Uncitral Model Law Essay Example

Uncitral Model Law Essay Pepperdine Dispute Resolution Law Journal Volume 3 | Issue 3 Article 5 4-6-2012 UNCITRAL Model Law on International Commercial Conciliation: From a Topic of Possible Discussion to Approval by the General Assembly Robert N. Dobbins Follow this and additional works at: http://digitalcommons. pepperdine. edu/drlj Part of the Commercial Law Commons, Dispute Resolution and Arbitration Commons, International Law Commons, International Trade Commons, Legislation Commons, Other Law Commons, and the Remedies Commons Recommended Citation Dobbins, Robert N. 2003) UNCITRAL Model Law on International Commercial Conciliation: From a Topic of Possible Discussion to Approval by the General Assembly , Pepperdine Dispute Resolution Law Journal: Vol. 3: Iss. 3, Article 5. Available at: http://digitalcommons. pepperdine. edu/drlj/vol3/iss3/5 This Article is brought to you for free and open access by the School of Law at Pepperdine Digital Commons. It has been accepted for inclusion in Pepperdine Dispute Resolution Law Journal by an authorized administrator of Pepperdine Digital Commons. For more information, please contact Kevin. [emailprotected] du. Dobbins: UNCITRAL Model Law on International Commercial Conciliation: From UNCITRAL Model Law on International Commercial Conciliation: From a Topic of Possible Discussion to Approval by the General Assembly Robert N. Dobbins As has often been the case for this virtually unsung Commission of the United Nations, with little fanfare outside the United Nations earlier this year the General Assembly formally adopted the Model Law on International Commercial Conciliation (the Model Law) created by the United Nations Commission on International Trade Law (UNCITRAL; also the Commission). We will write a custom essay sample on Uncitral Model Law specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Uncitral Model Law specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Uncitral Model Law specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Readers should not misconstrue the quietude as something indicative of insignificance. The Model Law is landmark legislation in this age of globalization, providing a solid foundation on which UN Member States and businesses can build international commercial relationships with the comfort of knowing that they can control the outcome of the inevitable future disputes. By no means a Pulitzer Prize winner, for those interested enough to inquire, the story of the creation of the Model Law is remarkable. The purpose of this Note is to give a snapshot of how, what began in the shadow of Arbitration as a possible work topic considered by the Commission . . . Conciliation, in the space of two and one-half years be- came the Model Law. As a secondary and intentional focus of this note, this author (conceding his own bias) hopes to allow the Secretariat of UNCITRAL to enjoy its well-deserved moment in the spotlight for its monumental efforts in the creation of the Model Law. In the first section of this Note, we will review the structure of the Secretariat the working arm of the Commission. Here we will also examine the Working Group the representatives of Member States and Non-Government Organizations (NGOs) who helped to craft the wording and the spirit of the Model Law. The second section will discuss some of the background to the actual process by which the Model Law went from the Commissions suggested 1. Report of the Working Group on Arbitration on the Work of Its Thirty-Second Session (Vienna, 20-31 March 2000), United Nations Commission on International Trade Law A/cn. 9/ 468 (10 April 2000) [Working Group Report 468J. Produced by The Berkeley Electronic Press, 2003 1 Pepperdine Dispute Resolution Law Journal, Vol. 3 [2003], Iss. 3, Art. 5 work topic to approval by the General Assembly. In this section we will begin with a short introduction to the concept of a model law a uniform legislative text intended as a tool for stabilization in its assigned subject. We will also consider the shadow of arbitration from which the Model Law emerged and can be recognized as covering a subject conciliation wholly distinguishable from arbitration. In the third section, we will explore the evolution of the Model Law. We will follow the progress of what began as a possible topic for consideration and, after extensive debate, negotiations, and redrafting, found its way to the final draft. We conclude in the fourth section with a discussion of the final draft how, in one and one-half years, the Secretariat and the Working Group had developed the Model Law and readied it for delivery to the Commission. This section ends with the words of the General Assembly acknowledging the Commissions remarkable achievement as it adopted the Model Law. I. THE SECRETARIAT AND THE WORKING GROUP: WHERE THE WORK GETS DONE Based in the magnificent city of Vienna, Austria, the Secretariat is the hard-working arm of the Commission responsible for taking from idea to fruition the concepts identified by the Commission as important to international trade law. The Secretariats under-staffed senior lawyers from 2 several different countries, taking directions from the Working Groups, prepare the draft provisions and working paper reports for the Working Group. The Secretariat also delivers the Report of the Working Group to the Commission. The Commission entrusted the work on the Model Law to the Working Group on Arbitration (which later became the Working Group on Arbitration and Conciliation [the Working Group]) with directions to the Secretariat to prepare the necessary documentation. Besides the Secretariat, the Working Group participants occupy three tiers: States Members of the Commission; 3 States observers; 4 and, observers from interna2. With apologies to the Secretariat for what may appear to be short shrift, a full discussion of its valuable service is beyond the scope of this note. As of this writing, the Secretariat oversees six Working Groups, including Arbitration and Conciliation: Publicly Financed Infrastructure Projects; Transport Law; Electronic Commerce; Insolvency; and, Security Interests. 3. At its inception, these were: Austria, Cameroon, China, Colombia, Egypt, Finland, France, Germany, Honduras, India, Islamic Republic of Iran, Italy, Japan, Lithuania, Mexico, Nigeria, Russian Federation, Singapore, Spain, Sudan, Thailand, United Kingdom of Great Britain and Northern Ireland, and the United States of America. ttp://digitalcommons. pepperdine. edu/drlj/vol3/iss3/5 2 Dobbins: UNCITRAL Model Law on International Commercial Conciliation: From [Vol. 3: 529, 2003] PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL tional organizations. 5 The Working Group met twice annually, once in Vienna and then in New York City. 6 The meetings are conducted quite formally: a Chair and Rapporteur are elected, an agenda adopted, and discussion among Working Group participants i s conducted by recognition from the Chair. Sessions are conducted in English with real time translations into French, Russian, Chinese, Arabic, and Spanish. All proceedings are recorded, except for the frequent and fascinating behind-the-scenes discussions held off the record. At the end of each days session, the Secretariat prepares comprehensive working paper reports of the proceedings, presents the reports to the translators, and has the reports ready for distribution before the next mornings session begins. Boiled down to their essence, the working paper reports state the proposed legislative provisions, including alternative wording, and reflect the Working Groups deliberations and conclusions had during the session regarding each provision and alternative. 7 The report serves as the starting point for the next days session, and the basis for the final report produced at the end of the two-week session. THE CONCEPT OF A MODEL LAW Before we examine the evolution of the Model Law, a brief explanation of the concept of a model law is useful. The term refers to a form of legislative text. The text is designed so that it can be adopted in total, without modification, by Member States legislatures, at which point it 4. The States Members sit on a rotating basis and, when not represented on the Commission, rotate into observer status. These were originally representatives from: Argentina, Canada, Costa Rica, Cuba, Czech Republic, Denmark, Indonesia, Lebanon, Morocco, Netherlands, Peru, Poland, Portugal, Republic of Korea, Rwanda, Saudi Arabia, Slovakia, Sweden, Switzerland, Turkey, Ukraine and Venezuela. . Though no less active participants, the NGO-observers were: Economic Commission for Europe; NAFTA Article 2022 Advisory Committee; Permanent Court of Arbitration at the Hague; Cairo Regional Centre for International Commercial Arbitration; Chartered Institute of Arbitrators; International Chamber of Commerce (ICC); and the International Federation of Commercial Arbitration Institutions. 6. Most likely attributable to budge t constraints, the Working Group now meets only once per year. 7. For an example of this, go to www. uncitral. rg, click on travaux preparatoires,click on UNCITRAL Model Law on International Commercial Conciliation, scroll down to Working Group Reports, then click on any or all of the four that are listed. Produced by The Berkeley Electronic Press, 2003 3 Pepperdine Dispute Resolution Law Journal, Vol. 3 [2003], Iss. 3, Art. 5 would become the law of that State; hence the term model. The legislative provisions are crafted so that they can be adapted to fit within the Member States legislative and procedural framework. It can also be referred to in commercial contracts as the law to be applied in the event of a dispute. The underlying philosophy is to afford stability and advancement of international commerce through uniformity. 8 II. IN THE SHADOW OF ARBITRATIONP If you have been with us since the beginning of this note, you have twice read the phrase in the shadow of arbitration. Given its importance to the evolution of the Model Law, let us set this phrase in context. As noted above, the Working Group began as the Working Group on Arbitration. The States Members, States and NGO observers are, in large part, those who created the globally recognized and highly respected UNCITRAL Model Law on International Commercial Arbitration. The Commissions view that conciliation may be merely an extension of international arbitration was apparent. It was thought that, the initial Commission Report states, even if ultimately no new uniform text would be prepared, an in-depth discussion by delegates from all major legal social and economic systems represented in the Commission, possibly with suggestions for un iform interpretation would be a useful contribution to 0 the practice of international commercial arbitration. 1 This arbitration shadow both fostered and framed the debate on the Model Laws provisions. Fortunately, Working Group participants comments made on and off the record provided continuing reminders that conciliation is and must be treated as a process fundamentally distinguishable from arbitration. 8. International commerce contemplates State-to-State transactions, State-to-private business transactions, and business-to-business transactions. In the right situation, the term can include business-to-consumer transactions. Each type of transaction occurs in the international arena, the term international ultimately being defined in the Model Law (see Article 1). 9. To review the Arbitration Model Law, go to www. uncitral. org, click on approved text, then click on UNCITRAL Model Law on International Commercial Arbitration. You can also find there the Guide to Enactment, which discusses the letter and spirit of the model legislation. Note also, for examples, the NGO observers and the head of the United States delegation Howard Holtzman, considered to be an icon in (if not a founding father of) international commercial arbitration. 10. Working Group Report 468, supra, note 1. http://digitalcommons. pepperdine. edu/drlj/vol3/iss3/5 4 Dobbins: UNCITRAL Model Law on International Commercial Conciliation: From [Vol. 3: 529, 2003] PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL III. THE MODEL LAW EVOLVES We have a snapshot of the Secretariat and have been exposed to the make up of the Working Group. We have a notion of the concept of a model law and an understanding that the Model Law emerged from the shadow of arbitration. Let us look now at the Model Laws evolution. As a foundation for its considerations, the Working Group acknowledged the growing use of conciliation as a process of choice for resolving commercial disputes. Intending conciliation and mediation as synonymous terms, the Working Group confirmed . . . that the use of such non- contentious methods of dealing with disputes deserved to be promoted and that the work of the Commission in the area should be geared to such promotion. They also wanted the picture of conciliation to be painted with the broadest brush to encompass an array of proceedings where the parties sought assistance from an independent and impartial third person to help the disputants reach an amicable settlement. Confirming that the process contemplated was a non-binding method of dispute resolution, the Working Group recognized that procedural techniques used to facilitate settlement and the expressions used to refer to the proceedings (for example, mediation) may differ. Whatever the form of text to be prepared (legislative or non-legislative), and by whatever name the process might be called, the consensus was to limit the context to commercial disputes. Similarly, the Working Group was clear that the overriding proposition throughout their deliberations was that party autonomy throughout the dispute resolution process was paramount. The Working Group had as a backdrop the previously-adopted UNCITRAL Conciliation Rules. 2 Though more procedural, the Conciliation Rules provided a frame of reference for the Working Groups substantive considerations as it began development of the Model Laws structure. At the outset, concerns were raised regarding confidentiality of information disclosed by the parties during the proceeding. Couched in terms of admissibility of certain evidence in subsequent judicial or arbitral proceedings, the Working Group recognized this fundamental aspect of con11. Id. 12. UNCITRAL Conciliation Rules (1980); Resolution 35/52 Adopted by the General Assembly on 4 December 1980. Produced by The Berkeley Electronic Press, 2003 5 Pepperdine Dispute Resolution Law Journal, Vol. 3 [2003], Iss. 3, Art. 5 ciliation. Their aim was to prevent a spillover of information into subsequent judicial or arbitration proceedings. As to cases where the parties have not agreed on a rule [governing confidentiality] the Working Group suggested, . . . he model provision should state that it was an implied term of an agreement to conciliate that the parties undertook not to rely in any subsequent arbitral or judicial proceedings on evidence of the types of facts to be specified in the model provision. 3 In their initial considerations, the Working Group was also concerned with issues relating to the role of the conciliator: could she subsequently serve as arbitrator, as a party representative in a subsequent proceeding, or as a witness in a later dispute? Other topics viewed as important included questions relating to enforceability of settlement agreements reached in conciliation; whether it was appropriate for a sitting arbitrator to assume a role of conciliator during the arbitration; what effect would proceeding with conciliation have on the running of limitation and prescription periods; should provisions be made that would treat conciliation agreements as binding; and, were there guiding principles of conciliation proceedings that needed to be articulated in any uniform provisions. There was also concern raised over whether the Working Group should attempt to draft a conciliators code of ethics . . . to build confidence in the conciliation process by distilling issues 4from the best traditions and openly enunciating standards of practice. Lest we lose sight of where we are, the preceding discussion in this section addressed only the starting point for the Working Group as of March 2000. As of this writing, we are a mere three years later, with the Model Law having been approved by the Commission and adopted by the General Assembly. When the Working Group met in March 2000, the Secretariat had not yet been given the task of beginning the draft legislative provisions. Working Group sessions only occurred approximately every six months, and the final draft of the Model Law was agreed upon in November 2001. In other words, in three sessions over a year and a half, the Working Group and the Secretariat met its Herculean challenge of creating the Model Law. To put this in context, after the March 2000 session, the Secretariat commenced drafting the initial legislative provisions. Over the ten days of the next Working Group meeting six months later, they debated the draft provisions, directing the Secretariat to make changes, additions, deletions, 13. 14. Working Group Report 468, supra note 1. Id. http://digitalcommons. pepperdine. edu/drlj/vol3/iss3/5 6 Dobbins: UNCITRAL Model Law on International Commercial Conciliation: From [Vol. 3: 529, 2003] PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL and providing insight into the philosophical and practical thinking upon which the provisions were based. The Secretariat then had only another six months to re-draft and have ready well in advance of the next Working Group meeting the working paper containing the revised provisions and the detailed discussion of the basis upon which these provisions were created. Moving forward to March 2001, again, a ten day extensive debate; again, daily preparation of reports; and again, a Report prepared by the Secretariat and adopted by the Working Group reflecting the progress on what had become apparent would be UNCITRALs next model law. In case the reader may think this authors use of the term Herculean was a bit melodramatic, let us not forget the Secretariats and Working Groups task. Think about it a moment: we are dealing with a concept neither generally recognized, understood, nor accepted as a means of resolving international commercial disputes. Working Group participants represent constituencies with as broad and diverse perspectives and experiences as are found in the global marketplace. On one end of the spectrum is the developing Third World Country, with little if any stabilized legal system let alone alternative dispute resolution procedures; on the other end, are the dominant and sophisticated economies of the US, the UK, and others. And, let us not overlook the impact of the NGOs perspective, and the influence from the shadow of arbitration. More than 50 participants trying to create a universally acceptable and uniform Model Law governing international commercial conciliation; melodramatic or not, the task was Herculean. The final version of the Model Law restructured, consolidated and removed provisions found in the first draft. 5 Party autonomy throughout the process continued to be a dominant theme. The development of confidentiality and the role of the conciliator reflected the importance to the Working Group of these two aspects of the Model Law. Refinements were made to assure a clear understanding of the concept of internationality, to guide the parties in their effort to determine the place for the conciliation proceeding, and to provide an expansive definition of conciliation to assure the broadest application of the Model Law. Significant debate was 15. For a more comprehensive review of the development of the final draft, see the Report of the Working Group on the Work of Its Thirty-Fifth Session; UNCITRAL document A/cn. 9/ 506. Produced by The Berkeley Electronic Press, 2003 7 Pepperdine Dispute Resolution Law Journal, Vol. 3 [2003], Iss. 3, Art. 5 had on provisions designed to address the enforceability of settlement agreements borne of the conciliation. The Working Group had extensive discussions on the issue of if and how a conciliation would effect the running of the statute of limitations. In continued deference to assuring that parties control the conciliation process, provision was made for them to vary or exclude portions of the Model Law. Extensive discussion, drafting and re-drafting were had to address concerns about the use of information obtained during a conciliation in subsequent proceedings. And if there was not enough drafting and debate going on, the Secretariat, at the behest of the Working Group, also prepared its Guide to Enactment and Use of the UNCITRAL Model Law on International Commercial Conciliation. Finally, the Secretariat and the Working Group were ready for the final push. IV. THE FINAL DRAFT, ADOPTION BY THE COMMISSION THE IMPRIMATUR OF THE GENERAL ASSEMBLY The on-the-record debate is concluded, the discussion in the hallways and the quiet negotiations over lunch, dinner, cocktails are behind them, and the final draft Model Law meets the approval of the Working Group at the end of its November 2001 session. To get there, a drafting group met daily, often-times more than once and into the evening, working with the Secretariat to formulate language for the various provisions to be considered by the Working Group. During the time leading up to the eventful November session, the Secretariat prepared the draft Guide to Enactment and Use of the UNCITRAL Model Law on International Commercial Conciliation. As stated in its preamble, this comprehensive document was created as background and explanatory material. In large part derived from the travaux preparatoires, [t]he Guide explains why the provisions in the Model Law have been included as essential basic features of a statutory device designed to achieve the objec6 tives of the Model Law. 1 The Guide states, In preparing and adopting model legislative provisions on international commercial conciliation, the .. .Commission was mindful that such provisions would be a more effective tool for States modernizing their legislation if accompanied by background and explanatory information. The Commission was also aware of the likelihood that the model provisions would be used in a number of States with limited familiarity with conciliation as a method of dispute settlement. Primarily directed to executive branches of Governments 16. Draft Guide to Enactment and Use of the UNCITRAL Model Law on International Commercial Conciliation; A/cn. 9/514 (27 May 2002). http://digitalcommons. pepperdine. edu/drlj/vol3/iss3/5 8 Dobbins: UNCITRAL Model Law on International Commercial Conciliation: From [Vol. 3: 529, 2003] PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL and legislators preparing the necessary legislative revisions, the information provided in this Guide should also provide useful insight to other users of the text, including commer7 cial parties, practitioners, academics and judges. Prepared by the Secretariat, the Guide discusses issues left unsettled in the Model Law, recognizing that some provisions may need modifying to conform the Model Law to particular legal traditions and nuances of a State contemplating adoption of the Law. Following the Working Groups approval of the language for the final draft Model Law and the Guide to Enactment and Use, the Secretariat set upon the task of preparing the final Report o f the Working Group the vehicle by which the Model Law would be presented to the Commission. This included preparing the Compilation of comments by Governments and International Organizations, 18 these comments having been received after the Secretariat circulated the approved Draft Model Law. In June 2002, the Commission approved and adopted the Model Law and Guide to Enactment and Use as submitted in the Secretariats Report. From there, the Model Law found its way to and surmounted its last hurdle adoption by the General Assembly. At its 5 2 nd Plenary Meeting, 19 November 2002, the General Assembly adopted the following resolution, to which was annexed the approved Model Law: The General Assembly, Recognizing the value for international trade of methods for settling commercial disputes in which the parties in dispute request a third person or persons to assist them in their attempt to settle the dispute amicably, Noting that such dispute settlement methods, referred to by expressions such as conciliation and mediation and expressions of similar import, are increasingly used in international and domestic commercial practice as an alternative to litigation, Considering that the use of such dispute settlement methods results in significant benefits, such as reducing the instances where a dispute leads to the termination of a commercial relationship, facilitating the administration of international transactions by commercial parties and producing savings in the administration of justice by States, 17. 18. Id. UNCITRAL document A/cn. 9/513 Produced by The Berkeley Electronic Press, 2003 9 Pepperdine Dispute Resolution Law Journal, Vol. 3 [2003], Iss. 3, Art. 5 Convinced that the establishment of model legislation on these methods that is acceptable to States with different legal, social and economic systems would contribute to the development of harmonious international economic relations, Noting with satisfaction the completion and adoption by the United Nations Commission on International Trade Law of the Model Law on International Commercial Conciliation, Believing that the Model Law will significantly assist States in enhancing their legislation governing the use f modem conciliation or mediation techniques and in formulating such legislation where none currently exists, Noting that the preparation of the Model Law was the subject of due deliberation and extensive consultations with Governments and interested circles, Convinced that the Model Law, together with the Conciliation Rules r ecommended by the General Assembly in its resolution 35/52 of 4 December 1980, contributes significantly to the establishment of a harmonized legal framework for the fair and efficient settlement of disputes arising in international commercial relations, 1. Expresses its appreciation to the United Nations Commission on International Trade Law for completing and adopting the Model Law on International Commercial Conciliation, the text of which is contained in the annex to the present resolution, and for preparing the Guide to Enactment and Use of the Model Law; 2. Requests the Secretary-General to make all efforts to ensure that the Model Law, together with its Guide to Enactment, becomes generally known and available; 3. Recommends that all States give due consideration to the enactment of the Model Law, in view of the desirability of uniformity of the law of dispute settlement 9 procedures and the specific needs of international commercial conciliation practice. CONCLUSION The Model Law, as amplified by the Guide, gives testimony to the vision of the Commission, the Working Group and the Secretariat. The use of dispute resolution processes that empower the parties to find their own settlement especially conciliation or mediation is rapidly ascending. What this author has tried to do in this Note is give the reader a glimpse of development of the Model Law groundbreaking legislation of international magnitude that fundamentally contributes to stability in the global marketplace. It seems appropriate to conclude with the words from the presiding legal officer of the Secretariat. When asked about the Model Law, Jernej Sekolec commented, The UNCITRAL process provides universal applicability. The Model Law is prepared and approved by consensus of representatives from across the spectrum. In part, this makes the Model Law significant in international commercial dispute resolution. 19. Resolution adopted by the United Nations General Assembly; document A/res/57/18.

Persuit Of Attention (Book Review) essays

Persuit Of Attention (Book Review) essays In the book The Pursuit of Attention written by Charles Derber, Derber describes how social class has a huge impact on how much attention one gets. Many times the only reason people receive as much as attention as they get is because of their social class and/or status. In this book Derber states, In America, wealth, occupation, and education all significantly affects who gets attention in everyday interactions, with members of privileged groups receiving the most and those in subordinate groups experiencing a certain daily invisibility"(pg58) . This statement proves that people with more wealth and higher status will receive more attention then those in a lower position only because of their class. From my own personal experience I can see that in America the higher your status and wealth the more attention you get. For instance take a charity for an example, a well off person who will donate ten thousand dollars a year apposed to a middle class person who donates one thousand dollars a year most likely will have more attention paid to them because they are helping the charity out more, even though they are both making donations. The wealthy are paid more attention to because more people can benefit from them, then the middle class. In Derbers book he goes on to talk about how the dominant classes in society define themselves as having greater personal and social worth then those who are in loser positions or classes thus feeling they deserve more attention. Derber states, In America, the dominant classes are those which come to control economic, political, and cultural life"(pg59). I agree with this statement because it was been proving right many times. A good example of this is our political leaders. Many of the political leaders that we have in our country are well off before they were put into office and are well off after they leave office, with very few exceptions. Another example o...

Business operation & system Essay Example | Topics and Well Written Essays - 3000 words

Business operation & system - Essay Example Contrary to few decades ago, nowadays, operations managers are enjoying a noteworthy status and importance in the companies; however, at the same time, they are confronting the pressure of ensuring efficiency and efficacy in different processes of the business. In particular, this report is an attempt to identify and examine different aspects of operations management while utilizing case study of an organization that will enable a comprehensive understanding of different strategies and techniques of operations management that will be beneficial for huge number of organizations globally. Business of Choice As mentioned earlier, the report includes a case study that will make it easier to understand the importance of operations management in an organization. For this reason, the researcher has selected ‘Tesco’ (Humby, Hunt & Phillips, pp. ... Contrary to other organizations, Tesco has not only been able to tolerate the adverse impact of global recessions and economic booms but one can observe significant expansion and development in its outlets and centres that is one of the major reasons of its success in the British, as well as global market. For this reason, the Tesco has been the choice of this report that will include its different processes, infrastructure, and activities to carry out the process of scrutiny in the context of operations management. (System Diagram of Tesco’s Retail Store) From this introduction of Tesco, the company does not stand less than a legend in its field as it has been successful in surviving with success for so many years since its establishment in the year 1919. Due to such long success story, Tesco has remained in focus of critics and business experts (Humby, Hunt & Phillips, pp. 15-46, 2007) since a long time, and everyone is always looking for the magic formula of Tesco that has enabled the company to survive, as well as achieve success during recessions as well. Once again, contrary to usual organizations, Tesco has put no efforts in hiding its magic approach, and has been discussing it everywhere, calling it ‘Tesco’s way’ (Humby, Hunt & Phillips, pp. 41-77, 2007). While analyzing Tesco’s way, it is an observation that it is nothing but an efficient application and implementation of operations management’s strategies and methodologies that have facilitated the organization to achieve success in the field. In particular, integration of technology with trained staff, and amalgamation of infrastructure with efficient planning in different

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Personal Plan Proposal | Leadership Personal development plan for a leadership would be to recognize areas for further development and encourage lifelong learning. It acts as a process of empowerment, self-assessment mentoring, continued renewal, role modeling, positive attributes, networking, and improvement on weaknesses. The proposed plan process describes how leader should lead by having the above mentioned skills to lead affectively. and support to help staff develop their capabilities. I would reinvent as nurse leader who is innovative by possessing the following abilities such as; self-assessment, empowerment, mentor, continued renewal, role modeling, positive attributes, networking and improvement on weaknesses (Bleich Kasiak, 2007). By having these trades will assist in support the staff to develop their capabilities and gain to be an efficient leader. I have never thought of myself as leader but I have been told that I possess the skills. 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Make these connections for positive reasons and in a careful manner, such as to assist in your professional growth, rather than to win power or take power from someone else. Avoid confrontation, as it rarely helps anyone. Power without respect is hollow. We dont need to see o urselves as victims. We complain to each other about how bad our jobs are and how nursing is not what we thought it would e. It doesnt have to be that way. We can increase our involvement in our workplace whenever possible. We can continue to observe our environment, gather information and contribute whatever we c can to make improvements. We can be a visible presence in the workplace, networking with others and asking questions. We can continue to practice professional ways to communicate our thoughts and needs, but recognize when using power may not be in our best interests or may increase hostility. We owe it to those who will come after us in the nursing profession as well as to ourselves to make an effort to change the degree of authority and power that we have. We can do it? Self awareness is stated as knowing ones internal states, preference resources and intuitions. This is being conscious and being able to connect to our feelings and actions. By accepting and understanding our thoughts and interpretation processes, one will have a clearer picture of what we want to achieve. And this will undoubtedly help in making wise and sound decisions in a personal or professional relationship. Interview: FF is the nurse manager of renal clinic at hospital. She is an R.N. whose leadership position is unique because she also created the program she is in charge of. F.F. had a vision and used her leadership skills to see that vision become a reality. The renal clinic began because there was a need. One of the qualities in an effective leader is the ability to recognize a need and take action to make that need met. F.F. started her nursing career after graduating from west state university by working in various areas and units. While working in these capacities one Dr A.B. approached her on several occasions about the need to have a renal clinic for diabetic patients. These patients population was not being served locally. F.F. would agree with him saying yes, it would be nice to have a renal clinic, and that would be it. Then in that time F.F. needed to care for a sick family member. At the same time the hospital needed a manager and F.F. was filling in as an interim for the inpatient d epartment. This position had a very demanding schedule that included weekends, being on call, and rotating shifts. And the hospital was not recruiting for a manager and what was supposed to be an interim position now did not have a foreseeable end. With a sick family member at home, F.F. needed more flexibility in her work schedule. This was the turning point that spurned F.F. to take action to meet the needs that were before her. The answer to F.F. personal dilemma took the shape of creating a renal clinic. F.F. could see that working in this specialty would give her the family friendly schedule she desired. She took the initiative in making the renal clinic a reality. As it is mentioned in the article of Quantum leadership that those who are not born leaders can acquire the necessary skills, (OGrandy Mallock, 2003). I believe anyone can be a leader by motivation and applying the self to become a leader. As a leader I would like to have a vision of greater good and initiate actions to achieve that vision. In making decisions to attain goals, as a leader I would create change and make that change a past history. In a nurse leadership often times they use personal traits to be beneficially and ethically which will influence others through a process where clinical and organization outcomes are achieved through joint efforts. As a nurse leader I would unite in building a relationship to empower staff or others that would led toward achievement. I like all the other elements of a nurse leader I dont have a less preference. As a follower I would want a leader that has direction that can be trusted, have a vision and hope for the department or organization. The most valuable asset of a leader is honesty and trust. I want a leader that is honest with both his or her staff and the management. Another element that a leader must have is integrity. Once a leader compromises his or her integrity it is lost. That maybe the reason integrity is considered the most admirable trait. Leadership qualities are different for different position but one must be thinking for future scope of improvement, quality and quantity of in conducting business. The ideal leader must have a vision beyond what is here today know where the business is headed and be able to use that vision to move the department forward. I would help my peers to become better by being a great leader that my peers can look up to and depend on. As, a leader I need the ability to lead because there is a certain quality to manage a problem if my followers cant face the problems on their own. This leadership quality is extremely important because if the leaders do not possess some special ability, then there wont be anything that will distinguish him/her from his/her followers. As a leader I would motivate my team mates for good work and maintain healthy environment. And make my first priority is safety for the workers and see that they are not exploited by superiors. These are some of the many ways that I can lead and have followers. Reference Bleich Kasiak, 2007 Fitzgerald, T., (2000), Nurse appeal profession tries new tactics to woo next generation of nurses, posted date January 13, 2000. Retreived on November 13, 2009 from http://www.nurseweek.com/features/00-01/attract.html Ketle, J. L., RN. Factors Affecting Job Satisfaction in the Registered Nurse, University of North Carolina, charlotte, NC. Retreived on Novermber 23, 2009 from http://juns.nursing.arizona.edu/articles/Fall%202002/Kettle.htm#Abstract OGrady, P. Mallack, 2003. Quantum Leadership 2003, article for this course. Bradberry Greaves, 2003 Francis, F., RN. (2009). Indian Health Service Hospital/ACL, Personal interview in October 28, 2009. Fletcher, C. E. (2001, June). Hospital RNs job satisfactions and dissatisfactions. Journal of Nursing Administration, 31(6), 324-31.

The sain case :: essays research papers

SAIN V. CEDAR RAPIDS COMMUNITY SCHOOL DISTRICT: PROVIDING SPECIAL PROTECTION FOR STUDENT-ATHLETES? The scholarly article I chose was of great interest to me for several reasons. The case is an educational malpractice case in which a student-athlete said he was provided false information by his high school consolor and lost his basketball scholarship as a result. I was a student athlete in high school and sports are still a big part of my life. On top of that I am considering teaching and coaching after I graduate, making this a very relevant topic to me. In the next several paragraphs I am going to summarize the article and cases that it mentions, then I will try and decide what the authors intent was with writing this piece. It has been said for years that any case of educational malpractice was doomed from the start. Because of this, it was a huge surprise when the Iowa Supreme Court denied the defendant, Cedar Rapids Community School District’s motion for summary judgement. This was a case where a student sued for negligent misrepresentation by a school guidance counselor. One reason why the court may have denied the motion was because it was trying to protect a category of people who were considered especially vulnerable, the student-athlete. Bruce Sain who was the plaintiff in the case attended Jefferson High School, which was in the defendants school district. He played basketball for the school and was very good at it, so good that he planned on getting a scholarship to finance his college education. In order to be eligible to play sports in college you must meet certain course requirements be the NCAA, which Sain was working on doing. In his senior year he still needed three English credits to satisfy the NCAA requirements and since he went to a school that brock their year down into trimesters, he thought this would be no problem. He completed his first English course and enrolled into his second, but for some reason or another he disliked the class, so he went to his school counselor to see what he could do. The counselor told him to enroll into a class called technical Communications, which the counselor assured him would be approved by the NCAA clearinghouse. But the school did not include that particular course on the list of classes that was sent to the clearinghouse. The next and final trimester Sain completed his third English credit and accepted a five year scholarship to Northern Illinois University.

International Business – Midterm Review

AFM 333 Midterm Review Module 1: – Fall of Berlin Wall 1989 – Two Trends altering global market: globalization of markets and technological advances – Globalization: interconnectedness of national economies, growing interdependence of buyers, producers and suppliers in different countries G6 economies: US, UK, Japan, Germany, France, Italy – Account for half of global consumption with only 1/10 of population –B6 economies: China, India, Russia, Brazil, Mexico, South Korea – China is the biggest market for phones, TVs, and cars in 2007 – China and India have more middle class households than all of the households in the United States – Growth in B6 more than 3x the growth in G6 economies 62 Multinationals in Fortune Global 500 20 of these multinationals are in China 12 from South Korea 6 from India 5 from Mexico and 5 from Russia B6 have three times the labour force of G6 countries 33 million university-educated young professiona ls in developing world compared to 14 million in the developed world 00 000 IT Engineers in India vs. 50 K in US In the decade to 2020, the working-age population of emerging economies is expected to increase by more than 500 million, compared with an increase of only 3. 7 million in developed economies. Drivers of Market Globalization – 1. Reduction of trade and investment barriers – 2. Market Liberalization: move to market based economies + adopt free trade in China + Soviet Union etc. – 3. Industrialization + Modernization + developing economies creating higher value adding products – 4.Integration of World Financial Markets: international banks, globalization of finance – 5. Advances in Technology: reduces cost and time, improves coordination and communication, facilitates development, helps share information/marketing, virtual space removes distance Dimensions of Market Globalization – integration/interdependence of global economies â⠂¬â€œ increase regional economic integration bloc – growth of global investment – convergence of buyer lifestyles/preferences – globalization of production activities Social Concequences – loss of national soverignity offshoring/outsourcing jobs – effects on the poor, the natural environment and national culture Firm-level consequences – new business opportunities – new risks and rivalries – more demanding buyers (less bargaining power to supplier) – international value chains Phases of Globalization 1. 1830-1880: Introduction of railway and ocean transport (trains and ships) + phone and telegraph invented 2. 1900-1930: increased steel and electricity production + Western Europe most industrialized country so established first multinational subs through colonization (Nestle, Shell, BP) 3. 948-1970: Form general agreement on tariff and trade + high demand for consumer products and input goods to rebuild after the war 4. 1 980- now: radical advances in IT, communication, manufacturing, consultation, and privatization. Caused by: †¢Commercialization of the personal computer. †¢Arrival of the Internet and the web browser. †¢Advances in communication and manufacturing technologies. †¢Collapse of the Soviet Union and ensuing market liberalization in central and Eastern Europe. †¢Substantial industrialization and modernization efforts of the East Asian economies including China.GDP growth rates highest in developing economies who emphasize global integration Information travels faster now than ever before (ships/carraiges, steamships/cars, motor vehicles/aircraft, internet (speed of light)). Firm Level Consequences of Globalization – international value chain – demanding buyers – increased rivalry and competition – increased opportunity for business – Management must change focus – Must partner and outsource better – look for product ivity and operational efficiency gains – find and measure key global strategic assets of org. International Business trade and investment activities of firms across borders Globalization – economic integration and growing interdependency worldwide Theories of Trade – mercantilism – national prosperity = positive balance of trade (trade surplus) – absolute advantage principle – produce only products for which your country/region has an absolute advantage – comparative advantage principle – both countries produce even if one has absolute advantage in all products, relative efficiency matters, specialize in what you produce best and trade for the rest you can use scarce resources more efficientlyNational Comparative Advantages – China low cost labour – India – IT workers in Bangalore – Ireland – service economy – Dubai – knowledge based economy Comparative Advantage = superior featu res with unique benefits in global market either naturally endowed or put in place through national policy – NATIONAL Competitive Advantage = distinctive competencies of a firm from cost, size, innovation that are difficult for competitors to replicate – FIRM Factor Proportions/Endowments Theory = produce and export products that use abundant factors of production and import goods that use scarce resourcesLimitations of Early Trade Theories – they don’t account for cost of international transportation – tariffs and import restrictions distort trade flows – economies of scale bring about additional efficiencies – low cost capital now available on global markets How do Nations Enhance Competitive Advantage – governments can proactively implement policies to subsidize and stimulate the economy outside of natural endowments – create national economic advantage through: innovation stimulus, target industries for development, provide incentives and low cost capitalNational Industrial Policy – economic development plan by public sector to nurture and support promising industries through: tax incentives, monetary/fiscal policy, rigorous educational systems, investment in national infrastructure, strong legal and regulatory systems – Example Ireland: fiscal, monetary and tax consolidation, partnership of gov with unions, emphasis on high value add industry like pharma, biotech and IT, membership in EU, investment in education – improved GDP, Unemployment and National Debt 3x by 2003 from 1987 Porter’s Diamond Model: Firm Strategy, Structure and Rivalry – strong competitors in country serves as national competitive advantage – clusters ? Factor Conditions – labour, natural resources, capital, technology, knowledge and entrepreneurship ? Demand Conditions – strengths and sophistication of consumer demand ? Related and Supporting Industries – avail ability of clusters and complementary firms in the value chain Industrial Clusters: – concentration of suppliers and supporting firms in the same regional area – ex. silicon valley, Switzerland pharma, fashion in italy/paris, IT in Bangalore – export platform for the nationClassical Theories – International Product Cycle Theory: introduction, growth and maturity of each product and its associated manufacturing – INTRO: inventor country enjoys a monopoly in manufacturing and exports – GROWTH: other countries enter the global market place with more standard manufacturing – MATURITY: original innovator becomes net importer of product – Now – hard for innovator to maintain a lead because there is a short product life cycle – New Trade Theory: economies of scale important for international performance in some industries.Ex. high fixed costs = high volume sales to breakeven Reasons to Invest Abroad: – market seek ing – efficiency/cost seeking – resource seeking – knowledge seeking Why Internationalize? 1. opp for growth through diversification of market 2. higher profit margins 3. new P&S ideas and business methods 4. serve customers who have relocated abroad (increase/maintain market) 5. closer to supply sources, use global sourcing advantages, flexibility in sourcing products 6. access to lower cost/better value factors of production 7. evelop economies of scale in sourcing, production, marketing, economies of scale 8. confront international competitors 9. invest in relationship with a foreign partner Nature of International Business – value adding activities can be done internationally (source, manufacture, market) – cross border trade not limited to raw materials, include capital, tech, knowledge, products, services etc. – Internationalize through: Export, FDI, Licence, Franchise and JV FDI – longterm acquisition of productive assets like capital, tech, labour P&E etc – large commitment used to manufacture products in low labour cost countries MNE – big company with lots of resources, subs and affiliates in many countries (US, Japan, Germany, France, Britain) SME – small to medium size enterprise, 500 or fewer employees Born Global Firm – young company that initiates business on the global market Risks in International Business: 1. Commercial Risk – weak partnerships, bad timing of entry, high competition, poor execution of strategy, operational problems 2.Currency Risk – tax, inflation, asset valuation, transfer pricing, currency exposure 3. Country Risk – protectionism/gov intervention, bureaucracy, lack of legal safeguards/poor leagal system, social/political unrest 4. Cross-Cultural Risk – cultural differences, negotiation, different decision making styles, different ethical practices MNE Avenues for Involvement: ? Import/Export ? Licencing/Franchising ? Joi ng Venture ? FDI – get progressively more risky, higher investment, higher potential benefit, higher commitmentIntermediaries Include: – Distributor – extension of firm, takes goods under their name to sell – Manufacturer Rep – under contract of exporter to rep and sell merch – Retailer – bypass wholesaler/distributer and sell to retailer to sell to customers – IKEA, WALMART – Trading Company – based in home country, high volume, low margin resellers. – Export Management Company – US, export agent who secures contracts to export goods – usually specialize in industries and areas – Agent – works on commission Licensor – Focal firm grants the right to the foreign partner to use certain intellectual property in exchange for royalties – Franchisor – grant right to use a business system for fees and royalties – ICV – share cost and risk fo new ventur e with another company – JV – create a jointly owned new entitiy with foreign partners – Project Based Venture – collaboration with a timeline without creating a new entity, common with R&D intensive ventures Facilitator – provide services for cross border transactions: Bank, Lawyers, Freight, Consultants, ad agency, custom brokers, insurance companies, tax accountants,Turnkey Contractor: Provide engineering, design, and architectural services in the construction of airports, hospitals, oil refineries, and other types of infrastructure. †¢These projects are typically awarded on the basis of open bidding by the sponsor. †¢Examples- European Channel Tunnel, the Three Gorges Dam in China, Delhi Metro Rail Ltd. and the Hong Kong Airport. †¢Build-own-transfer venture- an increasingly popular type of turnkey contract in the developing economies where contractors acquire an ownership in the facility for a period of time until it is turned o ver to the client.MODULE 3 [pic] Advanced economies are post-industrial countries characterized by high per capita income, highly competitive industries, and well-developed commercial infrastructure. †¢Examples- world’s richest countries and include Australia, Canada, Japan, New Zealand, the United States, and Western European countries. Developing economies are low-income countries characterized by limited industrialization and stagnant economies. †¢Examples- low-income countries, with limited industrialization and stagnant economies- e. g. Bangladesh, Nicaragua and Zaire.Emerging market economies are a subset of former developing economies that have achieved substantial industrialization, modernization, improved living standards and remarkable economic growth. †¢Examples- some 27 countries in East and South Asia, Latin America, Middle East and Eastern Europe- including Brazil, Russia, India, China (so called BRIC countries). [pic] Advanced Economies – 2 – 4% growth rates – mature industrial development – moved from manufacturing to service based economies – typically democratic political systems and capital economic systems – host worlds biggest MNEs – Emerging Economies – 7 – 10% growth rates 40% of world GDP – 30% of exports – 20% of FDI – low cost labour and capital, knowledgeable workers, gov support – fastest growth rate – attractive: growing middle class, manufacturing bases, sourcing destinations – market potential: percapita income, size of middle class, GNI, use adjusted GDP for PPP – middle class has some economic independence and discretionary income Hong Kong, Isreal, Saudi Arabia The EMPI combines factors that provide firms with a realistic measure of export market potential: †¢Market Size: the country’s population, especially urban population †¢Market Growth Rate: the country’s real GDP gr owth rate Market Intensity: private consumption and GNI represent discretionary expenditures of citizens †¢Market Consumption Capacity: The percentage share of income held by the country’s middle class †¢Commercial Infrastructure: characteristics such as number of mobile phone subscribers, density of telephone lines, number of PCs, density of paved roads, and population per retail outlet †¢Economic Freedom: the degree of government intervention †¢Market Receptivity: the particular country’s inclination to trade with the exporter’s country as estimated by the volume of imports †¢Country Risk: the degree of political riskChallenges of doing business with Ems – political stability – hard to forecast in uncertain conditions – beauraucracy/lack of transparency – weak IP rights – availability of good partners – presence of family conglomerates †¢Regional economic integration, refers to the growing economic interdependence that results when countries within a geographic region form an alliance aimed at reducing barriers to trade and investment. †¢40% of world trade today is under some bloc preferential trade agreement. Premise- mutual advantages for cooperating nations within a common geography, history, culture, language, economics, and/or politics †¢Free trade that results from economic integration helps nations attain higher living standards by encouraging specialization, lower prices, greater choices, increased productivity, and more efficient use of resources. 1. Market access. Tariffs and most non-tariff barriers have been eliminated for trade in products and services, and rules of origin favor manufacturing that uses parts and other inputs produced in the EU. . Common market. The EU removed barriers to the cross-national movement of production factors—labor, capital, and technology. 3. Trade rules. The member countries have largely eliminated customs p rocedures and regulations, which streamlines transportation and logistics within Europe. 4. Standards harmonization. The EU is harmonizing technical standards, regulations, and enforcement procedures that relate to products, services, and commercial activities. 5. Common fiscal, monetary, taxation, and social welfare policies in the long run.The euro (common currency since 2002): †¢Simplified the process of cross-border trade and enhanced Europe’s international competitiveness. †¢Eliminated exchange rate risk in much of the bloc and forced member countries to improve their fiscal and monetary policies. †¢Unified consumers and businesses to think of Europe as a single market †¢Forced national governments to relinquish monetary power to the European Central Bank, in Luxembourg, which oversees EU monetary functions. †¢NAFTA passage (1994) was facilitated by the maquiladora program – U. S. firms locate manufacturing facilities just south of the U. S. order and access low-cost labor without having to pay significant tariffs. NAFTA has: †¢Eliminated tariffs and most nontariff barriers for products/services. †¢Initiated bidding for government contracts by member country firms †¢Established trade rules and uniform customs procedures. †¢Prohibited standards/technical regulations to be used as trade barriers. †¢Instituted rules for investment and intellectual property rights. †¢Provided for dispute settlement for investment, unfair pricing, labor issues, and the environment. †¢Trade among the members has more than tripled and now exceeds $1 trillion per year. In the early 1980s, Mexico’s tariffs averaged 100% and gradually disappeared under NAFTA. †¢Member countries now trade more with each other than with former trading partners outside the NAFTA zone. †¢Both Canada and Mexico now have some 80% of their trade with, and 60% of their FDI stocks in the United States. †¢Mexican exports to the U. S. grew from $50 billion to over $160 billion per year. †¢Access to Canada and the U. S. helped launch numerous Mexican firms in industries such as electronics, automobiles, textiles, medical products, and services. †¢Annual U. S. nd Canadian investment in Mexico rose from $4 billion in 1993 to nearly $20 billion by 2006. †¢Mexico’s per capita income rose to about $11,000 in 2007, making Mexico the wealthiest country in Latin America. †¢By increasing Mexico’s attractiveness as a manufacturing location, firms like Gap Inc. and Liz Claiborne moved their factories from Asia to Mexico during the 1990s. †¢IBM shifted much of its production of computer parts from Singapore to Mexico. ASEAN – Brunei, Cambodia, Indonesia, Laos, Malaysia APEC – Asia Pacific Economic Coop – Australia, Canada, Chile, US, China, Japan, Mexico CER – Aussie and New Zealand – removed 80% of tarriffsWhy Nations Expand? 1. Ex pand market size  §Regional integration greatly increases the scale of the marketplace for firms inside the economic bloc.  §Example- Belgium has a population of just 10 million; the EU gives Belgian firms easier access to a total market of roughly 490 million. 2. Achieve scale economies and enhanced productivity  §Expansion of market size within an economic bloc gives member country firms the opportunity to gain economies of scale in production and marketing.  §Internationalization inside the bloc helps firms learn to compete more effectively outside the bloc as well. Labor and other inputs are allocated more efficiently among the member countries- leading to lower prices for consumers. 3. Attract direct investment from outside the bloc  §Compared to investing in stand-alone countries, foreign firms prefer to invest in countries that are part of an economic bloc as they receive preferential treatment for exports to other member countries.  §Examples- General Mills, Sams ung, and Tata- have invested heavily in the EU to take advantage of Europe's economic integration.  §By establishing operations in a single EU country, these firms gain free trade access to the entire EU market. 4.Acquire stronger defensive and political posture  §Provide member countries with a stronger defensive posture relative to other nations and world regions- this was one of the motives for the initial creation of the European Community (precursor to the EU). †¢The value chain can be thought of as the complete business system of the focal firm. It comprises all of the activities that the focal firm performs. †¢The focal firm may retain core activities such as production and marketing, and outsource distribution and customer service responsibilities to foreign-market based distributors, thus the global reconfiguration of the value chain. Dell makes a variety of products, each with its own value chain. The total supply chain for a notebook computer, including mult iple tiers of suppliers, involves about 400 companies, primarily in Asia, but also in Europe and the Americas. †¢On a typical day, Dell processes orders for 150,000 computers, which are distributed to customers around the world, with non-U. S. sales accounting for 40 percent. †¢Shipping is handled via air transport, e. g. from the Dell Malaysia factory to the U. S. Dell charters a China Airlines 747 hat flies to Nashville, Tennessee six days a week, with each jet carries 25,000 Dell notebooks that weigh a total of 110,000 kilograms, or 242,500 pounds. †¢One of the hallmarks of Dell’s value chain is collaboration. CEO Michael Dell and his team constantly work with their suppliers to make process improvements in Dell’s value chain. [pic] Automotive Industry †¢Manufacturing of the Chevrolet Malibu illustrates national and geographic diversity of suppliers that provide content for an automobile, a truly global value chain. †¢Suppliers are headquart ered in Germany, Japan, France, Korea, and United Kingdom, and the U.S. , and the components they sell to General Motors are manufactured in typically low-cost countries and then shipped to the General Motors plant in Fairfax, Kansas. †¢The German automaker BMW employs 70,000 factory personnel at 23 sites in 13 countries to manufacture its vehicles. †¢Workers at the Munich plant build the BMW 3 Series and supply engines and key body components to other BMW factories abroad. †¢In the U. S. , BMW has a plant in South Carolina, which makes over 500 vehicles daily for the world market. †¢In Northeast China, BMW makes cars in a joint venture with Brilliance China Automotive Holdings Ltd. In India, BMW has a manufacturing presence to serve the needs of the rapidly growing South Asia market. †¢BMW must configure sourcing at the best locations worldwide, in order to minimize costs (e. g. , by producing in China), access skilled personnel (by producing in Germany), r emain close to key markets (by producing in China, India and the U. S. ). †¢Global sourcing is the procurement of products or services from suppliers or company-owned subsidiaries located abroad for consumption in the home country or a third country. Technological advances, including instant Internet connectivity and broadband availability TECHNOLOGY †¢Declining communication and transportation costs †¢Widespread access to vast information including growing connectivity between suppliers and the customers that they serve; and SUPPLY CHAIN †¢Entrepreneurship and rapid economic transformation in emerging markets. GLOBALIZATION †¢Managers must decide between internalization and externalization — whether each value-adding activity should be conducted in-house or by an independent supplier. This is known as the ‘make or buy’ decision: â€Å"Should we make a product or conduct a particular value-chain activity ourselves, or should we source it from an outside contractor? † †¢Firms usually internalize those value-chain activities they consider a part of their core competence, or which involve the use of proprietary knowledge and trade secrets that they want to control. †¢Configuration of value-adding activity: The pattern or geographic arrangement of locations where the firm carries out value-chain activities. Instead of concentrating value-adding activities in the home country, many firms configure these activities across the world to save money, reduce delivery time, access factors of production, and extract maximal advantages relative to competitors. †¢This helps explain the migration of traditional industries from Europe, Japan, and the U. S. to emerging markets in Asia, Latin America, and Eastern Europe. [pic] †¢Outsourcing refers to the procurement of selected value-adding activities, including production of intermediate goods or finished products, from independent suppliers. This practice of externalizing a particular value-adding activity to outside contractors is known as outsourcing. †¢Firms outsource because they generally are not superior at performing all primary and support activities. Most value-adding activities — from manufacturing to marketing to after-sales service — are candidates for outsourcing. †¢Business Process Outsourcing (BPO). The outsourcing of business functions to independent suppliers such as accounting, payroll, and human resource functions, IT services, customer service, and technical support. BPO includes:  §Back-office activities, which includes internal, upstream business functions such as payroll and billing, and  §Front-office activities, which includes downstream, customer-related services such as marketing or technical support. †¢Offshoring is a natural extension of global sourcing. It refers to the relocation of a business process or entire manufacturing facility to a foreign country. †¢MNEs are particularly active in shifting production facilities or business processes to foreign countries to enhance their competitive advantages. Offshoring is especially common in the service sector, including banking, software code writing, legal services, and customer-service activities. †¢E. g. , large legal hubs have emerged in India that provide services such as drafting contracts and patent applications, conducting research and negotiations, as well as performing paralegal work on behalf of Western clients. With lawyers in N. America and Europe costing $300 an hour or more, Indian firms can cut legal bills by 75 percent. Best Jobs for Offshoring: Large-scale manufacturing industries whose primary competitive advantage is efficiency and low cost; †¢Industries such as automobiles that have uniform customer needs and highly standardized processes in production and other value-chain activities; †¢Service industries that are highly labor intensive, e. g. , call centers and legal transcription; †¢Information-based industries whose functions and activities can be easily transmitted via the Internet, e. g. , accounting, billing, and payroll; and †¢Industries such as software preparation whose outputs are easy to codify and transmit over the Internet or by telephone, e. g. routine technical support and customer service activities. [pic] †¢Cost efficiency is the traditional rationale for sourcing abroad. The firm takes advantage of ‘labor arbitrage’ – the large wage gap between advanced economies and emerging markets. †¢One study found that firms expect to save an average of more than 40% off baseline costs as a result of offshoring. These savings tend to occur particularly in R&D, product design activities, and back-office operations such as accounting and data processing. Benefits of Outsourcing: †¢Faster corporate growth. †¢Access to qualified personnel abroad. †¢Improved productivity and service. Business process redesign. †¢Increased speed to market. †¢Access to new markets. †¢Technological flexibility. Improved agility by shedding unnecessary overhead. Disadvantages to Outsourcing: †¢Vulnerability to exchange rate fluctuations †¢Partner selection, qualification, and monitoring costs †¢Increased complexity of managing a worldwide network of production locations and partners †¢Complexity of managing global supply chain †¢Limited influence over the manufacturing processes of the supplier †¢Potential vulnerability to opportunistic behavior or actions in bad faith by suppliers †¢Constrained ability to safeguard intellectual assetsRisks in Global Sourcing: 1. Less-than-expected cost savings. Conflicts and misunderstandings arise because of differences in the national and organizational cultures between the focal firm and foreign supplier. Such factors give rise to cost-savings that are less than originally anticipated. 2. Environ mental factors. Numerous environmental challenges confront focal firms including: exchange rate fluctuations, labor strikes, adverse macro-economic events, high tariffs and other trade barriers, and high energy and transportation costs. 3. Weak legal environment.Many popular locations for global outsourcing have weak laws and enforcement regarding intellectual property, which can lead to erosion of key strategic assets. 4. Risk of creating competitors. As the focal firm shares its intellectual property and business-process knowledge with foreign suppliers, it also runs the risk of creating future rivals (e. g. , Schwinn). 5. Inadequate or low-skilled workers. Some foreign suppliers may be staffed by employees who lack appropriate knowledge about the tasks with which they are charged. Other suppliers suffer rapid turnover of skilled employees. 6. Over-reliance on suppliers.Unreliable suppliers may put earlier work aside when they gain a more important client. Suppliers occasionally e ncounter financial difficulties or are acquired by other firms with different priorities and procedures. Over-reliance can shift control of key activities too much in favor of the supplier. 7. Erosion of morale and commitment among home-country employees. Global sourcing can create a situation in which employees are caught in the middle between their employer and their employer’s clients. At the extreme, workers find themselves in a psychological limbo, unclear about who their employer really is.