Performance of Telecom Service Provider

ASA University Review, Vol. 5 No. 2, July–December, 2011 Performance of Grameenphone and Robi in Telecom. Sector of Bangladesh: A Comparative Study S. M. Akterujjaman* Md. Rouf Biswas* Md. Nur-E-Alam Siddique** Abstract The last decade has brought the first wave of the truly mobile generation which is built around mobile phones, short messaging service (SMS), and portable electronic assistants. The mobile communications industry has been one of the most flourishing sectors within the ICT industry and, in general, within the economy.Grameenphone and Robi are the biggest mobile phone operators in our country and their contribution is very great to our economy. The prime objective of the study is to compare the performance between Grameenphone and Robi in the telecommunications sector of Bangladesh. This study is based on the basis of both primary and secondary data. The primary data were collected from relative mobile phone companies’ customers from Khulna city. Total 200 customers (100 customers of Grameenphone and 100 customers of Robi) were surveyed through the judgmental sampling method with questionnaire from March to June 2011.The questionnaire consisted of 25 questions. After collection of primary data, hypotheses were formulated and paired samples T-test was used to test the hypotheses with 0. 05 level of statistical significance. The statistical computer package SPSS version 16. 0 was used to analyze the data. The recommendations were provided based on the findings and analysis. Key words: Performance, Telecommunications sector, Grameenphone, Robi, Customer satisfaction, Network, Hypotheses. Introduction The people of Bangladesh are now dreaming of a digital Bangladesh.Faster development of telecommunications network coupled with improved quality of service in line with the national development is a must for the fulfillment of the vision and aspiration of digital Bangladesh and also to take her to a position of honor in the community of nat ions in the 21st century. Mobile phone operators have been playing an important role in this regard (Rahman, 2010). The last decade has brought the first wave of the truly mobile generation which is built around mobile phones, short messaging service (SMS), and portable electronic assistants.But now there is strong evidence to suggest that there is an even bigger wave to come driven by the increasing worldwide technological trend towards mobility and technology integration. This is evident through the plans and strategic directions of many of the major players in this field (Mahmud and Chowdhury, 2010). * ** Senior Lecturers, Department of Business Administration, Northern University Bangladesh Lecturer, Faculty of Business, ASA University Bangladesh 160 ASA University Review, Vol. 5 No. 2, July–December, 2011The telecommunication services in Bangladesh were provided until 1989 by the state-owned monopoly provider Bangladesh Telegraph and Telephone Board (BTTB), telecommunica tions services. In 1989, the Government of Bangladesh opened the telecom sector by awarding licenses to two operators; one to operate fixed telephones in rural areas (Bangladesh Rural Telecom Authority); and the other to operate cellular mobile phone and pager (Bangladesh Telecom LtdBTL) services. In 1992, Pacific Bangladesh Telecom Limited (PBTL) bought the mobile part of the BTL (Khan 2003).The telecommunications market in Bangladesh, particularly the mobile phone sector consists of six mobile phone operators. These are Grameenphone Limited (GP), Orascom Telecom Bangladesh Limited (Banglalink), Robi Axiata Limited, Airtel Bangladesh Limited, Pacific Bangladesh Telecom Limited (Citycell), and Teletalk Bangladesh Limited (http://www. btrc. gov. bd). Since its inception Grameenphone has built the largest cellular network in the country with over 13,000 base stations in more than 7000 locations. Presently, nearly 98 percent of the country's population is within the coverage area of th e Grameenphone network.Grameenphone has always been a pioneer in introducing new products and services in the local market. GP was the first company to introduce GSM technology in Bangladesh when it launched its services in March 1997. Grameenphone was also the first operator to introduce the pre-paid service in September 1999. It established the first 24-hour Call Center, introduced value-added services such as VMS, SMS, fax and data transmission services, international roaming service, WAP, SMS-based pushpull services, EDGE, personal ring back tone and many other products and services.The entire Grameenphone network is also EDGE/GPRS enabled, allowing access to high-speed Internet and data services from anywhere within the coverage area. There are currently nearly 2. 6 million EDGE/GPRS users in the Grameenphone network. Today, Grameenphone is the leading telecommunications service provider in Bangladesh with more than 33 million subscribers as of May 2011 (http://www. grameenphon e. com). The shareholders of Grameenphone contribute their unique, in-depth experience in both telecommunications and development. It is a joint venture enterprise between Telenor (55. %), the largest telecommunications service provider in Norway with mobile phone operations in 12 other countries, and Grameen Telecom Corporation (34. 2% ), a non-profit sister concern of the internationally acclaimed micro-credit pioneer Grameen Bank. The other 10% shares belong to general retail and institutional investors (http://www. grameenphone. com). Robi Axiata Limited is a joint venture company between Axiata Group Berhad, Malaysia and NTT DOCOMO INC, Japan. It was formerly known as Telecom Malaysia International (Bangladesh) which commenced operations in Bangladesh in 1997 with the brand name AKTEL.On 28th March 2010, the service name was rebranded as ‘Robi’ and the company came to be known as Robi Axiata Limited. Robi is truly a people-oriented brand of Bangladesh. Robi, the pe ople's champion, is there for the people of Bangladesh, where they want and the way they want. Having the local tradition at its core, Robi marches ahead with innovation and creativity. To ensure leading-edge technology, Robi draws from the international expertise of Axiata and NTT DOCOMO INC. It supports 2G voice, CAMEL Phase II & III and GPRS/EDGE service with high speed internet connectivity.Its GSM service is based on a robust network architecture and cutting edge technology such as Intelligent Network (IN), which provides peace-of-mind The Performance of Grameenphone and Robi 161 solutions in terms of voice clarity, extensive nationwide network coverage and multiple global partners for international roaming. It has the widest International Roaming coverage in Bangladesh connecting 600 operators across more than 200 countries. Its customer centric solution includes value added services, quality customer care, easy access call centers, digital network security and flexible tariff rates (http://www. obi. com. bd). Robi Axiata Limited is a Joint Venture company between Axiata Group Berhad (70%) and NTT DOCOMO INC. (30%) (http://www. robi. com. bd). Objectives of the Study The prime objective of the study is to compare the performance between Grameenphone and Robi in the telecommunications sector of Bangladesh. The more specific objectives are as follows: 1. To determine the factors that influence consumers to choose a mobile phone operator. 2. To find out different types of facilities that both companies are offering to grasp new customers and to retain the present one. . To know about the specific area where subscribers are satisfied or dissatisfied. 4. To find out the level of customer satisfaction towards the services provided by Grameenphone and Robi. 5. To provide some recommendations to increase the performance of Grameenphone and Robi. Methodology of the Study The methodology adopted for the current study is presented below in a sequential manner: Sour ces of Data: This study is based on both primary and secondary data. Primary data were collected through personal interview with a structured questionnaire and direct observations.Secondary data were collected from the published official statistics, report documents, laws, ordinance, books, articles, periodicals of different domestic and international agencies, annual reports of concerned cell phone operators, ministry of posts & telecommunications, websites etc. Questionnaire Design: The primary data were collected from relative mobile phone companies’ customers from Khulna city. Total 200 customers (100 customers of Robi and 100 customers of Grameenphone) were surveyed through the convenience sampling method with questionnaire from March to June 2011.The questionnaire consisted of 25 questions. The questionnaire was pre-tested (piloted) on a convenience sample of 30 respondents of both cell phone companies from Khulna city. The aim was to check that the issues were pertinen t and the questions were clear, understandable, and comprehensible. The layout of some questions was modified and further improvements were done as a result of the pilot study. Data Analysis Methods: A five-point Likert type scale statements were used to measure the variables where 1 stands for strongly disagreed and 5 stands for strongly agreed effect on the statements (Luthans, 2002).After collection of primary data, hypotheses were formulated and paired samples t-test was used to test the hypotheses with 0. 05 level of statistical significance. The statistical computer package SPSS version 16. 0 was used to analyze the data. 162 ASA University Review, Vol. 5 No. 2, July–December, 2011 Hypotheses Formulation: Research hypothesis is an unproven statement, which helps the researcher to draw the suggestion on his hypothetical assumption whether it is true or false based on some specific statistical test (Alam and Neger, 2009). For the convenience of the study the following hyp otheses are developed which are to be tested.Table 1: Developing Hypotheses for Different Factors Alternative hypothesis Factors Null hypothesis (H0) (Ha) Network Coverage x ncm? 0 x ncm* =0 Effectiveness of Network x enm? 0 x enm=0 Low Call Rate x lcrm=0 x lcrm? 0 Availability of SIM Card x ascm=0 x ascm? 0 Low Price SIM Card x lpscm=0 x lpscm? 0 Solution of the Problems Related to x sprsrm=0 x sprsrm? 0 SIM Replacement Special Offer to the Customers x socm=0 x socm? 0 Free Talk Time & Bonus Facilities x ftbfm=0 x ftbfm? 0 Pulse Facility x pfm=0 x pfm? 0 Availability of Flexi Load/Easy Load x aflelfm=0 x aflelfm? 0 Facility Friends & Family Number Facility x ffnm=0 x ffnm? Internet & GPRS Connection x igcm=0 x igcm? 0 Location of the Service Center x lscm? 0 x lscm=0 Value Added Services Facilities x vasfm? 0 x vasfm=0 *m= Two Mobile Companies (i. e Grameenphone and Robi) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Empirical Findings and Analysis An analysis is generated from th e questionnaire to fulfill the objectives of the study. In order to analyze the collected data a 5-point Likert type scale has been used. 5 stands for highly satisfied customers, 4 stands for only satisfied customers, 3 stands for neutral customers, 2 stands for dissatisfied customers, and 1 stands for highly dissatisfied customers.Several judgments are being made from the responses of customers to validate the objectives of the study. The results are presented below: 1. Network Coverage Network availability is an important factor to the customers. They give more emphasis in this particular point in purchasing the brand. The Performance of Grameenphone and Robi Table 2: Satisfaction Regarding Network Coverage Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011 163 Value 5 4 3 2 1Frequency Grameenphone 34 55 11 0 0 100 4. 23 . 63333 14. 97 Robi 15 46 29 8 2 100 3. 64 . 90476 24. 86 From the above table, it is found that 34% respondents of GP are highly satisfied and 55% respondents are satisfied regarding network coverage. On the other hand, 15% respondents of Robi are highly satisfied and 46% respondents are satisfied and 29% respondents showed their neutrality regarding network coverage. Here mean value of GP and Robi respondents regarding network coverage are respectively 4. 23 and 3. 64 and the coefficient of variation are respectively 14. 97 and 24. 6, which indicate that GP is in a very strong position than Robi. 2. Effectiveness of Network When the customers have the information in their hand about the different network facility of the different cell phone operators then they give the priority to buy the connection of that operator which has the best coverage. Customers also give importance on the effectiveness of the network. Table 3 shows that 62% customers are satisfied and 25% customers are highly satisfied about the effectiveness of network of GP. On the other hand, 32% customers were neutral in their opinion towards the effectiveness of network of Robi.Of whom 26% customers were satisfied and 18% customers were highly satisfied. The mean value of customers response towards the effectiveness of network of GP is 4. 12, which lies in satisfied category, while mean value of Robi is 3. 29 which lies in neutral category of customers opinion. Table 3: Effectiveness of Network Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011 Value 5 4 3 2 1 Frequency Grameenphone 25 62 13 0 0 100 4. 2 . 60769 14. 75 Robi 18 26 32 15 9 100 3. 29 1. 19168 36. 22 164 ASA University Review, Vol. 5 No. 2, July–December, 2011 The coefficient of variation of GP and Robi are respectively 14. 75 and 36. 22 which indicate that the opinion of the customers of GP is less deviated than Robi. 3. Call Rate From the table 4 it is found that 48% respondents of Robi showed their neutrality and 31% and 18% respondents were respectively satisfied and highly satisfied. On the other hand, 73% GP customers are dissatisfied and 15% are highly satisfied towards the call rate.Table 4: Satisfaction Regarding Call Rate Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011 Value 5 4 3 2 1 Frequency Grameenphone Robi 0 18 0 31 12 48 73 3 15 0 100 100 1. 97 3. 64 .52136 . 81054 26. 46 22. 27 Here mean value of GP and Robi respondents are respectively 1. 97 and 3. 64 indicate that Robi is in strong position than GP regarding call rate. The value of CV of Rabi and GP are 22. 27 and 26. 46 accordingly. It is observed that the CV of Robi is lower than GP.That means the customers of Robi perceived low call rate than that of GP. 4. Availability of SIM Card From the table 5 it is found that GP customers enjoy availability of the SIM card. That’s why about 47% respondents of GP are in highly satisfied level and 38% are satisfied regarding availability of SIM card. On the other hand, 28% Robi customers were neutral and 31% were satisfied towards availability of SIM card. Table 5: Availability of SIM Card Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011Value 5 4 3 2 1 Frequency Grameenphone Robi 47 15 38 31 15 28 0 19 0 7 100 100 4. 32 3. 28 . 72307 1. 14662 16. 74 34. 96 The Performance of Grameenphone and Robi 165 Here mean value of GP and Robi respondents regarding availability of the SIM cards are respectively 4. 32 and 3. 28 and the coefficient of variation are respectively 16. 74 and 34. 96, indicate that GP is in a strong position than Robi. 5. Low Price SIM Card Customers al ways expect that when they will feel the necessity for the SIM card of nay mobile phone operators, at that time they will get the SIM card in low price.Table 6 shows that 40% respondents of GP are dissatisfied and 35% respondents are neutral in their opinion regarding low price SIM card. On the other hand, 32% Robi customers were satisfied and 29% were highly satisfied about low price SIM card. The mean value of customers’ response regarding low price SIM card of GP is 2. 57, which lies in neutral category, while mean value of Robi is 3. 79, which falls in satisfied category of customers responses. In this regard, the value of CV of Robi is lower than that of GP. It is found that the opinion of the customers of Robi is less scattered than GP i. Robi offer low price SIM card. Table 6: Low Price SIM Card Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, M arch-June 2011 Value 5 4 3 2 1 Frequency Grameenphone 5 9 35 40 11 100 2. 57 . 97706 38. 02 Robi 29 32 28 11 0 100 3. 79 . 98775 26. 06 6. Solution of the Problems Related to SIM Replacement Table 7 shows that 54% respondents of GP are satisfied and 21% respondents are neutral in satisfaction regarding solution of the problems related to SIM replacement.About 54. 00% of the respondents of GP are above the satisfied level. On the other hand, 47% Robi customers are satisfied and 24% customers showed their neutrality. 166 ASA University Review, Vol. 5 No. 2, July–December, 2011 Table 7: Solution of the Problems Related to SIM Replacement Options Value 5 4 3 2 1 Frequency Grameenphone Robi 16 13 54 47 21 24 9 11 0 5 100 100 3. 77 3. 52 . 82701 1. 01980 21. 94 28. 97 Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011Here mean value of GP and Robi resp ondents about satisfaction regarding solution of the problems related to SIM replacement are respectively 3. 77 and 3. 52 and the CV is 21. 94 and 28. 97 accordingly. It is observed that the CV of GP is less than the CV of Robi. So, the researchers can conclude that the customers GP are more satisfied than that of Robi towards satisfaction regarding solution of the problems related to SIM replacement. 7. Special Offers to the Customers: Customers always expect that their operators will give some special offers to them regularly.The operators who are providing special offers to customers, are getting more customers. Table 7 reveals that about 39% respondents of Robi are satisfied and 26% are neutral. On the other hand, 37% GP customers are showing their neutrality and 32% was dissatisfied regarding special offers to the customers. Table 8: Special Offers to the Customers Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviat ion (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011 Value 5 4 3 2 1 Frequency Grameenphone Robi 9 21 12 39 37 26 32 14 10 0 100 100 2. 78 3. 67 1. 7853 . 96457 38. 80 26. 28 Mean value of GP and Robi respondents regarding special offers to the customers are respectively 2. 78 and 3. 67 and the coefficient of variation are respectively 38. 80 and 26. 28. It indicates that Robi is in a better position than GP in providing special offers to the customers. The Performance of Grameenphone and Robi 8. Free Talk Time & Bonus Facilities 167 Free talk time & bonus facilities are very important for the customers to choose a particular mobile phone service provider. So, they always like to use the connection of that operator who will offer them free talk time & bonus facilities.Table 9: Free Talk Time & Bonus Facilities Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV ) Source: Field Survey, March-June 2011 Value 5 4 3 2 1 Frequency Grameenphone Robi 0 26 0 39 7 25 51 10 42 0 100 100 1. 65 3. 81 . 60927 . 93954 36. 93 24. 66 Table 9 shows that 51% customers are dissatisfied and 42% customers are highly dissatisfied about free talk time & bonus facilities of GP. On the other hand, 39% customers were satisfied in their opinion towards free talk time & bonus facilities of Robi.Of whom 26% customers were highly satisfied and 25% customers were neutral. The mean value of customers’ response towards free talk time & bonus facilities of GP is 1. 65, which lies in dissatisfied category, while mean value of Robi is 3. 81 which lie in satisfied category of customers’ opinion. The value of CV of Robi is lower than GP and it denotes that the customers’ opinion of Robi is less deviated than GP. So, it can be concluded that the customers of Robi are enjoying more free talk time & bonus facilities than GP customers. 9. Pulse Facilitiy The c ustomers who want to talk in a short time desire for pulse facilities.There are some operators in our country who are providing pulse facilities to the customers. Table 10 reveals that about 49% respondents of Robi are dissatisfied and 22% customers are satisfied. On the other hand, 68% GP customers are dissatisfied and 23% were highly dissatisfied regarding pulse facilities to the customers. 168 ASA University Review, Vol. 5 No. 2, July–December, 2011 Table 10: Satisfaction Regarding Pulse Facility Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011Value 5 4 3 2 1 Frequency Grameenphone Robi 0 5 0 22 9 17 68 49 23 7 100 100 1. 86 2. 69 . 55085 1. 05117 29. 62 39. 08 Here mean value of GP and Robi respondents regarding pulse facility to the customer are respectively 1. 86 and 2. 69 indicate that Robi is in a strong position than GP. 10. Av ailability of Flexi Load/Easy Load Facilities It is more important to the customer. Every customer wants these facilities in a convenient location. The operator who provides this facilities the customers are more satisfied on that operator than that of others.Table 11: Availability of Flexi Load/Easy Load Facilities Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011 Value 5 4 3 2 1 Frequency Grameenphone Robi 63 12 32 20 5 32 0 29 0 7 100 100 4. 58 3. 01 . 58913 1. 12362 12. 86 37. 33 Table 12 shows that 63% customers are highly satisfied and 32% customers are satisfied regarding availability of flexi load facility of GP.On the other hand, 32% customers were neutral in their opinion towards Easy Load facility of Robi of whom 29% customers were dissatisfied and 20% customers were satisfied. The mean value of customers response towards availabilit y of flexi load/easy load facilities of GP is 4. 58, which lies in highly satisfied category, while mean value of Robi is 3. 01 which lies in neutral category of customers opinion. The coefficient of variation of GP and Robi are respectively 12. 86 and 37. 33 which indicate that the opinion of the customers of GP is less deviated than that of Robi.The Performance of Grameenphone and Robi 11. Friends and Family Number Facilities 169 Every customer has some special number which is very much essential to him. He or she needs to talk with these numbers frequently. So he or she expects a lower tariff for these numbers. Cell phone operators provide some facilities for these FnF number. The operator who provides lower tariff and gives opportunity to more FnF number the customers are more satisfied with that operator. Table 13 reveals that about 53% respondents of Robi are highly satisfied and 28% customers are satisfied.On the other hand, 49% GP customers are highly satisfied and 33% were satisfied regarding friends and family number facilities to the customers. Table 12: Friends and Family Number Facilities Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011 Value 5 4 3 2 1 Frequency Grameenphone 49 33 14 4 0 100 4. 27 . 85108 19. 93 Robi 53 28 12 7 0 100 4. 27 . 93046 21. 79 Here mean value of GP and Robi to the customer satisfaction regarding friends and family number facilities are respectively 4. 7 and 4. 27 and the coefficient of variation are 19. 93 and 21. 79 indicate that both the operators are near about equal position. 12. Internet and GPRS Connection Internet and GPRS connection are very important for the young cell phone users. They want to get these facilities within low cost. Table 13: Internet and GPRS Connection Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Stan dard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011 Value 5 4 3 2 1 Frequency Grameenphone Robi 11 8 28 25 35 31 16 22 10 14 100 100 3. 15 2. 91 1. 2254 1. 16424 35. 64 40. 01 170 ASA University Review, Vol. 5 No. 2, July–December, 2011 From the above table, it is found that 35% respondents of GP are neutral and 28% respondents are satisfied regarding Internet and GPRS connection. On the other hand, 31% respondents of Robi showed their neutrality and 25% respondents are satisfied and 22% respondents are dissatisfied regarding Internet and GPRS connection. Here mean value of GP and Robi respondents are respectively 3. 15 and 2. 91 and the coefficient of variation are respectively 35. 64 and 40. 01, which indicate that GP is in a good position than Robi. 3. Location of the Service Center Table 15 shows that 40% customers are satisfied and 29% customers are highly satisfied 24% customers showed their neutrality regarding location of the servic e center of GP. On the other hand, 37% customers were satisfied towards location of the service center of Robi. Of whom 28% customers were neutral and 26% customers were highly satisfied. Table 14: Location of the Service Center Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011Value 5 4 3 2 1 Frequency Grameenphone 29 40 24 7 0 100 3. 91 . 90000 23. 02 Robi 26 37 28 9 0 100 3. 80 . 93203 24. 53 Here mean value of GP and Robi to the customers satisfaction regarding location of the service center are respectively 3. 91 and 3. 80 and the coefficient of variation are 23. 02 and 24. 53 indicate that GP is in a better position than Robi. 14. Value Added Services Facilities Cell phone operators provide some value added services such as SMS, MMS, and VMS etc. which is very important to the customers. The Performance of Grameenphone and RobiTable 15: Va lue Added Services Facilities Options Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total Mean Value ( x ) Standard Deviation (SD) Coefficient of Variation (CV) Source: Field Survey, March-June 2011 171 Value 5 4 3 2 1 Frequency Grameenphone 10 45 36 5 4 100 3. 52 . 89307 25. 37 Robi 8 44 39 6 3 100 3. 48 . 84662 24. 33 Table 18 indicates that 44% respondents of Robi are in satisfied level and 39% are neutral in their opinion regarding value added services. On the other hand, 45% GP customers were satisfied and 36% expressed their neutrality.The mean value of customers’ response towards value added services of GP is 3. 52, which lies in satisfied category, while mean value of Robi is 3. 48 which lie in neutral category of customers’ opinion. The value of CV of Robi is lower than GP and it denotes that the customers’ opinion of Robi is less deviated than GP. In fine it can be said both the companies tried to reach their best position by offe ring various opportunities. Both the companies are staying a strong position. But their initial investment, customers, registration number of customers is different from each other.It is also seen that some of the customers are satisfied with the specific sectors of Grameenphone and some of the customers are satisfied with the specific sectors of Robi. Test of Hypotheses and Results Test of hypotheses and results have been presented in the below table 20 by the help of the statistical package SPSS version 16. 0. The interpretations of the hypotheses testing have been given after the table 20. Table 16: Paired Samples Test between Grameenphone and Robi Paired Differences Variables Mean 1. Network Coverage 2. Effectiveness of Network 3. Call Rate 4. Availability of SIM Card . 9000 . 83000 . 50000 1. 04000 Std. Std. Error Deviation Mean . 53362 . 05336 . 73930 . 07393 . 50252 . 05025 . 58465 . 05847 95% Confidence Interval of the Difference Lower . 48412 . 68331 . 40029 . 92399 Upper t df 99 99 99 99 . 69588 11. 057 . 97669 11. 227 . 59971 9. 950 1. 15601 17. 788 Sig. (2tailed) . 000 . 000 . 000 . 000 Cont. Table 172 ASA University Review, Vol. 5 No. 2, July–December, 2011 Paired Differences Variables Mean 5. Low Price SIM Card 6. Solution of the Problems Related to SIM Replacement 7. Special Offer to the Customers 8. Free Talk Time & Bonus Facilities 9. Pulse Facility 10.Availability of Flexi Load/Easy Load Facility 11. Friends & Family Number Facility 12. Internet & GPRS Connection 13. Location of the Service Center 14. Value Added Services Facilities -1. 22000 . 25000 -. 89000 -2. 16000 -. 83000 1. 57000 . 00000 . 24000 . 11000 . 04000 Std. Std. Error Deviation Mean 95% Confidence Interval of the Difference Lower Upper t df 99 99 99 99 99 99 99 99 99 99 Sig. (2tailed) . 000 . 000 . 000 . 000 . 000 . 000 1. 000 . 000 . 001 . 103 .52378 . 05238 -1. 32393 -1. 11607 -23. 292 . 43519 . 04352 . 37322 . 03732 . 16365 -. 96405 . 33635 5. 745 -. 81595 -23. 847 . 58119 . 5812 -2. 27532 -2. 04468 -37. 165 . 77921 . 07792 -. 98461 -. 67539 -10. 652 1. 71451 21. 557 . 05640 . 32517 . 17240 . 08819 . 000 5. 591 3. 498 1. 647 .72829 . 07283 1. 42549 . 28427 . 02843 . 42923 . 04292 . 31447 . 03145 . 24288 . 02429 -. 05640 . 15483 . 04760 -. 00819 Table 16 shows that in case of the factor ‘network coverage’ the calculated value of t (11. 057) is greater than the table value of t (1. 96) at 5% level of significance. So, H0 is rejected. That means, Ha is accepted. Regarding ‘effectiveness of network’ the calculated value of t (11. 227) is more than the tabulated value of t (1. 6) at 5% level of significance. So, H0 is rejected. That means, Ha is accepted. For the factor ‘call rate’ the calculated value of t (9. 950) is higher than the table value of t (1. 96) at 5% level of significance. So, H0 is rejected. That is, Ha is supported. Under the variable ‘Availability of SIM card’ the calculated value of t (17. 788) is greater than the table value of t (1. 96) at 5% level of significance. So, H0 is rejected. That means, Ha is accepted. In case of ‘low price SIM card’ the calculated value of t (-23. 292) is less than the table value of t (-1. 96) at 5% level of significance.So, H0 holds true. That means, H0 is accepted and Ha is rejected. The Performance of Grameenphone and Robi 173 Regarding ‘solution of the problems related to SIM replacement’ the calculated value of t (5. 745) is greater than the table value of t (1. 96) at 5% level of significance. So, H0 is rejected. That is, Ha is accepted. Under the variable ‘special offer to the customers’ the calculated value of t (-23. 847) is less than the table value of t (-1. 96) at 5% level of significance. So, H0 holds true. That is, H0 is supported. In case of ‘free talk time & bonus facilities’ the calculated value of t (-37. 65) is less than the table value of t (-1. 96) at 5% l evel of significance. So, H0 holds true. That means, H0 is accepted and Ha is rejected. Under the variable ‘pulse facility’ the calculated value of t (-10. 652) is less than the table value of t (-1. 96) at 5% level of significance. So, H0 holds true. That means, H0 is accepted and Ha is rejected. For the factor ‘availability of flexi load/easy load facility’ the calculated value of t (21. 557) is greater than the table value of t (1. 96) at 5% level of significance. So, H0 is rejected. That means, Ha is accepted. In case of ‘friends & family umber facility’ the calculated value of t (0) is less than the table value of t (1. 96) at 5% level of significance. So, H0 holds true. That means, H0 is accepted and Ha is rejected. For the factor ‘Internet & GPRS connection’ the calculated value of t (5. 591) is greater than the table value of t (1. 96) at 5% level of significance. So, H0 is rejected. That means, Ha is accepted. Regarding â €˜location of the service center’ the calculated value of t (3. 498) is greater than the table value of t (1. 96) at 5% level of significance. So, H0 is rejected. That means, Ha is accepted.Under the variable ‘value added services facilities’ the calculated value of t (1. 647) is less than the table value of t (1. 96) at 5% level of significance. So, H0 holds true. That means, H0 is accepted and Ha is rejected. Summary of Findings †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ Grameenphone spent a large amount of money in the establishment year for the tower purpose and is doing better for the network coverage than that of Robi. Most of the customers of GP have given their opinion in favor of effectiveness of network. The customers of Robi perceived low call rate than that of GP. GP is in a strong position than Robi regarding availability of SIM card.It is found that the opinion of the customers of Robi is less scattered than GP i. e Robi offe r low price SIM card. GP is in a better position in providing solution of the problems related to SIM replacement than Robi. It is observed that Robi is in a better position than GP in providing special offers to the customers. The customers of Robi are enjoying more free talk time & bonus facilities than GP customers. 174 †¢ †¢ †¢ †¢ ASA University Review, Vol. 5 No. 2, July–December, 2011 It is found that most of the customers’ of GP and Robi are dissatisfied regarding pulse facilities.But in comparison between these two operators, Robi is in a better position. Flexi load facility of Grameenphone is more available than that of easy load facility of Robi surrounding the country. The performance of both GP and Robi are satisfactory regarding friends and family number facilities to the customers. It is found that most of the customers’ of GP and Robi are showing their neutrality regarding Internet and GPRS connection. But in comparison between these two operators, GP is in better position. The customers of both the operators are satisfied in case of location of the service center.It is found that the customers’ opinion of Robi is less deviated than GP in case of value added services. That is Robi provides more value added services than GP. †¢ †¢ Conclusion Quality of telecommunications service depends on both the telephone network and the supporting services. The first is known as ‘equipment and system oriented quality’ and the second as ‘people and process oriented quality’. Equipment and system oriented quality consists of activities directly related to the network while people and process oriented quality consists of activities provided over the telephone network or face to face (Yusuf and Alam, 2010).The quality of service of mobile telecommunications is usually measured in terms of some common parameters such as call completion rate, call drop rate, voice quality, percentag e of complaints resolved within a stipulated time and customer service etc. (TRAI, 2008, Sutherland,2007, Australian Communications and Media Authority 2008). Accessibility and connectivity needs to be further improved. This can be achieved through the upgrading of technological infrastructure as well as the lowering of the internet usage costs through mobile phones to a more affordable level (Mahmud and Chowdhury, 2010).The research has provided insights like what are positive and negative aspects of both of the operators. For instance, the total number of customers of Grameenphone are very high than Robi. Grameenphone Company spent a large amount of money in the establishment year for the tower purpose and is doing better for the network facilities. On the other hand, Robi is doing better in case of call rate, low price SIM card, friends and family number facilities, bonus system etc.Robi needs to improve its poor network coverage, problem related to SIM replacement, insufficiency of the scratch card and easy load facilities, lack of convenient location of the service center and discount facilities etc. On the other hand Grameenphone is in a better position in comparison to Robi. It is doing better in case of following services like network coverage, effectiveness of network, solution of the problem related to SIM replacement, reconnection and migration, availability of the scratch card and flexi load facilities, location of the service center etc.But it can not be said that its services is much attractive to the customers. It has some other problems like lack of limited friends and family (FnF) number facilities and lack of bonus system (Free talk time, SMS), high call rate, lack of special offers to the customers, lack of pulse facilities etc. If GP takes initiative to remove or reduce these drawbacks, then it will be more successful in the telecommunications industry of Bangladesh. The Performance of Grameenphone and Robi 175 RecommendationsRecommendation s for Grameenphone: The authors have suggested some recommendations for improving the performance of Grameenphone are as follows1. The authority of Grameenphone should reduce its higher call charge. At the same time, the reduced call charge should be applied for all operators, not only for GP to GP, but also from GP to other operators. 2. It should provide more friends and family number facilities with GP to GP and other operators. 3. The Company should focus more to the prepaid subscribers than the post-paid subscribers. 4. SIM replacement (in case of lost or damaged SIM) charge should be reduced. . Most of the value added services (VAS) are not friendly for general handset users. GP should take some steps so that general handset users get an opportunity to have that VAS. Recommendations for Robi: The following are the provided recommendations by the authors to improve the performance of Robi1. Customers have been switching to other operators as a result of their poor network infra structure. So, Robi should have quick expansion in network development all over Bangladesh if it wants to keep its customers to stay with it. 2. Time duration of easy load and scratch card should lengthen.Easy load facility should be made easily available. 3. Charge should be reduced than the existing charge to take a new SIM if it is either damaged or lost. 4. The privilege services of the customer retention scheme of Robi should be launched as soon as possible as ‘djuice’ of Grameenphone has already started to saturate a certain segment of the market through its ‘X-tra Khatir Card’. 5. The Value Added Services (VAS) department should be coming up with more ideas to entertain its customers. This department has its potential but should be using it to the full range to provide more useful services to customers’ needs. . Customer Care has turned out to be one of the most focused points in the telecom industry. Survey results show subscribers expect a l ot of it and would appreciate special care facilities. References Agar, J. (2003) ‘Constant touch: A global history of the mobile phone’, Journal of Service Marketing, vol. 5, no. 1, pp. 21-27. Alam, M. J. , and Neger, M. (2009) ‘Measuring consumer attitude towards beautification products: A study on some selected brands in Bangladesh’, Journal of Business and Technology (Dhaka), vol. 4, issue 2, p. 61.Australian Communications and Media Authority (2008) ‘Telecommunications Today’, Report 4, Customer Satisfaction, February. Balasooriya, A. F. , Alam, Q. , & Coghill, K. (2007) ‘Ownership, competition and regulation under privatization policy: the Sri Lankan experience’, International Review of Administrative Sciences, vol. 73, no. 4, pp. 611-628. 176 ASA University Review, Vol. 5 No. 2, July–December, 2011 Bolton, R. N. (1998) ‘A dynamic model of the duration of customers’ relationship with a continuous service p rovider: The role of customer satisfaction’, Journal of Marketing, vol. 21, no. 6, pp. 5-9. Camp, L. J. & Anderson, B. L. (2001) ‘Deregulating the local loop: The telecommunications regulation path less chosen as taken by Bangladesh’, International Journal of Technology, Policy and Management, vol. 1, no. 1, pp. 100-114. Coldwell. (2001) The Practice of Management, 4th edition, New York: Harper & Row. Gupta S. P. and Gupta M. P. (2006) Business statistics, 11th ed. , New Delhi: Sultan Chand & Sons. Hasan, Mahmud. (2008) ‘Mobile phone operators in Bangladesh’, The Daily Star, 7 January. Heinonen, K. and Andersson, P. (2003) ‘Swedish mobile market: Consumer perceptions of mobile services’, Journal of Service Marketing, vol. , no. 1, pp. 33-36. Hess, D. J. (1997) Science Studies: An Advanced Introduction, New York: New York University Press. Khalil, M. (2000) ‘Ministerial support for mobile: Middle East Times’, Journal of Europ ean Business Management, vol. 25, no. 2, pp. 54-81. Khan, M. A. S. (2003) ‘Privatization in the telecommunication sector: An overview of comparative Bangladesh situation’, The Bangladesh Accountant, 41:14 pp. 29-36. Luthans, F. (2002) Organizational Behavior, 9th edition, New York: McGraw-Hill International Companies Inc. Mahmud, K. and Chowdhury, S. M. R. 2010) ‘Prospects of mobile learning for digital Bangladesh’, Journal of Business and Technology (Dhaka), vol. 5, issue 1, January-June, pp. 50-61. Mitchell, K. and Whitmore, M. 2003. Marketing Management: In Book-Location Based Services, Journal of American Business and Economics, 41(2):85-91. Rahman, M. T. (2010) ‘Making Teletalk a healthy competitor among the mobile phone operators in Bangladesh’, Journal of Business and Technology (Dhaka), vol. 5, issue 2, July-December, p. 133. Silva, H. D. , & Khan, A. S. (2004) ‘Regulation and investment: Case study of Bangladesh’, WDR Dial ogue Theme Discussion Paper WDR 03111-33.Sutherland, E. (2007) ‘The regulation of the quality of service in mobile networks’, Info 9(6), pp. 17-34. Symeou, P. C. (2009) ‘Does smallness affect the liberalization of telecommunications? The case of Cyprus’, Telecommunications Policy 33 (3-4), pp. 215-229. TRAI. (2008) ‘Quality of service assessment: Report of survey for basic service (Wireline)’, Cellular Mobile (Wireless) and Broadband, New Delhi: TRAI. Wang, Y. , & Lo, H. P. (2002) ‘Service quality, customer satisfaction and behavior intentions: Evidence from China's telecommunication industry’, Info, vol. 4, no. 6, pp. 50-60. Yusuf, M. A. and Alam, Q. 2010) ‘The influence of regulatory environment on mobile phone service quality: The case of Bangladesh’, Annual Asian Business Research Conference 2010, p. 5. Web References 1. 2. 3. 4. 5. http://www. grameenphone. com/about-us (Retrieved on 11 August 2011) http://www. gr ameenphone. com/about-us/corporate-information/ownership (Retrieved on 11 August 2011) http://www. btrc. gov. bd/licensing/operators/mobile_operators. php (accessed on 11 August 2011). http://www. robi. com. bd/index. php/page/view/98 (Accessed on 12 August 2011) http://www. robi. com. bd/index. php/page/view/99 (Accessed on 12 August 2011).

Child Life During the American Revolution Essay

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The Soviet Afghanistan War Research Paper Example | Topics and Well Written Essays - 1750 words

The Soviet Afghanistan War - Research Paper Example The international involvement in the war prepared an unsophisticated and unorganized guerilla force for sustained combat operations that lasted over 9 years and demoralized one of the world’s largest superpowers, consequently paving the way for its downfall (Arnold, 1985). Afghanistan enjoyed a healthy relationship with the Soviet Union during most of the 20th Century. Ever since the Russian Revolution in 1919, The Union of Soviet Socialist Republics had taken an active role in the military and economic functioning of Afghanistan. In fact, it was widely acknowledged that USSR and Afghanistan were very close allies and this often worried other political strongholds such as the United States of America and China. This relationship became official in the early 1950s when USSR sent billions in economic and military aid to Afghanistan. In 1978, the Afghan Army, which favored the PDPA (the voice of the masses of Afghanistan), caused overthrew and murdered Mohammed Daoud Khan, the ru ler. Soon after, Nur Muhammad Taraki, Secretary General of PDPA became President and Prime Minister as well. Once again, PDPA was divided internally into factions, Khalq (the masses) lead by Taraki and Hafizullah Amin and Parcham (flag) by Babrak Karmal and Mohammad Najibullah (Arnold, 1985). These conflicts resulted in violence, kidnappings and executions of many Parcham members and further deteriorating relations between the two factions. The problems that Afghanistan faced regarding ethnic and sectarian friction and violence deteriorated in the PDPA regime. Ever since the 1970s, Daoud Khan had neglected and angered the Pashtun populace of Afghanistan. Furthermore, Afghanistan had cemented problems with Pakistan as well after Daoud had urged his hardline Pashtunistan policies to Pakistan. Zulfiqar Ali Bhutto, the Pakistan president at the time reacted by training the Jamiat-e-Islami militants against Daoud’s secular regime. Although these rebels were unsuccessful in overthr owing the government, the roots of an organized Islamic Rebellion had been put in place and their power would be seen in the years to come. During the first two years of his time in office, Taraki employed a liberal approach to governance by modernizing reforms. Many of these changes were seen by the masses as being anti-Islamic, something that greatly inflamed many. For example, the changes put forth by Taraki regarding land reforms and marriage rules were seen as going against the tradition in which this Islamic country was so deeply immersed. So infuriated was the populace that soon rebellions broke out in the country in mid 1978 with people attacking public buildings and military strongholds. Soon civil war had spread throughout the country. So dire was the situation that in September 1979, President Taraki was killed after a palace shootout; Hafizullah Amin took power. The Taraki and Amin governments were similar in practice; both employed Soviet-style governance, establishing reforms that hurt property owners and Islamic sentiment. Inevitably, there was great opposition to these reforms and major unrest through the country which was dealt violently by the government. Large parts of the country went into open revolt against the government. By 1979, 24 of the 28 provinces of the country had surges of violence and instability. The situation was worsened when an American Ambassador to Afghanistan, Adolph Dubs, was kidnapped and killed by militants with the help of the Soviet Union communists. Afterwards, the United States officially expressed its disapproval to the Soviet Union putting strain on

Antarctic sea ice melt and its implications Essay

Antarctic sea ice melt and its implications - Essay Example mosphere and polar oceans; and changes the force of ocean buoyancy by redistributing fresh water through transportation and subsequent melting of comparatively fresh sea ice. Thesis Statement: The purpose of this essay is to investigate Antarctica sea ice melt, examine the ocean-atmosphere interaction, and evaluate the environmental and societal impact of rising sea levels and other impacts of the sea ice melt. Globally, there is a decline of snow and ice over the past several years, particularly since 1980, with an increasing downturn during the last decade. In the South Pole, the east and west Antarctic Ice Sheets are â€Å"two unequal parts, with different histories and characteristics† (Mercer 1978: 323), Figure 1 below. Unlike the vast, older and mostly land-based ice sheet in East Antarctica, the Western Antarctic ice sheet is younger, much smaller and marine-based, anchored to a distance of 2,500 meters below sea level. Further, West Antarctica is not a single continent, but is a series of islands covered by ice, touching the ocean floor, and not based on land (NASA 2010). Two-thirds of the continent is East Antarctica, a high, frozen desert. If all the ice melted, it would increase the global sea level by about 60 meters or 197 feet. The results from a recent National Aeronautics and Space Administration (NASA)/ German Aerospace Center’s Gravity Recovery and Climate Experiment (GRACE) study, indicate that since 2006 there has been greater ice loss from interior East Antarctica than earlier believed (Chen et al 2009). In the Southern Ocean, sea ice forms a fringe around the entire Antarctic continent (Figure 2. below) which is surrounded by the waters of different seas. The Antarctica is subdivided into 5 sectors by researchers, each impacted by diverse geography and weather conditions. This results in greater yearly variations in Antarctic sea ice, as compared to Arctic sea ice (Nasa.Gov 2010). â€Å"Across the Antarctic Peninsula lies one of the

Chemistry assignment Example | Topics and Well Written Essays - 500 words

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Investment and Portfolio Analysis Essay Example | Topics and Well Written Essays - 3000 words - 1

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College and Universities Should Teach Financial LiteracyManage Money Essay

College and Universities Should Teach Financial LiteracyManage Money - Essay Example One solution is to make financial literacy a part of the core curriculum for all colleges and universities in the United States. According to Annamaria (2010), financial literacy is the capacity to make sound financial judgments, and take workable actions about the current and future utilization and management of finances. Therefore, it is important for all individuals to be knowledgeable on basic financial information to enable them make right decisions based on their needs and income. There are several important aspects of financial illiteracy in the country. According to Braunstein et al (2005), lack of financial knowledge has increased the vulnerability of many consumers to heavy losses and deceptive business arrangements. This has resulted to some of the worst economic problems in the country such as the most recent financial downturn that was mainly caused by extensive consumer overleveraging. American universities and colleges can play a crucial role in empowering students wit h financial skills but historically, it has not been the case. College and university graduates play a critical role in making financial decisions in any economy, but for a long time financial literacy has been regarded as a ‘life skill’ acquired outside the classroom setting in United States (Thomas,2010,p60). In this respect, Thomas (2010, p67-68) notes that university administrators do not consider teaching financial skills a priority in their curriculums. However, recent changes such as increasing college fees, unpredictable job market in addition to various financial challenges that face students at school and after graduating has jolted authorities in higher learning institutions to review their stance. In view of these challenges, policy makers in the United States have indentified the need of introducing compulsory financial education in these institutions to enhance the capacity of students to make sound judgments in school and after graduating. According to Le wis(2008,p50), financial illiteracy is widespread among all American citizens, but low-income earners and people with no post secondary education are the most affected groups. A study conducted by Lewis (2008, pp56-89) found that minority groups especially African Americans and Hispanics had the lowest financial literacy level compared with other groups. In addition, American men have higher financial literacy level than women and as people grew older, their financial literacy increased (Lewis, 2008, p64). Thomas (2010) argues that economic, health and social wellbeing of the individuals, families and societies relies heavily on financial literacy. In this respect, the importance of financial education cannot be overemphasized. At individual level, financial literacy enables a person to plan for the present expenditures and save for the future. This includes developing pragmatic household budgets that enables people to prioritize on their expenses, create saving plans and make wise investment decisions. In addition, good financial education empowers individuals to manage their debts and make sound financial decisions for their retirement to ensure that they lead a financially secure life when they cease working (Thomas, 2010 pp 87-89). Moreover, financially literate people buy goods and services at lower prices and this enhances their savings and investments. In this respect, effective

Competing with Information Technology Essay Example for Free

Competing with Information Technology Essay Chapter 2 introduces fundamental concepts of competitive advantage through information technology and illustrates major strategic applications of information systems. Information Technology (IT) professionals must understand how to use IT systems and technology to deliver a competitive advantage to the organization. Information systems and technology should provide more than a cost savings benefit to organizations. Today, IT solutions are expected to provide the means to surpass a competitor’s performance. As discussed in Chapter 1, the role of IT professionals is changing. Currently, there is an evolving term, business technology, which is used to describe the emerging role in IT. IT professionals are becoming more and more integrated with the business operations of an organizations. The Real World Case Study 4, IT Leaders: Reinventing IT as a Strategic Business Partner, describes how one organization is reorganizing to better utilize IT to increase business benefits and contribute to a competitive advantage. It is important for an IT organization to utilize IT to reduce the cost of running the business, grow the business, or develop new services to change the business. To position an organization to better provide its products and services, an understanding of the competitive forces is needed. Michael Porter identifies five threats that require business strategies ensure that an organization can out-perform other competitors. They are: 1. Rivalry of competitors within its industry 2. Threat of new entrants 3. Threat posed by substitute products that might capture its market share 4. The bargaining power of customers 5. The bargaining power of suppliers To counteract these threats, competitive strategies must be developed to address the potential risks an organization may encounter as it strives to maintain its position on the market place. The competitive strategies are: 1. Cost Leadership Strategy 2. Differentiation Strategy 3. Innovation Strategy 4. Growth Strategies 5. Alliance Strategies 6. Other Strategies These strategies can be used either individually or in a combination to position an organization to better compete for the future. An example of an organization that is utilizing IT to change how it does business and remain economically viable in the future is the online magazine Cross Talk. In the 1990’s, Cross Talk was printing and mailing the magazine to subscribers. With a decrease in funding, this organization had to develop ways to reduce costs, deliver its services to its subscribers, grow its subscriber base, demonstrate its value above other on-line content providers, and justify why it should not be eliminated. Cross Talk is now available at its new website in either an online digital flipbook format or PDF version—CrossTalk is now completely electronic. This change reduces their carbon footprint and allows them to bring the journal to their readers in their preferred and most convenient format. This is also CrossTalks first step towards reaching new reader devices and enhancing the suitability of the journal for our increasing electronic readership. Customer Value Customer value has become a driving force in the world economy. A key success factor for many organizations is developing customer value by increasing customer loyalty, anticipate their future needs, respond to customer concerns, and provide top-quality customer service. One example is Southwest Airlines. Not only have they automated ticket sales via the Internet, Southwest also sends special offers regarding discounts available at my destination, emails to remind customers that the trip is around the corner, text alerts if a flight is delayed, and offers incentives to fly with them. It seems that Southwest Airlines provides a personal assistant to help make the travel experience more enjoyable. Think about how some of your favorite businesses are creating customer value for you. Internet Technologies Many organizations use Internet technologies to create a strategy to offer fast, responsive, high-quality products and services tailored to a customer’s individual preferences. Internet technologies make customers the focal point of customer relationship management (CRM) and other e-business applications. New technologies such as wikis and blogs are also being incorporated as a means to provide enhanced customer experience. Such communications enable continual interaction with customers by creating a cross-functional collaboration with customers in product development, marketing, delivery, service, and technical support. Television is taking advantage of this capability. TV news shows are reading and answering emails and some reality TV shows allow views to vote for their favorite contestant, preferred ending, or favorite commercial. Using the Internet technologies, business units are better able to shape and offer products and services. Value Chain The value chain is another concept that helps to identify opportunities for strategic information systems. It views an organization as a series of basic activities that add value to its products and services. In this framework, activities are organized into primary and support processes. From the business understanding gained by analyzing an organization’s value chain, the IT organization can determine where to best apply IT systems and technology. The following value chain graphic provides an example of how and where information technologies can be applied to specific business processes to gain a competitive advantage in the market place. Value chain offered by information technologies. Business Reengineering Often times, to remain competitive, an organization must consider more than just where and what IT systems and technology solutions should applied. An organization must look at how it actually does business and then reengineer its business processes. Business reengineering requires an organization to re-design how it does business by eliminating stove-piped, silo organizations and functions, develop an improved understanding for opportunities for information sharing, and instituting enhanced stewardship regarding an organizations data and business processes. Agile Companies The rate of change is increasing and organizations must be able to quickly respond to changing market trends. Standardized, long-lived products and services are giving way to globalized, niche markets which offer products that are individualized and short-lived. To become an agile organization, an organization must consider the following strategies. 1. Provide a solution that customers perceive as a solution to an individual problem. This allows the product to be priced based on value rather than cost to produce. 2. Cooperate with customers suppliers, and other companies to quickly bring the product to market. 3. Thrive on change and uncertainty. 4. Leverage the individuals and knowledge of the processes. Become entrepreneurial in spirit. Knowledge as a Competitive Advantage To remain competitive, organization must become a learning organization. Organizations must be able to capture the knowledge of the organization, learn from this knowledge, and then use it to enhance its offerings. Knowledge Management Systems facilitates an organization’s ability to capture and then utilize its knowledge. Understanding and being able to utilize this unstructured date is key to developing and maintain a competitive advantage. Information capture includes processes, procedures, patents, reference works, best practices, etc. This integration of knowledge helps an organization become an innovative and agile provider of high-quality products and customer services, and potentially a more formidable competitor in the market place. Leaders in information technology are expected to be not only a technology professional but also a business professional. Many are tasked with finding emerging business opportunities, driving growth, encouraging innovation, and engaging customers. This provides a tremendous opportunity for you to step up and co-create and ultimately shape the future business vision. Collaborating with the business will not be enough—you dont just provide the technology but jointly own the success and failure of business initiatives. IT Portfolio Management and Governance An emerging trend is enhanced IT Portfolio Management and Governance as a means to effectively apply IT systems and technology to business needs. According to Richard Spires, DHS CIO, in his blog post entitled Getting Program Governance Right Helps Ensure Success on the federal CIO Council Web site: Complex IT systems encompass at least a half-dozen stakeholder organizations that must be synchronized, including the strategy organization, the business or mission owner of the system, IT, finance, procurement, security, and privacy. Ensuring all key stakeholders are involved in key decisions is an essential element to assuring genuine alignment. Program Governance Boards provide guidance, decision-making, and oversight of one or more programs. The function of the Program Governance Board is not to usurp the authorities of the Program Manager (PM), but rather to provide a forum by which the PM can bring key issues and trade-off decisions to an informed, empowered body that has a vested interest in that program’s success and views the PM as a trusted advisor and true subject matter specialist. IT organizations must determine where to invest time, people, and money in current and new IT systems and services in order to enhance the value of products and services. To do this, many organizations are categorizing offerings into individual portfolios and establishing a strong governance structure to guide the selection and investment into solutions. Enterprise Architecture Organizations are establishing an Enterprise Architecture (EA) to inform, guide and constrain the investment decisions made by governance boards regarding IT systems. The Federal CIO Council defines EA as: Enterprise Architecture is a strategic information asset base, which defines the mission, the information necessary to perform the mission and the technologies necessary to perform the mission, and the transitional processes for implementing new technologies in response to changing mission needs. An enterprise architecture includes a baseline architecture, target architecture (sometimes referred to an as-is and to-be), and a sequencing plan. An EA identifies which processes and IT systems to standardize and integrate. The benefits of an EA are reduction in IT Costs, improved IT responsiveness, guides the proper selection of IT solutions to ensure the accomplishment strategic business outcomes. The components of an enterprise architecture is described in the figure below: Various layers of an enterprise architecture. (Source: NIST) Conclusion How does your organization determine how to invest in IT? You might see if one of your organization’s senior executives is available for a 30 minute meeting to discuss how the organization determines what technologies to invest in as a corporation. Think about questions to ask. Some examples might be: how is an business need identified? How are IT investments justified? Who are your competitors? If you work for an IT consulting firm, you might as how the company decides what contracts it will bid on. It can be said that our use of IT systems and technology is equivalent to when we were using rotary telephones. As you complete your Masters Program at UMUC, remain watchful of emerging trends in the IT industry, how it will be utilized to gain a competitive advantage, and what impact it will have on the skills needed by an IT professional and the organization structure required to take advantage of the advancements in technology. Trends currently occurring that may be worth watching are: cloud computing, software as a service, virtualization, social networks, and mobile computing. It is through developing learning as a life-long habit, remaining aware of trends in the industry, and understanding the impact that technology has on a company’s ability to compete that you, as an individual, will be able to keep your skills current, agile, and competitive.

Intercultural Aspect Of Culture Essay Example for Free

Intercultural Aspect Of Culture Essay Before evolving an intercultural model of conflict resolution it is important to understand and identify aspects of culture that lead to creation of the framework of conflict. The cultural spectrum holds different shades for a person, a society and a nation, accordingly helping each of them to assimilate and adapt to a common identity that is defined and shaped by culture (Holliday, Hyde and Kullman, 2004). In the process of evolving this collective identity, culture transcends its traditional role of providing an aggregate set of beliefs, customs, norms, values, ethics, traditions, moral, social and legal codes, perceptions, and philosophy, to become the overall physical framework for the society to function. Culture is strongly related with geographical setting of a place, religion, ethnicity, and race, explaining why different countries have different cultures, and also why places on seashore share common elements of culture that is quite different from culture of mountainous places. The imprinting of culture on ways a person thinks, acts, perceives the environment and models his/her reaction is very strong and virtually indelible, determining every aspect of human behavior and giving rise to cultural identity in addition to individual and national identity. Although the classic rational choice framework says that people are independent in choice of their behavior and approach towards events, its seen that at subtle levels the structural model provided by culture acts as final determinant in predicting a person, a society and a nation. Although culture is dynamic, evolving and continuously upgrading itself, in essence, these changes occur within the context of culture’s own timeframe. One of the most important contribution of culture to human civilization is the orientation provided towards other cultures, making the culture in question receptive, tolerant, indifferent or outright hostile towards different cultures. Societies are seldom mono-cultural, displaying a range of cultural traits, achieved through generations of trades, contact, and cross cultural mixing (Holliday, Hyde and Kullman, 2004). However, although for people belonging to a particular culture, their culture would hardly seem complex, the cultural realities are hidden beneath the surface, difficult to observe and discern from outside. These improper understanding and imperfect perceptions of culture often give rise to conflict when different cultures are required to meet or come across. In the workshops I have attended I have come across people from various cultural background and my first attempt is always to know as much possible as about them; not their individual preferences, but their cultural orientation and philosophy. My this approach has helped me immensely in not only developing an understanding of other cultures, but my own adaptability and flexibility in my relation towards them Conflict and Culture Conflict is an integral part of human culture. When a number of people of interact with their own individual perspectives, view points, ideologies, cultural and social backgrounds and intellectual development then differences and debates are bound to arise as a logical and inevitable consequence of the interaction (Killian and Pammer Jr. 2003, 3). These differences, acted upon by incompatible interests of attaining personal goals, change into conflict within groups, societies and nations. (Rahim, 2001,1) The greater the diversity and richer the profile of a society, the greater is the scope and range of its embedded conflict. Therefore it is essential to educate people on understanding and handling conflict and treat as an integral component of a democratic society that is important for developing a healthy social life (Killian and Pammer Jr. 2003, 3). In every conflict, whether it is individual or at social scale, culture has always an important role to play. Depending upon the actors involved and the context of conflict, the role of culture in conflict can be direct or subtle, but it is always present as the ultimate factor in deciding the scope of conflict, its direction or its outcome. Culture even decides the existence of conflict, for people who are embedded in the culture of seeing world as a harmonious entity, may not be aware of any conflict through their life. In all the major disputes, debates and disagreement taking place around world, differences in cultural identities and perceptions are fundamental causative factors. A further evidence of the role that culture plays is evinced by peace and harmony existing among societies that have same culture, such as observed between USA and Britain, sharing same historical and cultural roots. Every conflict, whether it is trans-generational, geographical, religious, organizational, or personal, has a cultural component involved. People enshrined in their own culture often react with hostility against any cultural identity that appears contrary to their thought process and ideas. It follows therefore that any effort of conflict resolution needs to incorporate cultural understanding and acknowledge the existence and necessity of diversity (ibid). Personally I have encountered cultural difference in perspective of style of communication. Some of my colleagues, belonging to different cultural background, initially took exception to the direct and frank method of communication that is followed in US, as this, according to them constitutes a mild level of effrontery. However, as they assimilated themselves with the general surrounding, they realized that the direct nature of communication is a norm, not an aberration. Communication and Conflict Communication is important, as it is the medium of conveying message, forming the first interface in method of conflict resolution. Communication is almost always within the context of culture, and culture determines the significance of words as well as gestures and non-verbal expressions, affording people with choices of high context or low context communication, depending upon their cultural maturity and ability to handle multi-culturalism and accommodate a range of opinions and ideas other than those familiar to them (Grosse, 2002). During the initial phase of cultural familiarity, communication takes place at low context, meaning that people rely more on direct verbal communication, which is more or less literal in nature. As the cultural relationship progresses, communication interaction moves ahead on continuum to become high context, and it becomes more interpersonal and contextual, minimizing chances of misunderstanding and confusion. Effective cross cultural communication is centered upon knowledge, empathy and intercultural sensitivity (ibid). The correct approach in such cases is be flexible, adaptable and receptive to all views, no matter how contrary or incongruous they appear.. A positive and patient listening attitude is also valuable as it allows people to fathom emotions of others and makes them perceptible to alternate view points. Finally, the most important attribute in cross cultural communication is recognition that every culture is correct in its own context and each has to yield some ground to reach a harmonious consensus (ibid). In my attempts to understand and know about other cultures, I have always relied on effective communication skills, that include both hearing and communicating. Personally I have felt that people from different cultures readily share their cultural background, their beliefs, customs and traditions as I myself do in a multi-cultural environment, as we all want to be well understood and appreciated. Active listening and frank communication skills have greatly helped me in establishing quick rapport in any multi-cultured environment. Discussion on mediation and skills in conflict resolution Effective communication strategies are keys to resolve conflict by providing channels that provide expression of grievances and bring conflicting parties together. In the field of conflict management, communication strategies help through the channels of 1. Negotiation: Negotiation has emerged as an important form of conflict management within organizational and social setups. As such research in communication theory in conflict management has started to pay close attention to communication behaviors, types and strategies towards successful negotiation. Negotiation, as a part of managing conflict, requires interested parties to trade proposals for settlement that include, out of court settlements, business contracts, collective bargaining contract etc (Womack, 1990, 32). As Womack further elaborates, generally the process of negotiation proceeds through motives that are both competitive and cooperative. The approach of communication in the entire process of negotiation is concerned with the messages that are transferred among negotiators and the concerned parties. Communication intervenes in the process of negotiation through its both verbal and nonverbal forms and constitutes the entire base on which the goals and terms of the bargain are negotiated. Communication plays the central role in not only developing the relationship among the parties in conflict, but also in determining its direction. It is also central in every form of bargaining process, whether the bargaining is done for organizational form of conflict management, involves conflict resolution, negotiation on legal agreements or for negotiation in inter-group an intra group conflict. The entire role of communication in negotiation processes and strategies is quite vast and it ranges from defining the conflict issues, selection and implementation of strategies to presenting and defending the viable alternatives and finally helping in reaching on a solution (Womack, 1990, 35). 2. Third party intervention: Third party intervention in conflict situation is a tricky and challenging situation. It is considered as one of those areas that offers real test to the communication skills of the intervening person. Although mediation requires a neutral and third party to bring the disputants on the resolving chairs and solve the conflict, the mediator per se, has no authority and commanding power to force the parties into acquiescing to an agreement. At the best, the mediator can use persuasive and convincing dialogues through which the involved parties voluntarily agree to reach at accord through advises, admonishments, ideas, and views of the mediator and break into meaningful dialogue with each other (Burrel, 1990, 54). Its easy to see that this entire procedure requires very high level of communication skills on the part of the mediator to successfully negotiate agreement among the conflicting parties. I have had the opportunity to mediate in certain cases of cultural misunderstanding in the workshop. I tried to resolve the dispute by completely understanding the issue of contention, and the respective approaches that each party had taken on the issue. Thereafter I clarified the entire situation to them, explaining in the process that their respective approaches where natural consequences of their cultural training and application of that training on the issue in hand. In the process I encouraged them to understand and appreciate each other’s cultural understanding and orientation, they were successful in settling the conflict. Designing a process of Intercultural aspects of conflict resolution In the course to evolve a systematic cultural response to conflict, the first step is to breed familiarity among cultures that adds plurality and multicultural dimension to broaden existing views. In the process of evolving cultural familiarity communication, approaches towards conflict, cultural interpretation of life and identities and roles are identified as essential parameters (Carbaugh, 1990). Out of these, role and range of communication has already been discussed. Now it is time to look at rest of three factors. Responses towards a conflict situation are largely culture dependent, guided by the ways each culture has systemized itself towards conflict. Direct and straightforward ways of approaching conflict, generally acceptable in western society, may seem threatening and offensive in eastern cultures accustomed to third party negotiations. Similarly, cultures that follow calm and reasonable response to conflict, may feel intimidated by emotional and passionate response to conflict situation (Carbaugh, 1990). Cultural interpretation of life sets the starting point for people that forms basis of their thinking, values and philosophy, eventually deciding the role they would play in every conflict and their outcome they come across. It is the cultural orientation that makes societies disciplined or diffused, generalized or specific, value oriented or bohemian, and cooperative or isolated (Carbaugh, 1990). Hence cultural conflict resolution ultimately depends on the depth of understanding attained through interaction. Intercultural differences are very real forces in an environment where multiple cultures are interacting and coordinating on day to day basis. From my learning and observation the nature intercultural differences and their consequences on organizational and group efficiency, these differences can be resolved by taking a more comprehensive, collective and adaptive view of situation, that includes our own cultural vulnerabilities when placed in an unfamiliar social structure. As the workshop trainings and experience has demonstrated, it is very important to know the cultural background of people with whom we interact, fully understand the points where our mutual cultural understanding differ and recognize where they converge. Finally we should also develop a mutual sense of regard and appreciation for our combined cultural diversity. One of the revealing experiences that I have undergone relates to issue of timeliness. While in western culture, schedules are strictly followed and meetings start exactly on designated time, it is normal in many cultures to digress in time by a limited margin. Thus, in a multi-cultured environment, cultural ignorance can lead to conflict on such simple issue of scheduled arrival, while cultural knowledge and understanding would help in ‘looking’ at from other person’s cultural lens. Given the range and depth of cultural impact on overall personal behavior and communication style of people, there are numerous situations where cultural ignorance can directly put people against each other. Hence we should always strive to learn as much about other cultures as possible and continue to update our knowledge. References Burrel, N. A, 1990. Theory and Research in Conflict Management. edit M. Afzalur Rahim editor. Praeger Publishers. :New York Rahim, M. A (2001), Managing Conflict in Organizations. Contributors: M. Afzalur: Quorum Books. Westport, CT Handbook of Conflict Management. (2003) . Jerri Killian ,William J. Pammer Jr. (edits): Marcel Dekker. New York. Womack, D. F, 1990. Theory and Research in Conflict Management. edit M. Afzalur Rahim editor. Praeger Publishers. :New York. Leborn, M. 2003. Culture and Conflict. Accessed online on 17. 11. 2007. http://www. beyondintractability. org/essay/culture_conflict/ Grosse, C. U. 2002. Managing Communication within Virtual Intercultural Teams Business Communication Quarterly, Vol. 65, 2002. Holliday, A. , Hyde, M. ,, Kullman, J. 2004. Intercultural Communication: An Advanced Resource Book; Routledge, Carbaugh, D. 1990 Cultural Communication and Intercultural Contact; Lawrence Erlbaum Associates.

Price elasticity income elasticity and cross elasticity

Price elasticity income elasticity and cross elasticity Explain the concept of elasticity of demand and discuss the factors that determine elasticity of demand. Distinguish between price elasticity, income elasticity and cross elasticity of demand and evaluate on their importance especially to businessmen. Solutions to Question 2 2.1: Concept of Elasticity of Demand Elasticity is a term that was initially developed by known economic scholar called Alfred Marshall, and has been since used in measuring the relationship that exists between product price and its quantity demanded. It typically followed the law of demand that states that the lower the price of goods and services, the higher the quantity that will be demanded of such goods and services i.e. it primarily explains only the actual directions of changes in the demand for the commodity, but not really explaining the extent of that change. A further development on these lapses led to the concept of elasticity of demands. In practical term, elasticity means the act of responsiveness. Meanwhile, elasticity of demand has been theoretically defined as the responsiveness of the actual quantity demanded of a product to the change in its actual price. E.K. Estham argued further that elasticity of demand could be defined as the measure of the degree of responsiveness of the quantity demanded to any small change in its price. This measure of the degree of responsiveness of the actual quantity demanded of a product to any changes in its price can be calculated with the use of the formula below: A good diagram to represent the established downward sloping curve of elasticity of demand could be seen as the incremental changes that are caused in the quantity that is demanded along the x axis, notably going in the opposite directions that are relative to these changes in the commodity price along the y axis. Below is figure 1 that aptly depicts the degree of responsiveness of demand due to changes in prices of the commodity: Thus, vivid observations of the above elasticity of demand complement the simple mathematical presentations of the elasticity of demand as presented above. Notably, the elasticity of demand is commonly expressed as Ed. Diagram 1 above indicates that depending on the actual responsiveness to any changes in prices of commodity, elasticity of demand could be either elastic or inelastic as seen described through the angles of the above demand curves. Importantly, economist have argued that the flatter these curves, the more elastic is the price of the commodity, meanwhile steeper curves will mean the more the price is inelastic. 2.2: Factors that determine elasticity of demand Below are the important factors that directly or indirectly influence the degree of demand to any small change in price: 1. Nature of the commodity Elasticity has been argued has primarily depending on if the actual commodity to be demanded is a basic necessity, a comfort or a luxury. This is because goods that fall under the basic necessities of life have been categorized as having inelastic demand, while those comforts and luxuries goods are categorized under the elastic demand. 2. Availability of the substitutes of goods or services Goods or services with available substitutes have been theoretically and practically argued and established as having elastic demand and those goods and services that are without available substitutes normally have inelastic demand. Good examples of these goods are coffee and tea that serve as substitutes to each other. They are substitutes because a change in the price of tea might make people to switch over to buying coffee. Alternatively, an increase in the price of coffee may also make people shift to buying tea. But a good example of inelastic good is salt because it has no substitute. 3. Uses and/or applications of the goods or services The usage of goods or services may affect its elasticity either elastic or inelastic. Good example is electricity, any decrease in its price will eventually led to consumers ability to make more use and further establishing electricity as having elastic demand curve. 4. Consumers proportion of the income that is spent on the commodity Practically we have noticed that the consumers can spend only a very small percentage of its income in buying such goods. Good example is salt and matches that normally take a very small percentage of consumers income, making them having inelastic demand curve. 5. The prices of goods Generally speaking, cheap goods and services normally have inelastic demand curve, while the expensive goods normally have elastic demand curve. 6. Income of the consumers Scholarly arguments have shown that the rich or high income earners normally have inelastic demand curves for their goods and services, while the poor or lower income earners normally have elastic demand curve. This is because he rich and high income earners will buy the goods and services at every levels of its prices, whereas the poor or lower income earners tends to change along the quantity of their consumptions due to changes in price. 7. Time period Evidence has shown that elasticity of demand would better occur in the long run production of the goods or services than at the short run. This is primarily because in the long run production and supply processes, the consumers could adjust to their individual demands by switching or trying cheaper substitutes. Industry evidence has shown that productions of the cheaper substitutes are only possible only at the long run operational processes. 8. Income and Wealth Distribution in the society The presence of unequal distributions of the national income would the demand for the goods and services to be relatively inelastic. Most advance countries that allow even distributions of their income and wealth will make possible elastic demand for its commodity. 2.3: Differences between price elasticity, income elasticity and cross elasticity of demand Below are the three types of elasticity:- Price elasticity Income elasticity is further divided into 3 i.e. Zero income elasticity of demand, Negative income elasticity of demand and Positive income elasticity of demand. Cross elasticity 1. Price Elasticity of demand Price elasticity of demand has been defined as the actual degree of responsiveness of the quantity that is demanded of a good or services in response to the changes in its actual price i.e. price elasticity of demand primarily measures how much of a change in actual price of any good that affects the demand for these goods or services, leaving all other factors to be constant. To calculate price elasticity, there is need to divide the proportionate of change in the quantity that is demanded by the proportion of change in the price. EP= Percentage change in the quantity demanded Percentage change in the price 2. Income elasticity Income elasticity of demand has been argued as measuring how much of a change in consumers income that affects the demand for such goods or services if its price and all other factors remained constant. Below is the formula for calculating income elasticity of demand: EY= Percentage change in the quantity demanded Percentage change in the income As divided into three, Zero income elasticity shows that a change in the consumers income will have no significant effect on the quantity that is demanded of such goods. Good examples are salts, matches and cigarettes. Next is negative income elasticity that shows that an increase in the incomes of consumers will lead to the decrease in the quantity that is demanded of such goods. This situation mostly occurs in inferior goods. Last is positive income elasticity that means an increase in the incomes of consumers will lead to the increase in quantity that is demanded of such goods. 3. Cross elasticity Cross elasticity of demand measures the actual change in the demand for commodity A due to the change in the price of commodity B. ED= Percentage change in the quantity that is demanded of commodity A Percentage change in the price of commodity B The above formula indicates that if the goods or services that have substitutes and cross elasticity are positive i.e. as above any increase in price of commodity X will finally result in the increase in sales of commodity Y. 2.4: Importance Elasticity of Demand to businessmen. As evident above, the concept of elasticity of demand has been playing a vital role in the decision making processes of the business world, especially as it relate to fixing commodity prices with the aim of making larger profits. Good example is if the cost of production tends to be increasing the company will want to pass this rising cost to the consumers through raising the price of the commodity. Practical examples have also shown that some companies do change their commodity price even without any visible change in the actual cost of their productions. But practically, whether the raising price is following any rise in the cost of production or otherwise has proved to be beneficial depends on the following situations: The actual price elasticity of the demand for such goods or ser product, i.e. the percentage change is subject to how high or low the proportionate changes in its actual demand relate to the percentage change in commodity price. The price elasticity of the demand is also very relevant for business in determining the value of their substitute, this is because when the commodity price increases the actual demand for the product substitutes also increases automatically even if the products prices generally remained unchanged. Businessmen are also able to know that increasing the price of their goods would only be beneficial if: The demand for their products is less elastic The demand for their products substitutes is also much less elastic. Finally, the usefulness of elasticity of demand also stands in its ability established the required quantitative relationships that exist between the quantity demanded of a product and its price or any other determinants of demand. Question 4: Discuss some of the characteristics of the Malaysian economy. Discuss some of its weaknesses and suggest some appropriate policy proposals to strengthen the economy in order to enable it to become a developed economy by 2020. Solution to Question 4: 4.1: Characteristics of the Malaysian economy. Malaysia is one of the countries located in the Southeastern Asia. The capital is called Kuala Lumpur. Malaysia comprised of two parts, one part is the Peninsular Malaysia and while the other is the East Malaysia which is called Malaysian Borneo. The Peninsular part has 11 states while the East Malaysia comprises of 2 states. Malaysian economy system is an open economy system; the economic involves domestic community and the international community. More so the economy is a state oriented market economy. The country has a fast growing economy. The economy was ranked 3rd largest among the south East Asian countries in 2007. Where Malaysia suited is a great advantage for its foreign trade. Malaysia GDP The Gross Domestic Product of Malaysia depends solely on its agricultural, manufacturing industries and the service sectors.  The agricultural sector contributed 9.7 % to the country GDP in 2007.   Also in the area of manufacturing industries it contributed 44.6% to the country and t of service sector contributed 45.7 % as well to the GDP. For the PPP (Purchasing Power Parity), the country is ranked 29th in the world. They have GDP growth rate of 20 % and it was realized towards the end of 20th century. In 2009 GDP of Malaysia was estimated US$ 207,400 billion PPP was calculated to be $ 3.9 billion. Malaysia Natural Resources Malaysia is rich natural resource, like agriculture, minerals and forestry. Most agricultural plant resources of Malaysia are rubber, pine apple, palm oil tobacco etc. The countrys economy In the area of Forestry, the loggings contributed a larger amount to the countrys economy. More so, in the plantation area is timber, rubber plant and palm tree. When we talk of minerals resources, Malaysia is a rich deposit of minerals like tin and petroleum. Sectors of Malaysia Economy Malaysian Industries Mining Industry: Malaysian Economy Malaysia mining industry has contributed a lot to the economy through the export of mine products. The most important ones are oil, gas and tin. Malaysia was ranked has the worlds largest producer of tin in 1980. The sea transportation was easy because the mine is located in location of the mines in the peninsular Malaysia. Crude oil production and natural gas has increased to a higher level over the last few years. In 1999, the overall production of petroleum reached 693,000 barrels. Production of liquefied natural gas was estimated to be 3.8 billion cubic feet. There are major oil refiners in Malaysia Manufacturing Industry : Malaysian Economy In Malaysia there are many developed manufacturing industries. The manufacturing industries of Malaysia are, electronics manufacturing industries, furniture manufacturing industries and Food processing industries etc. In the sector of manufacturing, the country is ranked in the 23rd position in the world countries. Malaysian Services Malaysian Tourism: Malaysian Economy Malaysia in the sector of tourism was ranking the 9th position in the world. The common tourism locations in Malaysia are Kuala Lumpur, Sabah, Perlis, Malacca, Terengganu etc Banking and Finance: The bank Negara Malaysia is in charge of finance sector. Master Plan was introduced in 2001 after the 1999 financial crisis and this gave more room for to Islamic banking. May Bank is said to be the largest bank in Asia Pacific that practice Islamic Banking. However Malaysian government plan to give licensure to more sectors by the end of 2010 to improve the opportunities of Islamic Banking. 4.2: Some Weaknesses in Malaysian economy. 4.2.1: Political Weakness In Malaysia Malay half of the population holds the constitutionally position in society, and this a kind of discrimination among the three race, this is not only in jobs but in wealth as well. Controversial Internal Security Act (ISA), give room for detention without trial, has been abuse by the government on many occasions with intention of quelling unrest. More so, some of the detentions government used it to oppress the government opposition. BMI Political Risk Ratings The Malaysias short-term political risk rating (STPR) of 80.2 shows higher compared to other regional country like Indonesia, Philippines and Thailand. As the opposition to Pakatan Rakyat always challenges the BN coalition being witnessed in the defeat of the 2010 budget bill in parliament in 2009, the people thought that general political stability will be maintained. However, it is encourage that Malaysia was able to maintain a peaceful political environment, but this all depend on Prime Minister Najib Razaks his straight to encourage unity in the nation with diverse ethnicity and faiths. 4.2.2: Economic Weakness Malaysias is becoming importer of oil in the next few years, Malaysia Economic openness will be as much of a burden as a benefit, because of it confirmations of a high level of vulnerability to global growth and capital flows. The taxes collected on oil contribute over 40% of the states revenues despite the fact that it was expected to become a net oil importer by the beginning of 2011. Because the government had difficult in having alternative income, this will make hard for the governments function perfectly and maintain economic development, which is potentially leading to stagnate economy. BMI Economic Risk Ratings In the previous quarterly report Malaysias STER rating has being declining to be 73.5. And still Malaysia is still in the respectable V-shaped recovery of 4.1% now the 2009.The actual GDP growth is1.7%), never the less Malaysia is exposed to a Chinese double-dip slowdown, most especially if Beijing was unable to diffuse the satisfactorily recent property bubble in the near future. Malaysia in addition, has a huge fiscal deficit that is over 7% of GDP in the year 2009 and this has bring the LTER rating down to 72.6. 4.2.3: Business Environment Weakness The country will keep price subsidization will a peripheral and it has become part of the economy system or economy life of Malaysia. Some of the big construction project and contract for foreign firm are all under the domain of formal Prime Minister Mahathir Mohamed so they are not directly connected to the government. In order words engaging in businesses in the country will always mean doing businesses with the politically connected people. BMI Business Environment Risk Ratings Furthermore, in (BER) Business Environment Rating Malaysia scores over average which is 63.4 but the score was dragged down because of the comparatively low score of 55.3 for the Infrastructure subcomponent like public transportation, mean while, in 2009 a reduction in the amount of red tape boosted the Institutions subcomponent to a score of 66.9 from 59.4. 4.3: Some policy proposals to strengthen Malaysian economy. There is a recommendation policy which must be followed accompanied with this, is other improvements in the economy. Firstly there should be huge notification should be on diversification. Most of the Malaysias export markets focused on technology sector and electronics which are vulnerable to global slumps in demand, mostly the US, the US are major exporter of Malaysian goods. Opening trade of a country economy is an important factor to decide a kind of exchange rate system that is desirable. If any country relies on trade, the fixed exchange rates provide stability in the market economy. Anyway, when having the exchange rate fixed does not mean the economy will remain competitive in foreign trade when some other countries are faced with inflation. Never the less it resulted to the second element, the inflation rates. The inflation rate of the trade partner is relevant factor so as the inflation of domestic inflation with the fixed rate; in order words the approach is not straightforward. So it is better for the country to remain with the fixed rate to avoid inflation tendency in the economy. Another recommendation is labor market flexibility which is used to determine which exchange is better in a given period of time. In this respect if there is flexibility in the labor market, the fixed exchange system work better. There must be flexible labor market and flexible exchange rate in order to avoid unemployment because of the output shock. Further more, the degree of financial development of the country is important. So when a country seems to be financially underdeveloped, fixed exchange rate is better to avoid urge effects of foreign speculation. Lastly is how to decide on which exchange rate system is better, and the mobility of capital. Mean while, it is better for exchange rate to be flexible when the capital mobility is high. Observation, Malaysias decision in pegging its currency to the dollar seems adequate. With solid financial institutions and credible policymakers, it would be adequate, as well transforming to a flexible exchange rate system. Concludsivly, easing the changings Malaysia will have to persistently implement consistent macroeconomic policies so as to maintain financial stability and sustainable fiscal and external positions. Question 7: Elaborate what you understand by deficit financing. What are its limitation as an instrument of economic development. Assuming that you are the economic advisor to the prime minister and he/she ask for your recommendations to eliminate a federal deficit, what would you recommend? Solution to Question 7: 7.1: Elaborate what you understand by deficit financing. What do we mean by deficit financing this is a strategy or ways to management of money which when spending is more than collected at the same period of time. In order words this is referred to budget deficit, this approach is used in business that is small, household budgets, in corporations and also in, governments sector mostly in all the level. If deficit financing is used in the right way it will help to launch a chain of the event and this will help in financing situation instead of any debt may cause problem or difficult to pay. Mostly common or know example of government deficit financing is how the government stimulate the economy of that country or nation to put a stop to any recession that country is facing. The government has a set aside a plan which will involved using borrow resources to purchase, the government can use different strategy like increasing demand output for product in all business sector of that nation. It also helps in the motivation of many business in o rder for them to hire more employees and it will reduced the level of unemployment in the country during the period of recession. Further more, the consumer confidence and trust will be restored in the market place because of the safe transformation, and these make it safe for the buyer to buy more goods and services. If the economy of a country in closely looked into and the deficit financing is carefully monitored, it will bring back economy stability in the country over short period of time like few month or few years. Deficit spending in economic does not only occurred in the government sector only but also in all business as well A company may plan to spend a certain amount of money as a kind of upfront thinking that they will be able to generate the fund back for investment .An investor or company owner may decide to buy a new machine for the company production with the hope that a new machine will hasten and make the production of goods in a less period of time with larger unit of goods, and with less cost. This kind of idea or strategy in business help the business to flourish and the manufacturer will be able to pay off his debt and have budget surplus instead of deficit, the owner of the business will be debt free and enjoy the surplus. 7.2: The limitations of Deficit financing being an instrument of economic development. In any given economy, the government normally embarked many projects that assisted it in generating the desired economy outputs both in investment and other capital projects. If the government prints more money out it will cause inflation in that economy and this situation usually affected the poor people in that society. The rich will be richer and the poor will be poorer. The buyer straight will be reducing to greater level and the businessmen profit margin will increase. In any society there is always the people that have and those who do not have so any increase made in price domestics goods leads to importation of cheap goods and the domestic goods high price will reduced the export. This in turn leads to adverse in balance of payments. Never the less this will affect the cost of the production because the raw material used in process of production has being increased, so the goods will be increased as well, perhaps it will definitely reflect on foreign investment, it will be le ss attracted by other country. Good example is figure 3 below that aptly depict government spending in OECD countries: Source: OECD (2010). Listed below are the disadvantages of deficit financing and some other cogent reasons to be alert about a National debt. The interest Payment In a society people do not lend to the government with the charity. Government must pay interest on every debt they are involved in just like any one in the society, it was recorded that last year government spent the sum of  £31 billon on interest payments alone. Looking at this in a perspective manner it will equate to 15 p on income tax. This amount is more than what UK spends on National Defense. The government borrowing for the year 2007/08 going to be  £42 billion same amount the government pays in interest. The Crowding Out effects The government debt always affect the private sector because they sell bond to the private sector in order for the government to borrow money and this in turn lead to less private investment because the government has bombard them with the bonds. Also the private spending is more efficient than the government level of spending because the government result to inefficient spending .this is what we called crowing out, the private investor is crowded out with government bonds because the government needs to borrow The financial crowding out The financial crowding out is when the government want to borrow large sum of money and they tried to increase the interest rate on bonds in order to attract many lender. The bonds rate is increased this will definitely put pressure on the interest rate generally, in order words this increase in the interest rate will affect the economy of that country because people will reduced their way of spending, investment level will be low and later run the economy growth will be low. The tax rises for the future. The tax rises for the future look into how the public sector debt is being paid. Any increasing public sector debts indicated that the future taxpayer will be the one to bear the burden by paying the bill. No matter the situation of the public sector debt reduced or not, the future taxpayer will be the one to pay the interest on the debts. Further this will a problem because, has it was mentioned above, changing of demographics show that government finances is usually placed under pressure, though without borrowing from at that moment of time. Limits Fiscal Policy In a normal situation the government should be able expand the fiscal policy in a situation where the economy is facing problem or recession. When a government has urge public debt they tried to reduced the scope by lowering tax in order to enhance demand. Then government must increase taxes and cut their spending in order to meet up with the budget .this is advisable because of the existing problems in the market economy. 7.3: Suggested recommendations to eliminate a federal deficit   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  In summary, I like to recommend these three-step formulas for prosperity: 1) Elimination of federal taxes. It will good to cancel government taxes because when the citizen gives money to the government is just like throwing coals to Newcastle. Government is the maker of money, they are the producer that has no limitation to their production. . When the citizen sends taxes to the government, they just used it to pay debt. When you send your tax money to the government, the government simply uses it to pay down debt. When paying down debt it destroys the economy money in a given society. In order words taxes damaged money in the society.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   More so, the federal tax system is a waste of resources, it will be good if the government can spend the billions of dollars spent on compliance on production of useful goods for citizen and this will ease the problem of the economy and the people.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The first suggested tax that should be eliminated is; the Medicare taxes and Social Security taxes. These will be politically popular; also regressive taxes directly impact businesses on low and the middle income people. That politician that ends FICA will becomes a hero.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  This will give federal government the opportunity to create money to support retirement and health care sector. 2) Elimination of federal borrowing. Government being a producer of money, an established government will not need to borrow money. These are inefficient; they are harmful, the exercise which provides no economic benefit. The Federal government borrowing provides semantic impression that government is in debt, and people it find repugnant.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  If there no borrowing; there would not be debt. 3) Establishing a national, money-supply goal. It is good to organize a congress, a congress that will look into the checking account called money created, They will add money to this account when needed. They will write checks and make a kind of transfers from the Money Created account in payment for all goods and services.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  This will be the suggested system for federal money creation in our economy. The congress will be the one to determine on how much money to be added to the Money Created account, however giving Congress power over money creation. Thus, the Federal will continue to control the interest rates and inflation.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The congress will spend what is necessary on retirement, the military health care, crime prevention, education, the infrastructure, and other national needs.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  The country will be free the tyranny of semantics and the problem of federal debt. This society prosper has rapid growth in their economy. Question 8: What are the constraints normally countries face in achieving a sustainable economic growth. What are the merits and demerits of attempting to achieve a faster growth rate in this country. Solution to Question 8: 8.1: Constraints facing the achievement of a sustainable economic growth. As evident in existing literatures that sustainable literally means ability of a system to endure and last long. So, sustainable economic growth means an economic development that is able to last longer! According to late David Pearce who happen to be one of the best environmental economists in his generation, states that sustainable economic growth primarily indicates that each of the generation should be able to pass on much of its capital as inheritance to its coming generations, under this Pearce approach he defined capital as including physical capital like machineries and infrastructures, also intellectual capitals like knowledge and technology and lastly environmental capitals like environmental qualities and stocks of the natural resources. This sustainable growth is what the world is witnessing from the groups of emerging economies have been trying all within them to continue to excel, particularly China and India that have remained as major drivers of the recent global expansions. But, evidence has shown that while the recent global growth outlook seems more positive, I will like to use this opportunity to mention that there are major four constraints which could threaten the sustainable growth of any country, i.e.:  Ã‚  Ã‚   The prices of Oil   the unpredictable increase in the prices of oil by producing countries have always been tried to remedy by both the OECD and its other sister organizations such as International Energy Agency all working very add to help many countries in addressing their short and long-term growth challenges as a result of sudden increase in energy prices, problems or fluctuations in security of supply and other alternative sources.   If not properly curtailed globally, fluctuations in oil prices could significantly impede economic growth of countries. External imbalances in trades The imbalances in current accounts of trading partners across the globe has reached an unprecedented levels especially between countries like the US, Japan, China, and some other Asian coun