Global Transportation and the Logistics Industry

Global Transportation and the Logistics Industry The Transportation Logistics sector spans a wide range of service offerings such as by air, road, rail, sea as well as related services such as warehousing, handling, and stevedoring. The extent of coverage includes value added services such as packaging, assembling, labelling etc. In addition to these, Transport Logistic providers undertake the management role of planning, administering and coordinating. Over the years, the sector has reshaped in manner where most players have a tendency to consolidate; resulting in larger, integrated groups operating in more than one of the Transport Logistics sub-services/sectors. As a result, the limits between the sub-services/sectors become more and more indistinct. The benefits of globalisation and business process outsourcing of logistics services generated double digit revenue growth in the industry in the early part of the 21st century. However the co-existence of other pressures, threats and limitations such as the economic downturn, and fuel price hike contribute to the dramatic changes faced by contenders in the sector. With privatisation and liberalisation, more complexities were introduced to the sector. In addition, trade routes are changing and networks have become increasingly complex as have the agreements between companies sharing resources. There have been several regulatory requirements which have changed substantially in the recent years. Due to more IT enabled interconnectivity in companies, it operates across national. Hence, issues pertaining to customs, tax compliance, accounting and governance have increased. Companies looking to build a sustainable business need to continuously offer value additions to its stakeholders. Therefore with the changing business models in the industry, many companies are evolving from forwarding and warehouse managing businesses to highly industrialised, IT driven supply chain providers; adopting a holistic approach in their service. Impact of the economic downturn Over the past years, the Transport Logistics industry has been profiting considerably from positive economic conditions and the demand for raw materials, capital and consumer products. Since 2008 though, the trade was suddenly faced with some of the most complex market conditions in history. A tightening global credit crisis and economic downturn that began in the U.S. quickly spread throughout the globe, impacting many organizations in nearly every aspect of the business. Changes in consumer buying patterns have led to less significant transport volumes, and shifts to less expensive delivery modes, with a sizeable impact on the express business. The volatile oil price coupled with a stronger focus on emission reduction has increased pressure on transportation companies, especially airlines, leading to a record in airline insolvencies. In addition, the economic recession places more fundamental challenges on the Transportation Logistics industry: consumer patterns and a general cur b of demand thereby causing a lower level of the flow of goods. Opportunities in the emerging markets For a countrys economy, in addition to the tourism sector, even the transportation sector is often viewed as an important indicator of growth. With the rise in commercial trade activities, the location of manufacturing facilities and distribution centres can have a major impact on the growth of a countrys transportation sector and transportation infrastructure. The relative location of these manufacturing facilities and distribution centres can dictate whether the country becomes a centre within a logistics network or a spoke in the wheel, serving in effect as a transit passage. Such matters are of particular importance to emerging economies where the transport and logistics infrastructure is making rapid development. Logistic providers are faced with clients who wish to source out of low-cost countries or access these new markets. They need to ensure that they can help their clients meet their objectives, understand the emerging markets environment, and expand their competencies and resources. These companies are at a crossroads in their development and have several strategic questions to consider. Should they expand or try new a niche? Should they move into an acquisition? Should they look at a stock-exchange float? Should they invest in IT/new technology? Should they look at optimising their cost base to counteract the trend towards smaller margins? How can they differentiate from competition by convincing customers that they add value to the business? About FedEx Corporation Introduction http://www.csustan.edu/manage/harris/case4.html Federal Express is an express transportation company, founded by Frederick W. Smith in 1973. During his college years, his intuition that the U.S. was becoming a service-oriented economy and needed a reliable, overnight delivery service company designed for dedicated transportation of packages and documents was the cornerstone of the companys existence today. He started Federal Express with over $80 million, making it the largest company of its time ever funded by venture capital. He found investors willing to contribute $40 million, used $8 million in family money, and received the rest from bank financing. Background Federal Express became successful due to the fact that they pioneered in advanced IT interventions ahead of its competition. They built a super-hub in Memphis, Tennessee, where all packages from the United States would be loaded and shipped out each night. Today, Federal Express has over 143,000 workers worldwide, and delivers more than 3 million express packages to 211 countries daily. One major change has affected Federal Express. In January of 1998, Federal Express the company re-launched as FDX Corporation. FDX Corporation now includes Federal Express, Roadway Packaging System (RPS), Viking Freight, Roberts Express, and Caliber Logistics. Even though FDX owns all these companies, Federal Express still remains independent. Federal Express CEO is currently Theodore Weise. FDXs strategy is to corroborate on selling and synergies for all FDX companies, but run operations separately and keep each companys strengths and markets separate. Therefore, some information will be about FDX, but most will be for Federal Express as its own company. FDX Corporate Subsidiaries All business units of FDX follow the corporate mission statement of the parent company. This synergy allows for growth. It also puts the entity in a position to acquire more companies whose operations are similar. Currently, these are the names and descriptions of the companies under FDX, other than Federal Express. 1. RPS: North Americas second-largest provider of ground small-package delivery. It also services 28 European countries and Puerto Rico. 2. Viking Freight: The premier brand name in less-than-truckload freight movements throughout the western United States. 3. Roberts Express: Engineer and execute time-specific, door-to-door surface and air-charter delivery solutions that solve special-handling challenges for FDX customers within North America and Europe. 4. Caliber Logistics: Develops and implements customized logistics solutions that help FDX customers manage costs, improve customer service and focus on their core business activities. In the Sales Breakdown for these FDX companies, Federal Express still accounts for 83 percent of total revenues. The next largest is RPS, bringing in 11 percent of FDXs total revenues. Strategic vision http://apps.shareholder.com/sec/viewerContent.aspx?companyid=FDXdocid=784953 FedEx Corporations vision is a world where goods and information move quickly and seamlessly. A world where businesses source raw materials and parts globally, then move high-value goods quickly between continents and across time zones. A world where global information and transportation networks can shrink time and distance, creating competitive advantages for customers. FedEx has experienced consistent growth in terms of net income in just about every year of its operation, which has meant three decades of growth. One of the companys greatest strengths is undoubtedly its business concept. No matter what the economy is doing, there will always be a need for package delivery of some sort by companies and individuals involved in nearly every industry. Even when times are tough and companies are seeking to save money, FedEx has less expensive delivery alternatives from which to choose. Of course, being the originator of the express delivery concept is also a key strength. FedEx became a household name before any of its competitors ever arrived on the scene, and thus has become synonymous with the idea of express package delivery in the minds of many, if not most, consumers. Visionary leadership (introduction to founder CEO) Fred Smith recognized the need for a reliable, overnight delivery service. Smith presented the idea in a Yale term paper in the 1960s, and received a C grade for his efforts. Between 1969 and 1971 Smith, however, secured $90 million ($40 million from investors, $8 million from his family, and $42 million in bank financing) to launch Federal Express as the then largest startup funded by venture capital. Federal Express began offering overnight and second-day delivery to 22 American cities in 1973. Today, The FedEx Express unit is one of the five subsidiary organizations that comprise Federal Express. The FedEx Express unit is the primary focus of this study. FedEx Express is the global market leader in express transportation. The firm moves an average of three million packages daily. FedEx Ground is a subsidiary of FedEx Express. FedEx Ground provides ground delivery of packages in North America. FedEx Freight is a less-than-truckload carrier. FedEx Freight operates throughout the United States. FedEx Freight has two operating subsidiaries à ¹ FedEx Freight East and FedEx Freight West. Access is what makes all forms of interaction and exchange possible between people, businesses and nations. Increases in Access boost opportunities and empower people with the ability and confidence to improve their current conditions and future prospects. Mission Statement The Mission Statement of FDX is to produce superior financial returns for stockholders, by providing high value-added logistics, transportation and related information services through focused operating companies. This mission statement shows that FDX has a clear focus. (1) The main focus is to bring returns to stockholders. (2) They will emphasize adding value above and beyond just their service of transporting an object from one place to another. (3) Their focus of operations will be logistics, transportation, and related information. This mission statement is focused enough to keep FDX from diversifying into for example, food products; yet vague enough to allow growth in all of those areas. Philosophy FDX and Federal Express, in particular hold a People-Service-Profit philosophy. The ‘People goal is the continuous improvement of managements leadership. The ‘Service standard is 100 percent customer satisfaction. The ‘Profit goal is much like any other companys goal, and is essential to long-term viability. This philosophy governs how FDX runs its business, and defines strategies. Customers Markets, Globalization and Services The scope of the Federal Express operation covers business-to-business, business-to-individual and individual-to-individual accounts. Federal Express markets include more than 200 countries where 90 percent of all the worlds revenues originate. Federal Express provides both document and freight deliveries as well as supporting services. Stemming from the visionary leadership of the CEO, the company follows market reach global footprint and a business strategy. Competitors Federal Express list of competitors include: United Parcel Service (UPS), Airborne Express, Emery Worldwide, BAX Global, DHL Worldwide, and United States Postal Service. Federal Express holds 46.5 percent, the largest portion, with UPS and Airborne Express as the largest competitors. As shown from the preceding information, Federal Express is clearly a large, strong, and growing express transportation company. Environment screening analysis This section will show the services Federal Express provides; its strengths and weaknesses as an organization; the opportunities and threats, current problems and issues faced. Services Federal Express provides delivery on documents and packages both domestically and internationally. Further, the company also provides supporting services. In the United States, Internationally Supporting Services Priority Overnight Priority interNet Ship Standard Overnight Economy Collect on Delivery Same Day Next Flight Location Service First Overnight First Dangerous Goods Service Express Freight Priority Freight Worldwide Logistics Weekend Shipping Economy Freight U.S. Government Shippers Alaska and Hawaii Airport to Airport International Government Guide S.W.O.T. Analysis Company Strengths and Resource Capabilities: Globalisation: Federal Express largely operates on a global scale. They operate in 211 countries. They provide services that appeal to most of the world. They have such a large market in which to operate which generates tremendous revenue for the business. Benefits of global economies of scale become available to players that operate in such a large playing field. Innovation: Federal Express took the first-mover advantage by identifying airplanes and trucks as a source and resource to gain business advantage. This helped them to remain the industry leader since 1973. Technology and Communication: Federal Express uses and continues to search for new technology. They allow spending of $1billion a year, 10% of total revenues on IT interventions such as integration. The companys commitment to introducing new customer centric service models through IT keeps customers from switching to other providers. Federal Express also has excellent communication with their customers. They use tracking devices on all shipments and customers can trace their shipment through many different avenues including a user-friendly Web site. Federal Express customers can feel assured that FedEx will always be on top of technology. Strategic Vision: Company CEO Frederick Smith built an industry leader, and sustained the title since 1973. The strategic vision of the company is cascaded through top managers who are in charge of the strategic direction of the business. First-Mover Advantage: The company has had first-mover advantage in several areas: (1) Being a global express transportation logistics company (2) Advanced IT interventions that attributed to the continued success of the company (3) Incorporating smaller business units with similar operations under its belt to synergize and control more of the market. Consolidating its resource capabilities at an optimized level has attributed greatly to its success. Strong Brand Image: In 1990, Federal Express became the first organization awarded the Malcolm Baldrige National Quality Award in the service category. Further, in 1994, the company was the first in global express transportation to obtain simultaneous system-wide ISO 9001 certification in international quality standards. Federal Express has also developed its own quality system that matches their customers standards. Company Weaknesses and Resource Deficiencies: Escalating prices: Federal Express prices are priced above its competitors. This can be a weakness if their customers do not perceive a difference between Federal Express and its competitors services. Labour Disputes with Pilots: Federal Express pilots have formed the FedEx Pilots Association. This organization demanded changes in the pilots salaries, retirement benefits, and suggested outsourcing some foreign flights instead of giving their own pilots the job. The pilots have a Web site where news is posted and any grievances are communicated. During the busy Christmas season in 1998, the pilots threatened to strike. Federal Express and the FedEx Pilots Association have developed a tentative agreement, which is published on the pilots Web site. However, the pilots do not believe this agreement fully meets their expectations. The pilot dispute is definitely an internal weakness for Federal Express, considering they have 3,500 pilots employed with them. The business operations would suffer if there were strikes. When UPS employees went on strike in 1997, Federal Express took the extra 800,000 shipments a day. If Federal Express employees went on strike, their competitors could gain an immediate advantage. The reason for running subsidiaries separately: FDX has deliberately chosen to keep its subsidiaries separate. According to FDXs 1998 Annual Report, CEO Frederick Smith states, Simply layering the unique resource and operating requirements of a time-definite, global, express-delivery network onto a day-definite, ground small-package network would surely result in diminished service quality and increased costs. Under the FDX umbrella, we will leverage our shared strengths while operating each delivery network independently, with each focused on its respective markets. Frederick Smith is confident this will be a strength, instead of a weakness. Company Opportunities: Expansion Globally: Federal Express can continue to expand its global footprint. Expansion Internally: Federal Express can continue to acquire more similar smaller business which could offer Federal Express leverage to expand into new technologies or areas in their industry. Run Subsidiaries Together: If FDX doesnt profit from running the subsidiaries separately, they can change to integrating their operations to achieve better synergies and economies of scale. Contracts with Large Corporations: To stay the industry leader, Federal Express should form contracts with companies who will add cost-saving or value-adding benefits to their services. Joint-Ventures: Federal Express can form joint ventures, such as already with Netscape and American Express, to enjoy the growth of integrating their customer bases. Expansion of e-commerce: Federal Express already has a major presence of shipping online. They should keep finding Internet companies to contract delivery of their products. Since the growth of e-commerce is rapid now, Federal Express could enjoy both profits and brand name recognition from this kind of expansion. Company Threats: Y2K Problem: If Federal Express communication and tracking systems arent actually Year 2000 ready, they will experience lost shipments, lost customers, and lost profits. This is a threat for every business, but a global company will be affected on a larger scale. Community Responsibility in the U.S.: Federal Express might be subject to community disapproval in expansion within the United States. Right now, Federal Express has plans to build a second super-hub in Greensboro, NC. The airport is supportive, but the citizens of the community are not. Federal Express has to decide whether the community support or building the centre is more important. Relations with Foreign Countries: Through Federal Express expansions globally, they are subject to laws and regulations of all foreign countries. There could be major problems in this area, stunting growth and raising costs. Already, Great Britain will not let Federal Express fly their own planes for shipments. Federal Express must either load their cargo on to British planes, or use ground transportation. This is very inefficient for Federal Express; however, it keeps competition out for British Air Transportation companies. Everywhere Federal Express goes, they are at risk for regulations that hinder their operations or efficiency. Economic and Political Conditions: Federal Express is subject to the entire worlds economic and political condition in the areas of fuel prices and supply, customer purchase of their services, and relations with foreign countries. As a global company, they are subject to much more risk than domestic companies. Current Problems and Issues Federal Express has several current issues and problems. Decisions about these issues will affect Federal Express profits and brand name in the future. Federal Express Pilots disputes with the company over their salary and compensation, retirement benefits, and Federal Express outsourcing some foreign flights. Federal Express spends only 13.17 percent of total operating expenses on their labor expense. The industry average is 14.81 percent. However, Federal Express main competitors spend 20 and 24 percent of total operating expenses on labor. This is why the pilots are voicing their disagreements, and demanding change. Fuel Price Fluctuation: Federal Express raised their prices and developed contracts with oil suppliers to cover fluctuating fuel costs and volatility of supply. Creation of super-hub in North Carolina: Federal Express does not have the communitys support. Alliance with Netscape: FDX created an alliance with Netscape in order to simplify the world of electronic commerce. FDX will offer delivery services on Netscapes Internet portal site. This will allow both companies to achieve mutual business targets that could not be achieved otherwise. Alliance with American Express: Federal Express offers a 10 to 20 percent discount on many delivery services to customers using an American Express Small Business Corporate Card. Federal Express offers many different services spanning the globe; this is why Federal Express has many strengths, and opportunities. However, Federal Express must also be concerned with their weaknesses and current problems. Industry Analysis Dominant Economic Characteristics Federal Express is in the Air Freight or Air Cargo Transportation Industry. This industry had sales of $34.2 billion in 1998. This industry is in the early maturity life cycle because entry is difficult, yet current competitors are still growing. Companies can realize economies of scale in this industry in marketing and purchasing. Services in this industry are essentially identical, with the exception being the value-added services. General Economic Conditions The current global economic crisis can affect this industry by stunting foreign expansion and reduced utilization of express shipping services. The current crisis in Kosovo may affect business for these companies if any countries they do business in feel the United States is wrong and want to boycott American-originating products and services. Porters 5-Forces Model Rivalry Among Competing Sellers: This is a strong force in this industry because the competitors use price cuts to compete, there is a low cost and ease to switching brands, and the companies in this industry diversify and acquire other companies for strategic growth and synergy. Competitive Force of Potential Entry: This is a weak force in this industry. Each company currently in the industry has strong brand images, leaving a harder job for new companies. The capital expenditures to start an express transportation company are large, and the companies currently are achieving economies of scale by going global. Any smaller company will not be able to achieve these right away, not allowing them to compete on prices. Another factor threatening potential entrants is trade tariffs and international regulations. Most companies currently in the industry have already established relations with foreign countries. New companies will have to prove themselves to foreign companies, suppliers, and customers. Competitive Pressures of Substitute Products: This is a weak to moderate force in this industry. Businesses and individuals that wish to ship cargo and packages can do it with other modes of transportation such as trucks, trains and boats. However, the customers that use air freight transportation usually desire convenience, speed, and low cost. Traditional transportation modes do not offer all three of these. Businesses and Individuals who want to ship documents can use e-mail, the Internet, and Facsimiles. However, these can take some time to scan and load, and then it is uncertain that your document will get to its destination. Power of Suppliers This is a strong force if the suppliers serve industries other than Air Freight. If a supplier only has accounts, or the majority of their accounts with these companies, they will not be able to control prices and supplies. Suppliers that are involved in this industry are: vehicle manufacturers, airplane manufacturers, fuel suppliers, labor, airports, and shipping materials manufacturers. Power of Buyers This is a moderate force in this industry because competition keeps prices similar among the companies. The only difference is companies, such as Federal Express who have value-added services that allow a higher price. Also, the buyers of the services in this industry are reactionary. They do not know the technology before it happens. They become dependent on the technology, service and speed offered by the companies in this industry and will pay for it. Industry Prospects and Overall Attractiveness A trend among Air Freight shippers is to use the Internet for communication with customers and even obtaining shipping contracts with companies selling on the Internet. This alliance with the fastest-growing industry will bring exponential growth to the Air Freight industry, above and beyond what they would normally have realized without this. This industry should remain attractive, with concentration on competition for market share, service differentiation, and brand image. Current Advertising has been aimed at being better than the competitor for different reasons. Performance Analysis FDX has an impressive performance record for example in 1998 they had revenues of $15.9 billion. We can also look at their Net Income for 1998, as well as for the last five years. This information is shown in 4 on Page 3 of the Appendix. As you can see, sales have been growing steadily for the past five years. Looking at the net income, though, it isnt that impressive. It even declined in 1997, from the rising fuel costs during that year. However, in 1998 it grew from $200,000 to $500,000. That could be from reduction in operating costs, or from the acquisition of the subsidiaries which had lower operating costs compared to Federal Express. The financial ratios for FDX compared to Airborne Express (ABF) are in Table 2 on Page 3 of the Appendix. Most of the ratios show Airborne Express in better financial condition than FDX. However, this can be explained through FDXs size as compared to Airborne Express. Airborne Express does not offer as many services or types of shipments as FDX, and it only has half the market share as FDX. Since UPS does not have air shipments, we could not benchmark FDX to them. Clearly though, FDX and Federal Express is the market leader in this industry, have outstanding sales, a healthy profit, and a safe amount of debt. A 5-Year analysis of Federal Express profitability and activity ratios is in s 5 and 6 on page 4 of the Appendix. These ratios over time show a steady increase, except for year 1997, where fuel costs hurt Federal Express deeply.TNT N.V. is an international express and mail delivery services company with headquarters in Hoofddorp, the Netherlands. In the Netherlands, TNT operates the national postal service under the name TNT Post. The group also offers postal services in eight other European countries, including the UK, Federal Express Five-Point Strategy Federal Express has five strategies that govern business tactics. These are to improve service levels, lower unit costs, establish international leadership and sustain profitability, get closer to the customer, and maintain the People-Service-Profit Philosophy. Major Strategic Issues FDX is focused on three primary growth strategies. A collaborative sales process that leverages their shared customer relationships, aggressive global marketing of the broad FDX portfolio to targeted prospective customers, and a strategic application of information systems to reduce costs and improve customer access and connectivity. Introduction to the business strategy Expanding Access Through Our Networks While the benefits and mechanisms of Access are too vast and complex to attribute to any one creator, FedEx is proud to have been the driving force behind many milestones and advances, beginning with overnight express delivery in 1973 from our hub in Memphis. At first connecting 25 U.S. cities — and today, 220 countries — express delivery was a historic breakthrough in Access, collapsing the time and distance between places and connecting people everywhere. Through our expanding networks, anyone shipping a package can now tap into unprecedented speed and worldwide reach. Shaping the Way the World Connects FedEx delivers systems and solutions, not just packages. In recent years, weve increased Access by moving information in the form of bits as close to its destination as possible before converting it into atoms. For example, when one customer planned to host a leadership seminar in New Delhi, FedEx Kinkos transferred tons of materials digitally to China, printed them in one day, and shipped them to India the next. With FedEx Office Print Online capability, any individual can do the same — printing documents remotely and having them delivered locally. Its one major new way FedEx is contributing to greater Access. Today, thanks in part to the Access provided by the internet and FedEx, its possible for a leading electronics company to synchronize its microchip factories in China to the pulse of global demand, flying the finished chips as needed to manufacturing lines in Shanghai, Seoul or Singapore. The chips are bound for laptops and phones that create personal connections in their own right, while the corresponding transformation of China into the worlds factory is expected to lift half a billion people out of poverty by 2020. New FedEx hubs in Guangzhou and Hangzhou will increase the global Access of homegrown Chinese companies and contribute to greater quality of life, while helping companies outside this market to navigate and grow their business here. Changing Whats Possible For 35 years, FedEx has been dedicated to changing whats possible and improving life for people everywhere by promoting greater Access. Every day around the world, we see first-hand how Access empowers people to improve their lives, their businesses and their communities. Because we see this power, we have a unique perspective on Access. Infrastructure/supply chain value chain FedEx has done several things with its value chain to develop new business. First they have always recognized the need to have technology and IT work to communicate the logistics that they run. They have developed internet technologies that work simply and efficiently to enable customers and sellers to use FedEx as a go between. This has enabled many companies to integrate FedEx technology into their own web sites for customers to use. However, up until January 19, 2000 the organization of Fe

How animals save the planet Essay

Narwhals like these help scientists track global warming in the Arctic. These mythical looking tusked whales, also known as the â€Å"unicorns of the sea,† are measuring changing temperatures in Greenland’s arctic waters to track global warming. Climate scientists at the University of Washington attached thermometers and small satellite transmitters to the narwhals, who can dive far deeper than humans. As a result they found that waters in Greenland’s Baffin Bay are 0.9 degrees C warmer than formerly calculated. Dogs Working Dogs for Conservation in action. Humankind has long looked to its best friend to lend a helping nose – whether it’s a hunter tracking down prey or a police officer searching for drugs. Now groups like Working Dogs For Conservation and UK-based Conservation Dogs use dogs to sniff out endangered animals and plants – like jaguars in the Amazon or black bears in China – so researchers can track and save them. Birds Birds are natural recyclers. While our feathered friends in more urban areas have been known to utilize trash like string and paperclips in the building of their nests, male bowerbirds in Australia and New Guinea repurpose bright plastic containers and bottle caps to build their elaborate â€Å"bowers,† arched walkways carefully decorated and designed to attract female partners. Octopi A resourceful octopus searches for suitable shelter. Another animal recycler, the octopus is renowned for its intelligence and use of tools. Certain species like the veined octopus build shelters from sea shells, coconut shells, or more human debris. As this video shows, octopi enjoy hiding inside of glass jars they find on the ocean’s floor, putting what would otherwise be trash to good use. Rats An African giant pouched rat sniffs out a landmine. Like dogs, rats have a superior sense of smell. African giant pouched rats like the one pictured here sniff out land mines while being too light to  actually set them off. Anti-landmine organization APOPO dubs them â€Å"HeroRATS† for their ability to help the group find these environmentally hazardous, not to mention dangerous, weapons. Bees Bees use their keen sense of smell to detect environmental contaminants. Bees are widely talented and have a sensitivity to smells, tastes, and colors. They’re also highly communicative, using sound and dance to talk amongst themselves. It turns out that they can recognize specific types of chemicals and send off a certain buzzing sound depending on what chemical is released into the air. This is helping humans detect toxic chemicals in the environment and could be useful in detecting chemical warfare attacks. Sea Lions and Seals A sea lion measuring ocean conditions.  Like the narwhals, sea lions and seals can easily dive deep below the water’s surface to track climate change. Researchers at the University of California Santa Cruz rely on them to measure salinity, temperature, and other conditions so we can develop better models of ocean water circulation. Elephant seals in the Arctic measure temperature and have also been used to track the health of U.S. salmon populations. Mules A mule measures radiation levels.  Sarah and Little Kate are two mules that have been recruited to brave the conditions of the Santa Susana Field Laboratory outside of Los Angeles. A 1959 leak at the laboratory left radiation that may still linger in the area. Equipped with gamma radiation scanning equipment, the mules investigate the area and report back to government officials conducting this study. While it may not be ethical to subject animals to hazardous areas, the work they are doing may end up making the area safer for humans and animals alike.

American CEO Compensation is Immoral

Substantial evidence shows that American CEOs are better rewarded than their counterparts in European countries, and that this trend has been on a rapid upward growth starting from the last thirty years and only slowing down during global economic recessions. As expected this trend has drawn considerable arguments, with a lot of questions posed about what structures do American companies usually apply when commissioning such abnormal pay hikes and whether such structures are ethically and professionally justified.For instance, it can be loudly wondered whether the American CEOs deserve these high payments more than other CEOs elsewhere in the world. It can also be wondered whether they have more responsibilities than their counterparts in Europe and other continents alike. Well, the answers to these questions may draw all sorts of answers to the affirmative and/or otherwise.For purposes of this paper it is hypothesized that, the abnormally huge compensation packages given to American CEOs in the form of salaries, bonuses, stocks, options, or even termination packages is not morally justified given that most workers in America are still struggling with the agony caused by unemployment, ineffective social welfare systems, and increased costs of living. In tackling this seemingly sensitive issue, efforts will be made to represent both sides of the argument in equal measures and then finally a final verdict will be made in support of the study hypothesis.Theoretical Framework: Rogerian Argument Himself a psychologist, Carl Rogers advances a â€Å"rational† kind of approach especially when sensitive matters are at stake. He opines that a writer should first of all understand strive to represent his readers perspectives in his writings using the most neutral words there can be. He should also do the same when advancing his standpoint on an issue, particularly if such standpoint is not good news to his readership.His advices are that a writer should not adopt a n adversarial approach in presenting arguments rather he should adopt a seemingly neutral ground that will help to build sympathy and the desire to read more on the part of the audience. In fact, he reasons that a writer should not make a generalization as what his readership should believe of do, rather he should together with his readership struggle to finding and defending a neutral ground that will enable the readership to make their own personal decisions based on the fairly and factually resented issue.Using this practical method of argument this paper will seek to present the sensitive issue of executive compensation by delineating the issue in operational terms; agreeing on morality of increased CEO compensation packages; refuting the morality of the same; offering examples why increased CEO compensation packages is not morally justified, and; proposing a neutral compromise that pits the two positions equally acceptable to the audience. Research Problem Is it morally justifi ed to pay CEOs huge salaries while other employees are poorly rewarded?This paper intends to carry out an intensive study to investigate whether the evidential abnormal American CEO Compensation packages are morally justified. To achieve this, a range of existing literature on marketplace modalities governing employee compensation vis-a-vis ethical structures will be revisited. The literature collected thereof will be analyzed and systematically presented using the five principles of communication as advanced by Carl Rogers with view of advancing an opposition verdict.There is a general consensus that teachers are underpaid and their professions are under respected. Now what if I told you that presidents of colleges make a lot of money? And that they have been making more money since the recession even though campuses at large have lost classes and fees have been increased for students. Do you feel that the presidents for scholastic institutions should still get paid so highly? Well , it all boils down to the general perspective held by an individual. Most European countries believe in a more socialistic approach to president/CEO/executive pay.Their salaries represent a level of contentment and achievement that can be justified as being equal to their counter parts below them. Here in America, since the recession many Americans have been scratching their heads in wonderment as to why CEOs of companies such as CountryWide, BofA, and Goldman have been pulling in such large amounts compared to the rest of the workers. Brian Foley mentioned that many American CEOs make more money in one year than the median salaried worker makes in lifetime. Is this an injustice? Our European corporate counterparts see it as such.However many European companies move their base to America to reap the same rewards that American CEOs get, so what part of making such high pay makes it right? As a student and an intern at a finance company I feel that the corporate pyramid represents mo re of a stairway to heaven. I wonder what part of life, morality, and injustice to my coworkers must I face to reap the future rewards of possibly being a partner or maybe more? Should I work for the money as many Americans do instead of our European counterparts who work for contentment and the ability to provide security to their employees and others?With the on set of the recession American corporate pay structure has not only been heavily scrutinized by those who are not in the top of that structure, but has also been shunned upon by many other CEOs and Presidents all over the world. Greedy for money, unjustly leaning towards the welfare of Top executives, immoral for people who are unemployed because a CEO is unwilling to hire new members to keep his salary as high as possible; these are the ideas that resonate in newspapers.Although after being an intern at KKR Capital for one and half years and getting paid at 25 an hour, my sentiments are starting to be different. Background Information There is no doubt on the authenticity of the generalization that, CEOs in American corporations (profit and not-for-profit alike) are rewarded handsomely compared to what their counterparts in other countries particularly those in Europe earn. Consequently, significant debate on this seemingly sensitive issue has ensued among policy makers and pundits alike within and beyond the US borders.Tellingly, some of these loud voices in acknowledgement as well as those in opposition have got some elements of sanity in them. After all, common sense as well as sound work ethics holds that employee compensation packages should be pegged against performance meters. In their investigation on the patterns of executive compensation among â€Å"S&P 500, Mid-Cap 400 and Small-Cap 600 companies† between the period commencing 1993 to 2003, Bebchuk and Grenstein found out that indeed there has been a tremendous increase in remuneration packages for CEOs and top executives across maj or organizations in the United States (2).Their findings pointed out to a whopping mean compensation increment of 146 percent for CEOs in the S&P 500 category, the mean compensation for â€Å"top-five executives† also grew by a 125 percent margin from $9. 5 to $21. 4 for the same category. An increase from the $3. 7million recorded in 1993 to $9. 1 million recorded in 2003. Similar upward trend was also observed in the Mid-Cap 400 and Small-Cap 600 company categories.A comparison of the mean compensation increase between CEOs and the top-five executives indicated that CEOs were higher in 2003 when compared to 1993, an indicator that indeed CEOs compensation packages has grown over the years (2-3). Faulkender et al argue that CEO compensation in majority of the leading US organizations has soared to reach higher levels courtesy of â€Å"an explosion in stock option grants† and â€Å"flawed governance mechanisms in the pay-setting process† (110). Precisely, their data shows that the mean CEO remuneration package for S&P 500 corporations grew significantly from a low of $850,000 to $14 million between 1970 and 2000.For unexplainable reasons the growth dropped in 2002to $9. 4 million only to gain momentum again to hit the high of $13. 5 million between 2005 and 2007 (110). Again, it dropped in 2008 to $10. 5 due to the biting effects of the global economic crunch. [See appendices 2 for amore details] There is a huge discrepancy between CEO salaries and those of other employees. Trends show that the discrepancy has been on an increase starting from the last thirty years and only slightly dipping on few occasions due to the effects of unfavorable economic developments.As a matter of fact, unusually high salary packages have been ditched even on controversial circumstances to executives embroiled in management squabbles. In mind is the notable $210 million that was given to HomeDepot departing executive, Robert Nardelli and the $187. 5 million gi ven to NYSE departing executive Richard Grasso. In the list of the â€Å"most controversial compensation packages† issued to an executive is the former Tyco CEO, Dennis Kozlowski who was given a dispatch package of $5.1million worth of shares in the company and other shares from a subsidiary company worthy $81 million despite him being not cleared from fraudulent charges brought against his manner of management while serving as the company CEO (Faulkender et al). Morality in American CEO Compensation Kaplan (2009) argues that, the widely held notion that CEO compensation packages are abnormally high is nowhere near the truth, and that CEO compensation packages do not contribute to financial crises.He offers what seems like a set of well researched and analyzed data showing that CEOs are actually underpaid particularly when their compensation packages are juxtaposed against those of â€Å"hedge fund managers, investment bankers, private equity investors, money managers, and l awyers†. In fact, in 2007 S&P 500 CEOs earned relatively low salaries compared with what top hedge fund managers took home. In his well broken down analysis, he offers that the salary scales of other employee groups just as that of the CEOs has grown considerably since 1990s.Analytically, this is an indicator that CEOs are not riding on an abnormal or even unethical reward wave. Contrary to other studies on CEO compensation trends among American corporations, Kaplan concise research findings show that CEO salaries among major US S&P 500 companies only gained momentum in 2000and that since then the mean and median CEO compensation indexes has been on a stagnant as opposed to a growing trend. Even so, in what seems as a concurrence with other studies on the American CEOs compensation matter, Kaplan agrees that since 2008 the trend has been on a decline trend.Moreover, as opposed to the gross income trends entered in the prior decade, CEOs only made a small portion, three percent of the number of Americans making the top 0. 1 percent gross income in the 2004- 2005finacial year. That the S&P 500 CEOs only managed to account for about 0. 60 percent of the total income for Americans making the top 0. 1 percent gross income in 2006 as compared to 1. 2 percent registered in 2001, with indicators showing a likely diminishing trend in the future. According to Bebchuk, Fried and Walker any ‘rational’ human being including CEOs may be tempted to enrich themselves if given an opportunity to do so.They argue that, â€Å"When changing circumstances create an opportunity to extract additional rents–either by changing outrage costs and constraints or by giving rise to a new means of camouflage–managers will seek to take full advantage of it and will push firms toward an equilibrium in which they can do so†(cited in Gabaix and Landier 53). A case atypical to this postulation is the popular use of the stock option packages by CEOs to incre ase their benefits without undergoing the agony of facing shareholders vetting and/or wraths.Moreover, the behavior of the board members also gives CEOs a leeway to sneak in high incentives for their positions. Incomplete or ill-informed board members may fail in their duties to vet any salary increases on the part of the CEOs giving them a wide operating space. Some board members may also be lacking the needed powers to question CEOs compensation decisions; this is a case common in corporations with very powerful CEOs who tend to ‘manage’ the board. There is no direct link between financial crisis and high executive compensation.Though it is obvious that high remuneration packages may play a significant role in financial crisis engulfing companies such as the one witnessed in 2008, other more directly linked and more powerful factors are responsible. In mind is the weird banking regulation that leaves too much space for financial institutions to give out unsecured cred it facilities as well as the great leeway on the part of such banking institutions that accords them an opportunity to double as hedge funds.By fair terms these two factors are the ones to blame and not the hiked executive salaries given that the financial crisis was chiefly caused by high rates loan and mortgage defaulting. As a matter of fact, Faulkender et al (116) argue that executive compensation forms a very small chunk of the many causal factors of the recently ended financial crisis and that it cannot be blamed for all the woes engulfing the American banking industry. According to Grundfest executives of banks experiencing financial crises cannot be held accountable for causing the crises.In fact, he boldly offers the executives incentives cannot be blamed for financial crisis that hit the banking sector in 2008. This he defends by offering that the executives always give their best when it comes to managing their organizations and that they formulate strategies that are bas ed to the best of their knowledge and experience: â€Å"Sure, they were miserably wrong, but they didn’t know they were making a huge mistake that would cost them, their shareholders and taxpayers a huge fortune† (1).He defend this argument by reminding his readership that even the executives lost their investments in the form of stock they held in the banks. That the executives are also shareholders of the organizations they head, it is an indicator that they do not their own interests but that of the shareholders and that any eventuality of a great financial crisis is just normal in that it is not triggered by any commission or omission on the part of the executives (1).The high CEOs compensation packages among American public corporations are ethically justified. The competitive nature of the domestic market economy between privately owned equity firms and public corporations where private organizations offer very competitive pay packages to woe top executive with p roven performance track records. A case atypical to this argument is depicted by the mass exodus of top executives from public corporations to Wall Street based private equity corporations where they offer a range of executive advisory services (Kaplan 1).American CEO Compensation Immoral Is American CEO Compensation moral? I believe that it is immoral because compared to that of European CEOs, American CEOs get paid so highly and with the onset of the recession, this has been highly scrutinized. It is argued that executives who by capitalizing on the seemingly lax regulations on the compensation modalities go ahead and declare abnormal bonuses for themselves are result-oriented as opposed to rule-oriented.Lundberg and Montell proves this postulation by asserting that the growing trend on the part of executives to reward themselves with hefty salaries is occasioned by the market systems, particularly those based on commission basis or the popular â€Å"performance-based† remu neration. Analyzing a number of similar trends they argue that the performance-based salary perks erode the moral content among executives to the extent that they fail to link their actions as unethical but economically justified, given the huge profits they help make for the companies they head (2).Financial incentives are responsible for attracting all manner of personnel some of whom are only driven by the desire to reap from the huge legitimate benefits and if possible to use the seemingly ambiguous employee compensation regulations to achieve this in a quicker manner (Schwab 1). As a matter of fact, it has been argued that incentivized compensation packages are usually complex especially if large production processes are involved so that it becomes difficult in determining the â€Å"what, how much, who, and when† of production units awarded to individual employees.Such complex scenarios may tempt executives to overstep their powers and therefore increase their salaries. Moreover, though the performance-based compensation scheme is buoyed by the notion that highly rewarded employees perform better this is may not be the case in all situations especially if some of section of the employees is rewarded handsomely at the expense of others.Paying executives too much money is tantamount to immorally siphoning a large chunk of the overall profits that an organization makes and spending it on one individual instead of doing so on the large number of the shareholders who are in real sense the owners of such organization. This trend which has been witnessed in many financial institutions in the US has resulted in immense suffering on the part of the shareholders. It can be argued that these sufferings are threefold (Murali 1):First, from the poor decisions taken at the expense of the long-term viability of the company; second, through the payouts of excessive benefits for mediocre or poor performance; and third for the costs and settlements of any ensuing la wsuits, which were paid by the companies involved. Most importantly, these skewed compensation packages do not subscribe to any conventional capitalism rules. This is because it flouts the tenets of performance-based reward system as it does not make sense that American CEOs are the only hardworking executives in the whole world.As Murali summarizes it, â€Å"There is no way that the job of CEOs in the US has become 20 times more difficult than it was in Alfred Sloan’s day or 10 times more difficult than it was in the 1970s, and yet the packages suggest precisely that† (1). There is no doubt that the American government does not give much attention to executive compensation practices employed by major corporations operating the US. This has given much room to large financial institutions to engage in unprecedented reward systems that enrich top executives at the expense of the other cadres of employees and the shareholders.Such, reward system is not only selfish and im moral but it also highlights on the bred of CEOs running large corporations: as persons out to perpetuate their own agendas rather than that f the shareholders. Mitigation Measures It is true that in approaching the American CEOs compensation issue a lot of care and sobriety should be used. This is because there are both light and dark sides on the issue. The most certain solution to the issue seems to be legislation of strict regulations that will put limits to the amount of bonuses executives can award themselves.However, this need not be as plain as it is said; otherwise it will not be accepted by the majority. Americans needs fundamental economic legislations that will address a wide area of the puzzle including making the cost of living more affordable for the common American so as to mitigate the biting effect of economic of future economic crunches. Such legislations will ensure that the executive compensation packages are also fixed in accordance with the prevailing economic trends as opposed to the individual performance of a company.In regard to their â€Å"result-oriented and rule-oriented† analogy, Lundberg and Montell offer that result-oriented executives are most likely to disregard the moral fabric when compared to their rule-oriented counterparts. In this regard they opine that the performance-based incentive programs are a recipe for moral degradation on matters of employee compensation and that they only succeed in creating result-driven executives and not rule-conscious ones (Lundberg and Montell 2).It can therefore, be asserted that even in the presence of rules that fix executive compensation limits, there can never be a convincing assurance that the problem of abnormal compensation can be fully addressed given that, the inherent failure on the part of the result-driven executives to acknowledge the element of morality in following or even breaking the set rules. Again, the bonus pegged market structure where both short and long ter m bonus targets are included as part of competitive reward system to motivate hardworking employees, and to attract and retain talented employees’ only serves as a catalyst for breach of such rules (2-3).This postulation is supported by Schwab (1) when he says: While regulation is important for the future of the global economy, rules alone are not sufficient. The economy is not an independent or self-contained realm; the crisis has shown that the economy has to serve society. We have to be careful that the measures taken to curtail the crisis will not damage the power of innovation in the real economy. In mitigation it is hereby advanced that the realm of management should not be commoditized, rather it should be handled as a profession.This postulation is advised by the conventional wisdom that a profession just like a society is governed by â€Å"ground rules† and not monetary incentives. Such a scenario will accord all cadres of employees an opportunity to reap from the fruits of their labor in proportionate measures irrespective of their status in the organizational ladder. Most importantly, this â€Å"will create an unspoken social contract of trust to other members of society† (Lundberg and Montell 4). This postulation draws its impetus from similar sentiments shared by Schwab (1) when he generously offers that:When I had surgery a few years ago, I knew very well that my future quality of life would be dependent to a large extent on the qualifications of the surgeon. This is why I sought an expert who was the best in his profession. I naturally assumed that I was in the hands of a doctor who could apply his most professional skills without claiming that he would like to have a share of my future income – since, of course, this would be dependent on his knowhow – in addition to his remuneration.In this regard Reynolds offers that organizations should foster efforts toward the improvement of personal qualities such as edu cational qualification, work experience, as well, the propensity to embrace change. He argues that such efforts are capable of instilling the sense of morality among employees (241). Work Cited Bebchuk, Lucian and Yaniv Grinstein. The Growth of Executive Pay. Discussion Paper No. 51004/2005, Harvard Law School Cambridge, MA 02138, (2005). Faulkender, Michael, Dalida Kadyrzhanova, N.Prabhala, and Lemma Senbet. Executive Compensation: An overview of research on corporate practices and proposed reforms. Applied Corporate Finance, 22. 1. (2010). Co Gabaix, Xavier and Augustin Landier. Why Has CEO Pay Increased So Much? The Quarterly Journal of Economics, February 2008. Grundfest, Joseph. ‘What’s Needed is Uncommon Wisdom’, New York Times online, October 6, 2009. Kaplan, Steve. (Good) CEOs Are Underpaid, Harvard Business Review, Harvard Business School Publishing, June 15, 2009.Lundberg, Viktor and Christofer Montell. The effects of incentive compensation on moral awa reness: An explorative study. Master Thesis in Management Accounting, University of Gothenburg, School of Business, Economics and Law, 2010. Merchant, Kenneth, A. , and Wim A. Van der Stede. Management control systems: Performance measurement, evaluation and incentives. Essex: Pearson Education Limited. Murali, D. Pay should reinforce right tone at the top.July 8, 2010, accessed July 22, 2010, from: http://www. thehindu. com/ Reynolds, Scott. Moral awareness and ethical predispositions: investigating the role of individual differences in the recognition of moral values. Journal of Applied Psychology 91. 1 (2006); 233–243. Schwab, Klaus. Financial crisis is a chance for positive change. Times Online, Publ. 081104. Accessed on July 22, 2010, from: http://business. timesonline. co. uk/tol/busines/management/article5076011. ece/

Analysis Of The Movie Copycat - 1205 Words

Analysis of Copycat (1995) In the movie â€Å"Copycat† from 1995 there is a character named Helen Hudson (Sigourney Weaver) who is a psychiatrist that studies the behavior of serial killers. At the beginning of the film she is giving a lecture at the University of San Francisco and at the end of the lecture, Daryll Lee Cullum (Harry Connick, Jr.) follows Helen into the restroom and tries to hang her, but fails and gets locked up in prison. Thirteen months later, Helen suffers from panic attacks and agoraphobia which have resulted from her Post Traumatic Stress Disorder. She has been housebound for months now and has a homosexual assistant named Andy (John Rothman). Darryl Lee is in contact with William McNamara, another psychopath who wants to follow in Darryl Lee’s footsteps and become famous. So Darryl Lee tells William to continue his work of killing Helen. 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