Advantages of Group Decision-Making Essay

Firstly, group decision making from experts in different areas is beneficial to solve complicate problems. For instance, in a small company, boss often makes suggestions by himself; the result of his behavior relies on the ability of the boss. So there are cases when he can’t make things right, which may be serious fault to the operation of a company. However, people with different backgrounds consider the problems more carefully and comprehensively, as a result, running the company will be in less risk. Secondly, people making decisions in groups are eager to bear more risks individually. Decisions come with risks. People who make the wrong decision will take the responsibility. A contradiction rises up when they attempt to avoid being wrong and at the same time, solve problems correctly. As a result, people will somewhat not dare to make the final decision. Nevertheless, group decision makers can share the risks because each of them has responsibility for the suggestions to the problem. Moreover, individual risks are decreased when some others rectify the suggestion for him or her. 2.Disadvantages of group decision-making Firstly, low efficiency in decision-making, everyone has his own opinions and under certain circumstances such as brainstorming, it costs more time to decide what to do by group decision-making than by personal decision-making. If things go well, the results will come out quickly. But if each of them in a group can’t comprise in the end, nothing will be achieved. For example, there is news from CCTV about the 2012 DOHA Climate Change Conference, †Nearly 200 countries haggling over how to stop climate change – and how to pay for it – failed to reach a deal on schedule Friday. That sets the stage for the wrangling to continue late into the night.† Things like these are usually occurred when a large number of people attend. Finally, the conference extended until they arrive at an agreement. Secondly, group decision-making will lose effectiveness when people are not likely to put up with suggestions out of some reasons. In such cases, the leader of the group will be the only one who does decision-making, which has no diffidence with personal decision-making. All the members of the group should have equal opportunities and are willing to speak out. Then, group decision-making functions better in dealing with problems.

The person that inspires me most Essay

The person that inspires me most turns out to be a fictional character, Barney Stinson from the famous series How I Met Your Mother. He exudes a uniquely vibrant and joyous energy in every single episode. Inspired by him, I have learnt many positive and useful traits. First of all, he is a positive person, even in the face of adversity. His well-known favorite quote:† When I get sad, I stop being sad and be awesome instead† depicts his notion clearly. It always reminds me of being sanguine no matter what happen and what I will come across. I believe by being positive as he is, I would have more self-control and therefore be able to achieve amazing feats in life. Secondly, Barney is a steadfast character as well. His never-give-up attitude proves to be one of most valuable lessons in life. Whenever he comes across a challenge, he is determined to see it done. That is also the reason why he is able to win the hearts of the large audience. His resolute has influenced me in making many important decisions in real life: when problems arise, no matter how daunting it seems, I must continue on and solve it at all cost. Step by step, I find myself more determined, more persistent in whichever path I tread upon. Last but not least, I am also impressed by his lightheartedness – to â€Å"live every moment to the fullest†. Yet he sometimes behaves in idiosyncratic nature as being unworried about many encumbrances; many desire to have such personality: being untroubled by pressing concerns and stressful life like him. Every moment, every second is to be treasured, because you never know what may happen to you tomorrow. Therefore I too believe: life is to be enjoyed, not to be detested.

Burden Of Proof

It is a proof that should be proved by the person who made allegations. The burden will be on a party to prove the allegations. So it is the responsibility of Plaintiff to establish the prima facie evidence on the allegations made. But the responsibility is limited to civil laws only. In case of criminal cases, the burden will be on the State. The complainant must produce the evidence for the allegations made by him/her. BURDEN OF PROOF IN THE BUSINESS Like in other, the business laws also require evidences when the allegations are made by plaintiff.If the business cases lead to civil nature the burden of proof lies on the complainant and whereas in the nature of criminal cases, the burden proof lies on the investigating authority or respective State. When the person not in a position to prove the allegation, the objection ceases to exist. Hence compliant become null and void. BURDEN OF PROOF IN CRIMINAL LAW When a crime has been committed, the criminal defines that investigating aut horities are responsible to arrest suspects, searching and investigating suspects, questioning of witnesses etc.Hence the burden of proof lies on the investigating authority but not on suspected person or victim. BURDEN OF PROOF IN LABOR LAWS Several labor laws exist that are based for workers protection i. e. Workers compensation, equal remuneration, minimum wages etc. All such laws must be complied by the employers. The burden of proof lies on the employers about compliance of labor laws. The creation of laws did not happen in a single day. Many centuries involved for the development of laws. When there was no law, the workers were paid the wages discriminating the men and women.Accordingly Equal Remuneration Act was established. Previously the wages were paid only and no compensations was paid for the persons who have met with illness or injury at work place. The workmen compensation Act established to provide the compensation to such workers. In such cases, when there is allegat ion, the employers having burden of proof that they have complied the laws. REFERENCES: 1. http://www. answers. com/topic/burden-of-proof 2. http://www. britannica. com/EBchecked/topic/84967/burden-of-proof 3. http://www. gotovertime. com/law. html

Choose two potential markets( construction related, such as railway or Essay

Choose two potential markets( construction related, such as railway or civil etc. ) for a contracting organisation to enter for - Essay Example Overall, construction advanced by 8% in the year 2010 and in the subsequent year by 2.8% (DKM Economic Consultants, 2009, P.15). Nevertheless, by the later part of the year 2011, the entire construction industry’s growth had started to become slow with a relative downturn in the year 2010. For instance, new construction orders in the year 2012 were below the preceding quarter’s level, by 8.5% (DKM Economic Consultants, 2009, P.17). At this time, the house construction sector, both public and private suffered a major blow, and only infrastructure construction showed slight signs of development, as the government made the attempt to keep the civil works running, through collaboration with private investors. This implies that, by the year 2012, the house construction segment had been surpassed by civil engineering in terms of performance and industry leadership. The United Kingdom’s construction industry is a major economic pillar, since it contributes about a tenth of Britain’s (GDP), provides work to approximately 1.4 million individuals and accrues revenue of about ?65 billion per year. This industry is also ranked among the world’s top ten industries, further emphasizing its significance and the wide array of opportunities it has for new engineering companies. Construction Market Sectors The United Kingdom building and engineering industry comprises of large and dominant companies, which operate along with smaller establishments. Competitive rivalry in the industry is slightly eased when companies diversify their operations into different sectors. Key among these sectors, are the house construction and civil engineering sectors, which are analyzed hereunder, for the purpose of advising a potential construction contractor (Greenhalgh and Squires, 2011, P.35). Civil Engineering Sector Civil Engineering, which encompasses public works like railway, highway and other infrastructure constructions, is UK’s building and const ruction industry’s largest segment. This sector accounts for approximately 52.9% of the overall value of the industry (Data Monitor. 2012, P.7). In 2012, the output from infrastructure construction amounted to ?14,181 million, whereas infrastructure maintenance stood at ?7,775m (Data Monitor. 2012, P.10). Division of the civil engineering sector into its sub-sectors indicates that, railways, roads, as well as, water and sewerage subdivisions represent the greatest infrastructure construction components, at 25%, 24% and 22% in that order (Data Monitor. 2012, P.16). In the duration running from 2007 to 2011, all the new civil engineering sub-sectors depicted relatively steady annual growth. For instance, the water and sewerage sub-sector depicted a 10% growth, the roads sub-division a growth of 9%, while the railway construction sub-sector was at 24% (Data Monitor. 2012, P.18). One of the principal leaders in this sector is Balfour Beatty. This renowned civil engineering compan y deals with construction, business investment and overall engineering services. Balfour Beatty offers its specialized services in complex structure, road, utility systems and rail construction, not only to the United Kingdom, but to the entire globe as well. The company’s operations cover the entire European region, the Americas, as well as, the Asia Pacific area. This

Alexis de Tocqueville, Democracy in America Vol II, Part 1, Chap 1-11 Essay

Alexis de Tocqueville, Democracy in America Vol II, Part 1, Chap 1-11 - Essay Example Alexis believes that the doctrines and methods of Descartes, Luther and Voltaire are applied best in America (Gutenberg). Although Americans are more liberal in thought and practice yet Christianity holds a mystical power; with politics or laws not affecting change on the religious beliefs (Gradesaver). Alexis regards that Americans are deep rooted in their ideology because they have not gone through any democratic revolution, thus no major shift in their ideological concepts has resulted (Tocqueville). Alexis says that societies only prosper when they have thoughts, ideas and actions that they have in common, and commonalities result from common belief systems and not following individual paths (Gradesaver). Tocqueville suggests that man does not have enough time to define and explain all the truths on his own and thus has to believe already established truths, which have either been established by people of superior intellect or by societies (Gutenberg). He thinks that every man’s intellect complies with the higher authority to a varying degree; no mind can be completely independent and free of all authority (Gradesaver). American people are more apt to believe in religion due to the majority of society believing in it, as the majority of people are believed to have equal capability of believing the truth thus; religion finds its strength based in public opinion (Tocqueville). Alexis believes that the tendency of American people to investigate every truth independently; unconsciously leads them to reverting to the behavior and attitudes of mankind and thus a generalization of views emerges (Tocqueville). Americans believe in equality which gives birth to generalization; the English are more inclined towards an aristocratic way of life, thus leading to particularity and negating individuality (Gutenberg). On the other hand, according to Tocqueville, Americans do not revert to

Management Functions of (whatever company you desire that makes it Essay

Management Functions of (whatever company you desire that makes it easier for you) - Essay Example cruiting, developing and rewarding individuals which comes under the function of Staffing while Directing is taken to be the process of influencing employees’ behavior through communication, motivation, leadership and discipline. The purpose of Controlling is setting the performance bar for not only the employees but also the company’s objectives and actual accomplishments. Even a successful conglomerate such as General Electric (GE) with more than 300,000 employees engaged in 11 technology, services and financial businesses across 160 countries has been focusing and improving on these basic management functions for almost 130 years and continues till date (GE, 2006). It is these very functions that have brought them the success and appreciation which is seen today (Colvin, 2006). For all aspects of management and the basic principles which a company follows as it conducts its business, a mission statement is quite important (Hellriegel, 2004). GE does not have a stereotypical vision/mission statement to consider as part of their planning function. They appear to believe very strongly in what they call ‘company values’ which is a combined vision-mission statement stated as imagine, solve, build and lead (GE, 2006). These four values interconnect with each other and help build products/services which are winners (Welch, 2005). A vision cannot be complete if it does not have leadership and the management functions of GE emphasize good leadership very strongly. GE Commercial Finance, Infrastructure, Healthcare, Industrial, Consumer Finance and NBC Universal make up the six broad-based industry segments to put together their combined 11 organizations. To name just a few, the GE divisions offer several consumer and commercial financing programs, water, aviation, medical information technologies, television channels and other entertainment to meet an array of human needs worldwide (GE, 2006). The organization of these business areas would not have been

American History between 1820-1920 Research Paper

American History between 1820-1920 - Research Paper Example The paper shall analyze aspects related to art and culture, business and economy, books and literature and immigration and migration (Barney). 1820-1830: This decade holds immense significance because it marked the start of a new era in politics. It was the decade of growth as a country and progress in politics. The decade saw the formation of the democratic and the national republican parties. Furthermore, it was also famous for being the time when the first woman was nominated for the presidency. There was progress in fields of art, literature, and the economy during this period as well. Economic and Business Activities: The federal land law was passed in 1820, which led to expansion into new territories as settlers could now purchase 80 acres of land for $1.25/acre. Enormous advancements in trade routes including rail lines and river routes helped the expansion of trade and commerce between new territories and established communities. The decade also saw the growth of gateway citi es such as Cincinnati, New Orleans, and Chicago providing urban markets that tied the new territories to the Atlantic states. Art and Architecture: The 1820s saw the starting of the revival of the American Greek style and federal style of art. The statue of George Washington was sculptured by an Italian named Antonio Canova. The widespread demand for portraiture helped sustain American art. The wealthy valued portraits and spent sums of money on them. Some of the beneficiaries of this spending spree included Gilbert Stuart and Thomas Sully (Barney). Books and Literature: Irving and Cooper were the most revered literary individuals of the decade. The readers grew in pride during the decade, which was a major reason why Cooper’s literature became popular. A good illustration of the love affair for that form of literature is the novel American Hero which sets America as an individual country, culturally different from England. The romantic treatment of Indians was another famous and loved literary theme of the decade (Jones). Immigration and Migration: The province of Tejas in Mexico saw the formation of the first Anglo American settlement in the aftermath of the panic of 1819. The federal government began the practice of collecting statistics of immigration by 1820 and estimates suggest that 151,000 new residents entered the United States during this decade. The majority of these residents hailed from the British Isles followed by individuals from Germany. The surge in foreign born residents had an impact on American politics. The democrats, who were considered to be friendly towards immigrants, gained an upper hand with the same (Jones). 1830-1840: This decade saw the passing of laws that granted married women the right to own property. Books of immense prominence and legacy were printed, included Book of Mormon and Nature. Texas gained independence from Mexico and several other events occurred that made this decade one of immense importance in Americaâ €™s History (Rozek). Arts and Architecture: The Hudson River artists continued to grow. These artists included Thomas Cole, George Innes and Thomas Doughty. The fancy chairs also emerged as 8200 American makers created fancy chairs in Robert Adam, Sheraton, Directoire and Empire styles. The decade also saw the inception of the idea of the Grace Church by James Renwick (Athearn). Economy and Business: The steamboats were introduced during the decade as goods travelling to the west of St. Louis were

Is China going to be the next major city caused the Global warming Essay

Is China going to be the next major city caused the Global warming - Essay Example China’s economic development has been inevitably dependent on the consumption of coal for energy. Energy consumption and economic development, and in turn environmental issues in China have been interrelated. Coal is the main source of energy and burning of coal leads to emission of green house gases. This is what has lead to the negative effects of China’s economic development on global warming. China has surpassed USA as the world’s leading emitter of green house gases (Landsberg, 2011). Globally, there has been a constant increase in the demand for energy. So is the case with China. As the population of China has been increasing so is its demand for energy. Also the economic growth is fuelled by this increase in the demand for energy. Economic growth is driven by industrialization and this leads to higher energy consumption. In china, the industrialization process is relatively young and is expected to grow. This means that the already high energy intensity in China will still increase. Therefore, as the economic growth curve goes upwards so does the energy demand and in turn energy consumption. As mentioned above, China with its huge population consumes enormous energy. This enormous energy consumption is the primary reason behind China’s negative impact on global warming. ... is the emission green house gases). According to Zhang Zhongxiang, China’s GDP will go down by 2% if there is a decrease of 10-20% in the green house gases emission. Also there will be a 1.29% increase in the emission of the green house gases when there is a 51% increase in the per capita income (Yu, 2008). This establishes the theory that China’s economic development has lead to an enormous increase in the emission of green house gases and in turn leading to global warming. Energy demand elasticity is an important factor in analyzing the relation between energy consumption or demand and the economic development. Energy demand elasticity is the ratio of energy demand growth to GDP growth. From 1978 to 2000, China’s energy demand elasticity was less than .5. But from 2001 to 2006 it rose to 1.5. This shows how the rapid economic development is associated with higher energy consumption. Another important evidence of the relationship between China’s economic development and global warming is the fact that the green house gas emissions had gone up 18 times in 1989 when compared to the 1952 emissions and the 2010 emissions is more than double the emissions in 1996. China’s economic development has been pointing upward since the reforms in 1970. Hence, there is a clear connection between economic development and global warming (gas emissions) (Hackett, 1998). Netherlands Environment Assessment Agency’s 2006 report found out that China was now the major contributor to the global greenhouse gas emissions. It has now overtaken USA and is the world’s leading emitter of green house gases with a margin of 8%. 2007 saw a 2.6% growth in the global emissions and China was responsible for

Personal Perception of Organized Crime Essay Example | Topics and Well Written Essays - 750 words

Personal Perception of Organized Crime - Essay Example These enterprises are run and managed by criminals for the sole purpose of perpetrating illegal activities (Allum and Gilmour, 2012). Examples include various gangs and even terrorist groups. As can be observed, both definitions highlight organized crime as the perpetration of criminal activity with the aid of various, highly established mechanisms such as groups or gangs. However, the initial perception of organized crime prior to further reading was only limited to the portrayal of organized crime in the form of certain gangs. This implies that further reading brought exposure with regard to other forms of organized groups such as terrorist groups. In addition, cyber crime could also be considered as a form of organized crime. Characteristics of Organized Crime Organized crime has numerous characteristics. Organized crime behaviors are mainly highly structured and employ the differentiation of roles and operations. The system is, thus, involved in various illegal activities around the world. As mentioned, these crimes are perpetrated with the aid of groups of gangs whose membership is extremely loyal and committed to the set objectives. Thus, the characteristics of organized crimes involve many classifications as subsequently outlined. Violence and Intimidation Violence and intimidation represent a core characteristic of most organized crime behaviors. This implies that in the perpetration of organized crime, the criminal involved either employs violent behaviors or intimidation methods. For instance, terrorist groups may indulge in violent tendencies in regards to achieving certain objectives. On the other hand, other organized crime groups such as gangs may employ intimidating behaviors in the control and regulation of territories. Thus, innocent civilians or residents may be intimidated into compliance with certain operations with regard to the activities of the gangs. For instance, shopkeepers may be forced and intimidated into parting with certain amount s of money on a regular basis to the gangs. As a result of this intimidation processes, civilians may fail to testify against the gangs in court owing to fear of vindication. Thus, violence and intimidation contribute significantly to the thriving of organized crime in modern societies (Allum and Gilmour, 2012). Employment of Technology This represents an emerging trend in the perpetration of organized crime in modern society. Organized crimes have embraced technological advancements in the perpetration of criminal activities. Cybercrime refers to one of the examples of employment of technological advancements with regard to organized crime behavior. Through cybercrime, organized gangs are able to obtain sensitive personal and financial information using software applications. Information collected may, in turn, be used in the perpetration of internet crimes such as internet theft or internet fraud. Money Laundering Money laundering also represents a significant characteristic of or ganized crime behavior. Thus, billions of dollars are laundered annually by organized crime groups around the world. This process involves the exploitation of domestic financial institutions. The system is extremely structured and organized. This implies that various parties are responsible for the operations within the process of money laundering. Money laundering also employs a range of forms of technological

Love is a Bitch in Amores Perros Term Paper Example | Topics and Well Written Essays - 1000 words

Love is a Bitch in Amores Perros - Term Paper Example The film is not a simplistic critique of the Mexican society. Rather it is a revelation of the human nature with all its frailties, speedily accentuated by the rapid social changes and a continual dilution of social values. Amores Perros depicts the darker side of the contemporary Mexican society and nudges the viewers to reflect on its disturbing and unjust dynamics. The film is set in the modern day Mexico City. The universal appeal of the film could be attributed to its illustrative depiction of the concepts of broken families and betrayal, the themes which tend to be common to most of the modern day cultures, societies and civilizations (Flynn 35). The selfish and callous tendencies of the characters in the movie give something to relate to almost all its contemporary viewers, irrespective of the place or country which they live in. The pain of Mexico City as shown in the film is the inevitable plight of modern societies. Story Amores Perros is a film woven around the stories of three characters that are Octavio, Daniel and El Chivo, which in a way represent a microcosm of the contemporary, middle class, Mexican domestic scene. The family life of all the three characters is shown to have a common thread of deception running through them. Octavio loves his sister-in-law Susana. He earns money by dabbling in illegal dog fighting. Daniel jilts his wife and daughter, to get into a relationship with a famous model Valeria. El Chivo fails to share a normal family life with his daughter Maru because of being behind bars. In the entire three stories one comes across disruption of family relationships, betrayal of intimacy and trust and flaunting of long cherished social and domestic values. The central characters in the story are depicted as trying to eke out a better life for themselves, but albeit through questionable and unconventional means. The story raises many questions as to whether the unscrupulousness of the three central characters is the strictly person al marrow of their bones or are their lives helplessly simmering in the larger boiling pot of an age and times where achievement is about money only, beauty is simply about looks and family life is about convenience, opportunism and shallowness? The characters in the movie discernibly evince a stark disassociation and variance between feeling and thought, success and honesty, intimacy and fidelity and end and means, which strikingly seem alright and normal in the surrounding social landscape (Podalsky, 148). This seeming normalcy of the things is what is abnormal and pervert. Class Depictions and Related Social Themes In the film, the lower middle class is depicted as being limited and constrained by self adopted and socially reinforced stereotypes, which glorify acquisition, street smartness and unscrupulousness. In such a socio-economic scenario, all the roads seem to lead to an idea of success that is also a dead end in itself. It endows its adherents with all the promised goodie s, yet mercilessly snatches much that is simple, accessible and harmless. The ghetto life in the contemporary Mexico is shown as being marred by preexisting perceptions, where the individuals brazenly feel justified and alright to act out the roles that are valued and encouraged by their social ambience. It is a male dominated society where the young women are both the subject and object of raw lust, deserving a high monetary,

Marketing Management Assignment Example | Topics and Well Written Essays - 250 words - 4

Marketing Management - Assignment Example theless, applying a simple but effective strategy before facing a competitor usually gives businesses first hand advantage even before the real battle starts From the story of the warrior and the lion, I have learned that victory is not always for the strongest. All that one needs is to spot a target, stand at a safe distance and make the attack. In relation to business and competition, we can say that it is not necessary that we use lots energy in fighting our competitors; in contrast, we should develop effective strategies that can help finish the competitors at only one strike. The only thing that marketer should ensure a better marketing strategy. Moreover, competition is important because it leads to improved quality product and better services. This is due to the fact that all the business will be competing to remain relevant and not to made exit. It also protects the public being manipulated with sole businesspersons who have selfish stakes. As a result, both the economy and the quality of product will continue to improve making business more` effective and efficient (Viardot 70). Conclusively, applying a simple but effective strategy before facing a competitor usually gives businesses first hand advantage even before the real battle starts. From the short story of the lion and the warrior, we can conclude that one does not need to apply a lot of energy but just use tactics that can paralyses competitor (Viardot 40). Therefore, for continued existence of a business, it must ensure that it develops effective strategies that can act as shortcuts and tam their

Break-Even Point of Industry Essay Example for Free

Break-Even Point of Industry Essay 1. Airbus’ Interests Objectives First of all, the large and cost-efficient A3XX would be popular with significant growth in the air transportation industry. Worldwide passenger traffic would almost triple in volume by 2019, with fuel price rising in the future. Creating large and cost-efficient aircrafts, rather than increasing frequencies and building new routes, would be the long-term solutions to the problem of growing demand. Therefore, this project will be strategically significant. Secondly, Airbus wants to gain market shares in the VLA market and break up the monopoly of the 747, but it didn’t have a product to compete with Boeing’s 747. Compared to the 747, the A3XX provides more advantageous features which would attract passengers especially on the longer routes, such as more space per seat, four-engine plane, etc. The combination of increased capacity and reduced costs would provide superior economics. Airbus felt confident that capacity increases would eventually prevail. As we stated above, Airbus’s objectives are to break up the monopoly of the 747, to increase its market share in the VLA market, to gain enormous financial success and to be an industry leader. 2. Break-Even Point Market Demand Production will be able to reach full capacity from 2008, with order and delivery assumed on a stable level. During this period, the capital expenditure will be offset by depreciation in calculation of free cash flow, and RD will be included in the operating margin. The company, as assumed, will produce and deliver 22 aircrafts for the airlines which have ordered, with 6 in 2006 and 16 in 2007. Since $700 million would have already been spent before the decision, this amount of investment should be treated as sunk cost, therefore irrelevant to the NPV analysis. To break even, with assumed operating margin of 18%, Airbus should produce and sell about 40 VLAs every year since 2008, or 495 in total before 2019. Taking the estimated margin from Lehman Brothers and CS First Boston into consideration, total orders needed for break-even can range from 306 to 509 in 20 years. From the view of Airbus, the market demand for VLA, 1550 in years, is large enough to take this project. And it is pretty safe to launch the development since, even with lowest estimated margin, 38% of total market share will guarantee a break-even. However, Boeing gives a totally different perspective and a much lower forecast on potential market demand. Under this estimation, A3XX development will have little chance to make a profit. Airbus should take at least half a market on VLA to make that project fruitful. 3. Boeing’s Response Based on the analysis before, the VLA market is so promising that Airbus is very likely to launch the A3XX. Facing with this threat, the most important move for Boeing is to prevent Airbus from dominating the VLA market. Therefore, Boeing can cut the price of existing 747 product lines and produce 747 stretch as response to Airbus. Producing 747 stretch which may contain 550+ passengers wont be too costly for Boeing since is a modification over the current model, and that can powerfully compete with A3XX in the VLA market. Before the stretch version is market available, Boeing can offer a price cutting of the existing 747 which can not only divert sales away from A3XX, but also make A3XX project less attractive. Other alternatives might not fit. Firstly, fighting the A3XX on legal grounds (improper subsidies) will probably induce the revenge complain from Airbus, making Boeing itself to pay a large penalty. Secondly, to develop its own super jumbo jet is costly and maybe not profitable. What’s worse, in 1997 Boeing faced the first loss in more than 50 years, it’s better for Boeing to have a prudent stable strategy than an aggressive investing. 4. The Threshold To Launch We think Airbus should commit to build A3XX. The Annual Sales and Orders as of 1999 show that Airbus currently faces a disadvantage in competition with Boeing on almost every size of passenger aircraft. Worse is that, while Boeing pockets the market for VLA, Airbus even has no product to compete. Breaking the monopoly on this market becomes critical for Airbus, which is aiming to lead the industry. Strategic significance of A3XX makes this project worth an effort. Compared with the situation when Boeing launched its 747 development with 25 initial orders, the current 22 orders, with other 34 probable, is not a negative sign to commit the project. However, there would also be great risk in the new aircraft development. The possible poor market demand will make the project unprofitable. More important is that new A3XX should be sold quickly in early years to exploit learning curve effect on manufactory and seize market before Boeing reacts.

Training Needs Theories and Principles

Training Needs Theories and Principles Chapter 2 Literature Review 2.1 Introduction Training has become a key focus for many organizations wishing to increase their capability, to pursue their strategy and to achieve their goals. It has a great impact not only on efficiency and organizational performance, but also on employees behaviour within the organization. Flexible training programmes may also help an organization to be more responsive to changes in its environment. Therefore, the first objective of this chapter is to explore the meaning of training and of training needs, while the second is to examine the theories dealing with these concepts. It then turns more specifically to an exploration of literature examining training needs in police organizations. 2.2 Developing Countries According to Kinsey (1988), developing country is a term used to describe countries outside the so-called Western bloc of technically advanced nations (North America, Western Europe, Japan, Australia and New Zealand) and the communist bloc. However, due to the rapid economic development in some countries (NICs) and the political and economic disturbances in the communist bloc which have resulted in dramatic changes during the last two decades, the above definition must be amended. Other terms which have been used to designate these countries include industrializing, less-developed and underdeveloped. Each tends to have certain connotations, some being more complementary than others, and some gaining popularity while others disappear. Whatever term is used, these countries are distinguished by widespread poverty. Beside this basic characteristic, Kinsey (1988) describes developing countries as having certain similarities, including low income per capita and per worker, small industria l sectors, few economies of scale, primitive technology, lack of specialization, low capital per worker, small savings per head for the bulk of the population, lack of enterprise, inadequate physical and social infrastructure, low volume of international trade per head and low efficiency. The question is: how could developing countries influence our country in management training? 2.3 Organizational Characteristics Organizations may be characterized in many different ways, depending on the reason for the classification. For the purposes of the present research, the characteristics of the Dubai Police must be examined in relation to the need for training; several authors have suggested that organization size, type of ownership and industrial sector are the main variables affecting the management of training needs (Abdalla and AlHomud, 1995). Alternatively, Wright and Geory (1992) connect training needs with management strategy, organizational structure and corporate culture. In theory, organizations can be characterized in many ways, but there is general agreement that the size of the organization is of prime importance, followed by structure, strategy (e.g. short or long term), technology use, environment and organisational culture. These are the theoretical concepts which will be examined in this study as quantifiable conditions and variables in the management of the Dubai Police. Definitions of Training Training is a very important process in any organization, allowing it to develop its employees skills and improve their performance at work. This section considers the definitions of training suggested by a number of authors. Thus, training can be described as a perfect way to learn a job or to develop employees skills. The organization of individual skills is a significant characteristic of business responsibility today, and employee motivation potentially grows in the process (Noe, 1999). The profit from employee development extends further than the concrete skills gained and their effect on an individuals efficiency (Benson, 2002). Among the many important definitions of training, the following selection is organised chronologically for convenience. Training has historical definitions; for example, Schuler and MacMillan (1984) defined it as part of human resource management (HRM) practice which has the potential to contribute to gains in competitive advantage. But this definition was incomplete because in 1984 there was a lack of information on HRM, which was still a new concept for many organizations. There was also a focus on competitive advantage among organizations, ignoring employee development and direct benefit to the organizations business. Rainbird and Heyes (1994) then defined training as employee development via engaging employees in a commitment to the organization. But this definition only involved employees in commitment and did not state how they were to be developed at work, so Heyes and Stuart (1996) refined this definition by adding that training is a development process which evolves through strategic stages. This definition indicates that development in any organization, whether short or long term, involves organizational commitment. Buckely and Caple (1995) defined training as a strategy to develop employees in skills, knowledge and attitude through a learning experience to achieve effective performance in a range of activities. Again, this definition was subject to important refinements, when Montesino (2002) pointed out that many factors may affect the effectiveness of training, including individual employees behaviour, the training programme, the local environment and the amount of support from each trainees immediate supervisor. Earlier, when Smith and Hayton (1999) defined training, they also attempted to show how certain factors impact on training needs and the decision to train employees. First, employee performance is very important and should be improved. Secondly, improvement is needed in the flexibility and adaptability of employees. Finally, training always needs new technology and investment in training needs to achieve high performance in an organization. This definition indicates the importance of high performance for training decisions, of changing the roles within the organization to increase flexibility and adaptability at work and of using new technology to achieve high performance. The authors also claim that it is a more sophisticated system of human resources management. According to Sparrow (1998), training can be managed to elicit the desired attitudes and behaviours in employees and to enhance involvement, motivation and organizational commitment. The main point of this definition is to motivate and involve employees in organizational commitment; the result could be to change employees behaviour, but these processes are controlled by the organization. Bartlett (2001) adds to this perspective by noting that there are many ways to motivate employees, the best being to improve access to training and the motivation to learn from training, as well as emphasising the perceived benefits of training. This definition shows the importance of motivating employees in training programmes and the benefit to be gained from supervisory support for training within the organization. Finally, Palo and Padhi (2003) define training as the process of developing skills, updating knowledge, changing employees behaviour and attitudes in order to improve their performance and abilities and so to enhance the efficiency and effectiveness of the organization. 2.5 Training Theories 2.5.1 Training and Behaviour Theories Luthans (1998) considers that training can help organisations to change employees behaviour and that one technique of behaviour modification, encouraging desired behaviours and discouraging unwanted ones, is operant conditioning. Such behaviourist techniques were first used for the treatment of mental disorders and phobias, in psychiatric rehabilitation and in recovery from accident and trauma. Applications have since been extended to organisational settings. As developed by Fred Luthans (Luthans and Kreitner, 1985; Luthans et al., 1998), organisational behaviour modification theory has five mains steps. The first step is to identify the critical, observable and measurable performance-related behaviours to be encouraged. The second is to measure the current frequency of those behaviours, to provide a baseline against which to measure improvement. Next, the triggers or antecedents for those behaviours are identified, as are their consequences, positive, neutral and negative. The fourth step is to develop an intervention strategy to strengthen desired behaviours and weaken dysfunctional behaviours through the use of positive reinforcement (money, recognition) and corrective feedback, noting that punishment may be necessary, for example to inhibit unsafe behaviour. Finally, there is a systematic evaluation of the effectiveness of the approach in changing behaviour and improving performance over the baseline. Training can appear particularly attractive to managers, who are often in ideal positions to manipulate the reinforcement of certain employee behaviours. They also tend to find this approach attractive because it argues that what has to be changed is behaviour, and that to achieve this one needs to know very little about the complex internal workings of the people concerned. Desirable workplace behaviours include speaking courteously to customers, attending training to develop new skills and being helpful to colleagues. Undesirable ones include lateness, the production of poor quality items and being uncooperative. Training should eliminate undesired behaviour and increase the frequency of desired work behaviour. Suppose a manager wants more work assignments completed on time and fewer submitted beyond deadline. The behaviour modification options are summarized in Table 2.5.1. Luthans (1998) gives some ideas for improving performance through training, which failed to work. But Luthans argues that behaviour modification should be designed to suit organisational applications. Firstly, training should be applied to clearly identifiable and observable behaviours, such as timekeeping, carrying out checks and repairs, and the use of particular work methods. Secondly, to change organisational behaviour there should be a good strategy of rewards which are contingent on the performance of the desirable behaviours. Thirdly, training should focus on positive reinforcement, which can take a number of forms, from the praise of a superior to cash prizes, food or clothing. Finally, training can lead to sustained modification of behaviour only if positive reinforcement is continued (albeit intermittently). Training and Motivation Theories Smith and Hayton (1999) identify the following theories, which mention the role of training in organizations. i. Human capital theory This theory focuses on training in terms of economic investment. Human capital theory sees training as improving efficiency (Becker, 1964; Mincer, 1974; Strober, 1990). It is concerned with developing ideal training conditions. In the 1980s neo-human capital theory stated that organizations should train their employees consecutively to develop the flexibility and suppleness of the workforce and their receptiveness to modernisation (Bartel and Lichtenberg, 1987). ii. Human resource management theory This theory concerns the commitment of employees to the organization and views training and employee development as a means of engaging it (Rainbird, 1994; Heyes and Stuart, 1996). The early formulation of a hypothetical structure for HRM came from the Harvard Business School in the early 1980s (Beer et al., 1984). Training is seen as a strategy for managing the human resource flow of a venture which, with other human resource policies, creates commitment, competence, congruence and cost-effectiveness. iii. Training and high performance theory This is among the most widely adopted theories in organizations in Britain and the USA. It concerns the skills trajectory and proposes a distinction between those occupations which are becoming increasingly skilful and others which are deskilling over time (Gallie and White, 1993; Cappelli, 1993). Studies of high-performance employment practices and HRM strategies have resulted in the concept of human resources bundles (MacDuffie, 1995; Dyer and Reeves, 1995) which highlight the significance of implementing a number of HRM practices collectively in bundles in order to enhance performance. Training is always cited as a critical measure within the set. Training Needs Analysis Training needs analysis (TNA) is a very important stage in the methodical training cycle of design, delivery and evaluation. The purpose of TNA is to take account of unusual meanings and perspectives depending upon a variety of actors in the process, avoiding misunderstandings about prospects and what can be achieved. In addition, external trainers and consultants are able to acknowledge the importance of a challenge when they rely upon TNA which has been conducted prior to their involvement with an organization. For instance, the excellence of feedback provided by the TNA process might differ significantly, from a very detailed search to a cheap and cheerful canvassing of opinions about what is needed. In addition to the challenges noted above, there are considerations about whose benefit is served: Is the training compulsory? Does it represent the needs of individual people, their managers, the organization, etc? 2.6.1 Definition of Training Needs Analysis Williamson (1993) defines TNA as a systematic approach to determining the real training needs which exist within an organization or department. This indicates that TNA involves collecting information, for example by examining the training programmes of different organizations. A number of managers will refer to the total procedure of identifying the essential training needs, after which the next step is to analyze and address them by the best available method. The pure understanding of the term describes the last procedure simply. Although understanding can differ, it is significant that there is supposed to be constancy of practice within any organization and all employees are assumed to be completely conscious of the sense of local terminology in this field. The term training need can be difficult to define in practice, with serious consequences. On other hand, there are many authors who have defined training needs analysis as the examination or diagnostic portion of the training system. In addition, it seeks to determine whether there exists a case of supposed performance deficiency in many organizations (Camp et al., 1986). This view applies to TNA. That is to say, needs evaluation in a training needs analysis is, in truth, a diagnostic attempt, rather than an effort to identify an apparently deficient performance, because TNA does not have direct access to employees performance. Conversely, Goldstein (1986) defines TNA as an attempt to analyze and diagnose an organization, task or individual, to decide if a cure is required and if so, which is the most likely to produce the desired results. Once more, TNA is seen as a diagnostic process at an organizational level. 2.6.2 Approaches to TNA One of the earliest writers on TNA was Boydell (1976), who planned a methodical approach to training needs that had its roots in analyzing supplies using a method based on organizational objectives. For Boydell (1976, p. 4), A training need exists when the application of systematic training will serve to overcome a particular weakness. He also argues that training needs must be identified before training begins. A similar perspective is presented by Bartram and Gibson (1994, p. 3): Analyzing training needs provides a focus and direction for the investment an organization has to make in its people. Likewise, Bee and Bee (2003) assert that organizations needs are the drivers for training solutions to close any performance gap. Two supporting considerations which influence TNA are also noted by Reay (1994). Firstly, establishing who has ownership of the TNA is likely to determine whether the findings are ignored or implemented. Secondly, the person who really pays for it will point to t he real employees and this is usually senior management. On the other hand, this methodical approach to TNA tends to adopt organizational perspectives. Reid and Barrington (1999) accept these perspectives, but warn that the needs may sometimes conflict, e.g. long-term development for an individual and lack of support opportunities might contradict each other. Similarly, Sloman (1994, p. 24) notes that in the training sphere there can be a singular divergence of interests between the organization and the individual. This viewpoint is shared by Palmer (2006), who warns against assessing training needs solely from the viewpoint of the organization. Many individual employees correctly follow their own training and development agendas and strategies. There are also sound business and motivational reasons for organizations to help employees to complete their self-development needs. Learning and development are continuing and practical (Sloman, 2003). They are supposed not to have to wait for business needs and training objectives to be set before embarking on a programme. Therefore, individuals need to take more responsibility for their own learning, rather than waiting for the organization to lead them. 2.6.3 Important TNA Factors in a Changing Competitive Environment There are important factors which affect TNA in a competitive environment for any organization and which a professional approach to change requires those responsible to consider. These are now examined in turn. i. Cross-competitive environment The abolition of collective differences in vocational results can be maintained by training programmes for diverse employees in a competitive environment, which can produce admiration for individual differences in attitudes, values and behaviours, according to DNetto and Sohal (1999), who recommend certain practices in the field of training. These include identifying exact training needs which are connected to the organizations goals and objectives; assessing individual training needs to facilitate a contribution within the training programme; developing individual annual training strategies which take account of knowledge, operational and interpersonal skills, attitudes to the job and technological skills training; evaluating literacy, language and numeracy to assess the ability to undergo training; connecting training to rewards, project agreements, development procedures and pay scales; and identifying the complementary skills of employees through a review process. ii. Diversity Moore (1999) suggests that a diversity needs analysis is required for the effective integration of diverse group members. Two contrasting approaches to diversity of background are to ensure that the organization is diversity blind or to provide a diversity-negative environment. According to Moore (1999), an important starting point in an environment of diversity in TNA is awareness of different challenges faced by people from different backgrounds within the organization. Training programmes should facilitate the understanding and appreciation of actual differences between people, which can apply in communicating and using language, in learning styles, in methods of dealing with conflict and in task and relationship orientation. Developing and integrating competencies and skills in culturally diverse employees is the next step presented by Moore (1999). It should create a mechanism whereby individuals learn to avoid damaging processes due to dysfunctional interpersonal conflict, miscommunication, higher levels of stress, slower decision-making and problems with group cohesiveness. Moore (1999) states that the development of important communication skills is needed in order to achieve effective integration of competencies. These skills are the ability to consider viewpoints that may differ from ones own, to communicate, to negotiate and to face difficulties appropriately. iii. Leadership According to Silverthorne (2005), leadership plays an important role in decision-making and organizational achievement. In order to develop effectively in a cross-competitive environment, leaders must understand and control their own behaviour, as this affects employees perceptions of leadership. They must also ensure that environmental issues are considered when choosing the best management style. However, appreciating the differences in leadership styles is not sufficient to be an effectual leader, as the necessary insight also varies with the environment. Silverthorne (2005) states that an effectual leader knows which leadership style to employ and when to employ it. There are four contrasting leadership styles: active or involved, supportive, participative and attainment-oriented. Active leaders tell subordinates what is required and put into effect individual systems to direct them; the supportive leader creates a friendly environment and is responsive to her subordinates needs; the participative leader engages them in the decision-making process; and the achievement-oriented leader applies high standards to the decision-making process and appears confident that subordinates will reach them. Silverthorne (2005) argues that an effective leaders choice of leadership style is based on the context of the task and the needs of the subordinates. iiii. Communication Silverthorne (2005) also suggests that one way to achieve better communication between individuals with different competitive backgrounds is to apply TNA to managers on how to work in a competitive environment. He proposes four ways of reducing cross-environment communication problems. First, managers should focus on differences in communication styles. Understanding that employees are different means describing a behaviour, rather than the individual. This will give the manager the time to understand the subject being discussed. Thirdly, the manager should attempt to understand the subject from the employees perspective. Seeing the employees point of view gives the manager an opportunity to better understand what the employee is trying to communicate. Finally, the manager must listen more openly than normal and engage in exercises to improve the communication process. 2.7 Management Training Many organizations today have training programmes for their employees but the reasons for conducting them vary widely. Some provide job orientation for new recruits; others training on new equipment for existing employees or strategic planning courses for managers. Successful managers need multi-skills training and detailed information about the organization. Training programmes for managers should cover different skills than those for employees; examples are functional, administrative, planning and leadership skills. Assessing changes in performance following training is complicated by the fact that while some of these skills can be easily observed in the short term, others will be apparent only from long-term changes in the performance of the manager, the department or the entire organisation. 2.7.1 Different types of training needs All employees should be aware of the types of management training their organization offers, because many will be planning to be line-managers in the future, so will require certain skills. McConnell (2003) lists twelve types of training which are very useful in ones current job and helpful for the future. These are now examined in turn. i. Group Training Group training involves three or more individuals who participate in a common learning activity, generally led by a group facilitator. ii. Coaching Coaching is one-on-one job training. Generally it includes demonstrations, lectures and observation of practice. iii. Mentoring This is a process in which experienced employees are assigned to assist newer employees through guidance. Sometimes it takes a formal approach; at others it is informal. It is also used to introduce employees to a companys culture and environment. iiii. Self-Paced Learning This is any learning activity in which the learner determines the speed at which the material is covered. Generally, it is an individualized form of instruction, but it can be used with groups, the speed being set either individually or by the group. V. E-Learning This is a term used to describe learning activities conducted from the users desktop via the Internet or e-mail. It is generally an individual activity. Vi. Computer-Assisted Instruction This is the delivery of training via a computer. Again it is generally individualized. It can include programmes on modelling, simulation, practice and knowledge. Vii. Distance Learning Training This describes instruction in which the teacher is geographically separated from the learner. Connection can be via satellite or phone line with the instruction delivered to a PC or to a room specially equipped with video or audio conferencing equipment. Viii. Self-Study Self-study refers to learning activities initiated and participated in by an individual. Programmed or computer-assisted instruction and reading assignments can all be self-study activities. Viiii. Simulations These are controlled and standardized representations of a job, activity or situation used as a basis for developing skills in dealing with the simulated situations. VV. Lectures These are structured oral presentations delivered for the transfer of information. VVi. Job Assignments Job assignments place an individual into an actual job, generally for a limited period of time, the primary goal being to learn all or part of the job. VVii. Job Rotation This is similar to job assignment but generally includes several assignments in a planned order or the exchange of jobs with another person. 2.7.2 Different levels of training needs The objective of a training needs analysis is the identification of the training required to meet the recognized needs. In point of fact, while these may be accepted or revised by the employees, a senior person may be assigned to decide what training is necessary. The person conducting the training or assessing the needs is not always the individual who develops or recommends the training. On the other hand, the most important step in TNA is to translate the recognized needs into objectives. Then individual objectives can be used to develop or choose a training approach at individual and organization level. Beside the types of training, McConnell (2003) specifies the levels of needs for individual and organization and the personnel who will conduct the training. i. Supervisors These are the people who manage the people being trained. ii. Human Resources These are the professionals in the human resources department. If training is a function of the HR department, it is treated separately. iii. Operating Department Employees These are the employees of the department for which an individual is to be trained. iiii. Training Department Personnel These are generally training professionals employed by the training department. Their strengths are their skills and knowledge of training techniques and procedures. The most common criticism of such people is that they lack specific job or operational knowledge. Some organizations assign their trainers to specific areas-sometimes even to temporary work in the operating departments-to overcome such weaknesses. V. Operating Department Personnel on Temporary Assignment to Training These are people who usually have excellent job knowledge but often lack training skills. Many organizations use this approach because it gives greater credibility to the training sessions, while the operating personnel on such an assignment benefit greatly from the experience and learning of training techniques. Vi. External Professionals These are usually training consultants, supplier employees, or academics. Generally, they are used when the required degree of knowledge or skill is not available within the organization. These people are usually excellent trainers, but they can be expensive to use. If they offer similar classes on a regular basis, consistency may be lost if the same external person does not conduct all classes. Vii. External Organizations Local schools and professional organizations often conduct registration programmes in general subjects. Knowing the types of training currently being used by an organization and who conducts each training type provides an initial indication of what can be done. However, in some cases the training will have to be designed and/or obtained elsewhere. 2.7.3 The Roles of HR, Trainers and Line-Managers The many roles within the training function can be analyzed and their strengths and weaknesses identified. The training function within an organization should have as part of its mission the meeting of the organizations requirements; its success at accomplishing that will be the basis for the analysis. HR people and line-managers in the training function should help the organization to improve and involve employees in training courses which could be helpful in enhancing their skills and hence their performance, so HR people and line-managers must undertake a number of tasks, summarised below. Training organization: the mission of the training function, its internal structure, and internal and external relationships. Training personnel: the selection, qualifications, and motivation of department employees. Employee training in the requirements of specific jobs or activities. Employee development training in the requirements of future jobs and broadening their abilities in their current posts. Remedial training, conducted to correct inadequate basic skills such as mathematics, reading and writing. Organizational development: improving communication and understanding throughout the organization in order to produce effective, functioning teams; establishing or changing to a desired culture; and responding to changing conditions. Internal and external communication of the training departments abilities, results, and offerings. Training facilities: the physical space and equipment allocated to conduct training. Identifying training needs: determining the training required by individual employees and the organization. Training design and development: creating, structuring, or obtaining a training programme to meet specific ob Training Needs Theories and Principles Training Needs Theories and Principles Chapter 2 Literature Review 2.1 Introduction Training has become a key focus for many organizations wishing to increase their capability, to pursue their strategy and to achieve their goals. It has a great impact not only on efficiency and organizational performance, but also on employees behaviour within the organization. Flexible training programmes may also help an organization to be more responsive to changes in its environment. Therefore, the first objective of this chapter is to explore the meaning of training and of training needs, while the second is to examine the theories dealing with these concepts. It then turns more specifically to an exploration of literature examining training needs in police organizations. 2.2 Developing Countries According to Kinsey (1988), developing country is a term used to describe countries outside the so-called Western bloc of technically advanced nations (North America, Western Europe, Japan, Australia and New Zealand) and the communist bloc. However, due to the rapid economic development in some countries (NICs) and the political and economic disturbances in the communist bloc which have resulted in dramatic changes during the last two decades, the above definition must be amended. Other terms which have been used to designate these countries include industrializing, less-developed and underdeveloped. Each tends to have certain connotations, some being more complementary than others, and some gaining popularity while others disappear. Whatever term is used, these countries are distinguished by widespread poverty. Beside this basic characteristic, Kinsey (1988) describes developing countries as having certain similarities, including low income per capita and per worker, small industria l sectors, few economies of scale, primitive technology, lack of specialization, low capital per worker, small savings per head for the bulk of the population, lack of enterprise, inadequate physical and social infrastructure, low volume of international trade per head and low efficiency. The question is: how could developing countries influence our country in management training? 2.3 Organizational Characteristics Organizations may be characterized in many different ways, depending on the reason for the classification. For the purposes of the present research, the characteristics of the Dubai Police must be examined in relation to the need for training; several authors have suggested that organization size, type of ownership and industrial sector are the main variables affecting the management of training needs (Abdalla and AlHomud, 1995). Alternatively, Wright and Geory (1992) connect training needs with management strategy, organizational structure and corporate culture. In theory, organizations can be characterized in many ways, but there is general agreement that the size of the organization is of prime importance, followed by structure, strategy (e.g. short or long term), technology use, environment and organisational culture. These are the theoretical concepts which will be examined in this study as quantifiable conditions and variables in the management of the Dubai Police. Definitions of Training Training is a very important process in any organization, allowing it to develop its employees skills and improve their performance at work. This section considers the definitions of training suggested by a number of authors. Thus, training can be described as a perfect way to learn a job or to develop employees skills. The organization of individual skills is a significant characteristic of business responsibility today, and employee motivation potentially grows in the process (Noe, 1999). The profit from employee development extends further than the concrete skills gained and their effect on an individuals efficiency (Benson, 2002). Among the many important definitions of training, the following selection is organised chronologically for convenience. Training has historical definitions; for example, Schuler and MacMillan (1984) defined it as part of human resource management (HRM) practice which has the potential to contribute to gains in competitive advantage. But this definition was incomplete because in 1984 there was a lack of information on HRM, which was still a new concept for many organizations. There was also a focus on competitive advantage among organizations, ignoring employee development and direct benefit to the organizations business. Rainbird and Heyes (1994) then defined training as employee development via engaging employees in a commitment to the organization. But this definition only involved employees in commitment and did not state how they were to be developed at work, so Heyes and Stuart (1996) refined this definition by adding that training is a development process which evolves through strategic stages. This definition indicates that development in any organization, whether short or long term, involves organizational commitment. Buckely and Caple (1995) defined training as a strategy to develop employees in skills, knowledge and attitude through a learning experience to achieve effective performance in a range of activities. Again, this definition was subject to important refinements, when Montesino (2002) pointed out that many factors may affect the effectiveness of training, including individual employees behaviour, the training programme, the local environment and the amount of support from each trainees immediate supervisor. Earlier, when Smith and Hayton (1999) defined training, they also attempted to show how certain factors impact on training needs and the decision to train employees. First, employee performance is very important and should be improved. Secondly, improvement is needed in the flexibility and adaptability of employees. Finally, training always needs new technology and investment in training needs to achieve high performance in an organization. This definition indicates the importance of high performance for training decisions, of changing the roles within the organization to increase flexibility and adaptability at work and of using new technology to achieve high performance. The authors also claim that it is a more sophisticated system of human resources management. According to Sparrow (1998), training can be managed to elicit the desired attitudes and behaviours in employees and to enhance involvement, motivation and organizational commitment. The main point of this definition is to motivate and involve employees in organizational commitment; the result could be to change employees behaviour, but these processes are controlled by the organization. Bartlett (2001) adds to this perspective by noting that there are many ways to motivate employees, the best being to improve access to training and the motivation to learn from training, as well as emphasising the perceived benefits of training. This definition shows the importance of motivating employees in training programmes and the benefit to be gained from supervisory support for training within the organization. Finally, Palo and Padhi (2003) define training as the process of developing skills, updating knowledge, changing employees behaviour and attitudes in order to improve their performance and abilities and so to enhance the efficiency and effectiveness of the organization. 2.5 Training Theories 2.5.1 Training and Behaviour Theories Luthans (1998) considers that training can help organisations to change employees behaviour and that one technique of behaviour modification, encouraging desired behaviours and discouraging unwanted ones, is operant conditioning. Such behaviourist techniques were first used for the treatment of mental disorders and phobias, in psychiatric rehabilitation and in recovery from accident and trauma. Applications have since been extended to organisational settings. As developed by Fred Luthans (Luthans and Kreitner, 1985; Luthans et al., 1998), organisational behaviour modification theory has five mains steps. The first step is to identify the critical, observable and measurable performance-related behaviours to be encouraged. The second is to measure the current frequency of those behaviours, to provide a baseline against which to measure improvement. Next, the triggers or antecedents for those behaviours are identified, as are their consequences, positive, neutral and negative. The fourth step is to develop an intervention strategy to strengthen desired behaviours and weaken dysfunctional behaviours through the use of positive reinforcement (money, recognition) and corrective feedback, noting that punishment may be necessary, for example to inhibit unsafe behaviour. Finally, there is a systematic evaluation of the effectiveness of the approach in changing behaviour and improving performance over the baseline. Training can appear particularly attractive to managers, who are often in ideal positions to manipulate the reinforcement of certain employee behaviours. They also tend to find this approach attractive because it argues that what has to be changed is behaviour, and that to achieve this one needs to know very little about the complex internal workings of the people concerned. Desirable workplace behaviours include speaking courteously to customers, attending training to develop new skills and being helpful to colleagues. Undesirable ones include lateness, the production of poor quality items and being uncooperative. Training should eliminate undesired behaviour and increase the frequency of desired work behaviour. Suppose a manager wants more work assignments completed on time and fewer submitted beyond deadline. The behaviour modification options are summarized in Table 2.5.1. Luthans (1998) gives some ideas for improving performance through training, which failed to work. But Luthans argues that behaviour modification should be designed to suit organisational applications. Firstly, training should be applied to clearly identifiable and observable behaviours, such as timekeeping, carrying out checks and repairs, and the use of particular work methods. Secondly, to change organisational behaviour there should be a good strategy of rewards which are contingent on the performance of the desirable behaviours. Thirdly, training should focus on positive reinforcement, which can take a number of forms, from the praise of a superior to cash prizes, food or clothing. Finally, training can lead to sustained modification of behaviour only if positive reinforcement is continued (albeit intermittently). Training and Motivation Theories Smith and Hayton (1999) identify the following theories, which mention the role of training in organizations. i. Human capital theory This theory focuses on training in terms of economic investment. Human capital theory sees training as improving efficiency (Becker, 1964; Mincer, 1974; Strober, 1990). It is concerned with developing ideal training conditions. In the 1980s neo-human capital theory stated that organizations should train their employees consecutively to develop the flexibility and suppleness of the workforce and their receptiveness to modernisation (Bartel and Lichtenberg, 1987). ii. Human resource management theory This theory concerns the commitment of employees to the organization and views training and employee development as a means of engaging it (Rainbird, 1994; Heyes and Stuart, 1996). The early formulation of a hypothetical structure for HRM came from the Harvard Business School in the early 1980s (Beer et al., 1984). Training is seen as a strategy for managing the human resource flow of a venture which, with other human resource policies, creates commitment, competence, congruence and cost-effectiveness. iii. Training and high performance theory This is among the most widely adopted theories in organizations in Britain and the USA. It concerns the skills trajectory and proposes a distinction between those occupations which are becoming increasingly skilful and others which are deskilling over time (Gallie and White, 1993; Cappelli, 1993). Studies of high-performance employment practices and HRM strategies have resulted in the concept of human resources bundles (MacDuffie, 1995; Dyer and Reeves, 1995) which highlight the significance of implementing a number of HRM practices collectively in bundles in order to enhance performance. Training is always cited as a critical measure within the set. Training Needs Analysis Training needs analysis (TNA) is a very important stage in the methodical training cycle of design, delivery and evaluation. The purpose of TNA is to take account of unusual meanings and perspectives depending upon a variety of actors in the process, avoiding misunderstandings about prospects and what can be achieved. In addition, external trainers and consultants are able to acknowledge the importance of a challenge when they rely upon TNA which has been conducted prior to their involvement with an organization. For instance, the excellence of feedback provided by the TNA process might differ significantly, from a very detailed search to a cheap and cheerful canvassing of opinions about what is needed. In addition to the challenges noted above, there are considerations about whose benefit is served: Is the training compulsory? Does it represent the needs of individual people, their managers, the organization, etc? 2.6.1 Definition of Training Needs Analysis Williamson (1993) defines TNA as a systematic approach to determining the real training needs which exist within an organization or department. This indicates that TNA involves collecting information, for example by examining the training programmes of different organizations. A number of managers will refer to the total procedure of identifying the essential training needs, after which the next step is to analyze and address them by the best available method. The pure understanding of the term describes the last procedure simply. Although understanding can differ, it is significant that there is supposed to be constancy of practice within any organization and all employees are assumed to be completely conscious of the sense of local terminology in this field. The term training need can be difficult to define in practice, with serious consequences. On other hand, there are many authors who have defined training needs analysis as the examination or diagnostic portion of the training system. In addition, it seeks to determine whether there exists a case of supposed performance deficiency in many organizations (Camp et al., 1986). This view applies to TNA. That is to say, needs evaluation in a training needs analysis is, in truth, a diagnostic attempt, rather than an effort to identify an apparently deficient performance, because TNA does not have direct access to employees performance. Conversely, Goldstein (1986) defines TNA as an attempt to analyze and diagnose an organization, task or individual, to decide if a cure is required and if so, which is the most likely to produce the desired results. Once more, TNA is seen as a diagnostic process at an organizational level. 2.6.2 Approaches to TNA One of the earliest writers on TNA was Boydell (1976), who planned a methodical approach to training needs that had its roots in analyzing supplies using a method based on organizational objectives. For Boydell (1976, p. 4), A training need exists when the application of systematic training will serve to overcome a particular weakness. He also argues that training needs must be identified before training begins. A similar perspective is presented by Bartram and Gibson (1994, p. 3): Analyzing training needs provides a focus and direction for the investment an organization has to make in its people. Likewise, Bee and Bee (2003) assert that organizations needs are the drivers for training solutions to close any performance gap. Two supporting considerations which influence TNA are also noted by Reay (1994). Firstly, establishing who has ownership of the TNA is likely to determine whether the findings are ignored or implemented. Secondly, the person who really pays for it will point to t he real employees and this is usually senior management. On the other hand, this methodical approach to TNA tends to adopt organizational perspectives. Reid and Barrington (1999) accept these perspectives, but warn that the needs may sometimes conflict, e.g. long-term development for an individual and lack of support opportunities might contradict each other. Similarly, Sloman (1994, p. 24) notes that in the training sphere there can be a singular divergence of interests between the organization and the individual. This viewpoint is shared by Palmer (2006), who warns against assessing training needs solely from the viewpoint of the organization. Many individual employees correctly follow their own training and development agendas and strategies. There are also sound business and motivational reasons for organizations to help employees to complete their self-development needs. Learning and development are continuing and practical (Sloman, 2003). They are supposed not to have to wait for business needs and training objectives to be set before embarking on a programme. Therefore, individuals need to take more responsibility for their own learning, rather than waiting for the organization to lead them. 2.6.3 Important TNA Factors in a Changing Competitive Environment There are important factors which affect TNA in a competitive environment for any organization and which a professional approach to change requires those responsible to consider. These are now examined in turn. i. Cross-competitive environment The abolition of collective differences in vocational results can be maintained by training programmes for diverse employees in a competitive environment, which can produce admiration for individual differences in attitudes, values and behaviours, according to DNetto and Sohal (1999), who recommend certain practices in the field of training. These include identifying exact training needs which are connected to the organizations goals and objectives; assessing individual training needs to facilitate a contribution within the training programme; developing individual annual training strategies which take account of knowledge, operational and interpersonal skills, attitudes to the job and technological skills training; evaluating literacy, language and numeracy to assess the ability to undergo training; connecting training to rewards, project agreements, development procedures and pay scales; and identifying the complementary skills of employees through a review process. ii. Diversity Moore (1999) suggests that a diversity needs analysis is required for the effective integration of diverse group members. Two contrasting approaches to diversity of background are to ensure that the organization is diversity blind or to provide a diversity-negative environment. According to Moore (1999), an important starting point in an environment of diversity in TNA is awareness of different challenges faced by people from different backgrounds within the organization. Training programmes should facilitate the understanding and appreciation of actual differences between people, which can apply in communicating and using language, in learning styles, in methods of dealing with conflict and in task and relationship orientation. Developing and integrating competencies and skills in culturally diverse employees is the next step presented by Moore (1999). It should create a mechanism whereby individuals learn to avoid damaging processes due to dysfunctional interpersonal conflict, miscommunication, higher levels of stress, slower decision-making and problems with group cohesiveness. Moore (1999) states that the development of important communication skills is needed in order to achieve effective integration of competencies. These skills are the ability to consider viewpoints that may differ from ones own, to communicate, to negotiate and to face difficulties appropriately. iii. Leadership According to Silverthorne (2005), leadership plays an important role in decision-making and organizational achievement. In order to develop effectively in a cross-competitive environment, leaders must understand and control their own behaviour, as this affects employees perceptions of leadership. They must also ensure that environmental issues are considered when choosing the best management style. However, appreciating the differences in leadership styles is not sufficient to be an effectual leader, as the necessary insight also varies with the environment. Silverthorne (2005) states that an effectual leader knows which leadership style to employ and when to employ it. There are four contrasting leadership styles: active or involved, supportive, participative and attainment-oriented. Active leaders tell subordinates what is required and put into effect individual systems to direct them; the supportive leader creates a friendly environment and is responsive to her subordinates needs; the participative leader engages them in the decision-making process; and the achievement-oriented leader applies high standards to the decision-making process and appears confident that subordinates will reach them. Silverthorne (2005) argues that an effective leaders choice of leadership style is based on the context of the task and the needs of the subordinates. iiii. Communication Silverthorne (2005) also suggests that one way to achieve better communication between individuals with different competitive backgrounds is to apply TNA to managers on how to work in a competitive environment. He proposes four ways of reducing cross-environment communication problems. First, managers should focus on differences in communication styles. Understanding that employees are different means describing a behaviour, rather than the individual. This will give the manager the time to understand the subject being discussed. Thirdly, the manager should attempt to understand the subject from the employees perspective. Seeing the employees point of view gives the manager an opportunity to better understand what the employee is trying to communicate. Finally, the manager must listen more openly than normal and engage in exercises to improve the communication process. 2.7 Management Training Many organizations today have training programmes for their employees but the reasons for conducting them vary widely. Some provide job orientation for new recruits; others training on new equipment for existing employees or strategic planning courses for managers. Successful managers need multi-skills training and detailed information about the organization. Training programmes for managers should cover different skills than those for employees; examples are functional, administrative, planning and leadership skills. Assessing changes in performance following training is complicated by the fact that while some of these skills can be easily observed in the short term, others will be apparent only from long-term changes in the performance of the manager, the department or the entire organisation. 2.7.1 Different types of training needs All employees should be aware of the types of management training their organization offers, because many will be planning to be line-managers in the future, so will require certain skills. McConnell (2003) lists twelve types of training which are very useful in ones current job and helpful for the future. These are now examined in turn. i. Group Training Group training involves three or more individuals who participate in a common learning activity, generally led by a group facilitator. ii. Coaching Coaching is one-on-one job training. Generally it includes demonstrations, lectures and observation of practice. iii. Mentoring This is a process in which experienced employees are assigned to assist newer employees through guidance. Sometimes it takes a formal approach; at others it is informal. It is also used to introduce employees to a companys culture and environment. iiii. Self-Paced Learning This is any learning activity in which the learner determines the speed at which the material is covered. Generally, it is an individualized form of instruction, but it can be used with groups, the speed being set either individually or by the group. V. E-Learning This is a term used to describe learning activities conducted from the users desktop via the Internet or e-mail. It is generally an individual activity. Vi. Computer-Assisted Instruction This is the delivery of training via a computer. Again it is generally individualized. It can include programmes on modelling, simulation, practice and knowledge. Vii. Distance Learning Training This describes instruction in which the teacher is geographically separated from the learner. Connection can be via satellite or phone line with the instruction delivered to a PC or to a room specially equipped with video or audio conferencing equipment. Viii. Self-Study Self-study refers to learning activities initiated and participated in by an individual. Programmed or computer-assisted instruction and reading assignments can all be self-study activities. Viiii. Simulations These are controlled and standardized representations of a job, activity or situation used as a basis for developing skills in dealing with the simulated situations. VV. Lectures These are structured oral presentations delivered for the transfer of information. VVi. Job Assignments Job assignments place an individual into an actual job, generally for a limited period of time, the primary goal being to learn all or part of the job. VVii. Job Rotation This is similar to job assignment but generally includes several assignments in a planned order or the exchange of jobs with another person. 2.7.2 Different levels of training needs The objective of a training needs analysis is the identification of the training required to meet the recognized needs. In point of fact, while these may be accepted or revised by the employees, a senior person may be assigned to decide what training is necessary. The person conducting the training or assessing the needs is not always the individual who develops or recommends the training. On the other hand, the most important step in TNA is to translate the recognized needs into objectives. Then individual objectives can be used to develop or choose a training approach at individual and organization level. Beside the types of training, McConnell (2003) specifies the levels of needs for individual and organization and the personnel who will conduct the training. i. Supervisors These are the people who manage the people being trained. ii. Human Resources These are the professionals in the human resources department. If training is a function of the HR department, it is treated separately. iii. Operating Department Employees These are the employees of the department for which an individual is to be trained. iiii. Training Department Personnel These are generally training professionals employed by the training department. Their strengths are their skills and knowledge of training techniques and procedures. The most common criticism of such people is that they lack specific job or operational knowledge. Some organizations assign their trainers to specific areas-sometimes even to temporary work in the operating departments-to overcome such weaknesses. V. Operating Department Personnel on Temporary Assignment to Training These are people who usually have excellent job knowledge but often lack training skills. Many organizations use this approach because it gives greater credibility to the training sessions, while the operating personnel on such an assignment benefit greatly from the experience and learning of training techniques. Vi. External Professionals These are usually training consultants, supplier employees, or academics. Generally, they are used when the required degree of knowledge or skill is not available within the organization. These people are usually excellent trainers, but they can be expensive to use. If they offer similar classes on a regular basis, consistency may be lost if the same external person does not conduct all classes. Vii. External Organizations Local schools and professional organizations often conduct registration programmes in general subjects. Knowing the types of training currently being used by an organization and who conducts each training type provides an initial indication of what can be done. However, in some cases the training will have to be designed and/or obtained elsewhere. 2.7.3 The Roles of HR, Trainers and Line-Managers The many roles within the training function can be analyzed and their strengths and weaknesses identified. The training function within an organization should have as part of its mission the meeting of the organizations requirements; its success at accomplishing that will be the basis for the analysis. HR people and line-managers in the training function should help the organization to improve and involve employees in training courses which could be helpful in enhancing their skills and hence their performance, so HR people and line-managers must undertake a number of tasks, summarised below. Training organization: the mission of the training function, its internal structure, and internal and external relationships. Training personnel: the selection, qualifications, and motivation of department employees. Employee training in the requirements of specific jobs or activities. Employee development training in the requirements of future jobs and broadening their abilities in their current posts. Remedial training, conducted to correct inadequate basic skills such as mathematics, reading and writing. Organizational development: improving communication and understanding throughout the organization in order to produce effective, functioning teams; establishing or changing to a desired culture; and responding to changing conditions. Internal and external communication of the training departments abilities, results, and offerings. Training facilities: the physical space and equipment allocated to conduct training. Identifying training needs: determining the training required by individual employees and the organization. Training design and development: creating, structuring, or obtaining a training programme to meet specific ob

A report on the Implementation of Standard Costing

A report on the Implementation of Standard Costing In current years, various tools such as activity-based costing, the balanced scorecard and target costing have been used in the business community. However, traditional management accounting systems continue to be widely applied. One example is standard costing, which has been used on a wide front during the last century. The purpose of this paper is to examine the widely use of standard costing system. Despite it is less relevant than newer accounting methods, standard costing is far from obsolete. Because of its simplicity, flexibility and affordability, standard costing remains a favorite cost accounting method among accounting and finance professionals. Introduction: In todays time of rapid technologic change, tough global and domestic competition, total cost management is central to sustained corporate profitability and competitiveness. The management focus today is to minimize cost. The cost leadership strategy does not mean compromise on either quality or technology or product differentiation. Low costs are no advantage, if the customers are not willing to buy the product of low cost firm. Cost management has to be driven with customer as the focus. The survival way for any company is how to manage its product/service cost, quality and performance. The customers are continuously demanding high quality and better performance products/services and at the same time, they want the prices to fall. The shareholders are also demanding a required rate of return on their investment with the company. Thus, cost has become a residual. The challenge is being able to manufacture or provide service with the stipulated cost framework. Thus, cost management has to be an ongoing continuous improvement program. Standard Costing In recent years, various tools such as activity-based costing, the balanced scorecard and target costing have been used in the business community (Kaplan Cooper, 1998; Kaplan Norton, 1996; Ansari et al1997). However, traditional management accounting systems continue to be widely applied (Brewer, 2000). One example of traditional management accounting is standard costing. Standards can be used with either job order or process costing system to provide important information for managerial planning, controlling, and decision making. Standard costing assists in setting budgets and evaluating managerial performance. The major motive to use standard costing is because it facilitates product costing estimation (Ask Ax, 1997). Ask and Axs study is supported by a study conducted by Puxty and Lyall (1989), which reported that 76 percent of the UK commercial and industrial companies operate a standard costing system. Although it is used widely, people recently criticize it could not provide the information needed in todays competitive environment. Despite the criticism, there are few signs that the use of standard costing tends to decrease. The survey from Ask and AX (1997) showed that 12.6 % of the companies investigated stated that they would abandon standards but on the other hand, 9.9 % stated that they would like to convert to standard costing system. The History of Standard Costing The standard costing system was developed in the early 1900s. According to Drury (1992), it was the scientific management principles recommended by F.W. Taylor and other engineers. Scientific engineers built up information about standards to set up the best way to use labour and material resources within manufacturing. Engineers used the standards to provide information for planning the flow of work so that the waste of materials and labour was minimized. Interestingly, engineers did not consider standards as a tool to control financial costs at that time (Drury, 1992) The first thoughts of using standards as a tool to control costs came from G. Charter Harrison, who designed the first standard costing system. Started in 1911, Harrison worked for the Boss Manufacturing Company, Illinois, in USA makers of work gloves. It took him a few years before he published the first set of equations for the analysis of cost variances (Solomons, 1968) Harrison was not the only person on the standard costing scene. In 1908 and 1909 Harrington Emerson supported the development of an information system specifically directed towards the achievement of efficiency objectives. Emerson stated that information about standards allow managers to differentiate variances that are due to controllable conditions and variances that are caused by conditions beyond managements control (Solomons, 1968) Traditionally standard costing systems are used in order to support the manufacturing industry. Today standard costing is widely used by all kinds of industries. The Purpose of A Standard Costing System: The purpose of cost and management accounting is to provide financial information to managers to help them to plan activities, control the activities and see the financial implications of any decisions they make take (Hussey Hussey, 1998). Standard costing systems provide cost data that can be used for many different purposes. Ask and AX (1997) have identified several fields of application when it comes to a standard costing system. Their survey has the following reasons/purposes why a company may use a standard costing system: Product Costing 82.4% Inventory Valuation 64.8% Variance Analysis 56.0% Budgeting 45.1% Transfer Pricing 31.9% Drury (1996) gives a wider view of the purposes. He states that the main purpose a standard costing system can be used are: To help in setting budges and evaluating managerial performance. To act as a control device by stressing those activities which do not match to plan and thus alert decision-makers to those situations that many be out of control and in need of remedial action. To provide a forecast of future costs that can be used for decision making purposes. To simplify the task of tracing costs to products for inventory evaluation purposes. To provide a challenging target with individuals are motivated to achieve. There are many advantages with standards. Calculations are easier made and an effective performance controls are enabled, which provide opportunity to savings. Critique Against Standard Costing Systems Standard costs are major elements within the management accounting area. They were used when organizations conditions were stable, standardized products were produced and labour and material costs were the major costs components. But todays business environment is different. The difficulties in the manufacturing process are increased when products are many and product series are short. (Ask Ax, 1997) When difficulties increase, it has more complicated interpreting of variances. Moreover, it could be difficult to tie the variances to the particular persons or the particular areas. Also, when the manufacturing conditions become more complex, the amount of fixed costs increases. Therefore, fewer opportunities will influence the total costs in the short term. Managers have less interesting to manage by using traditional thinking on how costs are influenced by volume. As shown above, standards may be difficult to set in todays dynamic conditions. A standard costing system may be expensive to maintain and the additional record-keeping may become a burden to managers and they lose confidence in the system. (Hussey Hussey, 1997) Richard Fleischman and Thomas Tyson claimed that standard costing cannot provide adequate assistance in the areas of construction strategy and operational management. (Fleischman and Tyson, 1998) Don Hansen and Maryanne Mowen describe standard costing system as potentially dysfunctional. (Hansen and Mowen, 2002) These criticisms have contributed to the dismissal of standard costing, especially for large companies that have more sophisticated method such as Activity Based Costing (ABC) and target costing. Mike Lucas even questioned that whether it is still appropriate for college accounting programs to teach this topic. (Lucas, 1997) Global Acceptance of Standard Costing While academics pointing out the weaknesses of standard costing, people observed that this accounting tool continues to be widely used throughout the world. Studies showed that in developed countries the standard costing using rate is as high as 73% in the U.K. and 86% in Japan. (Garg, Ghosh, Hudick and Nowacki, 2003) More specifically76% of 303 accountants in the U.K. and 73% of 85 finance and accounting specialists in New Zealand use standard costing. (Guilding, Lamminmaki and Drury, 1998) The authors also found that accountants viewed modern costing and production management tools as having no impact on how widely standard costing and variance analysis are used. A study by Maliah Sulaiman, Nik Nazli and Norhayati Mohd Alwi of companies doing business in Malaysia found similar widespread dissemination and persistence of standard costing: 70% of 66 local firms and 76% of 21 Japanese are using standard costing. These studies reveal that standard costing does not overemphasize cost control; however, it is linked to quality management. In addition, the Lucas and Sulaiman studies have shown that companies use historical performance instead of predetermined engineering standards on actual costs. Instead of using newer and costlier systems, companies chose to reconfigure existing system with more precise schemes, implying that firms have adapted standard costing to their specific needs and have not abandoned it. Swiss Chalet Standard Costs System: System Description In order to demonstrate that standard costing is far from obsolete. I examined the standard costing system at Swiss Chalet, one of the biggest Canadian restaurant chains. The collected data of this study consists of in-depth interviews with employees working with standard costing at different divisions within Swiss Chalet. The study about the standard costing in U.K., Dubai and Malaysia is also used. First opened in 1954, Swiss Chalet now has more than 190 restaurants across Canada and United States serving their signature rotisserie chicken and a variety of other menu items. In the beginning of each month, Swiss Chalets area manger will send standard costs to each Swiss Chalets store. The standard costs are generated through historical data and area managers analysis based on each stores current situation. Then, management in each store can project materials, labor and overhead costs by reviewing the standard costs established for each of these cost elements. Then computer generate the variances and make managers recognize the differences between the actual activities and resource consumption and the expected activities and resource consumption. When the variance is significant, this is a signal for investigation, Managers will try to discover the cause and exert influence to correct it. Therefore, cost control and performance evaluation is the main purpose of Swiss Chalets Standard Costing System. According to Mann-Whitney U test Statistic13, inventory costing is the key function of standard costing for industries in U.K, Dubai and Malaysia. Also, Mann-Whitney U test suggests that the industrial-sector companies in U.K. use standard costing to a greater extent than the service sector for the functions of cost control and performance evaluation, costing inventories and computing product cost for decision making. Also, in only one instance has this pattern reverted toward the service sector: the use of standard costing as an aid to budgeting. These findings are consistent with those of other studies of industrial sector companies in Malaysia and the U.K. (Marie Rao, 2010) Material Standards: Swiss Chalets direct material components have three categories: foods, liquor and disposals. Foods include chicken, potatoes, ribs, and vegetables. Etc. Liquor includes wine, spirit and other non-alcohol beverages. Disposals include food boxes and bags to wrap food. Also, the standard cost of non-value-added materials such as discount materials, food wastes and voidable orders are also included for the purpose of reduction or elimination. When area mangers determine the standard cost, historical cost, stores current performance and cost-benefit trade-offs are involved in making quality decisions. When all quantity and price information has been gathered, component quantities are multiplied by unit prices to yield the total cost of each component. These totals are summed to determine the total standard material cost of one unit of product and the total standard material cost. Information about direct material of each component, their specifications (including quality), their quantitie s and total standard material cost are listed on a bill of materials. This average of historic usage method is consistent with statistics of service sectors in Dubai, U.K. and Malaysia. According to Mann-Whitney U test Statistic, 76% of service sector in Dubai and 63% of service sector in Malaysia use average of historic usage to set up labor and material standards. On the other hand, nearly nine out of 10 industrial sector respondents in Dubai employed standards based on design/engineering studies, which is comparable to Japanese companies in Malaysia (81%). These firms appear to be significantly more scientific in their approach to standards setting compared to the service sectors, which predominantly used average of historic usage method. Labor Standards: The procedures for developing labor standards are similar to those used for material standards in Swiss Chalet. Swiss Chalet has four types of works in the front of the house: servers, hosts, managers and bar tenders. They also have three types of people in the kitchen: cooks, line cooks and pre cooks. The standard costs of each type of worker in each specific time range are identified. Because they are in the restaurant business, labor requirement is different during the different period of the day. Therefore, their labor standards are specifically identified in each hour. Their managers salaries are also counted into the labor standard costs although they are fixed overhead cost. Labor rate standards reflect the wages and fringe benefits paid to employees. Because employees in the same position are paid different wage rates based on their experiences in the restaurant business, a weighted average rate is computed and used as the standard. After labor tasks are analyzed, an operatio ns flow document is prepared that lists all the necessary activities and labor costs in each time range. Overhead Standards: Swiss Chalet store has two types of overhead costs: utility costs and maintenance costs. (Managers salaries are included in the labor costs). Utility costs include rent, gas and hydro, etc. Maintenance costs include equipment repair budget, sanitary service and pest controls, etc. Area managers use historical data, store situation and market price to determine the overhead standard costs. Swiss Chalets managers review the standard every month. Slightly more than half of Dubai industries (52%) conduct reviews semiannually, consistent with Japanese respondents in Malaysia (55%). On the other hand, domestic Malaysia firms in the U.K. were apt to review their costing standards annually at a rate of 35% and 68%, respectively. (Marie Rao, 2010) Material Variance: Store managers do the inventory count every week and then input direct material cost they used of each component, their specifications (including quality), their quantities and total standard material cost into the computer system. The computer system generates the price variance and quantity variance. Store managers usually can not do much about the price variance because they are not able to control prices. Head office has purchasing contracts with their suppliers with fixed prices in the yearly basis. The only price they can control is vegetable prices, which have seasonal fluctuation. Managers are able to influence the price according to the price variance. Quantity variances are considered the responsibility of the person in charge of the kitchen. When the quantity variance is too big, managers have to think about the efficiency of the material usage, weather experienced employees are well allocated in different shift and weather further training should be provided. Labor Variance: When employees start to work and when they leave the store, they input their password into the computer system. Computer system automatically records their working hours and generates labor rate variance and labor efficiency variance. If the labor cost is bigger than 29% of the total costs, head office will give a warning to the stores, demanding them to reduce the labor costs. Therefore, managers have to balance the use of experienced workers and inexperienced workers in a specific task by using labor efficiency variance and labor rate variance. Using highly skilled highly paid individuals for lower-level jobs could cause an unfavorable labor rate variance, accompanied by a favorable labor efficiency variance. Therefore, Swiss Chalet examines variance where the variance exceeds a given percentage of standard. In Dubai, 39% of industrial companies and 50% of service companies base their costing decisions on managerial judgment, compared to roughly half of U.K. companies and one fourth of local and Japanese companies in Malaysia. However, 35% of firms in Dubais industrial sector and 29% in its service sector answered when the variance exceeded a given percentage of standard, which is similar to the rates found in the Malaysia and U.K. studies. (Marie Rao, 2010) II Usefulness and effectiveness of the System: The major advantage of standard cost system in Swiss Chalet is that it highlights and allows management to manage by exceptions, that is, it allows management to concentrate on the areas where there are inefficiencies. It also allows company management to understand the quality expected and costs that will be incurred in the preparation of each dish and what impacts deviations from these standards will have on costs and profits. When the variance is significant, this is a signal for investigation, Managers tries to discover the cause and exert influence to correct it. In the Swiss Chalet store I visited, costs are under control; productivity is high; workers are achieving bonuses based on team activity goals and employee morale is high in a work environment typically viewed as tedious. The system is highly controlled and automated. The process is effective and the standards they set are appropriate and attainably. Although their standards are developed from past and current information, environmental, seasonal and economic factors are considered for the period in which the standards are to be applied. Swiss Chalets material, labor and overhead standard costs are changed every month. For example, recently, Swiss Chalet eliminated many non value added labor movements, their labor time standards changed very soon accordingly. Swiss Chalets standards can be reached or slightly exceeded approximately 60% or 70% of the time with reasonable effort by workers. Their standards allow for normal, unavoidable time problems or delays. Their standards represent an attainable challenge and are able to motivate workers performance and at determining how effectively and efficiently workers are performing their tasks. III Recommendation: Process changes: Under current system, area managers are the only people who do the standard costs setting. I believe that area managers could cooperate with purchasing manager, accountants, marketing managers and store managers to determine which choices are most appropriate. The cooperation will help the company better balance the interrelationship of cost, quality, quantity and selling price. Under the current system, standard costs of each type of worker in each specific time range are used to calculate the total labor standards. However, workers salaries are different even in the same position because their experiences are different. Therefore, each individuals salary and individual numbers in one specific time range used to calculate the standard labor costs should be identified for managers better understand the standards and better improve their labor arrangement and improve their labor efficiency. Computer System change: Swiss Chalets current computer system is good, but still not highly automated. They still use fax to transit data and information within the organization are not highly shared within one portal. Therefore, I believe Enterprise Resource Planning System (ERP) will make their work process more effectively. EPR system provides a much higher level of accuracy to gathering cost information. With most manufacturing processes being automated and operated with little direct labor, ERP system has the advantage of keeping an accurate record of overhead cost pools at all levels in an organization. ERP has greater capacity to accurately allocate costs and it is important for developing accurate standards. Standard costs can be prepared with, for example, the sub-module mySAP.com Financials under ERP system. Intermountain Health Care, Inc.s Standard System According to Mr. W.V. Rosqvists research paper Intermountain Health Care, Inc, (IHC) Satandard Costing System Methodology and Implementation, the IHC Standard Costing System is able to manipulate the procedure costs in any way desirable to provide meaningful groupings for analysis. The Standard Costing System provides hospital management with a tool for meeting increased cost pressures in the health care environment. The system is useful for pricing services, but it is also important to monitor productivity and analyze costs and profitability. IHC is a not-for-profit hospital chain with 22 hospitals in the intermountain area and head office is in Salt Lake City. They have a complex approach to determine detailed standard costs for every procedure in the hospital. IHCs standard costing system was designed to link the hospitals financial management and case mix reporting system to provide significant information in the area of following: Cost/Profit Studies: the ability to determine cost and profit at each of levels, such as patient, physician, medical specialty, payer and employer. Marketing: to make complex decisions regarding the competitive market forces such as pricing, contracting and physician retirement. The analysis gives hospital the advantage to determine the financial impact of changes in volume. Departmental Productivity: to monitor the department performance to help variance analysis and goal setting. Utilization of Hospital Service: the ability to alter utilization, which depends on the ability to analyze current patterns and associated costs. Cost Comparison: To compare costs to other hospitals to help managers to identify and learn the efficient methods. Competitive Analysis: To study competitor information and make reasonable judgment of its costs. It will allow a significant view of the impact of price completion on all the competitors. It will help IHC to determine the extent to which it should compete on prices with other hospitals and with nontraditional health care providers, such as outpatient surgery centers. The IHC approach to standard costing provides detailed costs for every individual charge item in the hospital. Fixed and variable costs are maintained for every item in broad categories: labor expense, supply expense, depreciation and hospital overhead. After the implementation, their standard costing system is able to: provide full standard fixed and variable costs for management purpose in making pricing and marketing decisions; maintain a management reporting system compatible with existing system; provide an approach to compare hospitals and departments; provide accuracy while allowing easy and rapid maintenance. (M. V. Rosqvist) The Future of Standard Costing: According to Cheatham and Cheatham (1996), many accountants do not know that a redesigned standard costing system can provide the important information that they need and updating their system is an easier process than adopting a new system. They also point out that standard costing system combines managerial, financial and operations accounting, which make it as a control system. But the possible replacement is only cost accumulation system. Critics against the standard costing system questioned whether the system is useful in the manufacturing system of today. As we demonstrated above, it is still a widely used method, due to the fact that it provides cost information for many different ways in addition to cost control. A lot of companies adapted their standard costing system to report on these variables that particularly important to them. In companies where an activity-based system is implemented, standard costing is still essential when it comes to controlling the costs of unit-level activities. Other criticism comes from that overemphasis is on the price and efficiency, which would make quality aside. Also, volume variance to measure utilization of capacity ignores overproduction and unnecessary build-up of inventory. In this situation the fact that variance analysis is not locked in to a set of variables is ignored. Used variables can be changed when the need arises. Examples of this are presented below. (Cheatham Cheatham, 1996) To use standards on the functions of raw material ordering and inventory levels, which give information about the effectiveness of suppliers. Because the objective is to deliver orders as placed, any variances are undesired. Price variances can be combined with a quality variance to prevent purchasing managers from only focusing on price but do not pay attention to quality. Raw materials inventory variances indicate an inventory build-up, because more material purchased than used, by reverted conditions. This is in line with a just-in-time theory. Further criticism is about the non-focus of continuous improvement. But, standards based on engineering studies or historical data are not a necessary part of a standard costing system because standards can be changed by a lot of methods. Examples are listed as below. (Cheatham Cheatham, 1996) Use last periods results as standards. The last periods result has to be representative; otherwise it needs to be revised. It is also achievable to use a base period that comparisons are made. Use benchmark as something outside companies. To compare with competitors or with the leader of the industry. Use predetermined cost reduction by reducing the standard cost for every period by a predetermined amount to achieve constant improvement. Finally, the reporting system of the standard costing system may be revised. In the traditional way internal completion often arises. By revising the reporting system, cooperation among workers, managers and departments can be supported. Conclusion: Despite it is less relevant than newer accounting methods, standard costing is far from obsolete. However, redesign and update the standard costing system to adapt the new environment may be necessary. Because of its simplicity, flexibility and affordability, standard costing remains a favorite cost accounting method among accounting and finance professionals.