Strategic decisions of human resource management

Strategic decisions of human resource management Introduction The intention of this report is to analyse and evaluate communication systems which impact upon strategic decisions with reference to modern-day views of human resource management within a medium sized contracting firm. Taking a look at relevant theorists views and whether they would fit in to the medium sized contracting firm model The following areas are to be analysed and considered Types of communication systems: How these impact on strategic decisions Strategic resource management overview Theorists relevant to Human resource management (HRM) How these impact on a medium contracting firm Reference is to be made specifically to theorists models (e.g., Guests 1997 model and Legge 1995) how they compare and weather they fit into the modern HR model Communication methods See Appendix 1. Within the modern working environment the problem for management and employees alike is how to select the most effective method of communicating with other individuals and groups many factors can help to determine this selection: Formal or informal content of message; Speed and delivery and response; Individual or small group or large group as receiver; Cost of communications; Availability of information and communication technology Communication systems There are many communication systems which are relied on within the modern working environment but are we sure that we mean the telephone, meetings, computer or even written these themselves have become mobile with the introduction of the mobile phone and lap top linked to a wifi network constantly giving access to internet and emails. These are the tools for communication. Communication can be broadly classified as verbal communication and non-verbal communication. Verbal communication includes written and oral communication Non-verbal communication includes body language, facial expressions and visuals diagrams Verbal Communication Verbal communication can be further divided into written and oral communication. The oral communication refers to the spoken words. Oral communication can either be face-to-face communication or a conversation over the phone. The other type of verbal communication is written communication. Written communication can be by email or written. The effectiveness of written communication depends on the style of writing, vocabulary used, grammar, clarity and precision of language Nonverbal Communication Non-verbal communication includes overall body language of the person who is speaking, which includes body posture, hand gestures, and overall body movements. The facial expressions also play a major part since facial expressions say a lot. Non verbal communication can also be in the form of pictorial representations, signboards, or even photographs, sketches and paintings Communication is a process that involves exchange of information, thoughts, ideas and emotions. Its important that the delivery of communication is received and under stood by all subordinates; this will then allow communications to play an active role within strategic decisions. Would this be relevant within a medium sized contracting firm? Most would find it difficult to operate without effective communication. Communication can take various forms as described above but all forms involve the transfer of information from one party to the other. In order for the transfer of information to qualify as communication, the recipient must understand the information conveyed to them. If the recipient does not understand the meaning of the information conveyed to them, communication has not taken place. Communication is the life source of all organisations because organisations involve people. People cannot interact with each other without communication. Internal/Organisational Communication Communication that takes place within an organisation, in addition to the usual face to face, telephone, fax or mail; modern organisations will more often than not use technology to communicate internally. Technology may be used for e-mails or a linked internal communication system such as the intranet which is an internet system designed solely for use by those working within the organisation. External communications conversely external communication is communication between the organisation and those outside the organisation. Modern organisations may design technological systems so that they can communicate with customers and undertake e-Commerce. Alternatively they communicate with other businesses through the internet or similar systems and undertake e-Business. Upward and Downward communication Downward communication is communication created by directors and managers and passed down the hierarchy of workers in the organisation. In traditional organisations this is the preferred method of communication i.e. Managers decide what the systems, rules and procedures will be and then they pass these down to employees they manage and supervise. Downward Communication can increase efficiency by synchronising organisational procedures and can ensure that everybody is working towards the same overall aims and objectives. Types of downward communication include job descriptions, appraisals/evaluations, organisational policy, and organisational systems Effective communication is the foundation for effectiveness (McNamara) experts on organisations; management and leadership avow there cant be too much communication. Leaders and managers have realised that there is a need to effectively convey and receive information, To reiterate (McNamara Carter) subordinates need to be given proper communication from managers, as this is believed to lead to an increase in absenteeism amongst workers thus effecting productivity, there should be two-way communication in an organisation. Its enviable that the Manager should have personal contact with his subordinates. He should clearly communicate goals and policies of the organization to his subordinates and should get feedback on these goals and policies. Feedback plays a very important role in the communication process. It enables us to evaluate the effectiveness of our message. Giving the subordinates chance to provide feedback is important for maintaining an open communication within the organisation. The manager must create an environment that encourages feedback Performance appraisal Performance appraisals the process of obtaining, analysing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improvingthe actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does andencourage employee communications about job-related and professional matters. (Harris, F 2006)Forms of communication include coaching, counselling, training and feedback on job performance. Strategic Human resource management What is strategic human resource management? Strategic human resource management (SHRM) could be defined as a process which is constantly evolving within many organisations, and should be constantly reviewed to suite employees and employers needs. Its definition and relationships with other aspects of business planning and strategy is not conclusive and opinion varies between many different theorists Theorists views Strategic HRM is the key to improved business performance within which there is comprehensive coverage of the various definitions and approaches to HRM, strategy and strategic HRM Armstrong, M and Baron, A. (2002) Is this statement a true reflection on what is believed to be the contemporary views of human resource management? Strategic HRM is regarded as a general approach to the strategic management of human resources in harmony with the intentions of the organisation on the future direction it wants to take. Strategic HRM is concerned with longer-term people issues and macro-concerns about structure, quality, culture, values, commitment and matching resources to future need. Boxall and Purcell argue that strategic HRM is concerned with explaining how HRM influences organisational performance. They also point out that strategy is not the same as strategic plans. Strategic planning is the formal process that takes place, usually in larger organisations, defining how things will be done, Purcell, J. (2003) To simplify these statements Strategic HRM is based on HRM principles incorporating the concept of strategy. So if HRM is a rational approach to the management of people, strategic HRM now implies that that is done in a planned way. Individuals, who are highly skilled, highly motivated and have the opportunity to participate within the organization by being given tasks to undertake. However, this will only feed through into higher levels of organisational performance if these individuals have positive management relationships with their superiors in a supportive environment with strong values. All these factors will support the willingness of individuals to perform above the minimum. It also could be said that the case is made for building the worker into the analysis of HRM, on the one hand, by incorporating worker attitudes and behaviour in the study of the HRM-performance relationship, and on the other, by paying serious attention to the association between HRM and worker-related outcomes. Evidence is presented to suggest that worker attitudes and behaviour mediate the HRM-performance relationship and that certain HR practices are associated with higher work and life satisfaction. (Guest, D 1997) Models on Strategic human resource management Human resource policies and practices have been linked with strategic objectives of many organisations. A number of British academics have made major contributions to the concept of HRM and their work is summarized below. Guest, D (1991) has taken the Harvard model and developed it further by defining four policy goals which he believes can be used as testable propositions: 1. Strategic integration: the ability of the organisation to integrate HRM issues into its strategic plans, ensure that the various aspects of HRM cohere and provide for line managers to incorporate an HRM perspective into their decision-making. 2. High commitment: A behavioural commitment to pursue agreed goals and attitudinal commitment reflected in a strong identification with the enterprise. Guest (1989) believes that the driving force behind HRM is the pursuit of competitive advantage in the market-place through provision of high-quality goods and services, through competitive pricing linked to high productivity and through the capacity swiftly to innovate and manage change in response to changes in the market-place or to breakthroughs in research and development. Legge, K (1989) considers that the common themes of typical definitions of HRM are that: Human resource policies should be integrated with strategic business planning and used to reinforce an appropriate (or change an inappropriate) organizational culture, that human resources are valuable and a source of competitive advantage, that they may be tapped most effectively by mutually consistent policies that promote commitment and which, as a consequence, foster a willingness in employees to act flexibly in the interests of the ‘adaptive organisations pursuit of excellence Summary Overall a medium sized contracting firm needs strategic systems in place especially taking into account the current economic climate, situations may arise where downsizing of the company and redundancies that may be prevalent due to the expected down turn in work load. At times of high unemployment, workers are thought to be concerned about losing their jobs and hence more conscientious and tolerant of strict management they become, its important to maintain communication in this situation. As states its important in difficult times for employees to become more flexible and foster willingness (Legge, K 1995) Other areas where lack of communication creates animosity between clients and contracting firm its proven that advising client of their needs and subsequently bring the projects successfully to implementation will help secure a good working relationship. Added values such as back up service of experienced staff and well qualified staff in all the requested areas of the construction programme this fits in with Guests model of giving high-quality goods and services, through competitive pricing linked to high productivity. (Guest, D 1997) If a business has highly motivated team then success will follow, this has to be lead from the top down and strategic integration from HR is paramount in the delivery of success as described in guests theory K, Legge at first contradicts Guests theory with whats known as a hard model theory by stating that employees are a resource just as any other business resource. Thus, human resource should match business needs and help achieve objectives. Management may monitor their performances for recognition and rewards. Furthermore, organizations will always try to acquire them as cheaply as possible, and exploit them to maximise profits. This model may sound less humanistic but the objective of achieving humanism should not compromise the objectives of organisations (Legge 1995). Theorists then began to look at other types of models and agreed that a softer approach was more fitting in certain current climates Harvard Business School developed soft or developmental humanism model, also tak es into consideration integration critical for the development of business strategies. At the same time, it also emphasises on treating people as valued assets. They should be treated as human capital, which is fundamentally different from other business resources. The soft model encourages developing employees so that they become proactive in organizational development and progress (Legge 1995). Many authors question the underlying practical applications of HRM models. Similar concerns are raised about SHRM. Its managerial focus, strategic perspectives and ‘realities‘ of HR practice have been questioned by several writers (Legge 1995; Guest 1997). SHRM is certainly concerned primarily with contributing to the ‘bottom line success of an organisation, which may sometimes involve a unitarist approach to the management of employees. SHRM may also infer a ‘hard HRM focus, which does not sit comfortably with some authors. However, as Legge (1995) points out, †˜If HRM, in either its ‘hard or ‘soft guises, involves the reassertion of managerial prerogative over the labour process, the strategies of flexibility reflect and constitute a path to this, employees as both resourceful humans and human resources Conclusion The above essay has analysed and evaluated various literature of human resource management, strategy and the links between these elements. While there is considerable discussion in relation to organisations using HRM strategically with a view to enhancing their organisation performance the actual implementation seems variable. The review of the literature also suggests there is a multi layer framework in which human resource management is located. (Guest, D. 2002) The relationship between organisations and workers is increasingly secured through different forms of involvement, ranging from an alienative to a moral involvement and from compliance to commitment as the basis for the ongoing attachment. Relationship and the interaction between the worker and employer have focused attention on outcomes. These outcomes can be perceived in terms of whether they are processes, procedures or practices, but at another they can be seen to be a mechanism for securing the objectives (Manning K 2005) Bibliography Books Bratton, J Gold, J (2003), Human resource management theory Practice 3rd edition, New York. Chaffee, E (1985) ‘Three models of strategy Academy of Management Review, London. Foot, M Hook, C. (2005), Introducing Human resource management 4th edition, London Harris, F McCaffer. (2006), Modern Construction Management sixth Edition, Blackwell Publishing, Oxford Price, A (2003), Human resource management in a business context 3rd edition, London Purcell, J. (2003), Strategy and human resource management, London. Mintzberg, H. (1994), The Rise and Fall of Strategic Planning, Prentice-Hall. Mintzberg, H., Ahlstrand, B. and Lampel, J. (1998), Strategy Safari: A guided tour through the wilds of strategic management, The Free Press. Whittington, R. (2000), What is Strategy And Does It Matter? 2nd edition Thomson Learning. Manning, Dr. K (2005), Strategic Human Resource Management and Performance. Internet McNamara, C 1997 (http://managementmrktng/org) accessed 10th Dec 09 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=347150 accessed 5th Jan 10 http://www.business.vu.edu.au/Mgt/working_papers/2005/wp6_2005_worland_manning. Accessed 5th Jan 2010 Journal articles Guest, D. E. 1997, ‘Human Resource Management and Performance: A Review and Research Agenda, International Journal of Human Resource Management, vol. 8, no. 3, pp. 263-276. Guest, D. 2002, ‘Human Resource Management, Corporate Performance and Employee-Well-Being: Building the Worker into HRM, the Journal of Industrial Relations, vol. 44, no. 3. pp. 335-358. Guest, D. E., Conway, N. Dewe, P. 2004, ‘Using Sequential Tree Analysis to Search for ‘Bundles of HR Practices, Human Resource Management Journal, vol. 14, no. 1, pp. 79-96. Guest, D. E. Michie, J. Conway, N. Sheehan, M. 2003, ‘Human Resource Management and Corporate Performance in the UK, British Journal of Industrial Relations, vol.41, no. 2, pp. 291-314. Reilly, P. (2008) Strategic HR? Ask yourself the questions.HR Director. No 44, February. Richards, J. (2007) Aligning HR with the business: two steps forward, one step back. IRS Employment Review. No 866 March.

Macbeth :: essays research papers

How do the witches create an atmosphere of nightmare And evil in ‘Macbeth’? The play ‘Macbeth’ was written in the early seventeenth century, in a time when the English people believed very strongly in the existence of witches. A range of powers were certified to these evil beings, including the ability to see into the future, control the weather, fly and become invisible at will and communicate with the devil. The witches were believed to enjoy making human beings suffer, by causing livestock to get ill and die, for example. From the outset of this play, when three witches appear on stage, the contemporary audiences would have anticipated a plot that demonstrated just how evil such creatures could be. In Act 1 Scene 1 Shakespeare introduces the witches immediately and this sets the tone for the rest of the play, it sets a mood of evil and supernatural influences. In this scene the witches meet close to the battlefield, this associates them with destruction and death. The first impressions we get from this scene is that there is aggressive weather which reflects their tendencies and their presence causes chaos in nature, also darkness links the witches with evil, two thirds of the play is set in the darkness. An absence of light suggests an absence of God and he is associated with light and goodness. The witches speak in rhyming couplets â€Å"When shall we three meet again? In thunder, lightening or in rain?† Speaking in rhyming couplets gives the impression of chanting or a spell being cast. Their control over the weather is alluded to as they discuss what it should be like the next time they meet. The witches refer to the current battle as a ‘hurly-burly’. Bu t really this was a battle of horrific proportions that was to decide the fate of an entire country, resulting in many deaths. The witches’ description of this as a ‘hurly-burly’ suggests that they are dismissive of it, comparing it more to a childish scuffle in a playground. This shows how contemptuous they are to the affairs if man and their lack of concern at such human carnage and suffering. The witches know when the battle will be over suggesting that they may have some influence on this and reinforcing the idea that they can see into the future. They discuss their plan to meet with Macbeth, an intention that convinces the audience they mean to cause him harm.

Nature in Sons and Lovers by David Herbert Lawrence Essay

In his introduction to The Letters of D. H. Lawrence, (Aldous Huxley, 1932) declared that Lawrence was ‘above all a great literary artist†¦one of the greatest English writers of any time. ’ Born in Eastwood near Nottingham, England on the 11th of September, 1885, D. H. Lawrence wrote novels that presented the dehumanizing effect of industrial culture and preached a glorified union with nature along with its corollary, sexual fulfilment. His experience growing up in a coal-mining family provided much of the inspiration for Sons and Lovers, his third novel, also considered his ‘crowning achievement’ (Qamar Naheed, 1998). Written in 1913, it is considered a pioneering work for its realism, vivid characterisation, treatment of sex complications and faultless control over tone and narrative method. Sons and Lovers is referred to as a Kunstlerroman (a version of the Bildungsroman), which is a novel charting the growth and development of an artist. The novel contains many autobiographical details, leading Mary Freeman (1955) to define Lawrence’s ‘most pervasive aim’ as the attempt to link experiences in his writing; she declares Sons and Lovers as the starting point from which Lawrence ‘moved towards more complex speculations’. Undoubtedly Lawrence used his own experiences very fully in the novel: his parents’ relationship, attitudes and personalities are mirrored in that of Morel’s. He remarked in a letter, ‘one sheds one’s sickness in books’ and Sons and Lovers is a way of his coming to terms with those formative experiences which made him the man he was (Jenny Weatherburn, 2001). Lawrence was an acute observer of the natural world who took great joy from it (Weatherburn, 2001) and the novel reveals a great preoccupation with nature. One of the important artistic features in Sons and Lovers is the symbolic meanings associated with nature. Lawrence applies the symbolism of nature to reveal Paul Morel’s complicated relationships with the three women in his life – Mrs. Morel, Miriam and Clara. These characters bond deeply in nature and Lawrence uses nature, and specifically flowers throughout the novel to symbolize these deep connections. Nature is used as a central symbol throughout Sons and Lovers and it is intricately linked to Lawrence’s presentation of Paul’s female relationships. Lawrence’s use of landscapes and nature images in Sons and Lovers directly contributes to the development of Paul’s relationship with his mother, Mrs. Morel. For Mrs. Morel, the garden proves to be a place of poetry, meditation and a means of escape from the ugly reality of her life. At the end of Chapter 1 when Mr. Morel, in a fit of rage and drunkenness, locks Mrs. Morel outside in the gardens to demonstrate his power in the household, the pregnant Mrs. Morel wanders into the garden and succumbs to ‘a kind of swoon’ – ‘her self melted out like scent’ – and the child too melted with her in the mixing-pot of moonlight. Her stillness in the garden where she contemplates the flowers and finds peace in their perfume highly contrasts with the noisy restlessness of her husband – ‘Mrs. Morel gasped slightly in fear. She touched the big, pallid flowers on their petals, then shivered. They seemed to be stretching in the moonlight. ’ (SL Page 31. ) Here Lawrence uses pathetic fallacy as the garden mirrors her emotions and she seeks refuge and comfort among her flowers. According to Stefania Michelucci, 2002; ‘In this nocturnal episode, the garden also represents a threshold from which she establishes a relationship with the unknown, with forces of nature which intoxicate and disturb at the same time. ’ (Page 38) Here the lilies in full bloom are symbolizing Mrs. Morel’s young exuberant life, while the pollen is breeding the new life. She and the embryo immerse and bond in the atmosphere all in a lethargic sleep; from the onset Lawrence uses flowers to reveal Paul’s and Mrs. Morel’s unordinary relationship. Lawrence was aware of Freud’s theory and Sons and Lovers uses nature to underscore the Oedipus complex present in Paul’s relationship with his mother. Paul is hopelessly devoted to his mother, and nature is used to reveal the love that often borders on romantic desire. Paul was born when she no longer loved her husband, and did not want to have this child. Ms. Morel decides to love this child well, as compensation for bringing him in to a loveless world. Nature, specifically flowers, connects the two, as Paul shows love by giving flowers to his mother from as early as infancy. Whenever Paul brings her flowers the mood is gay, lively, warm or poignant. In addition, Lawrence presents scenes that go beyond the bounds of conventional mother-son love: as the two spend a day in the country together at the Leivers’, the beauty and sensuality of the countryside are reflected in their relationship – ‘Then they went out into the wood that was flooded with bluebells, while funny forget-me-nots were in the paths. The mother and son were in ecstasy together’. (SL Page 145) Throughout the duration of this isit to the countryside, the beauty of nature entrances mother and son; so much in fact, that they both insinuate that their feelings of happiness can be attributed to this intimate, countryside visit. Upon leaving ‘his heart was full of happiness till it hurt. His mother had to chatter because she, too, wanted to cry with happiness’. (SL Page 148) The description of their unordinary relationship is replete with sensual descriptions of nature, of budding flowers and dew speckled grass, as well as of passion expressed through art. The imagery is clearly erotic and would have been unacceptable in Victorian England, therefore leading to harsh criticism upon publication. Similarly, Lawrence uses nature to symbolize Paul’s intricate relationship with Miriam. Nature has a strange fascination for both Paul and Miriam; the beauty of nature, her changing colours and forms stimulate them and Lawrence conveys this to the reader through descriptive paragraphs and dialogue. The nature aspects that are in the extract convey purity; the two characters are young and fresh and the descriptive language used reflects this. Miriam is eager to show Paul a ‘certain wild-rose bush she had discovered’ and the emotive language used reveals Miriam’s belief that until Paul has seen the bush ‘it had not come into her soul’; the bush is a way of representing the relationship between Miriam and Paul as whilst it holds great importance to Miriam it meant nothing unless it was shared with Paul. The language used to describe the nature suggests the writer finds euphoria in nature. The bush is described as ‘splashing darkness everywhere with great split stars, pure white’ which give is imagery of the night and the ‘stars’ are seen as the most beautiful aspect of the night. The ‘pure white’ reiterates the youth and beauty between the two characters. The ‘pure white’ can also be seen as representative of newness of the events. It is not only the characters’ love of nature that is portrayed in the extract but also the writer’s as the language Lawrence has used to describe the natural surroundings is beautiful and euphoric. Romanticism depicts that external nature is described accurately and sensuously and should be centered with human experiences and problems. The rose bush, described as having a ‘cool scent of ivory roses- a white virgin scent’, symbolizes the sexual tension between Paul and Miriam and reflects Miriam’s inner battle whether or not to have a physical relationship with Paul. Here again, Lawrence focuses unflinchingly on sexual experience and sexual feeling –‘She saw the dark yews and the golden crocuses, then she looked at him gratefully. †¦ And now he asked her to look at this garden, wanting the contact with her again. Impatient of the set in the field, she turned to the quiet lawn surrounded by sheaves of shut-up crocuses. A feeling of stillness, almost ecstasy came over her. It felt almost as if she were alone with him in this garden. ’(S L, p. 190). This chapter begins to suggest that Paul needs some connection beyond what he shares with his mother. In his free time, Paul is a painter, and he still needs his mother to do his best work, but Miriam allows him to take his work to another level; she makes him feel an intensity he has never before experienced. Miriam also seems to have some sense of this connection, evident especially when she feels that, until she shows him the rose bush, she will not fully have experienced it herself. The connection between Paul and Miriam may be one reason that Mrs. Morel dislikes Miriam – ‘She could feel Paul being drawn away by the girl. ’ She seems to view Miriam as direct competition for her son’s love and attention. Lawrence also links Miriam with nature in a psychological level. She is depicted as having a pantheistic worship of the natural world – ‘Miriam went on her knees before one cluster, took a wild-looking daffodil between her hands, turned up its face of gold to her, and bowed down, caressing it with her mouth and cheeks and brow. He stood aside, with his hands in his pockets, watching her. One after another she turned up to him the faces of the yellow, bursting flowers appealingly, fondling them lavishly all the while. â€Å"Aren’t they magnificent? † she murmured. â€Å"Magnificent! It’s a bit thick—they’re pretty! † She bowed again to her flowers at his censure of her praise. He watched her crouching, sipping the flowers with fervid kisses. ’ (SL Page 248) The disharmony between the two is evident from Paul’s annoyed reaction to Miriam’s almost sexual appreciation of nature – â€Å"Why must you always be fondling things? † he said irritably. â€Å"But I love to touch them,† she replied, hurt. â€Å"Can you never like things without clutching them as if you wanted to pull the heart out of them? Why don’t you have a bit more restraint, or reserve, or something? † (SL Page 248) Paul’s complex innermost feelings are evident; e is evidently fettered by Miriam and yearns for freedom – ‘When she bent and breathed a flower, it was as if she and the flower were loving each other. Paul hated her for it. There seemed to be a sort of exposure about the action, something too intimate. ’ (SL, p. 199) The way she holds the flower symbolizes her attitude toward Paul. Finally, toward the end of the book when Paul makes his final break with Miriam, he presents her with a bowl of flowers. A flower in the novel, seems to represent life. For Miriam, the flowers represent the rootless flowers of death. Nature is also used symbolically in the representation of Paul’s relationship with Clara. Lawrence uses nature to metaphorically symbolize the intense feelings Paul has for the women in his life and Clara’s connection to nature is portrayed to be totally antithetical to that of Mrs. Morel and Miriam – ‘The flowers were very fresh and sweet. He wanted to drink them. As he gathered them, he ate the little yellow trumpets. Clara was still wandering about disconsolately. Going towards her, he said: â€Å"Why don’t you get some? † â€Å"I don’t believe in it. They look better growing. â€Å"But you’d like some? † â€Å"They want to be left. † â€Å"I don’t believe they do. † â€Å"I don’t want the corpses of flowers about me,† she said. â€Å"That’s a stiff, artificial notion,† he said. ’ (SL Page 270) According to Mark Spilka (1980), Clara ‘doesn’t want to be ‘picked’ or taken by any man; she has separated from her husband and for her flowers become as proud and frigid, in their isolation, as she would like to be in hers. ’ This ritual of picking flowers causes Paul and Clara to engage in their first spirited conversation which reveals opposing values of both characters. The way they pick flowers reflects their values –‘Miriam with false reverence; Paul with love, like a lover; and Clara not at all – but at least she respects the life in them, and the flowers, in their turn, will defend her – whereas Miriam’s sheltered blooms will quickly die. ’ Lawrence entitles the lyrical chapter ‘Lad –and-Girl-Love’ and punctuates it with Paul’s intense enjoyment of the world of leaves and flowers, while relating it to the sexual attraction between Paul and the women in his life – Miriam Leivers and Clara Dawes. In the cene where Paul, Miriam and Clara are together on an open field in the country, Miriam is evidently aware of the attraction between Paul and Clara and uses it as a test to see if her spiritual hold over his soul will prevail over his desires for Clara’s body –‘Clara’s hat lay on the grass not far off. She was kneeling, bending forward still to smell the flowers. Her neck gave him a sharp pang, such a beautiful thing, yet not proud of itself just now. Her breasts swung slightly in her blouse. The arching curve of her back was beautiful and strong; she wore no stays. Suddenly, without knowing, he was scattering a handful of cowslips over her hair and neck, saying: â€Å"Ashes to ashes, and dust to dust, if the Lord won’t have you the devil must. † The chill flowers fell on her neck. She looked up at him, with almost pitiful, scared grey eyes, wondering what he was doing. Flowers fell on her face, and she shut her eyes. †(SL Page 271) The relation between man and nature is direct and vital. Lawrence’s characters experience moments of transcendence while alone in nature, much as the Romantics did. More frequently, characters bond deeply while in nature. Lawrence uses flowers throughout the novel to symbolize these deep connections. Sons and Lovers, perhaps more than any other of Lawrence’s books, is full of images of flowers. The different traits of the characters personalities are brought home to the reader through the help of flowers. Throughout the development of the novel, as intimacy is shared, it is only through nature and natural elements that we see this â€Å"intimacy† occur. This comparable relationship with nature metaphorically symbolizes and is intricately linked with the intense feelings Paul has for the women in his life.

Profitability of UK Banks Essay Example Pdf - Free Essay Example

Sample details Pages: 13 Words: 3798 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? ASSESS THE PROFITABILITY OF UK BANKS INTRODUCTION The issue of the profitability of banks in the UK market has been the subject of controversy for sometime now. For the past twenty years there has been a substantial increase in the number of financial firms entering the banking sector in the UK. This has mainly been due to the fact that the financial industry in the UK is not as fiercely competitively fought, in comparison to other European banks and other banks around the world. Don’t waste time! Our writers will create an original "Profitability of UK Banks Essay Example Pdf" essay for you Create order This has made the UK market attractive with regard to foreign banks wanting to come and set up shop in the UK. In the UK alone there are about 500 banks that operate, but the big five namely, Barclays, Lloyds TSB, Royal Bank of Scotland, HSBC, and HBOS, dominate the UK’s retail commercial banking industry. It is argued that Britons get the banks and the levels of innovation they deserve. However the hypothesis is that because most people in the UK are not too bothered about the level of service provided by most financial banks, most banks exploit this consumer apathy and notably consumer’s reluctance to switch accounts to swell the profits of the major banks. Recent research has shown that most people in the UK change their bank account as infrequently as they change their spouse, i.e. they have low expectations of the services provided by banks. It is argued that the only reason most banks make such astronomical profit margins is because we as consumers allow them to g et away with it, Fraser (2005). Recent calculations show that if UK consumers were to switch to the bank offering the best rates and level of service on offer, they would be better off to the tune of  £15 billion per year. With this in mind, this paper goes on to address the issue of profitability generation within the UK banking sector. This will be done by using published material from articles, journals and already established theoretical concepts. The idea is to try and visually picture exactly what factors lead banks in the UK to be able to generate such huge profit margins in comparison to other banks around the world. Therefore, this paper will start of by carrying out a literature review, and then the use of already established theory namely monopoly would then be described. Following, one would look at any matches or mismatches with regard to the literature review and the established theory of monopoly and then a conclusion will be arrived at the end. LITERATURE REV IEW The Cruickshank Report (2004) on competition in UK banking, established that there was a ‘complex monopoly’ that existed between the big five UK high street banks and that this position has not been corrected by the government. Bank consumers have continued to be financially disadvantaged or in plain English worse off. Additionally, the banks have been allowed to enjoy a further five years of monopolistic profiteering in an area that affects every UK consumer in their daily life. He argues that nothing has been done to boost competition among banks and the profits should sound alarm bells. The headlines surrounding this report into the state of the UK banking industry have tended to concentrate on the accusation that the industry is making ‘supernormal profits’ of  £3 to  £5 billion a year. The question here is why given the recent excellent profits made by UK banks do completely new players not enter the market? The unwritten rules, he argues ma ke partnership with an existing bank a condition of market entry. The British Bankers Association (2005) argues that  £30 billion profits make UK banks jittery. Perhaps the banks think they will appear to be profiteering? After all, they’ve all been pretty successful, making huge profits over more than a decade. They also argue how cheap it is in the UK to bank and how much better off we are than those in the US who pay for checking accounts. In an article by the Money Observer (2005), banks were blasted for their billions in profit making. It was stated that Banks were resisting calls for a windfall tax despite record profits. In particular HSBC and Barclays record profits led to calls for a windfall tax to be imposed on the whole sector as Weatherill (2005) puts it, ‘banks treat their customers very shoddily while demanding sky-high charges for inferior products’. A windfall tax is the only way to make this industry sit up and take notice. The consumers assoc iation (2004) accused the main high street banks of exploiting their strangle hold over the high street to make excessive profits. In another article by the Daily Express (2005), it was argued that Banks in the UK were conning their most loyal customers out of millions of pounds a year by failing to offer them the best rates. Savers and borrowers who stick with their bank through thick and thin are likely to suffer huge financial penalties because they are not offered the competitive deals designed to attract new customers. A report, from savings account provider ING Direct, argues that HSBC had posted record profits of almost  £10billion. Weatherill (2004) states that the big banks have always made their money by penalizing those customers they considered captive. These people reasonably think the bank will be honourable towards them because they act honourably towards the bank. ING direct (2005) said 40 percent of individual customers who had left a financial institution in the past year did so because of their banks two tier approach to dealing with customers. This means that the many savings account providers will allow existing customers to advantage of new better rates. However, this relies on the customers finding out about the better rate themselves. Most lenders will not allow existing borrowers to take advantage of new deals unless they think the customer is about to go elsewhere. If people moved from their current bank and looked for a better deal, they will make savings and get better service, Daily Express (2005). In another article by the Guardian (2005), HSBC unveiled profits of more than  £9 billion but denied the record figure by a London based bank had been made at the expense of UK customers. The 37% rise in annual profits forms part of a  £30 billion industry-wide haul that has left UK banks facing calls for a windfall tax and accusations that the sector runs a complex monopoly structure. HSBC denied this and stated that its profits a re owed much to the growth and favourable conditions in the United States and China, as less than a quarter of its earnings came from the UK. In the Herald (2005), it was argued that it takes more than a week to be able to draw money from a single deposited cheque. Banks such as the Royal Bank of Scotland, Alliance and Leicester, and the Co-operative Bank took the longest to clear cheques in a survey conducted by the Herald of 12 of the major high street banks. Even an electronic money transfer in which there are an estimated 3.5 billion transactions a year by phone or the internet will take a minimum of three and a maximum of five working days to be credited to accounts. That time, as the adage goes, is money, as the bank can then use the uncleared amount to earn interest on it. Customers in Britain have to wait longer than almost all their western European counterparts for funds to pass through the clearing process. While 12 million cheques are written every day in the UK, it is o nly the ones paid in to Barclays that will benefit from instant withdrawals and interest, before the clearing cycle has barely had time to revolve. Consumer groups say banks are making millions every year from the limbo of uncleared funds. Finally, in the Financial Times (2005), UK focused banks such as HBOS and Lloyds TSB argue that most of their profits came from business banking and corporate lending rather than UK consumers. The banks argue that UK retail banking profitability is falling and they have cuts costs to compensate for falling profit margins and say that net interest margins, i.e. the profit made on lending has been falling for years. THE CONCEPT OF MONOPOLY A monopoly occurs when one firm, called a monopolist or a monopoly firm, produces an industry’s entire output. In contrast to perfectly competitive firms, which are price-takers, a monopolist sets the market price. Because the monopoly firm is the only firm in its industry, there is no distinction bet ween the market demand curve and the demand curve facing a single firm as there is in perfect competition. Thus, the monopoly firm faces a negatively sloping market demand curve and can set its own price. However, this negatively sloped market demand curve presents the monopoly firm with a trade-off; sales can be increased only if price is reduced, and price can be increased only if sales are reduced. One must note here that monopoly firms have U shaped short-run cost curves just as perfectly competitive firms do and this is a consequence of the law of diminishing marginal returns[1]. However, this negatively sloped market demand curve presents the monopoly firm with a trade-off; sales can be increased only if price is reduced, and price can be increased only if sales are reduced. When the monopoly firm charges the same price for all units sold, average revenue per unit is identical to price. Thus, the market demand curve is also the firm’s average revenue curve. But un like the firms in perfect competition, the monopoly firm’s demand curve is not its marginal revenue curve, which shows the change in total revenue resulting from the sale of an additional (or marginal) unit of production. Because its demand curve is negatively sloped, the monopoly firm must lower the price that it charges on all units in order to sell an extra unit. It does follow that the addition to its revenue resulting from the sale of an extra unit is less than the price that it receives for that unit (less by the amount that it loses as a result of cutting the price on all the units that it was selling already). The monopoly firm’s marginal revenue is less than the price at which it sells its output. Now to show the profit maximisation equilibrium of a monopoly firm, we bring together information about its revenues and its costs and then apply two rules. First, the firm should not produce at all unless there is some level of output for which price is at least equal to average variable cost. Secondly, if the firm does produce, its output should be set at the point where marginal cost equals marginal revenue. The following diagram illustrates this. Figure 1: The equilibrium of a monopoly When the monopoly firm equates marginal cost with marginal revenue, it reaches the equilibrium shown in figure 1. The profit-maximizing output is the level at which marginal cost equals marginal revenue. The point on the demand curve corresponding to that output determines the price at which that output can be sold. The monopoly produces the output Q0 for which marginal revenue equals marginal cost. At this output the price of P0, which is determined by the demand curve, exceeds the average variable cost. Total profits are the profits per unit of P0 – C0 multiplied by the output of Q0, which is the area marked X on the graph. When the monopoly firm is in profit-maximizing equilibrium, equating marginal revenue with marginal cost, both are l ess than the price it charges for its output. This is because the firm’s marginal revenue is always less than the price it charges. The fact that a monopoly firm produces the output that maximizes its profits tells us nothing about how large these profits will be, or even whether there will be any profits at all. Additionally, because the monopolist is the only producer in an industry, there is no need for separate analysis of the firm and industry, as is necessary with perfect competition. The monopoly firm is the industry. Thus, the short-run, profit-maximizing position of the firm, as shown in figure 1, is also the short-run equilibrium of the industry. Allocative inefficiency of a monopoly Output under monopoly is lower compared to perfect competition, and so must result in a smaller total of consumers’ and producers’ surpluses. When the monopoly chooses an output below the competitive level, market price is higher than it would be under perfect com petition. As a result, consumers’ surplus is diminished, and producers; surplus is increased. In this way, the monopoly firm gains at the expense of consumers. This is not however, the whole story. When output between the monopolistic and competitive levels is not produced, consumers give up more surplus than the monopolist gains. There is thus a net loss of surplus for society as a whole. This loss of surplus is called the ‘deadweight loss of monopoly’. It follows that there is a conflict between the private interest of the monopoly producer and the public interest of all the nation’s consumers. This creates a rational case for government intervention to prevent the formation of monopolies if possible or, if that is not possible, to control their behaviour. Entry Barriers In both monopolized and perfectly competitive industries, profits and losses provide incentives for entry and exit. If the monopoly firm is suffering losses in the short-run, it will continue to operate as long as it can cover its variable costs. In the long-run, however, it will leave the industry unless it can find a scale of operations at which its full opportunity costs can be covered. If the monopoly firm is making profits, other firms will wish to enter the industry in order to earn more than the opportunity cost of their capital. If such entry occurs, the equilibrium position shown in figure 1 will change and the firm will cease to be a monopolist. Entry barriers may be natural or firm-created. If a monopoly firm’s profits are to persist in the long-run, effective entry barriers must prevent the entry of new firms into the industry. Barriers determined by technology Natural barriers most commonly arise as a result of economies of scale. When the long-run average cost curve is negatively sloped over a large range of output, big firms have significantly lower average total costs than small firms. A natural monopoly occurs when, give n the industry’s current technology, the demand conditions allow no more than one fir to cover its costs while producing at the minimum point of its long-run cost curve. In a natural monopoly, there is no price at which two firms can both sell enough to cover their total costs. Another type of technologically determined barrier is set-up cost. If a firm could be catapulted fully grown into the market, it might be able to compete effectively with the existing monopolist. However, the cost to the new firm of entering the market, developing its products, and establishing such things as brand image and dealer net-work might be so large that entry would be unprofitable. Policy created barriers Many entry barriers are created by conscious government action and are, therefore, officially condoned. Patent laws, for instance, may prevent entry by conferring on the patent-holder the sole legal right to produce a particular product for a specific period of time. A firm may also be granted a charter or a franchise that prohibits competition by law. Regulation and licensing of firms, often in service industries, can restrict entry severely. For example, the 1979 Banking Act required all banks in the UK to be authorized by the Securities and Investment Board (sib) or some other recognized regulatory body. Regulation and authorization of all financial firms, including banks, was formally transferred to the financial services authority in December 2001. Other barriers can be created by the firm or firms already in the market. In extreme cases, the threat of force or sabotage can deter entry. Barriers such as set-up costs for a new market entrant might play a significant factor of a firm gaining entry into a market. For example, the threat of price-cutting, designed to impose unsustainable losses on a new entrant, and heavy brand-name advertising could act as a major stumbling block for new market entrants. Now, because there are no entry barriers in perfect competition, profits cannot persist in the long-run. Profits attract entry, and entry erodes profits. In monopoly, however, however, profits can persist in the long-run whenever there are effective barriers to entry. Entry barriers frustrate the adjustment mechanism that would otherwise push profits towards zero in the long-run. In the very long run technology changes. New ways of producing old products are invented, and new products are created to satisfy both familiar and new wants. This has important implications for entry. A monopoly that succeeds in preventing the entry of new firms capable of producing its current product will sooner or later find its barriers circumvented by innovations. A firm maybe able to use new processes that avoid some patent or other barrier that the monopolist relies on, to bar the entry of competing firms. Another firm may compete by producing a new product that, although somewhat different, still satisfies the firm might get around a natural mon opoly by inventing a technology that produces the good at a much lower cost than the existing monopoly firm’s technology. (The cost curve maybe lowered throughout this range, and the minimum level of costs may be reached at a lower output than previously thought). The new technology may subsequently allow several firms to enter the market and still cover costs. Matches and Mismatches with regard to the Literature review and the concept of Monopoly in Bank Profits. Most importantly, the Cruickshank report (2000), stipulates that there exists behaviour of a ‘Complex Monopoly’ between the big five UK high street banks in the banking industry and that this position has not been corrected by the government as at today. This tallies with the established theory of a monopoly, because the five high street banks are the dominant firms in the banking industry and so they have the market power to control the level of service that needs to be provided in the banking se ctor. Also, the fact that the banking industry is reported to be making supernormal profits of between  £3 to  £5 billion a year; why then do new players not enter the market? This tallies with the fact that there are serious technological barriers to entry and firm-created barriers to entry. Infact, most new entrants into the UK banking sector have tended to either merge or acquire a bank in the UK, so as to have a solid and useful foundation in order to gain entry into this sector. Additionally, the fact that banks treat their customers very shoddily while demanding sky-high charges for inferior products as stated in the literature review, tallies with the established theory of dead-weight loss. Due to monopoly power, the firm charges a high price, reduced output or poor quality products and services are provided to the consumer, which leads to an allocative inefficient market. This is very typical of the banking industry as mentioned in the literature review, with regar ds to the level of service and financial products provided by the major high street banks. This is why the Cruickshank report was commissioned by the government to investigate possible solutions to this very serious problem. One issue that doesn’t correlate with the literature review is the fact that under monopoly firm’s price discriminates, i.e. charging more than one price for the same product. However, it all boils down to the information that is provided to the customer. Now, it is not every banks business to inform a customer about what the other bank rates are of its major competitors. It is up to the customer to go and shop around for the best bank rates. SUMMARY AND CONCLUSION This paper has mentioned the five dominant banks in the UK banking industry, namely, HSBC, Royal Bank of Scotland, Barclays, HBOS, and Lloyds TSB. In the context of the literature review, the contending issues that relate to the profitability of banks in the UK, such as, poor le vel of service; innovation; not enough competition in the banking sector; the barriers to entry; proper information being provided with regards to what options customers have; and technological issues pertaining the clearance of cheques and withdrawals; are all scrutinized. Also one has used the concept of monopoly to explain the banking industry. Sub-issues under monopoly such as allocative inefficiency; entry barrier, such as barriers determined by technology and policy – created barriers are all mentioned. Finally, a look at any correlations or mismatches with regard to the literature review and the concept of monopoly is then put into play. As a whole it will be worthwhile to conclude that, as technology evolves and we humans evolve with technology, the barriers to entry within the banking sector will begin to breakdown. Why? Because it is more convenient, easier and cheaper, for customers to be able to carry-out transactions online, without a physical presence at a ba nk. Additionally, this will lead to reduced profits for banks; however, they will be able to tap into developing markets in order to revise methods for profit maximisation. Examples of which are HSBC’s acquisitions of small to big banking conglomerates around the world, which has more than tripled their profits. Thereby, in the long – run competition in these markets would become rife. REFERENCES AND BIBLIOGRAPHY British Bankers Association, (2005), Article,  £30 billion profits make UK banks ‘Jittery’. Bulletin in the Banking News and Comments. Lipsey, R.G., and Chrystal, K.A., (2004), Economics, Tenth Edition, Oxford University Printing Press. Financial Times, (2005), Article, UK Bank profits head for  £1,000 a second, 31/01/2005 Fraser, I., (2005), Their profit†¦Ã¢â‚¬ ¦. Whose Loss, Article in The Sunday Herald, 13/20/2005. The Financial Regulator, (2000), Re-writing the contract, Financial market trends, No. 75. The Herald , (2005), Article, Slow cash makes fast money. The Cruickshank Report, (2004), Competition in UK Banking. Consumers Association, (2004), Article, How can banks keep growing? The Evening Standard, February. Daily Express, (2005), Rip – off banks do loyal clients out of millions, in Your Money, March. ING Direct, (2005), Daily Express, Your Money, in article, Rip-off banks do loyal clients out of millions. The Guardian, (2005), in article, HSBC denies profits accusations, February. Weatherill, E., (2005), Independent Banking Advisory Service, in article, Banks blasted for their billions, Money Observer, April. Weatherill, E., (2004), Independent Banking Advisory Service, in article, Watch dog to quiz Bradford and Bingley on debt tactics, Sunday Express, June. 1 Footnotes [1] This law states that if one or more of the factors of production are fixed, e.g. land; increasing the inputs of the variable factors of production, i.e. labour, raw materials, etc are increased; will eventually lead to a diminishing marginal product.