Fast Changes in Technology- Excitement or Agony Essay

In 1859, Charles Darwin published his theory of natural selection in which he observed that finches adapted a different beak shape to be able to survive in their environment. Science and technology are our civilization’s beak. A very good afternoon to everyone present here today. I, Shimona Agarwal, Of Scottish High International School, will be speaking today on the topic â€Å"Fast changes in science and technology- excitement or agony† and I am resolutely for the motion. As I am sure that most of you are aware, the global population is increasing at an alarming rate. While just a mere 10 years ago, the world population was 6070 billion, it is now a complete 7 billion. This rate of growing population will become unsustainable in the near future unless science and technology are advanced. Advancements in science and technology have provided humankind with luxuries that have enabled them to live a safe and comfortable living. Only, and only through the rapid changes being made in science and technology, have we been able to increase the average life span of a human being. There are new medical breakthroughs occurring every day, and new innovations are helping mankind lead a safer living. A particular idea that is fast advancing and can prove to be extremely useful is that of using EEG to put the brakes on a moving vehicle. This is a big deal because the normal reaction time for a person to apply the brakes is often too long to prevent an accident. However, by harnessing brain signals via electroencephalography (EEG), most accidents can be prevented. With further advancements, it will be soon possible for humankind to avoid death altogether. Stem Cell Heart Regeneration is such a field where science and technology is fast progressing and showing positive results. See more: how to cite an article For the first time, a human heart has been created using stem cells, a major step forward in organ generation. Scientists used adult stem cells to create a living human heart that they hope will revolutionize transplants. If all goes as planned, the heart will continue to grow and eventually begin beating automatically. Advancements in science and technology are the only way to prevent the eventual collapse of our environment. As the climate changes and pollution increases, we are facing a potential decline of our environment. New advancements, however, are providing us with solutions to save our environment. A recently discussed topic is Paperless Paper. For us stubborn paper lovers, there may soon be a product available that provides the look and feel of paper, with the advantages of a digital device. In fact, the technology is already available, though it hasn’t yet translated into a marketable product. It’s called electronic paper. Before long, the plastic shell of e-readers may not be needed and you’ll be able to handle â€Å"paper†. Another innovation which can prove highly helpful to our environmental problems is a space-based dust cloud which can be used to protect our Earth’s atmosphere. Scottish scientists have proposed to use a giant space-based dust cloud, blasted off an asteroid, to shade the Earth from the sun. This dust-cloud could be large enough to block out 6. 58% of solar radiation that would normally reach the Earth. This would be more than enough to combat any current global warming trends. Waste disposal problems are posing a serious threat to our environment and ecosystem, and science and technology could eventually solve this problem too. Using Plasma Arcs for waste disposal is gaining momentum in the waste disposal industry. Imagine harnessing the power of lightning to turn garbage into glass or into a gas that can be used as an energy source. The advantages include less garbage in landfills, less carbon from incineration, and creating a natural gas power resource. As I come to the end of my debate, I would just like everyone present here to truthfully acknowledge the fact, that without science and technology our lives are never complete. We need technology to advance for civilization to advance. At one point the wheel was the hottest piece of technology around.

Psychology and Social Situations Essay

Providing incentive for individuals to establish a carpool system or take the bus instead will motivate them to resort to these resolutions although it has been unsuccessful. The government and other organizations that campaign against overdependence on private vehicles which contribute to heavy traffic should not expect that simply asking the people to share rides and take buses in order to lessen the number of vehicles on the road will work. People should be given incentives in adhering to the requests of concerned organizations, such as free fare or transportation allowances for the people. Organizations and establishments concentrated on a specific location should grant employees with free rides on shuttles that will take them to and from work everyday. This allows individuals to understand that sharing rides and taking the buses will save them the fare and lessen inconveniences caused by heavy traffic. 2. From this particular situation, we may deduce the disparity of knowledge and competencies displayed by children. Individual differences also cause differences on the rate of performance within the classroom, such that there are those that excel and those who fail depending on the cognitive faculties. Assignments are provided by teachers not only to reinforce learning and introduce the succeeding lesson, but also to give children the chance to catch up and experience success through home-based activities that allow them to learn at their own pace. Children who are identified to be the lowest-achieving in class think about their chance of pulling up their grades by spending more time on their assignments and excelling through them. This is the same reason why excellent performers do not spend more time on their homework, because they already have experienced success within the classroom setting. 3. Providing rewards is a good way of motivating children and reinforcing learning. There are various forms of rewards that teachers will be able to use including tangible rewards. Although concrete objects are considered as rewards, they should be given in moderation. Teachers should look for other forms of rewards such as praises and commendations, exemptions from school work or activities, and other types of non-tangible rewards. The danger of utilizing concrete objects as rewards is that children will not be able to learn the value of maintaining desirable learning behavior in class. Every action that they take will depend on the presence of a tangible reward at all times. In this case, desirable learning behaviors are not reinforced and sustained throughout the learning process, and children will only choose to perform well and exhibit good behavior when they see that there will be tangible rewards made available for them after doing so. To address this situation, academic institutions should consider setting standards and guidelines on how teachers should provide rewards, stressing the need to lessen the use of concrete objects but rather utilizing non-tangible rewards that create emphasis on inherent changes and display on desirable learning behavior and excellent learning performances. B. Psychological Disorders 1. The classification of abnormal behavior stems from the need to appropriately determine the medical and professional methods and strategies that will be implemented in order to address problems associated with the variety of abnormal behavior. The classification system of abnormal behavior, particularly the DSM-IV established by the American Psychiatric Association or APA, is utilized in order to provide a clear illustration or image of the kind or type of behavior exhibited by an individual. The DSM-IV utilizes five axes that are utilized to categorize behavior, solidifying them into a profile that provides information on the dimensions of particular behaviors. Utilizing classification systems, such as DSM-IV, although convenient also has flaws or disadvantages, intensifying the difficulty of assessing and classifying behavior. For instance, since the DSM-IV utilizes five axes in categorizing behavior, it becomes a limited means of understanding the dynamics of behavior. Classifying behavior into five categories does not really border on reliability and validity since behavior will not always meet all the criteria of each category. 2. When one is diagnosed with psychological or mental disorders, this means that there is something nonstandard and uncharacteristic about an individual’s way of thinking and behavior. Having a disorder mean that an individual’s life, particularly his functioning, is influenced by its effects building problems and difficulties along the way. The diagnosis will point to possible causes, whether the disorder is caused by biological factors, environmental factors, and such, which affects one’s ability to work efficiently, socialize with other people or become integrated into society under normal circumstances, etc. After being diagnosed with a psychological or mental disorder, it will also mean that an individual will need to seek professional help in order to determine the root of the problem and disorder and identify possible solutions in order to resolve them. 3. Perhaps it is better to be wrongly diagnosed as having a mental disorder even if one actually does not than the other way around because in the process, the individual will still be able to disprove the diagnosis while medical professionals will have enough time to discover the wrongfulness of their diagnosis. One will not lose anything by being misdiagnosed as psychologically or mentally incapacitated, perhaps just time and effort in proving the misdiagnosis of medical professionals. On the other hand, if one is wrongly diagnosed as not having a mental disorder, he will miss the chance of being provided with professional help and assistance as to how he will be able to conquer the problems brought about by his psychological or mental disorder. After being diagnosed without mental disorders even if in fact, one is psychologically or mentally changed, it will not be treated properly fuelling the possibility of one’s illness or disorder getting worse, while at the same time, intensifying the effects that it might bring towards one life. Missing out on the chance of being treated will neglect â€Å"damage control† allowing the illness or disorder to intensify possibly leading to a state wherein medical professionals will not be able to provide and recommend treatment appropriately.

Chemistry - Fluoridation of Water Essay Example | Topics and Well Written Essays - 1000 words

Chemistry - Fluoridation of Water - Essay Example The world has realized the importance of regular fluoride intake. Hence there are many dental products are available in the markets that have fluoride as chief component. With the changing climatic conditions, high mobility rate of the population and availability of wide range of fluoridated products, people have started experiencing side effects of fluoride. Hence water fluoridation needed or not is still controversy. About Fluoridation Water fluoridation process is defined as â€Å"the adjustment of the natural fluoride concentration of fluoride-deficient water to the level recommended for optimal dental health† ("American Dental Association").Fluoride is an ionic form of Fluorine which is thirteenth naturally found element in the soil. Fluoride is abundant near the mountainous area where it can readily get dissolved with groundwater or surface water. Fluoride has great affinity towards calcium and hence found at the bones and teeth. ("Oral Health in America†).As per t he facts sheet released by American Dental Association (ADA), fluoride has capacity to reduce incidences of dental cavities in children up to 60% whereas for adults it is 30-35 %. (â€Å"American Dental Association†). ... Dr McKay was startled to see so many patients having brownish spots on their teeth. This was something he never experienced before. He kept observing such patients for almost 6 years while having discussions with fellow dentist but he failed to diagnose correctly. He started suspecting drinking water supply. Later on these mottled enamel stains were coined as â€Å"Colorado brown stain†. ("NIDCR") Further Dr McKay got opportunity to work with Dr G.V Black, who was a renowned Dental research scientist. They put immense efforts to solve brown stains mystery came up with two distinct findings. The first finding was children whose permanent teeth are yet to erupt are getting more affected with Colorado Brown Stains than the adults. Second finding was that brown stained or mottled enamel teeth are less susceptible to decay. In spite of so much of thesis both these geniuses could not identify the prime causative factor and continued doubting drinking water. Dr Black worked on the sa me topic till his death ("NIDCR"). Later on, in 1923, Dr McKay was invited to Oakley, Idaho to inspect some pediatric cases where children were having similar brown stains on their teeth. Parents told that brown stains appeared only after they started drinking water through newly created pipeline of nearby water source .Dr McKay asked the civilians to cut off this water supply and he got the hint that drinking water could be the probable cause of mottled enamel. Water samples were sent for lab investigations but there were no conclusive findings ("NIDCR"). In 1931, Dr. McKay and Dr Grover Kempf started investigating Bauxite water sample with the help of chemist of Mr. H.V Churchill. They conducted â€Å"photo spectrographic analysis† with the water sample couple of times to make sure the

Presumed Consent for Organ Donation Dissertation

Presumed Consent for Organ Donation - Dissertation Example Presumed Consent for Organ Donation The treatment of the dead body has enormous implications, not only for religious and spiritual reasons but also for non-religious and cultural reasons. Organ donation may be considered as one of the final acts of the individual who intends to part with his or her organs or tissue for the wellbeing of another person or for medical use. It basically depends on the decision regarding how the individual desires to live his or her life and to be remembered after his or her death (Inquiry into the EU Commission’s Communication on Organ Donation and Transplantation: Policy Action at EU Level 2008). Organ donation is also an ethical decision since it is intended to benefit the recipients of organs by way of transplantation. It is also a decision that may influence those whom the deceased leaves behind. Similarly, in cases where death occurs suddenly, in the absence of an explicit decision from the deceased, â€Å"the feelings of the bereaved family are very important†. The dile mma for many occurs when body parts are being cremated or buried. This contributes to an increase in the complications relating to ethical issues, apart from logistical problems. There can be inconsistencies in what people say they would do because their opinions and beliefs are subject to change according to the situation. Evidence suggests that â€Å"90% of the population supports the concept of organ donation – and what they actually do, i.e. they do not carry donor cards, and only 23% have registered their wish to donate†.... Families of the dead usually decline donation because they are not fully aware of the deceased person’s wishes . On the other hand, if the deceased had explicitly expressed a desire to donate organs, the relatives would do their best to fulfil the wishes of the dead person. Authorizing presumed consent is obtaining an absolute apathy of the founding ethical principles, or respect for autonomy, which is one of the four major principles of medical ethics. Spiritual and ethical education can be used to discover ethical rules in the relationship of motivation and actual behaviour. The divergence between individual rights and the advantage to society or to others as a group and apprehensions regarding the nature of physical reliability are at the core of the discussion. Importance of Obtaining Presuming Consent: As per the ethical view of the universe, there is an agreement that organs may be retrieved if there is a legitimate consent. Numerous legal approaches currently in vogue r elate to this. Presumed consent permits the organs to be used for the purpose of transplantation after death, except where the individual has objected to such donations. On the other hand, an informed consent system specifies that the individual must explicitly approve organ removal after death, by joining a national registry, carrying a donor card or any such document (Gill 2004). In the United Kingdom, the focus is on flexible choice, where the approval or assent of the family of the deceased is still necessary before harvesting the organ. If the deceased has not expressed any objection, organs will automatically become obtainable, if the relatives do not object to their removal. The general belief is that this will increase the possibility of obtaining organs as

Herbicide X Case Study Example | Topics and Well Written Essays - 250 words

Herbicide X - Case Study Example The results ultimately proved that the level of concentration is enough to cause cancer to the rats. The same concentration of Herbicide X is being used by farmers to control the weed as this is highly effective. In view of this, Herbicide X poses extreme threat to the humans as it is used in the same dosages as found to have affecting rats. Herbicide X is sprayed in the farms twice, once in the spring and the second time in fall. This means that farmers are exposed to the Herbicide X twice in a year that increases the health risk associated with this pesticide. It is quite scientific to assess the risk of any hazardous chemical first on animals such as monkeys, rats, cows. It is certified and confirmed by several peer-reviewed studies that Herbicide X is toxic in the given dosages and cause deadly disease like cancer. It is quite appropriate to conclude that it indeed poses a threat to the human life too, especially when humans are exposed twice in a year with the same level of concentration that affected rats. Moreover, it has also been found that Herbicide X remains in the environment for at least 3 months before it disintegrates into harmless substances; it is slow in biodegradation and not eco

The Role of NCAA in the Rise of Intercollegiate Athletics Assignment

The Role of NCAA in the Rise of Intercollegiate Athletics - Assignment Example NCAA membership at the national office performs the role of assisting the underlying institutional members from diverse universities and corresponding colleges in comprehending different fundamental legislation of the NCAA. It majorly offers easier accessibility of the knowledgeable workers found within NCAA to the institutions and the public. The organization also organizes numerous workshops and educational conferences annually in an attempt to attain its institutional membership (Rader, 2009). NCAA membership services aid in managing and operation of the institutional athletes in connections with the federal legislation. It's linked with the federal government aid NCAA in examining of the present laws and underlying legislation. Â  NCAA is also charged with the organizing of the Youth Sports Programs at the national level thus enabling the disabled youths to access education and take part in the participation process annually. It also participates in numerous outreach activities that aid in the promotion of the underlying athletes’ administration thus offering equal opportunities of participation to its members notwithstanding of the race and ethnic. Organization of the NCAA provides scholarship programs to the student-athletes that encompass both undergraduate and degree programs to those who desire to learn while training. The programs that are normally offered by NCAA mainly entail instituting of the competition and impartial regulations for diverse sports as well as developing and maintaining of fundamental sports records and corresponding athletes historical statistics. Moreover, NCAA membership is mainly charged with the handling of the recruitment malpractices, competitiveness, impartiality an d corresponding athletes’ educational performance.

Corporate Environmental Management Coursework Example | Topics and Well Written Essays - 2500 words

Corporate Environmental Management - Coursework Example According to Ochoa 2011 (43), the global clothes supply is to undergo a voluminous growth with about US$ 1,852.7 billion expected out of the industry by 2015. This shows that the industry has a potential of reaping massive incomes. However, according at a market analysis conducted in 2008, the US textiles presented a decrease in sales. Notably, a trend provides a possibility of future deterioration. Initially, naturally produced clothes had a considerable market. However, introduction of cheaper synthetic clothes poses substantial challenges on the customary clothing styles. Traditionally made clothing presents a comparatively higher cost a condition that renders them less competitive in the market. The product faces competition challenges from other clothing products like nylon, polyester, gortex among others. However, synthetic clothes are associated with considerable pollutions in processing processes and as non-degradable wastes (Oakess 2009). Enterprise pollutions are presently, of crucial concerns. Apparently, the world is alert on the impact of pollutions and the need for observing safe and sustainable practices. Perceptible ideas advocated robustly in the current generation are adoption of less materialistic and energy intensive procedures and promotion of environmentally friendly practices. This means business can no more continue with unsafe practices but has to be the solution in solving the present challenges. In fact, sustainable practice is a strong competitive strategy in the current world (North 2007). Organic clothes accounts for these ideas; the clothes will promote concept of naturalization of events since their productions utilizes local ordinary material. Organics are highly degradable meaning that idea addresses the question of pollution substantially. Importantly, synthetic clothes are flooded in the market and competition pressures are stiff. However, minimal organic clothing ventures exists providing the new line with potentials of sour cing sizeable sales. The Product The new product line will provide unique and sustainable clothing. The product will offer variety eco-friendly products extending from heavy to light wears. The products will provide a wide baby and adult assortments. Production will cover common-wares like t-shirts, hats, socks, shirts and other wares. Additionally, the line will provide different coded style specially structured to suit diverse ages. The products will emphasize on quality, durable and sustainable eco-friendly products propagating for the need of healthy clothing. An effective marketing design will observe promotion of a clothing style with a natural taste and one that identifies out of other common styles. Organic clothing will invite a differential idea by providing a highly sustainable model. Synthetic productions flooded in the market are not sustainable (North 2007). Processing of artificial materials for making clothes consumes a lot of energy. Energy is a costly and a limited element hence

Plant Biology Video & Essay Assignment #2 Example | Topics and Well Written Essays - 500 words

Plant Biology Video & Assignment #2 - Essay Example Biomimetics or Biomimicry is the creation of new technology by imitating functions found in nature and applying these concepts to various fields such as robotics, engineering and even medicine (Lepora, et. al.). Many commonplace materials such as velcro, to complex architectural designs are innovations inspired by plants (Cohen 6,13, 612). Plants are also used as biological models to study the action of various organic and inorganic substances at the cellular level and they are also utilized for studies in molecular biology and genetics (Morrissey 295). Aside from the benefits gained by science, plants also impart wisdom in conducting our day-to-day lives. Growth, resilience, stability, and nurture can all be observed and imbibed from planting trees from seeds. Appreciation for life in general can be fostered through gardening and watching the plants bloom and fruit in their season. These are important values which should be rooted in every man’s soul. Sources of knowledge and inspiration can come from all around. Plants should never be disregarded in this aspect for the kingdom contains a plethora of scientific information as well as examples for our everyday lives. As Sir Francis Bacon once said, Natural abilities are like natural plants, they need pruning by study (Klein). From the realms of science and technology to the depths of man’s psyche, the fountain of knowledge from the world of plants continue to enrich, enlighten and inspire. Morrisey, J. P. â€Å"Biological activity of defence-related plant secondary metabolite† Plant-derived Natural products. p295.ed. Anne E. Osborne and Virginia Lanzotti. New York: Springer Science+ Business Media, LLC. 2009. Web. 9 March

Social Work with the Elderly Essay Example | Topics and Well Written Essays - 1500 words

Social Work with the Elderly - Essay Example A challenge is a fact that it is common for the social workers’ clients to be afflicted with different kinds of diseases and disabilities: physically, mentally, or emotionally. This paper aims to give an in-depth discussion of the challenges involved in working with the elderly, and how the clients’ identity issues affect their relationship dynamics with the worker. First, let us explore the clients’ perspectives and situations from the beginning of things – as they enter the residential home for the elderly. Some have existing and financially capable relatives by they themselves choose to stay in a residential facility so as not to burden their family members with their needs. It could due to reasons of pride, or perhaps a deeply ingrained sense of independence that spurs them to instead opt for professional and paid help. It could be a defense against possible future rejection and the hurt that would succumb from it. Others would have preferred to stay with their children and/or grandchildren, as is in most cases in Asian countries for example, but the family members are either too poor, too disgusted at the prospect of being solely responsible of taking care of an elderly person, or too concerned with having their own lifestyles cramped. Many times the older persons in these cases are admitted to residential homes despite wanting to stay with their families or remain in their own homes. They perhaps just weren’t given a choice. The majority of the elderly have been placed in residential homes because of a physical or mental disability and/or because they do not have anyone around to take care of them anymore. These factors, one way or another, have a crucial impact on the clients’ psychological state and invariably affect their responsiveness and cooperation during the course of case management. As each and every human being has unique identities and personalities, the dynamics of an elderly person and his or her identity is profoundly affected.

Maoism in China Essay Example for Free

Maoism in China Essay Generally, the Communist system in the Soviet Union and in China are practically identical politically, economically, with the reciprocal purges ect†¦ However, Mao Tse-Tung and Stalin did not see eye to eye on many things and Maoism is considered today by most people to be a more developed stage of Marxism-Leninism. This is because of the historical and cultural background of China and because of her geographical position and climate which affects society. Contrary to Russia, Communism developed in the countryside instead of in the cities. Thus it was a peasants revolution rather than, as predicted by Karl Marx, a workers revolution. The cities in China were at the beginning, anti-Communist. The Chinese absorption of Marxism was highly selective. China took from Marxism those aspects which best suited the Chinese situation rather than force the Chinese situation to fit an overachieving ideology. Thus Marxism was to be the servant of the Chinese Revolution. Mao Tse-Tung believed that adherence to pure Marxist theory would be suicidal and concluded that proletarian revolution based upon the urban areas was impossible in China since 80 percent of the people were peasants. Due to the warmer climate and more fertile land, peasantry was more popular in China. This pragmatic solution led to the Revolution starting in the rural areas. The most important difference between Stalin and Mao is the comprehension of the word proletariat. The Russians believed it meant, as Marx had, the industrial workers while the Chinese, by lack of sufficient workers, understood it as the peasantry. The Great Leap Forward where everyone was put to work was another Maoist characteristic. For 100 days each year, the peasants were not working in the fields so Mao set them up to work in the off-season harvest after 1957. Millions of men and women were put to work in winter, digging irrigation ditches and canals, preparing railroads and laying track. Then the backyard furnace was invented and 600 000 small steel establishments were set up.  The object was to overtake Britain in steel production. However, when the peasants left their land to work on the industrial projects, the lands suffered. So more changes were made. In some communes, men and women were separated to increase their productivity by cutting down socialising. On February 27th 1957, Mao was feeling very positive about all that he had done so he decided to loosen the straps on the Chinese people. He introduced the hundred flowers campaign where he encouraged arts, sciences and a flourishing socialist culture in our land. Different forms and styles in art should develop freely. It seemed he was encouraging free thought and criticism of the system. After only six weeks though, Maos open invitation brought a real storm of furious criticism from the intellectual community who believed the chairman was sincere. This infuriated Mao who was expecting positive feedback and in April 1957 a rectification campaign had begun to eliminate the triple evils: subjectivism, sectarianism, and bureaucratism. The party members and Mao believed to be above criticism so a purge of intellectuals began. The Cultural Revolution is perhaps the greatest difference between Stalinism and Maoism and was entirely set up by Mao Tse-Tung. He has been called insane many times for the crazy extent which the Cultural Revolution took and for the lasting and devastating effects it continues to have. Mao favoured the word, destruction when he promoted the Cultural Revolution; he preached that he had to destroy an old system of production, an old ideology and old customs first. He thought that once the ideology had been established, productivity would follow in a revolution. Although the bourgeoisie has been overthrown, it is still trying to use the old ideas, culture, customs and habits of the exploiting classes to corrupt the masses, capture their minds and endeavour to stage a comeback. The proletariat must do the exact opposite: it must deal merciless blows and meet head-on every challenge of the bourgeoisie in the ideological field and use the new ideas, culture, customs and habits of the proletariat to change the mental outlook of the whole of society. At present, our objective is to struggle against and overthrow those persons in authority who are taking the  capitalist road, to criticize and repudiate the reactionary bourgeois academic authorities and the ideology of the bourgeoisie and all other exploiting classes and to transform education, literature and art and all other parts of the superstructure not in correspondence with the socialist economic base, so as to facilitate the consolidation and development of the socialist system. Fifteen years after the success of the Revolution, Mao saw his new society as troubled, he had destroyed the old ruling class, but had established two new ones: the intelligentsia and the bureaucracy. Mao had turned against the intelligentsia after the hundred flowers campaign but had not finished destroying them. When he saw the Soviet Unions new aristocracy with their dachas and limousines, he set out to destroy the establishment he had created. Always one to manipulate the masses, he turned towards the youth for a new society by creating the Red Guard, an army of children. They were sanctioned by the highest authority, Mao himself and were bent on destruction. In essence, the children destroyed anything which did not appeal to them, although the initial target was to destroy the four olds: ideas, culture, customs and habits. They travelled in bands for mutual protection and inspiration, destroyed stores and restaurants and attacked however they desired. The Red Guards were divided by family background: poor peasants against well-to-do peasants, peasants against workers, and the children of army officers. The next step of the Cultural Revolution came in January 1967 when Mao replaced the officials all over China by young people with no experience and no common sense. Then universities, middle schools and primary schools closed down. This was called the period of the terror. The only young people to receive an education were the children of intellectuals who were taught by relatives and parents. Mao tried to destroy the education process which was disastrous for China as specialist, technicians ect†¦ were indispensable for the development of a country, and in this case, they were dismantled. However, he changed his mind in 1978 and sent in the Peoples Liberation Army to desman the Red Guard. Maos theory of constant revolution to avoid the forming of classes is the major separation with Leninism and Marxism. It was under these conditions that the most earthshaking political event and the largest mass mobilization the Earth has ever seen took place. This is how Chairman Mao defined its objectives: The current Great Proletarian Cultural Revolution is absolutely necessary and most timely for consolidating the dictatorship of the proletariat, preventing capitalist restoration and building socialism. Maos Communism focuses especially on the particular interest for China and this by rejecting foreign intervention. The only use for foreign involvement is to insure Chinese security, economy†¦ He believes in Chinese Communism first, and not in World Communism. However, China supports people threatened by oppression which explains their expansion policy. Indeed, China has expanded her territory by invading the Tibet, fighting Korea. China has refused economic aid, except for trade with the Soviet Union which represented only 2 percent of Chinese investments. China developed its own brand of Communism to suit its needs and similarly to Stalinism, was dictated by only one man, who had the power to decide anything he desired.

Synergies of Product Diversification Strategy

Synergies of Product Diversification Strategy Introduction Nowadays large firms have to survive in the face of economic competition. They have to keep an eye on the competitors performance. Managers try to progress and run their businesses well in order to grow and be competitive. When a large firm has reached a mature life-cycle stage it often has to explore the possibility of how to still grow. Ansoff (cited by Johnson, Scholes and Whittington, 1998) presents four basic growth alternatives: a) increased market penetration, b) market development, c) product development and d) diversification. Choosing the right path is major decision for managers. Finding out if there are reasons which may lead a large firm to prefer diversification, more specific, product diversification as the growth alternative strategy instead of other strategies is a main question. Firms who spread their activities and businesses across different product markets that are more or less related between each other are said to follow a product diversification strategy. (Pils, 2009, p.10) Product diversification strategy definition has evolved during the last decades. Some definitions are evolutional and complementary but some others contradict each other (Goold and Luchs, 1993). Therefore, it is important for managers to have a clear definition. The benefits of product diversification have been divided into two categories depending on the type of diversification: related or unrelated. Related product diversification refers to entries into new products or service businesses that have a connection to the firms existing markets (Peng, 2008). Researches (Hoskisson, 2007) and business experiences (such as Mondi AG, Procter Gamble, CHR plc., etc.) have proven that some of the benefits of this type of diversification are: Operational synergy: economies of scale Utilizing excess productive capacity Reinvesting earnings Unrelated product diversification refers to the development of products or services beyond the current capabilities and value network (Johnson et al. 2008). Some of the benefits and reasons for this type of diversification are: Financial synergy: economies of scope Increasing market power Spreading risk across a range of businesses The challenge for any large firm, once product diversification is chosen as the growth path, is to decide which type of diversification is most appropriate and what strategic plan to follow. Product diversification gives also other challenges to managers such as the need of new skills to manage a wider group of businesses, new techniques, sometimes new facilities, large capital to test the viability of the new product, produce it and market the product, hire and train new employees, etc. Therefore, diversification has some inconveniences as it involves taking a step into a territory where the parameters are unknown to the firm (Peng, 2008). Product diversification can be achieved by acquiring an existing firm in the business it wants to enter, starting up a new business subsidiary or entering into joint ventures. For large firms knowing the different growth strategies including its benefits and inconveniences is fundamental to giving managers practical recommendations. For a better understanding of these fundamental issues this research will analyze whether related or unrelated product diversification strategy leads large firms to exploit more synergies and creates more value for the firm. Based on this research question, the following sub-questions are going to be addressed in this research: Should large firms, such as Mondi AG, aim to focus on related or unrelated businesses to exploit operational synergies? How is Mondis life cycle related to the right time of diversifying? Which recommendations on product diversification strategy can be given to large firms regarding financial synergy? To answer the above questions, I will present a detailed and methodical literature review on product diversification strategy concept, categories, synergies, its relation with large firms life cycle and explore the effects of a financial crisis on large firms who have chosen this type of diversification to identify the appropriate strategy for the research goal. This research is based on the hypothesis that related product diversification is the right strategy to be chosen if operational synergies are to be achieved while for financial synergies, unrelated product diversification strategies are more appropriate. The strength of this hypothesis is tested through a case study of a large firm: The Mondi Group. The Mondi Group has been chosen as the large firm to be explored in this research because it is an international firm with one of its largest teams and headquarters in Austria. Trend, an Austrian financial magazine, ranked Mondi as the 13th top Austrian large firm out of 500 firms in 2008 having 5.159,00 Mio. Euro net sales and 26.425 employees worldwide. Product Diversification In the 20th century many researchers have written about product diversification strategy (PDS). This research will analyse how PDS is seen by managers because of the larger experience there is nowadays. Diversification has been specially growing after the whole post-war period. Whereas in 1950 only around one third of large firms in France, Germany, and the United Kingdom were diversified, by the 1990s it increased to two thirds or more (Whittington and Mayer 2003). Size and Product diversification strategy This research is focused on how large firms have reacted to the different paths of growth. The firm size: small, medium or large is an important parameter while analysing a firm strategy. In the financial and economical studies and researches the relation between size and firm variables remains a controversial subject. Some argue that size is the primary factor that determines structure whether others say that size is irrelevant (Jackson and Morgan, 1978). In my opinion, it is true that product diversification can be applied both by small and large firms, but I believe that a small firm has more limitations and can not fully develop this strategy in its organization due to limited resources: human, financial and technological. I also believe that as a consequence a firm applying product diversification strategy will increase its size. With larger number of products, the complexity of processes and production is greater. Therefore the craft needed is greater. As mentioned before, some researchers agree with this point of view like the study realized by Dewar and Hage (n.d., cited by Jackson and Morgan, 1978) which suggests that large firms facilitate changes in structure in a way that small firms can not afford. On the other hand, Woodward, Zwerman and Harvey (n.d., cited by Jackson and Morgan, 1978) concluded that instead of size, the production systems used by the firms are more connected and explain better the firm structure and feature. In other words, an efficient production system can explain the success of one large or small firm and therefore the relationship between size and differentiation is not linear. Diversification and Product Diversification Strategy Terminology Diversification The root of the word is, obviously, diverse. Pitts and Hopkins (1982) define it as literally meaning different, unlike, distinct, and separate (p.620). Therefore, if this definition is applied to the context of product diversification, we can say that it means firms having their products in various and different lines. Pils (2009) also confirms this definition as he points out that product diversified firms are understood to be active in multiple, distinct product-markets (p.10). The various definitions, forms and ways of managing diversification are the main topics of this research. Product diversification strategy There is a common denominator in the way product diversification is defined in the literature. For instance, Pils (2009) defines it as firms spreading their activities and products across different product-markets that are more or less related between each other. He also affirms that product diversification strategy determines which businesses a corporation should be in, defining the scope of the firms activities and being of high relevance for creating value for the firm. Berry (1971, p.380) defines product diversification as an increase in the number of industries in which firms are active. However, he does not point out that it can be also increasing the number of products in the current industry. Pitts and Hopkins (1982, p.620) consider firms product diversification if operating multiple different businesses at the same time. Hoskisson (2007), on the other hand, says that the firms level of diversification is a function of decisions about the number and type of businesses in whic h it will compete as well as how it will manage the business. These definitions have surely been influenced by the work of Ansoff (1957) in which he presented diversification as a possible growth strategy as mentioned in the introduction. Ansoff presented two ways of diversification: market diversification and product diversification. Although this research only focuses on the product diversification side, few lines are dedicated to explain the difference and characteristics of these two strategies. Market diversification is a strategy that takes the firm from its existing market to new ones. It exploits the current products and capabilities in new markets looking for geographical spread. This strategy is more and more used in the current times where globalization is facilitating the firms internationalisation. It also presents some challenges like cultural barriers, adding management costs and government restrictions among others. Product diversification is about adding new product to the firms portfolio whereas market diversification is about entering in new markets offering the firms current products. Reasons and Challenges Reasons and Motivations for Diversification: Any firm has a start. Normally starting as a small business it focuses on a single product. This is known as a single business strategy. The natural reasons are commonly due to a lack of cash, experience and know-how. Over time, the resources, capabilities and core competences are rooted and stabilized. At that point, firms may choose product diversified strategy, with two broad categories (related or unrelated). Large firms use product diversification strategy for a variety of reasons. Pearce and Robinson, (2005) and Hoskisson ( 2007) mention among others, the following reasons: To increase the growth rate of the firm For a better use of the companies funds than investing them into internal growth To balance the product line Diversifying the product line when the firm has reached its mature life cycle To increase efficiency and profitability, especially, if there is operational or financial synergy To increase the firms value by improving its overall performance To increase revenues or reduce costs To match and neutralize competitors market power To reduce managerial risk To increase the firms size and thus managerial compensation Product diversification challenges The above mentioned reasons and motivations for PDS can also bring along challenges and costs. One could say that PDS needs new facilities, technologies, skills, know-how, employee and managerial training, etc. It is important to know that it can have a great negative impact on the firms current products if a new product is launched with the firms brand name and the product is not well accepted in the market. The reasons for the market rejection can be e.g. lower quality than expected from the firm, high price, poor distribution, etc. At that point, the whole company will be negatively affected by a bad move. This argument is also supported by various authors such as Hoskisson, (2007); Grant, Jammine, and Thomas (1998); Goold and Luchs (1993), (cited by Pils, 2009). They state that some of the challenges are information processing, coordination, and control problems due to increase of information asymmetries difficult for a single business to deal with. In case of applying a PDS a fi rm has to change its structure and adopt new systems. Moreover Hoskisson (2007) elaborates that the data and information a firm using PDS requires is substantially greater. Furthermore increasing portfolio diversity may involve inefficiencies due to growing conflict on top management and a lack of adaptability to environmental change. Product Diversification Strategy Categories: Related Unrelated Product Diversification Strategy As mentioned before, there are two broad categories of PDS: Related and Unrelated. Some authors such as Richard Rumel (cited by Lovallo and Mendoca, 2007), Peng (2008) also categorize PDS as: focused, moderately and highly diversified. These three categories are not deeply explored in this research. But to dedicate some words, it should be mentioned that Richard Rumelt, in 1972, was the first person to statistically prove the linkage between corporate strategy and profitability. He concluded that moderately diversified firms outperform more diversified ones. Lovallo and Mendoca (2007) sustain that this finding has been valid more than 30 years of research. Moreover, a contemporary author, Peng (2008), also points out that some moderate level of diversification is the most optimal. The main focus of this research is whether a related or unrelated strategy is more suitable for large firms while diversifying. Therefore, in the following lines a definition and a detailed explanation of both is presented. Related product diversification can be defined as a strategy that firms can choose as a growing path. As the word related signals, this diversification strategy is focused on products that have a correlation between each other and are related in some way, especially in their core competences. Normally, firms that choose related product diversification as a strategy are sharing a common factor such as the raw material, the technology or the know-how needed to produce different products. Moreover, the products offered by the firm do not necessarily need to be similar. For instance, a firm running a cinema complex and also offering soft-drinks to be sold at the movie theatres is using a related PDS. Even if their products may not be related, they must share some common ground on their value or supply chain. In this case, the customers targeted are the same. Pearce and Robinson,(2005) confirm this by defining related businesses as those relying on same or similar capabilities in order to have success and achieve competitive advantage in their product markets. Major advantages of related PDS are: concentration of strength, exploitation of a market niche, and the development of synergies. A good example, of a firm applying this strategy is CRH, an Irish company who operates in 35 countries with more than 93.500 employees. The CRH Corporate Social Responsibility Report (2007) states that the firm is a diversified building materials group which manufactures and distributes building material products from the fundamentals of heavy materials and elements to construct the frame, through value added products that complete the building envelope, to distribution channels which service construction fit-out and renewal. CRH has three closely related core businesses: primary materials (aggregates, cement, asphalt and ready mixed concrete); value-added building products (pre-cast, architectural, construction accessories, clay, gas, insulation, building envelope products); and specialist building materials (CRH, 2009). CRH initially decided to diversify to gain economies of scope and also to stretch the corporate parenting capabilities. While CRH diversified its market its power i ncreased and consequently it could afford to cross-subsidise one business from the surpluses earned by another, in a way that competitors could not. As an effect, it could drive out competitors. Before going into further details regarding related PDS, a definition of Unrelated Product Diversification is given. In this case, as the word unrelated points out this diversification strategy focuses on firms offering products that have no relation, are not complementary between each other and do not have necessarily the same raw material as their prime and main composition. Moreover, they do not need to share any part of their supply chain (customers, distributor, manufacturer, logistics, etc). For instance, the Easy Group Company is present in several industries and services that have actually no relation. Some of them are: travel companies, car rentals, internet-cafes, cinemas, cosmetics, etc. Stelio Haji-Ionannou, the founder of the company has developed a cost strategy that pretends to apply in all its businesses. It seems that he believes that his formula is valid for any business. Normally the reason why firms choose this path is known to reduce their financial risks. Peng (2008) refers to unrelated PDS as firms entering into industries new lines that have no evident connections to the present firm line of businesses. Furthermore, Hoskisson (2007) says that unrelated PDS occurs when there are no overlapping capabilities other than financial resources. This strategy is also known in the financial literature as conglomerates (Hoskisson, 2007; Peng, 2008; Pearce and Robinson, 2005) It has been widely discussed whether related is more successful or unrelated. To be able to answer this fundamental question the following pros and cons are explored: Human resources: Related product diversification is characterized by the ease of human resources relocation because the skills and capabilities needed for the introduction of the new products are very similar. On the other hand, unrelated PDS requires recruiting new personnel or training current employees in the new fields. (Tallman, 2003) Technologies Obviously, if a firm chooses unrelated PDS, it will probably not be able to share technologies. Therefore, the investment needed to apply this kind of diversification is greater than by applying a related one. Related PDS is characterised by sharing technologies needed to produce the new products. For example, a firm which produces shampoo and introduces hair conditioner may use the same technology. In that way it reduces the investment costs for the new production and gain economies of scope (also see 2.5). Tallman (2003) confirms that related products can increase the use of existing fixed investments and existing capacity for more purposes and more intensively, gaining efficiencies that reduce costs. Additionally, he says that it can improve the efficiency of its existing resource infrastructure by increasing the flow of product to a wider range of customers. Management For managers it is easier to introduce related products than unrelated ones because they are familiar to the industry and can apply the same or similar strategies. For unrelated ones, managers have to learn about the new products and often the strategy used for the current products is not applicable for the new ones. Therefore, managers should experience new strategies which at the beginning may fail. Prahalad and Hamel (1990), said that it is likely that firm managers of unrelated products may be ineffective because the routines and capabilities they have already developed are not applicable one to one to the entire range of businesses. On the other hand it could be argued that it can be effective as top management can concentrate on financial management and costs controls while leaving operational control with each business unit. Competitors It is easier for competitors to imitate the financial economies of a firm than the operational synergies derived from a related PDS. This is due to the fact that operational synergies derived from the use of current know-how, facilities, capabilities and experiences are more difficult to imitate than realizing that a firm is diversifying into new unrelated products based on the percentage of the revenue it can gain. Therefore, it is less likely that competitors will imitate a firm which introduces new related products. Peng and Delios, (2006), and Khanna and Palepu, (2005), (cited by Hoskisson, 2007) sustain that competitors find it easier to imitate financial economies than replicating the value gained by related PDS from the economies of scope developed through operational relatedness. Control Mechanism The principle control mechanism for related diversification is strategic control with rich communication between corporate and business units managers. Financial results are obviously not a fair means to measure the functioning of each business unit. One business unit may have low revenues but its main function is to support the others. For unrelated products, the best way to control is exactly the opposite. The emphasis has to be on financial control (return and investment) to evaluate the units performance. (Peng, 2008) Market saturation When the product a firm is offering is close to a market saturation or obsolescence, the best thing a firm can do is to enter into another market offering unrelated products. In that way the company has an opportunity to grow. It would be a great mistake in a saturated market to introduce related products because the competition is already very high and to get a profitable market share is unlikely. Stabilize Earnings Another reason would be to stabilize the earnings and dividends of a firm in a cyclical industry. In that case, the firm should diversify into an industry with complementary cycles independent of the relation with the current products. Independency Firms that are uncomfortable to be dependent on one product line should diversify into other businesses or industries. In that way the risk is spread and all the weight is not in one product line. All in all the benefits of both categories of diversification do not appear as the result of a magic formula that just happens but as Tallman (2003) and Peng (2008) also sustain it is the result of an active management of resources and capabilities with potential for broader application. Product diversification synergies need to be explored in more detail. Therefore the following section is dedicated. Product Diversification Synergies Pils (2009) explains that the word synergy is derived from the Greek word synergos and literally means working together. In business terminology, synergy is used to describe the ability of two or more business units or firms to make greater value working together than they would do independently (Goold and Campbell, 1998, p.133). Diversifying a large firm is considered economically positive only if synergetic effects between the different businesses units are achieved. As a consequence, the idea of maximizing synergies as the main objective of diversification strategy is presented below. Operational Synergies The emphasis of product related diversification is on operational synergies because in this strategy production resources are shared to have a cost competitive advantage. In the financial literature, the term operational synergy has been used as a synonym for economies of scope (Tanriverdi and Vendkatraman, 2005). Economies of scope and/or operational synergies are the result of two or more business units that share and transfer factors of production, its resources and capabilities. As a consequence the shared production costs will be lower than production costs of each one separately. Peng (2008) defines it as competitiveness increase beyond what can be achieved by engaging in two product markets separately. In other words, firms benefit from lowering unit costs by gaining advantage from product relatedness, i.e. 2+2=5. Some sources of operational synergy are (Peng, 2008): Technologies, such as common platforms Marketing, such as common brands, and Manufacturing, such as common logistics Conscious of these possible synergies, Zodiac a French large firm who in 1930 was focused on inflatable boats and had strong ties to the French army started to introduce new related products to its portfolio. Zodiac created 5 different divisions having inflatable materials as a common denominator. These divisions have been: marine division (recreation, military, professional, safety of life at sea, environmental solutions); pool division (pool sector and pool care and water cleaning, heating, pumps, filters); airline equipment division (passenger seats and on-board toilets and sanitation systems); aerosafety systems division (aircraft escape slides, parachute systems, helicopter floats, and flexible fuel tanks); technology division and aircraft system division. (Zodiac Aerospace, 2009) Zodiac has benefited from the operational synergies through the use of inflatable products technology and has also used market synergies because it has supplied the same customers with different produc ts. Conversely, unrelated diversification does not need to have advanced levels of operational relatedness. Rather, each business unit has its own strategic and operational responsibility and the management can focus on the financial synergies. (Tallman, 2003) Investment synergies are very much related to the operational synergies. It can be argued that one is the consequence of the other or that they are developed hand in hand. Investment synergies are the result of products sharing the same plant, resource and development (RD) and machinery. This is more probable to happen with a related product diversification because of the previous explanations. For unrelated products, the machinery is improbable the same and each product need its own RD. Financial Synergies The means obtaining financial synergy is different from obtaining operational synergies. The key role of firms is to identify and find profitable investment opportunities. The parameter to measure if financial synergies are to be achieved is whether managers can exceed the job of identifying and taking advantage of profitable opportunities compared to external capital markets (Peng, 2008). Hoskisson (2007) defines financial synergies as cost savings realized through a better use of financial assets based on investments inside or outside the firm. Competent internal capital distribution can lead to financial synergies and reduces risk between the firms businesses (Higgings and Schall, 1975). A firm using unrelated PDS may grow, but only internally in each business unit and will not reach operational efficiencies but financial ones. That means, the revenue of each business unit will be greater when functioning as a conglomerate rather than functioning independently. This idea is supported by Peng (2008) who states that competitiveness increases for each unit financially further than what can be achieved by each unit competing independently as an individual firm. Many different products that are not necessarily related offer opportunities of high returns. If a firm is only interested in the returns, unrelated product diversification may be a right path of growth. Sales synergies: These occur from sharing salespeople, warehouses, distribution channels, and advertising. Salespeople have more chances to be able to sell to the same customer a wide range of related products than unrelated ones. Salespeople will try to sell a complete pack of product to the same customer and in that way take advantage of the sales synergies that related product diversification presents. Imagine a company selling sport shoes and refrigerators, in a selling process it is more unlikely to be able to sell both products to the same customer than if he would offer sport shoes and sport clothes. On the other hand, if a firm has developed a well-known brand, the use of the brand-name in other products, related or unrelated, can increase and facilitate sales because it can have build before customer loyalty to the brand. For example, Mars chocolate confectionery successful launched ice-creams. Much of it success could be related to the brand name. So, sales synergies do not occur only withi n related products but also within unrelated ones if the brand name is positively perceived and recognized by the customers. Management synergies It arises from managers accumulating experiences from handling problems in one business unit that can be applied and used to solve problems in a related business unit. Even more, the accumulated experience and know-how allows answering faster to the industry trends and challenges. Managers are able to transfer their skills, experiences and strategies (Enz, 2009, p.222). Contrarily, unrelated product managers can not apply the experience gained from solving the problems of one unit to the other in most cases because the problems are specific for each product. All these synergies can be undermine due to additional layers of management, delays due to organization and information complexity, communication costs for coordination, imaginary synergies that in fact do not exist, incompatible production processes, etc. Therefore while choosing between related and unrelated PDS the mentioned synergy risks have to be taken into account. Research Methodology In this section an explanation of how the data for the case study was collected and how it was analyzed is presented. It is important to know how the data was collected because the method chosen affects the final findings. The information and content of The Mondi Group Case Study was obtained through an expert interview with Mr. Wolfgang Kropiunik, Mondis Marketing Manager of Uncoated Fine Paper. A questionnaire was sent as a guide and overview of the face-to-face interview questions. A meeting for a 40 minutes exploratory semi-structured interview was organized on the 24th of November 2009 at Mondi Headquarter, Vienna. Mondi Group was chosen as the large firm to be analyzed as it is a large firm with more than 33.000 employees worldwide and has its headquarter in Vienna (Mondi, 2009). Therefore the results presented in this research are very much related to Mondis functioning and successful method. It might be possible that if the studied firm had been another one, the results of the research question could have been different. The interview was recorded and the data obtained was transcribed (see appendix). The transcription of the interview allowed a deeper comprehension of Mondis product diversification strategy, synergies and challenges. Moreover, the recommendations presented to the company (see 4.7) are inspired from the challenges Mr. Kropiunik mentioned during the interview. The interview gave a number of information about Mondis life cycle, PDS and challenges especially during the current financial crisis The Mondi Group Case Study Mondi is a large and international packaging and paper firm represented in around 35 countries. In 2008, it had revenues of 6.3 billion EUR and about 33.400 employees (Mondi, 2009). It has a strong presence in Western Europe, Russia and South Africa. Mondis Europe and International Division has its headquarter in Vienna while the corporate headquarter is located in Johannesburg. In Vienna, there are three businesses: Uncoated Fine Paper, Corrugated and Bags Specialties. Mondi has reached to be fully integrated having the control of its supply chain. It grows trees, manufactures pulp and paper and converts packaging paper into corrugated packaging an Synergies of Product Diversification Strategy Synergies of Product Diversification Strategy Introduction Nowadays large firms have to survive in the face of economic competition. They have to keep an eye on the competitors performance. Managers try to progress and run their businesses well in order to grow and be competitive. When a large firm has reached a mature life-cycle stage it often has to explore the possibility of how to still grow. Ansoff (cited by Johnson, Scholes and Whittington, 1998) presents four basic growth alternatives: a) increased market penetration, b) market development, c) product development and d) diversification. Choosing the right path is major decision for managers. Finding out if there are reasons which may lead a large firm to prefer diversification, more specific, product diversification as the growth alternative strategy instead of other strategies is a main question. Firms who spread their activities and businesses across different product markets that are more or less related between each other are said to follow a product diversification strategy. (Pils, 2009, p.10) Product diversification strategy definition has evolved during the last decades. Some definitions are evolutional and complementary but some others contradict each other (Goold and Luchs, 1993). Therefore, it is important for managers to have a clear definition. The benefits of product diversification have been divided into two categories depending on the type of diversification: related or unrelated. Related product diversification refers to entries into new products or service businesses that have a connection to the firms existing markets (Peng, 2008). Researches (Hoskisson, 2007) and business experiences (such as Mondi AG, Procter Gamble, CHR plc., etc.) have proven that some of the benefits of this type of diversification are: Operational synergy: economies of scale Utilizing excess productive capacity Reinvesting earnings Unrelated product diversification refers to the development of products or services beyond the current capabilities and value network (Johnson et al. 2008). Some of the benefits and reasons for this type of diversification are: Financial synergy: economies of scope Increasing market power Spreading risk across a range of businesses The challenge for any large firm, once product diversification is chosen as the growth path, is to decide which type of diversification is most appropriate and what strategic plan to follow. Product diversification gives also other challenges to managers such as the need of new skills to manage a wider group of businesses, new techniques, sometimes new facilities, large capital to test the viability of the new product, produce it and market the product, hire and train new employees, etc. Therefore, diversification has some inconveniences as it involves taking a step into a territory where the parameters are unknown to the firm (Peng, 2008). Product diversification can be achieved by acquiring an existing firm in the business it wants to enter, starting up a new business subsidiary or entering into joint ventures. For large firms knowing the different growth strategies including its benefits and inconveniences is fundamental to giving managers practical recommendations. For a better understanding of these fundamental issues this research will analyze whether related or unrelated product diversification strategy leads large firms to exploit more synergies and creates more value for the firm. Based on this research question, the following sub-questions are going to be addressed in this research: Should large firms, such as Mondi AG, aim to focus on related or unrelated businesses to exploit operational synergies? How is Mondis life cycle related to the right time of diversifying? Which recommendations on product diversification strategy can be given to large firms regarding financial synergy? To answer the above questions, I will present a detailed and methodical literature review on product diversification strategy concept, categories, synergies, its relation with large firms life cycle and explore the effects of a financial crisis on large firms who have chosen this type of diversification to identify the appropriate strategy for the research goal. This research is based on the hypothesis that related product diversification is the right strategy to be chosen if operational synergies are to be achieved while for financial synergies, unrelated product diversification strategies are more appropriate. The strength of this hypothesis is tested through a case study of a large firm: The Mondi Group. The Mondi Group has been chosen as the large firm to be explored in this research because it is an international firm with one of its largest teams and headquarters in Austria. Trend, an Austrian financial magazine, ranked Mondi as the 13th top Austrian large firm out of 500 firms in 2008 having 5.159,00 Mio. Euro net sales and 26.425 employees worldwide. Product Diversification In the 20th century many researchers have written about product diversification strategy (PDS). This research will analyse how PDS is seen by managers because of the larger experience there is nowadays. Diversification has been specially growing after the whole post-war period. Whereas in 1950 only around one third of large firms in France, Germany, and the United Kingdom were diversified, by the 1990s it increased to two thirds or more (Whittington and Mayer 2003). Size and Product diversification strategy This research is focused on how large firms have reacted to the different paths of growth. The firm size: small, medium or large is an important parameter while analysing a firm strategy. In the financial and economical studies and researches the relation between size and firm variables remains a controversial subject. Some argue that size is the primary factor that determines structure whether others say that size is irrelevant (Jackson and Morgan, 1978). In my opinion, it is true that product diversification can be applied both by small and large firms, but I believe that a small firm has more limitations and can not fully develop this strategy in its organization due to limited resources: human, financial and technological. I also believe that as a consequence a firm applying product diversification strategy will increase its size. With larger number of products, the complexity of processes and production is greater. Therefore the craft needed is greater. As mentioned before, some researchers agree with this point of view like the study realized by Dewar and Hage (n.d., cited by Jackson and Morgan, 1978) which suggests that large firms facilitate changes in structure in a way that small firms can not afford. On the other hand, Woodward, Zwerman and Harvey (n.d., cited by Jackson and Morgan, 1978) concluded that instead of size, the production systems used by the firms are more connected and explain better the firm structure and feature. In other words, an efficient production system can explain the success of one large or small firm and therefore the relationship between size and differentiation is not linear. Diversification and Product Diversification Strategy Terminology Diversification The root of the word is, obviously, diverse. Pitts and Hopkins (1982) define it as literally meaning different, unlike, distinct, and separate (p.620). Therefore, if this definition is applied to the context of product diversification, we can say that it means firms having their products in various and different lines. Pils (2009) also confirms this definition as he points out that product diversified firms are understood to be active in multiple, distinct product-markets (p.10). The various definitions, forms and ways of managing diversification are the main topics of this research. Product diversification strategy There is a common denominator in the way product diversification is defined in the literature. For instance, Pils (2009) defines it as firms spreading their activities and products across different product-markets that are more or less related between each other. He also affirms that product diversification strategy determines which businesses a corporation should be in, defining the scope of the firms activities and being of high relevance for creating value for the firm. Berry (1971, p.380) defines product diversification as an increase in the number of industries in which firms are active. However, he does not point out that it can be also increasing the number of products in the current industry. Pitts and Hopkins (1982, p.620) consider firms product diversification if operating multiple different businesses at the same time. Hoskisson (2007), on the other hand, says that the firms level of diversification is a function of decisions about the number and type of businesses in whic h it will compete as well as how it will manage the business. These definitions have surely been influenced by the work of Ansoff (1957) in which he presented diversification as a possible growth strategy as mentioned in the introduction. Ansoff presented two ways of diversification: market diversification and product diversification. Although this research only focuses on the product diversification side, few lines are dedicated to explain the difference and characteristics of these two strategies. Market diversification is a strategy that takes the firm from its existing market to new ones. It exploits the current products and capabilities in new markets looking for geographical spread. This strategy is more and more used in the current times where globalization is facilitating the firms internationalisation. It also presents some challenges like cultural barriers, adding management costs and government restrictions among others. Product diversification is about adding new product to the firms portfolio whereas market diversification is about entering in new markets offering the firms current products. Reasons and Challenges Reasons and Motivations for Diversification: Any firm has a start. Normally starting as a small business it focuses on a single product. This is known as a single business strategy. The natural reasons are commonly due to a lack of cash, experience and know-how. Over time, the resources, capabilities and core competences are rooted and stabilized. At that point, firms may choose product diversified strategy, with two broad categories (related or unrelated). Large firms use product diversification strategy for a variety of reasons. Pearce and Robinson, (2005) and Hoskisson ( 2007) mention among others, the following reasons: To increase the growth rate of the firm For a better use of the companies funds than investing them into internal growth To balance the product line Diversifying the product line when the firm has reached its mature life cycle To increase efficiency and profitability, especially, if there is operational or financial synergy To increase the firms value by improving its overall performance To increase revenues or reduce costs To match and neutralize competitors market power To reduce managerial risk To increase the firms size and thus managerial compensation Product diversification challenges The above mentioned reasons and motivations for PDS can also bring along challenges and costs. One could say that PDS needs new facilities, technologies, skills, know-how, employee and managerial training, etc. It is important to know that it can have a great negative impact on the firms current products if a new product is launched with the firms brand name and the product is not well accepted in the market. The reasons for the market rejection can be e.g. lower quality than expected from the firm, high price, poor distribution, etc. At that point, the whole company will be negatively affected by a bad move. This argument is also supported by various authors such as Hoskisson, (2007); Grant, Jammine, and Thomas (1998); Goold and Luchs (1993), (cited by Pils, 2009). They state that some of the challenges are information processing, coordination, and control problems due to increase of information asymmetries difficult for a single business to deal with. In case of applying a PDS a fi rm has to change its structure and adopt new systems. Moreover Hoskisson (2007) elaborates that the data and information a firm using PDS requires is substantially greater. Furthermore increasing portfolio diversity may involve inefficiencies due to growing conflict on top management and a lack of adaptability to environmental change. Product Diversification Strategy Categories: Related Unrelated Product Diversification Strategy As mentioned before, there are two broad categories of PDS: Related and Unrelated. Some authors such as Richard Rumel (cited by Lovallo and Mendoca, 2007), Peng (2008) also categorize PDS as: focused, moderately and highly diversified. These three categories are not deeply explored in this research. But to dedicate some words, it should be mentioned that Richard Rumelt, in 1972, was the first person to statistically prove the linkage between corporate strategy and profitability. He concluded that moderately diversified firms outperform more diversified ones. Lovallo and Mendoca (2007) sustain that this finding has been valid more than 30 years of research. Moreover, a contemporary author, Peng (2008), also points out that some moderate level of diversification is the most optimal. The main focus of this research is whether a related or unrelated strategy is more suitable for large firms while diversifying. Therefore, in the following lines a definition and a detailed explanation of both is presented. Related product diversification can be defined as a strategy that firms can choose as a growing path. As the word related signals, this diversification strategy is focused on products that have a correlation between each other and are related in some way, especially in their core competences. Normally, firms that choose related product diversification as a strategy are sharing a common factor such as the raw material, the technology or the know-how needed to produce different products. Moreover, the products offered by the firm do not necessarily need to be similar. For instance, a firm running a cinema complex and also offering soft-drinks to be sold at the movie theatres is using a related PDS. Even if their products may not be related, they must share some common ground on their value or supply chain. In this case, the customers targeted are the same. Pearce and Robinson,(2005) confirm this by defining related businesses as those relying on same or similar capabilities in order to have success and achieve competitive advantage in their product markets. Major advantages of related PDS are: concentration of strength, exploitation of a market niche, and the development of synergies. A good example, of a firm applying this strategy is CRH, an Irish company who operates in 35 countries with more than 93.500 employees. The CRH Corporate Social Responsibility Report (2007) states that the firm is a diversified building materials group which manufactures and distributes building material products from the fundamentals of heavy materials and elements to construct the frame, through value added products that complete the building envelope, to distribution channels which service construction fit-out and renewal. CRH has three closely related core businesses: primary materials (aggregates, cement, asphalt and ready mixed concrete); value-added building products (pre-cast, architectural, construction accessories, clay, gas, insulation, building envelope products); and specialist building materials (CRH, 2009). CRH initially decided to diversify to gain economies of scope and also to stretch the corporate parenting capabilities. While CRH diversified its market its power i ncreased and consequently it could afford to cross-subsidise one business from the surpluses earned by another, in a way that competitors could not. As an effect, it could drive out competitors. Before going into further details regarding related PDS, a definition of Unrelated Product Diversification is given. In this case, as the word unrelated points out this diversification strategy focuses on firms offering products that have no relation, are not complementary between each other and do not have necessarily the same raw material as their prime and main composition. Moreover, they do not need to share any part of their supply chain (customers, distributor, manufacturer, logistics, etc). For instance, the Easy Group Company is present in several industries and services that have actually no relation. Some of them are: travel companies, car rentals, internet-cafes, cinemas, cosmetics, etc. Stelio Haji-Ionannou, the founder of the company has developed a cost strategy that pretends to apply in all its businesses. It seems that he believes that his formula is valid for any business. Normally the reason why firms choose this path is known to reduce their financial risks. Peng (2008) refers to unrelated PDS as firms entering into industries new lines that have no evident connections to the present firm line of businesses. Furthermore, Hoskisson (2007) says that unrelated PDS occurs when there are no overlapping capabilities other than financial resources. This strategy is also known in the financial literature as conglomerates (Hoskisson, 2007; Peng, 2008; Pearce and Robinson, 2005) It has been widely discussed whether related is more successful or unrelated. To be able to answer this fundamental question the following pros and cons are explored: Human resources: Related product diversification is characterized by the ease of human resources relocation because the skills and capabilities needed for the introduction of the new products are very similar. On the other hand, unrelated PDS requires recruiting new personnel or training current employees in the new fields. (Tallman, 2003) Technologies Obviously, if a firm chooses unrelated PDS, it will probably not be able to share technologies. Therefore, the investment needed to apply this kind of diversification is greater than by applying a related one. Related PDS is characterised by sharing technologies needed to produce the new products. For example, a firm which produces shampoo and introduces hair conditioner may use the same technology. In that way it reduces the investment costs for the new production and gain economies of scope (also see 2.5). Tallman (2003) confirms that related products can increase the use of existing fixed investments and existing capacity for more purposes and more intensively, gaining efficiencies that reduce costs. Additionally, he says that it can improve the efficiency of its existing resource infrastructure by increasing the flow of product to a wider range of customers. Management For managers it is easier to introduce related products than unrelated ones because they are familiar to the industry and can apply the same or similar strategies. For unrelated ones, managers have to learn about the new products and often the strategy used for the current products is not applicable for the new ones. Therefore, managers should experience new strategies which at the beginning may fail. Prahalad and Hamel (1990), said that it is likely that firm managers of unrelated products may be ineffective because the routines and capabilities they have already developed are not applicable one to one to the entire range of businesses. On the other hand it could be argued that it can be effective as top management can concentrate on financial management and costs controls while leaving operational control with each business unit. Competitors It is easier for competitors to imitate the financial economies of a firm than the operational synergies derived from a related PDS. This is due to the fact that operational synergies derived from the use of current know-how, facilities, capabilities and experiences are more difficult to imitate than realizing that a firm is diversifying into new unrelated products based on the percentage of the revenue it can gain. Therefore, it is less likely that competitors will imitate a firm which introduces new related products. Peng and Delios, (2006), and Khanna and Palepu, (2005), (cited by Hoskisson, 2007) sustain that competitors find it easier to imitate financial economies than replicating the value gained by related PDS from the economies of scope developed through operational relatedness. Control Mechanism The principle control mechanism for related diversification is strategic control with rich communication between corporate and business units managers. Financial results are obviously not a fair means to measure the functioning of each business unit. One business unit may have low revenues but its main function is to support the others. For unrelated products, the best way to control is exactly the opposite. The emphasis has to be on financial control (return and investment) to evaluate the units performance. (Peng, 2008) Market saturation When the product a firm is offering is close to a market saturation or obsolescence, the best thing a firm can do is to enter into another market offering unrelated products. In that way the company has an opportunity to grow. It would be a great mistake in a saturated market to introduce related products because the competition is already very high and to get a profitable market share is unlikely. Stabilize Earnings Another reason would be to stabilize the earnings and dividends of a firm in a cyclical industry. In that case, the firm should diversify into an industry with complementary cycles independent of the relation with the current products. Independency Firms that are uncomfortable to be dependent on one product line should diversify into other businesses or industries. In that way the risk is spread and all the weight is not in one product line. All in all the benefits of both categories of diversification do not appear as the result of a magic formula that just happens but as Tallman (2003) and Peng (2008) also sustain it is the result of an active management of resources and capabilities with potential for broader application. Product diversification synergies need to be explored in more detail. Therefore the following section is dedicated. Product Diversification Synergies Pils (2009) explains that the word synergy is derived from the Greek word synergos and literally means working together. In business terminology, synergy is used to describe the ability of two or more business units or firms to make greater value working together than they would do independently (Goold and Campbell, 1998, p.133). Diversifying a large firm is considered economically positive only if synergetic effects between the different businesses units are achieved. As a consequence, the idea of maximizing synergies as the main objective of diversification strategy is presented below. Operational Synergies The emphasis of product related diversification is on operational synergies because in this strategy production resources are shared to have a cost competitive advantage. In the financial literature, the term operational synergy has been used as a synonym for economies of scope (Tanriverdi and Vendkatraman, 2005). Economies of scope and/or operational synergies are the result of two or more business units that share and transfer factors of production, its resources and capabilities. As a consequence the shared production costs will be lower than production costs of each one separately. Peng (2008) defines it as competitiveness increase beyond what can be achieved by engaging in two product markets separately. In other words, firms benefit from lowering unit costs by gaining advantage from product relatedness, i.e. 2+2=5. Some sources of operational synergy are (Peng, 2008): Technologies, such as common platforms Marketing, such as common brands, and Manufacturing, such as common logistics Conscious of these possible synergies, Zodiac a French large firm who in 1930 was focused on inflatable boats and had strong ties to the French army started to introduce new related products to its portfolio. Zodiac created 5 different divisions having inflatable materials as a common denominator. These divisions have been: marine division (recreation, military, professional, safety of life at sea, environmental solutions); pool division (pool sector and pool care and water cleaning, heating, pumps, filters); airline equipment division (passenger seats and on-board toilets and sanitation systems); aerosafety systems division (aircraft escape slides, parachute systems, helicopter floats, and flexible fuel tanks); technology division and aircraft system division. (Zodiac Aerospace, 2009) Zodiac has benefited from the operational synergies through the use of inflatable products technology and has also used market synergies because it has supplied the same customers with different produc ts. Conversely, unrelated diversification does not need to have advanced levels of operational relatedness. Rather, each business unit has its own strategic and operational responsibility and the management can focus on the financial synergies. (Tallman, 2003) Investment synergies are very much related to the operational synergies. It can be argued that one is the consequence of the other or that they are developed hand in hand. Investment synergies are the result of products sharing the same plant, resource and development (RD) and machinery. This is more probable to happen with a related product diversification because of the previous explanations. For unrelated products, the machinery is improbable the same and each product need its own RD. Financial Synergies The means obtaining financial synergy is different from obtaining operational synergies. The key role of firms is to identify and find profitable investment opportunities. The parameter to measure if financial synergies are to be achieved is whether managers can exceed the job of identifying and taking advantage of profitable opportunities compared to external capital markets (Peng, 2008). Hoskisson (2007) defines financial synergies as cost savings realized through a better use of financial assets based on investments inside or outside the firm. Competent internal capital distribution can lead to financial synergies and reduces risk between the firms businesses (Higgings and Schall, 1975). A firm using unrelated PDS may grow, but only internally in each business unit and will not reach operational efficiencies but financial ones. That means, the revenue of each business unit will be greater when functioning as a conglomerate rather than functioning independently. This idea is supported by Peng (2008) who states that competitiveness increases for each unit financially further than what can be achieved by each unit competing independently as an individual firm. Many different products that are not necessarily related offer opportunities of high returns. If a firm is only interested in the returns, unrelated product diversification may be a right path of growth. Sales synergies: These occur from sharing salespeople, warehouses, distribution channels, and advertising. Salespeople have more chances to be able to sell to the same customer a wide range of related products than unrelated ones. Salespeople will try to sell a complete pack of product to the same customer and in that way take advantage of the sales synergies that related product diversification presents. Imagine a company selling sport shoes and refrigerators, in a selling process it is more unlikely to be able to sell both products to the same customer than if he would offer sport shoes and sport clothes. On the other hand, if a firm has developed a well-known brand, the use of the brand-name in other products, related or unrelated, can increase and facilitate sales because it can have build before customer loyalty to the brand. For example, Mars chocolate confectionery successful launched ice-creams. Much of it success could be related to the brand name. So, sales synergies do not occur only withi n related products but also within unrelated ones if the brand name is positively perceived and recognized by the customers. Management synergies It arises from managers accumulating experiences from handling problems in one business unit that can be applied and used to solve problems in a related business unit. Even more, the accumulated experience and know-how allows answering faster to the industry trends and challenges. Managers are able to transfer their skills, experiences and strategies (Enz, 2009, p.222). Contrarily, unrelated product managers can not apply the experience gained from solving the problems of one unit to the other in most cases because the problems are specific for each product. All these synergies can be undermine due to additional layers of management, delays due to organization and information complexity, communication costs for coordination, imaginary synergies that in fact do not exist, incompatible production processes, etc. Therefore while choosing between related and unrelated PDS the mentioned synergy risks have to be taken into account. Research Methodology In this section an explanation of how the data for the case study was collected and how it was analyzed is presented. It is important to know how the data was collected because the method chosen affects the final findings. The information and content of The Mondi Group Case Study was obtained through an expert interview with Mr. Wolfgang Kropiunik, Mondis Marketing Manager of Uncoated Fine Paper. A questionnaire was sent as a guide and overview of the face-to-face interview questions. A meeting for a 40 minutes exploratory semi-structured interview was organized on the 24th of November 2009 at Mondi Headquarter, Vienna. Mondi Group was chosen as the large firm to be analyzed as it is a large firm with more than 33.000 employees worldwide and has its headquarter in Vienna (Mondi, 2009). Therefore the results presented in this research are very much related to Mondis functioning and successful method. It might be possible that if the studied firm had been another one, the results of the research question could have been different. The interview was recorded and the data obtained was transcribed (see appendix). The transcription of the interview allowed a deeper comprehension of Mondis product diversification strategy, synergies and challenges. Moreover, the recommendations presented to the company (see 4.7) are inspired from the challenges Mr. Kropiunik mentioned during the interview. The interview gave a number of information about Mondis life cycle, PDS and challenges especially during the current financial crisis The Mondi Group Case Study Mondi is a large and international packaging and paper firm represented in around 35 countries. In 2008, it had revenues of 6.3 billion EUR and about 33.400 employees (Mondi, 2009). It has a strong presence in Western Europe, Russia and South Africa. Mondis Europe and International Division has its headquarter in Vienna while the corporate headquarter is located in Johannesburg. In Vienna, there are three businesses: Uncoated Fine Paper, Corrugated and Bags Specialties. Mondi has reached to be fully integrated having the control of its supply chain. It grows trees, manufactures pulp and paper and converts packaging paper into corrugated packaging an

Christianity and its Reception in Japan Essay -- Jesuit Missionaries,

During the fifthteenth century the Western religion of Christianity began to spread across the world through the influence of European powers such as Portugal and Spain. In 1549 the tiny island nation of Japan was first exposed to Christianity in the form of Jesuit missionaries, which included the affluent Saint Francis Xavier of Spain. Japan, up to this time, had always been an isolated country and this was applied towards its traditional cultural values as well, shunning outsider influences without a second thought. Through Xavier's efforts however, Christianity was able to create a solid foundation in spite of its foreign nature. From its point of arrival in 1549 Christianity enjoyed a peaceful and gradual growth, until 1597, when Japan's then de facto military leader, Toyotomi Hideyoshi, ordered the crucifixion of some twenty-six Christians in an outburst of anger (Spae 5). From here on the Japanese government began a series of persecution against Christianity and its followers w ithin Japan, ultimately cultivating into a bloody rebellion, and near massacre, in the Shimabara providence in 1639, and the eventual banning of all things Christian alongside a re-isolation of the country. This raises the question: Why was the religion of Christianity met with such resentment by the Japanese government? To answer the question, one must understand the circumstance and history of foreign tolerance in Japan, while also being aware of the political situation within the country at the time. From learning and analyzing these factors of society and politics, it can be realized that Christianity was utilized as a political scapegoat by the Shogunate [Military] government for superordinate means. Furthermore by analyzing this claim, an explana... ...d citizens. The attack of Christianity was chosen due to its foreign nature, as well the fact that it was minor nuisance, posed no actual political threat, and could easily be manipulated into a terrible monster. Once the Bakafu created this image of the evil Christians, and dispelled of it, the Japanese citizens were tricked into a fervent trust and admiration of their rulers. The events which transpired during this period of time help to explain why later Japan would become such a ultra-nationalistic country. The military administration of Japan was able to draw such focus and morale from its citizens due to an excellent manipulation towards view of foreign ideas. And from this initial embedding of anti-foreignness and blind belief in the government, would come the birth of the infamous modern-era patriotic and ultra-militaristic Japan of the twentieth century.