Thursday, December 5, 2019

Corporate Governance and Leadership Ethics

Question: Discuss about the Corporate Governance and Leadership Ethics. Answer: Leadership is an unusual position that is assigned to a person because of the organizational position that it has. The leader is something that dictates the actions of people who are working under the leader. The leaders can be good or bad, which depends hugely on the characteristics of leaders itself. Quality leaders do set examples by doing something, which is good for the humanity. However, the shadow part of leaders is such that they force the people working under them for any of their desirable works (Bethel 2012). The belief, which says that leaders are essential to make ethical decisions in the modern era of working environment, is not entirely true. This is because of several reasons, which would be mentioned in the paragraphs to follow. It has become a topic of debate that leaders are essential for making ethical decisions. This does not hold true in the modern era of working environment (Champoux 2016). Leaders, which have shadow part of leadership characteristics, can neve r make effective ethical decisions. One of the most powerful examples to support the fact can be extracted from the leadership styles of Ex-US President George Bush who willingly let the attack of planes happened to the World Trade Centre. It was termed as a terrorist attack, which most of the scientific researchers have proved wrong. The scientific evidences indirectly proved that Mr. Bush did intentionally make this happen. This is one of the examples of the modern era, which has supported the debate on the topic that leaders are not essential for making ethical decisions (Ciulla 2014). For those who think that leadership quality is necessary for making ethical decisions, they have rather the positive connotation about the leaders. They think that leaders are always good, which is very impractical from the perspectives of many believers. They do so because of the fact that history has a long list of leaders that have left a solid impression on the world of history. However, it does not at all mean that all the leaders would be of the same quality. To understand the debate between two groups on the subject topic, it is very important to understand first the modern factsheet behind the crowning of leaders (Conger and Riggio 2012). In the modern era of business or practical life, leaders are selected because of some skills that are operational based. They are hardly checked for behavioural aspects. The growing competition in the modern era in between the organization has somehow forced the organization in thinking for such leaders, which are productive. The biggest poi nt of concentration has now shifted to the production only. The personnel who are well experienced in the required domain of working, they are mostly preferred for the post of leaders (Cooper 2012). Quality leaders have hardly any demand in the changing scenario of business. For example, Vijay Mallya from India who is the CEO of Kingfisher airlines, it has several of corruption recorded to its credit. The world was respecting the particular person and was seeing to him with utter love. However, the perception is changing now because of the scandal cases, which are registered on to his credit. This is one of the simplest example that proves that it is not necessary that leaders are the only who can make essential and effective ethical decisions (Crane and Matten 2016). Mallya was found unethical with the help of caught scandal cases. It is also important to understand the different kinds of responsibilities that are bound to happen once someone is hired as a leader. This would certainly help in narrowing down the discussion that leaders in the modern era are not essential for making ethical decisions. The selection of leader also gives a collection of characteristics that are well expected from the selectors. The expected characteristics are such as power issues, information, privilege, responsibility and loyalty. Leaders who possess all the mentioned characteristics are good for the society and the organization. However, in the modern era of leadership, the definition and characteristics of leadership have been shifted to a new direction (Day and Antonakis 2012). The leadership is now more of power, which inspires most of the leaders of the modern era. According to Harvard Business Professor Rosabeth Kanter, for most of the Americans, power is the last dirty thing that they aspire of. According to her, in the mo dern era, having discussions on money and sex is the easiest of the tasks. However, it is very difficult to think on something, which is human. Some of the leaders in America have always proved their worth to the world. They are more of dominating character, which they can never sacrifice for anything. The importance of humanity has less importance in the sight of such leaders. Mr. Bush has already proved one of such examples in the accident of World Trade Centre. Unfortunately, abusive nature of power is very common in the modern era. Some of the most brutal leaders have proved the point right that leaders are not bound to make essential ethical decisions (Gasper 2016). There is a huge gap in between the kinds of leaders in the ancient time and the modern era. It does not mean that ancient leaders were not bad. One of the worst examples of ancient leaders is of Hitler whose activities were very inhuman. Hitler used to put Jews into gas chambers just because Hitler was a Christian. However, in the ancient times, world has also saw a number of ideal leaders that were good for the humanity. Some of the examples are such as Mahatma Gandhi, and John F. Kennedy who dictated the leadership style in a way, which is very different to that of Mr. Bush. This is an undeniable fact that the production of great leaders has been reduced to a considerable amount. Leaders that are not good are bound to make mistakes because power is the only concern for them. Some examples of brutal leaders do very well illustrate the fact behind the topic. Mahatma Gandhi is even respected amongst its haters. This is because of the fact that Gandhi was good for humanity. British mig ht not like the person because of the number of protests, which the person has posed to the British. However, they never ignore the sheer potential of Gandhi (Hollander 2012). In the modern era, there are several kinds of leaders, which are widely acknowledged not because of their love for human but because of their business success. One big name in this regard is of Bill Gates who is the CEO of Microsoft Corporation. The person has turned the destiny o to his favour; however, it is very difficult to say that if the leader does also has the ideal leadership quality in him. One most important fact in this regard is the distribution of power, which favours more to the leaders. They are the one who has a high rate of access to the unlimited kinds of powers. These are some of the reasons that prove that leaders are believed to make ethical decisions in the modern era. However, the fact is little different from the common perceptions of its followers. In spite of having maximum access to the in numerous resources of the organization, leaders are not very effective in making ethical decisions. For example, Unilever in Pakistan was criticised for not paying the f ixed amount of minimum wages to the labours. However, they claimed to do so, which could not be proved from the perspectives of labours. This is one of such instances, which highlights the bad sight of leaders who cares more about their business but not about the human values (Johnson 2013). It would not fair to claim that all the modern leaders have no skills, which could enable them for making ethical decisions. To understand the gap in the modern time of leaders, it is necessary to understand the different kind of leaders that exist in the modern times. Based on the types of leaders, they can be categorised as incompetent, corrupted, and motivated (Tannenbaum, Weschler and Massarik 2013). Incompetent are those leaders that have less capacity to fight with the challenging situations. These kinds of leaders are danger for the productivity of business and also for its career. These leaders find it difficult to retain its jobs, which is indeed not good for both the organization and the leader itself. This is one of the reasons that are responsible for a huge alteration of leadership in most of the modern organizations. In order to achieve and maintain the competitive advantage in the market, organizations tend to do so (McKee, Kemp and Spence 2012). Corrupted are those le aders, which can go to any level for achieving their evil desire. Productivity is anything to such leaders. In course of doing this, they even play with the ethical values of human life. This is because of the fact that these leaders are criticised for their corrupted behaviours. Motivated are those groups of leaders that are in less numbers in the modern times. The CEOs of different multinational companies such as Walmart USA, Tesco UK, Unilever, PG, Nestle, Microsoft, apple and Samsung are some of the examples of such leaders, which are highly motivated. They tend to incept the same level of motivation into their followers. This is because of the fact that these multinational companies are immensely successful. These leaders inspire the vision of an ethical standard for leaders. These leaders can essentially make ethical decisions. However, number of such leaders is very less (Menzel 2012). A less number of productions of such leaders are supporting the fact that leadership is not essential to make ethical decision. Leaders are known and remembered for such works, which have high values for the human lives. However, this is indeed interesting to know that world is not devoid of leaders, it is rather devoid of great and ideal leaders. Leaders are supposed to make decisions that are good for both the humanity and the organization. However, numbers are increasing of such leaders that are productive from the business perspectives but they are not good for the human values. Making an ethical decision for the betterment of business and the humanity is of level task (Pardey 2016). Normal employee have no access to that level but it is worth mentioning that even trustable and experienced employees could also help the organization in making the ethical decision. This is not only limited to the leadership quality but it is also related to all those who have the capabilities but h ave never tried. One of such examples is of the CEO of KFC, which is giving a strong competition to the world famous McDonalds. At the time when the CEO thought of the concept, the one was not even known to its nearest of neighbours. However, by gradually deploying new and innovative ideas, it became one of the leading billionaire of the world. Some may argue that the leadership quality that was hidden inside has compelled the CEO in turning the odd things into his favour. However, the CEO was just a normal person; the person was not any leader at that time. This indeed is important to understand that leaders are born but they take time to prove their worth to this world (Sims and Quatro 2015). Moreover, this also means that leadership is not confined only to those people who are recognized faces and are serving the organization by being at the highest position. It is rather hidden things, which needs to be identified. This simply proves that leadership quality is not the one thing, which is required to make ethical decisions. It rather requires the understanding of ethical values and the personal credibility to deliver on the self created chances. Moreover, all the leaders are not efficient enough to make ethical decisions but only those who can turn the world into their favour (Pava 2015). Positioning someone to the leadership position does not hold any guarantee for the commencement of ethical decisions. It rather depends on the true leaders that are seldom born in this world. The ancient world has seen so many of such leaders; however, the rate of production has been reduced to a lower number in recent times. It would be very wise to conclude the study that effective leaders are essential for making ethical decisions; however, all the leaders are not necessarily effective in leadership. References Bethel, S.M., 2012.Making a difference: Twelve qualities that make you a leader. AudioInk. Champoux, J.E., 2016.Organizational behavior: Integrating individuals, groups, and organizations. Routledge. Ciulla, J.B. ed., 2014.Ethics, the heart of leadership. ABC-CLIO. Conger, J.A. and Riggio, R.E., 2012.The practice of leadership: Developing the next generation of leaders. John Wiley Sons. Cooper, T.L., 2012.The responsible administrator: An approach to ethics for the administrative role. John Wiley Sons. Crane, A. and Matten, D., 2016.Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press. Day, D.V. and Antonakis, J., 2012. Leadership: Past, present, and future.The nature of leadership,2. Gasper, D., 2016. Ethics of development. Hollander, E., 2012.Inclusive leadership: The essential leader-follower relationship. Routledge. Johnson, C.E., 2013.Meeting the ethical challenges of leadership: Casting light or shadow. Sage Publications. McKee, A., Kemp, T. and Spence, G., 2012.Management: a focus on leaders. Pearson Higher Education AU. Menzel, D.C., 2012.Ethics management for public administrators: Leading and building organizations of integrity. ME Sharpe. Pardey, D., 2016.Introducing leadership. Routledge. Pava, M., 2015.Leading with meaning: Using covenantal leadership to build a better organization. Macmillan. Sims, R.R. and Quatro, S.A., 2015.Leadership: Succeeding in the private, public, and not-for-profit sectors. Routledge. Tannenbaum, R., Weschler, I. and Massarik, F., 2013.Leadership and organization. Routledge.

Thursday, November 28, 2019

Ip Proposal free essay sample

Tech) from Kalyani University, West Bengal. Currently a second year student of the Post Graduate Program, 2004-2006 at IIM Ahmedabad, he did his summer internship with ICICI Prudential LIC Ltd. on market penetration strategy in the high net income segment. †¢ Saugat Tripathy is a Computer Science Engineer from Delhi College of Engineering, and has worked Sapient Corporation for one year as an associate of technology. Currently, a second year student of the Post Graduate Program, 2004-2006 at IIM Ahmedabad, he did his summer internship with Star India Pvt. Limited on the feasibility of a separate channel / channel extension for rural India. Area of Project: †¢ The project deals specifically with Pricing and hence, is under the Marketing Area. Term in which project is credited: †¢ Term 5 Project Guide: †¢ Prof. Arvind Sahay Introduction Pricing is one of the most important variables in the entire marketing mix of any company. But it is rarely given the importance that it deserves. We will write a custom essay sample on Ip Proposal or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Most companies follow cost-plus pricing or competitive pricing techniques to price their products. These methods are not oriented to customer demands or the value that the customer may derive from the product. Hence, more often than not the product is either over-priced or under-priced. Reversing a pricing decision is very difficult to implement. Hence, in case of over-pricing the sales of the new product may fail to take-off and in case of under-pricing the consumer surplus is left on the table. Most of the marketing mix variables are decided based on market research so that the entire process is customer oriented. To do the same for pricing, one needs to know the underlying price sensitivity of the target customer base. There are many ways to do find out the price sensitivity of demand. Some of the most popular ones are 1. Conjoint Analysis 2. Price Metering 3. Dynamic Pricing All of these methods are very costly for most companies as discussed below. Preliminary studies show that conjoint analysis requires two separate surveys. The first one is used to validate the attribute space. The second one is used to find out the preferences of people – i. e. comparison of the attributes. Moreover the sample size required for both the surveys is generally large to get a reliable result. The whole process takes time, money and qualified manpower. Therefore it is very resource intensive. Price metering involves asking people their threshold prices. This is more complex than it sounds because very few people can decide what their threshold prices are. Therefore a large number of responses are required to arrive at aggregate threshold levels that have small deviation. Hence, this method although simple to administer, is not very reliable and is also costly. Dynamic pricing is another method to find out price sensitivity curve. But this involves changing prices over time and space. Therefore it is essential that people being subjected to different prices are not allowed to communicate with each other. This is very difficult to ensure. If people come to know that they have been charged different prices then not only the brand but also the company (in case of a multi-brand company) and the retail store earns a bad reputation. Hence, this is a very risky proposition and also very difficult to convince the retailers. Therefore small and medium sized companies cannot undertake these market research methods. Consequentially their pricing decision is always sub-optimal. Coming up with a generic model to measure price sensitivity is difficult, due to the following reasons – †¢ There is a significant difference in the way the purchase decisions are made for different goods. While purchase decisions for consumer durables take up considerable amount of time, the FMCG products can be considered as low involvement goods. †¢ The various options available for a good and level of differentiation between them also affect sensitivities towards prices. For e. . while buying a commodity, like electricity. Here, neither does one have the option of choosing a vendor, nor the option of not buying it. †¢ While purchasing a customized product, like an IT product for solving a business problem of a company. The price sensitivities here depend of various things like the various relevant features of the product, after sales service, company credibility and the monetary value of the deriv ed benefits from the product (like time saved, number of people who can be replaced, etc) The four product categories We thus divide the products into four categories, and believe that we need to study the measurement of their price sensitivities differently – †¢ FMCG goods †¢ Consumer durables †¢ Commodities †¢ IT solutions and other B2B products This project is intended to develop a cost-effective model for determining price sensitivity of demand for †¢ FMCG good –Toothpaste and †¢ Consumer good – Colour television Objectives †¢ To develop an alternative and cost-effective model to determine price sensitivity of demand for the two categories – toothpaste and colour television. Scope The scope of the project is limited to the premium brands of toothpastes (Colgate, Close-up, Pepsodent, etc) and conventional 21† colour televisions (LG, Sony, Onida, etc) We also intend to look at historical quarterly sales volume and price data for these brands for the last 5 years, in case we get this data. Research Questions †¢ What are the key factors that drive consumer buying decision in the two different product categories and what is the relative importance of price in the consumer buying decision? †¢ What is the price awareness of consumers? How do discounts or some other indirect price changes affect the probability of a buy? Review of Different Methods for Measuring Price Sensitivity Common methods of measuring price sensitivity †¢ Conjoint or Trade-off Analysis A popular experimental technique for measuring sensitivity to price as well as other product attributes, Conjoint analysis disaggregates a product’s price into the values consumer s attach to each attribute and helps in identifying the differentiation value of unique product attributes, design new products with attributes that consumers are willing to pay for and the price that consumers are willing to pay. However, the data required for a conjoint analysis requires an extensive survey conducted by the researcher, wherein the respondent is asked to make choices between pairs of fully described products or between different levels of just two product attributes. This makes the method more costly in terms of resources and time in comparison to simple surveys, despite the fact that it provides much more information †¢ Price Metering Price metering is another technique to determine the effect of the interaction of price and quality on the consumers’ perceptions of value. Robert C. Lewis and Stowe Shoemaker describe in their paper â€Å"Price sensitivity Measurement- A tool for the Hospitality Industry† the usage of the price metering method to gauge price sensitivity in the hotel and restaurant industry. The model as indicated in the paper is based on data obtained from respondents on the following questions: 1. At what price on the scale do you consider the product or service to be cheap? 2. At what price on the scale do you consider the product or service to be expensive? 3. At what price on the scale do you consider the product or service to be too expensive, so expensive that you would not consider buying it? 4. At what price on the scale do you consider the product or service to be too cheap, so cheap that you would question the quality? The responses to the above questions are statistically collated and analyzed using graphs as shown below: [pic] The paper states that the degree of price sensitivity depends on the relation between the indifference percentage, stress level and the range of acceptable price. While, a combination of low indifference percentage levels, high stress levels and a narrow acceptable price range indicates a sensitive market, a combination of high indifference percentage levels, low stress levels and a broad acceptable price range indicates a less sensitive market. The paper also suggests that the model enables comparison of the current price of a product or service with the acceptable price range. Further, price metering is an easy to use model, which is cheaper in terms of resources and time needed and does not require special knowledge or skill on the part of either the researcher or the respondent. Other Approaches or Methodologies After doing a survey of the literature available on measuring price sensitivity the following methods were seen to be suitable for a quick and less resource intense way of measuring price sensitivity. †¢ Self-Report Method Goldsmith and Newell had done a study to correlate price sensitivity with innovativeness – tendency of some users to try out new products. A 7 item likert scale questionnaire was constructed from a 6 item Likert scale questionnaire for a similar study done by Goldsmith in 1996. The questionnaire is based on the buying behavior of â€Å"innovators†. It questions people on two factors – one which ascertains their level of innovativeness and the other which ascertains their level of price sensitivity. Each of the 7 questions were to be rated on a 5-point response format. The sample selected was not random but reasonably diverse and the size was 457. Only one survey was conducted. Factor Analysis was done and the results were checked for reliability, consistency and construct validity. The data analysis was aimed to prove the hypothesis that innovativeness is positively correlated with low price sensitivity. Another interesting aspect of the study is that it has tried to compare innovativeness among different segments of the population divided on the basis of demographics. For example, it was found that women are more likely to try out newer fashion products than men and also they were less sensitive about price. The implications could be better targeting of individuals based on demographic factors when a new product is introduced and thus better extraction of the consumer surplus. This sort of a simple questionnaire can be used on people to ascertain their level of price sensitivity. An advantage is that the survey can be conducted over mail or internet. †¢ Through Interviews Van Helden had done a study in 1978 to find out price sensitivity in a way that was quicker and cheaper than conjoint analysis. The study was done to find out price sensitivity of demand for electric power. The respondent was asked just 2 questions: a. Would he decrease power consumption if price of power rose? The options were: i. Yes ii. No iii. Yes but he does not intend to. b. If the respondent chose the last response then by how much will the price of electricity will have to rise for him/her to reduce consumption? The options were classified into the following classes: i. 0 to 5% ii. 6-10% iii. 11-20% iv. 21-30% v. 31-50% vi. 51% or more Based on the answer, his price sensitivity is calculated as follows: The actual price increases are also divided into classes. The classes for actual price increase and threshold price increase for consumer to reduce consumption are balanced. Then if a respondent says that he will reduce consumption if price rise is 18% then the decrease in consumption for 5% and 12% (these are the class averages) will be 0, whereas for 18% the decrease in consumption will be 6% (18%-12%) and for 25% it will be 13% (25%-12%). This is based on the assumption that relative decrease in consumption is equal to the difference between actual price increase and threshold price increase. The individual price sensitivity curves are then aggregated to give the aggregate price sensitivity curve. There were around 300 respondents on whom the study was conducted. The study also collects such information as income, number of family members in the household, number of electrical appliances which can be used less if required, etc. The limitation of the study was that it requires people to have a clear idea as to the level of price rise after which they will reduce consumption. Moreover the way the individual sensitivities have been calculated may be challenged. For other products which are not necessities and are not supplied by a single supplier, relative prices of substitutes and competitor’s products need to be taken into account. Another limitation is that fact that people had to be interviewed and it cannot be done through mailers. Methodology: 1. What are the key factors that drive consumer buying decision in the two different product categories and what is the relative importance of price in the consumer buying decision? The key factors and the relative importance of price in the consumer’s buying decision process for the two product categories, viz. , premium toothpaste and conventional 21† colour television need to be determined in order to understand the drivers of price sensitivity in the above product categories. This would probably require a preliminary research and survey, which would be carried out as a representative survey in the city of Ahmedabad. 2. What is the price awareness of consumers? The determination of the level of the price awareness of the consumers of the two product categories would enable us in establishing an idea about the price sensitivity of the consumers as well as help in validating the model to be developed. This may as well be done through a survey of the consumers . 3. How do discounts or some other indirect price changes affect the probability of a buy? Evaluating the effect of discounts, indirect price changes and other offers would help in establishing the level of price sensitivity in the market for the two product categories. Further, this would enable us to determine the relative importance of such price changes on the model to be developed. Proposed Model for Measuring Price Sensitivity: Measuring price sensitivity of FMCG goods Historical data of sales and price variations is a good place to start if one wishes to measure the sensitivities of a product. If one has the data for the last 8 years (say), we can create a simple regression of the form –

Sunday, November 24, 2019

How the Puritans Differed from the Pilgrims

How the Puritans Differed from the Pilgrims The Puritans and the Pilgrims were two significant immigrant groups who moved from England to America in the 1600s. Both groups existed in England at a time when the country underwent a break with Catholicism. Following this break with the Catholic Church, The Church of England was established and every Englishman was required to acknowledge its authority.Advertising We will write a custom essay sample on How the Puritans Differed from the Pilgrims specifically for you for only $16.05 $11/page Learn More This new state of affairs led a group of religious people to seek immigration to the New World so that they could exercise their religious freedoms. Thus in the early 1600s, the Pilgrims and the Puritans headed left England for America out of religious considerations. This paper will highlight the major differences between the Puritans and the Pilgrims. The most significant difference between the two groups is that while the Pilgrims desired a separation of church and state, the Puritans only wanted to purify the Church of England from within. The pilgrims did not want to belong to the Church of England and they took to holding meetings in barns and homes. These separatists formed their own religious rules and traditions (Velm 83). Because of this, the King of England persecuted the Separatists. These pilgrims therefore moved to America, which was viewed as a place where they could have the freedom to worship the way they wanted. The Puritans on the other hand viewed did not seek a separation from the English establishment and only wanted to carry out reforms to remove corruption from the church. The Puritans emigrated to the New World since they were persecuted in their attempts to instigate reforms in the Church of England.  The two groups also differed in their perception of God. The Puritans deemed religion as a guideline for everyday living and God was regarded as a strict supernatural being who ruled over all. The Puritans laid great emphasis on spirituality and members of this group had great biblical knowledge (Conforti 190). Owing to their concern for Christian purity, the Puritans were strict in their way of life. Conversely, the Pilgrims had a more accommodating perception of God who was viewed as a benevolent and lenient ruler who could forgive easily. The pilgrims had a more liberal approach to worship and religion and little emphasize was made on spirituality. The Pilgrims way of life was more tolerant and it did not have many restrictions.  The other difference between the two groups is that while the Pilgrims emphasized on individual righteousness before God, the Puritans were committed to corporate righteousness. The Pilgrims were in favor of a strong separation between the church and state and for this reason; they were regarded radical rebels (Velm 83).Advertising Looking for essay on history? Let's see if we can help you! Get your first paper with 15% OFF Learn More To this group, each person was accountable for his or her own actions to God and corporate righteousness was unbiblical. The Puritans on the other hand supported corporate worship and deemed the state as integral to the perpetration of religion. The Puritans were of the opinion that the role of the government was to enforce Gods laws. The Puritans and the Pilgrims played a major role in the development of the American colonies. This paper set out to articulate the difference between the two groups. To this end, it has documented that the major difference was that the Pilgrims were Separatists while Puritans wanted to purify the Church of England. In spite of their differences, the two groups move to the New World where they were able to practice the religious freedoms they did not enjoy in England. Conforti, Joseph. Imagining New England: Explorations of Regional Identity from the Pilgrims to the Mid-Twentieth Century. Carolina: University of North Carolina Press, 2001. Print. Vel m, Greg. Wiley AP U.S. History. NY: John Wiley Sons, 2012. Print.

Thursday, November 21, 2019

E-Business report Assignment Example | Topics and Well Written Essays - 2000 words

E-Business report - Assignment Example According to the Entertainment and Leisure Software Publishers Association (ELSPA), "the UK gaming industry recorded a trade close to 200m in 2005 and is on a continuous inclination". These facts are favorable to the success of GameODrome. Being nave, GameODrome has to compete with several competitors and prove to the consumer that striking a deal with them is easier and more accessible. The advent of Internet has drastically changed lifestyles. E-Marketing is the latest revolution in Internet which allows buying goods while sitting at the luxury of one's home. Many companies now provide their sales and services through internet. One should know and understand various frameworks of E-marketing and their role in promoting a company. E-Marketing consists of several theoretical models, which provide a company with the tools to support the essential elements of marketing, namely price, promotion, product and place. The important models are: Merchant Model: This model is typically used by traders, resellers, wholesaler and retailers of goods and services. It includes 24x7 ordering and one to one custom marketing (embellix, 2000). This would be the most efficient solution for GameODrome, as its main form. It provides catalogues which make it easy for the consumer to choose a product. Auction Model: This model emulates the traditional 'bidding' model. It implements the bidding mechanisms by presenting goods and their value online. For GameODrome, this model would not be an immediate prospective. However once GameODrome establishes itself in the online industry, it can use this model to make 'year-end sales' and allow flagship firms to auction their goods. Manufacturer Model: It is used by the manufacturers directly to communicate to the consumers about their goods and services. Affiliate Model: In this model a company becomes an 'affiliate' of another company to advertise itself or its products and needs to pay certain amount for using it. This model can work well as a secondary model for GameODrome. Advertising Model: In this model, a company uses another website to advertise with the use of banners. Subscription Model: This model is generally used by Online Libraries and Scientific Organizations, where certain amount has to be paid as subscription charges to view or download any content offered (commissionjunction.com, nd). Logistics Model: In this model a company manages the logistical activities of another company. It is useful to organizations that have a strong foothold and already generated sufficient revenue. E-Business Implementation The implementation of the

Wednesday, November 20, 2019

Social work Essay Example | Topics and Well Written Essays - 500 words - 1

Social work - Essay Example This gives the indication that even if the objective for equal educational opportunity to everyone is greatly supported by the values held sociologists, there is need to indulge in professional commitment as well as record accomplishment. It is therefore important to face these challenges by way of equipping educational social workers with basic knowledge on African American experiences as well as equipping urban schools which are considered to have massive enrolments of black students. It is very important to ensure improvement in policy making and leadership toward educational reforms especially in urban schools. Research indicates that policymaking in regard to educational reform is a variable missing especially when focusing on school social work discussion. This therefore creates the need for school social work to take responsibility so as to initiate various contracts based on major policy decisions. Social workers need to largely participate in public policy forum related to education reform. School choices play a major role in educational reforms with main focus on schools in urban cities. Therefore, development of various school choice issues is perceived to change the function and structure of existing urban school. School choices can be through school vouchers that are considered to be an issue of equality in education whereby a state or federal educational funding is directly issued to those families that are underprivileged and would like to enroll in private schools. Educational social workers can engage in organizing various community forums to bring both school personnel and organizers together to discuss key reforms needed in the education system. Also, research plays an important role in policymaking educational reforms with main focus on black culture in the educational system. Through research, many researchers have identified critical issues within the African American

Monday, November 18, 2019

Carbon, Phosphorus, and Nitrogen Cycles Essay Example | Topics and Well Written Essays - 1000 words

Carbon, Phosphorus, and Nitrogen Cycles - Essay Example When the animals and plants die and they decompose, carbon atoms are returned back to the atmosphere, and the cycle starts again. Humans have the ability to negatively impact the carbon cycle. The most common method of doing this is by burning any type of fossil fuel, including oil, coal, and natural gas. When fossil fuels are burned, CO2 is produced and released into the atmosphere. While breathing CO2 is a normal part of the carbon cycle, when humans create more CO2 than oxygen-producing plants cannot keep up with, the cycle is thrown off (Wigley, 2000). In a similar sense, humans are also impacting the carbon cycle by cutting down plants, trees, and whole forests, further ridding ourselves of one of the aspects of the carbon cycle, as well as a vital component of oxygen production. The phosphorus cycle is a biogeochemical cycle that takes place as phosphorus moves through the lithosphere, hydrosphere, and biosphere. Phosphorus is found in rocks and begins as phosphate ions. When i t rains, the phosphate ions are removed from the rocks and are distributed into the soil and water. From there, plants absorb the phosphorus compounds from the soil, then animals take up the phosphorus atoms when they eat the plants. These phosphorus atoms are also found in water, where plants can absorb the water or animals can take a drink. When phosphorus is in the water, it gradually accumulates over time into insoluble deposits (Cole, 1999), which will be released back onto land as rocks, prompting the cycle to go again. Humans can impact the phosphorus cycle by creating too much phosphorus in the environment. When humans use fertilizers or pesticides, which are heavy in phosphorus atoms, they move the phosphorus around and it becomes excess runoff. As runoff, the phosphorus can end up in large bodies of water, which can lead to eutrophication, killing animals and plants that rely on that body of water. Also, sewage treatment facilities that use lakes and rivers as dumping grou nds create phosphate pollution that can grow algae and cyanobacteria, which destroys the oxygen in the water and reduces species diversity. The nitrogen cycle is the process in which nitrogen makes its way through nature. Nitrogen is an essential element for life; humans do not use the nitrogen, but it is still vital for our bodies. When plants and animals die, they decompose and add nitrogen into the soil. Bacteria within the soil converts the nitrogen into a form of nitrogen that plants are able to use to help themselves grow (Bothe, 2007). Animals and people eat the plants, obtaining their source of nitrogen. The animals and plants decompose and return nitrogen back into the soil. The cycle then repeats itself. Humans can impact the nitrogen cycle by producing too much nitrogen. They are capable of doing this through the pollution emitted by vehicles and chemical plants, doubling the amount of annual transfer of nitrogen into biologically-available forms (Howarth, 2006), as well as by force-feeding plants nitrogen through nitrogen-containing fertilizers. Humans can also impact the nitrogen cycle by depleting the amount of nitrogen that is made accessible. This can be done by the dumping of sewage and other types of organic matter into bodies of water, which damages oxygen levels, thus damaging nitrogen supplies. References Bothe, H. (2007). Biology of the nitrogen cycle.

Friday, November 15, 2019

Comparative Study of the Banks in Nepal

Comparative Study of the Banks in Nepal A well-structured financial sector is of special importance for the economic growth in both developed and developing countries. The commercial banking sector should be well organized and efficient for the growth of an emerging economy. Commercial Banks which forms one of the backbones of the financial sector are the intermediary link in facilitating the flow of funds from the savers to investors. By providing a means of mobilizing domestic savings and proficiently channeling them into productive investments, they lower the cost of capital to investors and accelerate the economic growth of a nation. No underdeveloped country can well progress without setting up a sound system of commercial banking system.  [1]   Nepal is an agrarian based economy with a GDP of $ 33.26 billion  [5]  . Nepalese banking industry has considerable changes over past decades because of liberalization, deregulation, improving information technology and globalization. The financial sector liberalization resulted in the entry of new firms in the market, which also added more pressure on competitiveness of individual banks; deregulation widened the scope of activities and expanded the banking activities; advancement in technology resulted into new methods to perform banking activities. Furthermore, the banks, these days, are entering into non-banking markets while other financial institutions are entering into the banking markets that have conventionally been served by the banks. These changes have altered the structure and market behavior of Nepalese banking industry. Currently there are 26 commercial banks out of which 6 are joint venture banks, 63 development banks and 77 financial institutions in Nepal. At present there is only one international bank operating in Nepal which is Standard Chartered Bank Limited. It started operation in Nepal since 1987 as a joint-venture operation and today it is a part of Standard Chartered Group having an ownership of 75% in the company and 25% shares owned by the Nepalese public. Nepal after its commitment to the World Trade Organization (WTO) during its accession in 2004, has allowed foreign banks to make their foray in Nepal to do only wholesale banking  from Jan. 1, 2010. Initially before the agreement with WTO (GATS), the Central Bank regulation allowed foreign shareholders to acquire maximum of 51% shares. Later the regulation changed which allowed foreign ownership of 75% and the recent regulation of 2010 allows 100% foreign ownership (i.e. allows a local entity to be a branch of a foreign company) in the banking industry. Entering of foreign firms is likely to generate benefits to financial sector as well as the economy as a whole (Chau HB, 2003). The effects can be seen mainly through an increase in efficiency and technological advancements as mentioned above. Over the past decade, the Nepalese banking industry has been doing well and has a number of new firms entering into the market. However, there is only one foreign bank and 6 joint-venture banks in the banking sector, though the government has liberalized the financial sector and allowed foreign banks to have 100% foreign ownership. With limited number of foreign banks in Nepal, it is still unclear whether entering of foreign banks, including joint venture, helps to improve overall performance of banking sector as well as to spillover some benefit to domestic banks in Nepal. Objectives To answer the key question above, there are two objectives of the research paper: To measure and analyze the performance of three types of banks namely domestic bank, joint-venture bank, and foreign bank and to explain the variation in performances of these banks. To identify whether the entry of foreign banks, including joint venture, banks would be beneficial for domestic banks which still dominate the financial market in Nepal. 1.3. Scope and limitations of the Study This study will only focus on three types of banks, i.e. domestic bank, joint-venture bank, and foreign bank, and it will offer an insight on the advantages of foreign banks in Nepal. Furthermore it will provide the reasons pertaining to variations in performance of the banks. The main limitation in this study is that there is only one foreign bank in Nepal till date, so the interpretation of the performance of the foreign bank in Nepal could be restricted to some degree. 1.4. Research Methodology This section develops research methodology to reach the objectives of the study. The banking sector in Nepal will be divided into three groups, namely foreign owned banks; joint-venture banks, and domestic banks. For this research, foreign-owned banks will be classified as those which have started a branch or subsidiary in the host country where the share of foreign bank ranges from 51% to 100% while joint venture banks will be classified as those in which foreign investors own the total equity of 50% or less and domestics banks are those which are purely owned by the Nepalese. The foreign owned banks are separated from joint-venture banks in this study because these two types of banks tend to have different operational management, resulting in their different performance. The research methodology is composed of both quantitative and qualitative analysis. First, the qualitative approach is applied to examine the structure and development of financial sector in Nepal during 2000-2010. The financial policy, especially competition-restriction regulation in Nepalese banking sector is also reviewed, mainly through official documents from central bank and international organization. Then the quantitative approach is developed to measure the performance and efficiency of banking sectors in Nepal. This is done by conducting various financial indicators of three types of banks in Nepal namely foreign bank, joint venture banks and domestic banks. Comparison of the indicators among these three types of banks over the past decades will provide the clear analysis of different performance between foreign-owned and domestic banks. The indicators can be grouped into four aspects, namely profitability; operational costs; staff productivity; risk prevention. Profitability à ¯Ã¢â‚¬Å¡Ã‚ ·Profit Margin (Net Profit/Total Income) Profit margin is very useful when comparing  companies in similar industries. A higher profit margin indicates a more profitable company that  has better control over  its costs compared to  its competitors. Profit margin is  displayed as a percentage; a 20% profit margin, for example, means the company has a net income of $0.20 for each dollar of sales. Profitability à ¯Ã¢â‚¬Å¡Ã‚ · Return on Asset (Net Profit/Total asset) ROA figure gives investors an idea  of how effectively the company is converting the money  it has  to invest into net income. The higher the ROA number, the better, because the company is earning more money on less investment. For example, if one company has a net income of $1 million  and total  assets of $5 million, its ROA is 20%; however, if another company earns the same amount but has total assets of $10 million,  it has  an ROA of 10%. Based on this example, the first company  is better at converting its investment into profit. Profitability à ¯Ã¢â‚¬Å¡Ã‚ ·Ã‚  Return On Equity (Net Profit/Equity) The amount of net income  returned  as a percentage  of shareholders equity.  Return on equity  measures a corporations profitability  by revealing how much  profit a company generates  with the money shareholders have invested.  Ã‚  Higher The ROE better the company. Profitability à ¯Ã¢â‚¬Å¡Ã‚ · Interest Rate Spread (Interest Earning Ratio-Interest Expense Ratio) The difference between the average yields a financial institution receives from loans and other interest-accruing activities and the average rate it pays on deposits and borrowings. The greater the spread, the more profitable the financial institution is likely to be; the lower the spread, the less profitable the institution is likely to be. Risk prevention Risk Prevention à ¯Ã¢â‚¬Å¡Ã‚ ·Capital to Risk Weighted Assets (CRAR) Total Capital/ (RWAs) This ratio is used to protect depositors and promote the stability and efficiency of financial systems around the world. à ¯Ã¢â‚¬Å¡Ã‚ ·Core CRAR = Tier I Capital / RWAs Tier one capital is that which can absorb losses without a bank being required to cease trading. This measures the capital standard of the bank à ¯Ã¢â‚¬Å¡Ã‚ ·Adjusted CRAR = (Total Capital Net NPAs)/(RWAs Net NPAs) This relates to the bankâ‚ ¬Ã¢â€ž ¢s ability to sustain the losses due to risk exposures is the bankâ‚ ¬Ã¢â€ž ¢s capital. The intermediation activity exposes the bank to a variety of risks. Staff productivity Staff Productivity à ¯Ã¢â‚¬Å¡Ã‚ ·Profit per employee (Net Profit/ No. of Employee) This helps to measure how productive the employees are in the bank by calculating profit generated by every employee. Higher the figure better for the company. à ¯Ã¢â‚¬Å¡Ã‚ ·Net Income per employee (Net Total Income/ Number of Employees) This also helps to measure income generated by every employee in the company Operational costs Overhead Expense à ¯Ã¢â‚¬Å¡Ã‚ · Overhead expense/total income The accurate accounting and allocation of over-head expenses are very important factors in calculating the true cost of the company Operating Expense Ratio à ¯Ã¢â‚¬Å¡Ã‚ · Operating Expense/ Net Income The Operating Expense Ratio is usually viewed as a measurement of management efficiency.   This is because management usually has greater control over operating expenses than they do over revenues. In addition to analyzing different performance between foreign-owned and domestic banks, this study further analyze whether entering of foreign banks helps to improve efficiency of domestic bank. This is done by (1) Structured interviews with managers of central bank and commercial banks. Specifically, the interview will provide detailed analysis on which factors do help to improve performance of domestic banking sector in Nepal; could foreign-owned banks influence performance of domestic banks; and which channels do foreign-owned banks influence domestic banks, and (2) by â‚ ¬Ã…“Granger causality testâ‚ ¬? between domestic bank performance and foreign bank performance. This will be done on profitability, staff productivity and operational costs. 1.5. Organization of the study There will be five chapters in the study. Chapter 1 provides introduction, objective, scope and limitation, and methodology of the study. Chapter 2 reviews relevant theoretical and empirical literature on foreign bank penetration and domestic bank performance in both developed and developing countries to lay the groundwork for developing analytical framework and methodology in examining the impacts of foreign bank penetration on domestic bank performance in Nepal. Chapter 3 examines the structure and development of financial sector in Nepal as well as financial policy over the past decades. The results of banking performance are shown in this chapter. Chapter 4 discusses the impacts of foreign banks to domestic banks, both qualitative and quantitative. Chapter 5 provides conclusion and policy inferences. Chapter 2 Literature Review This section reviews relevant theoretical and empirical literature on foreign bank penetration and domestic bank performance in both developed and developing countries. This is done in order to lay the groundwork for developing analytical framework and methodology in examining the impacts of foreign bank penetration on domestic bank performance in Nepal. Penetration of foreign bank can come in different forms, such as branch offices, subsidiaries, joint ventures, or strategic partnerships. Branch offices, for instance, are an integral part of the parent company, that is, they have no capital of their own. Subsidiaries, however, are their own corporate entities, which are fully owned by the parent company. Similarly, joint ventures are separate corporate entities owned jointly by more than one parent company. Finally, foreign banks may establish a strategic partnership by buying a majority stake of an already existing domestic bank. Weller Scher (1999) The main difference between the various operational forms of foreign banks is their regulatory treatment. The regulatory treatment of the banks differs amongst domestic banks, joint-venture banks and foreign owned banks. Although there are different forms of foreign bank penetration, foreign owned banks are defined as those in which foreign investors own more than 50% of the total equity. Okuda and Rungsomboon, (2004). Decree on Foreign Banks, Phillip Fox 2006, distinguished foreign banks as Foreign Bank Branches (FBB), Foreign Invested Banks (FIB) and Joint Venture Banks (JVB). FBB is a dependent subsidiary of a foreign bank, for which the foreign bank has provided written guarantee that it will be responsible for all obligations and undertakings under FBB. A 100% FIB is established as a separate legal entity with capital being contributed from only foreign entities. Amongst the foreign investors, there must be a â‚ ¬Ã…“parent bankâ‚ ¬? and it must hold more than 50% charter capital. A JVB is established as a separate legal entity, with capital being contributed from one or more foreign banks and domestic banks. Capital is not divided into shares. In JVBs, the capital contribution rate by the foreign bank(s) is capped at 50% of the capital of the bank. The regulations and supervision of financial sector in a host country are crucial in affecting the penetration of foreign banks. Over the past decade, most of the banks throughout the world have started standardizing their policies relating to financial sector according to Basel committee (Basel II Basel III)  [7]   Although Basel system has been introduced and regulations and supervision of banking sectors began to be standardized, regulations relating to competition within the banking sector, which influence the penetration of foreign bank and market structure of banking sector, vary significantly across countries and regions. According to Barth, Caprio and Levin (2001), there are three key aspects of the regulations relating to competition within the banking sector, namely 1) Limitations on Foreign Ownership of Domestic Banks determine (whether there are any limitations placed on the ownership of domestic banks by foreign banks); (2) Limitations on Foreign Bank Entry determine (whether there are any limitations placed on the ability of foreign banks to enter the domestic banking industry) and (3) Entry into Banking Requirement determine (whether there are specific legal submissions required to obtain a license to operate as a bank). The restrictions on overall bank activities and ownership vary from country to country. The research on Regulation and Supervision of Banks around the World by Barth, Caprio and Levine (2001) mentions that there are two measures of the size of a countryâ‚ ¬Ã¢â€ž ¢s banking industry. First measure is total bank assets as a percentage of GDP and the other is the number of banks per 100.000 people. . Both these measures show substantial variation across countries. Countries like Germany, Switzerland, Netherlands, and United Kingdom have very high total bank assets as a percentage of GDP whereas United States and Asian countries are much lower. However the number of banks per 100,000 people is not much different in the countries mentioned above. The table clearly shows that the countries in ASEAN region have higher restrictions on banking activities and ownership in comparison to countries like New Zealand and United States. The regulations are different in each country and do not match even if the countries are in the same region. But Professional supervision per bank is lower in developed countries like United States, New Zealand, United Kingdom whereas developing counties have higher no. of supervision per bank. According to the research the highest restrictions on overall bank activities and ownership are imposed by countries like Bhutan, Cambodia, China, Indonesia, Vietnam and lowest restrictions by New Zealand then Germany, Austria and United Kingdom. In countries like New Zealand and United states the government ownership of banks is zero percent whereas India, Bangladesh has very high percent of government-owned banks. Although the regulations on banking competition vary, over the last decades, restrictions on foreign bank penetration have been relaxed as part of financial reform and foreign bank penetration increased substantially in many countries. This could be because the host country expects the positive impacts of increased foreign bank penetration in the host countryâ‚ ¬Ã¢â€ž ¢s banking system. Trade agreements have also played a major role in liberalization of market entry for foreign banks as financial services are required for international trade, production and investments. Governments usually support flow of foreign investment and this has been evident especially after various financial crises. Many countries in Southeast Asia started liberalizing foreign investment after the Asian financial crisis. The Asian crisis appeared to have catalyzed the liberalization of FDI restrictions in the banking sector across several ASEAN countries. Chau H.B (2003) A number of empirical studies analyze the impacts of foreign bank entry on domestic financial sector in a host country. The impacts can be grouped into three aspects. Firstly, foreign banks promote efficiency (competition and new technology) in domestic financial sector. A larger foreign bank presence can improve the competitiveness of the banking sector. Greater competition is advantageous for many reasons: to enhance the efficiency of financial services; to stimulate innovation; and to contribute to stability. It can also widen access of qualified borrowers to financing, which may increase aggregate lending and so enhance growth. A competitive and well-organized banking system can also improve the effectiveness of monetary policy transmission by tightening the link between policy rates and deposit/lending rates. (BIS paper No. 23) Foreign banks also help in availability of funds and acquisition of consumer-marketing skills. Chau (2003) In addition, foreign bank entry introduces new technology; financial services and advanced management skills, which existing domestic banks lack. The new technology and skills introduced by foreign banks include new financial products, advanced IT technology, and sophisticated bank management techniques. These are expected to contribute to lower operational expenses, amplified profitability, and better bank risk management. Forced by market competition, domestic banks may emulate the new financial products and management skills. Okuda Rungsomboon (2004). The presence of foreign bank also improves the corporate governance structure of the domestic banks. This includes breaking down the family-controlled structure and improving the decision making process. Chau H.B (2003) Unite and Sullivan (2001) has found that increase in foreign bank entry narrows the interest rate spreads and also reduces operating expenses. Foreign banks induces domestic banks to be more efficient, the increased competition forces domestic banks to take in less creditworthy customers and foreign participation induces domestic banks to spend more on improving their operations. However, Okuda Rungsomboon (2004) found that the entry of foreign banks is expected to negatively affect the operations of domestic banks but overall performance is likely to progress in the long run. Secondly, the entry of foreign banks is associated with reallocation of loans. Findings suggest that foreign banks improves credit access for many credit-worthy firms but some firms with positive net present value without opaque information will have difficulty obtaining loans. More developed countries, such as the U.S., Japan, and those in the European community, argue that Less Developed countries should allow foreign banks to enter into their economies. By increasing competition, foreign bank entry may boost the supply of credit and improve efficiency. Gormley (2006) Foreign banks are comparatively less likely to lend to â‚ ¬Ã…“soft informationâ‚ ¬? firms, and more likely to lend to â‚ ¬Ã…“hard informationâ‚ ¬? firms. â‚ ¬Ã…“Soft informationâ‚ ¬? refers to information that cannot be easily publicly verified by a third party. â‚ ¬Ã…“Hard informationâ‚ ¬? on the other hand refers to credible and publicly verifiable information, such as a foreign firmâ‚ ¬Ã¢â€ž ¢s authentically audited balance sheets, or government guarantees. Mian(2003.) The loan portfolio of foreign banks consists of only credible clients which mean that the chances of default are very less. The domestic banks will be compelled to give loans to non-credible clients because the credible clients will be mostly handled by foreign banks. This will have greater chances of loan defaults for domestic banks. Thirdly, foreign banks are geographically spread relative to domestic banks; therefore they are less affected by adverse shocks in the domestic country. Both foreign and private domestic banks have similar low probabilities of being assisted by the government in times of difficulty but foreign banks are considerably more likely of being bailed out by their parent bank. For example, if the local subsidiary in a developing country of a foreign bank runs into trouble, it may get an injection of new capital from its parent bank to bail it out. This access to liquidity directs to a lesser deposit cost for foreign banks. Furthermore, foreign banks have access to advanced technology, outside resources and expertise which facilitates them in providing better service than the domestic banks. However, there might be some drawbacks that make the foreign banks perform worse than domestic banks in the host country. Firstly, a large foreign banking existence could mean that information available to host country supervisors can be reduced and the decision-making and risk management shifts to the parent bank. The delisting of the equity of local partner on the local exchange removes an important source of market intelligence for the foreign bank. In addition, if the integrated firmsâ‚ ¬Ã¢â€ž ¢ equities are delisted in the local market, host country controllers can also lose access to key foreign bank decision-makers. Secondly, a country might be more exposed to shocks due to foreign banks presence. External events which affect the parent bank will affect the branches or subsidiaries. The factors that determine exposure to such external shocks, whether it is greater with onshore foreign banking as compared to traditional cross-border bank lending, and the propositions for regulatory and supervisory policy also demand further investigation. Lastly Accounting Standards could also be a problem for foreign banks unlike the domestic banks which have clear set of accounting standards set within its organization. There is a need for transparent and reliable accounting and financial reporting but for foreign banks; usually parent banks and their foreign subsidiaries often have different accounting standards, which can lead to discrepant financial balances, even when they are based on the same financial information. This might lead to complexity in comparison between international financial statements which could raise doubt in the reliability of banks financial statements. Differences may occur in different tax treatment, deferred taxes, valuation and accounting of repos, amortization of goodwill, treatment of past due loans and from provision and inflationary accounting adjustments. Moreno and Villar (2005) Comparative Study of the Banks in Nepal Comparative Study of the Banks in Nepal A well-structured financial sector is of special importance for the economic growth in both developed and developing countries. The commercial banking sector should be well organized and efficient for the growth of an emerging economy. Commercial Banks which forms one of the backbones of the financial sector are the intermediary link in facilitating the flow of funds from the savers to investors. By providing a means of mobilizing domestic savings and proficiently channeling them into productive investments, they lower the cost of capital to investors and accelerate the economic growth of a nation. No underdeveloped country can well progress without setting up a sound system of commercial banking system.  [1]   Nepal is an agrarian based economy with a GDP of $ 33.26 billion  [5]  . Nepalese banking industry has considerable changes over past decades because of liberalization, deregulation, improving information technology and globalization. The financial sector liberalization resulted in the entry of new firms in the market, which also added more pressure on competitiveness of individual banks; deregulation widened the scope of activities and expanded the banking activities; advancement in technology resulted into new methods to perform banking activities. Furthermore, the banks, these days, are entering into non-banking markets while other financial institutions are entering into the banking markets that have conventionally been served by the banks. These changes have altered the structure and market behavior of Nepalese banking industry. Currently there are 26 commercial banks out of which 6 are joint venture banks, 63 development banks and 77 financial institutions in Nepal. At present there is only one international bank operating in Nepal which is Standard Chartered Bank Limited. It started operation in Nepal since 1987 as a joint-venture operation and today it is a part of Standard Chartered Group having an ownership of 75% in the company and 25% shares owned by the Nepalese public. Nepal after its commitment to the World Trade Organization (WTO) during its accession in 2004, has allowed foreign banks to make their foray in Nepal to do only wholesale banking  from Jan. 1, 2010. Initially before the agreement with WTO (GATS), the Central Bank regulation allowed foreign shareholders to acquire maximum of 51% shares. Later the regulation changed which allowed foreign ownership of 75% and the recent regulation of 2010 allows 100% foreign ownership (i.e. allows a local entity to be a branch of a foreign company) in the banking industry. Entering of foreign firms is likely to generate benefits to financial sector as well as the economy as a whole (Chau HB, 2003). The effects can be seen mainly through an increase in efficiency and technological advancements as mentioned above. Over the past decade, the Nepalese banking industry has been doing well and has a number of new firms entering into the market. However, there is only one foreign bank and 6 joint-venture banks in the banking sector, though the government has liberalized the financial sector and allowed foreign banks to have 100% foreign ownership. With limited number of foreign banks in Nepal, it is still unclear whether entering of foreign banks, including joint venture, helps to improve overall performance of banking sector as well as to spillover some benefit to domestic banks in Nepal. Objectives To answer the key question above, there are two objectives of the research paper: To measure and analyze the performance of three types of banks namely domestic bank, joint-venture bank, and foreign bank and to explain the variation in performances of these banks. To identify whether the entry of foreign banks, including joint venture, banks would be beneficial for domestic banks which still dominate the financial market in Nepal. 1.3. Scope and limitations of the Study This study will only focus on three types of banks, i.e. domestic bank, joint-venture bank, and foreign bank, and it will offer an insight on the advantages of foreign banks in Nepal. Furthermore it will provide the reasons pertaining to variations in performance of the banks. The main limitation in this study is that there is only one foreign bank in Nepal till date, so the interpretation of the performance of the foreign bank in Nepal could be restricted to some degree. 1.4. Research Methodology This section develops research methodology to reach the objectives of the study. The banking sector in Nepal will be divided into three groups, namely foreign owned banks; joint-venture banks, and domestic banks. For this research, foreign-owned banks will be classified as those which have started a branch or subsidiary in the host country where the share of foreign bank ranges from 51% to 100% while joint venture banks will be classified as those in which foreign investors own the total equity of 50% or less and domestics banks are those which are purely owned by the Nepalese. The foreign owned banks are separated from joint-venture banks in this study because these two types of banks tend to have different operational management, resulting in their different performance. The research methodology is composed of both quantitative and qualitative analysis. First, the qualitative approach is applied to examine the structure and development of financial sector in Nepal during 2000-2010. The financial policy, especially competition-restriction regulation in Nepalese banking sector is also reviewed, mainly through official documents from central bank and international organization. Then the quantitative approach is developed to measure the performance and efficiency of banking sectors in Nepal. This is done by conducting various financial indicators of three types of banks in Nepal namely foreign bank, joint venture banks and domestic banks. Comparison of the indicators among these three types of banks over the past decades will provide the clear analysis of different performance between foreign-owned and domestic banks. The indicators can be grouped into four aspects, namely profitability; operational costs; staff productivity; risk prevention. Profitability à ¯Ã¢â‚¬Å¡Ã‚ ·Profit Margin (Net Profit/Total Income) Profit margin is very useful when comparing  companies in similar industries. A higher profit margin indicates a more profitable company that  has better control over  its costs compared to  its competitors. Profit margin is  displayed as a percentage; a 20% profit margin, for example, means the company has a net income of $0.20 for each dollar of sales. Profitability à ¯Ã¢â‚¬Å¡Ã‚ · Return on Asset (Net Profit/Total asset) ROA figure gives investors an idea  of how effectively the company is converting the money  it has  to invest into net income. The higher the ROA number, the better, because the company is earning more money on less investment. For example, if one company has a net income of $1 million  and total  assets of $5 million, its ROA is 20%; however, if another company earns the same amount but has total assets of $10 million,  it has  an ROA of 10%. Based on this example, the first company  is better at converting its investment into profit. Profitability à ¯Ã¢â‚¬Å¡Ã‚ ·Ã‚  Return On Equity (Net Profit/Equity) The amount of net income  returned  as a percentage  of shareholders equity.  Return on equity  measures a corporations profitability  by revealing how much  profit a company generates  with the money shareholders have invested.  Ã‚  Higher The ROE better the company. Profitability à ¯Ã¢â‚¬Å¡Ã‚ · Interest Rate Spread (Interest Earning Ratio-Interest Expense Ratio) The difference between the average yields a financial institution receives from loans and other interest-accruing activities and the average rate it pays on deposits and borrowings. The greater the spread, the more profitable the financial institution is likely to be; the lower the spread, the less profitable the institution is likely to be. Risk prevention Risk Prevention à ¯Ã¢â‚¬Å¡Ã‚ ·Capital to Risk Weighted Assets (CRAR) Total Capital/ (RWAs) This ratio is used to protect depositors and promote the stability and efficiency of financial systems around the world. à ¯Ã¢â‚¬Å¡Ã‚ ·Core CRAR = Tier I Capital / RWAs Tier one capital is that which can absorb losses without a bank being required to cease trading. This measures the capital standard of the bank à ¯Ã¢â‚¬Å¡Ã‚ ·Adjusted CRAR = (Total Capital Net NPAs)/(RWAs Net NPAs) This relates to the bankâ‚ ¬Ã¢â€ž ¢s ability to sustain the losses due to risk exposures is the bankâ‚ ¬Ã¢â€ž ¢s capital. The intermediation activity exposes the bank to a variety of risks. Staff productivity Staff Productivity à ¯Ã¢â‚¬Å¡Ã‚ ·Profit per employee (Net Profit/ No. of Employee) This helps to measure how productive the employees are in the bank by calculating profit generated by every employee. Higher the figure better for the company. à ¯Ã¢â‚¬Å¡Ã‚ ·Net Income per employee (Net Total Income/ Number of Employees) This also helps to measure income generated by every employee in the company Operational costs Overhead Expense à ¯Ã¢â‚¬Å¡Ã‚ · Overhead expense/total income The accurate accounting and allocation of over-head expenses are very important factors in calculating the true cost of the company Operating Expense Ratio à ¯Ã¢â‚¬Å¡Ã‚ · Operating Expense/ Net Income The Operating Expense Ratio is usually viewed as a measurement of management efficiency.   This is because management usually has greater control over operating expenses than they do over revenues. In addition to analyzing different performance between foreign-owned and domestic banks, this study further analyze whether entering of foreign banks helps to improve efficiency of domestic bank. This is done by (1) Structured interviews with managers of central bank and commercial banks. Specifically, the interview will provide detailed analysis on which factors do help to improve performance of domestic banking sector in Nepal; could foreign-owned banks influence performance of domestic banks; and which channels do foreign-owned banks influence domestic banks, and (2) by â‚ ¬Ã…“Granger causality testâ‚ ¬? between domestic bank performance and foreign bank performance. This will be done on profitability, staff productivity and operational costs. 1.5. Organization of the study There will be five chapters in the study. Chapter 1 provides introduction, objective, scope and limitation, and methodology of the study. Chapter 2 reviews relevant theoretical and empirical literature on foreign bank penetration and domestic bank performance in both developed and developing countries to lay the groundwork for developing analytical framework and methodology in examining the impacts of foreign bank penetration on domestic bank performance in Nepal. Chapter 3 examines the structure and development of financial sector in Nepal as well as financial policy over the past decades. The results of banking performance are shown in this chapter. Chapter 4 discusses the impacts of foreign banks to domestic banks, both qualitative and quantitative. Chapter 5 provides conclusion and policy inferences. Chapter 2 Literature Review This section reviews relevant theoretical and empirical literature on foreign bank penetration and domestic bank performance in both developed and developing countries. This is done in order to lay the groundwork for developing analytical framework and methodology in examining the impacts of foreign bank penetration on domestic bank performance in Nepal. Penetration of foreign bank can come in different forms, such as branch offices, subsidiaries, joint ventures, or strategic partnerships. Branch offices, for instance, are an integral part of the parent company, that is, they have no capital of their own. Subsidiaries, however, are their own corporate entities, which are fully owned by the parent company. Similarly, joint ventures are separate corporate entities owned jointly by more than one parent company. Finally, foreign banks may establish a strategic partnership by buying a majority stake of an already existing domestic bank. Weller Scher (1999) The main difference between the various operational forms of foreign banks is their regulatory treatment. The regulatory treatment of the banks differs amongst domestic banks, joint-venture banks and foreign owned banks. Although there are different forms of foreign bank penetration, foreign owned banks are defined as those in which foreign investors own more than 50% of the total equity. Okuda and Rungsomboon, (2004). Decree on Foreign Banks, Phillip Fox 2006, distinguished foreign banks as Foreign Bank Branches (FBB), Foreign Invested Banks (FIB) and Joint Venture Banks (JVB). FBB is a dependent subsidiary of a foreign bank, for which the foreign bank has provided written guarantee that it will be responsible for all obligations and undertakings under FBB. A 100% FIB is established as a separate legal entity with capital being contributed from only foreign entities. Amongst the foreign investors, there must be a â‚ ¬Ã…“parent bankâ‚ ¬? and it must hold more than 50% charter capital. A JVB is established as a separate legal entity, with capital being contributed from one or more foreign banks and domestic banks. Capital is not divided into shares. In JVBs, the capital contribution rate by the foreign bank(s) is capped at 50% of the capital of the bank. The regulations and supervision of financial sector in a host country are crucial in affecting the penetration of foreign banks. Over the past decade, most of the banks throughout the world have started standardizing their policies relating to financial sector according to Basel committee (Basel II Basel III)  [7]   Although Basel system has been introduced and regulations and supervision of banking sectors began to be standardized, regulations relating to competition within the banking sector, which influence the penetration of foreign bank and market structure of banking sector, vary significantly across countries and regions. According to Barth, Caprio and Levin (2001), there are three key aspects of the regulations relating to competition within the banking sector, namely 1) Limitations on Foreign Ownership of Domestic Banks determine (whether there are any limitations placed on the ownership of domestic banks by foreign banks); (2) Limitations on Foreign Bank Entry determine (whether there are any limitations placed on the ability of foreign banks to enter the domestic banking industry) and (3) Entry into Banking Requirement determine (whether there are specific legal submissions required to obtain a license to operate as a bank). The restrictions on overall bank activities and ownership vary from country to country. The research on Regulation and Supervision of Banks around the World by Barth, Caprio and Levine (2001) mentions that there are two measures of the size of a countryâ‚ ¬Ã¢â€ž ¢s banking industry. First measure is total bank assets as a percentage of GDP and the other is the number of banks per 100.000 people. . Both these measures show substantial variation across countries. Countries like Germany, Switzerland, Netherlands, and United Kingdom have very high total bank assets as a percentage of GDP whereas United States and Asian countries are much lower. However the number of banks per 100,000 people is not much different in the countries mentioned above. The table clearly shows that the countries in ASEAN region have higher restrictions on banking activities and ownership in comparison to countries like New Zealand and United States. The regulations are different in each country and do not match even if the countries are in the same region. But Professional supervision per bank is lower in developed countries like United States, New Zealand, United Kingdom whereas developing counties have higher no. of supervision per bank. According to the research the highest restrictions on overall bank activities and ownership are imposed by countries like Bhutan, Cambodia, China, Indonesia, Vietnam and lowest restrictions by New Zealand then Germany, Austria and United Kingdom. In countries like New Zealand and United states the government ownership of banks is zero percent whereas India, Bangladesh has very high percent of government-owned banks. Although the regulations on banking competition vary, over the last decades, restrictions on foreign bank penetration have been relaxed as part of financial reform and foreign bank penetration increased substantially in many countries. This could be because the host country expects the positive impacts of increased foreign bank penetration in the host countryâ‚ ¬Ã¢â€ž ¢s banking system. Trade agreements have also played a major role in liberalization of market entry for foreign banks as financial services are required for international trade, production and investments. Governments usually support flow of foreign investment and this has been evident especially after various financial crises. Many countries in Southeast Asia started liberalizing foreign investment after the Asian financial crisis. The Asian crisis appeared to have catalyzed the liberalization of FDI restrictions in the banking sector across several ASEAN countries. Chau H.B (2003) A number of empirical studies analyze the impacts of foreign bank entry on domestic financial sector in a host country. The impacts can be grouped into three aspects. Firstly, foreign banks promote efficiency (competition and new technology) in domestic financial sector. A larger foreign bank presence can improve the competitiveness of the banking sector. Greater competition is advantageous for many reasons: to enhance the efficiency of financial services; to stimulate innovation; and to contribute to stability. It can also widen access of qualified borrowers to financing, which may increase aggregate lending and so enhance growth. A competitive and well-organized banking system can also improve the effectiveness of monetary policy transmission by tightening the link between policy rates and deposit/lending rates. (BIS paper No. 23) Foreign banks also help in availability of funds and acquisition of consumer-marketing skills. Chau (2003) In addition, foreign bank entry introduces new technology; financial services and advanced management skills, which existing domestic banks lack. The new technology and skills introduced by foreign banks include new financial products, advanced IT technology, and sophisticated bank management techniques. These are expected to contribute to lower operational expenses, amplified profitability, and better bank risk management. Forced by market competition, domestic banks may emulate the new financial products and management skills. Okuda Rungsomboon (2004). The presence of foreign bank also improves the corporate governance structure of the domestic banks. This includes breaking down the family-controlled structure and improving the decision making process. Chau H.B (2003) Unite and Sullivan (2001) has found that increase in foreign bank entry narrows the interest rate spreads and also reduces operating expenses. Foreign banks induces domestic banks to be more efficient, the increased competition forces domestic banks to take in less creditworthy customers and foreign participation induces domestic banks to spend more on improving their operations. However, Okuda Rungsomboon (2004) found that the entry of foreign banks is expected to negatively affect the operations of domestic banks but overall performance is likely to progress in the long run. Secondly, the entry of foreign banks is associated with reallocation of loans. Findings suggest that foreign banks improves credit access for many credit-worthy firms but some firms with positive net present value without opaque information will have difficulty obtaining loans. More developed countries, such as the U.S., Japan, and those in the European community, argue that Less Developed countries should allow foreign banks to enter into their economies. By increasing competition, foreign bank entry may boost the supply of credit and improve efficiency. Gormley (2006) Foreign banks are comparatively less likely to lend to â‚ ¬Ã…“soft informationâ‚ ¬? firms, and more likely to lend to â‚ ¬Ã…“hard informationâ‚ ¬? firms. â‚ ¬Ã…“Soft informationâ‚ ¬? refers to information that cannot be easily publicly verified by a third party. â‚ ¬Ã…“Hard informationâ‚ ¬? on the other hand refers to credible and publicly verifiable information, such as a foreign firmâ‚ ¬Ã¢â€ž ¢s authentically audited balance sheets, or government guarantees. Mian(2003.) The loan portfolio of foreign banks consists of only credible clients which mean that the chances of default are very less. The domestic banks will be compelled to give loans to non-credible clients because the credible clients will be mostly handled by foreign banks. This will have greater chances of loan defaults for domestic banks. Thirdly, foreign banks are geographically spread relative to domestic banks; therefore they are less affected by adverse shocks in the domestic country. Both foreign and private domestic banks have similar low probabilities of being assisted by the government in times of difficulty but foreign banks are considerably more likely of being bailed out by their parent bank. For example, if the local subsidiary in a developing country of a foreign bank runs into trouble, it may get an injection of new capital from its parent bank to bail it out. This access to liquidity directs to a lesser deposit cost for foreign banks. Furthermore, foreign banks have access to advanced technology, outside resources and expertise which facilitates them in providing better service than the domestic banks. However, there might be some drawbacks that make the foreign banks perform worse than domestic banks in the host country. Firstly, a large foreign banking existence could mean that information available to host country supervisors can be reduced and the decision-making and risk management shifts to the parent bank. The delisting of the equity of local partner on the local exchange removes an important source of market intelligence for the foreign bank. In addition, if the integrated firmsâ‚ ¬Ã¢â€ž ¢ equities are delisted in the local market, host country controllers can also lose access to key foreign bank decision-makers. Secondly, a country might be more exposed to shocks due to foreign banks presence. External events which affect the parent bank will affect the branches or subsidiaries. The factors that determine exposure to such external shocks, whether it is greater with onshore foreign banking as compared to traditional cross-border bank lending, and the propositions for regulatory and supervisory policy also demand further investigation. Lastly Accounting Standards could also be a problem for foreign banks unlike the domestic banks which have clear set of accounting standards set within its organization. There is a need for transparent and reliable accounting and financial reporting but for foreign banks; usually parent banks and their foreign subsidiaries often have different accounting standards, which can lead to discrepant financial balances, even when they are based on the same financial information. This might lead to complexity in comparison between international financial statements which could raise doubt in the reliability of banks financial statements. Differences may occur in different tax treatment, deferred taxes, valuation and accounting of repos, amortization of goodwill, treatment of past due loans and from provision and inflationary accounting adjustments. Moreno and Villar (2005)