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06 September 2011

13 July 2011

US economy from the 21st eye

Since the 9/11 incident, US recovered and moved forward. Although it hit the world trade centre it did not make a huge impact on their economy. Ironically, Eight year later houses could do more damage than the air planes did. US’s financial crisis went on to be an economic crisis and later a world economic crisis. The central bank and all the commercial banks do have a responsibility.  The central bank should analyse and forecast the upcoming issues on time, while the commercial banks should simply make sure that they keep the balance between profit and liquidity. In the year 2008, these duties were under estimated and as a result the American economy saw a down slope.
It is relevant to have a review of the roots of US’s economic down slope in 2008. Few years before the incident, the demand for houses in the country increased. It increased up to a level where housing business became an extremely profitable profession. As a result, the financial institutes including the commercial banks identified that lending money to these business sectors. Initially, banks realized a great number of profits through this sort of lending, tempting banks and business people to continue on the same practice in order to maximise the profits. “They thought they had spread all their risks effectively and yet when it really went wrong, it all went wrong.” (Anup Shah, 2010). Since no one knew the limitations, this went on until the house builders ran out of customers. This made them bankrupted and it spread to the banks as a virus where banks were unable to collect the money lent. Since the financial institutes ran out of liquidity, community lost faith on those banks. As a result those financial institutes suffered until they faced bankruptcy. As a result, the branches and deposits of banks such as main street and meridian were taken over by more reliable institutes such as central bank and other financial institutes with bigger capitalizations.
However, financial institutes hold back bone of an economy. since, the commercial banks were in such a fragile situation, the entire business cycle faced a threat and, before it was detected, a majority of the firms were forced to shut down by this economic disaster. The problems did not stop from there, it deviated to the community. People lost jobs to an extent where the so called richest country in the world was threatened to suffer with poverty. The lifestyles needed to be changed. The increasing prices of oil didn’t do any better for US. In fact the US firms suffered from two sides. People were having a lesser purchasing power and the raw materials were expensive. as a result of that, the cost of production was rising while the demand was decreasing.
All these reasons reflects the economic indicators. The real GDP shows a massive downturn in 2008 compared to other years. So is the unemployment rate. In fact unemployment has been a growing issue in USA as the graphs show increasing figures since 2008. The major reasons for unemployment and decreased GDP apart from the economic issue could be the fact that the US production firms prefer out sourcing methods in order to reduce the production costs. When firms out source a production plant, the country looses the job opportunities as well as the production that could have been done in the country. "More than 1.3 million additional Western jobs will vanish by 2014 due to "the accelerated movement of work to India and other offshore locations,"(rttsweb, 2010)
On the other hand, it is understandable that the US economy is threatened by Newly industrialized countries (NICS), which are in roads to be leading nations in the next few decades. Countries like India, china, and Mexico produces similar products at a lower cost courtesy of inexpensive labour. “This concern with the NICs is not surprising given the rapid growth of US imports, particularly manufactured imports, from these countries.”(Been Y A and Robert M J, 1985). This was just a concern in 1985, but by early 2000s it developed in to a major issue that increases every year. The best example to prove it is the higher demand for those products imported from china and india etc Compared to local products. These imported products can be bought at lower price than the local products causing further problems to the US manufacturers.
All in all, it is understandable that USA is going through a lot of issues, especially since the economic down fall. It is extremely important for US to find solutions to those issues such as increasing unemployment. Is US continues to suffer from economic issues, will the countries that depend upon US be able to overcome the global economic issue?

Anup Shah. 2010. Global Financial Crisis. [ONLINE] Available at: [Accessed 20 June 11].
Bee Yan Aw and Mark J. Roberts. 1985. The role of imports from the newly industrializing countries in US production. [ONLINE] Available at: [Accessed 20 June 11]. 2010. Statistics Related to Offshore Outsourcing. [ONLINE] Available at: [Accessed 20 June 11].

25 May 2011

Mark Zuckerberg as a leader

Human has developed a culture, a society a technology and a world from Stone Age to the current era where information technology along with Artificial intelligence has made a huge impact on civilization. The acceleration has never decreased, but increased tremendously. Innovative ideas make a huge impact on human development. There have been quite a few such ideas.  Mark Zuckerberg, the founder and the CEO of facebook is the personality that will be discussed here. Socially known as a geek, a nerd and a shy person, Mark has probably been able to create the evolution of the marketing, communicating and advertising philosophies.
            First and foremost, it is relevant to state the fact that the movie “social networking” does not provide100% accurate information regarding Mark or his respective company. “It has been reported that the film will not paint Zuckerberg in the best of light (Winslow, 2010). It is notable that Mark Zuckerberg has a strategic, conventional attitude towards his ambitions. We see him making crucial decisions along the way, such as turning down the offer of 1bn USD by yahoo, which many thought was a huge mistake. 90% of the early twenty year olds would have accepted this where he did not and here he rises up as one of the billionaires and a potential legend of the information era. Moreover, when facebook made a mistake with the FB news feed where every post a person makes go around his entire network, an FB user called Ben Parr made a group called “Students against Facebook news feed”, Instead of him, “Zuckerberg sent Parr an email asking for his advice on what Facebook could do better when introducing new products.” (Winslow, 2010). This reflects his humble attitude towards FB users and ability to handle those conflicts and admitting mistakes. In my opinion those qualities are not associated with many of the people at his age. This is a great example for his matured approach towards his managing activities.
            Observing his managerial activities, there is a lot of lessons can be taken for quite a few managers in conservative backgrounds. Unlike many Asian managers, he does not look in to the race or religion or any of those discriminating aspects. His executive board is a great example for the above fact. He makes his decisions on their employees regarding their quality. “Every employee is rated on a scale from 1 to 5, with five being the highest. No one gets a five. If you get a 1 or a 2, you’re quickly shown the door” (Marshal, 2009). This does not mean that Mark does not respect his employees. In fact when he had an idea argument with Chamita Palihapitiyta, one of the VPs, “whether it was the sheer number of friends a user starts with, or simple virility (making it easy to invite other friends) that was more critical to driving growth” ( Marshal, 2009), where palihapitiya was behind the idea of virality, Mark decided to practice both, optimizing for virality first, It proved to be the correct decision.
In conclusion, it is noticeable that Mark Zuckerberg's innovations do not rely completely upon his nerdy outlook, but on his matured and focussed approaches towards his goals.


18 May 2011

Technology and traditional cultures

Since the 18th century, technology has been moving forward without an interval. And at the same time it is understandable that the traditions have also changed at a similar spead. The controversy is wether there is a relationship between technology and traditional cultures.
                First and foremost, the cultures of each country have experienced serious changes largely due to globalization. As the introduction of internet, communication has got much easier. As a result people all over the world have connections to each other, along with the fact that social web sites such as facebook has got populer all over the globe. If someone wonders wether the cultures and traditions have changed, changed music genres can be given as a perfect example. But there is always a question mark next to the statement “this change of traditions and culutures is good”
                A country can never be alone in the modern world. Each and every country has to have relationship with the other countries. This change of cultures have never been one sided. In eastern countries like india and china the western costumes and living styles can always be seen. In fact, english has become a part of there languages, while eastern influence can also be seen in western countries.
                On the other hand, a culture can never be constant. The cultures all over the world are fairly similler comparing to the cultures that had been a century ago. This factor allows the world community to interact easily as well as this discourages the racial issues being happened in some parts of the earth. In addition , it can provide positive attitudes towards the economical activities through out the world. For an example, most of the countries have restaurents belong to  different nationalities.
                All in all, it is clear the fact that there is a relationship between culture and technology. And this cultural change can effect possitively towards upcoming global issues.

Effective motivation

To achieve consistency and efficiency, companies need to make use of all the available resources. As far as the human resources are concerned, the key factor is to maintain the motivation. Companies concentrate on many methods of maintaining the motivation of their employees. Paying extra amounts of money for the employees for their additional contributions is an act that is being practiced by most of the high performing companies. ‘Performance pay goes hand in hand with delegating human resources management’ ( 2005). Along with all the controversies and debates among the human resource managers this concept can be successful for those who will conduct it accordingly with required qualities.

First and foremost, it is important for the companies to improve the production to gain the expected profits. ‘The most important motivator of workers is salary and wages’ (Taylor 1911). Therefore they encourage the workers to increase the production level while maintaining the quality by paying them more for the extra hours they work or the extra units they produce. It is understandable that employees’ major expectation is a high salary. Therefore they work hard to earn the extra amount of money which will help the company to increase the productivity levels. Which means employers and employees both will mutually able to achieve their respective expectations.

On the other hand, ‘From the human resources perspective, they want to hire loyal employees because they can add more value to the organization of the duration of their stay’ (personal branding 2008). providing extra money will help to build the loyalty among the employees. It makes them realize that they are a part of the company. The authorities have to pass the message to the employees that the salary they get is not just a payment for their work but a certain portion of the company’s profit.  They can make the salary structure accordingly where the employees will get an extra amount when the company is earning profits. This will motivate the employees to work hard and make sure the company achieves the short term and long term targets. More importantly, having loyal employees will be helpful to create a fraud free environment in the work place, which will be a humongous achievement by the company, considering the modern day situations. When the employees get a flat income rate, there are certain chances that some employees will be tempted to commit in certain fraud which will harm the company’s performance as well as the goodwill. Therefore, to prevent such activities companies should overlook those traditional payment methods and practice modern salary plans according to the business and the duty they are involved in. Moreover, it will help to decrease all the anti-authority activities which will harm the organizations such as picketing. Considering the modern reasons for such activities, it is important that for the employers to maintain a pleasant financial relationship with the employees to make sure the company does not fall for any unexpected troubles.

Furthermore, retaining the existing employees is very important to the companies as well as recruiting new talented employees. “It appears that PRP can also act as a recruitment incentive” ( 2005). But workers will always be searching for a job with a higher salary. If they lose these existing workers who are trained and used to their respective duties, company will have to have an extra cost on recruiting and training new employees. Still they might not be as effective as the experienced workers. When the existing employees get extra payments, they will not be seeking for the other job opportunities.  This will help the companies to retain their experienced and loyal staff in order to maintain the efficiency as well as the productivity.

However, ‘Monitoring and measuring performance – especially the conduct of staff performance appraisals – is a difficult process’ ( 2005). Therefore, they have to make sure that the workers get paid accordingly to make sure the salary methods are relevant and similar to all the employees. If the authorities fail to evaluate the work by the workers or calculate the exact amounts, it will lead to miss understandings between the employees and employers. Therefore, the companies will have an extra cost on evaluating and calculating as well. Meanwhile, when the employees have extra amounts of cash in hand, they might get committed to the activities which will harm them as well as the company. Getting addicted to liquor can be spelt out as an example, which will eventually affect their duties by loosing focus and getting physical difficulties.

Considering all above, it is understandable that it is up to the authorities to identify the relevant payment methods and make sure the company gains benefits. At the same time, the companies should understand that performance payment method is not the only way to motivate the employees. Providing the needed facilities in the work place and keeping them without a stress is equally important to maintain the expected motivation level among the workers at the work place. It is understandable that despite the additional costs, providing extra money for the employees’ exceptional contributions is beneficial to the companies as long as the authorities maintain the qualities of salary methods and do it fairly where the amounts and percentages are equal to every worker in the work place. Motivation and the loyalty of the employees is the most important aspect for a company to achieve their respective goals.

                                                                                                            ( 899 words )

Reference list
1.      personal branding. (2008). Do Loyal Employees Exist Anymore?. Available: Last accessed 14th oct 2010.
2.      Oecd. (2005). Paying for Performance: Policies for Government Employees. Available: Last accessed 14th oct 2010.
3.      taylor. (2010). How Managers can Motivate their Employees. Available: Last accessed 14th oct 2010.