Cooking and Food Safety Measures Essay

Q1 – Identify potential food safety hazards when preparing, serving, clearing away and storing food and drink. People can get sick if the food they eat has harmful chemicals or microorganisms. This is called food-borne illness. The goal of food safety is to prevent the hazards that cause food-borne illness or injury. Most of the hazards in food are things you cannot see, smell, or taste. – Physical hazard: Hard or soft objects in food that can cause injury. For example, broken glass, jewellery, staples and fingernails. – Chemical hazard: Poisonous substances that occur naturally or are added during food handling. For example, cleaning products and pest control chemicals. – Biological hazard: Germs that cannot be seen without microscope. For example, parasites, viruses and bacteria. ( Preparing: – While preparing food, food workers must remove watches, rings, bracelets, and all other jewelry on the arms or hands. – Using the same cloth for cleaning surfaces used for both raw, i. e. meat and poultry, and ready to eat foods – Physical contamination e. g. flies, jewellery, broken glass and equipment in bad condition. ( Storing: – Store raw meats at the bottom of the fridge to prevent meat juice dropping on the other food – Eggs will be stored under refrigeration in order to reduce the growth of Salmonella – No cleaning materials should be stored where they may come into contact with open food. – Dried foods will be decanted into seal-able containers in order to protect from physical and chemical contamination ( Serving: – Serving Ready-to-eat food (e. g. sliced fruit, cooked pizza, bread) without additional washing or cooking to remove microorganisms. – Must use utensils such as tongs, scoops, deli papers, or single-use gloves to keep from touching ready-to-eat foods. – You place food and drink within easy reach of the individual – You serve food and drink with the appropriate utensils and in a hygienic manner ( Cleaning away: – Food-contact surfaces should be washed, rinsed, and sanitized after each use. – Scrape excess food into a rubbish bin – Leave dishes and cooking utensils to air-dry or wipe with clean dry cloth. – Rinse in clean hot water – Encourage individuals to wash their hands and clean themselves. Q2 – Explain the importance of implementing food safety measures when providing food and drink individuals. Every day people all over the world get sick from the food they eat. This sickness is called food-borne disease and is caused by dangerous microorganisms or chemicals. The importance of implementing food safety measures when handling food and drink is to keep children and young people safe from food-borne illnesses. Q3 – Explain why personal protective clothing should be used when handling food and drink. Personal protective clothing should be used to protect the wearer from specific hazards of a hazardous substance. – PPE includes gloves, respiratory protection, eye protection, and protective clothing. – You should always wear gloves to minimize the chance of bacteria entering the food from unclean hands. – Gloves must be changed each time you do a different task, e. g. preparing sandwiches then going into walk in cooler-touching different contaminated surfaces. – Aprons and chef jackets are a great way to prevent any of your clothing from contaminating the food. – Hairnets and hats are used to prevent hairs from entering food and drink. Q4 – Explain why surfaces, utensils and equipment must be cleaned before beginning a new task. Surfaces, utensils and equipment must be cleaned before beginning a new task to prevent cross-contamination. Cross-contamination is one of the most common causes of food poisoning. It happens when harmful bacteria are spread onto food from other food, surfaces, hands, utensils or equipment. Q5 – Explain the importance of clearing and disposing of food waste promptly and safely. Food waste must be disposed of on a regular basis. This helps to prevent cross contamination. Pests such as flies and insects love leftovers. There is also the added risk of attracting mice and rats. – Food waste and other refuse must not be allowed to left in food rooms, except so far as is unavoidable during the business operation. – It is good practice to remove all waste from the food room at the end of the day. – Food waste and other refuse must be deposited in closable containers. These containers must be of an appropriate construction, kept in sound condition, and where necessary be easy to clean and disinfect. – Adequate provision must be made for the removal and storage of food waste and other refuse. – Refuse stores must be designed and managed in such a way as to enable them to be kept clean, and to protect against access by pests, and against contamination of food, drinking water, equipment or premises. – Refuse should be removed frequently and, depending on the size and type of business more than one collection/removal per week may be required. – Storage facilities must be kept in a clean condition and the waste must be protected from rodents or birds. Q6 – Explain the importance of storing different types of food and drink safely. The importance of storing different types of food and drink safely is to avoid cross contamination and ensure a good rotation of stock. In the UK we end up throwing away 8. 3 million tonnes of food and drink every year and most of this could have been eaten. There are simple things you can do to reduce waste – to try to make sure you don’t buy or cook more food than you want to eat. Some food needs to be kept in the fridge to help stop bacteria from growing on it, such as food with a ‘use by’ date, cooked food and ready-to-eat food such as desserts and cooked meats. – Keep food covered to protect it from contamination from raw foods and physical objects – Always store â€Å"cooked† food above â€Å"raw† meat in the refrigerator this will eliminate the risk of contamination from bacteria and meat juice spillage to other foods. – Do not store food in open cans because when a can has been opened and the food is open to the air, the tin from the can might transfer more quickly to the can’s contents. – Do not overstock the refrigerator, as this will affect the airflow around the food. You can keep food safely in the freezer as long as it has stayed frozen the whole time; however, the taste and texture of food changes if it’s frozen for too long. It should be all right to freeze most raw or cooked foods. – Freeze it before the ‘use by’ date – Follow any freezing or thawing instructions on the label – Defrost it in the fridge so that it doesn’t get too warm. – Ensure food is thoroughly defrosted before cooking food Many types of food don’t need to be kept in the fridge to keep them safe to eat, for example dry foods such as rice, pasta and flour, many types of drinks, tinned foods, and unopened jars. But it’s still important to take care how you store them. – Try to keep food in sealed bags or containers. This helps to keep them fresh and stops anything falling into the food by accident. – Don’t store food or drinks near cleaning products or other chemicals. – Don’t store food on the floor, because this can encourage mice, ants and other pests. – Remember that some types of food might need to be kept in the fridge once you’ve opened them – follow any storage instructions on the label. Task 2 Q1 – Identify sources of information about food safety. – Food Safety Education – Food safety training – Research and development Q2 – Describe how to access and support about own role in maintaining food safety when providing food and drink for individuals. – Talking to teacher or leader of placement – Listen and take notes – Making posters. Bibliography ( Notes (http://www. who. int/foodsafety/publications/consumer/manual_keys. pdf ( http://web. princeton. edu/sites/ehs/hazardcommguide/3. htm (http://www. caerphilly. gov. uk/Pdf/Environment_Planning/HACCP-self-help-guidance-pack-for-caterers. pdf.

Madoff Scandal

Contents Introduction2 Early Career2 The Firm3 Sales Strategy4 Investment Strategy5 The Scandal7 He was not alone9 The Markopolos Whistle11 The collapse13 Charges and Sentence13 The Victims14 2009 Ponzi Schemes16 The SEC Failure17 SEC post- Madoff19 Hedge Fund Transparency20 Conclusion21 Bibliography25 Tables Table 1: List of Madoff Clients (taken from the â€Å"The New York Times†, last updated June 24, 2009)15 Table 2: 2009 Ponzi Scheme SEC Charges17 Figures Figure 1 Fairfield Sentry vs Gateway6 Figure 2 Madoff Investor Funds (taken from http://orgnet. com/madoff. html)7 Introduction Operating from central Manhattan, Bernie Madoff developed the first and biggest global Ponzi scheme, an event of greed and dishonesty that lasted for more than 20 years, in which $65 billion dollars vanished from the pockets of some of the world’s richest people, charities and ordinary investors alike. This scheme lasted longer than any other white collar crime in history and along the way ruined countless individuals and organizations. The Madoff Ponzi scheme has changed the rules of trust that governed the money game. † Unlike other similar schemes, Madoff’s Ponzi scheme also scammed wealthy and investment savvy individuals that Madoff associated with. Bernard Madoff is a former financier, American hedge-fund investment manager, chairman of the NASDAQ (National Association of Securities Dealers Automated Quotations) stock exchange, and chairman of the firm Bernard L. Madoff Investment Securities LLC. He is the main conspirator of the history’s largest investor fraud committed by a single person. As a result of his act, Madoff was sentenced on June 29th, 2009 to 150 years in prison for crimes that the judge called â€Å"extraordinarily evil†3 and imposed a sentence that was three times as long as the federal probation office suggested and more than 10 times as long as defense lawyers had requested. Early Career Bernard Lawrence Madoff was born in New York City on April 29, 1938 and grew up in a predominantly Jewish neighborhood. He earned a degree in political science from New York’s Hofstra University in 1960 and founded the Wall Street firm Bernard L. Madoff Investment Securities LLC the same year. 1 He was a pillar of finance and charity. As an outstanding philanthropist he served on boards of nonprofit organizations around the world such as businesses, charities and foundations, many of which were entrusted by his endowments. The firm started as a penny stock trader with $5,000 dollars he saved from working as a sprinkler system seller and lifeguard. In the beginning the firm started trading common stock over the counter (OTC) through the National Quotation Bureau using Pink sheets. It later challenged the New York Stock Exchange (NYSE) old brokers by using powerful marketing techniques to win clients and promoting electronic trading using innovative computer information technology. His firm grew with help from people around him such as his father-in-law, who referred him to friends and family. Madoff helped created NYSE rival, NASDAQ, where he later became the chairman. The Firm Bernard L. Madoff Investment Securities LLC functioned as a securities broker and/or dealer in The United States and internationally. Headquartered in New York City, it provided executions for dealers, brokers and financial institutions. The firm had been one of the top market makers on Wall Street with Madoff as the principal face. In plain terms, a market maker is an institution (brokerage company or bank) that is ready to execute stock trades (buying and selling) at every second of the trading day and charges a small fee for every trade via the use of a spread in the ask or bid price. It functioned as a third-maker provider by directly implementing commands from retail brokers. At one point, Madoff Securities was the largest market maker at the NASDAQ and in 2008 was the sixth largest market maker on Wall Street. Sales Strategy Around the 1970s, Madoff began administrating money for investors, some on them he knew personally and several others who belonged to clubs he was member of. He attracted billions of dollars and several large hedge funds also invested in the firm because he did not charge usual fees and only collected fees for processing trades. Madoff offered modest and steady returns to exclusive clients instead of offering high returns to all clients, giving the appearance of his firm to be exclusive. The firm’s annual returns were abnormally consistent, a key factor in achieving the fraud. Most business men believed the story that a single person could generate returns of 12 to 13 percent a year trading the stock market no matter what happens without a single down quarter. 7 Some of these people applied for membership to the clubs that Madoff was a member of, in order to meet and be accepted by him. In addition, he never hustled anyone for investing with him; instead he let them come to him. Thus, he created this aura of exclusivity around him and everyone wanted to be a part of his club. One of the groups targeted by Madoff was the â€Å"Jewish circuit. Being Jewish, Madoff attracted many wealthy Jewish people he met at country clubs on Long Island and Palm Beach. This was an Affinity Ponzi Scheme, as it was called by Newsweek article. 7 Affinity fraud includes investment frauds that prey upon members of identifiable groups, such as religious or ethnic communities, language minorities, and the elderly or professional groups. Around 1995, some of the most prominent Jewish individuals in finance and industry began to invest with Madoff. 1 His most effective recruiter, Jacob Ezra Merkin, was president of the Fifth Avenue Synagogue, member of Yeshiva University, Carnegie Hall and other nonprofit organizations. Mr. Merkin started the investment firm named Gabriel Capital Group. Embraced by philanthropies and installed in a superior position of trust, Merkin seemed to be a Wall Street wise and trusted person to manage other peoples’ money. 1 Investment Strategy His investment strategy consisted of purchasing blue-chip stock, from well established companies like Coca Cola, Intel and General Electric, having stable earnings and no extensive liabilities, and taking option contracts on them. Typically, a position will consist of the ownership of 30-35 S&P 100 stocks, most correlated to that index, the sale of out-of-the-money calls on the index and the purchase of out-of-the-money puts on the index. † When done correctly, this strategy creates boundaries in the stock and protects them against a quick decline in the share price. The investment strat egy used in Madoff’s feeder fund, Fairfield Sentry, is called the split-strike conversion strategy and involves a combination of stocks and options. In plain terms, Madoff bought 40-50 stocks from the S&P 100 index. He then bought put options on the index at strike prices below the market's current level and sold call options above the index's current price. It is similar to using collars, an options strategy that limits losses along with the gains for a particular stock. The following chart outlines the returns of the Madoff feeder fund against Gateway, a fund running the same split strike strategy. A feeder fund is a fund that conducts virtually all of its investing through another fund. Madoff used such feeder funds to mask the fact that he’s acting like a hedge fund in order to avoid SEC investigation. Figure 1 Fairfield Sentry vs. Gateway After the stock market crash of 2001, Gateway follows a downward path for a period of almost 3 years, before it starts to gain positive traction that will last until mid 2007, just in time for the mortgage meltdown that ignited one of the worst recessions in history. Interestingly enough, Madoff’s returns shows no signs of volatility and continue to gain positive traction with only minor fluctuations. Apparently he worked with multiple feeders and the network of individuals and funds were set up to pass money to him. Most of the investors did not know that all of their money was going to the same place: Madoff’s firm. The next diagram depicts the depth and interconnections of Madoff’s funds. The directions of the arrows represent the direction of the money flow. Figure 2 Madoff Investor Funds The Scandal The investment scandal was unveiled with Madoff’s confession. He reportedly confessed to his two sons during the first week of December 2008 that his business was â€Å"giant Ponzi scheme. † Madoff sons, Mark and Andrew, turned him in to U. S authorities on the day after his confession. On December 11, 2008 he was arrested and charged with securities fraud; also known as stock fraud and investment fraud, securities fraud covers a wide range of illegal activities, all of which involve the deception of investors or the manipulation of financial markets. He said to the agents that there was no innocent explanation to the fraud that cost clients $65 billion dollars. He traded and lost money and paid investors with money that was not there. How did Bernard Madoff set the most audacious fraud in history? Madoff said that had absolutely nothing, everything was just a big lie and it was essentially a giant Ponzi scheme. No one ever questioned the investment strategy and resources of the firm. No verification of the accounting was ever made. 7 A Ponzi scheme is a type of illegal pyramid scheme. It is named after Charles Ponzi who became infamous throughout the United States for using the technique in the early 1920s. The Ponzi scheme operation pays returns to investors from their own money or from money paid by new investors, rather than from actual return earned. This type of schemes attracts many investors because it offers high and consistent returns that other investments cannot provide. Eventually the system is destined to collapse under its own weight because earnings are usually less than the payments. â€Å"The business had been insolvent for many years. † Madoff was lying to his clients when he said he was investing their money and generating stable returns. 3 The money of new clients was used to pay clients who wanted to cash out. Some may still ask the question of why he started the scheme in the first place. A possible explanation of his actions could be that he incurred some trading losses and in order to recoup them quickly, put a quick plan together where he would shuffle money between new and old accounts. Initially he may have had the intention of paying all the investors back, but since his real investing strategy did not work fast enough, he stuck to the scheme. His initial intentions were probably not to carry on indefinitely to its present point. However, once his real trading strategies were not producing enough returns to cover his advertised returns (when the market was performing well), he continued until he lost control. If the economy were not in a recession, he would most likely keep going. The only reason he gave up is because investors started withdrawing money and he could not cover the upcoming withdrawals. If the economy kept going strong, Madoff would have been able to attract new money and continue living his double life as usual. He was not alone Few people knew that Bernard Madoff had a highly structured second life for more than 20 years. Bernard Madoff confession and the afterward fraud scandal triggered the investigation to uncover Madoff’s mysteries. He initially claimed that he committed the crimes all by himself, but because it extended trough decades and continents â€Å"a fog of suspicion immediately engulfed Madoff family members who worked at the firm, as well as employees and business associates. There were some small clues on how he pulled off the massive fraud, for instance, the 1980s server that Madoff refused to replace even though some data had to be typed by hand. When government investigated the machine it discovered that it was the heart of the fraud. The statements printed out from this old IBM machine showed trades that were never made. 15 First, the in vestigators turned to the accounting department. Madoff’s accountant David Friehling was also charged with securities fraud, investment adviser fraud and false filings made to the SEC. Unlike any other professional who protects the interests of his clients, accountants have the commitment to protect the public by ensuring accurate financial reporting. â€Å"They are the first line of defense against fraud. † Friehling’s duty at the investment firm was to ensure clients’ securities and money were they when they wanted to withdraw it. In addition, the SEC filed a civil enforcement action against him alleging that he did not perform his duties as an auditor. David Friehling was the auditor and the bookkeeper, which means that he audited his own work. It’s no great surprise that he found nothing wrong with any of his own work. †18 Next, they turned attention to the person second in command at Madoff’s firm. Frank DiPascali was Madoff’s right hand man for 33 years and his unofficial title was director or of options trading and chief financial officer. Nobody was sure what he did or what his official title was, but everyone knew he was a big deal. DiPascali rose to the position of CFO despite his lack of education and financial experience industry. On August 11, 2009, he pled guilty to ten counts of fraud related to the Madoff investment scandal and he is currently trying to negotiate his sentence (to be set on May 2010) in exchange of information of additional people involved in the scheme. Madoff trusted DiPascali completely to keep the secret of the scam operations. DiPascali manipulated fake returns on some key investors and if one of these clients had large gains, he would fabricate a loss to reduce the tax bill. 15 This means, if true, that these investors knew their returns were suspicious. JP Morgan Chase was the primary bank Madoff used to make his Ponzi deposits. According to one estimate, his deposits totaled $5. 5 billion sometime in 2008, and the after-tax profits grew to $483 million over a period of sixteen years. The bank withdrew a total of $250 million in the summer of 2009, due to suspicions arising from due diligence in Madoff’s investment-advisory business. According to a pending lawsuit against the bank: â€Å"Upon acquiring this knowledge, Chase entered into a conspiracy with Madoff and BMIS in violation of the federal Racketeer Influenced and Corrupt Organizations Act (â€Å"RICO†), 18 U. S. C.  § 1961 et seq. 19Depending on the outcome of the lawsuit, along with many more to come, JP Morgan Chase may have to shell out hundreds of millions of dollars in settlement. Madoff’s family was also the center of attention to find clues of Bernard Madoff’s fraud, although none of them have been charged or accused so far. During the plea hearing Madoff took all the responsibility of the fraud most likely to c over up his family. Peter Madoff, Bernard Madoff’s brother, was the chief compliance officer of the firm. He was in charge of ensuring adequate internal control and that the client funds and securities were properly protected. Even though Madoff sons, Mark and Andrew, did not have any position with the investments firm, they were involved in other areas within the firm. They are the ones that turned Madoff in. The family must have known about the long running scheme and should be indirectly responsible for some of the investor losses incurred, as the scheme had supported their lavish lifestyles. Irving Picard, the court appointed trustee in charge of liquidating Madoff’s firm, sued some of the Madoff family members (two sons, brother, niece) for $198. 7 million seeking defrauded investor damages. The Markopolos Whistle Bernard L. Madoff Investment Securities LLC firm was inspected at least 8 times and he was personally interviewed twice in a period of 16 years by the SEC and other regulators before being uncovered. For years, he avoided regular reviews by saying that he was managing accounts for hedge funds instead of running an investment advisory business. During the years of 1999 and 2000 the SEC was worried that the firm was violating a trading rule and sent examiners to investigate but in response Madoff summarized new procedures to deal with the findings. 12 In 2001 some outsiders were becoming suspicious of Madoff’s firm activities. Harry Markopolos, Barron’s, a Dow Jones & Co. publication and Marhegdge, a hedge fund trade publication, raised concerns about Madoff’s steady returns. 12 In 2005 Mr. Markopolos met with SEC investigators in New York and prepared a 21-page report entitled â€Å"The World’s Largest Hedge Fund is a Fraud† summarizing his concerns. The memo specified 29 red flags and in part concluded that â€Å"Bernie Madoff is running the world’s largest unregistered hedge fund† and â€Å"†¦yet since Bernie Madoff is not registered as a hedge fund but acting as one via third party shields, the chances of Madoff escaping SEC scrutiny are very high. 12 The SEC examined Madoff and did not find any violations. He failed for 8 years to get SEC to step in until the scam collapsed and prompted Madoff to confess. In his report, Markopolos clearly outlines some pretty obvious (by now) facts that the regulatory authorities omitted. Here is a short summary of some points that stood out: †¢If the Madoff returns are legitimate, they’re due to insider trading (unlikely scenario). If they’re illegitimate, they’re due to the setup being a Ponzi scheme (likely scenario). †¢The secrecy around the fund’s assets doesn’t make sense as a typical hedge fund would brag about such returns. The secrecy is probably due to the fact that Madoff doesn’t want the regulatory authorities to know he exists as a secret hedge fund. †¢Since Madoff is a broker-dealer, he can generate any trade tickets he wants, therefore generate false information. †¢The Madoff family has held important leadership positions in NASD, NASDAQ ® and other prominent industry bodies that would not be inclined to lead an investigation. †¢Out of 174 months, only 7 months (4%) saw negative returns in Madoff’s Fairfield Sentry fund. No MLB hitter bats . 60, no NFL team has ever had a 96-4 record out of 100 games, and no money manager is up 96% of the months. †¢Since Madoff is not registered as a hedge fund but acting as one via third party shields, his chances of escaping SEC investigations have remained high. The collapse The final weeks of the biggest scheme in history began on December 2008 when the market continued to fall. Madoff struggled to keep the scheme afloat wh en investors tried to withdraw $7 billion from the firm. In typical Ponzi scheme fashion, Madoff desperately needed money from new investors to pay off existing investors. Ten days before his arrest, he received $250 million dollars from Carl Shapiro, a 95 year old philanthropist and entrepreneur, and one of Madoff oldest friends. Mr. Shapiro helped Madoff launch his investing career by giving him money to invest in 1960. He also asked others to invest including Wall Street financier Kenneth Langone. Madoff said he was raising money, between $500 million and $1 billion, for a new investment vehicle for exclusive clients. Mr. Langone declined to invest. 13 Mr. Langone’s denial could have been based on quantitative analysis that most of Madoff’s investors failed to undertake. In addition, by the time Madoff proposed the new investment vehicle to Mr. Langone, rumors of his questionable returns had increased considerably. Charges and Sentence â€Å"On March 10, 2009, a Criminal Information was filed in Manhattan federal court charging Bernard L. Madoff with eleven felony charges including securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission (â€Å"SEC†), and theft from an employee benefit plan. † The case is United States v. Bernard L. Madoff, 09 Cr. 213 (DC). The criminal information or complaint declared that Madoff had defrauded his clients for $65 billion. On March 12, 2009 he pleaded guilty to all eleven counts and on June 29, 2009 he was sentenced to 150 years of imprisonment at the Metropolitan Correctional Center in New York (he was later moved to a prison in Butner, North Carolina) and $170 billion in restitution. A breakdown of his sentencing is given below:19 †¢40 years for two counts of international money laundering †¢20 years for securities fraud †¢20 years for mail fraud 20 years for wire fraud †¢20 years for false filing with the S. E. C. †¢10 years for money laundering †¢5 years for investment adviser fraud †¢5 years for false statements †¢5 years for perjury †¢5 years for theft from an employee benefit plan The Victims Some of Madoff’s clients included hedge funds, banks, charities, universities, astute financiers, hospitals, film prod ucers and many others. According to the latest Trustee Interim Report assigned for fund recovery, as of June 30, 2009 the recovery of funds from Bernard Madoff has been $1,088,507,818 with an additional $13. billion in incoming recovery requests. A short list of the investors with the largest losses follows: CLIENTTYPE OF CLIENTEXPOSURE Fairfield Greenwich Group Financial Firm$7. 5 Billion Kingate ManagementFinancial Firm$3. 5 Billion Tremont Group HoldingsFinancial Firm$3. 3 Billion Banco SantanderFinancial Firm$3. 1 Billion of client exposure Bank MediciFinancial Firm$2. 1 Billion Ascot Partners, run by Jacob Ezra Merkin, GMAC’s chairmanFinancial FirmMost of the firm's $1. 8 billion in assets Access International AdvisorsFinancial firm$1. 4 billion Fortis Bank NetherlandsFinancial firm$1. billion Union Bancaire PriveeFinancial firmunder $1. 08 billion HSBC HoldingsFinancial firm$1 billion Picower FoundationCharity$958 million Carl ShapiroIndividual$545 million Carl & Ruth S hapiro Family FoundationCharity$145 million Yeshiva UniversityCharity$100 to $125 million Hadassah, the Women's Zionist Organization of AmericaCharity$90 million Korea Life InsuranceInsurer$50 million Fairfield, Conn. pension fundPension fund$42 million Madoff Family FoundationCharity$19 million Jewish Community Foundation of Los AngelesCharity$18 million Alicia KoplowitzIndividual$14 million Table 1: List of Madoff Clients (taken from the â€Å"The New York Times†, last updated June 24, 2009) As if the loss of fortunes were not tragic enough, there were also 2 suicides that stemmed from the scandal. Rene-Thierry Magon de la Villehuchet, 65, who lost more than $1 billion of his own and his investors’ money, took his own life on December 23, 2008 after realizing that he would not be able to recoup his investment. The Magon de la Villehuchet family was one of the most prominent families in France, building its fortune in the shipping industry during the 17th century. William Foxton, 65, was the second suicide victim of the scandal, but unlike the first victim, he had never heard of Madoff and lost his investment through one of Madoff’s feeder funds. 2009 Ponzi Schemes The now infamous Ponzi scheme may have been popularized by Bernie Madoff during the present year, but the SEC has been uncovering such schemes at a rapid pace since the Madoff scandal. The following is a list of all the Ponzi schemes charges the SEC has issued in 2009 so far: DATEDEFENDANTSPONZI AMOUNT (In millions) 1/08/09Joseph Forte, Joseph Forte LP$50 1/15/09James G. Osie, CRE Capital$25 /19/09Robert Allen Standford$8,000 2/19/09Marvin Cooper, BCI Inc$4. 4 3/11/09Anthony Vassalo, Kenneth Kenitzer$40 3/26/09Millenium Bank$68 4/01/09Edward T. Stein$55 4/06/09Weizhen Tang$50-75 4/08/09Shawn Merriman$17-20 4/09/09Robert P. Copeland$35 4/13/09Clelia Flores, MRI Inc$23 6/09/09Peter Son, Jin Chung$80 6/10/09Gregory Bell & Lancelot Mgmt$2,000 6/15/09David J. Hernandez$11 6/24/09M ichael C. Regan, Regan & Co$15. 9 6/24/09Moises Pacheco, AMM, BD&C$14. 7 6/28/09John Bravata, Richard Trabulsy$50 9/08/09Philip Barry, Leverage Group$40 9/28/09Frank Bluestein$250 10/16/09Homepals14. 3 Table 2: 2009 Ponzi Scheme SEC Charges According to the SEC website, 2008 SEC Ponzi charges totaled $470 million (excluding Madoff charged on December 11), compared to 2009’s approximate amount of $11 billion YTD. The earliest Ponzi scheme on SEC recent records dating back to 1997 is reported on July 4, 2001 for $67. 5 million. There is no mention of another such scheme until June 9, 2005 for $6 million, while the next such scheme is reported on July 24, 2007 for $41. 9 million. The SEC Failure Bernie Madoff was so above suspicion that he even got his name informally applied an SEC rule. The â€Å"Madoff exception† allowed market makers such as Mr. Madoff to sell stock short to facilitate a customer buy order, even if the stock in question was ticking downward. Under a rule that was in place until 2007, short sales on a downward-ticking stock were normally prohibited. In a short sale, investors borrow stock and sell it, hoping to repay with shares bought at a lower price. Madoff was frequently and unsuccessfully investigated by the SEC. His firm’s first contact with the SEC was in the early 90’s when he hired two accountants, Frank Avellino and Michael Bienes, for his first small investment advisory business. The accountants helped him recruit more than 3,000 clients. They were violating the law selling unregistered securities; however they were not accused of securities fraud. The SEC shut down the Avellino & Bienes operation and forced Madoff to return more than $400 million to investors. 13 In 2000, the SEC Boston office is contacted by Markopoulos where he outlines his first concerns about Madoff. Unable to persuade an investigation, Markopoulos is told to contact the SEC New York office. 13 However, no further investigation is conducted partly because the information presented to the SEC is not understood by its investigators due to its highly complex nature. Since then many other letters from concerned outsiders are being sent to the SEC about Madoff. No action is taken from the SEC until January 2006 when it launches an investigation prompted by the Markopolos memo. After an interview with Madoff in May 2006 in its case-closing recommendation, the SEC said it â€Å"found no evidence of fraud. †13 After the uncovering of the investment fraud, the SEC conducted an internal investigation entitled â€Å"Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi scheme. A 477-page report was released in September 2009 were the SEC Office of Inspector General (OIG) analyzes the SEC failure to uncover Madoff’s Ponzi scheme, how it missed all the red flags and identifies recurring opportunities to find the fraud and how unsuccessful their efforts were. In a recent PBS interview with Henry Pitt, former SEC commissioner from 2001-2003, Mr. Pitt indirectly pointed out some SEC flaws:31 †¢The SEC’s exami nation program was put in place in the mid 90’s is fatally imperfect. The total staff of the SEC is 3,500 people (not all of them do examinations) and there are 11,000 registered investment advisers subject to the SEC’s jurisdiction. There will never be enough money, enough people and enough sophistication to conduct examinations the way they needed to be conducted. †¢The law for broker-dealers was setup in 1934 and in 1940 for investment advisers. The relationship between the two entities is treated separately. In today’s marketplace, this viewpoint needs to change. This is one of the reasons why Madoff continued to be in business after the Avellino and Bienes scandal. The SEC was heavily focused on legal analysis, while not paying too much attention to economic and financial analysis. †¢There needs to be more hedge fund transparency, something the SEC has failed to convince the courts to do so up to now. Arthur Levitt Jr, former SEC chairman from 1993-2001, maintains a view that supports a more focused approach on risk-assessm ent within the SEC. Mr. Levitt has been drawing criticism lately regarding his personal and business relationships with Madoff. When asked about SEC resources, he raises a valid point: â€Å"Since 2002, the number of investment advisers — such as Madoff Securities — has increased by 50%. Yet enforcement resources have been flat or even reduced. The number of SEC enforcement division personnel was cut by 146, to 1,192 in 2007 from 1,338 in 2005. †37 SEC post- Madoff Since the Madoff scandal, the SEC has been taking significant steps to reduce the probability that such frauds will occur in the future. A summary of the post-Madoff Reforms are included on the following list: †¢Safeguarding Investors’ Assets †¢Revitalizing the Enforcement Division †¢Revamping the Handling of Complaint and Tips †¢Advocating for a Whistleblower Program †¢Conducting Risk-Based Examinations of Financial Firms Increasing Focus on Agency-Wide Risk Assessment †¢Improving Fraud Detection Techniques for Examiners †¢Recruiting Staff with Specialized Experience †¢Expanding and Targeting Training †¢Seeking more Resources †¢Integrating Broker-Dealer and Investment Adviser †¢Enhancing Licensing, Education and Oversight Regime for †Å"Back-Office† Personnel In summary, the changes focus where the SEC had previously failed: enhancing investigator financial education, providing incentives for whistleblower tips, allocating additional resources. Hedge Fund Transparency One of the SEC’s attempts towards hedge fund transparency came in 2003 where the entity unsuccessfully tried to enforce the registration of a majority of hedge fund managers by re-interpreting the definition of ‘client’ to an investment-adviser. This rule would have required hedge funds to register as investment advisers. This attempt was dismissed by the U. S. Court of Appeals for the District of Columbia on June 23, 2006. The hedge fund industry as a whole is against regulation in part because such regulations would reveal the trading strategies employed internally to the competition. This is a viable argument in favor of the hedge fund industry, however not viable enough to prevent further regulation, at least in the US markets. A possible suggestion could be to create a quasi-government committee made up of various former heads of finance-related industries that are given the power to review and approve hedge funds. The information they have on their hands is solely between them and certain high level members of the SEC, with secrecy comparable to that of the likes of the Department of Defense. In this way, hedge funds avoid public disclosure of their strategies, while the SEC accomplishes the regulation they have always been pursuing. There could be different levels of approval according to the market value of a hedge fund. While this suggestion may not be the most viable, it is serves an option for both the SEC and hedge fund managers. Conclusion Given its impact on the financial world, it would seem that this scandal could have been prevented much earlier. Why did FINRA (Financial Industry Regulatory Authority), SIFMA (Securities Industry and Financial Markets Association), SEC, and other regulatory bodies not act quicker? Below follows a list of possible concluding points for such long inaction. The world to which the securities laws apply — laws now 70 and 75 years old — is light years away from the world we have today. †34 Point 1: Bernie Madoff was a legend on Wall Street. He and his family were among the elite of the Street and, due to his long career and connections, he obtained a God-like status on the Street and as someon e who could do no wrong. As any religious individual, they do not question God’s actions, they just believe. Furthermore, individuals who commit fraud usually do not have Madoff’s impressive background, connections and reputation. Madoff used his status on the Street as an advantage to raise more money and fly under the radar for as long as he did. A scheme is the last thing one would expect from someone whose resume includes a time as former chairman of NASDAQ. In addition, Harry Markopolos admits that he did not contact FINRA due to his family’s connections with the regulatory authority. In particular, Andrew Madoff served as an incoming District 10 member of FINRA in 2003 while his brother Mark served on FINRA’s Mutual Fund Task Force in 2004. Also, Bernie Madoff’s brother Peter served on the board of directors of SIFMA. Point 2: Madoff was not using any illegal trading strategies. The split-strike option is a legitimate strategy that has been employed for years by a few experienced industry professionals, such as Harry Markopolos. It is a highly complex strategy that even Markopolos in his SEC paper admits that few really understand, hence many of Madoff’s experienced investors failed to quantitatively analyze, yet they rather based their assumptions on word of mouth. In the same token, the SEC did not pay attention to something that they could not completely understand and did not put as much emphasis as they should have. Point 3: Red flags were not raised initially due to the overall economy’s performance. When the market was performing well, a 12% return was within reasonable lines of S&P returns. Some flags came up when the market started producing negative returns, yet Madoff’s returns kept their usual steady, profitable path. If the market were still performing neutral to slightly above neutral levels, chances are that the scandal would still lie beneath fake returns. Point 4: The SEC did not act any sooner possibly due to the psychological structure of its own investigators. A typical SEC investigator is young, non-aggressive, and lacks enough resources to fully take on such a case single-handedly. The aggressive and talented individuals get absorbed by Wall Street due to obvious lucrative reasons. This is not to say that the SEC does not employ talented, aggressive individuals; all that is being conveyed here is that probably some of the investigators’ psychological and character structure coupled with the lack of resources was a key mixture of ingredients the organization was missing. Plus, in order to raise such a high stakes complaint an SEC investigator would have to go through the usual bureaucratic red tape inherent in government process. Point 5: The SEC is made up of lawyers, thus lack the experience and knowledge of financial markets. The institution is not a financial entity that relies on satisfying shareholder returns; it is a regulatory authority that interprets and applies the law. Lawyers are not fund managers, thus are not familiar with the complexities and headaches that come with such territory. Point 6: The SEC failure in the Madoff case is yet another example of a ‘failure’ of the invisible hand to regulate capitalism’s promotion of self-interests. While de-regulation of capital markets was very instrumental to transform the US economy into a global powerhouse, lack of de-regulation brought upon the Madoff scandal along with one of the worst recessions in US history. If the markets were more heavily regulated from the beginning, one can only speculate on how far the US economy could have reached. In his testimony to Congress, Allan Greenspan admitted that his ideology of free market capitalism has a major flaw: â€Å"I made a mistake in presuming that the self-interest of organizations, specifically banks, is such that they were best capable of protecting shareholders and equity in the firms. † In short, Greenspan’s flaw was a variable he never considered as part of his ideology of free market capitalism: human greed. Not surprisingly, Greenspan’s flaw has influenced many areas of free markets from credit-default swaps and mortgage lending tactics, to unregistered hedge fund management practices. Bernard Madoff has left his imprint on Wall Street's ‘disgraced' list and his case will be used as an example to further regulate hedge funds and transparency needed in the financial industry. His life story of rising to the top and falling from grace highlights the double-edged sword of capitalism's laissez faire attitude. It will be very interesting to see how effectively the regulatory authorities will tackle this issue, as Madoff's case moves from the public eye to university case study in the coming years. Bibliography

Marketing Plan 3D printing Essay

Objective of this marketing plan for 3D printing is to create awareness to new customers in education industry, increase market share, and provide customized value-added solution to current users. 3D printing is considered a new technology in Singapore, so to achieve the objectives, we proposes Stratasys to make use the lateral diversification strategy. The reason of adopting this strategy is to improve its profitability and sustainability of the organization. The objective may be achieved through 3 phases. In the short-term (1 year), the objective is to create awareness through newspapers, online advertising and live demonstration will be conducted at institutes’ open house events, and where the new students will be introduced to this new technology together. Stratasys can also select some institutes to trial on this printer for 6 months which will helps to augment its marketability and school’s perception of the product. In the mid to long term (2 to 4 year) the objective is to provide customization and value-added solution to institutes that have been consistently using our products and services. Customization will be offered to meet institutes’ requirement and we can offered includes product training and customer consultation on the printers that are offered to them. Stratasys can also provide maintenance, repair service and improving product safety as an additional value-added solution. This will aid in promoting more institutes to use 3D printing in product development through word-of-mouth recommendation. In the long term (4 years onwards) the technology will be well recognized in the minds of the most institution, and this will enable Stratasys to gain loyal customers. With an increase in market share, Stratasys will be able to fine-tune on the price offered to make it affordable to allow more users to explore the technology, and also created more applications for it. For example, smaller printers will be produced to cater to small companies, and sector specific types for dental, aerospace, and medical. Ultimate goal will be gaining competitive advantage in the marketplace. Marketing Mix Marketing mix was designed as a simple way to focus attention on the main elements of marketing for a business and to create a marketing strategy to  the business, products or services. The traditional of marketing mix consists of four main elements which is product, price, place and promotion. They are the combination of marketing efforts that to meet and satisfy the needs and wants of consumers. But in a modern world, marketers have developed to seven P’s of marketing mix, which comprises the former 4P’s and added people, physical evidence and process. (Valuebasedmanagement.net, 2013) Products Stratasys has three main series of printers which is cater for different purposes. Idea Series printers bring 3D printers to smaller teams and individual, which allows them to utilize 3D printer within their financial budget. For this series of printers, it will be suitable for institutes that offered jewellery designs course. As for design series printers, it helps to improve on communication, collaboration and problem solving. With the use of photopolymer materials, it helps to create flexibility and confidence in product presentation. It is definitely more suitable for institutes that have offered product design offered. This will helps the students in completing and exhibiting their final products. Lastly is production series, it provides speed, accuracy and efficiency at an affordable cost. As for this series, it will be catering for engineering students. Each series of 3D printers will benefit institutes in reducing time, cost and increase of accuracy and efficiency. Apart from individual printer purchase, we do offer customized bundle packages for customers who wish to purchase more than a printer. Price Pricing plays an important role as it determines the revenue generated, therefore, price has to be attractive and affordable. Price of 3D printers that Stratasys offered depends on the size and purpose of the printers. The price strategy used is differential pricing strategy. Stratasys can adjust pricing based on various situations and circumstances. Price for new consumers will always start high and gradually lower if bundle packages are purchased or bulk buying. Price that customers are paying is not only for printer, but also the after-service. Offering discounts or additional value-added service will make the business more attractive to the business. Stratasys can offer more affordable 3D printers and bundle package offering  to institutes that purchase more printers and materials. Processes This is the process element how the service is delivered to the customers. Stratasys can implement a customer service to help monitor on new customers’ progress on the products and offer provides servicing to all new customers before their warranty for the printers are expiring. This will make customers feel importance and this will help to build up their confidence in our products and services offered. Promotion A Online Marketing – Facebook and You tube The main objective of promotion is to create awareness of a product or service. Promotion is the communicating information about your product or  service to generate a positive response from your customer. Online marketing is critical to business in this current society. With reference to Chart B, currently approximately 90% of Singapore resident are users in Facebook. It is important that Stratasys will use this medium to create communication on 3D printing technology. Most students in Singapore have a Facebook account, thus they are able to view Facebook Chart B – Facebook Users in Singapore B Event Road Show This is a different marketing strategy, compared to digital marketing. This marketing strategy requires physical demonstration and explanation of 3D printers at an event. This will attract the curiosity of potential customer that is new and curious to this technology. For such events, well-trained staffs will be present to demonstrate the advantage of 3D printing technology and help to resolve on consumers’ questions. C Youtube Youtube is an online media streaming website which users are able to access internationally. It is considered an inexpensive advertisement media to market products and services as the resources require are only computers, video camera and internet connection. Stratasys can upload videos on 3D printing into Youtube which will create more awareness internationally. Users will then use mouth-of-words to share this video with their families and friends, thus it will broaden the publicity of 3D printers to new customers.

Engineering - Quality Management Research Paper

Engineering - Quality Management - Research Paper Example Looking back to the early 1980s a revolution, which can be perceived as a not-so-quiet, has been in effect in the global business. This has been an ideas revolution involving the questions of how to do business. The revolution can be said to be largely spearhead by three individuals, that is, Joseph Juran, Philip Crosby as well as W. Edward Deming. Thesis Statement The purpose of this paper is to access the similarities and the differences from the works of Deming and Crosby in quality management. On similarities, the paper will address; Customer Requirement as an important standard, the responsible quality management, goal of Quality as well as management Perspective. On the aspect of differences, the paper will address; The Basic orientation to quality, the question of what is Quality, implementation’s chief elements, inspection/ Defect control, improvement Basis, management perspective and cost of quality Discussion Similarities Customer Requirement as an important standard According to the work by Deming, he is of the view that the presence of a consumer is brought about by a necessity and as such, it is the most vital aspect of a system of production, that is, where there are no consumers, what then is the need for production? Crosby’s work define quality as conforming to certain set of specifications, which have been stipulated by the management of an organization and not some concept of goodness full of vagueness. The specifications entailed in quality are not made arbitrary either (Baxter & MacLeod, 2008). As such, they ought to be set in accordance with the needs as well as wants of the customers. The responsible quality management team According to the work advanced by Deming, it advances that quality is designed in the boardroom. In his notion of quality, he says that ideas such as; sincerity, hard work, personal responsibility as well as decency, indeed are responsible for the changed management world. He says that it is unsubstantial to just perform a task to the best of your capacity. It is necessary that one becomes aware of what he is working on. Crosby work indeed shares the same notion (Baxter & MacLeod, 2008). According to him, improvement in quality ought to commence from the top. In order to come up with a manufacturing process, with no defect, or what he term as zero defects, then the management of any organization must then set the suitable atmosphere and the tone whereby the employees will easily follow. If the management fails to establish a production system with zero defects, then it is not closer enough to a quality product. Goal of Quality In both works, they advance that quality improvement is an unending process. In Deming’s work, it is suggested that in order to meet and exceed the needs of a customer, it is necessary that there are continuous improvements. In the same notion, Crosby points out that the continuous improvements must be enhanced and as such, it should be done by setting a production with zero defects (John & Barnes, 2006). Though both works share common grounds in regard to the quality management, the largest part they share are the differences on the notion of quality management. Management Perspective In both works, drawing of comparison is mentioned

Mortgages Essay Example | Topics and Well Written Essays - 1000 words

Mortgages - Essay Example These compound problems have worked to create a situation in which many homeowners have found themselves holding on to high interest rate mortgages for homes that are worth less than they owe to pay off their mortgage. Such a situation is known as an â€Å"underwater† mortgage. Due to the fact that different political parties have sought to take advantage of this misfortune by seeking to capitalize on the rhetoric surrounding the issues as a way to drum up support for a given candidate, the problem has been exacerbated as the federal government has furtively toyed with different types of interventions only to do little if anything to ameliorate the root problem. Thus, this brief essay will consider whether homeowners with subprime mortgages should be allowed to force their lenders to renegotiate their terms. The answer to the question is somewhat more complex than a simple ‘yes’ or ‘no’. From a purely economic point of view, the individuals who agreed on the home loans at the bank’s terms and conditions have entered into a legally binding contract that they had every opportunity to review and seek to understand prior to signing on the dotted line. In this way, a degree of culpability must be accepted by those mortgage holders that initially accepted the terms and conditions, regardless of whether they were too lazy to take the time to read and fully understand them (Richardson 87). From the bank’s point of view, much of the problems associated with the high number of subprime mortgages that had to be completed were a result of the unnatural legislation (Dodd-Frank) that was forced upon the banks as a means to fulfill a certain type of quota with reference to those within society that would otherwise never be able to afford or quality to purchase/borrow a house of their own (LaCour-Little et al. 88). In this way, it is impossible to blame the entire situation on the financial institutions themselves as the governmen t had a heavy role in creating such a crisis in the first place. From the individual borrower’s point of view, the banks instituted extraordinarily high interest rates due to the fact that they considered these subprime borrowers to be of an extreme default risk (Hill 49). In a way, these extremely high rates were nearly self-fulfilling prophecies due to the fact that as soon as the economy began to cool, the first individuals that were going to feel the crunch were necessarily those that had borrowed to the max and were going to have hardship making sure that their high interest rate mortgage is paid every month. One might rightly question why it should be incumbent upon the financial institution to renegotiate a signed and legally binding contract that has already been agreed upon with a terms of either 15-30 years. The answer to such a question can actually be found outside of forcing the financial institution to renegotiate the loan terms (An et al. 546). As such, a litan y of refinancing offers exists for qualified individuals. Those rates that were common during the early 2000’s have dropped to record lows within the past several years. The issue with such refinancing offers is that they invariably require a large amount of start up costs associated with actually changing the loan from one lender to another.

Marketing Report Coursework Example | Topics and Well Written Essays - 3000 words

Marketing Report - Coursework Example This has also been done for understanding the external environment. The findings derived after analyzing the market for IKEA revealed that IKEA is one of the major players in the furniture retailing market and though the company has many competitors, but due to certain Unique Selling Proposition (USP) the competitors would not be able to shake the strong foundation of the company. The company might face problems due to the economic slowdown that is prevailing around the world, due to which the sales might get affected. Introduction IKEA Furniture is private furniture retail chain in UK, which sells furniture and home products. The company also deals in customized furniture which has to be assembled according to the preferences of the customers. IKEA is one of the world’s largest furniture retailers and it sells furniture like beds, desks, chairs, tables, home appliances and accessories. The company was founded by Ingvar Kamprad in the year 1943, in Sweden. IKEA is best known f or stylish, designable and easy to handle furniture. Their furniture is eco-friendly and simply designed. Apart from its products, the company is also known for its cost control aspect. The company has always maintained a standard in controlling its internal cost, paying ample attention to the operational details and continuously developing and improving their product. IKEA is now owned and operated by both profit and non-profit organization. So the corporate structure of the company is segregated into two parts, namely: franchising and operations. The aim of this study is to analyze the functions and developments of IKEA furniture, conduct a complete market analysis of the company so as to understand the present position of the company in the industry and finally recommend strategies for improvement (IKEA, 2012). Procedure The aim of the study is to conduct competitor, market, environmental, customer and internal analysis for IKEA Furniture, so that the actual position of the compa ny in the global market can be identified. Competitors’ analysis can be done by first identifying the competitors, understanding their strategies for the customers, predicting the future steps of the competitors, assessing the value chain of the competitors and developing strategies to challenge their method. The market share of the competitors has to be estimated. The environmental analysis can be done by analyzing the external environmental of the country where IKEA has planned to open up a retail store. Similarly customers’ analysis can be done by studying the behavioural and psychological patterns of the consumers. Finally the internal analysis of the company would be done by assessing the human, financial, and physical resources within the company. Findings Competitor Analysis The major competitors of IKEA are ASDA, Ashley, and Bassett Furniture Industries among others. According to the CEO of the company, their brand awareness is must more than the size of the co mpany. This is because IKEA is not just a furniture merchant like the competitors, but it sells lifestyle to its customers. Apart

Peasantry is present in both novels, Fathers and Sons and The House of Essay

Peasantry is present in both novels, Fathers and Sons and The House of the Spirits. Explain the use of Peasants and their role i - Essay Example One of the main characters of the novel, Esteban Garcia, belongs to the family who represent the peasant class in the novel. The peasants, in this novel, can join the police force or the army and gain access to education and a higher class status. The antagonism between the two classes occurs due to the fact that the aristocrats own the lands while the peasants work on them. The discord between them intensifies when the upper class flourishes and the lower class fails to prosper. Several different approaches are represented towards the inequality. Esteban Garcia believes in the conventional view i.e. the peasants are a dignified class and should not strive to achieve the status of the higher class. They should be contented with whatever they have been provided with. On the other hand, another member of the same family, Pedro Tercero Garcia, represents the revolutionary peasants who want to change their situation. The peasants are also supported by the Trueba women. The novel starts a nd ends with a narration that refers directly to Clara and her use of journals. The words used by the narrator were written by Isabel Allende. Special attention has been given to the various ways in which each woman learn how to write. Clara and Alba first get a hang at writing and then learn how to make use of that writing. Writing testifies the events that they had witnessed on both personal and political level. The primary purpose of such a testimony being to broadcast these events to a wider audience so that they are able to draw lessons and learn from the events. At the personal level, Alba and her relatives were able to put together their family progeny and history on the basis of Clara's writings. Alba talks about military rule, the military regime etc at the political levels. Alba's writings reflect the events that place at Isabel's house in Chile during her life. Fate keeps playing its game in The House of the Spirits. The events had been thematized in Clara's clairvoyance that helped her understand the fate of people and to predict future. The plot has been structured such that it revolves around the encounters of the members of the del Valle-Trueba family and the Garcia family with each other. most of the young couples in the novels met each other when they were young and ultimately realized that they are meant for each other years later. The novel takes a slow and steady pace throughout the course of its story depiction and narration. Love returned and found its way through a rare combination of chance and design. The same was the case with most other relations in the novel including friendships and debts. Most turning points in the show were a matter of chance and the game of destiny. They did not follow a steady course of actions. The actions took place by chance. every character's fate in the novel was a culmination of his actions, whether great and small. This is analogous to the fate of country being determined by the roles played by forces of nature. (rags) .Fathers and Sons Ivan Turgenev novel, Fathers and Sons, is realistically set in a Russian countryside where Turgenev captures the situation of some families during the social upheaval in Russian history. Tsar Alexander II officially emancipated the serfs in 1861 after a movement which had been growing since 1859. Nikolai Petrovic forfeits his power and frees the serfs but he faces problems in maintaining order over them now. The Russian upheaval results in the

The Commercial Banks in Singapore Essay Example | Topics and Well Written Essays - 2750 words

The Commercial Banks in Singapore - Essay Example Commercial banks are the backbone of any economy and they contribute to the economic development in the following ways: 1) Promoting capital formation in the economy 2) Promotion of trade and industry through loans and investments 3) Development of agriculture through Agri-financing 4) Transferring surplus capital from developed to less developed regions to allow for balanced development of the economy 5) Encouraging businesses related to export by providing them support so as to improve the GDP of the country through positive trade (Janan, 2009) b.1. Following are the 5 principles on which the Islamic banking model operates: 1) Sanctity of contract – it must be ensured that the contract is halal (all components valid and not voidable) according to the Sharia rulings 2) Risk Sharing – profit must not be earned by a party without having a stake in the asset generating the said profit 3) No Riba/Interest – money should not be lent to earn additional amount on its u nderlying value 4) Economic Purpose – the activity should be for economic purpose 5) Fairness – the terms and conditions should be fair to all parties involved and be disclosed fully to avoid any doubt in the contract (Ahmad & Shabbir) b.2. Advantages of Islamic Banking over Conventional Banking: 1) Islamic modes of finance can’t be marketed beyond the initial parties of the contract and are also non-callable – both these features protect the financial system from collapsing. Conventional bank lending is a pyramid-shaped chain where one party can further the loan attained from the bank, thus when a financial crisis occurs and one party defaults the whole system crashes. Also, the non-callable feature allows for more certainty as the party is able to keep the loan until its maturity. (Ahmad & Shabbir) 2) Islamic banks bear the liability of getting involved in a transaction with the customer unlike conventional banks – thus they do not have a guarant eed return in form of fixed payments from customers (interest) rather they take risk of partnering in a venture with their client. For example in Musharika which is a mode of Islamic finance, the bank gets into a partnership agreement with the client and the profit sharing ratio is agreed upon by the parties while the ratio of loss sharing is in proportion to the capital invested by the bank and the client. (Ahmad & Shabbir) 3) The creditworthiness of the client is not the only determining factor in Islamic finance – the type, nature, viability, and profitability of the business are the main determining factors. Islam does not allow unethical and immoral business activities, thus lending to businesses such as alcohol, pornography, etc. is forbidden as these activities are also harmful and negatively affect the productivity of the economy. (Ahamed, 2008)

Finance and Growth Strategies -MBA- Essay Example | Topics and Well Written Essays - 3250 words

Finance and Growth Strategies -MBA- - Essay Example In a market where there is faultless information and perfect sureness, company share valuation would create not so many hassles, however, in the real world, assessment and projection issues connive to make the valuation process easier said than done. One recommendation is the employment of earnings approaches that take advantage of a firm’s net after-tax earnings at a suitable rate of return. In utilising an earnings-based method, at least three elements need to be established. The evaluator has to make an educated guess as to the amount and timing of future receipts and a suitable discount rate. An option to the employment of net after-tax earnings is to base the analysis on earnings before interest and taxes (Feldman 2005; Pratt, Reilly and Schweits 2000; Pratt 1986). This procedure is fashionable and well accepted among leverage buyout groups and investors because it permits them to reach a value that defuse differences in financial structure. Essentially, substantial debate enfolds the choice of the discount rate used to get the most out of earnings or cash flows. This price stands for both the time value of money and the â€Å"risk† involved in cash flows. As it is, the capital asset pricing model is a universally employed method. Nonetheless, speculative issues linked to the postulations of the appropriate market proxy, risk-free rate, and sample period have led valuation experts to reflect on different ways to work out an appropriate discount rate. Substitutes can include the application of historical market risk premiums and the employment of indices available from government or private sources (Koeplin, Sarin and Shapiro 2000, pp. 94-101; Brealey and Myers 1991; Weiss 1987). Several valuation schemes acknowledge the fact that when purchasing a business enterprise, a buyer is actually making a speculative venture today hoping for

Political theatre Essay Example | Topics and Well Written Essays - 1500 words

Political theatre - Essay Example th such exclusive motive had been classified as political theatre, which is no more the case, as â€Å"in one way or another all performance and theatre can be seen as involved in discourses of power† (Baz Kershaw, The Radical in Performance, 1999, p63). As any work of art needs to hold up a faithful mirror to nature (Aristotle, Poetics), and political theatre in general aims at representing social, political, cultural problems to the audience, political theatre in the modern period does not only represent but politicizes the representations, by either breaking the traditional representations or reinforcing them. They are sometimes known as experimental theatre or post-modern theatre (Auslander, 1987). In a way, they are part of any representations in any theatre and there is no more a separate political theatre. This is true in the modern and post-modern context after the rise of radical thinking and modern theories which politicize the dichotomies in the society. Each theory focuses on specific aspects of dichotomies; for example, Feminism politicizes body, gender identities and the otherness of women, while Post-colonialism focuses on the problem of cultural identity and politics. However, each one of them is concerned about power relations in the society and focuses more on the differences than on the similarities, unlike Modernism. In this context, any representation and use of language is no more a narrative but becomes a part of discourse making any theatre a political theatre. According to Baz Kershaw, as a consequence of the radical change in the literary theory, there is no more exclusive political theatre but all performances are political discourses in some way (Baz Kershaw, The Radical in Performance, 1999). To trace the history of literary theory of drama, Aristotle’s Poetics offers the actors power to think and act on behalf of the audience enacting them thereby enabling catharsis; however, the radical change has empowered the audience and

Ethical Challenges Essay Example for Free

Ethical Challenges Essay When meeting clients at community and social events the issue of confidentiality and privacy arises. And I agree with Stacey Mason that personal and professional boundaries should not be blurred meaning that clients should not try to consider social event as an excellent opportunity to talk to counselor about certain disturbances. I think confidentiality won’t be broken if relations between the counselor and client remain professional and defined. Of course, some clients may think counselor may share discussed information with the audience, but professional counselor will never use shared information as advantage over the person. I agree that the principles of beneficence and confidentiality should not be violated in any case. In situations, when client is viewed as danger to counselor, the last should take preventive measures either reporting police or informing the relatives. Thus, I agree with Stacey mason that the only case when the principle of confidentiality may be violated is when it is necessary to prevent a suicide attempt. I think that Meagan Bowser’s position on key ethical challenges is valid as well. There are clients who don’t want others to not about their visits to counselors, and, in such situation, counselor is recommended no to approach the client until the client says something to the counselor showing willingness to communication in informal environment. Of course, the counselor should not talk about treatment, counseling or other related issues. I think that counselors should always think of client’s privacy and confidentiality. I see the second situation is more confused and perplexing and professional counselor has to reassure the client that his confidentiality won’t be violated as, there are cases, when under severe stress students attempt to commit a suicide. I agree with the idea that the key responsibility of the counselor is to persuade the girl to tell parents about her problems, not to tell parents himself. Only professional counselors are able to process student’s emotions and direct them in the beneficial way.

The Fifth Discipline Essay Example for Free

The Fifth Discipline Essay Introduction The organizations that will truly excel in the future will be those that discover how to tap people’s commitment and develop the capacity to learn at all levels in an organization. Deep down, people are learners. No one has to teach an infant to learn. In fact, no one has to teach infants anything. They are intrinsically inquisitive, masterful learners. Learning organizations are possible because at heart we all love to learn. Through learning we re-create ourselves and are able to do something we were never able to do earlier. Through learning we reperceive the world and our relationship to it. Through learning we extend our capacity to create, to be part of the generative process of life. There is within each of us a deep hunger for this type of learning. This seminal book by Peter M Senge explains how learning organizations can be built. The building blocks Systems Thinking Business and other human endeavours are systems of interrelated actions, whose full impact may be seen only after years. Since we are part of these systems, it’s hard to see the whole pattern of change. Instead, we tend to focus on snapshots of isolated parts of the systems, and wonder why our deepest problems never seem to get solved. Systems thinking is a conceptual framework, to make the full patterns clearer and to help us see how to change them effectively. Personal Mastery Mastery means a special level of proficiency. People with a high level of personal mastery are able to consistently realize the results that matter most deeply to them in effect. They approach their life as an artist would approach a work of art, by becoming committed to their own lifelong learning. The discipline of personal mastery, starts with clarifying the things that really matter to us, of living our lives in line with our highest aspirations. Mental Models Mental models are deeply ingrained assumptions, generalizations, or even pictures of images that influence how we take action. Very often, we are not consciously aware of our mental models or the effects that they have on our behavior. Many insights into new markets or outmoded organizational practices fail to get put into practice because they conflict with powerful, tacit mental models. Institutional learning is the process whereby people change their shared mental models of the company, their markets, and their competitors. Building Shared Vision If any one idea about leadership has inspired organizations for thousands of years, it’s the capacity to hold a shared picture of the future we seek to create. When there is a genuine vision, people excel and learn, not because they are told to, but because they want to. But many leaders have personal visions that never get translated into shared visions that galvanize an organization. All too often, a company’s vision revolves around the charisma of a leader, or around a crisis that galvanizes everyone temporarily. But, people must pursue a lofty goal, not only in times of crisis but at all times. What is needed is a discipline for translating individual vision into shared vision – not a â€Å"cook book† but a set of principles and guiding practices. Team Learning The discipline of team learning starts with â€Å"dialogue,† the capacity of team members to suspend assumptions and enter into a genuine â€Å"thinking together.† Dialogue also involves learning how to recognize the patterns of interaction in teams that undermine learning. The patterns of defensiveness are often deeply engrained in how a team operates. If unrecognized, they undermine learning. If recognized, they can actually accelerate learning. Assessing the organization’s learning disability Most organizations learn poorly. The way they are designed and managed, the way people’s jobs are defined, and most importantly, the way people have been taught to think and interact, create fundamental learning disabilities. When people in organizations focus only on their position, they have little sense of responsibility for the results they produce. Moreover, when results are disappointing, we tend to find someone or something outside ourselves to blame when things go wrong. All too often, â€Å"proactiveness† is reactiveness in disguise. True proactiveness comes from seeing how we contribute to our own problems. Actions in organizations are dominated by concern with events: last month’s sales, the new budget cuts, the last quarter’s earnings, who just got promoted or fired, the new product our competitors just announced, the delay in launching a new product, and so on. Our fixation on events is actually part of our evolutionary programming. The irony is that today the primary threats to our survival, both of our organizations and of our societies, come not from sudden events but from slow, gradual processes. The arms race, environmental decay, the erosion of our society’s public education system, increasingly obsolete physical capital, and decline in design or product quality are all slow, gradual processes. Learning to see slow, gradual processes requires slowing down our frenetic pace and paying attention to the subtle as well as the dramatic. We learn best from experience but we never directly experience the consequences of many of our most important decisions. The most critical decisions made in organizations have systemwide consequences that stretch over years or decades. Systems thinking Systems thinking is the fifth discipline. It is the conceptual cornerstone that underlies all the five learning disciplines. The easy or familiar solution is not only ineffective; sometimes it is addictive and dangerous. The long-term, insidious consequence of applying non-systemic solutions is the increased need for more and more of the solution. There is a fundamental mismatch between the nature of reality in complex systems and our predominant ways of thinking about that reality. The first step in correcting that mismatch is to let go of the notion that cause and effect are close in time and space. Tackling a difficult problem is also a matter of seeing where the high leverage lies, a change which – with a minimum of  effort would lead to lasting, significant improvement. This point is quite similar to what Malcolm Gladwell makes in his book, â€Å"The Tipping Point†. Without systems thinking, there is neither the incentive nor the means to integrate the learning disciplines that have come into practice. Systems thinking is the cornerstone of how learning organizations think about their world. Sophisticated tools of forecasting and business analysis, as well as elegant strategic plans, usually fail to produce dramatic breakthroughs in managing a business. They are all designed to handle the sort of complexity in which there are many variables. Senge calls it detail complexity. But there is another type of complexity, where cause and effect are subtle, and where the effects over time of interventions are not obvious. This, Senge calls dynamic complexity. Conventional forecasting, planning, and analysis are not equipped to deal with dynamic complexity. When the same action has dramatically different effects in the short run and in the long run, there is dynamic complexity. When an action has one set of consequences locally and a very different set of consequences in another part of the system, there is dynamic complexity. When obvious interventions produce non-obvious consequences, there is dynamic complexity. The real leverage in most management situations lies in understanding dynamic complexity, not detail complexity. Unfortunately, most â€Å"systems analyses† focus on detail complexity, not dynamic complexity. Systems thinking is useful for describing a vast array of interrelationships and patterns of change. Ultimately, it helps us see the deeper patterns lying behind the events and the details. In mastering systems thinking, we give up the assumption that there must be an individual, or individual agent, responsible. Everyone shares responsibility for problems generated by a system. That does not necessarily imply that everyone involved can exert equal leverage in changing the system. But it discourages the search for scapegoats. In reinforcing processes, a small change builds on itself. A small action snowballs, with more and more and still more of the same, resembling compounding interest. But there’s nothing inherently bad about reinforcing loops. There are also â€Å"virtuous cycles† – processes that reinforce in  desired directions. If we are in a balancing system, we are in a system that is seeking stability. If the system’s goal is one we like, we will be happy. If it is not, we will find all our efforts to change matters frustrated until we can either change the goal or weaken its influence. Nature loves a balance – but many times, human decision makers act contrary to these balances, and pay the price. In general, balancing loops are more difficult to see than reinforcing loops because it often looks like nothing is happening. Leaders who attempt organizational change often find themselves unwittingly caught in balancing processes. To the leaders, it looks as though their efforts are clashing with the sudden resistance that seems to come from nowhere. In fact, the resistance is a response by the system, trying to maintain an implicit system goal. Until this goal is recognized, the change effort is doomed to failure. Systems seem to have minds of their own. This is specially evident in delays between actions and their consequences. Delays can make us badly overshoot the mark, or they can have a positive effect if we recognize them and work with them. That’s one of the lessons of balancing loops with delays. Aggressive action often produces exactly the opposite of what is intended. It produces instability and oscillation, instead of moving us more quickly toward our goal. Symptomatic intervention A reinforcing (amplifying) process is set in motion to produce a desired result. It creates a spiral of success but also creates inadvertent secondary effects (manifested in a balancing process) which eventually slow down the success. Instead of trying to push growth, we must remove the factors limiting growth. An underlying problem generates symptoms that demand attention. But such a problem is difficult for people to address, either because it is obscure or costly to confront. So people â€Å"shift the burden† of their problem to other solutions – well-intentioned, easy fixes which seem extremely efficient. Solutions that address only the symptoms of a problem, not fundamental causes, tend to have short term benefits at best. In the long term, the problem resurfaces and there is increased pressure for symptomatic response. Meanwhile, the capability for fundamental solutions  can atrophy. Symptomatic intervention; the â€Å"quick fix,† solves the problem symptom quickly, but only temporarily. In case of a more fundamental response to the problem, it takes longer to become evident. However, the fundamental solution works far more effectively. It may be the only enduring way to deal with the problem. The shifting burden structure explains a wide range of behaviors where well-intended â€Å"solutions† actually make matters worse over the long term. Opting for â€Å"symptomatic solutions† is enticing. Apparent improvement is achieved. Pressures, either external or internal, to â€Å"do something† about a vexing problem are relieved. But easing a problem symptom also reduces any perceived need to find a more fundamental solution. Over time, people rely more and more on the symptomatic solution. Without anyone making a conscious decision, people have â€Å"shifted the burden† to increasing reliance on symptomatic solutions. A special case of shifting the burden, which recurs with alarming frequency, is â€Å"eroding goals.† Whenever there is a gap between our goals and our current situation there are two sets of pressures: to improve the situation and to lower our goals. Dealing effectively with the situation requires a combination of strengthening the fundamental response and weakening the symptomatic response. Strengthening fundamental responses almost always requires a long-term orientation and a sense of shared vision. Weakening the symptomatic response requires willingness to face the truth about palliatives and â€Å"looking good† solutions. Leverage The bottom line of systems thinking is leverage. We must see where small actions and changes in structures can lead to significant, enduring improvements. The best results come not from largescale efforts but from small well-focused actions. Nonsystematic ways of thinking consistently lead us to focus on low-leverage changes, on symptoms where the stress is greatest. So we repair or ameliorate the symptoms. But such efforts only make matters worse in the long run. Systems thinking means organizing complexity into a coherent story that illuminates the cause of problems and how they can be remedied in enduring ways. The increasing complexity of today’s world leads many managers to assume that they lack the information they need to act effectively. The fundamental â€Å"information problem† faced by managers is not too little information but too much information. What we  most need are ways to know what is important and what is not  important, what variables to focus on and which to pay less attention to. This will generate leverage. Personal Mastery Organizations learn only if individual employees who learn. Individual learning is a necessary, through not sufficient condition for organizational learning. We must make personal mastery a part of our lives. This involves continually clarifying what is important to us. We often spend too much time coping with problems along our path that we only have a vague idea of what’s really important to us. We also need to see current reality more clearly. We’ve all known people entangled in counterproductive relationships, who remain stuck because they keep pretending everything is all right. In moving toward a desired destination, it is vital to know where we are now. The juxtaposition of vision and a clear picture of current reality generates â€Å"creative tension†. The essence of personal mastery is learning how to generate and sustain creative tension in our lives. The gap between vision and current reality is a source of creative energy. If there is no gap, there wo uld be no need for any action to move toward the vision. But when there is a gap between the goals and the current reality, negative emotion may also arise. We may lower our goals when we are unwilling to live with emotional tension. On the other hand, when we understand creative tension and allow it to operate by not lowering our vision, vision becomes an active force. Truly creative people use the gap between vision and current reality to generate energy for change. Mastery of creative tension leads to a fundamental shift in our whole posture toward reality. Current reality becomes our ally not an enemy. An accurate, insightful view of current reality is as important as a clear vision. If the first choice in pursuing personal mastery is to be true to our own vision, the second fundamental choice in support of personal mastery is commitment to the truth. What limits our ability to create what we really want is belief in our powerlessness and unworthiness. People cope with these problems in different ways. Letting our vision erode is one such strategy. The second is to try to  manipulate ourselves into greater effort toward what we want by creating artificial conflict, such as through avoiding what we do not want. Some people psyche themselves up to overpower all forms of resistance to achieving their goals. Willpower is so common among highly successful people that many see its characteristics as synonymous with success: a maniacal focus on goals, willingness to â€Å"pay the price,† ability to defeat any opposition and surmount any obstacle. Being committed to the truth is far more powerful than any technique. It means a relentless willingness to root out the ways we limit or deceive ourselves from seeing what is, and to continually challenge our theories or why things are the way they are. It means continually broadening our awareness. Focusing on the desired intrinsic result is a skill. For most of us, it is not easy at first, and takes time and patience to develop. As soon as we think of some important personal goal, almost immediately we think of all the reasons why it will be hard to achieve – the challenges we will face and the obstacles we will have to overcome. While this is very helpful for thinking through alternative strategies for achieving our goals, it is also a sign of lack of discipline when thoughts about â€Å"the process† of achieving our vision continually crowd out our focus on the outcomes we  seek. We must work at learning how to separate what we truly want, from what we think we need to do in order to achieve it. A useful starting exercise for learning how to focus more clearly on desired results is to take any particular goal or aspect of our vision. If we ask ourselves the question. â€Å"If I actually had this, what would it get me?†, the answer to that question reveals â€Å"deeper† desires lying behind the goal. In fact, the goal is actually an interim step to reach a more important result. Ultimately, what matters most in developing the subconscious rapport characteristic of masters is the genuine caring for a desired outcome, the deep feeling that it is the â€Å"right† goal. The subconscious seems especially receptive to goals in line with our deeper aspirations and values. People with high levels of personal mastery do not set out to integrate reason and intuition. Rather, they achieve it naturally – as a by-product of their commitment to use all the resources at their disposal. They cannot afford to choose between reason  and intuition, or head and heart. The discipline of seeing interrelationships gradually undermines older attitudes of blame and guilt. We begin to see that all of us are trapped in structures embedded both in our ways of thinking and in the interpersonal and social milieus in which we live. Our knee-jerk tendency to find fault with one another gradually fades, leaving a much deeper appreciation of the forces under which we all operate. Mental Models New insights fail to get put into practice because they conflict with deeply held internal images of how the world works. That is why the discipline of managing mental models – surfacing, testing, and improving our internal pictures of how the world works holds the key to building learning organizations. The problems with mental models arise not because they are right or wrong but because we often act without being aware of them. The healthy corporations are ones which can systematize ways to bring people together to develop the best possible mental models for facing any situation at hand. Learning skills fall into two broad classes: skills of reflection and skills of inquiry. Skills of reflection concern slowing down our own thinking processes so that we can become more aware of how we form our mental models and the ways they influence our actions. Inquiry skills are concerned with how we operate in face-to-face interactions with others, especially in dealing with complex issues. People who become lifelong learners practice â€Å"reflection in action,† the ability to reflect on one’s thinking while acting. Our mind tends to move at lightning speed. We immediately â€Å"leap† to generalizations so quickly that we never think of testing them. Our rational minds are extraordinarily facile at â€Å"abstracting† from concrete particulars – substituting simple concepts for many details and then reasoning in terms of these concepts. But our very strengths in abstract conceptual reasoning also limit our learning, when we are unaware of our leaps from particulars to general concepts. Leaps of abstraction occur when we move from direct observations (concrete â€Å"data†) to generalization without testing. Leaps of abstraction impede learning because they become axiomatic. What was once an assumption becomes treated as a fact. To spot leaps of abstraction, we need to keep asking what we believe about the way the world works – the nature of business, people in general, and specific individuals. We need to ask â€Å"What is the ‘data’ on which this generalization is based?† We need to ask, â€Å"Am I willing to consider that this generalization may be inaccurate or misleading? This is a powerful technique for beginning to â€Å"see† how our mental models operate in particular situations. It reveals ways that we manipulate situations to avoid dealing with how we actually think and feel, and thereby prevent a counterproductive situation from improving. Most managers are trained to be advocates. In fact, in many companies, what it means to be a competent manager is to figure out what needs to be done, and enlist whatever support is needed to get it done. Individuals became successful in part because of their abilities to debate forcefully and influence others. Inquiry skills, meanwhile, go unrecognized and unrewarded. But as managers rise to senior positions, they confront more complex and diverse issues. Suddenly, they need to tap insights from other people. They need to learn. Now the manager’s advocacy skills become counterproductive. What is needed is blending advocacy and inquiry to promote collaborative learning. When operating in pure advocacy, the goal is to win the argument. When inquiry and advocacy are combined, the goal is no longer â€Å"to win the argument† but to find the best argument. When we operate in pure advocacy, we tend to use data selectively, presenting only the data that confirm our position. When we explain the reasoning behind our position, we expose only enough of our reasoning to â€Å"make our case,† avoiding areas where we feel our case might be weak. By contrast, when both advocacy and inquiry are high, we are open to disconfirming data as well as confirming data – because we are genuinely interested in finding flaws in our view. Likewise, we expose our reasoning and look for flaws in it, and we try to understand others†™ reasoning. Learning eventually results in changes in action, not just taking in new information and forming new â€Å"ideas.† That is why recognizing the gap between our espoused theories (what we say) and our â€Å"theories-in-use† (the theories that lay behind our actions) is vital. Otherwise, we may believe we’ve â€Å"learned† something just because we’ve got the new language or concepts to use, even though our behavior is completely unchanged. Systems thinking is equally important to working with mental models effectively. Most of our  mental models are systematically flawed. They miss critical feedback relationships, misjudge time delays, and often focus on variables that are visible or salient, not necessarily high leverage. Understanding these flaws can help to see where prevailing mental models will be weakest and where more than just â€Å"surfing† the mental models will be required for effective decisions. Ultimately, the payoff from integrating systems thinking and mental models will be not only improving our mental models but altering our ways of thinking. T his will result in shifting from mental models dominated by events to mental models that recognize longer-term patterns of change and the underlying structures producing those patterns. Shared vision Shared vision is vital for the learning organization because it provides the focus and energy for learning. While adaptive learning is possible without vision, generative learning, occurs only when people are striving to accomplish something that matters deeply to them. In fact, the whole idea of generative learning will seem abstract and meaningless until people become excited about some vision they truly want to accomplish.  Vision creates the spark, the excitement that lifts an organization out of the mundane. Shared vision fosters risk taking and experimentation. People know what needs to be done. Even if they don’t know how to do it, they keep experimenting till they succeed. But even when they experiment, there is no ambiguity at all. It’s perfectly clear why they are doing it. Organizations intent on building shared visions continually encourage members to develop their personal visions. They want people to have their own vision, not to â€Å"sign up† for someone else’s. That leads to compliance, not commitment. On the other hand, people with a strong sense of personal direction can join together to move toward what they truly want. Personal mastery is the bedrock for developing a shared vision. This means not only personal vision, but commitment to the truth and creative tension – the hallmarks of personal mastery. The origin of the vision is much less important than the process whereby it comes to be shared. It is not truly a â€Å"shared vision† until it  connects with the personal visions of people throughout the organization. In many organizations, most people are in states of formal or genuine compliance with the organization’s goals and ground rules. They go along with â€Å"the program,† sincerely trying to contribute. On the other hand, people in non-compliance or grudging compliance usually stand out. They are opposed to the goals or ground rules and let their opposition be known, either through inaction or through grudging obedience. An organization made up of genuinely compliant people will be very productive and cost effective. Yet, there is a world of difference between compliance and commitment. The committed person brings an energy, passion, and excitement that cannot be generated if he is only compliant. The committed person does not play by the â€Å"rules of the game.† He is responsible for the game. If the rules of the game stand in the way of achieving the vision, he will find ways to change the rules. A group of people truly committed to a common vision is an awesome force. They can accomplish the seemingly impossible. Building shared vision is actually only one piece of a larger activity: developing the â€Å"governing ideas† for the enterprise, its vision, purpose or mission, and core values. These governing ideas answer three critical questions: â€Å"What?† â€Å"Why?† and â€Å"How?† †¢ †¢ †¢ Vision is the â€Å"What?† – the picture of the future we seek to create. Purpose (or â€Å"mission†) is the â€Å"Why?† the organization’s answer to the question, â€Å"Why do we exist?† Core values answer the question â€Å"How do we want to act? A company’s values describe how the company wants life to be on a day-to-day basis, while pursuing the vision. There are two fundamental sources of energy that can motivate organizations: fear and aspiration. Fear can produce extraordinary changes for short periods, but aspiration is a continuing source of learning and growth. Vision spreads because of a reinforcing process of increasing clarity, enthusiasm, communication and commitment. As people talk, the vision grows clearer, enthusiasm for its benefit builds and the vision starts to spread in a reinforcing spiral of communication and excitement. Enthusiasm can also be reinforced by early successes in pursuing the vision. If the reinforcing process operates unfettered, it leads to continuing growth  in clarity and shared commitment toward the vision, among increasing numbers of people. But any of a variety of limiting factors can come into play to slow down this virtuous cycle. The visioning process can wither if, as more people get involved, the diversity of views dissipates focus and generates unmanageable conflicts. People see different ideal futures. Must those who do not agree immediately with the emerging shared vision change their views? Do they conclude that the vision is â€Å"set in stone† and no longer influenceable? Do they feel that their own visions even matter? If the answer to any of these questions is â€Å"yes,† the enrolling process can grind to a halt with a wave of increasing polarization. This is a classic â€Å"limits to growth† structure, where the reinforcing process of growing enthusiasm for the vision interacts with a â€Å"balancing process† that limits the spread of the vision, due to increasing diversity and polarization. In limits to growth structures, leverage usually lies in understanding the â€Å"limiting factor,† the implicit goal or norm that drives the balancing feedback process. In this case, that limiting factor is the ability (or inability) to inquire into diverse visions in such a way that deeper, common visions emerge. The visioning process is a special type of inquiry process. It is an inquiry into the future we truly seek to create. If it becomes a pure advocacy process, it will result in compliance, at best, not commitment. Approaching visioning as an inquiry process does not mean that we have to give up our views. On the contrary, visions need strong advocates. But advocates who can also inquire into others’ visions open the possibility for the vision to evolve, to become â€Å"larger† than our individual visions. Visions can die because people become discouraged by the apparent difficulty in converting them into reality. As clarity about the nature of the vision increases, so does the awareness of the gap between the vision and current reality. People become disheartened, uncertain, or even cynical, leading to a decline in enthusiasm. In this structure, the limiting factor is the capacity of people in the organization to â€Å"hold† creative tension, the central principle of personal mastery. This is why personal mastery is the â€Å"bedrock† for developing shared vision – organizations that do not encourage personal mastery find it very difficult to foster sustained commitment to a lofty vision. Emerging visions can also die because people get overwhelmed by the demands of current reality and lose their focus on the vision. The  limiting factor becomes the time and energy to focus on a vision. In this case, the leverage must lie in either in finding ways to focus less time and effort on fighting crises and managing current reality, or to break off those pursing the new vision from those responsible for handling â€Å"current reality.† A vision can die if people forget their connection to one another. This is one of the reasons that approaching visioning as a joint inquiry is so important. The spirit of connection is fragile. It is undermined whenever we lose our respect for one another and for each other’s views. We then split into insiders and outsiders – those who are â€Å"true believers† in the vision and those who are not.