Saturday, August 31, 2019
The Unites States is the land of opportunities where people pursuit the American dream to have a better life. American life is built on the faith that it is possible to rise from humble origins to economic heights. In that case social mobility plays a big role in todays society. Social mobility refers to the ability to change the positions within a social stratification system. In other words, when people improve or decrease their economic status in the way that it affects their social class, they experience either pward or downward social mobility. With this in mind, the social mobility in United States appears to be stalled or in decline. One of the main reasons is poverty that is causing a decline. Furthermore, the rich-poor gap that widens also has an effect on mobility causing income inequality. Also, European social mobility is much better than that one in the United States. Some other factors that influence social mobility include race, income, mother and father occupation, and ethnicity. Certainly, one of the reasons why social mobility in United States appears to be talled or in decline is because of poverty. The higher the individual starts on the social ladder the more likely that individual will end up higher than where he or she first started. The more income the parents have will guarantee more opportunities for that person. According to Economic Mobility Project, 40% of Americans that are born in the bottom quintile remain stuck there as adults (Ã¢â¬Å"Upper boundÃ¢â¬ ). That means that that almost half of that social group doesnÃ¢â¬â¢t change their position within a social stratification system. That doesnÃ¢â¬â¢t mean it is their fault because people that are poor start with a disadvantage. For example, according to Eric Wanner, president of the Russell Sage Foundation, Ã¢â¬Å"Upper-income families can invest more in their childrenÃ¢â¬â¢s education and they may have a better understanding of what it takes to get a good education. Ã¢â¬ (Ã¢â¬Å"Harder for Americans to Rise From Lower RungsÃ¢â¬ by Jason DeParle). That means that a child that comes from a richer family has more educational opportunities than a child coming from the poor. Furthermore, a child oming from rich family will have a better understanding on how to succeed in school where on the other hand, child from poor family doesnÃ¢â¬â¢t have that opportunity. However, Just 8% of American men at the bottom rose to the top fifth. That shows that even though it is difficult it is still possible. Generally speaking, the rich-poor gap that widens also has an effect on mobility causing income inequality. As the gap between rich and the poor has widened since 1970, the odds that a child that is born in poverty will climb to wealth remain stuck. Same goes to child that is born rich will fall into middle class. One reason for mobility gap may be the depth of American poverty which leaves poor children starting especially far behind. Most of the time it is determined by the father and mother occupation. Based on the new data gathered by Bhashkar Mazumder of the Federal Reserve Bank of Chicago, he argued that 60% of a sonÃ¢â¬â¢s income is determined by the level of income of the father. (Ã¢â¬Å"Goodbye, Horatio AlgerÃ¢â¬ ). This means that more than half of men are dependable on their fatherÃ¢â¬â¢s income. Furthermore, this shows that the higher the income ot parents, the more opportunities the child example, researchers now estimate the elasticity of father-son earnings at 0. 5%. That means that for every 1% increase in fatherÃ¢â¬â¢s income, his sonsÃ¢â¬â¢ income will be increased or expected to increase by about 0. 5%. ((Ã¢â¬Å"Harder for Americans to Rise From Lower RungsÃ¢â¬ ). In other words, the better the income of the father, the better the income of the son. So the family background is very important in social mobility. In contrast, European social mobility is much better than that one in the United States. European countries have made serious investments to create equality of opportunity for all. According to Fareed Zakaria in Ã¢â¬Å"The downward path of upward mobility,Ã¢â¬ they have extremely good childhood health and nutrition programs, and they have far better public educations systems than the United States does. Furthermore, poor children compete on a more equal footing against the rich and in the United States poor children compete for better education few steps behind then others.
Lacuna's arrival to the convent, Gertrude appears and her life story takes up the following two chapters of the novel. Gertrude grew up at a time when a woman had two choices in life: the first was to find a spouse and have children while the other option was to become a nun. As a child, Gertrude had no desire to become a nun, but rather dreamt of the day when she could finally fall in love. Gertrude father indirectly forced his daughter into becoming a nun by giving her dolls dressed as nuns, sending her to Sunday school, and having her read the bible.The brain washed child grew up to having no choice but to move to a convent and take on the life long commitment of becoming a nun. The ceremony in which Gertrude accepts her future being a life devoted to God, she ponders her decision for a moment with conflicting thoughts rushing through her mind. She debates with herself on whether this is the life she wants or if this is the life society wants. When the church asks her if Gertrude has chosen to devote her life to God because of her own desire she causes while looking at her father.After another inner battle with her emotions, Gertrude finally vows to become a nun. Later on in Gertrude life, she goes to live in a convent located in an Italian town called Ã¢â¬Å"AmazonÃ¢â¬ , thus taking on the name Ã¢â¬Å"The Nun of AmazonÃ¢â¬ . Here she spends her days praying during the day, but living a completely different life during the night. As time goes on she falls in love and develops a forbidden relationship with a man named Goodie whom she has a child with. In her daily fife at the Covent, Gertrude always shows signs of rebellion after having found love.One example of her rebellious attitude is portrayed by a loose strand of hair falling from her veil. The strand of hair is a symbol of Gesture's hate and disgust towards the church for having made her once free life a life filled with unhappiness and restrictions. The smiling child she once was becomes an angry and troubled soul after years of feeling like a prisoner of the church.
Friday, August 30, 2019
The image of Hong Kong is well known as Ã¢â¬Å"shopperÃ¢â¬â¢s paradiseÃ¢â¬ and Ã¢â¬Å"Pearl of the OrientÃ¢â¬ . Further, according to the International Market Research Study, it shows that the lack of new appeals in Hong Kong is a significant reason for it not being considered as a vacation destination. Therefore, it is necessary to expand the appeals of Hong Kong. Why not use our existing natural resources as tourist attractions? To maintain the competitiveness, Hong Kong should build up its own unique and special character. Natural wonders of the territory provide a chance to show the uniqueness and international significance of Hong Kong ecology.Green tourism, outdoors, hiking and nature are some of the new and promising products most needed by consumers. Building ecotourism could attract special interest tourists. It was found that nature-based activities or scenery is one of the top attractions which the visitors to Hong Kong are interested in. These natural attractions i nclude trips to outlying islands, nature reserves (Mai Po), beaches, mountain hiking, urban nature trails and dolphin-watching. Hong KongÃ¢â¬â¢s remote, unpolluted outlying islands are an attraction for tourists.Many tourists are surprised that Hong Kong has dolphins in one of the world busiest harbors. In addition, a survey completed by the HKTA found that about 15% of tourists are interested in taking part in outdoor and hiking activities in Hong Kong. Since many overseas tourists are interested in seeing wildlife and beauty natural scenic, there is a potential market for ecotourism. About 70% of Hong Kong is rural area. Nature is right on the cityÃ¢â¬â¢s doorstep. They are mostly accessible by buses and minibuses. Hiking, swimming, scubas-diving and sailing are all possible just a short journey from urban area.A total of 24 country parks have been designated for the purposes of nature conservation, countryside recreation and outdoor education. There areÃ 22 special areas cr eated mainly for the purpose of nature conservation. The country parks and special areas cover a total area of 44Ã 239 hectares. The country parks comprise scenic hills, woodlands, reservoirs and coastline in all parts of Hong Kong. The country parks are very popular with all sectors of the community and spending a day in a country park is one of the best recreational choices. About 12. million visitors were recorded in 2012 and most visitors engaged in leisure walking, hiking, barbecuing and camping. Hong Kong has glory and outstanding scenic beauty, and also rich ecology. These are striking advantages for promoting ecotourism. Besides, Hong Kong is characterized by hilly topography with less low flat land areas. It consists of undeveloped and unspoiled steep hills, some 230 outlying islands and also other geographical and ecological features of high scenic and amenity value on Government lands with unrestricted public access and proximity to the urban areas.There is a wide varie ty of scenic views, landscape features and habitats including sandy beaches, rocky foreshores, mountain ranges, grasslands, valleys, shrub lands and so on. The sub-tropical climatic environment and extensive undeveloped tracts of natural landscapes provide a wide range of habitats, and supports high biodiversity of flora and fauna, both resident and migratory. There are about 500 species of birds, one-third of all species of birds in China. More than 230 species of butterflies and over 100 species of dragonflies can be found.There are more than 2600 species of vascular plants, 50 species of mammals, 80 species of reptiles and more than 20 species of amphibians in Hong Kong (AFCD 2013). A high proportion of birds in Hong Kong are winter visitors and passage migrants in spring and autumn, followed by resident birds and summer visitors. Migration is a strong instinct, and birds (particularly water birds) are often able to traverse immense natural barriers, frequently migrating and maki ng one or more stopovers en route.In Hong Kong, we can watch butterflies in all seasons due to warm climate and the presence of a variety of habitats. There are over 230 butterfly species in Hong Kong and more than 130 species have been recorded in Hong Kong Wetland Park. The Butterfly Garden in the Hong Kong Wetland Park is planted with various larval food plants and nectar plants. It is an ideal place for learning butterflies. Dragonflies and damselflies are among the most beautiful and spectacular insects in the world.Their lives are closely intertwined with wetlands. Up to April 2009, there are 115 species of dragonfly officially recorded in Hong Kong. During the Dragonfly Festival, Hong Kong Wetland Park will organize a series of activities for public to broaden their knowledge of dragonflies. These activities also aimed to promote dragonflies watching and encourage the public to engage in the conservation works of wetlands and dragonflies. Our bustling metropolis has more than 40% of its land designated as protected green areas.Apart from providing habitats for our myriad wildlife, this verdant countryside is also home to world-class rock formations and geological features. A geopark is a unique natural area with special geological significance and natural and cultural landscapes, and can serve the three objectives of conservation, education and sustained development. The Marine Parks Ordinance protects and conserves the marine environment and a rich collection of aquatic animals and plants, such as corals, sea grasses and dolphins. In Hong Kong, there are 84 species of reef-building corals.Reef-building Corals in Hong Kong with the splendid colors and graceful growth forms and they also build Ã¢â¬Å"homesÃ¢â¬ for a wide range of marine animals. At present, there are four marine parks and one marine reserve, including Hoi Ha Wan Marine Park, Yan Chau Tong Marine Park, Sha Chau and Lung Kwu Chau Marine Park, Tung Ping Chau Marine Park and Cape D'Aguila r Marine Reserve. They cover a total area of 2 430 hectares and comprise scenic coastal areas, seascapes and important marine habitats. Marine parks and reserve can be managed for conservation, education, recreation and scientific studies.In marine parks, visitors are encouraged to appreciate the beauty and diversity of marine life. Diving, snorkeling, swimming, canoeing, sailing, underwater photography and school visits are popular activities in marine parks. Educational activities such as guided tours, beach clean-ups, seabed clean-ups and public lectures are regularly organized. Tourists can take part in them. To conclude, there is a great potential for the further development of ecotourism in Hong Kong since the territory is rich in ecology with outstanding natural beauty.Pure Ecotourism can include as one of the attractions in the trip to experience the green side of Hong Kong and to show the compact and variety of the territory. However, it is unsuitable to promote ecotourism without any development strategy. To ensure the ecological sustainability of nature and ecotourism, conversation should be in the first priority when developing ecotourism. For the sustainable development of ecotourism, it is important to let tourism industry, government, tourists and residents know what is the meaning of ecotourism.
Thursday, August 29, 2019
The Effects of Biblical Violence on Readers' Behaviors - Essay Example Although studies from the American Academy of Pediatrics give a low rate on the effects of music on listenersÃ¢â¬â¢ behaviors, that lyrics are generally not given much attention or in the case of children, are not fully understood because of their limited understanding and experience, researchers are open to the idea that somehow songs suggest certain undesirable actions. In a world where violence abounds, it is not a wise action for a person to isolate himself or for parents to isolate their children only to avoid the evils of this world. It is then important for every individual to educate oneÃ¢â¬â¢s self and others about the consequences of a certain thought or action. For instance, the last lines of the aforementioned psalm speak about revenge to those who have done the Jews harm. However if one examines the verse closely, it is not the Jews who want to avenge themselves but that there would be another who would stand up against their enemies. This reveals their belief in the golden rule, that those who have wronged them will get their just punishments somehow. Such understanding could lead people to avoid doing evil towards others. II Yes, the Liturgy of the Hours should include the end of Psalm 137 however; it should be with the explanation or interpretation like that of St. AugustineÃ¢â¬â¢s, OrigenÃ¢â¬â¢s, St. AmbroseÃ¢â¬â¢s and the like. The Bible could be interpreted literally and figuratively so it could not be treated similarly to lyrics of modern music where promiscuity and violence are explicitly expressed. As it is always advised by professionals in the case of children, parents should guide their children in the choice of songs they listen to and clearly explain to hem what is good and what is not. Indeed, words have psychological effects on people so that even adults should choose their songs or meditate on the good implications of the songs rather than its evil suggestions. The Bible is actually full of stories of violence and promisc uity and surely, God did not like such stories to be exposed just for the sake of telling a story about a person rather have been narrated along with the consequences experienced by the people involved. They seem to be words from a parent saying, Ã¢â¬Å"Look, this is what happens to you if you do this and that.Ã¢â¬ This world is full of so many evils and that is just the way the God of the Bible wants people to look at it so that they would know how to prepare for the dangers they face each day. Therefore, preachers should do likewise, presenting all the truths and not just the things people want to hear from them. They have to send the people from the church to the world, armed with the necessary attitude and words of guidance that will keep them strong to avoid being involved in violent acts. III A group of students associated with campus ministry at CUA wants to have a liturgical service which includes a reading of Psalm 137, which they understand through the lens of St. Augus tineÃ¢â¬â¢s interpretation: Jerusalem represents the kingdom of God and Babylon represents the corruption of this world. Some students think the language at the end of Psalm 137 is too violent to be read or prayed, and point out that the Catholic Church has removed these verses from the Liturgy of the Hours.Ã
Wednesday, August 28, 2019
Aircraft maintenance eng - Aircraft Maintenance procedures -scenario for systems integration - Research Paper Example rding the aircraftÃ¢â¬â¢s system failures, system integration, Crew Resource Management, and tech recorders among others were evaluated, and the following information regarding the situation were summarized. The aircraft (Airbus A380) departed Changi International Airport for Sidney, Australia on November 4th, 2013 at 01:57 hours UTC. This aircraft (Airbus A380 whose registration number is VH-OQA) carried a total of 469 passengers (that is, 440 passengers and 29 members of crew) (ATSB 2010). During that day of flight, the weather was favorable, and was described by the metrological department of Changi International Airport as a clear and sunny Singapore day. After an approximate of 6 minutes after the takeoff of the plane (that is, at 02:02 hours UTC), and as the aircraft was climbing 7000 feet over Bantam Island in Indonesia, it was reported that the crew members hard a number of loud banging sounds (ATSB, 2010). These banging sounds were followed by ECAM (Electronic Centralized Aircraft Monitor) messages. These alerts were more than 50 in number and indicated that the aircraftÃ¢â¬â¢s Number 2 engine experienced a catastrophic failure. Immediately, the crew members initiated holding pattern then started to diagnose the problem. After approximately 50 minutes (that is at 14:52 UTC) the crew members made a decision to return to Changi International Airport in Singapore and attempt to land (ATSB 2010). At 16:32 hours UTC, the crew members managed to land the aircraft successfully with only one engine operating fully, with a maximum landing weight (MLW) of more than 50000 pounds, and in absence of the aircraftÃ¢â¬â¢s anti-lock brakes. In addition, the aircraft was stopped at distance of approximately 450 feet from the run way end (ATSB 2010). The disintegration of engine number 2, as indicated by investigations, produced a number of debris that struck (hit) the aircraftÃ¢â¬â¢s fuselage. Pieces of IP (Intermediate Pressure) turbine disc penetrated the aircraftÃ¢â¬â¢s left wing
Tuesday, August 27, 2019
Fromm's Human Needs Theory - Essay Example The article shows how FrommÃ¢â¬â¢s ideas could be beneficial today. Brennen article Ã¢â¬Å"The Sane SocietyÃ¢â¬â¢: Erich FrommÃ¢â¬â¢s Contributions to Social TheoryÃ¢â¬ evaluates FrommÃ¢â¬â¢s book The Sane Society. In The Sane Society, Fromm attacks Western capitalism and promotes a communitarian socialism. Fromm believed that without specific purposes like productivity and self actualization, humans are alienated and unhappy. Basing the foundation of his theory on Freud and Marx, he asserts that a communitarian socialism is the answers to the capitalism causing mental illness. Despite expanding on Freudian and Marxist thoughts, Fromm had criticism of both menÃ¢â¬â¢s ideas. In the end, this article suggests that FrommÃ¢â¬â¢s views might have validity. This article explains FrommÃ¢â¬â¢s theory on human based needs. Fromm had written a book called Escape from Freedom. In this book Fromm explains the evil of totalitarian regimes. The reason Fromm gives for individuals following a leader in a totalitarian regime is free of freedom and security about oneÃ¢â¬â¢s role in society. He goes on to explain the totalitarian regimes are evil due to the obliteration of individual rights. On the other hand, BrennenÃ¢â¬â¢s article suggests Fromm believes democratic nations give too much freedom. This theory was laid out in FrommÃ¢â¬â¢s The Sane Society. According to Fromm to be mentally healthy means working at a meaningful task, socializing during work, self actualization, and society working on specific issues together. Psychological issues should be considered of higher value than ownership or monetary concerns (Brennen 2006:8). This vision involves a communist type of government. Communitarian socialism is a government where all citizens contribute according to skills for the good of the community. This allows meaningful tasks can be completed, which in turn allows every citizen to
Monday, August 26, 2019
FINANCIAL MANAGEMENT IN SHIPPING - Assignment Example This report is a short study of some of the recent developments in international trade and finance and their impact on maritime transport, suggesting ways how shipping can weather the storm and manage itself financially to remain the most viable and popular mode of international transport. According to International Chamber of Shipping, the international shipping industry is responsible for the carriage of about 90 percent of world trade. Intercontinental trade, the bulk transport of raw materials and the import/export of affordable food and goods would simply not be possible without shipping. Notwithstanding the recent contraction in trade resulting from the present economic downturn, the world economy is expected to continue to grow and shipping will need to respond to the demand for its services. Ã¢â¬Å"Capesize VesselsÃ¢â¬ weigh from 175,000 tons to 400,000 tons and count as some of the largest craft in the World. They typically carry raw materials such as Iron ore, Steel, Coal and other raw commodities. Where you used to pay up to $230,000 per day to rent one, now you can have one for a measly $2800 per day. Lloyds even reported yesterday that one Capesize vessel was going for $1000 per day. These levels of payment are crippling the Shipping Industry and leading to cancelled orders with Shipyards where it is cheaper to let the shipbuilder keep the deposit. More and more older carriers are being scrapped as their value decreases. In October alone, more shipping tonnage was scrapped than in the previous 2 years. The inevitable result of this will be less tonnage available to transport raw materials. From an economic standpoint, supply will decrease thus theoretically lead to a commensurate increase in leasing prices, thus forcing the Baltic Dry Index up again. In the meantime though, there will be a large increase in job losses in the shipping
Sunday, August 25, 2019
The Wechsler Intelligence Scale for Children Fourth Edition - Essay Example The Wechsler Intelligence Scale for Children Fourth Edition The children that I work with are ages 11-16 which make it an appropriate test. The first version of this test was published in 1949 and today it is the "most widely used individual intelligence test for children," (Hogan, 2005, p. 306) surpassing the Stanford Binet. "The aggregate or global capacity of the individual to act purposefully, to think rationally, and to deal effectively with his environment" (Hogan, p. 297). He also said that intelligence was more than a childs intellectual ability; it also concluded that "the capacity to do intellectual work is a necessary and important sign of general intelligence" (Wechsler, 1952, p. 12 as quoted in Hogan, p. 297). In other words, Wechsler understood that children had the capacity to think on their own and to develop intelligence in more than one way. The original test was an extension of an adult test called the Wechsler-Bellevue test. It included three sub-sections that were not seen before on any intelligence scale: digit span, symbol search and mazes span (Gregory, 1996, p. 209). The test was revised in 1974 (WISC-R), again in 1991 (WISC-III) and in 2003, which is the current version of the WISC-IV (Niolin, 2005). As the WISC-III was being used, some researchers found that they could use Verbal and Performance IQ, and these could be supplemented by a third test that they labeled Freedom from Distractibility (Niolin, 2005).
Saturday, August 24, 2019
Possible Inherent Conflicts Between the Public Auditor and the CFO on Internal Controls - Case Study Example The public auditor, whose primary job is to give an opinion on the financial statements of the company after necessary examination of the statements, also places his reliance on the internal controls established by the management of the company to prevent, detect and mitigate the events of frauds and errors which may lead to erroneous financial reporting and deception of the shareholders. This is the reason that the auditor lays great emphasis on the establishment of strong and well defined internal controls where the occurrence of material misstatements can be prevented, and if not, then properly detected and appropriate actions be taken to mitigate the same from occurring again. In the course of the audit, the strong emphasis laid by the auditors on establishment of the internal control department may create conflicts between the auditor and the management of the company, specially the Chief Financial Officer. The auditor and the CFO initially have their roles clearly defined as to the extent of their jobs and are required to work independently with clear objectivity without interference in each otherÃ¢â¬â¢s work. The auditorÃ¢â¬â¢s responsibility is to report on the financial statements prepared by the management whether they are free from material misstatements and give a true and fair view. The auditor also has to report on the internal controls established by the management if they are organized enough to prevent and detect the frauds and errors. The auditor has to ultimately report to the shareholders on the safeguards established by the management to safeguard their rights. Conventionally, the role of the CFO is understood to be in the position of manager and regulator concerning the implementation of principles of accounting. Further, the post of the CFO also includes the preparation of the financial statements and related reports along with the supervision of the capital structure of the
Friday, August 23, 2019
A Synthesis of Current Literacy Theories Essay Example | Topics and Well Written Essays - 2500 words
A Synthesis of Current Literacy Theories - Essay Example As a result, many scholars have different views on the concept of literacy, which leaves the common person more confused. Indeed, although the term Ã¢â¬ËliteracyÃ¢â¬â¢ is seemingly easier to understand by everybody, it has unfortunately proved to be complex and dynamic concept to interpret or even define. As such, we have many educational theorists, scholars, and newspaper editors defining the concept literacy. In the ancient times, literacy only referred to the ability of a person to read and write at an adequate level of proficiency that would enable them to communicate with others (TakingITGlobal, 2012). However, in the recent times, there is no mutually satisfactory measure of what adequate literacy means. As such, this paper will refer to various scholarly sources in addressing the various theories of literature, the issues that relate to literacy, and an analysis of literacy. Additionally, the paper will elaborate, synthesise, and analyse various perspectives on literacy. F urthermore, the paper will discuss the implications of the application of these perspectives to learning in vocational education and training centres. More so, the paper will analyse the various ways that teachers and trainers can apply the concept of literacy to learning in vocational education and training. Some scholars refer to literacy, as the quality or state of being literate or simply being able to read and write. On the other hand, others associate literacy with creative writing or just having knowledge or competence. Moreover, other educational theorists introduce the aspect of visual literacy in understanding the concept of literacy. As such, they relate visual literacy to the ability to recognize and understand ideas conveyed through visible actions or images. However, according to the National Institute for Literacy, The Workforce Investment Act of 1998 defines literacy as Ã¢â¬Å"an individual's ability to read, write, speak in English, compute, and solve problems at le vels of proficiency necessary to function on the job, in the family of the individual and in societyÃ¢â¬ Ã (Valenzuela,2002). Additionally, the United Nations Educational, Scientific, and Cultural Organization thinks there is more to literacy than just being a set of technical skills of reading, writing, and calculating (United Nations Regional Information Centre for Western Europe, 2012). We may need to consider the factors that influence the multiple understandings of this concept. Notably, academic research, institutional agendas, national context, cultural values, and personal experiences influence individuals understanding on the concept of literacy. Indeed, there are four discrete understandings of literacy that include literacy as an autonomous set of skills, literacy as text, literacy as a learning process, and literacy as applied, practised and situated (Education for All Global Monitoring Report, 2006).The four understandings significantly incorporate almost all theore tical understandings of literacy. However, the most common understanding of literacy is as a set of cognitive skills that involve reading, writing, and oral skills. However, it is worth noting that despite the multiple definition of literacy, the literacy levels vary between the developed and developing nations. Indeed, the rate of literacy in the developed nations is much higher than in the developing nations. Nevertheless, there is a worldwide mission to eradicate illiteracy in the world.
An Element of Literature - Research Paper Example otional experience of the characters or the events, the reader, regardless of their own experience, begins to understand what it meant to be living during a period of economic depression, what it felt like to be subordinated to a point where you didnÃ¢â¬â¢t even have control in your own home or to be relegated to eternal poverty and hopelessness because of the color of your skin. Ideas such as these can be found in many forms of literature. For example, William BlakeÃ¢â¬â¢s poem Ã¢â¬Å"LondonÃ¢â¬ , Kate ChopinÃ¢â¬â¢s short story Ã¢â¬Å"Story of an HourÃ¢â¬ and Langston HughesÃ¢â¬â¢ poem Ã¢â¬Å"Dreams DeferredÃ¢â¬ all center upon the theme of the shackled spirit and in all three, the authors show their audience what it feels like through the use of powerful imagery and simile. In Ã¢â¬Å"LondonÃ¢â¬ , Blake describes the way in which the human spirit had been shackled under economic despair in 1794, the year the poem was written. Traces of political unrest can be found in the poem as the scenes and sounds of a typical walk down the London streets are reported. The first lines of the poem, Ã¢â¬Å"A mark in every face I meet, / Marks of weakness, marks of woeÃ¢â¬ (3-4), provide the first hint that something is not right within the city. The signs of decay and desperation are seen in every face, suggesting that they are community-wide rather than the personal problems of just a few. This idea of community despair is reinforced in the second stanza as the speaker says, Ã¢â¬Å"In every cry of every man, / In every infantÃ¢â¬â¢s cry of fear, / In every voice, in every ban, / The mind-forged manacles I hearÃ¢â¬ (4-8). From the youngest to the oldest, Blake indicates everyone is suffering from this same sense of legal oppression (Ã¢â¬ËbanÃ¢â¬â¢ refers to new laws being posted), so they are suffering from something that is outside of their control. This is again reinforced in the third stanza when the speaker indicates that business is down, Ã¢â¬Å"How the chimney-sweepers cryÃ¢â¬ (9), money is scarce Ã¢â¬Å"Every blackening
Thursday, August 22, 2019
Consideration Essay An Agreement here is defined as every promise and every set of promises, forming the consideration for each other, is an agreement defined under section 2(e) of Indian Contract Act, 1872. Making a contract is simply a way of facilitating amongst other things, the exchange of goods and services. Under a contract the, parties voluntarily assume their obligations or undertakings. Consideration is the recompense given by the party contracting to the other. 2. Consideration is the price for which the promise of the other is bought, and the promise thus given for value is enforceable. 3. Consideration means something which is of some value in the eyes of the law. 4. A valuable consideration in the sense of the law, may consist either in some right, interest, profit or benefit accruing to the one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. If a bargain gives a party a choice of alternative obligations, each alternative on its own must constitute sufficient consideration for the return promise. If a promise is void or voidable Ã¢â¬â e. g. , due to the incapacity of the promisor Ã¢â¬â the sufficiency of the consideration is not necessarily negated. The judges, when they exercise this power of interference, are playing an extrinsic test which frustrates the expectation of the parties. It does not follow however, that such a test is necessarily harsh, still less that it is illogical. In some of the cases the law is settled, other are shrouded in controversies; but in all of them the grounds of interference seems to be the same. Consideration made not be adequate and may, on occasion be extremely tenuous, but it must comprise ome element which can be regarded as the price of the defendant promise; and merely to repeat an existing obligation may well seem to offer nothing at all. It may be appreciated that a person, who by his official status or through the operation of the law is under a public duty to act in a certain way, is not regarded as furnishing consideration merely by promising to discharge the duty. For example, no one would expect a policeman to bargain with a citizen for the price of his protection. In the case stated the defendant argued that this meant that they were not obliged to pay for the large number if policemen who attend their ground at home matches because, in present conditions of crowd behaviour, a major police presence at the ground was necessary to preserve law and order. The Court of Appeal thought that there was a fundamental difference on the facts. In the Glassbrook case the threat to law and order was external to the parties since neither could call off the strike. In the present case, the defendant had voluntarily to put on their matches at times, typically Saturday afternoons, when large attendance and therefore large possibilities of disorder where likely, and when a substantial police presence could only be achieved by calling policemen of their rest days and paying large sum of overtime. The police authority were, therefore, entitled to be paid. When the plaintiff is bound by an existing contractual duty to the defendant : There is no consideration if all that the plaintiff does is to perform, or to promise the performance of, an obligation already imposed upon him by previous contract between him and the defendant is illustrated by a group of thesis in the first half of 19th century. In this case the defendant where a firm of building contractors who entered into a contract for the refurbishment of a block of 27 flats. They sub contracted the carpentry work to the plaintiff for 20,000. Although there was no formal arrangement to this effect, the plaintiff was paid money on account. After the contract had been running for some months and the plaintiff had finished the carpentry at 9 of the flats and done some preliminary work in all the rest, for which he had received some 16,200 on account, he found that he was in financial difficulties. This difficulties arose partly because the plaintiff had underestimated the cost of doing the work in the first place and partly because of faulty supervision of his work men. The plaintiff and the defendants had a meeting at which the defendants agreed to pay the plaintiff a further 10,300 at a rate of 575 per flat to be paid as each flat was completed. The plaintiff carried on work and finished some 8 further flats but only 1one further payment of 1,500 was made. The plaintiff stopped work and brought an action for damages. The defendant argued that they were not liable as they had simply promised to pay the plaintiff extra for doing what he has in any case obliged to do, that is to finish to the contract. The Court of Appeal might perhaps have found consideration in what Russell LJ described as the replacement of a haphazard method of payment by a more formalised scheme involving the payment of the specified sum on the completion of each flat since it was clear that the under the original contract there was no express agreement for stage payments. 3. Composition with creditors : It has long been a common practise for the creditors of an impecunious debtor to make an arrangement with him where by each agrees to accept a stated percentage of his debt in full satisfaction. The search for a sufficient consideration to support so reasonable an agreement has caused the courts much embarrassments. It would appear at first sight to fall under the ban in Pinnels case, and such was the view adopted in 1804 by Lord Ellenborough. Two alternatives suggestions have been proffered. The first was the second thought of Lord himself. There was consideration for the composition, he suggested in 1812, in the fact that each individual creditor agreed to forgo part of his debt on the hypothesis that all the other creditors would do the ame. A moments reflection will expose the weakness of this argument. Such a consideration would, no doubt, suffice to support the agreement as between the creditors themselves. But, if the debtor sought to rely upon it, he would be met by the immediate objection that he himself had furnished to return for the creditors promises to him, and, as already observed, it is a cardinal rule of the law that the consideration must move from the prom isee. A second solution is to say that no creditor will be allowed to go behind the composition agreement, to the prejudice either of the other creditors or of the debtor himself, because this would be a fraud upon all the parties concerned. The solution was suggested by Lord Tenterden in 1818 and supported by Willes J in 1863, and it has since won general approbation. But it is frankly an argument ab inconvenienti and evades rather than meets the difficulty. Where the plaintiff is bound by an existing contractual duty to a third party : When the plaintiff performs, or promises to perform, an obligation already imposed upon him by a contract previously made, not between him and the defendant, but himself and the third party. The question whether such a promise or a performance affords suficient consideration has provoked a voluminous literature more generous, indeed, then the practical implications would seem to warrant. In a case mentioned here the defendant agreed to pay money to he plaintiff in return for the plaintiff promise (a) to execute a separation deed and b)to pay his debts to a third party. The promise to execute the separation deed raised questions of public policy but was held good consideration.
Wednesday, August 21, 2019
Violent Crime Victims: Social Work Practices Chanchez M. Smith Abstract In this paper, I will discuss generalist social work practice with victims of a violent crime. The following elements will be included: a clearly defined victim population of my choice; the nature of the crime; ethical issues that may affect social work practice or that could impact practice with the population that I chose, or value conflicts that a social worker may experience (such as conflicts between professional and personal values, personal and client values, or professional values and client values). Policy issues that may influence social work practice will also be included. Violent crime is defined as an action or deed that results to causation of bodily harm and physical injury to another person. Violence has been a part of human history (Garland, 2012). Since the onslaught of evolution when early men settled their scores by means of brawl to the present day when the vice has taken up a widespread and more encompassing concept, it seems that violence will remain a part of human history for the foreseeable future. Previously, violence was used as means of indicating displeasure at a second partyÃ¢â¬â¢s sayings or deeds. It was also used as a way of marking territory and making conquests. In some communities and groups, violence was used in induction and initiation into certain levels of the society. Today, apart from the factors mentioned above, violence has taken up a different form and is a target of both the defenceless and otherwise. There are different types of violent crime. These include assault, armed robbery, kidnapping, homicide (for instanc e murder) and sexual assault crimes among a host of others. People from virtually all walks of life can fall victim to these types of crimes. In particular, violence against women and children has become common in todayÃ¢â¬â¢s society. Women have been on the receiving end of violent crimes of various types, most commonly rape and sexual assault (Stith, McCollum, AmanorÃ ¢Ã¢â ¬Ã Boadu, Smith, 2012). Children on the other hand are more commonly the victims of kidnap and assault. The role of the society with regard to occurrence of violent crimes is of immense importance when trying to establish the causative factors and means and measures of countering the vice. As social beings, our interactions, thoughts, actions and sayings are largely determined by our environment and upbringing. Thus, the society is largely involved in the making of violent people. Research reveals that most people who exhibit elements of violent behaviour have an underlying problem attributable to the society. This could be due to a troubled childhood in which the parents divorced when the offender was young, or lack of parental care (due to other causes such as being raised up in a childrenÃ¢â¬â¢s home), drug and substance abuse, mental problems or even poverty. Poverty is strongly linked to a number of violent crimes, most commonly robbery, kidnappings and gun violence. The society is also involved in the punishment accorded to such people and the way forward in terms of correction and rehabilitation. Through legislation of laws and making of rules that govern a people, the repercussions of violent crimes are and should be spelt out. In that way, those tempted to engage in such crimes are deterred. This aspect should be two sided such that the correctional aspect should also be factored in. The role of the society in rehabilitation of offenders with regard to violent crimes is immensely important. A system that allows the offender to realize the mistakes he/she made and work towards amending them will serve a greater purpose than that which only highlights the faults made without a clear means of overcoming and changing the violent nature. Victim Population This paper highlights women and children as the victim population that bears the brunt of the most commonly committed and the most heinous violent crimes. In the case of children, those aged between five and twelve years have a higher predisposition while in the case of women, all age groups are generally susceptible (Barner Carney, 2011). Notwithstanding the country or region, violence against women and children is becoming increasingly common. Further, the rate at which such offences are being carried out is alarming with research revealing that in spite of this, most cases go unreported altogether. Take an example of Australia, a country largely considered to be peaceful and exemplary with regard to crime management. A research conducted by the Australian Bureau of Statistics with regard to Personal Safety revealed what was becoming a disturbing trend. The research was carried out in 2005 to measure domestic violence and sexual assault directed towards women. According to the fin dings, about 5 percent (363,000) of the women in the country experienced some form of violence, either by people known to them or unknown offenders in that year alone. Among the people known to the victims, most cases involved husbands, particularly with regard to domestic violence. Findings from the study also revealed that 1.6 per cent (126,100) of the female population had experienced sexual violence. Further, 33 per cent (2.56 million) of women in the country have experienced physical violence since they were fifteen years old. 19 per cent (1.47 million) have experienced sexual violence since they were 15. From the results, one can draw that one out of every five women has experienced sexual assault since they were fifteen while one out of three has experienced some form of violence (Daly, 2012). As regards children, kidnapping is arguably the most common type of violence faced by most countries around the world although there are a significant number of cases involving child battery and assault too. A country synonymous with child kidnappings is Mexico. In Mexico, drug cartels have formed a formidable force and combining this with connections in the justice system and money to burn, are causing all sorts of trouble to authorities. However, the people with the greatest headache are parents, particularly rich folks. In Mexico, child abduction is often carried out with the intention of demanding ransom. The money is then used to service and propagate other criminal activities. On the other hand, killing of children is carried out for a more disturbing purpose; to prove to the world their ruthlessness and to exert their authority! Human rights groups in Mexico estimate that between 2006 and 2010, 994 youngsters (below 18 years) had been killed in drug related violence. Adding th e number of those abducted and exposed to other forms of violent crime results to the figures multiplying more than 100 fold. Interestingly, when it comes to international abductions, Mexico and the United States have a lot in common. This is highlighted by the fact that most children abducted in the US find their way to Mexico where they can be used as bait to demand ransom or sold to childless couples. In the same way, a good number of kidnapped children in Mexico are moved to the US where they find new families. Nature of Sexual Assault and Child Abduction Sexual assault and domestic violence against women is not only demeaning and degrading but also comes with a great deal of emotional turmoil to the victims. There have been cases of women committing suicide after falling victim to sexual assault. In other cases reported, the victims become withdrawn and may develop a negative attitude towards men. It is also common to find women suffering from mental problems such as stress and depression after incidents of sexual assault and violence. In some communities and regions, the blame is usually placed on the womanÃ¢â¬â¢s head (Daly, 2012). This makes the recovery process even more difficult as the victim is made to feel like she brought the misfortune upon herself. Child abduction usually culminates to a whole lot of problems, not only to the victim but also to the society. Many abducted children are used as a bargaining chip for demanding ransom. However, in other cases, child abduction is carried out with a different intention, one of which is child pornography. This has been an emerging issue in which children are kidnapped and forced into engaging into sexual acts. These are then taped, recorded and sold. The business of sexual exploitation of children is becoming common. This is attributable to the high levels of profits made by the people engaging in such outlawed activities. For instance, in Atlanta, children as young as eleven years of age have fallen victim to the activities of unscrupulous people in the name of pimps. To the child victim, the introduction to a corrupted world at such a tender age may change the outlook of their lives and the nature of their future. Such children usually end up becoming drug addicts posing a new challe nge to governments and the society. They may become social misfits, who end up engaging in outlawed activities as a way of Ã¢â¬Ëpaying backÃ¢â¬â¢ for what they went through. The victims may also become withdrawn and develop psychological problems as a result. Ethical Issues involved Most studies reveal that a significant number of cases of violence go unreported. In particular, cases of domestic violence against women are usually hushed up within the confines of the house. Domestic violence and even sexual assault are usually regarded as private incidences that need not be shared with the rest of the world. In some communities and regions in the world, a woman suffering physical violence in the hands of their husbands is quite normal. In others women who fall victim to sexual assault are largely viewed as the orchestrators of their own downfall; they are often believed to be the reason for the assault in the first place. This could be through their way of dressing, mannerisms or other factors. As a result, women in such communities suffer in silence knowing that the community would judge them harshly if they reveal the goings-on. What victims who fail to report cases of violence do not realize is that keeping quiet instead of reporting or talking about it does m ore harm than good (Garland, 2012). Failure to report the crimes may pose a challenge with regard to development of strategies and solutions for overcoming the vices. To begin with, it is difficult to point out victims of sexual assault and domestic violence. Even if they could be pointed out, without their willingness and cooperation it would be difficult to come up with a solution. Failure to report the ordeal in the first place amounts to lack of cooperation. In addition, by failing to report the crime, the victims directly and indirectly contribute to the continuation of the crime. For example, in the case of sexual assault, failure to report rules out the chance of tracking and nabbing the offender. This means that any other woman out there is a potential victim. In the case of domestic violence, failure to report denies other victims the courage to speak out and potential victims are also denied justice as they come into a society where the status quo is already predetermined. A social worker is also likely to come against values that challenge his/her own beliefs. For instance, coming from a more free and liberal society to interact with a community in which violence against women is considered part and parcel of life, the social worker may find it hard to adjust to the new set up. What he/she consistently views as wrong and unacceptable is, on the contrary tolerated. In Mexico, reporting of crimes is almost certain not to occur. The ruthlessness with which the drug cartels handle their victims is beyond imagination. Reporting such crimes only earn the persons involved a ticket for graver repercussions. Research reveals that even the media, including newspapers are forbidden by the cartels not to report incidences of crime; they have no choice but to abide. More specifically, child abduction is a common occurrence but which occurs right under the noses of the authorities and the society but the cases are hardly reported. In the same way, the activities that the children are made to undertake (such as child pornography) are difficult to report even by those who are not directly involved in the crimes due to ethical concerns. For example, it may appear ethically inappropriate to report cases of sexual molestation and exploitation of children in light of the unspoken taboos that revolve around sex. Even to a social worker, sometimes it may come with a level of discomfort when talking about sexual issues with children as the centre stage. This may directly contradict the values of a social worker who does not believe in premarital sex or any other kind of sex apart from that between married people. Policy Issues that may Influence practice Violence directed towards children and women can only be successfully managed with input from all stakeholders. This includes the victims, the society and governments. In particular, governments have a major role to play as they determine much to do with policies and legislations (Garland, 2012). If the government supports and encourages a free and liberal society, it will advocate for measures that provide a platform for reporting and subsequently dealing with offenders. This will serve to give the victims a voice and an assurance that their plight is taken into account. Provision of such an avenue should also be accompanied with measures that help the victims recover from the ordeal. This may include providing counselling programs and keeping the victims under watch to observe their progress and recovery In addition, policies that promote the role of the society and social workers in aiding victims of violence go a long way in aiding the management of the vice. Social Work Practice with Victims of Violent Crime The role of social work with regard to helping victims of violent crime cope is vital for their recovery and healing. In most cases, social workers engage victims in talks that though may seem and sound simple yet actually achieve a lot. The experience of sharing alone is enough to take a whole load of burden off the victimÃ¢â¬â¢s shoulder (Gitterman, 2013). In the process of sharing, the social worker gets the chance to interact with the victim at a personal level and to empathize. This is very important for the recovery of the victim. He/she needs to feel that someone understands the ordeal they went through, the predicament they are in and that the person is willing to listen and even offer pieces of advice. Social work may also act as an eye-opener to the goings-on in the society. Through knowledge, skills and experience, the social worker may be able to unearth facts about the community that were previously unknown. Facts to do with their beliefs, values and culture may offer insight into their way of life (Gitterman, 2013). Conclusion Violence against women and children is not a problem restricted to particular countries or regions. Rather it is a global menace (Barner Carney, 2011). According a 2013 global review of data, 35 per cent of women all around the world have experienced some form of violence. In some countries, the findings are even more alarming with reports of up to 70 percent of women having fallen victim to violence. Research also reveals that of all women who were killed in 2012, about half died in the hands family members or better halves. With this information in mind, it is important that communities and countries around the world demand for more from their governments and from themselves in the fight against violence directed towards women and children. The causes and the outcomes of violence against women and children stem from and affect the society at the end of the day. Therefore, the solution should come from the society in the first place. References Barner, J. R., Carney, M. M. (2011). Interventions for Intimate Partner Violence:Ã A Historical Review. Journal of Family Violence, 26(3), 235-244. Daly, K. (2012). Conferences and Gendered Violence: Practices, Politics, and Evidence.Ã Conferencing and restorative justice: International Practices and Perspectives, 117-135. Garland, D. (2012). The Culture of Control: Crime and Social Order in ContemporaryÃ Society. University of Chicago Press. Gitterman, A. (Ed.). (2013). Handbook of Social Work Practice with Vulnerable andÃ Resilient Populations. Columbia University Press. Stith, S. M., McCollum, E. E., AmanorÃ ¢Ã¢â ¬Ã Boadu, Y., Smith, D. (2012). SystemicÃ Perspectives on Intimate Partner Violence Treatment. Journal of Marital and FamilyÃ Therapy, 38(1), 220-240.
Tuesday, August 20, 2019
Risk Management techniques Risk Management Question: B) Ã¢â¬Å"We will never know if we have identified all the risks in a projectÃ¢â¬ Given that the above statement is true; explain to a member of the Board of Directors the value of using Risk Management techniques for major project. Introduction Ã¢â¬Å"Every human endeavour involves risk; the success or failure of any venture depends crucially on how we deal with itÃ¢â¬ . That means there is no perfect project in the construction industry in which all the risks can be identified and solved. Risk can neither be avoided nor be solved. It can only be mitigated and then either transfers or share to any other body which is a part of the project or just retain it. The success of a project depends on how well the project team analyse the risk. All the three parameters which determine the success of a construction project which are time, cost and quality are subjected to risk or uncertainty. It is the ability of the project team; right from the concept stage through out the implementation stage that how properly they are estimating the project by providing appropriate allowances for all those anticipated risks or uncertainties . This report includes a detailed analysis of various risks that can occur in a construction project. It also includes how to identify, analyse and mitigate those risks by highlighting the value of different risk management techniques that are used now-a-days for major projects with the help of a case study of 2012 London Olympic and Paralympic games. This report also explains about the systematic approach (project management techniques developed by the experts who are in the field of risk management for many years) of handling the risks. Neglecting the risk without taking that into in its context can turn a potentially profitable project to a loss making venture. 1. Risk in projects- a theoretical approach After a brief introduction, the author feels thats its time to explain risk in a broader frame and the management techniques to mitigate it. For that, all those management procedures need to be explained more along with the techniques used and substantiate that by using more examples. Before going into details of management aspects of the risk, the author needs to give a general idea about the difference between risk and uncertainty, and the risk classification in detail. 1.1. Risk and uncertainty According to Smith NJ, Ã¢â¬Å"the terms risk and uncertainty, if used rigorously, have different meaning but in terms of construction projects the distinction drawn between uncertainty and risk is of little significanceÃ¢â¬ . He defined risk and uncertainty as risk exists when a decision is expressed in terms of a range of possible outcomes and when known probabilities can be attached to the outcomes while uncertainty exists where there is more than one possible outcome of a course of action but the probability of each outcome is not known . Uncertainty in other words can be defined as a situation in which there is no historic data or previous history relating to the situation  . Ã¢â¬Å"Perminova defines uncertainty, as a context for risks as events having a negative impact on the projects outcomes, or opportunities, as events that have beneficial impact on project performance. This definition stresses dual nature of uncertainty in potentially having both positive and negative influence on the projects outcomesÃ¢â¬ .  Risk involves both a threat and a challenge where an opportunity is a threat for those expects failures and a challenge to those predicts victory. It can be taken purely on the basis of probabilities or chances and at the same time, risk can be a well calculated one. 1.2. Risk classification According to Robert Flanagan and George Norman, risks are generally of different types that can be classified based on these criteria which are by identifying the type of risks, the consequences, and the impact of risk. Smith N J and Merna T suggested an alternate method of classification of risk which is Global classification and Elemental classification. The method, they suggested is to separate the more general risks which might influence a project but may be outside the control of the project parties from the risks associated with key project elements; these are referred to as global and elemental risks. The classification based on type of risks is usually done by assuming that the total risk is made up of market risks (Speculative risk) and specific risks (Pure risk). The specific risk, sometimes called as static risk, which is having no potential gain typically arises from the possibility of accident or technical failure, while for speculative risk, there is a possibility of loss or gain which might be financial, technical, or physical. Ã¢â¬Å"Moreover, a companys systematic risk can be spit into two components: business and financial riskÃ¢â¬ . Business risk is the result of a company trading with its assets, which is borne by the equity and debt holders and the financial risk arises directly out of the gearing process brings risk only to the equity holders. The risk classification based on the impact of it can be subdivided into the environment risk, market or industry risk, company risk and the project or individual risk. This classification has done by considering the area with which the impact of the risk is affecting. The general environmental can again be divided into two parts: the physical and then the social, political and economical risks. The physical environment includes the weather and the natural phenomena like earthquake, landslips etc. Normally the risks involved in this environment cannot be controlled. By using the modern technologies, these phenomena can be identified well in advance and can take the measures to mitigate the effects of these phenomena. While in the other hand, the social, political and the economical environment risks are to some extent can be controlled. The government can control social, political and environment of a project to an extent . Market risk depends on a lot of factors and it is very d ifficult to control it. Recession is a risk that almost all the companies are facing throughout the world also comes under market risk. These types of risks are very difficult to predict too, so the better method to tackle is to try to mitigate the consequence. Any company operates within an open market and the risk attached with the market can influence the company as well. So in a company itself, for different major projects, different management groups are assigned and thereby it can act as a separate group or consortium (joint venture with another company). By doing the there are chances for the risks with which the parent company is facing may not reach this group. But the company risks and project risks are intrinsically linked because the company must ultimately bear the consequence of the risky project. 2. Project risk management critical analysis Ã¢â¬Å"Project risk management includes the processes concerned about conducting risk management planning, identification, analysis (both qualitative and quantitative), responses, and monitoring and control on a project; most of these processes are updated throughout the projectÃ¢â¬ . 2.1. Risk management planning: plans how to approach the risk bound activities in the project and to execute the risk management practices into those activities. Before going into the planning for risk management, it is always better to study the project as much as possible. According to PMBOK (3rd edition), while planning an approach for managing risk, it is advisable to consider these factors as well such as, environmental factors, organisational process assets and project scope statement (objective of the project). Risk management plan or method is the outcome or result of this planning, which is used for the identification of risk in the project . 2.2. Risk Identification: The best way to identify risk is a group session or a brainstorming session with all the management experts who are the part of the project. This is the best method of gaining team input and bringing expertise to the project  . The risk management plan which is obtained as a result of the first step (Risk management planning) can be used here to identify risk. After identifying all the risk, a risk breakdown structure (RBS) can be made, which shows the risk groups, risk categories and risk events at the lowest level. Then all these identified risks can be converged under two main categories, Internal and external risks. Internal risks, which consists of risks from the side of owners, consultants, contractors, subcontractors and suppliers while external risks are political, economical, social, cultural, natural and other risks such as delays in claiming insurance etc . Ã¢â¬Å"Identification of the risk is considered as the first and the most significant phase of the risk mana gement process. It brings considerable benefits in terms of project understanding and provides an early indication of the need for risk management strategiesÃ¢â¬ . It is impossible to know how far the risks are identified but it is likely that there will be some risks which are unknown. The purpose of identification itself is to use the combinations of different methods to try to ensure that the amount of the unknown unknowns is as small as possible . The right time of doing this identification of risk process is in the appraisal phase, because then there are a large number of risks in the project, and the options for avoiding or mitigating risks are very high and at that time, the project is highly flexible. Different methods of identification process are used by different organisations. Examining previous projects data with similar characteristics which has got similar type of risks can be used to ensure that corporate knowledge is utilized. This option of identification is having only limited scope, but this can at least used to make a checklist of risks which has got more probability to occur . Ã¢â¬Å"Interviewing the project personnel from each discipline and the staff from within the organisation who have experience of similar projects, ensures the corporate knowledge and personnel experience are utilized in the process of identifying risksÃ¢â¬ . The benefit of doing this technique is that, the organisation can utilise the experience that these experts got from the similar pervious projects. Once these risks are identified, detailed analysis can be done, either by qualitative analysis or by quantitative analysis or by both. 2.3. Risk analysis: Ã¢â¬Å"The purpose of the risk identification is to quantify the effects on the project of the risks identifiedÃ¢â¬ . The first and most important step in this phase is to decide which analytical technique to use. There are methods, at the simplest level in which each risk can be treated individually with no attempts made to quantify the risks or the probability of occurrence of this is not calculated. Much more detailed results can be achieved by adding various computation methodologies and by establishing the interdependency of the risks and then the calculation system will be more complex. The choice of technique will usually be based on the experience and expertise. 2.3.1. Qualitative analysis: Prioritising risk by analysing the probability of occurrence and impact in the project. For each risk that is identified, the team needs to assess its severity in order to decide what course of action to take . Expertise is required in this step, because all those analysis is done based on the knowledge from previous experiences. According to Smith N J, a typical qualitative risk assessment usually includes these issues: a brief description of the risk, the stages of the project when it may occur, the elements of the projects that could be affected, the factors that influence it to occur, the relationship with other risks, the likelihood of it occurring, how it could affect the project . According to PRAM, various techniques used for doing qualitative analysis are assumption analysis, by making a check lists and prompt lists, brainstorming, Delphi technique, use of probability- impact (P-I) table, interviews ands risk register . This method is basically experience based and the usage of any of the above mentioned techniques is compulsory, otherwise, the experience of the senior staffs cannot be utilised and thereby the project will be more vulnerable to risk. 2.3.2 Quantitative analysis: analyse numerically the effect of these risks in the overall project. This is the step in which the chances for error is maximum because in this step only, the calculations of the identified risks are done. So this step requires higher attention. Based on qualitative analysis, a relative important index (RII) can be developed and using that detailed categorisation can be done . The probability of a risk arising is a key factor in decisions on risk. Possible consequences of risk occurring are defined and quantified in terms of increased cost, increased time and reduced quality and performance, which can be analysed by using any of the quantitative analysis techniques, says Smith N J . Various techniques used are Decision trees, influence diagrams, Probability analysis (Monte- Carlo simulation), Sensitivity analysis, Project evaluation and review techniques (PERT) and Control Interval and Memory (CIM) approach in which sensitivity analysis and probability analysis are the widely used techniques to do the quantitative analysis of risk in a project. Sensitivity Analysis: This technique determines the risks which have the most potential impact on the project. Ã¢â¬Å"It examines the extent to which the uncertainty of each project element affects the objective, when all other uncertain elements are held at their baseline valuesÃ¢â¬ . The aim of doing sensitivity analysis is to identify those components of the projects whose uncertainty most influences the uncertainty of the projects outcome. Sensitivity analysis can be expressed by using different plotting methods like Tornado charts (a histogram method, which is useful for comparing relative importance of variables that have a high degree of uncertainty to those that are more stable.), Spider plots, and Risk-return graphs. This technique should performed on all the risks and uncertainties which may affect project in order to identify those which have a large impact on the economic return, cost, time and whatever are the objectives. Probability Analysis (Monte-Carlo simulation): Probability analysis overcomes many limitations of sensitivity analysis by specifying a probability distribution for each risk, and then considering the effects on the risks in combination. Random sampling is used where calculation of data inserted in an equation would be difficult or impossible  . Monte-Carlo simulation by means of random numbers provides and extremely powerful yet conceptually straight forward method of incorporating probabilistic data. The basic steps are. * assess the range for the variables being considered, and determine the probability distribution most suited to that variable * select a value for each variable within is specified range; this value should be randomly chosen and must take account of the probability distribution for the occurrence of the variable. This is usually achieved by generating the cumulative frequency curve for the variable and choosing a value from a random number * run a deterministic analysis using the combination of values selected for each one of the variables * repeat a number of times to obtain the probability distribution of the result. The number of iterations required depends on the number of variables and the degree of confidence required, but typically lies between 100 and 1000 . In normal risk management processes (RMP), one of the abovementioned analyses only is used. Ã¢â¬Å"The effectiveness and efficiency of quantitative analysis is driven to an important extent by the quality of the qualitative analysis and the joint interpretation of bothÃ¢â¬ .  2.4. Risk response: brings out the maximum possible outcomes from these risks bound activities to enhance opportunities and to reduce threats to the desired objective. With these outcomes, risks can be prioritised as high, medium and low risk according to the probability of occurrence and impact. Risk allocation strategies should be determined at the initial stages of the project by the client. The main characteristics of the available choices of risk allocation strategy can be grouped according to organisational structure or payment mechanism. The payment mechanism employed, price or cost- based, will determine the location of these contingencies . The allocation of risk between parties to a contract should be identified prior to tender. The rise response, or its allocation, can take any of these four forms: Risk retention, Risk transfer, Risk reduction and Risk avoidance. 2.4.1 Risk retention: According to Flanagan. R and Norman G, risks that produce individually small, repetitive losses are those most suited for retention. Not all risks can be transferred, but even if they are capable of being transferred it may not prove to be economical to do so. The risk will then have to be retained. Besides, it is preferred to retain a portion of risk in certain circumstances . Applying the probabilistic approach to cost estimates gives a range of estimates rather than a single value. Thus a series of contingency sums can be given which provide for different probabilities of protection against risk and uncertainty . 2.4.2 Risk transfer: Transferring the risk does not reduce the criticality of the source of risk, but it removes it to another party. In some cases, transfer can significantly increase risk because the party, whom it is being transferred, may not be aware of the risk they are being asked to absorb. The essential characteristic of the risk transfer is that the consequences of the risks, if they occur, are shared with or totally carried by a party other than the client. The client should expect to pay a premium for this privilege. The responsibility for initiating this form of risk response therefore lies with the client, and he should ensure that it is in his own best interests to transfer the risk  . As per PMBOK, contracts can be used to transfer liability for specified risks to another party . 2.4.3 Risk reduction: The most common and efficient way of reducing risk exposure is to share risks with other parties. Risk reduction fills in three categories: Firstly, education and training to alert the staff to potential risks. Secondly, physical protection to reduce the likelihood of loss and finally systems are needed to ensure consistency. In contractual agreement, the use of management fee types of contract will remove the adverse attitude of contractors and should reduce the likelihood of claims from the contractor for direct loss and expense . 2.4.4 Risk avoidance: Ã¢â¬Å"Risk avoidance involves changing the project management plan to eliminate the threat posed by an adverse risk, to isolate the project objectives from the risks impact, or to relax the objective that is in jeopardy, such as extending the schedule or reducing scope. Some risks that arise early in the project can be avoided by clarifying requirements, obtaining information, improving communication, or acquiring expertise.Ã¢â¬  2.5. Risk monitoring and control: tracking and monitoring the identified risks, identifying new risks, executing risk response plans, and evaluating their effectiveness throughout the project life cycle. The process of risk management can be grounded on a clear understanding about the nature and scope of decision making involvement in project management and a natural framework for examining these decisions is the project life cycle. For successful implementation of the project, a regular monitoring procedure of risk is essentially required in all the segments of this framework like conceptualisation, planning, design, construction, termination and disposal of a project. Risk Monitoring and Control is the process of identifying, analysing, and planning for newly arising risks, keeping track of the identified risks and those on the watch list, reanalysing existing risks, monitoring trigger conditions for contingency plans, monitoring residual risks, and reviewing the execution of risk responses while evaluating their e ffectiveness. The Risk Monitoring and Control process applies techniques, such as variance and trend analysis, which require the use of performance data generated during project execution. Risk Monitoring and Control, as well as the other risk management processes, is an ongoing process for the life of the project  These abovementioned processes can be effectively explained by using a case study. The case study explains the typical risks that a major construction project is always exposed to and through this case study the author wants to prove that even if the management team has done a detailed analysis of risks, they can never say that they have identified all the risks because still there are chances for some risks being left out as unidentified. 3. London Olympics 2012 a case study The reason behind 2012 London Olympics to be taken as the case study is that, the author feels it is better to consider a live or recent project to discuss the risk management issues than an old project because in a live project only, there is a scope to find more risks which the management team left out without considering like the recession in this case, which is left unattended by the management group is the biggest treat the project is facing. According to the report by Comptroller and auditor General, National Audit Office (NAO), the management team of the London Olympics has considered six major issues as their major risks that need to be considered to the successful delivery of the project. They are (1) Ã¢â¬Å"Delivering the project at an immovable deadline (2) The need for strong governance and delivery structures given the multiplicity of organisations and groups involved in the Games. (3) The requirement for the budget to be clearly determined and effectively managed. (4) Applying effective procurement practices. (5) Planning for a lasting legacy. (6) The installation of effective progress monitoring and risk management arrangementsÃ¢â¬ . Since this project is a major one and all these risks need severe attention, the management team planned various risk management techniques to tackle each risk individually to keep all of them under control at any time through out the project. The author finds it very essential to explain each of these abovementioned risks and the methods used to mitigate them in detail, to substantiate the value of risk management techniques to a member of the Board of Directors. 3.1. Delivering the project at an immovable deadline The Olympic project consists of a lot of individual but interdependent projects. Effective project management works on the basis of the three parameters- Time, cost and quality and if there is any change that happens to any of these parameters can affect the other two. So that implies delay in delivering any of the elements of the project puts pressure on cost and/or quality. Normally to release pressure from cost and quality that arises due to the delay in delivery of the project is to weaken the negotiating position. But in this project, these adjustments are not possible. Because any delay can affect the theme of the project. So to get rid of all these issues, they planned the project very well initially and kicked the construction off by starting the individual; non-interdependent (self dependent) works at the same time and by achieving all the milestones in construction at regular, pre-assigned intervals. Then they arrange the meeting of the representatives of all the major stakeholders and make sure that all of them are satisfied with the work done to attain the milestone within the given time. 3.2 The need for strong governance and delivery structures given the multiplicity of organisations and groups involved in the Games. According to the Comptroller and audit generals report, there are three major stakeholders to this project- The Government (represented by some bodies), the mayor of London and British Olympic Association. In addition to this, some other bodies are involved in delivering or funding the games. The management group deals with the risk of the need for strong governance and delivery structures by maintaining a clear focus on the need for timely decision making individually and collectively on a programme where there are multiple stakeholders and interests. The international Olympic Committee requires the host cities to organise the games and the management department decided to set up an Olympic delivery authority (ODA) to deliver the venues and the infrastructure and then to stage the games. From the previous experience they had in the past, they set up another body called LOCOG (London Organising Committee of the Olympic and Paralympic Games, which is responsible for operational and s taging aspects of the game. The Olympic Delivery Authority prepares the site, builds new venues, delivers the Olympic village, infrastructure and transport projects. The only thing the management team needs to make sure is the combined effort of both the organisations in delivering the project. The technique of setting up two organisations by the management department was found successful so far, from the timely delivery of the milestones . 3.3 The requirement for the budget to be clearly determined and effectively managed. One of the main risk which has got more probabilities to go wrong and which needs efficient management hands and effective techniques to deal with. So a very strong financial management set up is a prime requirement here. The need of maintaining comprehensive and accurate asset registers, which helps to transfer the asset later on at the end of the project and the need for strong contract management arrangements, with comprehensive contract records and payments made only in accordance with certified work carried out, is also of prime importance to keep in track with the income and expenditure of the project. Finally the actions required to manage this risks are setting up a budget for the project and making sure how it is funding, being sure about how the cash flow needs will be met, being clear about the costs associated with delivering the games and how to capture this amount on a consistent basis  . 3.4 Applying effective procurement practices. This is one of the main issues as far as a major project is taken into concern. The author feels so, because fixing a procurement route for such a large project is very difficult. To get a main contractor who is doing the major share of work for a big project is equally difficult. By considering these aspects, the management team started doing the procedures well in advance, so that they got enough time for doing their analysis works done for fixing the procurement route, to do the qualification processes for selecting the main contractor and to negotiate with the preferred team about the various aspects of the project. Along with this, the management team makes sure that the application of procurement practice was effective by being clear about the respective roles and responsibilities of the Olympic Delivery Authority and its Delivery Partner, and ensuring that the arrangement enables the Authority to contain its operating costs as planned. They gained confidence in the approach t o procurement by awarding contract in an open and fair way and by applying best practice  . 3.5 Planning for a lasting legacy. Since the project is very big and requires a lot of money, the management needs to make sure that the assets that are constructing for the games should deliver the maximum service. Planning for a lasting legacy, they planned the entire development of the city of London by adding these assets to it for future purposes. So this can also be considered as one among those crucial risks. They mitigated this risk by developing robust plans for the Olympic venues with the clear focus on whole life costs, to avoid the risks of these facilities being under-used or unaffordable after the games . 3.6 The installation of effective progress monitoring and risk management arrangements. A major issue for any construction project, no matter whether that is a small project or a large one, it affects very severe if there is no effective progress monitoring techniques and risk management arrangements. Especially for a high investment project like this, it is very important because of the interest of the public in the project. They managed this risk by providing a risk register for every stakeholder at different stages in developing their own risk strategies and registers to identify and manage the risks specific to delivering their responsibilities. At a particular programme level, the authority collates all of them and makes a database for registering risks and prepares action plans to mitigate them. Although they have done all these lengthier procedures to find out risks and to eliminate it, the project is still not completely out of risks. The main threat the project facing now is the risk developed due to global economic recession. The financial set up of the project might get affected because of this risk. Now their main objective is to save the project from this risk and they are currently working on the issue which is about how to reduce or mitigate this risk. Being government is the main stakeholder and the project is a prestigious one, they will somehow manage to finish this project within time, but the cost will still remain as unknown and that itself is the risk that the management team left out with identifying after doing this detailed analysis of risk. This is the reason why they say Ã¢â¬Å"we will never know if we have identified all the risks in a projectÃ¢â¬ . 4. Benefits of Project Risk Analysis and Management As per PRAM, benefits of using risk management can be classified into two: Hard Benefits and Soft benefits. Hard benefits are relatively easy to express and with enough effort it would be possible to measure the amount of benefit. But soft benefits are much less easy to quantify but, can give rise to dramatic performance improvement. These two can be explained in detail as Ã¢â¬Å"Hard benefits Enables better informed and more believable plans, schedules and budgets. Increases the likelihood of a project adhering to its plans. Leads to the use of the most suitable type of contract. Allows a more meaningful assessment and justification of contingencies. Discourages the acceptance of financially unsound projects. Contributes to the build-up of statistical information to assist in better management of future projects. Risk analysis enables objective comparison of alternatives. Identifies and allocates responsibility to the best risk owner and soft benefits Improves corporate experience and general communication Leads to a common understanding and improved team spirit Assists in the distinction between good luck/good management and bad luck/bad management Helps develop the ability of staff to assess risks. Focuses attention on the real and most important issues. Facilitates greater risk taking, thus
Monday, August 19, 2019
In June, French President Jacques Chirac revealed that nuclear tests would be conducted in the Pacific at the Mururoa coral atoll. These tests, Chirac, stated, would consist of eight nuclear explosions in a tunnel 1,800 to 3,000 feet below Mururoa beginning in September up until May 96. Chirac declares that these tests are necessary for computer simulation in the future. France has been bombarded with criticism, not only from environmental activists, but also from political standpoints. Japan and Australia officially protested French experiments and have convinced other Asian and Pacific nations to agree. New Zealand and Chile have recalled their ambassadors from France and the Japanese are presently protesting outside of their French embassy. 56% of the citizens in France polled oppose the tests and 60% want Chirac to reconsider his position. Stung by the criticism, France may cancel one out of the eight scheduled nuclear tests. Even the renowned Jacques Cousteau has publicly asked Chirac to rescind the tests. Cousteau has even resigned from the government agency Council for the Rights of Future Generations, in protest. France, along with the United States and Great Britain, has not signed a treaty completely prohibiting the detonation of any nuclear device in the South Pacific. Many of the protesting nations located in the Pacific have signed and support this treaty . Also, France has not followed the initiative of most of the nations of the developed world in signing a 1971 treaty prohibiting "the emplacement of nuclear weapons ... on the ocean floor and in the subsoil thereof." Besides public and international disapproval, France may suffer other side effects because of the nuclear testing. The explosive power of the blast is just less than 20 kilotons (20,000 tons of TNT). The bomb on Hiroshima was 15 kilotons. New Japanese research shows that bomb radiation increases risk of long term cancer. Radiation causes ionization in the molecules of living cells. The ions formed can react with the atoms in the cell causing damage. Cells that are changed permanently may produce abnormal cells when they divide, perhaps become cancerous. Not only are there health risks, but the French economy just lost a contract to build 40 jets and French goods are being boycotted by a number of nations. Environmental agencies warn of the damage to the life and rock around the blast atoll. Defense Minister Charles Milton said, "Nuclear Tests should not be mixed up with the question of arms and industry contracts. French Nuclear Testing :: essays research papers In June, French President Jacques Chirac revealed that nuclear tests would be conducted in the Pacific at the Mururoa coral atoll. These tests, Chirac, stated, would consist of eight nuclear explosions in a tunnel 1,800 to 3,000 feet below Mururoa beginning in September up until May 96. Chirac declares that these tests are necessary for computer simulation in the future. France has been bombarded with criticism, not only from environmental activists, but also from political standpoints. Japan and Australia officially protested French experiments and have convinced other Asian and Pacific nations to agree. New Zealand and Chile have recalled their ambassadors from France and the Japanese are presently protesting outside of their French embassy. 56% of the citizens in France polled oppose the tests and 60% want Chirac to reconsider his position. Stung by the criticism, France may cancel one out of the eight scheduled nuclear tests. Even the renowned Jacques Cousteau has publicly asked Chirac to rescind the tests. Cousteau has even resigned from the government agency Council for the Rights of Future Generations, in protest. France, along with the United States and Great Britain, has not signed a treaty completely prohibiting the detonation of any nuclear device in the South Pacific. Many of the protesting nations located in the Pacific have signed and support this treaty . Also, France has not followed the initiative of most of the nations of the developed world in signing a 1971 treaty prohibiting "the emplacement of nuclear weapons ... on the ocean floor and in the subsoil thereof." Besides public and international disapproval, France may suffer other side effects because of the nuclear testing. The explosive power of the blast is just less than 20 kilotons (20,000 tons of TNT). The bomb on Hiroshima was 15 kilotons. New Japanese research shows that bomb radiation increases risk of long term cancer. Radiation causes ionization in the molecules of living cells. The ions formed can react with the atoms in the cell causing damage. Cells that are changed permanently may produce abnormal cells when they divide, perhaps become cancerous. Not only are there health risks, but the French economy just lost a contract to build 40 jets and French goods are being boycotted by a number of nations. Environmental agencies warn of the damage to the life and rock around the blast atoll. Defense Minister Charles Milton said, "Nuclear Tests should not be mixed up with the question of arms and industry contracts.
Sunday, August 18, 2019
In Their Eyes Were Watching God, by Zora Neale Hurston, the relationship between Janie and Nanny is one of great dispute over if it is healthy or not. The idea that the most influential person in JanieÃ¢â¬â¢s life is also the one who triggered her struggles when she was becoming a woman is sadly ironic. NannyÃ¢â¬â¢s true influence on Janie is brought to light through symbolic, and decaying diction, Biblical, and Greek Mythological allusions, and natural metaphors, by describing JanieÃ¢â¬â¢s journey to womanhood, through finding her own opinion, acquiring a stable life from Nanny, her maturation, and what she gained when becoming a woman. Through the use of symbolic diction, decaying diction, and metaphors, Hurston illustrates JanieÃ¢â¬â¢s inner struggle around accepting NannyÃ¢â¬â¢s opinions as the correct ones. Inside JanieÃ¢â¬â¢s conscious self, Ã¢â¬Å"There is a basin in [her] mind where words float around on thought and thought on sound and sightÃ¢â¬ ¦Ã¢â¬ where she can think freely with thoughts that are, Ã¢â¬Å"Ã¢â¬ ¦untouched by wordsÃ¢â¬ (24). This is a place where Janie can flourish by thinking about ideas without being inhibited by peer pressure. To truly understand the ideas formed in JanieÃ¢â¬â¢s mind, it is necessary for Janie to get in touch with her body and herself. However, through symbolic diction, it is clear that JanieÃ¢â¬â¢s impressionability leads her to not completely understand these thoughts; she has not reached the level of maturity necessary for this level of self-reflection. These qualities cause Janie to have the tendency to mirror NannyÃ¢â¬â¢s opinions on issues, even when she internally disagrees with them. This tension is demonstrated when, Ã¢â¬Å"Nanny entered this infinity of conscious pain again on her old kneesÃ¢â¬ (24). The Ã¢â¬Å"conscious painÃ¢â¬ (24) which Janie speaks... ... NannyÃ¢â¬â¢s ideals, values, and opinions. Every aspect of Nanny was drilled inside of Janie, and once Nanny died, Janie was finally a free woman. The reason Janie was able to truly become a woman was because she realized that she was able to become a woman because when Nanny died she set her free. During the journey that Janie went through when she became a woman she gained self-knowledge, and understood on a deeper level why Nanny did things. While Janie matured, it looked at first glance like Nanny was hindering her advancement. However, NannyÃ¢â¬â¢s controlling actions were justified by her belief that she was doing the right thing, and that God would look after Janie. It is difficult to become a person unimpeded by what other people think, it took NannyÃ¢â¬â¢s death for Janie to be released of an important influence, and never return to this time in her life.
Saturday, August 17, 2019
Hence due to the diversity of views and strategies, is more accurate to think of behavioral therapies rather than a unified approach. Population Served: The approach has wide applicability to a range of clients design specific behavioral changes. If you problem areas for which behavior therapy appears to be effective are phobic disorders, social affairs, depression, anxiety disorders, sexual disorders, substance abuse, eating disorder, trauma, hypertension, childrenÃ¢â¬â¢s disorder, and many more. Goals of Counseling The hallmark of behavioral therapy is identification of specific goals of the outset of the therapeutic process. The general goals are to increase personal choice and to create new conditions are learning. And aim is to eliminate maladaptive behaviors nd learn more effective behavioral patterns. Pacific achievement goals should be concrete, measurable, and objective term. Techniques and Approaches Behavioral treatment interventions are individually tailored to specific problem experienced by different clients. Any technique that can be demonstrated to change behavior may be incorporated in achievement plan. Techniques such as role-playing, behavioral arsenal, coaching, guided practice, and homework assignments can be included in the therapist repertoire. Considerations (include strengths and weaknesses) Some of the strengths of behavioral therapy is that it is a short-term approach that as wide applicability. It emphasizes research into the assessment of techniques used, thus providing accountability. Behavioral approaches are in line with the movement towards evidence-based practice and manualized treatments, which fit well with managed care mental health programs. The concepts and procedures are easily grasped. Some ot the limitations ot behavioral therapy is that the success ot the approach is in proportion to the ability to control environmental variables. In institutional settings such as schools and mental hospitals the danger exists Imposing conforming behavior. Therapist to manipulate clients toward and they have not chosen. A basic criticism leveled at this approach is that it is not adjust broader human problems, such as meaning, the search for values, and identify issues, but focuses instead on very specific and narrow behavioral problems.
In early March 2004, Alejandro Perez, president and CEO of Chilean forestry company, Arauco, was about to present his recommendations to the board of directors as to whether the company should invest US$1 billion to construct a new state-of-the-art chemical pulp plant. The plant, part of a multiphase project called Nueva Aldea, would increase AraucoÃ¢â¬â¢s capacity by approximately 800,000 tons to 3. 2 million tons, placing the company as the largest producer of market pulp, just ahead of Aracruz in Brazil. Two years earlier, AraucoÃ¢â¬â¢s board approved the first phase of the Nueva Aldea project for US$150 million, which consisted of building a sawmill, plywood mill, and energy complex. The second phase involved constructing a pulp mill following the inauguration of the new Valdivia plant on January 30, 2004. The Valdivia plant had a designed production capacity of 700,000 tons of pulp, with an operating life between 30 and 40 years and expected sales of USD $350 million per year. 1 Perez was concerned about the downward trend in market pulp prices over the last three years. In addition, major paper companies, the sole buyers of market pulp, were typically backwardintegrated into the production of pulp. Perez was confident, however, that the board would trust his judgment given AraucoÃ¢â¬â¢s tremendous success in recent ventures into remanufactured wood products (such as cut stock, blanks, clear rips, and decking balusters), plywood, and fiberboard panels. Perez anticipated the toughest question the board would pose: would shareholders be better served by a strong-willed forward integration move into paper manufacturing rather than the horizontal growth plan he was proposing? Furthermore, was a large resource commitment a good strategic move at this point? History of Arauco and COPEC Arauco was formed through a merger between Industrias Arauco and Celulosa Constitucion in 1979. Both companies had been created 20 years earlier by the Chilean government to develop forest resources, improve soil quality, and promote employment. In the late 1970s, the Chilean government had initiated an aggressive privatization program, which resulted in the sale of Industrias Arauco in 1977 to Compania de Petroleos de Chile (COPEC), a conglomerate involved in oil and gas, fishing, ________________________________________________________________________________________________________________ Professors Ramon Casadesus-Masanell and Jorge Tarzijan (Universidad Catolica de Chile) and Research Associate Jordan Mitchell prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright Ã © 2005, 2006, 2008, 2009 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www. hbsp. harvard. edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any meansÃ¢â¬âelectronic, mechanical, photocopying, recording, or otherwiseÃ¢â¬âwithout the permission of Harvard Business School. 705-474 Arauco (A): Forward Integration or Horizontal Expansion? forest management, and pulp. Two years later in 1979, COPEC purchased Celulosa Constitucion, merging the two entities to create Celulosa Arauco y Constitucion SA (referred to as Arauco). Arauco began its expansion plan in the 1980s, which involved purchasing land and plantations and installing new technology equipment to improve efficiencies to compete effectively in the world market pulp arena. The expansion plan paid off as the companyÃ¢â¬â¢s total holdings in hectares2 grew from 170,000 in 1980 to 1,200,000 hectares in 2003. 3 Throughout the 1990s, the company increased its production capacity by constructing a second line at the Arauco mill, introducing new bleaching systems, entering new product lines, and expanding energy generation at its plants. By 1996, Arauco moved across the border to Argentina to purchase the company Alto Parana, expanding the companyÃ¢â¬â¢s overall product offerings, land holdings, and production capacity. In 2000, Arauco aggressively increased its capacity yet again by purchasing its third mill in Chile, increasing production in Argentina, and entering into the MDF (medium-density fiberboard) and HB (hardboard) markets through stakes in sawmill PANELS plants such as Cholguan and Trupan. In late 2001, the company commenced a three-year construction project of its new mill, the Valdivia mill, at an estimated cost of US$600 million. The Valdivia plant had opened in January 2004 with a total construction cost of US$1. 2 billion; US$900 million was apportioned to the purchase of the plantÃ¢â¬â¢s assets (a pulp plant and other assets), and US$300 million was for the creation of a 100,000 hectare forest. 4 The plant was the worldÃ¢â¬â¢s fifth-largest bleached kraft pulp plant and the largest in Chile. By 2004, Arauco was one of the worldÃ¢â¬â¢s premier forestry enterprises in terms of plantation areas and yields. It was also involved in the production of market kraft wood pulp, saw timber, and wood panels with forest plantations throughout Chile, Argentina and Uruguay. Arauco had sales offices in Argentina, Brazil, Mexico, Holland, Japan, and the U. S. , and distributorships in Peru, Columbia, Venezuela, Korea, Taiwan, Thailand, Malaysia, and India. (Exhibit 1 shows AraucoÃ¢â¬â¢s corporate structure. ) COPEC was the majority shareholder with 99. 98% ownership of AraucoÃ¢â¬â¢s shares. COPEC: This company was founded after the stock market crash in 1929 with the intention of guaranteeing fuel supplies in Chile. 5 As of the end of 2003, the market capitalization of COPEC was approximately US$9. 3 billion, which represented 12% of the market capitalization of all publicly traded companies in Chile. COPEC was publicly traded with the majority of shares being indirectly held by the Angelini Group (via another company, AntarChile). Anacleto Angelini, part owner of the Angelini Group, was deemed to be one of the 10 richest men in Latin America by Forbes magazine. 6 COPECÃ¢â¬â¢s consolidated sales were US$2. 7 billion, with operating income at $375 million. Although 35% of COPECÃ¢â¬â¢s sales7 came from forestry, COPECÃ¢â¬â¢s profits were tied closely to pulp prices, since 78% of the companyÃ¢â¬â¢s EBITDA originated from Arauco. 8 Other sales were derived from fuels (60. 4%), fishing (1. 4%), and other investments (3. 2%). AraucoÃ¢â¬â¢s Strategy Arauco explained its central strategy in a letter to shareholders: The central idea behind our global strategy is to strengthen our position as one of the most important forestry companies in Latin America, employing [the companyÃ¢â¬â¢s] size to achieve the necessary economies of scale for positioning [ourselves] as a company that provides a reasonable return to its shareholders while properly meeting its responsibilities to its employees, the country and the communities where it develops its activities. In the forestry area, AraucoÃ¢â¬â¢s strategy is to increase the value of it forest resources, consisting of radiata and 2 Arauco (A): Forward Integration or Horizontal Expansion? 705-474 taeda pine and eucalyptus through further purchases but especially through making intensive use of the most advanced technologies in genetic improvement, forest management and pest, weed and fire protection. 9 The company felt that it could achieve its strategy through implementing a capital expenditure plan aimed at increasing capacity, efficiency, and productivity in both pulp and wood products. While the companyÃ¢â¬â¢s current strength was in softwood through its radiata and taeda pine forests, Arauco wanted to increase its hardwood pulp production by planting eucalyptus trees. By using advanced forest techniques, the company hoped that it would improve product quality and increase margins. An analyst described AraucoÃ¢â¬â¢s cost advantage in comparison with its northern counterparts: Arauco has a leading business position in the volatile market pulp industry due to its lowcost production capabilities. Unlike bleached softwood market pulp producers in the Northern Hemisphere, Arauco produces bleached softwood kraft pulp for less than $300 per ton. As a result, Arauco has been able to generate positive cash flows during troughs in the market pulp cycle. Nevertheless, like all producers of market pulp, Arauco is not able to escape the impact of pricing swings on its financial performance. This is reflected in the companyÃ¢â¬â¢s credit protection measures, which have improved over the past two years as prices have risen. 10 Perez gave his view of AraucoÃ¢â¬â¢s performance against its strategy, in light of difficult economic conditions in Chile: During several years, the company has been concentrated in the pulp business because we had young forests. But while they were maturing, we developed other important businesses like woods and panels that gave a bit more stability to the results. As well, investments made to improve our assets, our operational strength, and economic conditionsÃ¢â¬âlike the favorable exchange rate for export industriesÃ¢â¬âhave all helped to reduce operational costs. And, thereÃ¢â¬â¢s a third reason that weÃ¢â¬â¢re different from other large Chilean companies that have a presence in Argentina. WeÃ¢â¬â¢re oriented to exports. The crisis in Argentina has shook us like it has others, but our focus has allowed us to gain access to other markets and weather the storm. 11 An industry observer commented on AraucoÃ¢â¬â¢s decreasing reliance on pulp: Ã¢â¬Å"The firm . . . has been diversifying their business lines to minimize the impact of the volatility of pulp pricesÃ¢â¬âone of their principal sources of income. The search to expand the companyÃ¢â¬â¢s horizons have already had some repercussions to the companyÃ¢â¬â¢s image: traditionally, theyÃ¢â¬â¢ve been called Celulosa Arauco y Constitucion (Celarauco) or Celco, but now the company is positioning themselves more frequently with the name Arauco. Ã¢â¬ 12 Product Segments Arauco had three main product segments: pulp products, such as bleached and unbleached kraft pulp; forestry products like pulpwood and sawlogs; and wood products, which included flitches, lumber, remanufactured wood products and panels. (Exhibits 2 and 3 show AraucoÃ¢â¬â¢s overall financials, employee base, and sales by product segment. ) Pulp Pulp was used primarily in the manufacturing of paper and paperboard products, although pulp was also employed in other products like rayon, photographic films, cellophane and explosives. 13 3 705-474 Arauco (A): Forward Integration or Horizontal Expansion? Ninety percent of the worldÃ¢â¬â¢s pulp originated from wood and 10% was produced through alternative materials such as straw bamboo, bagasse, kenaf, flax, hemp, and cotton. 14 Processes and types There were several types of kraft pulp traded throughout the world. Pulp could either be bleached or unbleached and derived from either hardwood or softwood. Two processes existed for producing pulp: mechanical (produced by shredding logs or wood chips) and chemical (made by cooking wood chips in a solution). Chemical pulp was further subdivided into two groups: sulphite pulp and sulphate pulp (more commonly called kraft pulp, meaning Ã¢â¬Å"strongÃ¢â¬ in German). By 2004, the kraft process was the worldÃ¢â¬â¢s predominant chemical pulping method accounting for 95 per cent of all chemical pulp. Kraft pulp was brown in color, and was thus bleached for most applications. For example, in the manufacturing of white paper, pulp was bleached at the end of the pulping process. In contrast, brown paper bags were manufactured from unbleached kraft paper. Arauco elected to produce all of their pulp through the kraft process. a Each region specialized in a given category: for example, northern bleached softwood kraft pulp was produced mainly in Canada, the U. S. , Russia and Scandinavia and bleached eucalyptus kraft pulp was made mostly in Latin America. AraucoÃ¢â¬â¢s production of pulp Over 50% of AraucoÃ¢â¬â¢s revenues were generated by pulp sales. As of early 2004, Arauco had five pulp mills in Chile: Arauco I, Arauco II, Constitucion, Licancel, and the newly constructed Valdivia. The company also controlled another pulp mill, which was part of the wholly owned Argentinean company Alto Parana. (Exhibit 4 provides information about each mill. ) Arauco Mills (both I and II) were located 600 kilometers south of ChileÃ¢â¬â¢s capital, Santiago, in what was known as the eighth region15 of Chile. The annual capacity of Arauco I was 290,000 metric tons of eucalyptus kraft pulp or 200,000 metric tons of RADIATA kraft pulp. Arauco II produced only bleached radiata pine pulp, and its annual production capacity was about 500,000 tons. Both mills were equipped to produce elementary chlorine-free pulpÃ¢â¬âa pulp that avoided the use of environmentally harmful chlorine gases. Constitucion Mill was located 360 kilometers southwest of Santiago in the seventh region of Chile, and boasted a capacity of 355,000 metric tons of unbleached pulp. Licancel made elementary chlorine-free bleached radiate and eucalyptus kraft wood pulp, which was used primarily in the production of printing, writing, hygienic, and industrial papers. Its production was about 120,000 tons annually. Based in Misiones, Argentina, Alto Parana produced approximately 350,000 tons of bleached softwood kraft wood pulp from tadea pinewood, supplied both from its own plantations and independent sources. The companyÃ¢â¬â¢s pulp mills were not affected by seasonality and generally ran at capacity throughout the year except eight to ten days of maintenance every 12 months. Arauco was the worldÃ¢â¬â¢s largest single producer of unbleached softwood kraft pulp, holding 15. 8% of the total market. The company actively exported around the world, with Asia as its major destination for export sales. Pulp represented US$709. 8 million or 48. 7% of AraucoÃ¢â¬â¢s sales in 2003. (Exhibit 5 shows AraucoÃ¢â¬â¢s pulp exports. ) Arauco Electricity Generation To combat against rising electricity costs in Chile in the first half of the 2000s, Arauco installed two electricity generating turbines beside its pulp production facilities at an approximate cost of $60 million. Combined, the turbines have a capacity of approximately 250 megawatts (MW) per year. AraucoÃ¢â¬â¢s plants used 120 MW, leaving 130MW extra electricity generation capacity. Arauco had decided to install the additional capacity (which cost roughly $20 million of the total $60 million) so that it could sell the extra electricity to the Chilean a The word Ã¢â¬Å"kraftÃ¢â¬ was derived from the German word Ã¢â¬Å"strong. Ã¢â¬ 4 Arauco (A): Forward Integration or Horizontal Expansion? 705-474 electricity grid. Arauco was the only Chilean manufacturer who engaged in energy trading of such magnitude; revenues from selling off the additional energy averaged about $100 million per year. Selling market pulp Arauco marketed all bleached pulp under the name Ã¢â¬Å"AraucoÃ¢â¬ and unbleached pulp under the name Ã¢â¬Å"Celco. Ã¢â¬ Pulp was a commodity and was marketed by pulp producers mostly on price and service to nonintegrated paper manufacturers. Arauco aimed to establish long-term relationships with nonintegrated paper manufacturers by providing competitively priced and high-quality pulp. (AraucoÃ¢â¬â¢s cost of producing pulp per ton is shown in Exhibit 6). Besides these costs, there were selling and administrative expenses averaging approximately 9% of yearly revenues. The asset beta of pulp production and sales was 0. 9. Arauco also tightly controlled its inventories, attempting to sell its bleached and unbleached pulp at favorable market prices. (Exhibit 7 shows AraucoÃ¢â¬â¢s Chilean bleached and unbleached pine pulp prices (CIF) per metric ton. ) Forests AraucoÃ¢â¬â¢s forestry products were classified as either sawlogs or pulpwood. Arauco was ChileÃ¢â¬â¢s largest radiata pine owner, with 33% of the countryÃ¢â¬â¢s total plantations. Radiata pine was a fastgrowing conifer tree and was highly regarded for its quality of wood. Chilean climatic conditions were ideal for the growth of radiata pine, and the country was generally considered to have the richest natural resources of radiata pine in the world. Common uses for the radiata pine were decorative veneer, form work, heavy and light construction, joinery, paneling, pulp/paper products, wainscotings, packing cases, boxes, crates, and building materials. In Chile, the harvesting of pulp logs could take place 16 to 18 years after planting and high-quality saw logs could be harvested in 25 years. In contrast, pulp logs cultivated in the northern hemisphere were harvested only 18 to 45 years after plantation and sawlogs required 50 to 150 years. Radiata pine in Chile had a high yield per hectare due to the quality of soil, making it possible to plant a larger number of pines by hectare. The first seven to 12 meters of the radiata pine tree was the highest quality part and was used in sawmills and plywood mills. The next eight to 13 meters was destined to sawmills or pulp mills depending on diameter and density of knot distribution. The top section was used for pulp and medium-density fiberboard (MDF) production. (Exhibit 8 shows a diagram of a tree and its multiple uses. ) Forests management AraucoÃ¢â¬â¢s forest holdings were geographically split by farmlands. To control forest fires, the company operated an organization dedicated to the constant identification and extinguishing of potential hazards. (Exhibit 9 summarizes AraucoÃ¢â¬â¢s land and forest holdings in Chile as of year-end 2003. ) In addition to the 900,000 hectares Arauco owned in Chile, it owned 200,000 hectares in Argentina and Uruguay. Bioforest Bioforest was the only forestry science and technology research center in Chile. In its laboratories, nurseries, and greenhouses, Bioforest conducted research and evaluated the latest techniques. The company fed innovations into the rest of AraucoÃ¢â¬â¢s operations but did not publicize its findings to the broader research community, nor did it offer consulting services to outside companies. The total spend on research and development was spread throughout several areas of the company and therefore, exceeded the research and development costs listed in the companyÃ¢â¬â¢s annual financial statements. With advances in genetics and pest controls, Arauco was constantly seeking to improve the quality of its plantations. Bioforest had reached important achievements including the genetic 5 705-474 Arauco (A): Forward Integration or Horizontal Expansion? replication of high-quality radiata pine trees and eucalyptus trees. The company also researched soil fertility and insects aiming to develop strategies for plague control. Among other techniques to exterminate parasites, the company used natural predators biologically designed and reproduced in its own labs. Wood Products From its plantations, Arauco provided logs to sawmills and pulp mills, and to factories for the manufacture of panels. Arauco also sold logs and a variety of wood pieces on the open market. Arauco supplemented its production of pulp logs with purchases in the Chilean market. The plantations owned by Arauco covered approximately two-thirds of the raw material needed for production. The remaining one-third was purchased from providers and forest owners. The company hired independent contractors to perform most of its forest operations (planting, maintenance, thinning, pruning, harvesting, transportation, and access road construction). In 2003, the company employed over 10,000 workers through more than 300 subcontracting deals, with many contractors having long-standing relationships with Arauco. One important activity performed by independent contractors was the transportation from the forest plantations and between mills and ports. Fifteen years earlier, Arauco had owned a complete fleet of trucks, but by 2003 the company had outsourced the majority of its transportation needs. In some situations, Arauco provided capital to truck owners in order to expand and improve services. Arauco strove to establish long-term relationships and made renewable agreements of up to three years with truck owners and operators. Sawmills: Sawmills cleaned, dried, cut, and chopped logs into sawn timber. AraucoÃ¢â¬â¢s sawmills varied in capacity and capability, with some designed to produce green sawn timber (wood not dried in a kiln) and others designed to handle kiln-dried wood and remanufactured wood products. Arauco strategically built its sawmills close to its plantations to cut down on transportation costs and reduce time. The company owned 11 sawmills in Chile and two in Argentina that divided their production between sawn timber (green or kiln-dried) and remanufactured wood products, with an annual production capacity of 2. 5 million cubic meters of lumber. Arauco also owned five remanufacturing facilities that produced remanufactured wood products from reprocessed sawn timber. Like its forest operations, Arauco employed independent contractors to operate all of the sawmills and remanufacturing facilities. By 2003, AraucoÃ¢â¬â¢s sales of sawmill products represent 27. 5% of total sales. The mills had a total capacity of 5. 4 million cubic meters of sawlogs and 2. 65 million cubic meters of lumber. The Horcones II sawmill in Chile and the Misiones sawmill in Argentina were built in the first quarter of 2000 to increase production capacity by 520,000 cubic meters of sawn timber per year. The investment cost for Arauco was approximately US$52 million. At the same time, Arauco acquired Forestal Cholguan, through which it got the Cholguan sawmill, which further increased production capacity by 300,000 cubic meters of lumber per year. Panels Arauco produced plywood and fiber panels, which represented 20. 4% of the companyÃ¢â¬â¢s sales in 2003. Arauco had expanded capacity first by building a plywood facility in 1997 at a cost of US$44 million, which increased production capacity by 230,000 cubic meters. In 2000, it built a second production line at a cost of US$30 million, and the total production of the facility reached 340,000 cubic meters. Maderas Prensadas Cholguan S. A. also became part of Arauco when the company bought Cholguan in 2000, increasing the capacity by approximately 300,000 cubic meters of MDF and HB. During 2002, two new mills MDF were set up, one in Chile and another in Argentina at a cost of US$135 million, amounting to a combined production capacity of 500,000 cubic meters. With all of these investments, AraucoÃ¢â¬â¢s current capacity was larger than one million cubic meters per year, making Arauco one of South AmericaÃ¢â¬â¢s largest panel producers. 6 Arauco (A): Forward Integration or Horizontal Expansion? 705-474 Log Merchandizing Arauco used a process called Ã¢â¬Å"log merchandizingÃ¢â¬ to determine the location of cuts on each log and the order in which each section was sent to different adjoining facilities. Log merchandizing involved the use of a computer-driven scanner, which identified the logÃ¢â¬â¢s diameter, the shape of the knots and the optimal points for the cuts. After a log was cut, it was automatically grouped and then sent to one of three destinations: sawmills for timber, panel production or the chip plant (for eventual pulp production). It was estimated that the log merchandizing process saved millions of dollars per year as a 10-centimeter (3. 9 inches) error variation for an optimal cut in a major batch could result in $50 million in losses. The investment to install the specific assets related to log merchandizing cost about $30 million. As an Arauco executive stated: Ã¢â¬Å"You have no idea of the quality of the tree and the number of knots until you cut it down. The log merchandizing process ensures that we are using the parts of the tree for the right purpose. Ã¢â¬ Alto Parana Arauco acquired Alto Parana in 1996, with the main goal of kick-starting profitable businesses in Argentina. The acquisition included a pulp mill and plantations. Alto Parana was located 1,300 kilometers northeast of Buenos Aires, in the Misiones province of Argentina. The Alto Parana plant was the biggest pulp market producer in Argentina, with a capacity of 350,000 tons per year of bleached softwood kraft pulp. Arauco obtained raw material from Alto ParanaÃ¢â¬â¢s plantations. While the plantations spanned 173,000 hectares, only 86,000 hectares were planted. Since these plantations were not sufficient for Alto ParanaÃ¢â¬â¢s pulp mill capacity, approximately 50% originated from third parties. Alto Parana frequently entered into negotiations with third parties negotiating on the basis of price, quality, availability, and delivery. Sometimes, price negotiation escalated to local government as the forestry industry was the lifeblood of the Misiones province. The proximity of third-party resources was another vital concern as transportation costs ate into margins. Alto Parana was located far away from the main ports in Argentina. Thus, it was neither plausible nor cost effective to transport raw material from other countries. ArgentinaÃ¢â¬â¢s main forestry zones were located in the provinces of Misiones, Corrientes, Entre Rios, Chaco, and Patagonia. Apart from Misiones, where Alto Parana was located, Corrientes was the closest at 300 kilometers from the Alto Parana facility. In 2003, Corrientes had pine and eucalyptus plantations spanning 117,000 and 71,000 hectares, respectively. Exhibit 10 shows the approximate costs of lumber transportation inside Argentina. In addition, there were loading costs associated with moving raw materials from the forest plantations to the plants. Owners of Argentinean plantations had to choose between exporting the wood to foreign nations or selling the wood to local-based enterprises. It was estimated that the following firms would require approximately 50,000 tons of market pulp each. The main Argentinean firms that needed wood as a raw material were: Ã¢â¬ ¢ Celulosa Argentina S. A. , specializing in the production of bleached pulp, and located in Santa Fe, 900 kilometers from Parana, with a capacity of 95,000 tons per year. Ã¢â¬ ¢ Faplac S. A. , manufacturer of PBO (particle boards), located in the province of Buenos Aires about 1,000 kilometers from Alto Parana, with a capacity of 50,000 tons per year. 7 705-474 Arauco (A): Forward Integration or Horizontal Expansion? Ã¢â¬ ¢ Ledesma S. A. , manufacturer of notebooks and commercial paper, with a production facility in San Luis, 1,400 kilometers from Alto Parana. Ledesma manufactured about 85,000 tons of paper a year, although most of the raw material it needed to produce pulp came from sugar cane. Ã¢â¬ ¢ Massuh S. A. , manufacturer of pulp and paper, with a production of 120,000 tons per year. Its pulp and paper plant was located in Quilmes, Buenos Aires province, more than 1,300 kilometers from Alto Parana. Ã¢â¬ ¢ Papelera Jujuy, paper manufacturer, located in Jujuy, 1,100 kilometers from Alto Parana with a capacity of 50,000 tons per year. Ã¢â¬ ¢ Papelera Tucuman, paper manufacturer, located in Tucuman, about 1,000 kilometers from Alto Parana, with a capacity of 50,000 tons per year. Pulp and Paper Industry The global pulp and paper industry consisted of five main activities: forestry, pulp production, paper and board production, distribution, and converting. Most of the larger players in the industry had integrated operations that involved two or more of the above activities. The industry had undergone a number of mergers and acquisitions in the 1990s as pulp and paper manufacturers struggled to enhance efficiencies, increase capacities, and lower costs. Some industry observers felt that the highly fragmented nature of the industry meant that prices were less stable. Several of the larger companies were considered to be fully integrated with the ownership and operation of forests, pulp mills, paper factories, distribution, and converting facilities. Other firms chose to focus on a particular category. The overall paper demand was determined ultimately by consumersÃ¢â¬â¢ willingness to purchase products such as newspapers, magazines, office paper, stationary, and a host of home products such as tissue and toilet paper. Paper and paperboard in packaging was widespread and used across most consumer and industrial applications. The overall usage of converted paper products (newspapers, magazines, tissue paper, diapers, etc. ) created the demand, which determined the prices for pulp and paper. The main consumers of paper were from North America, with an average consumption of 326. 5 kilograms of paper per person per year. Western Europe, Japan, and China consumed approximately 190 kilogram per person per year. Developing countries in Asia, Eastern Europe, and Latin America were also increasing their usage of paper products. For example, corrugated paper in China was estimated at 13 to 15 billion cubic meters a year, with growth rates projected to be 10% annually for the next 10 years. 16 The possibility of such growth had spurred several pulp, paper, and chemical companies to form joint ventures with Chinese firms. Pulp and paper prices fluctuated as producers lowered prices in times of soft demand, and moved to increase supply by building more capacity when demand was predicted to increase. Suppliers of pulp and paper controlled inventories tightly, releasing products to the marketplace at targeted times. (Exhibit 11 shows the worldwide consumption of paper. ) Environmental ConsiderationsÃ¢â¬âRecycling and Substitutes to Paper Governments had been increasing regulations for pulp and paper companies to avoid clearcutting forests, to reduce chemical by-products such as chlorine, limit gas emissions from the operation of factories, and increase recycling. With greater environmental pressures, the three Ã¢â¬Å"RÃ¢â¬ slogan (reduce, reuse and recycle) was creating alternative industries and increasing global 8 Arauco (A): Forward Integration or Horizontal Expansion? 705-474 capabilities to recycle paper. For example, in the U. S. , it was estimated that approximately 42% of paper was recovered for recycling. 17 Recycled fibers from paper replaced the use of pulp in paper manufacturing. Using recycled fibers had several advantages, including lower costs to recycle paper than to produce pulp, the reduction of wood usage, lower residues released into the environment, and an overall drop in the cost of environmental treatment. The major disadvantage of using recycled fibers was that its output per comparable ton was much less than pulp. Recycled fibers could be reused between five to seven times; after seven times, the fibers became too short for papermaking. 18 Recycled fibers were experiencing modest growth, with production growing at a compound annual growth rate of approximately 6% moving from 48 million tons annually in 1980 to an estimated 150 million in 2000. Some industry observers felt that the increasing use of computers, handheld devices, and mobile phones would act as a substitute for paper. However, with more information passing through these mediums, other industry observers felt that paper usage would increase. The Paper and Paperboard Industry Over half of the material that went into making paper and paperboard was made using pulp. Other materials included recycled fiber, chemicals, and minerals. By mixing together different variations of softwood or hardwood pulp, the paper manufacturer could produce a product for a specific intent. Paper products ranged from uncoated free sheets (such as regular writing paper) to coated free sheets, tissues, newsprint, and coated and uncoated groundwood. The worldwide paper market was estimated to be greater than 330 million tons at the end of 2003. The paper market had experienced three years of soft demand with no real growth in dollar terms since 2000. As of March 2004, an analyst assessed the worldwide paper market: Global paper demand is on the mend. U. S. prices are likely to lead the way into price recovery with a meaningful positive effect on U. S. earnings in the second quarter and should gain further in the second half. The U. S. dollar sets the tone for the sentiment to invest in the paper sector. While a weaker U. S. dollar undoubtedly has negative implications for earnings in the near term the impact of a weaker U. S. dollar is dwarfed in comparison to the impact of higher prices. . . . European paper prices have bottomed in our view and it appears likely that higher prices should start to impact earnings in some early cycle segments from the third quarter onwards. Later cycle segments, such as newsprint and SC paper, should see a nice price rebound in the early stages of 2005. Prices have been on a downward trajectory since the fourth quarter of 2000 but the tide is now turning. 19 Paper and Paperboard Companies Most of the large paper companies chose to operate a completely integrated structure that included the ownership of forests, pulp mills, paper manufacturing facilities, distribution arms, and converting capabilities. However, there were a number of smaller local firms that produced paper based on the specific need of their markets. These smaller paper manufacturers typically purchased raw materials such as pulp from suppliers based on the type of pulp (bleached, unbleached, softwood, hardwood, etc. ), the cost, and the service details. Some industry insiders felt that maintaining a fully integrated structure allowed for greater negotiation leverage with the main suppliers to the industry, such as chemical providers and paper and pulp machinery manufacturers. 9 705-474 Arauco (A): Forward Integration or Horizontal Expansion? Exhibit 12 shows a list of 25 of the worldÃ¢â¬â¢s largest paper companies. The top five producers included: 1. International Paper Co. (U. S. ) had revenues of $25. 2 billion and profits of $302 million in 2003. The company was a fully integrated enterprise producing plywood, paper, pulp, packaging, and chemical by-products from papermaking. It controlled over 10 million acres of forestlands in the U. S. , Brazil, and New Zealand. 20 2. Georgia-Pacific Corp. (U. S. ) had revenues of $20. 2 billion and profits of $254 million in 2003. Like its main rival, International Paper Co, Georgia-Pacific was a vertically integrated competitor in pulp, paper, lumber, plywood, oriented strand board, adhesives, and a number of paper consumer products. The company planned on spinning off its consumer products division but changed plans due to weak equity markets in 2002. However, it did sell majority ownership of its distribution arm, Unisource Worldwide. 21 3. Stora Enso Corp. (Finland) had revenues of $15. 2 billion and profits of $182 million. Stora Enso was involved in the manufacturing of a wide variety of products such as magazine paper, newsprint, fine papers, packaging, graphic products, office papers, wallpaper base, and sawn timber. 22