Psychoanalysis and The Wizard of Oz Essay

Analyzing â€Å"The Wizard of Oz†: Freud’s Psychosexual Theory and Theory of the Personality vs. Klein’s Object Relations and Play Technique Theory Psychoanalysis paved the way for infinite discoveries of the human mind. It has been attributed as the â€Å"mental science†Ã¢â‚¬â€a scientific way of locating and interpreting the (un)natural behavior of a person which greatly affects him or her. The psychoanalytic theory has always been very controversial since it introduces very unconventional ways of treating the mind. Although there are a lot of psychologists who have influenced the field of psychoanalysis, none can compare to the contributions of Sigmund Freud and his contentious theories. Sigmund Freud is most famous for his Theory of Personality that talks about the id, ego, and superego and the psychosexual interpretations that goes with it. Another important person to note is Melanie Klein who hypothesized her own theories that focus more on the mentality and behavior of a child and his or her relationship with the things and people around him or her. According to Mitchel and Black (1995), Melanie Klein made such a tremendous impact in the field of psychoanalysis that there is no another person aside from Sigmund Freud himself who can be appreciated for her contribution with regard to the field of psychoanalysis. Although Klein was influenced by Freud’s theories and patterned her theories after his, her own hypotheses are very much different from Freud’s. While Freud reinforced the idea that personalities of individuals are more likely connected to certain psychosexual gratifications (or dissatisfaction in many cases according to him), Klein more or less centered on the idea that individuals behave according to the experiences they had as a child, the kind of play acting they did, and the things that they played with. In fact, Klein focused more on â€Å"reading† a child by the artworks and play acting that he or she does. One thing that could be seen as similar in their works is the fact that both consider dreams as very important tools in â€Å"reading† a person and identifying his or her mental situation. Freud stipulated that dreams are very important since they involve thoughts that are unconscious to the person. Moreover, these dreams can also be traced to certain experiences that the person had as a child (Mitchel & Black, 1995). Klein herself believed in such theory, but Freud believed more in the psychosexual aspect of things concerning the human mind and the human behavior. In the setting of school education, most especially with the area of guidance and counseling, these two personalities and their theories are greatly used in interpreting children’s manners and their conduct. Counselors would use artworks as a way to delve deeply into what a child is thinking and what are the reasons for his or her certain behavior. Images, colors, signs, and symbols may seem so simplistic when they are looked at their surface interpretations, but psychoanalysis provides latent meanings to what could have been depicted as something so simple and mundane. In literature, there is such an approach called the Psychological Approach in which certain psychoanalytic theories are used to interpret a certain body of work. The intricate details are seen as symbols that contain very important meanings. Such perspective can be used in trying to analyze the ideas that Freud and Klein presented through their theories by comparing and contrasting certain elements of the 1939 movie version of The Wizard of Oz. The Wizard of Oz is a classic children’s literature that was written by L. Frank Baum in 1900 and has been hailed as a beloved masterpiece by many. The original work of Baum is very much different from the movie, but it is the movie which has been retained and appreciated by the general public. The characters, settings, certain elements, and scenes are depicted as marvelous by many—a fine example would be the appearance of the ruby slippers of Dorothy (which is in fact colored as silver in the original work as what was expressed by Tim Dirks in his review of The Wizard of Oz) that she can click together to transport her from one place to another. The plot is very simple yet meaningful. Dorothy, a nine-year old girl from a little farm in Kansas, goes on a long journey with her dog Toto, the Tin man, the Cowardly Lion, and the Scarecrow to find the Wizard of Oz in the Emerald City and fulfill their individual wishes (Dorothy wants to go home to Kansas, the Lion wishes to have courage, the Tin man desires to have a heart, and the Scarecrow thinks he needs a brain). At the end of the journey, they all realize that the things they are looking have always been with them and under their noses all along. As with many literary works, what makes a person think he or she has achieved the goal is not the resolution of the conclusion but the adventures that the long journey entails. In the end, Dorothy wakes up to find that it was actually just a dream (more or less like when Alice in the Wonderland wakes up to find that all her adventures were just a dream), but the values that she has learned in the journey is very much kept close to her heart. In connection to the psychoanalytic theory, the dream itself may be interpreted already as a somewhat significant aspect of Dorothy’s consciousness. There are many other aspects and elements that can be interpreted as something else if the theories of Freud and Klein would be taken into account. For instance, Dorothy has a very obvious conflict with the Wicked Witch of the West/Miss Almira Gulch over the Ruby Slippers and Toto the dog. During the start of the film, Dorothy was in trouble and in predicament over the vehemence of Miss Almira Gulch over Toto, her dog. Toto accidentally bit Miss Gulch on her leg which enraged the woman. She was so enraged that she had the sheriff write a warrant that would allow her to take Toto away and lock him up. However, Toto has always been the only companion of Dorothy and is the only reason that she laughs. Their farm in Kansas has been characterized as gray and dull and Dorothy has been deemed as the only person with such life and happiness. That reason for happiness is Toto, and Miss Gulch’s insistence that the dog be put away is stripping Dorothy of her happiness. According to Klein, such play things of a child are important and usually mean something more. Dorothy’s play thing may be a dog, but her obvious affection and love for the dog can be traced to the fact that she is yearning for another living thing that could be with her and provide her attention. Her Aunt Emily and Uncle Henry pay more attention to the farm than to their â€Å"adopted† niece, which gives Dorothy the idea that she needs company and does not want to be alone. The gravity of her attachment to Toto is realized in the scene where Miss Gulch arrives and plans on taking Toto away. Dorothy begs for Miss Gulch to reconsider her decision and even states with such self-sacrificial courage that she would replace Toto and be taken away. Miss Gulch is also so insistent that Toto be taken away and she does the task, symbolically stripping Dorothy of her happiness and causes great dissatisfaction on her part. In Freud’s object choice theory, the child readily associates things or people that he or she is surrounded with. The people that the child finds are considered as his or her associates (people that are close to the child or in some cases, the things that matters to him or her) that he or she wants to have affection with and instinct tells him or her that there needs to be a established relationship with that person (or people or things). Dorothy considers her Aunt Emily and Uncle Henry as people that she should connect with and feel some sort of affection, but the two characters do not reciprocate the feelings; instead, Dorothy finds herself drawn to Toto, her dog. Since the dog is her â€Å"maternal† substitute, Dorothy is drawn to make-believe and fantastically daydream which is the whole point of the story of The Wizard of Oz—Dorothy’s dream. Dorothy retreated to her world bringing Toto and play acting, but since the awful truth of reality plays such a big part in her life, the usual â€Å"running away† with Toto does not suffice anymore, and a deeper form of â€Å"running away† takes place and makes her fully leave the world of the farm in Kansas. Dreams as what Freud and Klein believe are very important tools; since Dorothy dreamt that she was in the World of Oz and having such wonderful adventures, she strayed away from reality and got lost in the make-believe world that she has unconsciously created. Another of Freud’s theory comes into place with the mention of the unconscious. The famous iceberg imagery or metaphor of his theory of personality and the id, ego, and superego play a part in Dorothy’s dreaming. The ego is what people perceive as reality and manifests in the physical world; the id is the unconscious which greatly affects and controls our behavior and way of thinking in reality and is considered as irrational since it involves the hidden urges and desires we have that we are not fully aware of; and lastly, the superego is the conscience and is considered as the ethical voice that controls our behavior subconsciously. Dorothy’s dreams may be her way of running away from reality (as what is supposed with regard to Klein’s theory), but it may also be the manifestation of her id (as what is supposed with regard to Freud’s theory). The beginning of the film appears as Dorothy not being welcomed by her Aunt Emily and Uncle Henry; she then resorts to the fantastical notion of the dream—the dream consists of her adventure with the Tin man, Scarecrow, and the Cowardly Lion. Dorothy’s participation may be that of a selfish reason (because she wants to go to Emerald City and find the Wizard of Oz so she can go back to Kansas). But the first part of the adventure (and the beginning of the movie) may be a manifestation of her id, as her wants and demands should be followed. However, as the adventure progresses, she soon realizes the selfishness of her desires and focuses on helping her friends find their own desires. Even if the dream is a manifestation of her id, the ego and superego win over the id. Another thing to point out is the second object of conflict between Dorothy and the Wicked Witch of the West which is the ruby slippers of Dorothy. Firstly, however, it is important to note the existence of the ruby slippers itself. Again, according to Tim Dirks’ review of The Wizard of Oz, the ruby slippers are the beginning of Dorothy’s entrance into female adolescence. Red has always been the archetypal color for passion and blood, and the symbolism behind such color could just mean that Freud’s psychosexual theory can be justified. Going back to the Wicked Witch of the West’s desire to have the ruby slippers, it can mean that the Witch wants to rid Dorothy again of the happiness (as the same character who portrayed Miss Gulch is the Wicked Witch too) that she wants to have because the slippers are her means of returning back to Kansas. From a different perspective however, it could mean the Wicked Witch of the West wants to steal Dorothy’s puberty and youth. There has been many literary works wherein evil witches are in desire of young girls’ youth, vitality, and virginity (as Snow White’s stepmother wants her dead because of her beauty or when Lamia lures Yvaine to steal her youth in the novel Stardust). It can be concluded that the situation may be the typical good versus evil scenario, but if the Witch so badly wants to have power and let evil reign in the Emerald City, why not go after the Wizard of Oz himself (even if he is a fraud)? If Freud was at the actual scene, he may have interpreted the ruby slippers as a symbol of the beginning of Dorothy’s menstruation. If Klein was there, she would have just said that the ruby slippers are another of Dorothy’s play things. The next thing to point out is the extreme conflict between Dorothy and Miss Gulch/Wicked Witch of the West. In Klein’s theory of Depressive Position, when a child hates his or her mother, he or she in effect hates him- herself. It cannot really be said that Miss Gulch/Wicked Witch of the West can be likened to Dorothy’s mother, but the enmity between them is so great that the Witch uses such horrifying threats to Dorothy and Toto. Even if the Witch really wants certain â€Å"valuable† things from Dorothy, the vehemence that the Witch feels for Dorothy is so great that it is certain that an underlying symbolism may be present. In Mitchel and Black’s book, a quotation by Herman Hesse was introduced to Klein’s chapter: â€Å"If you hate a person, you hate something in him that is part of yourself. What isn’t part of ourselves doesn’t disturb us. † This quotation, in all its simplicity, already justifies the claim that Dorothy and Miss Gulch/Wicked Witch of the West hate each other because there is a big part of themselves that they probably see in each other and in turn hates it since they see the mirror of themselves. Both Freud and Klein have a lot of similarities and differences in both their theories and in this paper, both theories have been voiced with the certain elements that were picked in the story. Although there is no claim in which theory is better or which interpretation provides more depth and breadth, it is safe to conclude that each theory is unique and helps in making getting a bigger and better viewpoint of The Wizard of Oz, most especially when used and analyzed together. References Mitchel, S. & Black, M. (1995). Freud And Beyond: A History Of Modern Psychoanalytic Thought. New York: Basic Books Dirks, T. (2009). The Wizard of Oz (1939): Review by Tim Dirks (Review of the movie The Wizard of Oz]. Filmsite. Retrieved March 30, 2009, from http://www. filmsite. org/wiza3. html.

Perspective of Deviance in Society

IntroductionSociologists define deviance as actions or behaviors considered to be against the cultural norms and formally accepted rules like laws as well as going against the social norms of a particular society. Sociologists consider deviance to be the opposite of conformity; the two opposing behaviors are what characterize social life. To sociologists, the term deviance behavior is conferred on individuals based on some acts by social definition. However, these social definitions of what constitutes deviant behaviors would vary from time to time, society to society and from place to place (Schaefer, 2008).In this paper I will undertake to explain the perspective of two different authors – Rosenhan and Eqbal about what constitutes deviance behavior as far as different societies are concerned. Rosenhan was bother by how society labeled those they considered insane and therefore undertook a study to find out how hospital authorities treated those admitted as insane (Rosenhan, 1973). From his analysis of what transpired when his associates were held in the hospitals for much longer period despite the fact that they were never insane, he concluded that the staff officials were perpetuating the societal definition of insanity.According to rosenhan, the staff cannot to be blamed at all neither can they be considered incompetent nor dishonest because they were carrying out their work effectively (Rosenhan, 1973). The staff officials were not concerned with making conscious efforts to overturn the label which the society had accorded these individuals. He argued that the label given to these individuals were so strong that it influenced how information about them was processed and perceived which therefore explained why the officials were reluctant to release them from hospital.According to him, the wrong perception of the behavior by the staff officials led to the labeling which profoundly affected other’s perception about his associates. He concluded that had the officials observed the same behaviors from a different perspective, the interpretation about these people would have been entirely different (Rosenhan, 1973) Eqbal’s â€Å"Terrorism: Theirs and Ours† offers a thorough analysis of the term deviance (Eqbal, 1998). The man who had an Arabic origin was greatly disturbed by people’s perception of the term terrorism.He argued the world societies lack consistency in defining terrorism and had therefore come up with different definitions that suit their interest and appeal to their cause. According, to him the definition has always changed over the years with the new developments in the world and has been use to further some people’s cause. He argued that people have missed the point when it comes to the definition of the term terrorism as some people are labeled terrorist by others. From Eqbal speech, it is clear to understand that what people consider deviance may change with time and place.For ins tance, he argued today’s terrorist was a yesterday’s hero and a hero today is a yesterday’s terrorist. Therefore, society’s definition of deviance behavior will always be inconsistent because what one group of people considers deviance may not be viewed the same by another group of people not only in place but also over time (Eqbal, 1998). Authors Views of Deviance The two authors share the same view of what constitutes deviance. Rosenhan is concerned with the tendency of the society to make rash judgment of what is deviance.He considered the definition of normal and abnormal behavior by the society as what would determine how a person is treated by those around him (Rosenhan, 1973). Like Rosenhan, Eqbal agrees that the society would be quick to judged others and condemn them as deviants based on generalizations or unfounded rumors. The two authors were very much concerned about the consequences of labeling on the individuals as well as the society as who le. According to Eqbal, the western misconception of terrorism had led to the continued attacks by the Arab world.He said that the western world had continually considered terrorism as an attack against western civilization which therefore vindicates the terrorist’s ideologies of using it to justify their cause. In a nutshell, eqbal considers deviance as a making of the society. He argued that while there are various forms of terrorist, the world has totally lost the meaning of the term and has therefore embarked on what he considers as labeling others’ behavior as abnormal to suit our cause.He considered the western political tyranny over other nations and the bloody attacks perpetuated by the Arab world as one and the same thing – terrorism and what differentiate them are probably the western society’s emotive definitions (Eqbal, 1998). Rosenhan made a point in his analysis of how society discriminatively separates the â€Å"normal† from the â₠¬Å"abnormal†. He argued that erratic labeling of others as acting or behaving abnormally may have serious repercussions on the societal wellbeing as well as on an individual’s life (Rosenhan, 1973).According to him the society’s misconception of what is abnormal behavior may lead one to a condemn life of loneliness. As his analysis of erratic diagnosis of sane persons as insane shows, one may be wrongfully put under rehabilitation program when actually the person is sound in mind. If professionals like psychiatrists, counselors, and psychologists can wrongfully diagnose a person and put him in a mental hospital what would the society become if we start labeling others based on unsubstantiated rumors?(Rosenhan, 1973). Deviance and Society Rosenhan views deviance as a product of the societal misconception of what truly constitutes unwanted behaviors (Rosenhan, 1973). He considered the labeling of others as either deviant or normal as a manifestation of the societyà ¢â‚¬â„¢s rash judgment of behavior. If only the society can observe the behaviors of others correctly, then the labeling would cease to be. His analysis takes into account the role of place and time as a factor in determining what deviance is and is not.Any person going into a mental hospital is considered abnormal by the society and as long as one is admitted he would remain to be so no matter his improvement or current state. Eqbal understands that deviance is not only a product of a difference in social and cultural background, but also a product of evolution. To him what one society considers deviance is considered normal in another society and what is celebrated today as a good act is today frown upon as an abnormal behavior.He said that what we presume as terrorist acts today may not be so tomorrow (Eqbal, 1998). Conclusion Every society and group of people has got social and cultural norms which define what constitutes abnormal and normal behavior. However, the norms and rule s are subjects of change and just as they are varied across societies, they would be varied across time within the same society. As the societies evolve, the social norms and rules would also change and therefore definitions of deviance. References Eqbal, A. (1998, October, 12). Terrorism: Theirs and Ours. A Presentation at the University of Colorado, Boulder, Retrieved on July 16, 2010, from http://webcache.googleusercontent.com/search?q=cache:72B6RATUyqAJ:www.sangam.org/ANALYSIS/Ahmad.htm+Ahmad,+Eqbal.+1998.+%22Terrorism:+Theirs+and+Ours.&cd=1&hl=en&ct=clnk&gl=ke&client=firefox-a Rosenhan, D. (1973). On Being Sane In Insane Places. Science, 179, 250-258. p. 253. Schaefer, R.T. (2008) Sociology Matters 4th edition, McGraw-Hill: New York   

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Marketing Management - Assignment 8 - Essay Example Thus, functionality of a product is an element that should never be absent in anything that is sold in the market. This is very evident in a consumer behavior where a customer would immediately ask for a replacement or product service for any damaged or defective produce they have just bought. With this said, functionality is the end all and be all. Though a form of a product would attract people to buy things that may not be necessary, this is just mainly applicable to impulsive buyers. Furthermore, a product with just form without functionality could end up in a sale but not a sustainable relationship with a certain product or brand (Form vs Function: Design, Emotion and Profitability, n.d.). Once customers are not satisfied with a product, they would always immediately look to another brand that would not disappoint. However, there are still products which lack functionality and yet are still in the market because of the few who put aesthetic considerations over functional considerations (Smashing Magazine, n.d.). Pricing is one of the elements that affect a consumer’s purchase behavior. This is because all of us have to prioritize the kind of expenses we make for a limited budget. That is why we are all told to be practical buyers, only getting what we need and to spend within our means. With this said, the question of whether prices should reflect the value that consumers are willing to pay or if prices should primarily just reflect the cost involved in making a product or service comes into picture. In my own opinion, companies should have the right pricing, meaning reflecting the cost involved in making a product or service which translates into fair pricing as opposed to a price that reflects the value that consumers are willing to pay for. This is because the latter poses many issues such as isolating a lot of consumers that belong to the lower income bracket. When

The Role of Globalization in Promoting Inequality in the United States Essay

The Role of Globalization in Promoting Inequality in the United States and the World - Essay Example On the other hand, it has been highly criticize by those who view it as an advancement of uncontrolled capitalism, and as a threat to social cohesion, which undermines social welfare. In a bid to understand the role of globalization in promoting inequality, this essay seeks to answer the following question; what is globalization? What does unequal distribution of globalization effects around the world mean? What relationship exists between inequalities and globalization? By addressing this questions, the paper underpins the role of globalization in promoting inequality in the United States and in the world. Discussion Role of Globalization on Poverty and Inequality In John A. Powell and S.P Udayakumar’sRace, Poverty and Globalization, Powell and Udayakumar look into the role of globalization on poverty and inequality in certain nations. Powell and Udayakumar define globalism as the process by which capital, goods and services move freely among countries. As globalization advan ces, national boundaries become more permeable and less relevant, allowing multinational companies to open branches worldwide. In most developing nations, the cost of living is sky-rocketing every day; the consumer goods are expensive and the governments’ adoption of a market oriented economics translates to loss of consumer goods subsidies. People in South America are forced to work under poor work conditions with low pay if they are to earn a living due to globalism. Inequality exists because while the U.S and other first world governments report budget surpluses, the people of color in this poor nations and in the U.S in general are not able to meet their daily needs. The government does not help improve housing for the low income earners and the homeless; the public schools attended by these minority races are in poor condition; and the government still has not found a proper solution to provide medical attention and social services for the poor. Globalism in the U.S is p articularly hostile to people of color; civil rights movements, women’s movements and environmental movements are marginalized in an economic arena by the wealthy and political figures in the economy. Effects of Globalization on the U.S Worker A closer look at Wal-Mart, America’s largest retailer, and one is able to draw conclusions as to the revolutionary power of retailers over manufacturers in America today. Retailers are no longer dependent in the local manufacturer; they continue to push for the move of production offshore which translates to reduced costs on their part, â€Å"everyday low prices† for the customers and low wages for the local worker. This new policy of reducing costs to the minimum leads to loss of jobs in America to the globalization trend of moving production offshore, where the cost of labor is cheap and readily available. This puts thousands of Americans on unemployment. At the same time, â€Å"globalization has transformed retailers l ike Wal-Mart into the powers of the economy, the center of business, and the manufacturers have become the vassal, the serf, who has to bid for the retailers,† says Nelson Lichtenstein, a professor at the University of California Santa Barbara. Wal-Mart’s major strategy is to operate at the lowest costs possible and to go global; most local manufacturers have had to either abide by Wal-Mart’s policy or risk losing shelf volume. This translates to workers in these companies suffering due to low wages imposed by these manufacturers in a bid to fit in with Wal-Mart’s policy of low prices. Manufacturing companies like Rubber Maid have had to risk losing volume since Wal-Mart could not take the price increase proposed by Rubber Maid to counter the

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Unit #7 Assignment Example | Topics and Well Written Essays - 250 words

Unit #7 - Assignment Example Most disabled children are easily subjected to ungovernability and truancy charges. According to Miller (2008, P. 113, C.2, Para. 1), there were97 deaf inmates at the Texas State Prison with 61% of them being convicted of violent offenses, 19% illegal drug violations, and 11% were convicted of other petty crimes like indecent exposure. Various schools are obligated to single out students with special needs like deafness and give them specialized treatment (Tulman, & Weck, 2010, P. 878, Para. 2). Failure to efficiently adopt this, deaf students will be more vulnerable to committing various crimes. Additionally, deaf students are likely to commit status offences which are, by classification, a particular category of non-criminal misbehaviors, (Tulman, & Weck, 2010, P. 879, Para. 2). Despite the fact that the Juvenile Justice and Delinquency Act (JJDPA) has advocated for the deinstitutionalization of status offences, several deaf offenders have ended up in correctional facilities. Due to their perceived naivety and disabilities, deaf inmates are highly vulnerable to sexual assaults and other discriminations in prisons, Vernon (2010, P.311, C.2, Para. 2). Additionally, some are subjected to forced treatments against their will in the correctional facilities. Subsequently, most prisons even do not know their deaf inmates are making it hard for them to get access to parole services. Moreover, it is uncommon for the jury to incarcerate deaf defendants experiencing linguistic incompetence, Miller (2008, P. 117, C.2, Para. 2). For instance, the case of Mr. J, who was deafened by meningitis, aged 3. Mr. J was treated harshly by a policewoman after he accidentally scratched a Corvette at a dinner. After being assaulted by more policemen, he was jailed without treatment. Additionally, he was tried without an interpreter. About 40% of deaf defenders experience communication

Paraphrasing Essay Example | Topics and Well Written Essays - 250 words - 3

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Businesses Polluting In a Third World Country Essay

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A textual Comparison Term Paper Example | Topics and Well Written Essays - 5000 words

A textual Comparison - Term Paper Example This paper will attempt to compare and discuss O’Neill’s Mourning Becomes Electra and Sophocles’ Electra in order to ascertain the extent of the influence of classic literature to modern drama. When a writer provoked comparison with the ancient Greek tragedians, as O’Neill does so, he cannot quite protest if his dispute is recognised and he is evaluated rigidly by their standards. Certainly, what would be offensive and an act of intentional and insulting denigration, would be a thoughtful analysis of Mourning Becomes Electra as rather ‘well done’ for an American, but apparently not, a work to be evaluated by European standards. I will not replicate that mockery to O’Neill. Because he boldly tries to write on the level of the three ancient Greek tragedians (Aeschylus, Sophocles, and Euripides), this paper will give him the privilege to evaluate him by the same standards applied to the ancient playwrights, particularly to Sophocles. The preliminary acts of Mourning Becomes Electra could have written only by a natural dramatist. Even though the play is lengthy, the acts are efficiently constructed, even in the final, scattered portion of the trilogy. The general of the Greek armies, and fortunate king and husband of the regal Clytemnestra, when he set forth on the expedition against Troy left behind him two smouldering fires of revenge. His father had been guilty of the blood of his own brother and nephews. One of the boys, Aegisthus had been spared and was now growing to manhood with but one purpose in life—to shed the blood of his more fortunate kinsman. But even more sinister was the pain he left in the heart of his wife, for before sailing, to insure the success of the enterprise, Agamemnon had been forced to slay his own daughter Iphigenia. During the long years of the war, the wife and the cousin can brood and plot, making common cause in behalf of justice. Justice—the call is as old as human nature. It’s a

Combining Nurse Leader with Advocacy Essay Example | Topics and Well Written Essays - 750 words - 1

Combining Nurse Leader with Advocacy - Essay Example Essentially, in keeping true to my beliefs and values, I aim to ensure that I am clear about the challenges that I can engage in, and the ones that are beyond my capabilities. Regardless of whether I take up a challenge or not, my aim is to make sure that I leave patients and colleagues in better conditions than I found them. Reflecting on my professional accountability, my aim is to always ensure that I carry out the duties that are allocated to me and ensure that I do not interfere with the duties of other medical professionals. Ideally, there are activities that a dialysis nurse is not allowed to engage in, depending on the institution, and I plan to adhere to the rules set by my seniors. Being a dialysis nurse, career planning for me involves deciding whether I would prefer to be administering dialysis in hospitals or in the homes of patients. Most of the times, nurses are not offered the option to choose between the two settings but if I could, I would prefer to be administering the dialysis in the homes of patients. This is because I am a very emphatic person and I like to identify with the personal lives of my patients. Being in their homes administering dialysis will give me the chance to build a good rapport with them and offer them support in the management of their condition. However, I am not very good at organizing things and may leave the patients’ room a bit messy, but that is something I am working on to improve my behavior. In my belief, being disciplined is all about ensuring that I do the things that I know I am supposed to do and not choosing to do only the things that favor me. My journey towards becoming a dialysis nurse will involve a lot of discipline, especially in terms of patience. Learning how to operate the dialysis machine will require a lot of patience so as to ensure that I do not endanger the lives of my patients. In the pre-service and

Communication Barrier Essay Example for Free

Communication Barrier Essay Communication is defined as an exchange of information. It involved the transmission of ideas and thoughts. To communicate means that you share with others your concepts, your thoughts and ideas. Most of our time is spent in this mutual relationship by either speaking or listening. This ability to communicate is what makes man the unique creature that he is, with the ability to control and dominate, to build and maintain. Communications is a big thing in America. It is said to be our most vital and largest industry. We are awed by mans methods of communication. We find them complete in oral, written or visualized form. In spite of this, communication is a big problem in our lives. Because of human nature, certain barriers exist making the communication process either ineffective or impossible. At times we just do not get through to people. This often results in misunderstanding. Many splits in congregations are due to the communications problem. Brethren have trouble talking to each other, they become estranged and some become enemies. Much of this can be eliminated if we understand some of the barriers to our communication. In the discussion that follows, the principal barriers to communicating effectively in todays working environment are identified, and proven techniques for coping with them are considered. The principal barriers to effective communication are: noise, poor feedback, selection of inappropriate media, a wrong mental attitude, insufficient or lack of attention to work selection, delay in message transmittal, physical separation of the sender and receiver, and lack of empathy or a good relationship between the sender and receiver. Lets now give four examples of communication barriers and the solution of each one as well. There are many communication barriers that come up during the communication process. First, there are physical distractions that interfere with the effectiveness of a communication attempt. For example, I work at a hardware store and I would be mixing paint for customer while another customer comes up to me and asks where something is located in the store. For this case, it can be many ways. You can ask someone else to attend to the customer, yet still be able to accomplish your job without losing the customer. If the first customer not around, you should attend to the other customer first and go back to your job. Second, we live in a verbal environment. Words constitute the most frequently used tool for communicating. Words usually facilitate communication; however, their careless, improper use in a given situation can create a communication barrier. Arthur Kudner, an advertising executive, once told his son: All big things have little names such as life and death, peace and war, or dawn, day, night, hope, love, and home. Learn to use little words in a big way. It is hard to do, but they say what you mean. When you dont know what you mean use big words; they often fool little people. The words we use should be selected carefully. Dr. Rudolph Flesch, a specialist in words and communication, suggests a way to break through the word barrier: use familiar words in place of the unfamiliar, use concrete words in place of the abstract, use short words in place of long and use single words in place of several. Unfortunately, almost every commonly used word has more than one meaning. Also words have regional meanings or derive new meanings as a result of the development of new industries or fields. The meaning conveyed by the senders words depends upon the experience and attitude of the receiver. Therefore, one way to penetrate the word barrier is for the sender to strive to speak or write in terms of the receivers experience and attitude. The better able he is to do this, the more successful the communication will be. Dr. S. E. Hayakawa, a U.S. Senator from California, expressed it very well when he said, The meanings of words are not in the words; they are in us. Third, the ability to empathize with someone else may not be easy. If you are to see things from anothers viewpoint, you have to put aside your own prejudices and preconceptions. The receiver may be of a different race,  creed, educational background, from a different section of the country, or have a different specialty or rank within the organization. Under these circumstances, the task of empathizing with the other member of the communication link is difficult. The task is further complicated if you believe that understanding anothers viewpoint may pose a threat to your own. To better communicate, we must try to see ourselves through the eyes of others in the communication link. By developing some empathy with the people to whom we will be directing messages, we might recognize the need to modify our messages from time to time before sending them. We should use easy word when we communicate with other people, let everyone understand easily. Not to ward, no technician word that people around the word will be able to follow. The last one, as manager, many communication barriers will turn out as well. Generally, managers make more frequent use of oral, rather than written, communication. However, the media one selects for communication in a particular situation should correlate with the feedback requirements. A communication failure or partial failure could occur if the media you select for transmittal of a message is inappropriate and necessary feedback is not received. Most simple messages can be transmitted orally either in a face-to-face discussion, formal briefing, or meeting of the staff. More complex messages should be written in a directive, instruction, memorandum, or report. Very complex messages should be transmitted in both oral and written form. Repetition and review of an oral communication in written form can be a facilitating device. So the personal qualities of the manager should be a consideration in the selection. As manager, you should recognize your strengths and limitations. You should evaluate your successes and failures in communication and plan to use the media that best fits your style and qualities. From the above communication barriers and each of solution, we can observe that in todays world, no matter what the communication barrier is, there is always to the solution over the barrier. It is just a matter of different  approach within you means and ability to execute the solution without losing any clients.

Truth behind Equality Essay Example for Free

Truth behind Equality Essay Peter Singer is an Australian Philosopher and a utilitarianism who actively advocates the animal rights and equality between species. He presented his arguments regarding his convictions on his articles such as â€Å"All Animals are Equal†, â€Å"Famine, Affluence and Morality† and â€Å"Humans are Sentient Too. † These articles, though have different points, were interrelated, and in one point, connected to each other. These articles simply advocated animal ethics and equality. In his article, â€Å"Famine, Affluence and Morality†, Singer presented his notions regarding morality in relevance to famine and affluence. His first notion in his article was that death caused by scarcity of basic necessities in life such as food, shelter and medicine was bad. Singer used the situation in Bengal on 1971 as an example, wherein poverty, starvation and civil war resulted to suffering and death of people of East Bengal. In his second notion, he suggested that if we were able to prevent such bad things to happen then we were required to do everything we could do to stop that without the expense of doing anything comparably bad. He also believed that affluence countries such as Great Britain and Australia, who had all the capabilities to provide help, should help first the people of Bengal, regardless of how it is from them, instead of giving attentions to less significant things. Furthermore, he believed that it was the government’s responsibilities to provide help so as the individuals. This thought made up his third notion. In his fourth notion, he believed that those who could provide aid should give maximally since not all people were able to contribute. Moreover, he suggested that people should change their outlook regarding charity. It was in our moral norm that charity was not mandatory- it is alright if you do have something to offer but it is also alright if you do not have. However, Singer suggested that it was against the moral norm not to give. Singer, made people blameworthy by this thought. Singer might get his views regarding his moral concept on Marxism wherein individuals were concerned on developing the human race. However, we are living in the real world where humans are too greedy and self-centered to give and to think of others. Moreover, on the economic point of view, it is not economically practical to accept the ideas of Singer since providing help to other countries is just a temporary solution in the case of East Bengal. In conclusion to Singer’s article â€Å"Famine, Affluence and Morality†, it is everyone’s moral obligation to give assistance to someone who is badly in need or in the near death. He believed that it was worth sacrificing the things that are less significant than the life of people. In this case, Singer’s claim with regard to his first article is related to his other article entitled â€Å"All Animals are Equal†. In this article, he first introduced the non-dying issue concerning sexism. He mentioned that all humans were not equal in any aspect, but we still believe that men and women were just morally similar and women deserved to be recognized as men did. Women deserved to have equality with men. In this case, since men and women were just part of the same species, Singer claimed that it was also possible to extend the same recognition to other species- the ones we called animals. Singer also pointed out the case of racism, which was also an undying issue in almost all parts of the world. Whites were claiming that they were superior to blacks; however we all know that it was not true. Some of the blacks were superior to whites and had some capacities that whites do not have. A person’s color was not a justifiable basis to know his abilities. It was not right to discriminate other people just because he was black and as a human being he deserved the same treatments and rights just like the other people. However, it was also undeniably right that humans and animals had so many differences and these differences might lead to different rights and considerations. Singer believed that these differences were not an excuse not to give animals the rights that they deserved. Humankind must realize that equality among humans was not just a factual possibility but also a moral ideal. Singer also suggested that the ideal of equality among humans was all about on how we ought to treat humans. Moral equality was highly dependent on the nature of the individuals, either human or non-human. Considering all those aspects with regard to moral ideals, various views on speciesism had come up to Singer. He described speciesism as an act or attitude which favors the interest of ones own species to take priority over the other species. It was not the physical and mental aspects of animals that were in question with regard of equality, but it was their emotional aspect that was taken into consideration. Humans let the animals to suffer just to satisfy our needs, though we definitely knew that there were other means of satisfying our nutritional requirements. As human beings, we all knew that we were guilty of doing such things. Singer noted in his article that humans were all speciesists and we were all morally wrong for being such since humans allowed the sufferings of other species to happen in our own hands. Singer also pointed out that our society allowed rearing and killing of sentient animals just to supply the needs of people for meats. Singer noted that the act of rearing and killing sentient animals was an obvious evidence of giving other species suffering though we knew that we could stop that to happen thus making us tolerate something bad to happen and at the same time making us morally wrong. Singer suggested that it was our moral obligation to stop practicing this method since it only catered satisfaction to our stomach and craving to eat meat. Likewise, Singer suggested that we should stop killing other species since they have feelings too- they also get hurt and feel pain and enjoy the pleasure of life. He also noted that it would cater no good to us since eating too much meat was bad for our health and it was the otherwise if we eat less or no meat at all. Moreover, he noted that it was not environmentally sound and inefficient to continuously raise animals for meat production since it was a very wasteful process. Singer imparted in his article that it was just equally immoral to perform experiments on non-humans and to eat their species. Singer did not find any difference between the two aside from the fact that there would be more significant outcome that could get in experimenting animals. Experiments on animals might result to additional understanding and knowledge as well as cures to diseases. However, Singer did not take it as an excuse and it was not justifiable to continue conducting experiments on animals. He noted that these experiments were just repetition and validation of previous experiments. Singer believed that people behind these experiments on animals were just doing the experiments for their own good and nothing else. However, Singer pointed out that if we were conducting experiments on animals, why we were not doing it also on humans. Experiments conducted only on animals were just simply discriminating their species since they could feel pain as any human. Animals should earn the same respect as we, humans, earn. Another form of speciesism aside from eating animal flesh and experimenting animal bodies for the advancement of science was determined by Singer as speciesism in modern philosophy. Singer noted that philosophy ought to present inquiries on the things that most people took for granted. However, philosophers at this age failed to query about the moral rights of sentient animals. Most philosophers presented the differences between human being and animals making it impossible to raise equality between the two species. They also presented equality in terms of human equality, and as the term suggested, non-humans though considered sentient, were disregarded when they mentioned or talked about equality. Singer assumed that the philosophers were discriminating the animals, since they did not exert any effort in bringing out the issue regarding equality between species. The other essay of Singer entitled â€Å"Human are Sentient Too†, also tackled the privilege of animals as a living creature to receive the consideration and rights that they ought to have. Singer mentioned again the term â€Å"speciesism† in this essay and claimed for the next time that all species were equal. He believed that the science world, especially the animal research was being unethical to the sentient animals. Singer noted that these researchers believed that animals were inferior to us only served as a tool that they could use to conduct researches and experimentation for the advancement of science. However, the animal liberation movement, especially Singer, did not accept their belief and considered them as immoral for letting the sentient animals to suffer and feel pain. Moreover, he believed that these researchers were violating the foundation of their knowledge and belief, The Theory of Evolution. The said theory entailed that we all existed in the planet due to unplanned evolution and all organisms existed were just equal; hence humans were not supposed to dominate the world. Considering the principle on the work of Jeremy Bentham, Singer came to think that it was possible to conduct experiments on animals and at the same time not causing them any pain or suffering. However, the science world still believed that we, humans, were superior and we were allowed of dominion over other species. And as a result, animal liberation movements were actively and continuously conducting demonstrations to show the society the inequality that they refused to see. However, Singer believed that the government and the science world, specifically the research institution were more responsible in making changes on the way the researches conduct experiments- researches and experiments without making violence on non-humans and preventing them to suffer and feel pain. In relation to the experiments being conduced on animals, there is another kind of technology that researchers invented in the mid-1970s that does not only involve plant species but also animal species. The new technology involves manipulating the genetic material of a species to modify the trait of that species and for it to have the desired trait. Researchers believed that modifying the trait of a certain species is the solution to some of the world’s problem such as starvation due to insufficient food supply, untreatable diseases and expensive medicines. The supporters of genetic engineering claimed that it is just like breeding a certain species. They also claimed that it is not unethical since nature itself did it through evolution. Evidence to the benefits of genetic engineering to our lives has long been reported. Genetically modified organisms are reported to solve the problems on various fields such as in medicine, agriculture, humanity and ecology. Genetic engineering has made dramatic progress on the said fields. Conversely, there are various groups that object genetic engineering. Religious critics, for an instance, believed that genetic engineering is against the statute and will of God. Moreover, they believed that life is so sacred that humans do not have the right to alter what the creator has given us. Other groups who object modifying the genetic code of species claimed that it is the dignity of the species to be modified that is at stake. It is not the right of anyone to violate the dignity not only of human kind but also of other life-forms. Meanwhile, critics of genetic engineering claim that it is unsafe and unethical to produce genetically modified crops since it may threaten the environment and the safety of human kind. Altering the genetic mode of organisms may lead to alteration of the balance in nature and may sequentially result to more serious problem. The world of science has not yet discovered the harmful effects of genetically modified organism hence it is too risky to depend so much on genetic engineering and deal ourselves with these â€Å"manufactured† organisms. When genetically modified organisms are released to the environment and in turn proven unsafe it will be impossible to recall these â€Å"manufactured† organisms. The society may allow the release of these organisms until we are guaranteed that it is safe and may not bring any hazard on our environment and our own health. Considering all the ideas and views of Singer on animal rights and equality and the facts regarding genetic engineering, though some are considerably absurd, it can be said that it is morally wrong to genetically modify non-humans or what we commonly call animals. It is beyond our ethical belief to alter what the creator has given us. Other species such as plant and animal also have sentience, capacities, self-consciousness and value. Sentient animals are not made for the sake of humanity; they exist in the planet for their own purpose- to live and enjoy the pleasure of life. Thus, humans are not licensed to lead the world and shall not bear in our minds that we are superior to the other life-forms. Humans are supposed to respect the existence of other species and give the consideration that these species shall earn from us otherwise; we do not deserve the rights and consideration that we are earning today. Humans enjoy the pleasure of life in this world and other life-forms might as well experience that pleasure of life. Humans, though given much more of the capabilities and knowledge that the other species failed to have, do not have sufficient right to dominate the world and do whatever they want to do to the other life-forms. As humans, given the opportunity to have higher faculty and self-consciousness, we are committed to take good care and preserve the world, as much as we could, as well as the other life-forms living in it. It is not that difficult for us to give the other life-forms the equality that we refuse to give them. All we need to do is to open eyes so we could have a clear outlook on the present situation of the sentient animals in our society today. In turn, we will realize and learn that their real role in this planet is not only to provide us sufficient nutritional requirements and a â€Å"tool† for research and but also to live and earn the respect and right that they have failed to earn from the very beginning. References Singer, P. 1972. Famine, Affluence, and Morality. Philosophy and Public Affairs, 1, 229-243. Singer, P. 2000. All Animals Are Equal. Contemporary Moral Problems, 490-499. Singer, P. 2004, â€Å"Humans Are Sentient Too,† The Guardian.

Causes of Software Project Failure

Causes of Software Project Failure All successful software projects start with the premise that the end result will be successful. The owner of the project initial goal is to deliver on time and on budget. Although these are the primary focus when the project begins, yet is it not more important that the project deliver tangible business and consumer results? A project manager must take both the customer and the project into consideration when performing a software project. Time, thought and much consideration (focus) must be the aim of the project from beginning until completion of the software project. These are primary keys to a projects success. There are many keys that ensure the success of a project many will become familiar to the reader throughout the reading of this paper. Business drivers such as problems or opportunities that maybe encountered in the beginning and throughout the completion of the project are criteria used to measure the benefits of the project. These drivers should be the primary focus when scoping the project and setting the goals of the project. All projects begin with goals in the order of priority directly related to and supported by the business goals. Target goals are put into place to ensure the project meets the specified time and does not deviate more than those allowable in project plan. The customer and the project planner must be in complete agreement on the goal and anticipation of the project before the project begins. An understanding of what the customer expects the success of the project to look like and what measurements will be considered to determine the desired outcome of the project to the customers satisfactions are critical points when the project is started. These issues should be easily understood by all concerned. A successful project must first be defined. Question, how do we define the success of a software project? We could begin by looking at meeting desired cost, schedule, and scope objectives. Was the projects completion date met? Was it within budget guidelines and did it meet the desired specifications? Software project success has often been defined in ways that are measured the day the project was finished. This is not always the case. Some projects exceed the specified date originally set forth at the forefront of the project. This does not mean that the project was a failure because of the time constraints. Many projects require more testing than was originally set forth at the start of the project or more funds that are necessary to ensure the project is a success. One example is the Sydney Opera House (Duncan, W.R.), that cost sixteen times as much to build and took four times as long to complete as the original estimates. Although thought to be a project management disaster ending up producing an enduring and inspiring civic symbol. Would this constitute as a project failure? Project success depends on a combination of product success and project management success. Many project owners define the success of the project by the time of completion. If the project was completed in the specified time it was a success. Ask yourself this question; if the project was completed early or a day or two late with all specifications met did you have a success software project? Or if it was completed on time with continual adjustments after completion, is this a successful project? A project must follow a completion milestone that should allow for each step of the project to fall within specification. All software project should include modification allowances that provide for added research should the project require it. Literature Review Software failure can be defined as the occurrence of either deficient functionality, where the program fails to perform a required function, or deficient performance, where the program performs a required function too slow or in an insufficient manner. (Rutgers Computer Technology Law Journal. Perlman, Daniel T., 1998) We live in a society that depends extensively on computers to accomplish our everyday needs; everything from monitoring patients in hospitals to monitoring our national defense depends primarily on computer software not failing. Bearing in mind their fundamental need for computers to function properly, software project failure rates are among the highest across all industries, however the number of statistical reports analyzing those Failure are lesser then one would expect. This literature review provides an overview of general literature available on this subject, the main of objectives of the evaluation are to establish why software projects fail and the main reasons a project may fail along with what lessons can be learned   to improve software developments in order for them to success in the future. The subject of Software Project Failures is full of books, and papers that  stress Why Software Projects Fail, most of them share numerous characteristics ranging from failure due to incomplete requirements to failure due to an incompetent project manager.   Among the studies examining these failures is the 2009 Standish Group CHAOS Report. The report is a collection of data on project failures in the software industry. Its main goal is to make the industry effective and productive and to illustrate ways to improve its success rates and increase the value of the software investments. Their most recent results were published in April, 2009. The introductory statement in CHAOS Report reads: The Roman bridges of antiquity were very inefficient structures. By modern standards, they used too much stone, and as a result, far too much labor to build. Over the years we have learned to build bridges more efficiently, using few materials and less labor to perform the same task. Tom Clancy (The Sum of All Fears) (The Standish Group, 2009) With use of this quote the CHAOS Report suggests that software developers should adopt bridge builders approach of learning from past mistakes. The report explains that the difference between software failures and bridge failures is that when a bridge fails it is investigated and a report is written on the cause of the failure whereas when a software fails the failures are covered up, ignored, and/or rationalized. As a result, we keep making the same mistakes over and over again. (The Standish Group, 2009) The Standish Group investigated the failure and success rates along with the reasons for success and failure. Their study surveyed four focus groups with IT executives of major companies. The attendees represented a wide variety of industries, including insurance, state and federal government, retail, banking, securities, manufacturing and service. Three distinct outcomes, called Resolutions, were what the subsequent report divides projects into. Project Resolution Types 1 (Success), 2 (Challenged), and 3 (Impaired). Resolution Type 1 was when a project was a success; it was completed on time and on budget, with all the functionalities and features intact.   The projects that fell in this category only amounted to 16.2%.  Resolution Type 2 was when a project was completed, however it was over budget or over time, and missing some or all of the functionalities and features that were originally requested.   52.7% of all studied projects fell into the Resolution Type 2 category. R esolution Type 3 were projects that were abandoned at some point during the development cycle, consequently becoming total losses.   A staggering 31.1% of all the projects studied fell into this category.   The Standish Group further divided these results by large, medium and small establishments. A large establishment was one with greater than $500 million dollars in revenue per year, a medium was defined as having $200 million to $500 million in yearly revenue, and a small was from $100 million to $200 million. However the statistics for failure were equally discouraging in companies of all sizes. The most important aspect of the research is discovering why projects fail. The report isolated that the top five factors found in successful projects were: user involvement, executive management support, clear statement of requirements, proper planning, and realistic expectations. These indicators were extracted from surveyed IT executive managers of their opinions about why projects succeed. Project Success Factors % of Responses 1. User Involvement 15.90% 2. Executive Management Support 13.90% 3. Clear Statement of Requirements 13.00% 4. Proper Planning 9.60% 5. Realistic Expectations 8.20% 6. Smaller Project Milestones 7.70% 7. Competent Staff 7.20% 8. Ownership 5.30% 9. Clear Vision Objectives 2.90% 10. Hard-Working, Focused Staff 2.40% Other 13.90% The top factors found in Challenged projects were: lack of user input, incomplete requirements and specifications, changing requirements and specifications, lack of executive support, and technical incompetence. The list of top indicators factors found in Failed projects were: incomplete requirements, lack of user involvement, lack of resources, unrealistic expectations, lace of executive support, changing requirements and specifications, lack of planning, didnt need it any longer, lack of IT management, and technical illiteracy. Project Challenged Factors % of Responses 1. Lack of User Input 12.80% 2. Incomplete Requirements Specifications 12.30% 3. Changing Requirements Specifications 11.80% 4. Lack of Executive Support 7.50% 5. Technology Incompetence 7.00% 6. Lack of Resources 6.40% 7. Unrealistic Expectations 5.90% 8. Unclear Objectives 5.30% 9. Unrealistic Time Frames 4.30% 10. New Technology 3.70% Other 23.00% The Standish group report conclude that projects succeed because of: executive support, user involvement, experience project manager, clear business objectives, minimized scope, standard software infrastructure, firm basic requirements, formal methodology, and reliable estimates. The main causes of IT project failure were: lack of clear link between the project and the organizations key strategic priorities, including agreed measures of success; lack of clear senior management and Official ownership and leadership; lack of sufficient data; lack of effective engagement with stakeholders; lack of skills and proven approach to project management and risk management; along with lack of effective project team integration between clients, the supplier team and the supply chain. Causes of failure could also be the result of the problem not being properly defined: they may have developed the right solution to the wrong problem. This is best addressed by trying to understand the reason for do ing the job. The CHAOS Report does have its own shortcomings. Its measures of success are relatively narrow; it only measures success by examining whether a project was completed on time and on budget. The Standish group does not include measures of quality, risk, and customer satisfaction. Nevertheless, the CHAOS Report endures as an important measure for the software despite limited standards of measurement and limiting sources to interviews with executives. There are several other studies on statistics over IT project failure rates which mainly concur with the overall picture of the IT industry that the CHAOS Report provides. In 1997, a study conducted by KPMG Canada, reviewed 176 projects. Their findings determined that over 60% of projects failed to meet their sponsors expectations. A staggering 75% missed their deadline by 30% or more, and over half substantially exceeded their budgets. The main causes for project failure that were identified were: poor project planning, specifically, inadequate risk management and a weak project plan; weak business case; and lack of top management involvement and support. In September 2000, the Gartner Group surveyed 1375 respondents through interviews. (Gardner, 2010) The study indicated that roughly 40 percent of all IT projects fail to meet business requirements. In a more recent survey, the Aberdeen Group claimed 90 percent of projects came in late, while 30 percent were simply cancelled before the deadline. (Booth, R., 2000) According to Tom Carlos in his article Reasons Why Projects Fail gather major reasons   ranging from simple to complex project, The most common reasons for failure   found in the list include :      Poorly managed    Inadequate or vague requirements    Undefined objectives and goals    Lack of management commitment    Poorly defined roles and responsibilities    Stakeholder conflict    Team weaknesses    Lack of user input    Scope creep No change control process Meeting end user expectations    Poor communication    Lack of a solid project plan    Lack of organisational support    Centralised proactive management    initiatives to combat project risk    Enterprise management of budget resources    Provides universal templates and documentation    Unrealistic timeframes and tasks    Competing priorities    Poor communication    Insufficient resources (funding and personnel) Business politics    Overruns of schedule and cost    Estimates for cost and schedule are erroneous    Lack of prioritisation and project portfolio management    Scope creep No change control process Meeting end user expectations    Ignoring project warning signs    Inadequate testing processes    Bad decisions The first 10 failure in the list focus strictly on software requirements where in the requirements are defined user input, stakeholders, communication. Data and Hypotheses When we look at the success or failure of a software project we must also analyze other areas that can have an impact on the project. A review of the Business Analysis Benchmark gives the project owner and the customer a clear understanding of the organizations maturity in requirements definition and with management expectation of the project outcome. (IAG Consulting. Ellis, E., 2009) Findings in this analysis showed that requirements maturity has a strong positive correlation to every major measure of development efficiency assessed. It can be a strong motivator in the success of the project. Based upon time performance, budget performance, function performance, each can be a fundamental point in project success when there is an increase in these areas. The project owner must have a clear vision/goal to prepare for success. Failure can become apparent in many ways, i.e. changing the vision in the middle of the project, disputes on the primary focus, expectations that are beyond proj ect scope, unreliable or not enough resources to maintain project direction and possibly the most valuable to the success of the project is good leadership. An article titled, If Software Quality is so Important, Why is it So Often Neglected? (Sassenburg, H., 2006), a great title for this literature review research. This article further explores the Standish Groups CHAOS Report with a great quote, Software Crisis has not yet reached the turning point. It gives the reader a good statistical percentage, Only 28% of software projects succeed these days, down from 34% a year or two ago. Outright failures [projects cancelled before completion] are up from 15% to 18%. The remaining 51% of software projects are seriously late, over budget and lacking features previously expected. As the study reviews this article a discovery is made based upon the research that includes how the cost is distributed. The designer allows certain percentages for each area of the project phase. In the analyze s egment of the project it is projected that 10% will be utilized. Design phase will encompass about 15% while the realization and testing will average the remaining percentage. Many projects exceed the budgeted percentage and allotted funds will be taken from one phase and move over to the phase in need. This can at times cause the project to slow in progress or be placed in a temporary state or even placed on hold. The end or mid-result can be the determinant of a number of factors that are evaluated to determine how to complete a software project. The CHAOS Report gives unique information regarding how much is spent on IT application development, $250 billion each year on IT application development which equates to approximately 175,000 projects. A large company can spend anywhere from $2,322,000 to develop a project. Medium companies can spend $1,331,000 and a small company can even spend $434,000 to develop a software project. It has also been determined that many of these projec ts regardless the cost will fail. Hence CHAOS, therefore no longer can one speak the three monkeys, hear no failure, see no failure, speak no failure. In the article, Project Management Practices: The Criteria for Success or Failure, (OW, S. H., Harzadeh, I.) list the top four factors that contribute to a projects success are, user involvement, executive management support, clear statement of requirements and proper planning. This article also explores how a project fails; the main reason for failure is listed as, the inabilities of project owners to plan and estimate correctly, or fail to implement the tasks according to plan or simply failure causes by human factor. The Standish Group has estimated that American companies spend at least $81 billion for cancelled software projects. Also, that another $59 million to complete a project that has exceeded budgeted plans. It has been estimated that only 16.2% of software projects were completed on time and on budget. Only 9% of this estimation is for larger companies that have a successful project finished on time and on budget. On occasion these are simply a fraction of the original requirements. Scary? On another scale, Smaller companies do much better. A total of 78.4% of their software projects will get deployed with at least 74.2% of their original features and functions. The study determined that the most projects, 37.1% were impaired and subsequently cancelled in medium companies, compared to 29.5% in large companies and 21.6% in small companies. Many software project failures are due to cost and time overruns which result in the restart of the project. These causes the project to go over budget and exceed time requirements set forth in the original software project plan. With the three major elements for a project in place, (user involvement, executive management support, and a clear statement of requirements), there is a much greater chance that the project will be a success. Without these three elements the chance for failure increases. In the project management scorecard there are several surveys in which to score whether the project is a success or a failure. A survey list reasons most people give, regardless the type of business for failed or poorly managed Projects. This score card also list the cost of a failed project when poorly managed. A n article in the datacenter journal, facing IT Project Failures, explains that the failure of an IT project as others discoveries disclose, can simply mean that the project has gone over budget by a certain percentage, that completion of the project was delayed beyond a certain point or that the business failed to reap a certain return on investment from its project. The CHAOS report indicates that project success rates have increased to 34 percent of all projects. This percent is 100% more from the success rate found in the first study in 1994. A decline in project failure to 15% of all projects is a great improvement over the 31% failure rate reported in 1994. In this current survey a total of 51% of all projects were over the specified time required, over budget or lacking features and requirements.

Pure Competition Essay -- essays research papers

There are many industries. Economist group them into four market models: 1) pure competition which involves a very large number of firms producing a standardized producer. New firms may enter very easily. 2) Pure monopoly is a market structure in which one firm is the sole seller a product or service like a local electric company. Entry of additional firms is blocked so that one firm is the industry. 3)Monopolistic competition is characterized by a relatively large number of sellers producing differentiated product. 4)Oligopoly involves only a few sellers; this â€Å"fewness† means that each firm is affected by the decisions of rival and must take these decisions into account in determining its own price and output. Pure competition assumes that firms and resources are mobile among different kinds of industries.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   No single firm can influence market price in a competitive industry; therefore a firm’s demand curve is perfectly elastic and price equals marginal revenue. Short-run profit maximization by a competitive firm can be analyzed by comparing total revenue and total cost or applying marginal analysis. A firm maximizes its short-run profit by producing that output at which total revenue exceeds total cost by the greatest amount. A complete firm maximizes profit or minimizes loss in the short run by producing that output at which price or marginal revenue equals marginal cost, provided price exceeds minimum average v...

An Analysis of Jack Londons To Build a Fire :: London To Build a Fire Essays

An Analysis of Jack London's To Build a Fire In his article "To Build a Fire" a Physical Fiction and Metaphysical Critics Charles E. May comments and disagrees with a statement that "To Build a Fire" is "a masterpiece of a short fiction"(20). Literary critics claimed that London used many metaphors in this work such as "sun-fire-life" or "cold-darkness-depression-death"(20), but May argues that this story should be read and interpreted literally and does not contain deep, dual or metaphorical meaning. He says: "For Jack London, and consequently for the reader, the man in the story is simply a living body, the cold is simply a physical fact"(22). What is more article's author strongly disagrees with the critic, who compares the theme of the story to a theme of a classical tragedy. May sarcastically states that the only visible similarity in terms of theme would be the issue of protagonist's death(22). I think that "To Build a Fire" story relates to many issues hidden behind a superficial plot. The story takes place in a very severe winter; the man under appreciates the dangers of nature forces and struggles to return to camp. He is warned about possible dangers, but he is also too pride and too self-confident to take the advice into consideration. The protagonist is accompanied by a dog. The man tries to survive, but forces of nature are stronger and he dies. The interpretation of the story, however, reveals real "treasures": problem of loneliness, deadly fear, acceptance, understanding, issue of time, and a scary silence. The protagonist seems to be a very independent and strong person, he rather listens to himself first. He planned his way back home, and regardless to weather condition he realizes his plans and sets off. During this trip he starts to realize that it may be too cold, initially tries to set up a fire, but it is not enough to survive. He is scared, and has a feeling of a coming death. In some ways he is similar to a contemporary person, who never has enough time for anything. The protagonist rushes to get home, to realize his own plans, to go forward, then on a deserted land he suddenly finds time, too much time to think, and to feel. It was a very uncomfortable feeling to be aware of his own death; he is able to predict what will happen. At first, he tries to escape and safely find camp, but afterwards he learns it is impossible, and accepts his fate.

Insider Trading Essay example -- Business, Investment

Insider trading relates the investment behavior of corporate insiders with their own stock. Insider trading topic not only attracts finance literature (see, e.g., Lorie and Niederhoffer 1968, Jaffe 1974, Seyhun 1986, 1998, Rozeff and Zaman 1988, Lin and Howe 1990, and Lakonishok and Lee 2001), but also attracts law and economics literature (see, e.g., Manna 1966, Georgeakopoulos 1993, and Carlton and Fischel 1983). The finance literature on insider trading had started with an examination of the strong market efficiency hypothesis. Subsequently, researchers gave their attention towards the determinations of insider trades’ profitability. Furthermore, another set of researcher also gave an attempt to find the information contents of insider trading to outsiders, which is an application to test the semi-strong market efficiency hypothesis. The third group of researchers measured insider trading activities around the corporate announcements, for example, merger and acquisitions, dividend announcements. In the following section, we will summarize studies that focus on the information content (abnormal return) of insider trading. Finnerty (1974) measured the strong market efficiency hypothesis condition on insider trading. The period of his study was from January 1969 to December 1972. He considered only open market trade for NYSE firms. To measure the strong market efficiency hypothesis, he formed two portfolios- buy and sale for each month; the buy (sale) portfolio for month t comprised of those firms for which any insiders were buyer (seller). Thereafter, he calculated portfolio returns for the portfolio formation month and subsequent eleven months. Using the CAPM to calculate abnormal return to insider trades, Finnerty (1974) ... ...ir timely disclosure of insider trades from 10 days after the month in which the trade had occurred regime to 2 days regime on August 29, 2002. He stated that if the information content of insider trades is relevant to outsiders, the timeliness announcement of insider trades will improve the information content of insider trades. And he found that the abnormal return (CAAR=1%) of pre-amendment associated with announcement of insider buys was lower than the abnormal return (CAAR=2.3%) of post-amendment. However, he did not find similar results for insider sales, hence; he again reinvestigated insider sales after taking litigation risk into consideration. And he concluded that insiders of firms those are associated with more litigation risk more likely to refrain from sales on private information than insiders of firms those are associated with low litigation risk.

Currency Risk Management Essay

Currency or Exchange rate risk management is an integral part in every firm’s decisions about foreign currency exposure. Currency risk hedging strategies entail eliminating or reducing this risk, and require understanding of both the ways that the exchange rate risk could affect the operations of economic agents and techniques to deal with the consequent risk implications. Selecting the appropriate hedging strategy is often a daunting task due to the complexities involved in measuring accurately current risk exposure and deciding on the appropriate degree of risk exposure that ought to be covered. The need for currency risk management started to arise after the break down of the Bretton Woods system and the end of the U.S. dollar peg to gold in 1973. The issue of currency risk management for non-financial firms is independent from their core Business and is usually dealt by their corporate treasuries. Most multinational firms have also risk committees to oversee the treasury’s strategy in managing the exchange rate (and interest Rate) risk. This shows the importance that firms put on risk management issues and techniques. Conversely, international investors usually, but not always, manage their exchange rate risk independently from the underlying assets and/or liabilities. Since their currency exposure is related to translation risks on assets and liabilities denominated in foreign currencies, they tend to consider currencies as a separate asset class requiring a Currency overlay mandate. It can be argued that prudent management of multinational firms requires currency risk hedging for their foreign transaction, translation and economic operations to avoid potentially adverse currency effects on their profitability and market valuation. DEFINITION AND TYPES OF CURRENCY RISK A common definition of currency risk relates to the effect of unexpected exchange rate changes on the value of the firm. In particular, it is defined as the possible direct loss (as a result of an unhedged exposure) or indirect loss in the firm’s cash flows, assets and liabilities, net profit and, in turn, its stock market value from an exchange rate move. To manage the exchange rate risk inherent in multinational firms’ operations, a firm needs to determine the specific type of current risk exposure, the hedging strategy and the available instruments to deal with these currency risks. Multinational firms are participants in currency markets by virtue of their international operations. To measure the impact of exchange rate movements on a firm that is engaged in foreign-currency denominated transactions, i.e., the implied value-at-risk (VAR) from exchange rate moves, we need to identify the type of risks that the firm is exposed to and the amount of risk encountered. The four main types of currency / exchange rate risk that exist: 1. Translation risk: A firm’s translation exposure is the extent to which its financial reporting is affected by exchange rate movements. As all firms generally must prepare consolidated financial statements for reporting purposes, the consolidation process for multinationals entails translating foreign assets and liabilities or the financial statements of foreign subsidiaries from foreign to domestic currency. While translation exposure may not affect a firm’s cash flows, it could have a significant impact on a firm’s reported earnings and therefore its stock price. Translation exposure is distinguished from transaction risk as a result of income and losses from various types of risk having different accounting treatments. Translation gives special consideration to assets and liabilities with regards to foreign exchange risk, whereas exposures to revenues and expenses can often be managed ex ante by managing transactional exposures when cash flows take place; 2. Transaction risk: A firm has transaction exposure whenever it has contractual cash flows (receivables and payables) whose values are subject to unanticipated changes in exchange rates due to a contract being denominated in a foreign currency. To realize the domestic value of its foreign-denominated cash flows, the firm must exchange foreign currency for domestic currency. As firms negotiate contracts with set prices and delivery dates in the face of a volatile foreign exchange market with exchange rates constantly fluctuating, the firms face a risk of changes in the exchange rate between the foreign and domestic currency. Firms generally become exposed as a direct result of activities such as importing and exporting or borrowing and investing. Exchange rates may move by up to 10% within any single year, which can significantly affect a firm’s cash flows, meaning a 10% decline in the value of a receivable or a 10% rise in the value of a payable. Such outcomes could be troubl esome as export profits could be negated entirely or import costs could rise substantially; 3. Economic Risk: A firm has economic exposure (also known as operating exposure) to the degree that its market value is influenced by unexpected exchange rate fluctuations. Such exchange rate adjustments can severely affect the firm’s position with regards to its competitors, the firm’s future cash flows, and ultimately the firm’s value. Economic exposure can affect the present value of future cash flows. Any transaction that exposes the firm to foreign exchange risk also exposes the firm economically, but economic exposure can be caused by other business activities and investments which may not be mere international transactions, such as future cash flows from fixed assets. A shift in exchange rates that influences the demand for a good in some country would also be an economic exposure for a firm that sells that good; and 4. Contingent Risk: A firm has contingent exposure when bidding for foreign projects or negotiating other contracts or foreign direct investments. Such an exposure arises from the potential for a firm to suddenly face a transactional or economic foreign exchange risk, contingent on the outcome of some contract or negotiation. For example, a firm could be waiting for a project bid to be accepted by a foreign business or government that if accepted would result in an immediate receivable. While waiting, the firm faces a contingent exposure from the uncertainty as to whether or not that receivable will happen. If the bid is accepted and a receivable is paid the firm then faces a transaction exposure, so a firm may prefer to manage contingent exposures. MEASUREMENT OF EXCHANGE RATE RISK After defining the types of exchange rate risk that a firm is exposed to, a crucial aspect in a firm’s exchange rate risk management decisions is the measurement of these risks.   Measuring currency risk may prove difficult, at least with regards to translation and economic risk. At present, a widely used method is the value-at-risk (VAR) model. Broadly, value at risk is defined as the maximum loss for a given exposure over a given time horizon with z% confidence. The VAR methodology can be used to measure a variety of types of risk, helping firms in their risk management. However, the VAR does not define what happens to the exposure for the (100 – z) % point of confidence, i.e., the worst case scenario. Since the VAR model does not define the maximum loss with 100 percent confidence, firms often set operational limits, such as nominal amounts or stop loss orders, in addition to VAR limits, to reach the highest possible coverage. VALUE-AT-RISK CALCULATION The VAR measure of exchange rate risk is used by firms to estimate the riskiness of a foreign exchange position resulting from a firm’s activities, including the foreign exchange position of its treasury, over a certain time period under normal conditions. The VAR calculation depends on 3 parameters: †¢ The holding period, i.e., the length of time over which the foreign exchange position is planned to be held. The typical holding period is 1 day. †¢ The confidence level at which the estimate is planned to be made. The usual confidence levels are 99 percent and 95 percent. †¢ The unit of currency to be used for the denomination of the VAR. Assuming a holding period of x days and a confidence level of y%, the VAR measures what will be the maximum loss (i.e., the decrease in the market value of a foreign exchange position) over x days, if the x-days period is not one of the (100-y)% x-days periods that are the worst under normal conditions. Thus, if the foreign exchange position has a 1-day VAR of $10 million at the 99 percent confidence level, the firm should expect that, with a probability of 99 percent, the value of this position will decrease by no more than $10 million during 1 day, provided that usual conditions will prevail over that 1 day. In other words, the firm should expect that the value of its foreign exchange rate position will decrease by no more than $10 million on 99 out of 100 usual trading days or by more than $10 million on 1 out of every 100 usual trading days. To calculate the VAR, there exists a variety of models. Among them, the more widely-used are: (1) the historical simulation, which assumes that currency returns on a firm’s foreign exchange position will have the same distribution as they had in the past; (2) the variance- covariance model, which assumes that currency returns on a firm’s total foreign exchange position are always (jointly) normally distributed and that the change in the value of the foreign exchange position is linearly dependent on all currency returns; and (3) Monte Carlo simulation which assumes that future currency returns will be randomly distributed. The historical simulation is the simplest method of calculation. This involves running the firm’s current foreign exchange position across a set of historical exchange rate changes to yield a distribution of losses in the value of the foreign exchange position, say 1,000, and then computing a percentile (the VAR). Thus, assuming a 99 percent confidence level and a 1-day holding period, the VAR could be computed by sorting in ascending order the 1,000 daily losses and taking the 11th largest loss out of the 1,000 (since the confidence level implies that 1 percent of losses – 10 losses –should exceed the VAR). The main benefit of this method is that it does not assume a normal distribution of currency returns, as it is well documented that these returns are not normal but rather leptokurtic. Its shortcomings, however, are that this calculation requires a large database and is computationally intensive. The variance – covariance model assumes that: (1) the change in the value of a firm’s total foreign exchange position is a linear combination of all the changes in the values of individual foreign exchange positions, so that also the total currency return is linearly dependent on all individual currency returns; and (2) the currency returns are jointly normally distributed. Thus, for a 99 percent confidence level, the VAR can be calculated as: VAR= -Vp (Mp + 2.33 Sp) Where, Vp is the initial value (in currency units) of the foreign exchange position Mp is the mean of the currency return on the firm’s total foreign exchange position, which is a weighted average of individual foreign exchange positions Sp is the standard deviation of the currency return on the firm’s total foreign exchange position, which is the standard deviation of the weighted transformation of the variance-covariance matrix of individual foreign exchange positions While the variance-covariance model allows for a quick calculation, its drawback includes the restrictive assumptions of a normal distribution of currency returns and a linear combination of the total foreign exchange position. Note, however, that the normality assumption could be relaxed. When a non-normal distribution is used instead, the computational cost would be higher due to the additional estimation of the confidence interval for the loss exceeding the VAR. Monte Carlo simulation usually involves principal components analysis of the variance-covariance model, followed by random simulation of the components. While it’s main advantages include its ability to handle any underlying distribution and to more accurately assess the VAR when non-linear currency factors are present in the foreign exchange position (e.g., options), its serious drawback is the computationally intensive process. MANAGEMENT OF CURRENCY RISK After identifying the types of exchange rate risk and measuring the associated risk exposure, a firm needs to decide whether to hedge or not these risks. In international finance, the issue of the appropriate strategy to manage (hedge) the different types of exchange rate risk has yet to be settled. In practice, however, corporate treasurers have used various currency risk management strategies depending, ceteris paribus, on the prevalence of a certain type of risk and the size of the firm. A. Hedging Strategies Indicatively, transaction risk is often hedged tactically (selectively) or strategically to preserve cash flows and earnings, depending on the firm’s treasury view on the future movements of the currencies involved. Tactical hedging is used by most firms to hedge their transaction currency risk relating to short-term receivable and payable transactions, while strategic hedging is used for longer-period transactions. However, some firms decide to use passive hedging, which involves the maintenance of the same hedging structure and execution over regular hedging periods, irrespective of currency expectations—that is, it does not require that a firm takes a currency view. Translation, or balance sheet, risk is hedged very infrequently and non-systematically, often to avoid the impact of possible abrupt currency shocks on net assets. This risk involves mainly long-term foreign exposures, such as the firm’s valuation of subsidiaries, its debt structure and international investments. However, the long-term nature of these items and the fact that currency translation affects the balance sheet rather than the income statement of a firm, make hedging of the translation risk less of a priority for management. For the translation of currency risk of a subsidiary’s value, it is standard practice to hedge the net balance sheet exposures, i.e., the net assets (gross assets less liabilities) of the subsidiary that might be affected by an adverse exchange rate move. Within the framework of hedging the exchange rate risk in a consolidated balance sheet, the issue of hedging a firm’s debt profile is also of paramount importance. The currency and maturity composition of a firm’s debt determines the susceptibility of its net equity and earnings to exchange rate changes. To reduce the impact of exchange rates on the volatility of earnings, the firm may use an optimization model to devise an optimal set of hedging strategies to manage its currency risk. Hedging the remaining currency exposure after the optimization of the debt composition is a difficult task. A firm may use tactical hedging, in addition to optimization, to reduce the residual currency risk. Moreover, if exchange rates do not move in the anticipated direction, translation risk hedging may cause either cash flow or earnings volatility. Therefore, hedging translation risk often involves careful weighing the costs of hedging against the potential cost of not hedging. Economic risk is often hedged as a residual risk. Economic risk is difficult to quantify, as it reflects the potential impact of exchange rate moves on the present value of future cash flows. This may require measuring the potential impact of an exchange rate deviation from the benchmark rate used to forecast a firm’s revenue and cost streams over a given period. In this case, the impact on each flow may be netted out over product lines and across markets, with the net economic risk becoming small for firms that invest in many foreign markets because of offsetting effects. Also, if exchange rate changes follow inflation differentials (through PPP) and a firm has a subsidiary that faces cost inflation above the general inflation rate, the firm could find its competitiveness eroding and its original value deteriorating as a result of exchange rate adjustments that are not in line with PPP. Under these circumstances, the firm could best hedge its economic exposure by creating payables (e.g., financing operations) in the currency that the firm’s subsidiary experiences the higher cost inflation (i.e., in the currency that the firm’s value is vulnerable). Sophisticated corporate treasuries, however, are developing efficient frontiers of hedging strategies as a more integrated approach to hedge currency risk than buying a plain vanilla hedge to cover certain foreign exchange exposure. In effect, an efficient frontier measures the cost of the hedge against the degree of risk hedged. Thus, an efficient frontier determines the most efficient hedging strategy as that which is the cheapest for the most risk hedged. Given a currency view and exposure, hedging optimization models usually compare 100 percent unhedged strategies with 100 percent hedged using vanilla forwards and option strategies in order to find the optimal one. Although this approach to managing risk provides the least-cost hedging structure for a given risk profile, it critically depends on the corporate treasurer’s view of the exchange rate. Note that such optimization can be used for transaction, translation or economic currency risk, provided that the firm has a specific currency view (i.e., a possible exchange rate forecast over a specified time period). B. Hedging Benchmarks and Performance Hedging performance can be measured as a distance to a given benchmark rate. The risk embedded in the hedge is usually expressed as a VAR number that will be consistent with the performance measure. Hedging optimization models, as methods for optimizing hedging strategies for currency-denominated cash flows, help find the most efficient hedge for individual currency exposures, while most of them do not provide a hedging process for multiple currency hedging. Thus, both performance and VAR are measured as effective hedge rates, calculated for each hedging instrument used and the risk in terms of a confidence level. A single optimal hedging strategy is then selected by defining the risk that a firm is willing to take. This strategy is the lowest possible effective hedge rate for an acceptable level of uncertainty. In this way, when the firm’s currency view entails a perception of volatility, options generate a better or similar effective hedge rate at lower uncertainty than the unhedged position. Furthermore, when local currency has a relatively high yield and low volatility, options will almost always generate a better effective hedging rate than forward hedging. As part of the currency risk management policy, firms use a variety of hedging benchmarks to manage their hedging strategies effectively. Such benchmarks could be the hedging level (i.e., a certain percent), the reporting period especially for firms that use forward hedging to limit the volatility of their net equity (e.g., quarterly or 12-month benchmarks) and budget exchange rates, depending on the prevailing accounting rules. Moreover, benchmarks enable the performance of individual hedges to be measured against that of the firm. C. Hedging and Budget Rates Budget exchange rates provide firms with a reference exchange rate level. Setting budget exchange rates is often linked to the firm’s sensitivities and benchmarking priorities. After deciding on the budget rate, the corporate treasury will have to secure an appropriate hedge rate and ensure that there is minimal deviation from that hedge rate. This process will determine the frequency and instruments to be used in hedging. It should be further pointed out that persistent moves relative to the numeracies (functional) currency should be reflected in the budget rates, or strategic positioning and hedging should be considered. Firms have different practices in setting budget exchange rates. Many corporate treasurers of multinational firms prefer to use PPP rates as budget exchange rates, often with the understanding that tactical hedging may be needed over the short-term where the forecasting performance of the PPP model is usually poor.2 However, other multinational firms prefer to set the budget rate in accordance with their sales calendar and, in turn, with their hedging strategy. For example, if a firm has a quarterly sales calendar, it may decide to hedge its next year’s quarterly foreign currency cash flow in such a way that they do not differ by more than a certain percentage from the cash flow in the same quarter of last year. Accordingly, this will necessitate four hedges per year, each of one-year tenor, with hedging being done at the end of the period, using the end-of-period exchange rate as its budget rate. Alternatively, a firm may decide to set its budget exchange rate at the daily average exchange rate over the previous fiscal year. In such case, the firm would need to use one hedge through, perhaps, an average-based instrument like an option or a synthetic forward. This hedging operation will usually be executed on the last day of the previous fiscal year, with starting day the first day of the new fiscal year. Furthermore, a firm may also use passive currency hedging, such as hedging the average value of a foreign currency cash flow over a specified time period, relative to a previous period, through option structures available in the market. This type of hedging strategy is fairly simple and easier to monitor. The relative version of the PPP theory states that bilateral exchange rates would adju st to the relative price differentials of the same good traded in the two countries. Setting budget exchange rates is also crucial for a firm’s pricing strategy, in addition to their importance for defining the benchmark hedging performance and tenor of a hedge (as the latter generally match cash flow hedging requirements). However, the budget exchange rate used to forecast cash flows needs to be close to the spot exchange rate in order to avoid possible major changes in the firm’s pricing strategy or to reconsider its hedging strategy. In this connection, it should be noted that forecasting future exchange rates is a key aspect of a firm’s pricing strategy. Since it has been well-documented that forward rates are poor predictors of future spot rates, structural or time-series exchange rate models need to be employed for such an endeavour. This becomes evident if we compare a firm’s net cash flows estimated by using the forecast rate and the future spot exchange rate. For an investment in a foreign subsidiary, moreover, the budget exchange rate is often the accounting rate, i.e., the exchange rate at the end of the previous fiscal year. D. Best Practices for Exchange Rate Risk Management For their currency risk management decisions, firms with significant exchange rate exposure often need to establish an operational framework of best practices. These practices or principles may include: 1. Identification of the types of exchange rate risk that a firm is exposed to and measurement of the associated risk exposure. As mentioned before, this involves determination of the transaction, translation and economic risks, along with specific reference to the currencies that are related to each type of currency risk. In addition, measuring these currency risks—using various models (e.g. VAR)—is another critical element in identifying hedging positions. 2. Development of an exchange rate risk management strategy. After identifying the types of currency risk and measuring the firm’s risk exposure, a currency strategy needs to be established on how to deal with these risks. In particular, this strategy should specify the firm’s currency hedging objectives—whether and why the firm should fully or partially hedge its currency exposures. Furthermore, a detailed currency hedging approach should be established. It is imperative that a firm details the overall currency risk management strategy on the operational level, including the execution process of currency hedging, the hedging instruments to be used, and the monitoring procedures of currency hedges. 3. Creation of a centralized entity in the firm’s treasury to deal with the practical aspects of the execution of exchange rate hedging. This entity will be responsible for exchange rate forecasting, the hedging approach mechanisms, the accounting procedures regarding currency risk, costs of currency hedging, and the establishment of benchmarks for measuring the performance of currency hedging. (These operations may be undertaken by a specialized team headed by the treasurer or, for large multinational firms, by a chief dealer.) 4. Development of a set of controls to monitor a firm’s exchange rate risk and ensure appropriate position taking. This includes setting position limits for each hedging instrument, position monitoring through mark-to-market valuations of all currency positions on a daily basis (or intraday), and the establishment of currency hedging benchmarks for periodic monitoring of hedging performance (usually monthly). 5. Establishment of a risk oversight committee. This committee would in particular approve limits on position taking, examine the appropriateness of hedging instruments and associated VAR positions, and review the risk management policy on a regular basis. Managing exchange rate risk exposure has gained prominence in the last decade, as a result of the unusual occurrence of a large number of currency crises. From the corporate managers’ perspective, currency risk management is increasingly viewed as a prudent approach to reducing a firm’s vulnerabilities from major exchange rate movements. This attitude has also been reinforced by recent international attention on both accounting and balance sheet risks. HEDGING INSTRUMENTS FOR MANAGING EXCHANGE RATE RISK Within the framework of a currency risk management strategy, the hedging instruments allowed to manage currency risk should be specified. The available hedging instruments are enormous, both in variety and complexity, and have followed the dramatic increase in the specific hedging needs of the modern firm. These instruments include both OTC and exchange-traded products. Among the most common OTC currency hedging instruments are currency forwards and cross-currency swaps. Currency forwards are defined as buying a currency contract for future delivery at a price set today. Two types of forwards contracts are often used: outright forwards (involving the physical delivery of currencies) and non-deliverable forwards (which are settled on a net cash basis). With forwards, the firm is fully hedged. However, the high cost of forward contracts and the risk of the exchange rate moving in the opposite direction are serious disadvantages. The two most commonly used cross-currency swaps are the cross-currency coupon swap and the cross-currency basis swaps. The cross-currency coupon swap is defined as buying a currency swap and at the same time pay fixed and receives floating interest payments. Its advantage is that it allows firms to manage their foreign exchange rate and interest rate risks, as they wish, but it leaves the firm that buys this instrument vulnerable to both currency and interest rate risk. Cross-currency basis swap is defined as buying a currency swap and at the same time pay floating interest in a currency and receive floating in another currency. This instrument, while assuming the same currency risk as the standard currency swap, has the advantage that it allows a firm to capture prevailing interest rate differentials. However, the major disadvantage is that the primary risk for the firm is interest rate risk rather that currency risk. For exchange-traded currency hedging instruments, the main types are currency options and currency futures. The development of various structures of currency options has been very rapid, and is attributed to their flexible nature. The most common type of option structure is the plain vanilla call, which is defined as buying an upside strike in an exchange rate with no obligation to exercise. Its advantages include its simplicity, lower cost than the forward, and the predicted maximum loss—which is the premium. However, its cost is higher than other sophisticated options structures such as call spreads (buy an at-the-money call and sell a low delta call). Currency futures are exchange-traded contracts specifying a standard volume of a particular currency to be exchanged on a specific settlement date. They are similar to forward contracts in that they allow a firm to fix the price to be paid for a given currency at a future point in time. Yet, their characteristics differ from forward rates, both in terms of the available traded currencies and the typical (quarterly) settlement dates. However, the price of currency futures will normally be similar to the forward rates for a given currency and settlement date. Comparing currency forward and currency futures markets, the size of the contract and the delivery date are tailored to individual needs in the forward market (i.e., determined between a firm and a bank), as opposed to currency futures contracts that are standardized and guaranteed by some organized exchange. While there is no separate clearing-house function for forward markets, all clearing operations for futures markets are handled by an exchange clearing house, with daily mark-to-market settlements. In terms of liquidation, while most forward contracts are settled by actual delivery and only some by offset—at a cost, in contrast, most futures contracts are settled by offset and only very few by delivery. Furthermore, the price of a futures contract changes over time to reflect the market’s anticipation of the future spot rate. If a firm holding a currency futures contract decides before the settlement date that it no longer wants to maintain such a position, it can close out its position by selling an identical futures contract. This, however, cannot be done with forward contracts. Finally, since currency hedging is often costly, a firm may first consider â€Å"natural† hedging, such as (1) matching, which involves pairing suitably a multinational firm’s foreign currency inflows and outflows with respect to amount and timing; (2) netting, which involves the consolidated settlement of receivables, payables and debt among the subsidiaries of a firm; and (3) invoicing in a foreign currency, which reduces transaction risk related primarily to exports and imports. HEDGING PRACTICES BY U.S. FIRMS According to the BIS (see Tables 1-4) and the International Swap and Derivatives Association, the OTC derivatives market has experienced an exponential growth. Even with the recent slowdown due to the special disclosure requirements of FAS 133, derivatives continue to be the main hedging instrument for most firms. However, the increased availability of derivative instruments, coupled with the advent of mark-to-market hedge accounting (FAS 133 and IAS 39), implies a difficult to follow impact of derivatives on firms’ financial statements. Several surveys have shown certain characteristics and practices of U.S. non-financial firms using derivatives. Thus, the larger the size of sales of U.S. non-financial firms, the more likely is to use derivatives in their risk management. Foreign currency derivatives usage is most common, with almost three-fourths of the reporting firms taking positions. The primary goal of exchange risk hedging is the minimization of the variability in cash flow and in accounting earnings, arising from the firms’ operational activities and characteristics. Preoccupation with accounting earnings may be related to their role in analysts’ perceptions and predictions of future earnings and in management compensation. Furthermore, it is interesting to note that U.S. firms do not place high importance in minimizing the variation in the market value of the firm (the present discounted value of the stream of future cash flows) when they use derivatives in risk management. The choice of derivative instruments for foreign exchange management by U.S. firms is concentrated in simple instruments, with OTC currency forwards being by far the most popular instrument (over 50 percent of all foreign exchange derivatives instruments), OTC currency options being the second most preferred hedging instrument (around 20 percent of all foreign exchange derivative instruments) and OTC swaps being the third (around 10percent). Forward-type (volatility elimination) instruments are used to hedge foreign exchange exposures arising from U.S. firms’ contractual commitments (accounts receivable/payable, and repatriations), as recommended by the international financial literature. Option-type instruments, on the other hand, are used to hedge uncertain foreign currency-denominated future cash flows (usually, related to anticipated transactions beyond one year and to cover economic exposures). The tendency of US firms to use OTC currency forwards rather than OTC options or swaps should mainly be attributed to the relatively higher liquidity and depth of forward markets. The use of OTC instruments (forwards/swaps and options) dominates that of exchange traded hedging instruments, with currency futures being preferred by less than 10 percent of U.S. firms and currency options being preferred by a very small percentage of firms. The prevalence of OTC instruments should be attributed to firms’ very specific hedging needs that can primarily be accommodated in the more-flexible OTC market. The majority of U.S. firms with a set frequency for revaluing derivatives do so on a monthly basis, with a quarter of the total firms valuing their derivatives at least weekly and a very small percentage doing so only on an annual basis. Finally, the most common methods to evaluate the riskiness of their foreign exchange positions are stress testing of derivatives and VAR techniques. CONCLUSION Measuring and managing currency risk exposure are important functions in reducing a firm’s vulnerabilities from major exchange rate movements. These vulnerabilities mainly arise from a firm’s involvement in international operations and investments, where exchange rate changes could affect profit margins, through their effect on sources for inputs, markets for outputs and debt, and the value of assets. Prudent management of currency risk has been increasingly mandated by corporate boards, especially after the currency-crisis episodes of the last decade and the consequent heightened international attention on accounting and balance sheet risks. In managing currency risk, multinational firms utilize different hedging strategies depending on the specific type of currency risk. These strategies have become increasingly complicated as they try to address simultaneously transaction, translation and economic risks. As these risks could be detrimental to the profitability and the market valuation of a firm, corporate treasurers, even of smaller-size firms have become increasingly proactive in controlling these risks. Thereby, a greater demand for hedging protection against these risks has emerged and, in response, a greater variety of instruments has been generated by the ingenuity of the financial engineering industry. This paper presents some of the main issues in the measurement and management of exchange rate risks faced by firms, with special attention to the traditional types of exchange rate risk (transaction, translation, and economic), the currently predominant methodology in measuring exchange rate risk (VAR), and the advantages and disadvantages of various exchange rate risk management approaches (tactical vs. strategical, and passive vs. active). It also outlines a set of widely-accepted best practices in currency risk management, and reviews the use of some of the widely-used hedging instruments in the OTC and exchange traded markets. It also reports on the use of various derivatives instruments and hedging practices of U.S. multinationals. Based on the reported U.S. data, it is interesting to note that the larger the size of a firm the more likely it is to use derivative instruments in hedging its exchange rate risk exposure; the primary goal of U.S. firms’ exchange rate risk hedging operations is to minimize the variability in their cash flow and earning accounts (mainly related to payables, receivables and repatriations); and the choice of foreign exchange derivatives instruments is concentrated in OTC currency forwards (over 50 percent of all foreign exchange derivatives used), OTC currency options (around 20 percent) and OTC currency swaps (around 10 percent). From the available exchange-traded foreign exchange hedging instruments, currency futures is preferred by less than 10 percent of U.S. firms and currency options by around 2 percent. Overall, it should be noted that the data on U.S. firms are only representative of the reporting period that they refer to and are indicative of the level of sophistication of U.S. corporate treasurers and the level of development of local derivatives markets. By no means can these stylized facts be generalized for other time periods and countries, especially those with different corporate structures and capital market development. To form a better understanding of global firms’ practices in this area, more empirical studies would need to be undertaken to explore their exchange rate risk measurement and hedging behaviours.