Marketing plan for Commonwealth Bank Essay

Commonwealth Bank is the largest of Australia’s big four financial service providers. At present, the Bank offers a range of award credit cards to, both, retail and corporate sectors. Profitable growth in retail and corporate card segments is a key part of the bank’s strategic direction. The main differential between cards is centred around fee structures, with little difference between them that is obvious to most consumers. The award scheme points can be redeemed for air miles, gifts and vouchers. Under this initiative, the Bank plans to set itself apart from the rest by launching a new credit card, which will allow clients to assign their award points toward a not for profit organisation. This initiative also creates a whole new paradigm within which cards are compared by prospective consumers, and puts the Bank at the very fore front of the credit card market. This card is unique, and is not currently available from other financial service providers in Australia. Research indicates there is a high demand for a socially responsible and ethical approach to banking. As such, the new card appeals to the growing philanthropic market in the retail sector. For the corporate sector, it reflects positively on their contribution in the community. CBA will utilise its current market penetration, strong brand image, management experience and distribution channels to ensure the card compliments their existing product suite. Profitable growth, retention of clients and an increased share penetration index have been forecasted as a direct result of bringing the new card to market. CBA has strong brand recognition. It is voted number 59 in the 2010 Forbes â€Å"world leading companies† Top 500 Brands survey (Forbes Magazine, 2010). The bank views its brand as its most valuable asset. Despite CBA having a strong brand image, banks in Australia remain unpopular. Consumers perceive the big four of price gouging; particularly so, as the banks delay or fail to pass cuts in the interest rate. Credit card retention and acquisition, in both corporate and retail sectors, is a key part of the bank’s profitable growth strategy. CBA plans to expand the credit card awards portfolio with a new product. The new card enables retail and corporate clients to automatically transfer award points to cash donations for non -government organizations (NGOs) and charities. This card is to be branded CBA’s â€Å"Community Card†. This positions CBA as a market leader and the first financial institution to introduce such a product into the credit card segment. CBA stands to gain significant competitive advantage. The new credit card stands to assist CBA’s corporate clients with their social responsibility obligations. A Harvard Business Review 2006 article notes â€Å"government, activists and the media have become adept at holding companies to account for their activities. Myriad organizations rank companies on their corporate social responsibility (CSR) and, despite sometimes questionable methodologies, these rankings attract considerable publicity. As a result, CSR had emerged as an inescapable priority for business leaders in every country† (Kramer, 2006) For the personal card holder, it is a vehicle to give back to the community. A survey conducted by Givewell noted that philanthropy is on the rise and estimated that, in 2009 Australians contributed over $1.8 billion total donations (Givewell, 2010). The Australian Taxation office notes that philanthropy is at its highest ever recorded. In the 2010 tax year, there were 4,649,646 recoded deductions for gifts and donations in individual tax returns. In 2009 there were 4,400,786 recorded dedications, a growth of 2.064 per cent in a 12 month period (Australian Taxation Office, 2012) 1.2 Background data on credit card market In the wake of the global financial crisis, many overseas banks have increased their credit scorecards and are reluctant to take on additional unsecured debt. The Australian credit card market is in good shape when compared with these overseas markets. This is due to prudent lending practices and the government’s credit card regulation reforms. Craig James, Chief Economist for CommSec, notes that we have a responsible population when it comes to credit card debt behaviour. â€Å"Aussie consumers pat yourselves on the back – you’ve mastered the plastic fantastic. People are using their credit and debit cards as much as they ever did, but smartly. Aussies are using their credit cards, but paying off the debt by the due date† (James, 2012) 1.3 Competition Strength in market makes the credit card sector a popular strategic choice for growth in the finance sector. Banks are able to charge annual fees and interest rates that generate a high level of profit. CBA’s main cards competitors are ANZ, Westpac and National Australia bank in the retail market and Amex, ANZ and Westpac in the corporate card sector. (Reserve Bank Australia, 2012) Strong competition for business has led to a spike in enhanced loyalty programmes and rewards for new and existing customers. Presently, there are no corporate or personal awards credit cards in the market that allow customers to cash their points as donations, with two main types of award programmes available. The first is the ability to accrue and redeem frequent flyer points for travel. The other allows clients to earn points to redeem gifts such as home appliances, supermarket and, department store gift cards and petrol vouchers. Predominantly, corporate clients opt out of enrolment in awards schemes, due to fringe benefit tax implications for employees. The issue of who owns the points, employer or employee, is one that is yet to be solved. Both external and internal market research has seen a decline in retail clients selecting cards with awards. The majority of customer feedback collected at point of credit card application has confirmed that there is a lack of perceived value in these programmes. 1.4 Distribution CBA personal credit cards are currently sold through the branch network, online and over the phone. A customer is able to apply for, or upgrade a card, 24 hours a day. CBA utilises the same distribution channels for its corporate clients, with the addition of a dedicated relationship manager. 2.0 SWOT analysis The following SWOT analysis helps to understand key strengths and weaknesses of the new credit card. It also describes opportunities and threats of the product, in both, the retail and corporate segments. Strengths Weaknesses * Reputation * Industry experience * Existing market share * First mover advantages * Distribution channels| * Costs of bringing new product to market * First mover risks and disadvantages * Little known about not for profit / community groups (not core business)| * Increased market share * Product embraced by customers / Improved customer satisfaction * Improved brand equity and brand loyalty * Increased profits and shareholder value * Enter new market segments * Convert switchers to CBA| * Changing customer tastes and demographics * Government policies * Product easily replicated by competitors * Threat of substitutes through non-bank lenders (store cards)| Opportunities Threats From the SWOT analysis, the most important issues to consider are: how CBA will adapt the product and remain competitive against substitutes, and other banks copying the product. CBA must monitor the market closely to avoid a price war between competitors. The key opportunities will be capturing new clients in a new market and the competitive learning gleaned from being the first to launch the product. 3.0 Financial objectives Using the 2012 Annual Report as a baseline, CBA has set targets for sales volume, market share and profit for the 2012/2013 financial year. (Commonwealth Bank Australia, 2012) There is strategic congruence of sales targets, marketing strategy and the overarching organizational strategic direction of profitable growth. 3.1 Sales volume * Achieve a minimum 4% growth in new card sales, initiated by branch staff in the retail market before 2012 / 2013 end of financial year. * Achieve a minimum of 3% growth in new card sales from remaining retail distribution channels (phone and online) before 2012 / 2013 end of financial year. * Increase corporate card sales by 5% in 2012 / 2013 financial year. * Migrate 20% of existing non awards corporate customers to the new product by December 2014. * Increase transaction volume of credit card book by 15% this financial year. 3.2 Market Share * Increase retail market share from 32% to 37% in the 2012 / 2013 financial year. * Increase corporate market share from 12% to 17% in the 2012 / 2013 financial year. * Decrease customer attrition rate by 15% across both sectors by the end of the 2012/2013 financial year. 3.3 Profit * Additional $364 million in lending fees collected in late payment and annual fees across from the retail sector. * Additional $453 million in lending fees collected from corporate clients in late payment fees, annual fees and customer maintenance fees. * Increase credit card interest earnings assets from 12.71% yield to 20.00% yield, both sectors combined. 3.4 Break Even Analysis The break even analysis indicates that 500 new cards must be sold across each segment every month to break even. As staffs become more experienced in selling the product and the consumer more familiar, the costs should decrease in line with the experience (Kotler, 2008) curve. Less money will be spent on training employees and advertising. Fewer products will need to be sold in order to break even. 4.0 Marketing segmentation and positioning Both the corporate and retail markets have been divided into segments. Niche marketing was considered due to the specificity of the Community Card however, CBA is prepared to take an educated risk by marketing to a wider group as, internal research indicates, it has a large credit card customer base with homogeneous preferences. â€Å"Aggregate enough minority tastes and you will often find a new market† (Anderson, 2006) 4.1 Corporate market segments * Heavy users and non- users of CBA’s current corporate card offering. * Organizations with a minimum of 50 employees and an annual turnover of a $500k minimum. * Primarily but not limited to white collar industries such as: advertising, human resource management, department stores, large scale hospitality clients (hotels) and travel agents * Organizations with highly centralised purchase decisions. * Companies seeking an edge on their competitors through improvement and / or diversification into social responsibility. * Not for profit organizations 4.2 Retail market segments * 35 – 49 and 50 – 64 year olds with a 54% clustering around the 50 – 64 age bracket. * Annual income in excess of $75k per annum. * Professionals, managers, executives and business people who are accomplished in their fields * People with a tertiary qualification. * Upper middle and upper class. * Native Australians (individually focused as opposed to collectively focused). * Culture orientated and socially aware. 4.3 Target markets People and businesses who want the freedom and flexibility a credit card provides, and have an emotional connection to making the world a better place, or a desire to improve their sustainability image. Corporate: * Corporate social responsibility * Flexible payment options * Ethical * Sustainable image * Community Retail: * Freedom * Flexibility * Social responsibility * Sustainability / give back * Ethical 4.4 Positioning CBA will position itself as Australia’s socially responsible financial services provider with a passion for community. A bank that understands the bigger picture. By being first to market with the new product, CBA signals that it is different from the other banks. It is a bank that is dedicated to offering both retail and business customers an alternative, an avenue to give back to their elected cause, NGO or community group. This position will be enhanced through training its 38,000 employees to act as ambassadors on the features and benefits of the Community Card. 5.0 Marketing strategy and the marketing mix 5.1 Marketing Strategy The first step in the marketing strategy is to make new and existing customers aware of the new product and how it will benefit the community. CBA’s message is that it is the ethical financial services provider, selling Australian’s the chance to give back to the community. The Bank plans to lead by example, offering the new product to its employees at a discounted rate. This will also allow for market testing and feedback. The Bank will communicate this message to its retail clients through local area marketing, television, radio and advertisements in selected newspapers that appeal to the target customer. The message for the corporate client is the same however; relationship managers will target potential clients through business development activities. 5.2 Product The product is to be sub-branded and operate on the MasterCard network. MasterCard is selected as it is accepted in 30 million locations worldwide, appealing to the target market’s desire for flexibility. With the acceptation of the awards programme, the new card has similar features and benefits to the existing suite of awards cards. According to the Innovation Bell Curve (Rogers, 1962), the familiarity of known features and benefits will assist in early adoption. The product will be popular with innovators. It is the first of its kind. 5.3 Pricing The pricing objective for the retail segment is maximum profits. The corporate pricing objective is maximum market share, as previously mentioned CBA only holds 12 percent of the market. Mark up pricing will be used in both the retail and corporate markets. The new product is exclusive as it is the first of its kind, distinctive and there are no readily available substitutes. These factors make both markets less price sensitive. The Bank has selected a high value strategy for the retail market. The annual fee for the card will be $65.00. This fee represents the midpoint in the total cards market. The debit interest rate on the card will be set at 21.59 percent per annum, slightly higher than the total cards market average. Retail customers will view this price as good for them and good for the community. CBA will also use a high value strategy for its corporate clients. The fee structure will differ slightly from retail as it includes a $130.00 annual fee and a $15.00 additional card fee per employee. The debit rate of interest remains the same as the retail card. This will prevent corporate clients from using their personal credit cards to save money on purchases. 5.4 Place CBA’s current distribution channels have significant competitive advantage in the banking marketplace. The bank has more branches; ATM’s and calls centers than any other bank. The website www.commbank.com was recently voted the most visited website in Australia in a report published by Neilson Consulting (AC Neilson, 2012). Given the age demographics of the target market, CBA will leverage off its staff in branches and relationship managers by using a direct to customer distribution model. This provides the opportunity for potential and existing customers to ask questions and clarify any areas of interest. CBA feels this is important to the target market. The Bank’s website is to be updated with a quick fact sheet on the new card, an award points calculator, information detailing the work of the eligible NGO’s and charities, and frequently asked questions. Call center staff are to receive specific training. Upon approval, clients are expected to receive their card within five working days. 5.5 Promotion CBA will reach both target audiences through online advertising on the CommBank website, radio advertisements, and television and newspaper advertisements. Some mass marketing will be used to target corporate customers through direct mail outs. The end of financial year is an important time for promotion in both market segments. In retail, 30 June is when people do their tax returns and claim back deductions for gifts and donations. For corporate clients, the new financial year represents a clean slate and the opportunity to pursue different ideas for the business. When promoting the new Community Credit Card, the Bank will position itself as being unique, ethical, flexible and fair. 6.0 References AC Neilson. (2012, January 15). Most Visited Websites. Sydney, NSW, Australia. Anderson, C. (2006). The Long Tail. New York: Hyperion. Australian Taxation Office. (2012). 2012 Taxation Statistics. Australian Taxation Office. Forbes Magazine. (2010). World Leading Compaines. Austrade. Givewell. (2010). Givewell Statistics. Retrieved october 06, 2012, from Givewell: http://www.givewell.com.au/statistics.asp James, C. (2012). CommSec Economic Insights. Commsec. Kotler, P. (2008). Marketing Management An Asian Perspective. Jurong: Prentice Hall. Kramer, M. P. (2006). Strategy and Society. Harvard Business Review. Reserve Bank Australia. (2012). Bulletin. Reserve Bank. Rogers, E. (1962). Diffusion of Innovations. United Kingdom : Simon & Schuster International .

Game Theories Essay

In â€Å"Game theories†, Clive Thomson contrasts the differences and similarities between the real world and that of the gaming world, through his depiction and analysis of the economics in both environments. To further drive Thomson’s insight, As a group we discussed two main points that are integral in understanding his perspective on the matter. One, the idea of an â€Å"economical pure model,† a scenario that is present in the gaming world as all individuals are born equal. Two, corruption- the idea that venality exists, and can exist the same way in the gaming world. The existence of both of these topics solidifies Thomson’s claims and can be explored through various examples and scenarios. As Smith states, â€Å"people inherently prefer a free market and the ability to rise above others,† a market that is non-existent as the world offers no â€Å"truly level playing field. † As individuals, we are born into an unpredictable environment that varies immensely between people. Whether the variation occurs in status, finance or cultural demographic, it’s impossible to create a baseline where we can interpret all as equal. â€Å"Capital was inherently unfair and those with power would abuse it,† thus there is no â€Å"pristine world† that exists. However, the gaming world offers individuals with the opportunity to begin as equals. There is no advantage to birth in this surreal world, and thus creating â€Å"the world’s first egalitarian polity. This ideal world is enjoyed by the millions of gaming fanatics who enjoy the undoing of â€Å"all the inequities in society,† something which can only be dreamt about in our world today. Ironically, the corruption that exists in our reality is also mirrored in the gaming community. Players can create businesses within the game, whether clean or dirty, a player can acquire currency through their endeavours. For example, certain individuals within the highly popular simulation game ca lled The Sims Online, a player developed a chain of brothels which led to sizeable profit in gaming currency. Another created a mafia that had the ability to red flag other players and eventually push them to be blacklisted leaving them isolated from other fellow gamers. Through the gaming worlds creation of an egalitarian polity we are shown the existence of an economic pure model in a surreal environment. Corruption that exists in society today is also equally present in the gaming world, that which is produced by the player. Both of these topics were openly discussed and used to further empower Thomson’s contrast of both worlds.

Greenwich Printmakers Essay Example | Topics and Well Written Essays - 3750 words

Greenwich Printmakers - Essay Example It serves as the home of a number of significant artists in a national level, promoter of several art clubs, developer of new commercial galleries and annual exhibitions and center for a major art training facility. Majority of its tourist attractions can be found in Central London while one may also find them outside the city centre. The city of London serves as home to St. Paul's Cathedral, where one can find just outside its official boundary the Tower of London and the Tower Bridge. Visitors are brought to the City of Westminster to the west with the Houses of Parliament, and Westminster Abbey, and the Buckingham Palace, which possesses several of London's top museums and galleries. Amongst its attractions are the British Museum, the National Gallery in Trafalgar Square, Madame Tussaud's, and the Tate Britain. Tourist attractions and heritage sites such as palaces remain popular for both visitors and the local people. Often, tourists take some poses with the amazing Horse Guards Parade for a ceremonial photo opportunity, whilst the nearby Downing Street serves as home to the new Prime Minister Gordon Brown who replaced Britain's former, Tony Blair. Meanwhile, the London Borough of Camden, situated at the north of the City of Westminster, features the famous London zoo and the northern end of Regent's park, which are both located inside Central London. Camten Town is located just outside it, serving as a home to the well-known market, which serves as a north attractor. Further to the west are the Royal Borough of Kensington and Chelsea, where one may find the museum district of South Kensington, which serves as home to the Kensington Palace, Natural History Museum, Science Museum, and Victorian and Albert Museum. Many hotels are also mounted in this area, ready to take in a visitor who wants to take a rest from a day's visit of London. The regeneration of South Bank and Bankside areas across the river from the City and Westminster was witnessed by the recent years. In these areas, one may contemplate visiting the Globe Theatre, the Tate Modern, the London Eye, and the London Aquarium. In West London, in the other side of the city, the London Borough of Richmond, featuring Kew Gardens, and Richmond are situated. The Hampton Court Palace may be found on the other side of the river in the southwestern edge of the borough. Also outside the center, in the eastern area of South London, is the Greenwich, a popular tourist destination with the Royal Observatory, the National Maritime Museum, and the Cutty Sark. It is common for many of London's museums to offer free entry while cultural or historic attractions charge an entry fee of anything between '5 to '20 per adult like the St. Paul Cathedral, the Globe Theatre, and the Tower of London. The London Sightseeing Pass offers entry with one ticket to several London Tourist Attractions, which one has to purchase in advance. The Greenwich

The New Jim Crow Essay Example | Topics and Well Written Essays - 250 words

The New Jim Crow - Essay Example have been facing a number of consequences barring them from gaining equal representation in the country which has been posing as a problem especially to those that have been boxed as prisoners. The author writes, â€Å"The clock has been turned back on racial progress in America, though scarcely anyone seems to notice. All eyes are fixed on people like Barack Obama and Oprah Winfrey who have defied the odds and achieved great power, wealth and fame.† An insight has been provided into the Jim Crow laws which in the past had replaced slavery and thus an explanation of how the same is required in order to deal with minority groups of people belonging to different castes so as to not relegate them to a racial status. The main aim of this piece of writing is to renovate the idea of human rights and equality in the minds of people in order to provide justice to criminals as well as make transparent data and information before wrongfully incarcerating

Odani Motohiko, SP2 New Born (Viper A), mixed media in acrylic case Essay

Odani Motohiko, SP2 New Born (Viper A), mixed media in acrylic case (paraffin, steel, reinforced plastic fibers), 2007 - Essay Example The first picture that comes to one’s mind when he/she comes in contact with the Odani Motohiko SP2 New Born is a picture of a sea-horse. To some people, the actual message sent by this piece of art is quite unclear. This has made led to some criticism arguing that Odani Motohiko has answers â€Å"hanging in the air†. It is quite challenging to determine the kind of material used to create this piece of work. This may require an analysis that entails engaging in a physical contact with the art. However, generalized arguments may conclude that it is made from plastic materials or even refined clay soil. Many questions may be elicited when one comes in contact with this piece of work i.e. questions revolving around time, human facets fear et cetera. The artist claims that this piece of work creates a sense of futuristic feeling among viewers. The art also brings a sense of movement, uniqueness, dynamism, transformation as well as speed in the field of art. Research has shown that the field of art and sculpture was almost â€Å"dying†, the essence of the sculpture seems to be regenerated by the Odani Motohiko. In this regard, it seems that the Odani Motohiko brings a fresh look in the history of culture through evolution of the manner by, which sculptures are created i.e. through modern technology, presentation and the kinds of sense they elicit. It is also apparent that the art takes a dimension of modern piece of art work. To begin with, the materials used are contemporary i.e. steel, plastics et cetera. There is also a modern sense of presentation; it basically entails using modern mode of lighting, painting as well as storage. This may lead to a conclusion that this piece of art lacks historical continuity hence differentiating it from other pieces of ancient art work. "Google Images." Google Images. N.p., n.d.

Role of ECOWAS union in the socio-economic development of West Africa Essay

Role of ECOWAS union in the socio-economic development of West Africa - Essay Example f the Economic Community of West African States (ECOWAS) has helped or hindered the economic progress of the countries in West Africa, with particular focus on the socio-economic conditions of the populations in those countries. In West Africa, ECOWAS has the following member countries: Benin, Burkina Faso, Cape Verde, Cote d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. This structure was set up to promote â€Å"cooperation and integration† leading to an economic union in West Africa â€Å"in order to raise the living standards of its peoples† (ECOWAS website, 2011). A Pan-African slant is also evident in that the intention to promote progress and development on the whole continent is explicitly stated. For a common market to occur; regional economic reform would have to take place; integration particularly in food, agriculture and natural resources was seen as vital. Furthermore the establishment of a common market through liberalization of trade among West African States was envisioned. An important aspect of the ECOWAS initiative is also to ensure a common external tariff and trade policy with regard to third countries, outside this initiative. Additionally, a stated intention in the ECOWAS revised treaty is to promote â€Å"balanced development† and a focus on the â€Å"special problems of each Member State particularly those of land-locked and small island Member States† (ECOWAS website, 2011).Thus the intention is to improve standards of living, improve Gross Domestic Product (GDP), improve Per-Capita Income (PCI) and generally improve West Africa’s trading position in a global economy for the citizens of this entire region (ECOWAS website, 2011). This has not happened. The elites – both within... This essay presents a modern thorough analysis of the state of economies of West Africa countries, that participate in the ECOWAS union, their political stances, and their trade policies. The world economy and West Africa’s part in it will be examined in this paper. In West Africa, ECOWAS has the following member countries: Benin, Burkina Faso, Cape Verde, Cà ´te d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. This structure was set up to promote cooperation and integration leading to an economic union in West Africa . A Pan-African slant is also evident in that the intention to promote progress and development on the whole continent is stated. The establishment of a common market through liberalization of trade among West African States was envisioned. An important aspect of the ECOWAS initiative is also to ensure a common external tariff and trade policy with regard to third countries, outside this initiative Economic and political power on a global stage continues to be centered in Europe and North America. There has been no real change in the international economic power relations after the Colonial Era, despite the growth of Asian economies. The relationship between West Africa and the central economic powers is highly influenced by history, and also by current political conditions in the countries of the region. Despite free trade agreements between the countries of West Africa, prosperity is not immediately, or perhaps even in the long term achievable.

Recidivism in America Research Paper Example | Topics and Well Written Essays - 1000 words

Recidivism in America - Research Paper Example Despite all these suggestions as the reason for the crimes, there still is an escalating prison system with no relief in sight (Clear, Resig & Cole, 2010, p4) Recidivism A 2002 study survey showed that among 275,000 prisoners that were set free in 1994, 67.5% were arrested within the next 3 years, and 51.8% were back in prison (Langan el at, 2002, p 26). The study found no evidence that spending more time in the prison raises the recidivism rate and those that serve the longest time had a slightly lower rate of arrest than every other category of prisoners (Clear, Resig & Cole, 2006, p 3). This is likely explained by the older average age of those released with the longest sentences. The study shows a strong negative correlation between recidivism and age upon release. Recidivism is, for that reason, a culture of both the young and the old. The prisoners commit the same offenses after their release because the causes of their arrest ignored before they are set free from the prisons o r they lack proper rehabilitation while they are in prison. Comparison Of Recidivism In America With Other Countries The United States has the highest documented incarceration rate in the world (743 per 100,000 populations). Russia takes the second position with a high rate of (577 per 100,000); followed by Rwanda (561 per 100,000). By comparison; the incarceration rate in England and Wales; October 2011 was 155 people imprisoned per 100,000 residents. The rate for Norway in May 2010 was 71 inmates per 100,000; Netherlands in April 2010 was 94 per 100,000; Australia in June 2010 was 133 per 100,000 and New Zealand in October 2010 was 203 per 100,000 (New York Times section A, 2008, p 1). Comparisons give a reduction according to the countries listing above. Still it is the length of sentences that truly distinguishes American prison policy, the mere number of sentences imposed would not place the United States at the top of the incarceration lists. If the lists were compiled based o n annual admissions to prison per capita, several European countries would outpace the United States (New York Times section A, 2008, p 1). Causes Of Recidivism In America, the rate of incarceration has increased dramatically. Prisons have been full to capacity with deplorable conditions and long lasting side effects of inmates, their families and communities in New York. In many prisons, the crimes continue on the inside and further affect outside crimes related activities. The main reasons for this increment include social environment, peer pressure, family structure, state-level policies and lack of employment opportunities (Scott 2010, p 4). However, other things that need to be relied are the individual’s circumstances before incarceration, things that happen before they are incarcerated and the period after they are released from prison. Both immediate and long-term considerations will put poverty and difficulties as the main reason for the causes of recidivism. Drug Ab use Treatment And Recidivism The purpose of this study is to examine the relationship between drug use and recidivism among criminals and to consider how generalized drug treatment participation and completion further affect this relationship. Among researchers and policy makers, a consensus reveals drug use as linked to criminal behavior and recidivism. Further, drug treatment reduces the chances of recidivism (Mackenzie, 1997). On average, 65% of individuals who

FGR Bond Investment Essay Example | Topics and Well Written Essays - 500 words

FGR Bond Investment - Essay Example The bond that is a tax-free with a high credit rating and a 4.7% taxable equivalent yield is much safer investment than that taxable bond that pays 5 % with a low credit rating. As a result, advisable that one does not need to buy tax-exempt bonds for him just to get the tax-free income if he is in a lower tax bracket. With the DES corporate bond, the yield that the investor receives is taxable at 30%.With the FGR municipal bond, the yield is tax-free. As a result, in order to compare the two options, one has to figure out the taxable-equivalent yield of municipal bond. First, one has to find out what he keeps from taxable investments, which, in this case, is 70% or .70 of the taxable yield. Since the investor pays 30% of every dollar in taxes, he gets to keep 70%. 12.9% (rounded up from 12.8571) is the taxable-equivalent yield of 9% corporate bond if you are in the 30% tax bracket. It is, as a result, obvious that this is more than the FGR’s municipal bond taxable rate of 7%. That is; one can conclude that if you were to earn 12.9% and pay 30% on the interest, one would end up with 9% after-tax yield. As a result, Beth who is an investor in this case in the 30% tax bracket would choose Options 1 for it is because the higher taxable-equivalent yield would give the most appealing income stream. The importance of municipal bonds is that, the interest received from it is free from federal income taxes thus making it free from state income taxes. As with municipal bonds, everything comes down to taxes. If one is not benefiting from tax-exemption, he will earn more with taxable bonds. However, based on one’s tax bracket, the tax-free municipal bond that has a lower yield may offer a higher after-tax return compared to the higher-yielding taxable Treasury

Investigation of Sustainable Tourism and its Role in Tourism Planning Essay

Investigation of Sustainable Tourism and its Role in Tourism Planning and Development - Essay Example Thus, a sustainable tourism aspect essentially tries to make the optimal use of the physical and environmental resources available in the host destinations because this constructs the basic element of an ethically and morally compliant tourism sector. Also, sustainable tourism involves the maintenance of the essential environment and ecological processes and actively acts towards the conservation of the cultural heritage, biodiversity and natural heritage of the host destination, shows adequate respect to the identification and the socio cultural authenticity of the tourism destination, conserves the living traditional values and contributes to the environmental and social development, enhances the intercultural tolerance and understanding of the benefits for the location. Sustainable tourism is also necessary because it helps to build up a more dynamic and efficient tourism sector by ensuring long term and viable operations and by providing various types of social and economic benef its to the key stakeholders of the industry. These benefits include the creation of income earning and employment opportunities, provision of social services to the local communities and contributions for poverty reduction and economic value creation for the respective destinations. The development of a sustainable tourism is critical to ensure that the negative impacts of the conventional tourism industry are restrained by the entities functioning in the tourism sector. The tourism developments should necessarily be planned in a sustainable manner because the need for sustainability and compliance with the environmental and ethical standards and requirements have become the buzzword for achieving competiveness and ensuring success in the dynamic and intensely competitive global tourism environment (Mowforth and Munt, 2003). Another reason why tourism developments are to

Aviation Inspection and Maintenance System Research Paper

Aviation Inspection and Maintenance System - Research Paper Example 996), since the beginning of the FAA regulation scheme, FAA maintenance personnel have been required to be certificated in order to perform various tasks in keeping aircrafts under repair and airworthy. Moreover, there are other mechanics that are granted inspection authorization by FAA to perform required inspections on all aircrafts operating in the national airspace (Eichenberger, 1996). Furthermore, federal aviation regulations have been put in place to regulate maintenance and inspections and define operating limitations for aircrafts having different kinds of certifications (FAA, 2008). The federal aviation regulations provide five regulation options that should be adapted by all the aircrafts operating in US airspace. These are the continuous airworthiness inspection program, inspection program used by air taxi operator, inspection program used by air travel club, a manufacturer’s inspection program and any other inspection program developed by the owner and approved by the administrator (King, 1986). According to Patankar and Taylor (2004), to reduce the aviation risks, aviation maintenance strategy should optimize the contribution of people and information through technical support. However, Garland et al. (1999) indicate that human factors such as the individual differences of aviation inspectors have a very great influence on the process of inspection and maintenance of aviation facilities and equipment. Several factors resulted in occurrence of this accident. One of the key factors is the failure of an air traffic control system to facilitate the dissemination of key, available wind information to the air traffic controllers and the pilots due to poor maintenance. In this case, both the pilot and the traffic controllers were not aware of the presence and effect of the gusting wind that was being experienced at the airport. It is clear that if the two were aware they could have chosen to delay the flight or could have chosen another runway and the

Assignment Questions Chapters 5-7 Psychology Essay Example for Free

Assignment Questions Chapters 5-7 Psychology Essay 1. Most current studies aimed at understanding human memory are conducted within a framework known as information-processing theory. This approach makes use of modern computer science and related fields to provide models that help psychologists understand the processes involved in memory. The general principles of the information processing approach to memory include the notion that memory involves three distinct processes. The first process, encoding, is the process of transforming information into a form that can be stored in memory. The second process, storage, is the process of keeping or maintaining information in memory. The final process, retrieval, is the process of bringing to mind information that has been stored in the memory (p.168). Two influential theorists concerning the information-processing theory are Richard Atkinson and Richard Shiffrin. They characterized memory as three different, interacting memory systems: sensory memory, short-term memory, and long-term memory. Sensory memory is the memory system that holds information from the senses for a period of time ranging from only a fraction of a second to about 2 seconds. Sensory memory can take in an enormous amount of information, but it can only hold on to it for a very brief period of time (p.169). Short-term memory is the component of the memory system that holds about seven (from five to nine) items for less than 30 seconds without rehearsal; also called the working memory. When short-term memory is filled to capacity, displacement can occur. In displacement, each new incoming item pushes out an existing item, which is then forgotten (p.170). Long-term memory (LTM) is the memory system with a virtually unlimited capacity that contains vast stores of a persons permanent or relatively permanent memories. There are no known limits to the storage capacity of this memory system, and long-term memories can persist for years, some of them for a lifetime. Information in long-term memory is usually stored in semantic form, although visual images, sounds, and odors can be stored there as well (p.174). 2. The analogy heuristic involves comparing a problem to others you have experienced in the past. The idea is that if a particular strategy worked with similar problems in the past, it will be effective for solving a new one. Another heuristic that is effective for solving some problems is working backward, sometimes called the backward search. This approach starts with the solution, a known condition, and works back through the problem. Once the backward search has revealed the steps to be taken and their order, the problem can be solved (p.207). Another popular heuristic strategy is means-end analysis, in which the current position is compared with a desired goal, and a series of steps are formulated and then taken to close the gap between the two. When you adopt a heuristic strategy, it may or may not lead to a correct solution. By contrast, the algorithm is a problem-solving strategy that always lead to a correct solution if it is applied appropriately (p.208). 3.Research suggests that there are both advantages and disadvantages to learning two languages early in life. One of the pluses is that, among preschool and school-age children, bilingualism, fluency in at least two languages, is associated with better executive control skills on language tasks. Executive control skills enable bilingual children to suppress impulsive responses to verbal tasks and, as a result, think more carefully about them. Thus, executive control skills are important in learning to read and write. On the downside, even in adulthood, bilingualism is sometimes associated with decreased efficiency in memory tasks involving words. However, bilinguals appear to develop compensatory strategies that allow them to make up these inefficiencies. Consequently, they often perform such tasks as accurately as monolinguals, though they may respond more slowly. Researchers have found that there is no age at which it is impossible to learn a new language. While it is true that those who begin earlier reach higher levels of proficiency, age is not the only determining factor (p.214). There is one clear advantage to learning two languages earlier in life, however. People who are younger when they learn a new language are far more likely to be able to speak with an appropriate accent. One reason for this difference between early and late language learners may have to do with slight variations in neural processing in Brocas area, the area of the brain that controls speech production. Research suggests that bilinguals who learned a second language early rely on the same patch of tissue in Brocas area for both of the languages they speak. In those who learned a second language at an older age, two different sections of Brocas are are active while they are performing language tasks (p.215). 4. Charles Spearman observed that people who are bright in one area are usually bright in other areas as well. In other words, they tend to be generally intelligent. Spearman came to believe that intelligence is composed of a general ability that underlies all intellectual functions. Spearman concluded that intelligence tests tap this g factor, or general intelligence, and a number of s factors, or specific intellectual abilities. Spearmans influence can be seen in those intelligence tests, such as the Stanford-Binet, that yield one IQ score to indicate the level of general intelligence. Howard Gardner also denies the existence of a g factor. Instead, he proposes a theory of multiple intelligences that includes eight important forms of intelligence, or frames of mind. The eight frames of mind are linguistic, logical-mathematical, spatial, bodily-kinesthetic, musical, interpersonal, intrapersonal, and naturalistic. In recent years, he has proposed a ninth type of intelligence, one that he calls existential intelligence, deals with the spiritual realm and enables us to contemplate the meaning of life. He first developed his theory by studying patients with different types of brain damage that affect some forms of intelligence but leaves other intact. The most controversial aspect of Gardners theory is his view that all forms of intelligence are of equal importance. In fact, different cultures assign varying degrees of importance to the types of intelligence (p.216-217). 5. I would perform a fixed-ratio (FR) schedule, in which a reinforcer is given after a fixed number of correct, non reinforced responses. So, if my dog knew that after rolling over correctly ten times without getting reinforced meant that she would get a reinforced after those ten times, she would then learn that after rolling over ten times correctly, she would be reinforced (p.147). In fixed-rate schedules response rates are very high, and the higher the ratio, the more resistant to extinction (p.148). 6. Psycholinguistics is the study of how language is acquired, produced, and used and how the sounds and symbols of language are translated into meaning. Psycholinguists use specific terms for each of the five basic components of language. The smaller units of sound in a spoken language-such as b or s in English-are known as phonemes. Three phonemes together form the sound of the word cat: c (which sounds like k), a, and t. Combinations of letters that form particular sounds are also phonemes, such as the th in the and the ch in child. The same phoneme may be represented by different letters in different words; this occurs with the a in stay and the ei in sleigh. And the same letter can serve as different phonemes. This letter a, for example, is sounded as four different phonemes in day, cap, watch, and law. Morphemes are the smallest units of meaning in a language. A few single phonemes serve as morphemes, such as the article a and the personal pronoun I. The ending -s gives a plural meaning to a word and is thus a morpheme in English. Many words in English are single morphemes-book, word, learn, reason, and so on. In addition to root words, morphemes may be prefixes (such as re- in relearn) or suffixes (such as -ed to show past tense, as in learned). The single morpheme reason becomes a dual morpheme in reasonable. The morpheme book (singular) become two morphemes in books (plural). Syntax is the aspect of grammar that specifies the rules for arranging and combining words to form phrases and sentences. The rules of word order, syntax, differ from one language to another. For example, an important rule of syntax in English is that adjectives usually come before nouns. So English speakers refer to the residence of the U.S. president as the White House. In Spanish, in contrast, the noun usually comes before the advective, and Spanish speakers say la Casa Blanca, or the House White. Semantics refers to the meaning derived from morphemes, words, and sentences. The same word can have different meanings depending on how it is used in sentences: I dont mind. Mind your manners. He has lost his mind. Or consider another example: Loving to read, the young girl read three books last week. Here, the word read is pronounced two different ways, and in one case, is the past tense. Pragmatics, is the term psycholinguists use to refer to aspects of language such as intonation, the rising and falling patterns that are used to express meaning. For example, think about how you would say the single word cookie to express each of the following meanings: Do you want a cookie? or What a delicious looking cookie! or Thats a cookie. The subtle differences reflect your knowledge of the pragmatic rules of English (P.210-211). 7. An intelligence test is a measure of general intellectual ability. An individuals score is determined by how his responses compare to others of his or her age. Thus, intelligence tests are norm-referenced. All psychological tests, including all the various types of tests that measure cognitive ability, are judged according to the same criteria.They must provide consistent results. An intelligence test must have reliability; the test must consistently yield nearly the same score when the same person is tested and then retested on the same test or an alternative form of the test. The higher the correlation between the two scores, the more reliable the test. Tests can be highly reliable but worthless if they are not valid. Validity is the ability or power of a test to measure what it is intended to measure. Once a test is proven to be valid or reliable, the next requirement is norm-referenced standardization. There must be standard procedures for administering and scoring the test. Exactly the same directions must be given, whether written or oral, and the same amount of time must be allowed for every test taker. But even more important, standardization means establishing norms, age-based averages, by which all scores are interpreted. A test is standardized by administering it to a large sample of people who are representative of those who will be taking the test in the future. The groups score are analyzed, and then the average score, standard deviation, percentile rankings, and other measures are computed. These comparative scores become the norms used as the standard against which all other scores on that test are measured. Reliability, validity, and standardization are especially important with regard to intelligence tests because the kinds of decisions that are sometimes based on intelligence test scores can have grave consequences. For example, a few years ago the U.S. Supreme Court ruled that is unconstitutional to execute individuals who have mental retardation. Thus, a psychologist who is charged with the responsibility of administering an intelligence test to a person who will or will not be subject to the death penalty at least partly on the basis of his or her intelligence test score must ensure that the test given is reliable and valid and has been properly standardized. Likewise, childrens scores on these tests are often used to place them in special school programs that, in a very real sense, change the course of their lives for years to come. In fact, such a goal was the impetus for the development of the first standardized intelligence test (p.219). 8. In memory loss there are two broad categories that involves this kind of memory loss, amnesia and dementia. Amnesia is a partial or complete loss of memory due to loss of consciousness, brain damage, or some psychological cause. Unlike the memory disorders that are experienced by some older adults, amnesia can be experienced at any age. In some cases, amnesia takes the form of an inability to store new information. This kind of amnesia is known as anterograde amnesia. Anterograde amnesia is the inability to form long-term memories of events occurring after a brain injury or brain surgery, although memories formed before the trauma are usually intact and short-term memory is unaffected. Some individuals with amnesia can form new memories, but they cannot remember the past, a disorder known as retrograde amnesia. Retrograde amnesia is a loss of memory for experiences that occurred shortly before a loss of consciousness. These people often lack knowledge of themselves and/or the events surrounding the development of their memory loss. It is not unusual for a person to have both retrograde and anterograde amnesia with regard to the events that immediately preceded and followed a serious car crash or other traumatic event (p. 189). Another form of memory loss is dementia. Dementia is a state of mental deterioration characterized by impaired memory and intellect and by altered personality and behavior. Dementia can result from such conditions as cerebral arteriosclerosis (hardening of the arteries in the brain), chronic alcoholism, and irreversible damage by a small series of strokes. Dementia is most common among older adults. However, diseases such as HIV/AIDS can cause dementia to develop in a younger person as well. About 50 to 60% of all cases of dementia result from Alzheimers disease. This is a progressive deterioration of intellect and personality that results from widespread degeneration of brain cells (p.190). 9. People reconstruct memories, piecing them together using schemas to organize fragments of information, a process that has both advantages and disadvantages. Information that fits with preexisting schemas can be efficiently remembered, but schemas can also introduce distortions into memory. Sir Frederick Bartletts research demonstrated how reconstructive processing changes memory over time (p.178). Most memories do not include source information, so memories for sources must be reconstructed. Source monitoring results in encoding of source memories. Flashbulb memories are different from others in that they always include source information, although the source information is subject to reconstruction changes over time (p.179). Autobiographical memories are reconstructed memories that include factual, emotional, and interpretive elements. They are subject to positive bias (p.180). 10. Bandura suspected that aggression and violence on television programs, including cartoons, tend to increase aggressive behavior in children. In several classic experiments, Bandura demonstrated how children are influenced by exposure to aggressive models. One study involved three groups of preschoolers. Children in one group individually observed an adult model punching, kicking, and hitting a 5-foot, inflated plastic Bobo Doll with a mallet, while uttering aggressive phrases. Children in the second group observed a nonaggressive model who ignored the Bobo Doll and sat quietly assembling Tinker Toys. The children in the control group were placed in the same setting with no adult present. Later, each child was observed through a one-way mirror. Those children exposed to the aggressive model imitated much of the aggression and also engaged in significantly more nonimitative aggression than did children in either of the other groups. The group that observed the nonaggressive model showed less aggressive behavior than the control group. The researchers concluded that of the three experimental conditions, exposure to humans on film portraying aggression was the most influential in eliciting and shaping aggressive behavior (p. 158-159). 11. Experiencing hunger pangs when you smell your favorite food is an example of classic conditioning.Your stomach rumbles when you smell your favorite food because smell and taste are so closely linked that food odors, functioning as conditioned stimuli, can actually make you think you are hungry even if you have just finished a large meal. The conditioned stimulus (CS) would be the presence of the smell of your favorite food which brings about the unconditioned stimulus (US) hunger pangs. Because humans do not need to be taught to be hungry for food, the act of feeling hungry would be the unconditioned response (UR). The conditioned response (CR) would be knowing that you will get hungry when you smell your favorite food (p.143). 12. Critics argue that therapists using hypnosis and guided imagery to help their patients recover repressed memories of childhood sexual abuse are actually implanting false memories in those patients. They are especially critical of claims of recovered memories in the first three years of life, because the hippocampus and areas of the cortex are not well developed enough to store long-term memories. Therapists who use these techniques believe that a number of psychological problems can be treated successfully by helping patients recover repressed memories of sexual abuse. These therapists believe that a process called repression, a form of motivated forgetting, can cause traumatic memories to be so deeply buried in an individuals unconscious mind that he or she has lost all awareness of them (p.192-193). 13. Writing notes, making lists, writing on a calendar, or keeping an appointment book is often more reliable and accurate than trusting to memory. But if you need information at some unpredictable moment when you dont have aids handy, several mnemonics, or memory devices, and study strategies have developed over the years to aid memory. Mnemonics, or rhymes are a common aid to remembering material that otherwise might be difficult to recall. As a child, learning to recite i over e except after c when you were trying to spell a word containing that vowel combination is an example of a mnemonic. The method of loci is a mnemonic device that be used to when you want to remember a list of items such as a grocery list. Select a familiar place your home, for example and simply associate the items to be remembered with locations there. For example, visualize the first item you want to remember in its place on the driveway, the second in the garage, and the third at the front door, and so on until you have associated the item you want to remember with a specific location. Overlearning is another method of improving memory. Overlearning is practicing or studying material beyond the point where it can be repeated once without error. It makes material more resistant to forgetting (p.173). 14. Bandura proposed that four processed determine whether observational learning will occur: Attention: The observer must attend to the model. Retention: The observer must store information about the models behavior in memory. Reproduction: The observer must be physically and cognitively capable of performing the behavior to learn it. In other words, no matter how much time you devote to watching Serena Williams play tennis or listening to Beyonce sing, you wont be able to acquire skills like these unless you possess talents that are equal to theirs. Reinforcement: Ultimately, to exhibit a behavior learned through observation, an observer must be motivated to practice and perform the behavior on his own (p.156). 15. In some cases, we are hampered in our efforts to solve problems in daily life because of functional fixedness, the failure to use familiar objects in novel ways to solve problems. Objects you use everyday such as, tools, utensils, and other equipment are what help you perform certain functions. Although, you probably do not think to use the normal functions of such objects in new and creative ways. Suppose you wanted a cup of coffee, but the glass pot for you coffeemaker was broken. If you suffered from functional fixedness, you might come to the conclusion that there was nothing you could do to solve the problem at that moment. But, rather than thinking about the object you dont have, think about the function that it needs to perform. Another impediment to problem solving is mental set, the tendency to continue to use the same old method even though another approach might be better. Perhaps you hit on a way to solve a problem once in the past and continue to use the same technique in similar situations, even though it it not highly effective of efficient. The cognitive process that underlies both functional fixedness and mental set is confirmation bias, the tendency to selectively pay attention to information that concerns preexisting beliefs and ignore data that contradict them. For example, when faced with an operating system crash, most computer users know that the first line of defense is to reboot. Every time rebooting solve the problem, confirmation bias in favor of rebooting as a solution for computer problems becomes stronger. As a result, when a problem arises that proves resistant to rebooting, most of us try rebooting a few more times before we confront the reality that rebooting isnt going to solve the problem (p.209).

The different types of budgeting systems

The different types of budgeting systems Budgeting systems of different types, usually customised to the needs of individual organisational managements, are in use in various types of organisations, business, governmental and not for profit, across the world. The use of traditional budgeting has in recent years come under intensive critique by different academic and experts for its detrimental impact on different organisational areas and especially upon the overall performance of organisational employees and consequently of organisations. Such developments present a difficult conundrum to organisational managers of the actual utility of budgets in performance management and control. This dissertation takes up the investigation of the role of budgeting in organisational performance, especially so in planning and control of organisational activity, both in theory and in practice. The information obtained from intense study of literature is augmentation by the investigation of budgeting practices at two leading fast food and restaurant chains, Pizza Hut and Burger King. The research reveals that whilst traditional budgeting practices dominate organisational policies for planning and control, modern budgeting concepts are slowly being adopted by organisations with some success. 1. Introduction 1.1. Overview Budgeting systems of different types, usually customised to the needs of individual organisational managements, are in use in various types of organisations, business, governmental and not for profit, across the world (Andrews Hill, 2003, p 135-158). Traditional budgeting methods emerged as important management tools in the pre Second World War era, when Fordist and Taylorist management principles directed the working of most business organisations (Grizzle Pettijohn, 2002, p 51-58). Traditional budgeting techniques involve the comparison of actual organisational performance in different areas of work with budgeted targets, the computation of variances between budgeted targets and actual performance, and the analysis of both favourable and unfavourable variances in order to determine the reasons for such differences (Pilkington Crowther, 2007, p 29-30). The chart provided hereunder explains the sequence of budgeting activities and the relationship of the process to internal and external factors (Tales, 1998, p1). Variance analysis helps in corrective action during the currency of an operating period and helps organisations to achieve various objectives. Analysis of variances and comparison of actual achievement with budgeted targets help in the measurement of performance of responsibility heads, managers, groups of employees, and individual employees (Pilkington Crowther, 2007, p 29-30). Budgetary control has over the years been found to be very useful for planning and controlling of organisational performance (Chapman et al, 2007, p 7-51). Budgets have also been found to be useful in the monitoring and achievement of group objectives and in the facilitation of team work (Chapman et al, 2007, p 7-51). Budgeting, despite its inherent utility in the planning and control of organisational performance, has come under increasing criticism from modern day management accounting experts like Kaplan, Argyris, Hofstede, and Hopwood, who argue that lack of thought and rigidity in the use of budgeting essentially results in the development of Theory X type management control tools that can cause various organisational problems like increased stress upon employees, organisational disagreement and dissention with inappropriately set budgets, and organisational de-motivation (Chapman et al, 2007, p 7-51). Recent years have seen the development of modern budgeting techniques like the balanced score card, rolling budgets and beyond budgeting techniques (Chapman et al, 2007, p 7-51). Whilst such new concepts in the area of budgeting are undoubtedly being taken up for discussion, study and implementation by some progressive firms, the overwhelming majority of business organisations continue to use traditional budgeting techniques suitably customised to the circumstances and needs of individual organisations (Chapman et al, 2007, p 7-51). 1.2. Purpose of Study The use of traditional budgeting has in recent years come under intensive critique by different academic and experts for its detrimental impact on different organisational areas and especially upon the overall performance of organisational employees and consequently of organisations. Such developments present a difficult conundrum to organisational managers of the actual utility of budgets in performance management and control. This dissertation takes up the investigation of the role of budgeting in organisational performance, especially so in planning and control of organisational activity, both in theory and in practice. The information obtained from intense study of literature is augmented by the investigation of budgeting practices at two leading fast food and restaurant chains, Pizza Hut and Burger King. This dissertation should hopefully help students, managers and academics through the generation of new perspectives in the area and help in improving the process of planning and control of organisational activities through the use of appropriate budgeting techniques. 1.3. Aims and Objectives The aims and objectives of this dissertation are now elaborated as under: To examine the elements of budgetary control and its application in actual practice. To examine the various actions involved in the preparation and planning of budgets, with special reference to the role and importance of accurate information inputs. To examine the key resources required by firms for gathering of information for the preparation and planning of budgets. To examine the limitations of budgeting. To examine recent developments in budgeting and recommend the adoption of the most appropriate system of budgetary control by organisations. 1.4. Structure This study has been sequentially structured. This introductory section is followed by a literature review and thereafter by the formulation of appropriate research questions. Subsequent sections take up the description and explanation of the adopted research methodology, the data obtained from such research, the analysis of data, and finally conclusions and recommendations. An extensive alphabetical list of references at the end of the study provides details on all source material used for the dissertation. 2. Literature Review This review of existing literature attempts to examine the published material available in the public domain on the issue of budgeting and its role in performance management of organisations, departments and employees. Budgeting emerged as an important management accounting and management control tool in the early years of the 20th century and forms a staple item of all text books on financial management and management accounting (Davila Foster, 2005, p 1039-1068). The budgeting process came under severe criticism in the 1980s with the publication of critiques budgeting by experts like Kaplan, Argyris, Hofstede and Hopwood. Recent years have seen the emergence of newer budgeting techniques like flexible budgeting, rolling budgets, the balanced score card approach, and beyond budgeting techniques (Davila Foster, 2005, p 1039-1068). 2.1. Role of Budgeting in Planning and Control Activities Planning and control are agreed to be among the most important of organisational managerial activities (Bhatnagar, et al, 2004, p 92). Budgets play a central and key role in the planning and control processes of business firms. The importance of budgets in planning and controlling functions makes management accounting and the provisioning of management information a critical organisational function. Surveys of UK business and industry reveal that most business organisations use budgeting techniques of some form, even as larger organisations have institutionalised and developed budgeting mechanisms (Bhatnagar, et al, 2004, p 92). The role of budgeting is best examined by locating its place within the wider framework of organisational planning and control (Carruth Digregorio, 2003 p 13-26). The chart provided hereunder explains the relationship of budgeting in the larger control framework of a firm. Management and operational control form very important components of the broader framework of planning and control. Management control represents the process through which managements ensure the execution of pre-determined strategies by their organisations (Carruth Digregorio, 2003 p 13-26). The process is essentially short term in nature, implemented through middle rung managers, and forms an important routine management activity. Operational control on the other hand represents the process of ensuring the efficient and effective conduct of specific tasks. The time spheres for such controls are short term, consist of periods that can extend from a day to a month, and are executed through junior managers (Pilking ton Crowther, 2007, p 29-30). With regard to planning, the use of budgets calls upon and directs managers to think ahead about the utilisation of resources for achievement of company policies and objectives in their area of work (Grizzle Pettijohn, 2002, p 51-58). Such planning involves the obtaining of relevant, accurate and valid information, (either from reliable historical sources or by logical estimation), the analysis and appropriate extrapolation of such information, and its use for projection of future operational figures in different areas like sales, production, income and expenditure (Grizzle Pettijohn, 2002, p 51-58). The relevance and effectiveness of budgets is to a large extent dependent upon the accuracy of information on which it is based (Hassel Cunningham, 1996, p 245). The overwhelming majority of budgeting exercises make use of historical information that is available within organisations. Important environmental information is also however often used by management accountants for projecting future developments and their impact on performance (Hassel Cunningham, 1996, p 245). Inaccurate or unreliable information can, it will be obvious, erode the reliability and credibility of the assumptions on which budget preparation is based, and therefore invalidates budgets (Craig, 2002, p 57). Modern day organisations, especially if they are large, adopt elaborate and complex methods for retrieval, study, investigation and analysis of the data needed for budgets. Manual accounting inputs for preparation of budgets have largely been discarded by most organisations (Craig, 2002, p 57). Complex acco unting and information retrieval systems that span departments, functions and geographies are used by most large organisations. Modern day Enterprise Resource Planning (ERP) plays an important role in the provisioning of management information in the preparation of budgets (Hassel Cunningham, 1996, p 245). The control function of budgets is executed through the allocation of responsibility to specific individuals for the achievement of specific budgeted targets and by the comparison of actual performance with budgeted targets (Craig, 2002, p 57). Such comparisons result in the establishment of positive or negative variances and reveal the extent to which people with responsibilities have been able to achieve their specified tasks. The extent of variance denotes the margin of success or failure (Pollitt, 2006, p 25). The reasons for such variances can be examined to ascertain the causes of success or failure of employees with accountability. Budgets have traditionally proved to be effective in performance control because they (a) establish specific, pre determined, and logically computed targets, (b) allocate responsibilities to specific organisational employees for achievement of targets, (c) establish widely known and uniform performance yardsticks and benchmarks, (d) provide a basis for assessment of actual performance and (e) pinpoint the people who can be held to be responsible for organisational failure, and (f) allow for analysis and determination of causes of failure (Pollitt, 2006, p 25). Budgets help in controlling performance by establishing benchmarks for performance and consequently for rewards against such performance (Andrews Hill, 2003, p 135-158). Organisational employees are often promised and provided rewards on the basis of their success in achieving targets in different areas of work (Andrews Hill, 2003, p 135-158). 2.2. Limitations of Budgeting Budgeting undoubtedly constitutes a critical and essential component of management control techniques that are employed by business firms for planning their future actions and thereafter controlling them. Whilst the importance and role of budgeting in achievement of organisational objectives and competitive advantage is widely accepted and also illustrated by the fact that the overwhelming majority of business firms across the world engage in some type of budgeting activity, the process has come under severe criticism in recent decades (Chapman et al, 2007, p 7-51). Experts like Kaplan have argued that traditional budgeting techniques have essentially not changed over the last 70 years and have become increasingly inappropriate for the modern day economy and the changed internal and external environments in which business firms operate (Chapman et al, 2007, p 7-51). Whilst traditional budgeting operates both on top down and bottom up approaches and are based both upon historic information and current information that is available in the public domain, budgets are in the overwhelming majority of cases finally decided by top management and imposed upon different levels of organisational managers (Chapman et al, 2007, p 7-51). Such imposition of budgets and their association with performance measurement, rewards, remuneration, and career progression of organisational employees leads to the development of various complexities, some of which are elaborated as under. Budgets are very infrequently felt to be fair and right. Budgeted targets are by and large felt to be either too soft or too hard, depending upon the perspectives of different persons (Hassel Cunningham, 1996, p 245). Such perceptions often lead to organisational dissention and ill will between subordinates and superiors and broad resentment of employees against organisational authority (Chapman et al, 2007, p 7-51). Soft budgets are felt to be contradictory to organisational well being and build environments of complacency and slackness. Difficult budgets on the other hand often prove to be unattainable and lead to de-motivation, resentment, criticism, dissension, and ill will. It is thus not an easy task to formulate a budget that furthers organisational objectives, stretches organisational employees to improve their performance, and acts as a good motivator and fair tool for judgement of performance (Hassel Cunningham, 1996, p 245). Argyris and others have pointed out that group attitudes towards budgets significantly affect performance and ultimate achievement of budget targets (Smith, 2001p 1). Geertz Hofstede elaborates that appropriate setting of targets is also very important for achievement of budgets. Hofstede states that whilst group participation was important, the attitudes of senior managers, especially the game spirit with which they play the budget game form a key ingredient of the budget process. (Hofstede, 2003, p 12-18) Hopwood (1972) identified different styles of budgeting, the budget constrained style, the profit conscious style and the non-accounting style. Whilst all three styles exerted pressure on workers, it was only the profit conscious style that drew involvement without eliciting defensive approaches (Hopwood, 1972, p 156-182) Hope and Bunce assert (2003) that autocratic and rigid budgeting approaches lead to the development of organisational bureaucracies that focus on finding fault with employee performance, rather than motivation and encouragement (Hope Bunce, 2003, p 1). Undue emphasis on achievements of budgets can divert management attention from other important organisational aspects like the importance of quality and staff morale with detrimental impact upon organisational wellbeing (Hassel Cunningham, 1996, p 245). The association of monetary and career rewards with the achievement of budgets can lead to a range of unethical activities like fudging of figures, window dressing of performance, and skirting with the law. The wrong decisions taken by managers of banks and financial institutions, (which greatly contributed to the development of the financial crisis of 2008) are closely related to the greed of managers to access the performance bonuses that were linked to achievement of ever-increasing performance targets (Chapman et al, 2007, p 7-51). 2.3. New Developments in Budgets Dissatisfaction with important aspects and outcomes of traditional budgeting principles has led to extensive research in alternative methods of optimisation of organisational and individual control and performance (Hearn, et al, 2006, p 286). Such efforts, both in areas of theory and practice, have resulted in a number of alternative approaches and modifications to traditional budgeting theory and practice. Some of the more important of these developments are represented by flexible budgeting, rolling budgets, the balanced score card approach and beyond budgeting principles (Hearn, et al, 2006, p 286). Rolling budgets are prepared for 6-9 months in detail, (unlike traditional financial budgets that are made for complete financial years), followed by broader and less detailed budgets that extend to 1  ½ to 2 years (Subramaniam Ashkanasy, 2001, p35). Flexible budgets on the other hand deal with operations and contain different estimates for various products and services (Subramaniam Ashkanasy, 2001, p35). Such methods allow for changes in costs or volumes and allow organisations to respond swiftly to changing situations and thereby maintain profitability and competitive advantage (Subramaniam Ashkanasy, 2001, p35). The balanced score card approach aims to translate strategy into practice from four dimensions, namely customer, financial, learning and growth, and business processes (Bhatnagar, et al, 2004, p 92). Its use helps organisations to pay attention to different aspects of organisational performance over the length of business cycles, which are longer than traditional budget periods and thus essentially more volatile. The use of this approach, along with Key Performance Indicators, (KPIs), enables organisations to built holistic targets and track performance in different dimensions (Bhatnagar, et al, 2004, p 92). Beyond Budgeting is a comprehensive and elaborate holistic approach that incorporates modern concepts like rolling budgets and the balanced score card approach and focuses on two groups of principles related with performance management. The first group of principles is process oriented, whilst the second set is leadership oriented. Taken together Beyond Budgeting principles enabl e organisations to motivate their employees, improve performance and enhance organisational creativity (Bhatnagar, et al, 2004, p 92). 2.4. Framing of Research Questions The research questions for this dissertation, framed in line with the aims and objectives of the dissertation and the results of the literature review are detailed as under: How does budgetary control help in planning and controlling of performance of employees? How are budgets used by successful organisations (Pizza Hut and Burger King) to plan and control performance? How do organisations ensure accuracy of information for preparation of budgets? What types of resources are used by organisations to gather information and prepare budgets? What sort of constraints and limitations do modern day organisations face in using traditional budgeting techniques? What measures can be adopted by organisations to make budgeting exercises more effective in planning and controlling performance? 3. Research Methodology 3.1. Important Research Factors Research in areas of finance, management, and business come under the broad ambit of economic research (Bryman Bell, 2007, p 12-28). The research methodology for such assignments is by and large determined in accordance with the tenets of social research and is of course shaped by the nature of the subject under investigation and the infrastructural and other resources available with the researcher. The determination of appropriate research methods and techniques involve the choice of specific research methods and the most suitable sources of information (Bryman Bell, 2007, p 12-28). 3.2. Quantitative and Qualitative methods of Research Social research methods are shaped by two broad and quiet different research approaches, namely the quantitative approach and the qualitative approach. These approaches are shaped by different epistemologies and involve the utilisation of different research techniques, both for obtaining and for analysis of data (Darlington Scott, 2002, p 33-47). The quantitative approach is guided by positivist epistemology and is closely related to scientific research methods (Darlington Scott, 2002, p 33-47). Quantitative approaches involve the application of scientific theory and aim to measure the responses of research subjects in easily quantifiable and numerical terms. Such methods are used in the majority of economic and business research efforts and are particularly useful in the gauging of broad trends of thoughts or opinions of chosen populations (Darlington Scott, 2002, p 33-47). Qualitative methods of analysis are essentially different and are used when the issue under study is subjective in nature and open to different ways of interpretation (Neuman, 2005, p 18-36). Qualitative research methods are shaped by interpretivist epistemology and involve detailed investigation of complex subjects that are often multilayered and incapable of being answered with yes or no responses. Such research is most appropriate for issues that involve questions that are what, why and how in nature and are best conducted by expert and involved researchers (Neuman, 2005, p 18-36). Qualitative research is far more time consuming and detailed than quantitative research and is mostly conducted with the help of direct one-to-one interviews and focus group discussions, in which researchers participate with the subjects under study and observe their reactions and responses in minute detail (Neuman, 2005, p 18-36). Whilst most research assignments call for the use of either quantitative or qualitative methods, some complex and multidimensional issues require the use of both techniques (Neuman, 2005, p 18-36). 3.3. Choice of Information Sources Information sources are broadly categorised into primary and secondary sources. Secondary information sources consists of all the information on the subject that is available to the public at large in the form of published material, more specifically books, articles, both journal and magazine, and other publications (Bryman Bell, 2007, p 12-28). Primary information is however obtained from sources that are part of or are integral to the subject under study (Bryman Bell, 2007, p 12-28). Whilst primary information is most commonly obtained from interviews and focus group discussions, such information is also available from specific public domain sources like organisational or departmental publications, publications authored by the subjects under study, interviews given by them to reliable media publications, and otherwise from information disseminated through personal or organisational websites. (Bryman Bell, 2007, p 12-28). 3.4. Adoption of Research Methodology The subject issue, as detailed by the aims and objectives, the literature review and the research questions of this study, is essentially complex, multilayered and open to interpretation in different ways (May, 2001, p 41-59). The use of budgeting techniques for planning and controlling performance in business organisations is an intensely debated topic and has multiple aspects. The interests of research on this issue will certainly not be appropriately served with the use of yes/ no/ multiple choice surveys administered to sample population groups (May, 2001, p 41-59). The elimination of quantitative methods of research for the assignment by extension also removes the relevance of mixed models and leaves only qualitative methods for use (Neuman, 2005, p 18-36). This research study therefore uses only qualitative methods for researching information. The research approach has been formulated on the basis of the aims and objectives of the dissertation and the information unearthed during the literature review (Neuman, 2005, p 18-36). This research effort attempts to obtain answers to the research questions through a detailed investigation of the budgeting practices of two well known and successful organisations in the fast food and restaurant industry, namely Pizza Hut and Burger King UK. Information for research has been obtained from a host of secondary and primary sources (Neuman, 2005, p 18-36). Study of information available in the public domain on the use of budgets for planning and control of performance in these organisations will provide a balanced multi-prospective view of their organisational policies and practices (Neuman, 2005, p 18-36). Primary information is sourced from an examination of organisational websites, observation of their work processes onsite and informal open ended discussions with members of their staff. The information obtained from secondary and primary sources has been carefully collated and thereafter subjected to appropriate analysis (Neuman, 2005, p 18-36). 3.5. Ethics Appropriate care has been taken to ensure the adoption of ethical rules and norms that are pertinent to business research (Bryman Bell, 2007, p 12-28). All information sources used for the purpose of study have been acknowledged carefully and comprehensively. All participants have been informed of the nature of the assignment and its purposes. Respondents have been informed of their right to confidentiality and of refusing to answer all or any of the questions asked of them. All respondents have also agreed in writing of their unilateral and unforced willingness to participate in this study (Bryman Bell, 2007, p 12-28). 3.6. Limitations The results of this study are limited by the actual reading carried out by the researcher. Whilst efforts have been made to ensure extensive examination of available literature, it is always possible that some important information may have been missed out (Darlington Scott, 2002, p 33-47). The actual investigation of businesses for ascertainment of budgetary control in practice is also restricted to two organisations, which may well be unrepresentative of the entire business fraternity. The result of this research study is subject to these limitations (Darlington Scott, 2002, p 33-47). 4. Data and Findings Information for research has been obtained from a range of secondary and primary sources. Secondary information on budgeting at Pizza Hut and Burger king has been obtained from information available on the subject from a range of sites in the public domain, even as primary information has been obtained by study of their organisational web sites. The information sources used for secondary information on budgetary control for Pizza Hut and Burger King have not been cited here but have been placed together at the end of the list of references for easy access. Primary information has also been obtained by visits to retail outlets of Pizza Hut and Burger King in London, observation of the work processes at these outlets and open ended conversations with their employees. It has been difficult to obtain relevant information on budgeting because information about budgeting practices belongs to the private information domain of the companies and is not openly discussed at public forums. The employees at such outlets are also more involved in servicing customers and their knowledge of budgetary control methods is restricted. Relevant information has however been accessed from discussions with middle managers at Pizza Hut stores and franchise representatives at Burger King. The information obtained from study of public domain information, onsite observations and interviews with middle managers of Pizza Hut and Burger King are provided below: Information from Study of Public Domain Information of Pizza Hut Pizza Hut is a US headquartered multinational chain of restaurants that offers different types of pizzaà ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¾Ã‚ ¢s and associated foods. The chain which belongs to Yum brands operates in more than 100 countries, contains approximately 34,000 outlets of different types and employees more than 30,000 people. The company is headquartered at Addison Texas and has grown enormously since its founding in 1958. The company operates its own stores in the majority of its locations in the US. It does however have some franchised units in countries outside the United States. The company is well known for its high quality and standard food and has faced very few quality complaints. The HR section on its website and information obtained from the public domain state that the company pays great attention to the selection, recruitment, training and performance of its employees. Pizza Hut operates a complex and detailed management information system with the help of extensive computer systems that connect all its global units with regional headquarters and to organisational headquarters at Texas. The computer systems used for the management information function are modern and constantly updated. Budgetary control forms an integral element of Pizza Huts overall management information system. The budgetary control system is extremely detailed and is prepared for every quarter of a calendar year. Budgets are multi dimensional and monitor both operational and financial aspects of the organisation. Budgets are prepared for all departments, all functions and for each restaurant operated by the chain. Much of the purchasing functions are done through annual regional contracts and employee of local retail outlets are not involved in these functions. Employees of retail outlets are however expected to add to organisational sales and competitive advantage through constant improvement of customer relationship and customer satisfaction. The chain has recently introduced the balance score card method for improving the performance of employees at retail outlets. Employees at Pizza Hut outlets are now assessed on a variety of counts that concern the provisioning of customer service, the achievement of customer satisfaction, the improvement of customer relationships and finally of the quantum of repeat customers. The company proposes to extent the balance score card method of budgetary and performance control to other areas of work. Information from Study of Public domain Information of Burger King Burger king is also a US headquartered international chain of fast food restaurants. Headquartered in Florida. Burger King is the second largest seller of hamburgers in the world. It has approximately 12,000 outlets, operates in 73 coun

History of Liberalism in Western Europe

History of Liberalism in Western Europe Liberalism originated in Western Europe during the struggle against absolutism and spiritual domination of the Catholic Church (16-18 cc.). The ideology of liberalism was founded by representatives of the moderate wing of the European Enlightenment. Economists Physiocrats formulated popular slogan  «laissez faire, laissez passer » (in French: do not disturb function), expressing the idea of laissez-faire and which in the 19th century was one of the basic principles of classical liberalism. Social environment that fed the ideology of liberalism in the 18-19 centuries was mainly the bourgeoisie. More radical wing of liberalism associated with democracy, has played an important role in the American and French revolutions. However, in the late 18th century. there has been a conflict between liberalism and radical democracy (Rousseau, and later the Jacobins). During the Restoration in France B. Constant, F. Guizot and other first character of liberalism gave more or less formalized p olitical doctrine based on certain historical and philosophical background. For the political doctrine of European liberalism of the first half of the 19th century. typical preference ideas of individual freedom was the idea of democracy and constitutional monarchy the republic. Later, with the expansion of suffrage, the differences between liberalism and democracy smoothed. In the late 19th century. Early 20th century. in relation to socio-economic changes, the growth of the labor movement, and so on. n., liberalism survived the crisis and was forced to give up some of the basic principles of their doctrine, including the principle of laissez faire. Liberalism in each country had the characteristic features due to its historical identity. In France during the Restoration liberalism took the form of a certain doctrine, versus how feudal reaction and democracy .The fall of Napoleon and his regime, the return to the throne of the Bourbons did not stop one of the class struggle that unfolded in France since 1789 for the approval of the countrys new, capitalist relations. Aristocracy continued to defend feudal beginning, though she was forced to go on the establishment of a constitutional monarchy, the recognition of the major economic, political and legal gains of the revolution. Industrial and commercial bourgeoisie struggled against the restoration of the old order, class privileges, protected individual freedom and equality of all before the law. Anti-feudal ideology of the French bourgeoisie in the first half of the XIX century was expressed by many political thinkers, among which were B. Constant and A. de Tocqueville. Most of the work on policy, the authorities of the State of Benjamin Constant (1767-1830), which researchers believe was even the spiritual father of liberalism in Europe, was written in the period between 1810-1820 years. (The course of constitutional politics). The ancient Greeks and Romans had the possibility of every citizen to participate directly in the affairs of state. However, the freedom that was common in antiquity, was combined with an almost complete subordination of the individual public authorities and left very little space for the manifestation of individual autonomy. Constant was sure: people being free, are able to independently and intelligently implement themselves in life. They are able through their individual efforts and without the influence of any transpersonal forces to secure a decent life. Guided by these ideas, Constant seriously corrects Rousseau thesis on the necessity of the omnipotence of popular sovereignty. Its borders must end where begins the independence of the individual and private life. The presence of such a framework makes the deterrence power and control over it in the cornerstone of the political and institutional structure of society. Constant’s political ideal were never passive and low-power state. The modern state is to be in shape, as thought Constant, a constitutional monarchy. In the face of the constitutional monarch of the political community becomes neutral power. She beyond the three classic of government (legislative, executive, judicial), independently of them, and therefore is able (and obliged) to ensure their unity, cooperation, normal activity. The King is quite interested in the fact that no power is intended to subvert the other, but rather that they mutually support each other and act in unison and harmony. Tocquevilles political concept has developed in a fair degree under the influence of Constant, the views of another prominent liberal French Pierre Royer-Collard. Important role in its formation has played a prominent historian Francois Guizot. The subject of his greatest interest amounted to theoretical and practical aspects of democracy, in which he saw the most significant phenomenon era. Democracy is interpreted broadly. It represents for him a social system, which is opposite to the feudal and knows no boundaries (birth or prescribed by the customs) between the upper and lower classes of society. The core of democracy the principle of equality, inevitably triumph in history. Tocqueville believed that the triumph of equality is not an absolute guarantee of freedom of accession. In other words, universal equality, taken by itself, does not automatically lead to the establishment of a political system that firmly protects the autonomy of the individual, excludes arbitrariness and neglects the right of the authorities. Freedom and equality, according to Tocqueville, are the phenomenon of different order. The relationship between them is ambiguous. And the peoples attitude to them, is different too. At all times, says Tocqueville, people prefer equality freedom. Neither equality nor freedom, taken separately, are self-sufficient conditions for a truly human existence. Just being together, in unity, they find such quality. Tocqueville Democracy outstanding theoretician and simultaneously consistent liberal deeply comprehended the truth that liberalism has to go towards democracy. This in the era of mass yield on the socio-political scene, in the era of the cult of equality saved supreme liberal values freedom. Ideas and idealism are still relevant in France. Ideologue of modern liberalism was sociologist Raymond Aron. And also operates a number of parties with a liberal platform. For example, the New Centre party (fr. Nouveau Centre), or the European Social Liberal Party (fr. Le Parti social libà ©ral europà ©en, PSLE) French centrist political party, sticking social liberal position. The new center was created by former members of the Union for French Democracy in 2007, not included in the organized Francois Bayrou Democratic Movement. Leader Hervà © Morin, Minister of Defense and former leader of the Union for French Democracy in the National Assembly. In Germany, liberalism was closely associated with the desire for national unity. Liberal Movement on German soil began in the early decades of the XIX century. On the eve of the revolution of 1848-1849. in Germany it reached a considerable height. Both in terms of scope and organization, as well as in terms of ideological and theoretical maturity. Early German liberalism one that originated and approved in the pre-revolutionary period was primarily a constitutional movement. In the framework of developing and offering a variety of desirable model for the German states of political and legal order. They sought social support in the bourgeois middle layers. But to a large extent they are expected to use common sense and monarchs, who will be able to heed the dictates of time and become spokesmen for particular interests, as guardians of the common good. German liberalism of the first half of XIX century was represented by Frederick Dahlman, Robert von Mohl, Carl and Carl Welcker Rottek, Julius Frobel and others. Their views and activities appreciably affect the political and intellectual climate of the time in Germany gained fame as the Pan-European in the first place riddled with liberal ideas work Lorenz Stein. Lorenz Stein (1815-1890) belongs to a series of fundamental studies on the society, the state, law, management. Liberalism Stein clearly expressed in the fact that at the heart of its socio-political doctrine, he raised the question of the individual, his rights, his property. The main motive that drives the individual, is seen by Stein in the quest for self-realization, the essence of which extraction, processing, manufacturing, and increase the benefits. Every good produced by a person, belongs to her, identified with her and because becoming as untouchable as herself. This immunity is entitled to benefits. United through to the right person at the same inviolable whole benefit of a property. A man cannot be engaged in productive activities alone, being isolated from other people. It entirely depends on them and therefore is forced to live with their own kind, to interact, cooperate with them. Thus arises the problem of Stein human community, society. He paints a society where human being is a fundamental contradiction: on the one hand, an irresistible desire for complete domination over the external world (over the material and spiritual wealth), on the other a very modest capabilities of a particular individual as a separate limited in their potencies being. The starting point is a unit of any society, in Stein, the division of property. Owners of the latter, owners and people working, always linked in a special way with each other. The law of social life is inherently permanent and immutable order, depending who does not own, from those who own. The existence of these two classes cannot be resolved and overcomed. Steins views on society and the state, and their ratio under the obvious influence of the respective ideas of Hegel. The concept of society Stein appears as a separate and in their own personalized social education. From the simple amorphous set of individuals it distinguishes the existence of such an integrating factor as a constant-round dependence of people from each other. Feature of society is also something that everyone in it is guided only by its own will. In view of these circumstances in the society, according to Stein, there is no ground for freedom Hence his categorical conclusion: the principle on which society rests – un free. The highest form of society is the state, which at the same time has a different organization and different goals than the society. It establishes the organic unity of a variety of individual wills and actions of people forming the society. Society and the state (because they are based on diametrically opposed principles) confront each other and are constantly at each other influence. And the company is committed to construct the state in his own image and likeness, and the state and to create their own social system pleases Him. This, which are under control of spontaneous, unbridled elements of society and between social classes to maintain a balance. Towering over the society, the state must remain master of his and mentor. His main role is to be able to fulfill, the conviction of Stein, when the executive power in the state will be true and reliable to serve the legislative authority. This subordination a guarantee of transformation simply state to state legal and bail them preserve this quality. Stein a supporter of law, in which the right of management is based on the constitution and there are legal distinction between laws and regulations. Optimal form of legal state Stein sees a constitutional monarchy. In a constitutional monarchy, in which the executive and to faithfully serve the legislative authority, the central figure of the monarch ought to be, since he could not prevent the prevalence of particular interests in society. Only the monarch to provide dominance in society common to all people of interest. Together with its officials monarch should stand alone against the will and the natural tendencies of the ruling classes of the lower elevation, first socially and politically subordinate class. Stein expects constant progress in raising the status of education and lower strata of the population, to achieve a higher level of productivity of their labor, a higher level of consumption, the higher life opportunities. Stein’s ideas regarding the state of the social reforms in favor of the workers to improve their material and cultural conditions, caused a backlash from supporters of the revolutionary way of satisfying the interests of the proletarian masses. Liberal ideas have not lost their electorate in Germany. Free Democratic Party (FDP) is one of them. This is a liberal party in Germany, founded December 11, 1948 Member of the FDP was the first German President Theodor Heuss. In 1859 he founded the German National Association, in 1861 she collapsed on the German Progressive Party and the National Liberal Party. In 1880, of the National Liberal Party split off its left wing formed the Liberal Union, in 1894, GLP and the Liberal Union merged forming the German Freethinkers party, but in 1893 it broke on Freethinkers Peoples Party, and free union, but in 1911 they teamed up with German Peoples Party, founded in 1868, in the Progressive Peoples Party, and in 1918 after the merger with some leftist member of the National Liberal Party, it was renamed in the German Democratic party, in 1930 it merged with Mladogermanskim Order in the German state party, part GFC members formed the Radical-democratic Party. In 1918, the National Liberal Party after the merger with the leftist members of the Free Conservative Party was renamed the German Peoples Party. One of the biggest parties of Germany, the third largest (after the SPD and CDU / CSU) party of the country adopted a liberal policy: reducing taxes, reducing state influence on economic policy, the promotion of large and small businesses. Economic FDP motto So much of the state, as necessary, but as little as possible. The main support is among the entrepreneurs and managers of large companies. After appearing in the political arena Green Party FDP role as kingmaker significantly decreased. New elections in 1998 won a coalition of the SPD / Green led by Gerhard Schroder, remained in power until 2005, when Gerhard Schroder announced early parliamentary elections. In the elections of 2005, the FDP has shown excellent results in 11 per cent in fact, the FDP was the only one of the four leading parties, which showed growth in the number of votes. However, this victory was a Pyrrhic one: because of the fact that the allies of the FDP, the CDU / CSU led by Angela Merkel scored significantly fewer votes than expected, the coalition of the CDU / CSU / FDP not typed in the amount of 50% plus one vote needed to forming a government. After lengthy negotiations with the SPD CDU / CSU coalition with the FDP terminated and formed a government of so-called grand coalition, the CDU / CSU / SPD. In federal elections in 2009 the FDP received 14.6% of votes and 93 parliamentary seats 0 single-seat constituencies and 93 on the party list. The party enjoys less support in the territory of the former GDR. The main difference between the new doctrine began to redefine the role of the individual and the state in society. Social Liberals believed that the freedom of individuals should not carry unlimited nature, individuals must coordinate their actions with other members of society and their actions should not cause them harm. Expand the functions of the state in society, which was to take care of its citizens, provide them with equal rights to education, health care. Both liberal and humanistic doctrines were reformist; Liberals rejected the revolutionary way of transforming society; were supporters of gradual progressive reforms. A number of liberal ideas was borrowed by conservatives and socialists. In contrast to the liberal parties who are experiencing some difficulties in modern history, the liberal doctrine is an important component of modern political culture.