Requirements of a business in International Trade - Free Essay Example

Sample details Pages: 4 Words: 1347 Downloads: 10 Date added: 2017/06/26 Category Business Essay Type Argumentative essay Did you like this example? An exchange rate is a rate at which one currency trades for another on the foreign exchange market. Rates of exchange are determined by demand and supply in the foreign exchange market. There are two extreme possibilities in exchange rate Fixed exchange rate. Floating exchange rate. 2.1 Fixed Exchange Rate Fixed Exchange Rate is a rate of exchange between currencies which is set by the governments rather than allowed to change freely with market forces. In order to keep currencies trading at the fixed levels, government economy authorities actively enter the currency market to buy and sell according to variations in supply and demand. Don’t waste time! Our writers will create an original "Requirements of a business in International Trade" essay for you Create order 2.2 Floating Exchange Rate The rate between two currencies that is allowed to fluctuate with the market forces of supply and demand. Floating exchange rates is uncertain as to the future rate at which currencies will exchange, because no one can predict rate in floating exchange rate. The uncertainty is due to increased popularity of forward, futures, and option contracts on foreign currencies. Floating exchange rate is also known as flexible exchange rate. 3. Example of Fixed Exchange Rate Lets have some clear idea of Fixed Exchange Rate by studying following example From the above figure we can say that initially the market of Australian dollar is stable, at 0.96 the supply of dollar is exactly equal to the demand of dollars. There is not need of government intervention to maintain the exchange rate. Assuming the demand of Australian beef is decreasing due to some reason and U.S citizen switch to other country for beef. In this situation Australian product shifts the U.S demand curve for the Australian dollar to the left. U.S demand fewer Australian dollars at ever exchange cost (Cost of an Australian dollar) as it is purchasing less from Australia than it did before. If there were no restriction on trade and assuming the price of Australian dollar were set in such a free market, the shift in the demand curve would lead to a fall in the price of Australian dollar, just the way the price of wheat would fall if there was an excess supply of wheat. U.S and Australia n government have committed themselves to maintain the rate at 0.96. To do so either U.S government or Australian government or both must buy up the excess supply of Australian dollars to keep its price from falling. In short, this works when government promises to act as the supplier or demander of last resort. It will ensure that the amount of foreign exchange demanded by the private sector will equal the supply at the fixed price. 4. Fixing the Exchange Rate Considering an example of an organization i.e. The Bank of Latvia The Bank of Latvia has chosen the fixed exchange rate policy for the implementation of monetary policy. Under this strategy, the Bank of Latvias intermediate target is the external stability of the national currency, i.e. the peg of the lats to the euro (at the rate 1EUR = 0.702804 LVL). The normal fluctuation margin around the fixed peg rate is +/- 1%. The Bank of Latvia performs interventions when the exchange rate of the lats exceeds the normal fluctuation margin of +/- 1%. Lats has been pegged to the euro from January 1, 2005. The Bank of Latvia ensures the external stability of the lats under free capital movement and unlimited convertibility of the national currency. Latvia has also established one of the most liberal foreign exchange and capital movement regimes in the world. Both foreign currency and lats can freely enter and leave the country, accounts can be opened in lats and foreign currency without any restriction and lets can be easily purchased and sold freely in exchange for the foreign currency. By this policy foreign investors can earn their profit in any currency without any restriction. 5. Why was the fixed exchange rate strategy chosen? A fixed exchange rate strategy is appropriate for the Latvian economy for other reason as well which are not related to the prospective participation in the EMU, therefore Latvia has maintained the above strategy. Firstly, a fixed exchange rate policy is appropriate for the small countries with an open economy, where foreign trade plays a very important role. In such countries , single major transaction may cause considerable short term exchange rate fluctuation, increasing foreign expenditure and risk. Secondly, in Latvias monetary transmission mechanism, the exchange rate channel affects consumer price dynamic considerably. That can be largely attributed to quite a high imports component both in Latvias consumption, as well as manufacturing. Having implemented the fixed exchange rate policy for the several years, it is evident that it was the right choice and this policy is still appropriate for the Latvian economy. 6. Advantages Disadvantages of Fixed Exchange Rate 6.1 Advantages of Fixed Exchange Rate. Any changes in the exchange rate can affect the market values of assets that are denominated in foreign currencies. This can increase the financial risks that a nations residents face, thereby forcing them to incur costs to avoid these risks. The possibility that variations in the market value of assets can take place due to changes in the value of a nations currency is the foreign exchange risk that residents of a country face because their nations currency value can vary. In above case if any company in Latvia had many loans denominated in Euro but earned nearly all their in Lats from sales within Latvia, a decline in the Euro value of the Lats would mean that Latvian companies would have to allocate a larger portion of their earning to make same Euro loan payments as before. Thus a fall in the Lats value would increase the operation costs of these companies, thereby reducing their profitability and +raising the likelihood of eventual bankruptcy. Therefore limiting foreign exc hange risk is a classic decision for adopting a fixed exchange rate. For example a company in Latvia that has significant U.S dollar earnings from sales in any of the US city but quite large loans from UK investors could arrange to converts its dollars earnings into pound through special types of foreign exchange contracts. The Latvian companies could likewise avoid holding of Lats and thus protect itself against variation in the Lats Value. Reduce risk in International Trade: As the rate of the exchange will be fixed so there wont be any risk in International trade, companies dont have to face high fluctuation of exchange rate. Government:-Fixed Exchange helps governments to keep the rate of inflation approximately to world levels provided there are not trade restrictions. Thus a fixed exchange rate prevents governments pursuing irresponsible macroeconomic policies. 6.2 Disadvantages of Fixed Exchange Rate. Large holdings of foreign exchange reserves required: Just to keep exchange rate stable countries require lots of cash or gold in their hand so that at the time of fluctuation in rate they can stable their rate. In this case government of that country have to hold different currencies in large proportion. Loss of freedom in your internal policy: The needs of the exchange rate can dominate policy and this may not be best for the economy at that point. Interest rates and other policies may be set for the value of the exchange rate rather than the more important macro objectives of inflation and unemployment. Huge pressure on under developed countries: There will be huge pressure to under developed countries by developed and developing countries to devaluate their rate at the time of inflation. Like wise unemployment problem rises in underdeveloped countries. Over Valuing: With fix exchange rates and an overvalued currency, the monetary authorities will be suffering a los s of reserves. It is this that causes balance of payments crises for governments operation under fixed exchange rate regimes. 7. Conclusion Under different circumstances, one can conclude that some nations like Latvia adopt fixed exchange rate regime for business in international trading while some nations allow the exchange rates to float. By adopting fix exchange rate the bank of Latvia is capable to maintain a stable lats exchange rate even in case of any external disorders.

Personal Statement The Hospitality Industry - 1394 Words

Introduction The Hospitality Industry has been regarded as one of the â€Å"most fascinating, fun, and stimulating industries in which to work† (Walker, 2016, p. 4). This is evident within special events which are â€Å"recognized as unique moments in time with ceremony and ritual to satisfy specific needs† (Walker, 2016, p. 310). Special events fall into four separate categories: mega events, association, corporate, and social functions. Out of these four separate classifications over 80% of the event market is corporate events which allows for a variety of advancement opportunities within corporate event management (Walker, 2016, p. 311). While this profession is both satisfying and rewarding it has been ranked as one of the most stressful careers†¦show more content†¦Some of a planners daily duties include: â€Å"consulting with clients to determine objectives and requirements for events,† â€Å"coordinate services for events,† â€Å"negotiate contracts wi th service providers,† â€Å"maintain records of event aspects, including financial details† (Event Planner Career, n.d.). Planners are responsible for communicating with clients, colleagues, employees, sponsors, and service providers in an effort to successfully run an event. For each event there are several tasks that must be completed in order to coordinate large functions from conception to completion. These tasks include: o Determining the event budget o Securing sponsorships o Arranging catering o Developing the menu for the event o Selecting and planning for the venue o Scheduling speakers, vendors, and participants. o Creating a marketing plan o Coordinating staff/ or volunteers o Developing and overseeing the event To complete all tasks at hand for an event, a coordinator must be organized, fast-paced, interpersonal, and able to multi-task efficiently (Houghton, 2015). 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Organizational Behavior and Management Skeel

Question: Analyzes their participation as a member of their project team in Skeel. Answer: Introduction Skeel (2013) defines that Bankruptcy is a state, where an organization is unable to repay some or all of their debts under the federalbankruptcycourt.Australian Financial Security Authority (AFSA) is an association that deals with these bankruptcy incidences and resolves the case for the Australian organization (Fedcourt.gov.au, 2016). The organization that is considered in this assessment is the sports association and the major concern is to identify the prime reason behind this bankruptcy. This business report highlights the lack of factors like motivation of employees, teamwork, organizational behavior followed by the managers and the employee along with the areas of future development. The assignment wraps up with an overall conclusion of the entire discussion. Discussion There are mainly three components of motivation, which is important for accomplishing the organizational objective- direction, persistence and intensity (Ya-jun et al., 2013). Weiss et al. (2012) further mentions that if an organization does not have a clear expectation and goals to achieve and do not research about the market condition, there is a high possibility that the organization would go bankrupt. Taken for instance, in a sports association, if there are more competition in the field, it is evident that people desire to enroll themselves in a reputed organization rather than a new one where same opportunities are provided. Manzoor (2012) also defines that offering job roles to an efficient employee will not only motivate the person but it also ensure that they are fulfilling their responsibility with proper attention. In this circumstance, if an employee who is not aware of the financial representation and is asked to prepare a balance sheet, the person will overlook all the essential data like tax payments and other legal obligation. Teamwork and the consideration where an individual thinks that achieving organizational goals is their sole work in the workplace is crucial for the success of the company. Bumann and Younkin (2012) defines an effective team knows each other's strength and weakness and they always emphasizes on enhancing the strengths and resolves the weakness for the advancement of both the organization as well and to the individual. Taken for instance if in a sports association, employees do not engage with the organization, there may be a chance that the person shares the internal managerial decision with the other competitors for their benefits. As a result, bankruptcy can occur within the sports association, as they will never bring something new to the market to satisfy their needs (Weiss, 2012). In sports association, there are internal and external stakeholders. The sportsperson, coach, associations chairperson and the equipment suppliers are known as the stakeholders. Dawsey et al. (2013) defines that if the chairperson provides more reputation to some sportsman, who does not deserve to play at the national level, the conflicts between these people may arise to a great level and there may be a lack of associatively in them. Moreover, Platt and Platt (2012) defines that there will be a change in their attitude and they intentionally show poor performance in the final tournaments. Thus, in the circumstance, the team got lost and as a result, they will not win prize money that may be used to pay some debts taken from the financial institute or pay tax to the government. The final consequence is that the sports association got bankrupt due to the stakeholder conflicts. The organizational behavior is a study that highlights the culture followed in a workplace. Wagner and Hollenbeck (2014) stated that effective organizational behavior is crucial for the betterment of the organization as it involves the management of the recruitment, providing them training and then analyzing the market demand. The managing authorities should be aware of the evolving technology and the rapidity of the change and if they are not changing the organizational behavior according to that, it is not possible for the organization to set a competitive advantage in the market and they will go bankrupt. Brigham and Ehrhardt (2013) depicts that in terms of a sports association, if the business is not growing then significant profitability cannot be obtained and the managers have to take money from a financial institute or taken the way not to pay the taxes. Thus, Weiss et al. (2012) depicts that improper implementation of new technology and no provision of employee training resul ts in poor customer satisfaction and as a result, these association can be bankrupted. The organizational culture of the sports authority comprises of the emotions, attitudes and the perceptions of the members (Alvesson Sveningsson, 2015). The management of the Sports Authority lacked professional outlook in managing the day to day matters. The employees of the organization were not interactive and hence there was not sufficient communication in the organization. The employees were not receptive to new ideas and they lacked flexibility in their organizational functioning. They were not willing to experiment with new ideas. Their compensation structure was not competitive and this caused low motivation level of the employees. The low motivation level of the employees causes lack of productivity of the employees which caused the organization to formulate improper financial policies. The national organizational culture of the sports industry in Australia is culturally rich. The sports industry has transformed the national identity of Australia. The national culture has a strong influence on the sports authority (Jarvie, 2013). However, the sports authority is unable to integrate the sports culture with the organizational culture. The national culture must share unconditional relationship with the local sports authority in order to maximize the operational efficiency. The sports authority is unable to adhere to the requirements of the national organizational culture, which has caused the organization to run in losses. The individual differences between the employees of the organization have great impact on the overall functioning of the organization. The employees have different perception, behavior, interactions and attitudes that affect the regular activities of the organization (Korschun, Bhattacharya Swain, 2014). The employees react differently to specific situations and this impacts the organizational activities. The organizational change is also perceived differently by each employee. The sports authority is a diverse entity that makes it difficult to achieve the effectiveness of the job tasks. The individual differences make it difficult for the organization to achieve optimum results. There is lack of coordination among the employees which makes it difficult to solve the organizational issues. This is one of the primary reasons for the bankruptcy of the sports authority. The organization must try to focus on developing the organizational behavior in order to achieve the maximum financial efficiency. The sports authority should give appropriate job roles to the employees, which is based on their skills as well as competencies. The managers should demonstrate an excellent performance by efficient administration of the team members. The planning, allocating, controlling and the evaluating job tasks should be performed well by the managers so that the team members are able to perform the financial functions in a better way. The organization must focus on fostering team work among the employees so that the organizational goals can be attained. The sports authority must strive in enhancing the work culture of the organization which would improve the performance of the employees. The managers must address the individual differences of the workforce and improve the cooperation level of the employees. The overall improvement of the organizational performance would lead to efficient management of the financial functions. Conclusion The sports authority has several issues with the organizational behavior due to which it faced bankruptcy. This paper analyzed some of the important parameters such as motivation level of the employees, individual differences, organizational culture, perception of the employees, team work and others that have a major impact on the organizational performance. This paper would broaden the understanding of the issues behind their financial crisis. References Alvesson, M., Sveningsson, S. (2015).Changing organizational culture: Cultural change work in progress. Routledge. Bankruptcy guide: introduction. (2016).Fedcourt.gov.au. Retrieved 22 September 2016, from https://www.fedcourt.gov.au/law-and-practice/areas-of-law/bankruptcy Brigham, E. F., Ehrhardt, M. C. (2013).Financial management: Theory practice. Cengage Learning. Bumann, M., Younkin, S. (2012). Applying self efficacy theory to increase interpersonal effectiveness in teamwork.Journal of Invitational Theory and Practice,18, 11. Dawsey, A. E., Hynes, R. M., Ausubel, L. M. (2013). Non-judicial debt collection and the consumer's choice among repayment, bankruptcy and informal bankruptcy.Am. Bankr. LJ,87, 1. Jarvie, G. (2013).Sport, culture and society: an introduction. Routledge. Korschun, D., Bhattacharya, C. B., Swain, S. D. (2014). Corporate social responsibility, customer orientation, and the job performance of frontline employees.Journal of Marketing,78(3), 20-37. Manzoor, Q. A. (2012). Impact of employees motivation on organizational effectiveness.Business management and strategy,3(1), 1. Platt, H., Platt, M. (2012). Corporate board attributes and bankruptcy.Journal of Business Research,65(8), 1139-1143. Skeel, D. A. (2013). Is Bankruptcy the Answer for Troubled Cities and States?.Houston Law Review, 13-9. Wagner III, J. A., Hollenbeck, J. R. (2014).Organizational behavior: Securing competitive advantage. Routledge. Weiss, M. R., Amorose, A. J., Kipp, L. E. (2012). Youth motivation and participation in sport and physical activity. Ya-jun, W. A. N. G., Long, W. E. I. (2013). Multi-angle of View Analysis on the Motivation of Evolution of Industrial Organization [J].Journal of Wuhan University of Technology (Social Sciences Edition),1, 005.

Shouldice Hospital Case Essay Example

Shouldice Hospital Case Paper 1. ) How well is the hospital currently utilizing its bed? 90 beds x 7 days/ week = 630 beds available in a week 30 patients x 3 days x 5 days per week = 450 beds utilized 450 beds utilized / 630 availble beds = 71. 43% The hospital is currently utilizing 71. 43% of their beds, this is actually an ideal operating point. To increase its rate of utilization might decrease the service quality. 2. ) Develop a similar table to show the effects of adding operations on Saturday. (Assume that 30 operations would still be performed each day. ) Check-in DayMondayTuesdayWednesdayThursdayFridaySaturdaySunday Monday303030. Tuesday303030 Wednesday303030 Thursday303030 Friday303030 Saturday Sunday303030 Total60909090906060 How would this affect the utilization of the bed capacity? Is this capacity sufficient for the additonal patients? 90 beds x 7 days/ week = 630 beds available in a week 30 patients x 3 days x 6 days per week = 540 beds utilized 540 beds utilized / 630 beds available = 85. 71% Adding operations on Saturday will improved the utilization rate of beds from 71. 43% to 85. 71%. It is still sufficient; however, we might risk the service quality. 3. ) Now look at the effect of increasing the number of beds by 50%. How many operations could the hospital perform per day before running out of bed capacity? (Assume operations are performed five days per week, with the same number performed on each day). 90 beds x 1. 50 = 135 beds 135 beds x 7 days = 945 beds available in a week 945 beds / 3 days x 5 days in a week = 63 operations per day The hospital could perform a maximum of 63 operations per day if the beds are increase by 50%. How well would the new resources be utilized relative to the current operation? 30 patients x 3 days x 5 days per week = 450 beds utilized 135 beds x 7 days = 945 beds available in a week We will write a custom essay sample on Shouldice Hospital Case specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Shouldice Hospital Case specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Shouldice Hospital Case specifically for you FOR ONLY $16.38 $13.9/page Hire Writer 450 beds utilized / 945 beds available = 47. 62% With the current operation, the utilization rate would only be 47. 62% if the beds would be increased by 50%. If we would add additional beds, we also need to accept more patients to fully utilize the investment. Could the hospital really perform this many operations? Why? (Hint: Look at the capacity of the 12 surgeons and the five operating rooms. ) Operating room maximum capacity: 8 operations (7:30- 4:00) (one operation per hour) x 5 operating rooms = 40 operations 12 surgeons x 4 operations per surgeon = 48 operations 7 assitant surgeons x 4 operations per surgeon = 28 operations. The case states that surgeons operate on 4 patients per. If surgeons means all the full time surgeons only, we have a maximum of 40 possible operations; thus the 30 operations per day is feasible. However, if we would include the part-time surgeons as surgeons that operates 4 patients per day, only 28 operations is feasible. 4. ) Although financial data are sketchy, an estimate from a construction company indicates that adding bed capacity would cost about $100,000 per bed. In addition, the rate charged for the hernia surgery varies between about $900 and $2,000, with an average rate of $1,300 per operation. Due to all uncertainties in government health care legislation, Shouldice would like to justify an expansion within a five-year time period. Option 1 Add 50% more beds Investment cost in adding 50% more beds : 45 beds x $100,000 = $4,500,000 Revenue: Maximum of 40 operations per days (maximum capacity for 5 operating rooms) x 5 days per week x 52 weeks per year = maximum 10,400 operations per year 10,400 operations x $1,300 = $13,520,000 Surgeon cost: (Assuming $600 for the full-time surgeon, payment for assistant surgeon is not given /included. ) 10,400 operations x $600 = $ 6,240,000 Maximum Annual Profit = $7,280,000 For five years = $36,400,000 Five years profit less the 45 beds investment = $31,900,000 Option 2 Add 1 more operating day (Saturday) Revenue: Maximum of 40 operations per days (maximum capacity for 5 operating rooms) x 6 days per week x 52 weeks per year = maximum 12,480 operations per year 12,480 operations x $1,300 = $16,224,000. Surgeon cost: (Assuming $600 for the full-time surgeon, payment for assistant surgeon is not given /included. ) 12,480 operations x $600 = $ 7,488,000 Annual Profit = $8,736,000 Five years profit = $43,680,000 Recommendation: With 90 beds and the current operation, the hospital is doing well. Their existing system and reputation have already set them apart as a market leader and has proven to be a profitable setup. However, there is still an unmet demand. Option 1 to add 50% more beds may not be beneficial if we dont also increase operation. Increasing the number of bed by 50% would not be advisable unless they would add more surgeons and operating rooms because the existing operating rooms capacity and number of surgeons could not fill an addition of 45 beds. They would be operating the surgery rooms at over capacity. Option 2 that involves adding one more day of operation is also valid as it would utilize resource capacity. However, adding a Saturday can also have a negative impact on the work force that drive down the service quality that gives the hospital a competitive advantage. This could be offset by hiring addition staff and consequently adding operating rooms. Adding more surgeons only and thinking they could extend operating hours beyond 4:00pm to fully utilized operating rooms is not a good option as this may disturb the scheduled dinner at 6:00pm. This get-together by patients is a major factor that contributes to the hospitals success. Between the two options given, option 2 to add one more operating day is more profitable. I would recommend combining the two options plus hiring more staffs and adding more operating rooms. However, due to limited information given by the case. We cant compute if this option is indeed more profitable than the rest. Shouldice Hospital Case Essay Example Shouldice Hospital Case Essay â€Å"Shouldice hospital, the house that hernias built, is a converted country estate which gives the hospital ‘a country club’ appeal. † A quote from American Medical News Shouldice Hospital in Canada is widely known for one thing-hernia repair! In fact, that is the only operation it performs, and it performs a great many of them. Over the past two decades this small 90-bed hospital has averaged 7,000 operations annually. Last year, it had a record year and performed nearly 7,500 operations. Patients’ ties to Shouldice do not end when they leave the hospital. Every year the gala Hernia Reunion dinner (with  complimentary hernia inspection) draws in excess of 1,000 former patients, some of whom have been attending the event for over 30 years. A number of notable features in Shouldice’s service delivery system contribute to its success. (1) Shouldice accepts only patients with the uncomplicated external hernias, and it uses a superior technique developed for this type of hernia by Dr. Shouldice during World War II. (2) Patients are subject to early ambulation, which promotes healing. (Patients literally walk off the operating table and engage in light exercise throughout  their stay, which lasts only three days) (3) We will write a custom essay sample on Shouldice Hospital Case specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Shouldice Hospital Case specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Shouldice Hospital Case specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Its country club atmosphere, gregarious nursing staff, and built-in socializing make a surprisingly pleasant experience out of an inherently unpleasant medical problem. Regular times are set aside for tea, cookies, and socializing. All patients are paired up with a roommate with similar background and interests. THE PRODUCTION SYSTEM The medical facilities at Shouldice consist of five operating rooms, a patient recovery room, a laboratory, and six examination rooms. Shouldice performs, on average, 150  operations per week, with patients generally staying at the hospital for three days. Although operations are performed only five days a week, the remainder of the hospital is in operation continuously to attend to recovering patients. An operation at Shouldice Hospital is performed by one of the 12 full-time surgeons assisted by one of seven part-time assistant surgeons. Surgeons generally take about one hour to prepare for and perform each hernia operation, and they operate on four patients per day. The surgeons’ day ends at 4 P. M. , although they can expect to be on call every  14 TH night and every 10 TH weekend. 2 THE SHOULDICE EXPERIENCE Each patient undergoes a screening exam prior to setting a date for his or her operation. Patients in the Toronto area are encouraged to walk in for the diagnosis. Examinations are done between 9 a. m. and 3:30 p. m. Monday through Friday, and between 10 a. m. and 2 p. m. on Saturday. Out-of-town patients are mailed a medical information questionnaire (also available over the Internet), which is used for the diagnosis. A small percentage of the patients who are overweight or otherwise represent an undue medical risk are refused treatment. The remaining patients receive confirmation cards with the scheduled dates for their operations. A patient’s folder is transferred to the reception desk once an arrival date is confirmed. Patients arrive at the clinic between 1 and 3 P. M. the day before their surgery. After a short wait, they receive a brief preoperative examination. They are then sent to an admissions clerk to complete any necessary paperwork. Patients are next directed to one of the two nurses’ stations for blood and urine tests and then are shown to their rooms. They spend the remaining time before orientation getting settled and acquainting themselves with their roommates. Orientation begins at 5 P. M. , followed by dinner in the common dining room. Later in the evening, at 9 P. M. , patients gather in the lounge area for tea and cookies. Here new patients can talk with patients who have already had their surgery. Bedtime is between 9:30 and 10 P. M. On the day of the operation, patients with early operations are awakened at 5:30 A. M. for preoperative sedation. The first operations begin at 7:30 A. M. Shortly before an operation starts, the patient is administered a local anesthetic, leaving him or her alert and fully  aware of the proceedings. At the conclusion of the operation, the patient is invited to walk from the operating table to a nearby wheel-chair, which is waiting to return the patient to his or her room. After a brief period of rest, the patient is encouraged to get up and start exercising. By 9 P. M. that day, he or she is in the lounge having cookies and tea and talking with new, incoming patients. The skin clips holding the incision together are loosened, and some are removed, the next day. The remainder are removed the following morning just before the patient is  discharged. When Shouldice Hospital started, the average hospital stay for hernia surgery was three weeks. Today, many institutions push â€Å"same day surgery† for a variety of reasons. Shouldice Hospital firmly believes that this is not in the best interests of patients, and is committed to its three-day process. Shouldice’s postoperative rehabilitation program is designed to enable the patient to resume normal activities with minimal interruption and discomfort. Shouldice patients frequen6tly return to work in a few days; the average total time off is eight days. 3  Ã¢â‚¬Å"It is interesting to note that approximately 1 out of every 100 Shouldice patients is a medical doctor. † FUTURE PLANS The management of Shouldice is thinking of expanding the hospital’s capacity to serve considerable unsatisfied demand. To this effect, the vice president is seriously considering two options. The first involves adding one more day of operations (Saturday) to the existing five-day schedule, which would increase capacity by 20 percent. The second option is to add another floor of rooms to the hospital, increasing the number of beds by 50 percent. This would require more aggressive scheduling of the operating rooms. The administrator of the hospital, however, is concerned about maintaining control over the quality of the service delivered. He thinks the facility is already getting very good utilization. The doctors and the staff are happy with their jobs, and the patients are satisfied with the service. According to him, further expansion of capacity might make it hard to maintain the same kind of working relationships and attitudes. Exhibit 1 Operations with 90 Beds (30 patients per day) BEDS REQUIRED ___________________________________________________________________________________ CHECK-IN DAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY Monday 30 30 30 Tuesday 30 30 30 Wednesday 30 30 30 Thursday 30 30 30 Friday Saturday Sunday 30 30 30 Total 60 90 90 90 60 30 30 QUESTIONS  Exhibit 1 is a room-occupancy table for the existing system. Each row in the table follows the patients that checked in on a given day. The columns indicate the number of patients in the hospital on a given day. For example, the first row of the table shows that 30 people checked in on Monday and were in the hospital for Monday, Tuesday, and Wednesday. By summing the columns of the table for Wednesday, we see that there are 90 patients staying in the hospital that day. 1. How well is the hospital currently utilizing its beds? 2. Develop a similar table to show the effects of adding operations on Saturday. (Assume that 30 operations would still be performed each day. ) How would this affect the utilization of the bed capacity? Is this capacity sufficient for the additional patients? 4 3. Now look at the effect of increasing the number of beds by 50 percent. How many operations could the hospital perform per day before running out of bed capacity? (Assume operations are performed five days per week, with the same number performed on each day. ) How well the new resources utilized relative to the current operation? Could the hospital really perform this many operations? Why? (Hint: Look at the capacity of the 12 surgeons and the five operating rooms. ) 4. Although financial data are sketchy, an estimate from a construction company indicates that adding bed capacity would cost about Rs 100,000 per bed. In addition, the rate charged for the hernia surgery varies between about Rs 900 and Rs 2,000, with an average rate of Rs 1,300 per operation. The surgeons are paid a flat Rs 600 per operation. Due to all the uncertainties in government health care legislation, Shouldice would like to justify any expansion within a five-year time  period. _________________________________________________________________ Selected Bibliography Amran, M. , and N. Kulatilaka. â€Å"Discipliend Decisions: Aligning Strategy with the Financial Markets. † Harvard Business Review, January-February 1999, pp. 95-104. Bakke, N. A. , and R. Hellberg. â€Å"The Challenges of Capacity Planning. † International Journal of Production Economics 30-31 (1993), pp. 243-64 Correll, J. G. , and N. W. Edson. Gaining Control: Capacity Management and Scheduling. 2 ND ed. New York: Wiley, 1998. Hammesfahr, R. D. Jack; J. A. Pope; and A. Ardalan. â€Å"Strategic Planning for  Production Capacity. † Internal Journal of Operations and Production Management 13, no. 5 (1993), pp. 41-53. Meyer, C. Fast Cycle Time: How to Align Purpose, Strategy and Structure for Speed. New York: Free Press, 1993. Giffi, C. ; A. V. Roth; and G. M. Seal, eds. Competing in World-Class Manufacturing: National Center for Manufacturing Sciences. Homewood, IL: Business One Irwin, 1990. Govil, M. , and J. Proth. Supply Chain Design and Management. Burlington, MA: Academic Press, 2001. Yu-Lee, R. T. Essentials of Capacity Management, New York: Wiley, 2002. Shouldice Hospital Case Essay Example Shouldice Hospital Case Essay 1. How well is the Shouldice Hospital doing? From our point of view, Shouldice Hospital is very successful and is getting more popular. This can be concluded according to the following facts, which we took out of the â€Å"Shouldice Hospital Limited† case: -â€Å"Under Dr. Obney’s leadership, the volume of activity continued to increase, reaching a total of 6,850 operations in the 1982 calendar year. † (p. 2) -â€Å"It was thought that most potential Shouldice patients learned about the hospital and its methods from past patients who had already experienced them. †(p.3) -â€Å"During their stay, patients were encouraged to take advantage of the opportunity to explore the premises and make new friends. † (p. 5) -â€Å"Patients sometimes ask to stay an extra day [†¦]. They share experiences with other patients, make friends easily, and have the run of the hospital†. (p. 5) -â€Å"When I interview prospective surgeons, I look for experience and a good education. I try to gain some insight into their domestic situation and personal interests and habits. † (p. 6) -â€Å"Excellence is the enemy of good. † (p. 6) -â€Å"Experience is most important. The typical general surgeon may perform 25 to 50 hernia operations per year. Our perform 600 or more. † (p. 7) -â€Å"Training in the Shouldice technique was important because the procedure could not be varied. It was accomplished through direct supervision by one or more of the senior surgeons. † (p. 7) â€Å"The steps are designed specially with a small rise to allow patients recently operated on to negotiate the stairs without undue discomfort. Every square foot of the hospital is carpeted to reduce the hospital feeling and the possibility of all. We will write a custom essay sample on Shouldice Hospital Case specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Shouldice Hospital Case specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Shouldice Hospital Case specifically for you FOR ONLY $16.38 $13.9/page Hire Writer † (p. 8) -â€Å"We don’t have an organization chart. A chart tends to make people think they’re boxed into jobs. † (p. 9) â€Å"The hospital relied entirely on word-of-mouth advertising [†¦]† (p. 10) Shouldice Hospital is focused on good working conditions. It tries to meet people’s needs and makes the hospital as good of a place to work as possible; not only for the patients, but also for the members of the hospital staff: For example surgeons, assistants and nurses were rotated every few days or weeks that they get as much experience as possible. Furthermore each secretary is trained to do another’s work and in an emergency is able to switch to another function immediately. In spite of the fact that the pay scale for the staff is higher than the union scale for comparable jobs, there is also a high bonus pool and profit-sharing plan for all of the employees. The hospital also provides some free services for parents, who accompany their children and also provides free annual checkups for past patients. As a conclusion, Shouldice Hospital is doing well in capacity, service, quality, efficiency and performance. What performance exactly means and how you account performance will be answered in the next question. 2. How do you account for its performance? To answer this question we looked at the literature of performance management and tried to relate the theoretical background with the information provided in the â€Å"Shouldice Hospital Limited† case material. In business literature several different approaches to performance exist. In organizational development, performance can be thought of as actual results vs. desired results. Any discrepancy, where actual is less than desired, could constitute the performance improvement zone. Performance management and improvement can be thought of as a cycle: 1. Performance planning where goals and objectives are established. 2. Performance coaching where a manager intervenes to give feedback and adjust performance. 3. Performance appraisal where individual performance is formally documented and feedback delivered. A performance problem is any gap between desired results and actual results. Performance improvement is any effort targeted at closing the gap between actual results and desired results. Other organizational development definitions are slightly different. The US Governments Office of Personnel Management indicates that performance management consists of a system or process whereby: 1. Work is planned and expectations are set, 2. Performance of work is monitored, 3. Staff ability to perform is developed and enhanced, 4. Performance is rated or measured and the ratings summarized and 5. Top performance is rewarded. In Business performance management literature, performance is described as a set of processes that help businesses discover efficient use of their business units, financial, human and material resources. The definition of  performance in Operational performance management literature focuses on creating methodical and predictable ways to improve business results, or performance, across organizations. The answer to question 1 of our paper focuses on actual performance of the Shouldice hospital and the answers to questions 4, 5 concentrate on ways to improve hospital’s capacity, which covers the operational management approach to performance. Since the case material is short on data as far as desired results are concerned, we will take historical and comparative approach in order to account the performance of Shouldice Hospital. Since the number of operations is considered by us as the most important measure of performance, from historical perspective we can see that performance on this measure has been increasing steadily since year 1982. â€Å"[†¦] the volume of activity continued to increase, reaching a total of 6,850 operations in the 1982 calendar year. † The average number of operations per year reached 7750 (please see question 4 for reference) at the time of interview. Increased number of operations indicates the higher number of patients, which could also indicate a high customer satisfaction level. Since the hospital in not using any marketing strategy to attract clients, and â€Å"relied entirely on word of mouth advertising† , we could presume that satisfaction reached desired results and increased the number of new patients. We could also look at the performance from financial perspective in terms of employees’ salaries â€Å"we try to maintain a pay scale higher than the union scale for comparable jobs in the area† . Ability to pay above average market salaries indicates reaching target revenues and non-existent or minimal gap between desired results and actual results for financial performance. From the facts in Shouldice hospital case material, high involvement of experienced surgeons in coaching and giving feedback in order to maintain high quality of operations could be also observed. â€Å"Training in the Shouldice technique was important because the procedure could not be varied. It was accomplished through direct supervision by one or more of the senior surgeons. The rotation of teams and frequent consultation allowed for an ongoing opportunity to appraise performance and take corrective action. † The above example of training program gives us insight on personnel management at Shouldice hospital. Here we can refer to The US Governments Office of Personnel Management approach to performance. Holistic approach to personnel performance management including planning, monitoring, development, performance evaluation and reward system (â€Å"bonuses to doctors were voted by the board of directors twice a year, depending on profit and performance† ) are integral parts of this approach and all of them, according to data from case material, exist (and are of great importance to Shouldice hospital’s management. We looked at different performance measures and approaches from comparative and historic perspective in order to answer this question. With the data given in the case and the facts outlined in the answer to question 1, we can conclude that in all discussed fields, i. e. customer satisfaction, capacity, financial performance and personnel management Shouldice Hospital is performing with no gap between actual results and desired results. 3. Develop a process flow chart for Shouldice Hospital. In this answer, we will provide a process flow chart for patients, who have had their hernias repaired at Shouldice Hospital. A process flow chart deals with a schematic diagram for describing a process. From our point of view, the real process starts when the patient arrives at Shouldice Hospital. That’s the reason why we do not have the previous steps (filling out questionnaires (1), patients getting their operation dates (2), information logged into the computer (3), patients sent their confirmation cards (4), patients contacted by phone (5)) in our process flow chart. Our process flow chart starts at 1:00-3:00 P. M. , when the patient arrives at Shouldice Hospital with 30 to 34 other patients. As you can see from the process flow chart, after four days, a patient is ready for discharge. This multi-stage process flow chart also includes a lot of buffers , where the patient has to wait till the next step in the process flow chart can be processed. As you can see on the last slide of the process flow chart, there is only limited information available about the third and fourth day. Finally, patients can leave Shouldice Hospital after four days. 4. What is Shouldice Hospital’s capacity? First of all, to make more clear how we interpreted this question, we will give a definition of capacity: â€Å"Capacity means the number/throughput of  units a facility can hold or produce in a period of time. † If we adjust this explanation to the Shouldice case, we assume that the capacity of the hospital is the maximum number of patients who can have an operation during one year. Referring to the case, the peak activity occurs in September when as many as 165 operations per week might be performed. Each year has 52 weeks, however according to the text: â€Å"For many of the same reasons, the hospital closed for two weeks late in December each year,† this means to a total of 50 work weeks each year. Using this information we can assume that the weekly capacity would be 165 patients and the yearly capacity being 8,250 operations. Alternatively, using an average figure of 155 weekly operations performed, this will result in a yearly average capacity of 7,750 operations. Also the capacity could be the number of beds, â€Å"Initially, a 36-bed capacity was create in Thornhill, but after some years of planning, a large wing was added to the house to provide a total capacity of 89-beds. † 5. As Dr. Shouldice, what actions, if any, would you take to expand the hospital’s capacity? In order to create further opportunities to expand the hospital’s capacity, and secure future growth, Dr. Shouldice should expand the hospital’s facilities into the U. S. This notion supported by the case, which states, â€Å"Approximately 42% of all Shouldice patients came from the United States† (p. 3). As of now, these patients are forced to pay â€Å"roughly $200 to $600† (p. 10) to travel to Toronto and patients from the U. S. must now have passports when travelling to Canada. Having a hospital in the U. S.  could reduce some of the costs of travelling for these patients, decrease some of the anxiety of travelling to a foreign country, and make the facilities more accessible for potential patients. Additionally, it would be in the best interest of the hospital to diversify its practice and pursue â€Å"opportunities such as eye surgery, varicose veins, or hemorrhoids† (p. 11). An expansion to the U. S. is an enormous undertaking and since opening a facility in the U. S. is akin to starting anew this is an opportune time for Shouldice Hospital to diversify their opportunities. Based upon Exhibit 4 in the case study, â€Å"it is quite clear that others are trying to emulate us,† which means that Shouldice Hospital is the premier hernia care provider. Now that they have mastered the hernia care and procedures, they must now transfer that knowledge of patient care to other areas of medicine. A staggering 86% of the attendees of the 1983 Shouldice Hospital Annual Reunion responded that Shouldice Hospital most definitely cared for them as a person (Exhibit 3, p. 16). With numbers like these and given Shouldice’s record of accomplishments, it is time for Shouldice to move forward and expand their opportunities. Furthermore, it would be in the best interest of the hospital to patent its world-renowned hernia procedure. Currently the procedure is available to all hospitals who, â€Å"may copy our technique and misapply it or misinform their patients about the use of it. This can result in failure, and we are concerned that the technique will be blamed for the recurrences. † (p. 11). Occurrences such as these can denounce the Shouldice name and can hinder potential patients from looking into Shouldice’s procedures. Shouldice should also look into advertising its procedures in order to increase its capacity. Presently, Shouldice is â€Å"afraid to send out this new brochure [they’ve] put together for fear it will generate too much demand† (p. 11). Advertising, in correlation with the expansion into the U. S. , would greatly increase the awareness of Shouldice because â€Å"the hospital relied entirely on word-of-mouth advertising† (p. 10). With the expansion into the U. S. Shouldice would be able to support the extra demand generated by an advertising campaign. The main types of advertising Shouldice should consider are direct mailings, magazine/newspaper ads, and infomercials. The atmosphere at Shouldice in Toronto is definitely one of a kind. The patients, nurses, and surgeons all have a special bond rarely seen in a hospital, which greatly contributes to the success of Shouldice. In such a quaint working environment, it is important to consider the needs of everyone involved when contemplating facility expansions and work schedule changes. With this in mind, and seeing that there are only a small number of workers, all of whom do not agree on a work schedule change to add Saturdays, Shouldice should continue its present work schedule and not add Saturday operations. Additionally, adding a floor to the current facility would greatly change the working dynamics of the hospital and the quaint environment in which the patients and staff thrive. Adding a new floor and Saturday operations may add revenue but it would take away from all that Shouldice stands for. As the case states, â€Å"‘I’d hate to see the practice split over the issue’† (p. 12). Finally, Shouldice should look into updating and digitalizing its computer systems. This will not only expedite the administrative process but would also lower patients’ waiting time and reduce the stress attributed to masses of paperwork. Patients should be able to fill out all the necessary paperwork one time on a computer and then not be bothered until the procedure. In addition, digitalizing Shouldice’s system would make the brochure sent out to patients (Exhibit 1) a more fluid process. If the form was available on the Internet then there would be faster response times and fewer mistakes. 6. How would you implement changes you propose? Based upon the information provided in the case, it seems as though Dr. Shouldice already has a few places in the U. S. in mind for the hospital (p. 11). We would encourage him to do further research to determine where the best geographic region is according to demand for hernia operations as well as the other opportunities mentioned (eye surgery, varicose veins, or hemorrhoids). Dr. Shouldice must also consider the cost of building a new facility and future revenues derived from greater capacity. In order to protect the surgery that has made the hospital so famous, Dr. Shouldice would need to apply for patents through the provincial government. Moreover, it would be wise for Dr. Shouldice to apply for patents in the U.S. as well before he begins operations there. Taking the necessary steps to obtain a patent would secure Shouldice’s unique surgical procedure and their future success. Although Shouldice currently handles all of their own operations, it is necessary for them to hire an advertising agency to launch a new campaign. An advertising agency has much more experience and knowledge about best practices and with the guidance of the administrative staff they could work together to achieve the desired outcome. Shouldice should consider advertising for their U. S. facility as soon as an expansion plan is completed and for their Toronto facility as soon as the U. S. facility is open. This would promote awareness among U. S. patients prior to the opening of the facility and give the Toronto facility enough time to phase out some existing U. S. patients. A test period of six months should be implemented and if the advertising proves successful then further implementation and changes can be made. The first step Shouldice should take to implement a new computer system is to find a company who provides the services they are looking for. Then the two sides would need to work together to develop computer software that fits the specific needs of Shouldice. Next, employee training would be required to familiarize all necessary parties with the new system. Then, a test period would be needed to ensure that the computer software was working properly and that all employees knew how it worked. Finally, the old system Shouldice currently uses would cease to exist and the new system would be fully implemented.

Women Empowerment free essay sample

Curriculum and Gender Question : The Indian Experience, Saroj Pandey ( Senior lecturer, DTEE, NCERT, New Delhi) , Social Action, Vol. 46, Jan-Mar. 1996, p. p. 340-347 This article explores the development of the curriculum in formal educational organisations from the point of view of gender equality, tracing back the historical antecedents,. It comments on the pre-independence and post independence status of womens education. It discusses recommendations made by various committees formed for womens education after independence. While appreciating the absence of visible curriculum differentiation, it states that gender inequality still persists in a social form. The article emphasizes that there is a need for sincere and sustained efforts to improve status of women in India. Equality Mishra, Sweta , Women and 73 rd Constitutional Amendment Act: A Critical Appraisal , Social Action, Vol. 44, 16-30, (1997) This paper begins by briefing about the marginal position occupied by the indian woman in the society and also in the political process due to socio-economic constraints. We will write a custom essay sample on Women empowerment or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It outlines the evolution of the Panchayati Raj Institutions (PRIs) against this backdtrop. It then gives a brief account of the position of women in the PRIs before the 73rd Constitutional Amendment Act. Finally, it examines the probable role of women in the context of the 73 rd Amendment Act. It examines whether women will be able to exercise political power through this system, what hurdles are there on their way, and finally how they can overcome these? Mrs. Sweta Mishra is a Research Scholar, Department of Political Science, University of Delhi, Delhi. Gender equality through reservation in decision-making Bodies, By Shashi. S. Narayana. Social Action 1998, Pg 147 This article discusses the need for political empowerment of women through reservation in its decision making bodies like parliament, and state legislature in the same line as at ‘Panchayat’ (village) level in India. The current economic and socio-political maladies along with increasing violence against women and children are attributed to the failure of male oriented polity. Representation of women in higher bodies of political authority has been considered a prerequisite for the success of democracy at the grass-root level. However the need for accountability and sense of commitment on the part of the elected women representatives is stressed. This requires a higher degree of awareness among women regarding health, literacy, gender and other relevant social, economic and political issues. Law and Gender Inequality : The Politics of Womens Rights in India. , Flavia Agnes, Oxford University Press, 1999, This book explores the issue of gender and law reform with reference to the politics and history on India. It also explores the strategies, which could safeguard the of womens rights in a country like India, which has a typical social, cultural and political background. The book is divided in four parts. First part contains five chapters and speaks about Pre-colonial and colonial Legal Structures. Second part comprises of three chapters, and explores the post-independence developments. Third part of the book which consists of two chapters explains the Developments in the personal laws of non-muslim minorities. Fourt and last part of this book contains the analysis of the current trends of the debate on the Uniform Civil Code. Off the Beaten Track: Rethinking Gender Justice for Indian Women by Madhu Kishwar OUP, New Delhi: 1999 Madhu Kishwar is an influential participant in the womens rights and human rights movements since the 1970s and is the founding editor of Manushi a journal about women and society. This volume is a collection of some of Madhu Kishwars best and most controversial essays concerning topics central to womens issues in India today: the role of marriage payments and dowry, unwanted daughters, denial of inheritance and land rights to women, love, sex and marriage, sexual harassment, identities, beauty contests etc. Many of these offer a critical appraisal of Madhu Kishwars activism and engagement. The essays are an attempt to grapple with one of the most serious challenges to women in India: Why is it that inspite of all the high profile attention on womens issues many remain unresolved? Most of the work thus far has resulted only through symbolic actions such as passing of laws, which very often are inappropriate and not implemented. In most cases where laws are misused it contributes to increasing the vulnerability of womens lives. The volume also deals with Madhu Kishwars moving away of ism-driven politics and orthodox feminist thinking. The essays reject statist interventions in social reform and appeal to peoples consciences to bring about any meaningful changes in the position of women. Gender Justice and The Supreme Court by Indira Jaising in Supreme but not Infallible: Essays in Honour of the Supreme Court of India B. N. Kirpal, Ashok H. Desai, Gopal Subramaniam, Rajeev Dhavan and Raju Ramachandran (eds. ) OUP, New Delhi 2000 (pages 29, words 199). Indira Jaising is a Senior Advocate of the Supreme Court of India. She has been a fellow of the Institute of Advanced Legal Studies London and is Secretary of Lawyers Collective which deals with socio legal issues of public interest. This essay traces the evolution of gender justice in the Supreme. Before taking up judicial decisions concerning issues that involve womens rights, the author draws attention to the composition of the judiciary and its starkly unrepresentative character. Through an analysis of cases dealing with property rights to women to cases of violence against women, the essay addresses the problem of formal equality and the evolution of equality jurisp rudence in the Indian Supreme Court where sameness and similarity form the criteria for classification. One of the recent cases (Vishakha vs. State of Rajasthan) where the Supreme Court has considered provisions in CEDAW to address sexual harassment in the workplace is also discussed. While some recent decisions do indicate a positive step towards gender justice the unevenness in this development is attributed to a greater emphasis on criminal law as opposed to civil law, leading to a neglect of womens economic rights. Finally, the essay points to emerging issues concerning validity of personal laws, womens representation etc. which will engage the courts and it is felt that an increasing number of women in the judiciary will be able to perceive women as autonomous decision makers and active participants in public life. Identifying Gender Backward Districts using selected Indicators, Preet Rustagi, Economic and Political Weekly, Vol. XXXV, No. 48, November 25 — December 1, 2000, pp. 4276-4286 The article identifies gender backward districts among fifteen major Indian States — Andhra Pradesh , Bihar, Gujarat, Haryana, Himachal Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal — based on 13 gender sensitive indicaters — such as demographic, educational, health related, socio-cultural and economic levels of development. The assesses the relative levels of backwardness or development, ranking based exercise on individual indicators. The study limits itself mostly on secondary data from 1991 census, 370 districts have been taken into consideration. The study indicates female to male ratio (FMR) as a demographic variable. Female literacy serves as basic indicator of educational status. The health related variable is mortality rate. The data source used for the study are : the census of India, 1991, mortality estimates from Rajan and Mohanchandran (1998) and UNFPAs calculated data on fertility and female age at marriage. The paper undertakes detailed state and district wise discussion on each of the selected indicators under separate heads. Through the study mekes no attampt to look at transition overtime and only focus on rural areas, however its significance lies on its methodology that reinforces two points — one disaggregated analysis and second significance of looking at different aspects of gender development. The findings of the study concludes that no state or district exhibits a uniform pattern of backwardness or development in terms of gender sensitive indicators. Gender gap in Literacy in Uttar Pradesh : Questions for Decentralised Educational Planning, Lori Mcdougall, Economic and Political Weekly, Vol. XXXV, No. 19, May 6-12, 2000, pp. 1649 The paper on gender differences in literacy attainment in Uttar Pradesh, 1951-91 reveals significant regional variations in female achievement and the gender gap. A case study of changing spatial patterns in the literacy gender gap within Uttar Pradesh illustrates national statistics on regional gender and caste inequities. The paper raises questions for further study about the ability of decentralized planning to promote educational equality and its threats to community cohesion. The study is mainly based on female and male literacy rates as reported by government of India census data collected in 1971, 1981, and 1991. It analyses total female literacy rates per state and district, comprising both rural and urban. Uttar Pradesh has high female literacy and gender gap and is a big state of 140 million people. The study covers status of literacy in northern and eastern parts of the state and influence of religion, urbanization and income on literacy rate and emphasis of history, social relations and politics on the female literacy level and gender gap in state. The study illustrates female literacy rate in both national and state maps and comparative study in graphs. The study is supported by relevant statistics. Representation for women, should Feminists Support Quotas, Meena Dhanda, Economic and Political Weekly, Vol. XXV, No. 33, August 12, 2000, pp. 2969-2976 The author in this paper a defence of gender quotas in legislative bodies and debates on potential political and socio-cultural consequences of the institution of a gender quotas in the Indian parliament by a constitutional amendment and provides justification for the use of a gender quota in legislative bodies. Author offers consequential argument in section I of the paper. In section II she emphasizes on concept of the public sphere and idea of acting in solidarity with women presupposed in the debate and in section III, she elaborates on her perspective on identitarian justification of gender quotas and compares her justification with support for gender quotas from the argument for ‘a politics of presence’ in section IV. In a concluding section of the paper she derives an answer to : Should feminists support the womens bill for an amendment to the Indian constitution that has provided 33% reservation for women in the Indian parliament and state legislature? Equality of Opportunities vs Equality of Results, Improving Womens Reservation Bill, Madhu Kishwar, Economic and Political Weekly, Vol. XXXV, No. 47, November 18, 2000, pp. 4151-4156 In response to Meena Dhandas article, representation of women should Feminist support Quotas, the author expresses her view point on the same. She argues on the improvements she has proposed to the original Womens Reservation Bill and reasons out its shortcomings. She further refers to impact caste and gender has upon women politicians and their insensitivity to womens concerns. The author states the salient features of the Alternative Bill and presents its advantages. The article presents statistical data analyzing gender advantage in Lok Sabha elections since 1952 and statistic on comparative performance of men and women candidates of recognized parties in Lok Sabha elections. Chatterji, Angana , Women in Search of Human Equality , Social Action, Vol. 40, 46-56, (1990) This paper attempts to situate women in the present context of national development, to assess their condition since the changes in their status and study the link between economic progress and the class to which the woman belongs , for studies have indicated that there is a close connection between the two. In order to analyse it, the paper first identifies the problems in the path of womens equality. After an overview of awareness of their situation among various classes of women, the paper ends with a view of the future and the possible solutions. Angana Chatterji is Research Assistant in the Department of Research, Indian Social Institute, New Delhi. Sarkar, Lotika, National Specialised Agencies and womens equality , Law Commission of India (CWDS), 1998 The report examines the role of the Law Commission of India (LCI), assesses its contribution to womens equality and identifies ways of improving that contribution. Specialised agencies like the LCI were recommended by the UN Commission on the Status of Women to play a multiple role in eliminating womens inequality. The first chapter of the book deals with the genesis of the LCI and the second chapter with its composition, status and functioning. The report, cextly deals with women specifi creports of the LCI which includes topics like, married wimens property, mrape,etc. the latter part of the same chapter deals with family law related topics like Gindu Marriage Act. Finally , the report concludes with catious recommendations like as per Indian laws a mother is continued to be treated as comng onl after the father as a natural grardian of a minor child is against the recommendations of the UN Commission on Feminist Theory The History of Doing, An illustrated Account of Movements for Womens Rights and Feminism in India, 1800-1990, Radha Kumar, pp. 197. The book is about the use of feminist movement in India. It notes the historical context of the movement and gives an account on the struggle of the radical thickness and social reformist, who first raised issues of womens fundamental rights. It gives an account of womens participation in freedom struggle and the emergence of the feminist movement as a process. The book reviews contemporary feminist movement and analysis the issues caused on dowry deaths, rape case and practice of sati. It present selective survey of major campaigns, organizations and figures defining issues that were raised and fright, photographs, old and new documents, excepts from letters, books and informal writings, case history of social activist makes good an interesting reading. It is a brief , interpretative account on history of womens movement in India, both pre and post independence period. Gender and Politics in India Edited by Nivedita Menon, Delhi, Oxford University Press, 1999. This volume presents an overview of feminist theory and politics in India. The introductory chapter provides an outline of the issues involved and the importance in explaining the politics of gender in India. The essays focus on different aspects of feminism in India, and debates on various issues like environment and gender, the impact of technological change on women work force, interpreting constitutional guarantee of ‘right’ to equality with gender perspective; different womens movement and the challenges encountered; and sexuality and gender. The section on environment and gender discusses Vandana Shivas concept of ‘Eco-feminism’. The ‘work’ section highlights structural adjustment and its impact on women, whereas the ‘law’ section suggests ‘reconceptualization’ of equality in view of womens subordination. The problem of a contemporary theory of ‘gender’ in the perspective of present socio-cultural change in Indian society has been highlighted. Girl child Girl Child in Indian Society Mita Bhadra (ed. ) Rawat Publications New Delhi: 1999 (words 200) Mita Bhadra is Senior Lecturer in the Department of Sociology and Social Anthropology, University of North Bengal, Darjeeling. Her area of research includes industrial sociology, gender studies and social change. The main focus of this collection of seven articles by a variety of authors is on the prevailing inequalities, discrimination against the girl child and her gender marginalisation. It presents information on the social status of the girl child in India including child labour and child prostitution. The volume also discusses the various laws enacted to secure the rights of the girl child in India. The first article deals with declining sex ratio, under nourishment, child marriage, female foeticide and the SAARC Plan of Action and the Government of Indias initiative to improve the status of girl children. The second paper deals with gender stereo-typing, prejudices, girl child abuses etc. The third and fourth papers deal with the exploration of situations under which the girl child is living. The fifth article touches upon issues of child marriage, which is rooted in traditionality and illiteracy, and its impacts. The sixth article focuses on child labour as and its impact on health. The seventh paper deals with various laws with reference to child prostitution as well as the living conditions of victims of such exploitation. The volume promises to be valuable to social researchers as well as for planners and policy makers. Kanya: Exploitation of Little Angels by Dr. (Mrs) V. Mohini Giri, Gyan Publishing House, New Delhi: 1999 Dr. (Mrs) V. Mohini Giri is former Chairperson of the National Commission for Women and has been spearheading the cause of sex workers and other marginalised sections groups among women. This volume on children prostitution deals with almost all relevant issues from prevention of child prostitution, to rescue and rehabilitation, awareness and social mobilisation, health care, housing and civic amenities, economic empowerment, legal reform, law enforcement trafficking and other human rights issues. The volume also informs of relevant national and international legal provisions including the 1949 Convention on the Suppression of Traffic in Persons and the Exploitation of the Prostitution of Others (Trafficking Convention) and CEDAW for the protection of the girl child from prostitution. It provides valuable insights into the system of exploitation as most of the instances cited are from Dr. Giris experience in the course of her work in the field of womens human rights. The volume also makes valuable recommendations for improving the condition of child prostitutes, many of whom come from the most disadvantaged sections of Indian society. The recommendations lay great emphasis on the active involvement of civil society groups and local level administrative authorities as it recognises the import of public support for the effective implementation of any such social legislation. Sreenath Lalitha, Victimisation of girl- child in the home , Journal of the Indian Law Institute, Vol. 38, pg-101-107, 1996 This article is a case comment on the case of Biswanath Das Vs Maya Das, which acquires significance as it highlights the deficiencies and inadequacies that exist in the present legal system, statutory laws, judiciary and Bar- and the Society. The Indian society is still plagued by victimisation of girl child through performance of child marriage despite the forthcoming Beijing Summit focussing on womens right and the affirmation in the UN Declaration of 1989 to which India is a signatory. There is an urgent need for law reform to protect the status and rights of child brides in India. The author points out that the male-chauvinist traditions of patriarchal societies still hold sway over the minds of the judges in courts. Bhadra Mita, Girl Child in Indian Society , Rawat Publications,1999 This volume aims at analysing the situation under which Indian girl children are living and identifying the sexual inequalities within the household and society at large. Emphasis is given to the girl child who should be given her rightful share of human dignity and opportunity- a concept which has found and appropriate place in the Plan of Action for implementing the World Declaration on Survival Protection and Development of Children in 1990s . The papers that have been compiled in this volume , range from those analysing the status of girl child in India to her socialisation process, gender stereotyping, discrimination changing age at marriage, girl child labour , child prostitution, and ameliorative legislations for her status enhancement in family, society and changing trends in these areas. Kishwar Madhu , Where Daughters are Unwanted , Manushi, no-86, Jan-Feb,1995, pg-15-22 The article emphasises the magnitude of the problem of sex determination tests (SDT) in India which has resulted in sex selective abortions of thousands of female foetuses . The state of Maharashtra passed the Prenatal Diagnostic Techniques (Regulation and Prevention of Misuse ) Act of 1988 to ban SDT. But inspite of stringent provisions , due to lack of proper implementation, this law has failed to curb the problem. There are many advocates of SDT, and they believe it will help control the population growth. Scarcity of women does not imply that their life will get better- it is a myth. The author decries the fact that often women themselves prefer a male child as shown from various studies due to social conditioning. The real solution lies in making families realise the value of their daughters, otherwise these SDT will never end. Health and Well Being Na Shariram Nadhi, My Body is Mine, by Sabala and Kranti, edited by Mira Sadgopal, 2 nd Edition 1996. The writers of the book have documented a process of self realization through self-examination of ones body. It potrays a process of self-help training experience in womens health and deals with issues that adversely affect womens health such as class caste and gender oppression in family and society, medicalisation of health, coercive and women targeting policies of the government and social stereo typing. It compiles the experience of eighteen women, in a ten months (Between February 1993 and November 1994) training on self-Help Training in Womens Health based in Hyderabad. The book contents issues related to gender sensitization and health politics of health and population, body politics and beyond fertility awareness and sexuality, gyn-ecological disorders and healing child-bearing support, the Experience documented here are those of dalit, tribal and otherwise marginalized women made out of deliberate choice. Each chapter in the book gives objectives and the mythology used in the training. It also records the successes and failures of the training processes, yet is a friendly and practical guide for seeking alternatives. The form of the book is simple and illustrative. The illustrations in book reflects the experience and insight of the participants. Mental health from a gender perspective, Edited by Bhargavi. V. Davar, New Delhi, Sage pub, 2001, pp. 427. This book is the compilation of a number of papers presented at a seminar on gender and mental health in 1995, and is an effort to understand the politics of the mental health discoursed from a gender perspective. The book is divided into four parts: part 1 reviews the issues involving women and mental health in India- clinical psychology; the social and cultural ambience; the contributions and the limitations of the interested parties. Part 2 deals with mental health issues related to body, reproduction and sexuality. Part 3 covers sexual violence, child abuse and mental health whereas the part four deals with inter-phase between gender and social institutions like hospital, court and media. Labour and Employment Women and Sexual Exploitation: Harassment at Work by Rehana Sikri, Kanishka Publishers, New Delhi: 1999 (149 words) The work, taking cognisance of the increasing number of women in the total workforce of countries of the world and the consequent emerging patterns of social interaction views the work place as a new domain of conflict in the running battle of the sexes. As the work presents a comprehensive profile of the working force in India drawing upon data from decennial Censuses, National Sample Surveys and small scale socio-economic surveys, it includes womens occupational profile as well as the social mores and family values that determine behavioral patterns specifically in the workplace. These survey results are analyzed for a further interpretation of the components of sexual harassment and male-female relationship in the workplace. Working womens search for identity is also addressed in the context of the traditional pattern of gender and sexual exploitation. The book brings out the distinctive and alarming aspects of gender confrontation and its sociological significance. Kishwar, Madhu, Sex Harassment and Slander as weapons of subjugation , Manushi, no. 62, jan-feb-92, pg-2-15 In this paper the author focuses on the more insidious and routine forms of sexual harassment women have to deal with when they step into the world to earn a livelihood or take part in social, political and educational activities. The segment of society chosen is university students and teachers from middle class. Real life experiences have been recounted which show how men use aggressive sexual encounters to maintain dominance and control and how and why women are forced to suffer such behaviour . Steps towards protecting women from sexual harassment are suggested, to bring a meaningful change in womens currently powerless and vulnerable position. Also, sexual slander is used as a weapon to keep women in a perpetual state of fear, the fear of losing izzat (honour) in a way that can affect a womans very chance of survival and result in loss of family, job and being a social outcaste. Exploitation of Domestic Women Workers : Case Studies from Karnataka, Kerala and Tamilnadu, Social Action, Vol. 43, April-June 1993, p. p. 235-241 This paper is an offshoot of a study conducted on the problems of women in the unorganised domestic sectors in the states of Karnataka, Kerala and Tamilnadu The purpose of the study is to portray the exploitation of domestic women workers. It emphasizes that the structure of the family affects exploitation directly as well as indirectly while stay with the employer results in direct exploitation. It suggests that economic support and skill training to the women of the non-familial structure, may enable them to be independent and self reliant. Women Making a Meaningful Choice — Technology and New Economic Order,Nirmala Banerjee Swasti Mitter, Economic and Political Weekly, Vol. XXXIII, No. 51, December 19, 1998, pp. 3247-3256 The paper address two contemporary issues, one related to Indian working womens response to technological changes and globalisation; and second relates to the impact of these changes on womens work in India. The reference used in the article published secondary material and documents of the grassroots experiences of NGOs that are currently engaged in women workers in the formal and informal sectors. The documented material is of the selected NGOs from eight Asian countries between 1994 and 1996 that United Nations University Institute for New Technologies (UNU / INTECH, Maastricht, the Netherlands) had commissioned. The paper focuses exclusively on India with emphasis on demands, concerns and aspirations of Indian working women with respect to technological changes as reflected in those commissioned reports. The study examines women of diverse background and their co-relation with changing technologies in the past and present, in different regions and industries of the country. The paper further analyses the position of Indian Womens movement in context with womens traditional role in the society. Employment of Women and reproductive hazards in Work Places , By Neeru Sehgal, research scholar( Delhi university), in Journal India Law Institute, Vol. 29, (1987), pp. 201-215. Treatise examines exposure hazards of toxic substances on fertile, pregnant mothers, discriminatory, exclusionary practices against women by employers to avoid legal, moral accountability. Probes instances of transfers to low paid jobs, self inflicted sterilization, law amendments introduced in U. S, disparate treatment on women, safety measures, foetal protection, medical screening. It cites instances and court judgments. It examines Indian perspective of the problem in developing countries and also examines Indian factories act in disallowing women from doing hazardous jobs, timings prescribed for women, hazards in industries of tobacco, cotton, agro based etc. Probes studies of India council of medical research on expectant women exposed to toxic substances in worlds worst industrial disaster Bhopal gas tragedy involving a multinational. Examines employers responsibilities, government role, duty to protect the interests of women under article 39(e) of the Indian constitution, need to have regulatory framework for multinationals seeking to operate industries in India. Marginalisation of Women Widows in India: Social Neglect and Public Action by Martha Alter Chen (ed. ) Sage Publications, New Delhi: 1998 Martha Alter Chen is Development Advisor, Harvard Institute for International Development and Lecturer, Kennedy School of Government at Harvard University in the USA. A specialist on gender and poverty, she has worked on South Asia and is author of A Quiet Revolution: Women in Transition in Rural Bangladesh and Coping with Seasonality and Drought. This volume aimed at a better understanding of the status and condition of widows as a marginalised group of Indian society is a result a workshop and a conference at Bangalore in 1994. The first was an informal gathering of 25 widows and 10 activists while the conference included 65 activists, scholars and policy makers who had experience on issues relating to widows. After these events, a network of widows and activists was established and a two year action plan launched in six states to ensure rights and dignity to widows. The papers in this volume, most of which were presented at the conference are grouped into six broad sections. Three papers explore the ideological construction of widowhood in India including patriarchal constructs, the practice of levirate and property rights under customary and modern statutory law. Two papers deal with the demographics of widowhood with reference to mortality and aging. The other four themes include property rights, social security, employment and social identity based on case studies of actual practice and individual histories. The author also provides a framework for analysis of widowhood in India, which includes concepts such as Patrilocality, Patrilineal Inheritence, Remarriage Practices, Employment Restrictions, Maintenance and Social Isolation. Marriage and Family life Enslaved Daughters, Sudhir Chandra, Oxford University Press, Delhi, 1998; This monograph discusses the Rakhamabais case, the first case filed in 1884 for restitution of conjugal rights and in detail. It also discusses the repercussions of the case on the society. Rakhamabai wedded Dadaji at an age at which she was incapable to give a wise consent. She refused to be obligated to a marriage solemnized when she was only eleven. During the eleven years of their unconsummated marriage she had grown to develop a strong dislike and argued that she was not bound to go to Dadaji. Dadaji moved the Bombay High court for the restitution of his conjugal rights, which resulted in strengthening her determination to resist the autocracy of indigenous social authority and colonial legal dispensation. Status of Women and Social change, By B. Sivaramayya in Journal of Indian law institute, Vol. 25, 1983, pp. 270. The author looks at ancient shastric Hindu law in matters of rights of women; sati practices, the involvement of the British in enacting laws to protect womens social status. It examines views, interpretations of courts, legislature in matters of bigamy, conjugal rights, inheritance, divorce, maintenance under Hindu marriage act and Muslim personal laws. It also looks at the Muslim community views. It examines the provisions of criminal procedure code and the Indian penal code in relation to above topics. This article cites instances, circumstances of litigation and court interpretations and views. In this article an attempt is made by the author to critically examine the social status of women by way of legislation, judicial interpretations and processes. Chowdhary Prem , Widow Remarriage in Haryana , Manushi, no. 82, May-June 1994, pg-12-18 The article explores the apparently progressive practice of widow remarriage in the state of Haryana in India which has several possible repressive aspec

Show How Transactions in Derivatives Can Be Used to Either Hedge Risk or to Open Speculative Positions. Essays

Show How Transactions in Derivatives Can Be Used to Either Hedge Risk or to Open Speculative Positions. Essays Show How Transactions in Derivatives Can Be Used to Either Hedge Risk or to Open Speculative Positions. Essay Show How Transactions in Derivatives Can Be Used to Either Hedge Risk or to Open Speculative Positions. Essay Economics of the Financial System Show how transactions in derivatives can be used to either hedge risk or to open speculative positions. Derivatives have become popular in response to the increasing volatility and complexity of financial markets. A diverse range of new financial products have been created to enable market participants to handle the risks arising from trade in securities and to speculate on future expected movements in securities prices, without direct trade in the assets themselves. Derivative contract creates a promise to deliver or trade an underlying product at some time in the future. The contract gives one party a claim on an underlying asset or cash value of the asset, at a fixed date in the future. The other party is contractually bound to meet the corresponding liabilities. Financial derivatives are traded on organized market such as LIFFE (London International Financial Futures Exchange) and through the intermediation of the clearing house system, there is more flexibility of exchange, and the risk of credit default is reduced. The two parties need not know each other they only have to satisfy the exchange that they are creditworthy to transact. The initial purpose of derivative contracts was to allow traders to hedge risk which they faced in the cash market. Two of the most popular derivative instruments are financial futures and options. Financial futures commit the parties to buy or sell underlying assets at set prices on an agreed future date. The benefit of financial futures in its most basic form can be exemplified by a poultry farmer who is worried about the risk of price fluctuations in eggs for instance. He knows in 8 months he will sell a certain quantity of eggs. He can hedge against this risk by selling (going short) an eight month â€Å"future† in eggs. The â€Å"future† will consist of a standard amount of chicken to be exchanged in eight months, at an agreed fixed price on the day the â€Å"future† is sold. The agent buying the eggs goes long, and is bound by contract to purchase the eggs in 8 months. A premium reflecting the risk of price fluctuation would be charged by the agent. If all goes well, the rate of profit on future contract can be very high but not without considerable risk. Investing in securities expose investors to many risks, the most important is the risk of an unexpected fall in the value of an investment. Likewise, not investing also exposes them to opportunity risk; the risk that future prices of portfolio of asset would rise thereby making it more expensive to acquire. Derivatives market offer investors an efficient way of managing some of the risks incurred in investment by purchasing derivative instruments. This allows them to attain desired adjustment to risk without having to trade in the underlying securities and sometimes gaining a profit. Hedging has become increasing popular as it helps investors to protect against the future value of their portfolio. An investor with a portfolio of cash, bonds and shares can take out a hedge to protect the future sale price of her portfolio by selling a corresponding amount of the appropriate futures contract. Risk could be hedged through options or future contracts. Hedging through future contracts involves taking a position in financial futures contract that will incur a gain to offset a loss in their existing investment portfolio. For example, Amana Mutual Fund manages a large portfolio of stocks. The portfolio manager speculates the prices of stock will fall over the coming month but will increase again after that time. They would like to hedge their portfolio against a loss over that period. A stock index futures contract with a month to settlement date is offered on the Dow Jones Industrial Average stock index at an index level of 20,000. Amana chooses to sell a futures contract on this index because it reckons that this index is strongly correlated with its existing stock portfolio. In a month, at the stipulated settlement date, Stanford will purchase the same contract. If stock prices plunge over this period, the index will fall as well, and so will the futures contract on the index in response. Amana will profit on its future position, because the future price paid at which the index is sold will be less than price paid for the index at settlement date. After a month, the stock market falls as anticipated, and the futures price of the DJIA is at an index level of 19,000. DJIA futures contract are rated at ? 10 the DJIA index, so Amana stands to gain. Sold DJIA futures for 20,000; receives 20,000 times ? 10 =? 00,000 Purchased DJIA futures for 19,000; owes 19,000 times ? 10 =? 190,000 Gain is ? 200,000 ? 190,000 = ? 10,000 This shows that Amana benefits from selling a DJIA futures contract. Amana has gained from a market decline, which can partially counterbalance the loss on its existing stock portfolio. However, to hedge a huge stock of portfolio, Amana would have to take a short position that had a value equal to the size of its entire stock po rtfolio. Options give one party the right, but not the obligation, to buy (or sell) at a set price on an agreed future date. Future Contracts are a means of avoiding risk but at the cost of eliminating opportunity. A trader may prefer to hedge risks through options so he can take advantage of an unexpected upswing. If hedgers of an equity portfolio sell futures contracts against their position to protect their portfolio and see the stock market go up rather than down as they presumed, they would not be able to take advantage of the upswing. It is therefore advisable to use future contracts when the investor is certain of future outcome as the contract fixes the value of an asset. However, hedging via options is more expensive as it protects from downside loss while leaving upside potentials open with the right but no obligation to purchase asset at a fixed price. Derivatives allow firms to hedge against security prices and interest rate movements, the latter being the most actively traded future contract used by banks and treasury managers. A pension fund manager holds an equity portfolio which closely resembles the US stock market in its compositions. If he thinks the US market is going to fall and wishes to turn his portfolio into cash. He has two choices, he could either sell shares which would not be as profitable because share prices might be depressed if it is a large portfolio plus it is time consuming. Or she could simply sell stock index futures against her portfolio. If accurate, the loss incurred on her equity portfolio will be counterbalanced by a profit on her financial futures position. Derivatives reduce the cost of protection through sophisticated risk management. Firms that are adversely affected by interest rate movements can take particular position in derivative securities to offset the effect of interest rate movement thereby reducing risk. By coming into a ‘forward rate agreement’ a company treasurer can fix the cost of borrowing which will be required on some future date, thus avoiding the risk of fluctuating interest rates in the prevailing period. Interest rate future contracts can be used to match the interest rate characteristics of the bank’s asset and liabilities portfolios. Market makers can hedge the risk resulting from significant positions in equities or bonds by buying offsetting contracts in equity or interest rate futures. Interest rate futures specify the amount of the notional bond and its interest- rate coupon, for instance a ? 50,000 nominal 15-year treasury bond with a 10 per cent coupon. Traders using futures to hedge against risk to which they are exposed in the cash market are seeking to lock into existing exchange or interest rates on future transactions. Once a firm has traded out of its open position in the cash market it no longer needs the hedge in the futures market. Howe ver, the use of futures to hedge to hedge against interest rates for instance can give rise to basis risk. Basis risk is the risk that fluctuations in future prices will differ from movement in the price of risk being hedged. Firms are also faced with exchange rate risks, in the absence of fixed exchange rates or monetary unions, firms must take action to protect themselves against these risks by taking out contracts which carry the opposite risk to that which they face in the underlying market. Another advantage of financial futures contract is that they offer both traders and investors the ability to take a short position in the underlying security; sell something they do not have. Traders may think a financial market is falling, by selling future contracts and buying them back later after the price has fallen they would be able to gain profit in a bear market. Derivatives help to combat adverse effects of volatile commodity prices on the economy as forward prices tend to be less volatile than spot prices. Since the spot price of a security can be offset by the sale of future contracts, the risk of holding securities is neutralized. Hedging is the basic motivation for a lot of businesses trading in financial derivatives market. Nonetheless, speculation is just as popular as derivatives allow firms and investors to take positions in the securities on the basis of their expectations of movements in the underlying financial asset. In other words, derivatives are instruments that allow market agents seeking profit gain to gamble on movements in the prices of other instruments without being required to trade in them. Furthermore, speculation provides liquidity in the markets and enables it to operate efficiently. Speculative positions are required to offset any imbalance which may arise from hedging transactions, and active speculation in response to small price movements ensures that any temporary imbalance would not lead to a drastic price change thereby reducing volatility. Derivative markets respond to information quicker than cash market. Therefore it allows speculators to predict with accuracy cash market prices and return of their investment. For example, a speculator who presumed that interest rate was likely to rise or a currency’s value decline would go short in the particular asset by selling a future contract. Derivatives permit traders to build an open position with speed, traders usually close this position when they have achieved profit objective. If anticipated profits are unlikely, they cut losses before delivery date. Investors could either purchase call or put options for speculative purposes. Call options are bought by investors who speculate a rise in price of underlying stock. An investor pays the option premium and becomes the owner of a call option he is entitled to the right to purchase stock at the exercise price up to the time of expiration date. The advantage of this is that investors have secured a price to be paid for stocks and therefore gain a profit in secondary market of stock prices rise. Tayo purchased a call option on British Telecoms (BT) Plc. for $3 per share, with an exercise price of $75 per share. She decides to exercise her option at the expiration date if the market stock price is above $75 at the time. Tayo wants to find out what her possible profit outcomes are per share under the different prices of Boots plc. stock. Possible Outcomes for Investment in a Call Option Possible price of boots plc stock at expiration($)| Premium paid($)| Amount Received from Exercising Option($)| Profit share from investment($)| 71| 3| Option not exercised| -4| 76| 3| 1| -2| 78| 3| 3| 0| 82| 3| 7 | 4| 85| 3| 10| 7| At any price above $75 but below $78, Tayo will exercise the call option but make a loss. For instance, at the price of $76, she can exercise the option by buying the stock at $75 and selling them for $76. However, with a premium of $3 to be paid, she incurs a loss of $2 on her investment. At the price of $78, tayo breaks even and at any price beyond that she makes a profit from this call option. On the other hand, put options are purchased by investors who expect a fall in price of assets. The contract is set at a predetermined rate lower than the current market price, so if prices do plunge further investors earn a profit from put option. This leverage allows speculative investments to be used to take advantage of specific profit opportunities or to insure a portfolio against risk. For an options contract, there has to be a corresponding seller (or writer) to the purchaser of an option, who is prepared to accept the increased risk exposure and the premium has to be large enough to compensate risk. The buyer of a call option acquires the right to buy specified instrument. For example, an investor who speculates that euro will rise against the US dollar could buy a euro surplus giving the right to buy euro at a specified price, say $0. 60 =? 1. If the spot exchange rate were to rise to $0. 68 =? 1, the option holder could acquire euro at $ 0. 60 under the terms of the option and sell them in the spot market at $0. 68. As the price of the underlying product rises, so too will the profit that can be made from exercising the option. The buyer of a call option thus assumes a long position in the underlying product. Swaps are a huge market. The first major example of a derivative trade occurred between the World Bank and IBM in 1983. The World Bank was lending in Swiss Francs and wanted to borrow in Swiss Francs, but it had depleted all its borrowing options, hence it faced rising costs. On the other hand, IBM was a dollar borrower but had never borrowed in Swiss Francs as it had no use for the currency. Nonetheless, Salomon Brothers, the investment bank set up a deal with IBM because IBM could borrow Swiss Francs at a cheaper rate than the World Bank could, so both institutions borrowed currencies they did not need. IBM in Swiss Francs and World Bank in dollars, this was done simultaneously and they converted proceeds into currencies they did need. Salomon Brothers was the ‘writer’ of the debt obligation and because of their dealings with each other; both institutions faced a lower interest rate. All of the above gives evidence that derivatives are a powerful instrument in combating risks and making profits from speculation amongst other. However, Warren Buffet warns that derivatives are not without its curses. He likens derivatives to â€Å"hell†¦. easy to enter and almost impossible to leave† and states that increasing trade in it pose a mega-catastrophic risk for the economy as it pushes companies onto a ‘spiral that can lead to a corporate meltdown’. For example, derivatives trading were held partially responsible for the collapse of the stock market in 1987. The story being that stock market trader anticipated a decline in the price of stocks that weekend. Immense orders to sell were made at brokerage houses and many traders automatically sold futures in shares of major corporations. This panic and wrong speculation destabilised stock markets and contributed to the volatility of the cash market. An example closer to home is the losses of ? 91 million made by traders at NatWest Capital Markets (the investment banking arm of the National Westminster Bank in London) in 1995 and 1996 on deutschmark and sterling options. In Conclusion, financial derivatives , although not without faults, has become a major global growth industry as financial agents have become increasingly assertive and innovative in their use of futures, options and swaps to hedge risks and take speculative positions. 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