Csr Case Study On Ikea Management Essay

Csr Case Study On Ikea Management Essay This report identifies Corporate Social Responsibility (CSR) as a demanding topic that has moved from ideology to reality and is acknowledged as a significant dimension of contemporary business practices and has been recognized as an important tool for business survival in the 21st century. This report takes into deep understanding of CSR by depicting a road map of core subjects with related issues and implementation based on the principles of CSR and discusses briefly on its characteristics; pros and cons; theories and approaches; justifications and fundamental principles. This report gives an insight on the significance of CSR and examines in detail about the expected key potential gains from its operational use followed by the discussion on the problems and barriers that CSR generally faces .Finally the report chooses the case study on IKEA and discusses in depth about its CSR experiences by studying its development and strategy dimensions of CSR in corporate social agenda(strateg ic and responsive forms of CSR) and analyses IKEAs responsibilities as integral elements of strategy with a brief discussion on CSR communication. The concept of CSR has widened its scope and its increasing global demand makes us to realize the responsibilities of a firm with its dimension towards social, economic and environmental impacts. INTRODUCTION: This report identifies Corporate Social Responsibility (CSR) as a hot topic and the reason for choosing CSR is due to its high profile attainment in the academic domain and most of us feel CSR as an absolute necessity to define the roles of organizations in Society and apply their responsibilities to their businesses in terms of social, ethical and legal standards. Moreover, CSR has become a globalised concept and achieved business prominence because of its geographical prevalence from US origin to its widespread suitability and establishment in Europe. This report structures the content to understand the concept of CSR by depicting a road map of core subjects with related issues and implementation based on the principles of CSR and discusses briefly on its characteristics; pros and cons; theories and approaches; justifications and fundamental principles. This report gives an insight on the significance of CSR and examines in detail about the expected key potential gains from its ope rational use followed by the discussion on the problems and barriers that CSR generally faces .Finally the report chooses the case study on IKEA and discusses in depth about its CSR experiences by studying its development and strategy dimensions of CSR in corporate social agenda(strategic and responsive forms of CSR) and analyses IKEAs responsibilities as integral elements of strategy with a brief discussion on CSR communication. UNDERSTANDING CSR: The term CSR seem to be new but research predicts that there has been an evolution of its concept throughout many decades. Way back in 30s of last century, the focus of marketing was initially on distribution and logistic, that was about how to provide some products at minimal cost. With the total marketing, the centre of attention is to set on the selling systems on the marketing mix comprising the 4 Ps: Price, Products, Place, Promotion. Social marketing emerged in the 70s whereby the company decides on the long-term interests of stakeholders internally as well as externally. A stakeholder could be any individual or a group, who can influence or get influenced by behavioral impacts of an organization. The categories of the companys stakeholder are shown in the table below: Companys Organizational structure and location Involvement in the Business activity Internal External Direct Shareholders, investors, managers, employees Customers, Lenders, Tax agencies Indirect Consultants, Suppliers, contractors Community, NGOs, Media General public Professional bodies The impact of any organization on the society through their operations, products or services rendered by associating with stakeholder groups such as customers, suppliers, employees, investors and community and this can be displayed in the form of a diagram below Source: Mallen Baker (2007) Different terms and ideas are associated and so it is difficult to define CSR due to ambiguity in the CSR field of research. There is always a problem to stick onto universal definition of CSR as the concept ranges from mere compliance with law to pure Philanthropy. Corporation refers to group of members acting as an individual, be it for business or elsewhere. Philanthropy has little to do with CSR because philanthropy is about how a company spends its money and CSR is about how a company generates money and how responsibly they conduct their business in doing so. However, European commission identifies CSR as a broad concept and recognizes, CSR as a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis(Commission of the European Communities 2001). WHAT CSR IS NOT? 1. It is not an alternative for the regulation of companies! 2. It is not a replacement for how companies should manage their social, ethical and environmental impacts! 3. It will not save the world! CHARACTERISTICS OF CSR: The main features of CSR can be summarised as shown in the table below: Features Description Triple-bottom-line Economic, social and Environmental Voluntary All activities are taken up voluntarily. Stakeholders integrity Connecting all parties involved. Long-term action Carrying activities over a long-term period. Credibility Enhances the credibility of the firm. PROS AND CONS OF CSR: Arguments for CSR Arguments against CSR Enhances reputation in society. Solves the problems caused by business in society. Stabilises corporate power with responsibility. Increases long-term profitability Beyond government regulations. Adjusts to imbalanced demands of stakeholders. Improves environmental conditions. Business should be meant for profit maximization. Enforces unequal costs among competitors. Stakeholders compelled to hidden costs. Business may lack social skills. Makes to forget the aims of the business Social responsibility cannot be a legal responsibility. Places responsibility on the business but not on individual. CSR THEORIES AND APPROACHES: The focus on economic, political, social and ethical aspects in social reality aspects according to Parsons (1961) are primarily based on four features that can be perceived in any social structure such as adaptation to the environment ,goal attainment, social integration and pattern maintenance or latency. This hypothesis led to the classification of CSR theories into four types which can be depicted in the following table with their related approaches. TYPES OF THEORIES AND ITS FOCUS APPROACHES ILLUSTRATION INSTRUMENTAL THEORIES Focus on the economic aspect of the interaction between business and society Augmentation of shareholder value This theory argues that CSR is the only means to the end profits. It is based on wealth creation that is measured by share price. Strategies for competitive advantage Social investments in the context of competition Strategies based on the view of firms available natural resources. Strategies related to the bottom of the economic pyramid. Cause -related marketing Considering Socially recognised philanthropic activities applied as an instrument in marketing POLITICAL THEORIES Focus on the business power applicable in the areas of politics Corporate constitutionalism Firms social responsibilities arise from their strength of social power Integrative social contract Assumption of the existence of contract between the business and society. Corporate citizenship The firm is perceived as a citizen with participation in community. INTEGRATIVE THEORIES Focus on the integration of social demands Issues Management Firms response to the social and political issues and their impacts Public Responsibility Current legal procedures and public policies are considered as recommendations for social performance Stakeholder management Stabilizing the firms stakeholders Corporate social performance Exploring the responses from social legitimacy to social issues ETHICAL THEORIES Focus on the right factor to attain a good society Stakeholder normative theory Considering trustful duties towards firms stakeholders Universal rights Considering the frameworks related to human rights, labour rights and respect for environment Sustainable development Achievement of human progress by accounting present and future generations The common good Awareness towards the common good of society JUSTIFICATIONS FOR CSR: The prevailing justifications for CSR are shown in the picture below: Moral obligation Attaining commercial accomplishment in approaches that tribute ethical value Insufficient assistance to stabilize complicated competence related to social and economic interests. Varied personal values among managers and stakeholders Licence to operate Developing goodwill to safeguard the consent of Governments and stakeholders Licences and approvals are needed for a business to operate. However, this kind of approach will have to compromise in controlling CSR agenda to the externals that lack knowledge about companys operations and competitive positioning. Encourages defensive responses for time being. Sustainability Self-interest to encounter the present needs without compromising the future needs Efficiency on environmental issues yielding immediate economic benefits. In other aspects other than environmental issues, intangible long-term results give a weak justification for short-term costs. Existing justifications focus on the pressure between the firm and society rather than bringing coordination. These generic rationales give a trivial guidance for taking up company activities. FUNDAMENTAL PRINCIPLES OF CSR: CSR mainly relies on three fundamental principles such as Economic, Social and Environmental areas. The purpose of CSR is to integrate business activity with its culture for attaining sustainability in its economic, social and environmental areas. Each fragment of CSR includes activities, which differ depending on the type of firm and the needs of stakeholders. ECONOMIC AREA: The firm is expected to behave as a transparent enterprise .Positive relationship among the investors, customers, suppliers and shareholders is expected. Economic impacts at local, national and international levels should be monitored. Stakeholders and the activities of CSR in the economic area of the market are shown in the table below: Economic area Market Stakeholders Owners and investors Customers/consumers Suppliers /partners Regulatory bodies Media CSR activities Creates ethical codex Transparency Best practice management Practice anti-corruption Build Stockholders relations Build Customer/consumer relations Build suppliers relations Build investors relations Protect intellectual property SOCIAL AREA: Responding and tackling the behavioral attitudes to employees in the working environment and focuses on assisting the local community. The company influences the working standards, education, health safety and develops the cultural aspects. The stakeholders and CSR activities in the social area are shown in the table below: Social area Stakeholders Work location Local community Employees Unions Non-Profit organizations Public CSR activities Health safety of the employees Human resources development Get rid of child labour Follow working standards Supporting laid-off employees Assurance of jobs Supporting social integrity Corporate volunteerism Donor ship Educating Public Improving the quality life of employees Creation of jobs and develop local infrastructure. ENVIRONMENTAL AREA: The Company focuses on its impact on ecosystem and elements like land, air and water. The company feels its determination to protect the natural resources. Environmental area Stakeholders Groups related to environmental aspects. CSR activities Eco-friendly processing and manufacturing products and services. Agreement with regulatory and standards(ISO,EMAS) Renewal of energies policy by recycling and using eco-friendly products. Lessening the environmental impacts. Protecting the natural resources. ROADMAP FOR CSR: The following roadmap depicts the core subjects and CSR implementation based on the principles . Source: vi.unctad.org/russiast09/docs/millercsr.ppt CORE SUBJECTS AND ISSUES: Issues related to core subjects of CSR can be depicted from the following table: CORE SUBJECTS ISSUES ORGANIZATIONAL GOVERNANCE Shareholder activism Political economy Cross border investments by foreign investors HUMAN RIGHTS Due attentiveness Risk conditions Escaping complicity Determining grievances Inequity and susceptible groups Civil rights Political rights Employees fundamental rights Socio-economic and cultural rights LABOUR PRACTICES Social conversation Child labour Forced labour Employment relationships Work conditions Social security Health and safety at employment Training and progress in the employment ENVIRONMENT Avoidance of Pollution Maintenance of resources Mitigating and adapting climatic change Protecting the nature REASONABLE OPERATIONS Anti-corruption Sensible political implications Good competition Encouraging social responsibility in the field of influence Assessing the value for property rights CONSUMER ISSUES Awareness Market sensing Health and safety for consumer protection Consumption sustainability Consumer support and solution for disputes Data security and privacy Entry to necessary services COMMUNITY PARTICIPATION AND IMPROVEMENT Education Culture Creating employment and developing skills Advancement of technology Income generation Social investment Community health CSR DRIVERS: The key drivers of CSR are discussed in the table below: DRIVERS DESCRIPTION Profound self-interest Generate ethical, social and economical cohesion where markets, labour and communities are linked to work together. Social investment Social capitalism and contribution to infrastructure has been seen progressively as necessary part of business activity. Transparency and trust Public perceives business as low ratings of trust. Public expectation about companys openness and accountability leads to prepare a report encompassing their performance in the areas of social and environmental issues. Increased public expectations of business Public expects beyond the companys contribution to the economy by taxation and provision of employment. In addition to the above key drivers, the following list shows general drivers of CSR. Business Risk management Reputation and brand management Learning and innovation Cost savings and operational efficiency Competitiveness and market positioning Improved relations with regulators Organizational transformation and continued improvement IMPLEMENTING CSR: Each firm is unique in its operational procedures, its awareness of CSR issues and the amount of work done towards CSR implementation.Therefore; different firms adopt different frameworks depending on their CSR approach.However, it adds value to the firm when CSR is implemented in a systematic route by integrating its mission, strategy, cultural, environmental and risk profiles, processes and activities. The following framework for CSR implementation gives scope to build quality and environmental management, which follows the model of plan, do, check and improve based on ISO standards .This flexible framework can be adapted by any firm as suitable for its organization. Implementation Framework PHASES STEPS TASKS Plan 1.Perform CSRassessment Gather a CSR management team Work out the definition of CSR Re-examine corporate documents, processes and activities Recognize and connect key stakeholders 2. Build up a CSRstrategy Develop support with experienced managerial staff Investigate others tasks Design a format of proposed CSR activities Build the ideas for scheduling and the business case for them Fix on areas of roadmap, methodology and focus Do 3. Explore CSRcommitments Take a glance on CSR commitments Organize discussions with key stakeholders Design the group to develop the commitments Plan for an introductory draft Check with concerned stakeholders 4. Implement CSRcommitments Build an integrated CSR decision-making framework Prepare a CSR business plan Lay down the quantifiable goals and find out the measures of performance Slot in the employees and to whom so ever applicable to CSR commitments Propose and perform CSR training Set up workshop to address the behavioural problems Design for setting up internal andexternal communications Check 5. Authenticate and report on progress Gauge the performance Hold stakeholders Report on performance Improve 6. Evaluate and Enhance Assess the performance Discover the opportunities for enhancement Engage stakeholders Double-check: Once a cycle completes Go back to plan and go ahead with subsequent cycle SIGNIFICANCE OF CSR: The issue of CSR initiatives and the perceptions of ethical standards have gained more attention by the management in considering approaches to strategic marketing. Usually, CSR is of growing importance towards managing the business processes and is magnetizing growing company investment. Unfortunately, marketing departments lack the skills to manage even the issues related to reputation thereby narrowing the insights. For example, pharmaceutical companies were criticised in the media for arrogance and lack of transparency. In order to rebuild its reputation, Pfizer took initiative to offer free medicines to those who were laid-off during recession. So marketing strategy expects to look for opportunities for better competitive positioning in market segments through increased customer value integrated with CSR initiatives. Majority of business leaders are focusing on CSR as a tool for differentiation and competitive advantage leading to generate revenue. CSR is not only important in considering the consumer relationships but also scrutinizes business-to-business relationships (comprising supply chain partners) with stakeholders like investors, government and lobby groups. CSR is an important business strategy by giving meaning and direction to day to-day operations. Satisfying each of the stakeholder groups allows companies to maximize their commitment to another important stakeholder group-their investors, who benefit most when the needs of these other stakeholder groups are being met. The business succeeds when values within the decision-making process and objectives of the organization are met. Lifestyle brand firms, in particular, need to live the ideals they convey to their consumers. CSR as a strategy is becoming increasingly important for businesses today because of three specific trends shown in the table below: Trends Discussion Changing social expectations: Consumers and society in general expect more from the companies whose products they buy with the regulatory bodies and organizations in place to control corporate excess. Increasing affluence: A society in need of work and inward investment is less likely to enforce strict regulations and penalize organizations that might take their business and money elsewhere. Globalization: The Internet fuels communication among like-minded groups to initiate a product boycott. These three trends portend corporate success. The result of this mix is that consumers today are better informed and feel more empowered to put their beliefs into action. CSR is particularly important within a globalizing world because of the way brands are built, at a time when these values and demands are constantly evolving. CSR can therefore best be described as a total approach to business in maintaining brand dominance. KEY POTENTIAL BENEFITS OF CSR: The benefits to firms, community and environment by practicing CSR can be discussed at length in the following table: KEY POTENTIAL BENEFITS DISCUSSION Efficiency in risk management: CSR oversees and scrutinizes the corporate activities by effectively managing the risks involved in governance, social, economic, environmental and legal aspects in day-to-day complicated market, thereby safeguarding the supply for overall market stability. Impact analysis about a firm by considering the concerns of the parties involved is one of the better ways to anticipate in managing the risks. This ultimately sharpens the decision-making. Enhanced reputation management: Reputation of a firm is mainly based on values such as trust, quality, reliability, which reflect the organizations image and brand recognition and so any firm concerned about addressing the CSR issues, can manage their reputation with effective CSR management. Ability to develop the recruitment and retention of staff: Effectiveness in CSR policies improvise the human resource management which has direct impact on firms image related to its products and services.CSR indirectly aids in executing the programs that enhance the morality and loyalty of employees who are valuable resources for companys performance. Fostering innovation, competitiveness and market positioning CSR gives positive impact in avoiding the risks by tackling diverse stakeholders who are the basic sources for generating ideas for novel products and markets thereby differentiating from its competitor, which result in competitive advantage, thus developing competitive strength based on innovative business models. For instance, a certified firm with social and environmental standards improves the chance to become a supplier to specific retailers. Increased operational efficiencies and cost reductions: By implementing CSR, there is always an opportunity to transform waste streams into revenue streams by systematic approach of environmental aspect of renewable energies by reducing costs through recycling. Tangible cost savings signify the reduction in carbon emissions. Building efficient supply chain relationships: A firm is at risk to susceptibility in its supply chain. Companies with like-mindedness can build long-term business relationships with aim to increase their profits by maintaining standards and thereby tackle the risks. Larger firms encourage smaller firms with whom they are related to take up CSR approach. For example, particular retailers may require their suppliers to adopt certain codes and practices. Improved ability to tackle change: CSR aids as a radar to anticipate the emerging market trends and by regular stakeholder dialogue with customers, a company can respond to any changes that occur in regulatory, economic, social and environmental aspects. Generate robust social licence to function in the community: Better understanding between citizen and stakeholder recognition of the firms activities and objectives can render enhanced stakeholder relations, thereby giving scope for robust alliances of public, private and civilized society.CSR enhances the social capital. Enhances investment: As CSR enhances the brand reputation, it leads to raising the companys profile in the investment community. The company value can be improved through further investments.CSR approach drives the financial institutions about incorporation of social and environmental criteria into their project plan leading sharp decision-making of where to invest money and this motivates the investors to look for better CSR management. Better relations with media and government regulators: CSR indicators act as tool for the governments to decide on obtaining export assistance contracts in some countries. In many cases, though CSR activities are beyond the regulatory requirements, governments considered CSR views to expedite the approval processes for firms in order to meet their sustainability goals by recognizing the business sector engagement as a requirement. Building customer relationships: In Cause related marketing the altruistic activities of the firms can be recognized by morally conscious customers who may be flexible in paying higher prices or in reduced costs may increase their purchasing power and so CSR in broader sense has significant impact in building the long-term customer legitimacy,loyalty,trust or brand equity. Acting as a catalyst for responsible consumption: In order to combat with the ever changing consumption patterns, company has to play a key role in achieving sustainability by the way it supplies its goods and services in the marketplace to meet responsible consumerism which considers to relate consumer rights and issues and how well the relationship between producers and consumers is authorized by regulatory bodies. BARRIERS AND CHALLENGES: CSR implementation in a competitive world draws certain barriers and challenges which are due to : Difficulty in implementing CSR concurrently with other business Concerns in a balanced and remarkable manner Difficulty of transparency Lack of clear communication Economic thoughtlessness Various instability problems in developing countries especially problematic for SMEs Complexity of the issues involved and so difficulty in managing the supply chain and regulating the sub-contractors Complex set of issues as CSR covers a broad array of direct and indirect business performances, achievements, and so its impacts differ from one business sector to another International differences that may lead to lack of universal acceptance in examining the potential impacts of CSR. Misinterpretation due to CSR being judged differently in many parts of the world depending on different priorities. For example, Chinese consumers interpret social responsibility as safe, high-quality products, while South Africans consider it as a contribution to healthcare and education. In Australia, Canada, Indonesia and the UK the highest priority is to protect the environment. In Turkey, it is believed as an indicator for charitable donation. In U.S, France, Italy and Switzerland and most of South America, the highest priority is towards fair treatment of employees. Complex set of stakeholders appealing to the business for a CSR attitude the appropriate stakeholders need to be involved stakeholder involvement is important, yet difficult Always ambiguity between CSR and financial success Low voluntary acceptance of CSR can lead to green washing Lack of devices to measure, monitor evaluate and report the impacts Two myths Smaller companies think it the responsibility of the bigger ones and It is mainly a philanthropic exercise High overheads of implementing and sustaining CSR efforts. No universally accepted frameworks Some of the main internal company barriers to CSR initiatives are: Executives recommending strategic marketing programmes that focus on CSR-based positioning must be aware of the likely barriers and challenges from those who do not believe CSR as a legitimate strategic tool. CASE STUDY: CSR AT IKEA: The reason for choosing IKEA as case study of CSR work is to understand its CSR focus as a leading company, which ranks as the first in CSR in the Accountabilitys Responsible Competitiveness Index 2008 (RCI). IKEA was selected due to its long history and experience in the area and its response to several CSR-related crises and criticisms that has enabled the organization to develop structured policies and a range of collaborations and initiatives with stakeholders and could set an example for companies aiming to develop their economic and environmental sustainability. IKEA is a value-based Swedish furniture giant that has wide recognition for its focus on cost reduction and it is a progressive company that manages to integrate its cost focus with CSR issues. This report discusses in detail about how this integration is possible for IKEA and it is interesting to know its implications for other companies who want to combine CSR into their business practices. The CSR experience gained by IKEA can make other companies to realise that CSR is not necessarily a cost addition but it is a cost-cutter, which imparts increasing knowledge on how companies can be socially responsible. The aim is therefore to analyze the

Storm Born Chapter Eleven

Someone was screaming in the desert, and I didn't realize it was me until Tim raced over and grabbed my shoulders. â€Å"Jesus! Eugenie, what's wrong?† I broke from him, dropped to my knees, and threw up into a convenient shrub. That soon gave way to endless dry heaves, my body's distress too strong to stop. When I finally finished – it seemed like hours but was probably only a few minutes – I ran my hands over my face. It felt like I had shoved my head through a window, cutting my skin to shreds. Yet, when I pulled my hands back, there was no blood. Apparently convinced I was done bringing up everything in my stomach, Tim carefully handed me a bottle of water. I wiped my mouth with the back of my hand and then drank greedily. When I started to hand the bottle back, he shook his head. â€Å"Keep it. What happened?† â€Å"Transition shock,† came Volusian's flat voice. â€Å"You came through the worlds too hard and too fast, mistress.† â€Å"You should be dead,† added Nandi. â€Å"Or at least segmented.† â€Å"Segmented?† asked Tim. I nodded and drank again. â€Å"If you're not strong enough to make it work, only your spirit will get back here. The body stays in the Otherworld.† He stared. â€Å"Will that kill you?† â€Å"Worse.† â€Å"What's worse than death?† asked a new voice. Or not so new. Wil. I'd forgotten about Wil. I leapt to my feet and spun toward him, gun drawn. Some part of me wondered if I even had bullets left. I'd changed the cartridge once in the Otherworld but couldn't recall how many times I'd fired at Aeson's men. Tim's mouth dropped open. â€Å"Eugenie, put that away!† â€Å"You don't know what he's done. He's a fucking backstabber.† Wil, sitting on the blanket he'd gone into trance on, froze, too afraid to move. But not too afraid to speak. â€Å"I had to. It was the only way to get Jasmine.† â€Å"Yeah, it worked pretty well, huh?† He sounded near tears. â€Å"I'd gone a year without any chance of getting her. Then that sprite cut me the deal. Said if I got you to go over, they'd give me Jasmine back. I'm sorry.† I didn't move the gun. â€Å"I was your only chance to get her back. If you hadn't led us into that trap, we'd be back here with her now.† He groaned, burying his face in his hands. â€Å"I didn't know. I didn't know. I just wanted her so badly.† He looked back up at me. â€Å"What happened? Why did she run away? Was she scared?† â€Å"Maybe. Or it could be that†¦what's that called? Where people help their kidnappers? Stockholm syndrome?† â€Å"What, like Patty Hearst? No. Jasmine wouldn't do that.† I wasn't so sure. She was young and impressionable, and Aeson struck me as a very forceful figure. â€Å"He's too pathetic to kill,† observed Finn after studying Wil for a moment. â€Å"No harm in doing it anyway,† said Volusian. â€Å"Kill him and enslave his soul.† Wil's eyes widened farther. â€Å"Eugenie!† Tim stared at me like I was insane. â€Å"You aren't seriously considering that.† Probably not. Sighing, I lowered the gun. â€Å"Get out of here, Wil. I don't ever want to see you again.† He scrambled to his feet, face falling. â€Å"But Jasmine – â€Å" â€Å"You lost your chance. You blew it. Get in your car before I do something stupid.† Wil hesitated, his face pleading and upset. Then wordlessly he headed toward the trail that led out to a makeshift parking area. I watched him leave, bitter anger boiling up within me. In the distance, thunder rumbled. â€Å"Eugenie†¦Ã¢â‚¬  began Tim hesitantly. A slight wind ruffled his hair. â€Å"I don't want to talk about it. Take me home.† We gathered up his things and walked in the direction Wil had gone. â€Å"Meet me back at my house,† I told the minions. They vanished. Tim had enough sense to leave me alone on the car ride back. I leaned my head against the window, liking the feel of the cool glass against my fevered cheek. So many things had happened tonight, I had no idea what to fixate on first. Jasmine? Wil's betrayal? Aeson's stupid accusation? Kiyo? Yes. Kiyo was probably the safest, which was saying something. My heart had leapt at seeing him again. It was stupid, considering the way he'd used me, but my emotions didn't appear to realize that yet. Why? Why did he have this pull on me when I barely knew him? I didn't believe in love at first sight. And what about the fox thing? I knew of no gentry who could do that, but I did know shape-shifters filled the Otherworld. I'd fought some before but never a fox. Seemed like a weird choice. Perhaps that explained why he hadn't felt gentry. He was something else, not gentry but still Otherworldly. Not much of an improvement. I left Tim as soon as we got home, seeking out the solitude of my room. Well, as much solitude as I could get with the three spirits waiting for me. I threw myself onto the bed, leaning into the corner where the bed sat against the wall. Exhaustion ran through me, and I did and said nothing, staring into the darkness. Thunder rumbled again but seemed fainter now, like the storm had changed its mind. The spirits simply waited and watched me. â€Å"Tell me what just happened.† â€Å"Um, which part?† asked Finn after a minute. â€Å"Any of it. Tell me what Kiyo is. The fox.† â€Å"Oh.† Finn seemed relieved to have a question he could answer. â€Å"He's a kitsune. Japanese fox spirit.† â€Å"Roland taught me hundreds of magical creatures. Never heard of a kitsune.† â€Å"You don't find them around here much,† explained Finn. â€Å"And they're not really dangerous.† â€Å"He looked dangerous enough to me.† â€Å"They carry animal traits into human form,† said Volusian. â€Å"Strength. Speed. A certain sense of aggression.† I thought about sex with Kiyo. Yeah. That had been pretty aggressive. I closed my eyes. â€Å"Why would he mark me and then follow me?† â€Å"I do not know.† It figured. â€Å"Anything else I should know about him? About them?† â€Å"They're usually female. Men are rare. Perhaps his human blood affected that,† said Nandi in her emotionless voice. â€Å"Half-human? Oh. His mother was the kitsune,† I mused, recalling him talking about his parents. â€Å"Yeah,† agreed Finn. â€Å"The women are supposed to be pretty hot. Like sirens. Real seductive. Men can't stay away from them.† â€Å"Like a drug,† added Volusian. I opened my eyes. â€Å"Could he do that too?† â€Å"Possibly.† Suddenly my obsession seemed less weird than twisted. Had he used some sort of sexual power to lure me in? Was that why I couldn't stop thinking about him? â€Å"I guess half-human isn't so bad,† I muttered, speaking out loud without meaning to. I hadn't bedded a full-fledged Otherworldly creature. â€Å"Not bad at all,† agreed Finn happily. â€Å"He's just like you.† â€Å"Stop it,† I snapped. â€Å"That whole thing†¦what Aeson said†¦it's stupid. I don't want to talk about it.† â€Å"And like so much, you ignore what you don't want to hear. Being Storm King's daughter is no small thing.† Volusian's red eyes held my gaze. â€Å"Your bluntness is so endearing.† My stomach turned, but it was now or never. â€Å"All right. I'll bite. Why does Aeson think that?† None of them had an answer right away. The impression I got from them was surprise more than ignorance. â€Å"Because you are, mistress,† said Nandi at last. â€Å"No, I'm not. I'm human.† Volusian crossed his arms over his chest. â€Å"You are half-human, mistress. And as I said, your prejudice blinds you from the truth.† â€Å"One gentry's accusation isn't the truth. Where are the facts?† â€Å"Facts? Very well. Here are facts. Who is your father?† â€Å"Roland.† â€Å"You know what I mean, mistress. Who is your blood father?† â€Å"I don't know. It doesn't matter. My mom always said he was a bastard not worth knowing.† Volusian stared at me expectantly. â€Å"That doesn't prove anything.† â€Å"What about your powers? You are rapidly surpassing every other human shaman. You are equal in strength in both worlds. Do you think it's coincidence that the most powerful shaman in remembered history grew up in Roland Markham's household? He brought you there, taking you from Storm King.† â€Å"From where? Are you saying I was born in the Otherworld?† Volusian inclined his head. â€Å"Storm King abducted your mother and made her his mistress. She bore his child. You.† â€Å"You seemly awfully sure about this.† â€Å"I saw your mother when she lived in the Otherworld. I have seen her in this world. She's the same woman.† â€Å"You're lying.† â€Å"By the power that binds us, you know I am not.† He was right. He couldn't lie to me – not so openly, at least. I knew that, and acknowledging that forced me to put my own world into a new perspective. It might explain why my mother hated the Otherworld so much. Why she and Roland had been adamant about instilling that hate in me, making sure I could never have any empathy with the gentry or anything else from that world. I swallowed and realized I was on the verge of tears. God. That would probably blow the show of strength I always tried to hold around these guys. We needed to get through this interview. â€Å"So, are you saying that's why Roland eventually killed him? To protect me?† â€Å"Among other things. Storm King's invasion was imminent. He had come to claim you. Roland Markham killed him, both saving you and halting Storm King's plans.† â€Å"So Dorian was telling the – wait a minute. He knew! That bastard. He sat there and fed me that stuff about Storm King, knowing who I was!† â€Å"Everyone knows who you are, mistress,† said Nandi. â€Å"It's pretty recent, though,† added Finn, seeing the look on my face. â€Å"Came out only a couple of weeks ago. The same time everyone learned your real name.† â€Å"How?† I glared at Volusian. He had known who I was this whole time. â€Å"Did you tell them?† â€Å"No.† â€Å"Then why didn't you tell me before this? Why didn't any of you tell me when this came out?† They stared. â€Å"Because you did not ask us,† replied Nandi. â€Å"Yes,† agreed Volusian. â€Å"Had you asked us, ‘Am I Storm King's daughter?' we would have gladly – â€Å" â€Å"Oh, shut up.† I rubbed my eyes. I wanted to sleep. I wanted to sleep forever and forget all this. But I had miles to go before I slept, just like in the Robert Frost poem. â€Å"If everyone thought Storm King was so great, then why are they all coming after me? Shouldn't I be some kind of hero? Instead they want to kill me.† â€Å"Most aren't trying to kill you, unfortunately. They're trying to bed you, mistress.† â€Å"Why?† â€Å"Probably because of the prophecy,† said Nandi. â€Å"Prophecy,† I said dryly. â€Å"Wonderful. Now there's a prophecy.† â€Å"Mistress,† she said hastily, â€Å"had you asked us if there was a prophecy – â€Å" â€Å"Yeah, yeah. I know. What's this one say? That I'm a good lay?† Finn hesitated. â€Å"Well†¦it says Storm King's vision will be carried out through his daughter's first son. That the human world will be reconquered.† â€Å"You're kidding.† Oh, God, I wanted to sleep. â€Å"When they found out you didn't have kids yet, everyone – well, every guy – wanted to get in on the action. Being the one to father Storm King's heir would be a pretty big deal.† â€Å"Likewise,† added Volusian, â€Å"the prophecy says Storm King's daughter will clear the way for her son. Being your consort would carry great prestige.† â€Å"Hey, I'm not clearing the way for any invasion. Not that I believe in prophecies. Not that I believe in any of this! In fact, that prophecy proves how stupid this all is. I wouldn't turn against my own kind.† I swear Volusian smiled. â€Å"Yes, but which people truly are your own kind? Your loyalties are now divided.† My anger flared. â€Å"No. Even if this is true and I am the daughter of the biggest gentry badass ever, I know where my loyalties are. I'm human. I act human. I have no gentry powers.† â€Å"As you say, mistress.† â€Å"Get out of here. All of you. None of this is true. I'll talk to my parents and clear this up.† Volusian bowed. â€Å"A wise idea, mistress.† I said the words to send them away and then lay on my bed. The storm had quieted outside, but one of my own raged inside me. I wanted to shut down my feelings. I wanted to forget all of this, because it wasn't true. It couldn't be. I wanted to take one of the prescription sleeping pills, but I didn't need Roland's warnings to know how stupid that would be. If every gentry was suddenly hot to get me pregnant, I couldn't let my guard down. I shouldn't have been able to sleep. Not after fighting gentry and seeing a girl run back to them. Not after learning my one-night stand was a kitsune. Not after discovering that I could very well be something I hated. Something that made me question everything I'd ever believed in. No, I shouldn't have been able to sleep at all, but my body knew better as tiredness flowed over me. My body knew I'd been up all night, that I'd fought and been injured. And most important, it knew my fight wasn't over. Not by a long shot.

Animal testing Essay - 865 Words

The Use of animals for Laboratory Testing There has been an on going debate on whether to use animals for laboratory testing. There are people now saying the use of animals in laboratory testing is not necessary and there are other alternatives. Many of these people claim the tests that are performed on the animals are not particularly valid. On the other hand, others claim that laboratory testing has been depended on animals to achieve medical advances. Whether or not the use of animals in laboratory test is a matter of opinion. It will take the necessary investigation and consideration to figure out what needs to be done. Taking a closer look at each issue will help to show the use of laboratory testing should not be†¦show more content†¦The side effects of the eye test are redness, swelling, ulceration, bleeding, and blindness. Acute toxicity test effects are even worse. They include convulsions, labored breathing, Brigman Page 2 malnutrition, skin eruptions, and bleeding from the eyes. The side effects of the skin test are redness of the skin, inflammation, weeping, and scabbing. The animals may also suffer symptoms such as abdominal pains and cramps, vomiting, paralysis, diarrhea, difficulty breathing, and bleeding ulcers. When all of the experiments are finished all of the animals is killed (Chea). Another issue of using animals in laboratory is it’s unnecessary. History has shown that many important medical advances have been made by clinical research and close observations of human patients, not animals. A study done by Vincent, at a Animal Research Medical Center found that the researchers are doing useless lung experiments on dogs. They would remove sixty-eight percent of those foxhound’s lungs and forced then to run on treadmills with masks placed over their faces. To fit the mask, the dog canine teeth are cut down. 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The Collapse Of The Icelandic Banking System Finance Essay - Free Essay Example

Sample details Pages: 7 Words: 1955 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? In the transition from a small-scale, low risk deposit money banking system to a universal international banking system oriented toward high-risk leveraged investments and depending heavily on foreign wholesale financing was accomplished in less than a decade. The three leading banks, Glitner, Kaupthing, and Landsbanki, were among the fastest growing financial institutions in the world (Eggertsson and Herbertsson, 2009). As the domestic economy had grown and stock prices had soared, the three banks assets had expanded from 100 percent GDP in 2004 to 923 percent at end 2007 (IMF,2008) which is almost ten times the countrys GDP. Early October 2008, the Icelandic economic euphoria was crushed by the three large banks failures, bringing down the financial system, creating an economic crisis, social and political chaos. The purpose of this Report is to respond to the issue as a regulator for banks, on the collapse of the Icelandic banking system by Identifying th e main causes of the collapse of the banks. Recommending prudential regulations which will protect the community from such devastating bank failures in the future. The failure towards the three large banks, effectively taken over the government placed a burden of debt on citizens. II. Main causes of the collapse of the banks Growth of Banks and size at the time of collapse The main explanation on the collapse of the three large banks, Glitner, Kaupthing, and Landsbanki is highly due to the rapid expansion and their subsequent size when they fell in October 2008. Internal growth of the bank was due to the increase in loan portfolios, averaged of nearly 50% from the beginning of 2004 until their collapse (Althingi,chapter2,2009); commonly associated with poor quality loans as a result of poor underwriting, record keeping, management and supervision (Flannery,2009). The quality of the loan portfolios were eroded under these circumstances as such large-scale and high risk growth were not compatible with the long-term interests of solid banks where there were strong incentives for growth within the banks. Foreign operations of the banks rocketed and a change in the nature of the banks activities were also seen as investment banking gained importance as part of their operations. An opening of global debt financing further drove the growth of the banks. The banks received high credit ratings; inherited from the countys sovereign debt rating on the sound position of the state and expectations. They also had access to the markets in Europe due to the European Economic Area Agreement (EEA), to participate in a European Unions single market without a conventional EU membership. Such big growth in lending by the banks will cause their asset portfolio to develop into a very high-risk one (Jimenez,2006). As the liquidity crisis started in 2007, foreign deposits and short term securitised funding became the main source of funding for the three banks and these type of financing were very sensitive to market conditions. A run on the collateralised loans was as detrimental as a run on foreign deposit accounts. The likelihood of run therefore increases, both on deposits and other means of funding. At the time of the collapse, repayment schedule of outstanding bond issues and collateral loans were burdensome due to the enormous growth throughout the decade. Weak equity As a result of the abundance of supply of credit with low interest rates in the international markets, the banks were able to borrow more money at low interest rates and passed in on to its customers. The economic resources that the banks had were invested into its own shares and were known as weak equity. It consisted of loans with collaterals and forward contract on own shares. It was reported that these three banks have financed themselves with 300 billion of Iceland Kro na (IKR) of their own shares in mid-2008(Althingi, chapter21, 2009). Hence, the bank capit al ratios did not reflect in the real ability of the banks in withstanding losses if it were to happen. Leveraging of the banks owners The owners of the large three banks were amongst the biggest borrowers (Althingi, chapter21 ,2009). As owners, they had easy access to the loans and received substantial facilities though banks subsidiaries that operated money market funds. The largest debtors of Glitner, Kaupthing and Landsbanki were also the principal owners of the banks. The operations of the banks were in many ways characterised by their maximising of the benefit of majority shareholders, who held the reins in the bank, rather than by running reliable banks with the interests of all shareholders in mind and to showing due responsibilities towards creditors. There is a conflict of interest between the operation of the banks and operation of other companies owned by the same owners. When in the late 2007 and 2008, where the banks began to experience funding problems, it se emed that the boundaries between the interests of the banks and the interests of their biggest shareholders were often unclear and the banks were seen to put more emphasis on backing up their owners instead. (Moore, 2010). The privatisation of the banks were owned and controlled by three groups of investors who used the banks to extend their balance sheet, and not by running the bank reliably and responsibly towards the interests of all shareholders. Concentration of risks Risk diversification is vital in the operation of the banks. As the banks are heavy indebted, it is therefore important for their portfolio of assets to be widely spread. As the largest debtors of the three banks are also the principal owner of the banks, there is a high risk such that the performance of the bank is dependent upon the performance of the group. It is too much risk for a bank to handle as the group falls and in the event when more loans is given, proven to be harmful to the depositors and cred itors if they default. There was the exposure of more than one related party which accumulated within individual banks in the country and also between banks as there were groups of interrelated borrowers within all the banks. As a consequence, systemic risk exposure became significant to the loan portfolios of the banks. The loan of the groups amounted up to 5.5 billion EUR, 11% of all the loans and about an aggregated equity of 53%.( Althingi, chapter21 ,2009) This significant systemic risk does not only affect one of the banks if it fails but all three banks. III. Recommendations on prudential regulations to protect community from future bank failures Keeping up in pace with the monitoring on financial institutions As the banks pursued rapid international growth and domestic expansion, it is vital that FSA is able to keep up to date with the rapid growth of the banks and be well equipped with technical expertise and the equipment necessary to produce high quality co mprehensive surveys of the position in the development of individual financial institutions. It was clearly seen from the FSAs budget up to 2006 that it was insufficient for it to keep pace with the growth ( Althingi, chapter 2,2009) and hence unable to fulfil its tasks properly. Vast expert knowledge is required on the operations of banks, economics, accounting, and legislation, especially for country has minimal experience in the financial industry. The Depositors and Investors Guarantee Fund (DIGF) needed strong surveillance under the FSA as an insufficient sum and the potential losses to foreign depositors will lead to serious problems. In closely monitoring the financial institutions and its activities, prompt actions should be exercised when growth is too rapid to reduce the size of the balance sheets of the banks, where the banking system will become far too big in relative to the size of the economy. Contingency plans There should be a stricter regulation into the s ystemic risk management on the capital reserve in the financial institution and also a compulsory contingency plan as to withstand a financial shock within the company. These contingency plans are to be clear and realistic. A strict act on minimum equity capital of banks should also be placed on these institutions. In the event of the failure in 2008, the rules were based on the so-called Basel II standards and provide that the capital base of banks should always extend more than 8% of the risk base. However, during the time where the financial system tumbled, capital ratios did not reflect the real strength as it own shares that risks exposure through direct collaterals and forward contracts on their own shares( Althingi, chapter21 ,2009) More sectors to identify specific risks It is important that there is compulsory of university degree, extensive knowledge and experience in financial market in hiring competent staff. With the resources and expertise, the organisational str uctured can be changed to incorporate groups of experts from different units who examine specific risks (including market risks) across sectors (Jà ¤nnà ¤ri,K. ,2009). A department for solvency and capital adequacy, department of credit and market risks can be introduced on top of the current four units. This can lessen the danger of compartmentalisation of the supervisory authority along the industry lines and allow regulators to concentrate on its own supervisory tasks. Maximise the amount of shares that can be owned by the debtor, Cross-ownerships Supervision in cross-ownerships has to be tighter and rules more stringent. The fact that banks were financing purchases of their own banks shares by their owners and other clients poses a large indirect risks in each others shares (Jà ¤nnà ¤ri,K. ,2009). This is especially true for a small economy. Cross-ownership is hard to avoid in the absence of a comprehensive regulatory and supervisory framework. Therefore close supervis ion is vital in the case of any methods used to boost their capital adequacy artificially. IV Conclusion In the wake of a flawed process of privatisation, together with insufficient experience in the financial industry; the rapid growth of the three banks, Glitner, Kaupthing, and Landsbanki in a short period of time was deemed only possible by applying weak underwriting standards, loans to large holding companies and relying on weak equity. The fall of these three banks resulted in some of the biggest bankruptcies ever. Preliminary estimates indicate that creditors might have lost around 70 billion dollars in the crisis (Eggertsson and Herbertsson, 2009)and about roughly $330,000 for every Icelandic man, woman and child (Lewis,2009). The failure and the collapse of these banks as a result of these iniquities have caused a significant burden to the Icelandic citizens. A change in the organisational structure of the prudential regulations is to be implemented, in order to pre vent and protect the community from such devastating bank failures in the future. Aliber,R.,2008, Monetary Turbulence and the Icelandic Economy, University of Iceland, June 20, 2008. https://www.hi.is/files/skjol/icelandlecutre-May-2008.pdf Althingi,2009, Chapter 2: Summary of the Reports Main Conclusions, Report of the Special Investigation Committee to the Icelandic Parliament Althingi,2009, Chapter 21: Summary of the Reports Main Conclusions, Report of the Special Investigation Committee to the Icelandic Parliament Buiter,W.,2008, The Icelandic banking crisis and what to do about it: The lender of last resort theory of optimal currency areas, Centre for Economic Policy Research, Policy insight No. 26., October 2008. https://www.cepr.org/pubs/PolicyInsights/PolicyInsight26.pdf Eggertsson,T. and Herbertsson,T. 2009, System Failure in Iceland and the 2008 Global Financial Crisis, University of Iceland University of Reykjavik, June 10, 2009. Flannery,M. 2009, Icelands Failed Banks : A Post-Mortem, University of Florida, November 9, 2009. International Monetary Fund, 2008, Iceland: Financial System Stability Assessment-Update, December 2008. Jà ¤nnà ¤ri,K., 2009, Report on Banking Regulation and Supervision in Iceland: past, present and future, March 30, 2009. https://www.island.is/media/frettir/KaarloJannari%20_2009_%20Final.pdf Jimenez,G., J. Saurina,2006, Credit Cycles, Credit Risk, and Prudential Regulation. International Journal of Central Banking 2, February 2006, pages 65-98. Lewis, Michael, 2009, Wall Street on the Tundra, Vanity Fair Magazine, April 1, 2009. Moore,J.,2010, Iceland was negligent over banking collapse, The independent, April 13, 2010. https://www.independent.co.uk/news/business/analysis-and-features/iceland-was-negligent-over-banking-collapse-1943153.html Don’t waste time! Our writers will create an original "The Collapse Of The Icelandic Banking System Finance Essay" essay for you Create order