FOOD SERVICE MANAGEMENT MODULE Speech or Presentation

FOOD SERVICE MANAGEMENT MODULE - Speech or Presentation Example Based on figures shown below, what is the current labor cost percentage of gross income? 1. University Hospital served 2012 meals last week. Their patient census had a daily average of 205. 14 FTEs were working a standard 40-hour week in food service. Calculate how many meals were produced for each labor hour. 2. The Food Service Director of a new school facility has to budget for her staff for the upcoming year. She will be expected to provide breakfast and lunch for all the 95 special education children attending the facility five days a week. How many FTEs will she need to hire? The industry average is 3.5 meals/labor hour. You have 8 FTE diet technicians who have the primary duty of providing selective menu service to all patients. This is a 7-day a week function. The diet techs work a 5-day, 40-hour week. How many full-time relief employees do you need to cover this function 7 days a week? 5. Hillside Cafeteria is an independent business operating on the ground floor of a retirement center. The residents of the center are the primary customers of this cafeteria. The owner/ operator employs 10 FTE to run the cafeteria 6 days a week, 2 meals per day. Cash register receipts indicate that 4,800 meals were served during the month (four weeks). Food cost per meal= (beginning inventory-ending inventory)+food purchase/number of meals per month; this is to say that the food cost per meal will be equivalent to food purchase/number of meals per month minus beginning and ending inventory, Mary Smith is the Food Service Director in a private 100-bed long term care facility. It is three (3) days before Christmas. Carl, the head cook, has a severe cold and cough. Due to the facility policy, Carl has used up all his vacation and sick time for the calendar year. One day, Mary received complaints from several of her employees concerned about his spreading of his germs to the staff and residents.

Psychology (personality) Essay Example | Topics and Well Written Essays - 250 words

Psychology (personality) - Essay Example Adler’s strategies can be compared to various points of scripture from the Bible. From the point of both aggression and withdrawal, the section of Genesis in which the Lord expels Adam and Eve from the Garden of Eden is applicable. â€Å"Because thou hast†¦ eaten of the tree, of which I commanded thee, saying Thou shalt not eat of it: cursed is the ground for thy sake; in sorrow shalt thou eat of it all the days of they life† (Holy, 1945). This passage shows both agression and withdrawal, because the Lord is aggressively expelling the couple, and they are being made to withdraw into the world. There tends to be more about punishment in Genesis, showing more aggression. Excuses can also be explained and correlated to scriptures and sections of the Bible, including passages from Job. In terms of applying Adler’s theories to scripture, one can see how the three major safeguarding strategies are put forth as described by Adler in terms of personality, and of cou rse, human beings are still human beings, just as in the Biblical

Models of Crime Prevention: Their application

Models of Crime Prevention: Their application Due to the increasing complexity brought about by modernisation, overpopulation, urbanisation, and globalisation, crime prevention has required a more urgent stance not only from government but also from communities, schools, citizens, families, and non-government institutions. While the prevention of crime has been unanimously agreed upon, the best way to go about it is still under debate. There have been several models of crime prevention which criminologists and law enforcement experts have introduced but until now, there remains no clear best model yet. Some of the major crime prevention programmes are situational or social in nature but so-called hybrid approaches or whole of government approaches have also gained popularity, especially in Australia. In order to develop a clear appreciation for the many-faceted nature of crime prevention as practiced today, it is necessary to define it clearly and analyse the different models used locally and overseas and examine how each model has fared when applied to actual crime prevention programmes. This essay discusses crime prevention, its models, and its application in the real-world setting. Defining Crime Prevention Crime prevention in its simplest definition is the process of deterring crime, criminals, and reducing levels of victimisation. White and Perrone (2005) view crime prevention as the creation and implementation of proactive programmes and strategies which are designed to prevent crime and address the fear of crime (p. 15). A more comprehensive definition is advanced by Van Dijk and De Ward (1991) to treat crime prevention as the total of all private initiatives and state policies, aimed at the reduction of damage caused by acts defined as criminal by the State (p. 415). The common thread of these definitions is the suggestion that crime prevention is not the sole responsibility of law enforcement and police, but rather a collective obligation of different sectors in society in government and in communities. Otherwise stated, crime prevention is a joint effort of various levels of society to work toward strategies that prevent crime occurrence. Rationale Behind Crime Prevention While concepts of crime and justice date back to antiquity, the enormity of concern attributed toward crime prevention emerged circa late 1980s and early 1990s. White and Perrone (2005) enumerated three major reasons why crime prevention has taken an unprecedented turn during this period: economic, operational, and community initiative. Economic. Crime prevention became an important economic concern because crime definitely pays, to use the popular catchphrase in huge amounts of fiscal resources. The cost of crime is increasing, and according to 2008 figures from the Australian Institute of Criminology (AIC), crime consumes almost 4 percent of the countrys GDP which is equivalent to $36 billion (Rollings, 2008). Crime-related expenditures include policing, corrections, the security industry, and the criminal justice system as well as hidden costs such as medical costs, compensation, and loss of productivity of victims. To curb this gargantuan cost, crime reduction is considered a feasible alternative. Operational imperatives of policing. Considering the massive cost of crime, it became incumbent upon police and law enforcement agencies to recruit and enlist the assistance of citizens in an effort to arrest the escalating costs of crime. Policing required the collaboration of the law enforcement structure with citizens in the so-called fight against crime (Martin Perrone, 2005). Demands of the community. As crime rates increased with demographic changes attributed to the sprawl of urbanisation and migration, citizens have learned to recognise that a singular campaign by law enforcement to prevent crime would not do; hence, citizens have assembled themselves into crime prevention groups based in their respective communities to assist in crime prevention. As citizens became more vulnerable to crime, so did their resolve to empower themselves to stop victimisation. While one or a combination of all factors may have contributed to the emergence of crime prevention theory and application in the modern world, another theory is the growing concern for human rights and individual freedoms have led to an influence leaning toward non-punishment forms of crime prevention. Sutton and Cherney (2002) emphasised that crime prevention is reflective of societys desire to handle crime by using processes other than those that are eliminative; instead of punitive action, restorative means are advanced in the campaign for crime deterrence. Models of Crime Prevention Throughout its history, differing models of crime prevention have been used by law enforcement and criminologists around the world to curb crime and reduce victimisation. The major conceptual models of crime prevention include: situation, social, and developmental. Crime prevention has also been classified into primary, secondary, and tertiary forms. Situational crime prevention. The situational theory of crime prevention suggests that the best way to stop criminals is to design physical space and environment in a manner that will make the commission of crime harder and increase the likelihood of apprehending criminals. The idea is to change criminals perceptions of the rewards of crime by making the situation harder and much riskier for them. The situational concept of crime prevention was developed initially in the 1980s by criminologist Ronald Clarke. Clarke (1992) suggested that the most effective way to prevent crime is to implement strategies that create conditions which make it harder for criminals to commit crime. Thus, as an intervention model, situational crime prevention requires the proper identification of routines, factors, and patterns associated with criminal activity. Clarke Cornish (2003) presented five types of techniques which criminology practitioners should consider when using the situational model: 1) incr easing effort required to commit crimes; 2) increasing risks of committing crimes; 3) reducing rewards out of crimes; 4) reducing conditions that provoke crime; and 5) removing excuses for committing crimes (as cited in Homel, 2005, p. 132). Social crime prevention. The theory of social crime prevention aims to prevent offending by changing not the physical environment but the social environment. Social prevention intends to create social conditions that will deter potential or actual offenders from doing crimes. Hence, strategies associated with social crime prevention include empowering communities with resources and programmes that create a diversion from criminal behaviour. As an intervention model, social prevention focuses on youth and children, and programmes liked to this model including employment programmes, skills building activities, leisure programmes, youth drop-in centres, and other activities that increase productive behaviour. Developmental crime prevention. Developmental crime prevention as a theory strives to link childhood development with later delinquency. Researchers that have conducted prevention experiments were able to establish that factors surrounding early childhood are significant precursors to delinquent behaviour. These risks to delinquency include poor parenting, socially disruptive behaviour, and cognitive deficits (Sutton Cherney, 2002). Poor parenting could involve factors such as neglect, conflict in the home, deviant behaviour of parents, and early experience of family disruption (Homel, 2005). Among the developmental intervention strategies used courses related to proper parenting and other school-based measures. Crime Prevention Programmes The theoretical concepts of crime prevention discussed earlier have generated various intervention strategies all aimed to preventing crime. Situational prevention. Situational prevention strategies aim at designing the physical environment in order to make it less desirable and riskier for individuals to commit crime. Advocates of situational prevention strategies are more likely than advocates of other models to claim empirical effectiveness in preventing crime. Situational prevention involves among others, identifying cities that are crime hotspots, the use of surveillance cameras or CCTV cameras, screens, reducing cash-handling among banks to curb robbery, the use of boom gates to reduce car theft, and the use of undergrounds inroads to prevent vandalism and graffiti (OMalley, 1997). One of the strongest critiques against situational prevention is that the approach is inherently biases in favour of the rich and against the poor. Moreover, opponents claim that the opportunity reduction strategy gives only cosmetic remedies and that crime involves economic and cultural aspects associated with capitalism and mass consume rist ideology (OMalley, 1997). Social prevention. In lieu of situational prevention techniques, some criminologists have advocated social prevention instead because of the view that crime as a social problem is deeply ingrained within the economic and cultural structures in society. One of the most prominent social prevention strategies implemented was the Bonnemaison programme of Epinay, France, named after the towns mayor, Monsieur Gilbert Bonnemaison, MP (Cornish, 1995). This programme was implemented in France during a period of turmoil characterised by high levels of unemployment, ethnic rioting, and violence. The French central government collaborated with the local governments to develop diversionary programmes for the youth and made it a national priority. Some of these crime prevention programmes inspired by the Bonnemaison strategy include (Cornish, 1995): education of young people; re-training of those who failed to cope in the education system; better housing; employment; adequate health service; aid to victims of crime; better conditions for immigrants and ethnic minority groups; drug abuse treatment; after school activities for the young; provision of youth, cultural, training and recreation centres in each council area. (p. 188) Another overseas example of successful social prevention strategies include the so-called head start projects pioneered in the United States since the 1960s. These programmes focused on social justice as a crime deterrent by empowering poor and disadvantaged families with educational and other family enrichment programmes (Cornish, 1995). To date, several community-based and community development strategies of crime prevention have been modelled after the social prevention concept. Hybrid or whole of government approaches. Instead of focusing solely on just one crime prevention strategy, several programmes have combined several strategies and developed so-called hybrid programmes or whole of government approaches as it is known in Australia (Homel, 2005). An example of this customised approach toward crime prevention is the Safety Action Projects implemented in Surfers Paradise and Queensland during the middle of the 90s. Other projects that were national in scale include Safer Australia and subsequently, the National Campaign Against Violence and Crime (NCAVAC) geared at the promotion of community-based crime prevention through coordination and operational partnerships with local and central government (Homel, 2005). Conclusion Crime impacts overall quality of life because it influences ones actions, where one lives, how one travels, people one associates with, and others. The major conceptual models of crime prevention are the situational, social, and developmental crime prevention strategies. However, there has been increasing acceptance that crime is more complex in nature so that not one single strategy is effective in deterring crime. The emergence of hybrid approaches toward crime addresses both situational and social factors, and is considered to be more appropriate for the complexity of the 21st century. Supply management: A complex function Supply management: A complex function 1. INTRODUCTION Supply management is a complex function thats critical to business success, responsible for delivering efficient costs, high quality, fast delivery and continuous innovation throughout companies entire supply chains. The strategic contribution of supply management is measured not only in savings made, but also in increased shareholder value (Niezen, Weller Deringer, 2007). Nike and Adidas are two global companies try to improve their competitive advantage through strategically managing and utilizing their supply chain. The purpose of this report is to compare and evaluate the supply chain management practices of Nike Adidas. 2. CORPORATE PROFILE 2.1 Nike Corporate Profile Based in Beaverton, Oregon, and employing approximately 29,000 people worldwide, Nike Inc. is the worlds leading designer and marketer of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities (Comtex, 2002; Nikebiz, 2007a). Nike holds a 32 percent worldwide market share, a $20 billion market cap (Koch, 2004), has 40,000 stock-keeping units of goods (Mongelluzzo, 2002) and sells over 120,000 products in four cycles per year (Koch, 2004). 2.2. Adidas Corporate Profile Adidas is a leading producer of sportswear and sports equipment, offering its products primarily through four brands: Adidas, TaylorMade-Adidas Golf, Maxfli and Reebok (Datamonitor, 2007) The Adidas group and its 150+ subsidiaries are directed from the headquarters in Herzogenaurach, Germany, and employ 26,376 people (Adidas, 2007) The Adidas product line includes more than 20,000 items, with thousands of product variations. To keep up with market demand, the company changes its product range twice a year; more often if new technologies are available and in demand (Webex, 2004). 3. REPORT SCOPE Nike and Adidas are global players across a number of product categories. Supply chain management practices vary as the different products across the portfolios work towards different objectives. Due to the wide scope of product categories, the following report limits itself to analyzing the supply chain management practices of Nike and Adidas within the context of the global footwear market. Key supply chain processes under analysis include; manufacturing flow management supplier relationship management, demand management, order fulfillment customer services and relationship management (Lambert, 2007). 4. MANUFACTURING FLOW MANAGEMENT 4.1 Outsourcing as procurement strategy The international sports shoe industry is typified by the large scale vertical disintegration of functions and high levels of subcontracting activity. Multinationals such as Nike and Adidas no longer manufacture products, relying strongly on outsourcing all production in low-cost overseas labor markets, invariably resulting in the majority being manufactured in Asia. Outsourcing practices allow Nike and Adidas to focus on their core competencies; marketing, design and product innovation, areas in which they can best achieve a competitive advantage (Anderson, 2005). The trade-off to outsourcing to offshore manufacturers is that companies face substantially longer lead-times for delivery typically taking six to eleven weeks to receive products from Asia (Sahling, 2007). Efficiencies gained in terms of reduced wages are countered by the increased difficulty of monitoring the product and the actual working conditions in the factories (Van Dusen, 1998). Also, Nike Adidas production capa bilities are governed by the economic state of emerging markets; as countries prosper, there is a need to find new, low cost opportunities. Conversely, production could also be affected by external factors such as natural disasters or political instability. 4.1.1 Nike Approach Asia provides the majority of Nikes manufacturing and distribution, delivering to more than 80 destinations throughout the world, which now accounts for 65% of U.S. imports (Mongelluzzo, 2002). China now supplies 40% of Nikes U.S. consumption, increasing its reliance on southern Chinese ports (such as the Yantian port) instead of the port of Hong Kong (Field, 2003a). Yantian currently handles about 20% of Nikes volume from China, and approximately 10% is shipped from the port of Qingdao (Field, 2003a). The Yantian port has increased efficiency due to the close proximity to the Nike factory base, and quicker transits to the States (Field, 2003a). Nike places more importance on choosing the right local partners, not just the right ports. Nike doesnt own any of its facilities, and local partners make important logistics decisions (Field, 2003a). To manage relationships, Nike has both a global and regional vendor management team as output volume increases, Nike dont expand the number of suppliers, but increase the volume of business they do with each supplier (Field, 2003a). The Nike production system can be stratified into three classes; developed partners, volume producers and developing sources (Donaghu Barff, 1990). Although Nike has developed different levels of supplier relationships with each class the production network is commonly classified as a virtual enterprise where independent firms work together based on shared values and a common way of doing business to exploit a business opportunity through joint manufacturing (Pfohl Buse, 2000). 4.1.2 Adidas Approach Adidas has also been referred to as a virtual enterprise however, it may be better characterized as a strategic network because its supply chain utilizes three different types of suppliers; The first group have a direct contractual business relationship with Adidas, whilst the second group, subcontractors, are companies that have been subcontracted by their suppliers and do not have a direct business relationship with Adidas; and thee third group includes local sourcing companies, which source and manufacture products for local markets, rather than group-wide distribution (Adidas, 2002). Further, Adidas provides all of their suppliers with detailed technical and design specifications for the production and delivery of products, with strict quality control enforcement and inspections (Pfohl Buse, 2000), rather than adopting co-operation techniques and joint manufacturing ideals. 4.2 Lean Manufacturing Principles Lead Time Reduction According to Gernaat (2006), the fashion (footwear) market characterized by short product life cycle, high variety, high demand volatility, low demand predictability, low volumes and high level of impulse purchase. Therefore short lead times are highly important functions of responsive, reactive and flexible supply chains (Gernaat, 2006). Global sourcing creates longer lead times, and more complex supply chains. Nike and Adidas have instituted lean manufacturing principles to rationalize the supply chain processes and decrease costs. However, lean manufacturing approaches leave the companies more vulnerable to potential stock outs and there is increased reliance upon other supply chain elements running in sync and without interruption. 4.2.1 Nike Approach Nike utilizes several subcontracting arrangements that allow the company: a high degree of flexibility in dynamic and fluid markets a flexible demand-driven production system to shift production between factories and countries; opening plants and signing contracts that potentially only last a year and it to utilize capacity subcontracting methods to meet variable market demands (Donaghu Barff, 1990). Nike is upgrading its supply chain to try to drive the manufacturing cycle for a sneaker down from nine months to six to match its lead time to retailers ordering schedule. Nike aims to manufacture its sneakers to order rather than three months in advance (Donaghu Barff, 1990). Nikes new supply chain, using just-in-time management already active in the US and Europe enables shipment of products to customers faster. Select retailers receive delivery within days rather than months; cutting costs and improving profits by freeing up inventory and increasing sales (Herzog, 2003) 4.2.2 Adidas Approach Prior to 2002, Adidas operations were traditional batch and queue, and stored in warehouses until the order was processed. As part of its overhaul of its supply chain, Adidas sought to significantly reduce footwear lead times by introducing lean manufacturing principles across its supplier network. The time-to-market initiative involved a coordinated, global effort on behalf of Adidas and its consultants which included training suppliers, technology improvements in supply chain planning and a focus on internal design processes (Productivity Press, 2006). Efficient implementation of lean manufacturing principles also removed non-value-adding procedures, improved labeling and special handling to reduce lead time (Datamonitor, 2007). The reduction in lead time also lead to a 33% increase in correct product choice, increased accuracy in ordering and in some cases, resulted in larger orders as customers were less risk averse and displayed increased commitment (Productivity Press, 2006). 4.3 Centralisation 3rd Party Logistics Specialisation 4.3.1 Nike Approach The theme of Nikes sneaker supply chain is centralisation. All product design, factory contracting and delivery is planned and co-coordinated from Beaverton, Oregon (Koch, 2004). Nike runs a single instance of SAP R/3 (a single planning engine), and centralised demand management to work with outsourced suppliers (MSI, 2004). Nike is currently pursuing a total information integration strategy integrating ERP (enterprise resource planning), supply chain planning and CRM software onto a single platform shared by Nike operations in North America, as well as Europe, the Middle East and Africa. Initial results are promising; improved financial visibility, cash flow management, revenue forecasting, and taking advantage of shifting exchange rates through the re-allocation of Nikes cash resources (Koch, 2004). Nikes key supply chain strategy is through achieving up-to-date shipment data that can be used to make the supply chain more efficient, with transit time being the deciding factor over other considerations (Mongelluzzo, 2002). Nike has pared its number of logistics providers from five to two. Nikes two third-party logistics providers specialise in data management APL Logistics handles eastbound shipments to the U.S., Canada and Latin America and Maersk Logistics manages U.S. outbound shipments (Mongelluzzo, 2002). Nike requires transportation vendors to provide: Geographic coverage of U.S., Canada and Latin America Carrier specialisation Multiple ports of entry Multiple consortia Expedited air and courier services Cargo security EDI interface Data and documentation management (Mongeluzzo, 2002). For 60 percent of cargo from Asia, Nike controls the transportation move from Asian factories directly to the distribution centres of its U.S. retailer customers. The company moves the rest through its own U.S. distribution centres, where they are stored until a retailer needs them (Field, 2003b). Although the shipper and its logistics partners manage the supply chain, decisions on how much to ship and when to ship it are made in response to customer needs Demand drives the logistics strategy (Mongelluzzo, 2002). 4.3.2 Adidas Approach Traditionally Adidas has operated in a decentralized manner, with separate operating units independently choosing software that suited their internal preferences and geography (Tibco, 2007). Since 2002, Adidas has begun implementing common processes to help establish a global direction and help regain its competitive advantage. Tibco software was implemented to streamline and automate its business operations, improving flexibility, scalability and visibility across the enterprise helping to reduce product delivery times (Tibco, 2007). Similarly, Adidas inadequate paper-based warehouse and distribution systems were replaced with unique WMS and RF software to halve distribution costs, reduce labour costs and improve accuracy and efficiency through automated cross-checking of all orders (CIPA, 2004). John Hamilton, the Development Manager for Supply Chain Applications noted that We use third-party manufacturing so we are involved with a lot of different partners, from people who manufacture our product, to people who manufacture our raw materials, to the distributors that sell our product throughout the world We had a bit of a lag in our ability to see downstream demand Its hard to see the end customers demand because we are working through a lot of different subsidiaries. (i2, 2004) i2 solutions replaced the home-grown planning system, to ensure that Adidas continued to meet the needs of customers, suppliers, and consumers enabling the company to reduce order confirmation times and to get products to market faster through its ability to improve asset utilization, factory fill rates, and to plan at multiple lead times (ibid). Adidas moved further toward a centralization strategy as it implemented logistics software SAP AFS to facilitate process and system standardization worldwide, providing a solution that supported a consolidated global focus. Adidas chose the software because AFS is specific to the apparel and footwear industry with its emphasis on seasonal fluctuation, proliferation of design variations and product characteristics, multiple distribution channels and customer-service requirements, and outsourced manufacturing (SAP, 2002). Adidas consolidated the distribution system into UPS, a single streamlined network, with automated inventory and fulfillment systems that rapidly scaled its services and add enhancements as required (UPS, 2005) 4.4 Supplier Relationship Management 4.4.1 Nike Approach Athletic footwear producers use similar techniques to promote stability and trust in their relationships with subcontractors; Nike develops and produces all high-end products with exclusive partners, while its volume producers manufacture more standardized footwear that experience larger fluctuations in demand (Donaghu Barff, 1990). Nikes strategies for alliance involve: Seeding Nike expatriate technicians into factories producing Nike footwear to function as a liaison between head office and RD to ensure smooth product development processes and maintain product control. Encouraging partners to participate in joint product development activities, sharing responsibility for the development of new footwear Stabilize production and reducing demand variance with key factories partners by placing monthly orders with partners that exclusively produce Nike products (Donaghu Barff, 1990) Nike are establishing longer-term contracts with key suppliers, operating more as partners (ibid), fostering strategic alliances and creating value-add capabilities within the supply chain. 4.4.2 Adidas Approach Adidas current approach to supplier relationship management is consolidation; in 2001 it reduced the manufacturing base by over 25% with a medium term goal of reducing the suppler base by 40% (Adidas, 2002). The aim is to deepen relationships and therefore reliability, also to increase Adidas influence and bargaining power with suppliers. Adidas focus is on building their suppliers own capacity and internal management systems in health and safety and human resource management, seeking to develop sustainable compliance processes and to drive self-enforcement (Anderson, 2005) 5. DEMAND MANAGEMENT 5.1 Forecasting Order Fulfillment Gernaat (2006) argues that accurate forecasting is highly difficult in the fashion industry, as it is characterized by short PLCs, volatile demand and high variety. Wide product lines are challenged by an increasing individualization of demand, which Nike and Adidas combat by creating an increasing number of variants (Berger Piller, 2003). This makes forecasting and planning for the companies increasingly difficult which has the potential to result in high overstocks, increased supply chain complexity and the need to provide significant markdowns to get rid of surplus stock (ibid). Forecast accuracy can be increased through flexible supply chains with shorter lead times. However Gernaat (2006) also points to the use of Point Of Sale data to adjust forecasts and quick response programs to respond accordingly as a way of combating inaccuracies. Nikes forecasting is largely based on its Futures program, where retailers must order up to 80% of their merchandise inventory 6 months in advance in order to get substantial discounts and guaranteed delivery times (Porter, Harris Yeung, 2002). The futures ordering program allows Nike to minimize the amount of inventory held, purchasing costs, the time necessary to fill customer orders, and the risk of non-delivery (Nikebiz, 2007b). Nike gained a significant competitive advantage in the 90s as retailers were eager to secure discounts and guaranteed delivery times. Nike now faces pressure from customers and rivals because retailers are more reluctant to commit to ordering 6 months in advance as consumers tastes are increasingly fickle and smaller, more agile rivals are willing and able to work within shorter order cycles. Nike also is behind its rivals in direct point-of-sale (POS) integration with retailers; supply chain experts believe that actual store data, rather than software algorithms, are the best predictors of demand, but Nikes SAP system cannot yet accept POS data (Koch, 2004). Adidas recently launched World Class Supply Chain initiative appears to be moving away from a forecast-based supply chain to a demand-driven supply chain. The company has re-engineered its supply chain to customize its business to five differentiated and dynamic business models which target consumer needs (Adidas, 2006). The initiative covers the whole concept-to-shelf process and incorporates marketing, sales and operations functions; Brand Model delivers Adidas brand statement products, supported by comprehensive customer service, marketing, retail and supply chain capabilities (launched 2006) Evergreen Model short lead times and never-out-of-stock capabilities for Adidas most commercial and long life cycle product lines (launched 2006). Quick Response model seizes additional market opportunities with a 3-6 month concept-to-shelf process (launched 2007) Global/Regional model creates regional adaptations of global concepts to reflect consumer needs in regional markets (launched 2007) 2008 model aims to reduce the percentage of products turned around with 18 months lead time to only 25%. (Adidas, 2006) 5.2 Customer Service Relationship Management The success of global supply chains is the value they add to their ultimate customers in terms of the cost/price and the related services they provide (Coyle, Bardi Langley, 2003). IT can play a significant role in facilitating customer service that provides the opportunity to remain competitive, improve differential advantage and finally, gain market share (ibid). Advances in IT allow sharing real-time information between supply chain partners, which facilitates better inventory management which increases customer service and value. Sharing data also strengthens relationships between supplier and customer, as there is a development on trust and reliability. However, it is important to note that increased reliance on IT and software can potentially negatively affect positive customer service outcomes. Nike and Adidas have both been exposed to the negative consequences; Nike lost $100million in revenue due to software bugs in its supply planning software in 2001 (Interestingly this is the i2 solutions supply chain planning software that Adidas has taken on board), and Adidas first attempt at implementing WMS software resulted in massive market share losses in 1996 when the system failed to work and could not process orders (Supply Chain Digest, 2006). 5.2.1 Mass Customisation Pillar et al (2004) see information technology, along with flexible manufacturing practices as facilitators of mass customization and its promise to deliver goods and services that meet individual customer needs with near mass production efficiency. Adidas and Nikes approach to mass customization provides a good example of the trade off between the increased complexity of mass customization and supply chain economies of scale. The mi Adidas concept offers a full range of shoe customization options in regard to fit, functionality and aesthetic design. In contrast, Nikes NikeId program, in line with its highly centralized approach, limits customer integration and feedback by only offering the different colour choices of a shoes components (Piller, Moeslein Stotko, 2004). Relative to Nike, the degree of product, process and information complexity is much higher for Adidas thus incurring increased supply chain costs. However the costs are offset by higher premiums charged up to 50% co mpared to the customized shoes of Nike (between 5% and 10%) (ibid). Adidas develops a learning relationship with consumers through the brand interaction, increasing the revenue from each transaction because as well as the actual product benefits, the simplified purchasing decision process entices repeat purchase, thus creating loyalty (Piller, Moeslein Stotko, 2004) and deepening customer relationships. The mass consumption concept can also help generate better customer service and relationship management, as Adidas gains sticky knowledge about its consumers; valuable market research which could help inform more efficient planning for new products for the mass market segment (ibid). 6. KEY FACTOR ANALYSIS Coyle, Bardi Langley (2003) argue that the key factors of successful supply chain management include inventory, cost, information, and customer service and collaboration relationships. Based on the above inventory management, financial measurement and performance measures, Nikes tightly controlled, centralized supply chain management practices appear to have the advantage over Adidas; in fact, Nike was recognized as being one of the top 25 companies that exhibit superior supply chain capabilities and performance (AMR, 2007). Such performance indicators strongly suggest that Adidas has a continued need to improve operating efficiency, inventory management and also seek to deploy assets in more profitable avenues (Datamonitor, 2007). Adidas relatively poor financial performance (compared to industry leader Nike) was recorded across the 2002-2006 period, during which the company began to implement substantial changes across its supply chain management processes. Adidas has significantly centralized and automated elements of its supply chain, boosting efficiency and effectiveness of the processes by reducing errors and increasing productivity. At the same time it seems better equipped to accommodate consumers individualized demands through the more sophisticated mass customization practices, and increased collaborative relationships. Although Nike has strong collaborative relationships across its supply chain, its highly centralized processes seems less flexible in terms of demand management and customization which could affect its future competitive advantage. References Adidas, What We Do (2007) (http://www.adidas-group.com/en/overview/general_information/default.asp) [Accessed 05/09/07] Adidas, 2002 Annual Report (2002) (http://www.adidas-group.com/en/investor/reports/annually/downloads/as_ar_2002.pdf) [Accessed 05/09/07] Anderson, W (2005) Speech http://autoweb.ccpit.org/edit/UploadFile/20051017112649215.doc. [Accessed 05/09/07] Berger, C. Piller, F. (2003) Customers As Co-Designers, IEE Manufacturing Engineer, Aug/Sept 2003, pp.42-45 CIPA (2004) adidas-Salomon Canada Increasing Efficiency Through Wireless Technology (http://www.cipa.com/award_winners/winners_04/adidas-Salomon.html) [Accessed 05/09/07] Comtex. (2002), SAP AG Nike Achieves Project Milestone with Deployment of SAP, Market News Publishing, 5 June 2002. Datamonitor (2007) Adidas AG Company Profile, Datamonitor Plc, 19 Mar 2007. Donaghu, M. Barff, R. (1990) Nike just did it: International Subcontracting and Flexibility in Athletic Footwear Production, Regional Studies, 24:6, pp. 537-552. Field, A. (2003a), Calling its own shots, Journal of Commerce, Vol. 4, Issue 44. pp. 20-22. Field, A. (2003b), Nike Just Does It, Journal of Commerce, Vol. 4, Issue 44. pp. 20-22. Hansen, F. (2007), A permanent strategy for temporary hires, Workforce Management, Vol. 86, Issue 4. pp. 25-30. Gernaat, M (2006). The Impact of Lead Time On The Fashion Apparel Supply Chain, Msc Thesis, Cranfield University Herzog, B. (2003), Rising With A Swoosh, The Oregonian, 21 September 2003 Holmes, S. (2003), Nike, Business Week, Issue 3859. p. 98. i2, (2004) Case Study Keeping adidas-Salomon One Step Ahead of the Competition, (http://www.i2.com/assets/pdf/CSS_CPG_adidassalomon_css7185.pdf) [Accessed 05/09/07] Koch, C. Nike Rebounds: How (and Why) Nike Recovered from Its Supply Chain Disaster (http://www.cio.com/article/32334/), 2004 [Accessed 05/09/07]. Lambert, D. Supply Chain Management (2007) (http://64.233.179.104/scholar?hl=enlr=q=cache:cCqvumWaqAsJ:fisher.osu.edu/supplements/10/1186/SCM%2520Updated%2520on%252006_08_04.pdf+Lambert+Global+Supply+Chain+Forum+Conceptual+framework+of+SCM+Ohio+State+University) [Accessed 05/09/07]. Mongelluzzo, B. (2002), Nikes logistics hierarchy, JoC Week, Vol. 3, Issue 12. p. 24. Niezen, C., Weller, W. Deringer, H. (2007) Demanding Better Supply Chain Management, Business Strategy Review, Spring 2007, pp.47-49. Nikebiz, Company Overview, (2007a) (http://www.nike.com/nikebiz/nikebiz.jhtml?page=3item=facts), [Accessed 05/09/07]. Nikebiz, 10k Form (2007b) (http://www.nike.com/nikebiz/investors/reporting_sec/ar_07/pdfs/Nike_AR_2007_10K.PDF) [Accessed 05/09/07]. MSI. (2004), MSIs Executive Series Highlights Nike Supply Chain Innovation, PR Newswire (U.S.), 10 March 2004. Pfohl, H. Buse, H. (2000) Inter-organizational logistics systems in flexible production networks, International Journal of Physical Distribution Logistics Management, Vol. 30 No. 5, pp. 388-408. Piller, F., Moeslein, K. Stotko, C. (2004) Does mass customization pay? An economic approach to evaluate customer integration, Production Planning Control, Vol. 15, No. 4, June 2004, pp. 435-444 Porter, J., Harris, M. Yueng G. (2002) Nike (http://www.cs.ucla.edu/~gavin/pub/IntlBusMgmtNike.pdf) [Accessed 05/09/07]. Productivity Press (2006) Lean Supply Chain: Collected Practices And Cases, Productivity Press. Sahling, L. (ed) (2007) Navigating Todays Supply Chain Challenges, Prologis Supply Chain Review, Winter 2007 SAP (2004) SAP Customer Success Story: Adidas-Solomon (http://www.sap.com/solutions/index.epx) [Accessed 05/09/07]. Supply Chain Digest (2006) The 11 Greatest Supply Chain Disasters, Jan 2006. Tibco (2007) Case Study Business integration gets adidas-Salomon in top shape (http://www.tibco.com/resources/customers/successstory_adidas.pdf), [Accessed 05/09/07]. UPS (2005) Case Study adidas Goes for the Gold in Customer Service (www.ups-scs.com/solutions/case_studies/cs_adidas.pdf) [Accessed 05/09/07]. Van Dusen S. (1998) The Manufacturing Practices of the Footwear Industry: Nike vs. the Competition, (http://www.unc.edu/~andrewsr/ints092/vandu.html) [Accessed 05/09/07]. Webex (2004) adidas-Salomon Improves Product Time to Market With WebEx Online Meetings Case Study (http://www.webex.co.uk/uk/overview/webex-customers.html) [Accessed 05/09/07]. Worthen, B. in Ross, A. (2004), Why bad forecasts can be good for business, Manufacturing Engineer, Vol. 83. Issue 3, pp.26-29.

Hopelessness of the Irish in Nineteenth Century England Essay -- Europ

Hopelessness of the Irish in Nineteenth Century England Throughout my research into the subject of the Irish in England's industrial north during the early nineteenth century, one fact became quite clear; contemporary writers' treatment of the Irish was both minimal and negative. I consulted many sources, Friedrich Engels, Leon Faucher, James Kay-Shuttleworth to name but a few and the reoccurring theme as pertaining to the Irish in all these works was mainly consistent; the Irish were a lazy, vulgar people prone to drinking and brawling. It was not until 1841 that Great Britain's government made its first attempt to count the number of Irish migrants in the Census of 1841. Data compiled from the actual census and other parliamentary sources at the time illuminate the fact that in 1841 and in the preceding years of this century, most migrants from Ireland were of the seasonal type. Typically, they would plant their potatoes in their mostly minuscule plots of land in May, travel to Great Britain for the summer months to partake of seasonal harvesting work and return in time for their own harvest. During this same time there were Irish who settled in Great Britain on a more permanent basis but they were outnumbered by their fellow countrymen who were strictly seasonal migrants. This latter group seemed quite successful in finding work in the agricultural districts of the industrial north, those parts of the country surrounding Manchester, Liverpool and the other great towns. After the Irish potato famine of 1822, the in flux of Irish into England grew and a large majority of these were seasonal migrants. These Irish were in great demand in the agricultural districts of England and in Labour Migration in England 1800-1850, Ar... ...ion of the Working Class in England Oxford University Press,1993. Faucher, Leon. Manchester in 1844. Frank Cass and Company Limited,1969. Gaskell, Elizabeth. Mary Barton. Penguin Group 1970,1985. Gaskell, Peter. The Manufacturing Population of England: Its Moral, Social. and Physical Condition and the Changes which have Arisen from the Use of Steam Machinery, with an Examination of Infant Labour. Baldwin & Cradock, 1833. Harris, Ruth-Ann M. The Nearest Place That Wasn't Ireland. Iowa University Press,1994. Jackson, John Archer. The Irish in Britain. Richard Clay and Company,1963. Kay-Shuttleworth, James. The Moral and Physical Condition of the Working Classes Employed in the Cotton Manufacture of Manchester. Frank Cass and Company Limited, 2nd ed. 1970. Redford, Arthur. Labour Migration in England 1800-1850. Manchester,1926 reprint,1964.

Fudged Accounting Theory

Fudged Accounting Theory and Corporate Leverage Audra Ong and Roger Hussey Abstract This paper is a follow-up of the article ‘Fudged Accounting Theory: Evidence from the UK’ in the Journal of Management Research (Ong, 2003). In that article, an analysis of the flexibility within the UK regulations, which allowed companies to use different accounting treatments for intangible assets, was illustrated to support fudged accounting theory (Murphy, 1990).This paper extends that earlier work by examining the association between corporate leverage and accounting choice in the UK at a period when the extant accounting standard for goodwill, SSAP22 Accounting for Goodwill (ASC, 1989), permitted two very different accounting treatments. As a result, other intangibles, particularly brands, could avoid the regulatory strictures. For the present study, a series of hypotheses relating to corporate leverage and capitalization of intangible assets were tested.The results of the present s tudy support fudged accounting theory by providing evidence that there is a relationship between the widespread capitalization of goodwill/brands and the relationship with leverage. The results demonstrate that financial managers will tend to adopt accounting practices that result in stronger balance sheets. Keywords: Leverage, Fudged Accounting, Intangible Assets, Brands/Goodwill, Food/Drink/Media Industries, International AccountingIntroduction The importance of Fudged Accounting Theory in understanding the accounting treatment of intangible assets has been discussed in an earlier paper by Ong (2003) in the Journal of Management Research. The purpose of the present paper is to investigate whether there is statistical evidence that companies capitalize intangible assets for the betterment of their balance sheets in a period of lax accounting regulations or ambiguity in regulations. This has been identified as fudged accounting theory (Murphy, 1990; Tollington, 1999).Audra Ong Roger Hussey University of Windsor, Odette Business School, 401 Sunset Avenue, Windsor, Ontario, N9B 3P4 Canada In this study, the UK was chosen because accounting for goodwill was regulated under SSAP 22 Accounting for Goodwill issued by the Accounting Standards Committee (ASC) in 1984, which was later revised in 1989. This standard allowed contradictory treatments: companies could either write goodwill directly against reserves in the balance sheet thus bypassing the profit and loss account; or capitalize it as an asset on the balance sheet subject to amortization.To add to the confusion, the standard did not apply to other intangible assets and some companies chose to distinguish brands from goodwill and treat them as permanent items on the balance sheet with no amortization (Barwise et al. , 1989; Paterson, 2003). This presented a stronger balance sheet with no impact on the income statement. To conduct the study, the annual reports and accounts for the five-year period 1993-97 for 1 43 companies listed on the London Stock Exchange were analyzed. Using the earlier work of Archer et al. (1995), a series of hypotheses were established and tested.As the sample is relatively small and is non-parametric in nature, the chi-squared test using Yates’ correction was employed to test the hypotheses. After a brief review of the literature, the research design of this study is explained. The main part of the paper, falling under the heading of Results and Discussion, is concerned with testing a number of hypotheses. Previous Research Consideration of intangible assets has been dominated by uncertainty over the appropriate accounting treatment of goodwill (Egginton, 1990). In the UK, the somewhat acrimonious debate is fuelled by strong opinions rather than facts.The depth and range of opinions has been well documented in the academic literature (Damant, 1990; Napier & Power, 1992; McCarthy & Schneider, 1995; Hussey & Ong, 1997, Ong; 2001; Oldroyd, 1998; Joachim Hoegh- Krohn & Knivsfla, 2000; Cravens & Guilding, 2001) as well as in professional reports (Coopers & Lybrand, 1990; Tonkin & Robertson, 1991; Hussey, 1994). The publication of SSAP 22 did little to calm the debate. Under that standard, companies faced the unpalatable alternatives of writing off goodwill against reserves and weakening their balance sheets or amortizing against earnings.Consequently, intangible assets such as brands and publication titles began to appear on the balance sheets of a number of well-known companies. Identification of such items as intangible assets, separate from goodwill meant that they did not fall under the requirements of SSAP 22. The intangible assets could remain on the balance sheet indefinitely, unless there was a permanent impairment in value. This contention that the appearance of brand valuations on the balance sheet had been motivated by the desire to correct or improve the balance sheet has been evident in several studies.Emanating mainly from the debt covenant approach and the early work of Zmijewski and Hagerman (1981), studies have found support for the debt covenant hypothesis (Mather and Peasnell, 1991) and evidence that a company’s decision to Volume 4, Number 3 †¢ December 2004 capitalize brands was influenced by London Stock Exchange rules on acquisitions and disposals (Muller, 1999). There has been some debate on the importance of intangible assets in private debt contracts (Citron, 1992; Day and Taylor, 1995).The study which most closely relates to the present research and shares the same theoretical foundation was published by Archer et al (1995) and was based on work conducted on 71 annual reports of UK and French companies for the period 1988-92. This earlier research concluded that a group with high leverage is more likely to capitalize goodwill and/or brands than a group with low leverage. The results, however, were stronger where goodwill and brands were amalgamated although it is possible that th e differing regulations in the two countries may have distorted the data.Research Design The annual reports and accounts for the five-year period 1993-97 of 143 companies in the food, drink and media industries were obtained. Such period of time is chosen as the debate on the most appropriate accounting treatment for goodwill and intangible assets was at its greatest and accounting practices were the most varied during this period. It also immediately preceded the changes to accounting introduced by FRS 10 Goodwill and Intangible Assets issued by the ASC’s successor, the Accounting Standards Board (ASB, 1997) and FRS 11 Impairment of Fixed Assets and Goodwill (ASB, 1998).Industries for the study have been chosen whose products are highly branded and also where companies in the industries have been strong in acquisitive activities. The company profiles and published financial information of these 143 companies were checked to see which companies capitalized intangible assets f or the entire five-year period 1993-97. The relevant population, which capitalizes intangible assets, is 15 food and drink companies and 28 media companies, resulting in a total of 43 companies.It should be noted that the remaining 100 companies either did not capitalize intangible assets in any one year, or only capitalized intangible 157 assets for part of the five-year period post -1993. Care has been taken above in explaining the sample used in this study because of its relatively small size. Although this may be regarded as a limitation of the subsequent analysis, a non-parametric test is used in the analysis of individual industries and this is generally regarded as defensible and acceptable in such circumstances.Yates’ correction has also been applied to the chi-square tests to achieve conservatism in establishing significance so that the results can be regarded as conservative and less likely to overstate the importance of the findings. Correlation tests are only cond ucted on the aggregate sample of both industries. The leverage ratio was defined as debt expressed as a percentage of capital employed (Reid and Middleton, 1988) because this definition was used in previous studies and it provides a high degree of precision.Results and Discussion Leverage and Capitalization The following two hypotheses were established in respect of the possible association between leverage and brands: H1: A company with high leverage is no more likely to capitalize intangible assets than a company with low leverage. H2: A company with high leverage is no more likely to capitalize goodwill/brands than a company with low leverage. To test these hypotheses the median leverage was established for the aggregation of companies capitalizing intangible assets, and for those companies not capitalizing the same.In some instances the median leverage did not provide a division of the sample to provide a sufficient number in each cell. In those instances a cut-off leverage leve l was selected to ensure cells of sufficient size and this is explained where it occurs. Contingency tables were constructed for the chisquared test and the results are described below. In all instances, Yates’ correction was applied. Media Industry Hypotheses 1 and 2 were tested separately on the Media industry and on the Food and Drink Industry. The results for the media industry for all intangible assets are shown in Table 1.In this test, the median leverage for the media industry was 28%. The chi-square test was significant at the 0. 01 level with a chi-square factor of 6. 86447 and 1 degree of freedom. The null hypothesis can therefore be rejected and we can accept that high-leveraged companies are more likely to place intangible assets on the balance sheet than low-leveraged companies in the media industry. Table 2 carries out the same test for the same industry but analyzes only those companies capitalizing goodwill and/or brands. In this instance the median leverage w as 31% and this was increased to 32% to ensure cells of adequate size.The chi-square test was significant at the 0. 01 level with a chi-square factor of 7. 286 and 1 degree of freedom. The null hypothesis can therefore be rejected and we can accept that high-leveraged companies are more likely to place goodwill/ brands on the balance sheet than low-leveraged companies in the media industry. Table 1: Contingency Table for Media Industry Showing Leverage and Capitalization of all Intangible Assets Capitalizing Leverage < 28% Leverage ? 28% Observed Expected Observed Expected 914. 26 1913. 74 Not capitalizing 1812. 74 712. 6 Total 27 26 158 Journal of Management Research Table 2: Contingency Table for Media Industry Showing Leverage and Capitalization of Goodwill and/or Brands Capitalizing Leverage < 32% Leverage ? 32% Observed Expected Observed Expected 59. 93 149. 07 Not capitalizing 1813. 07 711. 93 Total 23 21 Table 3: Contingency Table for Food and Drink Industry Showing Leverage and Capitalization of all Intangible Assets Capitalizing Leverage < 26% Leverage ? 26% Observed Expected Observed Expected 510. 74 104. 26 Not capitalizing 4842. 26 1116. 74 Total 53 21Table 4: Contingency Table for Food and Drink Industry Showing Leverage and Capitalization of Goodwill and/or Brands Capitalizing Leverage < 18% Leverage ? 18% Observed Expected Observed Expected 59. 80 72. 20 Not capitalizing 5348. 20 610. 80 Total 58 13 Food and Drink Industry The next two tables are concerned with the Food and Drink Industry. The median value for leverage was calculated at 18% for all intangible assets and in the following table an arbitrary cut-off point of 26% has been selected to ensure cells of adequate size and Table 3 shows the result for those companies capitalizing all intangible assets.The chi-square test was significant at the 0. 01 level with a chi-square factor of 11. 292 and 1 degree of freedom. The null hypothesis can therefore be rejected and we can accept that highl y leveraged companies are more likely to place intangible assets on the balance sheet than low-leveraged companies in the food and drink industry. Table 4 shows the results for those companies capitalizing goodwill and/or brands in the food and drink industry. In this instance the median leverage level of 18% was accepted for the calculations. Volume 4, Number 3 †¢ December 2004 The chi-square test was significant at the 0. 1 level with a chi-square factor of 7. 604 and 1 degree of freedom. The null hypothesis can therefore be rejected and we can accept that highly leveraged companies are more likely to place goodwill/ brands on the balance sheet than low-leveraged companies in the food and drink industries. Capitalization as a Function of the Level of Leverage Two further hypotheses had been established based on the premise explored by Archer et al. (1995) that the value of intangible assets was a function of leverage, in other words the higher the leverage ratio the higher th e value of intangible assets.H3: The value of intangible assets will be associated with the level of leverage. H4: The value of goodwill and/or brands will be associated with the level of leverage. 159 These hypotheses have been tested in previous research with somewhat contradictory results. It was considered that this study with its larger sample and separate focus on two industrial sectors might provide more conclusive results. Additionally, it was decided to extend the variables. Earlier studies have concentrated only on the absolute value of intangible assets i. e. the absolute amount appearing in the balance sheet. For the resent study a new variable of relative value was introduced and to test these hypotheses two aspects of the value of intangible assets were considered i. e. : a) its absolute value, i. e. the amount capitalized in the balance sheet (INTASS); b) its relative value, calculated by expressing intangible assets as a percentage of total fixed assets (INTFIX). Bot h Industries Table 5 shows the correlation based on our 43 companies, which capitalize all intangible assets: Table 5: Leverage as a Function of All Intangible Assets (Both industries) Gear Gear 1. 0000 (43) P=. .0179 (43) P= . 909 . 3229 (43) P= . 035 Intass . 0179 (43) P= . 09 1. 0000 (43) P= . .1876 (43) P= . 228 Intfix . 3229 (43) = . 035 . 1876 (43) P= . 228 1. 0000 (43) P= . appears to have stronger explanatory power. It is therefore possible to state that a relationship does exist between the level of leverage and the relative value of intangibles. In addition to looking at the sample of companies capitalizing all intangible assets, the same analysis has been conducted on the sample of 31 companies capitalizing only goodwill and/or brands. The results are shown below in Table 6. Table 6: Leverage as a Function of Goodwill / Brands (Both Industries) Gear Gear 1. 0000 (31) P= . -. 0176 (31) P= . 24 . 3275 (31) P= . 067 Intass -. 0176 (31) P= . 924 1. 0000 (31) P= . .1573 (31) P = . 390 Intfix . 3275 (31) P= . 067 . 1573 (31) P= . 390 1. 0000 (31) P= . Intass Intfix Intass Once again, Table 6 does not demonstrate a significant relationship between leverage and the absolute value of goodwill/brands. However, the association between leverage and the relative value of intangible assets is significant at 6. 7% level. It is therefore possible to state that a relationship does exist between the level of leverage and the relative value of goodwill/brands although it is less strong than that with all intangible assets.The above testing of the four hypotheses provides evidence that there is a relationship between leverage and the capitalization of intangible assets and there are differences between the two industries used in this study. The present research has also extended previous work of Archer et al b y introducing a new variable INTFIX and demonstrating that capitalization of intangible assets is a function of the relative value of intangible assets to fixed a ssets. The evidence from this study therefore provides support for the fudged accounting theory. IntfixTable 5 does not demonstrate a significant relationship between leverage and the absolute value of intangible assets. However, the association between leverage and the relative value of intangibles is significant at 3. 5% level. This would suggest that the measure of relative value 160 Journal of Management Research Implications: The International Dimension Given the debate on the appropriate accounting treatment of intangible assets and the obvious deficiencies of the provisions of SSAP 22, it is not surprising that the national accounting standard body in the UK was compelled to introduce a substantial regulatory change.FRS 10 and FRS 11 have replaced SSAP 22. Essentially, FRS 10 requires goodwill and intangible assets to be recognized and capitalized over 20 years. This presumption can be rebutted, however, and a longer life or an indefinite life can be selected. In these circum stances, an annual impairment review must be conducted as specified under FRS 11. At the international level, goodwill and intangible assets were first addressed by IAS 22 Business Combinations and IAS 38 Intangible Assets by the International Accounting Standards Board (IASB) respectively. IAS 22 was issued in 1993 and revised in 1998.IAS 38 was issued for the first time in 1998. In March 2004, however, the IASB published IFRS 3 Business Combinations (which supersedes IAS 22) together with related amendments to IAS 36 and IAS 38 as part of Phase 1 of the IASB’s project on Business Combinations. IFRS 3 contains some significant differences compared to FRS 10 (Simmonds and SleighJohnson, 2003) as the former proposes that goodwill will only be subject to impairment testing and must not be amortized. In addition, goodwill and other identified intangibles, which are similar in nature, will be subject to different accounting treatments.This reduces comparability and reliability an d creates a serious risk of accounting arbitrage or fudged accounting. The current IASB proposals in IFRS 3 represent only Phase 1 and, thus, the ASB will consider replacing UK standards only when both Phases 1 and II are complete. Therefore, UK companies should not have to change to the IFRS 3 based on Phase 1. Although IFRS 3 differs from FRS 10, the former achieves a high degree of convergence with FAS 141 Business Combinations (FASB, 2001) and FAS 142 Goodwill and Other Intangible Assets (FASB, 2001) in the US.With respect to managers, the introduction of IFRS 3 is expected to have important implications for brand managers and owners as well as the way trademarks are valued and accounted for (Haigh and Rocha, 2004). In particular, the separate recognition of trademarks and other acquired intangibles, together with annual impairment tests, will require companies to establish robust valuation methodologies for intangible assets in order to withstand increased scrutiny in the marke t.Conclusion This study compares practices in accounting for intangible assets in two industries known for their propensity to capitalize those assets in their balance sheets. The study covered the period from 199397 when the debate and uncertainty on appropriate accounting treatment was at its height. The annual reports of 143 UK companies were selected to investigate whether there was an association between leverage and capitalization of intangible assets. The results demonstrate that companies with high leverage in both industries are more likely to capitalize intangible assets, particularly goodwill and brands.A relationship between capitalizations of intangible assets as a function of leverage when the absolute value of intangible assets is used was not established. However, the present study added to our knowledge by demonstrating that the use of the relative value of intangible assets to fixed assets as a variable reveals that capitalization is a function of leverage. The fin dings from this study both confirm and extend the earlier research by Archer et al. It demonstrates that the topic of capitalization of intangible assets remains a fruitful area for the accounting researcher.The present study establishes that there are industry differences and one can speculate that these may be due to a number of factors such as acquisition activity within the industry, marketing strategy in relation to brands and financial structures and motivations. An extension of the work using the variable Volume 4, Number 3 †¢ December 2004 161 INTASS could lead to illumination of the underlying reasons. A study of present practices in the same industries may reveal what changes, if any, have occurred References following the adoption of FRS 10 and FRS 11.For future research, it would also be interesting to see the effects of IFRS 3 and the applicability of fudged accounting. Accounting Standards Board (1997), FRS 10 Goodwill and Intangible Assets, London. Accounting Sta ndards Board (1998), FRS 11 Impairment of Fixed Assets and Goodwill, London. Accounting Standards Committee (1989), SSAP 22 Accounting for Goodwill, London. Archer, S. , Alexander, D. , Collins L. , and Pham, D. (1995), The Treatment of Goodwill and Other Intangibles: Theory, Standards and Practice in France and the UK, Institute of Chartered Accountants England and Wales (ICAEW,) London. Barwise, P. Higson, C. , Likierman, A. and Marsh, P. (1989), Accounting for Brands, ICAEW/London Business School. Citron, D. (1992), Accounting Measurement Rules in UK Bank Loan Contracts, Accounting and Business Research 23(89): 21-30. Coopers and Lybrand (1990), Intangible Assets: A Survey of Businessmen’s Views, London. Cravens, K. and Guilding, C. (2001), Brand Value Accounting: An International Comparison of Perceived Managerial Implications, Journal of International Accounting, Auditing and Taxation 10: 197-221. Damant, D. (1990), Brands, the Balance Sheet and Company Value, Accountanc y, October: 29. Day, J. and Taylor, P. 1995), Evidence on Practices of UK Bankers in Contracting for Medium-Term Debt, Journal of International Banking Law 10 (9): 394-401. Egginton, D. (1990), Towards Some Principles for Intangible Asset Accounting, Accounting and Business Research 20 (79): 193-205. Financial Accounting Standards Board (2001) FAS 141 Business Combinations, Connecticut. Financial Accounting Standards Board (2001) FAS 142 Goodwill and Other Intangible Assets, Connecticut. Haigh, D and Rocha, M. (2004), The Standards Have Landed, Managing Intellectual Property, June 1: 1. Hussey, R. , Undervalued Intangibles (London: Touche Ross, 1994) Hussey, R. nd Ong, A. (1997), Food, Drinks and the Media: Accounting for Goodwill and Intangible Assets, The Journal of Brand Management 4 (4): 239-247. International Accounting Standards Board (2003) IFRS 3 Business Combinations, London. International Accounting Standards Committee (1998), IAS 22 Business Combinations, London. Internat ional Accounting Standards Committee (1998), IAS 38 Intangible Assets, London. Joachim Hoegh-Krohn, N. and Knivsfla, K. (2000), Accounting for Intangible Assets in Scandinavia, the UK, the US and by the IASC: Challenges and a Solution, The International Journal of Accounting 23: 243-265.Mather, P. and Peasnell, K. (1991), An Examination of the Economic Consequences Surrounding Decisions to Capitalize Brands, British Journal of Management 2: 151-164. Muller, K. (1999), An Examination of the Voluntary Recognition of Acquired Brand names in the United Kingdom, Journal of Accounting and Economics 26: 179-191. Murphy, J. (1990), Brand Valuation – Not Just An Accounting Issue, ADMAP (April): 36-41. Napier, C. and Power, M. (1992), Professional Research, Lobbying and Intangibles: A Review Essay, Accounting & Business Research 23(89): 85-95. Oldroyd, D. 1998), Formulating an accounting standard for brands in the ‘market for excuses’, The Journal of Brand Management 5(4): 263-271. 162 Journal of Management Research Ong, A. (2001), Changes in Brand Accounting for UK Companies, Journal of Brand Management 9(2): 116-126. Ong, A. (2003), Fudged Accounting Theory: Evidence from the UK, Journal of Management Research 3(1), April: 23-30 Paterson, R. (2003), Hidden Strengths, Accountancy, June: 98-99. Reid, W. and Myddelton, D. R. (1998), The Meaning of Company Accounts, Gower Publishing, Aldershot, UK. Simmonds, A. and Sleigh-Johnson, N. 2003), Fundamentally impaired, Accountancy, June: 100-101. Tollington, T. (1999), The Brand Accounting Sideshow, The Journal of Product and Brand Management 8(3): 204-218. Tonkin, D. & Robertson, B. (1991), Brands & Other Intangible Fixed Asset in Financial Reporting 1990-91, ICAEW, London: p. 328. Zmijewski, M. and Hagerman, R. (1981), An Income Strategy Approach to the Positive Theory of Accounting Standard Setting/ Choice, Journal of Accounting and Economics 3: 129-149. Volume 4, Number 3 †¢ December 2004 163 Repro duced with permission of the copyright owner. Further reproduction prohibited without permission.

What Happens When There Is a Surplus of Imports Brought Into the US

What happens when there is a surplus of imports into the U S: A surplus of imports is good for consumers but bad for local business. We have to produce and manufacture in order to export. As our export trade shrinks, so does our workforce and economy. The surplus of imported cars for 2012 has exceeded the exportation by $152 billion. Also the shelf life of cars is 1 year. Every year at the end of the cycle the existing models are sold off at huge discounts to make room for the new models, which is good for the consumer. What are the effects of international trade to GDP, domestic markets and university students. International trade comprises exports and imports, the net result of which affects our GDP. Since our imports exceed our exports our GDP would be impacted by our net exports or deficits. The rippling effect of financing deficits is an increase in interest rates from selling bonds that reduces investments and growth. This further reduces GDP. Domestic markets flourish when there is a demand for local products overseas. If the domestic markets have to compete with imported products it could be a struggle. However jobs can be created for the advertising, sales, and distribution of foreign imports. The effect of international trade on university students has recently brought about an awareness of a vibrant industry in the education services. Of the $35billion worldwide market for international students, the U S was able to capture a market share of 45%, showing a healthy surplus of $12. 6Billion in higher education. A foreign exchange rate is the rate at which one currency would be exchanged for another. It is essentially the value of a currency when compared to another and is determined by two fundamental forces of economics, supply and demand. When the supply of a currency exceeds the demand, the value of the currency falls. However when the demand for a currency exceeds the supply the value rises. When the value of a currency is low the exchange rate is low and vice versa. Exchange rates of currencies are influenced and determined as a result of a country’s income, changes in interest rates, price of goods and changes in trade policies. When income is high, imports are high and exchange rate is low. When interest rates are high there is a demand for U S currency to invest in U S assets and exchange rate is high. When the prices of local goods are high there is low demand for the local currency in favor of high demand for foreign goods and foreign currency. This results in a low exchange rate. Trade with a foreign country could be adversely affected by hiking trade restrictions like tariff. This increases the cost of imports and lowers the exchange rate. How do government choices in regards to tariffs and quotas affect international relations and trade Tariffs and quotas are just two of the direct methods used in trade restrictions. There are also indirect methods of trade restrictions like protecting the health and safety of residents seen in the importation of consumables, time consuming inspections on general goods, special codes for packaging. Some of these restrictions are imposed for legitimate reasons but most of them are designed to protect the domestic producers from international competition. The most legitimate form of trade restrictions used are tariffs, which are taxes governments impose on internationally traded goods and quotas, which are quantity limits placed on goods imported. Trade is good for all countries because they all have comparative advantages they try to implement amicably with the use of tariffs and quotas. However these restrictions occasionally are used politically to influence relationships with foreign countries. Why doesn’t the U. S. simply restrict all goods coming in from China? Why can’t the U. S. just minimize the amount of imports coming in from other countries: The first reason why the U. S doesn’t restrict all goods coming in from China is because this action would belie the main purpose of the World Trade Organization (WTO) which is to ensure that trade flows freely between nations. The U. S is the largest importer of Chinese goods. If the U. S stops the importation of Chinese goods, it is unimaginable what they would do with all these unused products. There would be no production or manufacturing of goods. Unemployment would be high, there would be no source of income and the country’s economy would be ruined. As the largest importer of Chinese goods most of the local U. S companies rely on these imports for doing business. They import spare parts, automibles, manufacturing goods, appliances, electronics and building materials just to name a few. If Chinese imports are stopped the economy of both countries would be ruined as well as the world’s economy. In order to minimize the amount of imports coming in from all other countries the U. S government would have to change the regulatory trade restrictions that are resently in place by increasing taxes and quotas. This would not be in the best interest of the U. S economy. We rely heavily on imports. If we do this, the other companies would retaliate. The Smoot-Hawley tariff was tried in 1930 when tariff on imported goods was raised to an average of 60% . As a result, trade wars ensued and the international trade plummeted f rom $60 billion in 1928 to $25billion in 1938. In 2002 President George Bush imposed a 30% tariff on imported steel, the EU countries, Japan, and China retaliated with threats of $335million worth of tariffs on U. S imports (Colander, 2010). No country has all the resources it needs. There might be lots of oil in the desert but there is lack of food, water and trees. Countries have to rely on their neighbors to fulfill their wants and needs. Even though China might want to impose unfair trade practices yet we cannot shut off their imports, because they are our lifeline just as we are theirs. The world satisfies its wants and needs through Trade. Without it lots of countries would not survive. References Colander, D. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw_Hill/Irwin. http://useconomy.about.com/od/tradepolicy/p/Trade_Deficit.htm http://trade.gov/press/publications/newsletters/ita_0909/higher_0909.asp