toured America, where she met with the Arab and Muslim

New York City Essay Example | Topics and Well Written Essays - 2000 words - 1

New York City - Essay Example The purpose of this paper is to evaluate the philosophy of the city by taking in consideration three different mediums that represent similar or different aspects of the city. Each person has a different view of the city and the purpose of this paper is to view the city from their perspective. In order to bring about a suitable understanding of the city, three different Medias are taken. These include photographs of the subway by Walker Evans, The Empire State Building and the postcard titled, ‘Future of New York’. Walker Evans, in his representation of New York has taken pictures of random people in the subway without their consent. The Empire State is the landmark for NYC and represents the city in various fronts. The postcard shows a futuristic view of New York, taking in view the rapid pace of development within the city. Thus, each medium has brought forward a different aspect of the city that is apt from their perspective. New York City New York City is one of the most famous and populated cities of USA. This city is the center of all economic activities including education, technology, commerce, trade, art, fashion etc. New York can be termed as the capital of the modern world with its enterprising nature. New York is able to enjoy such popularity on account of it being a city with the port. It is because of this importance of the city that New York continues to be an important part of representing American throughout the world. When people talk about American, they conjure up an image of the lively bustling streets of New York with its diverse population compromising of people from all races, religious and casts.

The Accounting Cycle Steps Research Paper Example | Topics and Well Written Essays - 1000 words

The Accounting Cycle Steps - Research Paper Example Some of the financial statements prepared during the accounting cycle include the balance sheet, the income statement, statement of shareholders equity, as well as the cash flow statement (Agtarap-San, 2007). The accounting cycle may take place with regard to time in which the organization prepares its financial statements. For example, a business may prepare its financial statements on a yearly, quarterly, or monthly basis (Warren, 2010). This paper will discuss the steps of the accounting cycle right from the recording of transactions to preparing of financial statements. The Ten Steps of the Accounting Cycle Step 1-Analyzing Transactions There are ten steps involved in the accounting cycle; step one to three take place during the entire accounting period whereas the other steps from four ten occur in the end of an accounting period. The first step includes the analyzing of transactions. In this step, an organization look at the source documents, which include the description of th e events and transactions. Source documents can either include electronic sources or hard copies. Some of the source documents that the organization analyzes during this step include cheques, bank statements, as well as purchase orders. The accounting department of the organization should receive all the source documents from the other departments (Warren, 2010). Step 2-Journalize The second step in the accounting cycle involves preparing journal entries, which is performed after the analysis of source documents, events, and transactions. During this step, the organization’s accountant uses the double-entry accounting method and rules to journalize. Therefore, there should be recording of transactions in two accounts; in addition, there is a requirement that the credits must be equal to the debits. Upon the application of the debit and credit rules, the transactions are then recorded in a journal. A journal entails a record that has the complete transactions (Agtarap-San, 200 7). Step 3-Posting The third step in the accounting cycle includes posting, which entails the transfer of information from the journal entries in the journal to the ledger. The journal entry, comprising of both the debit and credit entries is posted in the ledger with both the credit and debit transactions. Thus, the posting step is the basic transfer of credits and debits from the journal and transferring them to the ledger. Before they are posted to the ledger, the journal entries should be scrutinized to ensure that they are accurate (Warren, 2010). Step 4-Trial Balance The fourth step includes the preparation of an adjusted trial balance, which refers to a list comprising of all accounts, as well as their balances. The information used in the preparation of the trial balance is derived from the ledger, with the account balances from the ledger being used in preparing a trial balance. In the trial balance, there is listing of transactions in the debit and credit column (Agtarap-S an, 2007). Step 5-Preparing Adjusting entries The fifth step of the accounting cycle details the preparation of adjusting entries, which involves adjusting the liability or asset account to its actual amount. In addition, the adjusting of journal entries also details the updating of the expense or revenue account. To start with, there is recording of the adjusting entries in the general journal, after which they may be posted to the

Employment Law Assessment Essay Example | Topics and Well Written Essays - 1000 words

Employment Law Assessment - Essay Example In this analysis, steps that BSG Company can take to prevent legal action from Tony against the company because of the events that occurred have been recommended. This case involves HR issues, as well as, legal issues. First, it should be noted that both employers and employees have a shared responsibility to ensure that everything is alright in working practices and working conditions, as well as, other areas of working life. These areas include grievances, health and safety at the workplace. Employers owe a legal duty of care to their employees (Gennard & Judge, 2005, p, 378). It is expressive that Tony has an injury to mental health because he has not been reporting to work for four weeks due to stress associated with the ridicule he has been going through at work, after he was nicknamed the ‘BSG Smurf†. Therefore, the legal issue in relation to this situation is that BSG Limited has failed to fulfil its duty, as an employer, of ensuring health and safety at the workpl ace for Tony, as one of the company’s employees. Instead, Tony has been subjected to harassment from fellow employees, and the company has not taken any reasonable steps to stop this behaviour, in spite of the fact that this has been going on for a period of four weeks. It is imperative to note that harassment is prohibited both in criminal and civil law (Groenendijk, Guild, & Minderhoud, 2003, p, 181). Employers should guarantee a healthy and safe working environment for their employees is healthy and safe, as outlined in the Health and Safety at Work Act 1974 (ACAS, 2012, p, 3). Therefore, employers should ensure that there is a code of practice enforcing discipline, which employees should follow. The BSG HR has failed to ensure that discipline is observed by all employees to prevent unacceptable behaviour towards other employees, which may cause harm. As a result of Mickey’s behaviour and other employees at the Guildford BSG garage, Tony is suffering from stress. Fu rthermore, according to the Law of Tort, individuals have a duty not to act in ways that may cause physical or mental harm to others. Tort of Negligence in employment law requires or places a duty on employers to ensure the safety of employees (Mothersole & Ridley, 1999, p, 512). According to Gennard & Judge (2005, p, 378), stress levels that are allowed in the place of work is not regulated or controlled by specific statute. As a result, general doctrines that apply in addressing personal injury claims are used to address issues of work related stress. In law, mental health injury such as stress is treated just like physical health injury (Gennard & Judge, 2005, p, 378). Employers are generally responsible in the law for the acts of their employees, unless the employers can show that they took reasonably practical steps to prevent the employee carrying out the harassment from doing so (Davies, 2010, p, 68). It a high test for employers to show that indeed they took steps, which wer e practically reasonable to stop harassment. Employers are responsible for the unacceptable, harassment activities of their employees, if the victim proves that there was a course of two or more occasions of harassment that caused harm, and the perpetrator must have known or ought to have known the conduct amounted to harassment, as per the provisions of the Protection from Harassment Act 1997 (Davies, 2010, p,

Socrates Fortlow, History, and Anna Deavere Smith Essay

Socrates Fortlow, History, and Anna Deavere Smith - Essay Example In Always Outnumbered, Always Outgunned, Walter Mosley responds to the feasibilities for a person who has been incarcerated for a long time to readjust and to play a role in the society. The main character, who is Socrates Fortlow, has been contending with the life after and outside of prison after his release. By means of a series of unified and interrelated events focused on Socrates and his outlook, the reader will stumble across a system of problems, interlocked and tessellated the forms the backbone of the story. Socrates lives in the streets of Los Angeles; and from this haven reflect are the upshots of urban dilemmas such as poverty, crime, discrimination, violence, and white racism. Although Mosley leaves out the limits of mystery in writing this book, he has manifested his knowledge and observation of what really happens in real life; things that are answered by the most common questions: What is my future? Where to go? What to eat? What about racial discrimination? How do I measure up against the White gangster on the streets? These are typical questions that provide answers to what make up human history. In the book, Socrates has to deal with the many complications of human existence, especially among the Blacks in urban Los Angeles. One particular contention that is being subtly reverberated is how the truth about the severity of street violence, discrimination, and white racism towards the Blacks are reduced by the transition of these real events into texts or videos or whatever medium used to record a historical event. History does not necessarily tell the real events that have occurred in the past. There could be a lot of things that will be lost in translation or be left out deliberately. Nevertheless, the perspective or context in which historical texts are written provide clue to the network of issues or problems that blighted the past, and which can still be in existence up to this moment. Socrates stresses the importance of studying history and literature because it is in the texts that careful thinking is carried out in order to ensure that the voice of the past will still be the voice of the present. The way we understand history is based upon the ideas that we read on historical books; and without the m, there is no reason for us to critically imagine about the past. While there are many media that could keep details of history such as videos and pictures among others, oftentimes, these media are misrepresented. This is the point that Anna Deavere Smith would likewise want to stress out: â€Å"the video of Rodney King Keating, which seemed to "tell all", apparently did not tell enough, and the prosecution lost, as their lead attorney told me, "the slam dunk case of the century. The city of Los Angeles lost much more† (Smith xxi). Smith believes in the power of literature to be able to reiterate perspectives of the past to the present. However, in the case of Keating, who was a victim of beating, the jury favors to convict him even though the video clearly evokes how he was beaten mercilessly. Smith argues that â€Å"what most influences my decisions about what to include is how an interview text works as a physical, audible, performable vehicle. Words are not an end in th emselves. They are means to evoking the character of the person who spoke them.† The most ideal thing of using literature as a first medium to record

Writing a Blog for my second Lecture ( About consumer behaviour) Essay

Writing a Blog for my second Lecture ( About consumer behaviour) - Essay Example That’s why cognition familiarises the customer to the product, making him to be at ease on it. When this happens, the consumer eithers accept or rejects the information being processed in his mind. This is like passing by a Burger King store and feeling suddenly hungry. And then burger pictures flash on your mind. Before you know it, you’re in front of a crew taking your order. I have learned that consumer behaviour also goes beyond consumption of tangible products. It also depends on their use of services, experiences, ideas and many others (Hoyer and MacInnis, 2010, p.6). Like the products, services like going to the doctor or taking aerobics have been perceived and recognised inside the consumer’s mind, and therefore taking on with the decision of going there. The use of advanced communication technological devices is very popular in the advertisements today. It has been perceived as a must in our generation. Environmental influences are indeed many. However, recognising our own resources, needs and values when purchasing a product still rules out (Kardes et al, 2008, p.57; Blythe, 2008, p.19). This will help us gain satisfaction in meeting our

Child and family health nursing Research Paper Example | Topics and Well Written Essays - 500 words

Child and family health nursing - Research Paper Example Previous research on child and family health nursing focus on ways of enhancing health care without emphasizing on the importance of collaboration of all parties in the care. Therefore there is need for an investigation into ways in which the parties within child and family nursing care can collaborate as a way of improving the care on various childhood health issues. The aforementioned problem will be solved through a methodological research with a view of obtaining data and information from the parties involved in child and family health nursing. This data will be analyzed, discussed and presented in form of recommendations to all stakeholders. In order to solve the problem wholly, the proposed research will investigate into collaboration in promotion and maintenance of children’s health, healthy lifestyles among children and the various programs that are aimed enhancing the health of young people. In addition, the roles that are played by nurses, children and their family especially the mothers in promotion of child health will be investigated. The specific areas of care such as prevention of obesity and accidents among children will be focused by the investigation. The significance of programs for child and family health will be studied and their effectiveness improved. The analysis of research findings will lead to presentation of suf ficient data and information that would be applied for improved collaboration in child and family health nursing. In promotion of child and family health, there is need for healthy living. This can only be achieved if family members and their children are sufficiently informed on their role in promoting health. Through participation and communication as forms of collaboration, family members and children will be aware of the ways in which they would promote their health such as proper diets. Moreover the involvement of nurses in care will be

1967 Six Day War Essay Example for Free

1967 Six Day War Essay Assess the consequences of the 1967 (Six Day) War for Arab–Israeli relations On the 23rd May 1967, the Israelis declared war on the Arabs due to the blocking of the straits to Israeli shipping. The 1967 Six Day War had a major impact on Arab-Israeli relations. This is due to Israel gaining control over the occupied territories, large increases of Jewish settlement in the occupied territories, the increase of Israeli military in the Middle East. The Israeli occupation of Arab territories had a large impact on Arab-Israeli relations. Through the dominancy of the Israeli army during the Six Day War, they were able to capture the Sinai Peninsula, the Gaza Strip from Egypt, East Jerusalem, the West Bank from Jordon and the Golan Heights from Syria. In addition, Israel controlled the Sharm el-Sheik and the Gulf of Aqaba. This was significant as Israel stopped Jordanian ships from entering the Red Sea and closed the Gulf of Aqaba to Arab shipping increasing the tensions between Israel and its neighbouring Arab States. In November 1967, UN Resolution 242 called for ‘the withdrawal of Israeli armed forces from the territories occupied in the recent conflict’ and the right of all countries ‘to live in peace with secure and recognised boundaries’. Even though, UN Resolution 242 favoured both parties, the Arabs did not regain their territories as Israel debated the resolution did not specify the withdrawal from all territories and they claimed that the Occupied Territories were vital to its security. However, Israel did emphasis the second measure of the resolution claiming their right to exist, but the Arabs ignored it implying that Israel would first have to withdraw from the occupied territories. By both Arabs and Israelis not accepting UN resolution 242 and the continual Israeli control over the occupied territories, the tension between Arab-Israeli relations had increased. Also, the large increases of Jewish settlement into the Occupied Territories had a major impact on Arab-Israeli relations. Between 1975 -1977, Israel had made 75 settlements in the West Bank as they offered people cheap housing and necessities such as employment and appliances. The Gaza Strip contained approximately 300,000 Arabs and the Israelis had settled 3000 Jews in the area creating tension between Arabs and Israelis as evident through the ‘Intifada’ from 1987 to 1993 which killed thousands of people. By Israel creating large settlements in the Occupied Territories, it would be an obvious obstacle to any future peace negotiations over withdrawal from the Occupied Territories. The large group of Jewish immigrants also produced conflict in the Occupied Territories creating hardship for the Israeli Army as they continually had to stop violent raids. The Arabs argue that Jewish settlements should not occur in the Occupied Territories as it was Arab land; however the Jews argue that this land religiously belonged to them as through the biblical names of the West Bank, â€Å"Judea† and â€Å"Samaria†. By Israel increasing Jewish settlements in the Occupied Territories, the Arab-Israeli relations had deteriorated as it was now difficult to organise a Jewish withdrawal. Furthermore, the increase in the Israeli reputation and the decrease in military strength of the Arabs heavily impacted Arab-Israeli relations. On the 5th June 1967, the Israelis launched a pre-emptive strike on the Arabs as 180 Israeli warplanes attacked the airfields of Egypt, Syria and Jordon destroying 400 military planes ultimately deciding the fate of the Six Day War. There is a general agreement amongst historians â€Å"that although Israel struck first, this pre-emptive strike was defensive in nature†. As a consequence of the war, 12,000 Arabs had died with only 338 Israeli casualties. Historian Avner Cohen writes, â€Å"In the end Israel launched a pre-emptive aerial attack in which most of the Egyptian air force was destroyed, virtually deciding the Six Day War. Through Israel’s dominance they were regarded as the ‘strongest military power in the Middle East’. Also, the Arabs had become severely weakened as a result of the Six Day War, as they had lost a high amount of casualties and the relations between Syria, Jordon and Egypt declined as evident through Syria not accepting UN Resolution 242 while Egypt and Jordon did. Through Israel’s superiority, their relations with Egypt had improved as highlighted through Egypt recognising Israel as a state in 1979. Nevertheless, Israel’s dominancy also stresses its improvement in its relations with Jordan signing a peace treaty in 1994, and Iran signing a peace treaty in 1979. Even though, certain relations improved the Arabs would turn to terrorism and the Israeli army would be seen as the aggressor. By Israel dominating the Six Day War and establishing itself as the ‘strongest military power in the Middle East, its relations with other Arab countries had dramatically improved. In conclusion, the 1967 Six Day War had a major impact on Arab-Israeli relations. Due to Israel gaining control over the occupied territories and increasing its settlement, the Arab-Israeli relations had declined as the Arabs were livid that Israel would not withdraw from the Occupied Territories and further complicate the situation by increasing Jewish settlement. Also, the Israeli’s had become maddened as most Arab countries continued not to recognise Israel as a state. However, as the reputation of the Israelis became high and the military strength of the Arabs declined, Arab-Israeli relations improved as evident through the peace treaties of Jordan, Egypt and Iran.

Business Analysis Techniques for Strategic Planning

Business Analysis Techniques for Strategic Planning Through a strategic planning an organization defines its strategy, or direction, and decisions making on allocating its resources to practice this strategy such as its capital and people. There are various business analysis techniques that are used in strategic planning such as SWOT, PEST, STEER and EPISTEL. The strategic planning, which indicates the future course of an organization, is the formal consideration involves three key questions; these questions mainly refer to what an organization does, who it deals to and how it excel. Another integral question can be phrased as how to beat competition (Bradford Duncan, 2000). The development of this business strategy is of great importance for organization as the whole structure of organization depends on it. An authentic business strategy development needs an appropriate analysis of the organization and its environment. This analysis must be executed at an internal and external level in order to identify the strengths and weaknesses o f internal environment (organization) as well as threats, opportunities of the external environment. Different factors are assessed in this regard including the economy markets, competition, supplier markets, labor markets, regulatory environment and Technology. Marketing plans and strategies are the tools that are used as helpful in understanding the goals of the business and to develop the activities to achieve them. Strategic Models and tools are employed by marketing participants to analyze marketing decisions. The 3Cs, the corporation, the customer and the competitors, can be employed when beginning a strategic analysis to get a broad understanding of the strategic environment. Different organizations often use it to convey strategic positioning of their market mix. In order to form a market plan to practice a defined strategy, 4Ps, the product, the price, the place and the promotion, can be used. Marketing theories provides the solution for achieving the marketing goals throug h procedure. The basic theory of marketing revolves around Target Audience, Proposition and Implementation. Organizations sum up their objective and goals into mission and vision statement. They are used to formulate objectives and goals. Every organization follows particular organizational ethics, which meant to show how ethically internal or external stimuli are responded by them. Organizational ethics also expresses the values of an organization to its employees and other entities irrespective of governmental and regulatory laws. Organizational Ethics is interdependent with Organizational Culture. Organizational Culture deals with the beliefs and personal and cultural values of an organization, Psychology, attitudes and experiences. This culture is defined as a collection of norms and values shared by group of the people in the organization and the way they interact with each other and with the stakeholders outside organization (Hill and Jones, 2001). A core competency is definit e factor that is seen as being central to the way it by a business, or its works and employees. It carries out three key criteria, it provides consumer benefits, it is not easy for competitors to imitate and it can be leveraged many products and markets. Competitive advantage takes place when an organization acquires and develops an attribute and combination of attributes that allows it to outperform its competitors. A timetable for the implementation of a strategy shows the timing for the each steps of the plan that is pursued to implement the strategies accordingly. The effectiveness, efficiency and economy have to be evaluated so that the success of the timetable can be estimated throughout the implementation of planning and strategy. This paper examines and assesses the different business models, development of strategic planning, its implementation and evaluation of the effectiveness and efficiency of implementation of the timetable of strategic planning of an organization. The chosen organization is Marks Spencer (MS). Marks Spencer is chosen because it is an important and major British retailer, with over 895 stores in more than 40 territories worldwide, over 600 domestic and 295 international stores (MS International Stores MS website, February 2009). It is also the biggest clothing retailer in the United Kingdom, as well as being an up market food retailer, and the 43rd largest retailer in the world as of 2008. (Wal-Mart remains largest global retailer, according to Deloitte survey). Its domestic stores also sell both food and clothing; it has started the store expansion into other ranges including furniture, home ware and technology. In 1998 it was the first and only retailer to make a pre-tax profit of over  £1 billion (BUSINESS | Marks Spencer profits top expectations. BBC News, 1998). The business assessments of such organization of such a big range and with glorious history will definitely be a remarkable addition in the study of business management and business strategic planning. In general terms provide examples (4to 6) and briefly explain them of theories and principles that underlie strategic planning? Every organization comes into being with a strategy, which is called an organizational strategy and aims to provide a guideline to guiding member of the organization. Since the future survival of an organization depends on its strategy, therefore, every organization is commenced with their own strategy. This strategy involves business strategy mainly focusing on development and progress of the organization including internal and external factors as well. An organization needs to analyze the strengths, weaknesses, threats and opportunities that the organization could face while developing strategy, political, economic, social, and technological environment other socio-cultural, ecological, and regulatory factors and environment, informatics, and legal matter are also as important to be analyzed as above factors. For this purpose, therefore, organizations summarize these strategies into their mission, vision and values, which illustrate their business strategy. Provide in outline form, using a diagram a framework which would enable your choice organization to develop its strategy in general terms? The preparatory phase of a business strategic plan relies on planning. At the first, business plan includes Analysis of the Current Situation and Marketing Plan Strategy and Objectives. Marks Spencer requires having analysis of the current situation including past year. This analysis includes analysis of Business Trends, Market Analysis, Competitive Analysis, Market Segmentation, Marketing-mix, SWOT analysis, Positioning analyzing perceptions and Sources of information. Marketing plan Strategy and objectives for next year should also be analyzed including Marketing strategy, Desired market segmentation, Desired marketing-mix, TOWS-based objectives as a result of the SWOT, Position perceptual gaps and Yearly sales forecast. Describe and critically evaluate a small range (3 to 5) of models tools and techniques that could be used to develop marketing for your chosen organization? There are many Marketing strategic models and tools employed to analyze marketing decisions. In order to find a broad understanding of the strategic environment the 3Cs can be used by Marks Spencer. This 3Cs model points out that focus should be on three key factors for success. Three main players must be considered when planning a strategy for business: Corporation, Customer and Competitors. These 3Cs can sustain a competitive advantage in a strategic triangle. From a corporation point of view, strategies are needed to maximize the strengths of a corporation relative to the competition in the area of function that are critical to achieve the success. The corporation does not have to exceed in every function in order to win. If it can achieve decisive edge in one key function, it will ultimately be able to progress its other functions which are now average. In case of swiftly rising wage costs, it is an important decision for company to contract out a major share of its assembly ope rations. If the competitors are not able to shift production so swiftly to vendors and subcontractors, the outcomes difference in cost structure and in the companys ability to cope with demand fluctuations can have integral strategic implications. The cost-effectiveness can be improved by adopting three ways. At first, reduction in the basic cost, exercise greater selectivity such as products offered, orders accepted and functions performed and share certain important functions with other business of corporation and other organization. Since clients and customers are the base of strategy therefore the basic goal is to be of customers interest rather than of the shareholders. This segmentation appears from a trade-off study of marketing costs versus market coverage. There always appears to be a point of reducing returns in the cost versus coverage relationship. The task of the organization is to optimize its range of market coverage, geographically and channel wise. Competitors are l ikely to be scrutinizing the market in similar ways in fierce competition. The effectiveness of a given first strategic segmentation will tend to decline over an extended period of time. It is useful to pick a small group of customers in such situations and reexamine what it is that they really want. A market segment change takes place where the market forces are changing the distribution of the user-mix over time by affecting demography, distribution channels, and customer size, etc. This kind of change is meant to be the allocation of corporate resources to be shifted and the ultimate level of resources committed in the business to be changed. The strategy based on competitor can be built by looking at possible sources of diversities in functions including purchasing, engineering, design, sales and servicing. The power of image and capitalizing on profit and cost structure differences are the ways to achieve the differentiation. I mage can be the merely source of positive differen tiation when performance of product and form of the distribution are difficult to differentiate. In capitalizing on profit- and cost structure differences, firstly, the difference in source of profit may be oppressed, from new products sales etc. Secondly, difference in the ratio of unchangeable costs and changeable costs may also be oppressed strategically. A company with lower unchangeable cost ratio can lower prices in a lazy market and hence gain market share. Another strategic tool that can be useful for Mark Spencer is Porters 5 Forces Model. Porters 5 Forces Model is structural analysis of the market. It rather focuses view of analyzing the strengths and weaknesses of a Market Segment through analyzing the different threats prevail in the market. It is a framework for the business strategy development and industry analysis. It draws upon industrial organization economics to develop five forces that determine the competitive intensity and in the result attractiveness of a market. Porters 5 Forces Model Structureurl.png The Threat from the potential new entrants Profitable markets that submit high returns attract the new firms. Its consequence is many new entrants, which ultimately decrease profitability for all firms in the industry. The profit rate will constantly fall unless the new entrants are not blocked. This is also known as perfect competition. New entrants can be blocked by the existence of barriers in the form of copyright etc. Attractive segment is the one in which barriers for entrance is high while barriers for exit are low. Thus only few new firm ca enter and only non-performing firm can exit easily. Economies of product difference also make an opportunity for small firms to enhance their businesses thus large firms who have their product out in the market in high price, products of low price can affect them. Marks Spencer has been going through the same situation. Brand equity, which refers to the effects of marketing or consequences that accumulate to a product with its brand name compared with those that would increase if the same product did not have the brand name (Leuthesser, Kohli and Harich, 1995). The threat of substitute products or services The existence of products outside of the sphere of the common product boundaries boost the inclination of customers to switch to substitute including relative price performance of substitute, buyer switching costs, perceived level of product differentiation, number of substitute products available in the market, ease of substitution. Information-based products are more flat to substitution, as online product can easily replace material product. There are many reason cause customers to switch to substitute of the product such as substandard product, and reduction in quality of the product. Increase in the features of the product develops the competitive market. Marks Spencer by increasing the features of its products can make the customers stick with their product. The Bargaining power of customers or buyers The customers bargaining power is also defined as the market of outputs such as the efficiency of the customers to put the firm under pressure; it also affects the sensitivity of customers to price changes. Customers concentration to firm concentration ratio, degree of dependency upon existing channels of distribution, bargaining leverage, specifically in industries with high fixed costs, customers volume, customers switching costs relative to firm switching costs, information availability for customers, ability to backward integrate, availability of existing substitute products, customers price sensitivity and differential advantage and uniqueness of industry products are the actors that increases the bargaining power of customers. Large number of supermarkets will provide better opportunity for the potential customers to reach thus it will decrease the bargaining power of the customers. The Bargaining power of suppliers The suppliers bargaining power is also defined as the market of inputs. Suppliers of materials, components, labor and services such as expertise to the firm are source of power over the firm, when there are a few substitutes. Suppliers may possibly refuse to work with the firm or charge excessively high prices for unique resources. Despite the fact that supplier switching costs is relative to firm switching costs, and degree of differentiation of inputs, impact of inputs on cost or differentiation, presence of substitute inputs, supplier concentration to firm concentration ratio, employee solidarity like labor unions and supplier competition and ability to forward vertically integrate and cut out the buyer and Competition among the existing suppliers mainly reinforce the factor. Number of suppliers across Britain will rather diminish this factor for Marks Spencer. The competitive rivalry within an industry For most organizations, the major determinant of the competitiveness of the industry is the intensity of competitive rivalry. Sustainable competitive advantage by innovation, competition between online and offline companies; click-and-mortar -v- slags on a bridge, Level of advertising expense, Powerful competitive strategy and the visibility of proprietary items on the Web all these factor define the competitive rivalry within an industry (Rainer and Turban, 2009). The situation of competitive rivalry is hhigh because there are majorly three rivals of Marks Spencer that provide it a competitive advantage and change its strategic planning. State a variety 7 to 10 of general and marketing strategic options which have been used or are available to the organization of your choice and evaluate the advantages and disadvantages of four of these Product Branded product helps in capturing market as it creates an identity of the firm with that brand. Marks Spencer has been selling out branded product but there is no single of theirs, because owning the brand can exceed the sell of that product. The advantage of owning a product as a brand is that it allows the customers to identify the organization with a particular name. While mostly brand products are supposed to be accessible for everyone as a result of its price. Price Price is another factor that is integral for Marks Spencer. Determination of price that depends on the market situation very much affects the market situation for the firm. An affordable Price of the product can be more successful for the firm. Affordable price offer of the Marks Spencer will allow to everyone to access them easily thus it will generate demand of the products if it could not maintain the supply and demand of the products it will have to suffer in the market. Place The place of selling also makes a difference in the marketing strategy of a firm. Since e-commerce has been so much in practice Marks Spencer can start e-commerce through which it can sell out its products online. Besides this, variety of distribution outlets can also be an option for Marks Spencer as it is a good promotion tool of the product. Placing the products in every distributions outlet may lead the firm to the low market level due to its order of supply. Promotion Promotion of the products must be designed in the way Across the Line. Across the Line promotion of the product provide the opportunity to access the customers at any length. Promotion of the products Across the Line will cost the firm highly as promotion across the line requires in order to meet the promotion target. People Work force or staff must be well trained and professional because a well trained work force increase the productivity of an organization. Marks Spencer is the 43rd largest retailer if it hires professional and trained work force it will definitely hit its economy. Process The standard of the services offered must be of good and must be integrated with customer support. Physical Evidence Physical evidence of a firm especially like Marks Spencer does matter. The overall environment of the firm can provide a pleasant impression on others and results in good sell. Who are stakeholders in the organization of your choice and state the three major ones of these. What affect have or could the major stakeholders have on the strategy that the organization has or could introduce. What considerations should be taken into account to ensure that the three major stakeholders can contribute to the development of the organization strategy through some form of participation? There are number of group of stakeholders of Marks Spencer: employees, customers, shareholders, suppliers, local communities, pressure groups and local and national government. All these above directly or indirectly influence the Marks Spencer in its strategy making. Employees, who are direct stakeholders of the organization, want secure jobs, well and good pay and fair treatment with all employees. Customers, also a direct stakeholder of the organization, want high quality, good service, and good choice of products. Shareholders look for growth and profit. These direct stakeholders can affect the strategies of the organization. If employees are not satisfied or if feel that they are not enough benefits from the offered strategy they can strongly resist it by so many act of barriers such as resignation or boycott from service. Organization understands that in order to keep the customers stick with product it is important to provide them quality products and services in affordable r ate. The customers who want quality product in affordable price with good services would also reject the strategy if found it not in their favor by rejecting the product or switching to another substitute. Shareholders, who are back bone in the economy of the Marks Spencer, possess the shares of the company; organization will want them to have profit so that the stay with them in the business. Thus there will not be any strategy which in any way annoys the shareholders. The contribution of employees, customers and shareholders is equally important for organizations interest. This contribution by them can part in the development of the organizations strategy through expressing their expectation from the organization. These expectations are not just to be of their favor but in the favor of the organization as well because their benefits and profits are interlinked with the success of the organization. In a laymans language define the term vision, mission statement, objective and value and go to provide professional definitions of these giving the source of these. Every organization comes into existence with a definite purpose which is called objective of the organization. This objective varies from organization to organization such as profitable organization and non-profitable organization. The organization expresses its objective through vision, mission statement. Vision: Vision is the intended or desired future statement of an organization or enterprise in terms of the fundamental objective and strategic direction. Vision refers to a long term view, describing how the organization would like the world in which it operates to be. A vision statement provides the organization with an inspiration that is the basis for all the organizations planning. It explains what an organization wants to do. Mission: Mission is the fundamental purpose of an organization or an enterprise, concise describing the reason of existence and path to achieve its Vision. It also draws a future picture of the organization. Values: Values can be defined as the beliefs of an organization shared among the stakeholders of an organization. Values are the means of driving the organizations culture, ethics and priorities. The vision statement is a realistic, credible, and attractive future for an organization (http://www.au.af.mil/au/awc/awcgate/ndu/strat-ldr-dm/pt4ch18.html). Mission statement broadly describes the presence of an organization present capabilities, customer focus, activities, and business makeup (Glossary, Strategic Management: Concepts and Cases by Fred David). Provide the vision and mission statements and strategy of your chosen organization and explain how the effectiveness if these can be measured. Marks Spencer has defined its Vision, Mission statement and Values as follows: The Vision Statement The standard against which all others are measured. The Mission Statement Making aspirational quality accessible to all. The Values Quality, value, service, innovation and trust. Marks and Spencer has followed a value price strategy from its origin. Since Marks Spencer has focused on middle class customers, it has continued with the value pricing strategy. Although its most of suppliers have been Britain, which has higher textile manufacturing costs than other developing nations, Marks Spencer was able to maintain its value by developing strong economic bonds with its suppliers. Through its economies of scale in buying, MS has been able to require manufacturers to adhere to strict quality standards and to bargain lower prices for its customers (De Nardi-Cole, 1998). The standard against which all others are measured, as a vision statement thoroughly conveys the objective of the organization, as the organization has set up the standard as an objective of the organization to achieve. It is promoting inspirational standard of the organization in term of products, service, and quality and price. This vision has greatly affected the organization output as a consequence of achieving its objective through this vision. The mission statement of Mark Spencer revolves around its marketing strategy telling about the price of the products that are affordable enough to be accessed by everyone. Values of the organization describe the standard quality and value of products and services following innovation and trust of the customers. Define the term organizational g12 cultural and ethical values and explain the culture and ethical values of the organization of your choice. Organizational culture is an idea which illustrates personal attitudes, experiences, psychology, beliefs and values and cultural values of an organization. It is defined as the specific set of values and norms shared by people and groups in an organization. The organizational culture as well as ethical values is also known as beliefs and ideas about the kinds of goals of the organization and ideas about the appropriate kinds and standards of behavior members of the organization use to achieve these goals. From organizational ethical values develop organizational norms, guidelines, and expectations that prescribe appropriate kinds of behavior by employees in certain situations and control the behavior of organizational members towards one another (Hill, and Jones, 2001). Organizational Ethics refers the way an organization ethically responds to an internal or external stimulus. Organizational ethics and the organizational culture are interdependent. Although, it is similar to both org anizational culture and business ethics on the micro and macro levels, organizational ethics is neither Organizational culture, nor is it alone business ethics which includes corporate governance and corporate ethics. Organizational ethics express the values of the organization to its employees and to other entities irrespective of governmental and regulatory laws. The organizational culture of Marks Spencer is characterized as a reflection of taken for granted fashion the attitude that is shared by the all members of the organization. The basic assumptions and beliefs operate unconsciously among the members and also exist at the organizational level. The assumptions and taken for granted fashion have taken its roots from the basis of the success of organization. Marks Spencer strictly follow code of ethics, a detail document of the ethical codes, in order to get on with its internal matter. The document contains the responsibility of all belong to Marks Spencer and Behavior for customers, colleagues, shareholders and environment have been explained. Besides, there are policies about workplace and Business (MarksSpencer, Code of Ethics, 2010). Explain the term core competencies and critical success factor and state whether these are necessary to the success of the organization of your choice. Has the organization of your choice amended its strategy in response to changes in the current business and economic climate? A core competency is a particular factor that an organization looks as being integral to the way it, or its works, and employees. It performs three key criteria: provides consumer benefits, not easy for competitors to imitate and can be widely leveraged to many products and markets. A core competency can take many forms, such as technical or subject matter know-how, a dependable process and close associations with customers and suppliers. It also includes product development and culture, such as employee dedication. The core competencies are specific strengths relative to other organizations in the industry which supply the fundamental basis for the provision of added value. Core competencies are the organizations collective learning, and involve the way to coordinate different production skills and incorporate multiple flows of technologies. It is an involvement, a communication, and a strong commitment to working across organizational boundaries. Core Competencies of Marks Spencer The core competencies are vital for the existence of Marks Spencer; it is in its sourcing methods, gave it the power to deliver high value, reliable, consistent quality, investors and customers has trusted it, its quality of management was ranked very high, consequently feeling of what good for Marks Spencer was good for the Nation and epitomized the most honest face of commerce. Since the revolutionary change in the business world, Marks Spencer had to suffer a lot. After the crisis of 1999, Marks Spencer has remarkably amended its strategies in terms of products, customers, price and marketing strategy. As a result of e-commerce revolution Marks Spencer amended its strategy and started e-commerce which ultimately changed its marketing strategy. A large number of the same product in the market caused the Marks Spencer to adopt a differentiation way such as own brand products and Premium brand appearance. Since there are so many products out there in the market that is decreasing the sell of Marks Spencer, due to the threat of the substitute product Marks Spencer has reviewed its prices of the product in order to create competitive advantage. Explain how your organization has responded to change in its environment and consider whether this response has effective The change in the product price from Marks Spencer creates a competitive advantage fro it and it is much effective for the organization. The enhancement in the place of its firm can also be beneficial in the way that it is in the access of as many people as targeted. All these response to the environment from Marks Spencer could provide it some space to restore its position in the market. List what you would consider to be the major functional area in generally and discuss the three major functional areas of organization of choice and why this is so. Every business have work within certain functional areas, among them there are few general major functions performed in all businesses including finance and accounts, production and operations, administration and IT support, human resource, marketing and sales, customer services, and research and development. The major functional areas of Marks Spencer are sales and marketing, human resource and administration and IT support. They are the major functional areas of the organization because Marks Spencer is a retailer of goods, its business growth very much depends on the sales and marketing, human resource (the people and the staff serve the organization can make difference in the growth of the organization) and administration and IT support make the business process smooth and successful. Since the competition is so tough in the market, Marks Spencer must improve their major functional areas. How have the three major functional areas in organization been developed to provide it with a competitive advantage? Efficient and good sales and marketing strategy can play an important role to develop a competitive advantage for the organization. Decrease in the price by change in the marketing strategy increases the competitive advantage for the organization. Human resource is such a function that works as a back bone for an organization, skilled and trained human resource of the Marks Spencer can provide a competitive advantage through inputting the best to serve the organization. Administration and IT support has come out as one of the vital function of the organization since organization has initiated e-commerce, it can efficiently perform as support to e-commerce to give competitive advantage to the organization. Discuss how a timetable for the implementation of a strategy could be developed around key milestones. The implementation of a strategy roadmap needs a time table that defines milestones in weekly, one month, three month, and six month intervals. Implementation milestones should be established and communicated to all key business partners, the board of directors, stakeholders and investors, customers, and employees, from day one. The best timetable and milestones focus on at least the following dimensions: customers, competitors, finance, communications, and culture, intellectual property, globalization, governance, leadership, investors, marketing, partners, information technology, products, sales, processes and policies and space and inf

The Evolution of Whales Essay -- Exploratory Essays Research Papers

The Evolution of Whales Image sitting on the beach one July morning. The sun is beaming down and decide to go for a swim. As you approach the water, you see a whale unusually close. You begin to get nervous as it continues to approach the shore. However, you aren’t worried because you know that they are confined to the sea. As the whale comes near you can see it clearly. Just as you think that it will turn around, the whale walks out of the ocean! If you were to live during the tertiary period, this would be one of the things you would often see. All of the mammals that existed during that time period were terrestrial. They all were land dwelling mammals. Before J. G. M. Thewissen and colleagues’ discovery in Pakistan, many scientists believed, since the constant new discoveries twenty years ago, in what the numerous fossils from North America, Pakistan, and Egypt have revealed, â€Å"†¦these early cetaceans had mobile elbows and external hind limbs with articulated knees. However, they were fully aquatic, except for Ambulocetus, which was amphibious-much like sea lions† (Walking with Whales). Scientists had some idea to the evolutionary process of whales. â€Å"It has always been clear that aquatic cetaceans must have evolved from terrestrial mammals and returned to the water, and the forelimbs of recent cetaceans still have the same general pattern as that of land mammals.† (Walking with Whales) It was known fact that land mammals and whales were related. However, the change from ancient whales to modern whales is drastic. Today, we see much less of an obvious relationship of the cetaceans to the terrestrial mammals. â€Å"†¦Modern cetaceans are highly specialized, with numerous adaptations that allow them t... ...ls. J. G. M. Thewissen and his colleagues changed the way in which scientists thought about the early lifestyles of whales. The evolution of the ancient artiodactyls was discovered to be joined with the well-known group of cetaceans. The tertiary period was a time of terrestrial life forms. Every mammal walked the earth. It wasn’t uncommon to see a whale running through the grasslands or shark sleeping on the coast of a land mass. It was a time when mammals roamed freely and unconfined by the limits of the ocean. Now that scientists have this newly found knowledge, it is time the scientists further investigate â€Å"why?† Works Cited Muizon, Christian De. Walking With Whales. Nature 413, 259-260. September 2001. www.nature.com/nature/journal/v413/n6853 Thewessen, J. G. M., Williams, E. M., Roe, L. J. & Hussain, S. T. Nature 413, 277-281. 2001.

William Wallace :: essays research papers fc

William Wallace is considered to be â€Å"Scotland’s greatest hero† (McHale). In order to appreciate the true value of freedom one must understand the hardships and trials people faced in order to obtain that freedom. William Wallace was a freedom fighter. He went through many trials and tribulations during his life. William Wallace’s family came from Wales. William was not even Scottish (Fish). Yet he had the strength and courage to stand up for what he thought was right. William Wallace was born in a little town called Elerslie, in Scotland, around January 1272. â€Å"He was the second of three sons to Sir Malcolm Wallace† (Waters). His mother taught him his basic education, until he was six to seven years of age (Chung). At this time and age, the second male son of a family was obligated, by tradition, to obtain education by a clergy member of a monastery, and eventually become a clergy member himself. It is unknown, by historians, how William averted this tradition (Ewart). During this time the English king, Edward Plantagenet I, also called Edward de Longshanks (McHale), was taking over Scotland. The king of England issued all the people of Scotland to pay homage to him. Sir Malcolm Wallace was entirely against this. He made this widely known. He eventually became titled as an outlaw by King Edward, and was on the run from the English along with his oldest son Malcolm. Sir Reginald de Crauford, William’s grandfather, administered the homage to be paid to Edward I and noticed that his son-in-law’s name did not appear on the list that he compiled (Chung). He sent his daughter and grandsons to Cambuskenneth Abbey in Dunipace to live with Sir Malcolm’s younger brother who was a cleric there. This is where William received the remainder of his education. â€Å"His uncle instilled in him moral maxims compactly framed in Latin, and referred frequently to the great classic authors† (McHale). At the monastery he learned the passion a nd love of liberty he so frequently displayed as an adult. By the time William completed his education his father died. Sir Malcolm was murdered by an English knight, named Fenwick. The news of William’s father’s death spread quickly. A few months after, William was branded an outlaw, because he killed a man taunting him of his father’s death. This started whole slew of killings and Wallace’s rebellion against the English. Williams Wallace first appears in history early in 1297.

Chondrichthyes vs Arthropod :: essays papers

Chondrichthyes vs Arthropod The black widow is most easily recognized by the hourglass marking on the underside of its abdomen. When bitten, a neurotoxin is released that can cause dull pain and cramping in muscles, that can be accompanied by sweating and vomiting. Less than 1% of black widow bites result in death. Black widow spiders are usually not aggressive. If disturbed, they will retreat to a corner of their web. These spiders are more aggressive if they are protecting an egg sac. The natural habitat of a black widow is outdoors, under rocks, brush or piles of debris. Indoors, these spiders can usually be found behind furniture, in storage boxes, etc. A black widow's eyes are on top and near the front of its head. They have 8 eyes, arranged in 2 rows of 4 each. Some spiders have better vision than others. For example, hunting spiders have good eyesight at short distances. Their eyesight enables them to form images of their prey and mate. Web-building spiders (the black widow) have poor eyesight. Their eyes are used for detecting changes in light. A black widow's mouth opening is bellow its eyes. It does not have chewing mouth parts, and they eat only liquids. Various appendages around the mouth opening form a short "straw" through which the spider sucks the body fluid of its victim. The black widow can eat some of the solid tissue of its prey by predigesting it. To do this, the spider sprays digestive juices on the tissue. Chelicerae are a pair of appendages that the spider uses to seize and kill its prey. The chelicerae are above the mouth opening and just below the spider's eyes. Each chelicera ends in a hard, hollow, pointed claw, and these claws are the spider's fangs. An opening in the tip of the fang connects with the poison glands. When the black widow stabs an insect with its chelicerae, poison flows into the wound and paralyzes or kills the victim. The fangs of tarantulas point straight down from the head, and the poison glands are in the chelicerae. In the black widow, the fangs point crosswise, and the poison gla nds extend back into the cephalothorax. They also crush thier prey with their chelicerae. Pedipalpi are a pair of appendages that look like small legs. One pedipalp is attached to each side of the spider's mouth, and they form the sides of the mouth.

Liverpool one shopping development Essay

Liverpool’s CBD needed regeneration for a variety of reasons. During WW2, it was bombed heavily, due to it being a major port for resources from the USA. During the 1960s, it was rebuilt too quickly and then fell into disrepair before 2000, when the design and infrastructure was outdated. Many parts of the city, especially the CBD suffered from urban decline, with its population dropping by 50% and 45% of its industry also leaving. In addition, Liverpool faced competition for shopping by nearby Manchester and Chester, as well as out-of-town shopping centres like the Trafford Centre. Therefore, Liverpool’s CBD needed regeneration to be more attractive to consumers, and regain its spot in the top 5 shopping destinations in the UK. Liverpool One, the project to rejuvenate Liverpool’s CBD was completed in 2008. It was opened in phases on 29 May and 1 October 2008, with the final residential lots opening in early 2009. In the same year, Liverpool was named as the European Capital of Culture. Its total cost is approximately ? 1billion, with 42 acres of Liverpool city centre being redeveloped. It includes 3000 parking spaces, 169 stores or services, as well as a 5 acre park, and 500 new apartments. It also contains a 14-screen cinema and a 36-hole adventure golf centre. Shops present include Debenhams, John Lewis, Ted Baker, Waterstones, Starbucks, Topshop and Caffe Nero. These are all mainly comparison, high-order goods which are chain stores. The area is indoor, yet also mainly open-air. It is of a modern design, and is two storeys tall. There are many cafes and food areas, with many benches. There are also electronic maps and information panels across the centre. The pedestrian areas are wide and escalators are available to proceed to the higher floors. There have also been other improvements in the CBD, such as the rejuvenation of the Docks and the introduction of the Merseytram tram line in the CBD. As well as this, many roads and smaller streets in Liverpool have been rejuvenated and rebuilt as part of the redevelopments. Areas such as Princes Dock and the Kings Waterfront have seen heavy redevelopments. These have been to attract more tourists and shoppers to the CBD. The project has overall been successful as of yet, with 83% of consumers thinking that the city centre has improved. 91% of people said they were likely to return to Liverpool, and enjoyed the experience. And now, 40% of the shops in Liverpool One are new to the city, showing the popularity of the area. The previously redeveloped Albert Dock has been receiving an extra 100000 visitors per week, with Liverpool One itself receiving over 120000 visitors in the first day, and 13 million in the first year. It is safe the say the rejuvenation of Liverpool’s CBD has been a success, and that Liverpool One has played a big part in reversing the effect of urban decline.

Compare and Contrast: “All the Years of Her Life”

The thing about synonyms is that even though they though they might seem like they are the same thing, if put in a different context they can mean something completely different. It's interesting how two characters with very similar traits, goals and morals can be so different when placed In different stories, Like when you switch a word for Its supposed â€Å"synonym†. Don Ansell and Mrs†¦ Higgins are two very salary people. Both are traditional, respected, a little on the old-fashioned side and good at being seen as proud and confident.But It's their greatest lining factor, their love for their families and communities, which divides them. Don Ansell is a proud, traditional and very well respected man who has kept up the tradition of planting a tree for every child in the village to the point where a â€Å"gnarled but beautiful† orchard had become a part of his property. And when he is confronted with the request to ask the children to refrain from playing in the orchard, he explains that it is not his choice nor his place, as â€Å"the trees do not belong to him†. To him, nothing is more important than respecting the honor of his family.And to him, every child in that village whether they're related to him or not, is his family. On the other hand, Mrs†¦ Higgins has too close of an association with her son to the point where she sees his problems as hers. She has a proud and confident facade that hides a spirit broken by reasons that are out of her control. She appears to blame herself for her son's inability to keep a steady Job and lead a good life. Like Don Ansell she closely identifies herself with her family that in her case seems to have an ill effect on her lifestyle. â€Å"You've disgraced me again and again,† she toldAlbert as they left the pharmacy. She feels as if her son's shenanigans are her fault and this causes her spirit to crumble. This isn't the first time that her family has failed her, which in her eye s translates Into falling as a mother. So as you can see, both characters have almost Identical personality building blocks. On one hand, Don Ansell has used his love and respect for family to create a bond between him and his village that lead to a tight knit community. And on the other, Mrs†¦ Higgins chose to use her tolerance and pride to create a poisonous relationship teen her son's lifestyle and her happiness.Compare and Contrast: â€Å"All the Years of Her Life† and â€Å"The Gentlemen of ROI en Media† By Leila-Gaylord can be so different when placed in different stories, like when you switch a word for its supposed â€Å"synonym†. Don Ansell and Mrs†¦ Higgins are two very similar people. Both are traditional, confident. But it's their greatest linking factor, their love for their families and failed her, which in her eyes translates into failing as a mother. So as you can see, both characters have almost identical personality building blocks.

How China-Based Vanceinfo Grows Big Faster

CASE: HR-34 DATE: 01/23/09 SCALING: HOW CHINA-BASED VANCEINFO GROWS BIG FAST Our biggest challenge is that the company is growing very fast and we’re not sure that our systems can withstand such growth. 1 ? Chris Chen, Chairman and CEO, VanceInfo Technologies When Chris Chen founded VanceInfo Technologies in Beijing in 1995, the company had 25 employees and one low-end IT services outsourcing project for a U. S. multinational.By August 2008, through a combination of organic growth and acquisitions, VanceInfo employed more than 4,800 people, had numerous Fortune 100 clients, and enjoyed revenues exceeding $80 million over the preceding 12 months. It had attracted big-name venture capital partners and listed shares in 2007 on the New York Stock Exchange. Although small compared to more sophisticated Indian rivals, VanceInfo was well placed to capture an expected explosion in demand for Chinabased offshore IT services. At the same time, rapid growth was straining the firm’ s management personnel, systems, and resources.Headcount was slated to quintuple to 20,000 in four to five years’ time to keep pace with aggressive revenue targets. Old ad-hoc ways of doing things no longer could accommodate current or future needs. To succeed, management had to implement new financial, operational, and internal management systems, especially in the critical area of human resources where VanceInfo faced some of its greatest challenges. These included introducing effective processes for rapidly expanding, training, managing, and retaining its workforce in a fast-growth economy characterized by job hopping and a dearth of management talent.Moreover, in its quest to grow its workforce to 20,000 within five years, move into higher-margin business lines requiring new expertise, and beat out domestic and international rivals, management had to strike a balance between quick gains via acquisitions and potentially slower growth through organic expansion. 1 Interview with Chris Chen, Chairman and CEO, VanceInfo Technologies, August 18, 2008. Subsequent quotations are from the author’s interviews unless otherwise noted.Pamela Yatsko prepared this case under the supervision of Professor Hayagreeva Rao as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright  © 2009 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. To order copies or request permission to reproduce materials, e-mail the Case Writing Office at: [email  protected] stanford. edu or write: Case Writing Office, Stanford Graduate School of Business, 518 Memorial Way, Stanford University, Stanford, CA 94305-5015.No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means –– electronic, mechanical, photocopying, recording, or otherwise –– without t he permission of the Stanford Graduate School of Business. Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 2 THE OFFSHORE IT SERVICES OUTSOURCING INDUSTRY In the offshore IT services outsourcing industry, a company in one country exported IT-related work to a firm in a second country, normally to take advantage of lower labor costs.The industry’s growth took off in the late 1990s when global communications infrastructure became increasingly inexpensive and reliable. With a large pool of low-wage, English speaking, technologically savvy workers at their disposal, Indian companies were preferred suppliers. Valued at $17. 3 billion by 2006, the global offshore IT services industry was expected to grow at a CAGR of 17. 1 percent between 2006 and 2011 compared to a CAGR of 7. 4 percent for the $674 billion global IT services industry (Exhibit 1). 2 Five of the world’s top 15 IT services firms in 2006 hailed from India, thanks to their outsourcing prowess (Exhibit 2). China in 2004 ranked second to India in attractiveness as an offshore location, according to management consulting firm A. T Kearny. 4 Albeit from a low base of $1. 4 billion in 2006, China’s offshore IT services industry was expected to expand even faster than the global industry as a whole, some 38 percent annually between 2006-2011 as U. S. , European, and Japanese clients looked to diversify away from India and gain a foothold for their products in China (Exhibit 3). 5 China also offered 30 percent cost savings over India and more than 700,000 engineering graduates annually. Potential brakes on growth included economic downturn in client markets and concerns that offshore outsourcing was stealing domestic jobs. Compared to their Indian rivals, Chinese vendors primarily offered IT outsourcing services to the China-based operations of multinational firms under the category of R&D Services (RDS). Although technically challenging, these RDS activities typically required less English than higher-end IT outsourcing services, making them a good fit for Chinese engineers, who for historical reasons were weaker in English than their Indian counterparts.RDS included localization and globalization services, in which vendors translated clients’ software products into Chinese and adapted them for the Chinese market. RDS also included software testing and development for clients’ products. In 2007, some 60 percent of international clients hailed from Japan and South Korea, while U. S. firms accounted for 20 percent. 7 Whereas clients generally paid vendors of higher-end, competency-driven IT services on a project basis, R&D services were usually billed on a less risky time and material basis (known as a resource or time model), under which vendors billed clients for their engineers’ time.The more people the service provider put to work for a client, the more revenue it made. Some Chinese vendors had started moving up the value chain to w ork on clients’ internal IT systems, offering Application Development & Maintenance (ADM), Application Testing and Quality Assurance, and Enterprise Solutions. Chinese vendors offering Enterprise Solutions 2 â€Å"Introduction to VanceInfo Technologies,† VanceInfo Technologies, Q2 2008, p. 21. Ibid. , p. 23. 4 Ibid. , p. 26. 5 Ibid. , p. 21 6 Ibid. , p. 25. 7 â€Å"CBR Project Watch-Chinese Outsourcing on the Rise,† Computer Business Review, April 2, 2007, http://www. bronline. com/article_cbr_asp? guid+ED23811B-B0B2-a65B-BD99-78AD9C0A889E, (October 10, 2008). 3 Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 3 might customize and implement a U. S. software firm’s enterprise resource planning (ERP) software at a U. S. manufacturer’s China operations. These higher-end, more knowledge-based IT services (ITS) required expertise in the client’s industry. Despite the doubling of Chinese engineering graduates each year, Chinese vendors had trouble hiring enough qualified resources.Some firms were also setting their sights on scaling the top of the ITS value ladder to offer solutions to clients based on intellectual property created by their own engineers. Indian competitors had joined western counterparts in this more lucrative business. Success in the industry depended largely on management’s ability to attract, hire, train, and retain enough skilled workers to meet growing demand, rapid technological change, evolving industry standards, and changing customer preferences.And with labor costs accounting for roughly two-thirds of Chinese vendors’ total costs, finding ways to keep labor costs down was another key to competitiveness. Vendors made the most money by increasing efficiency and by predicting accurately market demand for specific skill sets and hiring/training for those skill sets. If they predicted incorrectly, they ended up paying for underutilized people. COMPETITIVE LANDSCAPE VanceInfo co mpeted for business with a dozen Chinese players. Much larger Neusoft, which built its business serving the Chinese and Japanese markets, led the domestic pack by a wide margin with total offshore revenues of $145 illion in 2007 (Exhibit 4). 8 VanceInfo, which did $55 million in offshore revenues that year, ranked sixth in the industry domestically. Whereas many local rivals focused on China- and Japan-based clients, VanceInfo developed a niche as a â€Å"go-to† Chinese vendor for U. S. and European multinationals with a significant presence in the Asia/Pacific region. With $49. 5 million in North American/EU revenue, it was the top Chinabased outsourcing vendor in those markets in 2007. That said, ChinaSoft, with $45. million and HiSoft with $42 million, were not far behind (Exhibit 5). 9 Analysts expected the field to dwindle in the future as a need for scale encouraged companies to consolidate. 10 Besides domestic players, VanceInfo competed with large Indian outsourcing f irms, such as Wipro, Infosys, TCS, HCL, Satyam, and Cognizant. New vendors were also emerging in Southeast Asia, Eastern Europe, and Latin America. Some international firms were establishing operations in China, driving up demand for IT service professionals and exacerbating employee turnover at Chinese providers.Although wage costs for skilled staff were lower in China than in India and western countries, these developments were putting pressure on wages in China. VANCEINFO MILESTONES Chris Chen, VanceInfo’s CEO, chairman, and founder, stood out from an early age. Born in 1963, he was the first person from his town in Jiangxi province to attend prestigious Tsinghua University in Beijing. He went on to work for state-owned Great Wall Computer, which in 1991 transferred him to Los Angeles. China’s economic reforms at the time were still in their infancy 8 â€Å"Introduction to VanceInfo Technologies,† op. it. , p. 19. Ibid. , p. 19. 10 â€Å"CBR Project Watch-Ch inese Outsourcing on the Rise,† loc. cit. 9 Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 4 and the experience exposed Chen early to U. S. business practices. Two years later, Great Wall assigned him to help spearhead a major project in China for U. S. technology firm IBM. The Early Days of VanceInfo When IBM in 1995 approached Chen to start a software localization and testing company, he and two cofounders jumped on the opportunity. â€Å"IBM explained to me India’s success in IT service outsourcing,† he said.With IBM as the start up’s first customer, Chen secured a 300,000-yuan loan (US$1:RMB6. 8) from a friend. In 1997, VanceInfo, which originally went by the English name of Worksoft, started doing testing for Microsoft. It opened branches in Shanghai in 1999 and in Japan in 2001, taking on Fuji Xerox as a client. Growth in offshore IT services was steady, but slow. The firm grew to 80 employees in 1998 and 200 in 2001. Lack of access to fi nancing was a problem: China’s state banks did not want to lend to private firms; venture capital was scarce; and the government did not let private companies go public.With company profits its only funding source, VanceInfo, for instance, could not afford in 1997 to pay US$1 million to send 30 engineers to Singapore for training in order to win an important IBM project related to Y2K conversion for the European banking industry. The project instead went to India, Chen recalled. The firm also had trouble attracting talent, since Chinese engineers looked down on IT services outsourcing firms for not creating their own intellectual property. Moreover, the family members whom Chen relied on to help build his business, like most Chinese entrepreneurs those days, lacked professional management know-how.Realizing that VanceInfo’s family-run structure was hindering growth, Chen in 2001 instigated a management shake-up. He asked family members to leave and tried to attract pro fessional talent locally and overseas. He hooked up with David Chen (no relation), who had worked for a number of technology companies in Silicon Valley and was itching to do something entrepreneurial in China. Together, the two Chens hatched an idea to provide high-end IT consulting services for domestic clients along with outsourcing services for overseas clients.They succeeded in attracting financing from local investors, but the new business did not succeed as expected. â€Å"Profits from IT consulting services were terrible,† said David Chen, â€Å"We spent a lot of money and time preaching those ideas [ERP and BPO] to Chinese companies. I think at that time we were too ambitious and too stretched, and that was a hard lesson to learn. As a small start-up we should have stayed very focused. † They sold off the consulting division in 2004 to focus solely on offshore IT services outsourcing. Meanwhile, the business climate for offshore IT services outsourcing in Chin a by 2004 had improved.With China’s economy booming, Fortune 1000 firms started doing more outsourcing in China. VanceInfo gained a number of important international clients, such as PeopleSoft (later bought by Oracle) and Citibank, for whom VanceInfo established offshore development centers (ODCs) in China to do RDS and core banking system application testing respectively. 11 Under the ODC model, VanceInfo operated facilities and project teams dedicated solely to clients. It coveted these arrangements, in which both client and vendor invested in building the ODC, encouraging long-term client-vendor relationships.With clients continually creating new 11 In China, offshore development centers (ODCs), are sometimes referred to as CDCs (China Development Centers) due to political sensitivities over offshoring in client countries. Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 5 software versions and ODC staff building up experience that clients did not want to lose, the work tended to be ongoing. Clients, who were extremely wary of intellectual property theft in China, favored the greater IP protection that ODC arrangements offered. Building Staff VanceInfo’s headcount by the end of 2004 jumped to 650 (Exhibit 6). 2 The industry had started gaining in prestige, making it somewhat easier to attract Chinese engineers. At the same time, VanceInfo was tidying house internally. Besides re-focusing management energy on offshore IT service outsourcing, Chris Chen believed the firm could not succeed without becoming international. To do this, he needed to hire more returnees with greater expertise in western business practices and more fluency in English than he himself possessed. Before hiring more returnees, however, he needed to resolve festering conflict over U.S. versus Chinese business practices between the several returnees already on board and the company’s local management team. He achieved this, he said, by clearly defining the responsibilities of all executives; making each responsible for their business units management, with a direct reporting line to the CEO; and by explaining the value that each side brought to the table. International teams would work on the front lines with international clients, while local teams would focus on dealing with local governments and controlling costs.To attract more returnees, Chen took advantage of new rules in China allowing VanceInfo to become an offshore Cayman Islands company, which in turn entitled it to offer stock options to employees. The re-domiciling also allowed VanceInfo to seek international venture capital. The firm in 2005 received funding from Silicon Valley VC Doll Capital Management (DCM) and local VC Legend Capital, with another Silicon Valley firm, Sequoia Capital, joining a second round in 2006. The VCs helped VanceInfo hone its governance structures, focus systematically on strategic and technical planning, and impose quarterly reviews. Between 2 001 and 2004, we knew about all that, but we only did it in increments,† President David Chen recalled. Rapid Growth With the groundwork thus set, growth took off. Between 2005 and 2007, VanceInfo acquired seven companies and set up or acquired seven new offices in China, three in the U. S. , and one in Japan and Hong Kong (Exhibits 7 and 8). It expanded into higher-end IT outsourcing services, and added a slew of international clients and two new ODCs (Exhibit 9). Net revenues in 2007 reached $62. 7 million and net income $9. 6 million, up from $29. 1 million and $4. 4 million in 2006 respectively (Exhibit 10). 3 Headcount surged to more than 3,600 by the end of that year (Exhibit 6). 14 Although most employees were Chinese nationals, VanceInfo’s workforce boasted 25 nationalities. The company’s leaders at the level of executive vice president and above were in some cases American citizens, but all of Chinese ethnicity. They were trying to attract nonethnic Chin ese managers, such as Technical Marketing Director Ken Schulz, a Caucasian 12 â€Å"Introduction to VanceInfo Technologies,† op. cit. , p. 6. VanceInfo Technologies, Form 20-F, June 27, 2008, p. 4. 14 Ibid. , p. 6. 13 Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 6American, and the Shanghai director of VanceInfo’s Microsoft practice Hajime Hirose, a Japanese American. VanceInfo was particularly proud of its leading position among Chinese vendors in North America and Europe. But with technology and telecommunications clients in those regions accounting for the vast majority of VanceInfo’s revenues in 2007, management knew the company was vulnerable to an economic downturn in those geographies and sectors (Exhibits 11 and 12). Although VanceInfo boasted a large number of international clients, its top two clients, IBM and Microsoft, each accounted for over 10 percent of net revenues. 5 Becoming a Public Company The company in 2007 set its sights on be coming the first pure-play IT services outsourcing firm to list on the New York Stock Exchange. When the offering price for the December 2007 IPO fell far below the original petitioned price, senior management discussed whether or not to call it off. They ultimately decided to forge ahead, deeming more important the company’s goal of raising brand awareness in its most important market. The decision, said David Chen, seemed the right one given that the company â€Å"signed a lot of contracts† following the IPO, which still raised $75 million.Rather than bristle under public scrutiny, management welcomed the discipline it forced. â€Å"We think it is a great way to help us become more process-oriented in terms of financial reporting,† he said. Prior to going public, the firm changed its name from WorkSoft to VanceInfo Technologies. While it did so mainly to avoid trademark conflict with another WorkSoft in Texas, the choice of VanceInfo reflected the company†™s focus on advancing customer and employee potential as well as its desire to shift away from a purely labor-intensive model toward a more innovation-driven future.Company executives in 2008 expected brisk growth to continue, with revenues up some 40 percent annually over the next five years and headcount hitting 20,000. To balance the rapid growth of VanceInfo’s present and future customer base with the internal changes that needed to take place to accommodate that growth, VanceInfo redistributed responsibilities among its leadership in early 2008. David Chen, who had been chief operating officer, became president. In this role, the fluent English speaker became VanceInfo’s public face to the international community and could focus more energy on the booming sales area.In addition to his CFO responsibilities, Sidney Huang was made COO to oversee the company-wide systematization of internal business processes across the firm’s business units (Exhibit 13). GRO WTH STRATEGY VanceInfo’s growth strategy historically and going forward has involved winning new clients and expanding service lines, both organically and through strategic acquisitions. 15 Ibid. , p. 6. Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 7 Service Line Expansion Labor-intensive R&D Services contributed the majority of VanceInfo’s revenues, some 63 percent in 2007 (Exhibits 14 and 15). 16 The handful ofODCs that VanceInfo operated for clients did mostly RDS work. VanceInfo typically started out doing a small RDS project for clients, proving itself on that project, and then winning more technically and/or geographically complex projects from them. Although ITS outsourcing accounted for 37 percent of revenues in 2007, VanceInfo wanted it to make up 50 percent in the future (Exhibits 14 and 15). 17 While profit margins were comparable for RDS and ITS, ITS was a larger market and presented stronger long-term growth potential for the company. In 2008 , VanceInfo’s profit margin hovered around 15 percent? ealthy for China where companies were often willing to do business for less—but not good compared to American and Indian IT services companies, which enjoyed profit margins above 20 percent. â€Å"So our profit margins would be flat,† said Schulz, â€Å"We’d probably be able to maintain rapid growth rates, but just not as rapid as if we were able to move into the IT services space as well. † Plus, the potential client base for RDS was limited to customers who developed their own software products. In ITS, VanceInfo could potentially serve any firm with an IT system.Explaining the firm’s decision in 2007 to invest more in IT services, James Xi, VP, General Industries Solutions, at VanceInfo in Shanghai, said: â€Å"Most of the revenue of Indian companies like Wipro comes from the financial services and manufacturing industries. We had to have a similar business model. † VanceInfo e xpected strong demand for ITS in China as multinationals expanded their presence in China and the Asia-Pacific region and needed to develop their IT systems. Xi believed VanceInfo’s knowledge of the China market gave it a competitive advantage over its larger Indian rivals.VanceInfo hoped to parlay its experience in ITS outsourcing into even higher-end Process Driven Services like Business Process Outsourcing (BPO), in which clients outsourced â€Å"non-core† functions, such as accounting, payroll, and customer service activities (Exhibit 15). Multi-year contracts, sometimes worth hundreds of millions of dollars, made BPO both highly attractive and competitive: Infosys, Wipro, Capgemini, Accenture, and IBM were among the players in BPO that VanceInfo would have to face. 18 The firm eventually planned to follow Indian and western rivals in providing solutions for clients based on its own intellectual property.The first step for VanceInfo in climbing up the ITS value lad der was strengthening its industry knowledge in targeted sectors: telecommunications; banking, financial services, and insurance; manufacturing and retail & distribution; and technology. That meant finding enough skilled talent with domain knowledge in those industries. Because engineers needed to act as consultants as well as developers in ITS outsourcing, they had to understand their client’s business, whether it consisted of supply chains for manufacturing clients or capital markets for financial service firms.Knowledge of business processes in China was low owing to the country’s recent transition from a socialist to a market economy and the continued existence of many state-owned enterprises. As a result, VanceInfo had to tap overseas markets in addition to the domestic 16 â€Å"Introduction to VanceInfo Technologies,† op. cit. , p. 5. Ibid. , p. 5. 18 â€Å"BPO – What Is Business Process Outsourcing? † SOURCINGmag. com, http://www. sourcingma g. com/content/what_is_bpo. asp , September 26, 2008. 17 Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 8 market for ITS talent.Xi, who was one of the executives leading VanceInfo’s charge into ITS outsourcing, for example, spent 15 years in the U. S. working for Lehman Brothers, Bank of New York, Deloitte Consulting, and Bearing Point before joining VanceInfo in 2006. Besides hiring talent, VanceInfo was acquiring domain expertise. In August 2008, for instance, the firm announced the purchase of a 33 percent stake in an ITS outsourcing firm serving multinational financial institutions. It had an option to buy the remaining shares, depending on the acquired company’s performance.COO/CFO Huang explained VanceInfo’s strategy for building teams in targeted sectors: â€Å"You hire the leaders first—people within the industry—and have those people recruit and train more. For most of our critical verticals, we already have a team, so if the project expands, the team can recruit and train more people. The beauty of our business when it comes to business growth is we rarely get big projects up front; we almost always start with small projects. † Once VanceInfo built up sufficient domain knowledge, it would be in a position to develop its own IT solutions and software products for those industries.As of 2008, innovation at VanceInfo was limited to customization of other companies’ software for individual clients. It did not have an internal R&D budget: Instead clients paid for R&D that its engineers performed on their behalf. Investing in R&D was still a challenge for VanceInfo since the engineering hours spent on developing its own intellectual property were not billable. VanceInfo was therefore proceeding cautiously, focusing on its advance into higher-end IT services and strengthening industry knowledge on the grounds that its engineers could not develop their own IP for an industry without that knowledge. At the same time, management would start thinking about how to create its own IP. â€Å"When we build the ITS business, we should keep in mind to put an emphasis on innovation and solutions building. We need to cooperate more with research organizations and try to get some more ideas. And we should also empower our employees to come up with more innovative stuff. We no longer need to be heavily dependent on just the time model,† said David Chen. The company had already hired some highly educated engineers with multinational experience for the ITS business and was encouraging them to keep an eye out for ways to make VanceInfo more innovative.The company eventually hoped to hire a corporate CTO. â€Å"A traditional service company does not have a CTO, but to become very innovative, you need a CTO to be responsible for long-range innovations, not short-term numbers,† he said. Besides winning more technically complex projects, VanceInfo planned to increase revenues by winn ing more global ITS outsourcing projects. As of 2008, it mainly acted as clients’ China or Asia/Pacific (APAC) vendor, but had won a large U. S. manufacturer’s confidence to become its global provider for two major e-business projects.Xi explained: â€Å"We started with one IT services project and then they said, ‘Great job, I will give you five more projects, 10 more projects’ until they made us their exclusive APAC vendor. Then [in July 2008] they invited our team to their headquarters to discuss global projects. We met with 40 to 50 managers including their CIO and Global VP. They said, ‘Great. China can do this, not just India. ’ † This success was particularly sweet given the competition VanceInfo faced in global ITS markets from Infosys, Wipro, and other Indian rivals, which were well-known brand names inScaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 9 U. S. industry circles and had bases there. VanceInfo in comparison enjoyed little U. S. presence or brand name recognition. â€Å"We have sales offices in New York, Silicon Valley, and Seattle, but we don’t have any real engagement team in the U. S. ,† Xi said (Exhibit 8). And while VanceInfo’s Chinese engineers could generally read and write English, they typically could not speak it as well as Indian engineers. They subsequently had difficulty participating effectively in conference calls with clients in the U. S. who often had to explain project requirements over the phone with VanceInfo’s team in China. Xi’s preferred solution was to hire returnees fluent in English and American culture to take senior management positions which required them to handle contacts with U. S. clients. Organic Growth vs. Acquisition By 2008, most of VanceInfo’s growth had been organic, with some selective strategic acquisitions (Exhibit 16). Although it made four acquisitions in 2007, Huang insisted the buying spree did not indicate a change in strategy, pointing out that only one-third of revenue growth came from M&A that year.He explained: â€Å"This is a fragmented industry so M&A should be part of our growth strategy. If there’s a perfect target we’ll jump on it. It’s just that there’s a tendency for CEOs to grow their companies through M&A because it’s easier than organic growth. They tend to ignore the danger in M&A. † M&A was ostensibly easier, he said, because VanceInfo gained a proven team with a manager rather than having to build a team one employee at a time. It also obtained the acquired company’s knowledge and customers, accelerating expansion into desired business lines, lumping revenues, and quickly gaining scale. VanceInfo could also leverage its larger platform to make the acquired company grow faster than it could on its own. The danger of M&A in IT services outsourcing? where a company’s assets were its people? was the possibil ity of acquiring a team that did not integrate well, resulting in the departure of the acquired firm’s core management team and customers. VanceInfo also had to make sure it did deals at a reasonable valuation. In its experience, entrepreneurs often had unrealistic price expectations, making it difficult to close the deal.Huang commented: â€Å"So it’s not that we don’t like M&A, we just fully recognize the challenges. This is such a great industry that even without M&A we could grow. We’ve proved it to the market in the past three quarters. Growth was purely organic. So why should we ruin this great growth story with some imprudent M&A activity? † Whether VanceInfo grew through acquisition or organically, Huang emphasized the importance of finding the â€Å"right people. † Executives stressed â€Å"cultural fit† between the candidate’s top management and VanceInfo’s.They determined cultural fit a number of ways, first s tarting with CEO-to-CEO discussions. When CEO Chris Chen met with the CEO of Beijing-based ITC, for instance, they enjoyed a meeting of the minds. â€Å"I think they have a lot of similar characteristics: very aggressive, very good salesmen, very inspiring, very charming,† said VanceInfo’s Regional Human Resources Director Wendy Xia, who originally worked for the smaller company and deemed its 2007 acquisition and integration into VanceInfo very successful.VanceInfo then structured deals to detect signs that the cultural fit was not as good as it seemed. Huang, for instance, informed acquisition targets that VanceInfo would divide payment into three tranches, paying the first tranche at the time of the purchase and tying the remaining payments to post-merger performance. This focus on contract details was different from Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 10 traditional practices in China, where parties often signed contracts and hashed out the s pecifics later.According to Huang, the method allowed VanceInfo to find out how the candidate really perceived their future business prospects and whether the CEO and top management planned to stick around. â€Å"Sometimes everything seemed good. CEO-to-CEO, they were very happy. But when I lay out terms, the CEO backs off. That sends us a signal that they may just want to get out,† he explained. The less than stellar performance of a small acquisition made in 2005 in a â€Å"handshake type of deal† helped underscore for VanceInfo the importance of cultural fit, CEO commitment, and rigorous vetting.The CEO of the acquired company believed his team’s performance as part of VanceInfo warranted a greater reward than management believed he deserved. He eventually quit. â€Å"He did not integrate into our culture,† Huang said. And although his team stayed, it never performed as well as VanceInfo had hoped. Huang estimated that for every completed acquisition, a chastened VanceInfo vetted 10 companies. To be successful, the acquisition also had to be a win-win situation for both sides. For example, although ITC had some Chinese clients, its biggest customer was a major European telecom company, which accounted for 70 percent of its revenue.The European company wanted to use fewer outsourcing vendors and had voiced concerns to ITC about the firm’s ability to handle growing demand given its small size and lack of access to financing. After VanceInfo’s purchase of ITC, the European company was reassured: It became just one of five top VanceInfo clients and VanceInfo became one of the European company’s key mobile telecom vendors under development. Moreover, the ITC team started winning business from other multinationals in the same industry—business that it never would have won on its own.Former ITC employees were enthusiastic about the purchase. â€Å"I think this is a very good opportunity for me and ITC,† said William Wei, who two months after the acquisition was promoted from running sales and marketing for VanceInfo’s ITC sub-business unit to doing the same for the entire RDS division. VanceInfo’s efforts to integrate its acquisitions through cross-staffing new managers like Wei helped ensure that the initial enthusiasm for the acquisition did not wane and that VanceInfo got the most out of its new mployees. ITC founder Howard Yu, for instance, went from running a 251-person team at ITC in 2007 to heading up VanceInfo’s RDS Mobile business unit, under which the ITC sub-business unit grew to 450 people by mid-2008, and the RDS mobile unit as a whole grew to some 800 employees. Returnee Junbo Liu managed 45 employees for SureKam when VanceInfo bought the international business unit of the IT outsourcing firm in 2005. By 2008, he managed more than 2,000 staff as the head of VanceInfo’s RDS business unit.According to Huang, cross-staffing provided promisin g managers room to develop within a large organization and helped them understand VanceInfo’s culture and management approach. It also broke up the acquired firm’s tight group, mitigating turf-protection and other problems. Chris Chen also made sure to talk on a regular basis after the acquisition to the former CEOs, to understand their thinking and how VanceInfo could support them. VanceInfo was working as well on integrating acquired companies’ financial, accounting, human resource, and other systems with its own.For instance, VanceInfo tracked acquired companies’ monthly financial activity, sending them financial reports and talking to them about their performance. Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 11 MANAGING GROWTH Company executives across the board underscored the importance of skillful management of human resources to VanceInfo’s past and future success. â€Å"We’re a service firm, but if you were to compare us to a manufacturer, our products and parts are our engineers and their skills,† explained Schulz.When trying to figure out how best to manage its growing staff of engineers, VanceInfo’s leaders did not have any real role models in China. The most successful Chinese technology companies were focused on manufacturing and sales & marketing—not services. VanceInfo instead looked to IBM, which organized human resource management into three centers: HR function, HR services, and HR solutions. China’s labor market posed a number of challenges owing to the country’s socialist past, doubledigit growth rates from 2002 to 2007, and potential as the world’s greatest market with more than 1. 4 billion consumers.China’s potential and its growth story inspired foreigners to pour $1. 8 trillion cumulatively in direct foreign investment into China by mid-2008, making it arguably the most competitive place to do business in the world. These factors c reated an â€Å"opportunity extravaganza† for engineering and managerial talent in China. The phenomenon affected attrition, retention, recruitment, and training at VanceInfo and complicated its goal of increasing its workforce to 20,000 in five years. VanceInfo Human Resource Director Kevin Liu commented: â€Å"The employees we recruit are not worried about having to find a job.Skilled labor has high expectations. If we do not provide them attractive conditions, it’s hard for us to retain them. † Xi compared expectations in China to those he encountered in the U. S. , where he recalled working with a 64-year-old database administrator: â€Å"His whole career was engineering. In China you can’t imagine this. When engineers here reach age 30, they want to become a manager or a salesperson. † Recruiting Because headcount determined business volume in the labor-intensive IT outsourcing industry, recruiting at VanceInfo was an extremely important funct ion.Despite China churning out some 5 million university graduates in 2007, of which 700,000 had engineering degrees and 3,000 had PhDs in computer science, â€Å"We see a continued challenge recruiting the best, most suitable employees for openings to keep up with the current pace of growth,† Huang said. 19 Indeed, one VanceInfo business unit offering higher-end IT services outsourcing reported having to put three projects on hold for a key client because it did not have enough qualified staff. Another unit doing RDS work for a major U. S. irm needed to fill 43 job openings and expected any day to have another 50 to fill. Campus Recruiting Campus recruiting accounted for approximately 25 percent of net hiring at VanceInfo, although percentages varied by business unit. VanceInfo’s Shanghai branch, which did higher-end IT services outsourcing, only recruited 10-15 percent of its employees from university because it required more experienced labor. Corporate HR handled c ampus recruiting for the business units. 19 â€Å"Introduction to VanceInfo Technologies,† op. cit. , p. 25.Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 12 Its team in Shanghai, for instance, visited 30 to 60 universities in Eastern China from February to May each year. In some cases, its recruiters first met with project managers in specific business units to find out the skill sets required. If they found suitable candidates at the universities, they asked the candidates to take a test. If the candidates passed, the recruiters referred them to business units to work as interns prior to graduation, after which they ideally became VanceInfo employees.In other cases, recruiters used general criteria to scout for university students to attend special training courses, known as â€Å"VanceInfo University,† during their senior year or immediately after graduation. They sought candidates who were quick learners and not afraid to take on challenges. Candidates who successfully completed VanceInfo University were referred to specific business units. Shanghai branch head Gerry Lu estimated that 60 percent of the branch’s college hires came from the intern program and the remainder from VanceInfo University.The branch probably recruited 100 college graduates through the two programs in 2008, up from 70 to 80 in 2007, and hoped to recruit even more in the future. (See Training for more on VanceInfo University and the intern program. ) In response to complaints from business unit heads, the firm was trying to determine best practices for campus recruiting to improve its integration with business requirements, David Chen said. Recruiting Lateral Hires The majority of new junior engineering staff at VanceInfo were lateral hires, enerally people who had worked in another firm’s IT department for two to three years, ideally not a competitor’s to avoid poaching wars. In response to the job-hopping plaguing the industry and the company’s rising headcount needs, VanceInfo employed a low-efficiency recruitment strategy: Instead of employing 5 recruiters to recruit 30 engineers per month, for instance, it might employ 8 recruiters to hire 40 engineers a month. â€Å"This is more expensive, but it’s more suitable for us,† Liu said.VanceInfo recruited more than 800 entry-level workers in 2007, many via the Internet. Recruiters at the corporate and business unit level mostly tapped Chinese corporate recruiting websites to post job listings and scour resumes, in order to find junior staff with at least a year’s work experience. Take VanceInfo’s localization sub-business unit. It dedicated one recruiter to search sites for suitable resumes according to a set of criteria provided by project managers. The recruiter then called candidates to ask them to come in for a job interview.Some business units compensated employees for referring candidates. Lateral hires, though more experien ced than college graduates, were also more expensive: The starting salary for entry-level staff straight from college was 3,000 yuan per month and at least 4,000 yuan per month for workers with a year’s experience. Junior wages were rising some 6 percent annually. VanceInfo hoped to cut costs by hiring fewer junior people laterally and more from university. Recruiting Mid-Level ManagersAlthough young engineers often wanted to become managers, finding mid-level managers who understood how to manage engineers in a service business in China was a challenge, owing to China’s long manufacturing tradition, said David Chen. VanceInfo’s acquisitions accounted for nearly half of mid-level hires in 2006 and 2007, but company executives expected this Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 13 proportion to decline given the company’s selective acquisition strategy. Other key avenues for recruiting managers were through websites and by grooming int ernally.VanceInfo’s corporate HR department did not yet have a centralized program for grooming managers from its engineering ranks, but rather left promotion and training tasks to individual business units. According to Chen, a key challenge going forward was for VanceInfo to figure out how to identify potential leadership candidates from middle management and turn them into top-line leaders (see Retaining Middle Management under Attrition and Retention for more on management grooming). This was particularly important given the shortage of senior managerial talent in China. It is hard to recruit suitable senior people in China. If you lose them, it’s difficult to back up the position,† Liu commented. VanceInfo senior executives with overseas experience often looked for recruits among other returnees—ones they met while overseas themselves or those referred by the firm’s VC partners. They looked for candidates, either in China or abroad, who felt th ey had reached a ceiling at their multinational corporation (MNC) employer and were interested in doing something more entrepreneurial.Hajime Hirose had considered starting an IT services outsourcing company after working for Microsoft in the U. S. for eight years, when the head of VanceInfo’s Microsoft practice, Jeff Wu, offered him the chance to run the Shanghai region’s practice. Hirose, who joined VanceInfo in January 2008, commented: â€Å"Microsoft is a great company, but it’s already established. This company is growing. They don’t have many processes, which is bad, but it excites me because that means we have a lot of room to improve.I figured that with my Microsoft and international experience I could make a difference here. † General Industries Solutions VP Xi estimated that for every 50 resumes he received, only two returnees were a match, of whom only one accepted. Not only did candidates need to have the right skills, want to return to China, and wish to join the ITS outsourcing industry, but their families had to want to move to China as well, which was tricky if their children were in school in North America and did not speak Chinese. Moreover, they had to have realistic compensation expectations.Xi recalled how one candidate seemed perfect until he demanded a salary similar to what he earned in North America: US$150,000 a year. When Xi could not meet it, the candidate requested an unrealistic number of stock options in the then pre-IPO company. â€Å"Everything has to be perfect,† Xi lamented. As a result, returnees accounted for only 5 percent of his staff. Given how critical a strong team of senior managers was to VanceInfo’s success, a question facing the company was whether to offer more competitive pay packages to lure high-level managers from multinational corporations.If so, it would need to reduce costs elsewhere. Its present cost control strategy emphasized opportunity over salary when r ecruiting/retaining all levels of workers. One sub-business unit head doing RDS business proposed that VanceInfo deflect the costs of offering MNC-comparable wages to senior employees by putting one senior manager in charge of many new graduates, thereby reducing the need for as many mid-level managers. In mid-2008, less than 10 percent of staff were senior, 30 percent middle, and 60 percent junior. â€Å"If we had more senior people, we could grow a lot faster,† he commented.Hiring Outside vs. Growth from Within The company’s leadership was also mulling over the best ratio of external professionals to homegrown talent for VanceInfo management. Despite the firm’s efforts to attract external Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 14 professionals, most managers to date either came up through the ranks or its acquisitions. Those who came through acquisitions were normally entrepreneurs themselves, able to fit easily into VanceInfo’s coll egial culture. â€Å"Our competitors hire professionals.Within our company, except for the finance organization, we don’t have a lot of professionals in the business operations,† David Chen explained. But VanceInfo’s goal was to become a world-class company, he said, and it could not achieve that without hiring more professionals. Homegrown talent often did not have the breadth of experience and skill sets necessary to manage global activities at a world-class level, like VanceInfo’s global sales organization. On the other hand, professionals from multinational corporations sometimes had trouble working effectively in a fast-growing start-up. For one, they ere used to a large support infrastructure to help them perform their jobs, which did not and could not exist at VanceInfo. This meant they had to do more on their own and that the solutions to certain problems at their former employer might not be suitable for VanceInfo. â€Å"If we copied everything their multinational had today, we’d lose money,† Chen said. External professionals often came with unrealistic expectations as well as large egos that clashed with VanceInfo’s collegial culture. Plus, hiring them in large numbers would be discouraging to homegrown staff, leading to greater attrition. We want to be a world-class company. At the same time, we’re very entrepreneurial. How then do we strike the right balance between a professionally run organization and our passion and entrepreneurial spirit? † Chen asked. He believed the ideal scenario was to groom 70-80 percent of senior managers internally and to hire the rest externally to keep management’s thinking fresh. To reach this ratio, VanceInfo would need to beef up its programs for developing homegrown talent (see Retaining Middle Management under Attrition and Retention for more on management grooming). Current vs. Future Skill NeedsManagement also had to strike the right balance be tween current business needs and its goal of expanding into increasingly complex business lines that required employees with more advanced skills than those currently in place. To do so, VanceInfo wanted to become less dependent on the time model that typified the RDS business in favor of the competency-driven model practiced by more sophisticated Indian and western IT service companies. â€Å"I think we need to look at the marketplace two years from today, determine the skill set required and then build those competencies,† Chen explained.That said, the company at present did not plan to make big investments in building these advanced skill sets without clear indication of business demand. Instead, it planned to â€Å"invest gradually with an eye always on demand,† said Huang. Central vs. Branch Office Recruiting Management was also trying to determine how much to centralize its recruiting efforts. The Shanghai branch’s experience underscored the complexities o f finding the right balance at a quickly growing operation. Recruiting at the ranch before 2006 was left to individual business units, since each had different HR requirements owing to their clients’ different technical needs. The branch had maybe 100 employees and two to three business units, with unit managers handling recruiting. The downside of decentralization was that VanceInfo had no systematic way to track recruiter performance or offer recruiters a career path toward becoming a well-rounded HR professional. Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 15 In 2006, the branch, which had grown to almost 500 employees, centralized recruiting.Centralization worked at that relatively small size, said Shanghai Branch head Gerry Lu: The account manager in each business unit could easily communicate the unit’s human resource needs to four or five recruiters based in Shanghai’s corporate HR department, who in turn could respond effectively to overni ght changes in clients’ requirements. By 2007, however, the branch had mushroomed to over 1,000 employees spread across five business units with multiple account managers handling an ever-growing number of projects.The centralized recruitment team could not always react quickly enough to satisfy clients, who expected seamless communication and understanding. Lu reorganized recruiting again, decentralizing it somewhat. Rather then clump all recruiters together in the corporate HR department, he put two to three recruiters back in each business unit to liaise between account managers and the centralized recruiting team. The four to five member centralized team hired the unit-level recruiters (with unit head approval), performed their performance evaluations, and provided them a career track.According to David Chen, management had not yet settled on the proper level of centralization for the company as a whole. Attrition and Retention VanceInfo’s attrition rate hovered ar ound 25 percent annually, which was average for the industry. Attrition varied, however, according to employee level. For project managers and above, who made up roughly 15 percent of the workforce and received stock-based compensation, the attrition rate rested in the single digits, Huang said. For the remainder, junior employees generally experienced the highest attrition rates, but numbers varied by business line.Attrition rates were below average in VanceInfo’s ODCs, mainly because employees felt they had a career ladder to climb. Attrition rates were higher in sub-business units focused on testing and lower-level activities, where little technical level differentiation existed. Many junior employees subsequently chose to leave after three years. Some went to work for VanceInfo’s multinational clients, which normally offered higher salaries, more prestige, and more professional training programs. â€Å"People leaving the company in some cases thought our training program was not comprehensive enough,† said Liu.Attrition rates were not formal criteria by which managers were evaluated, but according to company executives, managers knew they were very important. Retaining Senior Management VanceInfo executives attributed the company’s success thus far to stable and collaborative top management. They credited this situation to Chris Chen’s open-mindedness and his willingness to give managers enough opportunity and leeway to lead their teams. â€Å"If you look at our competitors, if there are any issues at this stage it’s internal management issues, meaning that people can’t work together.And when you have a defection at management level, it’s very disruptive,† Huang said. This fact, and the scarcity of senior managers in China, made retaining senior managers critical. Attracting and retaining senior managers, who at VanceInfo were aged 35 to 45, was tricky because the company could not afford to pa y as much as multinational corporations in China— let alone as much as returnees earned in North America. Shanghai Branch head Lu estimated that Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 16VanceInfo paid senior employees between 12,000 yuan and 30,000 yuan per month, making it competitive with local rivals. It then had to contend with 10-15 percent annual wage inflation to keep up. Tony Zhang, for instance, who joined VanceInfo in 2005, said he earned only oneeighth the amount he had made in the U. S. working in the e-commerce department of a major American insurance provider. Why then did someone like Zhang not jump to a higher-paying position at an MNC? One reason was that VanceInfo sweetened its compensation packages for the top 15 percent of its employees with stock options.It also often supported returnees with trip allowances to visit families in North America, with help renting an apartment in China, and through assistance with visa issues and other pe rsonal matters. Most important, according to executives, was that VanceInfo used its high-growth status to provide senior staff with plenty of opportunities to continue developing their careers— opportunities that would be harder to come by at an MNC. These included giving senior managers autonomy to run their own business units and making them responsible for their unit’s profit and loss, which was uncommon in China. This company offers an open platform. So even though a returnee like me has no affiliation with its founders, I am able to utilize this platform to run my own show,† commented Executive VP Jeff Wu, who headed up VanceInfo’s Enterprise Solutions Practice and its Microsoft practice, overseeing some 900 employees, approximately 850 more than when he started working for VanceInfo in 2004. He did not believe he would have had the same opportunity to grow had he taken a position with an MNC upon his return to China after almost 10 years in the Unit ed States. Retaining Middle ManagementVanceInfo also sought to retain middle managers, normally aged 27 to 35, with opportunities for career development rather than increases in wages, which were comparable to local competitors’ and ranged from 7,000 yuan to 15,000 yuan, growing at an annual rate of 10 percent. The firm’s rapid growth allowed management to offer mid-level employees ever-greater responsibilities. The team they managed might grow as the client needed more work, or VanceInfo might win a new project or new client, in which case a superior could promote a manager to take on more responsibility there.VanceInfo’s corporate HR department did not yet have a centralized program for grooming managers from engineering ranks, but rather left promotion and training tasks to individual business units, whose programs differed. Promotions and movement between business units was also organized among business units, rather than centrally through Corporate HR. Like wise, business units had different systems for evaluating and rewarding employees. Corporate HR simply offered general guidelines.The Microsoft business unit pioneered a differentiated title system, under which its employees received a VanceInfo title in addition to their client-supplied title. For example, employees could be a ‘software test engineer’ as far as Microsoft was concerned, yet also be classified as an ‘associate manager’ internally at VanceInfo. According to Wu, the system, which was devised internally, worked well to motivate and develop the unit’s employees. â€Å"We have throughout the years promoted so many engineers to important positions—development leads, technical leads— and many of them became associate managers and managers.By leveraging a good title system we’ve been able to provide a clear pathway to get them moving up,† he said. Corporate HR tried Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 17 to implement a similar company-wide program in 2007, but the project stalled when the newly hired HR executive championing it left the company. The Microsoft business unit also introduced a â€Å"two-track† career path for engineers to overcome the problem of losing talented engineers to management—a common approach at high-tech companies. In China, people perceived a promotion into management as the sign of career advancement and the route to higher pay.They therefore did not want to remain engineers even if that was where their talent lay. The Microsoft business unit offered engineers a chance to stay on the technical path, receiving promotions, titles, and pay equal to those on the management path. â€Å"We just have to communicate to people that they do not need to be a manager to move up the ladder,† said Hirose. As part of this program, the Microsoft unit offered stock options to 15-20 percent of engineers, in addition to the company-wide prac tice of offering them to executives at the director level and above.For Wu, steps like these were necessary to empower employees and middle managers in particular to take initiative and come up with solutions rather than relying on business unit heads, who had an increasing amount on their plates as a result of VanceInfo’s rapid growth. In addition to overseeing hundreds of projects for MNC clients, business unit directors had to meet P&L numbers to satisfy Wall Street, win more business, and hire and retain the right staff. â€Å"We need to have infrastructure in place so that normal people can do a fabulous job,† Wu commented.Rather than groom from within, business units that did ITS work preferred to hire senior managers externally. But Xi realized that doing so exclusively was demoralizing for internal staff, who needed promotion opportunities to stay motivated. â€Å"That’s the challenge I’m facing right now,† he said. He recently hired a nati ve English speaker to train talented engineers, promising them a promotion if they improved their English in six months. Retaining Junior Employees Retaining junior employees was tricky in a fast-growth economy like China’s.According to Liu, young workers had high expectations for quick promotions and salary hikes. With multinationals again offering higher salaries than VanceInfo could afford, the company emphasized opportunity and training over wages. Junior employees seemed satisfied with their VanceInfo salaries compared to those of peers in the same industry, but they stressed the importance of opportunity as part of their job satisfaction and their belief that VanceInfo, as a fast-growing company in a fast-growing industry, offered them that opportunity. If it did not, said one, â€Å"I will look for another job. VanceInfo found that retention was generally better among junior employees who attended VanceInfo University and/or worked as interns at VanceInfo before being hired full-time. That said, VanceInfo expected worse retention rates for junior staff, as employees unsuited for promotion or in low-end, non career-track jobs inevitably decided to pursue opportunities elsewhere. â€Å"If they leave after three, four, or five years, it’s okay,† said Lu. General Industries Solutions head Xi estimated that his business unit focused on providing a clear career path for its top 20 percent of employees only.Scaling: How China-Based VanceInfo Grows Big Fast HR-34 p. 18 Training VanceInfo’s focus on keeping labor costs down, and its perpetual need for bodies to fill large numbers of entry-level jobs, made hiring a greater proportion of VanceInfo engineers straight from university an important goal, particularly if the firm wanted to expand its workforce to 20,000 in five years. However, fresh engineering graduates in China were not well prepared to jump into VanceInfo projects; their university training was very theoretical.Recent gr aduate He Xiangao explained: â€Å"We always learned a lot of theory, but lacked practical experience. † Both to overcome those deficiencies and as a recruiting tool, VanceInfo’s corporate HR department designed a co-op program with 14 universities in China. These were not the country’s most prestigious colleges, but rather quality tier-two schools that graduated smart students willing to consider employment at a relatively unknown Chinese company rather than at multinational firms paying better wages. VanceInfo University VanceInfo’s co-op program had two components.The first was called â€Å"VanceInfo University,† in which students selected by VanceInfo recruiters attended the firm’s training classes for one to three months. At present, VanceInfo University was a more virtual concept than a physical one, with courses taking place at VanceInfo offices in Beijing, Shanghai, Wuhan, Dalian, Xi’an and a new dedicated training center in T ianjin. VanceInfo’s Beijing headquarters used to have a separate area for the classes, but the company needed that space to accommodate business growth and so courses there, as of August 2008, took place in conference rooms.While at VanceInfo University, students attended classes in common software development languages like C++, basic software testing, and other technical areas, plus English. VanceInfo then tested the students and recommended them to different business units, providing the units information on the training they received and their English language level. Business units then sent project managers to interview the candidates. The project manager might choose, say, three out of eight candidates. Those who weren’t selected received more training.