Derivatives and financial crisis Free Essay Example, 2000 words

They started hedging; it is like insuring their financial position against any exogenous condition like, liquidity, foreign exchange, stock market, etc. Derivatives evolved as financial instruments to hedge risks. Hedgers leverage the price volatility of such underlying assets by taking inverse positions contrary to the prevailing market conditions. There are primarily four types of derivatives available in the market i. e. forwards contract, futures, options and swaps. Options and futures are the most common of the lot, though swaps are gaining popularity in the market, owing to the exchange rate volatility (Whaley, 2007). All the above instruments are subject to default risk i. e. counter party failure. As in options, it creates an obligation and not actual right to buy/sell the option, thus prone to default risk where the party may not exercise the option. Under such circumstance the party only pays the option charge, thus reducing his loss burden if he would have exercised the o ption. For example, A purchases an IBM call option for â‚ ¬3 at a strike price of â‚ ¬200 with a one month window. Now A has got either option to exercise the call option. We will write a custom essay sample on Derivatives and financial crisis or any topic specifically for you Only $17.96 $11.86/pageorder now If the IBM stock price rises to â‚ ¬210 within the one month window, A will exercise his option, as the market price of the stock exceeds the strike price and the option charge of â‚ ¬203. In this process, A makes a profit of â‚ ¬7. Though derivatives are used to hedge risks, but can also be used to speculate as seen in the above case. Derivates usually protect investors from market volatility and aims to reduce the risk burden when faced with such volatility (Kolb and Overdahl, 2009). Conclusion With the emergence of newer financial products, risks have also risen, becoming a major area of concern for financial managers around the world. Investors aim to get a high return with minimum risk. They want to be in the top quadrant of the risk-return matrix. Risk is an inherent factor in business. Business’ have developed over the years and have acquired a global status, thus increasing their risk exposure. It is highly imperative for business’ to reduce such risks. In order to reduce the impact of external and market related factors, investors and managers use financial instruments like derivatives to the counter the effect of risk. It is often seen that such investment avenues give rise to speculative practises, thus adding to the pre existing volatility. It has now become a mandate for companies to disclose their derivatives position.

Our Founding Fathers Effect on the Past, Present, and...

In the beginning, the nation’s Founders were profoundly skeptical of direct democracy. They believed that the â€Å"follies† of direct democracy far outweighed any virtues it might possess (Politics in American pg. 76). According to an essay by Rose Wilder Lane (Lane, 1943), â€Å"George Washington, Thomas Jefferson, Benjamin Franklin, John Adams, James Madison, and James Monroe feared democracy.† The founders believed that the Constitution left all other governmental powers to the states (Politics in American 2009 pg. 133). Our Founding Fathers never intended for America to become a democracy. Most of them had served in the American Revolution, either as soldiers in the Continental Army or as part of a legislative body. After the Revolutionary†¦show more content†¦Essentially, the new constitution was written to protect the people from a democracy. The Founding Fathers had learned from the past that a democracy was a form of lawless mob rule. They saw t hat the ancient Greeks tried a true democracy that had failed and led to chaos. A true democracy would not run efficiently or properly. The Founding Fathers saw our Government as a Republic (McManus 2001). They were realists who believed in limited government and low taxes. Their ideal was to build a unique structure of government to put into action their beliefs in nationalism, limited government, and separation of powers with check and balances, and judicial reviews. The Founding Fathers wanted to generate a strong government while ensuring that the government would not become a threat to liberty or property. It was also decided that the legislative branch should consist of two houses. So a new constitution was drawn up and once ratified, the process of organizing a new government began. On September 13, 1788, Congress determined that the city of New York should be the seat of the new government. The capital was moved Philadelphia in 1790 and to Washington D.C. in the year 1800 wh ere it remains today (Lawler 2010). The process for the creation of the new government continued when George Washington was unanimously elected the first president, and John Adams of Massachusetts, the vice president. AdamsShow MoreRelatedGeneral George Washington And His Continental Army Had1643 Words   |  7 Pages1776, the founding fathers of the United States of America signed the Declaration of Independence, according to ushistory.org 60 delegates signed the document that granted the country we know today as the United States free from British rule.Some of the men that inked their name into American history were Thomas Jefferson. Benjamin Franklin, John Adams, and John Hancock. From that point on the United States was an independent nation. 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Chapter 33 †Early 20th Century - 5648 Words

Chapter 33 – Early 20th Century Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Throughout history, artists have regularly served political ends by using their art to make visual statements. Which of the following artists has created an overtly political statement with his/her work? |a. |Dorothea Lange | |b. |John Sloan | |c. |Wassily Kandinsky |†¦show more content†¦|Still-Life with Chair-Caning | ____ 10. Which of the following describes the focus of the Ashcan School? |a. |It focused on the horror of trench warfare in WW II. | |b. |It focused on the hurley-burley activity of farm life. | |c. |It focused on the bleak and seedy aspects of city life. | |d. |It focused on the dynamism of the machine. | ____ 11. 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The Great Gatsby By F. Scott Fitzgerald - 1636 Words

The 1920s: Two Perspectives, One Story F. Scott Fitzgerald s The Great Gatsby and Toni Morrison s JAZZ both tell the story of the 1920s in America, but from opposite points of view. Both authors provide us with two compelling narratives of the societal shift that took place in America after World War I had come to an end. Although the accounts share many of the same general topics, as well as the historical era, it is difficult to imagine how the two stories could be so different from one another. It is as though the two authors are giving a description of the same coin, but one describes the front and the other describes the back. To the white population this decade was a time of disillusioned self-indulgence. But to the black†¦show more content†¦But, the events of one drunken afternoon conspire to bring about an ending which includes the death of Tom’s mistress, Myrtle, as well as the murder of Gatsby, followed by the suicide of Wilson, Myrtle’s husband. Fit zgerald creates a picture of a lifestyle that is both fascinating and horrific. In all its excitement The Great Gatsby brilliantly captures the American dream both in its prime as well as its nadir. Morrison’s JAZZ is the story of a love triangle between three people living in Harlem during the Jazz Age. It tells story of Joe Trace, a married man in his fifties and Violet Trace. In 1906 the couple rode the train into New York City and began a new life there, Joe as a door-to-door beauty product salesman, Violet as a hairdresser. However, Joe’s has an affair with eighteen-year-old Dorcas Manfred and later murders her out of an outrage of love and anger. Violet attacks Dorcas’ body at her funeral seeking revenge. After Dorcas death, Joe and Violet continue to live together. In the spring, Joe mourns Dorcas s death and he and Violet patch things up in their relationship, mediated in part by their new friendship with Dorcas s best friend, Felice. Violet eventually realizes that Dorcas was a troubled young woman and that she has Joe’s attention now after he killed Dorcas. JAZZ gives us a very real glimpse of what it must have been like to be a black cit izen in Harlem during the Harlem Renaissance,

Roaring Dragon Hotel free essay sample

This paper introduces the concept of guanxi neglect through a case study that describes the takeover of a formerly Chinese managed hotel by a western based, international hotel management company. Specifically, it covers the cultural conflict that occurred for employees trying to adapt from the former Chinese relationship (guanxi) based planned methods of hotel management to that of the more market oriented, management company. Conclusions that are drawn highlight cultural characteristics and issues that companies taking over or approaching joint-ventures with SOEs, are advised to be aware of. In recent years, the hotel business environment in south-west China has undergone significant changes. China’s opening-up has encouraged an outbreak of new hotel construction and property speculation as companies and investors hope to cash in on the domestic and international exposure of the unique region. Prospects for growth in the number of tourists and investors visiting the region in the future were good. 1 Correspondence to: Stephen Grainger The University of Western Australia Perth, W. A. , AUSTRALIA Email: [emailprotected] uwa. edu. au Grainger, S., ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. -1- Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) The Roaring Dragon Hotel, was a famous 40 year old-Chinese SOE. In the second half of 1999 an international management company set about transforming the culture within the hotel from a Chinese hotel that was relationship based environment to a modern market oriented organisation. Following story describes the experience during the transition from a planned to market economy. Methodology From May to December 1999, June to July, 2001, and November to December 2002, research into the modus operandi of guanxi was carried out at a four-star hotel (referred to here as the Roaring Dragon Hotel) in south-west China. The hotel employed more than 670 people. Interviews were recorded with 35 middle and senior managers from the hotel and a group of 11 officials, academics, and businessmen from this environment. 15 participants were interviewed on more than one occasion across the three research periods. Un-attributed, direct quotes used throughout this manuscript are taken from verbal transcripts of these interviewees. In addition, a 65-item written survey was conducted with hotel staff the week before the takeover and again three months after the takeover. 439 completed the first survey and 144 the second. Some findings from this survey are acknowledged in the following. The Roaring Dragon Hotel The Red Dragon2 Hotel had been the first four star hotel in the city and since the early 1960s had enjoyed a reputation as the most famous accommodation-provider in the region. Being a state owned enterprise (SOE) with a long and colourful history, it was 2 The names of all people and places have been changed to protect the research sources. Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. -2- Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) the region’s premium guesthouse for visiting government officials, dignitaries and guests. To staff the Hotel at its commencement, employees had been transferred in from other SOE or government departments primarily on the strength of their guanxi or connections. Having gained a position from the opening of the Hotel, Roaring Dragon employees felt ‘excited’ and ‘very proud’. Some recalled ‘if your relatives or your friends knew that you were working in Roaring Dragon, you would be admired’, ‘it was a good work unit danwei’, and ‘you were lucky if you worked there’3. The original Hotel was a four-storey, rectangular, grey structure built in 1960 in a dull Russian style. By 1993, the provincial government had funded a new extension and the Hotel now consisted of two parts: the old four-storey section joined by a modern sixteen-storey extension perched on a hill behind the old Russian. There was a contrast in the standard of accommodation. Room rates were cheaper in the old section and so it attracted Chinese visitors searching for quality economy accommodation. Visiting government officials and higher-end customers on the other hand felt more comfortable in the newer and naturally more expensive section. There were two guarded entrances to the Hotel, one on each level. A series of stairways, elevators and a warren of banquet rooms, hallways, storage areas, offices, cafeterias, and a laundry untidily connected the two buildings. Reflection on a 1993 Experience The Roaring Dragon was a Chinese managed SOE until the opening of the new extension in 1993 when the provincial government decided to contract an international company to manage the Hotel with the objective of improving the quality of customer service. KYZ Corporation was identified as a suitable international management organisation and was contracted to manage the Hotel. Their representative, Mr. Meyer, a Mandarin-speaking German, became the Hotel’s new 3 These quotations are taken directly from the 35 interviews with Red Dragon Hotel employees. Grainger, S., ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. -3- Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) General Manager (GM) with the former Chinese GM, Mr. Wen, becoming second-incommand. After a short time under the new management, Wen began complaining that he had lost his privileges. He coul d ‘no longer enjoy practices such as inviting someone to the Hotel for a complimentary dinner or reap other benefits without first gaining approval from Meyer the KYZ GM. For Wen and his former management staff, the change of management was an issue of great concern as most of the privileges they had previously enjoyed had been discontinued. This loss of benefits resulted in the Chinese managers’ being reluctant to embrace new management practices as ‘in their hearts the Chinese employees did not want to be managed by Meyer or the KYZ Corporation’. In terms of incentive or financial reward, there were few, if any, reasons for the Chinese employees to make the new arrangement work. ‘Employee salaries had not changed’ and ‘the foreign management did not know the Chinese way’. From the time KYZ took over the management of the Hotel, business gradually declined. After three months, occupancy was very low’ and the recently opened extension was only in operation above the seventh floor. Finally, after a year of poor performance, the Chinese provincial government told KYZ that they were not performing well and that they wanted to end the contract. KYZ did not receive this notification well and commenced proceedings to claim damages in the courts from the provincial government breaking the contract. The provincial government had guanxi with the local judges and was confident the damages would be minimal. After a year of apparent non-cooperation and turmoil, the KYZ management left in November 1994 and Wen, the former Chinese GM resumed control. With Wen’s reinstatement came the resumption of the former organisational culture including the practices of nepotism and favouritism. Guanxi cliques in the Hotel resumed operation and the re-establishment of relationships with the local tourist agents resulted in the occupancy levels returning to their former levels. Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. -4- Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) The Roaring Dragon Hotel was eventually required to fund the resulting lawsuit compensation to KYZ. To Wen and the employees it did not matter as ‘the provincial government would pay the damages’. The 1998 Story By 1998, the provincial government had again become dissatisfied that the potential of the Hotel was not being realised, especially as the Roaring Dragon was situated in a famous tourist location. Since the Chinese management’s resumption of control in 1994, the financial performance was still well below its potential. At times, the Hotel was losing money and the provincial government ‘was not happy with the way it was being managed’. Under Wen, management practices remained outdated and ‘the staff were not developing or expanding the Hotel business’. Among the employees, there was an atmosphere of little concern as their salaries, although ordinary, were secure and they were content in the knowledge that the provincial government would cover any of the Hotel’s losses. The Hotel danwei was highly ranked4 which meant that the working conditions and benefits were good when compared with those of the rest of the population (Walder, 1986). The ‘580 yuan per month paid to a barman’ or the ‘1500 yuan per month paid to a manager’, combined with the easy work, neat and tidy uniforms, complimentary meals, accommodation and fringe benefits made the Hotel an attractive and respectable place of work. The organisational culture was very relaxed with many employees finding time to read newspapers and enjoy a green tea during working hours. For some managers, conducting private business was easy and from time to time they could be seen leaving the premises for a few hours to attend to ‘other business’. One example was the Hotel’s Head of Training who had a restaurant just a few blocks away. In the afternoons, he would make regular visits to ensure operations and supplies at his Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. -5- Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) restaurant were flowing smoothly. It was easy as the Hotel was overstaffed, jobs were secure, and besides no Chinese manager wanted to be responsible for firing potentially well connected, lazy or unproductive employees. As Rofel (1999: 108) identified, this type of SOE, as having work cultures that still operated largely under the shadow of the Cultural Revolution and carried employees who ‘did not have commitment’ or a ‘sincere working attitude’. The Roaring Dragon Hotel employees did not want to work hard and were not concerned about the Hotel’s steady decline in popularity and income. China’s new market economy demanded that organisations become profitable, yet the Roaring Dragon’s Chinese management showed little concerns for generating profit and basically did not comply. During the same period, competition arrived as new hotels opened their doors and as this competition grew, the financial fortunes of the Roaring Dragon Hotel declined even further. As a result, in 1998 the provincial government was again tempted to contract an international management company to arrest the declining fortunes of the Roaring Dragon. They identified Nothill as an organisation with the right international reputation, credentials and brand name to take up the management contract. They felt confident that under Nothill’s management, the Roaring Dragon Hotel’s potential would be realised. In March 1998, negotiations commenced with the globally respected Nothill Company to take over management of the Roaring Dragon. By mid-1998, it was agreed in principle that Nothill would take control of the management of the Roaring Dragon and, to save face, the incumbent Chinese GM, Wen, would be installed as the GM ‘of a new company, the Roaring Dragon Limited’. The role of Roaring Dragon Limited would be to oversee the activities of Nothill and ‘act as a conduit through which Nothill communicated with the Hotel’s Board’. 4 Each danwei receives a ranking from the government which determine its status in the Chinese community. This status directly influences the benefits and advantages the danwei is able to gain for its Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. -6- Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) Nothill and Harvey’s arrival To negotiate the finer points in the contract and help prepare the Roaring Dragon for a complete management takeover, Nothill sent one of their Australian Managers, Mr. Harvey, to complete the negotiations and initially co-manage the Hotel with Wen from May 1998. It did not take Harvey long to realise that a management takeover would involve changes in the Roaring Dragon’s organisational culture. Entrenched guanxi practices, the poor quality of customer service and at times significant annual losses had to be converted into more accountable, quality service practices with employees who were prepared to strive for excellence. Harvey’s mandate included identifying efficient and effective staff who would be able to help develop the Nothill standard of excellence at the Hotel. He realised that this might not be easy as many of the existing staff had been employed there for fifteen years or more. During that time the majority of them had experienced little or no training, and had developed only a limited understanding of the concepts of western professionalism or efficiency. Harvey faced the challenge of transforming a large group of relaxed family-based employees, working under an ad-hoc management style into a professional group of employees operating under a structured international commercial culture. From the time of his arrival, Harvey ’mixed easily’ with the Chinese people and regularly attending important functions, giving presentations and speeches’, playing tennis with the Governor, and sometimes even chatting at the nearby English Corner. Nothill’s Austrian born Head Chef Thomason, arrived five months after Harvey to take charge of the Roaring Dragon’s Food and Beverage (FB) Department. Notified of his appointment in England, Thomason had flown into China without a visa and was met at the airport by a provincial government representative. After a few questions were asked, he ‘was given a 24 hour temporary visa for 100 yuan’. The next morning, ‘a government official took his passport and secured him a long term visa’. He encountered a ‘similar process with his Immigration Health Certificate’. The ease members. Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. -7- Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA)with which the two events were taken care of highlighted the advantages of having powerful guanxi within the provincial government. A few months later, problems began to surface. Although officially Nothill’s representative, Harvey could not make any major decisions in the negotiations without consultation and approval of Nothill’s Regional President in Singapore and the Corporation’s Vice President in Beijing. Ev en though Harvey had negotiated most of the details of the Nothill takeover contract, he was never really in control. As one Chinese manager commented, ‘all the important decisions were made in Singapore and Beijing’. After ten months, Harvey returned to Australia. There was speculation that he had left because the ‘weather was not good for his health’, but many employees believed that ‘he was fed up with the frustration of nothing happening’. Others believed that ‘the Roaring Dragon Hotel board were against him ‘from day one’ and that was the reason ‘why his management lasted less than one year’. Erhi T Erhi T was a large SOE that had accumulated significant wealth in the region through its tobacco production. To help eliminate the Roaring Dragon‘s seemingly ever growing debt, the provincial government ‘told the Board of Erhi T to buy the Roaring Dragon Hotel’ so the resulting funds could be used to repay the debt. This request was made soon after Nothill’s arrival. Reliable sources claimed that ‘the Erhi T board was reluctant to make the purchase’ and this was reflected in their delays in signing the contract. Fortune reported that ‘eighty points in the original agreement had to be renegotiated’ between the Roaring Dragon and Nothill after Erhi T had arrived. By March 1999, after difficult negotiations, Erhi T had ‘purchased sixty percent of the Roaring Dragon Hotel for an estimated twenty million yuan’5. The final contract 5 No where was this sum officially printed or stated. However trusted informants who worked in the Red Dragon Accounts Department indicated that this figure was correct. Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. -8- Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA)stated that Nothill would manage the Hotel and Roaring Dragon Limited would continue as the Chinese management arm. This was the first official agreement between the two parties and it had proven a cumbersome task. At the first meeting between the new Chinese shareholders and the Hotel employees, an Erhi T manager made the comment that they ‘did not really want to buy the Hotel’. That s eemed to signal an inauspicious beginning and was perhaps, an indicator of the troubles to follow. The Provincial Government As the former government guesthouse, the Roaring Dragon Hotel’s relationship with the provincial government was very important. To nurture important government relationships, Hotel managers would regularly invite officials to dinner and to enjoy gifts such as moon-cakes and glasses displaying the Roaring Dragon logo. In addition they would arrange meetings with them to drink tea and offer to assist them in resolving any problems they might have. From the Hotel’s beginning, ministers had been the only government representatives who could afford to stay at the Roaring Dragon. As the only four-star hotel in the city for more than thirty five years there had never been a problem as far as low occupancy was concerned. However, that began to change from late 1998 when the number of hotels with the capacity to receive government and four-star accommodation guests increased from one to three, with a further two more competitors due for completion in mid-1999. Government officials and those who could afford it now had the choice of staying at a hotel that could offer them modern facilities and services at a competitive price. Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. -9- Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) April 1999 Fortune arrives Following Harvey’s departure, Nothill searched for a new General Manager and found their candidate in their African operations. Mr. Paul Fortune arrived in April 1999, two months after Harvey had left, to finalize the contract and resume preparations for the Roaring Dragon to complete its transition from ‘co-management by Nothill and the Roaring Dragon Limited to full management by Nothill’. This was contracted to begin from the first day of August 1999. Almost immediately Fortune established a pre-opening budget with the Roaring Dragon which ‘covered Nothill’s expatriate pay roll with effect from August 1’’. He also identified that ‘cash flow was going to be the main issue confronting the Roaring Dragon’. Erhi T may have to come up with working capital for at least the first two or three months before the newly managed Roaring Dragon could generate enough income to operate independently’. With the contract finalised, the Hotel’s Board of management suddenly expanded from four to twenty members. Among the new additions were ‘the local Communist Party Chief, the Chief Secretary, the Union representative, and eleven Erhi T representatives’. Fortune believed ‘everyone was trying to get a seat on the Board to keep an eye on Nothill’. As was the norm in Chinese management situations, ‘connections and relationships’ had played a key role in deciding all the positions on the Board. Fortune soon realised that it was ‘politically correct to include the Hotel Workers Union and to pay respect to them so as to minimise any problems they may cause’. In a push for information and to stamp its authority, ‘the Board proposed Nothill supply them with a copy of the Roaring Dragon’s accounts every week’. Fortune politely refused. Fortune and Nothill’s real concerns were ‘whether all the negotiated contractual agreements were going to be met’ and that their ‘brand name would not be brought in and thrown on the building’ with all other contractual agreements falling by the Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. 10 Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) wayside or encountering delays. As insurance, it was stipulated in the contract that Nothill would take over the management of the Hotel. However, the Roaring Dragon would not be re-named as a Nothill hotel until such time as significant progress had been made towards improv ing the quality of service, and that construction was underway on a proposed new five-star wing in place of the old Russian building. Once the old section had been demolished, and the service quality in the modern extension brought up to Nothill’s international standard’, the Hotel would be â€Å"rebranded the Nothill Roaring Dragon Hotel†. The demolition of the old section of the Hotel was to begin by January 1, 2000 and so it was planned that the new five-star accommodation wing and function centre would be completed ready for opening in late 2002. Fortune felt ‘confident that in two years, his team would be able to develop the local Chinese employees to a level whereby they could reproduce Nothill’s world class standard of service’. The old section of the Hotel was closed and stripped for demolition and all that remained open for guests was the modern, more expensive section of the Hotel. Left with a smaller number of rooms to service, redundancy was going to be an issue that Nothill was going to have to deal with. The remaining 675 employees were well in excess of the 350 employees Nothill estimated would be required to run the reduced number of rooms at capacity. Many staff would need to be re-employed elsewhere or have their redundancy paid out. In contrast, Nothill ‘planned to bring in eight expatriate staff to manage the takeover’ and later, when the time was right, expand their management team to include ‘pastry chefs, an executive chef, food and beverage managers, and a much stronger professional team’. In preparation for the forthcoming changes, Fortune publicly announced that all employees would undergo a two month training period following which employees would be chosen to be retained by Nothill based on their attitude and ability. Previously valued guanxi networks would supposedly become irrelevant and powerless. Erhi T or the former Chinese GM would have no control over the selection process and Erhi T would resolve any redundancy issues by paying out existing employee contracts or finding them positions elsewhere’. There was excitement Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. 11 Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) among the young staff who could see opportunity working with an international hotel and concern among the older staff for the security of their position. As none of the employees had ever experienced a redundancy program before, many were unsure as to how this exercise was going to be handled. Fortune quietly suspected that ‘when the redundancy lists were decided, Nothill would see guanxi connections come out of the woodwork’ in an attempt to save some unproductive yet well connected employees from losing their jobs and face6. Emerging competition Meanwhile in the local cityscape, new four and five-star hotels were nearing completion to commence operations that were in direct competition with the Roaring Dragon. These hotels were operated by international management corporations and enjoyed the advantage of recruiting their employees based on qualifications, appearance, efficiency and ability with no concern for guanxi relationships. The new competitors had hired international recruiting firms to sort through the hundreds of applicants who had applied for positions to identify the best recruits. In contrast, Nothill had inherited an untrained staff, a high percentage of whom had gained their positions through connections. Those with good guanxi with the HR Manager were usually able to find sons, daughters, relations and members of their guanxiwang7, a position without much trouble. An introduction or a recommendation to the recruiting staff always gave their ‘applicant’ the added advantage. Most of the existing employees had been ‘introduced to the HR Manager at the Roaring Dragon‘ and this ‘introduction’ had usually resulted in them securing a position. Another reason given was that when a parent retired or passed away their son or daughter legally had the right to secure a position as a replacement in the SOE.6 For a deeper investigation of ‘face’ see Brunner and Koh (1988: 39), Chen (1995: 54), Hofstede and Bond (1988), and Yeung and Tung (1996: 57). 7 guanxiwang (‘guanxi net’) means the whole network of guanxi through which influence is spread’ (Ambler, 1995). In China, these networks are like a complex web of trusting relation ships. Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. 12 Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) Historically, the Roaring Dragon’s recruitment policy has been very relaxed. Under former planned economy conditions, there was little need to consider generating a profit, as ‘all costs were financed by the provincial government’. Hence on a regular basis, more employees than were necessary were hired. Fortune realised that the Roaring Dragon’s nepotistic history had the potential to be one of Nothill’s obstacles in trying to choose the best employees to remain at the Hotel. At one time or another there had been as many as 32 families with more than one family member working at the Hotel. The kitchen had more than 70 chefs, many of whom did very little productive work. Departmental workloads were unbalanced with young employees stationed at the Front Desk and in the Restaurants working harder than older employees who worked ‘behind the scenes’. After older, more experienced, employees had finished their work duties on any given day they would ‘talk, play cards and read the paper and just complete a few extra minor tasks during working hours’. Nothill wanted to change some deeply entrenched behaviour. Nothill was inheriting the Roaring Dragon’s staff and it was proving to be a very different game to choosing a totally new staff from the beginning. Fortune admitted that Nothill would ‘have to make the best of the given situation’. July In early February 1999, Nothill and the Roaring Dragon had agreed to a freeze on the recruitment of any new employees. However the hiring of new employees by the Chinese HR Department continued even after the agreement was struck, as the managers’ wanted to provide opportunities for the younger members of their guanxiwang to work for the ‘world famous Nothill Hotel’. During the time between Harvey’s departure and Fortune’s arrival, Nothill did not have a General Manager on site. The Chinese managers took advantage of the moment by hiring some extra young employees with the thought that it would go unnoticed. Fifteen new employees chosen during this period were told they ‘would start work in July 1999, after completing their schooling’. These new appointments faced ‘no evaluation or interview process’ and a training manager’s comment was ’maybe we will just ask a Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. 13 Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) few questions’. Thomason, remained the only Nothill employee at the Hotel during that period. He noticed some new faces in his department one day and was told ‘these are your new e mployees’. He was a little angry that this had been done behind his back as ‘he had no control over who was chosen, their calibre, education, or ability’. Fortune registered his complaint with the Chinese managers and Erhi T. In late July, Nothill’s international managers arrived to take charge of the FB, Front Office, Accounts, Housekeeping, and Supply Departments. Fortune confirmed that between August 1st and October 31st, employees would be assessed on their ability and their quality of service. Nothill management would be working with them day in and out to assess their performance under strict, demanding conditions and to determine ‘whose eyes were sparkling’ and ‘who was comprehending and adapting well to the new system’. Any employee who failed to meet the new higher standards would be asked to leave. When Nothill’s international HR Manager arrived, she was surprised to discover that the Hotel had kept ‘very limited records on employees’ personal details, schooling, and experience’. Her immediate task was to set up and develop accurate files on every employee. This illuminated the difference in standards of professionalism between the old and the new methods of HR management of the Roaring Dragon Hotel. The take over from August 1st caught the imagination of the younger employees as they glimpsed the prestige that they would gain from working for an international hotel. Recalling the KYZ experience of 1993, older employees agreed that ‘Nothill was more famous’ but cautioned as they ‘were unsure of what the new management would be like’, ‘who would be laid off’ and what future those made redundant would face. Redundancy was a new concept in south-west China and one Chinese HR manager explained that ‘it would be difficult to ask someone to leave their job without a good reason or explanation’. Preserving the ‘face’ of employees made redundant was an issue that would need to be addressed. A significant event occurred in the same month. NuFu Travel was an agency that had in the past provided much business to the Roaring Dragon. In late July, they offered Grainger, S. , ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an International Management Contract. 14 Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) the Hotel a touring Japanese group that required a small banquet at the Hotel as part of their tour package. Nothill Head Chef Thomason, arrogantly told NuFu Travel that their package price ‘was too cheap’ and refused to accept their offer stating he ‘wanted a higher price’. The former Chinese Head of FB, Madame Fang advised him that ‘if he refused the offer he would effectively be excluding Nothill from any future bookings from NuFu’. Thomason refused to agree on the cheaper price package and as a result, NuFu retaliated by canceling all future’ tours booked to stay at the Hotel. Madame Fang complained that Thomason‘s ‘management was not Chinese and he does not understand’. The relationship she had painstakingly spent years building up was destroyed in one telling blow by his refusal. In a disappointed tone, she claimed ‘we are in China and must respect the Chinese way’. The guanxi she had developed between the Roaring Dragon and the NuFu agents was seriously damaged as a consequence of Thomason’s lack of understanding of the guanxi dynamic and his guanxi neglect. This resulted in the loss of all business coming from the NuFu at a critical time in the Roaring Dragon’s transition when hotel competition in the

Leading change free essay sample

Your life doesnt just happen or does it ? For many people life just goes by and we are victim of events circumstances and situations . The truth is carefully designed by you . You must believes that being proactive means that conscious control over your life . Setting goals and working to achieves them . Instead if reacting to events and waiting for opportunities . We love to procrastinate and never make the hard choices that enable us to succesed . We can choose to eliminate all from of procrastination from our lives . Self- awareness ; the understanding that you do have a choice . If someone abused you , you can choose to intsult them back . Conscience the ability to consult your inner conscience to make right decision for yourself based on you core principles and be liefs . Creative imagination the ability to envisage other responses . Independent will you do not have to conform to expectations of others but have the freedom to choose your own unique reaction . SUMMARISE OF THE ARTICLE Are you in control ? The choices you make will determine success or failure . Proactive folk about conditions in which they have little or no control . They focus on areas which they can change and influence . Our life doesnt just happen or does it ? For many people , life just goes by and we are victims of events , circumstances and situations. The truth is your life is carefully designed by you . Each decision and choice you make are all yours . Every moments , every situation ,provides a new choices . And the choices that we make will determine your life . Such as Roshan Thiran friends who was an FBI hostage negotiator , George Kolhrieser describes this helpless situation as being taken hostage . Besides that , a few year ago , someone came to Roshan Thiran and lamented about the state of persons life and how unlucky the person was . So he decided to help this person and asked him to list down the key things he did that day . After , Roshan Thiran heard his story and asked him why did he have not achieved much far and his friend answered back that he was really unlucky and never get the breaks like other people . After he listen his answer , he smile and sign because he found that many people have common theme ? We live to procrastinate and never make the hard choices that enabled us to success . Choosing to skip a movie to get work done or choosing to not eat junk food to become healthy are little choices that we all make daily . And we can choose to proactive and we can choose to eliminate all forms of procrastination from our lives . Being proactive is about taking responsibility for your life . You cant blaming everything on your boss and others . proactive people recognise that they are responseable . They dont blame events , circumstances or other people for their behavior . They know they choose their behavior . Reactive people , on the other hand , or are often affected by external stimuli . They forget that they have the power to choose their response . Proactive people also tend to have positive language . Proactive folk never worry about the conditions which they have little or no control . They will focus on areas which they can change and influence . No 1 habit from Stephen Coveys ? The 7 habit of highly effective people believe that being proactive means talking conscious control over your life , setting goals and working to achieve them . Instead of reacting to events and working for opportunities . You go out and create your own events and find an opportunities . There is a gap between stimulus and response and within this gap lies the choices for our proactive response . Such as self awareness , conscience , creactive imagination and independent will . According to Chinssy Scivique ? a career expert and coach claims that there are 5 Step to being proactive as predict , plan , prevent , participate and perform . First , predict is develop foresight . Learn to anticipate problem and events . Second , plan is proactive people plan for the future to ensuring your plans get executed and completed . Third , prevent is proactive people foresee potential obstacles and find ways to overcome them before those barriers turn into major issues that hinder your program . Fourth , participle is never idly observe that get involved and the take intiative . An the last is perform , being proactive means taking timely , effective action . Final throught , proactiveness simply is being proactive responsible for own lives . Remember , our behaviour is a function of our decision and make the right choice . EXTRACTION OF PRATICE MANAGEMENT Strategic management is has to do with the fact that organizations types and size face continually situations . The nature for organization composed of diverse , divisions , unit function and work activities that need to be coordinates and focused an achieving the organizations goals . SWOT analysis lists and consolidates information regarding the firms external opportunities and threats and internal strenght and weakness . Environmental scanning is the obtaning and compiling of information about environmental forces outside of the organization (external environment ) that might be relevant to the companys strategic planner. For example, Roshan Thiran friends who was in FBI hostage negatiator friends , George Kolhrieser describe this helpness situation as taken hostage . A decision is a choice from among available alternatives. Decision making is a process of developing and analysis alternatives and making a choice. A problem is a discrepancy between a descriable and actual situation. The problem-solving process is the same as making decision process. Judgement refers to the cognitive aspects of the decision making process. Are repetitive, routine and can be solved through mechanical procedures such as applying rules. Are unique and novel and mechanical procedures are not available nor applicable. For example, each decision and choice you make are all your. Every moment, every situation, provides a new choice and the choices you make determine your life. Planning is the process that involves defining the organizations goals , establishing an overall strategy for achieving those goals and developing a comprehensive set if plans to integrate and coordinate organizational goals . planning provides a sense of purpose and direction . It is a comprehension set of plans to integrate and coordinate organizational goals . Planning provides a sense of purpose and direction . It is a comprehensive framework for making decision in advance . It also facilities the organizing leading and controlling functions of management . Allows decision to be made ahead of time . Permits anticipation for consequences . Provides direction and a sense of purpose . Provides direction and a sense of purpose . Provides a unifying framework : avoiding piecemeal decision making . Helps identify threats and opportunities and reduce risks . Facilitates managerial control through the setting of standards for monitoring and measuring performance . For example , a few years ago , someone come to me and lamented about the state of the persons life and how unlucky the person was . Everything that could go wrong had gone wrong . Functional departmentalization means grouping activities around basic functions like manufacturing , sales , HR and finance . Customer departmentalization refer to the organizing of departments to serve the needs of specific customers . Customers can expect faster , better service . Product departmentalization refers to the organizing of dept by the companys products of services . Top level dept are organize around each of the firms marketing channels . Occurs when departments are organized for each of the territories in which the organization does business . Tall structure have many levels of authority and narrow spans of control . Flat structure have fewer levels and wide span of control . Flat and tall organizations have to do with the levels of hierarchy within the organization . Span of control is control is the number of subordinates responsibility for your life . You cant keep blaming everything on your boss or other . Proactive people recognise that they are response-able they dont blame events , circumstances or other people for their behavior . They know they choose their behavior . Reactive people , on the other hand , are often affected by external stimuli . They forget that they have power to choose the response . Proactive people also tend to have positive language . They use words like I can while reactive folks tend to use language . THE CONCLUSION OF THE ARTICLE The conclusion regarding the article in mystarjob. com as pre-little Are you in control its about the choices that you make will determine success or failure . Proactive folk will never worry about the conditions in which they have a little or no control . They mainly focus on the areas which that can change and influence . That believes that being proactive means talking concsious control over your life , setting goals and working to achieve them . In the article was conclude with practise of management as chapter level of strategies management , basic planning , decision making and organization structure . We must being proactive about taking responsibility of or life . The article also about the self-awareness , conscience , creative imagination and independent will they also have steps to being proactive . In conclusion , you must become more proactive on everything you do . For example , first you must predict , then must do planning . Third is you must predict , next is participant and at the last is you must perform well and final throught is our behavior is a function of our decision not your condition . ARTICLE (ARE YOU IN CONTROL) Your life doesn’t just â€Å"happen. † Or does it? For many people, life just goes by and we are â€Å"victims† of events, circumstances and situations. My friend who was an FBI hostage negotiator, George Kolhrieser describes this â€Å"helpless† situation as being taken â€Å"hostage†. The truth is your life is carefully designed by you. Yes, you read that right – You! Each decision and choice you make are all yours. Every moment, every situation, provides a new choice. And the choices you make determine your life. A few years ago, someone came to me and lamented about the state of the person’s life and how â€Å"unlucky† the person was. Everything that could go wrong had gone wrong. After a long state of moaning, I decided to help this person. So, I asked him to list down what were the key things he did the day before. His typical day went something like this: â€Å"I woke up and knew I had to get lots of stuff done. So, I set the alarm to ensure I woke up on time. But when the alarm went off, I just had to hit snooze as I still felt a bit tired. I knew that if I slept a bit more, my tiredness would subside and I would be much more productive. So, I slept on and then suddenly realised that it was already 10am. I quickly got up and knew I had to hurry as I had a long day with many things to accomplish. â€Å"I quickly prepared some breakfast, fried some eggs. As I was about to fry the eggs, I realised I didn’t have cooking oil. So, I quickly rushed to a grocery store to pick up the oil. I knew that I needed a good breakfast so that I could be productive. But as it was already almost 10:45am, I decided to have breakfast outside. Then I rushed back to get my work done. â€Å"But it was already almost noon by the time I got back. I decided I will make some lunch so that I would not get distracted once I start work. By 1pm, I had cleaned up the kitchen and my lunch was ready. I decided to jump right into work. â€Å"Within 10 minutes, my friend called me and started telling me about some interesting gossip. Not wanting to be rude, I listened to him but the call lasted more than an hour. I decided to have my lunch then. And I thought maybe I should watch some TV with my lunch. â€Å"Before I knew it, it was 6pm. I knew I had to get my work done. So again, I started working on it but a few friends came over to the house and asked me to join them for a quick drink. I decided to join them and maybe grab dinner too (which would save me some time). â€Å"After dinner, I got back by 9pm and was pretty tired after the long day. But I knew I had to get my stuff done, so I went to the computer to start work. But I saw my emails and started answering them. And some of them had links to really good YouTube videos. â€Å"Before I knew it, it was almost midnight and I was extremely tired. I decided that I would wake up tomorrow and make sure I get my stuff done. I was determined to get things done. † As I heard his story (and this is quite a common story), I asked the person, â€Å"why do you think you have not achieved much so far† and he answered again, â€Å"I am really unlucky. I never get the breaks like other people†. I could only smile and sigh. But the more people I asked to write out their calendars, the more I found this a common theme – we love to procrastinate and never make the hard choices that enable us to succeed. Choosing to skip a movie to get work done, or choosing to not eat junk food to become healthy are little choices that we all make daily. And we can choose to be proactive. We can choose to eliminate all forms of procrastination from our lives. BEING PROACTIVE Being proactive is about taking responsibility for your life. You can’t keep blaming everything on your boss or others. Proactive people recognise that they are â€Å"response-able. † They don’t blame events, circumstances, or other people for their behaviour. They know they choose their behaviour. Reactive people, on the other hand, are often affected by external stimuli. They forget that they have the power to choose their response. Proactive people also tend to have positive language. They use words like â€Å"I can†, â€Å"I will† and â€Å"I shall† whilst reactive folks tend to use language such as â€Å"I have to†, â€Å"if only† and â€Å"I wish. † Proactive folk never worry about conditions in which they have little or no control. They focus on areas which they can change and influence. Are you a proactive or reactive person? Answer these questions below to determine how your fare:  · Do you accomplish many things in your life or do you feel that you need to wait for good things to happen?  · Do you react to events around you or do you take initiative to prepare for, participate in and/or control the events? Do you blame others when things go wrong or do you seek to find out how you contributed to the issue and what lessons you can learn from the episode?  · Do you make a decision only when you have to or do you proactively make daily decisions that help you achieve long-term success?  · Do you sit around waiting for things to happen or do you proactively decide to make changes even when things may be working fine?  · Do you constantly have excuses like having no time to exercise or finish your work or are you proactively exploring how you can make time for these things? â€Å"Be Proactive† is the No. 1 habit from Stephen Covey’s The 7 Habits of Highly Effective People. Covey believes that being proactive means taking conscious control over your life, setting goals and working to achieve them. Instead of reacting to events and waiting for opportunities, you go out and create your own events and opportunities. According to Covey, there is a gap between stimulus and response, and within this gap lies the choice for our proactive response. Within this gap lie four special human endowments: 1 Self-awareness The understanding that you do have a choice. If someone abuses you, you can choose to insult them back. If you are offered some junk food, you can choose not to accept it or eat it. 2 Conscience The ability to consult your inner conscience to make right decisions for yourself based on your core principles and beliefs. 3 Creative imagination The ability to envisage other responses. By using your mind’s eye, you can mentally produce alternate options. 4 Independent will You do not have to conform to expectations of others but have the freedom to choose your own unique reaction. STEPS TO BEING PROACTIVE So, how do you become more proactive in everything you do? Chrissy Scivicque, a career expert and coach, claims there are 5Ps to proactive success. According to her, these will help you be effective at work: 1. Predict Develop foresight. Learn to anticipate problems and events. Understand how things work – patterns, routines and natural cycles that exist in your business. Never become complacent. Never expect the past to be an accurate predictor for the future. 2. Plan Proactive people plan for the future. Write down your plans. This is key to ensuring your plans get executed and completed. 3. Prevent Proactive people foresee potential obstacles (like feeling tired, friends calling you for drinks etc) and find ways to overcome them before those barriers turn into major issues that hinder your progress. Write out your game plan to overcome these key barriers/obstacles (i. e if a friend calls me to go for a drink, I will say I will come over once I am done) that may hinder you from accomplishing your actions. 4. Participate Never idly observe. Get involved and take initiative. Always be part of a solution and not the problem. 5. Perform Being proactive means taking timely, effective action. Take ownership of your performance and hold yourself accountable. FINAL THOUGHTS Proactiveness simply is being responsible for our own lives. Remember, our behaviour is a function of our decisions, not our conditions. Are you a proactive person? Or are you still a â€Å"hostage† who is forced to being reactive to circumstances, situations and people? You can decide today to choose to be proactive. It is just that – a choice! Roshan Thiran is CEO of Leaderonomics, a social enterprise with a mission of transforming the nation through leadership development.