The Concept of Charismatic Leadership theory

The Concept of Charismatic Leadership theory The study of leadership has been important to humans since the dawn of civilisation, the concept of leadership; leader and follower were represented in Egyptian hieroglyphics written 5,000 years ago. Between 400 and 300BC the Greek philosophers Plato and Aristotle wrote about leadership and the requirements, characteristics, and education of leaders (Paul, et al. 2002). Leadership is central to the human condition (Wren, 1995) and has found to be important to all societies, although specific patterns of behaviour vary overtime and across cultures (Bass, 1990). Leadership theories have evolved in the last century to the point where they began to be the basis for models that accurately describe the activities of leaders with good correlation to their success in some situations (Antonakis House, 2002), (Yukl, 2006a). Meindl (1990) leadership can best be understood as a perception that plays a key role in peoples efforts to make sense of organisational phenomena. According to his view, organisational systems, activities, and events are hard to comprehend because they are ambiguous and complex. Nevertheless, organisational members and observers have a need to make sense of their environment to preserve an illusion of understanding and control. Because leadership provides a convenient and plausible explanation for important, but causally ambiguous outcomes, it is overused as an explanatory category. Essentially, attributers romanticise leadership as a causal determinant of organisational processes and performance. In a sense, supervisory theories of leadership are about leadership in organisations. Strategic theories of leadership are concerned with leadership of organisations, see (Hunt, 1991) and are marked by a concern for the evolution of the organisation as a whole, including its changing aims and capabilities (Selznick, 1984). Strategic leadership focuses on the people who have overall responsibility for the organisation and includes not only the titular head of the organisation but also members of what is referred to as the top management team or dominant coalition (Cyert March, 1963). As (Mintzberg, 1989) argues, strategy can be understood as a pattern, that is, consistency in behaviour over time. In the strategy process, there may be intentions that are fully realised as well as fully unrealised strategies. In addition, the strategy may emerge. 2.1 General Leadership Theories 2.1.1 Phases of leadership theories The earliest modern literature on leadership appeared in the nineteenth century. This earliest generation of leadership research was set out from the assertion that the emergence of leaders must be connected with certain inherited endowments. There was even a book named Hereditary Genius (Galton, 1970). A comprehensive review of leadership research, published in handbook form, was produced by (Stogdill, 1974). In this handbook, he provided evidence that leadership traits vary not only from situation to situation, but also from time to time. Only a few components remain comparatively consistent over time. Subsequent editions of this handbook were revised by Bass, who is Stogdills successor (Stogdill Bass, 1981) and (Bass, 1990a). In the later edition Bass drew further evidence from later research and identified traits which were steadily relevant to leadership effectiveness. These included activity level, task competence, interpersonal competence, authoritarianism, power orientation and Machiavellianism, value, needs, well-being, accorded status and esteem, and charisma. (Locke et al. 1991) produced a similar list. Since then, the pace of development has mounted as the need for its application intensified following the development of society especially in business management after World War II. In terms of classifying this evolution, a widely accepted view was suggested by (Hunt, 1999a). According to his argument, this evolution can be divided into three generations; namely: trait theory, situational-contingency theory and transformational leadership theory In all it was later accepted that the trait approach failed to prove that there was a set of gifted traits, which made people become leaders. Researchers then mostly turned to the new assumption that leadership can be taught and learned under a proper set of principles according to (Lee Thomas, 2007). Bass also added an extra chapter to the handbook, and this was dedicated to charismatic and inspirational leadership style. Charismatic leadership is actually one of the most important areas in leadership theory since it has the longest acknowledgement in the literature and actually spans across all the three generations of leadership studies. (Weber, 1924, 1947 1968) was the first to mention the concept of charisma. He saw charisma as a special kind of leadership trait that can lead organisations to get through periods of crisis successfully. Since the mid-1970s, research interest in charismatic leadership was shifted from Webers view of crisis rescuer to an emphasis on those leaders who could effect extraordinary influence continuously. It was found that charismatic leaders could usually improve organisational performance through their own behaviour and that this could have a powerful effect on the morale of their followers. This kind of leadership is referred to by the situational-contingency school of researchers as charismatic leadership e.g. (Adair, 1973), (Kets de Vries, 1984) and (Conger Kanungo, 1987a), transformational leadership e.g. (Burns, 1978a) and (Bass, 1985a), inspirational leadership e.g. (Yuki Van Fleet, 1982) or visionary leadership e.g. (Bennis Nanus, 1985a) and (Sashkin, 1988a). Later, researchers in the generation of transformational leadership also classified it as change management (Bass, 1990b). The first author to differentiate between charismatic and inspirational leadership was (Downton, 19 73). He pointed out that the followers endorsement of charismatic leaders is based on blind faith in the leaders, whereas the endorsement of inspirational leaders is based on the rationale that the followers believe and share the leaders vision and strategy. 3.1 The Concept of Charismatic Leadership (up to 1992) and how it fits in to the general leadership theories 3.1.1 Theoretical background of charismatic leadership The term charisma, whose initial meaning is a gift in Greek, has been frequently used in politics and religion to adduce legitimacy to power. (Weber, 1968) defined it as an individuals personality quality (or at least, specifically exceptional powers or qualities) by virtue of which he/she is set apart from ordinary people and which thus legitimises his/her exercise of influence. (House, 1977a) developed a theory of charismatic leadership which is among the first attempts to build a comprehensive theoretical basis for studying the topic. Leadership theory, alternatively referred to as charismatic, transformational, visionary, or inspirational, has emerged in the organisational literatures of (House, 1977b), (Burns, 1978b), (Bass, 1985b), (Bennis Nanus, 1985b), (Tichy Devanna, 1986), (Boal Bryson, 1988), Conger Kanungo, 1987b), (Kuhnert Lewis, 1987), (Sashkin, 1988b). Relating to this new genre of leadership theory, such leaders transform the needs, values, preferences and aspira tions of followers from self-interest to collective interests. Further, they cause followers to become highly committed to the leaders mission, to make significant personal sacrifices in the interest of the mission, and perform above and beyond the call of duty. Theories of charismatic leadership highlighted such effects as emotional attachment to the leader on the part of the followers; emotional and motivational arousal of the followers; enhancement of follower valences with respect to the mission articulated by the leader; follower self-esteem, trust, and confidence in the leader; follower values; and follower intrinsic motivation according to (Shamir, House Arthur, 1993a). The integration of charismatic leadership theory with the upper echelons perspective in an attempt to better understand the leadership role of chief executive officers (CEOs) was reviewed by (Waldman, Javidan Varella, 2004). They proposed that emerging charismatic leadership theory and research may provide new possibilities for the upper echelons perspective. In the past, leadership theory has been seen as the domain of organisational behaviour and micro-oriented perspectives. (House, 1999) organisational behaviourists are generally more psychologically oriented and define charisma as one of the following: a relationship between an individual (leader) and others (followers) based on deeply held shared ideological (as opposed to material) values; an individual who accomplishes unusual feats through the efforts of followers who are exceptionally loyal to the leader, have a high degree of trust in the leader, and are willing to make personal sacrifices in the interest of the leaders vision and the collective led by the leader; a complex set of personal characteristics and/or behaviours of an individual that leads to the above outcomes. The specific traits and behaviours are defined somewhat differently among the organisational behaviourists theories. Organisational behaviourists have used all three of the above definitions, none of which are incompatible with the others. Charismatic leadership is assumed to have three core components: envisioning, empathy, and empowerment according to Conger (2006), increasing attention has been directed during the past several decades toward charismatic leadership. Charisma represents a potentially key construct relevant to strategic leadership (Pawar Eastman, 1997). Apparently, a recent theoretical perspective has begun to link charisma to strategic leadership. For example (Finkelstain Hambrick, 1996) acknowledged that charismatic leadership could affect firm performance in one of several ways. First, the values of such leaders could influence strategic choices through their impact on their field of vision, their perception and interpretation of information, and their strategic decision making. Furthermore, the day-to-day actions and behaviours on the part of charismatic chief executive officers could also affect organisational functioning and performance. Unfortunately, in their view, they did not make potential linkages between charisma and performance especially clear and, indeed, devoted little attention to such linkages in their consideration of strategic leadership. Conger Kanungo (1992) developed a model that focuses on several behavioural dimensions of charismatic leadership within organisations. According to the model, charismatic leadership is an attribution based on followers perceptions of their leaders behaviour. The leaders observed behaviour is interpreted by followers as expressions of charisma in the same sense as a leaders behaviours reflect that individuals participative, people and task orientations. Charismatic leaders differ from other leaders by their ability to formulate and articulate an inspirational vision and by behaviours and actions that foster an impression that they and their mission are extraordinary. As such, individuals choose to follow such leaders in management settings not only because of formal authority but out of perceptions of extraordinariness. Thus any measurement of charismatic leadership must be based on followers perceptions of the specific behavioural attributes of the leader that engender such outcomes . The Conger-Kanungo model proposed several distinguishing behavioural components in three distinct stages of the leadership process. A number of different behaviours may lead to perceptions of charisma (Bass Avolio, 1993), (Conger Kanungo, 1987c) and (Shamir, House Arthur, 1993b). Following earlier experimental research by (Yorges, Weiss Strickland, 1999), they demonstrated that a leader making personal sacrifices to achieve the collective vision rather than personally benefiting from his or her action was perceived as more charismatic. The more recent psychological and organisational behaviour literature has dealt with these variables rather extensively, arguing that charismatic leaders strongly appeal to the values and self-concepts of followers by articulating radical solutions to their problems (Shamir, House Arthur, 1993c). 4.1 Development of Charismatic Leadership (post 1992) In the past decade, the bulk of leadership research has focused on transformational and charismatic leadership (Judge Piccolo, 2004). In sharp contrast to the rational nature of the transactional leadership paradigm of the 1960s and 1970s (Bass, 1990e), transformational and charismatic leadership theories (Bass, 1985c), (Burns, 1978c), (Conger Kanungo, 1998a) and (House, 1977c) recognised the affective and emotional needs and responses of followers performance, placing more emphasis on the emotional, inspirational, and symbolic aspects of leadership influence (Shamir, House Arthur, 1993d) and (Conger Kanungo, 1998b). Attempts to integrate the multiple theories of transformational and charismatic leadership reveal many commonalities, including leader vision and a charismatic communication style (House Shamir, 1993) and (Kirkpatrick Locke, 1996). Newer frameworks that can be applied to leadership theory include meso-level paradigms that attempt to provide an integration of micro and macro organisational behaviour (House et al. 1995) and (Hunt Dodge, 2001). Concurrent with the development of meso-level paradigms, the field of leadership has witnessed an infusion of theory dealing with charismatic and inspirational leadership. 4.1.1 Realisation of Vision content and organisational performance Drawing from the communication literatures, (Holladay Coombs, 1993 and 1994) invoked the concepts of message content and delivery to explain the two-step process whereby charismatic leaders initially craft and then articulate an idealised vision. An idealised vision is generally considered to be a prerequisite for a leader to become transformational or charismatic e.g. (Bass, 1988). Once formulated, the vision must be articulated to mobilise followers to pursue it. Studies in the past decade have identified six behaviours exhibited more frequently by charismatic leaders than by non-charismatic leaders. These include: vision and articulation; sensitivity to member needs; environmental sensitivity; unconventional behaviour; taking personal risks; and not maintaining the status quo as defined by the Conger-Kanungo scale (Conger Kanungo, 1994a). Envisioning involves creating an overall picture of a desired future state with which people can identify and which can generate excitement. In addition to formulating a vision, they are adept at communicating the vision and infusing day-to-day work with a larger sense of purpose and greater intrinsic appeal (Conger, 1989a). Most charismatic leaders, therefore, are known as persuasive speakers. They often rely on various rhetorical techniques such as metaphors, analogy, and stories to inculcate key ideas into the followers minds, so that their message would have a profound impact on followers (Conger, 1989b). (Awamleh Gardner, 1999) suggested an agenda for research to clarify. In particular, the joint effects of vision content, delivery, organisational performance cues, and generalised leadership beliefs on perceived charisma and leader effectiveness warrant empirical attention. Accordingly, in their study they projected three key objectives: to explore the combined effects of vision content and delivery on perceptions of leader charisma and effectiveness; to investigate the relative effects of performance outcomes on these perceptions; and to examine the effects of generalised beliefs about leadership (i.e., romance of leadership disposition) on leadership perceptions. To put the results in perspective, they reconsidered (Lord Mahers, 1993) definition of leadership as the process of being perceived by others as a leader. Accordingly, when people use prototypes to infer leadership, strong delivery of an idealised and well articulated vision will lead to perceptions of charisma and leader effectiveness. These perceptions, in turn, provide the leader with an attentive audience of followers who will be highly receptive to the leaders influence attempts. On the other hand, when followers use organisational outcomes to assess leadership qualities, high performance appears to similarly enhance the leaders image of charisma and effectiveness. Importantly, such perceptions will in turn provide the leader with greater leverage in influencing others. Their point is that the recognition and inferential models are not mutually exclusive. To maximise their influence potential, leaders must provide a strongly articulated and idealised vision, and successfully at tain high performance outcomes. 4.1.2 Charismatic leadership and followers outcomes (Conger, 1999a) over the last decade and a half, highlighted that the topic areas of charismatic and transformational leadership in organisational settings have undergone a significant evolution in terms of both theory development and empirical investigations. Both the greatest amount of theory development as well as empirical research on charismatic and transformational leadership has been in the area of leader behaviours and, to a lesser extent, on follower effects. This was due largely to the backgrounds of the most active researchers, almost all of whom have had a strong behavioural orientation. While there have been a number of individuals studying either transformational or charismatic leaders e.g. (Bennis Nanus, 1985c) and (Kouzes Posner, 1987).Kouzes, J.M. and Posner, B.Z., 1987. . The leadership challenge Jossey-Bass, San Francisco. Three principal leadership processes are involved (Bass, 1985d)Bass, B.M., 1985. . Leadership and performance beyond expectations Free Press, New York. in achieving such outcomes: these leaders heighten followers awareness about the importance and value of designated goals and the means to achieve them; they induce followers to transcend their self-interests for the good of the collective and its goals; and they stimulate and meet their followers higher order needs through the leadership process and the mission. Bass was the first organisational scholar to operationalise the transformational leadership model into a measurement instrument. As a result, more studies employ his scale than any of the other models proposed to date. As such, today four behavioural components make up the dimensions of transformational leadership: charisma or idealised influence; inspiration; intellectual stimulation; and individualised consideration. In contrast to the other theories, charisma is a separate component and is defined in terms of both the leaders behaviour (such as role modeling) and the followers reactions (such as trust, respect, and admiration for the leaders ability) (Conger, 1999b). (Bono LLies, 2006) suggested that positive emotions play a role in the charismatic leadership process in an extensive literature linking positive affect to the same outcomes achieved by charismatic leaders (e.g., cooperation, task performance, motivation, creativity). Their aim was to examine the effects of leaders positive emotional expressions on follower mood and perceptions. They discovered that charismatic leaders express more positive emotions than do less charismatic leaders and that leaders positive emotional expressions have a direct effect on follower mood. Furthermore, they argued that both leaders emotional expressions and follower mood had independent effects on perceptions of leadership effectiveness and attraction to a leader. First, (Isen, 2004) has demonstrated that positive change is associated with task performance, particularly on creative tasks, though these effects are not universal, as (George Zhou, 2002) demonstrated that under certain conditions positive mood was negatively associated with creativity. Other studies linked group affective tone (i.e., positive group mood) to group effort and coordination (Sy, Cote Saavedra, 2005), improved cooperation and decreased conflict among group members (Barsade, 2002), and subjective assessments of performance (Totterdel, 2000) and (Fredericksons, 2003) broadened-and-built theory posits that positive emotions broaden the relationship between thought and action, leading to increased novelty and exploration of ideas on the part of employees who experience them. (Rousseau, 1998) suggested the possibility that high-quality relationships may develop even when only a few well specified and important resources are exchanged, such as hard work for high pay. In the recent work of (Cicero Pierro, 2007a), they reviewed that leadership and work outcomes are associated to social identification processes, referring both to recent developments of charismatic leadership models and to the recent developments of the social identity analysis applied to the workplace, e.g. (Abrams Hogg, 2001). Two field surveys were conducted using 200 Italian public and private sector employees (two different working organisations). Two questionnaires were designed in order to collect data. They included different measures of charismatic leadership derived by the literature e.g. the Conger-Kanungo Charismatic Leadership Questionnaire; (Conger Kanungo, 1994b and 1998), for Study 2), a scale to assess the degree of identification with the work-group (Van, K.D., Van, S.E.C.M., 2000) and some scales to measure the different outcomes considered e.g., (Brown and Leighs effort measure, 1996) and (Mobleys turnover intention measure, 1977). As they predicted, results o f Study 1 revealed that charismatic leadership was positively related to work-group identification, and employees work effort was positively related to work-group identification. Work-group identification also mediates relationship between charismatic leadership and work effort. Results of Study 2 replicated the positive association between charismatic leadership and employees work-group identification; work-group identification is also associated with their job involvement, job satisfaction, performance, and turnover intention. (Cicero Pierro, 2007b) admitted that their research has some limitations. The first one to note was that a causality relation cannot be inferred due to the cross-sectional nature of the data, although it was one of the most-used methods in applied and field psychological research. They suggested that future investigations, then, should adopt an experimental or longitudinal design. A second one was represented by the fact that the criteria variables had been assessed by paper-and-pencil self-report measures, which may reflect participants perceptions rather than objective realities. However, some of the analysed variables (e.g., work-group identification, turnover intention, job involvement, etc. pertain exclusively to individuals perceptions and feelings, so only a few of these measures (for instance leadership style and performance) should be assessed through actual behaviours and more objective measures in order to substantiate the results obtained. They concluded that their resul ts enlarged the knowledge of the dynamic that may affect work outcomes and underline the tangible relevance of social identification processes and, in particular, the relevance of employees identification with the work-group to the organisation life. 4.1.3 Concept between Instrumental, transformational and transactional leadership Research on leadership started with a concern for identification of leadership traits, so that this might be used to as a basis for management selection and training. When the relationship of such traits to organisation effectiveness proved weak, researchers sought to emphasise specific leadership behaviours, starting with participative management, and the later behavioural research on social/task and instrumental leadership behaviours, revealed the complexity of leadership and showed the futility of simple answers according to (Vasu, Stewart Garson, 1998). Current notions of leadership in particular, transformational leadership perspectives see (Hunt, 1999b), (Lowe Gardner, 2000) fail to address the strategic and task-oriented developmental functions of leaders (referred to as instrumental leadership by (Antonakis House, 2002), see also (Yukl, 1999). Theoretically, these instrumental leader functions are essential for ensuring sustainable organizational and follower performance. Instrumental leadership is not included in transformational leadership theories (e.g., the full-range leadership theory of (Avolio, 1999), (Avolio Bass, 1991), (Bass, 1985e), (Bass Avolio, 1994, 1997), an omission that might limit: the extent to which the full-range theory is able to predict effective leader functioning and our understanding of the contexts in which different types of leadership are important. (Antonakis House, 2004) defined instrumental leadership as a class of leader behaviours concerning the enactment of leader expert knowledge toward the fulfillment of organisational-level and follower task performance, see also (Nadler Tushman, 1990). Instrumental leadership is distinct from transformational (i.e., ideals, inspirationally based, etc.) and transactional (i.e., exchange-based) leadership and encompasses two subclasses of leader behaviours. Each of these subclasses, in turn, consists of two factors: strategic leadership leaders actions centered on environmental scanning strategy formulation and follower work facilitation leaders actions focused on facilitating follower performance. On the other hand, transformational leadership is associated with strong personal identification with the leader, the creation of a shared vision of the future, and a relationship between leaders and followers based on far more than just the simple exchange of rewards for compliance. The ability of the leader to articulate an attractive vision of a possible future is a core element of transformational leadership (Hartog Verburg, 1997). Transformational leadership goes beyond the cost-benefit exchange of transactional leadership by motivating and inspiring followers to perform beyond expectations (Bass, 1985f). As (Hater Bass, 1988) pointed out, contrasting transactional and transformational leadership does not mean the models are unrelated. Burns (1978d) thought of the two types of leadership as being at opposite ends of a continuum. However, here we follow (Bass, 1985g) who viewed transformational and transactional leadership as separate dimensions. This viewpoint implies that leaders could show both transactional and transformational behaviours. Bass argues that transformational leadership builds on transactional leadership but not vice versa. Thus, high-quality relationships have more in common with a transformational kind of relationship than with a purely transactional one (Gerstner Day, 1997). 5.0 Conclusions Each of the theories under consideration has evolved over time by different intellectuals and is still being studied and used today to explain modes of leader behaviour (Harris, Harris Eplion, 2007), (Yukl, 2006b), (Sagie Koslowski, 1994). Each of the theories considers both the leaders effect on followers and the interaction between leader and follower. According to (Summary Report of Accomplishments: 2003à ¢Ã¢â€š ¬Ã‚ 2008) reported that one measure of a journals influence on a field is Impact Factor and Citation Data. To calculate the impact factor, Thomson Scientific records the number of citations in a particular year to articles published in the two previous years, divided by the number of articles in the same previous years. For The Leadership Quarterly, the Impact Factors (and ranking within the categories of Management and Psychology, Applied) for the last 5 years as reported by its publisher, Elsevier, is illustrated in Appendix 1. Another measure of journal impact is the number of full text downloads between 2003 and 2008. The number of downloads for The Leadership Quarterly increased as summarised is shown in Appendix 2. The summary of the Impact Factor, it shows there has been a substantial increase in this index between 2003 and 2007 is shown in Appendix 3. I disagree with (Houses, 1992) article that charismatic leadership was a new genre of leadership theory. For the fact that in the past and the present, several publication have shown significant contribution by scholars in the study and practice of charismatic leadership. Researchers have played a key role in shaping and nurturing the fields of leadership and management to generate new knowledge and insights into leadership theories. Appendices Appendix 1. Year Impact Factor Management Rank Psychology Rank 2007 1.763 20/81 12/57 2006 1.720 16/78 12/54 2005 1.750 9/71 7/49 2004 1.769 10/67 6/50 2003 1.315 20/67 13/49 Appendix 2. 2003 2004 2005 2006 2007 2008 *Jan-Jun 83,528 125,417 162,583 213,027 260,948 185,627 Appendix 3. 2003 2004 2005 2006 2007 .511 .333 .778 .456 1.338 Source: ISI Web of Knowledge.

Consumer Awareness Essay

THE PROCESS of development along with the expanding globalisation and liberalisation process has increased the number of consumer related issues. Consumer protection has earned an important place in the political, economic and social agendas of many nations. In India, the Government has taken many steps including legislative, to protect consumers. Education is a life long process of constantly acquiring relevant information, knowledge and skills. Consumer education is an important part of this process and is a basic consumer right that must be introduced at the school level. Consumers by definition include all citizens who are, by and large the biggest group, who are affected by almost all government, public or private decisions. The most important step in consumer education is awareness of consumer rights. However, consumer education is incomplete without the responsibilities and duties of consumers, and this influences individual behaviour to a great extent. Definition Consumer awareness is making the consumer aware of His/Her rights. Consumer awareness it a marketing term. It means that consumers note or are aware of products or services, its characteristics and the other marketing P’s (place to buy, price, and promotion). Need : we need it so we will not be misled by producers,it explains if what we buy is worth to our money..and not harmful to us and to environment . Many people are ignorant of their rights to get protected against the exploitation by so many others. So when there is a forum for such redress of grievances there seems to be no such exploitation by many; and becomes a rare one. So in order to get a clear picture of the level of exploitation of consumers, the awareness is required. Role of producers  proper labeling, full information, health warnings, handling information, expiration date, etc. keep to requirements, norms, standards labelproducts according requirements, providing true facts If they are providing a service they should carry it out with due skill and  care. They must also make sure that any materials they provide as part of this service are fit for the purpose. It is also illegal for a supplier to cut off, or threaten to cut off, supply to a reseller (wholesale or retail) because they have been discounting goods or advertising discounts below prices set by the supplier. Consumer awareness is about making the consumer aware of his/her rights.It is a marketing term which means that consumers are aware of products or services, its characteristics and the other marketing P’s (place to buy, price, and promotion).Though the first consumer movement began in England after the Second World War, a modern declaration about consumer’s rights was first made in the United States of America in 1962, where four basic consumer rights (choice, information, safety and to be heard ) were recognized. Ralph Nadar, a consumer activist, is considered as the fathe r of ‘consumer movement’. March 15 is now celebrated as the World Consumer Rights Day. The United Nations in 1985 adopted, , certain guidelines to achieve the objectives of maintaining protection for consumers and to establish high level ethical conduct for those engaged in production and distribution of goods and services. High prices, duplicate articles, underweight and under – measurements, rough behavior, undue conditions, artificial scarcity are some of the ways by which consumers are exploited by manufacturers and traders. Limited information, limited supplies and low literacy are factors causing exploitation of consumers. In India, the concept of consumer protection is not new. References to the protection of consumer’s interest against exploitation by trade and industry, underweight and measurement, adulteration and punishment for these offences, were made in Kautilya’s ‘Arthashastra’. However, an organized and systematic movement to safeguard the interest of consumers, is a recent phenomenon. The consumers have to be aware not only of the commercial aspects of sale and purchase of goods, but also of the health and security aspects. Food safety has become an important element of consumer awareness these days. In case of food products, its quality depends not only on its nutritional value, but also on its safety for human consumption. Consumption of contaminated or adulterated food is a major cause of human illness and suffering. This called for strong legal measures to ensure that the manufacturers and sellers observe uniformity and transparency in prices, stocks and quality of their goods.Enactment of Consumer Protection Act, 1986 was one of the most  important steps taken to protect the interests of consumers. The provision of the Act came into force, with effect from July 1, 1987. The act recognizes consumer’s right to seek redresses and right to consumer education. The salient features of the Act are as follows:- †¢ Applies to all goods and services unless specifically exempted by the Union Government; †¢ Covers all the sectors whether private, public or cooperative; †¢ Enshrines the consumer’s rights related to safety, information, choice, representation and redress and consumer education. †¢ The act gives consumers an additional remedy besides those which may be available to them under the provisions of other existing laws and they are free to choose the remedy. †¢ Empower consumers seeking discontinuance of certain unfair and restrictive trade practices, defects or deficiencies in services and stopping in services or withdrawal of hazardous goods from the market. There are no legal formalities for filing the complaint. Suppose, you find yourself cheated by trader or a manufacturer and wish to make a complaint to consumer court, you can write the details on a plain paper. Attach the supporting documents, that is, guarantee or warrantee card and cash memo with the complaint and submit it in the district consumer court. You do not have to go to any lawyer or professional for legal assistance. You yourself can plead the case in the consumer court.Since, the enactment of the Consumer Protection Act and even before that, newspapers and magazines have been responding to the needs of consumers. Apart from publishing articles, columns etc newspapers have also tried to come to the rescue of harassed consumers. The Indian Express was one of the first newspapers to start a consumer complaint column. There are 500 consumer associations, which are working in the field of consumer protection. They deal with various aspects of consumer exploitation. Some of the prominent ones are: Consumer Guidance Society of India, Mumbai; Citizens Action group, Mumbai; Common Cause, New Delhi; Voice, New Delhi; Consumer Utility and Trust Society, Jaipur. So next time you find yourself at the wrong end of a purchase don’t just sit back and blame, go to a consumer court and make your claim. CONSUMER AWARENESS  THE PROCESS of development along with the expanding globalization andliberalization process has increased the number of consumer related  issues. Consumer protection has earned an important place in the political, economic and social agendas of many nations. In India, the Government has taken many steps including legislative, to protect consumers.However, this is largely unknown to many citizens irrespective of whether they areeducated or uneducated. With an enormous population along with high levels of poverty,unemployment and poor literacy levels, consumer awareness continues to remain low. Education is a life long process of constantly acquiring relevant information, knowledgeand skills. Consumer education is an important part of this process and is a basicconsumer right that must be introduced at the school level. Consumers by definitioninclude all citizens who are, by and large the biggest group, who are affected by almostall government, public or private decisions. The most important step in consumer education is awareness of consumer rights. However, consumer education is incompletewithout the responsibilities and duties of consumers, and this influences individual behaviour to a great extent. With the increasing changes in economic conditions, thechildren especially are becoming young consumers at an early age. Children must learn toobtain information about goods and services, understand the psychology of selling andadvertising, learn to shop wisely and distinguish between wants and needs. They mustalso understand the alternatives of conserving and saving rather than buying andconsuming.Children are spending more of their leisure time watching television at the cost of other pursuits such as reading or sports. With the introduction of a number of specialisedsatellite channels, television enjoys a large viewership base consisting of children.Exposure to the marketplace as young shoppers has made most children aware of thedifferent kinds of products that are available. Advertisements are no doubt an importantsource of information as they help to inform consumers about the availability of different products before making their choice. A majority of the advertisements are aimed at youngchildren today, especially those covering food products, beverages and cosmetics(especially toothpaste/fairness creams). Advertising influences the food preferences andeating habits of children to a large extent.Unfortunately, many advertisements make false promises, are highly exaggerated a ndgive incomplete descriptions of products. The media, schools and parents along withconsumer groups need to help children develop the ability to understand  the purpose of advertising. There is so much more information available to children that they must perceive the importance of distinguishing between different sources of information.The consumption patterns are changing fast and children today are very clear on their choices regarding food, clothing, cosmetics or accessories. Parents are increasingly permitting their children to take decisions when shopping. It then becomes veryimportant for children to check details (for example, labels) before buying products Children can be taught to shop wisely and a few simple precautions will ensure that theychoose the right product at the right price. It is but natural that parents wish the best for their children, and strive hard to fulfil their demands. But this is not always a good ideaas it affects both the parents and children in a negative way in the long run.Consumer education also involves environmental education as it deals with theimportance of conserving (natural resources) and sustaining (recycling and reusing) theenvironment, including the direct health effects of environmental pollution and toxic products on consumers.Schools must incorporate consumer education into school curricula as it is important toimpart the practical skills and critical ability needed to cope with social and economicchanges.Anyone who consumes goods is a consumer. Consumers get exploited in the market.They respond to advertisements and buy goods. Generally advertisements do not give allthe information that a consumer needs t know or wants to know about a product. Definition Consumer awareness is making the consumer aware of His/Her rights.Consumer awareness it a marketing term. It means that consumers note or are aware of products or services, its characteristics and the other marketing P’s (place to buy, price,and promotion).Usually commercials and ads increase consumer awareness, as well as â€Å"word of mouth†(a comment from someone you know about a product or service). 1 Need : we need it so we will not be misled by producers,it explains if what we buy is worth toour money..and not harmful to us and to environment .Many people are ignorant of their rights to get protected against the exploitation by somany others. So when there is a forum for such redress of grievances there seems to beno such exploitation by many; and becomes a rare one. So in order  to get a clear pictureof the level of exploitation of consumers, the awareness is required. 2. Role of producers proper labeling, full information, health warnings, handling information, expiration date,etc. keep to requirements, norms, standards label products according requirements, providing true facts They have to produce and deliver the goods/services of right qualityat right price at right time at right place at right quantity with right faceIf they are providing a service they should carry it out with due skill and care. They mustalso make sure that any materials they provide as part of this service are fit for the purpose. It is also illegal for a supplier to cut off, or threaten to cut off, supply to areseller (wholesale or retail) because they have been discounting goods or advertisingdiscounts below prices set by the supplier. Some of the common methods of exploitation are 1.Under weight and under measurements –not measured or weighed correctly2.Substandard Quality –defective home appliances and medicines beyond expirydate3.High prices—charging above the retail price4.Duplicate Articles—selling fake items in the name of the original5.Adulteration and Impurity—is done to get higher profits6.Lack of safety Devices—absence of inbuilt safe guards in appliances7.Artificial Scarcity—hoarding and black marketing8.False and Incomplete Information—misleading information on quality, durability,and safety.9.Unsatisfactory after sales Service—high cost items like electronics and carsrequire constant and regular service.10.Rough behavior and Undue conditions—harassment in getting LPG connection or a telephone connection.. Factors causing exploitation of Consumers. 1.Limited Information—providing full and correct information will help in thechoice2.Limited Supplies—when goods and services are in short supply then price shootsup3.Limited Competition.—single producer may manipulate the market in terms of price and stocks.4.Low Literacy.—illiteracy leads to exploitation.Hence Consumer Awareness isessential Rise of consumer Awareness Kautilya was one of the earliest to write in his Arthashastra about the need for Consumer awareness and protection. With the growth of private sector there is a greater need for discipline and regulation of the market. Consumers must be aware of the sale and purchase of goods, the health and security aspects also. Ensuring the safety of food itemssold in the market is essential these days.Legal measures for consumer safety and consumer awareness must be uniform, andtransparent in terms of prices, quality of goods, and stocks. Consumers must have thetools to combat malpractices and protect their rights. Rights and Duties of Consumers As codified under the Indian Laws the Consumers have the following Rights 1.Right to Safety—to protect against hazardous goods2.Right to be Informed—about price, quality, purity3.Right to Choose—access to a variety of goods and services at competitive prices.4.Right to be Heard—consumers interest and welfare must be taken care of 5.Right to seek Redressal—protection against unfair trade practicesand settlinggenuine grievances.6.Right to Consumer Education.—Kowledge about goods and issues related toconsumers. Duties 1.Get a bill for every important purchase and also the Warranty card2.Check the ISI mark or Agmark on the goods3.Form consumer awareness groups4.Make a complaint on genuine grievances.5.Consumers must know to exercise their rights. Consumer protection Measure 1. Legislation concerning Consumer Rights. The Consumer Protection Act 1986 provides for consumer disputes redressal at the stateand national level. With the help of this law the agencies can solve grievances in aspeedy, simple and inexpensive manner. A separate department of consumer affairs wasset up at the state and central government. A three tier system of consumer courts at the National, State and District levels were set up. These agencies have done good work byhandling lakhs of cases. 2. Public Distribution System .To protect the poor from price rise and black marketing the government food  security tothe poor by supplying essentials through the ration or Fair price shops. 3. Standardisation of Products .These are done to assure the quality of products. The ISI stamp on goods is placed by theBureau of Indian standards. This caters to industrial and consumer goods. These goodscan be trusted to confirm to specific standards. Agmark is meant for Agricultural products.At the International level the International Organization for Standardization (ISO) locatedin Geneva sets common standards. The FAO and WHO provide food standards. 4.Legal formalities for filing a complaint .The complaint can be written on plain paper. The supporting documents like the warrantycard must be attached. A lawyer is not required. We can argue our case

Credit Union Case Study - 1098 Words

†¢ The efforts and dedication to the Hispanic growth strategy is reflected in the percentage increase shown in the Credit Union Growth Stage. The score increased by 20% since the last time the HON assessments was completed in 2016. †¢ Based on Coopera’s Best Practice Index, Kern Schools Federal Credit Union is at 62% which is within the Emerging stage. †¢ The efforts around the Hispanic Growth Strategy have been more prevalent than years past. Such efforts are driving growth, momentum and the credit union’s leadership is confident they will continue to rise in the trajectory. †¢ Michael acknowledge the low response rate does not help their score. He would like to see this increase for next year’s HON assessment. †¢ Coopera sees the response†¦show more content†¦Ã¢â‚¬ ¢ Have received comments from members saying they are taking their money but they are not lending them money. They will be exploring possibilities. Is we are taking alternative forms of ids then we should be doing the same with the lending. †¢ Some staff members are still unsure of the growth the credit union has experienced in the last couple of years. It would be a good idea to share HMA numbers with the staff as part of their onboarding process. Jaime and Coopera will finalize the staff training materials to make them available for their staff. †¢ Overall, the cultural buy-in has progress since the first HON. †¢ The Board of Directors has shown interests in Hispanic Growth Strategy as well. They have also acknowledge the lack of diversity within their board and it’s an issue. The Board of Directors should strive to be presentative of their membership. †¢ Kern Schools FCU would like to hire another person to help with marketing and more of the outreach piece. †¢ Patty suggested that vacant and open positions be filled with a bilingual candidate. The need for bilingual staff will continue to be present. Hispanic Market Analysis (HMA) Report †¢ Kern Schools FCU’s Hispanic membership growth has surpass the overall membership growth. You have gwon since the last we did this at the beigning. †¢ The total number of Hispanic members is close to 61,000 when we include those who are under 16 years of age. †¢ TheShow MoreRelatedCredit Union Case Study748 Words   |  3 Pagesapplications as well as through email. Additionally, the credit union also participates in several community outreaches and utilizes these opportunities to further broadcast our offerings and capabilities. Currently the credit union is sponsoring several scheduled walks and runs to generate awareness for various health ailments. Furthermore, PSECU advises the employees through a corporate portal of any new additions, changes, and notifications. The credit Union focuses on providing a message of being able toRead MoreCredit Union Case Study Solution759 Words   |  4 PagesThe credit union’s net capital ratio has remained relatively stable, and remained at more than twice the peer group average throughout the review period. The consistent high level of net capital adequacy can be attributed to adequate profitability. As of the examination date the ROA ratio was 0.57%, which was well above the peer group average. Profitability has increased since year-end 2016 as a result of an increase in net interest margin and a decrease in operating expenses as well as no provisionRead MoreDid You End Up Working For A Company Based On Credit Unions : Case Study746 Words   |  3 Pages1. How did you end up working for a company focused on helping credit unions serve the Hispanic market? In 2014, I was a participant of the Latina Leadership Initiative, a leadership program for young Latina women in Iowa. Miriam De Dios, Coopera’s CEO, presented about the struggles and opportunities in the underbanked and unbanked Hispanic market. I could relate to her presentation as I grew up in an underbanked household. I was intrigued by the topic and by her personal story. I reached out toRead MoreThe Demand And Dominance Of Consumer Lending905 Words   |  4 Pageschanges in the last 60 years. These changes have in part to do with regulatory changes and financial products innovation. Yet one thing has remained: the demand and dominance of consumer lending. Consumer credit loans have increased in the banking industry, in general, as well as in Credit Unions in the last 60 years. Consumer loans have contributed to the way of life for many Americans. For many Americans who have wanted to increase their standard of living, consumer loans have been the answer. Read MoreSelect ing Trade Banker1089 Words   |  5 PagesCase Study #3: Selecting a Trade Banker Banking on relationship Technon International is a Canadian high-technology development firm, focused on emerging technologies in wireless communications. Technon sources components in China and has offshore programming activities in India covering certain functionality in its new wristwatch PDA with MP3 and cellular capabilities. Technon has several Canadian and international patents to protect its proprietary technology, and has developed some strongRead MoreImprovements in Singapores National Productivity1410 Words   |  6 Pagessome two hundred trade union leaders in Singapore, National Trade Union Congress (NTUC) Secretary-General, Mr. Lim Swee Say commented that it was an improvement that the nations productivity increased from -2 to zero from 2012 to 2013. 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Instead, more individuals launching small businesses are relying on relatives, remortgaging their homes and even drawing from their pensions -- all of which are risky approaches to financing a business. Increasingly, bank branches are headquartered in distant urban areas -- and in some cases, financial deserts exist in towns with few or no traditional financial institutions such as banks and credit unions. That means that local lending to individualsRead MoreEssay on Globalization Study Greece Economic Crisis975 Words   |  4 PagesGlobalization Case Study Greek economic crisis Introduction: In September 2009, Greek economic crisis exploded. Greek government announced that the country’s financial deficits and public debt to gross domestic product would be along about 12.7% and 113%, which are far from the provision of European Union: 3% financial deficit and less than 60% public debt to gross domestic product. Moody’s, SP and Fitch, the three major credit-rating agencies, all reduced the credit-ratingRead MoreFederal Reserve Bank Of New York Essay1620 Words   |  7 Pagesand income, financial claims on and liabilities to the rest of the word. If a country has received money, this is known as a â€Å"credit†, and if a country has paid or given money, the transaction is counted as a â€Å"debit†. Theoretically, the BOP should be zero, meaning that assets (credits) and liabilities (debits) should balance; however, in the reality, this is rarely the case. The BOP is divided into 3 main categories: the current account, the capital account, and the financial account (Reem Heakle

Inadequacy of Cyber Laws in India - Free Essay Example

Sample details Pages: 5 Words: 1387 Downloads: 1 Date added: 2017/06/26 Category Law Essay Type Research paper Level High school Tags: India Essay Did you like this example? Title: Inadequacy of Cyber Laws in India Inadequacy of Cyber-Laws in India* Introduction: A very simple understanding of the term à ¢Ã¢â€š ¬Ã…“Cyber Lawà ¢Ã¢â€š ¬Ã‚  is that it is the law governing Cyber Space. Cyber space is a very wide term and includes computers, networks, software, data storage devices (such as hard disks, USB disks etc.), the Internet, websites, emails and even electronic devices such as cell phones, ATM machines etc.[1] Crime is both a social and economic phenomenon and in todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s world it can be prevalent in our real space as well as cyber space. Thus in order to curb the cyber-crime, Indian Cyber Law was born on 17th October 2000.2 It is the primary source of cyber law in India.3 There are no other sources from which cyber law is derived in India. Don’t waste time! Our writers will create an original "Inadequacy of Cyber Laws in India" essay for you Create order This act covers all aspects of transactions and activities on and concerning the Internet, the World Wide Web and Cyberspace. It is often wrongly interpreted that cyber law is a technical field but in reality it is a really vast concept with constant need for amendments in the law. Every action and every reaction in Cyberspace has some legal and Cyber legal perspectives. With the increasing number of people spending majority of their time in cyber space there was an immediate need to introduce laws for the cyber space. This paper will talk about the legitimacy of cyber laws in India. Moreover the existing legislations and rules need to be reviewed again as they are inadequate for todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s society. Cyber laws are applicable to everyone ranging from registering the domain name to emailing anyone. Infact every activity which one pursues on the internet is governed under the cyber law. This paper will give a deep insight into the cyber laws of India and critique on its shortcomings and inadequacy in certain fields in India. Moreover the article will point out the limitations of the cyber laws in India and do a brief case study on the law. The cyber law concept being still new in India there is a vast playground for it to improve considerably. Also we have found out that since the past few decades the importance of cyber law has vastly improved.4 The researcher will highlight the key issues and state various landmark cases like Avnish Bajaj Vs. State (N.C.T.) of Delhi.5 A notable notion can be taken from the declaration of the independence of cyberspace by John Perry Barlow, Switzerland: We will create a civilization of the Mind in Cyberspace. May it be more humane and fair than the world your governments have made before. A Declaration of the Independence of Cyberspace. John Perry Barlow. Davos, Switzerland. February 8, 1996.6 This notion talks about that even though the government may be unfair to the world but in Cyberspace the i nternet aims to create a humane and a fair situation for everyone. Getting a reality check into this thought we know that it is not possible but with these cyber laws it may be possible to get one step closer to achieving this dream of a utopian mass society in cyberspace. However before jumping to conclusions based on the above statement it will be fruitful to jump into the detailed study of the cyber laws of India to get a deep insight. 5 Avish Bajaj was the owner of a shopping website on which some obscene mms clipping was posted and he was arrested. 6 https://www.eff.org/~barlow/Declaration-Final.html research methodology: The researcher has primarily relied on the à ¢Ã¢â€š ¬Ã…“Observational/Applied Researchà ¢Ã¢â€š ¬Ã‚  methodology. This research is based on studying various articles, textbooks, legislations and cases to understand the cyber laws problem in India. Analytical and Critical methods are used as primary tools in this study to support the argumen ts of the researcher. objectives of study: To discuss the role of Indian cyber laws as an essential factor in todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s society. To understand the vital role of laws in cyberspace and the factors which can exploit it. To study the inter relationship between the government and the laws in the country which revolve around it. To identify the limitations of the law and its shortcomings. To discuss whether the existing laws are adequate or they need to be made stricter. research questions: What is the basic aim of the Information Technology Amendment act? How binding is this act today in India? What are the different situations where this act can be used? What role does this act play in regulating cybercrimes in India? What are the shortcomings of this act? Are the existing laws adequate for safe cyber life? hypothesis: Information Technology Amendment Act 2010 is the primary source of cyber law in India. But this act is not implemented properly in India. There are huge shortcomings in the implementation of this act. Huge cyber-crimes are committed and still the criminals are not charged under this act. This act needs to be heavily revised and be implemented strictly. CHAPTERIZATION: Chapter one deals with the definition of Cyber law and its role in protecting the cyber space of India. Chapter two deals with the historical background of cyber laws and it also deals with its evolution over the years. Chapter three aims to establish the importance of technology and the various ways it can be exploited. Chapter four deals with the short-comings of the cyber law in India and various ways it can be exploited Chapter five sums up the entire research paper in the form of a well-structured conclusion and includes a few suggestions by the researcher. Literature Review 7 years of Indian Cyber Law Rohas Nagpal: This paper begins with a short outline of the various rules, regulations and orders that have been passed over the last 7 years. It then moves onto a brief discussion on the Indian law relating to cyber pornography and features the Avnish Bajaj (CEO of bazzee.com à ¢Ã¢â€š ¬Ã¢â‚¬Å" now a part of the eBay group of companies) case. Cyber Crime Law in India: Has Law Kept Pace with Emerging Trends? An Empirical Study Nappinai, N. S: India got its first codified Act in the Information Technology Act (IT Act), in the year 2000. The scope of this paper is to highlight some important provisions of the cyber-criminal laws in India relating to data protection, privacy, encryption and other cybercrimes and the extent to which the said provisions arm the enforcement authorities to combat not just existing but emerging trends in Cyber Crime. PR Cyberspace à ¢Ã¢â€š ¬Ã¢â‚¬Å" Indian Perspective Rohas Nagpal: This book goes into the texhnical aspect of computers and clears various concepts along with new introduction to evolution of technology. It also states the jurisprudence of Indian Cyber Law. Cyber-Laws and Enforcement Ajmal Edappagath: The article talks about importance of trust and security on cyberspace. It goes into the scope and development of cyberlaws in India. It gives an insight in the future of the cyber law in the country. Cybercrimes Law à ¢Ã¢â€š ¬Ã¢â‚¬Å" Dr. Amita Verma: This textbook talks mainly about cybercrimes and the laws revolving it. It describes various types of cybercrimes and the conceptual framework of the cyberspace. Various legal instances of cyberspace have been portrayed in this book. An Introduction to Cyber Law and Cyber Crime à ¢Ã¢â€š ¬Ã¢â‚¬Å" Dr. R.k. Chaubey: The part C of this textbook gives a detailed introduction of law in cyberspace along with challenges and conflicts revolving around it. It shines a light on the issue of jurisdiction of law in cyberspace along with critical analysis of the IT act 2000. Bibliography BOOKS: An Introduction to Cyber Law and Cyber Crime à ¢Ã¢â€š ¬Ã¢â‚¬Å" Dr. R.k. Chaubey Cybercrimes Law à ¢Ã¢â€š ¬Ã¢â‚¬Å" Dr. Amita Verma CASES: Avnish Bajaj Vs. State (N.C.T.) of Delhi (2005)3CompLJ364 (Del), 116(2005) DLT427, 2005(79) DRJ576 ARTICLES: Ajmal Edappagath, Cyber-Laws and Enforcement, Indian Institute of Management, Ahmedabad Volume 14, No. 3, December 2004. ONLINE MATERIALS: https://www.cccindia.co/corecentre/Database/Docs/DocFiles/india_cyber.pdf https://www.cyberlawsindia.net/cyber-india.html https://www.cyberlawsindia.net/Information-technology-act-of-india.html https://www.cccindia.co/corecentre/Database/Docs/DocFiles/india_cyber.pdf https://dict.mizoram.gov.in/uploads/attachments/cyber_crime/7_years_of_India Cyber_Law.pdf Page 1 [1] https://www.cccindia.co/corecentre/Database/Docs/DocFiles/india_cyber.pdf 2 https://www.cyberlawsindia.net/Information-technology-act-of-india.html) 3 https://dict.mizoram.gov.in/uploads/attachments/cyber_crime/7_years_of_Indian_Cyber_Law.pdf 4 https://www.cyberlawsindia.net/cyber-india.html

IKEA Global Sourcing Challenge Indian Rugs and Child Labor

Proposal Case: IKEA Global Sourcing Challenge: Indian Rugs and Child Labor Summary In this case, it is known that IKEA s procurement model is the mode of global sourcing. IKEA products are shipped to the 26 distribution centres from the trade area after procurement, and then delivered to the shopping malls in the world. IKEA s procurement philosophy and assessment of suppliers mainly include four aspects: continuous price improvement; strict supplier performance and service levels; good quality and healthy products; and environmental and social responsibility (IKEA Sustainability Report 2011). In the aspect of social responsibility, IKEA does not accept child labour, but also actively prevents the use of child labour†¦show more content†¦In addition, the communication of corporate social responsibility is crucial. It can maintain the attractiveness of IKEA for a new generation of partners. IKEA hopes that the partners in dealing with corporate social responsibility can show independence, but the ability to realize this issue will have to depend on the empl oyees’ management level (Maon and Swaen, 2006). Through this initiative, colleagues at all levels can increase the awareness of corporate social responsibility, so as to achieve the purpose of incentives. Key learning Corporate social responsibility is developed since the 1990s, which is a turning point of corporate social responsibility. IKEA is also in accordance with some of the pressure in this community to adjust its operating way on the requirements of the enterprise. IKEA s business is constructed in the price and quality environment and work environment (Maon et al., 2007). With regard to a supply and demand model of corporate social responsibility (CSR), it’s assumed that a firm’s size, level of diversification, research and development (RD), advertising, government sales, consumer income, labour market conditions, and stage in the industry life cycle could estimate the firm’s standard of CSR (McWilliams and Siegel, 2001). IKEA as a large multinational Corporation with 26 distribution centres and emphasis on RD andShow MoreRelatedIkea s Global Sourcing Challenge Indian Rugs And Child Labor1532 Words   |  7 PagesIKEA’S GLOBAL SOURCING CHALLENGE INDIAN RUGS A ND CHILD LABOR In 1995, Marianne Barner, IKEA’s manager for carpets, faced a difficult situation when one of their Indian rug supplier apparently was involved with the use of child labor in the manufacture of its products for IKEA. Even though they had a contract where IKEA explicitly forbid the use of child labor. These Allegations generated mixed opinion regarding the future of all the Indian carpet suppliers and the company was studying the futureRead MoreIkea’s Global Sourcing Challenge: Indian Rugs and Child Labor1548 Words   |  7 PagesIKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor Ethics in Business and Society Professor Stephen Griffith Otis West Tuesday, November 6, 2012 IKEA is the world’s largest furniture store that offers well-designed, functional home furnishing products at low prices. The store offers home furnishings to meet the needs of everyone. The company vision is to create a better everyday life for the many people. Ikea is able to back their vision with their products and prices. In additionalRead MoreCase Study of Ikea1445 Words   |  6 PagesCase Study of IKEA’s Global Sourcing Challenge In 1995, IKEA met a problem that its main supplier, Indian rugs, used the child labor to produce products, although they had signed an attachment of the contract to ban employing child labor. In addition, a German documentary maker was about to broadcast the problem of child labor on German television and also invited an employee from IKEA to have a live discussion in the TV program. Marianne Barner, the leader of IKEA, must find a great solutionRead MoreIkea Global Sourcing Challenge2551 Words   |  11 PagesIKEAs GLOBAL SOURCING CHALLENGE EXECUTIVE SUMMARY The IKEA Group, one of the world’s top furniture retailers, has emerged as the fastest-growing furniture retailer in the US. Its unique business strategy has given it its strengths for its success today. However, like all strategies, IKEA’s strategy has its own flaws that can pose as weaknesses. IKEA also has a lot of opportunities in the marketplace such as expansions of their company and threats such as competitors in the same industryRead MoreIkeas Global Sourcing Challenge1241 Words   |  5 PagesIKEA’s Global Sourcing Challenge IKEA, one of the world’s largest specialized furniture retailers, has been presented with a large issue within their operations. In 1995, a German TV station released an investigative report which exposed one of the suppliers for IKEA rugs for exploiting child labor in their factory. A recent addendum was signed by all IKEA suppliers which forbid the use of child labor (Bartlett amp; Sjoman, p. 1, 2006), so this incident has called the company to make an actionRead MoreIkea Children Labour6495 Words   |  26 Pages2006 CHRISTOPHER A. BARTLETT VINCENT DESSAIN ANDERS SJÃâ€"MAN IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A) In May 1995, Marianne Barner faced a tough decision. After just two years with IKEA, the world’s largest furniture retailer, and less than a year into her job as business area manager for carpets, she was faced with the decision of cutting off one of the company’s major suppliers of Indian rugs. While such a move would disrupt supply and affect sales, she found the reasonsRead MoreIkea’s Global Sourcing Challenge: Indian Rugs and Child Labor2782 Words   |  12 PagesIKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor Jordan de Jong Case Study _ The case I will analyze and discuss in this case study is â€Å"IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor†. I will begin with the vision, values, and strategy of IKEA and an internal analysis ofRead MoreEthical Issue Ikea2982 Words   |  12 PagesIntroduction of IKEA IKEA is a Swedish company producing home furnishing products at low prices to make them affordable to people. The company was founded in 1943 by Ingvar Kamprad and kept growing tremendously from 2 stores in 1964 to 114 stores in 1994 to 285 stores in 2008 in 36 countries with an additional 26 stores to be opened in 2009 welcoming a total of 522 million visitors. IKEA’s success story is the result of its founders opening store in 1951 to allow customers to inspect products beforeRead MoreIkeas Global Sourcing Challenge: Indian Rugs Essay1242 Words   |  5 Pagescase â€Å"IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A)† is about IKEA’s development from a backyard company to one of the world’s largest furniture retailers, which has to deal with the issues of child labor and how they should behave considering economical issues and the company’s policy! Conclusions made in this study are only based on the facts given in the case, considering pros and cons of an action. How should Marianne Barner respond to the invitation for IKEA to have a representativeRead MoreIkeas Global Sourcing Challenge2533 Words   |  11 PagesIKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A) Case Synopsis IKEA is a â€Å"privately held, international home products company that designs and sells ready-to-assemble furniture such as beds and desks, appliances and home accessories† (www.worldisyouroyster.com). The company was established in 1943 by Ingvar Kamprad in Sweden when he was just 17 years old. Kamprad himself, who still owns the private company, is rumored to be the world’s richest man. IKEA is currently the world

Internationalization Strategies Free Essays

string(87) " largest South Korean conglomerates operating across a wide range of business sectors\." Introduction In early days of civilization, people in most of the cultures and societies across the globe use to live in families, growing their own food, making their own clothes and supporting their lives through various other self made goods. Then the population of the world increased, and production and distribution of goods began to improve. This advanced the dependence of people on others for making some products. We will write a custom essay sample on Internationalization Strategies or any similar topic only for you Order Now This dependence intensified further with people becoming specialized in producing certain products and doing certain works. This specialization and dependence formed the basics of the modern business system. Like people within a society who are dependent upon each other for some products and services, countries are dependent upon each other too. Countries across the globe have different specialization over others in producing certain products and services. Countries are either innately specialized in some areas due to their natural resources and geographical features, or achieve their specialization over some time with due diligence in some areas. However, despite achieving a certain level of economic independence, even some of the most developed countries in the world depend upon other nations for some products or services. For instance, most of the coffee consumed in US comes from Brazil, while Japan depends on other nations for most of its oil. The business activities that facili tate the exchange of products and services among different nations is referred to as International Business. The growth of international business (internationalization or global business) reflects the phenomenon of globalization. While a wide range of academic literature indicates that internationalization and globalization is advantageous, expansion of businesses across countries involves considerable challenges and difficulties (e.g. Kacker, 1986). These challenges and difficulties underscore the importance of an international business strategy specifically aimed at determining a favourable international market for expansion, choosing a viable market entry strategy, and formulating relevant business level strategies to steer the expanded business towards success. This essay evaluates the international business strategy of two retail giants Wal-Mart and Tesco. Considering the enormity of the subject of international business, this essay narrows its focus towards evaluating the international business strategy of these firms in context of South Korea. Global Retail Food Environment The global retail food industry has been enjoying a steady growth over the past few decades. It was estimated to be worth USD2, 000 billion by the year 2010 (Euromonitor, 2009). The retail food industry is mainly dominated by large hypermarket and supermarket retail chains with smaller businesses such as luxury foods retailers, and independent convenient stores having a very small market share (Euromonitor, 2009). It creates a favourable situation for some of the world’s biggest supermarket chains such as Carrefour, Wal-mart and Tesco, to pursue international expansion. The global retail food industry is increasingly being consolidated by some of these major market players. Wal-Mart and Tesco, both having considerable resources at their disposal, are in a sound position to expand their businesses to favourable overseas market. Among many emerging markets, South Korea is certainly a big opportunity for any such supermarket chain. FDI Strategy of the Host Market The foremost objective of an international business strategy of a company is to assess the favourability of the foreign direct investment strategy of a new market. Foreign companies usually take on resource and capital intensive projects of large scale and are thus concerned with the level of support afforded to them by host governments. The host governments, on the other hand look for benefits of the spill over effect of technological and capital influx brought by the foreign firms (Conyon et al., 1999). Historically, the economy of South Korea has been a closed one especially in terms of retail operations. It was not until 1988, that foreign ownership of a retail establishment was allowed in South Korea. In 1988, the government of South Korea initiated a number of 3-year open-up plans aiming to enhance the efficiency and productivity of the local retail sector. The foremost plan which was implemented in 1989 allowed for the establishment of subsidiaries of foreign companies in South Korea. The second plan of the open-up policy enabled foreign retailers to set up stores within a limited size of 1,000 sq m (Retail 360, 2012). The final plan of the open-up initiative further relaxed the number and size of retail outlets that could be owned by foreign companies. In 1993, foreign companies were allowed to open up as many as 20 retail stores with a maximum size of 3,000 sq m. However, it was in 1996, that the FDI policy for the South Korean industry was completely liberalized allowing foreign supermarket giants to expand their international business operations in earnest. Sensing this opportunity, both Wal-Mart and Tesco entered the South Korean market almost at the same time; with both adopting different international business strategies (Retail 360, 2012). Market Entry Strategy Upon liberalization of the South Korean market, Wal-Mart attempted to make its way into the new market by building its own stores in remote urban areas of the South Korean cities where real estate prices were relatively lower than the main commercial centres. It was a clear replication of Wal-Mart’s US strategy of smaller-city store build-up. Wal-Mart succeeded in opening up a total of only 16 stores in all of South Korea; with having only one store in the Seoul metropolitan area. With this, the company failed to achieve the economies of scale. Wal-Mart anticipated that the Korean consumers, like those in the US, would drive to its remotely located stores for bulk price shopping. However, this location strategy proved to be contrary to the South Korean consumers’ lifestyle and shopping behaviours. Korean consumers preferred buying smaller units of goods more frequently and thus favoured accessibility to a store more over bulk price buying (Retail 360, 2012). Unlike Wal-Mart, Tesco took a more gradual path of market entry. Tesco entered the South Korean market through a joint venture with Samsung. Samsung is one of the largest South Korean conglomerates operating across a wide range of business sectors. You read "Internationalization Strategies" in category "Essay examples" With this market entry strategy, Tesco benefited from Samsung’s knowledge and know-how of local market and consumers behaviours whilst limiting its focus upon transferring its core retailing skills to the South Korean market. Tesco did not try to replicate its British version of retail business in the new market. Tesco gradually increased its stake in its joint venture until it acquired 95% of its stake (Retail 360, 2012). Firm Size and Internationalization Management literature prescribes four fundamental business strategies and their coinciding business models for firm operating internationally. These are: Multinational organizational strategy: It resembles a ‘decentralized federation’, wherein each of the foreign subsidiaries of an organization can adapt the company’s products and services and even business strategies, to meet the local requirements of its international destinations. The head offices of those companies adhering to this strategy presumably maintain only financial controls over its subsidiaries. International organizational strategy: This type of strategy resembles a ‘coordinated federation’ wherein the head office of a business is determined to transfer its knowledge, expertise and technology to its subsidiaries in new markets. The subsidiaries is foreign markets depend upon the headquarters for developing products and services, processes and ideas; although some tasks and authorities are decentralized. The subsidiaries enjoy some autonomy regarding policies and business level strategies. Global organizational strategy: This strategy essentially forms a ‘central hub’ wherein the centre has a stringent focus upon marketing standardized product and services across the globe through a predefined unified strategy. The head office observes a tight control over all the business activities with foreign subsidiaries being strictly confined to the implementation of the policies and procedures of the head office. Their task remains to provide only sales and service. Transnational organizational model: It resembles an ‘integrated network’ wherein ideas and information flows both ways from the head office to the subsidiary and vice versa. This strategy is prevalent in knowledge organizations and information technology firms and knowledge organizations. (Kairimi and Konsynski, 1991; Hill, 2003; Johnson and Turner, 2003) Considering the above theory, business strategy of Wal-Mart in South Korea can be described as being of ‘global organizational strategy’. Wal-Mart, which entered South Korea in 1996, disappointed South Korean customers by sticking to its Western marketing strategies. The company insisted upon focusing more on dry goods, ranging from clothing to electronics, just like its American stores, while its rivals focused more on selling food and beverages which according to experts attracts South Korean customers to hypermarkets/supermarkets. Moreover, Wal-Mart stores followed their traditional store design, making them look too simpler in appearance than its local rivals. Its store simplicity was further marked by its display strategy in wherein it sold its products in boxes, while most of its rivals built eye-catching display with clerks appealing to customers over megaphones and through hand clapping like a traditional street market (Sang-Hun, 2006 a). For instance, Wal-Mart d isplayed fish wrapped in cellophane, disregarding the South Korean custom of buying fresh fish (alive in tanks). Furthermore, by applying US standards to its stores in South Korea, the company failed to alleviate various difficulties faced by its customers. For instance, adhering to the US standards, the height of the shelves at Wal-Mart stores was too high for short South Koreans (Sang-Hun, 2006 b). Meanwhile, the business strategy of Tesco, can be described as that of a ‘multinational organization’. The South Korean subsidiary of Tesco operates with complete autonomy in terms of its business strategy and approach, following an organizational structure of a decentralized federation. This approach is evident from the company’s articulated ‘Homeplus’ stores, which have relatively different features than those of Tesco’s home country stores. The chairperson of the company’s South Korean division appears to formulate and execute its business strategy with a stern local perspective; a key constituent for the business’s success in South Korea. The most critical challenge for any company undergoing international expansion is to take into account the cultural differences between its home and foreign market (see Hofstede, 1991, 2001).From the case of Wal-Mart in South Korea, it is evident that cultural habits and preferences play the most crucial role in determining the success or failure of a retail food business. In order to overcome this challenge, Tesco adopted a strategy to run its South Korean business in a strictly localized way. Pertaining to this strategy, the company employs a large number of local staff, even at its top most managerial positions. For instance, in 2008, out of its 23000 employees, only four of them were British; one of them being the regional director while the others were positioned at middle management (Davey, 2009). This strategy has proved to be very successful of Tesco. According to Martin Uden, the British ambassador to South Korea, the success of Tesco in South Korea is attributed to its stra tegy to run the business like a local one. He states that Tesco is just using its general retailing skills to run the company with a Korean approach (Davey, 2009). The company’s Homeplus format of stores is another reflection of its multinational business strategy. The Homeplus format stores are regarded as highly popular cultural centres as they facilitate community education within the premises of the hypermarkets. Overall, Homeplus stores in South Korea have more than 650 classes being conducted simultaneously to a school term in numerous subjects such as English and Chinese, Cookery and Ballet among others. In South Korea, sending children to private tuitions after school hours (called as ‘hakwons’) is a common practice. The provision of community education where children attend regular classes while their mothers occasionally accompany them for shopping is a highly successful approach. Apart from this, the Homeplus format offer sitting, resting and play areas for children. Moreover, instant snacks such as noodles and others are served at the corners of various aisles throughout the stores (Davey, 2009). South Koreans value the street market shopping experience along with the convenience of a hypermarket offered by Homeplus store. Such customer-focused approach which has been very popular in South Korea is achieved by the company’s overall international business strategy. Conclusion The opening up of South Korean market and its favourable FDI policies paved way for the international expansion of large multinational retail chains within the South Korean market. Wal-Mart chose to enter the new market with complete ownership of its subsidiaries, anticipating its success based on its homeland experience. Meanwhile, Tesco treaded the new water more carefully by choosing to enter the new market through joint venture, and gradually increasing its stake in the business. The international business strategy of Wal-Mart and Tesco differed starkly in regard to the South Korean market, with the former adopting a standardized approach, adhering to a global organizational strategy while the latter following a customized approach for the expansion in South Korea, adhering to a multinational business strategy. The standardized approach adopted by Wal-Mart failed to deliver the level of success desired by the company, leading to its ultimate exit from the South Korean market in the year 2006. Tesco, on the other hand, continued to progress and succeed in its South Korean market, acquiring a 95% stake in its joint venture with Samsung. It can be concluded that when there are stark cultural differences within the home country and the new target market, a multinational firm should best adhere to a multinational organizational strategy rather than adhering to a standard global strategy for international business. This is not to say that this perspective is the si ngle factor behind the success and failure of Tesco and Wal-Mart in South Korea. Various other factors usually intertwine to determine the success or failure of a firm in an international market. However, this perspective can be considered as the leading cause behind it. References Conyon, S. Girma, M. Thompson, S., Wright P. (1999). The Impact of Foreign Acquisition on Wages and Productivity in the UK; Centre for Research on Globalisation and Labour Markets, School of Economics, University of Nottingham Czinkota, M., Ronkainen, I. and Moffett., H (2005) â€Å"International Business†, Wiley. Davey, J. (2009) Tesco enjoys a Korea break with Homeplus. The Sunday Time {online} http://www.thesundaytimes.co.uk/sto/business/article183991.ece (cited on 28th December, 2012) Euromonitor, (2009)Euromonitor International {online} http://www.euromonitor.com/ (cite on 9th August, 2012) Hill, (2003) in Lan, C. (2005) â€Å"Global Information Society: Operating Information Systems In A Dynamic Global Business Environment†, Idea Group Inc Johnson, D. and Turner, C. (2003), â€Å"International Business: themes and issues in the modern global economy†, Routledge Kairimi and Konsynski (1991) in Lan, C. (2005) â€Å"Global Information Society: Operating Information Systems In A Dynamic Global Business Environment†, Idea Group Inc Mckinsey Quarterly (2002) Taking Tesco global: David Reid, deputy chairman of Tesco, the United Kingdom’s largest grocer (2002), explains his international strategy. {online} http://www.mckinseyquarterly.com/Strategy/Globalization/Taking_Tesco_global_1221 (cited on 28th December, 2012) Retail 360, (2012) Korean retail therapy for foreign chains Tesco , Wal-mart and Carrefour International Retail Consultants {online} http://retail360uk.wordpress.com/2012/05/27/korean-retail-therapy-for-foreign-chains-tesco-wal-mart-and-carrefour/ (cited on 28th December, 2012) Sang-Hun, C. (2006 a) Wal-Mart quitting South Korea {online} http://www.nytimes.com/2006/05/23/business/worldbusiness/23shop.html?_r=0 (cited on 28th December, 2012) Sang-Hun, C. (2006 b) Wal-Mart quitting South Korea {online} http://www.nytimes.com/2006/05/22/business/worldbusiness/22iht-won.html?_r=0 (cited on 28th December, 2012) How to cite Internationalization Strategies, Essay examples

Accounting Software Packages of Fortescue-Free-Samples for Students

Question: Discuss about the Use of Accounting Software Packages in your Chosen Company. Answer: Introduction: The assignment studies the importance and application of accounting software in a Australian company. The paper considers Fortescue, the Australian metal company as the base of study. It is divided into two parts each divided into four subparts. The first part delves into the organisational structure, its software acquisition method, its sales process and control problems it face in operating the softwares. The second part deals with development of accounting software, its current market size, leading software companies and recommendations to them to help the customers acquire these software more easily. Organisation structure: Fortescue Metal Group follows a tall structure led by the CEO and the board of directors. that the organisation structure is led by the apex board chief executive officer, chairman of the board, lead director and four other directors. The second layer of management consists of the chief financial officer, corporate affairs and secretary, finance and secretary, director of business development, director corporate services, external relations, sales and marketing and operations. The second stratum of management reports directly to the chief financial officer. The third layer of management consists of group manager Fortescue people and group manager, health and safety. The second and the third line of management people are led by the chief executive officer (Fortescue Metals Group Ltd., 2017). Operational problems Fortescue can likely face due to its organisational structure: Fortescue Metal Group owing to its tall organisational structure of can face several operational problems like lack of dynamism in decision making and execution. Zakrzewska-Bielawska(2016) states that CEOs in the manufacturing companies perceive the impact of organisational structure and strategies on each while making decisions. Bridges and Bridges (2017) state that complex organisational structure prevents dynamic decision in manufacturing organisations which impedes fast operations. The next operational problem faced by Fortescue due to its complex and tall organisational structure is in the area of accounting. Wu(2013) states that the complex accounting processes of the manufacturing companies of two types, production activities consisting of transactions which are directly related to production of goods and non production expenses which refer to transactions committed towards supporting activities. Christopher(2016) states that manufacturing companies need to maintain and account for a large number of transactions relating to their complex supply chain management. This complex accounting procedure and vast expanse of business requires prompt decision making from the management and the CFO. However, the tall organisational structure of Fortescue and its bureaucratic layout impedes smooth decision making which often result in loss of business opportunities. This analysis shows that tall and complex organisational structure of Fortescue creates problems in smooth operations and decision making. Most likely system acquisition method: Fortescue uses Tax Monster as its accounting software which is a commercially available Enterprise Resource Planning(ERP) software (taxmonster.com.au 2017). The company is an iron ore mining and iron articles manufacturing company which engages in several types of transactions. The transactions are of two types, production related or productive expenditure and the non productive transaction which are not related to production activities. Laudon and Laudon (2016) state that ERP accounting software packages like Tax Monster help the manufacturing companies integrate their complex transactions pertaining to both the categories of flow of capital into and out of the organisations. Leon (2014) states that these software packages help in ERP planning of in manufacturing planning and helps the concerned departments integrate the accounting transactions and use them to form decisions like allocation of resources to areas of operations and production. A system flowchart of the sales procedures at Fortescue: The system flowchart shown below outlines the sales procedure followed at manufactirng companies like Fortescue. The sales process at Fortescue starts when clients place the purchase order(PO) stating the particulars and requirements like specifications of the product, expected characteristics in the finished product, quantity and so on. When the sales department acquires the orders and the Pos, it enters the particulars in the prescribed internal format and gets it approved by the clients. The contact agent then reviews the order and sees whether the terms of sale are according to the policies of the company, lawful and so on. If the contacts agent finds that the particulars of the order are accurate, the shipment department processes the order and the finished goods are shipped. If the orders are not according to the requirements, the agents requests approval from the management or the concerned person at Fortescue. If the authorised person approves the order, the contact agents to o approves it and the order is processed by the logistics departments for shipment. The accounts departments records the transactions in both these cases as sale of articles. If the authorised person does not approve the order, the agent cancels the order and it is not shipped. The sales department or the customer care department notifies the customer about the cancellation of orders from the side of Fortescue Figure 1. Figure showing sales processes (Source: Author) Control problem in the system and possible frauds in the system: Ismail and King (2014) states the manufacturing companies face certain control problems while using accounting software. The accounting softwares are very costly and require heavy investments in controlling and maintaining them. Tax Monsters charges around $500 for company tax returns filing using its software whereas book keeping services cost around $ 40. Thus, it is evident from the discussion that though the account software packages are designed to meet the varied accounting requirements of the big companies, the services the offered are charged spate which adds to the costs of the company to control, update and use them. According to Alrabghi and Tiwari (2015), the next control problem of accounting software is that they maintenance is very complex. The integrated accounting softwares are connected to other system softwares in the companies like HR software and admin software. Thus, upgradation of these accounting softwares lead to changes in the related softwares which makes controlling and maintenance extremely complex. Asllani and Naco (2014) state that the accounting software are susceptible to accounting frauds like inappropriate and exaggerated accounting entries. Thus the management of manufacturing companies like Fortescue cannot depend on the accounting results shown by these softwares which makes decisions making difficult. Biener, Eling and Wirfs (2015) supports the view of Asllani and Naco and points out to the biggest threats to accounting softwares and the companies using them, cyber security and data theft. They state that cyber security results in massive losses to companies like loss of crucial data which are interrelated, unauthorised accession into the companys financial data and so on. Thus, it can be inferred from the discussion that the three problems faced by the accounting software in companies are difficulty in maintenance, high expenditure, frauds and cyber threats. Development and adoption of the accounting software packages: Gereffi and Fernandez-Stark (2016) stated that development and accounting software packages led to integration of accounting works in the companies. The introduction of Turbo Cash in 1987 in South Africa which automated the system if preparing trial balance, balance sheet and income statement. Ryan(2017) states that around the same time IBM launched personal computers which made preparation of trial balance in form of spread sheets using Lotus 123 accounting software. IBM brought about the system of continuous upgradation by the companies using the accounting software packages. Taipaleenmki and Ikheimo (2013) points out that today companies adopt technology backed software packages which allow them to integrate all the activities in the company involving flows of financial capital like payment of salary and purchase of raw materials to form financial statements. Tayeh, Al-Jarrah and Tarhini(2015) point out that this adoption of technology based accounting software packages help the c ompanies to measure their standard of business excellent at any given point of time and facilitate formation of business strategies based on these results. Market size of accounting software packages: The account software package market size is growing at about a rate of 6 percent with the new accounting software packages being introduced. The growing demand of more integrated softwares which allow the companies to incorporate the financial transactions of all their departments is driving innovation and upgradation in the software package market(technavio.com 2017). The companies today are ready of invest in advanced softwares which can help the accounts departments to record transactions like loan applications, online sales, stock and commodity in hand and recruitment of human resources. Warren, Reeve and Duchac (2013) state that these integrated recording of diverse transactions help the management to forecast future requirements of materials, capital and human resorces. The accounting recordings are today are linked to the knowledge data bases of the companies and can be used by the authorised employees to make decisions. Ryan (2017) states that the accounting software market i s geographically segmented into markets like the American market, the Australian market, the Asian market and the European market. These markets are experiencing emergence of requirements of new types of accounting software to meet the business requirements of the companies in these markets. This growing need, technological advancement, continuous innovation and new accounting software packages are encouraging dynamic growth of the market of accounting software packages. The entry of multinational companies and their continuous innovation have led to the market of accounting software become very profitable and competitive. Leader in the accounting software package market and their competitive advantages: Oracle: Oracle manufactures Net Suit accounting software which integrates stock management, warehouse management, accounting and financial management. The software driven by advanced technology also facilitates customer management. These wide varieties of functions all integrated into one software is the main competitive advantage of Oracles Netsuit. The largest competitive advantage of Oracle which has made the company a leader in accounting software its software license and support services to the users(oracle.com 2017). Fishbowl Manufacturing: The Fishbowl is an Utah based inventory management software manufacturing company which manufactures the accounting software called Fishbowl Manufacturing. The software provides platform for business automation and electronic inventory management facilities. The competitive advantage of Fishbowl is that it is one of the largest inventory management softwares manufactured internationally. The software helps the companies to control their material requirement, forecast their material requirement in the future, manage office floor, customised inventory reporting and manufacturing process monitoring(fishbowlinventory.com 2017). The current gaps or challenges encountered by users and recommendations: Costly: The current gaps in the software packages are that they are very costly and requires huge continuous investment to install and update them. this high expenditure limit the small companies from installing accounting softwares which affects their accounting operations. Limited external integration: The second gap in the accounting software is that though they integrate the internal operations like inventory management and acquisition of assets with the company, they are not advanced to integrate the external financial transactions like withdrawal of money from the banks. This requires the companies to incorporate bank transactions separately the accounting statements which is very time consuming. Recommendations: The following recommendations can be made to the software companies to increase the utility of the software packages to the companies and customers using them: The software packages should be offered at more reasonable and low prices. This will help the customers to install and upgrade these packages at lower prices which will lead to save of capital. This lowering of the prices will encourage even the small companies to install accounting software. The accountings software should be advanced so that they are directly able to obtain data from important financial statements like bank statements and loan statements. This will help the companies using them maintain better financial control. Conclusion: It can be summed up that accounting software packages have revolutionised accounting in companies. They have led to integration of the various fields like inventory management, floor management and so on. However, the accounting software manufacturing companies should offer software at more affordable rates References: Alrabghi, A. and Tiwari, A., 2015. State of the art in simulation-based optimisation for maintenance systems.Computers Industrial Engineering,82, pp.167-182. Asllani, A. and Naco, M., 2014. Using Benfords Law for Fraud Detection in Accounting Practices.Journal of Social Science Studies,2(1), p.129. Biener, C., Eling, M. and Wirfs, J.H., 2015. Insurability of cyber risk: An empirical analysis.The Geneva Papers on Risk and Insurance Issues and Practice,40(1), pp.131-158. Bridges, W. and Bridges, S., 2017.Managing transitions: Making the most of change. Da Capo Press. Christopher, M., 2016.Logistics supply chain management. Pearson UK. Fortescue Metals Group Ltd. 2017. Executive Team. [online] Available at: https://fmgl.com.au/about-fortescue/executive-team/ [Accessed 21 Aug. 2017]. Gereffi, G. and Fernandez-Stark, K., 2016. Global value chain analysis: a primer. Global Business Accounting Software Market 2017-2021 | Market Research Reports - Industry Analysis Size Trends - Technavio. (2017). Technavio.com. Retrieved 21 August 2017, from https://www.technavio.com/report/global-enterprise-application-global-business-accounting-software-market-2017-2021 Gordon, E.A., Raedy, J.S. and Sannella, A.J., 2016.Intermediate Accounting. Pearson. Ismail, N.A. and King, M., 2014. Factors influencing the alignment of accounting information systems in small and medium sized Malaysian manufacturing firms.Journal of Information Systems and Small Business,1(1-2), pp.1-20. Laudon, K.C. and Laudon, J.P., 2016.Management information system. Pearson Education India. Leon, A., 2014.Enterprise resource planning. McGraw-Hill Education. Manufacturing Software. 2017. Fishbowlinventory.com. Retrieved 21 August 2017, from https://www.fishbowlinventory.com/solutions/manufacturing/ Online Tax Returns - From Only $49.95* - Ph1300 829 666 - Tax Monster Accountant - Professional Affordable Tax Agent CPA Accounting Firm - Australia Wide. (2017). Accountant Bookkeeper - Fortescue WA 6716 | Tax Monster. [online] Available at: https://taxmonster.com.au/accountant-tax-agents-bookkeeping-bookkeeper/Fortescue-6716/ [Accessed 21 Aug. 2017]. Oracle | Integrated Cloud Applications and Platform Services. (2017). Oracle.com. Retrieved 21 August 2017, from https://www.oracle.com/ Ryan, E. (2017). THE EVOLUTION OF ACCOUNTING SOFTWARE: PAST, PRESENT AND FUTURE GAA Accounting. Gaaaccounting.com. Retrieved 21 August 2017, from https://www.gaaaccounting.com/the-evolution-of-accounting-software-past-present-and-future/ Taipaleenmki, J. and Ikheimo, S., 2013. On the convergence of management accounting and financial accountingthe role of information technology in accounting change.International Journal of Accounting Information Systems,14(4), pp.321-348. Tayeh, M., Al-Jarrah, I.M. and Tarhini, A., 2015. Accounting vs. market-based measures of firm performance related to information technology investments. Warren, C.S., Reeve, J.M. and Duchac, J., 2013.Financial managerial accounting. Cengage Learning. Wu, J.Z., 2013. Inventory write-down prediction for semiconductor manufacturing considering inventory age, accounting principle, and product structure with real settings.Computers Industrial Engineering,65(1), pp.128-136. Zakrzewska-Bielawska, A., 2016. Perceived mutual impact of strategy and organizational structure: Findings from the high-technology enterprises.Journal of Management Organization,22(5), pp.599-622.