Strategic Human Resource Management: a Paradigm Shift for Achieving

International Bulletin of Business Administration ISSN: 1451-243X Issue 7 (2010)  © EuroJournals, Inc. 2010 http://www. eurojournals. com Strategic Human Resource Management (SHRM): A Paradigm Shift for Achieving Sustained Competitive Advantage in Organization Benjamin James Inyang Department of Business Management, University of Calabar P. M. B. 1115 Calabar, Nigeria E-mail: benji1955. [email  protected] co. uk Tel: +234 8033773403 Abstract The human resource of an organization offered the potential synergy for sustained competitive advantage, when properly deployed, maintained and utilized.From the onset, the traditional HRM, the formal system for managing people in organization, concerned itself essentially with transactional and administrative support services. The emergence of SHRM, concerned with the relationship between HRM and strategic management of the organization, was a paradigm shift. The strategic business partner model emphasized the proper integration or fit of HR practices with the business strategies of the organization, to generate a competitive advantage.To perform successfully, the roles of business partner and change agent under SHRM, the HR practitioner must be highly knowledgeable, multiskilled and acquire core competencies like business knowledge, strategic visioning and global operating skills, credibility and integrity, internal consulting skills, among others. Keywords: Strategic human resource management, human resource management, competitive advantage, fit, integration, business strategy, strategic business partner. 1. IntroductionAn organization requires the utilization of a complex array of resources to grow, survive and achieve the ultimate mission or objectives that informed its existence or creation. The mobilization and deployment of these resources – human, financial and material – in the right resource-mix, gives the organization leverage toward the desired end. Of these resources, the human resource is t he most potent and central, contributing significantly to corporate bottom line and competitiveness.The organization therefore gains sustained competitive advantage through people, the organization workforce. Competitive advantage is simply defined as anything that gives an organization an edge over the competitors in its market. According to Porter (1985), the unique talents among employees, including flexibility, innovation, superior performance, high productivity and personal customer service are ways employees provide a critical ingredient in developing a firm’s competitive position.Similarly, Chiavenato (2001) notes that employees are purveyors of activities and knowledge whose most important contributions in the organization are their intelligence and individual talents. There is a 23 growing consensus that effective management of human capital is critical to an organization’s success (Barney & Wright, 1998; Jackson, Hitt & DeNisi, 2003; Akhtar, Ding & Ge, 2008). Managing the human resources in the organization is the traditional responsibility of the personnel manager, a precursor to human resource management (HRM).Some scholars however equate HRM with personnel management, concerned with providing staff support in the organization (e. g. Guest, 1989). Other scholars consider HRM as a natural development of personnel management practices in the face of changing economic and business environment (Armstrong, 1989 & 2004; and Fajana, 2002). The people-management discipline is undergoing continuous metamorphosis, with the recent emergence of strategic human resource management (SHRM) in organization and management literature.In a recent review covering 30 years, Lengnick-Hall, Lengnick-Hall, Andrade & Drake (2009) present an evolutionary and chronological perspective on the development of SHRM. The authors identify the following seven themes which influenced the development of the field of SHRM: (1) explaining contingency perspective and fit, (2) shifting from a focus on managing people to creating strategic contributions, (3) elaborating HR system components and structure, (4) expanding the scope of SHRM, (5) achieving HR implementation and execution, (6) measuring outcomes of SHRM, and (7) evaluating methodological issues.SHRM is evolving as a new approach to the management of people, and specifically focusing on integrating the human capital to business strategy to enhance organizational competitiveness. According to Aswathappa (2004:39), â€Å"the advent of SHRM has brought forward the issues of linkages between the employer-employee relationships and wider organizational strategies and corporate objectives†. â€Å"The field of strategic human resources management has enjoyed a remarkable ascendancy during the past two decades, as both an academic literature and focus on management practice† (Becker & Huselid, 2006:898).The transition from the older HR practice with focus on staff matter to a subject of re-birth which focuses on linking people as organizational asset with the business strategy of the firm (Niehaus, 1995) means that the HR professional is performing a new and more challenging responsibility that requires new competencies and skills. He has to think outside the traditional organizational box of HR – and develop a radically different approach to manage the human capital and create a fit between HR architecture and business strategy formulation and implementation in the firm.The HR architecture, according to (Becker & Huselid, 2006:899) â€Å"is composed of the systems, practices, competencies, and employee performance behaviors that reflect the development and management of the firm’s strategic human capital†. This paper discusses the emergence of SHRM as a paradigm shift and the pertinent issues raised or implied in this transition. It further presents the resource-based view (RBV) of integrating SHRM with business strategy.The organizational im plications of the strategic business partner model for corporate competitiveness, and the strategic skills and core competencies required of the HR practitioner are finally discussed. 2. Literature Review: Traditional HRM versus SHRM In their seminal thesis on the development of HR function, Jamrog & Overholt (2004:1) declare that â€Å"over the past 100 years the HRM professional has been continuously evolving and changing, adding more and different responsibilities†.The authors’ account shows that the HRM function has evolved through many stages, from the medieval time through the industrial revolution, the scientific management, the human relations movement, etc. , to the present strategic business partner model. For most of its history, HR has mainly focused on the administrative aspects of HRM, except recently, with the strident call for HRM to become a strategic business partner (Ulrich, 1997; Brockbank 1999; Lawler III & Mohrman, 2000; and Lawler III & Mohrman, 2003). 24Some scholars therefore, are wont to differentiate between the traditional HRM and SHRM. Traditional HRM is transactional in nature, concerned essentially with providing administrative support in terms of staffing, recruitment, compensation and benefits (Rowden, 1999; and Wei, 2006). Ulrich (1997) argues that the HR function has been an administrative function headed by personnel whose roles are essentially focused on cost control and administrative activities. Managing people is therefore the responsibility of HR manager.HRM is then a â€Å"formal system for the management of people within the organization† (Bateman & Zeithaml, 1993:346). For Inyang (2001:8), HRM is simply â€Å"organization’s activities, which are directed at attracting, developing and maintaining an effective workforce†. The many transactional or administrative activities involved in managing the human resources of an organization – training and development, staff motivation, compensation, staff commitment, quality performance, etc. are meant to be carried out effectively to influence the achievement of corporate objectives (Inynag, 2008a).The paradigm shift from the administrative aspects of HRM led to the emergence of SHRM as a new generation of value-added core responsibility or function of HRM. The emphasis of SHRM is that of a strategic business partner. It now supports the company’s competitive advantage by providing high quality people and by helping business managers strategically plan the functions of the human capital within the organizations (Rowden, 1999). SHRM strongly beliefs that critical organizational capabilities or performance behaviors are sine qua non, for the attainment of a particular business strategy or goal.Unlike the traditional HRM which covers a wide range of employment practices, including recruitment, selection, performance appraisal, training and development and administration of compensation and benefits, SHRM refl ects a more flexible arrangement and utilization of human resources to achieve organizational goals, and accordingly helps organizations gain competitive advantage (Wei, 2006). For Becker & Huselid (2006:899) the traditional HRM differs from SHRM in two important ways: â€Å"First, SHRM focuses on organizational performance rather than individual performance.Second, it also emphasizes the role of HR management systems as solutions to business problems (including positive and negative complementarities) rather than individual HR management practices in isolation†. This therefore reflects a shift of emphasis from operating efficiency of individual employees to managerial efficiency of the entire organization. The distinction presented in this review shows SHRM as a more systematic approach, which extends beyond the management of human capital and people – management activity to involve the integration of human factors to strategic business goals of the organization.The s trategic business partner focus of SHRM helps to add value to the organization – by contributing to the bottom line and competitive advantage. Despite its current popularity among academics and HR professionals, SHRM is still experiencing problems of status identity and precise definition (McMahan, Virick & Wright, 1999: 101). Dyer & Kochan (1994) note the problem of status identity as affecting the development of a systematic theory of SHRM.Even the definitions of SHRM vary in emphasis among scholars: Wright & McMahan (1992); and Lundy (1994) emphasize the elements of HR planning; Hendry & Petigrew (1990, 1992) stress the management of organizational change; Watson (1986) defines it as coordination mechanism of the organization; Beer (1984), Guest (1987), Dyer & Holders (1988), Lengnick-Hall & Lengnick-Hall (1990); Schuler, Dowling & De Cieri (1993), Truss & Gratton (1994); Ulrich (1997), Boxall (1999); Brand & Bax (2002) highlight HR policies as a tool for business strategy .Despite the differences in definition, a common thread that is emerging in the literature is that which stresses the relationship between business strategy and HR practices as the core of SHRM. What has also emerged from the literature is the broad agreement of the basic function of SHRM, which is concerned with designing and implementing a set of internally consistent policies and practices that ensure the human capital of an organization contributes to the achievement of its business objectives (Schuler & MacMillan, 1984), Baird & Meshoulam, 1988; Jackson & Schuler, 1995).On his part, Armstrong (2004:105) states that SHRM is essentially â€Å"concerned with the relationship between human resource management and strategic management of the firm†. Following from this, he defines 25 SHRM as â€Å"the overall direction the organization wishes to pursue in order to achieve its goals through people† (p. 105). SHRM is a strategic approach to manage human resource of an org anization. It concerns all organizational ctivities which affect the behavior of individuals in their effort to formulate and implement planned strategies that will help organization achieve the business objectives. According to the Gomez-Mejia, Balking, & Cardy (1995), SHRM implies a managerial orientation that ensures that human resources are employed in a manner conducive to the achievement of organizational goals and missions. SHRM must give careful consideration to the organizational import of all human resource decisions and to their links with the external environment and the organization’s competitive strategy (Beaumont, 1993).In their own contribution, Boxall & Purcell (2003) argue that SHRM is concerned with explaining how HRM influences organizational performance. It is obvious from this point that SHRM is based on the principles incorporating, the concept of strategy. Therefore, if HRM is a coherent approach to the management of people, then SHRM implies that this approach is done on a planned way that integrates organizational goals with policies and action sequences (CIPD, 2007). 3. SHRM and Business Strategy Fit or IntegrationThe new business context, which is characterized by increasing globalization, greater organizational complexity, market competitiveness and cutting-edge information communication technology, is prompting organization executives to take more interest in the deployment and utilization of their human resources. The HR function is therefore playing a far more strategic role in the business or corporate strategic planning process in the organization. The emergence of SHRM is increasingly adding more value to the organization. Thus, SHRM is based on HRM principles, which integrate the concept of business strategy.Strategy here refers to â€Å"the pattern of organizational moves and managerial techniques or approaches used to attain organization objectives and to pursue the organization’s mission† (Inyang, 200 4:20). Strategy is also considered as â€Å"the process by which the basic mission and objectives of the organization are set, and the process by which the organization uses its resources to achieve these objectives† (Tichy, Fombrun, & Devanna, 1982:47). Organizations must choose and follow the diverse approaches in order to achieve success or gain competitive advantage.Scholarly advocacy as already noted has consistently emphasized the need for HRM to become a strategic business partner. That means that SHRM has to be integrated with business strategy. This is also the issue of fit. Integration or fit refers to the involvement of SHRM in the formulation and implementation of organizational strategies and the alignment of SHRM with the strategic needs of an organization (e. g. Buyens & De Vos 1999; Schuler & Jackson, 1999). To become strategic business partner means that the HR managers should participate in strategic decision-making alongside other senior managers in the org anization.This, according to Ulrich (1997), would provide greater opportunity to align HR goals, strategies, philosophies and practices with corporate objectives and the implementation of business strategies. The involvement of HR managers would be to become members of senior or top management in the organization (Budhwar, 2000; Teo, 2000). Membership at this level in the organizational hierarchy offers opportunity for SHRM to represent its concerns and influence the direction of business strategy from the onset of the decision making process.This involvement from the crafting stage of strategy decision-making will enhance commitment on the part of the HR managers during implementation stage of such business strategy. Inyang (2008b) argues for the co-optation of the HR manager to business policy formulation as a business partner, to help drive policy implementation to success and attain competitive advantage. There is research evidence that integration tends to result in enhanced co mpetence, congruence and cost effectiveness (Black & Boal, 1994; Teece, Pisano & Shuen, 1997). 6 There is increasing attention being focused on SHRM discourse about congruence or fit† or integration between HR practice and business strategy (Baird & Meshoulam, 1988; Wright & McMahan, 1992; and Wei, 2006). The underlying assertion in the fit analyses is that the employment of effective HR practices and the design of an HR system compatible with the firm strategy are sine qua non for the successful implementation of the organization’s business strategies (Lengnick-Hall & Lengnick-Hall, 1988).Fit is therefore a fundamental feature of SHRM, which connotes the utilization of human resources to enhance the attainment of organizational goals. According to Wright & McMahan (1992:298), fit means â€Å"†¦ the pattern of planned human resource deployment and activities to enable a firm to achieve its goal†. Scholars of SHRM identify two kinds of fit: horizontal fit and vertical fit. Horizontal fit refers to the congruence among various HRM practices (Baird & Meshoulam, 1998), and vertical fit refers to the alignment of HRM practice with strategic management process of the firm (Schuler & Jackson, 1987).Generally, vertical fit or integration is necessary to provide congruence between business and human resource strategy so that the latter supports the accomplishment of the former, and helps to define it. Horizontal fit or integration with other aspects of the HR strategy is required so that its different elements fit together. The aim is to achieve a coherent approach to managing human resources, in a manner in which the various practices are mutually supportive.Both types of fit contribute significantly to the competitiveness of an organization and it is important for organization to arrange a variety of HR practices in a systematic way. According to Pfeffer (1994), a set of properly arranged HR practices can have a positive impact on a firm perf ormance when they are properly implemented. Creating a proper fit or integration is the key issue in SHRM and it is this congruence in organization’s HR practices that impact on the bottom line. Figure 1 below illustrates these concepts and their impact on the organization.Figure 1: Two Types of Fit Vertical: (Alignment of HR practices with business strategy) SHRM Integration/Fit Horizontal: (Congruence among HR practices) †¢ †¢ †¢ Bottom Line Competitiveness Performance SHRM is essentially about integration – integrating HR practices with the business strategy of the organization. Both the vertical and horizontal fits create the congruence between business strategy and human resource policies which jointly enhance the attainment of bottom line, competitiveness and performance.Thus SHRM helps the organization to achieve strategic fit with its market environment. One of the key policy goals of SHRM according to Guest (1989) is to ensure that HR is integra ted into strategic planning so that HRM policies cohere both across policy areas and across hierarchies and HRM practices are used by line managers as part of their everyday work. Walker (1992) points out that the HR strategies are functional strategies like marketing, production or IT strategies, but they are different in the sense that they are intertwined with all other strategies in the organization.Managing the human resource is a very unique function in the organization, and the human capital provides the 27 resources for implementing all business strategies. Therefore, HR planning should be an integral part of all other strategy formulations in the organization. 4. SHRM and the Resource Based View (RBV) of the Firm The RBV of the firm is based on the ideas of Penrose (1959), who sees the firm as â€Å"an administrative organization and a collection of productive resources†. A firm that obtains and develops the human resource can achieve competitive advantage (Hamel & P rahalad (1989).Other researchers have similarly advocated the need to align HR systems with the firm’s strategy to create competitive advantage (Barney, 1986, 1991; and Wright & McMahan, 1992). The underlying assumption of the RBV of the firm is resource heterogeneity. This means that the resources that different firms own are unlikely to be identical. Accordingly, these resources owned by the firm that help it achieve sustained competitive advantage must meet four requirements. The resources must be (i) valuable, (2) rare, (3) inimitable, and (4) non-substitutable.This follows therefore that if the resources a firm employs cannot be easily imitated by another firm or substituted by similar resources another firm employs the firm can easily take advantage of this to gain competitiveness not simultaneously pursued by other firms. Snell, Youndt & Wright (1996) argue that human resources meet these four requirements. Others have equally shown that the linkage of organizational r esources and firm strategy cannot be easily identified and imitated by other firms due to the social complexity and causal ambiguity (Barney, 1991, Boxall, 1998).Thus, the integration of human resource practices and policies with the appropriate strategy can generate a sustained competitive advantage for the firm (Wei, 2006). The firm’s HR policies, practices and strategies are a unique blend of process, procedures, personalities, styles, capabilities and organizational culture, which are difficult to imitate. As Purcell, Kinnie, Hutchinson, Rayton & Swart (2003) point out, the values and HR policies of an organization constitute important non-imitable resources, as long as they are enacted and implemented effectively.One of the most important factors of competitive advantage is the ability to differentiate what a business supplies to its customers from what is supplied by its competitors. Purcell et al (2003) maintain that such differentiation can be achieved by having HR st rategies, policies and practices which ensure that: 1. The firm has higher quality people than its competitors. 2. The unique intellectual capital possessed by the business is developed and nurtured. 3. Organizational learning is encouraged, and 4.Organizational specific values and a culture exist that ‘bind the organization together [and] give it focus’. The RBV of the firm is concerned with developing strategic capacity, making adequate investment in the organization’s human capital to add more value to the firm. According to Armstrong (2004:108), the aim of RBV â€Å"is to improve resource capability – achieving strategic fit between resources and opportunities, and obtaining added value from the effective deployment of resources†.It is generally acknowledged that the human resource is an organizational asset, and when it is adequately trained and effectively deployed can contribute immensely to the bottom line. Aligning the HR systems with busin ess strategy is therefore a sine qua non for organizational competitiveness. Business strategies designed to achieve organizational objectives are not likely to succeed when HRM is not involved in both strategy formulation and implementation. Organizations must create the conducive environment for integrating HRM with business strategy since the HR supplies the energies for driving organization strategies.Wei (2006) notes that the HR system and practices are crucial in facilitating the achievement of business strategy through the management of people. Several studies have shown that a firm’s HR creates value in the organization in different ways. The impact of SHRM on organizational performance is quite obvious. SHRM has positive effect on business performance (Martell & Carrol, 1995); SHRM can help an organization to allocate its human 28 resources more effectively, promote operating efficiency, and encourage creativity and innovation (Dyer, 1983; Walker, 1980); it enables t he firm ope more effectively with the challenges of environmental change (Cook & Ferris, 1986; Tichy & Barnett, 1985); encourages a more proactive management style, transmits organizational goals clearly and motivates greater involvement by line managers in HRM concerns (Gomez-Mejia, Balking & Cardy, 1995); enhances organizational morale, financial performance, and overall organizational performance (Huang, 1998; Anderson, Cooper & Zhu, 2007); brings about commitment, customer satisfaction and innovation (Pfeffer, 1994; Chew & Chong, 1999; Bowen, Galang & Pillai, 2000; Wright & Kehoe, 2008); enhances market value per employee (Becker & Huselid, 1998); creates value for customers and stakeholders (Ramlall, 2006); and brings about return on equity (Delery & Doty, 1996).Garavan (2007:11) sees strategic human resource development as contributing â€Å"to the creation of firm-specific knowledge and skill when it is aligned with the strategic goals of the organization†. Increased p roductivity has also been noted in small enterprises that align or integrate their formal and informal HR practices and strategies with the business strategies of the organization (Singh & Vohra, 2005). 5. The Roles of SHRM Professional The HR professional has more challenging roles to perform under SHRM – the emergent business partner model. Unlike the traditional HRM, which is transactional in nature and is concerned with administrative activities, SHRM is a value-added core responsibility that aligns the HR system, policies and practices with business strategy to gain sustained competitive advantage for the firm.In performing the new challenging roles, the HR professional must think outside the traditional organizational box of HRM and develop a more systematic and radically different approach to manage the human element to effectively support the firm’s business strategy formulation and implementation. For successful implementation of the business partner role, the HR manager needs to understand the company’s business direction and its competitive position in the market place. Apart from this, to become a successful strategic partner, the HR manager must have competencies that have to do with the business issues involved in strategy and strategy development, and ability to contribute to organizational design and change management (Lawler, III and Mohrman, 2003).The HR function, according to Rowden (1999) must change from a staff function that delivers prepackaged HR services to a service that helps managers create customized strategic plans to influence the effectiveness of company performance. The HR manager can play an important role in the formulation of strategy and providing the human resource required to support various strategies and strategic initiatives in the organization. He provides the leadership role in developing the human capital and the necessary capabilities to enact the strategy and drive the implementation and chang e management processes to success (Lawler III & Mohrman, 2003). Good human capital management is a prerequisite for successful execution of business strategies.According to Ulrich (1998), the modern HR professional must perform four complementary roles. The first role, administrative excellence, is important because it is an immediate way of contributing to the overall efficiency of the organization. As administration expert, he must rethink how work is done throughout the organization. The second role HR professionals must realize is that of employee champion. The HR manager must play the crucial role of employee advocate. He should be the employee’s voice in management discussion, offer employee opportunities for personal and professional growth; and provide resources that employees need to meet the demands put on them.The new role might also involve suggesting, that employees be given more control over their own work schedules. This is the issue of employee empowerment. Tw o additional roles the modern HR professional must realize are those of strategic partner and change agent. Being a strategic partner calls for an on going evaluation of the alignment between current HR practices and the business objectives of the firm, and a continuing effort to design policies and practices that maximize this alignment. HR practitioner should be held responsible for defining an 29 organizational architecture – that is, identifying the organization’s way of doing business.Such framework as looking at the organizational components – strategy, structure, rewards, processes, people, style and shared values may be adopted. This new knowledge will allow HR to add value to the executive team with confidence. Being a change agent the HR manager must play a key role in implementing and managing organization change, assessing potential, sources of resistance to change, and collaborating with line managers to overcome these barriers. The HR professionalà ¢â‚¬â„¢s role as a change agent is to replace resistance with resolve, planning with results and fear of change with excitement about its possibilities. These last two roles – strategic partner and change agent – are of particular interest to us because they represent the emerging strategic dimension of HR function SHRM.In addition to the above roles the HR practitioner needs to be a model and take on the specific role of integrating people strategies with business strategies in a way that advances the bottom line. Metzler (1998) adds that: the HR manager must play an active and guiding role in enabling the organization to choose its human resources well, invest in these people, support that growth and respect their needs, while fostering innovations needed to achieve the strategic business objectives. The HR professional operating under the SHRM system must chart roles that include early and active involvement in key strategic business choices. He must become the part ner of decision makers in the organization, and sharing accountability for organizing and performing work.He must carry out effective monitoring to see that everyone in the organization, and at every organizational hierarchy, stay focused on share strategic priorities. He must challenge old ways and constantly promote innovation to enhance corporate performance and the firm’s competitiveness. 6. Requisite Strategic Skill Development and Competencies To function as a strategic business partner and successfully execute the new critical and challenging responsibilities, to bring about the bottom line, the HR professional needs to possess the relevant strategic skills or core competencies. Ismail & Long (2009: 118) define competency in general term â€Å"as a personnel related concept referring to a set of behavioral dimensions of one’s effective performance work†.Inyang (2009:65) considers competencies as constituting â€Å"a cluster of related knowledge, attitude s, and skills, which an individual acquires and uses together, to produce outstanding performance in any given area of responsibility†. A lack of certain competencies may affect the HR professional in the performance of the strategic role in the organization (Aitchison, 2007). Zigarelli (1997) identifies seven strategic skills that can help the manager develop effective strategic plans to handle the emerging challenges in the organization: 1. Global operating skills: These skills enable him to understand the issues of globalization and how to do business with individuals of diverse background or nationalities. 2.Business and financial savvy: He needs to understand financial reports, business goals, and possess the business acumen necessary to understand and support the function. 3. Strategic visioning, critical thinking and problem solving skills: As a strategic business partner, he needs the skills to take the lead in contributing to strategy, vision, and critical thinking to gain credibility for the HR function. 4. Ability to use information technology: The HR professional must be well grounded in information communication technology (ICT) and leverage this for business results. ICT is the engine that drives the modern organizations to business success and offers them sustained competitive advantage. 5.Deep HR knowledge: He needs to be well grounded in the theoretical and practical fundamentals of HR to adequately articulate HR practices. He needs to invest more time and resources for training and development. 30 6. Change management skills: He needs these skills to move the organization to new and more efficient ways of doing business. He needs to show commitment to change management in the organization. 7. Organizational effectiveness skills: These skills enable him to diagnose the effectiveness of the organization as accurately as possible to portray the current and future state of the organization. He can then monitor and correct inefficiencies. Ye ung, Wolcock & Sullivan (1996) identify the following core competencies that effective HR professionals should develop: 1.Business knowledge: Capacity to understand competitive issues impacting the business (e. g. , market, products, technology, processes) and to understand how business can create profit and value. 2. Customer orientation: Ability to viewing issues from the perspective of customers. 3. Effective communication: The ability to provide both verbal and written information clearly, consistently and persuasively. 4. Credibility and integrity: To walk what you talk, act with integrity in all business transactions and honor personal commitments. 5. Systemic perspective: The ability to view problems and issues in the context of the bigger picture and understand the inter-relationships among sub-components. 6.Negotiation and conflict resolution skills: The capacity to reach agreements and consensus in spite of different goals and priorities. Similarly, Ismail & Long (2009) ex amine six competencies – business knowledge, strategic contributions, HR delivery, personal credibility, HR technology and internal consultation, which HR professional needs to possess in order to function in his strategic partnership role and to excel in the current competitive environment. These competencies are based on Human Resource Competency Study (HRCS) under the initiative of the University of Michigan in the year 2003 (Brockbank & Ulrich, 2003), except internal consultation.The HR practitioner must acquire consulting skills which constitute a combination of diagnostic and behavioral skills that enable the professional, who is in support function in the organization to collaborate with the line managers to develop strategic solutions to business performance problems. As an internal consultant therefore, the HR manager is in a better position to contribute significantly to the functioning of other departments, solving problems, and delivering enhanced performance (Ism ail & Long, 2009). The rapidly changing global business environment calls for high knowledgeablity on the part of the human resource managers, to function effectively as strategic business partners. According to Inyang (2008a: 61), â€Å"Human resources practitioners need to broaden their horizons, seek more knowledge and information to manage the intellectual capital effectively.This requires people who are multi-skilled, self-responsible, visionary and able to learn, to handle, to lead the organization to success†. The HR practitioner is also expected to develop a new mindset, as he becomes a strategic partner. In fact, to be a strategic partner, â€Å"the HR function must go beyond delivering services, maintaining records, and auditing. It needs to spend time being a member of the management team, doing strategic HR planning and making contributions to organizational design, strategy development, and strategic change† (Lawler III & Mohrman, 2003:4). 31 7. Conclusion The traditional HRM practices, which are concerned with the management of people in an organization, have contributed significantly to organization bottom line.HRM offers traditional and administrative support services in the organization, in terms of staffing, recruitment, training and development, compensation and benefits. It generally concerned itself with attracting, developing and maintaining effective workforce. The emergence of SHRM as a paradigm shift generated more value-added core responsibility, and emphasized the need to integrate HR practices with business strategy. SHRM is a strategic business partner model, which strongly beliefs that critical organizational capabilities or performance behaviors are necessary for the attainment of a particular business strategy or goal. SHRM is a more radical and systematic approach to the management of human capital, placing more emphasis on organizational performance rather than individual performance.It is this approach that help s to create a fit or congruence or integration of HR practices with business strategies that enables the organization to achieve sustained competitive advantage. The RBV of the firm highlights the strategic position of the human capital, as an organizational asset, that contributes significantly to the overall performance of the organization, when adequate investment is made on the human resources. The HR practices must be properly aligned with the strategic goals of the organization. To function as a strategic business partner and a change agent, to successfully handle the emerging challenges of SHRM, the HR practitioner must possess the requisite strategic skills and core competencies.The skills and competencies required include among others, being highly knowledgeable about business and its environment, developing a strategic vision, global operating skills, understanding and applying the ICT regime, organizational effectiveness skills, change management skills and ability to und erstand and manage conflict as well as possess internal consulting skills. References [1] [2] [3] Aitchison, D. (2007). â€Å"HR transformation: Myth or reality†. HROA Europe and sharedpertise forums in association with TPI. Survey Report January 2007. Akhtar, S. , Ding, D. Z . & Ge, G. (2008). â€Å"Strategic HRM practices and their impacts on company performance in Chinese enterprises†.Human Resource Management, 47(1), 15-32 Anderson, K. K. , Cooper, B. K. & Zhu, CJ. 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Jackson (eds. ), Strategic Human Resource Management (pp. 159-176).Oxford: Blackwell Publishers Ltd. Singh, M. & Vohra, N. (2005). â€Å"Strategic human resource management in small enterprises†. The Journal of Entrepreneurship, 14 (1), 57-70. Snell, S. A. , Youndt, M. A. and Wright, P. M. (1996). â€Å"Establishing a framework for research in strategic human resource management: Merging theory and organizational learning†. In J. Shaw, P. Kirkbride and R. Rowland (eds. ) Research in Personnel and Resource Management, (14:61-90). Greenwich, CT: JAI Press 35 [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] Teece, D. J. , Pisano, G. & Shuen, A. (1997). â€Å"Dynamic capabilities in strategic management†.Strategic Management Journal, 18 (7), 509-534. Teo, S. (2000). â€Å"Evidence of strategic HRM linkages in eleven Australian corporatized public sector organizations†. Public Personnel Management, 29(4), 557-575. Tichy, N. M. , Fombrun, C. J. , & Devanna, M. A. 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Data Based Question

During the eighteenth century in Manchester, life was inhospitable, sullen, and difficult. Bodily and factory waste was strewn upon the streets, children were working In dangerous conditions, and factories overcrowded Manchester. Due to all the toxic fumes and disgusting street waste, people were getting sick. Families had to have their children go to work instead of school because money was hard to come by. Due to the increase in population in Manchester during the eighteenth century, many issues such as environmental health, wealth, and a population boom occurred in the social and political environments.She describes how magnificent things came out of hard, torturous labor. This document shows how awful the industrial revolution was at the time, but how ultimately, great things came out of it. Over time, working conditions improved in the Industrial Revolution. (William Abram, journal article,10) â€Å"The condition of the factory laborers has been vastly improved within the last quarter of a century†¦ Reduced to ten hours a day†¦ Wages-thanks mainly to accelerated machinery and improved working conditions-have largely increased†¦Sickness and mortality have been reduced to an extent that is almost incredible. † This document shows the different points of views from different journalists. In the previous documents depicted, the Journalists have written about how awful life was in the Industrial Revolution, however this Journalist wrote from a positive point of view; unbiased. This document expresses the idea that positive things eventually emerged from the dark despair of the Industrial Revolution. Due to the Industrial Revolution, a population boom occurred. W. H. Thomas, History of Manchester,l) The first map shows about one sixth of Manchester under development. The second shows Just about all of Manchester covered in areas of development, railroads, and canals. This relates to my thesis by showing how the growth of laboring factories affected Manchester in the eighteenth century. † Manchester, the Workshop of the World†¦ Seat of commerce and manufacture, which it has recently attained and for which it is distinguished beyond any other town in the British Dominions or indeed the world. (Whelan and Co. , document 9) This comment is relevant to my thesis because it states how the â€Å"Workshop of the World† boomed and excelled because of the population and growth of industries in Due to the increase of population in Manchester during the eighteenth century, many reactions such as environmental health, wealth, and a population boom occurred in the social and political environments, but ultimately the industrial revolution lead to many great things for the world that changed history forever.The Industrial Revolution is significant to our history because it lead to many new improvements for the world even though negative things such as poor health, child contemplated the idea of unifying the states. Due to the past wars and issues, the nations of Europe dealt with great conflict among one another regarding communism, trading, and alliance with distant countries. The people and countries of Europe were battered and broken from the war and great caution was taken among them all in fear of more strife and damage. Some nations were in favor of unity and others were opposed to the idea of unifying the nations of Europe.

Australian Immigration Laws

I am a registered migration agent in Australia who is writing you this application to waiver the condition 8503 attached on my client’s visitor’s visa. The name of the client is Sukhon Chaiprasit who is a 25 years old female Thailand citizen and holds a visitor visa Class FA, subclass 600 (tourist stream) with condition 8503 attached to it. Her visitor visa is about to expire in a couple of days, thus, my client Sukhon Chaiprasit wishes to get the condition 8503 waived on her visitor’s visa for applying for a fresh substantive visa in Australia. Condition 8503 is imposed on various temporary Australia visa and is referred as a â€Å"No further stay† condition. If condition 8503 is attached to an one’s visa, it will means that the said visa holder except for a few exceptions, is not allowed to apply for any other visa in order to extend his stay in any manner till he is present in Australia. The only visa in such cases which is legally permitted to be applied for is the protection visa. Any visa holder with condition 8503 is allowed to apply for a protection visa. The primary reason for introducing the said condition was to ensure the Department of Immigration and Citizenship (DIAC)  that visa holders with the said condition will leave the Australian territory before the expiry of their visa. The said assurance also allowed the Department of Immigration and Citizenship (DIAC)  to sanction more visas as the fear of individuals present in Australia without visa permit was minimized. Thus, condition 8503 on any visa restricts the visa holding on whose visa the condition is applies to apply for any other substantive visa except protection visa while his stay in Australia. The visa holder whose visa has the said condition attached has to leave the Australian land before the expiry of his visa and staying for even a single day extra after expiry of the visa date is illegal and can cause detention of the visa holder to depart him from Australia. In case, the visa holder whose visa has condition 8503 attached to it has to leave the Australian land and go back to his country to apply for a fresh temporary or permanent visa to return to Australia again for a longer period. Thus, condition 8503 restricts a visa holder from applying for any substantive visa while his stay in Australia, however under subsection 41 (2) (a) of the Migration Act 1958 and Regulation 2.05 (4) of the Migration Regulation 1994 he said condition can be waived by the Ministry of Immigration in Australia. To be eligible for the said waiver, the visa holder has to comply with certain requirements mentioned under the above mentioned legislations. The Regulation 2.05 (4) of the Migration Regulation 1994 states the first requirement for waiver of condition 8503 attached to Australian visa. It states that for waiving condition 8503, the visa holder is required to satisfy the Ministry of Immigration in Australia that some circumstances has changed since the visa was applied for and granted which are beyond the control of the visa holder. Moreover, the visa holder having condition 8503 attached to his visa also has to show that the Ministry has not denied any prior application of waiver. The sub section 41 (2) (a) of the Migration Act 1958 gives the circumstances in which Ministry will accept the waiver application and grant the waiver. Thus, the said section states that the visa holder in order to waiver condition 8503 attached to his visa has to prove that from the time the visa was granted to him, circumstances have drastically changed with compelling reasons which are beyond the control of the visa holder which have resulted i n changed present situation of the visa holder. My client Sukhon Chaiprasit has eligibly complied with subsection 41 (2) (a) of the Migration Act 1958 and Regulation 2.05 (4) of the Migration Regulation 1994 and meets the conditions which are required to grant her waiver of condition 8503 attached to her visitor’s visa. The lists of compelling reasons in the said case are as follows:- The above reasons are beyond the control and were not anticipated by my client while applying for the visitor’s visa. My client was totally unaware that such mishap would occur while her stay in Melbourne which will prevent her from travelling back to Thailand. Therefore, as a migration agent, I believe my client has met all the requirements necessary to be granted a waiver of condition 8503 on her visitor’s visa which can make her apply for a fresh Class UB Medical Treatment visa under subclass 602 without leaving the Australian land. I request you to consider the health of my client subsequent to the attack she faced in Melbourne and grant her waiver of condition 8503 as she has legally complied with ll the conditioned required by the statutory laws stated in 41 (2) (a) of the Migration Act 1958 and Regulation 2.05 (4) of the Migration Regulation 1994. The compelling reason in the said case being the attacked she faced which was totally unexpected which made it impossible for her to travel back, thus, the compelling reason also stands beyond the control of my client. Making my client travel back just to comply with condition 8503 and going against the doctor’s report which suggests her to avoid travelling for 6 months can be injurious to the physical and mental health of my client. Thus, in order to apply for the Class UB Medical Treatment visa under subclass 602 on grounds of her ill health which is backed by doctor’s report, it is important to waiver condition 8503 attached on his client’s visitor’s visa. Therefore, I request the Ministry to use its discretion granted to it by the Statute under section 41 of the Migration Act 1958 to accept the said written application of waiver of condition 8503 on Sukhon Chaiprasit’s visitor’s visa and grant her the said waiver in order to make her apply for Class UB Medical Treatment visa under subclass 602. The said letter stated that all the requirements to qualify for a waiver of condition 8503 are met by my client. My client has not sent any other waiver application which was previously rejected. Thus, a grant of waiver of condition 8503 will be appreciated. The doctor’s report and recommendations are attached to the application letter. Registered Migration Officer in Australia In the said case, Sukhon Chaiprasit visited another migration agent who applied for a fresh visitor’s visa, the said application was invalid. Sukhon’s visitor visa had condition 8503 attached to it. Therefore, according to Regulation 2.05 of the Migration Regulation 1994, the first step to apply for any fresh substantive visa would be to write an application to the Ministry request o waive condition 8503 attached to visitor’s visa. Section 46 of the Migration Act 1958 states that every visa application stands invalid if the same is made when the applicant is present in the migration zone and after he arrived in Australia; his visa has a condition attached to it which waiver is requested or refused by the Ministry after requesting or the same. Thus, the fresh visitor’s visa application of Sukhon Chaiprasit was invalid as she failed to get condition 8503 attached on her previous visitor’s visa waived. When a visa holder in Australia holds bridging visa, enforcement visa or criminal justice visa, section 48 of the Migration Act 1958 prohibits the said visa holders to apply for any other visa. Thus, Sukhon Chaiprasit as a migrant in Australia was subject to 48 of the Migration Act 1958 because she was capable of presenting in front of the Immigration Ministry a valid case which shows compelling and compassionate reasons which make her eligible for grant of waiver on the condition 8503 attached on her visitor’s visa in order to make her apply for another fresh substantive visa base on the changed circumstances which are beyond her control[9]. Every professional service providers have a Code of Conduct which is to be followed by every individual in the said profession. Thus, the registered migration agents in Australia also have a Code of Conduct which is present in Schedule 2 of the Migration Act 1958. The major breach of code of conduct committed by the former migration officer of Sukhon Chaiprasit was his failure to apply in writing for a waiver of condition 8503 attached on her visitor’s visa before making a fresh application of any substantive visa[10]. This action shows that the former migration agent of Sukhon Chaiprasit had poor knowledge of immigrations laws in Australia and violated section 2.1 of the Code of Conduct for registered migration agent which states that every migration agent should act following the immigration law and with diligence to serve the best interest of his clients. The migration agent also breached section 2.5 of the Code of Conduct which stated that a migration agent in Australia is required to be updated and keep his knowledge clear about the various migration laws in Australia including its amendments. Thus, the former migration officer of Sukhon breached the said section by apply for visitor’s visa where Medical Treatment visa under subclass 602 would be more appropriate after grant of waiver of condition 8503. Moreover, a migration officer is always required to be honest with his client about the possibility of success of their application according to section 2.6 of the Code of Conduct, thus, the former migration agent failed to state Sukhon that her fresh visitor’s visa could be rejected or stands invalid. Thus, failure of the former migration agent of Sukhon Chaiprasit to advice her clearly on the options she has for extending her stay in Australia prior to her attack and injuries, makes the agent violated the said sections of Code of Conduct for migration agents in Australia. Aas, Katja Franko.  The borders of punishment: migration, citizenship, and social exclusion. Oxford University Press, 2013. Code Of Conduct (Regulation 8) Second Schedule Of The Migration Act  (at 1) https://www.austlii.edu.au/au/legis/cth/consol_reg/mar1998287/sch2.html Code Of Conduct For Migration Agent In Australia  (at 1) https://www.mara.gov.au/becoming-an-agent/professional-standards-and-obligations/code-of-conduct/ Devetak, Richard. "In fear of refugees: The politics of border protection in Australia."  The International Journal of Human Rights  8.1 (2014): 101-109. Goot, Murray, and Ian Watson. "Population, immigration and asylum seekers: patterns in Australian public opinion."  Population  2010 (2011): 11. Hollifield, James, Philip Martin, and Pia Orrenius.  Controlling immigration: A global perspective. Stanford University Press, 2014. Joppke, Christian.  Citizenship and immigration. Vol. 2. Polity, 2010. Migration Act 1958 In Australia  (at 1) https://www.austlii.edu.au/au/legis/cth/consol_act/ma1958118/ Migration Regulations 1994 In Australia  (at 1) Phillips, Janet, and Harriet Spinks. "Immigration detention in Australia."Parliamentary Library  20 (2013). Waiver Of Condition 8503  (at 1) https://www.border.gov.au/about/corporate/information/fact-sheets/52b-nfc

Is terrorism a threat to international order Essay

Is terrorism a threat to international order - Essay Example However, even after the most significant and iconic terrorist strikes known to us i.e. the 9/11 attacks, the world order and the existing international relations have not changed significantly. In fact, if anything, the international order and the relationships between various countries (particularly western allies) have been more strongly defined since the attacks. Again, this definition may not remain true in the long term since international order is not solely dependent upon one evil character being the terrorist and one heroic country saving the world. The image of a country being good or bad is nearly always dependant on the perception of the people and it is irresponsible of the media or the government to present a very biased viewpoint since perceptions can be difficult to change overnight. Coady (2005) says: â€Å"There are very bad policies and very bad political leaders, but realism dictates that we recognize the presence of evil wherever and whenever it occurs. It also dictates that we take cognizance of the fact that the monsters of today were our allies of yesterday and may be our allies of tomorrow, and that our own shining virtue often appears in a different light to others. (Coady, pg. 16, 2005)† Of course the countries and individuals who are labelled as being terrorists by others quite simply reject it and take themselves as freedom fighters, separatists, even revolutionaries. Similarly, the titles given to terrorists range from evil to inhuman and responsible members of the international community are asked to shun them and force the surrender of terrorist group members since they are a threat to international order (Baylis, 2002). Undoubtedly there are several issues surrounding the debate and the first is the justification for terrorism. Martin & Martin (2003) report that it was St. Augustine who first gave the two

Challenger disaster Essay Example | Topics and Well Written Essays - 1250 words

Challenger disaster - Essay Example Activities carried out in programs that do not have established good house keeping conditions are also unsafe, as is the lack of maintenance of equipment. Finally, where the workers have not been prepared or have not been trained on how to respond to incidents like employee injury, fire, and spills, the working conditions are unsafe (Ohnysty 57). The training and education of the employees on the manner in which to conduct their activities in safety aids, in the minimization of exposure risks, and this is a critical element for all complete health and safety programs in the workplace. The training must involve how to carry out the activities safely, as well as ensuring that they comprehend the hazards inherent in their jobs on a day-to-day basis. It also needs to provide workers with information that covers how they should protect their fellow co-workers and themselves. However, safety is not achievable via reliability alone. Some systems in the workplace cannot be made safe from fai lure, especially where continuous availability is required. Lack of recovery procedures, fault tolerance, as well as lack of redundancy provisions, makes the activities performed in these conditions unsafe. In addition, systems in the workplace that are less sensitive for quality induced uncertainty or reliability prediction errors are also unsafe (Ohnysty 59). Finally, systems that do not have failure detection, as well as avoidance and correction of common causes of failure lead to unsafe conditions of work because of low system level reliability. 2. What responsibility did the engineers at Thiokol have to their company versus the general public and the astronauts on that flight? Understanding the code of ethics for professional technologists is a convention among professional technologists. It aids us in explaining why technologists cannot merely depend on private conscience during the practice of his/her profession (Ohnysty 68). This is in spite of how good their private conscie nce may be, which means that technologists must integrate what the engineers’ organization has to say concerning what the technologist is required to do. What the conscience tells one to do in the absence of a particular convention is not what the same conscience would tell one to do with the presence of the convention. Where the code of ethics is a morally permissible convention, it guides a technologist as to what to expect reasonably from one another. It is essential to know the code of ethics so as to know, for instance, whether as a technologist to weigh simply safety with disregard to the manager’s wishes or to give preference to safety issues against the wishes of the of the company. The code of ethics provides a guide on what to expect the other members of their profession to aid them to do. If prioritizing safety first were part of being a technologist, the technologists at Thiokol would expect their managers to support them. For instance, if the managers had asked them to think, not as technologists, but as managers, the engineer should have responded that they were there in their capacity as technologists (Ohnysty 69). This would have been the response of a technologist, although the question would arise as to whether, overall, this would have been the right thing. Technologists are not merely the members of their profession but are also persons with responsibilities and cannot escape punishment,

How well trained teachers are in educational technology Research Paper

How well trained teachers are in educational technology - Research Paper Example nd and properly utilized with the use of technological devices such as laptops, projectors, iPads, slideshows, and various softwares amongst thousands of other devices and programs. Moreover, it is vital for students to be aware of how to properly utilize these devices to improve their educational learning and to enhance their understanding. This makes it further essential for teachers to be fully trained in using such devices and educational technology in order to facilitate the learning process (Mumtaz, 2000). As some teachers belong to older generations or some are technology-aversive, a large proportion of teachers have usually been found to be unable to properly use programs such as Microsoft Office, statistical software, and technological devices such as computers and projectors in general. Therefore, while it is important to judge how well teachers are able to communicate with students, nowadays, it is also just as important to judge whether they can use information technology effectively (Mumtaz, 2000). This study aims to analyze and determine whether teachers belonging to higher education institutes are able to properly use educational technology (computers, projectors, microphones, and software) to facilitate the learning process and how well-equipped these teachers are in the use of this technology. The study will focus on the teachers of the Brownsville Independent School District (BISD) in the local area and determine how these teachers are in the use of information technology and educational technology. The study will then aim to analyze the data on local teachers’ technology competence reasons and will aim to compare and it with previous literature regarding teachers’ competence in information technology. The participants of the study will include male and female teachers between the ages of 21 to 60 employed at BISD. Five teachers will be chosen from each school through random stratified sampling. A total of six teachers will be analyzed for

The visibility of the Environmental reports Essay

The visibility of the Environmental reports - Essay Example 1. The elevation of social accountability and the current reach of the environmental responsibility of the corporate world? Is environmental responsibility addressing the real concerns or is it a public propaganda? 2. Prior research indicates that the firms used to elevate the social accountability as an employee welfare activity and ignore other related important operational information. A very little has been done to the environment improvement. There is no sustainable development but firms used to highlight specific events they have had organized. Firms from the seventies started concerning about environment to please the public and to get approved by the environmental & other governing authorities. The stringent laws imposed in response to the rapid pollution worldwide the firms were forced to abide the regulations specified by concerned authorities. 3. Socio Economic theory was used to examine the social accountability of the firm. 4. The theory describes about the authenticity of the disclosures about the environmental responsibility. The Socioeconomic theory demands for the release of both the extremes of the facts about the environment accountability of the firm which many companies were not providing at that time. The theory demands that the environmental reports are to released with the annual reports to enhance the accountability and visibility of the firm towards environmental awareness. However the firms used to release a separate report about the environment.

Market Expansion and Segmentation factors Essay Example | Topics and Well Written Essays - 500 words

Market Expansion and Segmentation factors - Essay Example The economic context of the potential market is equally important in the decision-making process regarding the market expansion. From a critical point of view, the economic conditions of a given region will shape the consumption pattern of the people living within the market frame. In this case, therefore, the company should consider expanding into areas where the employment rate is relatively favorable. An employed society will have a better consumption power, which will increase the estimated profit margins of Runjhun Jewelry. Specifically, the expected economy should be a middle-income economy, which is characterized by a society with disposable income. On the need as well as the utility, most luxury goods tend to thrive in markets where the people have disposable income. Political and legal factors The political environment is equally imperative in the identification of new markets. Governmental policies regarding foreign direct investments affect cross-border expansions of various companies. In this case, therefore, the given market should have fair governmental policies as well as reduced tariffs, which act as impediments international trade and globalization (Art, 2014). With the elimination of these barriers, the exotic Indian jewelry will reach the intended market hence a better company performance regarding revenue and market share. In conclusion, the expansion of the company’s operations into other countries will be successful if the discussed guidelines are adopted.

Identifying Consumers' Trends in Canada Research Paper

Identifying Consumers' Trends in Canada - Research Paper Example This report analyzes and examines the changing behavior of the consumers and how important it is for businesses to analyze the consumer trends. Moreover, the report also analyzes how to identify consumer trends and discusses about consumer trend drivers. The report then discusses about changes in the consumer trends towards the food products and how Canadians have been spending on their households, transportation, food and health care. With the changing environment and market, consumer needs and preferences are also changing and one of the changes in the consumer trend that has occurred is in the recent years is towards mobile phones. With the advancement in technology, there has been an increase in ecommerce and online transaction and this report discusses about the trends of online shopping in Canada and also identifies the barriers that could hurt the growth of ecommerce. 1.1. The Importance Of Identifying Consumer Trends Consumers have a very important role to play as their behav ior, actions, thinking can not only influence the businesses but it could influence the overall society as well (Higham, 2003, pg. 9: 2-3). This is the reason why understanding the consumer behavior and identifying the trends of the consumers is very important for businesses (Higham, 2003, pg. 9: 6-7). Consumers are the ones for which businesses offer goods and services, if they are not willing to buy the products, then there is no reason why businesses should sell the products (Higham, 2003, pg. 9: 8-9). So, understanding the consumer needs and preferences is very important. However it is not an easy task as the consumer preference and taste changes and businesses in order to keep up with the changing consumer preferences and trends come up with new products every now and then (Higham, 2003, pg., 9:12-13). According to Mintel’s New Product Database, twenty thousand new products are introduced every month (Higham, 2003, pg. 10:1). However, introduction of new products is not good enough to meet the changing consumer as businesses have to identify the changes in the consumer trends and offer products accordingly. As it has been found that 83% of the products are not able to meet their marketing objectives (Higham, 2003, pg. 10:5-6) and one of the main reasons for this failure is to not understand the consumer trends and what consumers are willing to buy (Higham, 2003, pg. 10: 8). Therefore it reflects how important it is for businesses to understand and identify the consumer trends and how these trends and preferences would shape up in future in order to make sure that their products are able to match with the consumer needs, preferences and taste (Higham, 2003, pg. 10:15:16). Otherwise, the products would not be able to achieve their objectives. 1.2. The Benefits Of Identifying Consumer Trends Businesses offer goods and services for consumers, if there are no consumers then who will be buying the products and services of the business. Consumer trend has been defined as the changes in the behavior of the consumers in the long run that could create opportunities for businesses (Higham, 2003, pg. 16:15). Therefore marketers need to recognize and identify the consumer trends and it is the most important principle that a marketer needs to understand

The Romantic Era Essay Example for Free

The Romantic Era Essay The basic notion behind the music belonging to the Romantic Era was its deep and realistic impact on the audience’s heart and mind. Such was the popularity of Romanticism amongst musicians that a certain number of them created their own unique templates. Along with the progressing popularity of the German lieder, newly introduced instrumental styles like overtures and symphonic poems also gained heat (Kirby, 1990). Classical music in this era prospered and rose to such a high notch that it is absolutely essential to state that some of music’s most magnificent works were created during this period. Legendary music composers including Beethoven, Schubert, Mendelssohn, and Schumann, have made priceless contributions to the romantic classical music. For example, Beethoven composed his later works in this period while Schubert composed a vast number of lieder, symphonies, chamber music, and piano solos. Furthermore, Franz Liszt and Richard Wagner also attained popularity in the mid 19th century on behalf of their sophisticated compositions. Liszt produced some extraordinary music for piano while Wagner combined the various forms of arts into his mythological musicals (Kirby, 1990). In the late 19th century, composers performed diverse experimentations on their works. For instance, Anton Bruckner had a tinge of both religion and secularism in his symphonies; Johannes Brahms found himself in Classicism; Giuseppe Verdi was responsible for some of the greatest operas of all time; Gustav Mahler composed for a full orchestra; and Richard Strauss made his name in symphonic poems and operas. Moreover, this era was also famous for its nationalistic characteristics. Musicians in the north and east side of Europe took the initiative to include a patriotic element in their compositions. Their basic inspiration for this matter was their local folk songs and dances. The renowned Russian composer, Peter Ilich Tchaikovsky was a significant figure of this category and is attributed for his nationalistic approach (Kirby,1990).

Indias Foreign Exchange System: An Analysis

Indias Foreign Exchange System: An Analysis CHAPTER-2 LITERATURE REVIEW 2.1 Introduction: It is a fact that the currencies of different countries have different values that is based upon their actual economic and monetary strength. It is from this difference that the genesis of foreign exchange occurs. Foreign exchange can be termed as the act of matching the different values of the goods and services that is involved in the international business transaction process in order to attain the exact value that is to be transferred between the parties of an international trading transaction in monetary terms. Foreign exchange as an activity had started the day civilization and independent principalities got established in the world. But in those days it was a case of exchanging value in the form of transfer of goods and services of identical value that is commonly identified with barter system. Moreover the transactions were done on a one-to-one basis, and the terms and conditions were determined by the parties entering into such transactions. There was no universal system or rule that determined these transactions. In that way foreign exchange and international monetary system is a modern day trend that gained an institutional form in the first half of the twentieth century and has been developing since then. 2.2 Foreign Exchange: According to International Monetary Fund (IMF), Foreign Exchange is defined as different forms of financial instruments like foreign currency notes, deposits held in foreign banks, debt obligations of foreign banks and foreign governments, monetary gold and Special Drawing Rights (SDR) that are resorted to make payments in lieu of business transactions that is done by two business entities or otherwise, of nations that have currencies having different inherent monetary value (www.imf.org). Leading economist Lipsey Richard G.,1993 has mentioned that the foreign exchange transactions are basically a form of negotiable instrument that are resorted to deliver the cost of goods and services that form a part of trading transactions and otherwise, between business and public entities of nations of the global economy. Sarno, Taylor and Frankel, 2003 gives the definition of foreign exchange as denoting the act of purchase and sale of currencies of different economies that is performed over the counter for various purposes that includes international payments and deliverance of cost of various business transactions, where the value is usually measured by tallying the value of the currencies involved in the foreign exchange transaction with that of the value of U.S. Dollar. According to Clark and Ghosh 2004, Foreign Exchange denotes transactions in international currency i.e. currencies of different economies. In such transactions the value of a currency of one country is tallied and exchanged with similar value of the currency of the country in order to exchange the cost of a business transaction or public monetary transfer that is taking place between two entities of these economies. 2.2.1 Foreign Exchange Transactions: Transactions in foreign exchange are done through various types and various modes between different countries of the world. According to information mentioned in the Reuters Financial Training Series, 1999,TOD Transactions, TOM Transactions, Swap Rates, Spot Rates, Forward Rates, Margin Trading and Buy / Sell on Fixed Rates foreign exchange transaction methods are some of the commonly used methods that are widely used by global managers for their foreign exchange transaction activities. 2.2.1.1 TOD Operations: TOD Operations are foreign exchange transaction methods where the trader uses the exchange rate of the day on which the foreign exchange transaction order is to be executed. In other words TOP operations are commonly used in intra-day foreign exchange transactions. As a result they are commonly resorted to by speculators in foreign exchange transactions and those who general speculate on the rates of different foreign exchange markets of the globe. 2.2.1.2 TOM Operations: In this type of transactions the transaction process carried forward to the next day instead of it being an intra-day trading. TOM transactions rate is fixed on the day the transaction is signed, but the rate of exchange is agreed upon to be that of the next day. 2.2.1.3 SPOTTransactions: SPOT Transactions can be compared with TOM transactions because here also the exchange rate is fixed at a value that prevails over the exchange rate of intra-day trading of shares. But SPOT transactions have been separated as a different category because unlike TOM transactions, SPOT transactions contracts are executed on the third day after the signing of agreement between the Bank and the client. 2.2.1.4 Forward Contract: Forward contracts are those exchange rate contracts where the currency conversion exchange rate agreement is decided at a certain rate at a time that is well before the date of execution of the exchange contract. In that way they are similar to TOM transactions. The only differ from them in the fact that these transactions are made for a long term i.e. generally for one year, and the parties involved in making this foreign exchange transaction deposit five percent of the contract value with the bank involved in facilitating the transaction at the time of executing the contract which is then returned to the client after execution of the exchange transaction. The need for depositing this amount is to secure the transaction against any loss due to market fluctuations. 2.2.1.5 SWAP: The greatest advantage of SWAP transactions is that the clients involved in the foreign exchange get prior information about the exchange rate of the currencies that are part of the transaction. In this type of transaction the bank first buys the amount of transaction form the client and resells it to the client after a few days after disclosing the exchange rate of the currencies involved in the transaction process. SWAP transactions are much sought after by traders because here they get to know beforehand the exchange rate of the currencies involved in the transaction process that helps them in avoiding fluctuations in market rate and gives them the advantage of determining the prices of goods, the nature of the currency market notwithstanding. . 2.2.1.6 MarginTrading: The key element of Margin trading is that any trader can opt for SPOT trading round the clock by going through the margin trading mode. The other key element of margin trading is that the traders can make deals with a minimal spread for a huge amount of funds by projecting fraction of the needed amount. In that way it is a unique form of global financial transaction where the threshold value that can be transacted through the margin trading mode is $ 100000 with bigger deals being multiples of $ 100000. But in order to deal in margin trading the trader has to make a security deposit of five recent of the contract value that has to be replenished from time to time in order to maintain the amount from which the probable losses from margin trading transactions are accommodated. 2.2.1.7 Buying/Selling on Fixed Rate Order: This is a mutual agreement between the buyer and seller of foreign exchange. Neither its rate nor its other terms and conditions are based upon actual conditions. Rather the deal is based keeping the mutual profitability of the buyer and seller intact where both of them get their desired amount. 2.3 Global Foreign Exchange Market: According to the table depicting the Triennial Bank Survey of Foreign Exchange and Derivatives Market Activity done by Bank for International Settlements (BIS)2007, as shown below the global foreign exchange market has an average daily turnover of over $ 2 trillion, which is an increase of around forty percent in terms of volumes . This rise in foreign exchange transactions it is observed has been due to rise in the volume of trading in Spot and Forward markets. This is indicative towards increase in volatility of foreign exchange markets around the world. (www.bis.org). Global Foreign Exchange Market Turnover Daily averages in April, (in billions $) Year 1989 1992 1995 1998 2001 2004 Spot Transactions 317 394 494 568 387 621 Outright Forwards 27 58 97 128 131 208 Swaps in Foreign Exchange 190 324 546 734 656 944 Gaps in Reporting (Estimated) 56 44 53 60 26 107 Total Turnover (Traditional) 590 820 1,190 1,490 1,200 1,880 Memo: Turnover (At April 2004 Exchange Rates) 650 840 1,120 1,590 1,380 1,880 (BIS Triennial Central Bank Survey, 2004) As observed by Jacque Laurent L.1996, Studies in foreign exchange point to the fact that the volume involved in foreign exchange transactions in the total markets around the globe has the potential to affect the overall functioning of the global financial system due to the systematic risks that are part and parcel of the foreign exchange transaction system. Most of the transactions occur in the major markets of the world with the London Exchange followed by New York and Tokyo Stock Exchange accounting for over sixty percent of the foreign exchange transactions done around the globe. Among these transactions the largest share is carried out by banks and financial institutions followed by other business transactions i.e. exchange of value for goods and services as well as dealers involved in securities and financial market transactions. According to the studies by Levi Maurice D., 2005, in foreign exchange transactions most of the transactions happen in the spot market in the realm of OTC derivative contracts. This is followed by hedging and forward contracts that are done in large numbers. The central banks of different countries of the world and the financial institutions operating in multiple markets are the main players that operate in the foreign exchange market and provide the risk exchange control mechanism to the players of the exchange market and the system where around $ 3 trillion amount of money is transacted in 300000 exchanges located around the globe. The largest amount of transactions takes place in the spot rate and that too in the liquidity market. The quotation on price in these markets sometimes reaches to around two thousand times in a single day with the maximum quotations being done in Dollar and Deutschemark with the rates fluctuating every two to three minutes with the volume of transaction for a dealer in foreign exchange i.e. both individual and companies going to the range of $ 500 million in normal times. In recent years the derivativ e market is also gaining popularity in OTC dealings with regards to the foreign exchange market. 2.4 Global Foreign Exchange Market Management Risks: According to the researcher Kim S. H., 2005, Foreign exchange transactions are identified by their connection with some financial transactions occurring in some overseas market or markets. But this interconnectivity does not affect the inherent value of the currency of the country which is determined by the economic strength of that country. This means that the inherent value of each currency of the world is different and unequal. So when the need arises to exchange the value of some goods or service between countries engaged in such activity it becomes imperative to exchange the exact value of goods and services. Considering the complexity and volume of such trading and exchange activity occurring in the global market between countries it is but natural that the currencies of individual countries is subject to continual readjustment of value with the currency with which its value has to be exchanged. This gives rise to the importance of foreign exchange transactions as a separate ar ea of study and thereby needs much focus for its understanding (Frenkel , Hommel and Rudolf , 2005). In addition to this it is to be realized that with the growing pace globalization and integration of global economic order there has been a tremendous increase in international business transactions and closer integration of economic systems of countries around the world especially between the members of WTO, that has led to the increase in economic transactions and consequent activity in international foreign currency exchange system (Adams, Mathieson and Schinasi, 1998). Added to this is the fact that the exchange value of currencies in the transactions is not determined by the respective countries but by the interplay of value of the currencies engaged in an international foreign exchange transaction and the overall value of each currency in the transaction prevailing at that time. In fact each country in the global economic order would want to determine the value of its currency to its maximum advantage, which was possible a few years ago in when the countries used to determine the value of their currency according to the existing value of their economy. The individual countries till the early nineties used to follow a policy of total or partial control over the exchange value of their currency in the global market. At the same time there also were a group of countries that followed the policy or system in determining the exchange value of their currency i.e. left it to the interplay of global economic activity where the value was determined by its economic performance. The currencies of countries that provide full or partial amount of control in the international exchange value of its currency are known to follow a Fixed Rate whereas the currencies of countries that allow its currency to seek its inherent value through its performance in the global economic system are termed as following the Floating Rate of foreign exchange conversion mechanism. Though lo gically both the type of mechanism of foreign exchange face the effect of exchange rate fluctuations and consequent volatility in rate it is the currencies having a floating rate that are continually affected by the fluctuations in exchange rate in the global market when in the case of currencies with a fixed rate it is more of a controlled and regulated affair (Chorafas Dimitris N., 1992). 2.5 Foreign Exchange Risks Prevailing in the Global Market: Risks related to the exchange rate of a currency in the global market as has been mentioned, occurs due to the interplay of inherent value of each currency of the respective countries that are part of the global financial mechanism. Risks related to foreign exchange come into picture and are also inevitable in this world marching towards increased interaction due to globalization. The risks will occur due to business interaction and consequent exchange of value for goods and services. According to Kodres LauraE., 1996, the risks related to foreign exchange occur when there is increased interaction between the currency of a country with that of other countries in the international market and that too if the currency has a floating exchange rate. In that case the value of the currency is continually affected by its business and financial performance. This relation with other currencies in the market affects it during the time when the need arises to exchange it with another currency for settlement of financial transaction in some business or financial purposes and gives rise to various types of risks. The prominent risks associated during this situation are Herstatt Risk, and Liquidity Risk. 2.5.1 Herstatt Risk: Herstatt risk is a risk that is named after a German Bank that got liquidated by the German Government in the seventies of the last century and made to return all; the claims accruing to its customers. This is because its creditworthiness was affected and it could not pay the settlement claims to its customers and also on behalf of its customers to their clients. It is basically connected to the time aspect of foreign exchange value claim settlements in which the foreign exchange transactions do not get realized as the bank loses its ability to honour the transaction in the intervening period due to some causes. In the particular case the German bank failed to honour the financial settlement claims of its clients to their counter parties that were to be paid in values of U.S Dollars. The main issues that arose were regarding quantifying the amount to be delivered and the time of the transaction process due to the two countries financial systems being located and working according to different or separate time zones. This case has established a phenomenon in foreign exchange market where there may erupt situations in which the working hours of banks located in different time zones may never match with each other leading to foreign exchange settlement transactions getting affected during the mismatch of the two banks closing and opening time. In fact the Alsopp Report that studied this phenomenon in detail said that though the foreign exchange transactions are made in pen and paper on a single day the actual transfer of value takes place within three to four days. And with the exchange value of currencies operating in the international market always remaining in a state of flux they either get jacked up or devalued. In either case it affects the clause of transactions that was decided on an intra-day rate, as the value of both the currencies in the international market has changed during these days. 2.5.2 Risks related to Liquidity: There can crop up different problems related to the banking systems operations and dynamics i.e. in both technical and management systems as well as inability in terms of volume of available liquidity strength or in mismatch in tallying of time etc; that can affect the capacity of banks to honour foreign exchange transactions in terms of transfer of liquidity. These types of risks are being commonly witnessed in newly emerging economies that are being unable to cope with the sudden surge in volume of global business transactions thereby leading to exchange rate settlement and payment delays, outstanding payments and dishonouring of financial commitments in the exchange rate transaction market. 2.5.3 Financial Repercussions: According to the Studies in foreign exchange related risks by Dumas and Solnik, 1995 aver that risk related to transactions in foreign exchange have increased with globalization and the rise of global economic integration process with the countries getting affected in relation to the volume of their transactions in the global financial and business marketplace. This is because the market is now more oriented towards market value driven convertibility of currencies that is influenced by the global financial movements and transactions, and any independent transaction especially of transnational and multinational companies; will automatically affect other transactions happening in the global financial marketplace (Klopfenstein G.,1997). However, according to another study by Gallati Reto R., 2003, these multinational and transnational companies are simultaneously being affected by the fluctuations in exchange rate of different currencies of the global market that is exposing their business operations in different global markets to exchange rate related risks especially due to difference in Spot and Forward rates and the inevitable fluctuations (Choi , 2003) that give rise to foreign exchange settlement related problems. 2.5.4 Remedies to Foreign Exchange Settlement Risks: As there risks that have cropped up in foreign exchange transactions due to increase in volume and frequency of transactions mainly as a result of globalization so, also there have come up remedies to minimize the risk related to adverse conditions in foreign exchange transactions. The Bank for International Settlements (BIS) in one of its studies in 1999 has said that settlement of claims is the most predominant risk that is related to foreign exchange transactions, especially the speed with which these transactions are materialized and the roadblocks that they may face in the process due to tremendous increase in volume of foreign exchange transactions that cannot be cleared in expected times. The solution to these risks according to the study is to simultaneously clear transactions on either side i.e. for both the parties side so that they simultaneously give and receive payments at the agreed rate of exchange. This would solve the problem of extended time of actual payment when the rate of exchange fluctuates, thereby creating problems for both the parties. This arrangement is related to deals being processed simultaneously, which requires the concurrence and common cause of both the parties. This is because the party that is expecting a hike in value of it s currency may not agree to such a proposal. In that case there should be some law or arrangement that would make it mandatory for both the parties to settle their intra-day payments on that day itself so that there is no scope left for speculation by them. According to the study, such arrangements have been made in USA and Europe where systems like Fedwire and Trans- European Automated Real-Time Gross Settlement Express Transfer (TARGET) have been established. Fedwire facilitates payments in foreign exchange transactions under the mode of Real Time Gross Settlements (RTGS)and TARGET facilitates intra-day transfer of foreign exchange between parties of member countries of Europe on the same day itself. But, for simultaneous release of funds by both the parties and the intra-day settlement of claims to succeed it is imperative that the member countries of the global economic system should come together have concurrence on these issues. This is because all said and done the foreign exchange transaction related rules and laws are still governed by the respective countries. And most of these countries are reluctant to make any headway in linking their currency system to the global currency system for speedy disposal of foreign exchange transactions for fear that such a move would expose their currency end financial system to the baneful effects of risks and volatility of global foreign exchange system (Hagelin and Pramborg, 2004). At the level of international trading corporations there has been initiated some steps whereby they have formed a private arrangement known as Group of Twenty. They are a group of twenty internationally acclaimed global clearing banks who have formed an system called the Global Clearing Bank that acts as a connection between the payment systems of different countries and verifies international foreign exchange transactions in order to simultaneously satisfy both the parties regarding authenticity of the process of transaction. The thing is that this system puts a high amount of strain on the financial and foreign exchange system as well as reserves of individual countries along with requiring them to bring about some amount of commonality between the financial rules and regulations of individual countries which is easier said than done. All the same the establishment of Bilateral Netting System and Multilateral Netting Systems as well as of Exchange Clearing House (ECHO) are trying t o facilitate foreign exchange transactions and minimize the inherent risks involved (McDonough ,1996). 2.6 Indian Foreign Exchange System: 2.6.1 Historical Background: The historical background of foreign exchange system in India was a saga of excess control and monitoring with even minor transactions being made to undergo the rigorous scrutiny of concerned government authorities to avoid any risks associated with such transactions and save the scarce foreign exchange reserves from being frittered away in some transactions considered unimportant or anti-national by the government. The Foreign Exchange Regulation Act (FERA) that was enacted in 1947 and made more stringent in 1973 was the embodiment of the prevailing sentiment of the governments of those days, which was to completely regulate and control all the foreign exchange transactions and protect the foreign currency reserves. (Mehta, 1985) All these changed in the nineties of the last century with the opening up of Indian economy in 1991 in keeping with the recommendations of the High Level Committee on Balance of Payments set up under the chairmanship of Dr C. Rangarajan by the Ministry of Finance, Government of India and subsequent entry of India into World Trade Organization (WTO) in 1994. This was preceded by the liberating of current account transactions and establishing full convertibility of current account transactions in 1993. In 1994 also the Government of India accepted Article VIII of Agreement of the International Monetary Fund that established the system of current account convertibility and the exchange value of rupee came to be determined according to the market rates with only the convertibility of capital account being under the control of the government (Krueger,2002) as the Tarapore Committee on Capital Account Convertibility of 1997 (Panagariya A., 2008) suggested the government to keep adequate sa feguards before allowing the convertibility of capital account to be determined according to the market forces as there was need to consolidate the financial system and have an accepted inflation target before such a venture. The Tarapore Committee also suggested that the legal framework governing the foreign exchange transaction system in India also needs to be modernized before going for total convertibility of the capital account due to which the Government repealed the FERA Act of 1973 and promulgated the Foreign Exchange Management Act (FEMA) in 2000. This new act did away with the system of regulation and control and established a system of facilitation and management of foreign exchange transactions thereby promoting all the activities related to foreign exchange transactions. The most important thing that was done by FEMA was to recognize violations or mistakes in foreign exchange transactions as a civil offence instead of a criminal offence as was done by FERA. FEMA also shifted the responsibility of proving the violation or mistake in foreign exchange transaction and related rules from the prosecutor to the prosecuted. And if the prosecuted was proved guilty he or she was to pay only monetary fine or compensation instead of being jailed as was the earlier provision under FERA. FEMA also simplified many of the rules and notified specific time frames for delivering judgments related to violations of foreign exchange rules and regulations and provide rules for establishing special tribunals and forums to deal with such cases. Th e compounding rules were also made less stringent and all matters related to compounding rules were notified to be dealt by Reserve Bank of India (RBI) instead of the previously assigned Enforcement Directorate. RBI was made the designated Compounding Authority in all related matters. Only the cases involving hawala transactions were left from its purview As per Mecklal and Chand