The concept of peak oil has been devised to reflect scarcity Essay

The concept of peak oil has been devised to reflect scarcity associated with oil supplies. But surely the price of oil would be a more efficient indication of its scarcity - Essay Example In contrast to the peak oil concept, global oil production showed a decline from its peak point at 74 mb/d in 2005; however, after a short decline the figures rebounded, and in 2011 there were higher production of oil than 2005 (US energy information and administration, 2011). Peak oil is ascertained by taking into account extraction rates from each oil well, the predicted oil reserves, and total extraction rate of an oil field comprising of associated oil wells (Berdellà ©, 2011). Here the core contentious issue is that the concept of ‘peak oil,’ which had been devised to reflect oil scarcity, is an ambiguous indicator of scarcity. Instead, some economists content that oil prices prove to be a more efficient indication of the scarcity of oil. Various experts contend that oil scarcity is dependent on the rate of consumption, where constraints placed on supply side are based on product demands. James L. Smith in his research papers, using benchmark scenario, high growth scenario and low growth scenario graphs, proved that peak timing is inconsistent as an indicator of oil scarcity (2011, pp. 8-13). Observations revealed that during 2007-08 economic crisis, despite oil supplies not increasing, there was loosening in the oil scarcity factor, owing to low demand. The equation for supply-demand graph can be plotted effectively through the factor of pricing, hence making oil prices a better indicator for its scarcity. Natural oil does not have any uniform or any standardised quality, and tends to vary significantly, which range from medium quality oil, to oil with high API gravity (high quality) from Saudi Arabian fields, to low API gravity (poor quality) heavy oil from fields in South America and Canada. Despite reports of fall in high quality oil levels, as far as supply of heavy oil is concerned, there is no scarcity, and many oil fields in deep-water areas remain unexplored (Stier, 2008). The Saudi Arabian high API oils are relatively easy to extract and oil

Writer is free to pursue any field of inquiry Research Paper

Writer is free to pursue any field of inquiry - Research Paper Example This is arguably the greatest difference and point that makes the beloved better since unlike the summer’s day the beloved is eternal. Moreover, the final lines of the piece explains how the beloved shall live forever in the words of the poem. Additionally, the couplet cements this by arguing that the beloved shall live eternally as long as men breathe and eyes see. Nevertheless, to clearly understand the sonnet there it is important to focus more on the overriding theme and also the general feeling prevalent in the sonnet. Determination of the overriding theme requires a critical evaluation and analysis of the main emergent idea in the sonnet. Theme are important since they give a clearer and better understanding of the main argument in a poem. For this particular sonnet, the overriding theme can be considered to be love. This is because the greatest part of the sonnet mainly focuses on praises directed towards the beloved. Unlike the summer’s day that seems to lack in so many respects such as too short, too hot, and too rough among others, the beloved carries all the desirable aspects of a perfect summer day. For example, the second line states â€Å"Thou art more lovely and more temperate†. Inclusion of such praise towards the beloved shows the speaker’s view and in totality love is the most prevalent theme in the sonnet. Incorporation of emotions in poetry is considered to be of great importance. This is because presence of emotions in a poem creates a platform for readers to interact with the main idea of the poem. Since most poems are written in a seemingly hidden meaning technique, there is need to incorporate an aspect that can act as an intermediary between the persona and the reader hence enhancing understandability. Shakespeare has managed to invoke readers’ emotions through the comparison tactic. There is a general feeling of tenderness as the reader goes through

Synergies of Product Diversification Strategy

Synergies of Product Diversification Strategy Introduction Nowadays large firms have to survive in the face of economic competition. They have to keep an eye on the competitors performance. Managers try to progress and run their businesses well in order to grow and be competitive. When a large firm has reached a mature life-cycle stage it often has to explore the possibility of how to still grow. Ansoff (cited by Johnson, Scholes and Whittington, 1998) presents four basic growth alternatives: a) increased market penetration, b) market development, c) product development and d) diversification. Choosing the right path is major decision for managers. Finding out if there are reasons which may lead a large firm to prefer diversification, more specific, product diversification as the growth alternative strategy instead of other strategies is a main question. Firms who spread their activities and businesses across different product markets that are more or less related between each other are said to follow a product diversification strategy. (Pils, 2009, p.10) Product diversification strategy definition has evolved during the last decades. Some definitions are evolutional and complementary but some others contradict each other (Goold and Luchs, 1993). Therefore, it is important for managers to have a clear definition. The benefits of product diversification have been divided into two categories depending on the type of diversification: related or unrelated. Related product diversification refers to entries into new products or service businesses that have a connection to the firms existing markets (Peng, 2008). Researches (Hoskisson, 2007) and business experiences (such as Mondi AG, Procter Gamble, CHR plc., etc.) have proven that some of the benefits of this type of diversification are: Operational synergy: economies of scale Utilizing excess productive capacity Reinvesting earnings Unrelated product diversification refers to the development of products or services beyond the current capabilities and value network (Johnson et al. 2008). Some of the benefits and reasons for this type of diversification are: Financial synergy: economies of scope Increasing market power Spreading risk across a range of businesses The challenge for any large firm, once product diversification is chosen as the growth path, is to decide which type of diversification is most appropriate and what strategic plan to follow. Product diversification gives also other challenges to managers such as the need of new skills to manage a wider group of businesses, new techniques, sometimes new facilities, large capital to test the viability of the new product, produce it and market the product, hire and train new employees, etc. Therefore, diversification has some inconveniences as it involves taking a step into a territory where the parameters are unknown to the firm (Peng, 2008). Product diversification can be achieved by acquiring an existing firm in the business it wants to enter, starting up a new business subsidiary or entering into joint ventures. For large firms knowing the different growth strategies including its benefits and inconveniences is fundamental to giving managers practical recommendations. For a better understanding of these fundamental issues this research will analyze whether related or unrelated product diversification strategy leads large firms to exploit more synergies and creates more value for the firm. Based on this research question, the following sub-questions are going to be addressed in this research: Should large firms, such as Mondi AG, aim to focus on related or unrelated businesses to exploit operational synergies? How is Mondis life cycle related to the right time of diversifying? Which recommendations on product diversification strategy can be given to large firms regarding financial synergy? To answer the above questions, I will present a detailed and methodical literature review on product diversification strategy concept, categories, synergies, its relation with large firms life cycle and explore the effects of a financial crisis on large firms who have chosen this type of diversification to identify the appropriate strategy for the research goal. This research is based on the hypothesis that related product diversification is the right strategy to be chosen if operational synergies are to be achieved while for financial synergies, unrelated product diversification strategies are more appropriate. The strength of this hypothesis is tested through a case study of a large firm: The Mondi Group. The Mondi Group has been chosen as the large firm to be explored in this research because it is an international firm with one of its largest teams and headquarters in Austria. Trend, an Austrian financial magazine, ranked Mondi as the 13th top Austrian large firm out of 500 firms in 2008 having 5.159,00 Mio. Euro net sales and 26.425 employees worldwide. Product Diversification In the 20th century many researchers have written about product diversification strategy (PDS). This research will analyse how PDS is seen by managers because of the larger experience there is nowadays. Diversification has been specially growing after the whole post-war period. Whereas in 1950 only around one third of large firms in France, Germany, and the United Kingdom were diversified, by the 1990s it increased to two thirds or more (Whittington and Mayer 2003). Size and Product diversification strategy This research is focused on how large firms have reacted to the different paths of growth. The firm size: small, medium or large is an important parameter while analysing a firm strategy. In the financial and economical studies and researches the relation between size and firm variables remains a controversial subject. Some argue that size is the primary factor that determines structure whether others say that size is irrelevant (Jackson and Morgan, 1978). In my opinion, it is true that product diversification can be applied both by small and large firms, but I believe that a small firm has more limitations and can not fully develop this strategy in its organization due to limited resources: human, financial and technological. I also believe that as a consequence a firm applying product diversification strategy will increase its size. With larger number of products, the complexity of processes and production is greater. Therefore the craft needed is greater. As mentioned before, some researchers agree with this point of view like the study realized by Dewar and Hage (n.d., cited by Jackson and Morgan, 1978) which suggests that large firms facilitate changes in structure in a way that small firms can not afford. On the other hand, Woodward, Zwerman and Harvey (n.d., cited by Jackson and Morgan, 1978) concluded that instead of size, the production systems used by the firms are more connected and explain better the firm structure and feature. In other words, an efficient production system can explain the success of one large or small firm and therefore the relationship between size and differentiation is not linear. Diversification and Product Diversification Strategy Terminology Diversification The root of the word is, obviously, diverse. Pitts and Hopkins (1982) define it as literally meaning different, unlike, distinct, and separate (p.620). Therefore, if this definition is applied to the context of product diversification, we can say that it means firms having their products in various and different lines. Pils (2009) also confirms this definition as he points out that product diversified firms are understood to be active in multiple, distinct product-markets (p.10). The various definitions, forms and ways of managing diversification are the main topics of this research. Product diversification strategy There is a common denominator in the way product diversification is defined in the literature. For instance, Pils (2009) defines it as firms spreading their activities and products across different product-markets that are more or less related between each other. He also affirms that product diversification strategy determines which businesses a corporation should be in, defining the scope of the firms activities and being of high relevance for creating value for the firm. Berry (1971, p.380) defines product diversification as an increase in the number of industries in which firms are active. However, he does not point out that it can be also increasing the number of products in the current industry. Pitts and Hopkins (1982, p.620) consider firms product diversification if operating multiple different businesses at the same time. Hoskisson (2007), on the other hand, says that the firms level of diversification is a function of decisions about the number and type of businesses in whic h it will compete as well as how it will manage the business. These definitions have surely been influenced by the work of Ansoff (1957) in which he presented diversification as a possible growth strategy as mentioned in the introduction. Ansoff presented two ways of diversification: market diversification and product diversification. Although this research only focuses on the product diversification side, few lines are dedicated to explain the difference and characteristics of these two strategies. Market diversification is a strategy that takes the firm from its existing market to new ones. It exploits the current products and capabilities in new markets looking for geographical spread. This strategy is more and more used in the current times where globalization is facilitating the firms internationalisation. It also presents some challenges like cultural barriers, adding management costs and government restrictions among others. Product diversification is about adding new product to the firms portfolio whereas market diversification is about entering in new markets offering the firms current products. Reasons and Challenges Reasons and Motivations for Diversification: Any firm has a start. Normally starting as a small business it focuses on a single product. This is known as a single business strategy. The natural reasons are commonly due to a lack of cash, experience and know-how. Over time, the resources, capabilities and core competences are rooted and stabilized. At that point, firms may choose product diversified strategy, with two broad categories (related or unrelated). Large firms use product diversification strategy for a variety of reasons. Pearce and Robinson, (2005) and Hoskisson ( 2007) mention among others, the following reasons: To increase the growth rate of the firm For a better use of the companies funds than investing them into internal growth To balance the product line Diversifying the product line when the firm has reached its mature life cycle To increase efficiency and profitability, especially, if there is operational or financial synergy To increase the firms value by improving its overall performance To increase revenues or reduce costs To match and neutralize competitors market power To reduce managerial risk To increase the firms size and thus managerial compensation Product diversification challenges The above mentioned reasons and motivations for PDS can also bring along challenges and costs. One could say that PDS needs new facilities, technologies, skills, know-how, employee and managerial training, etc. It is important to know that it can have a great negative impact on the firms current products if a new product is launched with the firms brand name and the product is not well accepted in the market. The reasons for the market rejection can be e.g. lower quality than expected from the firm, high price, poor distribution, etc. At that point, the whole company will be negatively affected by a bad move. This argument is also supported by various authors such as Hoskisson, (2007); Grant, Jammine, and Thomas (1998); Goold and Luchs (1993), (cited by Pils, 2009). They state that some of the challenges are information processing, coordination, and control problems due to increase of information asymmetries difficult for a single business to deal with. In case of applying a PDS a fi rm has to change its structure and adopt new systems. Moreover Hoskisson (2007) elaborates that the data and information a firm using PDS requires is substantially greater. Furthermore increasing portfolio diversity may involve inefficiencies due to growing conflict on top management and a lack of adaptability to environmental change. Product Diversification Strategy Categories: Related Unrelated Product Diversification Strategy As mentioned before, there are two broad categories of PDS: Related and Unrelated. Some authors such as Richard Rumel (cited by Lovallo and Mendoca, 2007), Peng (2008) also categorize PDS as: focused, moderately and highly diversified. These three categories are not deeply explored in this research. But to dedicate some words, it should be mentioned that Richard Rumelt, in 1972, was the first person to statistically prove the linkage between corporate strategy and profitability. He concluded that moderately diversified firms outperform more diversified ones. Lovallo and Mendoca (2007) sustain that this finding has been valid more than 30 years of research. Moreover, a contemporary author, Peng (2008), also points out that some moderate level of diversification is the most optimal. The main focus of this research is whether a related or unrelated strategy is more suitable for large firms while diversifying. Therefore, in the following lines a definition and a detailed explanation of both is presented. Related product diversification can be defined as a strategy that firms can choose as a growing path. As the word related signals, this diversification strategy is focused on products that have a correlation between each other and are related in some way, especially in their core competences. Normally, firms that choose related product diversification as a strategy are sharing a common factor such as the raw material, the technology or the know-how needed to produce different products. Moreover, the products offered by the firm do not necessarily need to be similar. For instance, a firm running a cinema complex and also offering soft-drinks to be sold at the movie theatres is using a related PDS. Even if their products may not be related, they must share some common ground on their value or supply chain. In this case, the customers targeted are the same. Pearce and Robinson,(2005) confirm this by defining related businesses as those relying on same or similar capabilities in order to have success and achieve competitive advantage in their product markets. Major advantages of related PDS are: concentration of strength, exploitation of a market niche, and the development of synergies. A good example, of a firm applying this strategy is CRH, an Irish company who operates in 35 countries with more than 93.500 employees. The CRH Corporate Social Responsibility Report (2007) states that the firm is a diversified building materials group which manufactures and distributes building material products from the fundamentals of heavy materials and elements to construct the frame, through value added products that complete the building envelope, to distribution channels which service construction fit-out and renewal. CRH has three closely related core businesses: primary materials (aggregates, cement, asphalt and ready mixed concrete); value-added building products (pre-cast, architectural, construction accessories, clay, gas, insulation, building envelope products); and specialist building materials (CRH, 2009). CRH initially decided to diversify to gain economies of scope and also to stretch the corporate parenting capabilities. While CRH diversified its market its power i ncreased and consequently it could afford to cross-subsidise one business from the surpluses earned by another, in a way that competitors could not. As an effect, it could drive out competitors. Before going into further details regarding related PDS, a definition of Unrelated Product Diversification is given. In this case, as the word unrelated points out this diversification strategy focuses on firms offering products that have no relation, are not complementary between each other and do not have necessarily the same raw material as their prime and main composition. Moreover, they do not need to share any part of their supply chain (customers, distributor, manufacturer, logistics, etc). For instance, the Easy Group Company is present in several industries and services that have actually no relation. Some of them are: travel companies, car rentals, internet-cafes, cinemas, cosmetics, etc. Stelio Haji-Ionannou, the founder of the company has developed a cost strategy that pretends to apply in all its businesses. It seems that he believes that his formula is valid for any business. Normally the reason why firms choose this path is known to reduce their financial risks. Peng (2008) refers to unrelated PDS as firms entering into industries new lines that have no evident connections to the present firm line of businesses. Furthermore, Hoskisson (2007) says that unrelated PDS occurs when there are no overlapping capabilities other than financial resources. This strategy is also known in the financial literature as conglomerates (Hoskisson, 2007; Peng, 2008; Pearce and Robinson, 2005) It has been widely discussed whether related is more successful or unrelated. To be able to answer this fundamental question the following pros and cons are explored: Human resources: Related product diversification is characterized by the ease of human resources relocation because the skills and capabilities needed for the introduction of the new products are very similar. On the other hand, unrelated PDS requires recruiting new personnel or training current employees in the new fields. (Tallman, 2003) Technologies Obviously, if a firm chooses unrelated PDS, it will probably not be able to share technologies. Therefore, the investment needed to apply this kind of diversification is greater than by applying a related one. Related PDS is characterised by sharing technologies needed to produce the new products. For example, a firm which produces shampoo and introduces hair conditioner may use the same technology. In that way it reduces the investment costs for the new production and gain economies of scope (also see 2.5). Tallman (2003) confirms that related products can increase the use of existing fixed investments and existing capacity for more purposes and more intensively, gaining efficiencies that reduce costs. Additionally, he says that it can improve the efficiency of its existing resource infrastructure by increasing the flow of product to a wider range of customers. Management For managers it is easier to introduce related products than unrelated ones because they are familiar to the industry and can apply the same or similar strategies. For unrelated ones, managers have to learn about the new products and often the strategy used for the current products is not applicable for the new ones. Therefore, managers should experience new strategies which at the beginning may fail. Prahalad and Hamel (1990), said that it is likely that firm managers of unrelated products may be ineffective because the routines and capabilities they have already developed are not applicable one to one to the entire range of businesses. On the other hand it could be argued that it can be effective as top management can concentrate on financial management and costs controls while leaving operational control with each business unit. Competitors It is easier for competitors to imitate the financial economies of a firm than the operational synergies derived from a related PDS. This is due to the fact that operational synergies derived from the use of current know-how, facilities, capabilities and experiences are more difficult to imitate than realizing that a firm is diversifying into new unrelated products based on the percentage of the revenue it can gain. Therefore, it is less likely that competitors will imitate a firm which introduces new related products. Peng and Delios, (2006), and Khanna and Palepu, (2005), (cited by Hoskisson, 2007) sustain that competitors find it easier to imitate financial economies than replicating the value gained by related PDS from the economies of scope developed through operational relatedness. Control Mechanism The principle control mechanism for related diversification is strategic control with rich communication between corporate and business units managers. Financial results are obviously not a fair means to measure the functioning of each business unit. One business unit may have low revenues but its main function is to support the others. For unrelated products, the best way to control is exactly the opposite. The emphasis has to be on financial control (return and investment) to evaluate the units performance. (Peng, 2008) Market saturation When the product a firm is offering is close to a market saturation or obsolescence, the best thing a firm can do is to enter into another market offering unrelated products. In that way the company has an opportunity to grow. It would be a great mistake in a saturated market to introduce related products because the competition is already very high and to get a profitable market share is unlikely. Stabilize Earnings Another reason would be to stabilize the earnings and dividends of a firm in a cyclical industry. In that case, the firm should diversify into an industry with complementary cycles independent of the relation with the current products. Independency Firms that are uncomfortable to be dependent on one product line should diversify into other businesses or industries. In that way the risk is spread and all the weight is not in one product line. All in all the benefits of both categories of diversification do not appear as the result of a magic formula that just happens but as Tallman (2003) and Peng (2008) also sustain it is the result of an active management of resources and capabilities with potential for broader application. Product diversification synergies need to be explored in more detail. Therefore the following section is dedicated. Product Diversification Synergies Pils (2009) explains that the word synergy is derived from the Greek word synergos and literally means working together. In business terminology, synergy is used to describe the ability of two or more business units or firms to make greater value working together than they would do independently (Goold and Campbell, 1998, p.133). Diversifying a large firm is considered economically positive only if synergetic effects between the different businesses units are achieved. As a consequence, the idea of maximizing synergies as the main objective of diversification strategy is presented below. Operational Synergies The emphasis of product related diversification is on operational synergies because in this strategy production resources are shared to have a cost competitive advantage. In the financial literature, the term operational synergy has been used as a synonym for economies of scope (Tanriverdi and Vendkatraman, 2005). Economies of scope and/or operational synergies are the result of two or more business units that share and transfer factors of production, its resources and capabilities. As a consequence the shared production costs will be lower than production costs of each one separately. Peng (2008) defines it as competitiveness increase beyond what can be achieved by engaging in two product markets separately. In other words, firms benefit from lowering unit costs by gaining advantage from product relatedness, i.e. 2+2=5. Some sources of operational synergy are (Peng, 2008): Technologies, such as common platforms Marketing, such as common brands, and Manufacturing, such as common logistics Conscious of these possible synergies, Zodiac a French large firm who in 1930 was focused on inflatable boats and had strong ties to the French army started to introduce new related products to its portfolio. Zodiac created 5 different divisions having inflatable materials as a common denominator. These divisions have been: marine division (recreation, military, professional, safety of life at sea, environmental solutions); pool division (pool sector and pool care and water cleaning, heating, pumps, filters); airline equipment division (passenger seats and on-board toilets and sanitation systems); aerosafety systems division (aircraft escape slides, parachute systems, helicopter floats, and flexible fuel tanks); technology division and aircraft system division. (Zodiac Aerospace, 2009) Zodiac has benefited from the operational synergies through the use of inflatable products technology and has also used market synergies because it has supplied the same customers with different produc ts. Conversely, unrelated diversification does not need to have advanced levels of operational relatedness. Rather, each business unit has its own strategic and operational responsibility and the management can focus on the financial synergies. (Tallman, 2003) Investment synergies are very much related to the operational synergies. It can be argued that one is the consequence of the other or that they are developed hand in hand. Investment synergies are the result of products sharing the same plant, resource and development (RD) and machinery. This is more probable to happen with a related product diversification because of the previous explanations. For unrelated products, the machinery is improbable the same and each product need its own RD. Financial Synergies The means obtaining financial synergy is different from obtaining operational synergies. The key role of firms is to identify and find profitable investment opportunities. The parameter to measure if financial synergies are to be achieved is whether managers can exceed the job of identifying and taking advantage of profitable opportunities compared to external capital markets (Peng, 2008). Hoskisson (2007) defines financial synergies as cost savings realized through a better use of financial assets based on investments inside or outside the firm. Competent internal capital distribution can lead to financial synergies and reduces risk between the firms businesses (Higgings and Schall, 1975). A firm using unrelated PDS may grow, but only internally in each business unit and will not reach operational efficiencies but financial ones. That means, the revenue of each business unit will be greater when functioning as a conglomerate rather than functioning independently. This idea is supported by Peng (2008) who states that competitiveness increases for each unit financially further than what can be achieved by each unit competing independently as an individual firm. Many different products that are not necessarily related offer opportunities of high returns. If a firm is only interested in the returns, unrelated product diversification may be a right path of growth. Sales synergies: These occur from sharing salespeople, warehouses, distribution channels, and advertising. Salespeople have more chances to be able to sell to the same customer a wide range of related products than unrelated ones. Salespeople will try to sell a complete pack of product to the same customer and in that way take advantage of the sales synergies that related product diversification presents. Imagine a company selling sport shoes and refrigerators, in a selling process it is more unlikely to be able to sell both products to the same customer than if he would offer sport shoes and sport clothes. On the other hand, if a firm has developed a well-known brand, the use of the brand-name in other products, related or unrelated, can increase and facilitate sales because it can have build before customer loyalty to the brand. For example, Mars chocolate confectionery successful launched ice-creams. Much of it success could be related to the brand name. So, sales synergies do not occur only withi n related products but also within unrelated ones if the brand name is positively perceived and recognized by the customers. Management synergies It arises from managers accumulating experiences from handling problems in one business unit that can be applied and used to solve problems in a related business unit. Even more, the accumulated experience and know-how allows answering faster to the industry trends and challenges. Managers are able to transfer their skills, experiences and strategies (Enz, 2009, p.222). Contrarily, unrelated product managers can not apply the experience gained from solving the problems of one unit to the other in most cases because the problems are specific for each product. All these synergies can be undermine due to additional layers of management, delays due to organization and information complexity, communication costs for coordination, imaginary synergies that in fact do not exist, incompatible production processes, etc. Therefore while choosing between related and unrelated PDS the mentioned synergy risks have to be taken into account. Research Methodology In this section an explanation of how the data for the case study was collected and how it was analyzed is presented. It is important to know how the data was collected because the method chosen affects the final findings. The information and content of The Mondi Group Case Study was obtained through an expert interview with Mr. Wolfgang Kropiunik, Mondis Marketing Manager of Uncoated Fine Paper. A questionnaire was sent as a guide and overview of the face-to-face interview questions. A meeting for a 40 minutes exploratory semi-structured interview was organized on the 24th of November 2009 at Mondi Headquarter, Vienna. Mondi Group was chosen as the large firm to be analyzed as it is a large firm with more than 33.000 employees worldwide and has its headquarter in Vienna (Mondi, 2009). Therefore the results presented in this research are very much related to Mondis functioning and successful method. It might be possible that if the studied firm had been another one, the results of the research question could have been different. The interview was recorded and the data obtained was transcribed (see appendix). The transcription of the interview allowed a deeper comprehension of Mondis product diversification strategy, synergies and challenges. Moreover, the recommendations presented to the company (see 4.7) are inspired from the challenges Mr. Kropiunik mentioned during the interview. The interview gave a number of information about Mondis life cycle, PDS and challenges especially during the current financial crisis The Mondi Group Case Study Mondi is a large and international packaging and paper firm represented in around 35 countries. In 2008, it had revenues of 6.3 billion EUR and about 33.400 employees (Mondi, 2009). It has a strong presence in Western Europe, Russia and South Africa. Mondis Europe and International Division has its headquarter in Vienna while the corporate headquarter is located in Johannesburg. In Vienna, there are three businesses: Uncoated Fine Paper, Corrugated and Bags Specialties. Mondi has reached to be fully integrated having the control of its supply chain. It grows trees, manufactures pulp and paper and converts packaging paper into corrugated packaging an Synergies of Product Diversification Strategy Synergies of Product Diversification Strategy Introduction Nowadays large firms have to survive in the face of economic competition. They have to keep an eye on the competitors performance. Managers try to progress and run their businesses well in order to grow and be competitive. When a large firm has reached a mature life-cycle stage it often has to explore the possibility of how to still grow. Ansoff (cited by Johnson, Scholes and Whittington, 1998) presents four basic growth alternatives: a) increased market penetration, b) market development, c) product development and d) diversification. Choosing the right path is major decision for managers. Finding out if there are reasons which may lead a large firm to prefer diversification, more specific, product diversification as the growth alternative strategy instead of other strategies is a main question. Firms who spread their activities and businesses across different product markets that are more or less related between each other are said to follow a product diversification strategy. (Pils, 2009, p.10) Product diversification strategy definition has evolved during the last decades. Some definitions are evolutional and complementary but some others contradict each other (Goold and Luchs, 1993). Therefore, it is important for managers to have a clear definition. The benefits of product diversification have been divided into two categories depending on the type of diversification: related or unrelated. Related product diversification refers to entries into new products or service businesses that have a connection to the firms existing markets (Peng, 2008). Researches (Hoskisson, 2007) and business experiences (such as Mondi AG, Procter Gamble, CHR plc., etc.) have proven that some of the benefits of this type of diversification are: Operational synergy: economies of scale Utilizing excess productive capacity Reinvesting earnings Unrelated product diversification refers to the development of products or services beyond the current capabilities and value network (Johnson et al. 2008). Some of the benefits and reasons for this type of diversification are: Financial synergy: economies of scope Increasing market power Spreading risk across a range of businesses The challenge for any large firm, once product diversification is chosen as the growth path, is to decide which type of diversification is most appropriate and what strategic plan to follow. Product diversification gives also other challenges to managers such as the need of new skills to manage a wider group of businesses, new techniques, sometimes new facilities, large capital to test the viability of the new product, produce it and market the product, hire and train new employees, etc. Therefore, diversification has some inconveniences as it involves taking a step into a territory where the parameters are unknown to the firm (Peng, 2008). Product diversification can be achieved by acquiring an existing firm in the business it wants to enter, starting up a new business subsidiary or entering into joint ventures. For large firms knowing the different growth strategies including its benefits and inconveniences is fundamental to giving managers practical recommendations. For a better understanding of these fundamental issues this research will analyze whether related or unrelated product diversification strategy leads large firms to exploit more synergies and creates more value for the firm. Based on this research question, the following sub-questions are going to be addressed in this research: Should large firms, such as Mondi AG, aim to focus on related or unrelated businesses to exploit operational synergies? How is Mondis life cycle related to the right time of diversifying? Which recommendations on product diversification strategy can be given to large firms regarding financial synergy? To answer the above questions, I will present a detailed and methodical literature review on product diversification strategy concept, categories, synergies, its relation with large firms life cycle and explore the effects of a financial crisis on large firms who have chosen this type of diversification to identify the appropriate strategy for the research goal. This research is based on the hypothesis that related product diversification is the right strategy to be chosen if operational synergies are to be achieved while for financial synergies, unrelated product diversification strategies are more appropriate. The strength of this hypothesis is tested through a case study of a large firm: The Mondi Group. The Mondi Group has been chosen as the large firm to be explored in this research because it is an international firm with one of its largest teams and headquarters in Austria. Trend, an Austrian financial magazine, ranked Mondi as the 13th top Austrian large firm out of 500 firms in 2008 having 5.159,00 Mio. Euro net sales and 26.425 employees worldwide. Product Diversification In the 20th century many researchers have written about product diversification strategy (PDS). This research will analyse how PDS is seen by managers because of the larger experience there is nowadays. Diversification has been specially growing after the whole post-war period. Whereas in 1950 only around one third of large firms in France, Germany, and the United Kingdom were diversified, by the 1990s it increased to two thirds or more (Whittington and Mayer 2003). Size and Product diversification strategy This research is focused on how large firms have reacted to the different paths of growth. The firm size: small, medium or large is an important parameter while analysing a firm strategy. In the financial and economical studies and researches the relation between size and firm variables remains a controversial subject. Some argue that size is the primary factor that determines structure whether others say that size is irrelevant (Jackson and Morgan, 1978). In my opinion, it is true that product diversification can be applied both by small and large firms, but I believe that a small firm has more limitations and can not fully develop this strategy in its organization due to limited resources: human, financial and technological. I also believe that as a consequence a firm applying product diversification strategy will increase its size. With larger number of products, the complexity of processes and production is greater. Therefore the craft needed is greater. As mentioned before, some researchers agree with this point of view like the study realized by Dewar and Hage (n.d., cited by Jackson and Morgan, 1978) which suggests that large firms facilitate changes in structure in a way that small firms can not afford. On the other hand, Woodward, Zwerman and Harvey (n.d., cited by Jackson and Morgan, 1978) concluded that instead of size, the production systems used by the firms are more connected and explain better the firm structure and feature. In other words, an efficient production system can explain the success of one large or small firm and therefore the relationship between size and differentiation is not linear. Diversification and Product Diversification Strategy Terminology Diversification The root of the word is, obviously, diverse. Pitts and Hopkins (1982) define it as literally meaning different, unlike, distinct, and separate (p.620). Therefore, if this definition is applied to the context of product diversification, we can say that it means firms having their products in various and different lines. Pils (2009) also confirms this definition as he points out that product diversified firms are understood to be active in multiple, distinct product-markets (p.10). The various definitions, forms and ways of managing diversification are the main topics of this research. Product diversification strategy There is a common denominator in the way product diversification is defined in the literature. For instance, Pils (2009) defines it as firms spreading their activities and products across different product-markets that are more or less related between each other. He also affirms that product diversification strategy determines which businesses a corporation should be in, defining the scope of the firms activities and being of high relevance for creating value for the firm. Berry (1971, p.380) defines product diversification as an increase in the number of industries in which firms are active. However, he does not point out that it can be also increasing the number of products in the current industry. Pitts and Hopkins (1982, p.620) consider firms product diversification if operating multiple different businesses at the same time. Hoskisson (2007), on the other hand, says that the firms level of diversification is a function of decisions about the number and type of businesses in whic h it will compete as well as how it will manage the business. These definitions have surely been influenced by the work of Ansoff (1957) in which he presented diversification as a possible growth strategy as mentioned in the introduction. Ansoff presented two ways of diversification: market diversification and product diversification. Although this research only focuses on the product diversification side, few lines are dedicated to explain the difference and characteristics of these two strategies. Market diversification is a strategy that takes the firm from its existing market to new ones. It exploits the current products and capabilities in new markets looking for geographical spread. This strategy is more and more used in the current times where globalization is facilitating the firms internationalisation. It also presents some challenges like cultural barriers, adding management costs and government restrictions among others. Product diversification is about adding new product to the firms portfolio whereas market diversification is about entering in new markets offering the firms current products. Reasons and Challenges Reasons and Motivations for Diversification: Any firm has a start. Normally starting as a small business it focuses on a single product. This is known as a single business strategy. The natural reasons are commonly due to a lack of cash, experience and know-how. Over time, the resources, capabilities and core competences are rooted and stabilized. At that point, firms may choose product diversified strategy, with two broad categories (related or unrelated). Large firms use product diversification strategy for a variety of reasons. Pearce and Robinson, (2005) and Hoskisson ( 2007) mention among others, the following reasons: To increase the growth rate of the firm For a better use of the companies funds than investing them into internal growth To balance the product line Diversifying the product line when the firm has reached its mature life cycle To increase efficiency and profitability, especially, if there is operational or financial synergy To increase the firms value by improving its overall performance To increase revenues or reduce costs To match and neutralize competitors market power To reduce managerial risk To increase the firms size and thus managerial compensation Product diversification challenges The above mentioned reasons and motivations for PDS can also bring along challenges and costs. One could say that PDS needs new facilities, technologies, skills, know-how, employee and managerial training, etc. It is important to know that it can have a great negative impact on the firms current products if a new product is launched with the firms brand name and the product is not well accepted in the market. The reasons for the market rejection can be e.g. lower quality than expected from the firm, high price, poor distribution, etc. At that point, the whole company will be negatively affected by a bad move. This argument is also supported by various authors such as Hoskisson, (2007); Grant, Jammine, and Thomas (1998); Goold and Luchs (1993), (cited by Pils, 2009). They state that some of the challenges are information processing, coordination, and control problems due to increase of information asymmetries difficult for a single business to deal with. In case of applying a PDS a fi rm has to change its structure and adopt new systems. Moreover Hoskisson (2007) elaborates that the data and information a firm using PDS requires is substantially greater. Furthermore increasing portfolio diversity may involve inefficiencies due to growing conflict on top management and a lack of adaptability to environmental change. Product Diversification Strategy Categories: Related Unrelated Product Diversification Strategy As mentioned before, there are two broad categories of PDS: Related and Unrelated. Some authors such as Richard Rumel (cited by Lovallo and Mendoca, 2007), Peng (2008) also categorize PDS as: focused, moderately and highly diversified. These three categories are not deeply explored in this research. But to dedicate some words, it should be mentioned that Richard Rumelt, in 1972, was the first person to statistically prove the linkage between corporate strategy and profitability. He concluded that moderately diversified firms outperform more diversified ones. Lovallo and Mendoca (2007) sustain that this finding has been valid more than 30 years of research. Moreover, a contemporary author, Peng (2008), also points out that some moderate level of diversification is the most optimal. The main focus of this research is whether a related or unrelated strategy is more suitable for large firms while diversifying. Therefore, in the following lines a definition and a detailed explanation of both is presented. Related product diversification can be defined as a strategy that firms can choose as a growing path. As the word related signals, this diversification strategy is focused on products that have a correlation between each other and are related in some way, especially in their core competences. Normally, firms that choose related product diversification as a strategy are sharing a common factor such as the raw material, the technology or the know-how needed to produce different products. Moreover, the products offered by the firm do not necessarily need to be similar. For instance, a firm running a cinema complex and also offering soft-drinks to be sold at the movie theatres is using a related PDS. Even if their products may not be related, they must share some common ground on their value or supply chain. In this case, the customers targeted are the same. Pearce and Robinson,(2005) confirm this by defining related businesses as those relying on same or similar capabilities in order to have success and achieve competitive advantage in their product markets. Major advantages of related PDS are: concentration of strength, exploitation of a market niche, and the development of synergies. A good example, of a firm applying this strategy is CRH, an Irish company who operates in 35 countries with more than 93.500 employees. The CRH Corporate Social Responsibility Report (2007) states that the firm is a diversified building materials group which manufactures and distributes building material products from the fundamentals of heavy materials and elements to construct the frame, through value added products that complete the building envelope, to distribution channels which service construction fit-out and renewal. CRH has three closely related core businesses: primary materials (aggregates, cement, asphalt and ready mixed concrete); value-added building products (pre-cast, architectural, construction accessories, clay, gas, insulation, building envelope products); and specialist building materials (CRH, 2009). CRH initially decided to diversify to gain economies of scope and also to stretch the corporate parenting capabilities. While CRH diversified its market its power i ncreased and consequently it could afford to cross-subsidise one business from the surpluses earned by another, in a way that competitors could not. As an effect, it could drive out competitors. Before going into further details regarding related PDS, a definition of Unrelated Product Diversification is given. In this case, as the word unrelated points out this diversification strategy focuses on firms offering products that have no relation, are not complementary between each other and do not have necessarily the same raw material as their prime and main composition. Moreover, they do not need to share any part of their supply chain (customers, distributor, manufacturer, logistics, etc). For instance, the Easy Group Company is present in several industries and services that have actually no relation. Some of them are: travel companies, car rentals, internet-cafes, cinemas, cosmetics, etc. Stelio Haji-Ionannou, the founder of the company has developed a cost strategy that pretends to apply in all its businesses. It seems that he believes that his formula is valid for any business. Normally the reason why firms choose this path is known to reduce their financial risks. Peng (2008) refers to unrelated PDS as firms entering into industries new lines that have no evident connections to the present firm line of businesses. Furthermore, Hoskisson (2007) says that unrelated PDS occurs when there are no overlapping capabilities other than financial resources. This strategy is also known in the financial literature as conglomerates (Hoskisson, 2007; Peng, 2008; Pearce and Robinson, 2005) It has been widely discussed whether related is more successful or unrelated. To be able to answer this fundamental question the following pros and cons are explored: Human resources: Related product diversification is characterized by the ease of human resources relocation because the skills and capabilities needed for the introduction of the new products are very similar. On the other hand, unrelated PDS requires recruiting new personnel or training current employees in the new fields. (Tallman, 2003) Technologies Obviously, if a firm chooses unrelated PDS, it will probably not be able to share technologies. Therefore, the investment needed to apply this kind of diversification is greater than by applying a related one. Related PDS is characterised by sharing technologies needed to produce the new products. For example, a firm which produces shampoo and introduces hair conditioner may use the same technology. In that way it reduces the investment costs for the new production and gain economies of scope (also see 2.5). Tallman (2003) confirms that related products can increase the use of existing fixed investments and existing capacity for more purposes and more intensively, gaining efficiencies that reduce costs. Additionally, he says that it can improve the efficiency of its existing resource infrastructure by increasing the flow of product to a wider range of customers. Management For managers it is easier to introduce related products than unrelated ones because they are familiar to the industry and can apply the same or similar strategies. For unrelated ones, managers have to learn about the new products and often the strategy used for the current products is not applicable for the new ones. Therefore, managers should experience new strategies which at the beginning may fail. Prahalad and Hamel (1990), said that it is likely that firm managers of unrelated products may be ineffective because the routines and capabilities they have already developed are not applicable one to one to the entire range of businesses. On the other hand it could be argued that it can be effective as top management can concentrate on financial management and costs controls while leaving operational control with each business unit. Competitors It is easier for competitors to imitate the financial economies of a firm than the operational synergies derived from a related PDS. This is due to the fact that operational synergies derived from the use of current know-how, facilities, capabilities and experiences are more difficult to imitate than realizing that a firm is diversifying into new unrelated products based on the percentage of the revenue it can gain. Therefore, it is less likely that competitors will imitate a firm which introduces new related products. Peng and Delios, (2006), and Khanna and Palepu, (2005), (cited by Hoskisson, 2007) sustain that competitors find it easier to imitate financial economies than replicating the value gained by related PDS from the economies of scope developed through operational relatedness. Control Mechanism The principle control mechanism for related diversification is strategic control with rich communication between corporate and business units managers. Financial results are obviously not a fair means to measure the functioning of each business unit. One business unit may have low revenues but its main function is to support the others. For unrelated products, the best way to control is exactly the opposite. The emphasis has to be on financial control (return and investment) to evaluate the units performance. (Peng, 2008) Market saturation When the product a firm is offering is close to a market saturation or obsolescence, the best thing a firm can do is to enter into another market offering unrelated products. In that way the company has an opportunity to grow. It would be a great mistake in a saturated market to introduce related products because the competition is already very high and to get a profitable market share is unlikely. Stabilize Earnings Another reason would be to stabilize the earnings and dividends of a firm in a cyclical industry. In that case, the firm should diversify into an industry with complementary cycles independent of the relation with the current products. Independency Firms that are uncomfortable to be dependent on one product line should diversify into other businesses or industries. In that way the risk is spread and all the weight is not in one product line. All in all the benefits of both categories of diversification do not appear as the result of a magic formula that just happens but as Tallman (2003) and Peng (2008) also sustain it is the result of an active management of resources and capabilities with potential for broader application. Product diversification synergies need to be explored in more detail. Therefore the following section is dedicated. Product Diversification Synergies Pils (2009) explains that the word synergy is derived from the Greek word synergos and literally means working together. In business terminology, synergy is used to describe the ability of two or more business units or firms to make greater value working together than they would do independently (Goold and Campbell, 1998, p.133). Diversifying a large firm is considered economically positive only if synergetic effects between the different businesses units are achieved. As a consequence, the idea of maximizing synergies as the main objective of diversification strategy is presented below. Operational Synergies The emphasis of product related diversification is on operational synergies because in this strategy production resources are shared to have a cost competitive advantage. In the financial literature, the term operational synergy has been used as a synonym for economies of scope (Tanriverdi and Vendkatraman, 2005). Economies of scope and/or operational synergies are the result of two or more business units that share and transfer factors of production, its resources and capabilities. As a consequence the shared production costs will be lower than production costs of each one separately. Peng (2008) defines it as competitiveness increase beyond what can be achieved by engaging in two product markets separately. In other words, firms benefit from lowering unit costs by gaining advantage from product relatedness, i.e. 2+2=5. Some sources of operational synergy are (Peng, 2008): Technologies, such as common platforms Marketing, such as common brands, and Manufacturing, such as common logistics Conscious of these possible synergies, Zodiac a French large firm who in 1930 was focused on inflatable boats and had strong ties to the French army started to introduce new related products to its portfolio. Zodiac created 5 different divisions having inflatable materials as a common denominator. These divisions have been: marine division (recreation, military, professional, safety of life at sea, environmental solutions); pool division (pool sector and pool care and water cleaning, heating, pumps, filters); airline equipment division (passenger seats and on-board toilets and sanitation systems); aerosafety systems division (aircraft escape slides, parachute systems, helicopter floats, and flexible fuel tanks); technology division and aircraft system division. (Zodiac Aerospace, 2009) Zodiac has benefited from the operational synergies through the use of inflatable products technology and has also used market synergies because it has supplied the same customers with different produc ts. Conversely, unrelated diversification does not need to have advanced levels of operational relatedness. Rather, each business unit has its own strategic and operational responsibility and the management can focus on the financial synergies. (Tallman, 2003) Investment synergies are very much related to the operational synergies. It can be argued that one is the consequence of the other or that they are developed hand in hand. Investment synergies are the result of products sharing the same plant, resource and development (RD) and machinery. This is more probable to happen with a related product diversification because of the previous explanations. For unrelated products, the machinery is improbable the same and each product need its own RD. Financial Synergies The means obtaining financial synergy is different from obtaining operational synergies. The key role of firms is to identify and find profitable investment opportunities. The parameter to measure if financial synergies are to be achieved is whether managers can exceed the job of identifying and taking advantage of profitable opportunities compared to external capital markets (Peng, 2008). Hoskisson (2007) defines financial synergies as cost savings realized through a better use of financial assets based on investments inside or outside the firm. Competent internal capital distribution can lead to financial synergies and reduces risk between the firms businesses (Higgings and Schall, 1975). A firm using unrelated PDS may grow, but only internally in each business unit and will not reach operational efficiencies but financial ones. That means, the revenue of each business unit will be greater when functioning as a conglomerate rather than functioning independently. This idea is supported by Peng (2008) who states that competitiveness increases for each unit financially further than what can be achieved by each unit competing independently as an individual firm. Many different products that are not necessarily related offer opportunities of high returns. If a firm is only interested in the returns, unrelated product diversification may be a right path of growth. Sales synergies: These occur from sharing salespeople, warehouses, distribution channels, and advertising. Salespeople have more chances to be able to sell to the same customer a wide range of related products than unrelated ones. Salespeople will try to sell a complete pack of product to the same customer and in that way take advantage of the sales synergies that related product diversification presents. Imagine a company selling sport shoes and refrigerators, in a selling process it is more unlikely to be able to sell both products to the same customer than if he would offer sport shoes and sport clothes. On the other hand, if a firm has developed a well-known brand, the use of the brand-name in other products, related or unrelated, can increase and facilitate sales because it can have build before customer loyalty to the brand. For example, Mars chocolate confectionery successful launched ice-creams. Much of it success could be related to the brand name. So, sales synergies do not occur only withi n related products but also within unrelated ones if the brand name is positively perceived and recognized by the customers. Management synergies It arises from managers accumulating experiences from handling problems in one business unit that can be applied and used to solve problems in a related business unit. Even more, the accumulated experience and know-how allows answering faster to the industry trends and challenges. Managers are able to transfer their skills, experiences and strategies (Enz, 2009, p.222). Contrarily, unrelated product managers can not apply the experience gained from solving the problems of one unit to the other in most cases because the problems are specific for each product. All these synergies can be undermine due to additional layers of management, delays due to organization and information complexity, communication costs for coordination, imaginary synergies that in fact do not exist, incompatible production processes, etc. Therefore while choosing between related and unrelated PDS the mentioned synergy risks have to be taken into account. Research Methodology In this section an explanation of how the data for the case study was collected and how it was analyzed is presented. It is important to know how the data was collected because the method chosen affects the final findings. The information and content of The Mondi Group Case Study was obtained through an expert interview with Mr. Wolfgang Kropiunik, Mondis Marketing Manager of Uncoated Fine Paper. A questionnaire was sent as a guide and overview of the face-to-face interview questions. A meeting for a 40 minutes exploratory semi-structured interview was organized on the 24th of November 2009 at Mondi Headquarter, Vienna. Mondi Group was chosen as the large firm to be analyzed as it is a large firm with more than 33.000 employees worldwide and has its headquarter in Vienna (Mondi, 2009). Therefore the results presented in this research are very much related to Mondis functioning and successful method. It might be possible that if the studied firm had been another one, the results of the research question could have been different. The interview was recorded and the data obtained was transcribed (see appendix). The transcription of the interview allowed a deeper comprehension of Mondis product diversification strategy, synergies and challenges. Moreover, the recommendations presented to the company (see 4.7) are inspired from the challenges Mr. Kropiunik mentioned during the interview. The interview gave a number of information about Mondis life cycle, PDS and challenges especially during the current financial crisis The Mondi Group Case Study Mondi is a large and international packaging and paper firm represented in around 35 countries. In 2008, it had revenues of 6.3 billion EUR and about 33.400 employees (Mondi, 2009). It has a strong presence in Western Europe, Russia and South Africa. Mondis Europe and International Division has its headquarter in Vienna while the corporate headquarter is located in Johannesburg. In Vienna, there are three businesses: Uncoated Fine Paper, Corrugated and Bags Specialties. Mondi has reached to be fully integrated having the control of its supply chain. It grows trees, manufactures pulp and paper and converts packaging paper into corrugated packaging an

Hamlet Essay -- Shakespeare

‘Critics often judge Gertrude as a weak, selfish and innocent woman, caught up in conflicts she does not fully understand.’ To what extent do you agree with this? The two female characters in Shakespeare’s tragedy seem to be drowned in the mist of the deceitful power-game played by the male characters, which contribute to the on-going tragic conventions of murder, revenge and betrayal so prevalent in this form of drama. The title of Hamlet’s metatheatrical play-within-a-play, 'the mouse-trap' is as applicable to the plot of Shakespeare’s 'Hamlet'; set in the especially patriarchal society of Elsinore, which is dominated by the authoritative actions of the male characters, Hamlet may be seen as a tragedy where the female characters have small and seemingly unimportant roles in the tragic plot compared to the climactic ‘masculine’ moments – the visitations of the Ghost, the dramatic agon between Hamlet and Claudius and the final conquest between Hamlet and his counterpart Laertes. Gertrude is a character whose fate is tragically overshadowed by the power of these men, indicative of the submissive role o f women in the Jacobean period. Despite the fact that directors often present Gertrude as a sensual and deceitful woman who is vain and self-satisfied with strong sexual appetites, if one looks to Shakespeare’s text, this character has a very small and arguably innocent voice in the play; indeed Rebecca Smith argues that ‘Gertrude’s words and action create not the lusty, lustful, lascivious Gertrude that one generally sees in stage and film productions but a compliant, loving, unimaginative woman whose only concern is pleasing others’. In order to assess Shakespeare’s characterisation of the Queen, it is necessary to exami... ...arded as selfish, weak and innocent, caught up in a conflict that she more than understands. Works Cited Bamber, L.(1990) â€Å"Class Struggle: Shakespeare and Sexism.† The Women’s Review of Books 7:5. Bradley, A.C. (1966) Shakespearean Tragedy. New York: St. Martin's Press. Burnett, Mark, ed. (1994) New Essays on Hamlet. New York: AMS Press. Granville-Barker, Henry. (1970) Prefaces to Shakespeare. New York: Hill and Wang. Heilbrun, Carolyn. (1957) Hamlet’s Mother. California: University of California Press. Kolin, Philip C. (1991). Shakespeare and Feminist Criticism an Annotated Bibliography and Commentary. New York: Garland. Loske, Olaf. (1960) Outrageous Fortune. Oslo: Oslo University Press. Shakespeare, William. Hamlet. Shakespeare, William. Macbeth. Smith, Rebecca. ‘A Heart Cleft in Twain: the Dilemma of Shakespeare’s Gertrude’.

Electricity and Economy in Kenya Essay

ICT has been the main driver of Kenya’s economic growth over the last decade, growing on average by 20 % annually, and propelling the combined transport and communications sector into the economy’s second largest after agriculture. In chapter three I have discussed the impact of electricity on key economic sectors in Kenya which are agriculture, educational services, banking and communication services, microenterprises and tourism all of which are key pillars of Kenya Vision 2030. It costs approximately Ksh. 5,000 to connect to the grid and about 15 US cents equivalent per kWh of electricity service. This high cost is a major obstacle to the expansion of electricity connection to low-income households. Chapter 1: Introduction 1. 1 Overview and statement of the problem Broad agreement exists that the level and the intensity of energy use in a country is a key indicator of economic growth and development. A number of researchers claim that for modern energy to make a diff erence on poverty, it must necessarily contribute to productive uses that generate income and create jobs. Kenya’s Vision 2030 identified energy as one of the infrastructure enablers of its pillars and it is expected that more energy will be required to realize the objectives of the Vision. The economic pillar of Vision 2030 aims at providing prosperity for all Kenyans through an economic development programme aimed at achieving an average GDP growth rate of 10% per annum over the next 25 years. Electricity remains the most sought after energy source by the Kenyan society and access to it is normally associated with rising or high quality of life. Its current consumption is at 143 kilowatt hours (kWh) per capita and national connectivity rate of about 28. 9% which is below the average of 32% for developing countries. Electrification plays an important role in the start-up and growth of microenterprises which may lead to sustainable livelihoods and poverty reduction. Energy can be directly linked to improved food security because energy can be used in any part of the food supply chain, from growing, processing, storage and cooking, through to marketing and distribution.

Anselms Ontological Argument Essay

St Anselm (1033-1109) fame rests on his belief that faith is prior to reason: â€Å"I do not seek to understand that I may believe, but I believe in order to understand. For this I also believe- that unless I believed, I should not understand†. Anselm employed his powers of reason in order to establish, by rational argument, the existence of God (Ally 2010:62). Anselm’s ontological argument When we are really thinking of something (and not merely uttering the associated verbal symbol), that thinking is our understanding (2010:63). Of course, we need not understand that it exists, for we may be thinking of something which we believe does not exist, or we may be thinking of something of whose existence we are uncertain (2010:63). But in any of these cases, if we are thinking of something, if we understand it, then it, and not something else, is in the understanding (2010:63). This point applies to our thoughts of anything including God (2010:63). However, in the case of God, we are thinking of a unique thing, for we are thinking of the greatest thing conceivable, the being â€Å"than which nothing greater can be conceived†( Stumph & Abel 2002:107). Now if a being exists in the understanding alone, it cannot be the greatest conceivable thing, for a being that exists in reality as well as in the understanding would be greater (2010:63). Consequently, since God is the greatest being conceivable he must exist in reality as well as in our understanding (2010:63). Or, to put it another way, if the greatest conceivable being exists in the understanding alone, then it is not the greatest conceivable being- a conclusion which is absurd (2010:63). Gaunilos objections Do we in fact have an idea of an absolutely perfect being? This was the question posed by Anselm’s contemporary, Gaunilo, who noted that the sceptic who is not convinced of God’s existence would not grant Anselm’s assumption that people have an idea of a most perfect being (2010:63). To this Anselm could have replied that he was not trying to convince sceptics that God exists, but to provide Christians with a rational understanding of Christian truth (â€Å"I do not seek to understand that I may believe, but I believe in order to understand†- Anselm 1987:225). In any case, he would have aintained that he could prove that people have an idea of a perfect being (2010:63). Anselm actually argues that we have various experiences of â€Å"degrees of perfection†- for instance, we experience some things as better or more beautiful than others (2010:64). We can make this kind of relative judgement only because we have a standard of comparison: the idea of absolute perfection (2010:64). It will be seen that the argument here turns on the question how can a finite mind transcend and reach an understanding of an infinite object? 2010:64). What a finite mind feels to be an intellectual grasp of an infinite object may be only an emotive response (2010:64). One ought to remind oneself of the need to distinguish between emotive understanding and the kind of meaning needed for philosophical communication (2010:64). So, although â€Å"most perfect being† has a powerful emotive meaning, has Anselm actually provided this phrase with of a meaning that enables us to discuss â€Å"the most perfect being† philosophically and unemotionally? (2010:64). Is existence indeed an added perfection? That is, is a being that exists necessarily greater (more perfect) than one that does not exist? (2010:64). Allowing that people have an idea of a most perfect being, does it follow that a being corresponding to this idea must exist? (2010:64). Anselm’s assumption is that existence is indeed an â€Å"added perfection† (2010:64). If existence is not an added perfection, there is no contradiction in allowing that the most perfect being exits only as an idea (2010:64). Just because I am thinking of a being, thinking of it as the greatest conceivable being, and thinking of it as existing necessarily, does not provide any evidence that there is actually such a being, for the thought of a necessarily existing being is one thing and necessarily being is another. Conclusion What is significant about Anselm’s attempt to prove God’s existence using reason alone is that it demonstrates the possibility of a distinct contrast between faith and reason (2010:65). Questioning such proofs inevitably raises issues about the relation between faith and reason (2010:65). Even in an age of faith, human beings could not get on without using their reason (2010:65). Clearly, they need to know where reason is appropriately used and where it should be set aside (2010. 65). They need a logical decision process that shows what a valid proof is (2010:65). If this decision process discloses that certain articles of the Christian faith cannot be proved, then they need a theological doctrine that shows how faith and reason are related at the point where reason leaves off and faith takes over (2010:65).

4 Tips for Finding Online Sources You Can Trust - Proofed

4 Tips for Finding Online Sources You Can Trust - Proofed 4 Tips for Finding Online Sources You Can Trust Online sources can be vital when researching a college paper. But the internet is also a massive repository of lies and nonsense. And that means that you need to be careful when citing a website in your written work. So, then, how can you find online sources you can truly trust? 1. Check the Credentials Look at who wrote and published the page you’ve found. Ideally, it will have a named author who you can google to find their qualifications and past publications. If you cannot find any information, look elsewhere. Likewise, online sources published by well-known organizations are usually more trustworthy. For example, an article about urban myths posted on the Scientific American website will be more trustworthy than a post by Mad Bob the Bigfoot Hunter taken from www.crypto-news.bz. With evidence like this, why wouldnt you believe Mad Bob?(Photo: RyanMcGuire) 2. Writing Quality A reliable source should be well written and error free, so look out for spelling or grammar mistakes on websites you want to cite. If nothing else, a lack of proofreading may suggest the author has been similarly careless when it comes to fact checking! Similarly, the tone of a website can tell you a lot. It is typically a good sign if the language is formal and academic. If it is informal or full of slang terms, however, you might want to look elsewhere. 3. Crosscheck Sources If you find new information online but aren’t sure you trust the website, check whether it cites any sources. This could be a reference list, but it could also be links to other sites that provide extra information or data to back up the point being made. It is also a good idea to crosscheck sources against one another. If you find a useful statistic on one website, for instance, look to see if it is used on other reliable sites. This is especially important when a page was published years previously, since the information may not be up to date. 4. Don’t Cite Wikipedia We have nothing personal against Wikipedia. In fact, it is a fantastic free source of information on a huge array of topics for day-to-day life. The problem is that is isn’t always entirely factual. Even Wikipedia admits that Wikipedia is not a reliable source. Anyone can edit a Wikipedia page, after all. And that is a bit like anyone being able to come along and rewrite the books in your college library, which we imagine would cause problems. But while it is not an academic source, Wikipedia can be helpful. If you find some interesting facts in an article, check the citations at the bottom of the page. These should point to more reliable sources, such as books or journal articles. You can then find these and use the original sources instead.