Relation Between the Oil Prices and the Sales of Automobiles

Relation Between the Oil Prices and the Sales of Automobiles Abstract The objective of this research is to study and understand the relation between the oil prices and the sales of automobiles. The escalation in the petroleum prices plays a major role in the automobile industry worldwide. When the price of oil increases, it evidently alarms the automobile industry because the auto companies are in the competition with one another to fulfill the new demands for more fuel efficient consumer mindful at condensed price. Furthermore, rise in the petroleum prices also impacts the kind of means of transportation demanded by the buyer and the way those vehicle motors are designed. However after studying the oil price impact on Pakistans automobile industry sales we have concluded that the relationship of oil prices and auto sales does not exists in Pakistan. Contents Acknowledgements II Abstract III Contents IV 1.0 INTRODUCTION 1 The Impact of Rising Oil Prices on Automobile Sales: 1 Background of Pakistans Automobile industry 4 2.0 LITERATURE REVIEW 5 4.0 RESEARCH METHOD 14 5.0 HYPOTHESIS TESTING 15 5.1 INDEPENDENT AND DEPENDENT VARIABLE 15 5.1.1 Independent Variable à ¢Ã¢â€š ¬Ã¢â‚¬Å" domestic oil prices 15 5.1.2 Dependent Variable à ¢Ã¢â€š ¬Ã¢â‚¬Å" Pakistans Auto mobile Sales 16 6.0 DATA ANALYSIS: 17 7.0 CONCLUSION IMPLICATIONS 19 8.0 REFERENCES 20 List of Tables: Table 6.1 ANOVA and level of Significance 18 Table 6.2: Regression Statistics of the tested variables 18 1.0 INTRODUCTION The Impact of Rising Oil Prices on Automobile Sales: Impact of oil in daily life is quite evident. Oil is considered as a strategic energy for economic time line. The price of oil has an effect on cost of production in diversified ways such as with the increase in oil prices, there is an increase in the costs of transportation of export, import and goods for local expenditure. Apart from this there is also an upward slope in rates of air, road, rail and sea transportation with the rise in the price petroleum. Oil endows with 97% of the transportation fuels that facilitates in running the trucks cars and other automobiles in the countrys highway. Thus, when the price of the oil increases, it evidently alarms the automobile industry because the auto-companies are in competition with one another to fulfill the new demands for more fuel proficient consumer mindful at condensed price. There are no reservations that profit margin of the companies are affected by this. Furthermore, rise in oil price also affects the kind of means of transportation demanded by the buyer and the way those vehicle motors are designed. The escalation in the petroleum prices plays a major part in the automotive industry. The world consumes over 82 million barrels of oil per day (BPD), with the united states taking roughly 20 million BPD1. Petroleum is one of the most essential contributions in a nations economy and its price has extensive economic and social impacts. Various researches illustrate that the price of petroleum in Pakistan is considerably high either with or without involving per capita income and it needs to be leveled downwards in order to guarantee competitiveness of Pakistans exports and lessen the burden on the buying competence of the nation. Nevertheless, this cannot be a simple task as Pakistan heavily depends upon imported oil in order to fulfill its petroleum necessity and the development surcharges and the import revenues compose a major sector of the Government income. However, a feasible and reasonable solution to trim down oil price is needed keeping in sight the revenue making facet and the prevailing global prices of crude oil. The major reason of escalated oil prices is linked with the demand of oil and the complication in oil refineries. Petroleum is used usually for two reasons: Firstly, in the gasoline production and secondly in the production of tires. In the US, during the last few years the prices of gasoline have risen up considerably reaching on an average over $ 3.00/gallon (EIA-Energy Information Administration).Oil is considered as the main element in the tires production. With the increase in the oil prices, the cost and expenditure in making the tires escalates, the cost to heat up or cool the manufacturing plant where tires are produced increases, and eventually escalates the expenditure of shipping the tires to further destinations. Because of the rise in the price of petroleum, the tire makers are also increasing the price of tires. The automobile sector is affected by both, tire production and gasoline prices as the profit margins are affected by the rise in oil prices and tire production prices. The automobile industry catastrophe, currently worldwide phenomena, started during 2008-H2. The automotive sector is going through a crisis condition in US and Canada because of the Automobile products Trade Agreement. Nevertheless, all auto makers worldwide, especially in Japan and Europe are also facing the same crisis. The first fragile connection in the auto sector was the record high petroleum prices during 2008 which caused global oil crisis and made fuel costs and expenditures unreasonable, causing buyers to opt for smaller cars rather than larger SUVs (sports utility vehicles) and the pick up trucks. Background of Pakistans Automobile industry The global oil crisis has affected Pakistan economy severely. Automobile sector has been greatly impacted by the oil price shocks. There had been consistency in the Gross Profit Margin of Pakistans Automobile industry. It raised from FY01 (6.83) to FY03 (13.73).Then had a downward slope for two consecutive years to 12.17 (FY05), then remained stable for two more consecutive years (FY05 FY07).Since FY07 there has been a constant downward slope, reaching 6.14 (FY09) the diminishing Profit margin was because of the ever escalated cost of goods sold. The risen up cost is primarily due to the global oil price shocks and the high depreciation value of Rupee. The escalated costs were also linked to the high inflation rate during FY09. 2.0 LITERATURE REVIEW Escalated oil prices have been accountable for periods of extreme inflation, recessions, and lower productivity and reduced economic growth. For the Automobile manufacturers the fuel price debate is nothing new. Due to predefined end of petroleum resources, the automakers have come up with various strategies to avert any sudden need for action. However till now, no one has clearly defined the oil supply definitive end. Kiseol Lee and Shawn Ni analyzed the effects of oil price shocks on demand and supply in automobile industry depicting the effect of oil price shocks mainly reducing demand. They suggested that oil price shocks influence economic activities. The first OPEC oil embargo in early 1970s has led to the start of debate over the oil shocks and its Macroeconomic effects. The most comprehensively surveyed theories on the direct consequence of oil price shocks incorporates that an input-cost effect, that higher energy cost lowers usage of oil which in turn lowers productivity of capital and labor; and an income effect, that higher cost of imported oil reduces disposable income of U.S. households. (K.Lee, 2002) According to an editorial in 1973-1974 oil crises: Automobile sales, especially for standard and medium-sized cars, began diminishing almost with the first realization that the energy crisis is reality. The trade-in value of big gas-guzzlers toppled unmercifully and some dealers were threatening not to take them in trade at all. Gasoline mileage, not size and comfort suddenly became the paramount concern for the consumer. (Wards Auto World) K.Lee contrasted to the situation in the petroleum refinery and industrial chemical industries which were bothered by the escalated cost of fuel, research in trade papers proposed considerable indications that the automotive industry distraught by the two fuel price shocks mainly due to the demand for larger vehicles stabbed. The effects of oil price hikes for nearly all other industries are less severe and intricate. The writings in trade journals of rubber, metals and other machinery industries often cited that the major factor of soggy economical activity is the dejected and depressed automotive market, however the highlighted that various sectors of these industries have also gained benefit from augmented economic activity in energy exploration and protection.(K Lee ,2002) The steel sector was adversely affected by the hunch in automotive sales. According to the Wards Auto World, Chemical week and Industry Week magazines, the oil prices crunches lowered the demand for the metals by their effect on automobiles, housing and consumer durables. Globally, the auto mobile assemblers are facing financial crisis at their worst which is eventually leading to recession. In the same way , as Pakistan s Auto Market is an export driven industry which attracts both foreign and locals investments, therefore is facing decreasing sales and production level and depicting a depressing future. Because of the present critical situation prevailing in the automobile sector, many companies are on the threshold of economic failure and bankruptcy. K Lee discussed that after an oil price shock, demand for vehicles is destabilized in view of the fact that a prospective new car holder may go for other ways of transportation to save the operating expenditure of vehicles, or delay buying a new car because ambiguity about future energy prices makes it difficult to come to a decision which type of automobile to purchase. Increase in Oil price also alters the composition of the automobile demand. As compared to the small-size cars, the demand for full-size cars is much more destabilized. The U.S. auto makers suffered more ruthlessly from rising and falling oil price because they manufacture inconsistently more full-size cars than their overseas competitors. Hamilton in 1988 mentioned in his writings that the oil crisis stimulate recessions primarily because a sharp increase in oil price escalates ambiguity and elevates operating costs and expenditures of several durable goods, which diminishes demand for durables, venture and investments. (Hamilton 1988, 1999). Brad M. Barber, Reid W. Click, Masako N. Darrough analyzed and empirically estimated the degree to which exchange rate and oil price alterations have contributed to this market swing. Increase in oil prices diminishes the amount of vehicles sold by the US auto makers, but conversely to the common idea, had minor effect on the Japanese auto mobile makers .That oil price effect reported 6.5 percent of the variance of alteration in monthly sales volume for US automobile manufacturers. They also discussed that productions costs are affected by oil prices hikes. For their research they used VAR to highlight the environmental issues that influence the cost of manufacturing and demand in the automobile industry. They clearly account for the effect of oil prices and exchange rates on manufacturing costs and the impact of oil prices and income on the demand for vehicles. Their outcomes suggested that the all the considered macroeconomic variables affected sales volumes as forecasted by the model they used. With reference to oil prices, escalated oil prices have certainly led to turn down in sales by the U.S automobile manufactures. Hamilton proposed that financial slumps tend to emerge after oil price trends. In particular, the worldwide inflationary strains of 2008 became rigorous with the spikes up in fuel prices shocks in the global financial system including Pakistan. Fuel prices with respect to domestic currency emphasized the fact that the delivering channels of global shocks via exchange rates variations put down major effects on the domestic inflation within the economy. According to Hamilton, the variations in oil prices in local currency are inflated and unpredictable in contrast to the variations in prices of oil in dollar terms particularly in 1999 and onwards. This underlines the details that the impacts of external oil price shocks have considerable effect upon local inflation via exchange rate variations in the economy (Hamilton, 2005). Bresnahan and Ramey discussed that the OPEC oil price shock in US during 1973 had major impact on the U.S auto mobile industry. It amplified the demand for smaller, fuel efficient cars and at the same time condensed the demand for larger cars. As the funds, financial stock and labor force were basically bound for the manufacturing and production of larger cars, therefore the U.S automotive companies were inadequate to respond to this oil price shock. As a result, capacity consumption, utilization and the output cut down during the period of Oil price shock. Only few plants were equipped to produce the small cars, manufacturing and operating at their peak capacity. (Bresnahan and Ramey ,1993). Steven J. Davis, John Haltiwanger studied the impact of oil price shocks on the creation and devastation of American automobile manufacturing employment from 1972 to 1988. The oil price shock unfavorably had an effect on the proximity between the preferred and actual characteristics of factor contributed in the automobile industry along different dimensions. Firstly, a large amount of the physical resources in the auto industry was devoted to the manufacture of larger cars instead of the smaller ones. Secondly, the American automobile labor had built up proficiency that was skilled and specialized in the manufacture and production of particular car models, and these were likely to be larger vehicle models. In Pakistan also the increase in oil prices had impact on many enterprises. Many different small to medium Automobile companies in the manufacturing sector are facing a severe threat of downsizing, closures, layoffs and limited production cuts due to an abrupt rise in their cost and expenditures of doing manufacturing and a significant reduction in their car sales. According to the owners of different small automakers, the sales of different auto parts have plunged downwards to 30%-in proportion to the reduction in the car sales. The overall margins have also dropped down. With reference to the statistics of Pakistan Automotive Manufactures Association, car sales during the period of 2008-09 positioned at 82,844 units, which were declined by 48% from 164,650 units in the 2007-08. According to Birol and Keppler (2007) the association between mobility, calculated as time spent in movement, and economic output is more stable than the relationship between output and fuel utilization, partly due to increased possibilities of substitution between the latter. This examination bears a significant policy lesson: relative price changes to decrease energy consumption per unit of output are most effective where possibilities for substitution are highest. (Birol, Keppler, 2007) Storchmann (2005) employed a pooled model to calculate approximate average fuel utilization using various explanatory variables such as, population, private income, urbanization rates, density, oil prices and automobile expenditures. The sales of automobile sector is affected by all these variables. Thomas Klier and Joshua Linn estimated the impact of the price of gasoline on the demand for fuel efficient vehicles. They institute the idea that gasoline prices considerably influence the new auto market and the price escalations explained almost half of the down turn in market share of U.S auto firms. The outcomes suggested that consumer demand reacts when the price of gasoline increases or rise up during 1970s and near the beginning of 1980s. During stable prices in the middle period, the sales had a negligible effect by the prices of gasoline; their results were steady with casual observation of the new auto market. Hamilton (1988) used a model called sectoral shifts that elucidated how an oil price slog might lower real GDP. The primary propagation method in this model is that an oil price escalation will lower consumer buying power of energy-using commodities such as automobiles. Goldberg (1998) determined the rebound effect by means of the Consumer Expenditure Survey for the years between 1984-1990, as an ingredient of a bigger equation system that also forecast the effect of oil on automobile sales and prices. Lutz Kilian in 2007 used Regression analysis to discuss that Automobile purchases were by far the most responsive expenditure item when the oil prices fluctuates. Purchase of other durables goods for instance appliances or furniture; by contrast, are far less responsive to energy price swings. Spending on public transportation and on food at home are few of the expenditure items that privileged from unexpected elevated energy prices. There will be a demand side impact of oil price increases. When oil prices rise, consumers are likely to delay or postpone their purchasing durables such as automobiles. This demand side impact leads to relative increase in inventories to sales and then decline industrial production. 4.0 RESEARCH METHOD The objective of this study is to determine the impact of local oil prices on Pakistans Automobile sales. The research is exploratory in nature and relied on secondary research and data collection, reviewing available literature and data. The sample data consists of five years monthly oil prices; taken from OGRA (Oil and Gas regulatory authority), and five years monthly auto sales; taken from PAMA (Pakistan Automotive Manufacturers Association.) An extensive secondary data analysis was done where the impact of oil prices were observed and the related research were also examined to find out the linkages of the oil prices with the auto sales, data analysis was done through Ms-excel. The statistical tool used is regression and correlation. The tables were also generated through Ms-Excel 2007 version. 5.0 HYPOTHESIS TESTING The purpose of this research is to find the relationship between Local oil prices and the Pakistans auto industry sales. Globally, researchers have observed that oil plays a major role in impacting the Automobile industry sales. In our research we are also testing the following hypothesis. H1: The local oil prices have a direct impact on Automobile sales in Pakistan. 5.1 INDEPENDENT AND DEPENDENT VARIABLE 5.1.1 Independent Variable à ¢Ã¢â€š ¬Ã¢â‚¬Å" domestic oil prices In Pakistan, the oil prices passed through to domestic consumers is determined by Oil and Gas regulatory authority (OGRA) and although the oil price in international oil market fluctuates on a daily basis, in Pakistan the pass through is carried out after every 15 days. The international oil prices impact almost every sector of the country from transportation to the Agriculture. Hence oil is the backbone of every sector of the economy and plays an important role in the development of any economy. 5.1.2 Dependent Variable à ¢Ã¢â€š ¬Ã¢â‚¬Å" Pakistans Auto mobile Sales Pakistans automobile sales were taken from PAMA which is a registered Pakistan Automobiles Association company. The global oil crisis has affected Pakistan economy severely. Automobile sector has been greatly impacted by the oil price shocks. 6.0 DATA ANALYSIS: The data analysis was done through Ms-Excel 2007, Correlation and Regression analysis was done to find out the relationship between the two variables. The monthly local oil prices were compared with the monthly automobile sales. The regression Analysis was done to determine if escalation in oil prices affects the sales of automobile industry or not, to find out this the following equation has been used Y = a + bx Here Y= auto sales And X= oil prices Sales = f (oil price) S=16,150.92-32.03(oil price) Negative sign of X intercept shows that the result is inline with the literature review i.e. with the increase in oil prices, automobile sales is declining. However the relationship is insignificant because P value is 0.51 (greater that 0.05).Therefore, the research hypothesis has been rejected and there is no relationship between oil prices and sales of auto industry. Table 6.1 ANOVA and level of Significance ANOVA df SS MS F Significance F Regression 1.00 7,521,403.95 7,521,403.95 0.44 0.51 Residual 55.00 939,576,283.03 17,083,205.15 Total 56.00 947,097,686.98 Table 6.2: Regression Statistics of the tested variables Multiple R 0.09 R Square 0.01 Adjusted R Square (0.01) Multiple R is 0.09 which means the correlation between the two variables is negligible. R square is also 1% which also indicates negligible effect of oil on the auto sales .Y intercept signifies that if oil price is 0, still the auto sales will be 16,150.92 units. Whereas, the slope indicates that with the increase in oil prices, the auto sales will decrease with 32.03 units. Log of both the variables was tested in order to find out the linearity, but no such relationship exists between the two variables. 7.0 CONCLUSION IMPLICATIONS The purpose of this study is to find out the effect of local oil prices on automobile sales in Pakistan. After conducting this research the results indicates that there is no significant impact on the Auto sales when the oil price changes. The escalation in the petroleum prices plays a major role in the automobile industry worldwide. When the price of oil increases, it evidently alarms the automobile industry because the auto companies are in the competition with one another to fulfill the new demands for more fuel efficient consumer mindful at condensed price. Furthermore, rise in the petroleum prices also impacts the kind of means of transportation demanded by the buyer and the way those vehicle motors are designed. However after studying the oil price impact on Pakistans automobile industry sales the research concluded that the relationship of oil prices and auto sales does not exists in Pakistan. The result shows that the correlation between the two variables is very minor and the significance value F indicated that there is no linear relationship between the two variables.

Descriptive Essay - College Dorm Room -- Descriptive Essay, Descriptive

Filthy College Dorm Room As I lifted my head, I was greeted by at least fifty naked models, all in various X-rated positions, each eyeing me with an expression that suggested nothing but lust and desire. I stepped into the room, only to be overwhelmed with at least twenty-five more girls stripped of any trace of clothing. Although my legs were begging to walk my sickened body out the door, I brought myself together and looked at the reason I was forcing myself to stay there. I had to pee so badly, and a small, filthy toilet was only a few short steps across the chilled tile floor. My bare feet felt every speck of dirt underneath them, and I laughed at the thought that I respectfully took off my shoes before coming in. The heavy stench of mildew continued to coat my lungs so thickly I was tempted to hold my breath. I focused only on my destination and tried to figure out how anyone, even if they are college freshmen full of testosterone, could turn the walls of their dorm bathroom into a Playboy magazine. After going about my business, I reached for the brass door-handle that would let me out of the tiny room, which consisted of the toilet, a small shower, a moldy rug, and a trash can that was overflowing with tissues and toilet paper. A few pieces of blue gum were carelessly stuck on top of the heap. I hesitated, however, to let my hand touch the door-handle in fear of what might be living on it. I took the chance and grabbed the smooth metal anyway, turned it as quickly as I could, and stepped out of the bathroom to the sink to wash my potentially diseased hands. Chad, who came with me to Joe's dorm, stood nervously in the living area, his hands hanging onto the rims of his pockets. The porcelain sink, which I am assuming... ...e building, and took a deep breath of fresh air. Not only did the environment of the dorm appall me, but I was thoroughly shocked that I could be so blind when it came to Joe. My mind flashed to other people in my life, and I thought about how their outside images may easily conceal their true ways. Joe's dorm made me realize that the depictions I have of a person are often misleading or simply untrue. Chad was now just behind me, and Joe was following him. Joe stopped in the doorway. As we proceeded to walk down the hallway, we passed four gray doors, each identical to Joe's. As we neared the glass doors of the exit, Chad turned around and said to Joe, sarcastically, "Yeah I hope we didn't interrupt you. You weren't tidying up or anything, were you?" He then replied, as he gradually closed the door, "What are you talking about, man. This place is clean."

Reflective Practice in Teaching

Reflective Practice in the context of teaching ESOL Reflective practice engages practitioners in a continuous cycle of self-observation and self-evaluation in order to understand their own actions and the reactions they prompt in themselves and in learners (Brookfield, 1995; Thiel, 1999). Reflective practice is considered as an evolving concept which views learning as â€Å"an active process of reviewing an experience of practice in order to describe, analyse, evaluate and so inform learning about practice. (Reid, B 1993 cited in Garfat, T. 2005). In my opinion, implementing reflective practice approach to professional development in order to expand our knowledge is a challenge. This challenge involves teacher’s ability to â€Å"reflect on his or her practice† in order to â€Å"bring about change and improvement†, especially in the ESOL context that is represented by variety of learner groups, curricula, available resources, and amount and type of teacher prepar ation (Schellekens, 2007, p. 199). To me, nowadays, teaching students to meet their requirements does not only involve the effective and professional use of methodology, training and concept alone. I think that it is all about the ability of integrating both theory and practice with highly exploratory process of reflective practice. I consider reflective practice as a reflective professional development tool, which I treat merely as a personal low-tech way of incorporating reflective practice in day-to-day classroom teaching in order to make my class more effective. Developing own reflective or critical thinking skills should engage various aspects of teaching, such as preparation process, receiving feedback form the learners, self-evaluation process, feedback or criticism from the colleagues, statistical data, teacher’s diary, training/development and own teaching experience. According to The Institute for Learning’s policy statement on professional formation, reflective practice is a professional requirement to show reflection on the impact of professional development (Lifelong Learning UK, 2007). The Institute’s online personalised learning space, REfLECT, requires teachers to submit variety of individual reflective practice evidence that includes: * self evaluation – an individual analysis of the applicant’s learning needs and goals for the next 12 months, * professional development planning – n individualised learning plan detailing the actions the applicant will take to address the needs and goals identified through self assessment, * reflective practice – reflection on the impact of professional development on the applicant’s teaching practice, the benefit to learners and wider communities of practice: could include, or be a mix of, a personal reflection on the impact of CPD, peer review, learner obse rvations, observation of teaching and learning, collaborative working, etc. (IfL, 2008) The models of reflection, which I have chosen to mention in this paper, promote looking at what has been learned and planning how those lessons can be applied if similar experiences re-occur. The two models of reflective practice in the context of teaching are: Brokfield’s model of four reflective â€Å"lenses† and The Reflective Cycle by Gibbs (1988). 1. Brookfield’s model of four critically reflective lenses In his â€Å"model of four critically reflective lenses†, Brookfield (1995) suggests that we should make use of the four â€Å"critical lenses† through which to view and reflect upon our teaching practice, and he suggests the following: 1. ur own view (which he refers to as autobiography); 2. that of our students; 3. that of our fellow professionals; 4. and the various theoretical perspectives propounded in educational literature. Brookfield treats teacher’s personal experience as the most important insight into teaching to which teache rs have access, and this personal experience should combine both: considerations of classroom and lesson management as well as whether or not the learning experience was a profitable one for the students. By talking to colleagues about what happened in the classroom, not only may we find solutions to problems but also share and broaden our teaching experience. (Brookfield, 1995; p. 31-36). 2. The Reflective Cycle by Gibbs (1988) Gibbs Reflective Cycle (1988) encourages a clear description of the situation, analysis of feelings, evaluation of the experience, and analysis to make sense of the experience to examine what you would do if the situation arose again. This straightforward and therefore useful cycle appeals to me in several aspects. An incident is identified and thought about to provide a description of what happened. The abstract aspects of the situation – the emotional dimension – are taken into account and reflected upon. This has to be done because if I can stand back from what happened and identify how I felt then those feelings can be evaluated. In the light of reflection I could see how perhaps extremes of emotion affected my outlook and thus actions. Was there anything positive that could be carried forward into the future or negative that needs to be addressed? Is it possible to find the cause of these positive and negative aspects that I might examine later? This analysis allows me to break down the incident into smaller parts that made up the situation. The question I ask myself is: What were the issues, key factors and influences and how did they combine to bring about the incident? Once I have this deeper understanding drawn from all the information I have about the situation I can try to work out what else could have been done at the time. Having concluded what, upon reflection, would have been the way to address the situation I can produce an action plan for the next time the same situation arises. By applying this reflective practice cycle to similar situations the outcome should be steady, gradual improvement, associated with stimulating personal and professional growth, and closing the gap between theory and practice. DESCRIPTION My reflection below describes a critical incident involving my 17 year old, Entry 1 ESOL student from Somalia with undifferentiated Attention Deficit Disorder (ADD). In undifferentiated ADD, the primary and most significant characteristic is inattentiveness but hyperactivity is not present. The student manifests problems with organization and distractibility, even though he may seem quite and passive. The symptoms I noticed in the classroom environment included: * a short attention span, * occasionally impulsive behaviour, * difficulty sitting still, * a tendency to express the wrong answer, * inconsistent levels of task-attentiveness, * a tendency to appear forgetful as the consequence of inadequate access to actually well-stored information, * inconsistent levels of task-completeness, often losing things necessary for tasks * an appearance of being forgetful, when in fact the information was never really received or processed, * compromised summarization/paraphrasing competencies. FEELINGS I have found myself wondering whether this student might have a learning disability about three months ago as I noticed that his learning issue, ADD, is impeding his progress in English. At times I was also slightly frustrated with the students’ classroom behaviour and lack of his academic progress. I was advised to take a â€Å"wait and see† approach to this case. I decided that there must be a better way of handling these exceptional students. In order to help me understand the complexity of the issue I decided to do extensive research on students with ADD and ADHD and how to tackle the issues in class, as well as how to help my student achieve in ESOL. EVALUATION After careful evaluation why my student may advance through his ESOL studies at a slower rate than their peers and having done a detailed â€Å"tick-off† evaluation sheet of all of the symptoms I noticed during lessons, I decided to explore future solutions to this problem. Extensive research about students with ADD and ADHD helped me understand the complexity of the issue and how to tackle the issues in class. It really motivated me to find out how to help my student achieve in ESOL. ANALYSIS During my reflections after each lesson and reflective analysis of the student’s action during lessons, I thought it was essential to uncover his special needs before he could get into disciplinary trouble, lose all self-esteem, or drop out of school. I realised that a â€Å"wait and see† approach is this case was not a way to go. Instead, I should act fast and refer this student to be professionally assessed by the Educational Psychologist and organise a Study Support Assistant. In conclusion, I became conscious of the fact that having a special education aide in the ESOL classroom, cross-training of special education and ESOL teachers, and making resources on this topic (literature and trained staff) more available, would be of great help in recognising such learning difficulties and dealing with them on regular day-to-day basis of ESOL teaching. CONCLUSION On the positive side, this reflective practice raised my awareness of the numerous reasons some ESOL students may reveal through inappropriate behaviour and/or limited language learning progress. I have learnt and I will continue to observe such students, incorporating teaching strategies for teaching students with learning disabilities in the classroom, analyse teaching and learning process to help them, make adjustments in delivery of the language when dealing with students with ADD/ADHD, and promptly refer students that present truly special education needs. On a slightly negative side, the previous teacher did not identify the student’s problems early enough or did not have enough evidence to justify my student’s ADD/ADHD as a potential threat to his achievement in ESOL class. I started teaching this student about three months ago but it was only a month and a half ago when I started applying various strategies to meet his individual learning needs to help him success in ESOL despite his ADHD, such as: student monitoring, self management, discipline, and encouragement. In more detail, I provided supervision and discipline through enforcing classroom rules consistently, encouraging him to positive self-talk, trying to be very patient with him, avoiding all distracting stimuli and transitions, physical relocation, changes in schedule, and disruptions, developing an extensive individual learning program, simplifying instructions, giving extra time for certain tasks. I strongly believe that his learning difficulties should ave been identified much earlier and appropriate strategies put in place at the beginning of the course. ACTION PLAN Next year, I am planning to apply the background information obtained by this reflective practice in the new group of ESOL young learners and to relay it to my colleagues. I will also connect with a special education professional who will be happy to observe my ESOL students next year and to provide assistance with strategies to use in my classroom, if the students with learning difficulties are going to be identified. I will also research some literature resources to educate myself more about placement procedures for students with special education needs, practical reading strategies for ESOL students with learning disabilities, and teaching teens with ADD and ADHD. As the most immediate action plan, I shall incorporate special reading and writing strategies for the student with ADD/ADHD. These may include the following strategies. However, the student will be required to give me feedbacks which of them works best for him, and these include: * Using â€Å"previewing† strategies by being aware of the following reading problems: 1. Reversals when reading (i. e. , â€Å"was† for â€Å"saw†, â€Å"on† for â€Å"no†, etc. ) 2. Reversals when writing (b for d, p for q, etc. ) 3. Transposition of letters and numbers (12 for 21, etc. ) 4. Loss of place when reading, line to line and word to word * Shortening or lengthening the amount of required reading * For all assignments, clearly identifying expectations in writing * Making required book lists available prior to the first day of class to allow students to begin their reading early or to have texts put on tape * Encouraging the use of books-on-tape to support students reading assignments * Providing students with chapter outlines, or handouts, that highlight key points in their readings * Having students make a chart similar to the one below of their strengths and challenges so that they, as well as I, can learn from their perceptions of how well they read, write, remember, listen, speak, attend and get ideas out. Skills| Strengths| Challenges| Comments| Reading| | | | Writing| | | | Memory| | | | Listening| | | | Speaking| | | | Attention| | | | Getting Ideas Out| | | | To sum up, reflective practice is perhaps best understood as an approach which promotes autonom ous learning that aims to develop students’ understanding and critical thinking skills. It also helps students to understand that learning is individual. It is an act of being able to reflect on our strengths, weaknesses and areas for development. It is also an emotional response that complements our knowledge and what we understand about a subject, and which enables us to act in a situation. Personally, I strongly agree that the importance of reflecting on what we are doing, as part of the learning process, is one of the defining characteristics of teaching professional practice. References * Brookfield, S. (1995) Becoming a Critically Reflective Teacher. San Francisco: Jossey Bass * The Excellence Gateway http://excellencegateway. org. k/tlp/cpd/assets skills_life_basic_key. rtf (accessed 13/05/2011) * Gibbs, G. (1988) Learning by Doing: A guide to Teaching and Learning Methods. Oxford: Further Education Unit, Oxford Polytechnic. * The Institute for Learning http://www. IfL. ac. uk/__data/assets/pdf_file/0014/4640/ProfessionalFormationStatement. pdf (Accessed 13/5/11) * Lifelong Learning UK, 2007, New Professional Standards for Teachers, Tutors and Trainers in the Lifelong Learning Sector. http://www. lluk. org/documents/professional_standards_for_itts_020107. pdf (Accessed 05/5/2011) * Reflection Models http://www. brainboxx. co. uk/a3_aspects/pages/ReflectionModels. tm (Accessed 16/05/2011) * Root, C. – A Guide to Learning Disabilities for the ESL Classroom Practitioner http://www. cc. kyoto-su. ac. jp/information/tesl-ej/ej01/a. 4. html (Accessed 16/05/2011) * Schellekens, P. 2007. The Oxford ESOL Handbook. Oxford: Oxford University Press. * Strategies For Teaching Students with Attention Deficit Disorder (AD/HD) http://www. as. wvu. edu/~scidis/add. html#sect0 (Accessed 16/05/2011) Professional Values and Ethics Values are enduring beliefs, both hard-wired (meaning acquired genetically) and shaped by cultural context, about preferred â€Å"end states† (Urbany, Reynolds, & Phillips, 2008, p. 75). According to Merriam-Webster Online Dictionary (2009), ethics is discipline dealing with good and evil and with moral duty or moral principles and practice. Professional ethics and values guide the decision-making process of all companies and organizations. Most businesses and organizations state their values and ethics in their mission statement and in their code of ethics. The professional ethics and values of a business or organization will set the tone of how they conduct their operations, how they interact with customers and how employees interact with each other. Sources of Professional Values and Ethics The three groups include the Council on Ethical and Judicial Affairs (CEJA), Ethics Resource Center and the Institute for Ethics. The CEJA develops ethics policy for the American Medical Association by preparing reports that analyze and addresses ethical issues (AMA, 2009). The Ethics Resource Center develops practical solutions for physicians who are confronted with ethical challenges and provides continuing education and outreach programs for medical students, practicing physicians, and residents. The Institute for Ethics is an academic research and training center on ethics in health care. The Institute covers issues such as, professionalism, health information policy and health preparedness (AMA, 2009). Association of American Educators (AAE) The ethical conduct toward students outlines how teachers should interact and communicate with their students. This principle states that teachers hould take responsibility to ensure that students learn qualities that will help them evaluate the consequences of and accept the responsibility for their actions and choices. The second principle, ethical conduct toward pra ctice and performance instructs teachers on assuming responsibility and accountability for their performance and maintaining the dignity of their profession. Ethical conduct toward practice and performance also covers official policies and laws. The third principle, ethical conduct toward professional colleagues discusses issues such as confidentiality among colleagues, and making false accusations about colleagues or the school system. The final principle, ethical conduct toward parents and community includes issues such as, effectively communicating with parents, respecting the values and traditions of the diverse cultures, and manifesting a positive and active role in school/communities. Public Relations Society of America (PRSA) How Ethics and Values Affect Success Professional ethics and values can have both positive and negative affects on a business’ or organizations’ success, â€Å"Values, whether neutral, virtuous or not so virtuous, drive our decision making† (Urbany, Reynolds, & Phillips, 2008, p. 76). Many companies have made millions using unethical strategies, while others have been destroyed by them. For example, several banks were lending money to individuals who they knew could never pay back the entire amount owed as a result most of the banks went bankrupt. However, Fannie Mae and Freddie Mac, the biggest offender in this situation was bailed out by the government with a slap on the wrist. On the other hand, there are several companies that pride themselves in choosing to make the tough ethical decisions. For example, companies that recall millions of dollars worth of products to ensure their customers safety, or companies that choose to operate in the United States although they could operate at a lower cost outside of the United States. Conclusion {text:bookmark-start} {text:bookmark-end} References American Medical Association (AMA). (2009). American Medical Association. Retrieved from www. ama-assn. org Association of American Educators (AAE). (2009). Association of American Educators. Retrieved from

The Three Theoretical Approaches to Strategic Management - Free Essay Example

Sample details Pages: 8 Words: 2501 Downloads: 10 Date added: 2017/06/26 Category Management Essay Did you like this example? Introduction Strategic management involves the construction and implementation of major aims and objectives taken by an organisations managers to represent the views of the owners. It is usually based on the consideration of resources, and on an assessment of the internal and external factors affecting the organisation (Nag, et al., 2007). It is an incredibly important factor for company owners to take into consideration as it is directly related to the success of an organisation. Don’t waste time! Our writers will create an original "The Three Theoretical Approaches to Strategic Management" essay for you Create order This report will explore the three theoretical approach to strategic management; resource based view, market based view and I/O view. Furthermore, it will also investigate three type of strategy, which are corporate strategy, business strategy and operational strategy. Resource Based View The resource based view to strategic management provides an explanation of competitive heterogeneity based on the premise that close competitors differ in their resources and capabilities in important and durable ways (Helfat Peteraf, 2003, p. 997). Furthermore, the resourced based view has become one of the most prominent and influential theories in management. This is because it aspires to explain the internal resources that an organisation can utilise to gain a competitive advantage (Kraaijenbrink, et al., 2009). The central theme of a resource based view to strategic management is that for a firm to achieve sustained competitive advantage it must acquire and control a wide range of resources and capabilities (Barney, 2002). Although the resource based view appears to be an incredibly appealing technique to use, it has been extensively criticised. The various criticisms of the resource based view can broadly fall under six main categories. These are (Kraaijenbrink, et al., 2 009); No managerial implications: The resource based view tells managers that certain resources, valuable, rare, inimitable and non-sustainable (VRIN), should be obtained. However, it doesnt give feedback on how managers should go about obtaining these resources (Conner, 2002). Implies infinite regress: Many theorists critique the resource based view because it will lead firms into an infinite loop of endlessly searching for the best resources. Collis (1994, p. 148) states a firm that has the superior capability to develop structures that better innovate products will, in due course, surpass the firm that has the best product innovation capability todayà ¢Ã¢â€š ¬Ã‚ ¦. Applicability is too limited: Conner (2002) believes that the resource based view can only be adopted by large firms who have a lot of market power. This alienates many, smaller firms, from being able to benefit from the success that a resources based view can hold. Sustained competitive advantage is not achievable: The resource based view is focused on sustaining competitive advantage. However, competitive advantage cannot really be sustained because Both the skills/resources, and the way organizations use them, must constantly change, leading to the creation of continuously changing temporary advantages (Fiol, 2002, p. 692). Not a theory of the firm: Most academics agree that the resource based view is not a theory of the firm, but with some turning it into a critique. As the resource based view does not take into account operational boundaries, values, internal structure or asset ownerships, it cannot be a theory of the firm (Dosi, et al., 2008). Definition of resource is unworkable: Many definitions of resources are extremely broad, and if all were taken account than anything of substance to a company would be considered a resource. As the resource based view does not take into account the different definitions and types of resource, it is hard to apply to specific situations (Kraaijenbrink, et al., 2009). Market Based View This perspective focuses on factors outside the firm on the markets in which it competes. Furthermore, the market based view states that the sources of value for the firm are embedded in the competitive situation characterizing its external product markets (Makhija, 2003, p. 437). This basically means that a firms sources of market power is a contributing factor to the organisations performance. Most academics highlight three main sources of market power, these are (Grant, 1991); Monopoly: If a firm has market power in the form of a monopoly then they should expect exceptional business performance. This is because they will be the only company operating within a market, and can dictate the pricing of their products at free will. However, they will also be susceptible to new companies penetrating the market. Barriers to entry: For a company operating as a monopoly they will want to impose strict barriers of entry to try and maintain control of the market for as long as possible Furthermore, this approach should be taken by most companies in a dominant market position, as they do not want other companies to penetrate the market and steal market share. Bargaining Power: The more bargaining power a company has, in regards to both consumers and suppliers, the higher the expected performance would be. This is because if the firm has a low of power over their suppliers and consumers, then the chances are that there are not many substitutes for the suppliers or consumers to choose between. Once again, this allows the company to have dominant impact on the pricing within the market. Furthermore, because many academics suggest that business markets evolve very slowly (Geroski Masson, 1987; Mueller, 1986), it means that market power does not erode rapidly, and a company can maintain it for a reasonably long time. However, even if the market were to dramatically change, a company can utilise their current market power to cushion the effects of any detrimental actions that may occur. Industrial/Organisation View The organisation view on strategic management focuses on how an organisation chooses which industries to operate. It suggests that if an industry is performing exceptionally well, then a business can enter that market and reap substantial financial benefits (Chin, et al., 2003). It is centred on Porters Five Forces (1980), as it analyses the different modes and restrictions of entry into a market. Makhija (2003) takes the view that the I/O view is about manipulating power asymmetries and trying to develop market power. It does this by attempting to minimise the impact of Porters Five Forces, such as industry rivals and threat of new entrants. Furthermore, an I/O view would view market power as a substantial defence against new entrants, and that the industry can have significant impacts on competitive advantage, not so much the market or the organisation. It is a relatively outdated view of competitive advantage, with the resource based view and market based view being preferred by most academics and corporations. Corporate Strategy Michael E Porter (1987, p. 1) defines corporate strategy as the concern as business as on how to create competitive advantage in each of the businesses in which a company competes. In essence, corporate strategy concerns every facet of the business, to add up to more than the sum of its business unit parts. Furthermore, Porter (1987) outlines four generic strategies that exist at a corporate level. These are; Portfolio Management: This is a corporate strategy that is in use by most organisations. It is primarily based on a diversification strategy through acquisition. Although acquisitions can be in a completely new market, corporate managers will often limit the differences to focus their own personal expertise. Furthermore, the acquired firms should run autonomous, with teams focusing on their own work and being reward based on unit results. Restructuring: This is quite dissimilar to portfolio management, as it involves the complete restructuring of businesses. A corporate manager will usually acquire a company with unrealised potential and then seek to actively review and restructure the business operations. This strategy benefits from underperforming companies that are at threat of going into liquidation. When well implemented, the restructuring strategy offers many benefits, it is a cheap mode of acquisition and still leaves a lot of freedom for development. Transferring Skills: The previous two strategies both rely on the acquisition or restructuring of companies and leaving them to operate autonomously. However, a transferring skills strategy seeks to build interconnected relationships between each business unit of the corporation. However, sometimes business units will not synergise well together and no matter how hard a corporation tries, the skills cannot be transferred. This can prove costly and timely for an organisation. Sharing Activities: The final strategy developed by Porter (1987) is via a sharing activities strategy. This strategy is a blend of the three previous strategies, as it leaves business units to act autonomously, but will seek to share a portion of activities between them. This could be in the form of production, supply chain or distribution. Furthermore, this strategy is becoming more and more prominent as sharing often enhances competitive advantage for a business by lowering costs. As all four strategies have a variety of benefits, a corporation must decide on what strategy is most beneficial to follow. In general, the sharing activities strategy will be very suitable, as it is a cheap strategic choice, potentially lowering costs, and maintains the autonomy between business units. However, if a company is looking for rapid strategic growth then they may just build up a large portfolio of acquisitions. Unfortunately, this does come with a substantial amount of risk and resource usage. Business Strategy A business strategy is fundamentally the way in which an organisation will set out to achieve any designated aims or objectives. Furthermore, a business strategy will typically cover a period of around 3-5 years and encompasses three generic strategies. These are; growth, globalisation and retrenchment. Growth and globalisation both look at how an organisation can expand their operations, either domestically or internationally. On the other hand, retrenchment is a defensive strategy, and looks into ways in which an organisation can reduce their operations to focus on what they do best (BCS, 2015). As with the other strategies, business strategy is still meant to give an organisation competitive advantage. There are a variety of ways in which a business strategy can achieve this, including lowering prices or product differentiation. Business strategy is significantly different to corporate strategy in this regard, as it relates to the finer details of operation and gives individu al employees a say on decision making. Functional/Operational Strategy Strategy in an operational context is essentially about how the organization seeks to survive and prosper within its environment over the long-term (Barnes, 2007, p. 24). Furthermore, Slack, et al., (2004) outline five key attributes that an operational strategy will try and achieve. These are; Cost: The ability for an organisation to produce at a low cost. Quality: The ability for an organisation to produce within specification and with minimal errors. Speed: The ability for an organisation to produce quickly and meet consumer needs and demands, such as offering a short lead time between when a customer orders a product and when it gets delivered. Dependability: The ability for an organisation to deliver their products in accordance with any promises made to the consumer. Flexibility: The ability for an organisation to be able to change their operations at any given time. This can include changing volume of production or the time taken to produce. If a company can perform exceptionally well in one or more of these factors, then it allows them to pursue a strategy that uses the factor as a competitive advantage. Barnes (2007) provides a table highlighting the different competitive strategies that a company can pursue dependent on where they are exercising efficient operations. Excellent Operations Performance in Gives the Ability to Compete on Cost Low Price Quality High Quality Speed Fast Delivery Dependability Reliable Delivery Flexibility Frequent new products/services Wide range of products/services Changing the volume of product/service deliveries Changing the timing of product/service deliveries Furthermore, it is highly unlikely that an organisation will be able to act proficiently at every one of the five factors mentioned above, so choosing one to excel it is a preferred method. If a company were to try and focus on all five factors they will likely cause confusion and actually lose their competitive edge. This concept was proposed by Skinner (1969) and is referred to as the trade-off strategy. It basically means that a company can trade-off performance in one facet of their operations to perform exceptionally well in another. Operations can play a fundamental role in strategic decision making, and a company must be clear on where they are performing well in order to market this as a competitive advantage. Conclusion There is not really an optimum strategy to pursue for an organisation, as it is dependent on a variety of external factors that could be specific to the organisation. Careful planning and preparation must be conducted before any organisation commits to following a certain strategy, otherwise they may risk losing substantial resources. Furthermore, the resourced based view and market based view both have their merits, with a combination of the two probably being the most optimum method. An organisation should order their resources to establish a strong market power within an industry. Once this market power has been attained, corporate level members can begin filtering down aims and objectives that can be accomplished by business and operational strategies. Strategic choice involves heavy integration throughout all levels of the business, as strategies can be implement by a number of different departments, all of which offer their own benefits to the overall aims and objectives o f the organisation. Bibliography Barnes, D., 2007. Operations Management. London: Cengage Learning. Barney, J. B., 2002. Gaining and Sustaining Competitive Advantage. s.l.:Prentice Hall. BCS, 2015. Business strategy. [Online] Available at: https://businesscasestudies.co.uk/business-theory/strategy/business-strategy.html#axzz3bWvHhfHY Chin, J. W., Widing, R. E. Paladino, A., 2003. Comparing the industrial organization view and market orientation, s.l.: Market Orientation and Relationship Marketing. Collis, D. J., 1994. How Valuable Are Organizational Capabilities?. Strategic Manamement Journal, 15(1), pp. 143-152. Conner, T., 2002. The Resource-Based View of Strategy and Its Value to Practising Managers. Strategic Change, 11(6), pp. 307-316. Dosi, G., Faillo, M. Marengo, L., 2008. Organizational Capabilities,Patterns of Knowledge Accumulation and Governance Structures in Business Firms: An Introduction. Organization Studies, 29(8), pp. 1165-1185. Fiol, C. M., 2002. Revisiting an Identity-Base d View of Sustainable Competitive Advantage. Journal of Management, 27(6), pp. 691-699. Geroski, P. A. Masson, R. T., 1987. Dynamic market models in industrial organization. International Journal of industrial organization, 5(1), pp. 1-13. Grant, R. M., 1991. A resource-based perspective of competitive advantage. California Management Review, Volume 33, pp. 114-135. Helfat, C. E. Peteraf, M. A., 2003. The dynamic resource based view: Capability lifecycles. Strategic Management Journal, 24(10), pp. 997-1010. Kraaijenbrink, J., Spender, J. C. Groen, A., 2009. The resource-based view: A review and assessment of its critiques, Munich: Munich Personal RePEc Archive. Makhija, M., 2003. Comparing resource based and market based views of the firm: Empirical evidence from Czech Privitisation. Strategic Management Journal, 24(5), pp. 433-451. Mueller, D. C., 1986. Profits in the Long Run. Cambridge: Cambridge University Press. Nag, R., Hambrick, D. C. Chen, M.-J., 200 7. What is strategic management, really? Inductive derivation of a consensus definition of the field. Strategic Management Journal, 28(9), pp. 935-955. Porter, M. E., 1987. From Competitive Advantage to Corporate Strategy, s.l.: Harvard Business Review. Skinner, W., 1969. Manufacturing: The missing link in corporate strategy. Harvard Business Review, 68(3), pp. 136-145. Slack, N., Chambers, S. Johnston, R., 2004. Operations Management. 4th ed. Harlow: Pearson Education.