Leadership Foundational and Critical Perspective Research Paper

Leadership Foundational and Critical Perspective - Research Paper Example   Leadership in an organization is characterized by taking going before, initiatives, setting examples and showing ways to an organization in a holistic manner. Organizations, today, in an extremely competitive business environment heavily rely on leadership and their role. The goals that are expected to be set by the leadership of an organization can either by humanitarian or entrepreneurial. The level in a hierarchy, leadership exists should instill passion and sense of purpose to work which is organization undertakes. Thus for Human Resource managers, it is an important task to hunt such individuals. Human Resource Management is thus concerned with identification, development, and sustenance of leadership in an organization. Structure of an organization is dependent on the type of business field and its standing on the type of economic activity it performs. Leaders of these organizations are entrusted with efficiency and affectivity tasks of various tiers of an organization. Org ans that constitute purview of a leader solicit his input, judgment, and accountability. It is not possible for them to work as the stand-alone unit. The systems are so designed that they might act as internal customers of an organization. These internal customers need directives that must follow all along supervision of leader. From individual-employee satisfaction to organizational behavior role of leaders have a profound effect on the employee. Leadership has many important aspects that are important for an organization.   

Sustaining Employee Performance Paper Essay Example for Free

Sustaining Employee Performance Paper Essay Money is no longer adequate enough these days to recruit and maintain top talent for any given business organization. Offering an appealing benefits plan is just as significant. Today’s economy is up and down throughout the US, and reducing employee benefits is frequently the easiest thing employers can to do to conserve money. Competitive businesses with benefits programs will be capable to entice employees away particularly if that organization does not make available the most important programs like health care and disability insurance. Beside the simple morale reasons for retaining employee benefits, there are some additional reasons to be mindful of including: Tax Credits – Expenses that can help a business at tax time would be a business who provides healthcare plans that include dental or company-paid premium life insurance plans. Furthermore, for the employees, many healthcare plans are pre-tax programs. This means the employee’s portion of the premium is subtracted then the federal and state taxes are withdrawn based on a subtotal. Retirement Credits – Depending upon the retirement plan, an employer and employee can reap tax credit rewards. It is important to seek out a qualified tax expert on the most beneficial retirement program to initiate. Employee Packages – When hiring employees salaried or hourly, he or she may not be thrilled or content about their base wage in the beginning. By keeping employee benefits, providing the cost the company will be bearing into his or her total employee compensation package as a way to demonstrate how the company is investing on his or her behalf. Lower Turnover Rate – Asking employees up and down the ranks what benefit is most wanted and the response will be medical benefits. If an employer understands the significance of employee benefits and keeps them, the company will most certainly incur less employee turnover and will continue employment where they are receiving the best package. When looking at company expenses, learn to recognize the weight of employee benefits and refrain from making benefits the first thing on the chopping block. Employers (business owners) must realize that employees make the business operate effectively, so don’t cut back on something that provides the workforce with a feeling of security.

SSEs acquisition of The Energy Solutions Group (ESG)

SSEs acquisition of The Energy Solutions Group (ESG) EXECUTIVE SUMMARY This report has been undertaken to come up with the intrinsic value of SSE plc which is operating in energy industry, using shareholder value analysis (SVA) model. The underlying value of the company is estimated to be  £12,122.14m, which is lower than the market value of  £15757.52m (FAME database, accessed on 19th January 2017). The discrepancy of the two values may be explained by referencing to Efficient Market Hypothesis, asymmetric information issue and shortcomings of SVA model. Based on sensitivity analysis, it is determined that SSEs intrinsic value is highly sensitive to changes in operating margin and WACC. It is found out that an adjustment of +2% made towards operating margin and WACC will remarkably change the company value by +86% and nearly -50% respectively. Therefore, analysts should pay more attention to these two variables when employing SVA model. The later section of the report identifies SSEs acquisition of The Energy Solutions Group (ESG) as a critical financial event, highlighting that the transaction will bring more synergy to the firms operation and enhance its competitive advantage in the energy industry. However, it is imperative for shareholders to keep track of the companys performance to alleviate problems of hubris or empire building. Objectives This financial report is expected to achieve two primary objectives. First, this report aims to provide the valuation and analysis of SSE plc a company operating in the energy industry by employing Shareholder Value Analysis (SVA) technique. Second, SSEs acquisition of The Energy Solutions Group (ESG) in 2014 will be evaluated with reference to finance theories in Mergers and Acquisitions. 1.2 Report structure This financial report is organized in five main parts: Section I: Introduction This section provides main purposes of the report and briefly describe structure of the report. Section II: Company Profile This section gives an overview of SSEs business activities, its market share and competitive positioning. Section III: Company Valuation This section covers the following contents: Evaluate the appropriateness of SVA model to value a company Perform the valuation of SSE plc using SVA model Provide justifications for variables and proxies used in the model Carry out comparative analysis and sensitivity analysis Section IV: Actual Corporate Financial Event This section critically evaluates SSEs acquisition of The Energy Solutions Group (ESG) with reference to finance theories. Some implications would also be proposed following the event evaluation. Section V: Conclusion This section summarizes the employment of SVA measure in case of SSE and then provide some recommendations. 2.1 Business Description SSE plc (Scottish and Southern Energy plc) is a British energy company headquartered in Perth, Scotland, United Kingdom. SSE was established in 1998 as a result of the merger between Scottish Hydro-Electric and Southern Electric. SSE is listed on London Stock Exchange and it stock forms part of FTSE 100, FTSE 350 and FTSE All-Share. SSEs business covers three segments: Wholesale, Networks and Retail. The Wholesale segment involves power generation from renewable and thermal plant in the United Kingdom, Ireland and Europe; the Networks segment is responsible for distributing electricity to customer premises in the North of Scotland and the South of England; meanwhile, the Retail segment supplies electricity and gas to residential and business customers in the United Kingdom and Ireland (Financial Times, 2017). Since SSE undertakes both generation and retail supply activities, it is considered a vertically integrated energy business. This makes SSE unique since SSE is the only company listed on London Stock Exchange involved in such a broad range of energy businesses (SSE, 2016a). Market share Regarding Wholesale business, in 2015 SSE had a small market share of 7%, accounting for only a quarter of EDFs share and about half of RWEs share (see Appendix 1). Referring to Ofgem (2016b), in 2015 the market shares of dominant energy producers in the UK remain relatively unchanged compared with these of 2014, which is also the case of SSE. With respect to Retail business, there were over 43 active energy suppliers in Britain by March 2016, most of which offering both gas and electricity supply (Ofgem, 2016a). SSE is included in Big 6 which are widely known as dominant leaders in the market, including British Gas, EDF Energy, E.ON, SSE, npower and ScottishPower. These companies supply gas and electricity to over 50 million household and businesses in Britain, with 87% share of domestic customers by March 2015 (Ofgem, 2016a). SSE is operating in a very competitive and well-functioning energy retail market. The firms market share in the market for energy supply can be illustrated in Appendix 2 and Appendix 3. By March 2016, SSE had the second largest market share of UK electricity supply market (about 15%), while its market share of gas supply (about 13%) only accounted for approximately one-third of British Gass share. Increasing competition in energy industry and SSEs competitive positioning Out of the three segments, Wholesale and Retail businesses have been facing increasing competition in recent years due to the entrance of new rivals in the GB Energy Supply market. There have been some concerns over barriers to entering wholesale and retail energy market such as the complexity and extent of credit requirements or low levels of liquidity in the market. Despite of these, new entry has taken place (see Appendix 4). The result of new suppliers entry is falling market share of the six large suppliers from 90% to 87% between March 2015 and March 2016 for electricity, and 90% to 86% for gas over the same period (Ofgem, 2016a). Specifically, the entry and growth of new suppliers has led to SSEs market share declining. There is a decreasing trend in the number of energy customer accounts for the past three years (see Appendix 5). In addition to the new rivalries entrance to the market, customers switching is another issue that reduce the market share of six large suppliers. Households are increasingly turning to smaller suppliers, with consumers complaining the sector is slow to pass on wholesale energy cuts and offers poor service. The total number of users switching suppliers in March 2016, 476,528 customers, was the highest since November 2013 (Energy UK, 2016). As the market become more and more competitive, attracting and retaining customers can pose challenges to SSE. However, SSE has a clear strategy to differentiate itself and create value by becoming a market-leading, digital and diversified retailer of energy and essential services. According to SSE (2015a), for the past few years SSE has: Launched its first large-scale advertising campaign for the SSE brand in both Britain and Ireland, known as Proud to make a difference campaign. The campaign has been implemented in many forms from TV, radio, billboards, print media to various digital and social media formats; Overhauled its digital channels in order to create a simple, seamless and intuitive customer experience and provide the best possible service at the lowest possible cost; Introduced a new customer relationship management (CRM) platform which facilitates better customer understanding and tailors communications and propositions to the needs of different customers; Developed and reopened sales channels and processes to ensure compliant growth. Additionally, SSEs commitment to decarbonization means that the firm will continue potential expansion in renewable energy portfolio which are comprised of onshore wind, offshore wind and conventional hydro. Furthermore, SSE is the leader in the UK energy industry to handle customer complaints. According to Energy Ombudsman in February 2016, only four out of 100,000 customer complaints required further investigation in the first three quarters of the year, pointing out the fact that 99.969% of SSEs customer issues were fully resolved (SSE, 2016a). 3.1 Evaluate the appropriateness of SVA Model There are many methods for estimating value of a company, including valuations based on asset, dividend, earnings and cash flows. Among these methods, discounted cash flow valuation is the most technical way of valuing a business as it is heavily dependent on assumptions about long-term business conditions. This measure is especially useful for cash-generating businesses which are stable and mature. Alfred Rappaport (1998) developed a simplified approach of cash flow discounting called shareholder value analysis (SVA). SVA model makes assumptions about steady changes in a number of cash flow factors as they are all relevant to sales level. There are obvious advantages associated with the use of this model. SVA is not subject to different accounting policies used by different companies and therefore can be applied across many business sectors. In addition, firms using SVA must concentrate on the future and customers, with specific focus on future cash flows. On the other hand, SVA is not a perfect model as it contains some shortcomings when being used in practice. Irrational assumptions about value drivers, as well as data unavailability are possible drawbacks that analyst frequently encounter when employing this model. 3.2 Justification of variables and proxies Employing the SVA Model to calculate a companys intrinsic value requires assumptions about a number of key variables. Sales growth might be the most important factor in the model, setting the foundation to come up with other variables values such as operating profit, incremental capital investment and incremental working capital investment. In case of SSE, sales growth is determined after careful consideration of historical growth rates, price forecast and potential future projects. For the last three years, sales growth has witnessed a decreasing trend, which can be explained by a number of reasons. First, energy prices in the UK are influenced by oil and coal prices; therefore, when these commodities prices move upward or downward, they are likely to drive gas and electricity prices in the same direction (Ofgem, 2016b). Since the second half of 2014, there were downward trends in oil and coal prices due to oversupplied markets for these commodities, contributing to declining energy prices and therefore SSEs revenues. The movements of oil price can be illustrated in the following figure: Figure 1: Brent Crude Oil price from 2010 to 2016 (Source: Bloomberg, 2016) Second, there are more and more energy suppliers in the UK market. Levels of new entry have been very high recently: 14 new suppliers became active between April 2015 and March 2016, compared to five between April 2014 and March 2015 (Ofgem, 2016a). The presence of new rivals leads to SSEs declining market share as well as the firms revenue. Third, more and more customers are switching to small and medium-sized suppliers, as shown in Figure 2. If this trend goes on, there will be much pressure on expected revenue of large energy suppliers. Figure 2: Monthly increases in the total number of domestic gas and electricity meters supplied by small and medium-sized suppliers (Source: Ofgem analysis of data provided by Xoserve, DNOs and iDNOs, 2016) From the above data, it might seem that SSEs revenue will be struggling in the next few years. However, there are evidences for investors to believe in SSEs sales growth for at least the next 5 years. First, oil price forecasts by World Bank, IMF and EIU indicate crude oil prices will observe steady increases from 2017 to 2025 (Knoema, 2016) (see figure 4, figure 4 and figure 6). Figure 3: World Bank Oil Price Forecast (Source: Knoema, 2016) Figure 4: IMF Oil Price Forecast (Source: Knoema, 2016) Figure 5: EIU Oil Price Forecast (Source: Knoema, 2016) Second, some renewable projects will be fully operational in 2017 and these will definitely support revenue growth in the next few years. As reported by SSE (2016c), three onshore wind projects under construction are expected to come into operation in 2017, including Dunmaglass (94MW), Clyde Extension (173MW) and Bhlaraidh (108MW). After above analysis has been taken into account, the sales growth is determined as the arithmetic average of the changes in sales over the previous three years, giving the result of 0.82%. This sales growth is reasonable given that SSE is operating in increasingly competitive industry, with customers tending to switch to small and medium-sized suppliers in recent years. The operating profit margin is predicted to be 2.87%, which can be worked out by taking the average of the margins in previous three years. The reason behind this assumption is that SSE is an efficient energy supplier committed to maintaining relatively low operating costs in order to make a fair profit. According to SSE (2015a), SSEs indirect costs per customer are around 20% lower than the average across the rest of the major suppliers. The effect of low operating costs can be demonstrated by stable operating profit margins for the last three years, and it is expected that this trend will continue for the coming financial years. The incremental capital investment of 53% is understandable as the company continues to develop secure, sustainable and low carbon energy infrastructure, given that the energy industry is switching to renewable energy sources. In its interim results for the six months to 30 September 2016, SSE announced it plans to invest a record  £1.85bn of capital expenditure and investment in Great Britain and Ireland in 2016/17 (SSE, 2016b). According to Alistair Phillips-Davies, SSE Chief Executive, the firm is making more investment in supporting the modernization of UKs energy facilities, and the total investment and capital expenditure by 2020 is forecast to reach approximately  £6bn. A relatively low working capital investment of 10% is determined since SSEs current assets are just enough to absorb current liabilities in the last few years. Trade and other receivables accounts for a large proportion of SSEs current assets due to the nature of the energy supply business. Meanwhile, current liabilities are mainly comprised of trade and other payables, which is because the company is making heavy investment in renewable energy infrastructure. Simply put, an incremental working capital investment of 10% is appropriate for SSE given that many potential energy projects will be under construction in the coming years. The corporation tax rate of 20% is applied to company profits (HMRC, 2016), and SSEs business is also subject to this rate. Another key variable in SVA is weighted average cost of capital (WACC). The cost of debt is determined as SSEs weighted average interest rate, which is 3.73% for year 2016. Meanwhile, the cost of equity is computed using CAPM model. SSEs beta (0.74) was obtained from FAME database, while the UK Gilt 10 Year Yield (1.40%) collected on Bloomberg website is used as the proxy for risk-free rate; all of these figures were retrieved on 19th January 2017. In addition, the UK market risk premium (5.3%) by Fernandez, et al., (2016) is another key component in the CAPM. Subsequently, a WACC of 4.59% is achieved and this is the required rate of return for SSEs capital providers. In short, the following seven value drivers will be applied in case of SSE: Table 1: Seven value drivers for SVA model Key Drivers Value Sales growth 0.82% Operating Profit margin 2.87% Tax rate 20% Incremental fixed capital investment 53% Incremental working capital investment 10% Planning Horizon 5 Required Rate of Return 4.59% Source: Analysts estimate 3.3 Employment of SVA Model Table 2 illustrates how SVA model is utilized in SSEs case. SSEs revenue of  £28,781m (recorded on 31st March 2016) was increased annually by a sales growth of 0.82% over a 5-year planning horizon. Subsequently, an operating margin of 2.87% was applied to revenues to come up with the firms operating profit. Before arriving at SSEs operating cash flows, a corporation tax rate of 20% was imposed on the operating profit, followed by subtractions of 53% in incremental capital investment and 10% in working capital investment. Afterwards, the present value of future cash flows was estimated by discounting the firms operating cash flows by 4.59% cost of capital. It is noted that SSEs terminal value at year 6+ was discounted twice, the first of which worked out the value at year 5 and the second one brought out the value in present day. After the net present value of  £18,930.7m was figured out, adjustments were made by adding  £360.2m cash and marketable securities, and then deducting  £7,168.8m total debt. After all, SSEs intrinsic value was determined at  £12,122.14m. Table 2: SSEs Shareholder value analysis (unit: million pounds) Year 1 2 3 4 5 6+ Sales 29,018.4 29,257.7 29,498.9 29,742.2 29,987.5 29,987.5 Profit 833.6 840.5 847.4 854.4 861.5 861.5 Associate Profit 206.5 208.2 209.9 211.6 213.4 213.4 Less Tax 166.7 168.1 169.5 170.9 172.3 172.3 Less ICI 125.1 126.1 127.2 128.2 129.3 0 Less IWCI 23.7 23.9 24.1 24.3 24.5 0 Operating Cash Flow 724.6 730.6 736.6 742.7 748.8 902.6 PV of cash flows 692.8 667.8 643.8 620.6 598.3 15,707.4 NPV 18,930.7 Add mkt secs 19,290.9 Less debt 7,168.8 Equity Value SVA 12,122.14 million Actual Value 15,757.52 million FAME access on 19th January 2017 Source: Analysts estimate 3.4 Comparative Analysis SSEs intrinsic value derived from SVA model was  £12,122.14m while its market capitalisation was recorded at  £15757.52m (FAME database, accessed on 19th January 2017), pointing the difference of  £3,635.38m between the two values. One possible explanation for this discrepancy is that all relevant information may not be incorporated into the share price. It could be inferred from Efficient Market Hypothesis (Fama, 1970) that the extent to which the share price is reliable depends on the efficiency of the markets. Under the strong form efficiency, the market value of  £15757.52m will fully reflect all past, present and insider information. On the other hand, if the market is under the weak form efficiency, the market value of  £15757.52m will only reflect the historical prices of the security, and hence lacking reliability. Furthermore, the information asymmetry, e.g. between management and investors and between investors themselves, is another explaining factor. Plesco Sobol (2013) states that investors who are ill-informed about financial disclosures can make unreasonable decisions in their investment. Due to irrational trading behaviours of these investors, share prices may not yield a fair market value. Another cause of the difference between the two values lies in the limitations of SVA model. The constant sales growth every year is not very realistic because the growth depends on potential development and firms strategies, which are subject to annual reviews. In the same manner, keeping WACC (4.59%) constant over 5-year planning horizon is not rational in practice, because the firms capital structure will change over time. Last but not least, the assumptions of sales growth and other key variables depend on each analysts subjective viewpoint. Changing these values by a small percentage might result in considerable change in eventual intrinsic value. 3.5 Sensitivity Analysis The sensitivity analysis performance indicates that SSEs underlying value is highly sensitive to changes operating profit margin. A positive adjustment of 2% made towards the operating margin will result in a substantial increase of 86% in the firms equity value (see Appendix 6). It is worth remembering that SSE is committed to preserve low operating costs so as to gain a fair profit. According to SSE (2015b), the firm has participated in a value program to ensure effective use of people and capital, the overall objective of which is business streamlining and simplification. This program comes with efficiency target, with expected  £100m of annual savings in overheads. In addition, the program involves reduction in offshore wind development as well as disposal of non-core assets. In general, this value scheme is likely to help SSE optimize its investment and re-balance its business. Moreover, it is noticeable that the firms intrinsic value is susceptible to changes in WACC. An adjustment of +2% in the WACC will lead to approximately 50% reduction in the firms equity value (see Appendix 6). According to Fitch Ratings (2016), SSEs equity has been diminishing recently due to the influence of sustained asset impairment losses and generous dividend pay-outs. In agreement with Pecking Order Theory, debt takes priority over equity in case external finance is required (Donaldson, 1961). Because SSEs cost of debt (3.73%) is lower than cost of equity (5.32%), it is appropriate for SSE to obtain  more bank loans to finance its long-term operations, while still making sure cost of capital is kept to a minimum. Particularly Fitch Ratings (2016) claims that SSE has a policy of accessing debt markets, ensuring that its committed borrowings equal to at least 105% of forecast borrowings over a six-monthly rolling period and adequate liquidity will be fulfilled until at least S eptember 2017. 4.1 Background information In the end of July 2014, SSE completed the acquisition of The Energy Solutions Group Topco Limited (ESG), the North west-based provider of energy management services, from Bridgepoint Development Capital for  £66m with an additional  £6m if agreed targets are achieved. Working with private and public sector customers, ESG identify improvements in their management of energy consumption; as well as install, maintain and support building management systems and solutions, saving customers around 20% to 30% of their energy consumption (SSE, 2014). 4.2 Evaluation of the issue in the context of finance theories This acquisition is classified into vertical MA (Mergers and Acquisitions). According to Arnold (2013), vertical MA occur between companies operating in the same industry at different stages of production, i.e. one company acquires another company that is either before or after it in the supply chain process. In case of SSEs acquisition, both SSE and ESG work in the energy industry. SSE involves in all many stages of energy supply chain including wholesale, networks (distribution) and retail; meanwhile ESG engages in the retail business where it is the designer and provider of energy management solutions. Therefore, SSEs acquiring ESG would be a downstream vertical acquisition. So, what is SSEs motivation behind this acquisition? Vertical integration has some advantages, including the attraction of increased certainty of supply or market outlet; reducing cost of search, contracting, payment collection, advertising, communication and co-ordination of production (Arnold, 2013). SSE (2014) states that the acquisition of ESG will strengthen SSEs services in competitive markets for industrial and commercial customers. These services are comprised of electrical and mechanical contracting, lighting services, private energy networks and telecoms, all of which are under the control of Enterprise division which forms part of SSEs retail business. According to Arnold (2013), one of the merger and acquisition motives is synergy in which the two firms together are worth more than the value of the firms apart; hence in this case, ESG will bring commercial synergies to SSEs Enterprise division. SSEs Chief Executive Alistair emphasized that managing energy costs and environmental impact are SSEs big priority for large industrial and commercial customers. Benefiting from ESGs expertise, SSE expects to meet the energy and related demands of these customers in an enhanced manner. It was confirmed that the ESGs existing management team would be in charge of the Enterprise division, and the firm believed that the commitment of the ESG management team and other employees will benefit its customers and the environment in terms of effective energy management solutions delivery. SSEs acquisition of ESG is considered a strategic acquisition in order to achieve external growth. There are two ways to categorize strategic acquisitions: by type of capability transferred and by their relation to corporate strategy (Goold Luchs, 1995). Regarding capability transfer, SSE (2015a) asserts that the acquisition of ESG added new capabilities to the business. (Goold Luchs, 1995) claims that value is created in an acquisition when competitive advantage of one firm is enhanced through the transfer of strategic capabilities including resource sharing, functional skill transfer and management skill transfer. The presence of ESG management team in SSEs Enterprise division will upgrade SSEs capability of strategic planning, ensuring that effective energy management solutions are delivered for the sake of customers. Generally, SSE is expected to benefit from management skill transferred from ESG. Another way to categorize strategic acquisitions is based on their contribution to corporate-level strategy. In other words, acquisitions are assessed considering their connections in maintaining and changing the balance between the firms existing domain and the renewal of its capabilities (Goold Luchs, 1995). An acquisitions contributions are classified into either domain strengthening, domain extension or domain exploration. In light of SSEs acquiring ESG, this would be an illustration of domain strengthening because this acquisition will deepen SSEs presence in retail business, especially reinforcing Enterprise divisions operation. Next, it is essential to see what happened with SSE stock price after the firm made announcement about the acquisition of ESG. Theoretically, when a firm acquires another one, a short-term impact on the stock price of both companies is expected. Specifically, a lot of practical studies point out that the acquiring firms stock price will go down while the acquired entitys stock price will rise (Investopedia, 2016a). With respect to the takeover company, its stock will go down mainly because of a number of uncertainties associated with the acquisition, such as turbulent integration process, lost productivity, additional debt or expense incurred and accounting issues (Investopedia, 2016a). Figure 6 demonstrates SSEs stock prices after the acquisition of ESG was disclosed. Figure 6: SSEs stock price movements after acquisition of ESG (Source: Hargreaves Lansdown, 2014) As can be seen from the above figure, SSEs stock prices witnessed decreases in two consecutive days after the acquisition and this conformed with the empirical studies implication m

South African Development Plan Essay -- Urban Development

South Africa is a country in the continent of Africa, located to the south tip as its name suggests. Colonized by the Dutch in 1994, South Africa is seperated into nine provinces and is bordered to the north by the countries: Namibia, Botswana, and Zimbabwe, to the east: Swaziland and Mozambique, while coined in the south east is the country Lesotho, completely surrounded by the territory of South Africa. South Africa is one of the most diverse places in the world, and has eleven nationally recognized languages, whereas most countries only have one (Rosmarin & Rissik, 2003). The black indigenous population makes up a majority of the country while also harboring other ethnic cultures such as: whites, Greeks, Germans, Italians, and Asians (Rosmarin & Rissik, 2003). South Africa has a mixed economy based on its agriculturally fertile lands, mineral resources and tourist attractions. Though there is political and economic stability, the country is still faced with drawbacks such as unemp loyment, poverty, and the AIDS pandemic (OECD, 2008). A development plan is vital for the economic development and growth of South Africa. In an attempt to create jobs and build a unified South Africa, the government should draw up informed policies, budgets, and influential programs to ensure that no citizen is excluded and thus benefit everybody in the country. Indeed, South Africa has the relevant economic and social resources imperative for the realization of all the demands of industrialization (Bond, 2002). Though seemingly prosperous, the social evils hidden in the country are normally impediments to the growth and success of the nation. Without doubt, much of the success of the country is basically a function of the unknown resources in the c... ...ing in South Africa. Such a plan will be instrumental for fostering unity in the region and may increase participation with other countries. Works Cited Rosmarin, I., & Rissik, D. (2003, January). South africa: Cultures of the world. (2 ed.). New York: Benchmark Books. Organisation for Economic Co-operation and Development. (2008, July). Economic assessment of south africa. Retrieved from http://www.oecd.org/dataoecd/58/32/40959551.pdf Bond, P. (2002, August). Unsustainable south africa: Environment development and social protest. London: University of KwaZulu-Natal. African National Congress. (1994). The reconstruction and development programme. Johannesburg: Umanyano Publications. Abbi, A. (2005, June). Culture, education, and development in south africa: Historical and contemporary perspectives. Westport, CT: Greenwood Publishing Group, Inc.

Reverse Brain Drain

However, around 60,000 Indian professionals returned In 2010 and reverse rain drain seems to be the silver long on the cloud. It Is because though the global economic meltdown caused an upheaval In the western countries, India withstood the trauma and Is still growing at 6 per cent GAP growth rate. Abound with challenging Jobs, attractive pay packages and an equally good lifestyle, India Is succeeding In bringing back the great minds. The US economy had been reaping huge benefits from the migration of tens of thousands of talented Indians who have settled in the country.However, with a reverse brain drain in recent times, India is gaining and will continue to gain in the Eng term by leveraging this pool of highly educated and skilled workers who also have the western experience. It's been noted that almost half of the start ups in the Silicon Valley are headed by immigrants. Intellectual capital in the form of knowledge of western markets and management techniques has been flowing in . These returnees also possess the essence of the country culture and some experience about the prevalent mindsets.They either Join corporate or make their own start ups thus making the economy more competitive. The foreign experience that they earned also helps them to capitalize on the untapped market and earn better remuneration. The play ground will be level as hundreds of companies are started which provide equal or better opportunities than that available in the western companies. The growth of domestic industries and foreign investments has helped the country to resist the meltdown that has badly affected most of the developed countries.Like everyone else, Mahayana Seriatim left India for US to get a broader world view. He left a job at Google to return and start his own company Greenish Planet which manufactures solar power lamps for rural India. Evades Imitate, after studying at the London Business School, is now a partner at the Iambi branch of Hollered & Struggles. Kanji Shah, studied Design In Atlanta, worked In New York, now owns her company Big Red Tent with his husband which Is trying to broaden the appeal of weekend camping in India.All such ventures create thousands of employment opportunities and compete effectively In World market. With Indian's economic might rolling, expatriates are coming back In Increasing number and In the process It seems that the pastures for them are greener In India now. Reverse Brain Drain By semiquavers chime India is on the brink of an economic upturn as the phenomenon of brain drain has many as 100,000 professionals were heading to the US every year in search of a great career.However, around 60,000 Indian professionals returned in 2010 and reverse brain drain seems to be the silver lining on the cloud. It is because though the global economic meltdown caused an upheaval in the western countries, India withstood the trauma and is still growing at 6 per cent GAP growth rate. Abound with challenging Jobs, attracti ve pay packages and an equally good lifestyle, India is succeeding in bringing back the great minds. Job at Google to return and start his own company Greenish Planet which London Business School, is now a partner at the Iambi branch of Headrace & Struggles. Kanji Shah, studied Design in Atlanta, worked in New York, now owns her company Big Red Tent with his husband which is trying to broaden the appeal of opportunities and compete effectively in World market. With Indian's economic might rising, expatriates are coming back in increasing number and in the process it seems that the pastures for them are greener in India now.

Systems analysis and modeling: A macro to micro approach with multidisciplinary applications Essay

The recent price wars between mobile phone industries and supermarkets have been beneficial to the consumers as well as their respective industries. It can be argued that price wars enable customers to save their money, increase consumer utility and lead to great competition. However customers will only enjoy the benefits of price wars in the short-run, but the situation change in the long run. Price wars lead to decrease of prices, but it is essential to evaluate the effect of price decrease on consumer spending. The rationale of this paper is to examine the effect of price wars between mobile phone industries and the supermarkets. Findings and Analysis                  Price wars eliminate marginal players and alter the structure of the market. In case of price wars, few competitors will be willing to enter an unattractive market that greatly rely on low prices for success, and minor competitors leave the market because they are unable to make profits. In some cases, some firms might dominate in the market due to price wars; for example, acquisition of Macro foods by Woolworths in 2009. Price wars have a long-term effect on consumer preference, since consumers are left in a market with fewer players with greater authority. This case mostly applies to supermarkets. Price reduction by retailers weakens the brand investment made by producers (Wallner, 2001). Price wars between mobile phone industries and supermarkets have short-term benefits to the consumer, but they result to decrease in price which has a long-run impact to the consumer. Price cuts emanating from price wars alter consumer expectations for discounting and affect future pricing. Price reduction also affects the capacity of product distribution to small outlets such as bottle shops, local stores and convenience outlets. The price war between Britain’s dominant supermarkets has shifted into mobile market with major supermarkets reducing their prices by half. On the other hand, the rival mobile phone companies maintained that they offered the best price in the market. The mobile phone companies have announced price increase over the last few weeks; however supermarkets slashed down the price for mobile phone service. The supermarkets are able to take the opportunity cost of cutting the prices because they will gain back by selling high margin goods (Eweje & Perry, 201 1). There is price discrimination in calling rates because different mobile phone industries have different tarrifs. The pressure exerted in the markets makes the mobile phones to adjust their prices to attain market equilibrium. In order to understand the current micro and macro-business operations existing in the mobile phone industries and the supermarkets, it is imperative to analyze the social, political and economic structures. The reduction of interest rates by the government has greatly reduced the level of unemployment. In addition the purchasing capability of clients will increase because of the improved financial situation. However, the possibility of huge financial uncertainty will affect consumer spending especially while purchasing bonus products (Boyd, 2001) Analysis on current European demographics shows that there is an increasing trend of ageing population. There is low possibility of old generation to go shopping in the supermarkets as compared to the young generation. The internet literacy is at 65 years, although growing population considers online shopping as efficient. Macro environment is external to the business sector and they are uncontrollable factors that are beyond control by any organization (Forstater, 2007). Appropriate macro environment will enable supermarkets and mobile phone industries to make effective policies and strategies to make changes as well as coping up with changes in the current market. Micro environment on the other hand are the internal factors that mobile phone industries and supermarkets can control. Micro environment have direct impact to an organization because it directly affect its zsuccess and operations. Micro environment will affect an organization’s capacity to serve its clients. Therefore, before supermarkets and mobile phones industries decide on any corporate strategy, they need to appraise their micro environment. Micro environment include all departments existing in an organization and each of these department has a great effect on an organization marketing decisions. The other aspects that are included in micro environment are the publics and the customer market. Thus, mobile phones industries and supermarkets should understand their micro and macro environments so that they can make appropriate strategies that will affect both their success and operations (Wan, 2006).The law of demand and supply will help supermarkets and mobile phone industries to settle on a market equilibrium calling price. In an attempt to run from high calling cost from other mobile ser vice providers, customers ends up in the supermarkets which charges low prices to its mobile customers. However, supermarkets place price premiums on basic items so that they can substitute the low prices which had attracted the customers. It can be argued that, price wars benefit customers in the sort-run, but in the long run they greatly affect the customer (Krugman & Wells, 2009). The cost of mobile phones have fallen to such a level that if the trend carries on, mobile service will be more affordable to much larger parts of the emerging markets population. The price wars ensure that both the supermarkets and mobile phone industries keep checking on their prices so that they can maintain their profits as well as making profits. The supermarkets continue to increase their promotions while other rival companies such as Tesco hold that they will continue being aggressive. There are various factors that have led to the reduction in price of mobile phones. The cost of mobile phones is brought down by heavy subsidies from the government, high levels of competition as well as efforts from local manufacturers who set on selling entry-level phones. The price of mobile phones has been brought down by the anticipated growth of markets (Wessels, 2006). Mobile manufactures are focusing to sell their phones in the emerging markets such as Philippines, Nigeria and India. Mob ile phone manufactures have a great opportunity for the cheap phones to substitute feature phones in the emerging markets. Mobile phones manufactures face the problem of lack of operator subsidies in the emerging markets so that they can support the entry of these cheap mobile phones. As the cost of mobile phones continues to reduce, it is anticipated that emerging markets will receive an increasing number of cheap phones in future. However, there are different approaches of entry of cheap phones to the emerging markets. For example, it was anticipated that there will be a growth of 95% of smartphones in India in 2013, while it was 46% in Brazil. In Brazil the import duties was expected to hamper the cheaper supply effect. By examining the current situation, mobile phones manufacturers who will be able to cope up with the stiff competition in the modern market, will secure a strong stance in the future mobile phone market (Eweje & Perry, 2011). Technology advancement has enabled manufactures to device life-fitting mobile phones that are cheap and affordable. Mobile phones are a very crucial aspect in human daily lives because it enabled people to communicate, socialize and to spur development. Smartphones technology continues to be more prevalent in developed countries; however, the drop in price of phones has drastically changed the situation since smartphones are now more accessible in the emerging markets. Cheap mobile phones are very helpful to the emerging markets, since they will help to revolutionalize the lives of health-care professionals, farmers and educators in the developing nations. Lower price will definitely make smartphones more accessible in emerging products, but there is low internet connectivity in developing countries. Low internet penetration is a major hindrance of entry of cheap smartphones in emerging markets (Forstater, 2007). The high outlay of data plans hinders various people from accessing internet through their phone. There is also high rate of inflation and unemployment in emerging markets which is another hindrance of entry of cheap phones in these markets. Though mobile phones are essential in modern day lives, most people in emerging markets struggle to make their ends meet. In the efforts of developing cheap mobile phones in emerging markets, the issue of insufficient network infrastructure should also be addressed. Mobile network operators should focus on sustainability, where they should develop business structures that permit them to earn returns by bringing data networks to emerging markets (Worthington & Britton, 2006). The network connectivity can be provided by companies like Google; however, the cost imposed to the local economy would be huge. The attempt of brining solutions to the issue of network models in emerging markets, would have adverse effects to the local ecosystem as well as devastating impact to the mobile network operators who provide employment, and to the government who get remunerated for network licenses and use the funds for economic development. Apart from benefiting from cheap mobile phones, emerging will benefit from the internet connections plans that are just to be implemented. The emerging markets will get internet through microwave signals and fiber optics. The local governments will benefit from revenue collected from internet licenses. Conclusion                  Price wars between mobile phone industries and supermarket will benefit both the consumers as well as their respective industries. The price wars will lead to an increasing trend of the cost of mobile phones. The reduction of cost of mobile phones will enable more access of phones in emerging markets. Smartphones are more prevalent in developed countries where they have advanced the lives of farmers, health-care professionals among other people thus encouraging economic development. Emerging markets such as India, Nigeria and Philippines will receive more phones because manufacturers believe that there is a large market in developing nations. Mobile manufacturers have contributed a lot to development in the emerging markets for devising cheap phones that are affordable; however, they should also develop the internet model in the emerging markets. Lastly, cheap mobile will be of great benefit to the emerging markets since they will improve communication am ong other benefits. References Boyd,  D.  W. (2001). Systems analysis and modeling: A macro to micro approach with multidisciplinary applications. San Diego, CA: Academic Press. Do consumers really benefit from the supermarket price wars? (n.d.). 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